Wage and Hour Class Action Lawsuits
Workers who believe that they have not been given proper minimum wage or overtime pay, who have been denied breaks or forced to work off the clock can often pursue alleged violations of state and federal labor laws through wage and hour class action lawsuits. These lawsuits, which allege that employers broke laws such as the Fair Labor Standards Act (FLSA), can represent thousands of workers and lead to large settlements or verdicts, often of millions of dollars.
See FindLaw's Wage and Hour Laws section for related articles and resources.
Why Workers Pursue Class Action Lawsuits
Employers that violate labor law, such as by refusing to pay overtime, often do so to many employees at once, not just to a single individual. A class action lawsuit allows a group of workers who have suffered similar harm to come together and pursue their claims in a single court action. Suits brought under the FLSA are one of the most common types of workplace class action.
For example, client service associates at Morgan Stanley, the world's largest brokerage firm, have alleged that they were repeatedly denied overtime pay. Three plaintiffs brought a class action suit on behalf of over 800 employees, which resulted in a $2.4 million settlement. Individually, their claims to back pay would likely have been too small to justify the cost of a lawsuit. A class action allows plaintiffs to join together to pursue recovery. Workers often have to do little more than opting in or signing up for the class action.
Common Wage and Hour Class Action Lawsuit Claims
Many wage and hour class action lawsuits allege that employers have wrongly violated the FLSA. The FLSA establishes requirements for minimum wage, time and a half overtime for employees working more than 40 hours a week, and other requirements. It also prohibits employers from allowing non-exempt employees to work "off the clock" without pay. Many class action suits allege violations of these requirements.
Many class actions also pursue claims based on state law. In addition to federal requirements, many states have additional protections for workers. For example, wage and hour class action lawsuits are a common occurrence in California, where state law provides for a higher minimum wage, mandates breaks and requires overtime pay when some employees work more than 8 hours a day, not just 40 hours a week. Based on these laws, workers at Hooters franchises in California have filed class action lawsuits alleging that they were not given their share of tips, were not provided breaks, and were not paid properly for promotional work.
How Wage and Hour Class Actions are Formed
The FLSA specifically outlines the process for creating a class action, called a "collective action" by the law, over wage and hour violations. The process is different from typical class actions. Under the FLSA, an employee who alleges wage and hour violations will first determine whether other current or former employees were "similarly situated." If the employee files for collective action status, a court will typically provide a conditional certification. Plaintiffs then send notice to potential class members, who must opt-in to the lawsuit. Courts can help facilitate this process, often by requiring companies to post notice and opt-in forms at work sites and to provide contact information for their employees, who are then contacted directly.
Types of Relief
Since wage and hour class actions often revolve around allegations of unpaid wages, the most common form of relief is payment for back wages. The FLSA also allows for liquidated damages equal to what is owed in unpaid wages, essentially allowing recovery of double back pay. Injunctive relief, such as a change in company policy, can also be required.
Many companies chose to settle wage and hour class action lawsuits instead of risk losing millions of dollars at trial. For example, in 2008, Wal-Mart settled over 60 wage and hour lawsuits for a total of up to $640 million. The cases alleged unpaid off the clock work, lack of breaks and illegal erasing of hours from time cards, as well as other violations. The settlement followed a series of court losses, including a $172 million jury verdict for failing to provide meal breaks in California and a $188 million verdict for requiring off the clock work in Pennsylvania. When a settlement or final judgment is made, the money awarded, after attorneys' fees, is divided among the members of the class action in proportion to the harm they suffered.
How a Lawyer Can Help
A lawyer can help both employers and employees determine if state or federal labor law has been violated and whether a class action suit would be appropriate in the circumstances. If you are concerned about off the clock work, lack of overtime or other potential violations, consider contacting a qualified employment law attorney to discuss your situation.