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The National Labor Relations Act (NLRA) grants all employees working in the U.S. the right to file any claims against their employer as a class action or collective action lawsuit. These types of lawsuits allow many employees with similar complaints against their employer to combine their claims into one large lawsuit. In doing so many employee complaints can come to the attention of the courts and the public that would not otherwise have that chance. Many employees aren’t aware of all their rights under the law, and even if they are aware, their complaints tend to be too small to justify the expense of filing an individual lawsuit.

On the other side of the spectrum is arbitration, which was initially designed for businesses to settle legal disputes among themselves outside of court. Arbitration is handled by an arbitrator who is supposed to be fair and unbiased, but the reality is not always so ideal. Arbitrators are in business to make money and can potentially be biased towards the party that brings them a lot of business, even if they’re unaware of that bias. Arbitration is private (neither the claims nor the results are made public), offers no explanation for the ruling, no opportunity to appeal the decision, and no class actions or collective actions.

Companies have increasingly been including arbitration agreements in their employment contracts to prevent their employees from filing class action lawsuits. Employee advocacy groups have argued these agreements unfairly burden employees by preventing most employees from being able to file any claims against their employer. Continue reading

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When an employment class action is filed, it’s common for the motion for class certification to ask the court to include “all similarly-situated employees,” but a federal Texas judge recently refused to include employees in “similar positions” in a recent misclassification lawsuit against Anderson Perforating Services. Judge Henry J. Bemporad said the inclusion of current and former employees in “similar positions” was too broad, and therefore could not be included in the proposed class.

The class action wage and hour lawsuit was filed by Justin B., who worked for three months in early 2014 as an engineer at Anderson’s various oilfield well sites all over Texas. According to the overtime lawsuit, Justin and other engineers worked between 80 and 110 hours each week, but because they were classified as exempt from overtime, they were never paid for more than half the hours they allegedly spent working for Anderson.

The federal Fair Labor Standards Act (FLSA) defines overtime as any time spent working after eight hours a day or forty hours a week. It also requires employers to pay all their workers a higher wage (one and one-half times their normal hourly wage) for all the overtime they spend working. The FLSA does allow certain classes of employees to be held exempt from the requirement for overtime compensation, but it is very specific about the kinds of employees who qualify for this exemption. Continue reading

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When two or more parties decide to settle a legal dispute outside of court, it’s common for the settlement amount agreed upon to be less than the original value of the claims made by the plaintiff. That’s what makes it a compromise, but if the settlement amount is too much lower than the value of the alleged violations, they may not get approval for the settlement from the court judge.

When determining whether to approve a settlement agreement, the court judge presiding over the case is responsible for determining whether the agreement is fair to both parties. A settlement amount that is too much smaller than the original value of the claims provided might not be fair to the plaintiffs.

A California court judge presiding over a class action wage and hour lawsuit against Frito-Lay has refused to certify a proposed settlement because he says the $600,000 it provides is much too small to be fair to the plaintiffs. Continue reading

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When two parties agree to settle a legal dispute outside of court, it can be mutually beneficial for both parties, but they have to prove to the judge that both parties benefit equally from the agreement. One of the ways they do that is by including a complaint along with their proposed settlement agreement. The lawsuit cannot be considered settled until a court judge has issued both preliminary and final approval of the terms of the settlement agreement.

In a recent class action wage and hour lawsuit against UPS, in which 32,332 seasonal workers allege the shipping company denied them wages and rest breaks under California law, the judge presiding over the case has refused to grant preliminary approval of their settlement until the plaintiffs file an amended complaint.

The proposed class involves thousands of workers who worked for UPS for at least 20 days during the busy holiday season of November and December. The wage and hour lawsuit alleges UPS allowed its seasonal workers to take rest breaks only when they worked shifts of four hours or longer. For every day an employee misses a break, for any reason, she is entitled to one hour’s worth of wages, in addition to all wages, tips, bonuses, etc. earned that day. Continue reading

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In order to save some money, companies frequently hire interns, who are either unpaid or not paid very much. Recently, several companies have had to face legal action from unpaid interns alleging they should qualify as paid employees under the federal Fair Labor Standards Act (FLSA), but most for-profit companies don’t try to save money by using volunteers.

Only not-for-profit companies, such as charities and community organizations, can legally use volunteers. According to the federal Department of Labor (DOL), Rhea Lana Inc. was had volunteers selling items at the company’s semi-annual sales of children’s clothing, toys, etc. The company leases the space and handles the logistics for these events.

The volunteers/consignors who help sell the clothing at these events are not paid for their time, although they are allowed to purchase items before the general public and prominently display their own items for sale in order to improve their own profits. Consignors take home about 70% of the proceeds from the sales of their items.

The DOL sent two letters, both of which explained that Rhea Lana’s use of volunteers at their sales was illegal. One letter went to the company, while another went to the volunteers. Continue reading

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The federal Fair Labor Standards Act (FLSA) defines overtime as any time spent working after eight hours a day or 40 hours a week. It also requires all employers to pay their workers one and one half times their normal hourly rate for all the overtime they spend working. There are some exceptions to the rule of overtime compensation, but the FLSA is very specific about the types of employees that can qualify for exemption from the overtime compensation requirement. Nevertheless, there are times when the line between who qualifies and who doesn’t can get a little blurry.

Under the FLSA, an employee can qualify to be held exempt from overtime if they fit into one of three categories: administrative, executive, or professional. In order to qualify for the administrative category, an employee must perform primarily office work and provide assistance directly to an executive. For the executive category, an employee has to spend the majority of her time managing other employees, have the authority to discipline those employees, and have direct say in the hiring and firing of those employees. The professional category is made up of all those workers whose jobs require a particular set of skills or level of higher education. Attorneys, doctors, and entertainers are just some of the types of workers who generally fit into the professional category.

Certified public accountants also fit into the professional category, but, according to a recent wage and hour class action lawsuit against PricewaterhouseCoopers LLC, auditors do not. Continue reading

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The National Labor Relations Board (NLRB) is a board formed by the federal government designed to protect employees working in the United States. The NLRB can form opinions and weigh in on various legal matters, but it does not have any jurisdiction and it has limited power to enforce any of its decisions.

Recently, the NLRB ruled that employment agreements that require workers to settle any disputes with their employer in arbitration are illegal and should be unenforceable in a court of law. Because the arbitration system is not equipped to handle class action or collective action lawsuits, the NLRB argues arbitration agreements deny employees their right to class action lawsuits, which is granted them in Section 7 of the National Labor Relations Act.

The Fifth Circuit Court has largely overturned the past few rulings made by the NLRB and allowed arbitration agreements between companies and their employees to stand. But the Seventh Circuit Court recently made a ruling that’s in line with what the NLRB has been saying all along. The Seventh Circuit Court ruled that Epic Systems’s arbitration agreement with their employees unfairly benefited Epic Systems and denied the employees their rights under the law. Continue reading

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The Federal Arbitration Act was put in place in 1925. It provides a formal, private setting for businesses to hash out their disputes with each other without resorting to the courts. It’s more cost effective for the businesses and saves the courts time and money by preventing them from getting flooded with business disputes.

An arbitration agreement is a clause included in a contract that states that, in the event of a dispute, the two parties will settle their differences in arbitration, rather than in court. These types of agreements have been common in contracts between businesses ever since the FAA was enacted in 1925, but over the past decade or so, more and more companies have been stretching their interpretation of the 1925 federal law to mean a business can force arbitration with anyone they do business with. They have been including arbitration agreements in their contracts with consumers and employees alike, but many advocacy groups have been arguing that forcing individuals to settle their disputes with large companies in arbitration puts the individuals at a severe disadvantage.

To start with, arbitration does not allow for class actions, which means any employee with a small claim does not have the ability to combine their claims with other individuals with similar claims. Many people with small claims who signed arbitration agreements simply forgo pursuing the matter because their claim doesn’t justify the costs of bringing a suit. Continue reading

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Scheduling employees for shifts and using a time card system so they can punch in when they begin work and punch out right before they leave is a perfectly valid method of tracking the amount of time workers spend on the job, but only if the timecards are used properly.

According to a recent proposed class action wage and hour lawsuit against American Airlines, the largest airline company in the world, the company allegedly manipulated its time card system to cheat employees out of earned wages. The proposed class action was filed by two current employees of American Airlines on behalf of all employees who work as clerks for the huge airline. Clerks are responsible for loading baggage onto departing planes and unloading baggage from arriving planes, operating towlines to pull aircraft into and out of hangars, in addition to other duties related to departure and arrival. None of these responsibilities allegedly qualify them for the overtime exemption provided by the federal Fair Labor Standards Act (FLSA), which means they are entitled to receive one and one-half times their normal hourly rate of pay for all the overtime they work. Continue reading

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In the United States, federal laws are meant to apply to everyone living and working in the country. If a federal law conflicts with a state or local law, it may not always be immediately clear which one takes precedence. Some federal laws explicitly state that they can be preempted by state or local laws, but when the answer isn’t clearly written in the law, it can leave some people guessing.

An ordinance recently passed in Miami-Dad County in Florida raised the minimum wage for employees of contractors servicing Miami-Dade County or using airports owned by the county. The ordinance includes employees of third-party firms who provide janitors, security guards and clerical workers.

Amerijet International Inc. sued the county, alleging the ordinance violated the 1975 Airline Deregulation Act as well as the 1994 Federal Aviation Administration Authorization Act. Amerijet also argued that the Commerce Clause and Equal Protection Clause of the U.S. Constitution should prevent it from having to pay increased rates to baggage handlers who also handle baggage for other airlines at Miami International Airport.

The court ruled in favor of the county, so Amerijet appealed the decision up to the Eleventh Circuit Court, which upheld the lower court’s ruling. Amerijet then appealed to the Supreme Court, which refused to hear arguments for the case and upheld the ruling of the circuit court. Continue reading