18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 303 service charge. Defendant also asserted that Plaintiffs’ overtime claim failed because Defendant was exempt from the FLSA overtime regulation as a retail or service establishment. The Court determined that since customers did not control the decision to pay the service charge or the amount, the policy was uniformly applied to all charges, and Defendant distributed 90% of the proceeds to employees, the fee had all the characteristics of a service charge, and not a tip. Id . at*48. Therefore, the Court concluded that the fee was a service charge, not a tip, and it agreed with Defendant that when the service charge was added to the minimum wage, the hourly rate of Plaintiffs was above the statutory minimum. The Court thus granted Defendant’s motion for summary judgment as to Plaintiffs’ minimum wage claims, and denied Plaintiffs’ motion. As to the overtime claims, the Court ruled that it was Defendant’s burden to show that the § 7(i) exemption in the FLSA applied, and Defendant failed to make the requisite showing that it did not. For these reasons, the Court denied both parties’ motions for summary judgment on Plaintiffs’ overtime claims. Wintjen, et al. v. Denny ’ s, Inc., 2021 U.S. Dist. LEXIS 35199 (W.D. Penn. Feb. 25, 2021). Plaintiff, a former restaurant server, filed a class and collective action alleging that Defendant violated its minimum wage obligations under the FLSA and the Pennsylvania Minimum Wage Act (“PMWA”). Id. at *2. Specifically, Plaintiff claimed that Defendant’s compensation policies violated the FLSA’s minimum wage requirements: (i) by failing to notify its tipped servers that it would claim a tip credit; and (ii) by paying its tipped servers sub-minimum wage while requiring those servers to perform “side-work.” Id. Plaintiff filed a motion for partial summary judgment, and Defendant filed a motion for partial summary judgment and a motion to dismiss. The Court granted in part and denied in part Plaintiff’s motion, while denying both of Defendant’s motions. As a threshold matter, the Court noted that, to the extent Plaintiff sought summary judgment on her PMWA claim, Plaintiff could not obtain an order binding on all putative class members before she secured class certification. The Court thus denied Plaintiff’s motion as to her PMWA claim. With respect to Plaintiff’s FLSA allegations, the Court assessed the claim under the FLSA’s tip credit notice provision, which requires employers seeking to utilize a tip credit to first provide notice to their employees about the tip credit exception. The Court concluded that Defendant’s tip credit notice was incomplete because it failed to mention that the tip credit would not apply to any server who was not informed of the relevant regulatory provisions. Defendant countered that Plaintiff lacked Article III standing to pursue this claim because she did not suffer a concrete injury fairly traceable to Defendant’s allegedly incomplete notice. The Court found that Defendant’s deficient notice did result in concrete monetary harm, since its missing information directly related to the wages earned by servers. Defendant also contended that Plaintiff’s dual-jobs claim regarding servers’ side-work was overly speculative and not supported by sufficient evidence. The Court disagreed. It pointed to Plaintiff’s statement that servers dedicated one-to-two hours per shift completing side-work such as rolling silverware, cleaning and stocking the restaurant, and washing dishes. Given that Defendant admittedly failed to tracks its servers’ side-work as required by federal wage & hour regulations, the Court ruled that Plaintiff was entitled to summary judgment on this claim as well. Accordingly, the Court granted in part and denied in part Plaintiff’s motion for partial summary judgment and denied both of Defendant’s motions. (xxxvii) Travel Time Issues In Wage & Hour Class Action Litigation Bennett, et al. v. McDermott, Inc. , 2021 U.S. App. LEXIS 10948 (5th Cir. April 15, 2021). Plaintiffs, a pipefitter and a welding foreman, filed a collective action alleging that Defendants failed to pay for time spent waiting for mandatory bus transportation to and from rural worksites in violation of the FLSA and the Louisiana Wage Payment Act (“LWPA”). Defendants filed a motion to dismiss, which the District Court granted. On appeal, the Fifth Circuit affirmed the District Court’s ruling. Plaintiffs contended that Defendants’ transportation system required employees to ride in employer-provided buses to and from the liquefaction facility and designated park- and-ride sites. Plaintiffs contended that the bus seats were limited and it was difficult to get parking at the site, which required employees to arrive early and if they missed a bus, to drive to another site. Plaintiffs asserted that the commute process could take up to several hours every day, which was time for which Defendants did not compensate the employees. The District Court found that the Portal-to-Portal Act barred Plaintiffs’ claims, and that the FLSA preempted the LWPA claims. The District Court also determined that Plaintiffs failed to assert a violation of the LWPA, which only covers "agreed-upon" wages. Id . at *5. The Fifth Circuit ruled on appeal that the Portal-to-Portal Act provides that travel time is integral to business and therefore not compensable when: (i) “the use of such vehicle for travel is within the normal commuting area for the employer’s business;" and (ii) "the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee." Id . at