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Is There a Class Action Lawsuit in Your Future?

Originally published in Orange County Register

The latest trend in California is the workplace class action lawsuit, but there are ways to protect your company.

The latest trend in California is the workplace class action lawsuit. The awards being reaped by disgruntled employees (and their lawyers) are sensational:

  • $100 million awarded to 100,000 Starbucks Baristas — related to employees rightful portion of tip jar.
    Chau v. Starbucks Corporation, No. GIC836925 (Cal. Superior San Diego, settled March 20th 2008)
  • $5.2 million awarded against the Chinese Daily News — related to overtime, meal and rest breaks.
    Wang v. Chinese Daily News, Inc., No. 2:04-cv-01498-CBM-JWJ (Cal. Central District Los Angeles, awarded February 29th 2008)
  • $1.3 million settlement by Pyramid Breweries — related meal and rest periods.
    Taylor v. Pyramid Breweries, Inc., No. 07AS02039 (Cal. Superior Sacramento, settle April 18th 2008)

On average, 120 work related claims are filed with the state daily. Many of these claims end up as lawsuits, with as many as 10 new employment based class action lawsuits being filed every day. The large numbers of new class action filings is a direct result of one simple fact: they make plaintiffs’ lawyers a lot of money. Plaintiffs’ lawyers need only find a handful of current or former workers to bring a class action on behalf of a much larger group of workers. This means that one or two disgruntled current or former workers can sue to recover for the alleged violation of any of the myriad of rules and regulations governing the workplace on behalf of all of your full or part time employees.

For example, on May 22nd 2008, class action status was granted against Sun Microsystems in an action brought by a single technical writer on behalf of a class of over 250 employees. The lawsuit involves overtime and whether Sun properly classified its technical writers as being exempt from state and federal overtime laws. Hoenemier v. Sun Microsystems, Inc., No. Case No.: 106CV-071531, Cal. Superior Santa Clara, filed May 13, 2008.

Only a day later, on May 23rd 2008, the owners of four Los Angeles area car washes were sued by eight named plaintiffs representing a class of 250 like workers related to meal and rest breaks, overtime, tips, and minimum wages. The lawsuit is believed to be one of the first in this industry. The most sophisticated lawsuits now seek to recover from employers for not fully reimbursing employees for mileage.

Another reason employment class action lawsuits are so prevalent, is that plaintiffs’ attorneys can often collect their attorneys fees and costs in addition to the award received by their clients (and the class). On June 11th 2008, the state Court of Appeals affirmed the award of just under $2 million in attorney’s fees and costs to the lawyers representing laundry workers.

At McKasson & Klein LLP we help our clients avoid becoming a statistic by critiquing existing employee manuals, policies and payroll records and implementing a system which produces excellent documentation going forward.

Please feel free to contact John McKasson if you would like our assistance.

Article written by:
John McKasson