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Lawsuits Over Employee Pay Rise As Economy Struggles

Source: South Florida Sun-Sentinel

Posted on 19 Sep 2012 by Neilson

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EPLIA recent lawsuit accusing Orlando-based Darden Restaurants of underpaying servers is one of a growing number of legal actions by workers who say their employers have shortchanged them.

Employees filed more than 7,000 federal lawsuits commonly known as wage-and-hour cases during the past year, records show. Such actions have climbed steadily since 2008 and more than tripled since 2002.

The nation's economic woes have fueled many of the lawsuits, as companies squeeze more productivity out of smaller staffs, worker advocates said.

There are "more stresses put on workers these days," said Cathy Ruckelshaus, legal co-director of National Employment Law Project, a workers' advocacy group. "That adds to the ability for workers to come forward and bring claims."

Other factors have contributed to the increase in cases filed under the Fair Labor Standards Act, attorneys say. Employees working fewer hours and getting small or no raises are checking their pay stubs more. And many who get laid off or fired seek legal help.

Often, "the lawyer says, 'Don't tell me about how you got fired. Tell me about how you got paid,' " said Samuel Estreicher, who teaches labor-and-employment law at New York University.

Lawyers who defend companies say plaintiff's attorneys have become increasingly aggressive about such cases, which can be difficult to defend and often result in lucrative settlements. Walmart, for example, has agreed to pay hundreds of millions of dollars through the years to settle dozens of employee lawsuits from workers who said they had to toil off the clock and without breaks.

And the Obama administration has made enforcing wage laws a priority, adding 300 wage and hour investigators for a total of more than 1,000. The department won $224.8 million in back wages last year, compared with $176 million in 2010.

In recent Central Florida cases, defendants range from the South Lake County Moose Lodge, where a former bartender said pay came solely from tips, to nationwide employers such as Target, where a former loss-prevention worker said she was wrongly classified as a salaried employee.

The Moose Lodge says its bartenders and servers are volunteers. Target would not comment on the Orlando lawsuit but said in an emailed statement that courts have rejected claims in similar cases.

In Miami federal court, two former servers at Olive Garden and LongHorn Steakhouse sued Darden this month, saying they had to do some work without hourly pay.

The suit also said servers, who make less than minimum wage because they earn tips, had to perform too much nonserving work such as dishwashing and vacuuming for which they should have received more pay.

Attorneys hope to include in the suit servers nationwide who worked for Darden's major chains and say more than 300 workers have contacted them.

Darden's Capital Grille faces similar accusations in a suit filed earlier this year by worker-advocacy group Restaurant Opportunities Centers.

Darden, the world's largest casual-dining company, said it follows labor laws but that its enormous size makes it a target for litigation. Darden said workers in the lawsuit never brought their concerns to the company.

Retailers, restaurants and other employers of low-wage workers are frequently sued over pay issues.

"We're seeing a surge in those cases," said Brett Bartlett, an attorney with Chicago-based Seyfarth Shaw, which represents corporations, including Darden.

"There's greater flux in the work forces; there's more attrition in the lower-wage-earning industries; there's more people who are not going to feel beholden to their employer," Bartlett said.

Companies can run into trouble because laws regarding pay can be confusing. For example, Bartlett said, some employers don't realize that hourly and overtime rates are higher for employees who earn commissions and bonuses.

But as companies try to keep costs low, attorneys say some employees might feel pressured to do unpaid work either on their own or with a boss's prodding.

"Sometimes you see very low-level supervisors asking their employees to work through lunches and breaks and to work off the clock, " said Pete Zinober, a Tampa attorney who represents companies.

Zinober insisted "an explosion" of attorneys focusing on wages is fueling much of the increase.

But "there is some shortcutting there in an effort to save money in a bad economy," he said.