Articles Posted in Wage & Hour Law

The United States Supreme Court recently ruled that an employer is not required to pay its employees for the time they have to wait to go through security screening even though the employer requires the screening.

The employer, Integrity Staffing Solutions, Inc., provides warehouse employees to Amazon.com throughout the country.  Its employees package products and ship them on behalf of Amazon.  Integrity required the warehouse workers to pass through metal detectors at the end of each day before they could leave the warehouse.

Two employees, Jesse Busk and Laurie Castro, filed a class action wage and hour lawsuit against Integrity.   They claimed Integrity violated the Fair Labor Standards Act (“FLSA”), a federal law, because it did not pay them for the time they had to wait to pass through metal detectors at the end of every day.  The employees estimated they had to wait an average of 25 minutes per day, or nearly to 2 1/2 hours per week.

Last month, a judge in the United States District Court for the District of New Jersey ruled that an employee who files a wage and hour claim with the New Jersey Department of Labor (“NJDOL”) can be protected from retaliation under the Fair Labor Standards Act (“FLSA”) even if her original claim did not assert that her employer violated the FLSA.

Veronica Reilly worked for Quick Care Medical, P.C., as an office manager. She filed a claim seeking to recover unpaid vacation time and overtime pay with the NJDOL. Specifically, she claimed the company failed to pay her $673.20 to which she was entitled when she used a week of her accrued vacation time. She also claimed she was improperly denied $168.40 in overtime pay. She brought her claims under two state laws, the New Jersey Wage Collection Statute and the Wage Payment Law Statute. Ms. Reilly won both of her claims, and the NJDOL ordered Quick Care to pay the full $841.60 she sought in vacation and overtime pay.

Office ManagerAccording to Ms. Reilly, when she returned to work on the day of her hearing at the NJDOL, her boss, Dr. Neerja Misra, reprimanded her for failing to tell the company she was going to be late for work that day. Dr. Misra apparently told Ms. Reilly not to come to work for the next three days, and then fired Ms. Reilly when she returned to work on the fourth day after her hearing.



The Third Circuit Court of Appeals recently reinstated an employee’s class action overtime pay lawsuit under Fair Labor Standards Act (FLSA) and the New Jersey Wage and Hour Law (NJWHL).  In doing so it recognized successor companies can be liable for their predecessors’ overtime violations, and individual owners and supervisors can be held personally liable under both of those laws.

Real estate concept - business-man signs contract behind househoPatricia Thompson was hired by Security Atlantic Mortgage Company as a mortgage underwriter in June 2009.  Security Atlantic quickly assigned her to provide training at a related company, Real Estate Mortgage Network (REMN).  In February 2010, Security Atlantic stopped doing business and Ms. Thompson began working directly for REMN.  Otherwise, her job and the business remained essentially the same.

Ms. Thompson claims Security Atlantic and REMN both failed to pay her and other mortgage underwriters time-and-a-half when they worked more than 40 hours per week, in violation of both the FLSA and the NJWHL.  Specifically, she alleges mortgage underwriters worked through lunch and at home to complete their assignments on time, but were not paid overtime because the companies misclassified them as exempt employees.

The City of Newark recently enacted an ordinance requiring certain employers to provide paid sick leave to their employees.  Newark is now the second city in New Jersey to pass a paid sick leave law.  As discussed in a previous article, effective January 24, 2014, Jersey City Law Requires Employers to Provide Paid Sick Leave.

To Whom Does the Law Apply?

The Ordinance applies to most employees who work in Newark for at least 80 hours per year.  However, it does not apply to the federal, state or local government, or to employees of any school district or Board of Education, including Rutgers University.

Earlier this year, the Second Circuit Court of Appeals ruled that a company’s Chief Executive Officer can be held personally liable for a company’s overtime violations even if he had no personal involvement in violating the law.

In Irizarry v. Catsimatidis, a group of employees filed a class action overtime claim against Gristede’s Foods, Inc. They brought federal claims under the Fair Labor Standards Act (FLSA) as well as claims under the New York Labor Law. They also named the company’s Chief Executive Officer, its District Manager, and its Vice President as individual defendants in the lawsuit.

Eventually, the court ruled in favor of the employees, finding Gristede’s failed to pay them time-and-a-half for their overtime hours, in violation of the FLSA and New York State law. At the time the court did not decide whether any of the individual defendants were personally liable.

The City of Jersey City recently passed a law that will require private employers to provide their employees 5 paid sick days per year. The law, which is the first of its kind in New Jersey, is scheduled to go into effect on January 24, 2014. New York City Passed a Paid Sick Leave Law earlier this year.

Jersey City Requires Employers to Provide Paid Sick Leave.jpgEmployers are required to permit employees to use their paid time off for mental or physical health needs, including diagnosis, care, treatment and preventive care. Employees can use this time off to care for their own health needs, the health needs of their spouse, civil union partner, domestic partner, children, grandchildren, parents, grandparents and siblings; as well as for the health needs of the children, grandchildren, parents and grandparents of their spouses, domestic partners, or civil union partners.

In a statement released before the law was passed, Jersey City’s Mayor Steven M. Fulop explained that the right to take time paid medical leave time is “an issue that impacts the most vulnerable in our society and it is the right thing to do.” He further indicated that “[i]n New Jersey, some 1.2 million workers – that’s more than 1 in 3 of us – do not earn paid sick days.”

Last month, the United States Supreme Court dismissed an overtime case filed by an employee, Laura Symczyk, against her former employer, Genesis Healthcare Corporation. Ms. Symczyk filed the case as a collective action on behalf of herself and other similarly situated employees who were not paid for all of the hours they worked. Specifically, she claims Genesis deducted 30 minutes of pay per day for a meal break, even when they worked during their break. She asserted the company’s policy violates the Fair Labor Standards Act of 1938 (“FLSA”). The FLSA is a federal law that set the federal minimum wage and guarantees overtime pay to non-exempt employees. The FLSA permits employees to sue on behalf of similarly situated employees in what is called a “collective action.”

Supreme Court ruling overtime case and collective action.jpgWhen Ms. Symczyk filed her lawsuit, Genesis made her a formal settlement offer, called an offer of judgment, in the amount of $7,500 plus all of her attorneys’ fees and costs. Ms. Symczyk admits the $7,500 would have full compensated her for all of her own damages. However, she did not respond to the offer because she wanted to continue with her case on behalf of her coworkers, and as a result never received the $7,500. But since the offer would have paid Ms. Symczyk everything she was seeking for herself in the lawsuit, and none of her coworkers had joined the case, the trial court no longer considered her to have a personal stake in the outcome of the case. In other words, it deemed her case to be moot.

On that basis, Genesis sought to have the case dismissed. In response, Ms. Symczyk argued the company was improperly trying to end the case before the collective-action portion of the case even could begin.

The District Court dismissed the case. It ruled the $7,500 offer of judgment fully satisfied Ms. Symczyk’s claim, and a collective action cannot proceed unless there is at least one person who has joined the case whose claim against the company is not moot. The Third Circuit Court of Appeals reversed, finding that even though Ms. Symczyk’s claim was moot, it was improper for the company to try to “pick off” the named plaintiff to defeat the collective action. Genesis appealed the ruling to the United States Supreme Court. However, Ms. Symczyk did not cross-appeal the Third Circuit’s finding that her personal claim was moot.

In its opinion in Genesis Healthcare Corp. v. Symczyk, the Supreme Court ruled that since Ms. Symczyk did not cross-appeal the finding that her case was moot, it was bound by that conclusion whether or not it is correct. It then ruled that since her case is moot, she cannot proceed with the collective action on behalf of her coworkers. However, since the Court did not indicate whether Ms. Symczyk’s case really was moot, and merely assumed it because she did not cross-appeal that ruling, it did not indicate whether the same tactic of offering full damages to each named plaintiff would work in future cases. As a result, it remains unclear whether employees who bring collective actions and are offered settlements that would satisfy their own claims have the right to reject the offer and continue to proceed with the collective action.

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New Jersey’s Appellate Division recently recognized it can be unlawful for a company to reduce employees’ overtime hours in response to an overtime lawsuit. Specifically, the case finds that such a policy could violate New Jersey’s whistleblower law, the Conscientious Employee Protection Act (CEPA).

Howard Flecker III worked as Ferry to Statue of Liberty.jpga Deckhand for Statue Cruises, a company which provides ferry service from New York and New Jersey to Liberty Island and Ellis Island.Under the company’s Collective Bargaining Agreement (CBA), employees were entitled to be paid time-and-a-half only after they worked more than 48 hours per week. The FLSA is a federal law which requires companies to pay “non-exempt” employees overtime pay at the rate of time-and-a-half when they work more than 40 hours per week
In 2009, Mr. Flecker filed a class action lawsuit claiming the CBA violates the Fair Labor Standards Act (FLSA). In direct response to Mr. Flecker’s lawsuit, the company issued a memorandum indicating that none of its employees would work 40 hours per week. For example, the company reduced Mr. Flecker from 50 to 40 hours per week.

As a result, Mr. Flecker’s coworkers lost 8 or more hours of pay per week. Many of his coworkers confronted him about this on a daily basis, and pressured him to withdraw his lawsuit. Mr. Flecker’s lawyer told the company that its policy was a form of unlawful retaliation in violation of CEPA. The company responded that it was attempting to minimize the potential damages in Mr. Flecker’s overtime lawsuit. Eventually, due to the stress caused by his co-workers’ constant pressure to withdraw his lawsuit, he resigned. He also added a retaliation claim to his lawsuit under CEPA.

The trial court dismissed Mr. Flecker’s CEPA claim, finding he had not alleged any retaliatory action. However, in Flecker v. Statue Cruises, LLC , the Appellate Division disagreed, and found two potential retaliatory actions. First, it ruled a jury could conclude the company’s actions were intended to turn Mr. Flecker’s co-workers on him, which in turn forced him to resign. In other words, a jury could conclude the company constructively discharged him. Second, it found reducing Mr. Flecker’s hours because he filed an overtime lawsuit could violate CEPA if the company’s motive was to retaliate against him for filing his lawsuit. The court explained this theory was supported by the fact that, although the company claimed it was going to reduce the hours of all of its employees, it did not reduce the hours of at least two of the employees who had been harassing Mr. Flecker.

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Sandy.jpgAs a result of Hurricane Sandy, many businesses in New York and New Jersey had to stop their operations for a considerable period of time. Now that many employees are returning back to work, they are asking whether they should be paid for the days when their offices were closed due to the storm.

The United States Department of Labor provides a clear answer to this question as it relates to employees who are “exempt” under the Fair Labor Standards Act (FLSA). An employee is generally considered exempt if he meets certain requirements regarding his job duties and is paid a salary of at least $455 per week ($23,660 per year based on a full time schedule). The most common exemptions are for employees employed in a bone fide executive, administrative, and professional capacities.

An employer may not withhold pay to an exempt employee because the office was closed as a result of the storm or another natural disaster without jeopardizing the employee’s exempt status. In other words, if a company fails to pay an exempt employee his salary for the period he was unable to work during a natural disaster, then that employee might be entitled to overtime pay if he works more than 40 hours in a week. However, if the employee has accrued vacation or personal time, the employer can require the employee to use that time during his absence from work due to the storm.

As far as non-exempt employees, under the FLSA employers are required to pay them only for the hours they actually worked. Thus, unless they used paid time off, employees who are paid on an hourly basis and other non-exempt employees are not entitled to pay for the days they were unable to work because of the natural disaster. Of course, companies still have to pay employees if they are required to do so under an individual employment contract, a collective bargaining agreement, or a company policy.

Employees who became unemployed as a result of Hurricane Sandy may be eligible for Disaster Unemployment Assistance. The information about the requirements and the application process is available through the New Jersey Department of Labor and the New York Department of Labor.

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The Court of Appeals for the Third Circuit was recently asked if a parent company is responsible for overtime violations committed by its subsidiary. The lawsuit, In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, was brought by a group of assistant branch managers who worked for various locations of Enterprise-Rent-a-Car, which are wholly owned subsidiaries of Enterprise Holdings. The employees claimed Enterprise Holdings was liable for their overtime pay under the Fair Labor Standards Act (FLSA) as a “joint employer.” The FLSA is a federal law that requires companies to pay time-and-a-half overtime pay to most “non-exempt” employees.

Car Rental Company sued for overtime violations.jpgJoint employment is when two or more employers share control of an employee. Although joint employment is a well-recognized concept, the Third Circuit was addressing this issue for the first time in the context of an FLSA claim. The court created a new four-part test for “joint employment,” which it named the Enterprise test.

Under the Enterprise test, in deciding if a party is a “joint employer,” courts must consider whether the company has:

(1) Authority to hire and fire employees;
(2) Authority to issue work rules and job assignments, and set conditions of employment like compensation, benefits, and hours;
(3) Authority to supervise and discipline employees on a day-to-day basis; and
(4) Control of employee records such as payroll, insurance, and tax records.

When the court applied this test, it determined Enterprise Holdings was not a joint employer even though there are many indications of joint management. For example, Enterprise Holdings is very involved in running its subsidiaries. It also provides them with administrative services and Human Resources support, including employee compensation guides indicating which employees should be paid salaries, and which employees should be paid by the hour. In addition, both companies are managed by the same Board of Directors. But the Court found that was not enough to make them joint employers.

The court reached this decision because it found Enterprise Holdings did not directly control assistant branch managers working for its subsidiaries, and the guidelines it provided to its subsidiaries were recommendations rather than requirements. Although the court suggested that other factors can also be taken into consideration, in Enterprise it gave those factors very little weight.

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