Tyco Settles Lawsuit Over Wage and Hour Rules

A California electronics company recently settled a class action lawsuit over alleged violations of wage and hour rules for nearly $5 million. Tyco Electronics Corporation was sued by employees who claimed the company automatically deducted pay for half-hour meal breaks, whether those breaks were taken or not.

Case Background

A worker filed the class action lawsuit in 2014, stating that Tyco (TE Connectivity Networks) was in violation of state labor laws when it did not provide clear, written meal and rest break policies to workers covered under the statute. This failure, the plaintiff said, had the effect of denying these workers the opportunities to take their breaks.

At the same time, the company allegedly had a policy by which 30 minutes of time was automatically taken out of their paychecks, regardless of whether or not employees took advantage of scheduled breaks.

There were delays and difficulties in certifying the class. In 2017, the judge presiding over the case, the Hon. Elizabeth D. LaPorte, granted partial certification for the plaintiffs whose pay had been improperly deducted for the 30 minute break periods. However, the plaintiff had failed to realize how many of his co-workers were affected. It was not until the following year when it was finally determined whether assembly lines were actually shut down for break periods, that Judge LaPorte was able to certify the entire class.

Lack of Clarity Leads to a Settlement

It was this confusion over who all should have been included in the class that eventually led to the multi-million dollar settlement. A few months after Judge LaPorte’s certification, defendant Tyco appealed to the Ninth Circuit, asking the court for clarification on policies that allow automatic deductions from employee pay and how that issue would support class certification.

Ultimately, both parties agreed that further litigation would be unlikely to end in favor of the plaintiffs, and would involve considerable legal expenses for both sides. Wilson said, “Defendants would certainly appeal any verdict favorable to the class, resulting in further delay and the risk that a favorable verdict would be overturned on appeal.”

The settlement provides just over $3,800 for each of the 1,300 Class Members who were affected.

Common Violations of Wage and Hour Rules

Frequent wage and hour rules that are violated involve unpaid overtime (or wages that are not paid at all), hourly and salaried workers who are misclassified as independent contractors, being forced to do work that is not part of an employee’s stated duties, working off the clock and missed meal and rest breaks. These violations are the most common causes of action in employee lawsuits against the companies at which they work.

All of these are covered under the federal Fair Labor and Standards Act as well as the California Labor Code, which is even more stringent. Unfortunately, as companies seek to maximize profits by squeezing labor, such violations have become more frequent in recent years.

The Tyco Class Action Lawsuit was Case No. 3:14-cv-04872 in the U.S. District Court for the District of Northern California.

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