A Pair of $29 Million Settlements in California Wage Cases
Two recent cases out of California show workers earning substantial victories against employers and the value and importance of class action lawsuits in recovering unpaid wage claims.
First, Ecolab Inc. settled a class action suit based on Ecolab improperly denying overtime pay to hundreds of workers. Employees claimed that Ecolab misclassified around 400 exterminators as exempt from the overtime requirements. As a result of the settlement, the workers will recover their unpaid wages plus interest, and their positions will be reclassified as eligible for overtime.
In the other California case, India’s largest conglomerate agreed to pay nearly $29,750,000 to settle a class action lawsuit. Approximately 13,000 non-U.S. citizen IT workers of Tata in America sued their employer. The lawsuit argues that the company illegally forced the employees to sign over their tax refunds to Tata.
After costs and attorney’s fees, each plaintiff is expected to recover approximately $1,600, combining both the withheld taxes in addition to accrued interest. Individually, this means that suing Tata would not make financial sense; costs of litigation would likely exceed $1,600. Class action litigation allows similarly injured parties, in this case, employees of an employer that improperly took their tax refunds, to bring suit together and make sure that all injured people are justly compensated.
The importance of class and collective action litigation cannot be overstated in the employment context. If the employer is doing something wrong to one worker, it is likely doing the same to others. If employees do nothing, companies will be able to take advantage of them – stealing a few thousand dollars from each individual, which adds up to tens of millions in the aggregate. Therefore, wronged employees should not sit in silence, but rather contact an attorney and seek out other employees similarly wronged by the employer. When dealing with wage and hour claims, there is truly strength in numbers.