Monday, April 8, 2013
NORFOLK -- More than 6,000 Dollar Tree employees have joined a lawsuit claiming that the retailer failed to pay them for work they routinely performed "off the clock."
The workers allege that they often worked through their half-hour lunch breaks, though they had punched out for that time, continuing to help customers or stock shelves. They were scheduled for just under 40 hours a week to avoid accruing overtime but put in an additional 30 to 45 minutes each day for which Dollar Tree never paid them, according to their complaint.
"In an effort to provide low-cost merchandise to its customers and still maximize profits, defendant Dollar Tree has engaged in a policy, pattern or practice of requiring its thousands of hourly associates and assistant managers to work without pay, in several ways," reads the suit, filed in U.S. District Court in Norfolk.
This case, though, isn't focused on Dollar Tree's treatment of its workers - at least not yet. Right now, the more crucial question is whether the court will allow the nearly 6,300 workers to remain combined to take on the Chesapeake-based retailer, the nation's largest selling everything for $1.
U.S. District Judge Raymond A. Jackson has granted "conditional" certification of the class. Before he makes a final decision, the attorneys for both sides will present evidence to help the judge determine whether the workers' experiences, and the remedies for compensating them, share enough in common to allow them to move forward together.
The employees have to show that "the wrongs alleged are part of the same situation," said D.G. Pantazis Jr., an attorney in Birmingham, Ala., who is among those representing the employees.
Tim Reid, a company spokesman, declined to answer questions about the case, citing "a longstanding policy to not comment on pending litigation." Attorneys representing Dollar Tree did not return phone calls.
Class actions and other multi-plaintiff lawsuits involve a large number of people with similar experiences dealing with an organization that they believe did them wrong. Class actions help individuals whose cases, on their own, garner too little money to make them worth the cost or effort to push through the legal system. With strength in numbers, they create a more compelling case and the potential to win millions in damages.
"If they don't get certified, individuals are going to have a very hard time getting lawyers," said Charles Craver, a professor who specializes in employment law for George Washington University's law school in Washington. "Class actions really do empower the little person."
Many class actions combine groups of consumers, including those who claimed Ticketmaster charged excessive processing and shipping fees and those who sued the daily deals website Groupon on allegations that it placed illegal conditions on the vouchers it sells. Lawsuits involving classes of employees often focus on "wage and hour" disputes and possible violations of the federal Fair Labor Standards Act.
As of last year, the number of wage-and-hour class or collective actions filed in federal court had more than quadrupled since 2000, according to Seyfarth Shaw, a law firm based in Chicago that specializes in defending employers and has handled more than 400 class and collective cases in the past two years. The growth in these suits has outpaced all other types of employment class-action cases, the firm wrote on its website in the section introducing its Wage & Hour Litigation division.
"Multi-plaintiff wage and hour lawsuits pose the greatest employment litigation threat to American businesses today," the Seyfarth Shaw site reads.
Two recent U.S. Supreme Court cases, however, suggest that class-action certification is growing more difficult. In a case against Wal-Mart, the court ruled in 2011 that female employees alleging discrimination by the retailer didn't qualify as a class because they couldn't prove that the company carried out the same kind of unlawful conduct across the group.
In late March, cable television subscribers failed in their attempt to establish a class and sue Comcast, which they claimed overcharged them. The court decided that the circumstances of 2 million customers in many locations varied too much to determine uniform damages.
Dollar Tree has almost 82,000 employees, most of them part-time, in 48 states. In its most recent annual report, released in March, the retailer lists eight pending lawsuits - including four class actions alleging federal wage-and-hour violations - as part of its discussion of legal proceedings that could have a financial impact on the company.
The 6,276 hourly workers suing Dollar Tree are a "fairly sizable" group for such cases, Craver said. The workers in that case technically constitute a "collective," rather than a class, which means they had to choose to join the suit.
It started with Marina LaFleur and Theresa Croy, who worked for Dollar Tree in Kane County, Ill., and sued their employer in November 2011 in U.S. District Court in that state on behalf of themselves and "all others similarly situated." In June, Dollar Tree succeeded in getting the case transferred to federal court in Norfolk.
According to the court filings, about 275,000 current and former workers since 2009 could qualify for the class. The plaintiffs' attorneys sent letters to those workers and gave them the chance to "opt in" to the lawsuit.
"If you are or have been employed by Dollar Tree in the position of store associate at any time in the past three years, and if you believe you worked 'off the clock' without compensation or overtime compensation, you may join this lawsuit. It is entirely your own decision whether to join this lawsuit," the notice reads.
LaFleur, a former assistant manager for Dollar Tree, is no longer a plaintiff in the case, though her name remains on it, because she qualifies as a member of a class bringing a different suit against the retailer that's specific to assistant store managers and was filed earlier. That case, in a federal court in Colorado, claims that assistant managers regularly worked off the clock and past their scheduled hours and never received pay for that time.
Dollar Tree faces two other complaints by groups of assistant managers, each alleging that they worked beyond their scheduled hours and weren't paid overtime or regular wages. Those lawsuits, filed originally in 2011 in Georgia and Florida, have since moved to federal court in Norfolk.
In the hourly workers' class action in Norfolk, attorney Pantazis and his colleague, Josh Wilson, expect a ruling on certification this summer, they said. Then the two sides will begin to address the "merits" of the case: whether Dollar Tree broke the law.
"These cases can take time, and you have to be prepared for that," Wilson said.
The suit describes Dollar Tree's practices as "willful, known and/or reckless," going back at least five years. It projects that the retailer owes the workers in excess of $5 million in unpaid compensation, though specific damages have yet to be determined.
Besides working through their lunch breaks and beyond their allotted hours, employees spent at least 15 extra minutes on many days to prepare deposits and take them to the bank, though the company never accounted for that time, according to the suit. Dollar Tree used the off-the-clock policy as a way to increase productivity, the workers claim.
"Regardless of the size of the store, its location or district, every detail of how the store is managed and run is uniformly fixed, mandated and controlled by defendant through its policies, directives and mandated procedures," the suit reads.
Lawsuits on behalf of hourly, low-wage employees have a stronger chance of succeeding than some other class actions, Craver said. Companies and workers keep time records, which make the patterns of practice easier to track.
"You usually have a policy where you're not paying the person the $7.25 minimum wage or you're not paying the person overtime," Craver said. "It's amazing how many employers don't want to pay the overtime."
In most cases, if a class is certified, the employer will settle the case rather than go to trial, he said. The company not only pays a large amount, which is distributed among the plaintiffs, but also might agree to change policies to address the problems alleged.
Large settlements provide a windfall for the attorneys, as well, which has helped fuel the growing trend of these cases, Craver said. "The lawyers for class actions make millions."
But the amount of effort necessary for such complex cases is significant, Pantazis argued.
"Lawsuits are very difficult," he said. "They're expensive, and they're a big risk for all involved, including the attorneys."