Tag Archive for 'claims'

Wage and Hour Lawsuits are on the Rise

It looks like plaintiffs’ lawyers have their work cut out for them in a new breed of lawsuit that’s quickly grabbing hold of the nation.  “Wage and Hour” litigation is getting bigger, especially in federal court.  Wage and Hour claims typically involve situations where an employer fails to pay an employee minimum wage or overtime pay according to the standards set out in the Fair Labor Standards Act (FLSA).

Wage and hour claims are different from your usual employment lawsuits involving harassment or discrimination- those tend to involve only one employee in a somewhat isolated incident.  In comparison, these newer wage and hour claims we’re seeing can involve an entire class of employees- sometimes hundreds or even thousands working for the same company.  These class action suits can create huge chunks of losses for the employer, with many of them ending in settlements of anywhere from $10 to $90 million dollars.

Federal Judicial Caseload Statistics reports that well over 6,000 wage and hour lawsuits were filed in each of the years 2011 and 2010.  Overall, the federal courts have seen a 325% increase in these types of claims since 2001.  For anyone familiar with legal trends, this represents just an absolutely massive increase in labor cases.  These figures actually should raise some concern, especially for major employers who might be negatively affected by this new trend.  Why the sudden spike in wage and hour claims?

For starters, legal analysts suspect two distinct factors that may be linked to the increase in wage and hour claims, both of which have to do with exemption laws (if an employee is classified as “exempt” they may not be entitled to overtime pay).  First, it’s possible that many employers have been intentionally misclassifying employees as exempt in efforts to cut company costs.  Though this is illegal, with today’s economy, some outfits have been desperate enough to engage in this type of conduct.

The second, more complicated factor is that employers might be lacking a thorough understanding of wage and hour laws.  Exemption laws are difficult to navigate already; combine this with the many changes in the workforce that we’ve seen in the past decade, and it starts to become clear why so many employees may have been misclassified.  For example, wage-hour laws are not at all clear on many new developments like:

  • Alternative Work Weeks:  A good chunk of the working sector doesn’t follow a rigid, 9-5, M-F schedule anymore.  More and more people are working odd weeks, like M-Thu, and Sat., or weeks involving 10 hour days.  Nurses and other care providers are especially known for working non-standard shifts.  Exemption laws also don’t specifically define what a “working day” is and so it’s getting more difficult to monitor employee hours.
  • Odd Management Structures:  Exemptions apply especially to persons working in executive, administrative, or professional positions.  In practice, more and more businesses are actually being run by persons with titles like assistant managers rather than actual managers.  This makes it difficult to classify managers, since exemption eligibility is based on duties performed and not generic job descriptions.
  • Interns:  Full-time unpaid internships are particularly prone to employment abuse, as we’ve blogged about in the past.  Many have debated about whether interns should be paid minimum wage, and some employers may be engaging in FLSA violations with regards to their interns.
  • Work-related Technological Advancements:  Technology always seems to throw a wrench in the legal system.  Here we’re talking specifically about mobile devices that allow a person to put in work while away from the office.  It makes it much more difficult to determine exemption status if a worker is constantly performing work tasks while away from the office.

At first I thought this was just another case of the frivolous lawsuit craze that is (sadly) characteristic of our so-called “litigious society”.  But upon closer examination, to me it looks like something more serious is going on here.  I mean, there are literally thousands of these cases being filed, all of them having to do with FLSA and exemptions.

Yes, these people need to be compensated for lost pay, but I don’t think this is a case of bandwagon litigation.  Something seriously needs to be done on the employers’ parts, such as getting a better grasp of wage and hour laws.  Part the danger here is that one employer’s mistake or intentional disregard of the law can affect entire classes of workers.  And also the law itself needs to be updated in this area.  The Fair Labor Standards Act is well over 70 years old, which makes it a dinosaur by legislative standards.  No one has done anything in a long while in terms of incorporating information-age changes into FLSA.

If you actually think about it, business owners and managers need to start protecting themselves against wage and hour claims, because they can be deadly to a company, especially class action lawsuits.  We’re talking major, major losses for corporations, not to mention the time and frustration involved for laborers.  If these trends continue (which it looks like they will), more and more lawyers might be billing for overtime pay as well.

BP Oil Spill Lawsuit Update

So what’s been going on with the BP oil spill crisis?  We’ve blogged about it several times in the past but there have been some recent developments on the legal front.

As expected, the lawsuits are pouring in by the hoards- a major civil suit has already been filed by the U.S. Justice Department, a separate criminal investigation is well underway, and several thousand individual claims have been filed by Gulf Coast residents.  Even Kevin Costner and Stephen Baldwin have a legal claim in connection with the oil spill.

But the latest development in the Gulf of Mexico Oil Spill is a recent move by several attorneys who are calling for a shift in tactics for their plaintiffs.  A group of about 30 lawyers are urging their clients to settle and utilize the “Spill Response Fund” created for the purpose of providing relief for those affected by the disaster.  The $20 billion Fund was created last summer by President Obama in cooperation with BP executives and is currently being overseen by Kenneth Feinberg.

Basically, qualified claimants could receive up to 6 months compensation without waiving their right to sue.   Beyond that, the plaintiff would be required to give up their right to sue in exchange for additional support from the Fund.

Also, a streamlined payment of $25,000 for businesses and $5,000 for individuals is available.  Final settlements for long-term damages would also be covered by the Fund.  However, these options would also require the plaintiffs to forfeit their right to litigation.

On the one hand, the Response Fund is a unique creation with much potential.  It will provide oil spill victims with an avenue of relief that is not typically available in mass tort claims.  Such large amounts of funds are usually not as readily available for plaintiffs.  In addition to providing relief for victims, the Fund was launched with the hopes that it would help to alleviate the court burden by reducing the number of lawsuits that it has to deal with.

But as can be expected with a project of such a grand scale, there are some major flaws with the Spill Response Fund.  The first, of course, is that the Fund is not creating the “immediate” relief that many believed it would provide.  Feinberg claims that more than 168,000 claims for immediate relief have been paid for a total of $3.35 billion thus far.

However, only one final settlement payment has been issued out of 91,000 final settlement claims.  This claim was settled back in December 2010 for $10 million.  That’s a pretty big recovery amount, but with only 1 down so far, victims are wondering when they will ever see their fair share.  For many, this pace is currently unacceptable.

Secondly, the Response Fund is now forcing plaintiffs to make a major decision.  As mentioned, claimants are required to waive their right to sue BP and any other defendants who have been named in connection with the spill.  This places the plaintiffs in a bit of a quandary- either pursue a lengthy litigation process for potentially larger awards, or tap the fund for faster recovery but forgo the right to damage awards.  Many victims need major financial assistance right now, especially those who are regular, everyday citizens.  Something needs to be done to bridge the gulf that has been created by the filing procedures.

And Ken Feinberg is taking a lot of heat for the way that the Fund is being administered.  Feinberg has had some experience with relief fund projects in the past.  For example, he was head of the 9/11 Victim Compensation Fund.  But due to the slow response with the BP situation, many are questioning Feinberg’s leadership and the lack of transparency in overseeing the fund.

Legally speaking this is a very sticky situation.  The reality is, BP has a lot more to clean up than the oil it spilled.  Providing recovery for every single victim is a project of massive, epic proportions.  And so personally I don’t expect to hear about any kind of finality for many years, possibly even decades.

Case in point- there are still claimants who haven’t been compensated for the Exxon-Valdez Oil Spill in Alaska.  And that was way back in 1989, more than 20 years ago.  Over 1,800 Exxon-Valdez settlement claims are still unpaid because some of the plaintiffs either cannot be located or have become deceased.  The same thing could happen here if measures are not taken to keep track of the thousands upon thousands of claimants who need relief.

So just like the slick little oil traps and chemical dispersants, the Recovery Fund seems to me more like a quick fix, a band-aid method rather than genuine, lasting solution.  But that being said, I guess any effort is better than none.  Until the major lawsuits get worked out, the plaintiffs will have to wait patiently on the shores in the meantime.

Life, Liberty, And The Right To Sue The U.S. Government

In this country full of big shots who know all the angles, it’s easy to feel like a powerless nobody struggling to make ends meet.  I mean, it’s hard enough to figure out what the hell happened at the end of Lost, let alone navigate fairly within the laws of this country without giving into anger over the fact that it can sometimes seem like the rich and powerful get to play with all the cheat codes turned on.  (Note: I’ve been dying to use a video game reference in this blog!)

Anyway, life can seem daunting in this way.  Nowhere is this feeling more impressed upon people than when one is forced to deal with the very government tasked to serve them.  The same government that was founded hundreds of years ago upon the now very ironic belief that its officials should serve and bend to the will of the people.  Lest it become the very same tyrannical and oppressive rulers that was the English monarch at the time – a form of rule whom the forefathers fled to free themselves of, probably so they could marry their cousins or something.  (Note: I’ve been dying to use a Simpsons reference, too!)

Sorry for taking so long with all my digressions.  I know you all are just dying to see where I’m going with this post (unless you read the headline first), but I assure you that this seemingly nonsensical build-up is the perfect segue into the topic of how to file a lawsuit against the government.  Go back and read the intro again.  See, doesn’t it all make sense now?

For many people, the idea of suing the government sounds not only unrealistic and crazy, but also downright unpatriotic.  However, doing this feat successfully is not only possible, but would also make our founding fathers proud to see people keeping corruption everywhere in check.  Just please be sure to have suffered an actual harm – frivolous lawsuits weren’t part of their grand vision.

Now before we begin, you should be aware of something called government immunity.  Essentially this means that the government can exempt itself from being sued for doing certain actions and the immunity extends to most state and federal agencies.  This is to prevent mental patients from suing the president for going to war or congress for passing new taxes.

So when can you sue the government?  Well, you can only sue the government in areas where the government allows itself to be sued.  For instance, the Federal Tort Claims Act allows the government to be sued for the gross negligence of its employees.

Suing the government is a similar process as suing any other person; however there are special notice requirements that you should be aware of.  Before filing a suit, generally you must first write a demand to the government department that has wronged you telling them what happened.  Whether it was that a faulty light fixture from one of their buildings fell on your head or something else, you have to give written notice to the agency before you can file a lawsuit.  This is to give them the chance to either own up and pay you for your damages, or deny your claim.  If they do the latter, you can then bring your lawsuit.  One other important note is that for most claims against the government, you have to bring them within two years or you won’t be able to sue for your alleged harm AT ALL.

The kinds of remedies you can get are also not too different from the kind you’d get for winning a lawsuit over a regular citizen.  You can get money damages to cover any physical pain and expenses you incurred as a result of your harm, as well as injunctive relief (which means the court issues an order telling the government to change the way they current do something).  What is usually much harder to get is emotional suffering damage.  It’s not impossible, but let’s just say that the burden of proof is much, much higher than what you’d see in a normal civil suit.

Both the federal and various state governments have entire divisions dedicated to litigating claims brought by people against the government.  These will be the attorneys you’ll be going up against.  And believe me, when it comes to being sued, just like ordinary citizens, the government tries to hire some of the best lawyers around.  So be ready for an uphill battle and get yourself a good attorney to help you through the process.

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