Wage and hour lawsuit settlements Â» July 23

Wage and Hour in the Courts: Week of July 23-27

Posted on 27-Jul-07 by The Timekeeper

Ya know, it gets repetitive (and depressing) reporting these things individually! So, I decided to bundle ‘em together this week.

Las Vegas company pays nearly $1.2million in back wages

In this week’s first case, a Las Vegas construction company, Desert Plastering, agreed to pay $1,147,921 in back wages to 1,060 current and former employees as the result of an investigation by the U.S. DOL.

It was the same old, same old. Failure to properly record the hours of work for the employees, which resulted in a failure to pay proper overtime.

Apparently, the problem came to light through an “initiative” on the part of the Employment Education and Outreach program (EMPLEO). EMPLEO is a joint effort among Las Vegas businesses and community organizations, state and federal government agencies and the Consulate of Mexico in Las Vegas. The goal is to help Spanish-speaking workers and employers understand their workplace rights and responsibilities under U.S. law. (By “initiative” I think you can read: an employee or former employee complained once they found out what the law is.)

Colorado-based defense contractor pays nearly $1million in back wages

Later in the week, I heard about the case of Ball Aerospace & Technologies, who agreed to pay more than 900 employees a total of $976,327 after a DOL investigation turned up evidence that employees were “routinely required to work through lunch breaks without compensation.”

Further, the investigation revealed that the company owed senior technicians overtime, because it had misclassified them as salaried exempt, even though they were actually paid hourly.

According to the Rocky Mountain News, the company issued a statement saying it disagreed with the findings, but had nevertheless taken “immediate action” to resolve the issue.

District Court rejects class action settlement in Kakani v Oracle Corp case

District Court Judge William Alsup rejected a proposed class-action settlement in the case of Kakani v Oracle Corp.

Although the case initially started as an overtime dispute filed under California wage-and-hour law, the settlement greatly expanded the class, and would have had the effect of denying class members all across the United States the opportunity to sue for pretty much any wage and hour violations (not just overtime) for the period covered. Further, it would dispose of any pending cases already before the courts, nationwide.

And that was just the first of the problems with the settlement. Without going into excruciating detail, essentially it would have provided a potential windfall for Oracle — who would get to keep all unclaimed funds (plus interest), even if the potential claimants never received the class settlement notice in time to respond — the plaintiffs’ attorneys — who were set to receive $2.25million — and the three named plaintiffs — who would have been given hefty “incentive payments” — while allowing a pittance for the other members of the class. A total of only $9million dollars was to be made available in the pool against which class members could file a claim, despite the fact that an expert damages report had pegged potential liability at closer to $52.7million (no explanation of this disparity was offered as part of the settlement). Further, the settlement allowed for greater payments to be made to class members who live in California, despite the fact that only about 20% of the class members are Californians.

The judge declared, “the fundamental substance of this proposal is so unfair to absent class members that it cannot pass even the threshold of plausibility required for even preliminary approval…”

The morals of these stories

Don’t count on ignorance of the law on the part of your employees to save you. All it takes is one complaint and the DOL will come a-knockin’.
There is no excuse for not keeping accurate employee time records.
Make sure you’ve classified your employees correctly. Above all, don’t call them “salaried exempt” and then pay them by the hour!
Don’t count on a “sweetheart deal” to get you out of hot water.