Recent Blog Posts
- Controls Imposed by Franchise Agreements May Support Class Action Claims That Franchisees Are Actually Employees Claims that employees have been misclassified as independent contractors remain a focus for private plaintiffs and government agencies. Contracts that exert control over the business of another company may be a particularly fertile source of misclassification claims by plaintiffs seeking unpaid wages.
Two recent suits arising from franchise agreements with Jani-King, described by the Third Circuit as “the world’s largest commercial cleaning franchisor,” demonstrate the potential liability that can arise under these circumstances.
Wage Hour Division Sues Based on Misclassification of Franchisees
- Twenty-One States Allege the New White Collar Salary Thresholds are Unlawful A group of 21 states (“the States”) has filed a Complaint in the Eastern District of Texas challenging the new regulations from U.S. Department of Labor that re-define the white collar exemptions to the overtime requirements of the FLSA. The States argue the DOL overstepped its authority by, among other things, establishing a new minimum salary threshold for those exemptions.
Pursuant to the new regulations from the U.S. Department of Labor, effective December 1, 2016:
the salary threshold for the executive, administrative,... More
- A Plaintiff’s ATM & Cell Phone Records May Be Discoverable When There Is a Particularized Showing of Relevance Michael D. Thompson
In Gonzalez v. Allied Concrete Industries, Inc., thirteen construction laborers filed suit in the Eastern District of New York. The plaintiffs claimed they worked in excess of forty hours per week, but were not paid overtime in violation of the Fair Labor Standards Act and the New York Labor Law.
To obtain information regarding the plaintiffs’ activities during hours they claimed to have been working, the defendants sought an order compelling discovery of their ATM and cell phone records.
- New York Attorney General Contends Domino’s Is a Joint Employer with Franchisees
After spending the last few years litigating with Domino’s franchisees over wage hour violations, the New York Attorney General has filed suit contending that franchisor Domino’s Pizza Inc. is a joint employer with three franchisees, and therefore is liable for the “systematic underpayment” of franchise employees.
The New York Attorney General also claims that, regardless of whether it’s a joint employer, Domino’s is liable for misrepresentations and nondisclosures that led to the underpayment of employees at the three franchises and violated the... More
- The Wage Hour Division Issues an Interpretation on Joint Employment Relationships As part of the Wage Hour Division’s continuing focus on defining the employment relationships covered by the FLSA, the Division’s Administrator has issued an Administrators’ Interpretation (as well as a Fact Sheet) addressing joint employment relationships. At the very least, the Interpretation suggests that the Division will be seeking to use the “joint employer” doctrine to pursue multiple entities – and “deeper pockets” – to address wage issues.
“Larger and More Established” Employers
The Administrator’s Interpretation notes that joint employment often involves... More
- Have We Now Seen the Last of “Bag Check” Class Actions? In recent years, employers across the country have faced a great many class action and collective action lawsuits in which employees have alleged they are entitled to be paid for the time spent in security screenings before they leave their employers’ premises – but after they have already clocked out for the day. Retailers have been particularly susceptible to these claims as many require employees to undergo “bag checks” before they depart their stores to ensure that employees are not... More
- “Small Doses” of Non-Educational Work Did Not Turn Students into Employees Following recent precedent by the Second and Eleventh Circuits, the U.S. District Court for the Northern District of California dismissed the claims of cosmetology and haircutting students who claimed they acted primarily as workers rather than students.
In Benjamin v. B&H Education, Inc., the plaintiffs sought to represent a putative class of students seeking wages from their schools under the federal Fair Labor Standards Act (“FLSA”) and the wage hour laws of California and Nevada.
The District Court held that the putative... More
- Meal Periods with Travel Restrictions May Be Compensable In Naylor v. Securiguard, Inc., the Fifth Circuit Court of Appeals held that an employer may be required to compensate employees for meal breaks if the employees are required to spend a significant portion of that period traveling to a required break area.
Securiguard employees guarded several gates to a Naval air station. During their shifts, the guards received two scheduled thirty-minute meal breaks. The guards expressed a desire to eat at their posts, but Securiguard prohibited them from doing... More
- The Department Of Labor Addresses Independent Contractor Misclassification And Concludes That “Most Workers Are Employees” The Administrator of the Wage Hour Division of U.S. Department of Labor has issued an Administrator’s Interpretation of the FLSA’s definition of “employ.” And the conclusion is one that not only could have a significant impact on the way companies do business, but lead to numerous class and collective actions alleging that workers have been misclassified as independent contractors.
Addressing the misclassification of employees as independent contractors, the Administrator’s Interpretation notes that the FLSA’s defines the term “employ” as “to suffer or... More
- Motor Carrier Exemption Applies to Drivers Who can be Expected to Drive Interstate In Resch v. Krapf’s Coaches, Inc., the Third Circuit Court of Appeals ruled that drivers who “rarely or never crossed state lines” were nevertheless covered by the motor carrier exemption to the FLSA because they worked in safety-affecting jobs and reasonably could have been expected to drive interstate routes.
The FLSA’s motor carrier exemption creates an overtime exemption for employees who are covered by the Secretary of Transportation’s authority to regulate the safe operation of motor vehicles in interstate or foreign... More