Labor Law firm
gets hit with wage claim;
Distressed Company avoids
"conversion" despite treating
exempt like non-exempt
Affirmative Action Officer
Claims Seyfarth owes OT
Engineer forced to take
unpaid days off when
company in hard times
Chicago-based Seyfarth Shaw, a multinational law firm concentrating its practice, among other things, in employment and labor law, has been sued for violations of federal and state wage laws. Lynne Harris individually, and on behalf of all others similarly situated v. 09 C 3795 (N.D. Ill. Bucklo, Judge). Harris claims that as an affirmative action analyst for the firm's Chicago office for seven years, she was repeatedly denied overtime compensation. Harris also claims a class of similarly situated workers at the firm involved in affirmative action work at the firm's other offices. ,
In Robinson v. Tellabs, Inc. __IllApp3rd__, 1-07-2731 (1st Dist April 27, 2009) an engineer laid off by a troubled company claimed that its corporate-wide practice of imposing unpaid days off before or after paid holidays converted him (and a class of other professionals) to non-exempt employees. Robinson, invoking the Fair Labor Standards Act in a state court case, argued that because Tellabs had created holiday weeks that included unpaid days, he was no longer a receiving regular compensation for a fixed period. This is legally signficant because under the "salary test" to separate exempts from non-exempts, the salaried individual's compensation must be "regularly received for a fixed period." 29 CFR Sec. 541.118(a).
Tellabs had implemented the unpaid days off (and laid off half of its workforce) to stem critical financial problems threatening to tank the company. The effect of the unpaid days off left Robinson with 80% of his salary for the Christmas-New Years pay periods and 90% of his salary for the Labor Day and Thanksgiving pay periods.
Relying on a federal court of appeals decision upholding 's implementation of seasonal reductions of salaries for pharmacists due to business conditions, the Tellabs court ruled that the US Department of Labor's interpretation of its regulations supported the finding below that Tellabs could implement the reduction in paid days because of business necessity and not convert Robinson to a non-exempt.
The appeals court upheld judgment for Tellabs.