Judge Allows Michaels Wage and Hour Class Action

On March 9, a California federal judge refused to toss a wage and hour class action lawsuit filed against Michaels Stores Inc., alleging the craft store chain knowingly concealed the amount of vacation time individual employees had accrued during their work year.

The judge did reject some claims of fraud and negligent misrepresentation, but will allow a breach of contract claim to stand, ruling the plaintiff had provided sufficient documentation to support his allegations on a class-wide basis.

Earlier in this vacation time class action lawsuit, U.S. District Judge George Wu had given a tentative ruling that would partially dismiss plaintiff Rondal K.’s  putative wage and hour class action lawsuit against Michaels. However, Michaels’ attorney later urged the judge to reverse this tentative ruling  in order to dismiss the former employee’s claims of fraud and negligent misrepresentation, which would leave no room for the plaintiff to amend his vacation time wage and hour class action lawsuit.

Michaels’ legal counsel also argued that the plaintiff did not have an innate right to receive proper accounting for vacation time outside of the California labor code, and because of this he cannot pursue claims based on loss. Michaels told Judge Wu, “The only conceivable loss he’s alleged here is he might have accrued more vacation during his employment and then potentially been paid out termination. That’s a labor code remedy.”

However, Judge Wu disagreed with Michaels, finding that even the company’s argument allowed the plaintiff to recover damages from his former employer.

Rondal originally filed this wage and hour lawsuit in California federal court against Michaels last summer, claiming Michaels and its subsidiary companies, which include Aaron Brothers Inc. and Aristree Inc., illegally withheld the actual amount of vacation time accrued by their employees. By allegedly concealing this information from employees like Rondal, Michaels and its subsidiaries allegedly prevented Class Members from using their accrued vacation time before it reached the “capped” limit.

These kind of allegedly illegal business practices could deprive Rondal and other Michaels employees of their accrued vacation time. Class Members should have received paid compensation for this accrued, unused vacation time when they left the company, but according to the Michaels vacation time wage and hour class action lawsuit, this type of compensation never occurred.

In December, the plaintiff filed a second amended complaint, bringing forth claims of fraud negligent misrepresentation, breach of contract, and unfair business practices against Michaels. In this wage and hour class action lawsuit, Rondal was seeking to represent himself as well as a Class of all former and current Michaels California employees, which according to the Michaels vacation time lawsuit, could potentially include over 10,000 Class Members.

In the most recent case, the defendants attempted to dismiss the plaintiff’s breach of contract claim, though the judge has allowed this claim to move forward and told Michaels, “I understand your argument but I’m not buying it.”

Finally, Judge Wu has asked both parties involved if this vacation time class action lawsuit could be included in a group of wage and hour lawsuits and class action lawsuits filed against the craft supply retailer that were recently consolidated in a Michaels multidistrict litigation (MDL).  However, the plaintiff’s attorney argued that Rondal’s claims were different than the issues brought up in the Michaels MDL, convincing Judge Wu to keep this vacation time class action lawsuit separate from the MDL.

The Michaels Vacation Time Wage and Hour Class Action Lawsuit is Case No. 2:14-cv-06561, in the U.S. District Court for the Central District of California.

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