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Proliferation of Overtime Lawsuits Expected to Continue

Late last month, Urban Outfitters Inc. was slapped with not one but two wage-and-hour lawsuits regarding alleged overtime violations in both New York and New Jersey.
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These cases represent an increasing trend of New York employment litigation aimed at companies that have either improperly compensated workers for their time or failed to provide appropriate breaks as required by state and federal law.

Part of this upswing can be attributed to the fact that the down economy had many employers struggling to stay afloat with fewer resources – and that includes human resources. More has been expected of people who managed to hang onto their jobs. Market competitiveness and the fear that they might suffer a job loss if they spoke up also kept employees from taking action for some time.

Now, as the economy inches toward improvement, we see that attitudes are shifting. Not only that, but workers are becoming more aware of their rights. They are more knowledgeable about the law and they know when employers are failing to uphold their end of the bargain.

In the case of Urban Outfitters, employees in New Jersey say that store supervisors were instructed by company leaders to forge employee time cards in an effort to avoid paying them overtime. The New York employees, which have filed a collective action, say that the store misclassified a number of employees so that they would be exempt from overtime pay and other Fair Labor Standards Act requirements.

In the New Jersey case, Lesley Mitchel-Tockman et al. v. Urban Outfitters Inc., workers repeatedly complained to management about the lack of overtime pay on their paychecks, but the alterations of time cards continued. In one case, a worker who was particularly vocal in speaking out against the practice suffered retaliation and also had her work hours reduced. She was ultimately fired.

The New York collective action, Jeffrey McEarchen et al. v. Urban Outfitters Inc., involves store managers from Brooklyn, New York City, Nashville, Tenn. and Birmingham, Ala. The employees there say they routinely worked over 40 hours each week, but were denied overtime pay because they were classified as “managers.” This was despite the fact that their duties required little skill and did not include any managerial responsibilities. The workers say they mostly folded clothes, operated cash registers, clean the stores and took out the garbage.

The Federal Judicial Center reports that nearly 7,800 wage-and-hour lawsuits have been filed throughout the country so far this year. While that might seem relatively low, the fact is, it represents a spike over the last several years. It’s a 10 percent rise from what we saw in all of last year, when about 7,100 cases were filed. And it’s a 400 percent increase when we look at figures from 2000 to 2011.

The Fair Labor Standards Act, passed in 1938, stipulates that workers must be paid overtime time-and-a-half pay for any work in excess of an 8-hour day or 40-hours-weekly. It also differentiates between workers who are to be paid hourly and “highly-compensated workers” who instead receive salaries and no overtime.

However, the law in some cases leaves a lot of gray area, so it’s often up to the courts to interpret.

Questions regarding New York’s Wage and Hour laws can be found by vising the New York State’s Department of Labor, Labor Standards website.

If you suspect your employer may have improperly classified you in order to deny paying you overtime or has not properly compensated you for overtime hours, contact our offices today.

The Law Offices of Ira S. Newman provides employment litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.

Additional Resources:
Court Battles Heat Up: ‘I Want Overtime Pay’, June 17, 2013, By Mark Koba, CNBC
More Blog Entries:
Intern Lawsuits on the Rise Following Recent Ruling in NYC Case, June 28, 2013, New York Employment Lawyer Blog