Well, here we are, still in the midst of this horrible COVID-19 pandemic, staying home, scared to go out, wearing masks and gloves, but yet, the first lawsuit(s) involving virus issues have already been filed. In this instance, right in my home state of New Jersey, a hair stylist has filed a class and collective action, alleging that the employer did not pay workers in violation of the Fair Labor Standards Act and the New Jersey Wage Payment Act, following the closure of its beauty shops due to the virus scare. The case is entitled Olsen v. Ratner Cos. LC d/b/a Hair Cuttery and was filed in federal court in the District of New Jersey.

The named plaintiff, Nicole Olsen, alleged that the workers received varying messages about the Company decision to cease operations. The Complaint alleges that the Company, prior to the March 21 shutdown, told the employees that they would not receive their pay for work performed in the previous week. The Company maintained that it was waiting for federal funds and employees would be paid once the funding was received or after the Company went back into business. The Complaint then asserts that “subsequently, on April 7, 2020, plaintiff and employees similarly situated were not paid the wages they were due.”

The stylists earn commissions, but must make at least the minimum wage for every hour worked and if the commissions do not yield that, then the employer must supplement the employees’ pay to reach that level. The Company was doing that but then evidently stopped. The Complaint alleges that the Company (which operates in sixteen States) did not pay the employees their commissions or their minimum wages for the period March 15-21.

The plaintiffs filed under the Fair Labor Standards Act, as a collective action and also under the New Jersey Wage Payment Law as a class action. They want compensatory damages, as well as liquidated damages, civil penalties, and, naturally, attorney fees. The plaintiffs’ counsel took the position that he was fighting for a good cause. He stated that “the idea we can climb out of this crisis on the back of working men and women is completely unfair, unjust and, as alleged by our client, illegal under federal and state law. We are proud to be fighting for working men and women during this national economic crisis.”

The Takeaway

I wonder if there was another way to resolve this. Of course, the workers are entitled to be paid and should be paid, but is the employer not paying them out of pique or spite? No. The vicissitudes of what we are all dealing with in this unprecedented situation have caused this employer to hit a wall, very quickly, because of the particular business it is in. But, a class action lawsuit? Maybe there will be a quick mediation and it will be resolved. Maybe the employer will receive the funds and, on its own, pay the workers.

This could have, and should have, been resolved without litigation!