Settled Cases

Aon Corp. Settles Employee Misclassification Lawsuit for $10.5M

July 8, 2011

By Howard | Nassiri, PC

A $10.5 class action wage and hour lawsuit settlement has been recently approved in Los Angeles, California, accusing Aon Corporation units in California of engaging in the employee misclassification of over 500 employees.

The California Account Specialists were reportedly misclassified as exempt administrative employees who were salaried, and therefore did not receive overtime compensation when they worked beyond forty hours in a workweek. The group of California Aon specialists reportedly included relationship specialists, client specialists and senior account specialists, as well as account managers, client services representatives, and customer services representatives--and were all classified as exempt from overtime and rest and meal break requirements.

The California class action wage and hour lawsuit was certified last year, against Aon Insurance Services, Aon Risk Services Companies, and Aon Corporation, and the $10.5 million settlement approved last week by the Los Angeles Superior Court, applies to 534 class action members, who should receive their wage and hour settlement within the next sixty days.

As our Riverside employment and labor attorneys have discussed in a recent California wage and hour blog post, employee misclassification continues to be massive labor and employment problem throughout the nation. The misclassification of employees can often happen when an employer incorrectly classifies an employee as "exempt," so that the employee is not entitled to overtime pay or other wage and hour benefits, like meal and rest breaks, that are usually available to covered non-exempt employees.

Often employee misclassification happens when an employee is guided to work in such a way that causes the exempt employee to lose his exempt status, like when an employer subtracts work time that was missed from the employee's salary, which make the employee eligible to receive overtime pay.

Under the Fair Labor and Standards Act (FLSA), non-exempt employees are required by law to be compensated for one and a half their regular hourly rate of pay when they work over forty hours in week. Employers often miscalculate how much overtime workers are actually owed, when working past a forty hour work week, which can also lead to wage and hour violations.

California Supreme Court Rules in Oracle Overtime Lawsuit

July 19, 2011

By Howard | Nassiri, PC

The California class action wage and hour lawsuit was originally filed against Oracle Corporation, by a group of instructors, residents of Arizona and Colorado, who traveled between states, instructing customers on how to properly use the Oracle software products. The employees argued in the lawsuit that under California's wage and hour laws, they should be entitled to overtime payment for working over eight hours in a day, during California business trips.

The employees in the lawsuit claimed that Oracle engaged in employee misclassification by erroneously classifying them as teachers under federal law, putting them in the category of "exempt" workers, who are not entitled to overtime compensation. The employees argued that they were in fact "non-exempt" employees under California law, and should be eligible to receive overtime payment.

Oracle reportedly argued that California law should not apply to employees visiting from other states, as their own state laws should follow them while working in any other states. Oracle also claimed that applying California's wage and hour laws to employees who are visiting and not residents would impose undue burdens on California employers. Oracle's other argument claimed that both Colorado and Arizona's wage and hour laws conflicted with California's, and therefore Oracle couldn't properly apply the California laws.

The California Supreme Court decided unanimously that non-exempt employees who are residents of Arizona or Colorado, and who work for a California-based company spending entire days or weeks working in the state of California, should be covered by California's overtime laws while working in California. The state's highest court did not find any conflicts in the laws of all three states and ruled in favor of the employees.

Pending Cases

CA Drug Sales Reps Sue Novo Nordisk in Class Action Wage and Hour Lawsuit

July 28, 2011

By Howard | Nassiri, PC

Anaheim - A recent California class action wage and hour lawsuit, filed by pharmaceutical sales representatives of the drug company Novo Nordisk, who claim that the company violated overtime laws by failing to pay the employees for overtime hours worked.

In the lawsuit, the pharmaceutical sales representatives accuse the drug giant of engaging in employee misclassification by classifying them as outside salespersons, and "exempt" from overtime laws under California law and the Fair Labor Standards Act.

Under the FLSA and California law, most non-exempt employees are entitled to overtime compensation at one and one half their regular pay rates for any hours worked beyond forty in a workweek. The FLSA provides exemptions from both minimum wage and overtime payment for outside sales representatives, administrative, executive, computer and professional employees. To qualify for an exemption under the FSLA, the employee's specific job responsibilities must be considered, and not just the job title.

The Novo Nordisk class action wage and hour complaint claims that the primary qualification for an outside salesperson exemption is that the sales representatives must be making sales. The Novo Nordisk sales representatives claim that while working they were not actually making sales, rather only promoting prescription drugs to physicians. According to the complaint, the physician can only agree to prescribe the medicine to the patients, but cannot actually buy the drugs from the pharmaceutical sales representatives directly.

The sales representatives allege the as they have been misclassified by Novo Nordisk, and that they do not qualify for the outside salesperson exemption. The employees claim that they should receive overtime compensation for working over eight hour days and forty hour weeks under California Labor Code and the FLSA.