Here’s more incentive to pay close attention to your compensation practices: Wage-and-hour lawsuits can easily morph into collective actions in which a few employees represent all similarly situated employees.
Even if an employer manages to persuade the court that the claims aren’t suitable for a collective action, that doesn’t mean the case is over. Instead, as a recent 7th Circuit Court of Appeals case makes clear, those employees can continue their lawsuits individually.
Recent case: Debbie Alvarez was one of 54 paramedics employed by the Chicago Fire Department who filed a Fair Labor Standards Act () overtime claim. Another 300 employees quickly joined the lawsuit.
Among the wage claims were allegations that some employees hadn’t been paid bonuses promised for maintaining fitness levels and for being available 24 hours at a time. The bonuses were also supposed to cover uniform and continuing-education costs.
The court eventually dismissed the collective action because the claims weren’t common to everyone.
The employees appealed and the 7th Circuit Court of Appeals said the employees were entitled to individual trials on their claims. In effect, the original collective action had attracted additional employees to the lawsuit, who then ended up with their own lawsuits. (Alvarez, et al., v. City of Chicago, No. 09-2020, 7th Cir., 2010)
Final note: Avoid FLSA lawsuits by regularly reviewing all your pay policies. It’s the best way to make sure you don’t have a lawsuit—or 300—lurking.