Wage and hour class action lawsuits could potentially devastate a company, which is why they’re often called “bet the farm” cases. No one understands the stakes better than we do, which is why we it give it our all. Hirschfeld Kraemer’s wage and hour class action litigation attorneys are strategic, aggressive, detail-oriented and creative when determining how to resolve especially complex litigation matters.
Wage and Hour
One matter involved a corporation that provides health care services to patients in their own homes, nationwide. The company employs sales representatives who meet with physicians to explain the roster of services it offers to individuals requiring home care. Based on such meetings, the doctors, in turn, ultimately recommend the company’s home health services to their patients. These sales representatives are highly compensated and, as might be expected, they work long and unusual hours given their travel schedules. The company treated these representatives as exempt employees because they conducted outside sales, and thus, they were not paid overtime. A disgruntled representative, however, consulted with a plaintiff’s attorney, who commenced a wage and hour class action, leaving the company vulnerable to potentially significant liability.
“Selling” the Judge on an Inventive Legal Analogy
The plaintiffs’ chief argument was that the entire class of sales representatives did not qualify as exempt because they did not actually “sell” anything to an end-user. The sales representatives disseminated information about the company to physicians and received compensation based on the doctors’ use of the company’s services in a given geographic territory. Factually, there was no direct sales connection between the representatives and the ultimate end users, i.e., the physician’s patients who required home health care services. The company turned to Hirschfeld Kraemer to defend this lawsuit.
Hirschfeld Kraemer’s wage and hour class action team in Santa Monica, led by partner Reed Schaper, devised an innovative argument based upon a U.S. Supreme Court case involving pharmaceutical sales representatives. In that case, the pharma company argued that its sales representatives were exempt employees, even though they did not actually sell products to end-users. Their sales were exclusively to doctors, who, in turn, prescribed the medications to their patients, who were the actual end users and buyers of the product. By analogy, Reed and his team argued that the company’s “sales” representatives, although they never “sold” anything directly to end-users, operated in the same manner with health care providers as the pharma sales representatives did in the Supreme Court case. The company’s representatives were “selling” the home health care services that doctors would recommend to their patients. There existed no case law on point for sales representatives in the home health care industry, but Reed argued the analogy so effectively, the court agreed, finding that the sales representatives were indeed exempt employees. This result proved extremely valuable to our client, given its potential liability extended well into the eight-figure range.
Identifying Individual Disparities to Defeat Class Certification
In another case, a corporation providing roadside assistance (other than towing), hired independent contractors who were dispatched to assist motorists needing such services, pursuant to contracts with various motor clubs and insurance companies. The company treated the drivers as independent contractors – these drivers used their own vehicles and equipment, could work as much or as little as they wanted, and they were paid on a per-call basis. A disgruntled driver sought out a plaintiffs’ attorney, who challenged the drivers’ independent contractor status on a class-wide basis. The plaintiffs’ counsel alleged that the drivers were, in actuality, employees, and, as such, they were owed overtime pay. Moreover, counsel alleged these drivers were not provided correct California paystubs; they were not given proper meal and rest periods; they were not paid minimum wages; and they were not reimbursed for legitimate business expenses, among other claims. They argued that all of these drivers (members of the alleged class) were subject to the same policies, were treated similarly, and thus, should be certified as a class. The company retained Hirschfeld Kraemer to defend them.
Hirschfeld Kraemer’s wage and hour class action team in San Francisco, led by partner Felicia Reid, opposed the class certification motion by arguing that even if these drivers were considered employees, that determination should not automatically result in the class being certified. Felicia argued that the group of drivers had unmanageable individual liability issues, such as the number of hours worked, which rendered class certification improper. The court accepted Felicia’s argument and denied class certification as to the claims for overtime, minimum wage, meal and rest periods, and waiting time penalties, which eliminated the claims subject to substantial liability. What remained of the litigation was a limited claim for paystub violations. Plaintiffs’ counsel then amended their complaint to add claims for reimbursable business expenses and unlawful deductions, and they filed a second class certification motion. During the pendency of that motion, however, the litigation was settled for an extremely favorable result for our client, based on Felicia’s zealous and persistent advocacy that reduced their liability from a substantial number to a modest one.
When faced with novel issues in complex wage and hour class action litigation, Hirschfeld Kraemer attorneys devise inventive legal solutions to substantially minimize our clients’ potential liability risks.