California Labor Law Class Action or Individual Lawsuit? Attorney Explains

September 22, 2011, 8:00AM. By Jane Mundy

Beverly Hills, CASay that your employer refuses to provide you with meal breaks and/or rest periods, or your employer misclassifies you as an independent contractor to avoid overtime payment—you know your employer is violating the California Labor Law, so should you file an individual lawsuit or a class-action suit? Employment attorney Shaun Setareh discusses your options…

"We are seeing a lot of employers cheating their employees by the above examples," says Setareh. "Unfortunately companies who are not paying California overtime and misclassifying their employees see their actions as a 'cat and mouse game,' meaning they look at it as the cost of doing business. They know they will be sued eventually but they will try to get away with violating California labor laws for as long as possible, before they get caught with their hands in the cookie jar."

One of the main reasons they get away with it for so long is because employees are afraid of losing their job, and employers can use this economic climate to their advantage. But Setareh stresses that any current employee should not fear any retribution. "Retaliation is a lawsuit in itself and employers would be wise to study the labor law because it can be very costly if they even intimidate an employee who makes a claim against them."

If you believe that your employer is cheating you by not paying overtime, failing to provide you with the required meal and/or rest breaks, violating the California labor code by misclassifying you or any other conduct that you feel is just wrong, you should seek the advice of counsel. But should you file an individual or class-action lawsuit against the company?

"If you are a current employee, it is advantageous to file a class-action lawsuit unless the company is extremely small," says Setareh. "There should be more than 25 former and current employees combined to file a class action. With a class action, you will be protecting your own rights along with everyone else, and if you are the class representative, you qualify for class enhancement, which means that the court will most likely award you extra money when the case is settled."

If you work in a small facility with multiple locations elsewhere, Setareh's firm can investigate. If you are working in a "Mom and Pop" operation, they will look at the employee handbook and pay stubs; they will talk to witnesses and other employees, but they don't talk to the employer.

"We don't talk to the employer because it is usually a waste of time," Setareh explains, "because they will try more often than not to delay the process."

Once you've decided to make a claim, there isn't really much more that you need to do—with the help of an attorney. "The employee doesn't need to get witnesses or get anyone else on board," Setareh explains. "All that's needed is just one person to file a lawsuit and we do the rest. For instance, if you are not getting meal breaks, we will investigate. First we will talk to the person who is seeking legal advice; we might have an investigator call the other employees but it isn't usually necessary. Then we notify the employer that a class action has been filed and request every employee's file and pay records and the witnesses' pay records as well. Sometimes we file a lawsuit immediately while other times we have to do more due diligence, depending upon the kinds of claims being alleged."

There are no fees for a consultation and both individual lawsuits and class-action suits are based on contingency.

"We recently sued an international shipping company and received over $10 million as settlement for meal and rest breaks for 40,000 employees," says Setareh. "In that case, the employer simply disregarded the rights employees have when working for someone. Although their policies were 'clean' and compliant with California state labor laws, they grossly failed to comply with any of their own policies, which made a recovery and that case possible."