Overtime Attorney Blog

In a decision penned by Priscilla Owen, the Fifth Circuit held that an employee's complaints to her employer regarding wage violations are insufficient to raise a fact question as to whether the employer knew or recklessly disregarded the employee's statutory rights.

Ikossi-Anastasiou v. Board of Supervisors of Louisiana State University is an Equal Pay Act claim. The Equal Pay Act is part of the Fair Labor Standards Act. Under the Equal Pay Act, an employer must pay male and female employees the same wages for the same job.

The FLSA has a two or three-year statute of limitations. The statute of limitations is expanded to three years if the employee proves that the alleged violation was "willful." Willfulness can be shown if the employee proves that the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988).

Ikossi-Anastasiou attempted to show that the employer willfully violated her rights because she had previously complained that she was dissatisfied with her salary and that she wanted her salary to be adjusted upward to the level of her male colleagues. Owen writes for the court, "however, the facts that Ikossi was paid less than many of her male colleagues and that LSU knew she was dissatisfied with this difference are not enough to raise a fact question as to whether LSU knew or recklessly disregarded that its pay scale was prohibited by the FLSA. Ikossi has not provided evidence that LSU actually knew that the pay structure violated the FLSA, or that LSU ignored or failed to investigate Ikossi's complaints. Without more evidence, Ikossi's allegations of willfulness cannot survive the summary judgment stage."

Finding that Ikossi's claims were outside the two year statute of limitations, the court barred her EPA claims.

Continue reading "Fifth Circuit: Employer's Knowledge of Complaints of Wage Violations Alone is Insufficient to Establish Willfulness" »

Sandoz filed a purported §216(b) collective action against Cingular alleging that she and similarly situated contract sales consultants were not paid minimum wage. Sandoz filed her case, which was removed to federal court. Cingular then made a Rule 68 offer of settlement, and moved to strike Sandoz’s case for lack of subject matter jurisdiction (the make whole offer would divest the district court of jurisdiction). The trial court denied the motion, and the matter came to the Fifth Circuit on expedited appeal.

As a threshold matter, the Fifth Circuit concludes that, unless and until similarly situated employees opt in, a named plaintiff represents only herself. This would ordinarily render the case moot.

However, or “luckily” as the Court puts it, the relation back doctrine allows the motion for class certification to relate back to the filing of the complaint. The test is whether the named plaintiff timely seeks certification without undue delay. Then, if the trial court grants certification, the Rule 68 offer is void because it fails to account for the class. If the trial court denies certification, the Rule 68 applies and renders the named plaintiff’s case moot.

Finally, it is worth noting that footnote 2 appears to bless two-stage certification.

The case is Sandoz v. Cingular Wireless, LLC, --- F.3d ----, 2008 WL 5341434 (5th Cir. Dec. 23, 2008).

Following trial but before rendering a verdict, Judge Sarah S. Vance decertified a nationwide collective action of assistant store managers against their employer, Big Lots. The assistant store managers claimed they were improperly classified as exempt under the executive exemption.

Ultimately, however, the Court noted there were simply too many discrepancies between Plaintiffs to support class certification, which relies on the Plaintiffs being similarly situated.

The Court noted that three Lusardi factors are predominantly used to determine if members of class are similarly situate:

(1) the extent to which the employment settings of employees are similar or disparate; (2) the extent to which any defenses that an employer might have to overtime or misclassification claims are common or individuated; and (3) general fairness and procedural considerations.

561 F.Supp.2d at 573. The Court noted only a "handful" of courts have adopted the Rule 23 standards in overtime collective actions.

Unfortunately for Plaintiffs, the class was simply too diverse. The Court found that Plaintiffs moved away from their theory that the position was misclassified and toward a theory based on misclassification on an individual basis. The Court stated "it became obvious that [the Court] could not draw any reliable inferences about the job duties of Plaintiffs as a class." 561 F.Supp.2d at 587.

The citation is Johnson v. Big Lot Stores, Inc., 561 F.Supp.2d 567 (E.D.La June 20, 2008).

Judge McBryde of the Northern District of Texas has developed a reputation for having great disdain for litigants who present “conclusions” as “facts.” Songer v. Dillon Resources, Inc. is no exception. Here, the Judge denied the motion for class certification of twenty-four truck drivers. Specifically, the Judge stated that the following are conclusions, not facts:

All drivers for Sunset and Dillon are working overtime because anyone who fails to complete an assigned delivery will lose his minimum guarantee in a later week where there is no work.
At no time has the company ever converted the drivers' pay per load into a regular hourly rate, and then paid for the hours in excess of forty (40) at one and a half times this rate.

Because the plaintiffs presented “primarily conclusory allegations unsupported by any factual assertions demonstrating the basis of the affiants' knowledge” the plaintiffs were held to have failed to make the threshold showing required for class certification.

Class certification is left to the discretion of the trial court; most trial courts would probably not have reached the same result.

The citation is: Songer v. Dillion Resources, LLC, --- F.Supp.2d ----, 2008 WL 2901324 (N.D.Tex. July 24, 2008).

Defendants argued that summary judgment should be granted that poultry workers’ time spent putting on and taking off gear was compensable time and that time following donning was compensable under the continuous workday rule. The Court denied this portion of Defendants’ MSJ.

However, the Court found such time was excludable under section 203(o) that excludes certain time where there is a custom or practice under a CBA.

The citation is Gatewood v. Koch Foods of Mississippi, LLC, --- F.Supp.2d ----, 2008 WL 2902188 (S.D.Miss. July 23, 2008)

There have been no published overtime cases reported on Westlaw for two days, so lets take a look at an unpublished case from the Southern District of Texas.

In Serrano v. Interlingual of America, plaintiffs were bill collectors who claimed they were not paid overtime. Plaintiffs filed a motion for summary judgment but defendants filed no response.

The Court notes that failure to respond is taken as a representation of no opposition. Nevertheless, the Court must consider the merits of the motion. Finding that plaintiffs were not paid $455 per week or more (required by the exemptions), the Court granted summary judgment that plaintiffs are not exempt under the white-collar exemption to the FLSA.

The citation is Serrano v. Interlingual of America, Inc., 2008 WL 2944570 (S.D.Tex. July 23, 2008) (unpublished)

In Davidson v. RGIS Inventory Specialists, plaintiffs originally filed a collective action on behalf of a putative nationwide class. Although a class was certified, it was limited to one location. While the original case continues, workers brought a brand new second, lawsuit with nearly identical claims on behalf of a putative nationwide class. Defendant moved to dismiss and plaintiff amended to clarity that she did not seek national certification but rather certification of a different location.

First, the Court ruled that under Rule 15, Plaintiff could amend her complaint without leave. A motion to dismiss is not a "pleading" that would extinguish a plaintiff's right to amend as a matter of course.

Second, the Court ruled that plaintiff was not collaterally estopped by the decisions of the first action from bringing the second action. The Court notes that collateral estoppel requires finality, and the decision not to certify certain offices in the first suit is not a final decision. A decision of class certification is not an appealable, final judgment. Thus the plaintiff could continue with her action.

The citation is: Davidson v. RGIS Inventory Specialists, 553 F.Supp.2d 703 (E.D.Tex. Feb. 23, 2007).

Judge Ginger Berrigan approved a $3,120,000 settlement of claims made by poultry plant workers against Sanderson Farms. The detailed opinion has several issues of note.

The Court notes that under D.A. Schulte, Inc., v. Gangi, 328 U.S. 108 (1946) parties cannot privately settle FLSA matters. The Court adopts the well trod standard set forth in Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) to determine whether the settlement should be approved. The question for the Court is whether this matter presents a fair and reasonable resolution of a bona fide dispute over FLSA provisions.

The Court notes that settlement of FLSA collective actions is different than settlement of actions certified under Rule 23. In Rule 23 settlement, the focus is due process while in FLSA settlement, the crux is ensuring that an employer does not take advantage of its employees in settling their claim for wages.

The Court finds that a bona fide dispute exists, the Court states that it must find that the parties are not negotiating around the FLSA's requirements. The Court does more than note that a lawsuit exists, rather the Court examines the actual claims and defenses. A rather substantive portion of the opinion concerns analyzing the arguments the parties could raise and their possibility of success.

The Court finds that the settlement is fair after examining:
(1) The existence of fraud or collusion behind the settlement,
(2) The complexity, expense, and likely duration of the litigation,
(3) The stage of the proceedings and the amount of discovery completed,
(4) The probability of plaintiffs' success on the merits,
(5) The range of possible recovery, and
(6) The opinions of class counsel, class representatives and absent class members.

Finally, the Court finds the attorney fee of 25% to be fair. The Court finds $350 an hour for partners and $95 an hour for paralegals to be fair and reasonable. The Court "cross-checks" this amount and notes that settlements usually fall into a range of 25% to 33%.

The full citation is: Collins v. Sanderson Farms, Inc., --- F.Supp.2d ----, 2008 WL 2811225 (E.D.La. July 9, 2008).

In Liger v. New Orleans Hornets NBA Ltd. Partnership, Judge Ginger Berrigan reviewed competing summary judgment filed by both the employee class and the defendant. At issue was whether the Hornets were (1) exempt under the seasonal amusement and recreation exemption or (2) exempt under the retail or service exemption. Judge Berrigan denied defendant's motion and granted summary judgment in favor of plaintiffs.

There are two ways for the Hornets to be exempt under the seasonal amusement exemption. They can either be in business for seven or fewer months or they can have receipts in the previous year in which six months were 33 1/3 or less of their receipts. The Court reaffirmed its earlier ruling that the Hornets are in business year round. Regarding the second test, the Court ruled that "receipts" means receipts, not revenue or accrual-based accounting. The Hornets fail this test.

The District Court judge also ruled that the retail exemption is inapplicable. First, the Hornets are engaged in the production of goods, not just their sale. Second, the Hornets cannot show that 75% of revenue comes from sales of goods or services. Rather, the majority of their revenue comes from the sale of broadcast rights.

Therefore, the District Court ruled that the Hornets had not met their burden to prove a valid exemption and summary judgment was entered for the employees.

The full citation is: Liger v. New Orleans Hornets NBA Ltd. Partnership, --- F.Supp.2d ----, 2008 WL 2718939 (E.D.La. July 10, 2008).