Week Adjourned: 3.14.14 – McDonald’s, Geico, Suave Professionals

The week’s top class action lawsuits and settlements including top stories from McDonald’s, Geico and Suave Professionals Hair Care.

I'm Hatin' McDonald's Happy Meals

Top Class Action Lawsuits


Mickey D’s served up a supersized set of wage and hour class action lawsuits…Yup McDonald’s workers in California, Michigan and New York this week filed wage and hour class action lawsuits in federal and state courts claiming the fast food giant is systematically stealing employees’ wages by forcing them to work off the clock, shaving hours off their time cards, and not paying them overtime among other practices

In three California wage and hour suits, workers claim that McDonald’s and its franchise owners failed to pay them for all time worked, failed to pay proper overtime, altered pay records and deprived them of timely meal periods and rest breaks. A fourth case makes similar claims on behalf of a statewide class of workers in McDonald’s corporate-owned restaurants, who are adding their claims to a lawsuit for unpaid wages, penalties, and other relief that is already pending against McDonald’s in Los Angeles Superior Court.

In two Michigan lawsuits, filed against McDonald’s Corp., its U.S. subsidiary and two Detroit-area franchisees, workers assert McDonald’s regularly forces workers to show up for work at a scheduled time but then has them wait without pay until the store gets busy enough, and that it routinely violates minimum wage laws.

The lawsuits contend that, using McDonald’s franchisor standards and corporation-provided software, McDonald’s franchisees closely monitor the ratio of labor costs to revenues. When it exceeds a corporate-set target, managers tell workers arriving for their shifts to wait for up to an hour to clock in, and sometimes direct workers who have already clocked in for scheduled shifts to clock out for extended breaks until the target ratio is again achieved. Workers are not paid for these wait times, and McDonald’s Corporation knowingly tolerates this practice, in violation of federal labor law.

The lawsuits also allege that McDonald’s forces its low-paid workers to buy their own uniforms. Because McDonald’s restaurants pay at or near the minimum wage, this drives some workers’ real wages below the legal minimum, in violation of federal labor law.

The case filed in New York federal court seeks to redress McDonald’s blatant failure to compensate and reimburse workers at its New York stores for the time and cost of cleaning uniforms which McDonald’s requires them to wear and to keep clean.

The plaintiffs contend that McDonald’s failure to reimburse employees for uniform cleaning violates the New York state requirement to pay workers weekly for uniform maintenance and often also violates both federal and New York state state minimum wage laws.

FYI McDonald’s reportedly brought in nearly $5.6 billion in profits last year, so why the problem with paying its employees?

Geico policy of bad faith? A Geico class action lawsuit, alleging bad faith insurance has been filed against the auto insurance giant in New York federal court. The lawsuit claims the insurer “deliberately and systematically” misrepresented information about the plaintiffs’ accident histories and risk tiers to stop them from going to competitors. Really?

The New York class action alleges Geico either assigned “at-fault” status to policyholders who bore no reasonability for the accidents or misclassified their risk tiers.

“As a result of Geico’s misclassification schemes, plaintiffs and the class have had difficulties purchasing insurance from other insurance companies, have been captive to Geico, and have paid inflated premiums,” the lawsuit states. Well, that’s the last time I believe a cute little gecko.

But let’s not stop there—a second bad faith class action was filed against a unit of Geico Corp, alleging the company has been arbitrarily denying personal injury protection claims for years. The Geico lawsuit claims the defendant uses software that reduces or eliminates claims payments without “reasonable basis or justification.”

Filed in Delaware Chancery Court, by plaintiff Yvonne Green, the complaint states that the only factors taken into consideration by the fully automated PIP claims-processing system Geico General Insurance Co, uses are the date of an accident and the date and geographic location of medical treatment.

“By employing these rules to deny benefits, Geico violates Delaware law and breaches its contractual and legal obligations,” the lawsuit states. “The only justification for Geico’s conduct is to contain Geico’s costs and to maximize Geico’s profits.”

The lawsuit, (Green v. Geico General Insurance Co., case number 9431), further claims Geico makes no effort to determine what a reasonable fee ought to be for a specific doctor providing a particular treatment but has a computer system that sets a “hidden cap” at the 80th percentile of what the insurer has been charged by other medical providers. Instead, price recommendations are generated by the software based on a provider’s location. However, it doesn’t consider other factors such as a doctor’s level of expertise, inflation, rent or cost of staff, the lawsuit states.

Green further alleges that claims for certain passive treatments that occur eight weeks after an accident are automatically denied without any review by an actual agent.

“Geico uses this rule even though it has information that treatment and healing times for injuries vary,” the lawsuit states. “Further, Geico enforces this rule without making any inquiry into facts or treatment.”

Green is basing her complaint on her 2011 car accident in which she sutained injuries. She alleges her PIP benefits were denied despite having submitted records detailing her injuries and that they were related to the crash, and that her treatment was reasonable.

The lawsuit seeks to represent a proposed class of plaintiffs who, three years prior to the filing and up to the date of final judgment, had claims on Delaware policies that were either reduced or denied under similar circumstances, according to the complaint.

Top Settlements

Get a little more than you bargained for with Suave Professionals Keratin Infusion 30-Day Smoothing Kit? Like scalp injuries? If so, you may be interested to know that a settlement has been reached in the defective product personal injury class action lawsuit pending against Unilever United States, Inc. (“Unilever”) and two other companies (collectively, “Defendants”). The Suave lawsuit represents customers who purchased or used the Suave Professionals Keratin Infusion 30-Day Smoothing Kit (“Smoothing Kit”) in the United States before February 17, 2014. FYI—the kits must have been purchased for personal or household use.

The allegations are that Unilever misled consumers into purchasing and using the Smoothing Kit by making false and misleading statements concerning the safety of the Smoothing Kit, and by failing to disclose that the Smoothing Kit posed an unreasonable risk of hair and/or scalp injury when used by consumers in accordance with the product warnings and instructions, or when misused by consumers in ways that were foreseeable. All Defendants deny that they did anything wrong and deny that the Smoothing Kit posed an unreasonable risk of harm to consumers. Of course.

The settlement includes a one-time reimbursement of up to $10 and/or reimbursement for the costs of treating class members who suffered bodily injury to their hair or scalp, and who does not timely request exclusion.

For complete details on how to file a claim, visit: http://suave30daysmoothingkitlawsuit.com/info/claim.

Ok Folks, That’s all for this week. See you at the bar!