Amazon’s Push for Delivery Guys Leaves Them Facing Employment Law Claims

This past summer, Amazon’s Jeff Bezos announced a need for aspiring entrepreneurs and offered them a chance to make $300,000 per year by starting their own Amazing delivery business with as little as $10,000 required to get started. Amazon is highly dependent on the creation of a network of independent drivers around the country as they struggle to keep up with demand. To entice entrepreneurs, Amazon uses their buying buyer to get their partners good deals on necessary items, like: vans, insurance, etc. Then they provide them with a steady stream of items to be delivered.  

The entrepreneurs tackling Amazon’s delivery needs are actually facing the bigger challenge as they attempt to recruit and hire drivers who can meet the high standards of Amazon at a low pay rate.

The structure leaves Amazon in a bit of a gray area legally. They have to be careful how much control they are exerting over the people employed by their delivery companies. Amazon already faces a number of lawsuits from delivery drivers that claim they were not paid wages as required by federal law while employed by Amazon partners and they’re including Amazon in the list of responsible parties since their job duties were on behalf of the giant online retailer. If Amazon finds a legal way to add drivers and vans without spending their own company funds, the risk could be worth it for them in the long run.  

Amazon has already gathered tens of thousands of entrepreneurs excited for this type of ground floor opportunity. The aspiring entrepreneurs go through phone interviews and several days of training. Within a few months, hundreds of new businesses have popped up all over America and they’re employing thousands of delivery drivers. More hopefuls fill a waiting list for further expansion in the coming year.

The business model appears profitable for Amazon as they avoid both the costs of training and maintaining drivers throughout the nation. The business model also appears profitable for entrepreneurs looking for a chance to run their own business with the power of Amazon supporting their efforts – many entrepreneurs are already enjoying the fruits of their efforts as Amazon partners. Yet Amazon’s new delivery model is drawing lawsuits that allege Amazon partners are violating overtime pay requirements by paying their drivers daily rates instead of hourly wages. A case in Illinois referred to the Amazon Partner Delivery Model as an “unlawful scheme” trying to avoid responsibility for providing legal wages to delivery drivers. FedEx paid out a $13 million lawsuit settlement to resolve claims of “misclassification” of workers leading to lost wages. They altered their business model in response, now requiring service providers to keep drivers on payroll. Amazon ended up settling in a similar lawsuit filed in California alleging that contract delivery drivers (listed as independent contractors) were underpaid.

Finding people willing to do quality work at low wages is a significant challenge. Most drivers are paid around $15/hour. This particular challenge has been passed from Amazon to the Amazon partners responsible for managing routes and drivers. Many expect this to be a slight redirection of the problem rather than a solution.

If you are dealing with misclassification in the workplace or you need to find out how to obtain overtime pay you are owed, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Former Bodyguards Receive Settlement After Suing Depp for Employment Violations

Two former bodyguards for Johnny Depp, Eugene Arreola and Miguel Sanchez, filed a California lawsuit in May 2018 alleging claiming Depp was in violation of employment law. Sanchez and Arreola claimed they were overworked and not paid overtime. The bodyguards also claimed they were subjected to unsafe working conditions. The lawsuit has now been settled.

Depp came to an agreement with the two former bodyguards who filed suit in 2018 and the case has been closed with all future hearings cancelled. Court documents indicate that the bodyguards reached a conditional settlement the resolves the matter. Settlement details were not released.

Arreola and Sanchez claimed in their lawsuit that Johnny Depp overworked and underpaid them during their time with him as bodyguards. They specifically cited a two-year period during which they described their time on the job as intolerable. They claimed they were expected to act as Depp’s babysitter. The duo claimed that between April 2016 and January 2018, they did not receive any overtime pay and they were deprived of food and rest breaks due to their work looking after the Depp family.

The original lawsuit was riddled with intense allegations. One claim described a situation in which the bodyguards were required to wipe drugs from Depp’s face at a nightclub in order to prevent others around the celebrity from seeing him using. The bodyguards describe their time with Depp during this time period as watching him spiral into a financial hurricane and act as babysitters for his children. One of the bodyguards claimed that one of his major job duties was to ensure that one of Depp’s children was looked after appropriately because they were living in an outhouse on Depp’s compound in Los Angeles.

Arreola and Sanchez asked for unspecified damages and compensation to make up for money they were owed due to overtime violations, etc. The two bodyguards described their job as requiring them to protect Depp from himself and his vices while he was in public – effectively making them caretakers.

Sanchez and Arreola (a 38-year-old LAPD veteran) worked happily for Depp for years while they were employed by a security company the celebrity hired, but then the problems started. Early in 2016, the bodyguards noticed Depp’s’ behavior start to change as well as the atmosphere in his Hollywood Hills compound. He started to make sudden and drastic changes to his staff and management team. The moves resulted in a substantial financial crunch for everyone except Depp.

In April of 2016, in the midst of his rocky marriage with Amber Heard, Depp fired the security company that employed both Sanchez and Arreola, Premier Group International. The bodyguards claim that Depp and his entourage made the change to “cut out the middle man” and hire the bodyguards directly so they could avoid the agency fee.

Once the guards were employed by Depp directly, their pay checks and hours were not properly tracked. They were expected to work 12-hour days and back to back shifts. And their job duties expanded to include safeguarding Depp and others who were around him as they engaged in “illegal activity.” They were often in situations that required more of them that what a bodyguard would reasonably be held responsible for. They were frequently being asked to perform the tasks of drivers for Depp and his family. They were repeatedly asked to drive vehicles that contained illegal substances as well as open containers and minors. They were asked to monitor unstable people in Depp’s life. Sanchez was specifically tasked with looking after one of Depp’s children (either 19-year old Lily rose or 16-year old John Depp III, the lawsuit did not specify which child). In fact, more often than not, Sanchez who was hired to protect Depp’s children, was more often than not the primary caregiver for Depp’s minor child who loved on the Depp compound, but in a separate home. Sanchez was advised to give in to every whim of Depp’s children. He worried that if he didn’t, he would be terminated from his position.

If you are being forced to work in a toxic or dangerous work environment or if you are not being paid overtime as required by federal law, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

The California Supreme Court’s Dynamex Decision Impacts Standards

The California Supreme Court’s decision on Dynamex Operations West, Inc. v. Superior Court of Los Angeles is affecting legal standards determining whether a worker should be legally classified as an employee or an independent contractor. The company in the case, Dynamex, put a test in place as a standard determining classification that made it more difficult for businesses to classify workers as independent contractors.

For example, Lawson v. Grubhub, Inc. was a case heard before U.S. Magistrate Judge Jacqueline Scott Corley. It was a closely watched case out of California federal court. The judge on the case noted in a new order that her decision on the case may have been different if the Dynamex opinion had already been recorded. While Judge Corley declined to vacate her earlier finding, it is likely the order will be reversed upon appeal.

In Lawson v. Grubhub, Inc. the plaintiff, Raef Lawson was a GrubHub driver who claimed he was misclassified as an independent contractor. When GrubHub moved to dismiss the suit in early 2018, the district court found the company did not “control” Lawson’s work – siding with the company. Lawson appealed. After the Dynamex decision, Lawson filed a motion. He sought relief from the judgment on record. Lawson argued that his case would have had a different outcome if the California Supreme Court had adopted a new legal standard for use when determining the classification of workers as employee or independent contractor. The court responded by allowing that a careful consideration of the issues and with the benefit of an oral argument, the motion raises substantial issue, but they declined to definitively rule on vacating the judgment. They court noted that deciding whether or not the Dynamex ruling should apply retroactively is a decision to be made by the U.S. Court of Appeals for the Ninth Circuit.

If you have questions about misclassification or if you need to discuss how you can seek justice when your employer refuses to provide you with overtime pay, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Infosys Facing Allegations of Failure to Pay Overtime

A former employee of Infosys, Anuj Kapoor, filed an overtime lawsuit against the company. It is not the first and will likely result in a US Department of Labor investigation. Kapoor was involved with a CVS project in Rhode Island and filed suit against the company in June. Kapoor alleges that Infosys made him work over 1,000 hours of overtime without providing him with overtime pay.

Kapoor, plaintiff, alleges that he worked an estimated 1,084 overtime hours for the company between May 2015 and June 2017 and that they were over and above his weekly 40 hours. He also alleges that the overtime hours worked resulted in zero compensation. Not only was not provided accurate overtime wages, but he was not provided any wages for the additional hours at all.

Kapoor isn’t the only employee of Infosys who has made this type of allegation against Infosys. Infosys has run into overtime claims before. The company paid $26 million in 2008 to the California Division of Labor Standards Enforcement. The payment settled a previous investigation into allegations of unpaid overtime.

The company, Infosys, denies the allegations. They not only insist that Kapoor’s allegations are unfounded, but they state that they will defend themselves in the action. Infosys’ spokesperson states that they comply with employment law throughout the United States. Additionally, the Defendant noted that the current case based on Kapoor’s allegations has no connection to past allegations and that the decade-old case in California has no relevance to the current case.

Infosys is not the only Indian IT company that has faced overtime lawsuits from their employees. Wipro, another Indian IT company, was sued by one of their employees for unpaid overtime. In the current regulatory environment in the United States, lawsuits and complaints are definitely raising concerns and companies operating in “gray areas” are finding that allegations cannot be ignored or easily swept aside.

If you need help seeking overtime pay from your employer or if you have questions about overtime regulations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

KBP Foods Fighting Suit Claiming Labor Law Violations

Six employees of Overland Park-based KBP Foods LLC filed a lawsuit including allegations that the giant OP fast-food franchisee purposefully used faulty equipment for timekeeping. The suit claims that the company’s timekeeping system utilized a thumbprint scanner that consistently malfunctioned, which prevented their employees from clocking in when starting their shift or ending a break. Employees cite a failure to pay overtime wages, failure to pay minimum wage and failure to pay employees for all wages earned on the job.

The company owns 581 different restaurants throughout the country with KFC and Taco Bell being the most recognizable. In fact, the suit claims that KBP Foods is the largest KFC franchisee in the nation. KBP is accused of knowingly using equipment that failed to properly record time for employees’ shifts due to frequent malfunctions, including overtime hours. The lawsuit also alleges that corporate officers went so far as to put a policy in place that required employees to clock out but remain on site to complete standard (and required) closing operations.

Due to the company’s policy, many store managers consistently deleted hours worked from employee time cards/sheets in order to deprive them of wages and overtime pay for hours they completed on the job. The plaintiffs allege the company did so in a willful act intended to reduce labor costs for the company and earn incentives paid to management for maintaining overall labor costs below a designated threshold.

According to the lawsuit, when the thumbprint scanner fails to clock an employee in for their shift or at the end of a break, the manager on duty is supposed to manually enter the info into the restaurant’s back office computer, but this was rarely if ever done, resulting in employees who were underpaid and/or not paid for overtime hours worked. The timekeeping system in place also made it necessary for managers to run reports daily after the registers were closed. Plaintiffs allege that managers have the employees clock out prior to shutting down the registers in order to run the day’s reports; leaving the employees working off the clock for the closing procedures.

Plaintiffs in the suit seek class action status. They seek payment of unpaid wages, overtime wages, attorney fees and other compensation that the court deems appropriate.

If you have questions about California labor law or if you are not being paid overtime wages you have earned, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Cinemark Faces Certified Class of Employees Alleging Overtime and Wage Statement Violations

A class of Cinemark movie theater employees claim that the company did not comply with state law requiring pay stubs to be accurate and itemized; detailing specifically the overtime pay rates. The group of 843 eligible California employees was recently certified for class action.

The estimated 843 employees located in California and employed by Cinemark who are eligible to join the class action lawsuit is based on calculations of legal counsel on the case who made their determinations based on the popular movie theater’s disclosures regarding the number of incorrect wage statements they issued to employees.

The federal judge on the case (Amey v. Cinemark USA Inc., 2018 BL 296573, N.D. Cal., No. 13-cv-05669) certified the class on August 16th, 2018. Certification of the class means that Cinemark USA Inc. will be required to provide the names and the contact information for any employees who received non-compliant pay stubs. Class members who do not opt out will receive a share of any payout or settlement that results from the case during pre-trail negotiations, mediation or a trial win. 

Employers are required to provide employees with detailed, itemized, and accurate pay stubs (a.k.a. wage statements) in order to assist employees in regulating their pay rate and overtime pay rate. Providing accurate wage statements creates transparency and allows employees to determine when they are not receiving the right pay for their work hours or the right rate of pay for their overtime hours specifically. California labor code requires more extensive pay stub disclosures than federal law. California law allows a $50 penalty per employee for the first pay stub violation and $100 for subsequent violations. As there are 26 pay periods in a year for employers who issue pay biweekly, pay stub violations can be very costly for employers.

If you have questions about California labor law pay stub requirements or if you are not receiving overtime compensation as required by law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Supreme Court Rules in Favor of Car Dealerships in Overtime Suit

A recent Supreme Court ruling found service advisers at car dealerships to be exempt under federal law from overtime pay requirements – much like car salesmen and mechanics. The ruling came down 5-4 that service advisers are sales people (even though they also fulfill additional duties such as greeting customers, and proposing various repair service, etc.) The ruling will affect more than 18,000 dealerships across the nation that together as a whole employ over 100,000 service advisers alone.

The case involved a Mercedes Benz dealership out of Encino, California and several of their current and former service advisers. Each side in the case interpreted the Fair Labor Standards Act differently…”any salesman…primarily engaged in selling or servicing automobiles” doesn’t have to provided overtime compensation.

The dealership’s arguments were based on their interpretation that the definition of salesman clearly included the service advisers. Their range of duties includes helping to diagnose mechanical issues, preparing price estimates for vehicle repairs, etc. Service advisers argued that they were not included in the definition of “salesman” as intended by the Fair Labor Standards Act.

In a majority opinion, Justice Clarence Thomas wrote that the “ordinary meaning of ‘salesman’ is someone who sells goods or services.” According to this ordinary meaning of the word, service advisers are, in fact, salesmen. Justice Ruth Bader Ginsburg dissented arguing that because the service advisers do not sell or repair vehicles, they should not be exempt from overtime.

The Department of Labor changed its interpretation of the Fair Labor Standards Act in 2011; which led the issue to the high court. For decades prior to the 2011 change, the department operated under the assumption that employers were not required to provide service advisers with overtime compensation.

This decision was the second time the court has ruled on this case. The earlier litigation resulted in the U.S. Court of Appeals for the 9th Circuit ruling that service advisers were entitled to overtime. In 2016, after the death of Justice Antonin Scalia, the overtime question was sidestepped by an eight-member Supreme Court; advising the appeals court to take another look at the case. The appeals court again ruled in favor of service advisers.

The Supreme Court ruling in favor of car dealerships will have affect dealerships and service advisers nationwide.

If you have questions about overtime eligibility or overtime compensation as required by employment law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.