Limo Drivers Settle Overtime Case for $3.5 Million

Limo drivers are hardworking people.  They routinely work 12 to 14 hour days.  And just as routinely, they are victims of wage theft by not getting the overtime compensation they deserve.

This week, Sunny's Limousine Service, Inc. of New York agreed to pay 3.5 Million Dollars to settle a class action brought on behalf of hundreds of limo drivers who were not paid the overtime they deserved.  According to the lawsuit, Sunny's allegedly misrepresented the amount of fares and gratuities collected when it paid the drivers based on a percentage of each fare, and when the pay structure shifted to an hourly basis, hours worked weren't properly tracked and some weren't paid for at all, and others didn't get the proper overtime rate.  The suit also claimed that, until August 2013, the drivers didn't get any premium overtime pay despite working roughly 72 to 82 hours per week.

Limo companies here in Connecticut are also getting sued for similar actions.  The U.S. Department of Labor has sued Premier Limousine.  I myself am involved in class-action lawsuits against Hoyt Livery, Inc., Serlin International Limousine, Rudy's Limousine Service, Inc. and Elite Limousine.  Our hope is that the limo industry will clean up its act and start paying its drivers according to the law.

Progressive Sued For Not Paying Overtime to Auto Appraisers

It has been a while since we’ve seen a major insurance company sued by its automobile damage appraisers for overtime.  The last few to hit the Courts of Appeals resulted in rulings against them.  Progressive Casualty Insurance Company was just sued last week by two automobile damage appraisers who claim that they, and all other MRRS (Progressive calls them “managed repair reps” or “MRRs;” they are also called "Claims Adjusters -- Auto Damage") should have been paid overtime when they work more than forty hours per week.

There is a very informative post on this topic by Richard Hayber of Hartford.  The general rule seems to be that automobile damage appraisers whose primary duty is to prepare damage estimates and reach an agreed price with the auto-body shop are entitled to overtime pay.  When the auto appraisers spend time negotiating with the insured over the value of a totaled vehicle, their duties start to look more like claims adjusters (who usually don’t get overtime pay). 

This latest lawsuit quotes from job postings which list the duties of the position.  Those duties do not include negotiating overt total losses.  The case is being handled by the Hayber Law Firm in Hartford.  It asserts only the Fair Labor Standards act.  This law gives other employees the chance to join the case just by signing a Consent Form and filing it with the court. 

This case will be worth watching.  Earlier decisions in the District of Connecticut were favorable to automobile damage appraisers, including Reich v. AIAC in 1994 (summary judgment for the appraisers), and Neary v. Metropolitan Property and Casualty Company in 2007 (defense motion for summary judgment denied). 

Court Refuses to Force Employees to Arbitrate Overtime Claims

The Fair Labor Standards Act (FLSA) allows employees to band together in a "collective action"  (a form of class action) to sue their employers as a group for unpaid overtime.  One way the employers try to get around this is by forcing employees to arbitrate these claims instead of going to court, and then prohibiting them from collective actions in the arbitration agreement.

Earlier this month, a federal judge in Manhattan struck down such an arbitration agreement.  In Sutherland v. Ernst & Young, LLP (warning -- you'll need a subscription to the PACER service to view the opinion) Judge Kimba M. Wood found Ernst & Young's standard arbitration agreement unenforceable, thus allowing a collective action to proceed in court.

The Plaintiff, Stephanie Sutherland, worked for Ernst & Young as a low-level accountant.  She claims that, despite the fact that most of her work was secretarial and clerical, Ernst & Young classified her as an "exempt" employee and denied her the overtime that she is entitled to by law.  When she brought suit as a collective action, Ernst & Young moved to dismiss, arguing that she must arbitrate her individual claim instead of going to court.  Judge Wood denied the motion to dismiss for several reasons.  First, Ms. Sutherland's costs and attorneys fees would exceed $200,000, when her maximum recovery would be just over $3,700.  The Court stated that "only a 'lunatic or a fanatic' would undertake such an endeavor" and went on to note that if she couldn't pursue the case as a class action, Ms. Sutherland would be forced to give up any rights she might have to recover overtime payments.  The Court also noted that, because the arbitration agreement left it to the arbitrator's discretion to award attorneys' fees, if forced to arbitrate Ms. Sutherland likely would not be able to find an attorney to represent her.  Finally, Judge Wood found that enforcement of the class waiver provision would effectively ban all proceedings by Ms. Sutherland, thus giving Ernst & Young de facto immunity from liability for violations of labor laws.

This well-reasoned decision recognizes the realities that face employees who are wrongfully denied overtime.  Often, the amount at issue is relatively small -- a few thousand dollars.  By trying to force employees to submit to an expensive arbitration process while denying them the ability to act collectively, employers are gaming the system so that they can never be held liable for their actions.  So a tip of the hat to Judge Wood!

Supreme Court Refuses To Overturn Pharmaceutical Workers' Victory

The U.S. Supreme Court last week refused to hear an appeal filed by Novartis Pharmaceuticals of a decision holding that Pharmaceutical Sales Representatives are entitled to overtime pay.  On July 6, 2010, the New York-based Second Circuit Court of Appeals ruled in the case of In re: Novartis Wage and Hour Litigation that these workers, who routinely put in 60 hour weeks traveling to doctors' offices to promote the latest medications, are non-exempt workers and thus should be paid overtime.

This decision by the Supreme Court is good news, at least for pharma reps in Vermont, Connecticut and New York, the three states covered by the Second Circuit.  Unless and until the Supreme Court (a) decides to hear another pharma rep case, and (b) rules otherwise, these workers will be able to recover back overtime, and get paid overtime going forward.  Hopefully this decision will help change an industry whose business model is based on forcing its workers to put in ridiculous hours without pay..