Judge rejects $7.5M Comcast settlement resolving 'systemic' FLSA violations
- A California judge has rejected a $7.5 million settlement regarding wage and hour claims under state and federal law because the settlement doesn't explain how the defendants' practices have changed or will change in the future (Soto, et al. v. O.C. Communications, Inc., et al., No. 17-cv-00251, (N.D. Calif., April 2, 2019)).
- O.C. Communications Inc. (OCC), Comcast Corporation and Comcast Cable Communications Management, LLC. were sued by a group of technicians who install cable, television, phone, security and internet services and claimed that OCC and Comcast were joint employers. The plaintiffs were classified as non-exempt employees and performed installation services throughout the U.S., the court said. They worked five to six days a week and as many as 10 hours a day, according to court papers. The plaintiffs said they were compensated on a "hybrid hourly and piece-rate basis, based on the various jobs and tasks" they performed for Comcast's customers. The plaintiffs said they were often pressured to under-report their hours and to report meal periods that were never taken; they also claimed their time cards were manipulated to reduce hours, and that they were refused reimbursement of necessary expenses, "actively" prevented from taking meal and rest periods and issued wage statements that "intentionally" concealed the rate at which the work was compensated. The plaintiffs said they were not paid the required minimum, overtime and "completed piece rate" wages, were not provided the opportunity to take meal and rest periods, did not receive compensation when meal and rest periods were not taken, were not reimbursed for expenses and were not issued accurate, itemized wage statements.
- In the latest legal developments in the lawsuit, a California federal judge denied the parties' request to have a $7.5 million settlement approved. Noting that it was a case in which the "alleged wage and hour violations appear to have substantial merit" and that the issues seemed to be "systemic," the court said it appeared that the settlement was achieved at a discount, and that such a discount was "difficult for a court to swallow" without some assurance that the violations are likely not to happen in the future.
The Fair Labor Standards Act prohibits much of the alleged behavior in this legal action. The federal law establishes standards for minimum wage, overtime and recordkeeping by covered employers, and states also have their own standards for minimum wage and recovery payments, another reason why the judge denied approval of the settlement.
Unless exempt, employers must pay employees overtime, which is time and one-half, for all hours over 40 worked in a workweek. Covered employers also have to keep certain records. A specific form isn't required, but certain information is mandatory, including the employee's name, hour and day when the workweek begins, total hours worked each day and week, regular hourly pay rate for any week when overtime is worked, and so on.
A Georgia-based herbal product manufacturer and distributor recently settled similar claims. Hi-Tech Pharmaceuticals agreed to pay $454,655 in back wages to settle claims that it violated the overtime and recordkeeping provisions of the FLSA by failing to pay employees overtime, unlawfully deducting time from workers' timecards when they took short rest breaks, improperly rounding workers' time under the FLSA and failing to keep proper time and payroll records. Overall, the Labor Department says it collected a record $304 million in back pay for employees in fiscal year 2018.
Regular compliance training for managers and supervisors can keep employers from running afoul of state and federal wage and hour laws.