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Groupon Agrees to Settle Unpaid Overtime Claim of Sales Representatives for $2.5 Million

Just because the law requires employers to pay their workers one and one half times their normal hourly wage for any overtime they work does not always mean that paying workers one and one half times minimum wage justifies not paying them overtime. But that was one of the reasons Groupon gave for classifying its company sales representatives as exempt from overtime compensation.

The wage and hour lawsuit was filed in November 2014 by Sean M. and Kenisha W., who are asking the court for the opportunity to be named plaintiffs in the lawsuit. With that title, they would be representing the interests of the approximately 2,000 similarly situated employees who were allegedly denied overtime as a result of Groupon’s employment policies.

According to the complaint, Groupon’s alleged misclassification of its account representatives and account executives led to the company failing to pay those workers overtime when they worked more than eight hours a day or forty hours a week. The lawsuit accused Groupon of allegedly violating the federal Fair Labor Standards Act (FLSA) and Illinois Minimum Wage Law by making their employees work overtime without the proper overtime compensation.

Groupon denies the allegations, saying the employees, who were paid a salary plus commission, were properly classified as exempt from overtime compensation. In addition to their salaries reaching the minimum requirement for the overtime exemption, Groupon claims the responsibilities of the employees in question were directly related to Groupon’s management and/or general business operations. The employees were also responsible for exercising discretion and using their own independent judgment when it came to matters of importance for the company. If these claims are true, the employees in question might meet all the qualifications for the overtime exemption provided under the FLSA.

Despite these arguments, Groupon has agreed to settle the proposed class action lawsuit for $2.5 million. Out of that amount, $1.57 million will be distributed among the class members, while the rest will go to covering the attorneys’ fees and legal costs, the administration fee for the settlement, and the payments to the class representatives.

Attorneys representing the proposed class of employees recently filed a motion with the court asking the judge to grant certification of the class of employees, preliminary approval of the terms of the settlement, Kenesha and Shawn’s appointments as class representatives and their attorneys as class counsel, as well as a date for a fairness hearing for the court to determine if the terms of the settlement are fair to both parties.

The counsel for the plaintiffs have already released a statement, saying the settlement amount is more than fair for the employees, considering the class has not yet been certified. Even with certification, it is always risky to pursue a legal dispute in the courts because you can never know for sure which party the court will side with. By accepting Groupon’s offer to settle the case outside of court, both parties are saving a lot of time and money by putting the dispute to a decisive end sooner rather than later.

Groupon also saves time and money by offering a settlement now when it can control the amount, instead of waiting for the possibility of a court-ordered award, which might far exceed the $2.5 million they are currently set to pay.

The Chicago class action and employment law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Joilet and Palatine. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Des Plaines and Schaumburg overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.