— Posts About Collective Action

Patterson Harkavy Wins in Fourth Circuit for Underpaid Workers

In Simmons v. United Mortgage and Loan Investment, LLC, the Fourth Circuit ruled for plaintiffs and reversed the district court in this wage and hour case.  The plaintiffs are Charlotte-based Junior Asset Managers for a mortgage company who were not paid overtime even though they worked more than 40 hours per week.  They brought claims under the Fair Labor Standards Act (FLSA) and North Carolina Wage and Hour Act (NCWHA) based on the failure to pay overtime.  The primary issue is whether the plaintiffs will be able to pursue their case as a collective and class action on behalf the other underpaid workers at the company.  The defendants tried to short-circuit the collective/class action process by tendering a limited settlement offer before other workers could be notified of the case.  The Fourth Circuit rejected this tactic, finding the settlement too indefinite to moot the case.  The Court remanded the case to the trial court to consider plaintiff’s motion to certify the collective action and plaintiffs’ amendments to the NCWHA claims.  Ann Groninger, Burton Craige, and Narendra Ghosh are representing the plaintiffs.

More from the opinion below:

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Magistrate Judge Concludes that Smithfield Wage and Hour Collective Action Should Proceed

In this case, plaintiffs are bringing collective action claims under the Fair Labor Standards Act (FLSA) based on the under-payment of wages and overtime at Smithfield Packing’s Tar Heel, North Carolina meat processing facility.  Magistrate Judge Gates issued an opinion last week recommending that defendant’s motion to decertify the FLSA collective action be denied.  If his recommendation is approved by the district judge, the case will proceed to trial as a collective action.  The plaintiffs are represented by several lawyers, including Ann Groninger.

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Ninth Circuit Rejects Tip-Pooling Claims of Servers Making More than Minimum Wage Before Tips

In a case that appears to one of first impression at the federal appellate level, the Ninth Circuit ruled in Cumbie v. Woody Woo, Inc., that there are no tip-pooling claims under the Fair Labor Standards Act (FLSA) for restaurant employees who are paid more than the minimum wage before tips.  FLSA, the federal wage and hour law, regulates how tips can be distributed and/or shared as part of its regulation of the minimum wage.  As restaurants commonly do, servers can be paid a small base amount and make the rest of their wages in tips.  Properly arranged, the tips paid to the servers are a “tip credit” for the employers that combines with the base pay to meet the minimum wage.  An employer can use a “tip pool” as part of its tipping system if it meets two requirements: (1) the employee is fully informed; and (2) the tip pool only includes “other customarily tipped employees.”  Disputes often involve this second requirement, e.g. if tips are shared with managers (who are not customarily tipped).

Reading the FLSA in this way, the Court held that because the servers in this case (who had brought a class and collective action case) were receiving a base pay that was already greater than the minimum wage, the employer was not taking advantage of the “tip credit,” and therefore did not have follow the tip-pooling regulations.  Of course, if the servers’ base pay had been less than minimum wage, the outcome would be entirely different.  (Also note that different analysis may apply under the North Carolina Wage and Hour Act.)

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Reply Brief Filed for Simmons Appeal in Fourth Circuit

In Simmons v. United Mortgage and Loan Investment, LLC, we have filed this reply brief with the Fourth Circuit Court of Appeals in this wage and hour case.  See here for a summary of the case.   Ann Groninger, Burton Craige, and Narendra Ghosh are representing the plaintiffs, who are seeking to remedy the company’s failure to pay overtime to themselves and other Junior Asset Managers.  Here is a summary of our argument to the Court:

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Brief Filed for Underpaid Workers in FLSA Appeal to Fourth Circuit

In Simmons v. United Mortgage and Loan Investment, LLC, we have filed this opening brief with the Fourth Circuit Court of Appeals in this wage and hour case.  The plaintiffs are Charlotte-based Junior Asset Managers for a mortgage company who were not paid overtime even though they worked more than 40 hours per week.  They brought claims under the FLSA and NC Wage and Hour law based on the failure to pay overtime.  The primary issue is whether the plaintiffs will be able to pursue their case as a collective and class action on behalf the other underpaid workers at the company.  The defendants have tried to short-circuit the collective/class action process by tendering a limited settlement offer before other workers could be notified of the case.  Ann Groninger, Burton Craige, and Narendra Ghosh are representing the plaintiffs. Read more…

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Recent Fourth Circuit Labor and Employment Decisions

The Fourth Circuit has published opinions in three labor and employment cases in recent weeks.  The first case, Sepulveda v. Allen Family Foods, Inc., concerned a Fair Labor Standards Act (FLSA) collective action that was brought on behalf of a class of current and former employees of a chicken processing plant.  The employees claimed, among other things, that the company had violated the FLSA by not compensating them for time spent donning and doffing their protective gear before and after their shifts.  There is a specific exception in FLSA for cases regarding compensable time for “changing clothes” when the employees are represented by a union that has negotiated a collective bargaining unit.  The Court held that putting on and taking off protecting gear was “changing clothes,” so the exception applied because these plaintiffs had a union, and so judgment was rightly granted to the employer.

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