Unpaid Overtime: Questions answered by a lawyer

From a phone interview with Robin Workman, Trial Attorney, Qualls & Workman, LLP

Q: Why would some companies rather pay fines than pay overtime?

A: It is simply a cost benefit analysis. From a fiscal standpoint it is more cost effective for some companies not to pay overtime. Companies can roll the dice and they may never get sued. A large corporation, for example, has the capacity to stretch out a court case over a longer period of time. It can hope that over the course of a litigated case, that can last years, that it will obtain a favorable legal ruling that will allow it to resolve the case for a fraction of what it would have cost the corporation to pay overtime. The bottom line is that not all corporations who engage in overtime payment violations will be sued.

Q: How many lawsuits go to trial?

A: While I do not know the exact numbers, judges convey to me that statistically, of all the cases that are filed, 90-95% settle out of court. Practically, the court system could not function if all of the cases filed actually proceeded to trial.

Q: What if the client doesn't like the result?

A: The client is the one who approves any settlement offer. A lawyer cannot accept a settlement offer without the client's approval. So, in the end, if the settlement offer is not something that the client believes is reasonable, then the matter will not settle. Most mediators will tell you, however, that a good settlement is one where both sides are a little disappointed in the amount paid. The bottom line is that the result achieved through a settlement process is whatever the client believes, taking into consideration the cost and risk of proceeding, is the best thing to do.

Q: Are overtime violations increasing?

A: It would be fair to say that there is an increased awareness by employees of their entitlement to overtime. I cannot say whether actual violations are increasing or if people's awareness is what is increasing. It also could be that companies are cutting benefits paid to employees, i.e., insurance, pensions, etc. Given this fact, employees are more mindful of the hourly rate that they take home because the employees now are responsible for these costs.

Q How should an employee proceed?

A: It depends on the situation in which employees find themselves. Current employees are less inclined to rock the boat. Even if the employee feels that he or she is not being compensated properly, because he needs the income, current employees are less likely to complain than an ex-employee. Although the law prohibits employers from retaliating against current employees who make such complaints, employees believe that they will suffer retaliation if they complain about working conditions. In this situation, a current employee can always contact the Department of Labor who can conduct an independent investigation.

Ex-employees are not constrained by the fear of retaliation. One approach for an ex-employee is to file a complaint with a state agency, such as the DLSE in California, and present their claim. With entrenched employers, however, this is not a very effective strategy because irrespective of the result, the employer can appeal any decision to the trial court. Another option for an ex-employee is to contact an attorney experienced in this field.

Q: How does an employee start a class action lawsuit?

First, an employee must contact a lawyer experienced in this area. The attorney will question the employee thoroughly to determine if the employee suffered potential overtime violations and if the practices impact other employees. To be a class representative an employee must have claims that are typical of the class the employee seeks to represent. So, first, there must be a violation of the overtime laws. Second, the claims of the class representative must be typical of the claims of those other employees they wish to represent.

For example, in the recent verdict against Wal-Mart in California the claim was for the failure to provide meal and rest periods. The class representatives alleged that Wal-Mart did not afford them the opportunity to take the meal and rest periods required by law. The class representatives also asserted that their circumstance was typical of those they wished to represent. The trial court agreed and the matter proceeded to trial.

The same requirements apply in the overtime context. If one is an assistant manager at a store who believes he or she is entitled to overtime, to proceed as a class, the class representative must establish that the work experience under which he or she operated is typical to those he or she wishes to represent.

Ask yourself this: Are your claims typical to others that you wish to represent?

(Wal-Mart was ordered to pay over 116,000 current and former California employees more than $172 million in a class action suit for denying them meal breaks, a California jury ruled December 22nd, 2005. This class action lawsuit was the first against Wal-Mart to go to trial and the company currently faces similar suits in more than 30 states, and more than 40 class action suits alleging workplace violations against Wal-Mart.)