Class-Action

Overtime Class-Action Certified in Northern District of Illinois Federal Court

May 4, 2011 | Peter S. Lubin and Patrick Austermuehle

Every man and woman who goes to work each day has the right to be paid for his or her labor, but sometimes the companies for whom they work either fail to do so, or miscalculate the wages that they owe their employees. Those miscalculations may be intentional or they may be by mistake, but that does not change the fact that they must pay for the errors. At Lubin Austermuehle, we represent many workers who were not paid the regular and overtime wages they are owed, and our Barrington class-action overtime attorneys are always tracking new court cases in the field of wage and hour law.

One recent case from the US District Court in the Northern District of Illinois is Chavez v. Don Stoltzner Mason Contractor, Inc. The action was filed by Plaintiffs, who were former employees of Defendant and provided masonry installation services to Defendant. Plaintiffs claimed that Defendant illegally adjusted their time records downward to avoid paying them the required time-and-a-half rate for the overtime that they worked. Plaintiffs also alleged that they were required to work on Saturdays without pay for an extended period as well. Eventually, Plaintiffs filed a class-action in Illinois state court alleging violations of the Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law (IMWL) for unpaid overtime wages. Defendant subsequently removed the case to federal court. Plaintiffs then sought to certify an IMWL class-action under Federal Rule of Civil Procedure 23 and pursue their FLSA claims individually.

The Court granted class certification under Rule 23(b)(3), holding that the numerosity requirement was met because there were between seventy and 130 potential plaintiffs, and joinder of that many actions would be impracticable. Next, the Court found Rule 23’s commonality requirement was met because Defendant had a common practice of underpaying its employees’ overtime wages, and the typicality requirement was satisfied because all potential plaintiffs’ claims were based upon the same violations of the IMWL. Because there was no evidence the named Plaintiffs had a conflict of interest with the remaining class members and their counsel was deemed competent to pursue their claims, the Court found that the class was adequately represented. Finally, in granting class certification, the Court held that there was a single common issue (Defendant’s policy of not compensating employees for overtime) overriding the litigation, and that a class-action was the superior method for resolving the claims.

Northern District of Illinois Rules that Arbitration Clause in Employee Handbook is Enforceable

May 2, 2011 | Peter S. Lubin and Patrick Austermuehle

More and more businesses are utilizing employment agreements with new hires, and often those agreements contain arbitration dispute resolution clauses. As experienced wage and hour class action attorneys, Lubin Austermuehle is familiar with such agreements and our attorneys are always mindful of court rulings that affect this area of the law. The Northern District of Illinois, Eastern Division federal court rendered a decision affecting employment arbitration agreements recently, and we wanted to make our readers and clients aware of the court’s ruling.

Brown v. Luxottica Retail North America Inc. pits a class of salaried retail, lab, and general managers against their employer Lenscrafters. Plaintiffs argued that they were non-exempt employees, and therefore were entitled to overtime compensation. The employees filed suit alleging violations of the Fair Labor Standards Act (FLSA), Illinois Minimum Wage Law (IMWL), and Illinois Wage Payment and Collection Act (IWPCA) for unpaid overtime wages. In response, Defendant moved to compel one of the named plaintiffs to arbitrate her claims and stay the proceedings with respect to that plaintiff. Defendant so moved pursuant to a dispute resolution agreement contained within the employee handbook Plaintiff was given while still employed by Defendant. Defendant required Plaintiff to accept the terms of the handbook in order to continue her employment. The agreement contained a form to allow the employee to opt-out of the arbitration clause and instructions how to fill it out, but Plaintiff had failed to sign the form. Plaintiff objected to Defendant’s motion on the grounds that it was unconscionable and unenforceable.

In considering Plaintiff’s arguments, the Court evaluated the procedural and substantial unconscionability of the agreement. The Court found no procedural unconscionability because the arbitration language was “clearly set off” from the rest of the employee handbook and was easy to find by those who actually read the entire handbook. Next, the Northern District held that there was no substantive unconscionability due to the existence of the opt-out clause and the fact that the Plaintiff chose not to exercise her right to opt-out even though she signed a document stating she had read and accepted the terms of the handbook. Finally, the Court ruled that nothing in the FLSA precludes an agreement to arbitrate an FLSA claim, and granted Defendant’s motion to compel arbitration.

New York Times Reports on Class-Action Lawsuit Which Alleges that Kaba Push Button Locks Are Susceptible to a Magnet Opening Them

March 28, 2011 | Peter S. Lubin and Patrick Austermuehle

To Get In, Push Buttons, or Maybe Swipe a Magnet
By JOHN SCHWARTZ
Published: March 26, 2011
A lawsuit argues that push-button locks are easily, and discreetly, foiled, accuse Kaba of deceptive trade practices, common-law fraud, negligence and product liability.

To read the full article click here.

You can link to a video showing how easily Kaba locks allegedly can be by-passed with a magent at this blog site by clicking here.

Bloomberg Reports: “AIG, Three Others Will Pay $27 Million in Antitrust Suit”

March 24, 2011 | Peter S. Lubin and Patrick Austermuehle

Bloomberg reports that AIG and three other insurance companies settled a class action lawsuit which originally arose out of charges brought by New York Attorney General Elliot Spitzer regarding fake insurance quotes used to steer insurance buyers to certain carriers. The article states:

AIG, Liberty Mutual Holding Co., Travelers Cos., Inc. and XL Group Plc (XL) agreed to settle the case with buyers of insurance policies sold from 1998 through 2004. Five other insurers agreed to settle a related set of claims over non-excess casualty policies.

“We are pleased to have reached an agreement to resolve this matter,” said company spokesman Mark Herr in an e-mailed statement. “Through this settlement, AIG brings an end to another long-standing lawsuit about events from many years ago.”
Zurich Financial Services AG (ZURN), the largest Swiss insurer, and Arthur J. Gallagher & Co., an insurance broker, previously settled the case pending in federal court in Trenton, New Jersey. Zurich, based in the Swiss city of the same name, agreed to pay $121.8 million to clients and $30 million in attorneys’ fees. Gallagher, based in Itasca, Illinois, agreed to pay $28 million to clients and $8.9 million in attorneys’ fees.

To read the full article click here.

Illinois Federal District Court Denies Class Certification for Violations of IMWL and IWPCA Under FRCP 23

March 21, 2011 | Peter S. Lubin and Patrick Austermuehle

When large companies fail to properly compensate their employees, a class-action lawsuit is usually the most efficient means to resolve the legal claims between the two parties. At Lubin Austermuehle, our Chicago Fair Labor Standards Act lawyers fight for the rights of those who are due unpaid wages, and our lawyers are always striving to find ways to best serve our clients’ interests. As a firm that focuses on wage and hour class-actions, we are always watching for new court decisions in the area, and our Orland Park overtime lawyers recently found one such case in the federal Northern District of Illinois, Eastern Division Court.

Slayton v. Iowa College Acquisition Corp. is a case brought by a plaintiff who worked for Defendant as an Admissions Advisor for Kaplan University, where she and other putative class members were paid an hourly wage and were frequently required to work more than forty hours a week, but were not paid overtime. Plaintiffs alleged that Defendant required them to arrive at work prior to their shifts in order to perform certain job duties without compensation. Upon filing the putative class-action, the named plaintiff proposed two sub-classes — one for overtime violations of the Illinois Minimum Wage Law (IMWL), and one for unpaid wage violations under the Illinois Wage Payment and Collection Act (IWPCA) — and sought to certify them under Federal Rule of Civil Procedure 23(b)(3). Defendant did not dispute that the proposed class met the numerosity and adequate representation requirements of the rule, but did argue that Plaintiffs could not meet the commonality and typicality requirements.

In denying class certification, the Court found that Plaintiffs did not establish that Defendant engaged in standardized conduct to toward members of the proposed class. While there was evidence that Defendant required Plaintiffs to arrive early, it was unclear that Defendant had a widespread policy to not record that time. The Court also held that typicality was not established because not all the class representative’s claims had the same essential characteristics of the claims of the class at large and consequently, no common questions of law or fact predominated over the individual claims of the class members.

Federal District Court in Illinois Authorizes Class Notice in Warehouse Worker Overtime Litigation

March 6, 2011 | Peter S. Lubin and Patrick Austermuehle

The holiday season is a busy time for many corporations and particularly for those tied to the retail industry, increased holiday business usually means that employees have to work longer hours to keep up with consumer demands. Our Aurora overtime attorneys came across a case that illustrates what can happen when employers fail to compensate employees who work extra hours during such times of increased workflow.

In Nunes v. Chicago Import Inc. Plaintiffs worked for Defendant as warehouse laborers responsible for loading and unloading merchandise from delivery trucks and keeping the warehouse organized. In performing these duties, Plaintiffs routinely worked over forty hours per week, and worked seven days a week during the month of December. Plaintiffs were paid a flat rate of $300.00 per week for the first three weeks of the month, and were paid $400.00 for the fourth week. They were paid an additional $50.00 per week in December, but never received hourly or overtime wages for their services. Plaintiffs then filed suit alleging violations of the Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law (IMWL), and asked the Court to issue an Order to Authorize Notice to Similarly Situated Persons under FLSA Section 216(b).

The Court granted Plaintiffs’ motion, holding that it was proper to leniently review the pleadings at this early stage of the litigation. As such, the five sworn declarations submitted by the Plaintiffs established that the representative and pending class members were sufficiently similarly situated to proceed with a class action. Defendants made objections that the proposed notice was too broad, and should not include administrative or executive staff. The Court agreed with Defendant and ordered adjustments to the form of the notice to exclude such employees, but otherwise found in favor of the Plaintiffs and granted their motion to authorize notice.

Northern District of Illinois Rules that State Law Overtime Claims Not Precluded by Prior Dismissal of FLSA Class-Action

February 28, 2011 | Peter S. Lubin and Patrick Austermuehle

When dealing with class-action wage and hour disputes, defendants will try to get the court to dismiss claims by any means that they can, and there are a variety of legal defenses that allow them to do so. At Lubin Austermuehle, our overtime lawyers are familiar with all of the tricks of the trade, so to speak, so they were interested to discover a case that illuminates just one of these many tools that is utilized by defendants to escape liability.

In Anyere v. Wells Fargo Co. Inc, Plaintiffs were current and former employees of Defendant and worked as credit managers who provided customers primarily with loan consolidation services. Plaintiffs filed a lawsuit alleging overtime violations under Fair Labor Standards Act (FLSA) because they were required to work during lunch, on weekends, and late into the night on a regular basis. Plaintiffs also alleged that Defendant “verbally disciplined employees for logging more than forty hours per week” and would adjust employees’ time records to stay under the overtime threshold. In response to these allegations, Defendant moved to dismiss the action on the basis of collateral estoppel due to a previous lawsuit filed against Defendant in California for the same overtime violations.

The Court dismissed the FLSA claims for nationwide relief based upon issue preclusion — the California-filed class-action was dismissed because the members of the proposed class were not similarly situated. However, the Court maintained the statewide action because the prior case did not contemplate an Illinois-only class-action and therefore could not have been litigated previously.

Northern District of Illinois Denies FRCP 12(b)(6) Motion to Dismiss Brought Against Dialysis Technicians

February 28, 2011 | Peter S. Lubin and Patrick Austermuehle

Because we focus on large-scale overtime class-action lawsuits, the attorneys here at Lubin Austermuehle have helped clients from many different fields recover their unpaid wages. We think it is important for all of our potential clients out there to understand what kinds of issues arise in wage and hour cases, so our Evanston overtime attorneys are always on the look-out for new decisions. In fact, our lawyers discovered a federal case in the Northern District of Illinois that involves workers in the medical industry.

In Howard v. Renal Life Link Inc., Plaintiffs worked for Defendant as dialysis technicians and routinely worked over forty hours each week, but Defendant allegedly deducted any overtime worked and paid Plaintiffs for only forty hours. The named Plaintiff complained to Defendant that she was not being paid properly for all of the time that she had worked, but Defendant allegedly ignored these complaints and continued to deduct any time worked over forty hours each week. Plaintiffs then filed suit alleging that these working hour deductions constituted violations of both the Illinois Minimum Wage Law (IMWL) and the Fair Labor Standards Act (FLSA). In response, Defendants filed a motion to dismiss the action under Federal Rule of Civil Procedure (FRCP) 12(b)(6) alleging that Plaintiff failed to supply sufficient factual evidence in the complaint in order to meet the requirements of FRCP 23.

Defendant’s based their argument that Plaintiff failed to allege enough facts because the complaint contained allegations based “upon information and belief” instead of hard evidence. The Court found this argument unpersuasive, however, because FRCP 8 allows such allegations as long as there is sufficient detail in the complaint to make the claims facially plausible. In denying Defendant’s motion to dismiss, the Court held that the issues brought up by Defendant were properly analyzed at the class certification phase of the case, and were not properly brought in a 12(b)(6) motion to dismiss.

Southern District of Illinois Federal Court Dismisses Minimum Wage Claim for Failure to Plead Sufficient Facts

February 28, 2011 | Peter S. Lubin and Patrick Austermuehle

A motions to dismiss is a weapon that is frequently used in large scale wage claim litigation, as it is an easy and expedient way for defendants to eliminate many lawsuits. Lubin Austermuehle is an experienced class-action law firm whose Chicago wage and hour attorneys frequently handle overtime disputes, and we deal with such motions on a regular basis, which is why our lawyers were interested in a case out of the Southern District of Illinois that discusses the federal standard for dismissals under Federal Rule of Civil Procedure (FRCP) 12(b)(6).

FRCP 12(b)(6) allows litigants to dismiss an action for a failure to state a claim upon which relief can be granted by a federal court. Nicholson v. UTI Worldwide, Inc. is an action brought by forklift operators who worked for Defendant Uti in its warehouses in Illinois. Plaintiffs claimed that they were forced to work without pay prior to the start of their shifts performing inspections, logging into computer systems, “donning special clothing and protective gear,” and other activities. Because they were not paid for this work, Plaintiffs claimed that Defendant had violated the Fairl Labor Standards Act (FLSA), and the Illinois Minimum Wage Law (IMWL). In their complaint, Plaintiffs failed to plead how frequently the pre-shift activities occurred and also included no estimates of the applicable wage rates that applied during the times that Plaintiff’s performed such work. Defendant filed a motion to dismiss for the lack of pleading specificity in response to Plaintiff’s complaint.

In making its decision, the Court held that Defendants had been sufficiently notified of the overtime claims because Plaintiffs plead enough facts to show that their employment was covered by FLSA and the IMWL. Despite the fact that the complaint did not include allegations that Plaintiffs worked over forty hours a week, Plaintiffs did allege that they worked “overtime,” which was enough to give Defendant notice of the claim. However, the Court dismissed the minimum wage claims because Plaintiffs failed to plead facts suggesting that their actual wages fell beneath the applicable minimum wage. Thus, the Court allowed the overtime claims to proceed, but dismissed the minimum wage claim under the IMWL.

Central District of Illinois Rules that Filing Opt-in Consent Forms is not Enough to Establish a Class-action Under FLSA

February 21, 2011 | Peter S. Lubin and Patrick Austermuehle

Across the nation, there are employees who go to work each day and earn overtime wages, but are unaware that they should be getting paid time and a half for the time they work over forty hours each week. Lubin Austermuehle focuses on wage and hour law, and our attorneys frequently meet clients who have years worth of unpaid overtime, and we help them get the wages they are owed. Our Chicago unpaid overtime class action attorneys discovered a case from the federal court for the Central District of Illinois that we wanted to share with our readers due to the unique nature of the issues tackled by the Court in its opinion.

Murray v. Tyson Foods is a case to determine whether Tyson should have paid overtime wages for the time that Plaintiffs spent putting on and taking off protective clothing worn in Tyson’s beef and pork processing plants. The case is one of many similar actions filed in five different states regarding this same issue. Plaintiffs filed a class-action suit alleging that Defendant’s failure to compensate Plaintiffs for that time constituted violations of the Illinois Wage Payment and Collection Act (IWPCA) and the Illinois Minimum Wage Law (IMWL), and filed individual claims for violations of the Fair Labor Standards Act (FLSA),
After the start of the litigation, Defendant filed a motion for partial summary judgment on the basis that the state law claims were preempted by the Labor Management Relations Act and the parties’ collective bargaining agreement. This motion was was granted, eliminating the class action issues and leaving only the FLSA claim for the six named Plaintiffs. The parties went on to discovery, and three days before the close of discovery, Plaintiffs noticed a 30(b)(6) deposition. Defendant opposed the deposition and filed for a protective order on the grounds that Plaintiffs sought the deposition to gather information on the previously dismissed class action claims. Plaintiffs responded by asserting that the filing of 1,474 opt-in consent forms from other putative class-members had created a collective action under FLSA.

The Court declined to agree with Plaintiffs’ argument because the complaint did not contain a representative FLSA claim and no motion was ever filed to certify a class-action on the claim. Thus, the opt-in consent forms had no legal meaning and did not create a class-action under FLSA. Additionally, the Court found that Plaintiffs’ 30(b)(6) notice was too broad, and granted Defendant’s protective order, but gave Plaintiffs time to issue a more tailored 30(b)(6) notice.