Kronos Hack Leaves PepsiCo Vulnerable to Wage and Hour Claims

The recent Kronos hack seems to have left PepsiCo in a tough spot, facing wage and hour claims after employees filed a California wage and hour lawsuit.

The Case: Madriz v. PepsiCo, Inc., Naked Juice Co., and Tropicana Products, Inc.

The Court: Central District of California

The Case No.: 5:22-cv-00549

The Plaintiff: Madriz v. PepsiCo, Inc., Naked Juice Co., and Tropicana Products, Inc.

The plaintiff in the case, two PepsiCo workers, filed suit alleging the company failed to properly keep track of overtime hours their employees worked and provide overtime pay at accurate overtime rates after Kronos, an HR technology provider, was hacked in 2021. The plaintiffs seek class certification, awards of unpaid wages, liquidated damages, penalty damages, restitution, pre-, and post-judgment interest, attorney’s fees and costs, etc.

The Defendant: Madriz v. PepsiCo, Inc., Naked Juice Co., and Tropicana Products, Inc.

Kronos is one of the world’s largest human resources companies that work with their clients (other companies) to manage timekeeping and payroll information. In December 2021, Kronos was hacked. As a result, PepsiCo employees allegedly were not paid a full overtime premium for overtime hours worked. Instead, according to the complaint, PepsiCo issued paychecks based on scheduled hours or duplicated paychecks from pay periods before the Kronos cyber attack. In addition, plaintiffs claim PepsiCo paid based on estimates of time or pay, arbitrary calculations, or considerations other than the hours employees worked and their agreed upon pay rate. As a result, many employees allegedly received pay for fewer hours than they worked and at a lower wage.

The Case: Madriz v. PepsiCo, Inc., Naked Juice Co., and Tropicana Products, Inc.

Plaintiffs claim PepsiCo’s behavior was negligent and that the company should have immediately put various methods in place to keep track of employee hours and accurately calculate employee wages. Instead, plaintiffs argue the company chose not to. Based on this decision, the plaintiffs argue that the defendants violated the Fair Labor Standards Act (FLSA) and California wage laws such as the California Labor Code, Private Attorneys General Act, and Unfair Competition Law.

If you have questions about California employment law or need to file a wage and hour lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.