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Staff Writer |
Courtrooms have become more hazardous places than U.S. Labor Department conference rooms for employers accused of wage-and-hour violations.
"It is easier to get something resolved with the Department of Labor than it is with a private lawyer bringing an issue," said Brian Finucane, regional managing partner of Fisher & Phillips LLP.
Although underpaid workers can ask the government to enforce overtime laws, they're increasingly banding together and suing in court, hiring lawyers who more doggedly try to maximize the employers' payouts than do regulatory bureaucrats.
"Even though the law has been around forever ... it has not been until the last three or four years a heavily litigated area," Finucane said.
Alleged violations follow two potential patterns:
- Employers exempt certain workers from eligibility for overtime pay by improperly applying the law's classification system.
- Employers fail to keep proper records of actual hours worked by employees or even modify records to avoid paying overtime.
The first step to avoiding such suits is to audit the payroll, said Sharon Co-berly of Seigfried Bingham Levy Selzer & Gee PC.
"They should retain an attorney to do a complete audit of the positions that they're claiming as exempt," she said.
Misclassification is the main allegation brought by employees' law firms, such as Kansas City firm Stueve Siegel Hanson Woody LLP.
Finucane said an audit can help companies ensure that they're not misclassifying workers who are legally entitled to overtime pay.
"There are a lot of jobs that are in the gray area, so most employers are going to need outside assistance to interpret wage-and-hour law," Finucane said.
One such gray area is the classification of loan officers.
Suits brought by Stueve Siegel lawyers have targeted financial companies that allegedly paid loan officers flat salaries regardless of the hours they worked, though their job duties allegedly fell within the legal definition of jobs that are eligible for overtime pay.
In mid-January, Bank of Blue Valley and National Bank of Kansas City reached confidential settlement agreements in two collective-action lawsuits brought by Stueve Siegel, according to filings in U.S. District Court for Kansas City, Kan.
Meanwhile, U.S. District Judge Carlos Murguia on Jan. 12 ordered that a Kansas City, Kan., case against First Horizon Home Loan Corp. could proceed as a collective action.
"The law is very clear that those folks are actually nonexempt and are owed overtime," said attorney George Hanson of Stueve Siegel.
In fact, the law assumes that any worker is entitled to overtime pay unless the employer can prove otherwise, Hanson said.
Job titles such as "manager" don't eliminate a worker's eligibility unless the employee has significant supervisory duties, Hanson said.
Those include some role in the hiring and firing of other employees as well as some responsibility for assigning jobs and disciplining and reviewing employees, Finucane said.
Doctors, lawyers, scientists, chemists and pharmacists all typically are ineligible for overtime pay in the law's "professional employee" exemption. Also ineligible are outside salespeople.
Two local suits against Wal-Mart Stores Inc. deal with another type of alleged violation: improper record-keeping.
Lawyer Rick Paul of Shughart Thomson Kilroy PC said a case in Jackson County District Court alleges that the company intentionally altered workers' computerized time records to delete work hours.
On Nov. 2, Jackson County Circuit Judge Sandra Midkiff granted class-action status to about 250,000 Wal-Mart employees in a suit brought by Paul's firm alleging employees worked without pay and weren't allowed breaks.
Wal-Mart has denied the allegations and appealed the decision to the Western Missouri Court of Appeals in Kansas City. Meanwhile, Shughart Thomson is awaiting word from Wyandotte County Circuit Court on whether a case there can proceed as a class action, Paul said.
Outside a class-action suit, few Wal-Mart employees would be able to afford suing the company for unpaid wages, Paul said.
Class-action cases are more difficult to bring than individual actions, however, because of the burden of condensing millions of pages of data into a form that can serve as evidence in court, Paul said.
But computerization has simplified gathering and presenting data, making class-action wage suits sufficiently manageable to encourage plaintiffs to sue rather than merely report an employer to the Labor Department.
Shughart Thomson won class-action status for the Wal-Mart case after gaining court-ordered access to company payroll data, the firm said in a written statement.
"The trend is certainly toward litigation, and I think the reason for that is really kind of the computer age, the fact that there is electronic data that can be used," Paul said.
But even an absence of evidence can work against employers, Finucane said.
"Employers need to make sure management and supervisory employees of the company are properly complying with time-keeping and wage-payment policies," he said. "Frontline supervision cannot be playing fast and loose with lunch and break time."
Wage complaints can be difficult to defend against because the law favors workers, Finucane said. Employers that can provide evidence that they've tried to comply with the law have better prospects of success not only in court cases but also in cases handled by regulators.
"The law is employee-friendly on the issue of whether the employer can look the other way and kind of ignore that someone is working overtime," he said.
mkind@bizjournals.com | 816-421-5900
