$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.

ERISA Lawsuit Targeting Oracle Corp. Achieves Class Action Status

Allegations that Oracle Corp. did not do enough to monitor their retirement plan’s investment fiduciaries led to ERISA suit v. Oracle. Evolving since 2016, the ERISA lawsuit was recently granted class action status – potentially benefitting thousands.

Allegations included in the suit:

Fiduciaries acting on behalf of Oracle Corp. (Defendant) failed in their duties by investing in funds/investments that did not maintain the best interests of plan participants/investors. ERISA (the Employee Retirement Income Security Act) requires that fiduciaries maintain/manage investments in the best interests of investors. Plaintiffs were participants in the company’s 2016 benefit plan. They allege that the company failed to make prudent investment decisions and incurred tens of millions of dollars of excessive fees – effectively breaching their fiduciary duties.

According to the ERISA suit, Oracle paid a number of fees for record-keeping to Fidelity, Plan trustee, on a revenue sharing model that was calculated on Plan assets instead of the number of participants. Without a fixed fee per participant, the expenses were inflated and resulted in unreasonable fee amounts. With drastic increases in the fund assets, Fidelity’s revenue skyrocketed as well without any increase in the services they were providing.

In addition to failing to adequately monitor fiduciaries, plaintiffs allege that Oracle also kept poorly-performing funds that caused plan participants to suffer significant losses: Artisan, PIMCO and TCM.

Oracle argued that Fidelity was compensated with reasonable fees for the services provided and moved to have the suit dismissed. This motion to dismiss was denied in March 2017. In June 2017, plaintiffs moved for class certification and the judge approved class certification in January 2018.

The judge did specify that class certification reserved was to be reserved for claims related to excessive fees. The Judge found the original class definition to be too broad. The judge created two other classes for plan participants that invested in the “under-performing” funds (Artisan and TCM), but did not create a third for the allegedly under-performing PIMCO fund because there was not class representative available.

If you have questions or concerns about ERISA suit class certification or fiduciary duty violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.