Domino's Pizza Sued by New York Attorney General

 On May 24, New York Attorney General Eric Schneiderman filed a lawsuit against Domino’s Pizza for wage theft and other wage violations against their delivery drivers. The lawsuit is also against three franchisees that own ten stores in the New York Area.

The complaint alleges that Domino’s was underpaying its delivery drivers below even minimum wage, and that they were not being properly paid overtime, either. According to the complaint, Domino’s knew about certain issues in their payroll system, PULSE, which underreported time and tips for the workers. However, these issues were not reported to the franchisees, which resulted in workers being underpaid.

Other allegations include requiring their drivers to pay out-of-pocket for their own job expenses, such as paying for their own gas or paying for bicycle maintenance, and improperly determining tip credit – the franchisee owners never checked if their drivers made enough in tips to justify a tip wage of 2.13/hour, which caused many of the drivers to work for below the federal minimum wage.

Does this situation sound familiar? If you’re experiencing similar actions from your employers, let us know by giving us a call at 615-250-2000! 

McDonald's Workers Allege Wage Theft

Last week, McDonald's workers in three states filed seven lawsuits alleging that the company is systematically stealing wages through illegal pay practices including failure to pay overtime, forced work off the clock, and erasing hours from their timecards.  The lawsuits, filed in California, Michigan and New York, also accuse McDonald’s of denying workers meal periods and rest breaks, and requiring employees to buy their own uniforms or pay to clean those uniforms -- practices that brought the workers pay below the federal minimum of $7.25 per hour.  Five of the seven lawsuits also name some of the company’s individual franchisees as defendants.  Two lawsuits filed in Michigan against McDonald’s and the Detroit-area franchise owners, allege that the restaurants told the worker to show up to work, but then ordered them to wait an hour or two without pay until enough customers arrived.  

These allegations are not unique to McDonald's -- these are the kinds of complaints our office often hears from restaurant employees and workers at car washes.  In fact, they are similar to the facts in several of our current and recent cases.  The McDonald's cases are remarkable for their potential size.  Just one of the cases was filed against the roughly 100 McDonald’s restaurants in California that are company-owned and operated.  That lawsuit seeks to be a class action representing 27,000 current and former McDonald’s employees.

If you want to learn more generally about these kinds of pay practices and their legality, visit our website here.

 

Celine Dion Sued for Failure to Pay Employees Properly

In a lawsuit filed in federal court last week, a handyman who was employed by Celine Dion and her husband at their home in Florida claims that he (and other employees) didn’t receive overtime pay to which he was entitled under the Fair Labor Standards Act (“FLSA”).  Keith Sturtevant claims that Ms. Dion cheated him out of pay for several years by classifying him as a “manager” exempt from overtime pay.

Generally speaking, under the FLSA most employees must be paid at least the federal minimum wage ($7.25 per hour) for all the hours they work in each workweek, and overtime pay of one and a half times their regular rate of pay for each hour they work over 40 in that workweek.  The FLSA provides exemptions from these general rules for certain executive or management employees.  To qualify for the executive exemption, the employee must (1) be compensated on a salary basis of not less than $455 per week; (2) have a primary duty of managing the enterprise or a recognized department or subdivision of the enterprise; (3) customarily and regularly direct the work of at least two or more other full-time employees; and (4) have the authority to hire or fire other employees or have their opinion about such matters be given particular weight.

Even though he was paid a salary and had the purported title of “manager,” Mr. Sturtevant claims that he “did not have the power to hire or fire employees.”   Therefore, he claims that Ms. Dion “improperly and illegally designated him as an exempt employee ,” and that he should have been paid overtime for all the 8-20 hours he worked over 40 each week – including the “extensive tasks” he performed at Ms. Dion’s home each week.

While her heart might go on, let’s hope Ms. Dion’s failure to pay workers properly doesn’t.

Look here for more information about the overtime requirements of the FLSA and here to learn more about the exemptions from minimum wage and overtime.

UPS may be Forced to Deliver Overtime Pay to Drivers

            Ernesto Carrera and Christopher Stephenson, sued UPS Supply Chain Solutions, Inc. (“SCS”), a subsidiary and sister company of UPS, for minimum wage and overtime violations under the Fair Labor Standards Act.  SCS is self-described as a logistics company that manages other companies’ supply chains, and as part of that, operates hundreds of distribution centers throughout the U.S. and around the world.

             The drivers worked in Fort Lauderdale and Miami as delivery drivers for SCS.  Delivery assignments were made by SCS from a list of drivers in the area.  When the driver’s name reached the top of the list they were offered the job, which they could refuse or accept.  Drivers usually accepted the jobs, because if they declined, their name went to the bottom of the list. 

             SCS classified the workers as “independent contractors” under a non-negotiable piece rate method of payment where drivers were paid either a lump sum within a specified area or a flat rate per mile outside the area.  Drivers were not paid for the time they spent waiting for assignments despite claims that they were required to wait around the warehouse and were prevented from being able to pursue work at other locations during the waiting time. The drivers claimed they were paid below the minimum wage and were denied overtime pay.  SCS contends that drivers are independent contractors, and as such, are not owed minimum wage and overtime premiums.

             The U.S. District Court for the Southern District of Florida allowed the case to proceed as a collective action, finding that a class of similarly situated drivers existed and that such class members may join the lawsuit. 

Class Action for DirecTV Installers Proceeds

The U.S. District Court for the District of Minnesota allowed workers who install and maintain DirecTV satellite systems to proceed as a class.  The lawsuit for unpaid wages under the Fair Labor Standards Act was brought by Carlton Edwards and others against Multiband Corporation, one of DirecTV’s largest full-service home service providers (HSP’s). Multiband is responsible for 20% of the installation and maintenance of DirecTV’s satellite equipment for single-family homes throughout the nation, operating in 16 states. It claimed that the workers were really employees or independent contractors of other companies with whom Multiband subcontracted.  The court found that Multiband directly controlled the work done by the technicians, including requiring them to start a job at a certain time, clock-in with a Multiband dispatcher, perform the job within a certain time frame, pass inspections by Multiband for the work done, and attend Multiband classes to stay current with Multiband policies and procedures.  Other DirecTV HSP’s have been sued for similar pay practices.

Baluchi's Indian Food to Pay $1 Million to Workers

Restaurant workers at a New York City restaurant chain, Baluchi’s Indian Food, and its owner, Rakesh Aggarwal, will finally get paid.  Eighteen workers filed suit for to recover minimum wages, overtime pay and misappropriated tips, under the FLSA and New York state wage and hour laws on behalf of a class of workers.  Judge Richard J. Sullivan of the U.S. District Court for the Southern District of New York, approved a $1 million settlement between the parties.

Current and former employees of Baluchi’s will receive a portion of the $1 million settlement based on their position, weekly wage, hours worked per week, and number of weeks worked.  Individual compensation will also depend on whether an employee is classified as a “Front of the House Plaintiff” who traditionally received tips while working, such as a waiter or delivery person, or a “Back of the House Plaintiff,” who traditionally did not receive tips, such as a cook or a dishwasher.  

According to Forbes, restaurant jobs are among the lowest paying jobs in America. Furthermore, low-wage workers in the restaurant industry are often subjected to illegal pay practices.  For more information on working conditions affecting New York restaurant workers read Behind the Kitchen Door: Pervasive Inequality in New York's Thriving Restaurant Industry published by the Restaurant Opportunities Center of New York.

Sam Kane Meat Processing Workers Seek Wages

Judge Hayden Head of the U.S. District Court for the Southern District of Texas granted class status to a group of current and former employees of Sam Kane Beef Processors Inc. Judge Head ordered that notice should be sent to all hourly wage earners involved in production, processing, packing and cleaning activities during the three years prior to August 10, 2007. The workers who filed the lawsuit claim that they spend up to 2 hours a day engaging in unpaid work activities, including dressing and undressing, waiting in security lines and sanitizing equipment. Sam Kane Beef Processors argues that all of its employees were already paid for the disputed time.

The Supreme Court, in IBP v Alvarez, determined that meat processing workers must be paid for time spent donning and doffing protective or safety gear and equipment. In Alvarez, the Supreme Court also decided that under the continuous workday rule employees must be paid for all walking and waiting time occurring after donning but before doffing the required gear and equipment. 

Workers in meat processing and poultry plants have sued employers throughout the country. Tyson Foods in particular has faced many lawsuits regarding its alleged illegal pay practices. In 2007 the Third Circuit Court of Appeals decided that Tyson must pay its poultry workers for donning and doffing their safety gear. Pay practices at Tyson’s Goodlettsville, TN meat processing facility have been challenged in a lawsuit joined by over 600 workers. That case is scheduled for trial in August 2008.

Restaurant Wait Staff Gets Stiffed

A Coral Gables restaurant agreed to pay $53,324 in back wages to 27 employees following a Department of Labor investigation. Cafe Vialetto in Coral Gables, FL agreed to pay its employees after federal investigators determined the restaurant did not pay wait staff for hours worked before and after their shifts, violating minimum wage laws. The DOL also found that the restaurant violated the overtime pay and record keeping requirements of the Fair Labor Standards Act.

Minimum wage and overtime pay violations are very common in the restaurant industry. Illegal pay practices are so common in the industry that many restaurant workers assume that the practices must be legal. Exploitation of restaurant workers is particularly troubling because their wages are among the nations lowest. Restaurant jobs meager wages make them some of the worst paying jobs in America.

18 Tyson Overtime Lawsuit Consolidated

The U.S. Judicial Panel on Multidistrict Litigation ordered that pre-trial proceedings in 18 wage and hour lawsuits against Tyson Foods Inc. be consolidated. Tyson workers in Arkansas, Alabama, Georgia, Indiana, Kentucky, Maryland, Mississippi, Missouri, Oklahoma and Texas filed lawsuits for unpaid overtime wages. In 2005, the U.S. Supreme Court ruled that Tyson-owned IBP, Inc. violated the FLSA by failing to pay workers in South Dakota for the time they spent donning and doffing required sanitary and protective gear and equipment, as well as associated waiting and walking time. 

In September 2007, the Third Circuit Court of Appeals determined that donning and doffing required gear and equipment by Tyson workers constituted work as a matter of law. Still, Tyson chooses to not pay many workers for time spent changing into or out of protective clothing, waiting in lines to retrieve the clothing or perform production work, or walking from the locker rooms to their work stations.

The Arkansas Democrat-Gazette reports that: “Robert Camp of The Cochran Firm in Birmingham, Ala., who represents more than 1,000 clients in a suit against Tyson, said it could work to the plaintiffs' advantage also to all be heard in one court.”

Tyson Poultry Workers Win Appeal

On September 6, 2007, the U.S. Court of Appeals for the Third Circuit held that workers at Tyson Foods, Inc.’s poultry processing plant in New Holland, Pennsylvania engaged in work under the FLSA by donning and doffing required sanitary and safety gear.  In the case, De Asencio v. Tyson Foods, Inc. the Third Circuit court relied upon a 2005 U.S. Supreme Court decision, IBP v. Alvarez, which held that the FLSA required Tyson to pay its meat processing workers for similar donning and doffing work and all related waiting and walking time. 

Yesterday’s ruling by the Third Circuit is an important victory for meat and poultry processing workers. The court held that the worker’s donning and doffing activities constitute work as a matter of law. Tyson and other employers in the meat and poultry processing industry choose not to pay workers for time spent putting on, taking off, and collecting required safety gear and equipment. After the Supreme Court’s decision in Alvarez it is clear that workers must be paid for this kind of donning and doffing. Hopefully, this latest courtroom defeat will finally end Tyson’s steadfast refusal to pay its workers for all hours worked. 

The U.S. Department of Labor should be commended for its work on behalf of the unpaid workers. DOL lawyers involved in the appeal include: Howard M. Radzely, Solicitor of Labor; Steven J. Mandel, Associate Solicitor of Labor; Paul L. Frieden, Counsel for Appellate Litigation. Joanna Hull argued on behalf of the DOL.

Restaurant and Service Workers Top Worst Paying Job List

Forbes ranks the 25 best and worst paying jobs in America. The ranking is based upon the U.S. Government’s National, State and Metropolitan Area Occupational Employment and Wage Estimates using 2006 data. Not surprisingly the restaurant and other service workers dominate the worst paying jobs list. Medical professionals hold 13 of the 15 top spots.

The worst paying job classification in America is “combined food preparation and service workers, including fast food.” The mean annual wages for such workers was $15,930.

The complete list of worst paying job classifications are:

  1. combined food preparation and service workers, including fast food
  2. fast food cooks
  3. dishwashers
  4. dining room and cafeteria attendants and bartender helpers
  5. hosts and hostesses, restaurant, lounge and coffee shop
  6. counter attendants, cafeteria, food concession, and coffee shop
  7. gaming dealers
  8. shampooers
  9. waiters and waitresses
  10. ushers, lobby attendants, and ticket takers
  11. amusement and recreation attendants
  12. farm workers and laborers, crop, nursery, and greenhouse
  13. cashiers
  14. personal and home care aides
  15. lifeguards, ski patrol, and other recreational protective service workers
  16. parking lot attendants
  17. pressers, textile, garment, and related materials
  18. food preparation workers
  19. bartenders
  20. graders and sorters, agricultural products
  21. maids and housekeeping cleaners
  22. cooks, short order
  23. child care workers
  24. laundry and dry-cleaning workers
  25. service station attendants
  26. Service station attendants, the best of the worst, had a mean annual wage of $19,150.

Koch Foods Agrees to Pay Unpaid Overtime Wages to Poultry Workers

A poultry plant in Mississippi agreed to pay 174 workers $326,971 after an investigation by the DOL. Koch Foods, the company that owns and operates the plant, did not pay its employees the required overtime premium (time and a half) for all hours worked over 40 in a workweek. The company also neglected to pay some employees drive time for transporting crews to work sites in violation of federal law. Lawsuits and Department of Labor enforcement actions aimed at illegal pay practices in the meat and poultry processing industries are quite common. Typically, these claims relate to the failure to pay for all hours worked by the employees.

Servers and Other Restaurant Workers Are Getting Short Changed

Minimum wage and overtime violations are rampant throughout the restaurant industry. These violations affect servers, bartenders, bus persons, hosts and hostesses, and kitchen staff. FLSA minimum wage and overtime violations in the restaurant industry are particularly disturbing because of the low wages earned by most restaurant workers. The U.S. Department of Labor’s Bureau of Labor Statistics reports median hourly earnings (as of May 2004) for restaurant workers: fast-food cooks earn $7.07 per hour; waiters and waitresses (including tips) earn 6.75 per hour; bartenders (including tips) earn $7.42 per hour; and hosts and hostesses earn $7.52 per hour.

The scope of violations in the restaurant industry is evident by reviewing the U.S. Department of Labor Wage and Hour Division’s enforcement record over the past several years.  Many restaurants across the country, particularly smaller ethnic restaurant chains, have been subject to DOL enforcement actions. 

Las Palmas Mexican Restaurants, for example, agreed to pay $130,698 in back overtime wages to 85 employees who worked at three restaurants in Nashville, Tennessee.  The Wage and Hour Division’s investigation revealed that servers, busboys, hostesses and kitchen staff had not been properly paid under the Fair Labor Standards Act (FLSA). 

La Tapatia Mexican Café y Cantina in Houston has paid $109,708 in back pay after an investigation by the U.S. Department of Labor’s Wage and Hour Division found 217 current and former servers and cooks had not been properly paid.  According to the Wage and Hour Division the company violated the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA), by paying servers straight time for all hours worked and also by failing to pay overtime to non-exempt cooks.

A Federal Court in Minnesota ordered El Mariachi restaurants in Fairmont and Austin, Minnesota to pay 21 workers $39,931 in unpaid overtime compensation, minimum wages and liquidated damages.

In Indiana, 245 restaurant workers, including cooks, servers and bus persons recovered $350,041 because of the DOL’s efforts.  The workers were employed in 11 different restaurants throughout Indiana.  Another dozen Indian workers, kitchen workers at Mexico City Grill, in Indianapolis and Mi Casa Mexican Restaurant in Greenfield, Indiana were ordered to receive $10,000 in unpaid overtime wages.

In Austin, Texas eight kitchen staff employees recovered $51,347 in back wages from The New Mandarin Chinese Restaurant

Asian Super Buffet La. Inc. in Kenner, Louisiana violated the FLSA by including tips, meals and lodging as part of the wait staff’s compensation for hours worked, resulting in employee wages below the federal minimum wage. The company also failed to properly compensate employees for overtime hours and to maintain required records. As a result, Asian Super Buffet agreed to pay $77,218 in back wages to 26 current and former kitchen workers and wait staff. 

El Nopal Mexican Restaurant paid back wages totaling $95,800 due to 15 employees of the Valley Park, Missouri restaurant following an investigation by the U.S. Department of Labor’s (DOL) Wage and Hour Division. According to the investigation, the work force consisted of primarily low-wage Hispanic workers employed as servers and cooks.  Restaurant officials were found in violation of the minimum wage, overtime and record-keeping provisions of the Fair Labor Standards Act (FLSA). Approximately $68,000 of the total was due from the minimum-wage provision violations, and the remaining $27,000 involved unpaid overtime compensation.

San Pietro Restaurant, an Italian eatery located in Midtown Manhattan, paid 45 employees a total of $102,216 in overtime back wages. According to a U.S. Department of Labor investigation, the restaurant improperly paid cooks, waiters and bus boys among others. The investigation found that many employees worked more than 40 hours a week without receiving overtime pay. Investigators determined that employees worked an average of 52 hours per week. Management officials of San Pietro Restaurant agreed to pay employees the back wages they were due and to come into full compliance with the FLSA in the future.

While most of the DOL’s enforcement actions have targeted local restaurant chains. National chains and franchises face similar issues. In 2006, the DOL filed a lawsuit against Barbeque Ventures LLC, Barbeque Ventures of Nebraska LLC and Old Market Ventures LLC, known as Famous Dave’s, to collect $92,516 in back wages due 25 employees. The department alleged that the employees (kitchen workers and servers) at all five Famous Dave’s locations in Omaha and Bellevue, Nebraska, and Council Bluffs, Iowa were not paid overtime.

In Nashville a restaurant worker at two Sbarro Restaurants, operated by franchisee F & S Foods, Inc., filed a federal lawsuit claiming that he and his co-workers were not properly paid for overtime hours and were required to work off the clock without compensation. The employer told the Court that it had compensated its employees for unpaid overtime and agreed to the entry of an $11,000 judgment in favor of the one employee who filed the lawsuit.

Arkansas Workers Sue Tyson for Overtime Violations

Employees from Tyson Foods, Inc. poultry processing plants in Arkansas filed a lawsuit against Tyson for overtime pay violations (Adams, et al. v. Tyson Foods, Inc., U.S. District Court, Western District of Arkansas). The lawsuit claims that Tyson violated the FLSA by failing to pay its employees for the time spent donning and doffing required gear and equipment, as well as time spent walking, waiting, and performing other job duties “off the clock.” Tyson is facing lawsuits throughout the U.S. for alleged FLSA overtime pay violations at its chicken processing and meat processing facilities

Tyson and others in the poultry and meat processing industries have longstanding differences with workers and the U.S. Department of Labor over industry pay practices.  These differences appeared to be finally resolved when the U.S. Supreme Court ruled in favor of workers in Alvarez v. IBP.  Still IBP (now Tyson) and other employers refuse to pay workers for time spent donning and doffing required gear and equipment.  According to the Department of Labor workers should be paid for this time. 

Timeshare Salespeople Are Entitled to Overtime Pay

The U.S. Department of Labor recently published a formal opinion letter stating that timeshare salespeople are not exempt from the FLSA’s wage and hour provisions under the “outside sales” exemption.  Timeshare salespeople’s primary duties are to sell timeshare condominiums at resorts typically found in exotic locals and tourist destinations throughout the United States, including Florida, Hawaii, Puerto Rico and even Gatlinburg and Nashville, Tennessee.  Consumers who purchase time shares buy a share of the condo (i.e. certain weeks of the year) rather than pay for the entire dwelling. 

Timeshare salespeople typically earn commissions on the timeshares they sell. The DOL’s opinion letter underscores the legal requirement that “outside salespeople” must be employed away from the employer’s place of business. The typical timeshare salesperson, however, works on location at the employer’s resort, which is the employer’s place of business. As such, timeshare salespeople are not exempt under the outside sales exemption and should receive overtime wages as provided by the FLSA (unless another exemption applies). 

Wal-Mart Violates Overtime Laws; Settles With DOL

Wal-Mart recently settled a case with the U.S. Department of Labor involving violations of the FLSA’s overtime provisions for $33 million.  The case involved 87,000 salaried and hourly employees who were not paid at the proper overtime rates.  The retail giant improperly calculated overtime payments by failing to include bonus payments into the employees pay rate when calculating overtime premium.  The agreement also addresses payment of overtime to certain non-exempt salaried interns, manager trainees, and programmer trainees.  While violations of this nature are common, Steven Mandel, an associate solicitor at the Department of Labor, said "these are serious violations."

Wal-Mart, facing approximately 70 lawsuits for wage and hour violations throughout the country, reported these violations to the Department of Labor and then settled with the DOL.  A spokesman for Wake-Up Wal-Mart, Chris Kofinis, criticized the agreement stating, "How do you negotiate a deal on behalf of workers when workers aren't included in the negotiations."  The employees had no independent legal representation in the settlement process.  As a result, Wal-Mart was likely able to settle the case for less than their actual liability.  Wal-Mart also avoided assessment of fines or penalties.

Prince Faisal and the Underpaid Security Guards

Five security guards hired to protect Prince Faisal bin Turki bin Nasser Al-Saud (a diplomat and a member of the Saudi royal family) at his McLean Virginia home are entitled to overtime pay according to a U.S. Appeals Court.  The security guards filed a lawsuit because they were paid only straight time without any overtime premium for hours over 40 in a workweek.  The court ruled that the security guards were joint employees of the Prince and Capital International Security, Inc. and that CIS was required to pay them overtime.  CIS had argued that the guards were independent contractors, who are outside the protection of the FLSA.