Worker Wage-and-Hour Suits Rise in Difficult Labor Market

Lawsuits by U.S. workers contesting wages and hours, including demands for overtime pay, reached a 20-year high this year as unemployment remained above 8 percent.

There were 7,064 federal wage-and-hour cases filed during the 12 months ending March 31, a number that has grown almost every year since 2000, when the total was 1,854, according to the Administrative Office of the U.S. Courts, which plans to release the data publicly later this year.

The recession and the unemployment rate contributed to the rise, said Richard Alfred, chairman of the national wage and hour litigation practice at Seyfarth Shaw LLP, who represents companies in lawsuits brought by groups of workers. His firm reported the 2012 data in July.

“When employees are laid off, that may be an opportunity for them to seek legal counsel either to see if there’s any basis for contesting their termination or to make sure that what they’re receiving in severance or other benefits is proper,” Alfred said in a telephone interview.

Jason Rozger, a partner at Beranbaum Menken LLP in New York, which represents employees, said high unemployment gives companies leverage to compel work off the clock because people are worried about losing their jobs. That changes once they get fired, he said.

“As unemployment goes up, people get laid off and they’re no longer worried about retaliation,” Rozger said in a phone interview.

Fired Workers

Attorneys for terminated employees seeking advice may be prompted to look into wage-and-hour lawsuits, Alfred said.

“I don’t suggest these cases are brought in such a cavalier way, but they’re complicated,” he said.

Different courts have reached different conclusions on the same questions, such as which employees are entitled to overtime pay, he said.

Ambiguities in the Fair Labor Standards Act, which establishes standards for overtime pay, also contribute to the volume of cases, the lawyers said. The law, enacted in 1938 and amended in 2004, defines which workers are entitled to extra pay for working more than 40 hours a week.

It exempts executive, professional and outside sales workers, among others, laying down rules for each category. Someone exempted as an administrator, for example, must do office or “non-manual” work related to “the management or general business operations” of the company.

The worker’s primary duty must include “the exercise of discretion and independent judgment with respect to matters of significance.”

Programmer Exemption

Computer programmers, defined as those who analyze and design computer systems, are exempt from the overtime requirement. Some employers try to classify workers performing rote computer tasks under the exception, Rozger said.

“The fact that you’re using a computer doesn’t mean you’re not entitled to overtime,” he said.

Alfred said the labor law is outdated.

“It is complicated, confusing, difficult for employers to apply laws that were written and adopted in a very different industrial setting to today’s far more technological workplace,” Alfred said. “Proper application of the exemption depends on many unclear concepts -- concepts that can be interpreted differently by very well-intentioned people.”

Lawsuits arise over which workers exercise “discretion and independent judgment.” In one such case, information technology workers at Amdocs Inc., a software company, sued for overtime pay in federal court in San Francisco in September 2010.


The employees claimed they “primarily performed non-exempt duties including providing computer support, trouble shooting, testing related to repairs and problem-solving and/or other technical services,” according to a December 2011 court order certifying the case as a class action, or group lawsuit.

“Plaintiffs have submitted evidence showing that they used procedures and manuals to perform their jobs, and that they did not have the discretion to deviate from prescribed guidelines,” U.S. District Judge Susan Illston wrote.

She said the question of whether the employees’ primary duty “includes the exercise of discretion and independent judgment” should go to trial. The case is pending.

Amdocs argued in a court filing that the workers “fall squarely within this exemption from minimum wage and overtime.” While arguing that the plaintiffs fell within the computer- programmer exception, Amdocs said they would be exempt under other provisions of the law anyway.

Class Size

Amdocs told the court the class as certified might include more than 700 people.

Similar issues arose in cases filed last year against Wells Fargo & Co. (WFC) by home-mortgage consultants. The consultants were paid commissions and didn’t get overtime. They sued Wells Fargo and the Wachovia Mortgage Corp. unit it acquired in 2008, alleging the companies misclassified them and owed them overtime pay. A judge in Houston certified two classes on Aug. 10.

Wells Fargo said in a court filing that it changed its classification system because of “legislative and regulatory changes affecting the industry” and “to remain competitive with other mortgage lenders.”

The San Francisco-based bank estimated the proposed class would include 21,000 people. Alfred said cases have also turned on disputes over tracking hours for employees who can work from home or who spend five minutes on a work-related phone call while technically off the clock.

Independent Contractors

The use of independent contractors has prompted legal actions ranging from mass litigation on behalf of FedEx Ground drivers, now before a federal appeals court in Chicago, to individual disputes.

A U.S. Labor Department-commissioned study in 2000 found that 10 percent to 30 percent of companies in nine states misclassified workers.

Sometimes growth leads to violations because a company is unprepared to handle employee classification, said Jahan Sagafi, a partner with Lieff Cabraser Heimann & Bernstein LLP, in San Francisco, which represents plaintiffs.

Growing companies should be careful to get “adequate HR protections” in place to comply with the law, Sagafi said.

Greater awareness of the law is fueling the litigation, the three lawyers said. As Congress debated Fair Labor Standards Act amendments in 2003, filings under the law almost doubled, to 4,055 from 2,035 in 2002, according to the Federal Judicial Center, the research arm of the federal courts.

Sagafi said he has worked on cases involving information technology workers and the computer-professional exemption. He said he has also seen cases in the drug and retail industries. Alfred cited retailing as a frequent source of wage-and- hour litigation, along with hospitals and hospitality.

“The fact that they continue to be brought in record numbers is something that corporate America is paying attention to,” he said.

By Emily Grannis - Aug 14, 2012 11:00 PM CT

Ask A Lawyer: How Can I Get Paid For Overtime?

How can you get paid for all the hours you worked? Whether it's getting paid vacation days or lunch breaks, lots of AOL Jobs readers have concerns about this issue, so I'm going to answer three readers' questions in this column. Please note: I'm giving general answers based on federal law. Your state may have laws with more stringent requirements for employers, so always check with an employment lawyer in your state about your specific situation. Q: I work for a government agency and if we get any overtime, say on a Tuesday, we have to flex it in time off that week so that we don't get paid for it. The time we get off is straight time not time-and-a-half. They make us flex our time off if we work more than an eight-hour day. Is this legal?

A: As long as the employer makes you take the time off in the same workweek, flex time is legal. Nothing in the Fair Labor Standards Act (the federal law regulating overtime) prohibits an employer from changing your schedule from day to day or week to week.

If the employer makes you take time off in a different week, that's a different matter entirely, called "comp time." If you've worked over 40 hours in any workweek, you're entitled to overtime pay (unless you're exempt). In the private sector, employers can never offer comp time instead of paying you time-and-a-half for all hours worked that week.

If you work for a state or local government agency, they may offer comp time instead of paying overtime. However, they must offer at least an hour-and-a-half for each overtime hour worked. The employer may not deny your request to take comp time off unless using it that day would unduly disrupt the agency's operations.

Q: I work as an exempt professional. We receive paid holidays, but management says that the week of the holiday, if we are scheduled to have that holiday off, we must work a different day. Management says that this is a industry norm. I have checked with multiple companies in the same industry in our area, and others that I have worked at, and no one else has this policy. Can our company demand this of us?

A: There is no federal law requiring that employers give any paid holidays. However, most employers do have holidays when they are closed. As an exempt employee, you are supposed to be paid a salary whether or not you work 40 hours in any given week. That means you must be paid your full salary for any holidays off if you worked at all that week.

However, because you are exempt, your employer can make you work eight or even 80 extra hours that week with no extra pay. So yes, they can demand you work extra hours. Of course, that's the legal answer. The morale there must be awful.

What are the consequences if you don't make up the hours? If they deduct from your pay, then they may be making a critical mistake. They may lose the exemption, and you could be entitled to overtime for any hours you work over 40 hours.

They can retaliate in other ways that are legal. They can fire you, discipline you or make your life miserable if you don't comply with their lousy policy. Maybe it's time to update your resume.

One other possibility is that you're misclassified, and you might not really be exempt, so I'll address one final issue about holiday pay. If you're paid for a holiday that you didn't work and you aren't exempt from overtime, those hours don't count toward your overtime that week. For instance, if you worked 35 hours and were paid eight hours of holiday pay, you don't get 3 of those hours at time-and-a-half.

Q: I am a government employee. My agency pays people in my job classification for working 37.5 hours a week; we have a daily 40-minute lunch break, but are not paid for 30 minutes of it each day, so that is where the missing 2.5 hours come from to keep us from getting paid 40 hours a week. However, most of us work way beyond even 40 hours a week, but do not receive compensation for it.

The time that employees at my level are allotted every day to get all they must get done is woefully inadequate. Most of us work through their lunch break, stay late and/or bring home assignments. Additionally, we are often pressured into attending workshops/in-services sans pay on our own time to sharpen our craft, and to volunteer our off time towards charitable or extracurricular activities.

We do have a union contract with the agency to work and be compensated for 37.5 hours a week. While I know this is an all too common scenario, have you any advice or help you can offer?

A. Based upon the information you provided (and which I've deleted for privacy purposes), you are an exempt professional, which means that you are probably not entitled to overtime. If your union contract says that you are entitled to extra pay for more than 37.5 hours worked, you may have a grievance that you can pursue through the union.

I'll address some other issues you raise. First, lunch breaks. You say you are docked 30 minutes per day for your 40 minute lunch break. No federal law requires pay for breaks over 20 minutes, so docking you for your lunch break (assuming that you don't work through it) is fair game. Because you're classified as "salaried exempt," they don't have to pay extra even if you work through lunch, unless your union contract says otherwise.

The other issue is requiring you to "volunteer" for charitable or other outside activities. The regulation on this issue states, "Time spent in work for public or charitable purposes at the employer's request, or under his direction or control, or while the employee is required to be on the premises, is working time. However, time spent voluntarily in such activities outside of the employee's normal working hours is not hours worked." In order for work to be voluntary, it must be truly that: done without any coercion or undue pressure from the employer. If non-participation adversely affects your employment or working conditions, it isn't voluntary and counts as hours worked.

As an exempt employee, that doesn't mean much. However, if it turns out that you are misclassified, you could be entitled to compensation for any non-voluntary "volunteer" activities, so keep track.

Pregnancy Discrimination In The Workplace Target Of New EEOC Crackdown

WASHINGTON -- During the past week, the Equal Employment Opportunity Commission (EEOC) has filed four pregnancy discrimination related lawsuits and settled a fifth -- just weeks after the government's workplace discrimination law enforcement arm announced a plan to target employers who illegally discriminate against pregnant women.

On Sept. 20, a California security guard company, Quest Intelligence Group, was sued after a female employee, Tabitha Feeney, was fired from her job during her maternity leave. When Feeney tried to return to work, she was told the company had no open positions, but would call her as soon as it did. Quest never called Feeney, but hired a number of male guards while she waited to return to her job.

"Losing my job and facing a brand-new job search right after giving birth was incredibly stressful," Feeney said in a statement. "I had a new baby to support and no income. I had planned on going back to my job, and it was devastating to lose that."

Also facing a lawsuit this week is Bayou City Wings, a Baytown, Texas-based restaurant chain that allegedly fired at least eight female employees because they got pregnant. According to the EEOC complaint, a Bayou City Wings employee handbook specifically instructed managers to fire pregnant employees three months into their pregnancies. One manager said this was because keeping the women working would "be irresponsible in respect to her child's safety." The manager was also afraid he would be punished "for not following procedures" if he didn't fire the women.

A third suit, also involving a restaurant, was filed against J's Seafood in Panama City, Fla., which was sued Thursday for discrimination after firing two pregnant waitresses, shortly after the women told their manager they were pregnant. "The restaurant told the employees that their pregnancies caused them to be a liability to the company," said the EEOC.

Employee instructions about how to handle pregnancies were also at issue in a fourth case, involving the Muskegon River Youth Home, a juvenile detention center in Evart, Mich. The center currently requires "employees to immediately notify the company once the employee learns she is pregnant, and requires her to produce a certification from her doctor that she is capable of continuing to work." In this case, the EEOC is seeking an injunction to prevent the home from carrying out the policy.

Have you been treated unfairly at work? The Huffington Post wants to know about it. Email Please include your name and phone number if you're willing to do an interview.

Cases of women being fired after notifying employers they are pregnant are all too common. Chemcore, a plumbing products company, agreed this week to pay $30,000 to settle EEOC charges that the company fired Marie Simmons, a customer service rep, mere hours after she told a supervisor she was pregnant.

"Too many employers continue to penalize their female work force because of pregnancy," said Delner Franklin-Thomas, district director of the EEOC's Birmingham District, referring to the case against J's Seafood. "This lawsuit sends the message that employers need to hear -- stop discriminating against pregnant employees."

According to Detroit employment lawyer Louis Theros, a partner at Butzel Long, the high turnover rates and decentralized management structure prevalent at chain restaurants and retail stores make them a hotbed of discrimination lawsuits. "Many of the managers have little-to no contact with corporate HR," he said, "and a major question for them is whether they should act independently to 'fix' an issue, or whether they should risk reporting what could reflect badly on them as a manager."

In the cases of illegal policies, like those at Bayou City Wings and Muskegon River Youth Home, Theros said it's unlikely a lawyer reviewed them before they were established, because if they had, the policies would have set off "atomic-level red flags."

Currently, the EEOC only has the resources to prosecute a fraction of the complaints it receives each year. Many more are settled before they get to court through mediation, where the plaintiff gets a monetary settlement and the employer avoids a lawsuit.

But taken together, all five cases likely represent early steps in the EEOC's plan to tackle pregnancy discrimination and employer accommodation of pregnant employees over the coming year, a subject it labels "an emerging issue."

The plan dovetails with efforts by Democrats in Congress to pass the Pregnant Workers Fairness Act, a bill which would ensure that pregnant women are allowed the same reasonable accommodations currently available to people with disabilities.

All this comes as good news to Emily Martin, vice president and general counsel of the National Women's Law Center. "I'm very heartened to see the EEOC step up on this," she told HuffPost.

Government action is especially important, she said, because in cases of employment discrimination "the employer has access to a lot of information the employee doesn't have, so it's often difficult for women to even realize they're being discriminated against." This is especially true "when you're talking about lower wage workers, who are less likely to assert their rights, and often more vulnerable to retaliation by supervisors or managers."

Theros also has taken note of the EEOC's interest in pregnancy discrimination, and said he would be making a point of discussing this with his clients.

"If the EEOC has put it on their plates, then my clients would do well to be even more cognizant about what they are doing with pregnant employees," he told HuffPost. "By issuing a strategic plan, the EEOC is essentially shooting a flare, giving employers a heads-up that, 'we're going to push this issue over the next few years.'"

"I've told clients for years that they should consider treating pregnant women's accommodations the exact same way they do with other people with temporary injuries," he said. "But now, do I go back to them and say that recent signs point to a broader scope of accommodation in the future? You bet I do."

Government Cracking Down On Workplace Racism

WASHINGTON (AP) — It started with allegations of hangman’s nooses, graffiti and racist comments targeting a handful of black workers at a trucking company warehouse in Chicago Ridge, Ill.

Four years later, the Equal Employment Opportunity Commission had turned the case into a major class action lawsuit alleging more than 170 employees of Yellow Transportation Inc. were victims of a racially hostile work environment.

When the company agreed in June to settle the case for $11 million, it became the EEOC’s latest victory in a systemic strategy to bring more large-scale bias cases against prominent companies — all in the name of cracking down on discrimination in the workplace.

Instead of filing a lawsuit on behalf of one worker at a time, the commission is increasingly trying to super-size cases. Investigators look for patterns of discrimination against dozens or even hundreds of workers at a single company in areas such as hiring, pay, promotion or termination.

The EEOC, which enforces the nation’s workplace antidiscrimination laws, hopes that larger settlements that generate widespread publicity will send a strong message to employers about complying with the law.

While the tactic has won praise for deterring discrimination, business groups complain the EEOC is overreaching, driving up their legal bills and making their investments riskier. Federal courts also have rapped the commission, saying in particular cases that it overstepped its bounds.

Many corporate targets, like Yellow Transportation — now YRC Worldwide Inc. — often decide it’s cheaper to settle without admitting guilt than to endure years of costly litigation against the government.

“They’ve gotten every employer’s attention,” said Chicago lawyer Gerald Maatman, who represents companies sued by the EEOC. “It’s a commission that, under the Obama administration, has dramatically expanded its enforcement efforts to send a message to corporate America.”

The systemic effort has surged from less than 50 active investigations in 2006 to nearly 600 last year. In 2011, more than 40 companies — from Denny’s restaurants to United Airlines to Verizon — paid out more than $60 million in settlements or unfavorable court judgments after the EEOC brought systemic discrimination cases.

The surge in bigger cases comes as Republicans and business groups accuse the Obama administration of hampering business growth with burdensome regulations and policies.

The Supreme Court’s decision in Dukes v. Walmart last year, which made it harder for individuals to bring large-scale bias claims, could encourage the EEOC to file more such cases on its own. The EEOC is not bound by the same rules as private citizens for establishing class certification.

“We’re not a rich agency, so we’re trying to have the most impact that we can with the resources that we have,” EEOC general counsel P. David Lopez told The Associated Press.

Last year, for example, the commission reached a $20 million settlement with Verizon Inc. after alleging the company unfairly fired or disciplined hundreds of disabled workers for missing work. Technology firm 3M paid $3 million to settle age discrimination charges after the company laid off hundreds of workers over the age of 45. And Pepsi Beverages Co. paid $3.1 million to settle allegations it used background checks to screen out more than 300 black job applicants.

“They’re searching to make a lawsuit as large as they can make it to have the biggest impact possible, so they’re trying to find victims, rather than handling claims of victims that come to them,” Maatman said.

Lopez says that’s part of the commission’s duty.

“We are a law enforcement agency,” he said. “What we are trying to do is enforce the law, and part of that means we need to identify any victims of discriminatory practices.”

Harry Glasper, one of the early plaintiffs in the Yellow Transportation case, said he wasn’t sure anything would ever be done to improve conditions at work before the EEOC got involved. When he complained about a noose that was hung from his forklift, he said, his boss told him it was “just guys having fun” and that he should throw it away and get back to work.

“I was just so in awe of the EEOC and the actual research they had done,” said Glasper, 57, of Park Forest, Ill. “They had pulled all of the atrocities together. They were able to document this stuff and get the proof. I had gotten to the point where I never thought anything would be done about it.”

Lopez, who was named by President Barack Obama in 2009, is the first career EEOC attorney to be named general counsel; the job typically goes to people from outside the government. He made his mark helping the agency develop large, high-impact cases against companies like Walmart, UPS and AutoZone.

The commission decided in 2006 to make systemic cases a priority but was hamstrung by major budget cuts during the Bush administration. EEOC staffing levels were trimmed by nearly 25 percent. Funding was restored once Obama took office, and the agency has hired hundreds of new investigators and experts to tackle the cases.

“If you are just resolving one person’s complaint, and it’s a policy affecting many people, you’re not making an impact,” said Julie Schmid, acting director of the EEOC’s Minneapolis office, which negotiated the Pepsi settlement. “You’re not doing the best you can.”

At the same time, the commission is facing growing resentment in the business community, and some courts are questioning its tactics.

“Unfortunately, we have seen that the EEOC can sometimes be too quick on the trigger in bringing these kinds of cases against employers without adequate foundation and plunging ahead to force an employer into a settlement,” said Randel Johnson, the U.S. Chamber of Commerce’s vice president of labor issues.

In three recent cases, federal judges said the commission had no basis to bring class action lawsuits and ordered the EEOC to pay the attorney fees and costs of corporate defendants. Last year, a judge awarded $2.6 million in fees to Ohio-based uniform maker Cintas Corp., finding the EEOC failed to show the company discriminated against women applying for service sales representative positions.

Another judge awarded $750,000 to Peoplemark Inc., a Kentucky-based temporary staffing company, saying the commission could not support its claim that using criminal convictions to screen job applicants resulted in a disparate impact on minorities. The EEOC is appealing both decisions.

In a third case, a judge’s award of about $4.5 million to Iowa-based CRST Van Expedited Inc. was later thrown out by the 8th U.S. Circuit Court of Appeals. The appeals court still found the EEOC was premature in filing a lawsuit on behalf of more than 100 women who claimed they were sexually harassed by male truck drivers at the company.

“I think the agency’s gotten scuffed up a bit in some of these recent decisions,” said Ron Cooper, who served as EEOC general counsel during the Bush administration. “The agency needs to have its ducks in a row when it files the lawsuit, and not just have a general thought that there’s a problem and hope to discover support in the course of litigation.”

Lopez defended his tactics.

“Our litigation success rate is 90 percent, better than the private bar,” he said. “We want to bring solid cases.”

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Norfolk Southern Forced To Pay Two Whistleblowers $932,000

HICAGO -- The U.S. Department of Labor has found Norfolk Southern Railway Co. violated federal whistleblower protections in the dismissals of 2 employees who reported workplace injuries. The Department's Occupational Safety and Health Administration ordered the company to pay the workers more than $932,000 in damages.

An assistant secretary of labor, David Michaels, said Tuesday that "railroad workers must be able to report work-related injuries without fear of retaliation."

The investigation found "reasonable cause to believe" that the employees' decisions to report their workplace injuries led to internal investigations and dismissals from the company.

The two workers were a utility switchman based in Decatur, Ill., and a trackman in Melvindale, Mich.

Norfolk Southern spokesman Robin Chapman says the company will appeal the decision to an administrative law judge.