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Costco Sued in Class Action Alleging Unpaid Breaks

Under California labor law, employers are required to provide all of their hourly employees with a paid rest break lasting at least ten minutes for every four hours worked. For every five hours worked, employers must provide an unpaid meal break lasting at least half an hour. What employers are not allowed to do is automatically clock out their employees for lunch breaks, regardless of whether the employees actually take those breaks. In fact, if an employee misses one of these breaks, for any reason, the law requires the employer to pay her one hour’s worth of wages, in addition to all straight wages earned that day.

According to a recent class action wage and hour lawsuit against Costco, the wholesale retailer had a “continuous and widespread policy of ‘clocking out’” employees for half hour- or hour-long lunch breaks, regardless of whether the employees actually took their breaks. The lawsuit alleges it is common for Costco employees to work through their lunch breaks, which means they regularly perform work for which they do not get paid.

Douglas T., the lead plaintiff in the class action, filed the lawsuit on behalf “of himself and all other[s] similarly situated, and on behalf of the general public.” He alleges that Costco owes more than $17 million in unpaid wages for missed lunch breaks alone, but that’s not the only allegation the company is facing. Douglas further alleges that Costco failed to provide employees with wages in a timely manner, which violates California labor law.

California labor law also requires employers to provide their hourly workers with all wages due them within 72 hours of termination of employment. If the employee provides notice of termination at least 72 hours in advance, then all wages are due upon termination. According to the recent wage and hour lawsuit, Costco allegedly failed to provide all wages in a timely manner.  Costco denies all of the claims.

Because the proposed class is so large and Douglas alleges the amount of the claims is so high, the class action lawsuit has been moved to federal court under the Class Action Fairness Act. This Act allows defendants to request that a class action lawsuit be moved to federal court in order to prevent plaintiffs from “forum shopping” or filing their lawsuit in the court they know would be most favorable to their side. Under the CAFA, a class action lawsuit must fit certain requirements in order to be eligible for relocation to federal court. These requirements include a sufficiently large class and claims adding up to at least $5 million.

Wage and hour lawsuits, such as this one, illustrate the importance of class actions as a tool for plaintiffs. They allow plaintiffs with small individual claims to file a lawsuit in which they can combine their claims into one lawsuit. This allows them to collect on unpaid wages they would have otherwise missed out on. Because many employees are unaware of the law, class actions have the added benefit of providing relief to employees who would otherwise not know that they were being denied their rightful wages.The Chicago overtime lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims against large retail chains such as 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.