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The Class Action Lawsuit.
Those of us who work in the legal industry often hear complaints from the general public about Class Action lawsuits. Comments such as “I only got a lousy $5 dollars, and the lawyers made millions” populate internet message boards everywhere. It is understandable that, to a lay person, a $5 coupon doesn’t seem like much of a reward. Why should anyone bother with so small a return?
Obey existing laws
The answer is fairly straightforward. Because whether it is found to be unlawful computations of wages due to mis-classification or a mass consumer fraud, the company or employer is engaging in some type of large-scale illegal behavior. That behavior needs to be stopped. Whether you are the consumer or employee on the receiving end of this behavior, there is little one person can do alone to encourage the company to deal with you fairly. Enter the Class Action lawsuit: the best method available to force a large “misbehaving” organization to comply with all existing law in its treatment of the affected consumer or employee. So, when one of those “tedious” little postcards comes in the mail, it’s a good idea to complete it. “Opt in” and be counted. By responding in the affirmative to the suit, even if you never see much money, you have voiced a very important message. That message? Obey existing laws.
Big Business & Class Action
You can imagine how much big business likes to be hit with Class Action litigation. To that end, many companies are engaging in the preemptive strike. They ask individuals, either directly or indirectly, to sign away their rights to participate in a class action. These waivers can be hidden in an employment package, or an on-line click-through. The Supreme Court is currently holding individuals to these agreements. The do so by forcing them to arbitrate individually any claims that arise between them and the business to whom they provided such a waiver. This process is much easier on the business, and encourages the bad behavior tenfold. What can you do? Be aware of the language contained in any document you sign. You may be signing away your rights.
Employment Class Actions
In the Employment Class Action field, there is a trend toward correcting a practice by employers which has ballooned in the United States in the past three decades. That practice involves the misclassification workers to save money. Whether it be the use of “independent contractors”  – who are often, in reality, merely employees without benefits — or the misuse of “interns”– a group so misunderstood that the majority of them are essentially unpaid slave labor – employers have, on a massive scale, inadvertently or deliberately engaged in the underpayment of thousands of American workers.
The use of interns in particular is facing a great deal of scrutiny by the Department of Labor. Several bills have hit the floor of Congress to begin to rectify the situation, but these bills haven’t made it through the gridlock on the Hill. On the heels of the recent Black Swan case out of New York, other similar lawsuits are cropping up. Also in New York, Sirius XM is facing an unpaid intern class action. Filed by Melissa Tierney, a former intern for The Howard Stern Show, the suit alleges that the company is in violation of the Fair Labor Standards Act (FLSA) and New York labor law because it had its interns work long hours with no monetary compensation. McDonald’s (on the heels of their infamous “Low Wage Budget” guide for employees), has been sued by a group of workers alleging wage fraud.
Dancers & Wages
In addition, several class actions have been filed on behalf of strippers in New York City and Missouri, alleging that they were misclassified as “independent contractors” in order to avoid paying them the benefits due to employees, though their activities as dancers in the club were subject to fairly strict control by management. Businesses would argue that these workers knew the terms when they signed on to work for free, and that they are “reneging” on a deal. The law disagrees. Workers are due wages for their labor, and minimum wages are true minimums. There is no “opting in” to practices that run tantamount to slavery.
The employment class action takes many forms. Its utilization as a form of leverage to force companies to pay, with interest, wages that were not paid to employees at the time those wages were due, is an invaluable tool for large groups of employees who might never see recovery of the wages owed them in any other way. In addition to being a method for large groups of employees in various fields to recover wages due them under the law...it is also one of the biggest disincentives for employers to continue these practices.
The Take Away
The members of this firm have participated in dozens of such cases over the years, with an excellent track record on recovery for the affected classes. One of the earliest of those cases, Amaro v. Continental Can, was one in which plaintiffs’ counsel sought unpaid pension benefits for lifelong employees at a manufacturing mill. After weeks of reviewing the mountains of shuffled paperwork provided by attorneys for the defendant, Mr. Lazear discovered the “smoking gun” — a document which allowed him to successfully achieve victory. The reward? Recovering large pension funds for the workers. These awards averaged about $80,000 per class member, which in 1987 was sufficient for most of them to purchase homes and settle into the retirement they had earned. The day he was able to hand out those checks was one of the most rewarding in his career.
So don’t listen to the whining of the pro-business types. Like Donald Sterling, they would have you believe that they are innocent victims of greedy lawyers (or ex-girlfriends) out to get them. They are, in reality, the best way a group of individuals can be heard and, if successful, finally stick it to “the Man.”
Lazear Mack, LLP
Employment Law Attorneys
436 14th Street, Suite 1117
 See our previous post “WAGE THEFT – Part Three” which deals with the various forms of worker mis-classification.