Labor & Employment Law Daily Wrap Up, WORTH NOTING—Cases of note dealing with wage and hour issues, (Feb 21, 2025)

By WK Editorial Staff

A roundup of recent decisions involving wage and hour issues of interest to the labor and employment community.

D. Del: Summary judgment motion filed against former farm employees in wage and hour case fails. Eight former farm workers sued a farm operator and its owner under the FLSA, the Delaware Minimum Wage Act (MWA), and the Wage Payment and Collection Act (WPCA), alleging failure to pay overtime and minimum wages, unpaid wages, and retaliation. After partial dismissal of the original complaint, the farm workers filed an amended complaint, alleging failure to pay minimum wages and retaliation under the FLSA; and unpaid wages under the FLSA and WPCA. The farm operator and its owner filed a motion for partial summary judgment against three of the workers. With respect to two of the workers, the court noted that the farm operator and owner improperly characterized their motion as one for summary judgment when it was essentially a motion for sanctions due to alleged non-compliance with discovery obligations. The court found that the farm operator and owner failed to follow proper procedures for discovery disputes and denied their motion. Regarding the third worker, the farm operator and owner argued that he was an “exempt employee” under the FLSA. The court determined that genuine disputes of material fact existed concerning whether the worker was salaried, whether his primary duty was management, and whether he directed the work of others or had hiring and firing authority, and the motion was denied (Wu v. East Ocean Agriculture Corp., No. 21-cv-668-RGA (D. Del. Feb. 10, 2025)).

D. Ore.: Preliminary class settlement approved despite incentive awards, attorney fees concerns. A court granted approval of a preliminary settlement of $3 million in suit alleging that an employer’s new payroll system caused widespread pay errors for Oregon employees. Store employees filed a class action suit against the store alleging that the employer “knew or should have known that the new system would cause payroll errors.” The employees alleged violations of Oregon wage statutes. The parties settled the matter, and although the court found that the prerequisites for class certification under F.R.C.P. 23(a) and 23(b)(3) were satisfied, it denied the employees’ unopposed motion for preliminary settlement due to concerns about the fairness of proposed service awards and attorney fees. The employees refiled the motion. The court scrutinized the proposed $9,500 service awards for class representatives, finding it difficult to conclude that the time the employees spent on the case warranted such an award. The court also expressed reservations about the requested attorney fees amounting to 25 percent of the gross settlement, noting the lack of detailed billing rates and the presence of a “clear sailing” provision. Despite these concerns, the court granted preliminary approval, noting that it would revisit the service awards and attorney fees issues at the final approval stage (Woody v. Fred Meyer Stores, Inc., No. 3:22-cv-01800-HZ (D. Ore. Feb. 3, 2025)).

E.D.N.Y.: Construction worker’s FLSA, NYLL overtime claims survive summary judgment. A construction worker, who worked for a construction management company from 2017 to 2019, sued the company alleging that the company and its owners failed to pay overtime wages under the FLSA and New York Labor Law (NYLL), and that they failed to comply with NYLL notice and wage statement requirements. The company and its owners moved for summary judgment, arguing that the construction worker was an independent contractor rather than an employee; that the owners were not his employers under the FLSA and NYLL; and that the construction worker did not have Article III standing to bring the wage statement and notice claims. The court found genuine issues of material fact regarding the construction worker’s employment status, which precluded summary judgment on the FLSA and NYLL overtime wage claims. However, the court granted summary judgment in favor of one of the owners, finding she did not exercise sufficient control over the company’s operations to be considered an employer under the FLSA or NYLL. The wage statement and notice claims were dismissed without prejudice for lack of Article III standing (Vera v. The 6 Group, LLC, No. 21-CV-03696(HG) (PK) (E.D.N.Y. Feb. 5, 2025)).

M.D. Tenn: Motion seeking FLSA collective action denied for lack of “similarly situated” employee evidence. A lube technician at a Jiffy Lube was denied motion to facility notice of an FLSA collective action alleging that the employer failed to properly pay overtime pay for all hours worked over 40 in a workweek. The employee sought to initiate a collective action, claiming that the company had a widespread policy of requiring employees to work after clocking out and during unpaid meal breaks. He filed a motion supported by his own declaration, which asserted that he and other employees were “subject to the same policies pertaining to timekeeping and compensation” that led to unpaid overtime. The company opposed the motion, arguing that the employee’s declaration was insufficiently detailed and failed to demonstrate a “strong likelihood” that other employees were similarly situated, as required by Sixth Circuit precedent. The court agreed with the employer, finding that the declaration lacked specific factual allegations and evidence of actual knowledge regarding other employees’ job duties, hours worked, and compensation (Williams v. Premium Velocity Auto, LLC, No. 3:23-cv-00901 (M.D. Tenn. Feb. 11, 2025)).

S.D. Tex.: Arbitration agreements precluded exotic dancers’ FLSA collective suit. A former exotic dancer sued managers of a gentlemen’s club on behalf of herself and other exotic dancers alleging they were misclassified as independent contractors by the club’s managers in violation of the FLSA and the Texas Minimum Wage Act. However, instead of suing the club itself, the suit targeted “six individuals who allegedly managed the club,” asserting they were “employers” under the FLSA. The exotic dancer moved for distribution of court-authorized notice to potential class members under 29 U.S.C. Sec. 216(b). The court denied the motion, finding that the arbitration agreements signed between the dancers and the club’s corporate entity precluded collective action in federal court. The court found that Texas Supreme Court precedent prevents parties from avoiding arbitration by suing individual agents rather than the corporate entity itself. The court determined that the claims against the managers were substantively claims against the club itself, and subject to arbitration (Garza v. Armstrong, No. 3:22-cv-00418 (S.D. Tex. Jan. 30, 2025)).

Cases: WageHour Overtime ClassActions Arbitration Exemptions MinimumWage CoverageLiability Procedure EmployeeStatus EvidenceDiscovery