Author: lawofficesofmitchellschleyllc

SIX MAJOR RETAILERS TO STOP ON-CALL SHIFT SCHEDULING

Last week, New York Attorney General Eric Schneiderman along with attorneys general from seven other states announced that six major retailers, namely, Disney, Aeropostale, Carter’s, PacSun, Zumiez and David’s Tea, will stop scheduling employees for on-call shifts.  This scheduling practice requires employees to call their employer one to two hours before their scheduled shift to find out if they are required to report to work that day.

 The attorneys general all shared a concern that because on-call shifts do not provide a concrete work schedule, it hinders planning for child care and elder-care arrangements and makes it difficult to pursue an education or other important activities.  Attorney General Schneiderman stated, “People should not have to keep the day open, arrange for child care, and give up other opportunities without being compensated for their time.”

After these retailers received a joint letter from the attorneys inquiring about their use of on-call shifts and after having discussions with the attorneys general, the retailers agreed to stop using this type of scheduling practice.  In lieu of on-call shifts, they have implemented alternative staffing methods, such as pool arrangements.

Several issues arise involving on-call time, such as, whether an employee should be paid while they wait to see if there’s work to be performed or if they should be paid while they are on “standby.”  Whether an employee should be paid for this time depends on who controls that time and what restrictions are placed on an employee.  If an employee is free to use that time to engage in their own personal activities, then a court is less likely to find that an employee should be compensated.

New York has a “call in pay” regulation which requires employers to pay workers for reporting to the workplace, even if the employer has no work for them to perform.  The regulation requires employers to pay at least minimum wage for four hours, or if the shift is shorter than four hours, the number of hours in the shift, to an employee who is requested or permitted to report to work.

BED BATH & BEYOND HIT WITH OVERTIME CLASS ACTION SUIT IN NEW YORK

Last month, a class action lawsuit was filed in New York federal court against Bed Bath & Beyond by department managers and assistant managers who claim that the Company failed to pay them overtime compensation pursuant to the Fair Labor Standards Act and New York Labor Law.

Plaintiffs claimed that although their title was that of a manager, they performed routine work of store employees, including, stocking shelves, dusting, cleaning bathrooms, organizing sales floor, building fixtures, preparing orders for pickup and performing cashier duties. 

The Company paid department managers pursuant to a fluctuating work week model which entitles employees to an overtime premium of 50 percent, instead of the regular 150 percent overtime premium (time-and-a-half), for hours worked in excess of 40 per week.  In order to use this method, however, certain pre-requisites must be met, that is, 1) the employee’s hours must fluctuate from week to week, 2) the employee must receive a fixed weekly salary which remains the same regardless of how many hours are worked per week, 2) the employee’s regular rate is at least minimum wage, and 4) the employer and employee have a clear mutual understanding that the employee will be paid a fixed weekly salary regardless of the amount of hours worked.

Here, the department managers claimed that the Company was not entitled to use the fluctuating work week model because the conditions to use that method, such as the fluctuation of employees’ work hours, were not met.   In this regard, the department managers alleged that they their weekly work hours did not fluctuate in that their number of scheduled work hours and overtime hours were consistent from week to week.

Further, the assistant store managers in the lawsuit allege that they were misclassified as exempt employees and were unlawfully denied overtime pay.

An answer to Plaintiffs’ Complaint is expected in the upcoming weeks.

COURT RULES THAT PAID MEAL BREAKS CANNOT OFFSET UNPAID OVERTIME

Earlier this month in Smiley v. E.I. Dupont De Nemours & Co., the Court of Appeals for the Third Circuit ruled that employers cannot offset their obligation to pay overtime pay for hours worked in excess of 40 hours per week by voluntarily paying employees for a bona fide meal break.

In Dupont, employees filed  a collective and class action lawsuit against the Company seeking unpaid overtime for pre and post shift work donning and doffing their uniforms and protective gear and performing “shift relief” work in which employees would share information about the status of their work with incoming shift employees.  Plaintiffs spent about 30 to 60 minutes per day performing this work without compensation.

Plaintiffs worked 12-hour shifts at Defendants manufacturing plant and received three 30 minute meal breaks, which the Company voluntarily paid for.  The Company argued that because it paid for meal breaks even though it was not required to do so under the Fair Labor Standards Act (FLSA), it could use that compensation to offset the money owed for the unpaid time spent donning and doffing and performing “shift relief” work.

The lower court held in favor of Dupont and concluded that Plaintiffs were not owed additional compensation because the amount of paid non-work time (meal breaks) exceeded unpaid work time (pre and post shift work).  The Third Circuit disagreed.  It ruled that Dupont was required to pay employees for pre and post shift work, even though it voluntarily paid for meal breaks, because that meal break pay was already part of the employees’ standard compensation.

The Department of Labor, which filed an amicus brief in this case, stated that “there is no authority for the proposition that compensation already paid for the hours of work can be used as an offset and thereby be counted a second time as statutorily required compensation for other hours of work.”  The Third Circuit agreed and concluded that paid meal breaks could not offset uncompensated time worked.

NEW JERSEY SUPREME COURT UPHOLDS $1.4 MILLION EMOTIONAL DISTRESS AWARD IN DISCRIMINATION CASE

Last month, the New Jersey Supreme Court upheld a $1.4 million jury award in emotional distress damages in a discrimination/retaliation case brought by two brothers, Ramon and Jeffrey Cuevas.  The Cuevas brothers brought suit against their former employer, Wentworth Group, alleging that they were subject to harassment due to their Hispanic heritage and then fired for complaining about it in violation of the New Jersey Law Against Discrimination (“NJLAD”).

Plaintiffs contend that company executives would often make disparaging remarks about them because of their race.  For example, at a company meeting at a restaurant, Ramon claims that his supervisor stated that if he did not pay for the bill, he could join his father in the back kitchen to wash dishes.  At another meeting at a restaurant, the same supervisor allegedly asked if they can get salsa music or a Mariachi band to play to “better fit” Ramon’s taste and stated that Ramon probably knew of a Mariachi band that could perform.

Jeffrey similarly claimed that company executives joked about having to “order twice as much Mexican food and hire a salsa band” to satisfy plaintiffs.   A human resources director also referred to the brothers as “Latin lovers,” which they found to be particularly demeaning since the comment came from a human resources executive.

The Cuevas’ alleged that the abuse was humiliating, continuous and wore them down.  Jeffrey claimed that he told in-house counsel that he wanted the harassment to stop, but the company lawyer allegedly dismissed him and simply told him to “calm down.”  Four days later, he was terminated.  Ramon said he contacted the president and CEO to complain about his brother’s treatment, and within a month, he was terminated too.

At trial, the brothers testified that they felt helpless and depressed, but did not seek medical treatment.  The jury returned a verdict for $1.4 million in emotional distress damages in addition to back pay, front pay and punitive damages.  Wentworth filed a post-trial motion and asked that the court to reduce the amount of emotional distress damages because they felt it was “unconscionably high.”  The trial court denied the motion, and Wentworth appealed.

The Appellate Division affirmed the trial court’s decision, and Wentworth appealed to the New Jersey Supreme Court.  Wentworth argued that only nominal damages should be awarded in discrimination cases under the NJLAD when there is no independent proof or showing of physical and psychological symptoms.  The Supreme Court rejected Wentworth’s argument and affirmed the decision of the trial court.

The Court reasoned, in part, that the “Legislature intended victims of discrimination to obtain compensation for mental anguish, embarrassment and the like, without limitation to severe emotional or physical ailments.”   It further stated that the court’s conscience was not shocked in this case and ruled that the brothers’ testimony on the matter was sufficient even though they did not present expert testimony to justify their claims of emotional distress.

NEW JERSEY JUDGE GRANTS FINAL CERTIFICATION IN ASSISTANT MANAGERS’ OVERTIME SUIT AGAINST OFFICE DEPOT

This week, New Jersey federal Judge William Martini granted final certification to a collective action against Office Depot on behalf of approximately 300 assistant store managers who claimed to have been denied overtime pay in violation of state and federal law.  Judge Martini also allowed the case to proceed as Rule 23 class action in three states, namely, Colorado, Maryland and Washington.

Plaintiffs worked as assistant store managers for Office Depot and alleged they were not paid the proper overtime compensation for hours worked in excess of 40 hours per week from the years 2005 to 2012.  The Company argued that Plaintiffs were paid overtime pay at the correct rate based on a fluctuating workweek plan which allowed overtime to be paid at the employee’s regular hourly rate, instead of the time-and-a-half rate.

Plaintiffs contended that the elements needed for the application of the fluctuating workweek plan were not met, such as the requirement of receiving a fixed weekly salary regardless of how many hours they worked.  The Court agreed.  The Company also argued that Plaintiffs were not “similarly situated” and explained that the degree in which assistant store managers disciplined and reviewed employees and participated in the hiring process varied greatly. However, Judge Martini ruled that these differences were outweighed by consistent testimony showing that the ultimate decision to hire employees was made by store managers, not assistant store managers, and rejected the Company’s claim that certification should not be granted due to variations in the amount of supervisory authority.

The Court concluded that the differences the Company highlighted are “not sufficiently material to preclude final certification” and ruled that assistant store managers are similarly situated for purposes of final certification under the Fair Labor Standards Act.  This ruling will allow Plaintiffs’ to proceed as a group in seeking unpaid overtime and Office Depot will have to decide whether to proceed to trial or settle the case.

This Firm will continue to monitor the developments in this case.

LABORER’S NEW JERSEY WHISTLEBLOWER CLAIM NOT PREEMPTED BY FEDERAL LAW AND BELONGS IN STATE COURTS

Last week, the Supreme Court of New Jersey held that the state court had jurisdiction over a worker’s whistleblower lawsuit, rejecting the defendant’s argument that that National Labor Relations Board had jurisdiction.  In this case, Plaintiff Salvatore Puglia worked as a laborer for Elk Pipeline, Inc.   In 2010, he worked on a public sewer reconstruction project for the city of Camden which was subject to the New Jersey Prevailing Wage Act.

He and another worker noticed that their wage rate was significantly decreased, causing Puglia to complain to the project manager and the Company’s president.  Although the Company restored the prevailing wage rate and paid back pay to affected employees, Puglia stated that he was not paid the full amount owed to him.  He was laid off in December 2010 because, according to the Company, less onsite laborers were needed on the project since it was “winding down.”

Puglia filed a complaint in state court alleging violations of the Prevailing Wage Act and the New Jersey whistleblower law called the Conscientious Employee Protection Act (CEPA).  The Prevailing Wage Act claim was settled, and pursuant to the remaining CEPA claim, plaintiff alleged that he was terminated due to his complaints regarding the Company’s failure to pay him proper wages.

Elk Pipeline argued that the CEPA claim was preempted by federal laws, namely the National Labor Relations Act and the Labor Management Relations Act, because there was a Collective Bargaining Agreement (CBA) in place and Puglia’s claims were founded on rights created in the CBA.  The trial court agreed with the Company. Puglia appealed and the Appellate decision affirmed the trial court’s decision.  The Appellate Division held that the CBA was related to the CEPA claim because the work was winding down, “causing Elk to trim labor based upon seniority, a defined term of art under the CBA,” which could not be reviewed without interpretation of the CBA.   Puglia again appealed to the New Jersey Supreme Court.

The Supreme Court reversed the lower court’s decision in favor of Puglia.  In sum, a unanimous court held that whether Puglia performed a whistle blowing activity when he complained about his pay under the Prevailing Wage Act and whether he was fired because of his complaint are factual questions that are unrelated to the interpretations of the CBA and employee rights contained therein.  The court explained that CEPA created independent rights and his “CEPA cause of action is unaffected by whether the CBA was violated.”

The court also added that the Puglia could have sought relief based on provisions in the CBA, such as those relating to wages or seniority, but the court reasoned that the CBA-based claims would not make a CEPA claim depend on the CBA.  The court stated, “[Puglia] is asking our court to enforce his rights under CEPA, independent and apart from his bargained-for employment conditions.  That, our courts can do.”

WAHLBURGERS RESTAURANT CHAIN SUED FOR MINIMUM WAGE, OVERTIME AND TIP VIOLATIONS

On August 18, 2016, this law firm along with Pechman Law Group PLLC filed a wage and hour class action lawsuit involving over 100 employees in federal court against Wahlburgers restaurant chain located in Coney Island, New York.  Wahlburgers is owned by Mark, Donnie and Paul Wahlberg, celebrity actors and chef.  A&E also has a TV series which follows the brothers as they run their restaurant chain.

The lawsuit alleges that the restaurant violated the Fair Labor Standards Act and New York Labor Law by shaving hours of compensable time from the weekly hours of employees, failing to pay its workers minimum wage and overtime, stealing tips from employees and illegally requiring servers to share their tips with non-tipped, back-of-house kitchen staff.

We will be prosecuting these claims and hope to get the employees a recovery.

THIRD CIRCUIT RULES TRUCK DRIVERS IN FRACKING INDUSTRY NOT EXEMPT FROM OVERTIME

The Third Circuit recently affirmed the decision of the district court which found that defendants, Fast Rig Support, LLC and First Americans Shipping and Trucking, Inc., did not prove that its truck drivers were exempt from overtime compensation under the FLSA and Pennsylvania state law.

The plaintiffs were truck drivers that transported water to hydraulic fracking sites within Pennsylvania and were paid overtime for work performed in excess of 45 hours per week.  Plaintiffs argued that this practice violated federal and state wage and hours laws because they were not paid overtime for work over 40 hours per week.  Defendants argued that plaintiffs were exempt from overtime under the motor carrier exemption, which exempts certain truck drivers from receiving overtime pay if certain criterion is met.  One such criterion is that the driver must transport property through interstate commerce, that is, across state or international lines.  Even when transportation takes places within one single state, however, the interstate commerce requirement may still be met if the employee’s work involves a practical continuity of movement across state lines.

In this case, defendants argued that the after fracking is completed, they are occasionally hired to transport the water used in the fracking process to injection wells for disposal.  The Third Circuit, however, ruled that defendants did not meet their burden to prove that the drivers’ transportation of water involved a continuous stream of interstate travel.

Although defendants produced three pieces of evidence, the court did not find it adequate because it did not show whether drivers actually drove across state lines or whether the water drivers actually transported was out of state.  The court explained that “the relationship between defendants, the fracking companies, and the movement of wastewater out of the state could theoretically be one involving a practical continuity of movement in interstate commerce, depending on…the intent of the shipper at the time shipment commenced, the role defendants’ drivers played, whether the water is altered during the fracking process, and the steps for water removal and outgoing transportation,” but defendants produced no evidence concerning these matters.  Thus, the court held that defendants did not meet their burden to show that the motor carrier exemption applies, and affirmed the judgment of the district court.

NEW YORK COURT UPHOLDS FAST-FOOD WORKER MINIMUM WAGE INCREASE TO $15

Last year, New York Governor Andrew Cuomo announced that a new minimum wage would gradually be phased in for fast-food workers who work at establishments that are part of a chain of 30 or more locations, including those operating under a franchise agreement where the franchisor owns or operates at least 30 such establishments nationally.    Effective December 31, 2015, the new minimum wage increased to $10.50 for New York City fast-food workers and is on track to increase to $15.00 by 2018.  The minimum wage order was issued by the Commissioner of Labor on May 7, 201.   The National Restaurant Association, a trade group, appealed to the Industrial Board of Appeals (IBA) asserting that the wage order was contrary to law.  The IBA confirmed the wage order, and Petitioner appealed the decision in New York state court.

Last month, the Supreme Court of New York, Appellate Division upheld the decision to increase the minimum wage for fast food workers to $15.00 per hour.  The Court rejected Petitioner’s arguments that it violated the U.S. Constitution’s Commerce Clause, that it was wrongfully delegated to a state agency and that the wage board members appointed by the Commissioner were not true representatives of employers and employees.

 

The Court noted the difficult nature of the work in the fast food industry and that workers often work irregular hours, engage in a variety of complex tasks often under extreme pressure and poor working conditions. The Appellate Division upheld the wage order and agreed with the wage board that “fast food chains have recently experienced significant increases in profits without an accompanying rise in wages for their work, implying that those profits were wrung from the necessities of their employees.”

NEW JERSEY SUPREME COURT RULES EMPLOYERS CANNOT CONTRACTUALLY SHORTEN TIME LIMITS ON WORKER EMPLOYMENT DISCRIMINATION SUITS

On June 15, 2016, the New Jersey Supreme Court, the highest court in this state, issued its decision in Rodriguez v. Raymours Furniture Company, Inc. in which it addressed whether the two-year statute of limitations under the New Jersey Law Against Discrimination (“LAD”) could be shortened by a private agreement.

In that case, Plaintiff Sergio Rodriguez applied for a job at the furniture store.  The last page of the employment application, which he signed and submitted, contained a section that read, in bold capital letters, “I agree that that any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six months after the date of the employment action that is the subject of the claim or lawsuit.  I waive any statute of limitations to the contrary.”   A few years later, Rodriguez suffered a work-place injury, and two days after he returned to full-duty work, he was fired.  He filed a lawsuit seven months after he was terminated alleging employment discrimination based on actual or perceived disability in violation of the LAD.

Defendant argued that because Rodriguez filed the lawsuit after the six-month statute of limitations period, his lawsuit should be dismissed.  The trial court ruled in favor of Defendant, holding that the waiver provision was clear and unambiguous and that the shortening of the statute of limitations period was not unreasonable or against public policy, as Rodriguez contended.  Rodriguez appealed, and the Appellate Division affirmed the trial court’s decision.  Although the court found that the employment application was a contract of adhesion, Plaintiff had ample time to review it.   Rodriguez appealed to the New Jersey Supreme Court.

On appeal, Plaintiff argued, in part, that contractual shortening of the statute of limitations would frustrate the remedial purpose of the LAD.  The court reversed the lower court’s decision and decided in favor of Plaintiff.  The court recognized that although parties have the freedom to contract, there is strong public interest that the LAD serves to protect in trying to elimination discrimination.  The court further stated that the contractual shortening of a limitations period effectively eliminates claims because it would not allow enough time for an aggrieved person to bring forth their claims and the two-year statute of limitations was purposefully designed to create uniformity and certainty.   As such, the court ruled that the two-year time frame to bring a claim under the LAD cannot be altered through a private agreement.

The full decision can be found here.