Specter of an FLSA Class Action? Scooby Dooby Doo!

My original title for this blog post was “All I Ever Needed To Know About Fair Labor Standard Act (FLSA) Class Actions I Learned From Saturday Morning Cartoons.” But then I quickly realized that there was a single cartoon expert on this topic: that kooky Great Dane, Scooby-Doo.

For those less familiar with this Saturday morning classic, let me fill you in. Each Scooby-Doo episode begins with some zany premise suggestive of a ghost story. Invariably, though, as those meddling kids pull up in their Mystery Van, they are quickly introduced to a parade of purportedly concerned and frightened people who tolerate the predictable antics of Scooby and Shaggy. Meanwhile, Velma and Fred do their best to solve the mystery. (Daphne is there too, of course, though her contribution is often a mystery in itself. I digress.)

The truth comes out at the end of each episode when the “ghost” (phantom, monster or whatever) is ultimately trapped, his/her mask pulled aside, and suddenly it is revealed that the most innocuous of characters introduced at the beginning of the episode is the real culprit behind the entire ruse. Aha!

As Velma and Fred walk us through the caper, we must be convinced that the whole crazy story makes perfect sense. For example, the elderly man bussing tables is dressed up as a swamp monster to frighten people away from the abandoned amusement park so it wouldn’t be turned into luxury condos with hip retail spaces on the ground level.

And now, you ask, what does this have to do with FLSA class actions? Let me channel my inner Velma and explain.

Class actions are brought by a named class representative. Actions are brought under their name, e.g., Janice Smith v. Company, Inc. Who is this class representative? The person serving as the class representative may be someone who has completely been under the radar, never having raised an issue or complaint, for example. Quite often, the class representative is initially as indistinguishable as the culprit we discover at the end of each Scooby-Doo episode.

To represent a class, the representative needs to demonstrate that he/she has claims against an organization that are the same or similar of others who would make up the class. Using this information, you can begin to ferret out potential risk, focusing less on the individual that represents the class and more on the characteristics of the larger group and of your organization.

For example: Where do we have concentrations of similarly situated employees who may or may not be classified properly? Which employees should be tracking their work hours because a simple recording error could be costly when multiplied over a large number of employees, making the mistake one, two or more times each day for two or three years? These are the same things, by the way, that plaintiff attorneys looking for new clients are assessing.

Scooby’s pals only figure things out at the end of the episode when the mask is pulled away. That doesn’t have to be you. Any sleuth looking to shine a light on the specter of a wage and hour action can identify early potential risks and use them to prioritize and mitigate identified vulnerabilities. Your next action steps will be developed based on whether you respond “yes” to the statements below:

  • You belong to a “targeted” industry. Currently, those industries include: telecommunications, healthcare, retail, pharmaceutical and utilities. It is important to keep up with trends because the targets can change quickly.
  • You have a concentration of employees in similar roles or functions (e.g., customer service, field operations, inside sales, retail) who are predominantly classified as non-exempt.
  • You have not conducted regular training for managers and employees on FLSA issues.
  • Your managers do not agree with or understand the requirements under your policies and, as a result, are ineffective at monitoring and correcting the work habits of their employees.
  • You have not regularly communicated the organization’s policies and expectations regarding work schedules, timekeeping, overtime pay, meal breaks, etc.
  • You do not routinely audit position descriptions to ensure that (a) descriptions accurately describe required duties and responsibilities and (b) the positions are properly classified as exempt or non-exempt.
  • You believe that your employees will never bring a lawsuit against the company without alerting you to potential issues first.
  • You are confident that your automatic timekeeping software (or other stated practice or technology) will take care of everything.
  • You are aware of brewing tensions between employees and managers within certain areas, particularly where you have concentrations of non-exempt employees.
  • You assume you are doing things correctly because everyone else in your industry is handling things exactly the way you are.
  • You assume that others more knowledgeable than you must have classified your positions correctly.
  • You assume that “white collar” and “professional” positions are automatically exempt.
  • Almost everyone in your organization is classified as exempt rather than non-exempt.
  • You automatically classify everyone who is paid a salary as exempt and everyone who is paid hourly as non-exempt.
  • You have non-exempt employees who are required to perform certain activities before beginning their scheduled work day or following the end of their scheduled work day (e.g., booting up their computer, undergoing a security check out, etc.).
  • You allow non-exempt employees to take compensatory time off when they work in excess of 40 hours.
  • You allow non-exempt employees to eat lunch at their desks where they sometimes perform a mixture of work-related and non-work-related activities during the lunch hour.
  • You issue Blackberries and laptop computers to non-exempt employees allowing them to work remotely (and during unscheduled, perhaps unreported, hours).

Careful consideration of these potential risk factors will help to unmask potential claimants without the need for Scooby snacks. More importantly, you may begin to solve some of your time-keeping and classification mysteries well before being haunted by litigation. Where to begin? Train your managers. We can help.

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