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Wage wars


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In some of his lawsuits, Thierman has made off-the-clock claims on behalf of lower-wage employees. For instance, in a suit on behalf of employees of Hollywood Video stores, a movie rental chain, he alleged workers had to boot up the computer before they could punch in, and had to punch out before they could close the register for the night and do the store tally. He used store surveillance cameras to document the time spent on these tasks, settling the case for $7.2 million.

Nearly all of the cases faced by Wal-Mart are off-the-clock claims, with allegations that employees worked through lunch breaks without pay, or were forced to punch out when the store closed but then continue with tasks such as restocking shelves. Store managers are under constant pressure from Wal-Mart headquarters to keep wages down, says attorney Michael Donovan, who won the $72.5 million verdict against the retailer in Philadelphia last year. The easiest way to control wages, he says, is to prevent workers from logging overtime. "We're finding that that's a common pattern in large retail operations where a store manager's compensation is based in part on the profitability of their store," says Piper Hoffman, a New York attorney who has filed similar suits. John Simley, a spokesman for Wal-Mart, says the notion that the retailer doesn't pay people for overtime is "simply not true." Simley says that Wal-Mart will appeal the $172 million California verdict. He also notes that the company has persuaded courts to reject numerous class actions.

There are many variations on the off-the-clock theme. In June, Bank of America was sued in Florida by an employee who alleges that her branch manager deleted the amount of overtime she logged from the bank's records in order to receive a branch productivity bonus. A BofA spokeswoman says there is no basis for the complaint.

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The issue of when the workday begins can get complicated. Delivery truck drivers, utility workers, and service technicians, for example, now regularly download their route assignments or appointments from their homes by computer each morning. Should they be paid for this time? Should this be the start of their workday? The same questions arise for white-collar workers. Daniel J. McCoy, an attorney at Fenwick & West in Mountain View, Calif., says that 15 years ago he would have presumed that a person who checked her e-mail remotely or who telecommuted had the type of job that would not be eligible for overtime. "That's less and less true today," he says. He gives the example of his own assistant, who sent McCoy an e-mail on a Sunday. McCoy said he promptly told his assistant that he didn't need to be working on a weekend, but that if he was, he had to be sure to record his time, since he is covered by wage and hour laws.

Management-side attorneys like McCoy are certainly cashing in on the wage and hour lawsuit boom. But they can only look with astonishment and envy at what plaintiffs' attorneys are now making in this area. Thierman says his recent settlements alone total $458 million. Attorneys fees are about 25% of that, and Thierman usually splits his take with various co-counsel on each case. While he won't say how much he's due to receive from these cases (and courts must still approve the fees in some of them), he doesn't dispute that it's in the low tens of millions.

In a friend-of-the-court brief filed in a case in August, the U.S. Chamber of Commerce decried the "FLSA litigation explosion" and its having become the "claim du jour" for plaintiffs' attorneys. Thierman shrugs at such concerns. The alternative, in his view, would be to have the laws enforced by a government bureaucracy. "Somebody's got to regulate this stuff," he says, "and I think the bounty hunter system works just fine."

Copyright © 2009 The McGraw-Hill Companies Inc. All rights reserved.


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