Articles Posted in Class-Action

 

As Illinois wage and hour rights attorneys, we were interested in a decision establishing the scope of state courts’ right to enforce judgments obtained in other states under the Constitution’s “full faith and credit” clause. Nazario et al. v. O.J. Thrall Inc., et al., 1996 WL 285541 (Conn.Super. 1996) allowed Puerto Rican farmworkers to enforce their default judgment against a Connecticut farm operator. The Connecticut Superior court found that because the farm operator used Puerto Rican logistic, recruitment and screening services, it had enough “minimum contact” with the territory for the Puerto Rico court to establish personal jurisdiction.

Defendant O.J. Thrall, Inc. grows tobacco in Connecticut. It recruited 51 Puerto Rican workers for its growing season through an interstate clearance system created by the federal Wagner-Peyser Act. That law also regulates working conditions and pay for domestic farmworkers, including the Puerto Rican farmworkers. The workers were in Connecticut between June 12, 1991 and July 19, 1991, when they were discharged. Upon their return, they sued Thrall in Puerto Rico Superior Court for breach of contract and the federal clearance order. That court determined that it had personal jurisdiction in the case because Thrall had done business in Puerto Rico through the Wagner-Peyser job clearance system. Thrall was properly served, but the case ended in a default judgment. The workers were awarded $2,084 each in unpaid wages and $190 each in air travel expenses, plus attorney fees.

The workers then sought to enforce their judgment in Connecticut, where Thrall had its operations. Thrall fought that action, arguing that it didn’t have sufficient minimum contacts with Puerto Rico to establish personal jurisdiction. The Connecticut Superior Court started by noting that this was an issue of first impression in the state, as the only previous Wagner-Peyser Act case had to do with subject matter jurisdiction. The Constitution requires state courts to give one another’s decisions “full faith and credit,” it noted, but also limits their personal jurisdiction over nonresidents through the due process clause of the Fourteenth Amendment.

It first took up Thrall’s argument that the clearance orders it extended under Wagner-Peyser were not offers of employment, as required to establish “minimum contacts” with Puerto Rico. The Connecticut court rejected that argument. Of the 12 cases it found in the United States and Puerto Rico that discussed whether a clearance order is an offer of employment or a contract, only two declined to make such a finding. One declined to make any finding on the subject, while another found that another contract was the controlling contract. Furthermore, the court wrote, the clearance order specifically said it “describes the actual terms and conditions of the employment being offered by me and contains all the material terms and conditions of the job,” followed by the signature of Thrall’s Vice President. For those reasons, the court found that the clearance order was a unilateral contract containing an offer of employment.

The court next addressed Thrall’s argument that the local Department of Labor office in Yauco, Puerto Rico, which recruited the workers, was not Thrall’s agent and had no authority from the company. Under Connecticut caselaw, the court said, it must review whether the Wagner-Peyser Act creates an agency relationship between firms and the federal Department of Labor. This Depression-era law allowed the federal government to establish employment offices giving preference to U.S. and Puerto Rico workers over foreign workers. When hiring the workers, the court wrote, Thrall delegated its hiring authority to the Yauco office, specifically referring workers to that office rather than merely using it as a referral source. This established an agency relationship between the Yauco DOL and Thrall, the court wrote. However, the office was not under Thrall’s control, the court said, citing caselaw from around the U.S. Thus, the agency relationship was implied, not stautory. However, this was still sufficient to establish jurisdiction.

Finally, the court addressed Thrall’s argument that it had transacted no business in Puerto Rico, aside from the clearance order it was required by law to file in order to use the foreign worker program. In support, it cited a dissent from a New York case with similar facts, Rios v. Altamont Farms, Inc., 100 A.D.2d 405, 475 N.Y.S.2d 520 (N.Y.A.D.1984), which allowed Puerto Rico courts personal jurisdiction over a New York apple grower. In that case, the court wrote, the facts satisfied both parts of the two-part test laid down by the Supreme Court in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The defendants used Puerto Rico services with certain awareness that their job offers would be extended in the territory, satisfying the “minimum contact” requirement. Jurisdiction was fair because a hearing in Puerto Rico imposed less burden on the defendant than a mainland hearing would impose on plaintiffs, whom the government has an interest in protecting. All of these considerations applied to the instant case as well, the court said. Thus, the judgment may be enforced against Thrall in Connecticut.

Continue reading ›

The National Association of Consumer Advocates is the premier lawyers organization for pursuit of consumer rights. Its website is one of the best resources for consumer law issues. You can view the website by clicking here.

The website has this to say about predatory lending practices:

Predatory Lending Practices

 

In a wage-and-hour class action, the Illinois Second District Court of Appeal reversed all parts of a Kane County trial court’s ruling denying class certification. Our Chicago unpaid overtime lawyers were interested to read the ruling in Cruz et al v. Unilock Chicago, Inc., 383 Ill.App.3d 752, 892 N.E.2d 78, 322 Ill.Dec. 831 (2008), because it helped establish that trial courts may go beyond the complaint to determine class certification — but reminded them that they should not determine class certification on the merits of the case.

Wilfredo Cruz and the four other lead plaintiffs worked at Unilock Chicago’s Aurora manufacturing plant, which makes cement paving “stones.” They were hourly employees with a half-hour lunch break. In their complaint, the plaintiffs said they were required to be at their stations 10-15 minutes before work started, in uniform, to discuss anything the previous shift needed them to know. This required employees to show up 15-30 minutes early to change and get to their stations. Similarly, they say they were required to wait for the next shift to arrive before leaving, brief that shift, clean up and change. They say they punched in for these times, but Unilock had an automatic system that deducted up to 30 minutes before a shift and 15 minutes afterward, in order to meet the company’s labor budget. Furthermore, they claim that Unilock automatically deducted the 30-minute lunch break from their time records, then regularly required them to cut short or work through lunch. If necessary, these deletions would be backed up by a manual edit by the plant’s manager, who removed time before or shifts that went past the 30- or 15-minute defaults.

Unilock disputes much of this. It concedes that time records were manually edited, but said this was necessary because workers forgot to punch in or out, and that edits were confirmed with shift supervisors. This actually added time, it argued. Nonetheless, the plaintiffs sued, claiming that all of these practices resulted in underpayment of both regular time and overtime. Citing violations of the Illinois Wage Payment and Collection Act and the Minimum Wage Law, they moved to certify a class of more than 300 current and former hourly employees who had worked at Unilock’s Aurora plant since June of 1999. The trial court denied this motion for class certification, saying that plaintiffs had failed to meet any of the four standards for class certification. Plaintiffs appealed, arguing that the trial court improperly made findings of fact and rulings that assessed the merit of the claims themselves, rather than of the class certification request.

The Second District agreed. It started its analysis by refereeing the parties’ disagreement about whether courts may consider facts and allegations beyond the complaint in order to determine class certification. After a review of caselaw, the court decided that they can, relying in part on Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir.2001). However, it was careful to say that courts should look into whether the plaintiff’s claim would satisfy the requirements for class certification, not the merits of the claim itself.

The Third next agreed with plaintiffs that the trial court had impermissibly decided several class certification issues on the merits of the case. For example, the trial court relied on depositions and pleadings when it determined that nobody had lost pay because employees who arrived early were permitted to leave early, “accept[ing] as conclusive the defendant’s evidence.” This and other examples are factual determinations that should not be determined at the class certification stage, the appeals court said. Many applied to the numerosity requirement of class certification. Not only were the trial court’s reasons for ruling on numerosity improper, the appeals court said, but evidence submitted by plaintiffs shows that 80 to 90 employees did not receive overtime, and defendants offered nothing in support of their assertion that this evidence was manipulated. For that and other reasons, the appeals court found sufficient evidence that the proposed class met the numerosity requirement.

It then addressed the requirement that class members have common questions to decide, which predominate over other issues in their cases. Again, it found that the trial court was incorrect in determining that these issues didn’t exist. The trial court wrote that there was no commonality or predominance because there was no evidence supporting the plaintiffs’ contentions about widespread unfair policies or time record manipulation. The plaintiffs argued that these conclusions ignored evidence or improperly reached the merits of the claim, and the appeals court agreed. The existence of disputed policies like requirements to work through lunch or editing time records is a common question, the appeals court said, regardless of how strong the evidence for it is at the pretrial stage. It would also be a predominant issue if the trial court determines that there was such a policy — which is a question for the merits of the claim, the court noted.

Finally, the appeals court rejected the trial court’s determination that the class representatives are inadequate because plaintiff Cruz had been a low-level supervisor. The trial court incorrectly relied on caselaw that isn’t sufficiently similar, the appeals court wrote, to determine that a supervisor cannot represent a class including the supervised. When the supervisor’s interests are the same as those of the supervisees and he or she did not participate in the alleged wrongdoing, it is inappropriate to deny his or her adequacy. Jefferson v. Windy City Maintenance, Inc., No. 96-C-7686, 1998 WL 474115 (N.D.Ill. August 4, 1998). Furthermore, if evidence implicating Cruz arises in discovery, the appeals court said, he can be discharged without discharging all the representatives. Thus, it reversed the trial court on all counts and remanded the case to Kane County circuit court with instructions to certify the class.

Continue reading ›

Lubin Austermuehle is a litigation firm with many local clients in the Chicago-land area. Our Oak Park wage and hour attorneys recently came across an interesting case about a class-action filed in the circuit court of Cook County. Lewis v. Giordano’s Enterprises Inc. pits Plaintiff Mina Lewis, an hourly employee, against her former employer, Giordano’s, who owns and operates multiple restaurants in the Chicago metro area. The lawsuit alleged violations of the Illinois Minimum Wage Law (IMWL) and the Illinois Wage Payment and Collection Act (IWPCA) for Defendants’ automatic deduction of $0.25 per hour in exchange for making food and drink available to working employees.

This particular opinion was rendered by the Appellate Court of Illinois First District, Third Division in response to an interlocutory appeal filed by the Plaintiff. For those readers unfamiliar with legal jargon, an interlocutory appeal is a way for a party to appeal a specific issue in an ongoing case. Normally, a party must wait for a decision by the trial court before bringing an appeal to an appellate court.

In Lewis v. Giordano, the Plaintiff moved for class certification in early 2007 and the hearing on the matter was scheduled for November 14th of that year. Defendants then filed for and received several extensions of time to delay the trial court from ruling on the class certification question. Defendant obtained leave of the court initially because they had retained additional counsel shortly before the hearing date, and won a second motion to delay the ruling because of ongoing settlement discussions.

Plaintiff discovered later that during the time period after moving for class certification, Defendants obtained signed releases from employees that absolved Giordano’s of all liability arising out of the wage violations alleged in Plaintiff’s complaint. Defendants incentivized the employees to sign the release by offering them a one-time payment of ten dollars. Upon discovery of this information, Plaintiff filed a motion to prevent Defendants from obtaining any more releases and informed the trial court that there had been no good faith settlement negotiations during the time period that Defendants’ filed their motions to delay the class certification hearing. Plaintiffs also requested that the court declare all of the releases void as a matter of law. The trial court partially granted Plaintiff’s motion by enjoining Defendants from obtaining any more releases and declaring the releases obtained after the November 14th hearing date to be void. Plaintiff then filed the interlocutory appeal to the Appellate Court to have the releases signed prior to November 14th voided as well.

The Court reviewed the issue de novo to determine whether releases of claims from putative class-members obtained by an employer while a motion for class certification has been filed but not yet ruled upon are void as a matter of Illinois law. Upon review, the releases signed by employees whose wages dropped below the minimum wage rate because of the $0.25 deduction were expressly void under section two of the IMWL. The remaining releases obtained after Plaintiff filed her motion for class certification were declared void as well. The Court reasoned that public policy dictated that once a motion for class certification is filed, a defendant employer may not solicit or accept releases from putative class-members.

Lewis is a boon for potential wage and hour litigants, and serves as an inducement to Plaintiffs and their attorneys to get on the ball after filing a class action wage and hour lawsuit. The lesson here is straightforward; an experienced and prudent Aurora wage and hour attorney can prevent a Defendant from obtaining releases that will erode the number of potential class members by promptly filing a motion to certify the class after filing suit.

Continue reading ›

 

A recent decision by the U.S. Court of Appeals for the District of Columbia caught the attention of our Illinois overtime rights attorneys. In Robinson-Smith v. Government Employees Insurance Co., No. 08-7146 (D.C. Cir. Jan. 5, 2010), more than 200 auto damage adjusters sued auto insurance company GEICO for unpaid overtime. The adjusters claimed that they were incorrectly classified as administrative employees, making them exempt from overtime laws. A federal district court agreed and granted summary judgment to the workers. However, the D.C. Circuit reversed that decision, saying the claims adjusters meet the definition of administrative employees because they exercise “some discretion” on the job.

The case turns on whether the adjusters exercise “discretion and independent judgment with respect to matters of significance,” as required by the Department of Labor definition of an administrative employee. The adjusters claimed they did not have sufficient discretion or independence, in part because they estimate only the price of auto damage and not liability. The trial court agreed, finding that supervisors have to sign off on some of the adjusters’ decisions, and their decisions were largely constrained by GEICO training and standards. But the appeals court opinion, authored by Judge Karen L. Henderson, said it was undisputed that the adjusters exercised at least some discretion. Because the DOL test does not include a requirement for how often that discretion is exercised or whether it’s a primary duty, the judge wrote, some discretion is enough to make the adjusters ineligible for overtime.

The case follows a similar decision from the Ninth Circuit in In re Farmers Ins. Exch., Claims Representatives’ Overtime Pay Litig., 466 F.3d 853 (9th Cir. 2006). That case had very similar facts, and was also overturned at the appeals level by a court that found the definition of “administrative employee” sufficient for claims adjusters. Like that decision, the D.C. Circuit’s decision in Robinson-Smith overturns only a grant of summary judgment for the claims adjusters. This means both sides will still have a chance to prove their claims at trial.

Continue reading ›

 

As Chicago employee rights attorneys, we were interested to see what may have been the first unpaid overtime filing of 2010 in the U.S. District Court for the Northern District of Illinois. Harris v. Cheddar’s Casual Café, No. 20-cv-0045 (N.D. Ill.) was filed Jan. 5 by three former servers and bartenders who seek to certify a class of current and former employees denied overtime and tips by the Cheddar’s Casual Café chain of restaurants. Plaintiffs Donny Harris, Keith McKinstery and Shaniqua Bell allege that managers at a Cheddar’s in Boilingbrook, Ill shaved time off their timecards and required them to work off the clock in order to avoid paying overtime. They also allege that their tips were diverted to a tip pool that illegally included non-tipped workers.

The complaint in the case says plaintiffs, and other similarly situated workers, were required to clock in and out for their shifts using the chain’s computerized system. They allege that the restaurant, and manager Solomon Tristan, illegally manipulated the timesheets created by that system to remove hours. They also allege that they were encouraged to work before clocking in and after clocking out, further denying them overtime. Furthermore, the plaintiffs say, they were compelled to participate in a tip pool that included the restaurant’s “quality assurance” workers, who they say are not tipped employees. Under federal law, employers may not pay tipped employees less than minimum wage unless they are allowed to keep all their tips, or contribute only to a legal tip pool. Thus, the complaint said, Cheddar’s policies violate the Fair Labor Standards Act.

At Nationwide Consumer Rights, our Wheaton, Ill. overtime attorneys see cases like this frequently. Hourly employees such as waiters and bartenders are regular targets for employers who prefer not to pay all of the wages they owe, and even sometimes to skim their earned tips to pay other employees. This behavior relies on employees to stay quiet, either because they don’t know they have rights or because they’re afraid of punishment for speaking up. However, federal and state law is very clear employees must be compensated for all of their time at work, and paid time and a half for any time over 40 hours in a week. Failure to follow these basic requirements exposes companies to lawsuits seeking all of the back pay owed, attorney fees and any other costs incurred. In cases of egregious law-breaking, courts may also require employers to pay punitive damages — money intended to penalize willful law-breaking.

Continue reading ›

The below short video documentary shows that wage theft is a real and growing problem.

In our work as Illinois and nationwide wage and hour attorneys, we frequently see workers who have been misclassified as exempt from overtime. Whether this was an honest mistake or an intentional attempt to save money, it effectively “steals” wages from the misclassified employees. Lubin Austermuehle stands up for the rights of workers in Chicago, Illinois and throughout the country who are victims of overtime wage theft, including misclassified employees as well as those pressured to work off the clock; lie on timesheets; or simply not paid an overtime rate. Our Oak Brook, Waukegan, Elgin, Warrenville, Highland Park, Lisle, Wheaton, Northbrook, Aurora, Elgin, Evanston, Joliet and Chicago unpaid overtime lawyers handle both individual and class action employment cases. Based in Chicago and Oak Brook, Ill., our Chicago overtime attorneys represent clients throughout Illinois, the Midwest and the United States.

 

Our Oak Brook, Ill. employee rights attorneys were very interested to see a recent labor lawsuit against telecom giant AT&T. Bloomberg News reported Dec. 17 that two separate units of the company were hit with simultaneous lawsuits Dec. 16 over unpaid overtime. The plaintiffs seek to represent more than 5,000 current and former workers who they say were misclassified as low-level managers, so AT&T would not have to pay them overtime. Each of the two lawsuits seeks $500 million in unpaid overtime, as well as compensation for rest and meal breaks that were allegedly not granted.

According to the article, the employees were classified as “Level One” managers, even though their job duties didn’t meet the federal definition of management positions. They say they worked as many as 60 hours a week, or 10 to 14 hours a day, and were expected to be available on weekends, all without overtime pay. In fact, the Atlanta plaintiffs claim that they were eligible for overtime when they worked for BellSouth, before its acquisition by AT&T. Joe Luque, a lead plaintiff in the San Francisco litigation, said in a press release that he was chewed out when he tried to exercise managerial duties by firing a poor-performing employee. The suits come shortly after a Connecticut federal court certified a class of AT&T workers with similar complaints, in a suit filed by the same law firm.

As Chicago overtime rights lawyers, we’re pleased to see workers standing up for themselves against such a large employer. The right to overtime pay is provided by a federal law called the Fair Labor Standards Act, which requires time and a half for any work above 40 hours a week. This can be very expensive — so some companies, instead of hiring extra personnel to handle the work, look for ways to break the law. Mis-classifying employees as “managers” with no real management duties is one way to end-run around workers’ rights. Other employers may pressure their employees to work off the clock; work through legally required rest and meal breaks; or shift the extra hours to another week. Unfortunately, far too many workers don’t understand their rights, or are afraid of losing their jobs if they stand up for themselves.

Continue reading ›

 

Our Illinois overtime rights lawyers were interested to see a recent ruling on unpaid overtime from the Seventh U.S. Circuit Court of Appeals. In Musch v. Domtar Industries, No. 08-4305 (7th Cir. Nov. 25, 2009), Alan Musch and his colleagues were maintenance workers at two Wisconsin paper mills owned by Domtar Industries. In their lawsuit, they say their job routinely exposes them to dangerous chemicals, requiring them to put on special protective gear before shifts and to shower and change after. They are not paid for the time it takes to do those things, however. They sued for unpaid overtime pay for the showering and changing time, as well as for time spent shaving, a requirement under Domtar company policy.

After the case was filed, Domtar moved for summary judgment dismissing the case. It argued that company policy says workers should shower and change immediately after exposure to a hazardous chemical, even if that means the employee goes into overtime. Because it has that policy, the company argued, overtime compensation was inappropriate. The district court agreed and granted summary judgment for Domtar. After the court declined to reconsider, the plaintiffs appealed both rulings. They argued that the district court missed or ignored evidence showing that chemicals actually were on workers’ skin; that is, they do not shower because they merely think they might have the chemicals. Thus, changing and showering time is appropriate for overtime pay under the Fair Labor Standards Act.

In its analysis, the Seventh Circuit started by noting that the FLSA and Wisconsin law both require employers to pay for all of the work employees do. However, federal law makes a distinction between work and preliminary or postliminary activities. Changing and washing is ordinarily considered preliminary or postliminary, the court wrote, but may sometimes be considered part of the job if it’s “integral” and “indispensable” to the job. The plaintiffs argued evidence showed that they didn’t always realize there were chemicals on their skin until the end of shifts, meaning showering after shifts would be following the company’s stated policy.

The Seventh Circuit disagreed. The plaintiffs’ evidence showed that showers were sometimes necessary, it wrote, but not that the Domtar policy of showering after any exposure was insufficient. Furthermore, the court said, employees admitted to bringing work clothes home to wash them, suggesting that they don’t believe the chemical exposure is that serious. Finally, employees are free to seek overtime under the existing company policy when they are required to shower and change, the Seventh said. Because these are all “normal conditions” under the meaning of the FLSA, the post-shift changing and showering is postliminary activity, not an essential job requirement, the court wrote. Thus, it upheld the trial court’s orders.

Continue reading ›

 

Our Chicago overtime rights lawyers were interested in a recent wage and hour decision out of the Second Circuit. In Whalen v. J. P. Morgan Chase Co., No. 08-4092 (2nd. Cir. Nov. 20, 2009), a group of loan underwriters sued J.P. Morgan Chase, their employer, for unpaid overtime in a proposed class action. The plaintiffs contended that they were misclassified as administrative employees, because their duties did not meet the federal Department of Labor’s definition of administrative duties. The district court in New York disagreed and granted summary judgment for Chase. But the Second Circuit reversed that judgment, saying loan underwriters cannot be exempt administrative employees because their work furthered Chase’s core business of making loans, rather than helping to run or direct the company.

For four years, plaintiff Andrew Whalen worked for Chase as an underwriter. His job was to evaluate whether to grant loans to individuals, using detailed guidelines provided by Chase. Some underwriters were sometimes permitted to deviate from these standards. Whalen contended that he frequently worked more than 40 hours a week, but Chase classified him as an administrative employee exempt from the overtime provisions of the Fair Labor Standards Act. Whalen eventually sued for a declaratory judgment that Chase violated the FLSA by failing to pay overtime, but Chase prevailed on cross-motions for summary judgment. Whalen appealed.

The Second started by looking at the definition of administrative employees. The federal Department of Labor says administrative work is “directly related to management policies or general business operations” and “customarily and regularly exercises discretion and independent judgment.” Using a variety of documents from the Department on the financial services industry, the court drew a distinction between exempt employees with advisory duties and non-exempt employees who carry out the employer’s day-to-day operations.

Whalen’s job was to sell loans according to Chase’s detailed standards, the court wrote, not to advise customers on which loans to get. This puts the job firmly on the “production” side of Chase’s business, the court wrote, as distinct from management duties or “general business operations” such as human resources. Furthermore, the Second wrote, Chase itself referred to underwriters’ duties as “production” work. In doing so, the court drew a distinction between “production” and “administrative” work supported by its own past decision in Reich v. State of New York, 3 F.3d 581 (2d Cir. 1993) as well as by precedents in the Ninth, Third and First Circuits. Whalen’s job did not met the management/general business operations test set forth by the Department of Labor, the court wrote, which is enough to conclude that he was not a bona fide administrative employee. Thus, the Second Circuit reversed the trial court’s summary judgment decision.

Continue reading ›

Contact Information