Published on:

Costco Settles Class Action Which Alleged That It Allegedly Locked Workers On The Premises and Forced Them to Work With Unpaid Overtime

The U.S. federal government came up with the Fair Labor Standards Act (FLSA), which ensures all employees working in the United States are entitled to be paid for all the time they spend working. This means hourly employees are paid for all time spent working for their employer and are paid one and a half times their normal hourly rate for all time spent working after eight hours a day or forty hours a week.

In addition to the FLSA, each state has their own labor laws to govern the employees working within the state. The have their own limits on everything from minimum wage to mandated breaks.

Employers in California have recently been dealing with a rash of lawsuits concerning employees forced to stay on their employer’s premises after they have clocked out for the day. Whether this is due to bag checks or managers locking them in, it constitutes significant unpaid time for the employees.

Most recently, Costco decided to settle a lawsuit with a class of hourly nonexempt employees who allege they were forcibly kept on the premises after they had clocked out for the day. According to the class action wage and hour lawsuit, Costco managers allegedly locked the warehouses at the end of the day while Costco supervisors closed the cash registers and performed other closing duties. According to the lawsuit, this practice forcibly kept hourly nonexempt employees in the Costco warehouses when they were allegedly not working and were ready to leave. Costco denies all these claims and contends it did nothing wrong.

Wage and hour lawsuits of this nature have gone back and forth in debates to determine whether employees should be paid for time spent on the premises, but not working. On the one hand, they are not actively performing work for the employer, so defendants claim employees should not be paid for this time. On the other hand, it is time employees are forced to stay on the premises. They are unable to go where they want and they are not free to do whatever they want. Therefore, they argue it is time for which they should be compensated.

This lawsuit was filed in California by two plaintiffs back in 2009. They filed the lawsuit on behalf of all hourly nonexempt employees of Costco who worked in one of the California locations and worked the closing shift. U.S. District Judge Gonzalo P. Curiel denied the plaintiffs class certification, saying there was no way to determine how many of the proposed 30,000 class members had valid claims or for how long they were kept in the warehouses without receiving compensation for that time.

The plaintiffs had planned to appeal that ruling, but now they don’t have to because Costco has agreed to settle the wage and hour lawsuit. Each member of the proposed class will receive a certain amount (whether a fixed amount or an approximation for each class member’s claim has not been revealed). As part of the settlement agreement, the two lead plaintiffs have agreed to drop their individual claims. However, they may be able to collect parts of the settlement as members of the class.The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as Petsmart, Officemax, Staples, Smart & Final, Apple, Walgreen’s, CVS, Urban Outfitters, GAP, Abercrombie & Fitch, Limited, Forever 21, Macy’s, Target, JC Penney’s, Lowes, Marshalls, TJ Max, Victoria’s Secret, Nieman Marcus, Saks Fifth Avenue, Best Buy, Home Depot, Apple, Best Buy, Sears, K Mart, J.C Penney, Walmart, Costco and other retail chains for misclassifying employees as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, failing to pay for time spent on security checks, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at (312) 869-4095 or contact us online.  We have offices in Chicago and Oak Brook near Wheaton and Bollingbrook.