Week Adjourned: 5.20.11

Top Class Actions

AXA axing pay? Pay—overtime, regular time, anytime in fact that requires payment is a recurring theme in class action lawsuits. This week, thousands of commissioned US employees at global financial giant AXA filed a potential class action against the company alleging they worked as many as 60 hours a week, but weren’t paid minimum wage or overtime.  

Because this is apparently a long-running problem—the suit alleged the violations go back as far as 2005 —the potential class could consist of more than 1,000 current and former employees: from the company’s financial product marketers and financial product marketer trainees to cold callers, according to the suit.

Employees of the company were paid a $24,000 base salary plus a percentage share of any commissions earned by licensed brokers, if they were successful in obtaining new accounts for the brokers, according to court papers. So, maybe we’ll pay you—but you can put in the hours anyway? Am I reading this correctly? Failure to pay overtime violates the U.S. Fair Labor Standards Act, (FLSA) which covers employees paid commissions.

One employee, Bennet Marcus, of New York City, worked from 8 a.m. to 8 p.m. five days a week and was unpaid during his training, according to the suit. He worked for AXA from October 2010 through February 2011 as a trainee and cold caller. Where’s Charles Dickens when we need him?

FYI—AXA is one of the world’s largest insurance companies with 2010 revenues of 91 billion Euros—$129 billion. In case you’re having trouble calling the company to mind—their popular TV commercials feature a 900-pound gorilla–that’s him above. No small irony there.

The suit, which requests a jury trial, seeks unspecified back wages and overtime, damages, interest, attorney fees and costs. In addition to the claims under federal law, the plaintiffs also are seeking damages for underpayment of wages under New York State law for AXA’s workers in New York. 

Top Settlements

From unpaid overtime to retirement…it’s all about employees. This week a federal judge approved a $30 million settlement ending a 5-year old ERISA class-action filed against Duke Energy.

The lawsuit, brought by 20,000 class members who worked for Duke Energy Corp, alleged the company broke federal law when it changed its retirement plan. Now why would they want to do that?

According to the Greenville News, Duke workers said the Charlotte, N.C., company violated the Employment Retirement Income Security Act of 1974 in how it administered and calculated benefits under its retirement cash balance plan. A penny saved is a penny earned—not a penny pinched. 

UMB made the most of his weekend? UMB Financial Corp, has agreed to pony up $7.8 million in settlement monies, potentially ending the class action lawsuit brought against it in April 2010. The suit alleged that UMB Bank, a subsidiary of UMB Financial Corp, unfairly charged overdraft fees by treating pending deposits differently than pending withdrawals, thereby rearranging withdrawals to maximize overdraft fees. 

By way of example, David Johnson who filed the suit, claims that UMB charged him 17 overdraft fees, each in the amount of $36, over a single weekend. This included a $36 overdraft fee on a eighty-five cent purchase. UMB then charged Johnson additional overdraft fees and negative balance fees after these 17 fees depleted the hundreds of dollars of available funds in his account.

Nice! That’s certainly putting your customers’ needs first.

The settlement, subject to approval by Jackson County Circuit Court, includes no admission of wrongdoing. Of course it doesn’t. But money talks. 

That’s enough good news for one week. See you at the bar.

Week Adjourned: 5.13.11

Top Class Actions

Put your paycheck on a diet? These women don’t think it’s a such a good idea. Two Long Island women who worked for Jenny Craig filed a unpaid wages class action lawsuit, alleging that the well-known weight-loss chain put their paychecks on a diet.

The women, in a suit filed May 10 In New York State Supreme Court in Manhattan, claim that Jenny Craig Operations Inc., the Carlsbad, Calif.-based chain owned by multi-national food giant Nestlé’s, improperly shortchanged them by a 1/2 hour a day for every shift they worked, even though they worked during their 30-minute break times. The alleged underpayments violate New York’s labor laws, according to court papers.

The suit, which seeks class action status, was filed by Tammy Weinstein, of Bellmore, who has been a program director and weight loss consultant since November 2002 at Jenny Craig locations in Valley Stream and Massapequa, and by Melissa Pallini, of Holbrook, who was a weight loss consultant, program director, part time receptionist, and stocker from June 2008 until June 2010 at the chain’s East Patchogue location.

The suit seeks to represent all New York employees of Jenny Craig who worked as weight loss consultants, receptionists, stock persons, program directors and any other employee at Jenny Craig weight-loss centers. According to court papers, the class included more than 500 people who’ve worked at Jenny Craig since May 2005. The chain has 30 locations statewide, 10 of them on Long Island, in Centereach, E. Patchogue, Great Neck, Farmingdale, Freeport, Hicksville, Huntington Station, Massapequa and Valley Stream.

The employees worked about 15 to 35 hours a week on shifts of five to eight hours one day to five days per week, according to court papers.

Jenny Craig, a commercial program that features portion-controlled, prepackaged meals supplemented by store-bought vegetables and fruit, received top marks this week from Consumer Reports for diet success. The chain offers support through weekly counseling sessions.

The diet chain’s celebrity spokespersons have included actress Kirstie Alley, Valerie Bertinelli, Queen Latifah, actresses Sara Rue and Nicole Sullivan, actor Jason Alexander and, since January, actress Carrie Fisher.

Top Settlements

Where there’s smoke, there’s gas… This is certainly an interesting twist on an old theme. A Flordia judge recently ruled in favor of the plaintiffs in litagation over defective Chinese drywall. The Hillsborough County judge, Robert Foster, ruled that homeowners’ insurance should Continue reading “Week Adjourned: 5.13.11”

Week Adjourned: 5.6.11

Top Class Actions

Reel, er Real, Life Conspiracy Theory. So who knew? It’s an interesting twist on antitrust. Siddharth Hariharan, a former software engineer at Lucasfilm and founder and CEO of InEarth, filed a class action lawsuit this week alleging that several of the nation’s leading high-tech companies violated antitrust laws by conspiring to fix the pay of their employees and entering into “No Solicitation” agreements with each other. That’s kind of like a union for employers… maybe.

Hariharan is looking for restitution for lost compensation and treble damages for the anti-competitive employment practices of Adobe Systems Inc. (ADBE), Apple Inc. (AAPL), Google Inc. (GOOG), Intel Corporation (INTC), Intuit Inc. (INTU), Lucasfilm Ltd. (creators of Thrillville, at left), and Pixar. No small request there.

But Hariharan points out, “My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader. It’s disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees.”

The complaint contains quite a laundry list of allegations, specifically conspiracy among defendants consisting of (1) agreements not to actively recruit each other’s employees; (2) agreements to provide notification when making an offer to another’s employee (without the knowledge or consent of that employee); and (3) agreements to cap pay packages offered to prospective employees at the initial offer.

Short back story, “starting in 2005 with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into “No Solicitation” agreements with knowledge of the overall conspiracy and with the intent to reduce employee compensation. As additional companies joined the conspiracy, competition among participating companies for skilled labor decreased. Compensation of defendants’ employees was less than what would have prevailed in a properly functioning labor market where employers compete for workers.”

But this is more than just conspiracy theory—the complaint for damages follows an investigation in 2010 by the United States Department of Justice into similar misconduct by defendants. After that investigation was made public, the defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. This class action was filed to seek lost pay for the employees who were targeted by defendants’ conspiracy. ‘Sorry’ doesn’t pay the mortgage, after all.

Top Settlements

Cooking with gas—to the tune of $40 million—the California Culinary Academy has reached a settlement of a class action lawsuit brought by students of the CAA over allegations of false advertising. Specifically, the suit charged that the school “misrepresented its 98 percent job placement rate, exaggerated its prestige in the industry and suggested that it had a selective qualifying process.” 98% job placement—in this market? Really?

While the settlement is pending approval, if its green lit, some 8,500 students who attended the CCA between 2003 and 2008 may be eligible for rebates of up to $20,000 each. (It didn’t cost me that much to learn to cook—wonder what I skipped?) 

Plumb Deal, Finally? For all you who suffered plumbing woes thanks to Kitec, you will be interested to find out, if you don’t already know, that a preliminary settlement for both the US and Canada is in the works. In a joint announcement between the courts in the US and Canada this week, the parties concerned said they have entered into an agreement to settle class actions alleging that the Kitec Plumbing System manufactured by IPEX may be subject to premature failure and otherwise may not perform in accordance with the reasonable expectations of users.

The settlement relates to systems sold under various brand names, including Kitec, PlumbBetter, IPEX, AQUA, WARMRITE, Kitec XPA, AmbioComfort, XPA, KERR Controls and Plomberie Amelioree. The settlement covers class members throughout the U.S. and Canada.

Because this is a class action settlement, the agreement has been preliminarily approved by United States District Court Judge Royal Furgeson on April 29, 2011. Ontario Justice Terrence Patterson and Quebec Justice Jean-Francois Émond will consider preliminary approval in May 2011.

The settlement agreement provides a Settlement Fund and Claims Process for those who file claims related to any structures they own, have owned, lease, or have leased that contain a Kitec System. The amount paid per claimant depends upon the type and extent of any possible failure, the size and type of Kitec System and its installation, and the available funds in the Settlement Fund.

FYI—you can find out who to contact to get more information on this—in the US and Canada—by reading our post on the Ipex Kitec settlement

And that’s it for this week. See you at the bar.