Employees suffering from wage theft continue to rack up big victories. Failure to pay most workers minimum wage or overtime at time and one half is a federal offense. Unfortunately, that doesn’t stop some employers from shorting employees’ paychecks. Four cases from earlier this month give hope to workers.
Oil Company Day Workers – Shell Oil
Shell Oil Company is a huge, multibillion dollar oil company. Shell has hundreds of oil and gas wells here in the United States and in the Gulf of Mexico. At most drilling sites, Shell has wellsite foremen or wellsite managers. Some of these workers are hired by the company as employees while others are labeled as independent contractors. One of these wellsite foremen is James Reynolds.
Reynolds claims the company pays its foremen by the day. According to his lawsuit, Shell pays a flat rate without overtime even though the foremen routinely work more than 40 hours per week. Often the foremen worked 12 or more hours and for weeks on end yet received no extra pay, let alone time and one half overtime.
Under the Fair Labor Standards Act, so-called independent contractors can bring a claim for misclassification. Simply because the employer classifies a worker as an independent contractor doesn’t mean he or she is. The law looks at a number of factors including the level of control the company has over the worker.
Reynolds says he worked side by side other day workers, some were employees while others were regarded as contractors. Their duties were the same. The big difference, of course, is that contractors don’t receive benefits and overtime pay.
According to Reynolds, Shell set his schedule, offered him retention bonuses, and provided him with any equipment he needed. As a practical matter, he also wasn’t able to work for others. All these facts suggest that Reynolds was misclassified and really is an employee.
Under the Fair Labor Standards Act, if Reynolds proves his allegations, he will be entitled to double damages and legal fees. His case was filed as a collective or “class action” meaning the court could include all other day worker wellsite foremen in any relief.
Burlington Coat Factory Managers – Overtime Claims
A group of assistant store managers working for Burlington Coat Factory claim they were illegally denied overtime. Under the Fair Labor Standards Act, managers are exempt from overtime. Many companies try to claim line supervisors or foremen are managers. Generally, in order to be exempt from overtime, a manager must be salaried, supervise two or more workers and have significant input in hiring and firing decisions. If any of these factors aren’t met, so called “managers” become eligible for premium overtime at time and one half pay.
More than 500 assistant managers are covered by the Burlington Coat wage theft case which was filed in 2011. The case seeks back wages and double damages going all the way back to 2008. The company is seeking to decertify the class meaning each manager would have to file his or her own lawsuit.
To qualify as a class, the court must find that the workers have a similar position and perform similar duties. Burlington claims that although they are all assistant managers, each performs significantly different duties making it impossible to handle the case as a class.
Over the last several years, extensive discovery in the case has been undertaken. Much of that is in the form of depositions (asking the managers questions under oath.) In response to Burlington’s late request to decertify the class, the lawyers for the managers accused Burlington of cherry picking “snippets” from the depositions and only highlighting the differences. The workers’ lawyers say the managers perform similar duties.
The Burlington Coat Factory managers should get a big boost from a similar case decided this week in New York involving assistant store managers for Duane Reade
Duane Read Wage Theft Case
Assistant managers for Duane Reade have been fighting a particularly difficult battle over their wage theft claims. On four different occasions, Duane Reade challenged the class certification of the assistant managers. Like Burlington Factory, Duane Reade hopes that by destroying the class and forcing everyone to sue separately, most managers will give up. It is much easier for a large group of workers to take on their employer than for individual workers to find a lawyer willing to pursue separate claims.
Despite four attempts by Duane Reade to toss the class certification, on June 9th a New York federal judge ruled in favor of the workers. Even though the court had already ruled in favor of the workers during a prior hearing, Duane Reade tried to argue that “late discovered” new evidence should cause the court to reverse its own prior ruling! This shows the fear employers have of class actions under the Fair Labor Standards Act.
In reaffirming his earlier decision, Judge Paul Oetken found that the pharmacy chain assistant managers relied on the store manager and HR personnel for hiring and firing decisions. The court found that the assistant managers didn’t even have much say in scheduling. As noted above, if managers don’t have independent authority and can’t hire / fire, they are generally entitled to overtime.
Although there were some differences in the duties of each store manager, the court said, “Commonality does not require plaintiffs to show that class members perform identical duties – an impossible task,’ but only that they are ‘largely consistent…, which lends itself to common determination.” Commonality is the key when certifying a class.
The case can now proceed to trial. We suspect that Duane Reade will settle instead of litigating.
Big Win in Pizza Worker’s Overtime Theft Case
In another win for workers, a Philadelphia federal judge refused to dismiss an overtime claim filed by an employee of J&J South Philly Pizza. Emilio Diaz and three others claim they often worked 65 to 70 hours per week as laborers and cooks for the popular South Philadelphia pizza shop but were not paid overtime.
J&J didn’t try to argue that the cooks were managers or independent contractors, instead they sought to dismiss the case because the restaurant wasn’t engaged in commerce or the production of goods for commerce. Because the Fair Labor Standards Act is a federal law, Congress rooted its jurisdiction of the Commerce Clause of the U.S. Constitution. (Many federal laws get their authority from the Commerce Clause.)
While a child’s front lawn lemonade stand might not be engaged in commerce, most commercial businesses are. There is a presumption of interstate commerce if the sales of a business are over $500,000 per year. Here Diaz specifically claimed sales in excess of one half million and said the pizzeria regularly relied on shipments from Sysco which were transported in interstate commerce (trucks).
In our experience, employers will try a wide variety of pretrial motions to toss wage theft claims on technicalities. They will also try to break up the class. Employers know their best chance of winning is before a judge on a technical violation. Once the jury gets the case, most jurors are sympathetic to workers, particularly workers who have been exploited.
MahanyLaw Fights Wage Theft Claims
Fighting corporate America isn’t easy. As you can see from these four cases, there is a lot involved in bringing a successful wage theft case. The law rewards workers who win, however, with double damages. As noted above, the Fair Labor Standards Act insures workers receive minimum wage, that workers are paid for all hours worked and that workers get time and one half for work in excess of 40 hours in a 7-day period.
The law also forces employers to pay for the attorneys’ fees when the workers win. Finally, the law has anti-retaliation protections.
Because of the legal fee provisions and complexities of the law, there is no reason why workers should try to take on their employer alone. If you feel you are the victim of wage theft, give us a call. We are not afraid to take on the biggest and toughest employers. And we don’t get paid unless you win.
For more information, contact attorney Katherine Holiday at or by telephone at (414) 258-2375. The call is free and completely confidential. You can also visit our FLSA information page.
MahanyLaw – America’s Wage Theft Lawyers