Worker Misclassification

Hydraulic fracturing, commonly referred to a fracking, is a drilling technique used for extracting oil or natural gas from deep underground. It is estimated that more than 4 million oil and gas related wells have been drilled in the United States in recent years. Fracking has become a major industry, which employs tens of thousands of workers across the country.

Recently, Ensign Energy Services, Inc. agreed to pay a group of salaried workers who were responsible for measuring certain metrics during the drilling process a whopping $1.8 million for unpaid overtime wages.  The lawsuit alleged that the salaried workers were misclassified as exempt from overtime.  In a three-year span, nearly 60 workers filed complaints claiming they were misclassified and owed overtime wages for services they performed for the operation.

The Defendant, Ensign Energy Services, Inc. is a Canadian company that provides oilfield services for the North American and international market. They claim to be among the world’s strongest, fastest-growing energy services companies.

The Fair Labor Standards Act (FLSA) requires that non-exempt employees be paid at a rate of one and one half their regular hourly rates. However, the FLSA also provides for a number of exemptions, many of which require that the employee be paid on a salary basis to be eligible for the exemption.  Although the plaintiffs in this lawsuit were paid on a salary, they did not meet the duty based requirements that go along with the exemptions.  Accordingly, the plaintiffs argued that they had been misclassified as exempt from overtime premium pay.

Ensign declined to comment on the settlement.

Of the $1.8 million to be paid in the wage and hour settlement, $693,000 will be paid to the plaintiffs’ attorneys for fees and costs.  The federal district judge in Denver, Colorado believed the settlement to be fair and reasonable, given the challenges each side faced if the case were to continue in litigation.

A plaintiff in a wage and hour lawsuit brought under the Fair Labor Standards Act can seek back wages and liquidated (double) damages if the violation of the Act was willful.  The prevailing plaintiffs, such as the plaintiffs in this case, are also entitled to have their reasonable attorney fees and costs paid by the employer that violated the Act.

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JPMorgan Chase recently opened up their checkbooks to a group of assistant branch managers that work for the multinational banking and financial services company, which is headquartered in New York City.  The lawsuit alleges that the assistant branch managers were misclassified as exempt from the overtime protections of the Fair Labor Standards Act (FLSA).

Many of the class members will receive $3,000.00 each for their overtime claims that date back to 2012. Roughly 5,400 employees were included in the class.  JP Morgan Chase stated the employees were getting a great deal, seeing as many of the class members rarely worked overtime hours.

The FLSA requires that all non-exempt employees be paid at an overtime premium of one and one half their regular hourly rate for any hours worked over 40 in a single workweek.  Failure to comply with the Act carries penalties for back wages, attorney fees and costs, and potentially liquidated (double) damages.

JPMorgan Chase also pointed out that branches are seldom open for more than 40 hours in a week, and that number is offset by breaks and lunches.

Nonetheless, JPMorgan Chase recognized the risks associated with litigating the case, particularly whether they had misclassified the assistant branch managers as exempt, so they agreed to the settle the employees’ claims.

The cases are Taylor et al. v. JPMorgan Chase & Co. et al., case number 14-cv-01718, and Varghese v. JPMorgan Chase & Co. et al., case number 1:15-cv-03023, in the U.S. District Court for the Southern District of New York.

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On November 9, 2017, a court in California granted a Costco worker’s motion to certify a nationwide collective action comprised of workers whose job was to dispense coffee and tea samples at Costco stores. The lawsuit is against Costco, as well as CACafe Inc., a tea and coffee company, and Club Demonstration Services, an in-store demonstration management firm. The workers claims that Costco, CACafe, and Club Demonstration Services jointly employed them and misclassified them as independent contractors, even though they were employees. Further, the workers claim that they were paid a fixed amount for each product they sold, with no hourly wage, and as a result did not receive minimum wage or overtime pay.

In granting the workers’ motion, U.S. District Judge Yvonne G. Rogers found the evidence supported their claim that all Costco in-store demonstrators nationwide were subject to common policies implemented and enforced by Costco. Judge Rogers rejected Costco’s argument that it did not “employ” in-store demonstrators, and ruled that the case could proceed as a collective action, with a court-approved notice set to be circulated to in-store demonstrators who are potentially eligible to join the case.

Workers who provide similar in-store demonstration cases should take note. Even if the retailer does not directly employ you, you may still have a claim that it is liable as a “joint employer.” Further, if your employer pays you a fixed amount for each product sold, like in the Costco lawsuit, it is still required to pay you overtime. The Costco lawsuit illustrates that employees in this industry may be owed unpaid wages.

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A former Urban Outfitters department manager recently filed a lawsuit against the retail clothing company for violating the Fair Labor Standards Act (FLSA) by misclassifying her as exempt from federal overtime laws. Under the FLSA, non-exempt employees are entitled to overtime pay, while exempt employees are not. The plaintiff alleges that she regularly worked over 40 hours a week throughout her employment but did not receive overtime compensation from Urban Outfitters as required by federal law. The lawsuit claims that the plaintiff’s treatment was part of the store’s broad, company-wide policy to minimize labor costs by classifying all department managers as “exempt” from the FLSA’s overtime provisions.

Whether an employee qualifies as exempt depends upon a variety of factors, including the job duties he or she performs—not the employee’s job title. To be exempt from receiving overtime, a manager must exercise a significant degree of independent decision-making that affects the business, direct or supervise the work of other employees, and have the authority to hire and fire employees. According to the lawsuit, the department managers at Urban Outfitters were actually non-exempt because, despite the management job title, they primarily performed manual labor and did not do any hiring, firing, disciplining, supervising, or engaging in any independent judgment and discretion.

Misclassifying employees as exempt is a common way employers can violate the FLSA. Keep in mind that a job title of “manager” or “supervisor” doesn’t necessarily mean you are exempt from receiving overtime—if you are regularly performing non-exempt work, you may be entitled to unpaid overtime wages for up to the past three years, an additional amount in liquidated damages equal to the unpaid overtime, and attorney’s fees and costs.

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