$16.8M Overtime Deal on Kellogg Case is a Go

A federal judge threw preliminary support behind a $16.8 million deal to settle overtime claims against Kellogg Co. The suit alleges that the company misclassified its workers and failed to properly compensate workers for overtime they earned. If the settlement goes through it ends claims that Kellogg violated the Fair Labor Standards Act (FLSA).

According to plaintiff, Patricia Thomas, Kellogg deprived their territory managers and their retail store representatives of premium pay when workers were completing hours in excess of 40 per week. In early 2014, the class was certified. Following class certification, Kellogg attempted to squash the suit repeatedly by arguing that the employees failed to show that class members were similarly situated. In their bed for the judge’s approval, the class brought two things to the judge’s attention: without proving that Kellogg willfully violated the FLSA, 20% of the plaintiffs would recover nothing, and if the company proved that the fluctuating workweek applies, but the class prevailed on all other issues, the plaintiffs’ recovery dropped to about 30% of the total damages claimed.

In March 2014, the third amended complaint was filed claiming that the territory managers and retail store reps often worked over 60 hours in one workweek but did not receive the time-and-a-half premium overtime rate that the workers were allegedly due.

Plaintiffs allege that their job duties were to police the store locations contracted with Kellogg to ensure their products were properly displayed, that Kellogg received access to the correct amount of square footage on shelves, to build and stock Kellogg displays at customer store locations, and to monitor the freshness of the Kellogg products. Specifically, the amended complaint stated that the rep’s primary job duty was not sales. Motions for summary judgement were rejected in late 2016. The core issues of the case include: whether or not plaintiffs engaged in sales and were sales the primary duty. The settlement comes after years of litigation.

If you need assistance determining overtime payment or if you aren’t being paid overtime you are due, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.