18th Annual Workplace Class Action Report - 2022 Edition

276 Annual Workplace Class Action Litigation Report: 2022 Edition Reed, et al. v. Brex, Inc., 2021 U.S. App. LEXIS 23573 (7th Cir. Aug. 9, 2021). Plaintiffs were a group of auto repair technicians who brought a collective and class action alleging violations of the FLSA and state wage & hour laws. Plaintiffs alleged that they were entitled to overtime pay and that Defendant’s commission-based compensation pay scheme did not qualify as bona fide . The District Court found in favor of Defendant, agreeing that its commission compensation qualified as bona fide, and on appeal, the Seventh Circuit affirmed the decision. Plaintiffs claimed that Defendant’s convoluted compensation scheme violated the FLSA by denying technicians overtime wages, and instead relying on a commission structure that Defendant factored in hourly wages in addition to a multitude of additional factors in calculating pay. The District Court found that Plaintiffs’ argument that the commission was not bona fide failed because Defendant paid each technician a commission that was based on actual sales. In reviewing the District Court decision , the Seventh Circuit determined that the judgement was appropriate because, although Defendant used a pay formula that included hours worked, it found that the formula was “mathematically identical to paying a straight commission,” and that the calculations for the hourly wage change based on the technician’s sales. Id. at *12. The Seventh Circuit rejected Plaintiffs additional arguments because Defendant’s payment calculation included a guaranteed wage floor it therefore could not be a part of a true commission scheme. The Seventh Circuit found that this argument was unsupported by any statutory or case law authority. For these reasons, the Seventh Circuit affirmed the District Court’s grant of summary judgement for Defendant. Solis, et al. v. American Airlines, 2021 U.S. Dist. LEXIS 205340 (C.D. Cal. July 27, 2021). Plaintiff, a an airport agent, filed a class and collective action alleging that Defendant failed to pay all wages due and failed to provide adequate real and meal breaks in violation of the FLSA and the California wage & hour laws. Defendant filed a motion for judgment on the pleadings, and the Court granted in part and denied in part the motion. Plaintiff brought 10 causes of action, and Defendant sought judgment regarding three of them, including: (i) failure to maintain accurate payroll time records in violation of § 1174 of the California Labor Code (“CLC”) and the Industrial Welfare Commission ("IWC") Wage Order No. 9; (ii) failure to pay overtime and minimum wages in violation of § § 510, 1194, and 1197 of the CLC, and IWC Wage Order No. 9; and (iii) failure to pay overtime and minimum wages in violation of the FLSA. Plaintiffs asserted that Defendant automatically deducted 30 minutes for meal breaks, regardless of whether employees took meal breaks, and failed to pay proper overtime compensation for affected employees who worked more than 40 hours per week. Defendant argued that it was required to record the start and end times of meal periods, Wage Order No. 9 exempted Plaintiff from California’s overtime protections once the parties’ collective bargaining agreement (“CBA”) took effect, and the FLSA exempted Plaintiff from the FLSA’s overtime compensation requirements as an airline employee. The Court found that Wage Order No. 9, which required that employers must maintain accurate time records, provided that “meal periods during which operations cease and authorized rest periods need not be recorded." Id . at *8. The Court explained that pertinent case law authorities interpreted this language to require employers to record that a meal period occurred, but not its exact start and end times. Id. Accordingly, the Court granted Defendant’s motion for judgment on Plaintiff’s claim for failure to maintain accurate payroll records. In addition, the Court determined that under the Railway Labor Act ("RLA") exemption, any employees in the airline and railway industries who have entered into the CBA were exempt from the Wage Order’s overtime requirements. However, Plaintiff contended that Wage Order No. 9 did not excuse Defendant from complying with the statutory overtime requirements of § 510 of the CLC. The Court disagreed. It determined that the Ninth Circuit had explicitly held that "the RLA exemption excuses employers from both Wage Order 9’s overtime requirements and Section 510’s overtime requirements." Id . at *10. Finally, the Court agreed with Defendant that the FLSA overtime provisions did not apply to employees of air carriers, and granted Defendant’s motion as to Plaintiff’s FLSA overtime claim. Since Defendant asserted no basis for dismissing Plaintiff’s FLSA minimum wage claim, the Court denied the motion as to that claim. For these reasons, the Court granted in part and denied in part Defendant’s motion for judgement on the pleadings. Tarax, et al. v. Blossom West Inc., 2021 U.S. Dist. LEXIS 63621 (S.D.N.Y. March 31, 2021) . Plaintiffs, a group of restaurant employees, filed a class and collective action alleging that Defendants failed to pay minimum wage and overtime compensation in violation of the FLSA and the New York Labor Law. Defendants filed a motion for summary judgment of the FLSA claims, and the Court denied the motion. The parties disputed many of the central facts in the action, including: (i) whether Plaintiffs were paid minimum wages; (ii) the frequency with which Plaintiffs worked overtime and whether they were fully paid when they did; (iii) whether Plaintiffs