Class action lawsuits are the latest California workplace trend, says employment attorney John McKasson of McKasson & Klein LLP in Costa Mesa.
And if they’re popular here, can the rest of the nation be far behind?
John McKasson
Here are a few recent examples:
- A San Diego judge ordered Starbucks to pay $100 million to 100,000 of its “baristas” for sharing tips with managers.
- Chinese Daily News in Monterey Park was ordered to pay $2.5 million for overtime and rest breaks.
- Pyramid Breweries in Sacramento agreed to pay $1.3 million to settle a class action lawsuit for unpaid meal and rest breaks.
“On average, 120 work-related claims are filed with the state daily,” McKasson says. “Many of these claims end up as lawsuits with as many as 10 new employment based class action lawsuits being filed every day.”
He claims such lawsuits are on the rise because the attorneys’ fees can be huge.
“On June 11, 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” in a class action case, he says. That was in addition to the clients’ award.
Often a case starts with one or a few disgruntled employees, McKasson says.
“For example, on May 22, 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,” he says.
McKasson has four tips for employers to avoid lawsuits that can be expanded to all employees:
1. Set up a time card system and insist that workers clock in and out for lunches and breaks, not just at the beginning and end of their shifts.
“Most class-action lawsuits involve employers who can’t prove that employees took their mandated breaks,” he says. “If you don’t have the documentation, the burden of proof is on the employer”
The employer’s motto should be: “A little documentation up front prevents a pound of trouble later.”
2. For businesses in which employees receive tips (restaurants, valet parking etc.) don’t share the money with supervisors, even if they do the service work for which customers tip.
3. If you have exempt (or salaried) and nonexempt employees (those who earn overtime), have an attorney review your classification. Those allowed by law to be exempt are fewer and fewer, McKasson says.
4. Don’t let nonexempt employees leave early one day and make up the hours later. California law requires employers to pay overtime after eight hours of work. If an employee works 10 hours in one 24-hour period, he must be paid two hours overtime even if he is making up for leaving early the previous day to attend his kid’s soccer game.
Some class action suits are egregious abuses, McKasson says, citing a Los Angeles car wash accused of requiring its employees to pay cash to receive their paychecks.
“But others, like the Starbucks tips case fly in the face of common sense. If managers do the work, why shouldn’t they share the tips?”
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It seems that California is doing a great job at givings incentives for companies to leave the state. I bet you in the near future when Calfiornia starts begging for companies to come back or not leave, that it will on deaf ears. Way to-go California
I used to work for Starbucks. I worked there for 5 years. Everybody that worked there was automaticly part of the lawsuite. I wonder when I will see my payout. I am expecting a few hundred to thousand.
If the liberal Democrats smog laws don’t drive all the businesses out of California the class action lawsuits will. Then we won’t have any wealth for Barrack Hussein Obama to share with the lazy worthless people that accorn registered to vote.
Hey, “ThisIsNot”
Let me know when you get your check. Fun to know exactly what these cases bring to the individual.
I once got a portion of a class action settlement from Levis jeans. I think it was about $2.50.
Jan Norman
I write/moderate this blog
Hmmm…. Class action lawsuits…
Laywers get millions of dollars and I get a coupon for 25 cents off my next purchase…
Beautiful! The American Way!
Keep the time-cards squeaky clean. I’m sad to see a lot of jobs leave the country for cheaper labor and less lawsuits. Per Obama’s last speech he is going to penalize employers if they send work over-seas. We as U.S. citizens need to quit suing on every little thing to get rich quick.
if the employers done nothing wrong they would win the case.The companies abused their employees breaking our civil laws and now will have to pay for it.Dont break the law and you dont have to pay.Trial lawyers do all of us a service by keeping the threat of being sued over employers who might not always want to do the right thing because of financial incentives.I do not feel sorry for them because they broke labor laws.
Dear John
As a former employer I was sued several times with no grounds. My insurance went up, cost went up, I had to hire additional managment due to my absence to defend groundless cases which no losses were paid but large amounts of MONEY were lost (expenses to defend), not to mention opertunity losses. Other employees didn’t receive cash Christmas gifts or year end bonuses as that money was spent to defend my Company. I could go on and on how well our system protects employers (NOT) rom these kinds of lawsuits, but that would be pointless. I learned my lesson. I still enjoy the chalanges of business ownership, just WITHOUT EMPLOYEES!
Cycleitin
Hey, “ThisIsNot”
You will see but a small fraction of what you are thinking. The only ones making money are the lawyers. Seriously, they will take 80% to 90% of the settlement.
Gosh, Jan, you go a long ways back! That Levi’s class action was for them enforcing retail price maintenance agreements on retailers — in other words, forcing retailers to sell jeans at or above a certain price. That suit was great for consumers because it allowed retailers to offer lower prices than what manufacturers insisted upon. What’s wrong with giving retailers that power? Yes, the lawyers made out, and those of us who had purchased Levi’s got very little, but all consumers benefited indirectly, and we have ever since.
I agree that many class action lawsuits seem ridiculous and trivial, but the companies that are targets of these suits are well aware that they are in violation. Small businesses are not likely to be the targets of a class action lawsuit anyway, if they have few customers or employees. They’re more likely to be sued by those individuals directly.
Seems like class action lawsuits benefit future would-be victims than the people who actually filed the lawsuit. I guess that’s a good thing.