The U.S Equal Employment Opportunity Commission, an agency that enforces federal laws prohibiting employment discrimination, sued CFS Health Management, Inc., d/b/a Shefa Wellness Center, for pregnancy discrimination under Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act. The EEOC filed suit alleging that the Company’s employee, April Raines, was unlawfully terminated after informing her boss that she was pregnant. The lawsuit alleges that Raines was a newly-hired, licensed skin care therapist who was fired just 2 days after announcing her pregnancy. When Raines asked why she was terminated, she was told that she deceived the Company by not disclosing her pregnancy during the interview. The EEOC seeks back pay, compensatory and punitive damages and injunctive relief for Raines.
Author: lawofficesofmitchellschleyllc
NYC RESTAURANT ORDERED TO PAY $2.7 MILLION TO 11 WORKERS
Last week, U.S. Magistrate Judge Michael H. Dolinger ordered popular Korean restaurant, Kum Gang San, to pay nearly $2.7 million in back wages and damages to 11 restaurant workers. Kum Gang San is owned by Ji Sung Yoo and is a twenty-four hour restaurant with locations in Manhattan and Queens. The court found that the restaurant exploited immigrant workers for many years and forced them to work long hours without paying them overtime pay or minimum wage and also diverted some of their tip income.
The workers claim they were also forced to perform work for Yoo outside of the restaurant, such as picking vegetables at a farm and shoveling snow from Yoo’s driveway. The company has been found in violation of wage and hour and child labor laws in the past. In fact, the state ordered the restaurant to pay $1.95 million in damages for wages owed to 66 employees back in 2010, which still remains unpaid.
Unfortunately, wage theft is a frequent occurrence that affects the restaurant industry, particularly restaurants that employ immigrant workers. This case serves as an example of an ethnic restaurant that has been found to exploit immigrant workers.
NLRB ISSUES REPORT ON EMPLOYER HANDBOOKS
Last week, NLRB General Counsel Richard E. Griffith, Jr., issued a thirty-page report regarding the legality of employer handbook policies under Section 7 of the National Labor Relations Act (“NLRA”). The report contains guidance as to what types of employer policies and rules that the National Labor Relations Board has found to be lawful and which are likely to be found unlawful under the NLRA.
Specifically, the report is divided into two parts. The first part offers a comparison of rules that the NLRB has found to be unlawful with those it has found to be lawful in the context of confidentiality, professionalism, anti-harassment, trademark, photography/recording, and media contact rules. The second part discusses the General Counsel’s recent settlement with Wendy’s International LLC and explains why some policies in the Wendy’s employee handbook were found to be violative of the NLRA.
The General Counsel stated that his hope was that this comprehensive report containing specific examples of lawful and unlawful handbook policies and rules will be beneficial to employers, attorneys and human resource professionals.
VIACOM AGREES TO SETTLE FOR $7.2 MILLION IN INTERNSHIP LAWSUIT
Last week, media giant Viacom, Inc., agreed to pay about $7.2 million to end the class-action lawsuit filed by a former MTV intern, who alleged that the Company failed to pay minimum wage. The deal encompasses interns who worked at the Company’s New York and California offices at certain time periods. The average settlement payment to each claimant will be approximately $505 for each academic semester in which they were an intern at Viacom, with a cap at $1,010.
Although the Company agreed to pay $7.2 million, it still must be approved by the court. As such, U.S. Magistrate Gabriel W. Gorenstein asked for more financial details of the proposed settlement before he could approve. If approved, this will be the highest settlement amount awarded to interns to resolve labor claims.
This Firm will continue to monitor the developments in this case.
THIRD CIRCUIT RULES THAT ARMORED CAR DRIVERS ENTITLED TO OVERTIME PAY UNDER FLSA
In a precedential ruling, the U.S. Court of Appeals for the Third Circuit affirmed the lower court’s ruling that armored vehicle driver, Ashley McMaster, was entitled to overtime pay under the Fair Labor Standards Act (“FLSA”). The Court held that the motor carrier exemption, which exempted certain drivers of commercial vehicles from overtime pay laws, did not apply to truck drivers, such as McMaster, who spent all or part of their time operating vehicles under 10,000 pounds.
The Court reasoned that the Corrections Act of 2008, which revised the FLSA, applied to the instant case. The Corrections Act states that the motor carrier exemption does not apply to drivers, driver’s helpers, mechanics, and loaders who spend all or part of their workweek operating certain vehicles weighing under 10,000 pounds. As such, the Court ruled that since McMaster spent approximately 51 percent of her time driving vehicles more than 10,000 pounds and 49 percent driving vehicles under that weight, she fell within the purview of the Corrections Act and was entitled to overtime pay for work performed in excess of 40 hours per week.
Defendant, Eastern Armored Services, Inc., argued that certain district courts have held that subjecting truck drivers to the Motor Carrier Act when they drive vehicles over 10,000 pounds and also to the FLSA when they drive trucks that weigh less “would require burdensome record-keeping, create confusion and give rise to mistakes and disputes.” However, the Court stated that this policy statement cannot overcome the “express change to the statutory scheme.” The case was remanded back to the district court for assessment of wages owed to McMaster.
This decision is significant as there have been conflicting decisions amongst district courts regarding whether overtime pay is required to be paid to commercial drivers who spend part of their time operating a noncommercial vehicle, instead of a commercial vehicle.
The case is Ashley McMaster v. Eastern Armored Services, Inc.
TGI FRIDAY’S SETTLES WITH 14 PLAINTIFFS IN CLASS ACTION SUIT
Last year, the parent company of popular restaurant, TGI Friday’s, was sued in New York federal court by restaurant workers claiming to have been shorted on wages when performing side work and “off-the-clock” work. Specifically, it was alleged that tipped workers were required to perform work during off-hours without receiving minimum wage and overtime, and management manipulated employee time records to permit “off-the-clock” non-tip producing side work such as cleaning and preparing food. Plaintiffs sought to recover unpaid minimum wages and overtime, misappropriated tips, unlawful deductions and other wages under The Fair Labor Standards Act (“FLSA”) and New York Labor Law.
Earlier this week, TGI Friday’s agreed to settle the claims of 14 members of the FLSA class. U.S. District Court Judge Analisa Torres approved of all settlements, which ranged from $2,500 to $82,000. Several other named plaintiffs and opt-in plaintiffs still remain in the case.
The case is Flood, et al. v. Carlson Restaurants, Inc., No. 14-cv-2740.
PAPA JOHN’S NEW YORK FRANCHISEE ORDERED TO PAY $2 MILLION TO UNDERPAID WORKERS
As we previously reported in October 2014, New York Attorney General Eric T. Schneiderman filed a civil action lawsuit against Papa John’s franchisee and its owner-operator for various labor law violations in New York City.
Last week, New York County Supreme Court Justice Joan M. Kenney ordered the franchisee to pay more than $2 million in back pay, interest and damages for failing to pay hundreds of delivery workers overtime pay and shaving down their hours. The five pizza restaurants subject to the court’s orders are all located within Harlem. Earlier this year, Attorney General Schneiderman also obtained a judgment against another Papa John’s franchisee and has also reached several out-of-court settlements with other fast-food franchises, including Domino’s Pizza.
DEFENSE TO SEXUAL HARASSMENT SUITS STRENGTHENED BY NEW JERSEY HIGH COURT RULING
Last week, the New Jersey Supreme Court in Aguas v. State of New Jersey, adopted the test set forth in two federal cases, namely, Burlington Industries v. Ellerth and Faragher v. City of Boca Raton, when reviewing sexual harassment claims under the New Jersey Law Against Discrimination (“LAD”). Prior to this landmark decision, the New Jersey Supreme Court maintained that an employer is vicariously liable if a supervisor creates a hostile work environment through sexual harassment. Now, under the Ellerth/Faragher analysis, the Court held that an employer may escape liability if it exercised reasonable care to prevent and correct promptly any sexually harassing behavior and if an employee unreasonably failed to take advantage of any preemptive or corrective opportunities provided by the employer, or fails to avoid harm otherwise.
The Court also broadened the definition of a “supervisor” under the LAD. The Court defined supervisors as not only individuals who have the authority to make tangible employment decisions, but also those in charge of the employee’s daily work activities.
This decision will likely result in many employers using its anti-harassment policy as a defense to sexual harassment claims under the LAD. As such, it is important that victims of sexual harassment report their claims of sexual harassment in the workplace and consult an attorney.
SECOND CIRCUIT RULES IN FAVOR OF APPLEBEE’S RESTAURANT WORKERS IN WAGE-AND-HOUR SUIT
In 2010, workers at Applebee’s restaurants located in New York sued franchisee owner, T.L Cannon Corp. (“Cannon”), for alleged violations of the Fair Labor Standards Act and New York Labor Law. Specifically, Plaintiffs claimed that Cannon failed to pay hourly employees an extra hour of pay when working a ten-hour workday pursuant to state regulations and also required managers to subtract pay for rest breaks they did not actually take. Plaintiffs moved for class certification on both claims. The district court, relying upon a misreading of the Supreme Court case, Comcast Corp. v. Behrend, found that since damages were not measurable on a class-wide basis, Plaintiffs motion for class certification must be denied. The district court construed Comcast as holding that the failure to offer a damages model that is susceptible of measurement across the entire class is fatal to the class certification question.
Plaintiffs appealed the lower court’s decision. Yesterday, the United States Court of Appeals for the Second Circuit vacated and remanded the order of the district court. The Second Circuit found that the lower court misinterpreted the Comcast decision when it denied class certification to Plaintiffs solely based on the damages issue and ruled that individualized damages determinations alone cannot preclude class certification. The case will now return to the district court, which will decide whether to certify the class based on the proper standards.
The case is titled Roach v. T.L. Cannon Corp., and the full decision can be read here.
NEW JERSEY SUPREME COURT HOLDS THAT WORKER-FRIENDLY TEST TO BE USED IN DETERMINING INDEPENDENT CONTRACTOR STATUS
Last week, the New Jersey Supreme Court ruled in Hargrove v. Sleepy’s, LLC that the “ABC” test should be used in determining employee or independent contractor status under New Jersey wage laws, namely, the NJ Wage Payment Law and the NJ Wage and Hour Law. This decision is significant as the ABC test is broader and imposes stricter standards upon employers in comparison to other tests used to determine independent contractor status under other employment laws.
Under the ABC test, an individual is presumed to be an employee unless the company can show the following three elements: (A) that the individual has been and will continue to be free from the company’s control or direction over the performance of their service, both by contract and in fact; (B), that the service provided by the individual is outside the usual course of the business for which such service is performed, or that the service is performed outside of all places of business of the company; and (C) that the individual is customarily engaged in an independently established trade, occupation, professional or business. If the company fails to prove all three of these factors, then the individual will be classified as an employee – not an independent contractor – under New Jersey wage laws.
The Hargrove case was brought by delivery drivers who alleged Sleepy’s misclassified them as independent contractors, which resulted in both financial and non-financial losses to them. The district court held in favor of Sleepy’s and ruled that the plaintiffs were properly classified as independent contractors pursuant to different test. Plaintiffs then appealed, and the Third Circuit Court of Appeals sought certification from the Supreme Court of New Jersey regarding what test should be used to determine employment status for purposes of the NJ Wage Payment Law and the NJ Wage and Hour Law. As explained above, the Supreme Court held that the ABC test should be applied.
To read the full decision, please click here. This firm will continue to monitor the developments in this case.