The Face Modeling Competition Winner Devyn Abdullah Files Complaint Seeking Payment of Withheld Portion of Ulta Beauty Contract Award Against Direct Model Management, Inc. and Owner Mykola Webster

On April 21, 2015, The Dugger Law Firm, PLLC filed a federal complaint on behalf of Devyn Abdullah, the first winner of The Face television modeling competition, against her former modeling agency, Direct Model Management, Inc., as well as Direct owner and president Mykola Webster, and Direct head of finance Atiff Joseph, for violations of federal and state wage and hour laws, as well as breach of contract.  

The complaint alleges that Defendants misclassified Ms. Abdullah as an independent contractor in violation of the Fair Labor Standards Act and the New York Labor Law.

Among other violations, Ms. Abdullah alleges that Defendants withheld, and otherwise failed to pay her, at least $13,000 of her wages from The Face competition award of a $50,000 contract with Ulta Beauty

The complaint also alleges that Defendants failed to pay Ms. Abdullah for work with several additional modeling industry clients.

Ms. Abdullah seeks payment of minimum wages, payment of unpaid earned wages, liquidated damages with respect to minimum wages that were eventually paid but were not paid promptly, reimbursements for illegal deductions, additional associated liquidated damages, as well as damages for breach of contract and New York Labor Law recordkeeping violations.

The case is Abdullah v. Direct Model Management, Inc., et al., No. 15 Civ. 03100, in the United States District Court for the Southern District of New York.

For more information contact Cyrus E. Dugger at cd@theduggerlawfirm.com or (646) 560-3208.

California Uber and Lyft Driver Misclassification Cases Survive Summary Judgment

Two federal judges have held that whether Uber and Lyft drivers are employees or independent contractors under California law cannot be decided on summary judgment and must be decided by a jury:

"Two landmark lawsuits that claim that drivers for ride-hailing services Uber and Lyft should be considered employees rather than contractors will both go to jury trial, two U.S. judges ruled Wednesday. The decisions could have a ripple effect on the business models of the burgeoning on-demand and sharing economies." (link)

The Uber decision is available here and the Lyft decision is available here.

This is a big win for workers. 

Joe’s Crab Shack Managers Overcome Class Hurdles to Move Forward with Class Certification of Misclassification Case

A helpful overview from JDSupra that notes how the court addressed common class certification disputes issues is available here (excerpt below):

Although some of the plaintiffs could not accurately account for the exact amount of time spent performing non-exempt tasks, the court noted that “courts in overtime exemption cases must proceed through an analysis of the employer’s realistic expectations and classification of tasks rather than asking the employee to identify in retrospect whether, at a particular time, he or she was engaged in an exempt or nonexempt tasks.”  It stated that “[b]y refocusing its analysis on the policies and practices of the employer and the effect those policies and practices have on the putative class, as well as narrowing the class if appropriate, the trial court may in fact find class analysis a more efficient and effective means of resolving plaintiffs’ overtime claims.” (link)

The Dugger Law Firm, PLLC Files Independent Contractor Misclassification Class Action Against MSA Models and Susan Levine

On September 26, 2014, Eva Agerbrink filed a class and collective action complaint in New York federal court against modeling agency MSA Models and MSA Models owner Susan Levine.  The complaint alleges that MSA and Levine have misclassified their “fit models” as independent contractors in violation of the Fair Labor Standards Act and the New York Labor Law.  Ms. Agerbrink seeks payment of minimum wages, payment of unpaid earned wages, liquidated damages with respect to minimum wages that were eventually paid but were not paid promptly, reimbursements for illegal deductions, as well as additional associated liquidated damages. 

In addition, Ms. Agerbrink alleges that MSA and Levine are operating as an unlicensed employment agency in violation of New York General Business Law § 172, and therefore, cannot enforce their modeling employment agreement with respect to all, or a portion of, the “commissions” that MSA and Levine deduct from their fit models’ wages.  The complaint further alleges that MSA Models’ deductions for “commissions” are illegal wage deductions in violation of New York Labor Law § 193.

Ms. Agerbrink seeks certification of a class of all MSA fit models from September 2008 through the resolution of the lawsuit.  The case is Agerbrink v. Model Service LLC d/b/a MSA Models, No. 14 Civ. 7841, in the United States District Court for the Southern District of New York. 

Letterman Probably Not Laughing in Light of Unpaid Intern Class Action

Probably not laughing at all:

"ICM Partners might be happy to hear today that they are not the latest industry enterprise to be hit with an interns lawsuit, but it’s a good bet CBS and The Late Show With David Letterman are not. The network and the late-night show have been walloped with a class action of their own: Late last week, Mallory Musallam filed a class action complaint against CBS Broadcasting, CBS Corp. and the retiring late-night host’s Worldwide Pants on behalf herself and everyone who has ever been an intern on the show. 'Named Plaintiff has initiated this action seeking for herself, and on behalf of all similarly situated employees that also worked on The Late Show With David Letterman, all compensation, including minimum wages and overtime compensation, which they were deprived of, plus interest, attorneys’ fees, and costs,' says the jury demanding filing in New York Supreme Court (read it here)." (link)

Will CBS and Letterman go the way of Charlie Rose and his production company and get ahead of this unpaid intern lawsuit (Rose settled early on in litigation for $110,000), go the way of Fox Searchlight and litigate, lose, appeal, and then cross their fingers, or win and face appeal as in the Hearst unpaid intern litigation?

We shall soon see.

Wage Theft on the Rise

Wage theft claims appear to be on the rise:

"David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.
'We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,' Mr. Weil said.
His agency has uncovered nearly $1 billion in illegally unpaid wages since 2010. He noted that the victimized workers were disproportionately immigrants." (link)

Here in New York:

"New York’s attorney general, Eric T. Schneiderman, has recovered $17 million in wage claims over the past three years. 'I’m amazed at how petty and abusive some of these practices are,' he said. 'Cutting corners is increasingly seen as a sign of libertarianism rather than the theft that it really is.'” (link)

Some employer advocates claim the rise in wage claims is just "opportunistic lawsuits:"

"Lee Schreter, co-chairwoman of the wage and hour practice group at Littler Mendelson, a law firm that represents employers, said wage theft was not increasing, adding that many companies had become more vigilant about compliance. But that has not stopped lawyers from bringing wage theft complaints because of the potential payoff, Ms. Schreter said. 'These are opportunistic lawsuits,' she said." (link)

But you have to ask yourself -- why would a plaintiff's attorney bring a wage and hour lawsuit on contingency that lacked merit?  If the case has no merit plaintiff's counsel will lose and won't obtain any fees -- an attorney seeking profit is unlikely to do that.

Moreover, wage and hour lawsuits are usually pretty clear-cut -- the employer either paid minimum wage/overtime or the employer did not -- it's often that simple.

What do you think?



Sixth Circuit: Collective Action Waiver Unenforceable Without Arbitration Agreement

As covered by Workforce:

"The 6th Circuit held that the waivers were invalid. It concluded that any agreement that deprives one of his or her rights under the FLSA is invalid. Because the waiver deprived the employees of their right to participate in the collective action, it was invalid.

The employer argued that the at-issue agreement does not deprive anyone of any rights, since each employee is free to pursue an individual claim against the company for FLSA violations. The court, however, was not persuaded. Instead, the court concluded that because each employee’s potential claim for unpaid overtime was relatively small, the only real opportunity to pursue the alleged FLSA violation was via a collective action.
'Requiring an employee to litigate on an individual basis grants the employer [a] competitive advantage…. And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages.'
As the Killion court points out, this decision now creates a split of authority between the 6th other Circuits. The Killion court also pointed out, however, that every other circuit that has decided this issue in the employer’s favor has done so because the agreements also contained arbitration clauses; the agreement in this case lacked that mechanism. It will be interesting to follow if this employer pursues this matter to the Supreme Court, and if that Court is interested in this important issue, or if other circuits follow Killion’s lead in the non-arbitration context." (link)

I think this paragraph puts it perfectly:

"Because no arbitration agreement is present in the case before us, we find no countervailing federal policy that outweighs the policy articulated in the FLSA.  The rationale of Boaz is therefore controlling.  Boaz is based on the general principle of striking down restrictions on the employees’ FLSA rights that would have the effect of granting their employer an unfair advantage over its competitors.  Requiring an employee to litigate on an individual basis grants the employer the same type of competitive advantage as did shortening the period to bring a claim in Boaz.  And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages.  Boaz therefore controls the result here where arbitration is not a part of the waiver provision" (link)

In summary, a thoughtful and helpful decision from the Sixth Circuit.

Of course, most employment agreements attempting to waive collective action rights will also include mandatory arbitration -- particularly after this decision.  Nonetheless, at least some, like the one in this case, clearly do not. 

At least plaintiff's counsel have one more stone to throw at the arbitration Goliath.

The decision is available here.



MLK - Economic Justice & Racial Justice Are Intertwined - The Need for a Living Wage

The current debate about the need, or lack thereof, to raise the federal minimum wage is slowly heating up.  Advocates stress human dignity and the economic stimulus this policy would advance.  Opponents point to the cost to businesses' bottom line  - often invoking the mom and pop store that is barely making ends meet. 

Although I think proponents very much have the upper hand in this argument - this is surely a place where reasonable minds can disagree.

Or can they?

As in most things, it's sometimes important to take a step back and re-frame modern debates in historical contexts.

Most people remember Martin Luther King, Jr. as one of the great leaders of the civil rights movement.  However, near the end of his life, he was increasingly focusing his message on the problems of poverty and economic justice.  Moreover, this shift in focus happened well before America had even begun to fully deal with racial equality - so why the shift?

If you are an advocate for a living wage take a moment to see what MLK had to say about it.

If you consider yourself a supporter of MLK, but are opposed to a living wage, you may have to do some soul searching on this issue if you take the time to listen.

Perhaps this should change how we talk about a living wage as a national issue.


Minimum Wage Hikes Gaining Steam

Great news regarding increasing the minimum wage with an increase from $8 to $11 an hour in Massachusetts signed into law by Governor Deval Patrick (fully effective by 2017) and, in the corporate sphere, with IKEA planning to raise it's average hourly wages to $10.76 an hour.

The Massachusetts law will give that state the highest minimum wage in the country.

From Governor Patrick - who appears to see this increase as just a first step:

"This minimum wage is great progress, but it's not a livable wage," Patrick said to applause from members of Raise Up Massachusetts, a coalition that had gathered more than 350,000 signatures in favor of a minimum wage hike.
"Keep looking ahead and above all, keep in mind that people for whom the American dream is still just a dream . . . deserve the chance for themselves and their families to dream along with the rest of us . . . ." (link)

President Obama, who recently signed an executive order increasing the wages of employees of federal contractors to $10.10 on future contracts (effective 2015) and has supported increasing the federal minimum wage (currently a measly $7.25 an hour) to $10.10, strongly praised Massachusetts lawmakers for the new law.