- Southwest Airlines Facing $100M Class-Action Lawsuit for Wage Violations
- Court Rules Restaurant Chain Violated Minimum Wage and OT Regs
- IRS Nudges Standard Mileage Rate 3 Cents Higher
- Indiana Court Rejects Employer’s Noncompete for Former COO
Southwest Airlines Facing $100M Class-Action Lawsuit for Wage Violations
Attorneys representing “100 or more” nonexempt workers filed a class-action lawsuit Monday, Dec. 30, against Southwest Airlines for wage violations and is seeking $100 million in damages.
The New York-based workers, including ramp agents, cargo agents, and luggage and cargo handlers, assert they were denied weekly paychecks in violation of a New York Labor Law (NYLL) “manual worker” statute as well as the federal Fair Labor Standards Act (FLSA). The airline company had paid such workers on a bimonthly basis. The suit claims the violation period spans from 2018 to present.
“By retaining the wages of its manual workers beyond the timeframes set by the NYLL, Southwest benefits and benefitted from delaying the payment of wages at the expense of the plaintiffs and class members,” said Andrew Melzer, a member of the legal team representing the workers. “This illegal practice allows the airline to utilize those funds for its expenses or accrue interest in its business accounts, while its manual workers struggle to meet their basic household needs. This is exactly what the statute is designed to prevent.”
Court Rules Restaurant Chain Violated Minimum Wage and OT Regs
The owner of three taco restaurants in western Michigan will pay 177 workers a total of $823,326 after a federal court concluded the restaurants operated an illegal tip pool that led to violations of federal minimum wage and overtime regulations.
The judgment by the U.S. District Court for the Western District of Michigan resolved the U.S. Department of Labor’s Sept. 7, 2023, complaint prompted by a Wage and Hour Division investigation into FLSA violations.
Specifically, the court found the restaurant chain and its owner:
- Required tipped employees — who were paid using the tip credit — to surrender a portion of their cash and credit card tips to managers after each shift. Managers then redistributed these tips to nontipped employees, including kitchen staff.
- Failed to pay tipped employees the federal minimum wage of $7.25 per hour.
- Incorrectly paid tipped employees overtime based on the tip credit rate instead of the applicable minimum wage rate.
- Failed to keep accurate records of employees’ hourly rates of pay and overtime wages due.
“If an employer claims the tip credit, tips may only be shared by employees who customarily receive tips as part of their wage compensation,” stated Mary O’Rourke, a Wage and Hour Division district director in Michigan. “There are specific legal rules for how tips must be distributed, how overtime is calculated and requiring the payment of minimum wage. Employers should verify that they are always following the law.”
IRS Nudges Standard Mileage Rate 3 Cents Higher
The Internal Revenue Service on Dec. 19 increased the optional standard mileage rate for automobiles driven for business purposes by 3 cents, starting on Jan. 1, 2025, while the mileage rates for vehicles used for other purposes will remain unchanged from 2024.
The standard mileage rates for the use of a car, van, pickup or panel truck are now:
- 70 cents per mile driven for business use, up from 67 cents per mile in 2024.
- 21 cents per mile driven for medical purposes, the same as in 2024.
- 21 cents per mile driven for moving purposes for qualified active-duty members of the Armed Forces, unchanged from last year.
- 14 cents per mile driven in service of charitable organizations, equal to the rate in 2024.
The rates apply to fully electric and hybrid automobiles, as well as gasoline and diesel-powered vehicles.
Indiana Court Rejects Employer’s Noncompete for Former COO
The Indiana Court of Appeals recently ruled a former chief operating officer at a medical fee collection company did not breach that employer’s noncompete agreements and nondisclosure provision when she took a job at a competitor.
In the case Med-1 Solutions, LLC v. Taylor, an employer group collectively referred to as RevOne Companies sought to enforce a series of noncompete contracts to stop former executive Jennifer Taylor from taking a job with a company that provides similar services.
According to court documents, Taylor had signed a noncompetition agreement in 2010 as a condition of her hiring and then signed a subsequent agreement in 2014 after being told it was required for her continued employment.
“We hold that, where an at-will employee signs a noncompetition agreement as a condition of their hiring and is later told to sign a new noncompetition agreement or they will be fired, the employee’s continued employment can serve as consideration for the latter agreement,” Judge Nancy Harris Vaidik wrote in the opinion document.
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