Unpaid Overtime Pay

Bringing the Case Back to Life

On November 17, 2017, the Fourth Circuit restored a federal Fair Labor Standards Act (FLSA) overtime claim brought against Schmidt Baking Company, Inc. The wage and hour lawsuit was brought by salaried employees who claimed they were non-exempt, but the Maryland district court dismissed both the employees’ federal and state claims based on the scope of the Motor Carrier Act (MCA) exemption.

Although the FLSA exempts certain employees from overtime protections under the MCA exemption, the Fourth Circuit looked to the Third Circuit decision in McMaster v. Eastern Armored Services, Inc., 780 F.3d 167 (3d Cir. 2015), concluding that the plaintiffs fell within the definition of a “covered employee” under the SAFETEA—LU Technical Corrections Act (TCA), which was enacted by Congress in 2008 and waives the FLSA overtime exemption for motor carrier employees whose work, in whole or in part, affects the safety of vehicles weighing 10,000 pounds or less.

MCA spells Misclassification

The 3 plaintiffs who worked as district sales managers for the defendant Schmidt Baking Company, Inc. frequently worked more than 40 hours in a given week.  The district sales “managers” actually drove routes for the company, and the plaintiffs alleged the title of “manager” was also a ruse. In fact, the managers spent the bulk of their time making deliveries, and the large majority of vehicles they drove indisputably weighed less than 10,000 pounds.

The defendant contended that the plaintiffs were not entitled to overtime compensation because they worked on a mixed fleet, also known as a hybrid fleet, consisting of vehicles weighing both more and less than 10,000 pounds. However, the panel rejected the Defendant’s argument, noting that “[t]he structure of the TCA exception makes clear that an employee need only work on smaller vehicles ‘in part’ to qualify for overtime compensation, thereby placing drivers of mixed fleets within the FLSA’s requirements.”

10,000 Pounds of Justice

It is common for employers to try and use the Motor Carrier Act to deprive workers of their rightful overtime pay. Courts had been trending to overly apply the Act and allow exemptions from overtime where the worker would do one single act on a vehicle weighing more than 10,000 pounds and sometimes would find that exempted the worker from overtime pay for the week. This persisted until Congress stepped in and clarified the issue on behalf of the worker with the TCA.

The TCA and MCA both have highly technical components, and it is crucial to consult with an overtime lawyer, especially a wage and hour firm that has dealt with the MCA exemption before. As a rule of thumb, if the driver is driving a truck less than 10,000 pounds, one should be suspicious of whether they are properly exempt from overtime. Another common area for FLSA trucking violations is minimum wage violations, and one should check to see if the driver makes more than minimum wage after all the hours worked. The Fourth Circuit falling in line with the Third Circuit revived this lawsuit, and the employees’ FLSA claim was sent back for further deliberations consistent with its ruling on the overtime rights.

 

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A pizza restaurant chain in Manchester, Connecticut was held liable for violating the Fair Labor Standards Act (FLSA). An investigation conducted by the U.S. Department of Labor’s (DOL) Wage and Hour Division found that the pizza restaurant chain had violated the FLSA’s minimum wage, overtime, and record-keeping requirements between February 2013 and November 2015. The FLSA requires that non-exempt employees receive one-and-one-half times their regular rate of pay when they work more than 40 hours in a work week and that employers maintain adequate and accurate records of employees’ wages and work hours.

The DOL found that the restaurant did not pay overtime to three employees who worked up to seventy-five (75) hours per week. Additionally, the restaurant took payroll deductions for cash register shortages that resulted in one employee receiving less than minimum wage. The investigation also found that the restaurant maintained and supplied false time and payroll records and statements to investigators during the current investigation and a prior investigation in 2015.

Additionally, the investigation found that between December 2015 and April 2016, the owner of the restaurant continually pressured one employee to make false statements to investigators, leading the employee to believe he had no choice but to resign. The Department of Labor charged that the owner’s behavior resulted in the worker’s constructive discharge in violation of the FLSA’s anti-retaliation provisions.

On November 16, 2017, a United States District Court in Connecticut issued a judgment against Chemro LLC d/b/a People’s Choice, and Defendant Robert Y. Mercier II for back pay in the amount of $67,151.14, which includes minimum wage and overtime payments due as well as liquidated damages, compensatory damages, punitive damages, civil money penalties, and interest. The Court also ordered that the company and its owner comply with the FLSA and “refrain from discharging or discriminating against employees who initiate or cooperate with an FLSA investigation.”

 

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The Force of FLSA

Wage and hour violations have been extremely prevalent in the oil and gas industry over the past several years. In 2012, as part of an effort to put an end to countless violations of the Fair Labor Standards Act (FLSA), the United States Department of Labor (DOL) began a special enforcement initiative that targeted wage and hour violations in the oil fracking industry. However, despite their best efforts, many employers in the industry continue to skim wages from their employees. This is a high-stakes gamble, considering a victim of wage theft can be entitled to double damages if it is established his or her employer willfully violated the FLSA.

A wage and hour lawsuit was recently filed by current and former employees of Empire Scaffold, LLC (Empire), which is a company responsible for constructing scaffolds at large oil refineries. The employees alleged that they should have been paid for time spent riding buses from a remote parking lot to the refinery grounds where they were dropped off a few hundred yards from the location of their scaffolding duties.

Empire Strikes Back

Empire claimed a victory, as the 5^th Circuit Court of Appeals recently determined that the time spent on the buses was not compensable. In reaching their decision, the 5th Circuit panel explained that, since enactment of the Portal to Portal Act of 1947, two primary groups of activities are considered exempt from pay claims under the FLSA:  (1) walking, riding or traveling to and from the actual place of performance of an employee’s principal activity or activities; and (2) activities which are “preliminary to or postliminary to” such principal activities. The Court pointed out that “principal activities” includes those that are an “integral and indispensable part” of those activities (quoting Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513, 516-17 (2014). In this case, the principal activities of the employees were erecting and dismantling scaffolding. The Court held the the time spent waiting was not compensable because it was neither “tied to nor necessary to the erection and dismantling of scaffolding – the work that the [plaintiffs] were employed to perform.”

The citation to the 5^th Circuit’s full opinion is Bridges v. Empire Scaffold, LLC, 2017 U.S. App. LEXIS 22520 (5th Cir. Nov. 9, 2017).

 

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A collective action lawsuit was recently filed against All Star Concrete & Mason Inc. and others for Fair Labor Standards Act (FLSA) violations. The plaintiff, who worked for the defendants as a construction worker, concrete worker, and laborer, worked approximately sixty hours per week; yet the defendants only paid him $900.00 per week from April 2017 through October 2017. The lawsuit alleges that this is a blatant violation of the FLSA because the defendants failed to pay its employees overtime for hours worked over forty in a workweek. According to the lawsuit, up to fifty other employees of defendants were subjected to the same pay structure.

As All Star Concrete & Mason Inc. is finding out, failing to pay non-exempt employees an overtime rate of 1.5 times their regular rate of pay is a violation of the FLSA. Further, the plaintiff in this case brought additional claims against All Star Concrete & Mason Inc. for willfully posting notices of the minimum wage and overtime requirements in a conspicuous place. Failing to clearly post the minimum wage and overtime requirements is a violation of the FLSA. The lawsuit further alleges that defendants failed to keep accurate payroll records as required by the FLSA’s recordkeeping requirements.

The lawsuit was filed in the U.S. District Court for the Southern District of New York, and is titled Herrera et al v. All Star Concrete & Mason Inc. et al, No. 1:17-cv-09014.

 

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Brightview Landscapes has recently agreed to pay $4.8 million dollars to settle a class action lawsuit filed by its landscapers.  The lawsuit, which was filed in the Middle District of Pennsylvania, alleged that 839 workers who were employed by Brightview across the county were not properly paid overtime premiums.  The landscapers that comprised the class were employed between October 8, 2010 and June 8, 2014.  As noted below, in June of 2014, the Defendant changed its overtime policies as a result of this lawsuit.

The Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid at a rate of at least one and one half times their regular hourly rate for all hours worked over 40 in a single workweek.  The Complaint alleged that Brightview paid less than the FLSA mandated premium for overtime hours.

In granting final approval of the settlement, U.S. District Court Judge Malachy E. Mannion noted that not only are the class members receiving a sizeable settlement, but also “the defendant has changed its method of computing overtime compensation … [t]hus, not only will those in the FLSA class be fairly compensated for any potential wrongdoing, employees hired after the defendant’s change in pay practices will likely benefit from this action … [t]hus, the benefits of this settlement reach beyond the settlement itself … this result clearly furthers the purpose of the FLSA to protect workers and ensure they are paid appropriately.”

The case is Acevedo v Brightview Landscapes, case number 3:13-cv-02529, and was pending in the Middle District of Pennsylvania.

 

 

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