Transportation Workers Exempt from Forced Arbitration

Unlike just about everyone else, so-called “transportation workers” cannot be forced out of court due to fine print tucked away in an agreement. Other workers can be forced to sign an agreement to get and keep a job, and that agreement may contain language requiring the employee to give up their right to sue in court and band together with others in class action cases. Under current federal law, namely the Federal Arbitration Act (9 U.S.C. §§ 1-16) (“FAA”), these provisions in employment and consumer contracts are generally enforceable and do deprive workers of their rights; however, transportation workers are exempted from this law.

For example, today, the U.S. District Court for the District of Massachusetts decided that Lyft could be sued in a class action case by its workers notwithstanding an otherwise-valid arbitration provision. The decision rested on the court’s view that Lyft drivers are “transportation workers” under the law. The court reached that conclusion partly because Lyft drivers transported passengers from Logan Airport on their first or last leg of their interstate journeys. That was critical because the focus in determining whether a worker who transports goods or people is a “transportation worker” centers on the connection between those goods or passengers and travel between different states and countries, in contrast to merely travel within one state’s boundaries.

When analyzing whether a worker transporting goods is a “transportation worker,” the key questions are:

  • first, whether the employee works in the transportation industry
  • second, whether the employee is directly responsible for transporting the goods in interstate commerce
  • third, whether the employee handles goods that travel interstate
  • fourth, whether the employee supervises employees who are themselves transportation workers, such as truck drivers
  • fifth, whether, like seamen or railroad employees, the employee is within a class of employees for which special arbitration already existed when Congress enacted the FAA
  • sixth, whether the vehicle itself is vital to the commercial enterprise of the employer
  • seventh, whether a strike by the employee would disrupt interstate commerce
  • eighth, the nexus that exists between the employee’s job duties and the vehicle the employee uses in carrying out his duties

This case, Lenz v. Yellow Transp., Inc., 431 F.3d 348, 352 (8th Cir. 2005), is often cited by courts when conducting an analysis of these factors.

If you feel that you are as a transportation worker and believe that you have been misclassified as an independent contractor or otherwise been deprived of wages, feel free to reach out to us at 617-338-9400 for a free case review.

Delaying or Deferring Wages is Illegal

The coronavirus (COVID-19) pandemic has upended life in the Commonwealth, causing serious health problems, mass layoffs, and fundamentally changing our day-to-day lives.  While many “non-essential” employers have shuttered in response to Governor Baker’s COVID-19 order, many employers remain open because they constitute “essential” businesses.  And while these employers may continue to operate and bring in revenue, some are delaying or deferring all or part of the wages due to workers until the economy is on better footing.  For example, some employers are lowering employee’s pay with the promise that they will make up the difference at some later date or even delaying the payment of previously earned wages altogether.  This is illegal.

The Massachusetts Wage Act, M.G.L. c. 149, s. 148 protects employees’ earned wages.  For most employees, the statute requires that employers pay them all of their earned wages within six days of the pay period in which the wages are earned.  The statute also contains a provision that makes it illegal to make any agreement to get around this timing requirement.  In other words, even if an employer and employee agree to delay payment of earned wages beyond six days after the closing of a pay period, that agreement is not enforceable. A case from 2003 decided by then-Superior Court Judge Ralph Gants (now Chief Justice of the Supreme Judicial Court) illustrates this point.

In Dobin v. CIOview, Plaintiff Amy Dobin worked in a management position for CIOview, earning a salary of $75,000 per year.  For months, CIOview timely paid Ms. Dobin her salary.  Later, however, the company began experiencing financial difficulties.  While the parties disputed the specifics of what happened next, ultimately, Ms. Dobin agreed to defer her salary on CIOview’s promise that, when the company’s finances improved, her salary would be the first thing paid after rent and utilities. 

One key issue before the court was whether or not the agreement to defer Dobin’s salary was lawful in the first place.  Judge Gants held that it was not.  As he reasoned, Ms. Dobin’s wages “continued to accrue during the time she went without pay. Instead, the deferral agreement between Dobin and CIOview simply attempted to postpone the moment payment became due for the wages she had already earned, based on the financial ability of the company to afford those wages, which is precisely what the unambiguous language of the Wage Act forbids.”  In short, even when an employee agrees to delay or defer wage payment, this is illegal.

If your employer is delaying or deferring your wages due to the COVID-19 pandemic or for any other reason, feel free to contact us for a free consultation.

Governor Baker Attempts to Take Away Earned Overtime

UPDATED November 7, 2019Due to an impressive level of pushback from Massachusetts workers, the provisions in the Baker budget that would have deprived commission-only workers of their earned overtime were removed during deliberations in the Massachusetts legislature. Two key takeaways from this: (1) your calls, emails and letters to your state legislators matter, keep them up, you can find your legislators here; (2) those calls and emails are really going to matter this winter and spring of 2019-2020 because the Massachusetts legislature created a commission to study whether or not the industry should going to get what it wants, a reduction in overtime rights for commission-only and other Massachusetts workers. That commission must file a report by the first day of March, 2020. Please make your views known to your Massachusetts state legislators, and we’re optimistic we can prevail. Updates will be posted here.

Original Article, posted September 20, 2019:

In September, Governor Baker introduced a supplemental budget bill meant to retroactively take away earned overtime from car salespeople and other commission-only workers who work overtime. And the Governor goes even further than that, seeking to strengthen employers’ hand in overtime disputes by creating new defenses to all overtime claims. If this bill is enacted into law, it will have sweeping and harmful consequences for the middle-class in Massachusetts.

Baker’s proposed changes to the law were tucked away in a supplementary budget normally meant to settle the state’s books before end of the year (like modifying the snow removal budget). Notably, the Governor did not mention employees or overtime in his press release for the supplemental budget. For Massachusetts employees, Governor Baker’s bill would do three critical things:

  • Retroactively eliminates Sunday pay and overtime protections for commissioned employees, slashing key protections that have been in place for decades;
  • Enable employers to manipulate the administrative process to create new defenses to the wage laws, which have traditionally been construed strictly so that workers get paid their earned wages; and
  • Extract lawfully earned wages out of Massachusetts citizens’ pockets by retroactively classifying them as exempt under the Wage Act, Overtime Laws and Blue Laws.

If the bill is passed with these provisions, millions of dollars in overtime and Sunday pay, owed to thousands of hard-working Massachusetts residents, will instead go back to the businesses making these proposals.

The May 2019 Supreme Judicial Court issued its decision in Sullivan v. Sleepy’s LLC, SJC-12542, ruling that the overtime law, prior caselaw, and administrative regulations have all required and continue to require that employers make separate and additional overtime and Sunday pay for non-exempt sales employees, even if they are paid on a commission-only basis. Department of Labor regulations made this requirement abundantly clear back in 2015, when the DLS promulgated the following regulatory language: “Whether a nonexempt employee is paid on an hourly, piece work, salary, or any other basis, such payments shall not serve to compensate the employee for any portion of the overtime rate for hours worked over 40 in a work week.” 454 Code. Mass. Regs. 27.03(3). The language presented in the budget bill represents a wholesale upending of the SJC’s decision confirming that the existing legal requirements require that employers pay commissioned employees overtime and Sunday pay.

The Governor’s allies have argued that the proposed changes to the law would merely bring Massachusetts law in line with Federal law. However, this sidesteps a key fact: Through the legislative process, workers in Massachusetts have won additional rights that do not exist in, say, Florida or Iowa, so matching Massachusetts law to federal law result if those rights and benefits being lost. And dramatically so here, where the thousands of workers have already earned wages that may be retroactively taken away with a stroke of a pen.

This story is ongoing as of October 3, 2019.

Case Report: Massachusetts Superior Court Certifies Car Sales Employee Class Action

On July 23, 2019, the Massachusetts Superior Court for Plymouth County certified a class of sales employees in Speakman v. Sullivan Bros. Nissan, Inc., et al., Case No. 16-00165, an unpaid wage class action. Our law firm was appointed as class counsel for the employees.

In our motion for class certification, we argued that the employees had suffered similarly due to two different violations of the Massachusetts Wage Act:

  • Employees worked more than 40 hours in a workweek and were not paid overtime wages for those overtime hours.
  • Employees received pay stubs that did not list their actual hours worked.

The defendants opposed the motion, but the judge agreed with the employees and certified an Overtime Class and a Pay Slips Class.

If you worked for Sullivan Brothers between February 2013 and the present, or if you are an employee at a different company facing similar issues, feel free to contact us.

Six Flags Overtime Decision

On June 20, 2019, the Massachusetts Superior Court for Suffolk County issued a major decision regarding the rights of amusement park workers to overtime pay.

We represent a class of approximately 10,000 seasonal Six Flags New England workers in a case for unpaid overtime. The Court issued a decision last week granting this class of workers summary judgment on their claims for 2015, 2017, and 2018. The Court decided in Six Flags favor for the years 2013, 2014, and 2016. Summary judgment is a procedure that the Court can use to decide a case that only hinges on a legal interpretation when the parties agree on the material facts.

In this case, Six Flags claimed an exemption under the Overtime Law for amusement parks that do not operate more than 150 days in a year. We argued that Six Flags routinely operates more than 150 days in a year and therefore did not meet its burden to prove an entitlement to the exemption.

Crucial to the Court’s decision were the days in 2017 and 2018 during which Six Flags operated “Holiday in the Park,” a Christmas-themed version of the park’s normal activities. While the park claimed that Holiday in the Park was an attraction separate from the park’s normal activities, we argued and the Court agreed that all Holiday in the Park days counted towards the operating day limit, pushing 2017 and 2018 past the amusement park exemption threshold.

Six Flags also argued that it should be permitted to count some operating days as “partial days” for the purposes of keeping the total at 150 or fewer days, but the Court disagreed stating, “the statutory exemption says nothing about counting hours, or treating shorter days as less than a calendar day.”. The Court therefore denied Six Flags the exemption for 2015, while upholding it for 2013-2014 and 2016.

This case began in early 2016, so we are pleased to have finally secured this victory on behalf of thousands of park employees who work hundreds of hours of overtime for the park without the benefit of overtime pay for their labor. You can read the full decision here:

Feel free to contact us if you work in excess of 40 hours a week and are not paid overtime. An overtime exemption could apply to your work, but not every employer exemption is valid.

Overtime for Commission-Only Employees

Overtime for commission employees
Commission-only employees have right to overtime pay

On May 8, 2019, the Massachusetts Supreme Judicial Court issued a major decision guaranteeing overtime to employees who are paid on a commission-only basis. The case is Sullivan v. Sleepy’s LLC. The SJC was considering whether salespeople who receive only commissions and a draw and no other salary are eligible for overtime and Sunday premium pay.

The case was brought by salespeople at Sleepy’s, a national chain of mattress stores, who were paid a daily draw of $125 and any sales commissions above that amount. They did not receive any extra pay for working overtime or on Sundays, and they argued that they were eligible for both.

Sleepy’s did not dispute that the overtime statute applied to its salespeople. Instead, it maintained that if you took the salespeople’s take-home pay (again, made up only of the draw and commissions) and divided it by the number of hours they worked, their effective hourly rate was at least the minimum wage for straight time and at least 1.5 times the minimum wage for overtime hours worked. The employees were, in effect, already receiving premium pay as part of their regular pay, according to Sleepy’s argument. The company relied on two opinion letters by the Massachusetts Department of Labor Standards from 2003 and 2009.

This reliance was misplaced, because as the SJC reminded us, the wage and hour laws do not allow employers to “retroactively reallocate and credit payments made to fulfill one set of wage obligations against separate and independent obligations.” In other words, an employer cannot use one wage obligation (to pay commissions) to cover another one (to pay overtime).  

If employers could credit commission and draw payments against their overtime obligations, it would undermine the chief purposes of the overtime law: to discourage long work hours (so that employees can have more personal and family time), to encourage employers to hire more workers (to avoid paying the overtime premium), and to reward employees who do work overtime hours with extra pay. The interpretation of the law advocated by Sleepy’s – whereby it did not have to pay extra money when employees worked overtime – undercut each of these purposes, so the SJC rejected it. 

The SJC’s decision in Sleepy’s will be very important for overtime cases. We have several cases on behalf of employees who are paid on a 100 percent commission basis, must work far more than 40 hours a week, but receive no additional compensation beyond commissions and draws. Those cases will be strengthened by this decision. Feel free to contact us if you work more than 40 hours in some workweeks but only get paid commission, no overtime — or if you work in retail, and work on Sundays, but get paid nothing beyond your commissions.