Week Adjourned: 8.2.13 – Apple Store, Pfizer, Chester Career College

The week’s top class action lawsuits and settlements for the week ending August 2, 2013. Top lawsuits include Apple employees claiming wage and hour violations, Pfizer Rapamune Off Label marketing fines and Chester Career College settling consumer fraud charges.

.appleTop Class Action Lawsuits

Bad Apple! It seems Apple may be entering the ever-growing list of wage and hour offenders. This week, a class action lawsuit was filed against the tech giant, alleging that Apple store staff are not paid for the time they spend undergoing bag searches, as required by the company’s policy.

Apple has a policy of requiring its retail store employees to undergo two mandatory bag searches per day. Two former Apple store employees from New York and Los Angeles filed a complaint in San Francisco federal court on Thursday regarding this policy. They allege they had to stand in lines up to 30 minutes long every day for store managers to check their bags and ensure they weren’t smuggling home stolen goods. The Apple unpaid wages lawsuit claims that the cumulative time employees spend having these bag searches done totals dozens of hours of unpaid wages, roughly $1,500 per year.

“Apple has engaged and continues to engage in illegal and improper wage practices that have deprived Apple Hourly Employees throughout the United States of millions of dollars in wages and overtime compensation,” the complaint reads.

“These practices include requiring Apple Hourly Employees to wait in line and undergo two off-the-clock security bag searches and clearance checks when they leave for their meal breaks and after they have clocked out at the end of their shifts.”

 

According to the complaint, Apple’s retail stores employ some 42,400 people in 13 countries. The retail outlets generated net sales of $156.5 billion in 2012. Most hourly workers make between minimum wage and $18.75 per hour and work 40 hours per week.

Amanda Frlekin and Dean Pelle, the two former employees who filed the wage and hour lawsuit, worked as “specialists,” essentially an in-store customer support position. The Apple lawsuit describes the bag searches as “required but uncompensated security checks,” claiming that Apple violated the Fair Labor Standards Act (FLSA), and New York labor law, and California labor law.

Top Settlements

Off-label Drug Marketing Saga Continues—this week, it’s news that Pfizer will have to pony up $491 million to settle criminal and civil charges relating to its off-label marketing of Rapamune. The US Justice Department had claimed the drug company marketed the kidney-transplant drug for patients who received non-kidney organ transplants.

The Justice Department began its investigation over four years ago, and Pfizer inherited the probe when it bought Wyeth in 2009.

According to the Justice Department, Wyeth trained sales reps to push Rapamune for unapproved uses and offered bonuses to persuade them to flog the drug for patients it wasn’t cleared to treat. “This was a systemic, corporate effort to seek profit over safety,” U.S. Attorney Sanford Coats said in a statement. “Companies that ignore compliance with FDA regulations will face criminal prosecution and stiff penalties.”

Under the Pfizer Rapamune settlement agreement, Pfizer’s Wyeth division pleaded guilty to a criminal misbranding violation under the Food, Drug and Cosmetics Act. The deal includes a criminal fine of $157.58 million and asset forfeiture amounting to $76 million, or $233.5 million total. Civil payments to the government and states add another $257.4 million, for a total of $490.9 million. Okee dokee…

Looks like Chester Career College hit the Learning Curve on this one—at a cost of $5 million. That’s the settlement that was just approved ending a financial consumer fraud class action lawsuit pending against the college, formerly known as Richmond School of Health and Technology. The lawsuit alleged that the for-profit college practices predatory lending practices affecting thousands of students, primarily African American students, while offering sub-par education.

The back story—Chester Career College purportedly offers classes leading to careers in nursing, massage therapy and other medical-related fields, and specifically targeted inner city students with ads on hip-hop stations and other media aimed at their demographic. According to the lawsuit, the college enrolled “almost exclusively” students who qualified for federal financial aid, primarily in the form of student loans.

The Chester Career College settlement, approved by US District Judge John A. Gibney, will also see the school reimburse more than 4,000 students and for attorneys’ fees and requires Chester Career College to institute changes that will provide prospective students with “much more transparency” before they enroll. Further, the settlement also provides for continued tracking of students and career placement “to strengthen the school” and its educational mission as it moves forward.

Here’s the skinny—the settlement covers students enrolled at the school from July 2004 through February 2013. Students who qualify for claims will receive settlement notices by mail. Any money left unclaimed from the remaining funds in the escrow account after one year will be donated to nonprofit organizations dedicated to assisting the economically disadvantaged.

Ok folks, have a good one—see you at the bar!

Week Adjourned: 5.29.10

Kiss the week goodbye…Memorial Day Weekend here we come!

Wyeth's inspiration for marketing Rapamune?Top Class Actions

Demented Segmented Marketing. A couple of former employees who blew the whistle on Wyeth in 2005 by filing a lawsuit against the pharmaceutical company refiled an amended complaint this week, alleging that the company illegally promoted its kidney transplant drug Rapamune for use with other organ transplants—the Swiss Army knife of meds!— for which the drug is not indicated. You know—heart, lung, liver, pancreas—essential organs—that kind of thing…  

And , yes—there’s more, the complaint claims Wyeth targeted African American patients, who are a high-risk patient group, despite the lack of evidence to support its use in this population. Sadly, this all sounds par for the course by now. Oh—by the way—Wyeth is now owned by Pfizer, and Pfizer, if you recall, settled a whistleblower lawsuit in September 2009—paying $102 million to six whistleblowers who brought a suit over its marketing and promotion of the prescription arthritis medication Bextra, and ordered to pay $2.3 billion in civil and criminal penalties. Pfizer also agreed to plead guilty to a felony charge for promoting Bextra and 12 other drugs for unapproved uses and dosages.

Anyway—back to Rapamune. The two whistleblowers who filed the suit are ex-Wyeth sales reps— their turf was hospitals—so they are in position to know. The list of allegations on the complaint is pretty lengthy and makes for some shocking reading. But it boils down to illegal promotion and kickbacks in exchange for prescriptions written. Thing is, this could affect numerous transplant recipients across the country: 

 “Despite limited data on high-risk patients, Wyeth targeted transplant centers that catered primarily to African-American patients, typically in urban areas. In 2005, Wyeth’s sales management selected Philadelphia’s Einstein Medical Center as a center on which to focus a Wyeth marketing plan designed to rapidly increase or accelerate Rapamune sales in a 90 day period. Einstein’s transplant patient population was approximately 75 percent African-American in 2005,” the suit states. 

Nice to know these folks had the patients’ best interests at heart…no pun intended.

Top Settlements

New Wal-mart Recycling Program: Lawsuits? It’s business as usual for Wal-Mart—one of our profoundly regular, if not ignorant contributors—has  settled yet another employment class action this Continue reading “Week Adjourned: 5.29.10”