Living Wage Whistleblowers Could Be Next For False Claims Act

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There could be more whistleblowers under state and city False Claims Act in the coming years if recent initiatives to tie the payment of a living wage to government contracts and business subsidies takes hold in other jurisdictions.

A Hudson Yards office tower in New York City is the first in the Big Apple to strike a deal for construction tax breaks since Mayor Bill de Blasio raised the hourly wage to $13.13 and expanded the living wage law to include employees of commercial tenants on construction projects receiving more than $1 million in subsidies.

Because New York City has a whistleblower law which rewards individuals for reporting false claims against the local government, whistleblowers may be able to report companies which do not follow the terms of deals like this and earn a reward. Of course, more research would be necessary into the specific terms of the law, because tax enforcement actions are sometimes excluded from versions of the False Claims Act.

Although we have used New York City in this example, it similarly apples to the Philadelphia False Claims Act and the living wage law here. The executive order issued by Mayor Michael Nutter requires contractors receiving government contracts from the City of Philadelphia to pay a specified minimum wage to its employees working on the contract. If the individuals are paid less, the submission of a payment request is a false claim.

As with any law, there are exclusions which limit the application of the rules to certain parties and certain employees. For example, individuals in summer job programs and bona fide student internships are excluded from the coverage of the law in Philadelphia. So any particular case will require careful review by an attorney to determine whether the law applies to the individual.

In the past, minimum wage laws have typically been enforced by employees bringing collective claims for their unpaid wages. However, the Federal False Claims Act has been applied in several cases where federal contractors or subcontractors are not paying the prevailing wage required by the law.

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New York Investigates Short Notice Work Shifts at Retailers

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New York Attorney General Eric Schneiderman is investigating on-call staffing at 13 major retailers including Gap, Sears, Target and Abercrombie & Fitch. Last week, the NY AG asked the retailers to provide information on their use of on-call shifts by May 4th.

Apparently, some retailers are using scheduling software to provide just in time schedules, notifying workers less than a week in advance of their hours at the store. Others are requiring individuals to call-in prior to coming to work. The software predicts customer demand based on weather patterns and recent sales and alters schedules. If there isn’t enough demand on a particular day, it may tell managers to send workers home unexpectedly.

The practice appears to be widespread. A survey in 2011 found that 70 percent of workers didn’t know their schedules more than a week in advance. A significant number, around twenty percent, were expected to call in during the 24 hours prior to see if they would indeed be needed at work.

Legislators in both New York and California are considering further measures to rein in the practice of telling an employee that they are not needed to work less than 24 hours in advance. The New York bill would have to pay workers for a minimum of four hours if they were not given more than 24 hours of notice that they did not need to work.

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Workers Fight Wage Theft Despite Fall in Class Actions

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Wage theft has been huge a topic in employee rights over the past year. But class action lawsuits addressing employment issues are falling and more employees must give up their right to file a lawsuit in court, according to a Wall Street Journal article published yesterday.

The number of employers requiring workers to sign arbitration agreements has more than doubled since the Supreme Court ruling in AT&T Mobility v. Concepcion approved them on a 5-4 decision. Only 16% of companies used arbitration clauses in 2012. That number has now grown to 43% last year according to the survey.

The validity of class action waivers is still in dispute as the Supreme Court has so far declined to address the issue. The National Labor Relations Board has twice ruled that class action waivers violate the National Labor Relations Act. Companies, on the other hand, feel increasingly confident that the Supreme Court will uphold their point of view.

The survey found that the increasing use of arbitration clauses and waivers of the right to bring a class action are decreasing the amount of lawsuits that are filed in court. Only 23 percent of class-action suits in 2014 addressed an employment law issue, down from 28% in 2011.

The publication of the survey comes at an interesting time. Employees actually seem to have been making inroads against employers with their push for higher minimum wages and opposition to wage theft outside of the courtroom. McDonald’s has just said it plans to increase wages on its company-owned stores (not including franchisees) to more than $1 above minimum wage. Walmart made a similar promise in February – it plans to raise its minimum pay to $10 an hour next year.

Seattle will start raising the minimum wage in the city to $15 an hour starting this month. Small employers must follow a seven year schedule of mandatory pay raises. Large employers have three to four years, depending on whether they pay toward an employee’s medical benefits plan, to reach the new higher minimum.  Los Angeles is also considering an increase in its minimum wage to $13.25 or $15.25 an hour.

The Secretary of Labor also promised additional efforts against employers committing wage theft, citing a UCLA study that $1 billion is lost by low-wage workers each year due to wage theft. Wage theft occurs when an employer withholds earnings or benefits required by state or federal law. This can include skipping mandated meal breaks, failing to pay overtime wages or otherwise failing to pay employees for money that is due to them.

In March, a Papa John’s pizza franchise in New York was ordered by a judge to pay more than $2 million as a result of their failure to pay delivery workers what they were owed. The lawsuit was filed by New York Attorney General Eric Schneiderman’s office.

The push by employers for these clauses in employment agreements stands in stark contrast to yesterday’s enforcement fine levied by the SEC against KBR for inhibiting the right of its workers to report potential violations of the law to the securities regulator.

Congress and the Department of Defense have also taken a stand against employment agreements prohibiting government contractors from reporting fraud, waste and abuse to the U.S. Government. The Cromnibus spending bill contains a requirement that no money from government spending in FY2015 go to companies with agreements that prohibit reporting of fraud, wast and abuse. The DoD now requires a certification by its contractors that they do not require employees or subcontractors to sign or comply with such agreements.

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Sunoco Inc. Agrees To Pay $675,000.00 To Settle FLSA Action


Egan Young, Attorneys-at-Law, is pleased to announce final approval of a $675,000.00 dollar settlement with Sunoco, Inc. to resolve a collective action lawsuit brought under the Fair Labor Standards Act (“FLSA”) on behalf of 488 current and/or former unionized operations and laboratory workers in Philadelphia, Pennsylvania. (Ripley, et. al. v. Sunoco, Inc, 2:10-cv-01194, E.D.Pa.).

In February 2010, Plaintiffs, members of the United Steelworkers of America, Local 10-1, asserted that Sunoco, Inc. violated the FLSA and analogous Pennsylvania state laws by failing to pay operations and laboratory workers for pre and post shift work time, including required “shift relief” — a process unique to refinery workers who routinely work 12-hour shifts.

The agreement resolves all wage claims asserted in the lawsuit.  In addition, Sunoco agreed to change certain operational policies such that class members will also receive additional future compensation for engaging in the required “shift relief”.

Eric L. Young, lead attorney for the plaintiffs, commented, “Sunoco refinery workers labor tirelessly in a difficult and dangerous work environment.  They deserve to be paid for all of the time spent at work.  We are honored to have been successful in obtaining additional wages for these dedicated workers.”   Mr. Young was assisted by EY attorneys Gerard P. Egan and Brandon J. Lauria.

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For more information about this settlement, please contact Eric L. Young, Esquire at 1-800-590-4116 or  Egan Young, a Philadelphia-based law firm, is dedicated to representing employees throughout the United States in wage and hour collective and class action litigation.

It Is About Time!


For years, powerful lobbyist for corporate America have successfully impeded government intervention with regard to wide-spread violations of state and federal wage protection laws. Well, times have changed. Yesterday, Senator Sherrod Brown and Representative Lynn Woolsey introduced the Employee Misclassification Protection Act which is aimed at helping millions of workers who are misclassified by their employers as independent contractors, often as an excuse to avoid paying federal and state payroll taxes. This scheme allows unscrupulous employers’ to cut cost by as much as 30 percent—and gives them an unfair advantage over law-abiding competitors, driving down labor standards for all workers.

For workers affected by this practice—construction workers, hospitality workers, broadcast technicians, stage hands, musicians, home health care workers and day laborers, among many others—this bill offers a pathway to receiving labor protections that most Americans take for granted, like being paid the minimum wage and receiving overtime pay after 40 hours of work, or workers’ compensation when they are hurt on the job. Workers wrongly classified as independent contractors also are denied pension or and health benefits, and are told they aren’t protected by civil rights laws.

The bill would require employers to classify workers as employees, using a well-defined test that has existed since 1947, and it establishes a penalty for failing to do so. It applies common sense to the workplace, requiring that employers tell workers if they have been classified as independent contractors and how they can challenge that classification. The bill also protects workers who do challenge misclassification from retaliation.

Workers should be paid what the law says they are due. Misclassification has cost workers untold millions in wages and has cost the federal and state governments many millions in unpaid income, Social Security, unemployment and workers compensation taxes and premiums. New York City construction industry losses in payroll taxes and social insurance premiums due to misclassification are estimated at $170 million a year. In Ohio, the attorney general estimates annual costs from worker misclassification may be $100 million for unemployment insurance, more than $510 million in workers compensation premiums and almost $180 million in forgone state income tax revenues. Misclassification, he says, cost cities and villages more than $100 million in local income tax revenues in 2006, and cost school districts $7.8 million in 2008. Many other states report a similar impact. In fact, the Internal Revenue Service reported that in 1984, almost 20 percent of construction industry employers misclassified workers; a number that has surely grown.

This bill is a step in the right direction to protect workers, make sure that the country’s labor standards are upheld and place all employers on a level playing field. We look forward to working with Senator Brown and Representative Woolsey and their colleagues on this important piece of legislation. It is a crucial component in our ongoing campaign to ensure that all jobs are good jobs.

Eric L. Young, is a seasoned trial lawyer who specializes in wage and hour litigation and whistleblower litigation. Mr. Young can be contacted at 800-590-4116 or

YLG Beefs Up Its Wage and Hour Practice


With the down turn in the economy over the last several years, there has been an exponential increase in the number of employers who are violating federal and state overtime and other wage protections. In fact, the U.S. Department of Labor recently announced that due to the increase in these violations, that it was successful in obtaining additional funding for enforcement purposes. While additional government investigations and enforcement are welcome it is not enough.

In an effort to provide additional support and expertise to our clients who have been deprived of payment of all wages for hours worked, YLG recently added former DOL Wage and Hour enforcement specialist, Timothy Dronson, Esquire, to the team. While with the DOL, Mr. Dronson fought for employees through the United States and enforced a number of federal laws including, the Fair Labor Standards Act, the Family Medical Leave Act, the Employee Polygraph Protection Act, and the Service Contract Act.

Mr. Dronson investigated and prosecuted a number of actions while with the DOL involving both large and small companies alike. He is intimately familiar with the methods employers use to avoid paying wages and overtime for all time worked and looks forward to working with YLG attorneys to provide quality representation to those in need.

We Settle Wage & Hour Case For Zinc Production Workers


Young Law Group, P.C., Attorneys-at-Law, is pleased to announce final approval of a $1.2 million dollar settlement with Horsehead Corporation to resolve a collective action lawsuit brought under the Fair Labor Standards Act (“FLSA”) on behalf of over 500 present and former unionized zinc production workers in Monaca, Pennsylvania. (Figas, et. al. v. Horsehead Corporation, 2:06-cv-01344, W.D.Pa.).

Plaintiffs, members of the United Steelworkers of America, Local 8183, asserted that Horsehead violated the FLSA by failing to pay production workers for time spent donning and doffing protective clothing and equipment before and after paid time.  Plaintiffs also sought compensation for the time spent by production workers traveling to and from their respective work locations.

Eric L. Young, lead attorney for the plaintiffs, commented, “Horsehead’s Zinc Production Workers labor tirelessly in a difficult and dangerous work environment — they deserve to be paid for all of the time spent at work.  We are honored to have been successful in obtaining additional wages for these dedicated workers.”

For more information about this settlement, please contact Eric L. Young, Esquire at 215-367-5151 or  Young Law Group, a Philadelphia-based law group, is dedicated to representing employees throughout the United States in wage and hour collective and class action litigation.

YLG Files 2nd Employee Class Action Against Best Buy


New York Employees Subjected to Off-the-Clock Security Searches & Missed Breaks

NEW YORK – Jan. 24, 2008 – Eric L. Young, Esq. has filed a 2nd Class Action Complaint against Best Buy in the Supreme Court of New York on behalf of a class of current and former Best Buy employees alleging violations of New York state labor laws. The lawsuit contends that employees at 33 New York Best Buy stores are subjected to off-the-clock security checks at the end of each shift which can take up to 15 minutes. It also accuses the Richfield, Minnesota-based company of forcing employees to work through meal and rest breaks without compensation.

The suit alleges that after clocking out, employees are required to wait in line at a security checkpoint along with customers and submit to a search. Employees who work the closing shift are subjected to the longest waits since store policy dictates that all employees gather at the front of the store before beginning security checks.

“Workers are not being paid for mandatory searches which frequently add up to a half hour or more a week per employee,” said Eric L. Young, Esquire.

The suit also maintains that employees are routinely required to work during paid meal and/or rest breaks.

EY files Class Action Complaint


PHILADELPHIA – Feb. 26, 2010 – EGAN YOUNG filed a class action lawsuit in the Philadelphia County Court of Common Pleas on behalf of current and former Sunoco employees alleging violations of the Pennsylvania Minimum Wage Act of 1968.The case alleges that Sunoco, Inc., a Philadelphia-based company, has failed to pay all wages and overtime owed for approximately 600 of its hourly operations and maintenance employees at the company’s Philadelphia refinery.

Specifically, the complaint alleges that Sunoco fails to compensate hourly refinery employees for work-related activities performed prior to clocking in, and after clocking out.In order to perform the essential duties of their jobs, Plaintiffs are required to; don and doff personal protection equipment; obtain and/or store tools; travel to and from assigned work sites; prepare and clean work equipment; and, engage in required shift change briefings between co-workers.

Plaintiffs’ attorney, Eric L. Young, stated that, “After a thorough investigation, it was evident that Sunoco’s workers were not and presently are not paid for all required pre-operations and post-operations activities that are necessary and integral to their overall employment responsibilities.Through this suit, we intend to make right Sunoco’s wrong.”

For more information about the lawsuit contact Eric L. Young or Brandon J. Lauria at (215) 367-5151.

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