California Wage and Hour Class Action Settled for $2.25 Million

Oakland, CA: Final approval has been granted for a proposed settlement in a California Wage and Hour Lawsuit against Bank of America alleging improper classification of some employees. The settlement, granted final approval on January 14 of this year, is worth $2.25 million.

According to court documents, plaintiff Zelma Brawner was an employee of the Bank of America in California for almost three decades at the financial institution’s back-office facility located in Concord. Brawner alleged in her California Wage and Hour class action that the defendant misclassified dedicated service directors (DSDs) as administrative employees - denying anyone working as a DSD overtime pay.

The DSD is a kind of personal concierge available to bank customers and clients, and according to the plaintiffs, “If the customer wishes to open a new account, close out an old account or inquire about the status of a transaction in an existing account, the customer can contact the DSD and expect a personalized and prompt response,” the employees said in the motion. “The Bank did not pay any overtime premium pay to the DSDs because it classified them as ‘administrative’ employees who are ‘exempt’ from the overtime protections set forth in Wage Order 4.”

In her California wage and hour lawsuit - first brought in June 2014 - Brawner cited no fewer than five violations to California wage and hour laws: failure to pay overtime wages, failure to provide accurate itemized wage statements, willful failure to pay all wages due within 72 hours after separation from employment, violation of California’s unfair labor law, and violation of the Labor Code Private Attorneys General Act.

The defendant, Bank of America, is reported to have denied the allegations, but agreed to the settlement as a pathway to avoid a costly and lengthy litigation.

In her summation granting final approval of the settlement, the judge in the case noted that “litigation poses risks and is expensive, and an evaluation of the strengths and weaknesses of the plaintiff’s and the defendant’s cases militates in favor of settlement,” Judge Yvonne Gonzalez Rogers wrote in the order granting final approval. “Second, the settlement treats class members fairly, allocating the money to them based on a formula weighted by their annual salary, estimated overtime hours and eligible workweeks.”

The settlement is reported to cover DSDs, treasury service consultants and senior treasury service consultants numbering 133 in total and having worked for Bank of America at the Concord facility from May 9, 2010 through January 14 of this year, the date at which the California Wage and Hour Settlement was formally approved.

Following dispensation for court costs, legal fees and other deductions, some $1.6 million will be available for class members according to the judge’s distribution template, noted above.

The case is Brawner v. Bank of America National Association, Case No. 3:14-cv-02702, in US District Court, Northern District of California.

California Minimum Wage Increases

San Diego, CA: As of January 1, 2016, the California minimum wage has increased to $10.00 per hour. That means all eligible employees must be paid at least $10.00 per hour for regular hours. Employees who are not properly paid the minimum wage may be eligible to file a wage and hour lawsuit against their employer.

According to the Department of Industrial Relations, the January 1 increase is the second in 18 months. On July 1, 2014, California’s minimum wage was increased from $8.00 per hour to $9.00 per hour. The second stage of the increase was the January 1, 2016 raise to $10.00 per hour. The pay increase took effect as of the first day of January, meaning all employees who earn the state minimum wage should see the change in their pay beginning January 1.

“Almost all employees in California must be paid the minimum wage as required by state law,” the department notes in its news release. Independent contractors and other workers may be exempt from minimum wage pay, but most workers are eligible for it. Employers must also post information about wages, hours and working conditions at an employee-accessible area. As a result of the minimum wage increase, eligible employees will also see an increase in the minimum overtime pay required.

Some cities in California have higher minimum wages than state law. According to KTLA (12/28/15), San Francisco, Oakland and Emeryville have minimum wages of more than $12. Los Angeles reportedly may raise minimum wages in the city to $15 per hour by 2020.

Cheerleaders in California might notice the biggest jump in pay. As of January 1, all California sports teams are required to pay their cheerleaders at least minimum wage. Although that will only affect a small number of games this season, it will affect all games for California teams going forward.

Cheerleaders are frequently treated as independent contractors instead of as employees, despite their supervisors having a great deal of control over their appearance and their cheerleading schedule. The new law (AB 202) requires that cheerleaders in California be treated as employees, meaning they are also eligible for paid sick leave and meal breaks.

In recent years, lawsuits have been filed by cheerleaders in various sports leagues alleging their pay often amounts to well below minimum wage when expenses, fees and penalties are factored in. Some of those lawsuits have been settled for millions of dollars, while others are still pending.

California Judge Grants Preliminary Approval to $1.8 Million Settlement

Los Angeles, CA: A California Wage and Hour Employment class-action lawsuit reached an important milestone a week ago when a US District Court Judge gave a nod to a settlement worth $1.8 million. Up to 22,000 class members will share in about $1.2 million, with the remainder going to attorney’s fees.

The defendant in the case is the Burlington Coat Factory Warehouse Corp (Burlington). According to court records, the allegations centered on the deprivation of rest periods and a requirement for bag checks that were conducted off the clock, allegedly depriving class members of wages to which they were entitled.

The original California wage and hour lawsuit (Armida Rodriguez v. Burlington Coat Factory Warehouse Corp. et al., Case Number 2:13-cv-02426, in the US District Court for the Central District of California) was filed in 2012 by named plaintiff Armida Rodriguez. Two years later, in November 2014 Rodriguez filed her motion to certify the class given the belief that Burlington maintained a “uniform policy” relating to rest periods and bag checks that would have affected all non-exempt employees in Burlington’s 60 locations across California, in similar fashion.

According to court documents, the settlement benefits all current and former hourly, non-exempt (for overtime purposes) employees of Burlington who worked in any one of its retail stores in the state of California from October 2008 through the date of settlement approval.

The plaintiff, in her California wage and hour lawsuit, asserted that Burlington maintained a handbook of policies and protocol requiring managers to conduct bag checks for security purposes after hourly employees had already clocked out for the day.

On Wednesday, December 2, it was reported that US District Judge Dean D. Pregerson granted preliminary approval of the $1.8 million settlement. The next step in the process comes early in the New Year, when Judge Pregerson will hear arguments for a final fairness and approval hearing on February 29, 2016.

In his order granting preliminary approval, Judge Pregerson referenced the “risk, expense, complexity and likely duration” of trying the litigation, together with the risks associated with trying to maintain class-action status throughout a pending trial.

Thus, he granted preliminary approval of the settlement.

The requirement for bag checks at major retail establishments has long been the bane of low-paid retail workers who are often required to wait in long lines for mandated bag checks for security purposes. The problem, plaintiffs say, is that such security checks are undertaken on their own time, after they have clocked out for the day. In some cases, employees are often required to undergo security checks prior to commencing their meal breaks - again, on their own time, which also is alleged to impinge on the length of time they have available for nourishment and rest.

To combat these alleged California wage and hour injustices, plaintiffs have taken to the courts for redress.

Plaintiffs Have Another Go at Farmers Insurance Exchange in California Lawsuit

Los Angeles, CA: It’s déjà vu for Farmers Insurance Exchange (Farmers), following the filing of a California wage and hour class-action lawsuit alleging Farmers improperly classified commercial claims representatives as exempt from overtime pay, while often being made to work upwards of 50 to 60 hours per week or more without compensation.

A similar class-action lawsuit (Bell v. Farmers Insurance Exchange) was settled some time ago following a landmark judgment against the defendant. That judgment, ending a lawsuit originally filed in 1996, was worth $210 million.

“Although many of the plaintiffs were Farmers claims adjusters at the time that Bell v. Farmers Insurance Exchange was resolved, they were not personal lines adjusters and accordingly were not included as class members in the final resolution of the case,” the complaint filed November 2, 2015 states. “Despite the fact that plaintiffs had similar duties and responsibilities to those claims adjusters, they were not considered members of the plaintiff class in Bell v. Farmers Insurance Exchange and accordingly have never received compensation for the overtime hours that they worked.”

This latest California wage and hour class action seeks to represent all those who were not part of the original lawsuit - current and former claims reps employed by the insurer in the state of California from May 2003 to present day. The lawsuit has been brought by the R. Rex Parris Law Firm.

California law requires that hourly, non-salaried workers are paid overtime for any hours worked beyond 8 hours in any given day or 40 hours in any given week. Meal breaks and rest periods are also mandated and must be compensated in kind if missed or not provided. There are various provisions in the California labor code that free employers from paying overtime, including jobs that are classed as management, or IT professionals who are salaried and whose pay has reached a certain threshold, as an example. Thus, there are legitimate instances where employees are exempt from overtime.

However, employers are also known to bend the rules in an attempt to avoid paying overtime to employees who properly qualify.

It has been alleged that following the settlement in the Bell v. Farmers case, the insurer duly reclassified their affected employees as qualifying for overtime, but in name only. A subsequent lawsuit filed in Los Angeles Superior Court in 2012 accused the insurer of continuing to deny their qualifying employees overtime while at the same time discouraging overtime pay, while maintaining a workplace culture that promoted and required work off-the-clock.

The 2012 lawsuit, which was not a class action but proceeded as an individual claim, was dismissed outright without prejudice by the court in June 2015. A new class action against the insurer was filed in September, apart from the lawsuit noted below which was filed earlier this month.

John Bickford, an attorney with the R. Rex Parris Law Firm, noted that “insurance companies are all about making profit for themselves and trying to cut corners when they have to pay.”

The California wage and hour class action is Karen Mickey et al. v Farmers Insurance Exchange, Case Number BC599916, in the Superior Court of the State of California, County of Los Angeles.

Uber Appeals Class-Action Ruling

San Francisco, CA Following a federal judge’s ruling certifying the Uber lawsuit as a class action, Uber has filed an appeal of the judge’s ruling. On September 1, U.S. District Judge Edward Chen ruled that a California lawsuit challenging Uber’s business model could move forward as a class action. The lawsuit alleges that drivers for the ride-sharing company are employees and not contractors, and therefore should receive the same protections and benefits that employees are entitled to.

The original lawsuit was filed by three drivers, who alleged that they should be considered employees because Uber controls many aspects of their job. Under labor guidelines, there are certain conditions that must be met for workers to be considered independent contractors. The plaintiffs allege Uber controls everything from what the drivers charge to the circumstances surrounding termination, making them employees. Uber has argued that its drivers prefer to be independent contractors because it allows them flexibility in setting their hours.

The distinction between independent contractor and employee is an important one for workers and employers. True independent contractors have more discretion in their work, but they also do not have job protections including wage and hour protections, overtime or benefits including health insurance. They are also not generally eligible for work expenses, such as the cost of fuel or car maintenance. This makes independent contractors less expensive for employers.

According to The Wall Street Journal (9/15/15), Uber has filed an appeal of Judge Chen’s ruling, arguing that the three drivers named in the lawsuit cannot represent the thousands of other drivers, given the differences in individual circumstances. A ruling on class-action status is not a comment on the merits of a lawsuit but a determination that plaintiffs all have similar questions of fact. The Los Angeles Times (9/2/15) notes Judge Chen found that the drivers have similar enough circumstances, including being held to the same Uber controls.

Uber is not the only company to face such a lawsuit. Lyft, another ride-sharing company, and some home-cleaning companies also face lawsuits alleging their workers are misclassified as independent contractors.

Meanwhile, even employees with protections are filing lawsuits alleging their employers do not follow California employment regulations. A class-action lawsuit has reportedly been filed against Vons in California, alleging employees were not properly paid for overtime, not always given minimum wage and were not given proper breaks. The lawsuit claims time cards were falsified to make it appear employees were given adequate meal and rest breaks. Furthermore, plaintiffs allege they worked up to 12 hours in a day without being paid overtime.

Parking Valets Allege Misclassification As Independent Contractors

San Francisco, CA Employees of Luxe Valet Inc. allege there is nothing deluxe about their jobs with the valet company, alleging in a pending California labor lawsuit that their employer has illegally misclassified them as independent contractors. In so doing, Luxe is attempting to avoid payment of payroll taxes, overtime pay and the necessary meal breaks and rest periods as required under California labor law.

Luxe Valet operates in similar fashion to Uber and Lyft. Consumers can contact Luxe parking valets through a mobile app for car parking services. According to the lawsuit, Luxe provides parking valets with specific instructions and directions with regard to interacting with customers and parking their vehicles, effectively controlling and directing the entire process. It’s this micro-managing of the process that has provided the fodder for plaintiffs to take exception to a classification as an independent contractor, when parking valets have so little influence in the process.

There are scripts to follow - or so it is alleged - suggesting what to communicate to customers. Directives are provided as to where and how to enter a parking lot and where to park the vehicles. Processes involved in securing customer’s keys and returning vehicles to the customer are also tightly controlled, or so it is alleged.

Given the foregoing, plaintiffs suggest there are no grounds to classify employees as independent contractors as there is no independence implied or provided. Thus, the correct classification should be employee under California and labor law, together with the benefits that an hourly employee would enjoy as an employee - namely overtime pay, meal breaks and rest periods as mandated under California labor employment law.

There are various instances when employees are exempt from overtime pay and other labor statutes guaranteed under the California labor code including management, for example. Jobs that fulfill a management or supervisory role are normally salaried jobs at a higher rate of compensation, and thus are exempt from overtime. Jobs in the IT industry that command a high-wage grid are also exempt - as are independent contractors, given their non-employee status and their provision of a service to the employer under contractual obligations but with a fair degree of independence and autonomy.

Plaintiffs in the foregoing California labor lawsuit allege there are no such provisions for independence and autonomy and thus, Luxe has erred in classifying parking valets as independent contractors.

The California labor code class action was brought by a former parking valet with Luxe. The lawsuit, Case No. CGC-15-545961, was filed in San Francisco Superior Court and is currently pending.

ULTA Stores Hit with Overtime Pay Class-Action Lawsuit in California

Los Angeles, CA A class-action lawsuit alleging affronts to California labor law has been filed against ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA). The complaint holds that store and salon managers classified as exempt from overtime according to the California labor code are in fact improperly classified given that the majority of tasks performed by the plaintiffs are non-managerial in nature.

“Because Defendant allocates insufficient staff hours to each store, while simultaneously requiring [store managers] to perform the full gamut of customer service, sales, stocking, and cleaning tasks, Plaintiffs and Class Members are misclassified as exempt because they are forced to spend the majority of their working time performing the same non-managerial tasks being performed by non-exempt employees, such as Cashiers and Stock Associates,” the lawsuit claims.

“As a result, [store managers] work long hours, and often skip their meal and rest breaks, without receiving any overtime compensation or compensation for missed meal and rest breaks.”

Under California and labor law, hourly employees are entitled to overtime pay for any hours worked beyond eight hours in any given day or 40 hours in any given week. However, employees who have achieved a certain salary threshold, or those who are employed in jobs that are classed as management, are exempt from overtime. In other words, if their working day or working week from time to time exceeds the normal maximums, there is no requirement to pay overtime due to the management or supervisory role of the employee, or the salary level earned by that employee.

In many cases, however, employers attempt an end-run around California labor employment law by incorrectly classifying employees as managers or supervisors when, in fact, they primarily perform menial tasks more appropriate for an hourly employee.

The complaint notes that ULTA is a sizeable entity, with a total of 817 stores in 48 states, including 97 locations in the state of California. A Form 10-K filed with the US Securities and Exchange Commission (SEC) notes that ULTA is the largest beauty retailer in the Continental US as a vendor of cosmetics, haircare products, salon styling tools, skincare products, fragrance and nail care products. ULTA is described as also offering in-store salon services at the majority of its locations.

Three former California store managers are serving as the lead plaintiffs in the California labor employment law class action, which seeks to represent all current and former store managers who may have been employed by ULTA from September 9, 2011 through to the present day.

The case is Quinby et al. v. ULTA Salon, Cosmetics & Fragrance, Inc., Case No. 3:15-cv-04099, in the US District Court, Northern District of California.

California Labor Lawsuit Alleges Failure to Pay for Missed Meal Breaks

Los Angeles, CA A former employee of Guess Retail Inc. (Guess) has launched a California labor lawsuit citing missed meal breaks, lack of compensation for those missed meal breaks, improper payment of wages upon termination and other deficiencies related to payment of wages and records. The lawsuit is proposed as a class action, and is the third lawsuit Guess has faced this year.

According to court documents, plaintiff Kriss Burgos was a non-exempt hourly employee at a Guess location in California. She alleges that she was required to toil without the availability of rest periods or a meal break, and was never compensated. California labor law holds that employers provide the capacity for regular rest breaks and an uninterrupted 30-minute meal period enjoyed while completely off-duty, after the fifth hour of duty.

By failing to compensate Burgos and other potential class members in the proposed class action, the employer in actual fact eked additional work hours from its employees without paying for the extra work, or so it is alleged.

“Defendants have failed to provide plaintiff and members of the proposed California class one or more rest periods on one or more days of their employment with defendants, and have failed to compensate them at the rate of one hour or pay at their regular rate of pay for each day on which one or more meal periods were not provided,” Burgos said in her California labor lawsuit.

Burgos - who was reportedly terminated from her position - also accuses Guess of failure to pay her final wages in a timely fashion. California labor employment law mandates that final wages to a terminated employee should be paid within 72 hours. Burgos alleges that not only were the final wages not paid on time, there were also deficiencies in the final statement of wages.

The plaintiff is seeking class-action status for her California labor code lawsuit on behalf of any similarly affected employees of Guess dating back four years. Burgos makes five claims of violations under California and labor law and is seeking straight time, overtime and double compensation that Guess allegedly failed to pay, as well as penalties and compensatory damages, attorneys’ fees and costs. The California labor lawsuit is Burgos v. Guess Retail Inc., Case No. BC592087, in the Superior Court of the State of California, County of Los Angeles.

In April, Guess Inc. was served with a lawsuit brought on behalf of disgruntled consumers alleging deceptive comparison pricing involving outlet stores under the Guess banner.

Class-Action Status Given to Apple Wage and Hour Lawsuit

San Francisco, CA Plaintiffs in a California wage and hour lawsuit against Apple have had their class-action motion certified, after initially having the lawsuit dismissed. The main issue in the lawsuit is whether employees should be compensated for time spent waiting for security checks prior to leaving the job site. The lawsuit was filed on behalf of 12,000 current and former Apple employees, who allege they should have been paid for that time.

The initial lawsuit - which was dismissed in 2014 after a Supreme Court decision in a different case - was refiled. It alleges that because the security check is for the sole benefit of Apple and is done in all Apple retail stores across the US, that employees should be paid. Typically, employees undergo security screening after they have clocked out for their meal break or at the end of the day, meaning any time spent waiting for a manager to be free to do a check is unpaid time.

According to the initial lawsuit, that time can add up. For an employee leaving twice during a shift, the wait can mean anywhere from 10 to 15 unpaid minutes. For full-time employees, that adds up to uncompensated overtime.

The lawsuit calls Apple’s conduct regarding the unpaid security checks “illegal and improper” and says employees throughout the US are owed millions of dollars in wages and overtime. Amanda Frlekin, a named plaintiff in the original lawsuit, recorded between 10 and 15 uncompensated minutes during every shift, adding up to between 50 and 90 minutes over the course of the week.

“This daily 10-15 minute uncompensated waiting time during security checks was done in order to undergo searches for possible contraband and/or pilferage of inventory,” the lawsuit alleges. “Because such screening is designed to prevent and deter employee theft, a concern that stems from the nature of the employee’s work (specifically, their access to high value electronics and merchandise), the security checks and consequential wait time are necessary to the employee’s primary work as retail Specialists and done solely for Apple’s benefit.”

Workers are allegedly prohibited from leaving the store prior to a screening, and employees who refuse the security checks can face disciplinary action, including termination.

Apple has argued that the time spent undergoing bag checks is negligible and therefore should not be compensated. It also argues that not all managers conduct security screenings.

Uber Driver Is Employee, according to California Labor Laws

San Francisco, CA Companies like Uber have been called part of the on-demand or shared economy with entrepreneurial spirit and part of the new world order. But the California labor laws regarding misclassification could put the breaks on those monikers.

Last month, the start-up cleaning company Homejoy threw in the towel. With four lawsuits fighting over misclassification - like Uber, workers were classified as independent contractors rather than employees - CEO Adora Cheung said the company wasn’t able to raise funding, according to the San Francisco Chronicle.

The California Labor Commissioner’s Office on June 17, 2015 said that Uber must classify its drivers as employees rather than independent contractors. As employees, the drivers would be entitled to minimum wage, meal breaks and overtime (many drivers say they typically work 12-hour days), reimbursement for expenses such as gas and car maintenance, and other benefits and protections.

The ruling by the California Labor Commissioner’s Office came about in a claim brought by an Uber driver. San Francisco-based Barbara Ann Berwick was awarded $4,000 in expenses, which Uber is appealing. If the ruling holds, other Uber drivers could claim employee wages and benefits.

Uber on July 9 filed a motion to oppose a class-action lawsuit filed in California’s Northern District Court claiming that more than 160,000 of its drivers should be classified as employees and are therefore misclassified. Uber argues that, should the class-action suit be successful, it “could force Uber to restructure its entire business model.” It could also have a ripple effect across the burgeoning start-up culture, leading other companies with similar structures to recalibrate,” according to TIME.

On the heels of the Uber California lawsuits, Toronto taxi drivers are launching a class-action lawsuit against Uber, seeking more than $307 million (USD). Reuters reported that the proposed case covers all drivers and taxi companies in Ontario.

And Uber is also up against Congress, which wants to create some kind of a “benefits safety net.” In her first economic policy speech, Hillary Clinton said that “This ‘on demand’ or so-called ‘gig economy’ is creating exciting opportunities and unleashing innovation but it’s also raising hard questions about workplace protections and what a good job will look like in the future.” According to The Hill, Senator Richard Blumenthal (D-Conn.) took her comment one step further, saying that misclassifying workers is

Labor attorney Shannon Liss-Riordan said that two California misclassification cases are headed toward trial. She believes that companies such as Uber will continue to be successful if they reclassify their drivers as employees and assure that the drivers are earning at least minimum wage. Start-up companies argue that independent contractors have more flexibility and can be their own bosses, but as Liss-Riordan points out, employers also give their employees flexibility, and it is a growing trend.

One estimate has Uber valued at $41.2 billion, making it the most valuable start-up in the US.