New York Employment Lawyer Blog

Call center employees are unquestionably entitled to overtime pay, yet they are among the most stubbornly undercompensated groups of overtime-eligible employees. While many companies have relocated their customer service call centers abroad to India and other countries to avoid minimum wage and overtime laws, many remain in the US and their owners simply flout these laws. Aside from not receiving overtime compensation for hours worked in excess of 40 in a work week, many call center employees are simply not paid for all compensable hours whether they work over 40 hours in a week or not. In fact, call center employees are often not compensated for purported "off the clock" workday activities such as routine bathroom breaks or time spent waiting between customer service inquiries, despite the fact that the Department of Labor considers this time to be compensable.

Overtime pay should not be a concern for mortgage brokers, who have larger problems to deal with. Mortgage defaults are at record rates and the employment picture is particularly bleak in the industry. However, a series of recent rulings have opened the door to overtime eligibility for a broad number of housing/mortgage industry employees, including mortgage underwriters and loan officers. In 2009, the Second Circuit Court of Appeals in Whalen v. J.P. Morgan Chase held that underwriters responsible for approving loans did not engage in exempt administrative work. Earlier, the Department of Labor had reached a similar conclusion with respect to "typical" mortgage loan officers, reasoning that loan officers were primarily engaged in the sale of financial products and therefore protected by federal overtime law. Since much of the industry is misclassified, and since the Department of Labor is actively pursuing employers, employees should be particularly cautious of retaliation should you chose to raise the matter with management.

If you are employed as an unlicensed Junior, Associate, Senior or Consultant Accountant at one of the large accounting firms, or if you are a junior accountant or accouting clerk in any corporation, your employer may be violating the FLSA and state overtime laws by not paying you time and a half for all hours worked over 40. In Kress et al. v. PricewaterhouseCooper, Judge Karlton in the Eastern District of California preliminarily certified an FLSA collective action comprised of Associate and Senior Accountants who were not licensed as Certified Public Accountants. This fact bodes well for those at other accounting firms who are employed in similar positions and are contemplating bringing suit for unpaid overtime. Also, many large corporations violate the FLSA by employing closely supervised "financial accountants" who are not CPAs, perform mostly clerical accounting, and who earn a salary without eligibility for overtime compensation. These violations are particularly egregious given the long hours these accountants are known to work. Also, since the law is developing in favor of paying these employees overtime, it will be difficult for employers to argue that violations are not willful and therefore subject to additional penalties under the FLSA.

When a group of employees bring a putative class action suit against their employer, a potential conflict of interest immediately arises.   This potential conflict exists because all of the employees in the proposed class may soon be in an adverse position with the company.   But technically those employees in the proposed class are not adverse until the case is certified as a class action.

This dynamic came into focus recently in a tip pooling case against Starbucks.   In that case it was alleged that Starbucks refused to share tips with Assistant Store Mangers in violation of the New York Labor Code.   Starbucks defended on the ground that the Assistant Store Managers are managerial employees who are not entitled to share the tips.

The named plaintiffs moved to certify the case as a class action under rule 23 of the Federal Rules of Civil Procedure.   Starbucks opposed the motion by submitting declarations from 16 Assistant Store Managers who described the scope of their duties in order to establish that the ASMs were managers.

The plaintiffs promptly deposed half of the ASMs about their declarations but during the depositions, Starbucks' counsel would not let the ASM's testify about the execution of their declarations under the attorney-client privilege.  The plaintiffs then filed a motion compelling answers to these questions as well as all emails and other documents that concerned the selection of the ASMs and the execution of their declarations.

The court, United States Magistrate Judge Francis of the Southern District of New York, held that "within a corporation ... the attorney-client privilege protects communications by corporate employees to counsel for the corporation who is acting as a lawyer when the communications are made at the direction of corporate superiors in order to secure legal advice and the employees were aware that they were being questioned in connection with the provision of such advice."  The plaintiffs argued that the privilege did not exist because Starbucks' counsel did not represent the ASMs individually.   The Court rejected this argument and held that the privilege existed and it belonged to Starbucks and not the ASMs as Starbuck's counsel never pretended to represent the ASMs individually.

The court recognized that a complication exists because the employees were members of the putative class.   As the class had not yet been certified, Starbucks was not prohibited from communicating with putative class members.   Courts generally permit pre-certification communication with putative class members absent a court order or evidence indicating that the communication is misleading or improper.  Since the communications did not appear improper, Starbucks counsel properly communicated with the ASMs and since the attorney-client privilege attached to those communications, the ASMs are forever barred from revealing those communications absent a waiver by Starbucks.

This ruling makes it clear that company counsel can communicate with putative class members prior to certification so long as those contacts are not misleading or otherwise improper.   Moreover, these communications are also likely to be protected by the attorney-client privilege in favor of the company and the employees are barred from revealing those communications in the future even if the case is later certified as a class action.

See the entire opinion here and a post on the same case by The Wage & Hour Litigation Blog.