Intel to Shell Out $5M to Settle California Unpaid Wages Lawsuit

Santa Clara, CAPlaintiff Medina Asalati was formerly employed by Intel Corp. as an administrative assistant. She lead a class of over 3,000 hourly Intel employees including admins, clerical workers, janitors, and logistical support specialists in a class action lawsuit that has been resolved for millions of dollars. Intel denies any wrongdoing in the settlement agreement, but the Plaintiffs allege that they were expected to work extremely long hours in a demanding environment without meal and rest breaks. The relatively large $5 million award could make big waves in California Unpaid Wages lawsuit news if and when it is officially approved by the court.

California State Judge Approves ”Significant Recovery” for Class Action Plaintiffs

In June of 2018, Judge Thomas E. Kuhnle ruled that Intel’s proposed $5 million dollar award was fair in light of the fact that the parties had negotiated in good faith, and due to the size of the settlement award. He accepted the approval with the understanding that parties needed to tie up a few minor loose ends, such as requiring the lead plaintiff Asalati to detail her role in the proceedings to justify the relatively high $15,000 lead plaintiff incentive bonus. Such financial enhancements for the named Plaintiff are typically awarded in order to induce wronged employees to seek California Unpaid Wages legal help. Most California unpaid wages lawsuits are filed as class actions, because an employer’s unlawful wage practices will typically affect many individuals.

In the papers seeking preliminary approval of the settlement, the lead Plaintiff alleged that although she frequently worked up to 16 hours per day, up to 11 p.m. at night, she was routinely only paid for the first eight hours of her shift. The initial complaint, Asalati v. Intel Corp., was filed in March of 2017. In addition to seeking monetary recovery for the Plaintiffs who were denied lawfully earned wages, the complaint sought penalties for violations of California’s labor code under the state Private Attorneys General Act. The parties were able to reach a settlement with the help of a privately hired mediator. Counsel for the Plaintiffs represented that interviews with numerous Intel hourly workers indicated that a large number of them routinely worked long hours after clocking out for the day.

Details of the Agreement: Who Gets What

Pursuant to the agreement, all “non-exempt” individuals who were employed by Intel between November 10, 2012 and April 19, 2018 are entitled to payment. But what exactly does “non-exempt” mean? In California, some workers are exempt from the laws that generally require employers to pay overtime. For example, employees who earn a yearly salary that is at least two times the minimum wage for full-time employment are not entitled to overtime. Employers are known to misclassify employees (accidentally or intentionally) as “exempt” in order to avoid having to pay overtime. In such cases, the misclassified employees are still legally entitled to overtime pay, and can recover a back pay award by filing a donning and doffing lawsuit or a California unpaid wages lawsuit.

The Asalati v. Intel Corp. settlement agreement provides that Intel is to pay attorneys fees, nearly $50,000 in penalties to the state Labor and Workforce Development Agency, nearly $50,000 in “class administration costs,” the $15,000 class representative enhancement to Asalati, and a distribution to the class of around $1,100 to each of the 3,018 class members. Plaintiffs estimated that had the case gone to trial and they had prevailed, they would have been entitled to well over $50 million.

What Overtime Pay Are California Employees Entitled To?

California employees are fortunate enough to enjoy greater benefits and protections under the law than employees in nearly every other state. Non-exempt employees are entitled to one and a half their regular rate of pay for hours worked over an eight-hour day, or over forty hours per work week. In addition, non-exempt employees are entitled to “double-time” pay. This is twice their regular rate of pay for hours worked over 12 hours a day, or over eight hours on the seventh day of the workweek.

In the Asalati Court’s review of the proposed settlement agreement, Judge Kuhnle noted his surprise and perhaps concern that only 3,000 out of Intel’s approximately 13,000 total employees were nonexempt. Counsel for Intel responded that the reason is because most of Intel’s workers are “highly professional” and presumably highly paid. Intel noted that the most of Intel’s non-exempt employees do not work in California, but work in either Arizona or Oregon. One potential reason a company might elect to locate non-exempt employees out of state is to avoid having to comply with California’s stringent overtime laws.