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Although courts across the country don’t always agree on whether arbitration agreements with employees should be enforced as a general rule, sometimes the fate of a particular arbitration agreement lies in a technicality. In the case of a recent proposed class action wage and hour lawsuit against Century Fast Foods Inc., a Taco Bell franchisee, that technicality revolves around the ambiguity of the term “related companies.”

Jesus M., a former employee who worked at a Taco Bell restaurant owned by Century, filed a wage and hour lawsuit on behalf of himself and all other similarly-situated current and former employees of the franchisee for allegedly denying them overtime, legally-mandated rest breaks under California labor law, and other claims. Century tried to invoke the arbitration agreement Jesus signed when he filled out an application to work for Taco Bell, but so far two courts have denied the company’s petition.

According to Century, Jesus signed a contract that included an agreement to use arbitration to settle all disputes with Taco Bell, as well as its related companies. The problem, according to the courts, is defining the term “related companies.” First the Los Angeles Superior Court said in 2015 that Century failed to prove it qualified as a “related company” of Taco Bell. Century appealed the decision and the case went before a California appellate court, which upheld the lower court’s ruling.

According to the appellate court, Century failed to provide sufficient evidence that there was an agreement between itself and Taco Bell that Century was a related company of Taco Bell. In it’s published decision, the court also pointed out that it had not seen sufficient evidence that Jesus could reasonably be expected to understand that Century was a related company of Taco Bell, and therefore subject to the arbitration agreement he had signed with the fast food chain. Instead, the court suggested it would have been more convincing if the franchisee had provided a separate contract for employees to sign that included an arbitration agreement between Century and its employees. Continue reading

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Under the federal Fair Labor Standards Act (FLSA), all hourly, non-exempt employees are entitled to one and one-half times their normal hourly rate for all the overtime they spend working. It sounds simple enough, and for most workers it is, but employers need to make sure they’re including all the compensation earned by workers when calculating their overtime rate.

An overtime class action lawsuit against the U.S. division of Weatherford PLC alleges, among other things, that the oil company failed to properly calculate employees’ overtime rates. According to the wage and hour lawsuit, the company did not take into account certain bonuses (called “wellness bonuses”) that employees had earned when calculating the premium overtime compensation they should be paid when working more than eight hours a day or forty hours a week.

The class action lawsuit, which was filed in California in 2014, also alleges that Weatherford illegally denied workers compensation for the meal breaks they worked through.

Although the FLSA does not require employers to provide their workers with breaks throughout the workday, some state labor laws do, including California. Under California labor law, all hourly, nonexempt workers are entitled to one, paid, uninterrupted rest break of at least ten minutes for every four hours they spend working. For every five hours worked, employees are entitled to one, unpaid, uninterrupted meal break lasting at least half an hour. For every day an employee does not take one of these breaks, for any reason, that employee is entitled to one hour’s worth of pay, in addition to all other wages, bonuses, tips, etc. earned that day. Continue reading

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For the past few years, many of the large employers across the country have had to face the possibility of redefining what they consider to be “work.” The federal Fair Labor Standards Act (FLSA) does not provide a definition of “work,” although the U.S. Department of Labor (DOL) does define a “workday” as beginning with the first “principal activity” the employee performs and ending with the last “principal activity” they perform. But what can and cannot be considered a “principal activity” has long been debated between employers and their workers.

In general, anything that is required by the employer and provides a direct benefit to the employer qualifies as a “principal activity,” but the courts continue to go back and forth about the kinds of activities that meet this requirement. For example, many employees argue that the time they spend putting on protective gear when they’re required to wear it while performing their jobs constitutes a principal activity, and as such, they should be paid for that time. Not every employer agrees with that assertion and the DOL itself has gone back and forth on whether employees should be paid for that time. Continue reading

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When a class of plaintiffs wins their class action lawsuit against their defendant, or the case settles outside of court, it is common practice for the named plaintiffs to receive at least a few thousand dollars each, in addition to their share of the award or settlement amount. This extra share is known as an incentive award and is meant to encourage potential plaintiffs to file class action lawsuits against large defendants, which tend to be large corporations that have much more leverage than the plaintiffs, both in business and in the courts.

But a Florida judge recently refused the incentive awards for the six named plaintiffs who filed a class action overtime lawsuit against their former employer, Hartford Fire Insurance Co. Despite the fact that he approved the rest of the $3.7 million to settle the legal dispute, U.S. District Judge Roy B. Dalton said the plaintiffs had not submitted sufficient evidence to show that the named plaintiffs had significantly contributed to the case or taken any serious risks. Continue reading

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Because franchisees are representing a larger company in various regions across the country, it makes sense for the parent company to maintain a certain level of control over how the franchisees run their business. After all, it’s the reputation of their brand at stake.

But the amount of control a franchisor can legally exert over its franchisees is limited. Franchisees need to maintain enough control and autonomy in the running of the business to be legally considered independent contractors.

The federal Fair Labor Standards Act (FLSA) is very specific about the requirements workers need to meet in order to be considered independent contractors. They include qualities like being able to make their own hours, control the environment they work in, what they wear while working, how the work is conducted, how they get paid and their rates. If any one of these conditions is not met, then the workers need to be classified as employees and paid accordingly, including benefits. Continue reading

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In addition to the federal Fair Labor Standards Act (FLSA), which provides definitions of things like overtime and the federal minimum wage, each state and city has its own labor laws to govern employers within their limits. There is also the federal Service Contract Act, which defines minimum wage limits for certain types of employees working on government contracts worth $2,500 or more.

Misclassifying employees in order to avoid paying them overtime is common enough among large employers looking to save a few bucks, but one contractor has been accused of allegedly deliberately misclassifying employees in order to avoid paying them a higher hourly wage.

In summer of 2011, the U.S. Department of Homeland Security granted to New Jersey’s Essex County a five-year contract for $130 million to run an immigrant detention center at Delaney Hall Center in Newark, New Jersey. The county subcontracted parts of the job to Education and Health Centers of America Inc., which also subcontracted portions of the job to Community Education Centers Inc. (CEC).

The Wage and Hour Division of the Department of Labor investigated the employment practices at the detention facility and determined that both CEC and Essex County had allegedly illegally misclassified 122 operations counselors who allegedly should have been classified as detention officers. The minimum wage for detention officers is $30.97 per hour, while the minimum for operations counselors is only $11.29 per hour. To make matters worse, the lower minimum wage the workers were paid was allegedly due to a collective bargaining agreement that had been invalidated by the National Labor Relations Board at the end of 2013. Continue reading

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When a large company with multiple franchises is faced with a lawsuit, sometimes there’s a question of whether the company itself is at fault, or the franchisee. Many franchisees choose that career path because they want to be their own boss, but different companies maintain various levels of control over their franchises. The situation is usually beneficial to both parties, but when there’s a lawsuit over business practices, sometimes there’s a question of whether the parent company should be held responsible, or just the franchise owner.

In the case of DoubleTree, the massive hotel chain recently tried to argue it should not be included as a defendant in a recent class action overtime lawsuit involving one of its hotels in Tarrytown, New York.

According to the complaint, hourly, nonexempt employees working in the hotel’s housekeeping and food and beverage departments were allegedly told it was hotel policy to not pay workers more than 40 hours a week, no matter how many hours they actually spent working. If the allegations turn out to be true, such a policy violations both New York labor law and the federal Fair Labor Standards Act (FLSA). Continue reading

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Class actions are a powerful and important tool for individuals with similar claims against a common defendant. Often, the defendant is a large, powerful corporation with a team of expensive attorneys at its disposal. Most employees and consumers do not have the resources to take on these corporations in court on their own, not to mention the fact that their individual claims are usually too small to justify the expenses associated with filing a lawsuit.

The class action solves all these problems. It allows individuals with similar complaints against a common defendant to combine their claims into one, large claim. It also provides them with the leverage they need to arm themselves with competent legal representation.

But plaintiffs looking to combine their claims need class certification from a court judge, and in order to get that, they need to prove the class meets certain requirements.

One of those requirements is that all the members of the class must have claims and situations that are similar enough to justify filing all their claims together. This is a common target for defendants to attack, often claiming that plaintiffs are not eligible for class certification because their situations are not exactly identical. This view was perpetuated in the Supreme Court’s ruling in favor of Wal-Mart a few years ago, but many judges are still certifying class actions all over the country and maintaining that their certifications are still in line with both the relevant class action law and the Supreme Court’s decision. Continue reading

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One of the first things a company needs to do when it starts taking on employees is put in place employment policies and make sure they’re in line with all the relevant labor laws that apply to them (federal, state, local, etc.). It’s a good way for companies to protect themselves against potential wage and hour lawsuits, but it’s only the first step. They also need to make sure they’re educating all their employees and managers in order to make sure the policies are as effective as they can be.

No matter what employers have on paper, it is always possible for them to coerce their workers, either intentionally or unintentionally, into giving up some of their legally-mandated rights. This has been exemplified in the allegations of a wage and hour class action lawsuit that was recently filed against Courtyard by Marriott in California.

Under California labor law, all hourly, nonexempt employees are entitled to one paid, uninterrupted rest break lasting at least ten minutes for every four hours they spend working. For every five hours of work, employees are entitled to one unpaid, uninterrupted meal break lasting at least half an hour. For every day an employee does not take one of these breaks, or is interrupted, for any reason, they are 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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Judges have many things to consider when deciding whether to approve a proposed settlement agreement. The most obvious considerations are whether both parties agree to the agreement and whether the agreement is fair to both sides. Part of that includes making sure both parties can uphold their part of the agreement.

In a recent class action wage and hour lawsuit against, a laundry app that allows users to request laundry to be picked up, cleaned, and dropped off back at their homes, the judge is concerned won’t be able to pay the class of plaintiffs anything.

The lawsuit alleges’s delivery drivers (which it referred to as “ninjas”) were improperly classified as independent contractors. As a result, they were allegedly denied the proper minimum wage, overtime compensation, and regular meal and rest breaks, which are required by California labor law.

In addition to the federal Fair Labor Standards Act (FLSA), which protects workers by doing things like providing a federal minimum wage, defining overtime, and requiring a higher compensation for overtime hours, there are also state and local laws that employers need to be aware of and abide by. Continue reading