Recent reports have indicated that the number of FLSA collective actions rose sharply in 2009. Many believe this trend will continue in 2010 as employees gain increased awareness of their rights under wage and hour laws and the plaintiffs’ bar recognizes the potential value of FLSA collective actions.
Indeed, there has been a recent flurry of activity across the country in the area of wage and hour class actions. Assistant managers at Foot Locker Retail Inc. filed a nationwide collective action in the Southern District of California, alleging that the company misclassified them as exempt and failed to pay them overtime wages. Similarly, Vermont state employees have brought a putative class action under the FLSA, claiming that the state has failed to pay overtime to employees in higher pay grades.
A federal judge in Florida has denied conditional class certification in a putative class action brought against H&R Block by its tax agents because the lead plaintiffs could not show that the company’s failure to pay overtime was a companywide practice. In Missouri, however, a group of AT&T call center workers won conditional certification in their collective action, in which they seek overtime compensation for the amount of time it takes them to log onto their systems prior to shifts.
Recent settlements have also been reached. A judge in the Middle District of Florida signed off on a settlement between Cemex Inc. and a group of former truck drivers who had accused the company of withholding overtime wages. Finally, the plaintiffs in an FLSA case against First Residential Mortgage Network Inc. settled their claims following the decertification by the court of a class of loan advisors.
Given the increase in FLSA collective action activity, it is important that all employers be mindful of their classifications of employees and pay practices. These cases can be very expensive for employers to defend and sometimes even more expensive to settle.
If employers have any questions about whether they have properly classified their employees as being exempt, they would be wise to spend a little money up front to conduct a self-audit. Among the steps employers can take are (a) confirming that job descriptions truly describe exempt executive, administrative, professional, computer professional or outside sales positions; (b) confirm that employees are actually doing what their job descriptions say they are supposed to do; and (c) ensure that exempt employees are being paid at least the minimum qualifying salary. In addition, to avoid other potential wage and hour litigation, employers should confirm that non-exempt employees are recording all hours worked, that minors are not forced to work outside state law requirements, and that individuals that are treated as independent contractors are not really employees.