AT&T Socked With Wage And Hour Class Action Suits

December 18, 2009

An article in The American Lawyer details new class-action lawsuits filed against AT&T for alleged wage-and-hour violations, in which AT&T allegedly classified thousands of employees as “first-level managers,” and accordingly classified them as exempt employees under federal wage laws who could not earn overtime, even though those employees did not have any actual managerial authority.

Although we do not speculate on the probability of success in that case, employers need to make sure they are not cutting any corners in abiding by federal and state wage laws, like the Fair Labor Standards Act.  Trying to classify non-exempt employees as exempt employees, classifying employees as independent contractors, and so on are common things that employers have done to try to cut payroll and overhead costs in this tough economy.  But these actions only get the employer in trouble down the road.  Employers should contact Jessica M. Kelty before trying to get too creative in evading these regulations, to make sure that additional liability (and future lawsuits and class-actions) is not on the horizon.


Wal-Mart Settles Largest Wage-And-Hour Class Action

November 4, 2009

The Nevada U.S. District Court approved a settlement resolving 39 class action cases brought on behalf of roughly three million employees against Wal-Mart for allegedly failing to compensate for off-the-clock work and overtime, denying them rest breaks, and falsifying time records.  It’s the largest wage-and-hour class action on record, according to an article in the National Law Journal. 

Wage-and-hour claims against employers are multiplying in number, and employers need to make sure that their employment and compensation policies are consistent with federal and state law, especially the Fair Labor Standards Act.  If you have questions about whether your company’s policies are compliant, please contact Jessica M. Kelty.


New Opinion: No Retaliation Under FLSA For Oral Complaints

October 16, 2009

The Fair Labor Standards Act makes it unlawful for an employer “to discharge or in any manner discriminate against any employee because such employee has filed any complaint . . . under or related to this chapter[.]“  This is FLSA’s anti-retaliation clause, preventing employers from taking adverse action against employees that have made complaints under the Act.  Several other Acts, like the Occupational Safety and Health Act, have similar provisions.  However, courts have disagreed over what “filed any complaint” means.  Does it include intra-office complaints, or only complaints to judicial and administrative bodies?  And does it include oral complaints or only written complaints?  These questions are important in determining whether an employee has triggered the anti-retaliation protections of the Act.

In Kasten v. Saint-Gobain Performance Plastics Corp., the U.S. Court of Appeals for the Seventh Circuit, sitting en banc, denied a request to review a panel decision that held that “filed any complaint” included intra-office complaints, but also held that the provision required a written submission be filed.  Three judges dissented from the denial, arguing that other circuits, including the Sixth, Eighth, Ninth, and Tenth, have all found oral complaints to be covered, while noting that the “vast majority” of the circuits have agreed that intra-office complaints are covered as the panel held. 

What is noteworthy about this for Virginia businesses is that our own Fourth Circuit held, in Ball v. Memphis Bar-B-Q Co., Inc., 228 F.3d 360 (4th Cir. 2000), that internal complaints are not covered under the anti-retaliation provision, and neither are oral complaints.  Only written complaints to judicial or administrative bodies bring an employee under FLSA’s protections.  Thus, we have what appellate lawyers call a “circuit split,” which makes these issues ripe for the consideration of the U.S. Supreme Court to finally resolve the matter, should someone appeal this all the way up.  The Fourth Circuit’s reading of “filed any complaint” appears to be in the minority — even the Seventh Circuit only agrees with the oral/written part — but for the time being employers need to take note of the differences between the circuits in handling their employment matters until these issues are resolved.


New Study: Many Employers Violating Wage/Hour Laws

September 10, 2009

new article by the National Law Journal examines the results of a recent study that found “employment and labor laws are regularly and systematically violated” by employers in New York, Los Angeles, and Chicago, in virtually every industry.  Among the findings:

  1. 76% of those workers interviewed who had worked overtime in the previous week had not been paid time and a half for it, as required under the Fair Labor Standards Act;
  2. 26% were being paid less than the minimum wage required in the jurisdiction.

Although the study only covered those three cities and was commissioned by pro-union and pro-labor groups, employers need to know that the Department of Labor recently announced plans to hire 250 more investigators to help root out wage and hour violators.  That means that employers need to be more careful than ever that they are following the standards set forth in the FLSA and pay their workers properly.  The Act allows aggrieved workers to recover triple their damages plus their attorneys’ fees, so those employers who think they can cut corners in the short term may find their long-term liability exposure to not be worth the risks. 

GCPC’s attorneys have experience in dealing with FLSA claims and helping employers audit their HR practices to ensure compliance with state and federal employment regulations.  Please contact Merritt Green if you have any questions.


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