There is no industry or business that is immune to FLSA collective actions. One might think that the a “high end” jewelry business would not be hit with such a suit, but a California federal judge has just certified a class of Zales employees who have alleged that their employer did not pay overtime properly; that FLSA class has been certified, nationwide. The case is entitled Tapia v. Zale Delaware Inc. et al., and was filed in federal court in the Southern District of California.
The class includes 1,600 workers in a class limited to California workers. The plaintiffs alleged that the Company rounded down time reflected on time cards. The judge found it “easy” to certify the class as the Company’s uniform payroll policy showed that the workers were similarly situated. The Court stated that “plaintiff established that defendant uses the same ‘point of sale’ computer system to record the time its hourly employees work at the stores. Thus, plaintiff is able to determine from defendant’s time records — to the minute — the time every employee in the class clocked in and clocked out.”
The judge rejected Zales’ essentially legal argument that its “rounding” practice was legal. The Court concluded that it was too early into the case to make that merits-based determination. That was the (just) the California case. The Court also granted conditional certification of a nationwide class of possibly 20,000 workers who worked at Zales since July 2010. They alleged that the same rounding practices deprived them of overtime monies. Again the Judge found commonality, stating that the “plaintiff has shown that there are other similarly situated employees because defendant uses the same payroll procedures at all of its stores.”
The named plaintiff, who was fired after less than one year, alleged that her time records were altered to show that she worked fewer hours than she actually did. For example, if she worked nine hours and three minutes, the extra three minutes were automatically deducted. She also claimed that a thirty minute lunch was deducted, whether she took her lunch or worked through it and she was not paid overtime. The brevity of her employment may undermine her credibility. The Company strongly denies the allegations and contends that the rounding system was in compliance with FLSA standards.
This class was certified due to the overall, uniform practice of rounding employee time down (and, hopefully, up). This is dangerous. In many class actions, we defend by arguing that too much individualized scrutiny is called for and that is why the necessary commonality does not exist. Here, where an overriding practice obtains, that argument goes away. What the Employer is left with, it seems, is contending that the rounding practice comported with the FLSA.
All those eggs in a single basket?
I have a feeling it may hold them…