Independent Contractor Compliance Blog - by Collabrus™

I was doing some research for a project I’m working on, when I started running into example after example of class action lawsuits being brought against companies because they misclassified or miscalculated their worker’s status. 

Many of the examples below were from websites set up to solicit current and former employees and/or IC’s to join in the lawsuits against their employers.

Here’s just a sampling of what I found.

CVS-A nationwide class action was filed against drugstore chain operator CVS RX Services, Inc. (which recently purchased Longs Drugs), on behalf of current and former pharmacist employees who allege that the company has not paid them overtime for hours they worked in excess of their normal 40-hour workweek, in violation of the federal Fair Labor Standards Act. The action seeks compensation for up to three years of back overtime pay per worker and an equal amount in punitive damages. The action alleges that employees put in anywhere from 100 hours to 1040 hours of overtime per year.

Shelby County, Alabama, Board of Education-A collective action has been filed in Alabama against the Shelby County Board of Education. The action is brought on behalf of all former and current employees who have worked in excess of 40 hours a week, but who have not been paid overtime by Aiken County. The action is brought under the federal Fair Labor Standards Act and is seeking back pay as damages.

Big Lots Stores, Inc-A class action lawsuit has been filed in the Eastern District Court of Texas against Big Lots Stores, Inc., for alleged violations of the Fair Labor Standards Act (FLSA).  Big Lots Stores is a discount retailer who owns and operates over 1400 stores throughout the United States.  Specifically, the complaint alleges that class members were improperly classified as exempt employees and required to work in excess of 45-55 hours per week, but were not paid overtime for all hours worked in excess of 40 hours per week.

The employees filing the action are furniture department managers, furniture sales managers and assistant managers. Even though their job titles indicated they were managers, the class members claim that they are incorrectly classified as exempt employees because:

• Their primary duties consisted of non-managerial activities such as operating registers, processing forms, sales, stocking and re-stocking merchandise, janitorial duties and answering phones.
• They did not customarily or regularly exercise discretionary powers, and
• Did not regularly direct or manage the work of two or more full-time employees.

I discovered many more examples-too many to cover here-and from my experience there are thousands of these actions filed each year. Most you never hear about. That’s because they are settled quietly by the company in question to avoid the negative publicity and expensive legal battles.

It is clear from these examples that protecting the organization from employee misclassification risks is becoming a vital component of responsible company management.