Posted on 01-Mar-10 by The Timekeeper

For those of you who still think there’s not much downside to, uhmmm… being “aggressive” about minimizing overtime payments to your employees (i.e. avoiding paying overtime to employees who clearly are not exempt and have clearly worked more than 40 hours a week)… listen up to
the story of Wild Edibles, a seafood wholesaler, retailer and restaurant.

The company recently settled a labor dispute — or at least tentatively settled one — to the tune of $340,000 in payments to about two dozen (mostly former) employees. The dispute alleged both violations of the Fair Labor Standards Act (FLSA) wage and hour regulations (such as not paying overtime) and retaliation against workers who were trying to organize the company’s employees.

What makes this a particularly cautionary tale for employers is the tactic the employees and their allies at the worker advocacy group, Brandworkers International, used to bring pressure to settle on the company.

Apparently, they tried to convince Wild Edibles’ clients to stop buying from the company because of the company’s alleged labor law violations. According to Brandworkers, about 75 clients actually did stop doing business with Wild Edibles — reportedly leading to a Chapter 11 bankruptcy filing in 2007.

Now that they’ve settled, the pressure is off and the company can start to rebuild its business, according to a Brandworkers spokesperson. But that’s a heckuva hit to try to recover from.

So how about you? If some of your employees filed suit against you, could they bring similar pressure to bear against you? Are you prepared to take a chance they wouldn’t (or that if they did, it wouldn’t work)?

Be Sociable, Share!

• 

No Comments

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a comment