Articles Posted in Wage & Hour Violations

The City of San Francisco has agreed to settle a Department of Parks and Recreation overtime discrimination suit for $250,000 pending approval from the city council, as reported in the Bay Citizen today.

The suit in question, Michael Horan v. City and County of San Francisco et al., was filed in the San Francisco Superior Court in 2009 by an employee of the city’s Department of Parks and Recreation. The plaintiff Michael Horan had worked as a security guard for the Parks Department for a number of years. During his employment, Hogan alleged that workers were collecting overtime benefits for hours they had not worked, and that his supervisor discriminated against non-Asian Americans in the distribution of those hours.

Hogan filed a complaint with the Parks Department about the abuse of overtime hours and the discrimination in the allocation of those hours. After he complained, he immediately faced retaliation and retribution from the workers in his department. He was verbally abused and threatened with physical harm. His complaints to the Department were ignored, and in November 2008 he finally left his job, fearing for his safety.

The city of Scranton, Pennsylvania, in a move that has garnered national media attention, has cut all its city workers’ salaries to minimum wage, as reported last week by the New York Times.

The mayor of Scranton, Chris Doherty, made the drastic move after being alerted last week that only $5,000 remained in the economically troubled city’s bank account. Since then, the bank account balance has increased to $133,000, but that is not nearly enough for the city’s expenses for even a single day. As the New York Times reported, Scranton’s decision to unilaterally cut its workers’ pay is unprecedented, and it has expectedly met immediate resistance from the workers’ unions.

City workers received just days’ notice of the change, which is in violation of their union contracts with the city. The unions had immediately filed suit in state court for an injunction as soon as they had received notice of the mayor’s plan. The court found in their favor, forbidding the mayor from cutting the workers’ salaries. Ignoring the injunction, the mayor cut the salaries and issued checks this week for $7.25 an hour for all the city’s workers, including all the city’s firefighters, teachers and policemen, as well as the mayor himself. As a willful violation of the court’s order, the unions have formally requested the court to find the mayor in contempt, which might put him into jail.

Hole front-woman and former wife of Kurt Cobain Courtney Love has just been hit with an overtime suit in Los Angeles Superior Court this week, as reported by the San Francisco Chronicle. The suit was filed by a former administrative assistant who claims Love refused to pay wages, business expenses and overtime during her year of work for the singer. This case marks the third overtime lawsuit against a major celebrity in as many months, following the suits against Celine Dion and Sharon Stone this summer.

The complaint filed this week alleges that Courtney Love refused to pay her assistant overtime, reasonable business expenses and back wages. Jessica Labrie v. Courtney Love Cobain also sets out claims of violation of the employment contract and fraudulent misrepresentation. Labrie claims that she began work for Love in June 2010 after promises that the singer would pay her college tuition and eventually get her a job at her music management company, among other promises. Labrie claims that Love never fulfilled any of her promises and in fact harassed and discriminated against her from June 2010 to June 2011.

Labrie’s overtime claims are premised on the fact that Love had her work over 60 hours a week without paying her overtime at time and a half. Under California Labor Law §510, employers must pay their employees time and a half for all hours worked over 8 hours in a day or 40 hours in a week. There are very few exceptions to this rule, such as for workers who are independent contractors and those who are professional, managerial or outside sales representatives. As Labrie here would not be found to fit within any of these exceptions, Love probably violated the labor code in refusing to pay her overtime for her work.

San Francisco’s Tower Car Wash has agreed to reimburse its workers $500,000 to settle a wage theft suit, as reported last week in the San Francisco Chronicle. The car wash will also pay the City an additional $70,000 for attorneys’ costs and fees. The popular Mission Street car wash had been hit last August by the suit by the City and County of San Francisco after complaints by workers that they weren’t being fully paid for their hours of work. This case exposes the increasing problem of wage theft in San Francisco and across the nation, especially in these trying economic times.

The case in question, City and County of San Francisco v. Vladigor Investments, Inc., dba Tower Car Wash et al was filed last August by the City Attorney in San Francisco Superior Court on behalf of almost 100 of the car wash’s current and former employees. The complaint alleged that Tower Car Wash had a pattern and practice of refusing to pay its workers for their hours at the workplace over a 4-year period. The City alleged that workers at the car wash were required to arrive to work at pre-scheduled times each day. When they arrived, they were placed into a separate room to wait until the car wash was busy. Once the car wash was busy, they were then allowed to clock in. For many workers, their waiting time topped 5 to 6 hours each week. This time was not paid, however, although the workers were required to be there on time or face termination.

The City Attorney set out that these practices violated both California and San Francisco labor laws because the workers should have been paid for the time they spent waiting. First, these practices violated the San Francisco Minimum Wage Ordinance because the time the workers spent waiting before they were allowed to clock in lowered their hourly rate to less than the minimum wage, in violation of the statute. The City also alleged that these practices violated California overtime pay provisions because oftentimes the time spent by the workers at the car wash exceeded 8 hours a day or 40 hours a week when the waiting time was included. As these hours were not calculated by Tower Car Wash, that often left workers working over 8 hours a week without being paid their required time and a half wage. The City also set out that Tower Car Wash violated state and local ordinances in their practice of sending workers home if the wash was not busy enough. Tower Car Wash would send workers back after they waited for up to 2 or 3 hours if the wash was not busy, not allowing them to clock in for any of their time waiting. This practice is in violation of the labor laws requiring payment for all hours worked. The City set out that Tower Car Wash also violated California and San Francisco labor requirements that companies pay any workers who report to work at least a half day’s pay even if they have to send them home.

A California federal judge just certified an overtime pay class action suit against Office Depot last week, exposing the Fortune 500 company to perhaps millions of dollars of liability for failing to include bonus pay in its overtime calculations. The suit, Provine et al v. Office Depot Inc., pending in the Northern District of California court, concerns thousands of workers at the company who received incentive bonus pay in the form of $50 “Bravo Cards.” The federal judge has allowed the suit to continue to determine whether Office Depot violated California and federal labor laws in failing to pay overtime on the 5,940 such cards it gave out. This suit follows a similar case pending in the Central District of California court by workers at Bloomingdale’s who similarly alleged their company failed to include their commissions and other bonus pay in their overtime pay calculation. This Office Depot suit as such stands as an example of a growing issue in California labor law today of the proper way to include bonus pay in overtime calculations.

Provine et al v. Office Depot Inc. was filed by a worker at the Antioch Office Depot, just outside San Francisco, who claims the company violated California labor law and the Fair Labor Standards Act in failing to properly calculate his overtime pay. The dispute centered on Office Depot’s bonus incentive “Bravo Awards” program. In the Bravo Awards program, workers were given $50 based on a monthly lottery of eligible workers who had already received recognition for their hard work that month. As overtime pay is calculated based on a “regular rate” of pay that includes non-discretionary bonuses or commissions, Provine claimed that the $50 he was awarded as part of the program was non-discretionary and should have been included in determining his overtime pay. Provine in his suit also filed on behalf of all other workers who had received Bravo Awards that had similarly not been included in their calculation of overtime pay.

This issue of the proper calculation of bonuses in overtime pay is often overlooked, but it can be costly for both workers and employers. Another recent case in California by a worker at Bloomingdale’s, Johnmohammadi v. Bloomingdale’s, alleged a similar set of facts, citing the company’s failure to include bonus pay in determining the “regular rate” of base pay for its overtime calculations. In the Provine case, Office Depot claimed that it did not make a mistake in not including the bonus incentives in its calculation because the “Bravo Awards” bonuses were discretionary. The California federal court rejected this argument, finding that although the bonuses were discretionary in that managers were able to give them to any workers they wished who fulfilled certain criteria, the fixed amount of $50 for such awards made them no longer so.

K-9 police officer dog workers have filed suit in federal court demanding overtime pay for their work spent at home training and taking care of the police canines. The case in question, Yuhouse & Wilson v. Borough of Wilikinsburg, brings a long-settled issue of overtime law again into the spotlight and demonstrates how many employers, including state and local governments, still do not take seriously some requirements of federal labor and employment law.

Yuhouse & Wilson v. Borough of Wilikinsburg was filed in federal district court by two police officers at the Wilikinsburg Borough police department who claimed they were not paid overtime by their department for the hours they spent at home cleaning, feeding, training and otherwise caring for their K-9 (canine) police dogs. The issue of paying police officers for the time spent caring for their canine dog workers is a settled issue in federal law, ever since the Supreme Court in their 1985 decision in Garcia v. San Antonio Metropolitan Transit Authority set out the requirement for local governments to pay overtime to their eligible public employees for such use of their time.

Under the Fair Labor Standards Act, all non-exempt employees are required to be paid time and a half for hours worked more than 40 in a week. In California, the requirement is even more stringent, with all hours worked over 8 in a day requiring overtime as well. For the police officers in Wilikinsburg, as with most overtime cases, the question is not whether they worked more than 40 hours in a week. It was clear from their records that they spent at least 40 hours a week at the job and the time spent with the canines at home added at least 30 minutes to their workday. Instead, the questions are whether the police officers are exempt employees and whether their training, feeding and caring for their canine dogs is properly “work” under the law.

The Grammy-Award winning singer Celine Dion has just been sued in federal court for refusing to pay overtime to workers at her $20 million Florida mansion, as reported yesterday by the New York Daily News. The suit Sturtevant v. Feeling Productions Inc. and Celine Dion, filed in the District Court of the Southern District of Florida, requests the singer and her record producer husband pay unpaid overtime wages, damages and attorneys’ costs. This suit makes Celine Dion the second high-profile celebrity to be charged with refusing to pay overtime to her workers this year, after Sharon Stone was hit by a similar suit in California last month.

The suit was filed by Keith Sturtevant, a warehouse manager for Celine Dion who also performed work duties at her Florida mansion from March 2009 to June of this year. In the complaint, Sturtevant claims that the singer categorized him as exempt from the overtime provisions of the Fair Labor Standards Act by giving him the title of “warehouse manager” although he was the sole employee at the singer’s warehouse and did not have the power to hire or fire workers. Sturtevant also claims that he spent much of his time working at the singer’s mansion performing such duties as fixing ice makers, cleaning the shutters of her house, building stages and repairing kitchen appliances. He also claims that he was sent on a number of unrelated errands as well. Sturtevant claims that considering the overall character of his work duties, he was only categorized as a “manager” so that Celine Dion could avoid paying him overtime. Sturtevant also claims that other workers for Celine Dion were also miscategorized as independent contractors even though most of their work was at the singer’s mansion and was under her control. He filed suit for himself and on behalf of all these other similarly situated workers for the unpaid overtime wages he claims were due.

This suit in federal court, beyond being an embarrassment for the singer is also evidence of the continuing relevance of the issues of overtime and the categorization of independent contractors in labor and employment law today. Many employers have been miscategorizing their workers as independent contractors or otherwise exempt from the overtime laws for years, but only recently has the issue come into the spotlight as workers around the country have felt the pinch during this economic recession. The Department of Labor and the IRS have responded by warning that they will take a more aggressive stance towards those employers who wrongly categorize their workers as independent contractors. Last September the Department of Labor and the IRS signed a memorandum of understanding agreeing to work together to identify and prosecute employers who wrongly categorize their workers as independent contractors. Since then 13 states have followed suit and agreed to cooperate with the Department of Labor to supply information to identify such employers. Employers who categorize their workers as exempt managers, executives or professionals will also be carefully scrutinized.

A class action suit against Walgreens was just filed by California employees alleging that the company forced them to work off-the-clock without paying them their wages and overtime due. This suit, Hodach et al. v. Walgreen Co., exposes Walgreens to up to tens of millions of dollars in liability for not paying wages and overtime for off-the-clock work for its tens of thousands of workers in its 270 California stores. The case, which has employees alleging that Walgreens forced its workers to have their bags checked at the end of their shifts after they had already punched out, is almost identical to the January 2012 class-action suit against California Forever 21 stores and demonstrates that this issue is an increasingly important one for employees across the state.

Hodach et al. v. Walgreen Co. was filed last month in Sacramento Superior Court and the complaint alleges a number of violations by Walgreens of California labor and business laws. The suit was filed on behalf of all of Walgreens’ hourly workers across the state, although it is not clear if the court will allow class action certification of such a large number of potential plaintiffs. The plaintiffs allege that Walgreens required its employees to undergo security bag checks at the end of each shift, undertaken in order to deter theft of merchandise by the workers. The workers allege that these bag checks took place after they had already punched out, adding 10 and more minutes to their shift that was not paid. The plaintiffs allege that all workers at all Walgreen’s stores across the state were subjected to the same kinds of end-of-shift bag checks and were all similarly wronged by not being paid for the time they spent waiting and having their belongings inspected. Additionally, as most workers had their bags inspected after a full 8 hour shift or had a 40 hour weekly work schedule, the additional time they spent having their bags checked also needed to be paid at the overtime rate of time and a half.

This suit by Walgreens plaintiffs is the second major class-action suit in California this year alleging that workers were not paid for time their belongings were being inspected, as reported by the Los Angeles Times. In January, employees at a Forever 21 store in San Francisco brought a similar class action complaint against the company on behalf of all its thousands of employees across the state who were not paid for the time spent having their bags checked after they had already clocked out. These employees also allege that their bags had to be checked before meal breaks, which added an additional 10 minutes to their shift and also violated California’s laws regarding meal and rest breaks.

A bill that would make farmworkers in California eligible for overtime pay is in front of the State Senate Labor and Industrial Relations Committee tomorrow, as reported by the Sacramento Bee. Advocates for the bill have been lobbying for years for the legislature to consider it, and are hopeful that Governor Jerry Brown, who signed the landmark Agricultural Labor Relations Act in 1975, will soon have a chance to pass it into law. The bill will make California the first state to recognize farmworkers as equally protected under the overtime laws as all other hourly workers, and if it passes it will be a victory for employee rights activists across the nation.

Assembly Bill 1313, introduced last fall by Assemblyman Michael Allen D-Santa Rosa, would require California employers to pay overtime to their farmworker employees at time and a half for any hours worked over 8 hours a day or 40 hours a week. The federal Fair Labor Standards Act already requires overtime pay for hourly workers for any hours over 40 in a week, and California law additionally requires overtime for any hours worked over 8 hours a day. Farmworkers, however, have been excluded from both protections from the start, and were even exempted from the protections for union organizing under the National Labor Relations Act. This was due mainly to political reasons: for the FLSA and NLRA to pass, Congress had to acquiesce to Southern politicians’ demands that the millions of mostly minority domestic and agricultural workers be exempted from the labor protections of both Acts, including the minimum wage and overtime provisions. The California labor law had a similar history, with the politically marginalized mostly minority agricultural and domestic workers mostly excluded from the state law protections as well.

It wasn’t until 1975 when Governor Jerry Brown during his first governorship of California passed the Agricultural Labor Relations Act that farmworkers were afforded any labor law protections in the state at all. That statute created a mechanism for farmworkers to organize unions and afforded them similar state law protections as those under the NLRA for their activities. Governor Brown also passed a statute requiring overtime pay for farmworkers for any hours worked over 10 hours a day or 60 hours a week. Although much less protective than that for most non-exempt workers overall, it still put California in the forefront in the nation in protecting its agricultural workers.

A federal district court ruled this month that mortgage loan officers are entitled to overtime pay under a 2010 Obama Administration regulation, as reported by Reuters. The case, Mortgage Bankers Association v. Hilda Solis, et al., decided in DC District Court, reinstates mortgage lenders to their pre-Bush administration status as non-exempt under the Fair Labor Standards Act and its overtime and minimum wage provisions. A victory for employee rights advocates everywhere, the case sends a message to all employers that the Department of Labor and courts will look carefully at the actual functions of employees in determining whether they are exempt under the Fair Labor Standards Act or not.

This case was brought by the Mortgage Bankers Association, a trade association that represents the real estate finance industry. The association brought the suit to challenge a 2010 Department of Labor administrative opinion letter which reclassified mortgage loan officers as non-exempt non-administrative employees under the Fair Labor Standards Act. Under the FLSA, employees that are classified as bona fide executive, administrative, or professional employees, or who work in the capacity of outside salesmen, need not be paid overtime at time and a half for their hours worked over 40 hours a week. Before 2004, mortgage loan officers had been presumed to be non-exempt under these provisions, as much of their work involves inside sales and does not rise to the level of managerial or administrative work. As such, for decades the industry had classified mortgage loan officers as non-exempt and paid such workers overtime when required. In 2004, the Bush Administration changed course and the Department of Labor issued an opinion letter reclassifying mortgage loan officers as exempt administrative employees. For six years thereafter, mortgage loan officers were no longer eligible for overtime under the FLSA. In 2010, the Obama Administration issued an opinion letter from the Department of Labor again classifying mortgage loan officers as non-exempt non-administrative employees under the FLSA. The Mortgage Bankers Association, which had taken advantage of not having to pay overtime for almost six years, immediately filed suit claiming the Obama administration had acted outside its authority in reclassifying the workers.

The DC district court found that the Mortgage Bankers Association’s suit had no merit, as the Obama administration was well within its rights to reclassify the workers, and its reclassification was not unreasonable. First, the court found that the new regulation did not err in considering mortgage loan officers to be primarily engaged in inside sales, which would exclude it from the administrative exemption. The court found it revealing that mortgage loan officers were mainly paid by commission based on the number of mortgages sold, and their primary duty was to undertake such sales. The court also found that mortgage loan officers did not perform duties in furtherance of the general business of the company, which would have allowed them to fall under the administrative exception. Instead, most mortgage loan officers’ work is dedicated not to the production work of the company, but to the sales aspect. Both of these issues led the court to find that mortgage loan officers were non-exempt under the Fair Labor Standards Act and as such eligible for overtime pay,

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