Posts Tagged ‘Fair Labor Standards Act’
Wednesday, September 7th, 2016
Yesterday, the Ninth Circuit took sides in a major split within the U.S. Courts of Appeals over the enforceability of class arbitration waivers. In Morris v. Ernst & Young, LLP, No. 13-16599, Slip. Op. (9th Cir. Aug. 22, 2016), the Ninth Circuit held that employers violate Sections 7 and 8 of the National Labor Relations Act (“NLRA”) by requiring employees covered by the NLRA to waive, as a condition of their employment, participation in “concerted activities” such as class and collective actions. (Slip Op. at 1.)
By this holding, the Ninth Circuit joins the Seventh Circuit, which in Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. May 26, 2016) adopted the National Labor Relations Board (“The Board”) position in D.R. Horton, Inc., 357 NLRB No. 184 (2012). Under this line of authority, the Federal Arbitration Act (“FAA”) does not mandate enforcement of a contract that waives the substantive federal right to engage in concerted action established in Section 7 of the NLRA. (Slip Op. at p. 18-19.) Bryan Schwartz Law blogged in detail about the Lewis v. Epic Systems Corp. decision, here.
In Morris, two employees filed a class and collective action alleging that their employer had misclassified workers as exempt and deprived them of overtime in violation of the Fair Labor Standards Act (“FLSA”) and California labor laws. As a condition of employment, the employees were required to sign contracts containing a “concerted action wavier” that obligated them (1) to pursue legal claims against their employer exclusively through arbitration and (2) to arbitrate individually in “separate proceedings.” Based on these agreements, the employer moved to compel the employees to arbitrate their claims individually. The U.S. District Court granted the employer’s motion. (Slip Op. at p. 4-5.)
The Ninth Circuit reversed, reviewing the decision to compel arbitration de novo. Chief Judge Sidney R. Thomas explained in the opinion:
This case turns on a well-established principal: employees have the right to pursue work-related legal claims together. 29 U.S.C. § 157; Eastex, Inc. v. NLRB, 437 U.S. 556, 566 (1978). Concerted activity – the right of employees to act together – is the essential substantive right established by the NLRA. 29 U.S.C. § 157. Ernst & Young interfered with that right by requiring its employees to resolve all of their legal claims in “separate proceedings.” Accordingly the concerted action waiver violates the NLRA and cannot be enforced.
(Id. at p. 6.)
The Ninth Circuit explained that the FAA does not dictate a contrary result. (Id. at 14.) While the FAA creates a “federal policy favoring arbitration” clause enforcement, the Act contains a savings clause that prohibits enforcement of arbitration agreements that defeat substantive federal rights, including the right to engage in concerted activity under the NLRA. (Id. at 15, 26.) In Morris, employees’ waiver was illegal not because it required the employees to pursue their claims in arbitration, but rather, because they could not do so in concert. (Id. at p. 16.)
Other circuit courts have taken a contrary position, enforcing employers concerted action waivers under the FAA. See Cellular Sales of Missouri, LLC v. N.L.R.B., 824 F.3d 772, 776 (8th Cir. June 2, 2016); Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013 (5th Cir. 2015); Owen v. Bristol Care, Inc., 702 F.3d 1050, 1053-54 (8th Cir. 2013); D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 361 (5th Cir. 2013); Sutherland v. Ernst & Young LLP, 726 F.3d 290, 297 n.8 (2d Cir. 2013).
As more circuits choose sides on whether class action waivers in arbitration agreements are enforceable, Supreme Court review becomes an inevitability.
The High Court would also be wise to resolve a disagreement between the Ninth and Seventh Circuits regarding such waivers. In the Seventh Circuit, any “[c]ontracts that stipulate away employees’ Section 7 rights . . . are unenforceable.” Epic, 823 F.3d. at 1155. The Ninth Circuit precedent is narrower, making such contracts enforceable if employment is not conditioned on agreeing to the clause. (Slip. Op. 11, n. 4.) For example, if an employee has the opportunity to opt-out of a class action waiver and keep his or her job, but chooses not to, that waiver would be enforceable by the employer in the Ninth Circuit. (Id. (citing Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1076 (9th Cir. 2014))). The Seventh Circuit provides a clearer rule, one that better comports with the purposes of the NLRA, and one that the Supreme Court should adopt.
For now, workers in the Ninth and Seventh Circuits, as well as their advocates, should take note that employers cannot force employees to sign class action waivers as a condition of employment, because Epic and Morris tell us that the NLRA provides employees with the right to vindicate their employment rights collectively.
This blog appeared on Bryan Schwartz Law on August 23, 2016. Reprinted with permission.
Rachel Terp is an associate at Bryan Schwartz Law, where she focuses on employment discrimination, whistleblower, and wage and hour claims. Previously, Ms. Terp was a Bridge Fellow with the East Bay Community Law Center (EBCLC), where she specialized in consumer litigation.
Bryan Schwartz Law is an Oakland, California-based law firm dedicated to helping employees protect their rights in the workplace. Mr. Schwartz and his firm have fought to prohibit discrimination, retaliation, and harassment obtained reasonable accommodation for disabled employees, vindicated whistleblowers’ rights and ensured that corporations pay workers all wages they are owed. Bryan Schwartz Law has successfully litigated individual and class action complaints nationwide, helping to recover millions of dollars for thousands of employees, forcing corporations and Government agencies to change their practices and punish wrongdoers. Bryan Schwartz Law is also one of the few Bay Area-based law firms with extensive experience representing Federal employees in their unique Merit Systems Protection Board and Equal Employment Opportunity Commission complaints.
Tuesday, February 16th, 2016
A bunch of congressional Republicans (and two Democrats who should be ashamed of themselves) are very upset that the Obama administration plans to expand overtime pay eligibility. The lawmakers have written a letter to Labor Secretary Tom Perez expressing concern about changes that aren’t even being made, but mostly about the fact that they don’t want people to get overtime pay:
What is in the rule, which the members of Congress who signed the letter don’t like, is a long overdue increase in the salary an employee must be paid if an employer wants to avoid paying overtime. The current rule sets that exemption threshold at $23,660 a year—below the poverty line for a family of four. The proposed rule, as the representatives note, “would raise the salary threshold and require employers to pay overtime for all employees who make $50,440 or less per year.” The signers don’t like that, but the reasons they give don’t hold water.
The letter says the increase in the threshold would suddenly make 5 million employees eligible for overtime pay. That’s true, and it’s a good thing. Making employers pay their employees extra when they work more than 40 hours in a week is the purpose of the Fair Labor Standards Act. It’s good for those employees and their families, whether they get paid more or are simply allowed to spend more time with their families. And because it applies to all employers equally, it will not create competitive burdens.
The representatives claim the proposed salary threshold somehow fails to take into account the fact that “the purchasing power of a dollar is drastically different in various parts of our country.” But the claim is ridiculous. The point of the salary threshold is that workers paid less than this amount—even if they are classified by their employers as managers or executives—are automatically entitled to overtime protections. Essentially, this threshold separates workers with genuine managerial and professional responsibility, who have substantial autonomy over their work schedule and have real bargaining clout with their employers, from those workers who are simply labeled “managers” (often by employers precisely looking to avoid the obligation to pay overtime) but who nevertheless can be compelled to work long hours.
A fair day’s wage
? Workers in Las Vegas’s Culinary Union were denied a permit to protest outside the Palace Station Hotel & Casino, so they were like “fine, we’ll commit nonviolent civil disobedience … “
? A Kentucky judge ruled against a county-level anti-union law.
? Wage theft, sexual assault, and no sick leave: The horrible conditions facing poultry workers.
? This is vile behavior to see from a teacher, let alone a teacher whose school has elevated her as a model for others. And before dismissing it as a one-time occurrence, consider that the video was recorded by an assistant teacher who was sick of watching that sort of thing. And that at Success Academy charter schools:
Jessica Reid Sliwerski, 34, worked at Success Academy Harlem 1 and Success Academy Harlem 2 from 2008 to 2011, first as a teacher and then as an assistant principal. She said that, starting in third grade, when children begin taking the state exams, embarrassing or belittling children for work seen as slipshod was a regular occurrence, and in some cases encouraged by network leaders.
? A war on teachers in Virginia.
? John Kasich is riding high in the Republican presidential primary, at least temporarily, so let’s take a look at Kasich’s education record.
This blog originally appeared in dailykos.com on February 13, 2016. Reprinted with permission.
Laura Clawson has been a Daily Kos contributing editor since December 2006 and Labor editor since 2011.
Monday, July 13th, 2015
Millions of workers who have not been receiving overtime pay would become eligible under a newly announced rule change. According to the Economic Policy Institute, the number of newly overtime eligible workers could be as high as 15 million. The change would update what is known as the “white collar” exemption to the overtime pay rules that covers certain executive, administrative and professional employees. Currently, these types of employees can be classified as “exempt” (meaning not entitled to mandatory overtime pay) so long as they are paid a salary of at least $455 per week ($23,660 per year) – an amount that is below the poverty line for a family of four and that has not been adjusted since 2004. Under the new rules, the minimum salary requirement for exempt white collar workers would increase to $970 per week ($50,440 per year) for 2016 and be indexed going forward to keep pace with inflation. Workers whose salary falls below this level would now be classified as “non-exempt” and guaranteed time-and-a-half for all hours worked over 40 per week.
While some big business groups are opposing the proposed changes, claiming terrible economic consequences will result if their labor costs increase; this is nothing new and the same cry that is heard every time they are forced to increase wages. The facts and history do not, however, support their dire warnings. In cities such as San Francisco and Santa Fe where the minimum wage has for years been set well above the federal minimum, and even coupled with other employee benefits such as paid sick leave and health-care, the impacts on employment have been essentially zero. Contrary to the claims of catastrophic job loss and business closing, studies have shown “no measurable” negative effect on employment when cities or states have raised their minimum wage above the federal minimum wage. Historically, increased pay for workers tends to generate a positive feedback loop – workers earn more, spend more, resulting in positive economic activity.
To put the pay figures in perspective, look back 40 years. In 1975 the minimum salary amount was adjusted and set to $250 per week. At that time, 65% of the American workforce was paid less – entitling them to overtime pay. Today, however, a mere 11% of the workforce earn less than the $455 per week minimum. Today, the $250 per week minimum salary would equate to more than $980 per week (approximately $51,000 per year) if it had been annually adjusted per the Consumer Price Index. So, to merely keep middle-class workers in the same economic position they were in as of 1975, the current $455 per week minimum salary would need to be increased to at least $980 per week. This is roughly what is being proposed under the new rules.
The Fair Labor Standards Act (FLSA) was implemented in 1938 to specifically address the serious problems caused by the overworking and underpayment of our nation’s core middle-class workforce. The two primary reasons the FLSA was put into place are:
- First, to protect against working conditions that are “detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” The law recognizes that employees need some time off to spend with family and relaxing from often stressful work and provides an economic incentive to not overwork employees. If an employer is going to demand work hours that deprive employees of this precious down time, the law places a premium value on such time – a cost that the employer must cover.
- Second, requiring the payment of time and a-half for all hours over 40 per week creates and strong economic incentive for employers to hire more people and spread the work, instead of overworking their existing staff. This helps to reduce overall unemployment in the U.S. economy, an issue every bit as relevant today as it was 75+ years ago.
The proposed changes to the overtime pay regulations are important to restore fair pay to millions of middle-class workers and are consistent with the overall goals and policy objectives that originally inspired the federal overtime pay laws.
About the Author: The author’s name is Jillian Johnson. Jillian Johnson is a freelance writer from New Jersey who has contributed to an array of blogs of various industries, particularly business, finance and health. She freelanced for a local NJ parenting magazine “Curious Parents” magazine and wrote for her college newspaper, “The Tower,” ultimately becoming the Editor-in-Chief. Jillian holds a BA in Communications and is currently working towards a BSN.
Friday, March 20th, 2015
Workers who get cheated out of their due pay in central Florida will have a much easier time recovering what they’re owed after Osceola County approved a tough new wage theft law, making it the latest in a string of local governments to take on increased responsibility for enforcing federal wage and hour laws.
Under the new rules, workers will be able to file cases with the county and employers who are accused of wage theft could end up having to repay triple the amount they stole from employees if they fight a case and lose. Workers in Miami-Dade County have so far recovered about $1.8 million since that wage theft law came online in late 2010.
Osceola’s law adds an important, tougher element to the basic model laid out in Miami-Dade. Companies that fight a wage theft claim and lose can have their business license revoked by the county.
Efforts to combat wage theft at the local level appear to be spreading, according to Tesedeye Gebreselassie of the National Employment Law Project (NELP). “It’s clear that existing laws and resources on fed state level are insufficient, and we’re starting to see more cities and counties take action in any way that they can,” she said. “There’s a growing trend to figure out what can be done on the local level now that everybody’s acknowledged that wage theft is a huge problem.” Propagating enforcement systems that work will be especially important if low-wage workers are to actually realize the economic benefits that should come from a rash of state and local minimum wage increases around the country, as the NELP argues in a new report.
There is no perfect deterrent, since a business owner willing to ignore wage laws in the first place is often going to choose to go out of business rather than dole out back pay. And the prevalence of low-wage, low-skill jobs in the American economy has helped create a sort of race to the ethical bottom among employers who are more interested in cutting corners than giving honest pay for honest work. As David Weil, the top federal official in charge of enforcing wage and hour laws for the Department of Labor, told the New York Times in 2014, “We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law.”
“I have a very close relative that had this happen to him,” Osceola County Commissioner Michael Harford (D) told ThinkProgress. “It was very difficult for him to understand how he was getting paid.” Harford gradually realized that wage theft was relatively common among his constituents, and helped push the law through this spring after voters elected four Democrats and one Republican to the commission last fall.
Harford’s reforms not only increase the consequences of wage theft for employers who get caught, but also make it easier for workers to find legal help. If the new adjudication process finds a company liable for wage theft, it must pay treble damages for the withheld pay and also cover the legal fees incurred by the workers who brought the allegation. “If we had more of an incentive for representation in these cases, we’d see hopefully the same effort to vindicate workers’ rights that we see to vindicate the rights of the injured in personal injury cases,” Rep. Alan Grayson (D) told ThinkProgress.
There’s no reason other localities can’t follow Osceola and Miami’s lead. Jeanette Smith, executive director of South Florida Interfaith Worker Justice and a key member of the coalition that researched the wage theft question for two years before bringing a legislative proposal in Miami-Dade, told ThinkProgress she thinks the model ought to be easily transferred even beyond the state line.
“I tell people not to just change the name on it, make sure it works,” Smith said. “But in general I think this kind of process is portable, as long as you’ve got a division of your government that can pick it up and administer it, and you have the political will, and frankly that you have responsible businesses that speak up.” Partly that’s because the laws don’t require business owners to comply with any new regulations and they don’t require local governments to hire new enforcement officers. “These ordinances do not put new regulations in place. Nothing at all. It’s simply offering a venue where the workers can go,” Smith said.
The real cutting edge of a law like Osceola’s comes well before a lawyer would ever get involved, in a pre-hearing process called conciliation. After a worker notifies the county of a wage theft allegation and provides evidence for the claim, the county contacts the employer and invites him to address the complaint voluntarily. Conciliation has produced a little over half of the $1.8 in recovered wages and damages under Miami-Dade County’s law and 53 percent of cases brought under the law were resolved at that early stage, according to Smith.
“There’s a big emphasis on conciliation, because the idea is that these are predominantly low-wage workers and they need to get their money right away. These are people who can’t go to court and wait all that time,” Smith said. By creating a two-stage process and giving employers immunity from the damages provision of the law as long as they resolve a legitimate wage violation in the conciliation stage, these laws give employers an incentive to be responsive to complaints. “There is gonna be that smaller group of completely unscrupulous employers that just completely disappear, often people who never even had a business license to start with,” Smith said. But even if workers for such employers never get made whole under this new process, the law still discourages willful violators from setting up shop in the area.
Wage theft steals more money from American workers each year than the combined haul from every robbery and heist nationwide. The term refers to violations of federal wage and hour protections, and that federal jurisdiction is part of the reason that local protections like the ones just passed in Osceola County are rare. Workers who think they’re being cheated by the boss can file a suit anywhere, regardless of local ordinances, and they have done so at a rapidly increasing clip in recent years. Workers have won court settlements from retail logistics firms, trucking companies, strip clubs, and fast food companies. They’ve also lost one significant case before the Supreme Court, though it only narrowly curtailed the types of employer policies that can be considered wage theft.
But going to court is expensive, in both dollars and time, and Osceola is the most recent place to erect a more worker-friendly system for addressing the complaints. Wage theft laws intended to help workers recoup wages without getting tied up in court have come into effect in Chicago, Houston, andColorado in recent years.
Lowering the local barriers to recovering stolen wages is a good start, Grayson said, but it does not address the various other ways in which workers have been pitted against one another by recent attacks on union solidarity on the job. “The right to organize has been frustrated and in many cases defeated by business groups. That’s left a disorganized low-wage labor base that can be exploited at will by unscrupulous employers, so the problem increases over time,” Grayson said. Right now, “crime does pay if you’re cheating your employees. And we have to stop that.”
This blog originally appeared in Thinkprogress.org on December 10, 2014. Reprinted with permission.
About the Author: Alan Pyke is the Deputy Economic Policy Editor for ThinkProgress.org. Before coming to ThinkProgress, he was a blogger and researcher with a focus on economic policy and political advertising at Media Matters for America, American Bridge 21st Century Foundation, and PoliticalCorrection.org. He previously worked as an organizer on various political campaigns from New Hampshire to Georgia to Missouri. His writing on music and film has appeared on TinyMixTapes, IndieWire’s Press Play, and TheGrio, among other sites.
Friday, October 12th, 2012
In 2010, the military newspaper Stars and Stripes labeled Fort Lewis-McChord, a joint Army and Air Force base in Washington state, “the most troubled base in the military” due to its inability to treat post-traumatic stress disorder (PTSD) or address mental health problems. Fort Lewis-McChord has one of the highest suicide rates of army bases across the country, and last year had the highest number of total suicides with 16. It was where Sergeant Robert Bales was stationed right before he was shipped to Afghanistan and massacred 16 Afghan civilians–including nine children–last March. And it was where the soldiers who formed a “kill team” that murdered civilians in Afghanistan in 2010 had previously been stationed.
The murders of Afghan civilians and high rates of suicide among the soldiers stationed there are believed to stem from the failure of Lewis-McChord’s doctors to adequately treat mental health problems. In the past five years, approximately 300 soldiers saw their PTSD diagnoses reversed by doctors at the base. The Army is currently investigating whether doctors at Lewis-McChord reversed the diagnoses in order to save money.
Now, a Working In These Times investigation has found that workers assigned to help families suffering from the effects of PTSD have been told to close cases on suicidal patients in order to save money, haven’t been paid on time and have been forced to attend anti-union meetings that they claim the contractor, Strategic Resources Inc. (SRI), has billed to the federal government, in violation of federal law. (In July, an In These Times expose on union busting at Fort Lewis-McChord spurred a federal investigation into whether General Dynamics was illegally using government dollars to engage in union-busting.)
Kevin Cummings, an organizer with the International Association of Machinists (IAM), has been attempting to unionize mental health counselors employed by SRI at Lewis-McChord for the past several months. Counselors at the base tell Working In These Times they often have been told to close cases early in order to save money and to lie to federal investigators about how much the contractor was reimbursing them for driving expenditures. They also report being met with illegal threats and intimidation when they tried to unionize.
“[SRI] had no idea really what victim advocates do,” says Kara Karlson, a former counselor with SRI’s Victim Advocacy group. “It’s just completely about money-making. When we were hired on, they didn’t send us any training materials. I got a company handbook that was only eight pages long. They would do whatever they could to save a penny for themselves and hang you out to dry.”
“There was a lot of pressure to close cases quickly even if we didn’t feel like we should close them,” says another counselor who works in SRI’s New Parents Support Program, and who requested anonymity out of fear of being fired. “I had a friend who was working with a family that had a suicidal teenager and was told to back away from the family. She refused to back away. They wanted other services to take on the risk of dealing with someone who is suicidal.”
“[Workers] are directed to keep a certain number of cases open and keep a certain number of cases closed,” says IAM’s Cummings. “The lead will tell them, ‘You have too many cases open, close that one.’ They are telling them to close cases on people on suicide watch. If [SRI] need [to hire] additional bodies, they need to get them. Maybe the contract needs to be opened to help them hire additional people.”
In addition to finding it difficult to provide proper treatment, counselors in SRI’s New Parent Support Program and its Victim Advocacy Group say their pay was cut by as much as 25 percent when SRI took over their contract three years ago.
Most federal contractors must abide by the Service Contract Act, which mandates that workers be paid the prevailing wage for the job in the region. However, workers at SRI, many of whom have master’s degrees, allege the company misclassified them as less skilled employees. As a result, they make only $27.50 per hour, instead of the $36.05 per hour that would be mandated under the Service Contract Act’s provisions if they were classified properly. The workers hope that if the Department of Labor reviews their contract, it will find that their work falls under the better-paying classification.
In addition, SRI has refused to pay workers overtime, claiming that they are exempt under the Fair Labor Standards Act, according to Cummings. However, he says that isn’t actually the case.
“Read the act,” Cummings says. “It says they are not exempt if their work is preventive or investigatory in nature. The VA [Victim Advocates] Group absolutely meets those criteria, [and] the NPSP [New Parents Support Program] seems to as well. NPSP has to provide me a full breakdown of their duties, but the job description and service contract for them indicate they should not be exempt either.”
Workers at SRI say that to keep them from joining together to demand higher wages, the company instituted a rule prohibiting them from talking to each other about their wages. Such a rule would violate the National Labor Relations Act, which allows workers to discuss their wages.
Along with the low pay and unpaid overtime, workers claim the company routinely delays compensating them for the gas mileage that they accrue when driving to meet families in crisis or victims of crime or abuse. “We would spend $250 a month on gas sometimes and have to wait up to five months to get paid,“ says one worker with New Parent Support Program, who requested anonymity out of fear of losing her job.
When workers informed the Department of Labor about the delays, the department sent an investigator to examine the complaints. That prompted an SRI manager to tell workers to lie about their gas mileage, according to one worker. The worker cites a May 12, 2012, conference call in which the manager instructed workers to redo their forms and change key information, such as the number of miles that they had driven.
Finally, after seeing another group of SRI workers employed as IAM-unionized truck drivers picket Fort Lewis-McChord over their greivances, counselors in SRI’s New Parent Support Program and Victim Advocacy Group decided to organize with IAM. SRI responded with behavior that the union claims was illegal.
According to email exchanges and conversations with the workers, in July, the nine women employed as counselors in SRI’s Victim Advocacy Group say they were forced to attend a meeting in which an outside consultant warned them about the dangers of joining a union. In August, 14 counselors with the New Parent Support Program were also forced to attend meetings in which the same consultant spoke out against unionizing.
In both instances, workers claim they were forced to bill the time attending the meetings to the federal government. President Barack Obama’s Executive Order 13494, which went into effect last December, prohibits federal contractors from being reimbursed for the cost of their anti-union activity. (In an interesting side note, SRI Presdient Rose McElrath- Slade and her husband Cleveland Slade were major donors to Obama, giving a combined $100,000 to his inauguration fund in 2008.)
“The workers were mandated to attend the meetings, then directed to charge as though they were working on their normal jobs,” says Cummings. “Our money is not supposed to be used for this. Our money is supposed to support our rights, not deny them.”
The command of Fort Lewis-McChord did not respond to multiple requests for comment.
In an email to Working In These Times, an SRI spokesperson wrote, “Your inquiry is the first we have heard of this. SRI strives to comply with all applicable laws/regulations and to honor our commitments to our customer, the federal government. We have different levels of review for timesheets for accuracy. Any error identified is corrected to ensure compliance.”
On July 31, the nine counselors of SRI’s Victim Advocacy Group voted to join IAM. The 14 in the New Parent Support Program are still in unionization talks with IAM, despite being forced to attend the anti-union meetings that they claim were billed as regular work to the federal government.
“There is a problem when they are using taxpayer money to deny taxpayers their basic rights,” says Cummings. “If they want to talk their employees out of unionization, that’s fine, but don’t send taxpayers the bills on it.”
This post originally appeared in Working In These Times on October 3, 2012. Reprinted with permission.
About the Author: Mike Elk is an In These Times Staff Writer and a regular contributor to the labor blog Working In These Times. He can be reached at email@example.com.
Friday, March 4th, 2011
CHICAGO—After three months of working in a Wal-Mart warehouse in the Chicago suburbs last fall, Robert Hines was fed up with getting paid much less than he had been promised by the company Reliable Staffing, which hired temporary workers to unload containers.
But the final straw came when he wasn’t paid at all for seven 10-12 hour days he’d worked shortly before Thanksgiving, he says. His calls to the agency weren’t returned, and when he went in person to demand his money, he said a manager claimed he and his work partner, Leo Williamson, had never worked those days at all.
So Hines and Williamson are among eight named plaintiffs in a class action lawsuit filed today in federal court charging Reliable Staffing, its owner Daniel Gallagher and Schneider Logistics, which runs the Wal-Mart warehouse in Elwood, Ill., with violating state and federal labor laws.
When former Reliable Staffing workers marched into the agency last Monday demanding pay and billing records (as is their right under the Illinois Day and Temporary Labor Services Act), they were not given any records and, they say, were greeted with hostility by Gallagher.
Deathrice Jimerson and Demetrie Collins allege they were cheated out of hundreds of dollars in wages at a Wal-Mart warehouse. (Photo by Kari Lydersen)
Under the Illinois day labor act, considered one of the nation’s strongest such laws, the workers have the right to see what Reliable Staffing billed Schneider for their work, and what it paid them. If the hours and/or piece rates reported to Schneider and reported to the workers themselves don’t add up, it could show Reliable Staffing was intentionally not paying workers for their labor.
The plaintiffs think that was standard practice at the company.
“The lady looked me in the face and said I have no recollection of you working,” said Hines, 37. “I got vulgar comments, a snazzy attitude from them. And I was breaking my back for peanuts, or to not even be paid at all.”
The lawsuit alleges violations of the aforementioned Illinois Day and Temporary Labor Services Act, along with the Fair Labor Standards Act, the Illinois Minimum Wage Law and the Illinois Wage Payment and Collection Act. Allegations include unpaid overtime, failure to pay state and federal minimum wage and failure to pay at least four hours’ wages when workers were called in to work, as mandated by the day labor services act.
The lawsuit says that plaintiffs who worked for Reliable Staffing from 2006 on were promised $10 an hour, plus a piece rate for unloading trucks, including a higher “premium” piece rate for heavier goods. It alleges they were not paid the piece rate as promised, and that in fact workers were often paid less than state and federal minimum wage along with not being paying overtime.
Hines said that at the rate promised, his paychecks for working often from 6 a.m. to 6 p.m. should have been at least $300 a week – not counting overtime, which he also should have been due. But he was usually paid $239.
The suit also alleges workers were not paid for mandatory waiting time, adding up to multiple hours per week. It says that when one defendant wrote his arrival time on a sign-in sheet, a supervisor actually tore the sheet up.
“Reliable Staffing actually did not keep track of people’s hours,” said attorney Chris Williams. “That’s illegal. Even if you are paying a piece rate, under federal law you need to show that adds up to at least minimum wage.”
And the suit alleges Reliable Staffing violated state laws by failing to provide workers with documentation of where and for which third party they would be working, the nature of the work and how much they would be paid. The suit basically alleges that workers were paid the $10 piece rate only – often divided between two or three workers, workers say – and then the employer simply made up the number of hours the worker supposedly worked by dividing the piece rate by 10.
“The check stub is a fiction—their check stub could show they worked 36 hours when they really worked 72 hours,” said Williams. That’s why, Williams said, it’s so important the workers are able to demand their billing records under the state day labor services act.
“The workers are supposed to be able to go into the office and get this information themselves,” Williams said. “But unfortunately the law isn’t working. That’s why we had to take this to federal court.”
The suit says:
In fact, Defendants Reliable and Gallagher provided Plaintiffs and similarly situated laborers with check stubs that contained false information, showing the final gross compensation to the laborer divided by $10.00, thereby showing a number of hours worked on the check stub that bears no relationship to the actual number of hours worked…
Rather than provide Plaintiffs and the Class with the actual hours worked, Defendants Reliable and Gallagher provided Plaintiffs and the Class with a fictional number of hours worked and a fictional pay rate as described in paragraph.
The lawsuit adds that failing to provide workers documentation of their employment terms makes it easier for employers to cheat workers, saying:
The Illinois legislature found that such at-risk workers are particularly vulnerable to abuse of their labor rights, including unpaid wages, failure to pay for all hours worked, minimum wage and overtime violations, and unlawful deduction from pay for meals, transportation, equipment and other items.
The workers’ want unpaid wages, going back up to three years. The lawsuit also asks for statutory damages on some counts, attorneys’ fees, and that the company be blocked from violating these laws in the future. The suit notes that under the day labor services act, third party companies like Schneider that hire staffing companies are liable and legally responsible for any unpaid wages by the staffing company.
Depending on how the law is interpreted, it’s possible Wal-Mart itself could be liable.
“Hopefully this lawsuit will trickle down and help not just us but other people,” said Hines. “Maybe they’ll wake up and see that they have to treat people fairly if they want to get more out of us. Now they’re sitting there high on the hog, eating nice food, while we’re on the dollar menu at McDonald’s.”
This blog originally was posted on http://www.inthesetimes.com/on February 28, 2011. Reprinted with Permission.
About the Author: Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist whose works has appeared in The New York Times, the Washington Post, the Chicago Reader and The Progressive, among other publications. Her most recent book is Revolt on Goose Island. In 2011, she was awarded a Studs Terkel Community Media Award for her work. She can be reached at firstname.lastname@example.org.
Thursday, September 30th, 2010
The United States is a country where hard work is supposed to be rewarded. If you agree with that, would you be shocked to learn that there are more than 1.6 million homecare workers who are being denied federal minimum wage and overtime protections under current labor laws? And it is almost 2011!
Chew on this for a minute: More than 1 million hardworking Americans are legally denied basic labor rights most of us take for granted at this point. How did that happen, what can we do to change that?
It all goes back to The Fair Labor Standards Act (FLSA), which was enacted in 1938 to ensure a minimum standard of living for workers through the provision of minimum wage, overtime pay, and other protections – yet, domestic workers were excluded.
In 1974 the FLSA was amended to include domestic workers, such as housekeepers, full-time nannies, chauffeurs, and cleaners. However, people who were described as “companions to the elderly or infirm” were for some reason excluded from the law. They were compared to babysitters…
I love asking the question: If your elderly family member needed homecare to change herself, use the bathroom, get lifted from the chair to the sofa, and then have her meds dispensed at specific times; would you call the babysitter you call for date night with your spouse? Of course you wouldn’t, so why does the government consider these hardworking homecare providers babysitters? Yeah, I don’t know either.
In 2001 the Clinton Department of Labor finds that “significant changes in the home care industry” have occurred and issued a “notice of proposed rulemaking” that would have made important changes to this bizarre exemption. So, that was good news, right?
It was good news until W came to town. The Bush Administration terminated the revision process shortly after taking office. Thanks, W!
Then comes 2007: the US Supreme Court, in a case brought by New York home care attendant Evelyn Coke, upheld the DOL’s authority to define this exception to the FLSA. In short, that means that this crazy archaic law can be reversed beginning with the DOL, today.
Before we get you to take action on this situation, please keep in mind that these million-plus workers are currently living at near poverty level earning a median income of $17,000 a year. Most of these workers, who both love their work and are good at their work, must have two and three jobs to just make ends meet. With this scenario in play, these workers are quick to burn out or leave their trade entirely. This ultimately comes back to the consumer who often finds it difficult to hire and retain high quality home care services.
This article was originally posted on SEIU”s Blog.
About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.
Friday, August 20th, 2010
For the last few months I’ve been thinking about and writing about home care workers. In my work, I find that if folks haven’t had to hire a homecare worker for themselves or their family, it appears that most of these workers fall off the radar.
The problem here is somewhat circular. The demand for homecare services is exploding as the baby boomer generation ages and more seniors and people with disabilities choose to live at home rather than in a nursing home. Low wages, no federal minimum wage or overtime protections, and no benefits contribute to homecare workers leaving their profession (turnover is estimated to be as high as 60% per year). Consumers and patients have difficulty finding and keeping homecare services as a result. Which leads to – yes – increasing demand for homecare workers.
How did this happen?
Well, it goes all the way back to 1938 when the Fair Labor Standards Act (FLSA) was enacted to ensure a minimum standard of living for workers through the provision of minimum wage, overtime pay, and other protections – but domestic workers, for some reason, were excluded.
Then 36 years later, in 1974, the FLSA was amended to include domestic employees, such as housekeepers, full-time nannies, chauffeurs, and cleaners. However, people who were described as “companions to the elderly or infirm” were for some reason excluded from the law. They were compared to “babysitters.” Weird, huh?
The following year, in 1975, the Department of Labor (DOL) goes on to interpret this “companionship exemption” as including all direct-care workers in the home, even homecare workers employed by third parties, such as home care agencies.
So, in 2001, the Clinton DOL finds that “significant changes in the home care industry” have occurred and issues a “notice of proposed rulemaking” that would have made important changes to this weird exemption. They agreed that it made no sense to exclude this whole industry, as if they were just like “babysitters.”
Clinton’s findings were unfortunately short-lived because the incoming Bush Administration terminated the revision process. Thank you, Mr. Bush.
In 2007 something else happened worth noting: The US Supreme Court, in a case brought by New York home care attendant Evelyn Coke, upheld the DOL’s authority to define this exception to the FLSA. This means, this crazy archaic law can easily be reversed by the DOL.
Meanwhile more than 1.5 million homecare workers are currently living at near poverty level earning a median income of $17,000 a year. Most of these workers, who both love their work and are good at their work, must have two and three jobs to just make ends meet. Many of these workers need food stamps to put food on their tables. All this ultimately comes back to the consumer who often finds it difficult to find and retain high quality homecare services.
The injustice here is, as was said in a June 6 NY Times Op-Ed, ” …while nannies and caregivers make it possible for professional couples to balance the demands of family and work, they often cannot take time to be with their own families when sickness or injury strikes.”
Though I inherently know that we can fix this problem together, I am keen to know what you think is the best way to make this happen.
This article originally appeared on the SEIU Blog.
About the Author: Richard Negri is the founder of UnionReview.com and is the Online Manager for the International Brotherhood of Teamsters.
Tuesday, June 15th, 2010
During the past several years, we have represented employees of several clothing retailers, including sales associates working for Polo Ralph Lauren, Gap and Banana Republic, and Chico’s in California-wide class action cases. All of these cases were prosecuted under California labor law. Our most recent employment class action against Polo Ralph Lauren challenged its failure to pay employees for the time they spent waiting for and undergoing “bag checks” or internal theft prevention inspections at the end of their shifts. Our clients alleged they sometimes had to wait for up to a half an hour for managers to perform bag checks and let them leave the stores. They alleged that under California law this off-the-clock time was “work” and that they were entitled to wages for the time they spent in their stores between “clock out and walk out.”
Bag Checks Are Common In the Retail Setting
In the retail store environment, many companies require employees to undergo bag check inspections before they can leave their stores for breaks or at the end of their shifts. According to industry experts, bag checks are a loss prevention tool used by retailers to discourage internal theft. These bag checks are permitted under California law and are generally a mandatory condition of employment for certain types of retail workers. The problem arises when employees are required to wait for their managers or other authorized personnel to perform bag checks on them after they have clocked out and are no longer being paid for their time. Is this waiting time compensable under California, however?
Under California Law, an Employer’s Control Over the Worker Is Key
With certain limited exceptions, hourly employees in California are entitled to be paid for all the time they are “subject to the control of an employer.” Bono Enterprises, Inc. v. Bradshaw (1995) 32 Cal. App. 4th 968. This “includes all the time the employee is suffered or permitted to work, whether or not required to do so.” Industrial Welfare Commission Order 7-2001. In the Polo case, our clients alleged they had been locked inside their stores after they had clocked out at the end of their shifts. From our clients’ perspective, physical confinement plainly satisfied the “control” requirement under California law.
The Federal De Minimis Defense
Polo defended the claims by relying on a federal legal doctrine called the de minimis defense. The de minimis defense arose out of the Portal-to-Portal Act (a 1947 amendment to the federal Fair Labor Standards Act). 29 U.S.C. § 254(a), a provision of the Fair Labor Standards Act, provides that certain activities performed before (preliminary) or after (postliminary) the worker’s principal activities are not compensable.
Under the Fair Labor Standards Act, principle activities include any work of consequence performed for an employer, no matter when the work is performed. If the activity is necessary to the business and is performed by the employees for the primary benefit of the employer, it is generally compensable time, unless it is deemed to be de minimis. It is de minimis when the unpaid time is short, occurs infrequently and is difficult for the employer to track. Lindow v. United States, 738 F. 2d 1057 (9th Cir. 1984)
As the United States Supreme Court explained more than 60 years ago,
When the matter in issue concerns only a few seconds or minutes of work beyond the scheduled working hours, such trifles may be disregarded. Split-second absurdities are not justified by the actualities of working conditions or by the policy of the Fair Labor Standards Act. It is only when an employee is required to give up a substantial measure of his time and effort that compensable working time is involved.
Federal Courts, including the Ninth Circuit, have developed a three-part test to evaluate when unpaid work time can be described as de minimis. In Lindow v. United States, (9th Cir. 1984), the Ninth Circuit Court of Appeals explained that to excuse an employer from its wage obligations under the de minimis defense, the courts must evaluate: “(1) the practical administrative difficulty of recording the additional time; (2) the aggregate amount of compensable time; and (3) the regularity of the additional work.”
Thus, if the work time is short, occurs only on rare occasion and is very hard to track, under federal law the employer can essentially ignore it.
But, Does the De Minimis Defense Apply Under California Law?
One of the central legal issues in the Polo case was whether the federal de minimis exception applied to wage and hour claims under California law. We argued that applying the de minimis defense to our clients’ off-the-clock claims would undermine California’s “subject to the control” test. In other words, if employees under California law are entitled to be paid for all time they are under the employer’s control, it does not matter whether the time is preliminary, postliminary or de minimis. The only thing that matters is whether the worker is under the employer’s control. If control is present, then the worker is entitled to be paid for the time they are under that control.
While the de minimis defense has not been tested by any California appellate court, one thing is clear: “The federal authorities are of little if any assistance in construing state regulations which provide greater protection to workers.” Bono Enterprises, Inc. v. Bradshaw, 32 Cal. App. 4th 968 (1995). This distinction is of great benefit to California workers and is one reason most wage and hour cases in California are prosecuted under California, and not federal, law.
So, does the de minimis defense apply to wage and hour claims under more employee-friendly California law? We still do not know. Just days before the trial court in the Polo class action was scheduled to decide whether to apply the federal de minimis defense to our clients’ claims, the case settled for $4 million.
Eventually, of course, a California appellate court will be asked to decide whether the de minimis defense applies to California off-the-clock claims. For now, California law remains unclear. What if the de minimis defense is deemed to apply to California claims? If workers can establish that the off-the-clock work occurred regularly, amounted to substantial time during the course of employment and that it would have been feasible for the employer to track the time, the de minimis defense should not have a substantial impact on their right to be paid wages for all the time they are subject to their employer’s control.
About the Author: Patrick Kitchin is a labor rights attorney with offices in San Francisco and Alameda, California. He has represented thousands of employees in both individual and class action cases involving violations of California and federal labor laws since founding his firm in 1999. According to retail experts and the media, his wage and hour class actions against Polo Ralph Lauren, Gap, Banana Republic, and Chico’s led to substantial changes in the retail industry’s labor practices in California. Patrick is a 1992 graduate of The University of Michigan Law School and is personally and professionally committed to the protection of workers’ rights everywhere.
Tuesday, June 8th, 2010
In the 1930s, when the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA) passed, these two laws offered labor protections to workers nationwide – with the exception of two large segments of the work population: domestic workers and agricultural workers. These groups were excluded in the interests of political expediency since a large proportion of both groups were comprised of blacks and women, two populations that weren’t generally afforded full rights in many public and social arenas at the time.
With the 33-28 vote passage of the New York State Domestic Workers’ Bill of Rights in the Senate, New York is likely to become the first state in the union to remedy that. The Bill is not yet final law – first, the Senate bill needs to be reconciled with the bill passed by the state Assembly and then Governor Patterson must sign it.
Bill Number S2311D would “… amend the labor law, the executive law and the workers’ compensation law, in relation to establishing regulations regarding employment of domestic workers including hours of labor, wages and employment contracts.” The purpose of the bill is stated as being to: “… provide domestic workers with a Domestic Workers’ Bill of Rights which would set out the responsibilities of employers and employees as well as rules for paid holidays, paid vacations and standard overtime.”
It’s estimated that there are about 200,00 domestic workers in New York, 93% of which are women and 95% of which are people of color. Because the Bill covers all domestic workers – both legal and illegal – it’s been fairly controversial. Opponents decry the increase in regulation, which some say will result in fewer jobs. Many opponents also bridle against any protection for illegal workers, feeling that offers a legitimacy. Proponents say that it will go a long way to regulating an industry that has no standards or oversight and afford basic worker rights to a largely ignored worker population. Many of those in favor of the bill also think that shedding light on some of unregulated business segments which have historically been magnets for undocumented workers will be an important step in coming to grips with the hiring of illegal workers.
In a column in the New York Daily News, Albor Ruiz notes the irony that although we trust these domestic workers with our children, our elderly parents and our homes, they are among the most exploited of society’s laborers. He cites a study by Domestic Workers United and DataCenter, which found that, “…26% of domestic workers make less than the poverty line or the minimum wage rate. Also, 33% say they have been abused verbally or physically, and half report working overtime but not being paid for it. Health insurance from their employer is a rare luxury – only 10% get it.”
From our viewpoint, we think all employers have the responsibility to provide a fair and safe workplace for all employees, regardless of the work population involved – legal, illegal, here in the US, or offshore in other countries. It’s simply the right thing to do. But for those who don’t share this value, it generally makes sense from a cost perspective, too. In our experience, doing the right thing by employees is less costly in the long run.
This blog originally appeared in WorkersCompInsider.com on June 7, 2010. Reprinted with permission.
About the Author: Julie Ferguson is an insurance industry consultant with more than 20 years experience developing and implementing communications programs for workers compensation, workplace health & safety, employee communications, and general insurance programs. She founded and serves as editor for the nation’s first insurance weblog, Lynch Ryan’s Workers Comp Insider. She also founded and manages HR Web Café, a weblog for ESI Employee Assistance Group; Consumer Insurance Blog for the Renaissance Insurance Group; and is one of the administrators of Health Wonk Review, a bi-weekly health policy carnival. If you have a question for Julie, you can reach her at email@example.com.