18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 241 the delivery drivers. The District Court denied Browne’s motion on the basis that the DOL could not be compelled to arbitrate based on the U.S. Supreme Court’s decision in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). On appeal, the Ninth Circuit affirmed the District Court’s ruling. In Waffle House , the Supreme Court noted that a terminated employee had no authority to control the litigation even though the EEOC sought monetary relief on his behalf, since the EEOC was the "master of its own case," and the statute "unambiguously authorized [the EEOC] to proceed in a judicial forum.” Id . at *5. Since the EEOC was not party to Waffle House’s arbitration agreement, it was not bound by the agreement because the FAA "does not require parties to arbitrate when they have not agreed to do so." Id . The Ninth Circuit reasoned that because the DOL, and not the employees on whose behalf relief was sought, had authority to direct an FLSA enforcement action, the DOL could not be compelled to arbitrate, even if the employees agreed to arbitration. The Ninth Circuit cited to the ruling in Waffle House , which stated that “to hold otherwise would undermine the detailed enforcement scheme created by Congress simply to give greater effect to an agreement between private parties that does not even contemplate the [Secretary’s] statutory function." Id . at *10. For these reasons, the Ninth Circuit affirmed the District Court’s ruling denying the motion to compel arbitration. U.S. Department Of Labor v. Five Star Automatic Fire Protection, LLC, 2021 U.S. App. LEXIS 3728 (5th Cir. Feb. 9, 2021). The U.S. Department of Labor (“DOL”) filed a lawsuit on behalf of Defendant’s construction employees alleging that Defendant failed to pay overtime compensation and failed to maintain accurate timekeeping records in violation of the FLSA. After investigating Defendant’s payroll practices, the DOL concluded that Defendant did not compensate employees for pre-shift and post-shift work, nor did it record any of these hours in its timesheets. The DOL requested that Defendant compensate its employees with the requisite back pay to account for these missed hours, but Defendant insisted that this error was due to employees failing to accurate record their hours worked. As a result, the DOL filed this action. Due to the evidentiary gaps in the record, the District Court allowed six of Defendant’s employees to testify as to their hours worked, and despite minor variations, these employees generally testified that Defendant’s supervisor either implied or directly told them not to record their pre-shift and post-shift time. In light of this testimony, the District Court awarded $121,687.37 in back wages. Defendant appealed the District Court’s damages award. The Fifth Circuit affirmed the District Court’s ruling. Defendant initially argued that its records were sufficient because the DOL never outlined the standards for accurate timekeeping records, but the Fifth Circuit opined that this “missed the point” because the adequacy of the records related to establishing liability and damages, and not Defendant’s failure to conform with certain standards. Id. at *7-8. Defendant also challenged the employees’ testimony as unreliable, but the Fifth Circuit rejected this argument since the overarching theme of the employees’ testimony was consistent, i.e. , that Defendant instructed or implied that employees should not record pre-shift and post-shift time. Defendant further contended that the District Court’s back pay award was inaccurate due to improper calculations by the DOL. The Fifth Circuit rejected this contention. It held that the DOL proposed conservative estimates of the back pay owed in an effort to promote settlement. Consequently, the Fifth Circuit affirmed the District Court’s findings. U.S. Department Of Labor v. Japanese Steakhouse, Inc., 2021 U.S. Dist. LEXIS 128912 (W.D. Penn. July 12, 2021). The U.S. Department of Labor (“DOL”) brought an enforcement action alleging that Defendants willfully failed to pay their kitchen employees overtime pay at the restaurants that they owned and operated, and also failed to make and keep appropriate records in violation of the FLSA. The parties cross moved for partial summary judgment, and the Court granted the DOL’s motion in its entirety, and denied Defendants’ motion. The DOL sought summary judgment on all issues in the case except as to damages. Specifically, the DOL moved for summary judgment on seven points and the Court agreed with the DOL and granted summary judgment as to each issue including: (i) that the Restaurant Defendants were “covered enterprises" subject to the FLSA; (ii) that the Individual Defendants, Yuan Zheng Xiao and Christine Xiao, were "employers" under § 3(d) of the FLSA; (iii) that Defendants violated § 7(a) of the FLSA by failing to pay their employees statutory overtime premiums; (iv) that Defendants violated § 11(c) of the FLSA by failing to make, keep, and preserve the employment records of their kitchen employees; (v) that Defendants willfully violated the FLSA’s overtime provisions; (vi) that the DOL was entitled to liquidated damages under § 16(c) of the FLSA; and (vii) that the Court should enjoin Defendants from future FLSA violations. As to Defendants’ motion, Defendants moved for summary judgment on the basis that certain employees were exempt from the overtime requirements of the FLSA because they qualified for the executive exemption under § 213(a)(1). In response the DOL argued that the executive exemption was an