Management & Training Corp. Pledges $3.5M to Settle California Labor Laws Claims

Private prison management company Management & Training Corp. has agreed to pay $3.5 million to settle claims that it shorted employees on overtime pay and failed to provide proper meal and rest breaks.

The settlement awaits final approval from U.S. District Judge Jeffrey T. Miller, a California federal judge. According to court documents, both the workers and the company believe that the settlement is fair and reasonable, especially “in light of the complexities of the case, the state of the law, and of the uncertainties of the outcome of the pending motions and litigation.” It will provide between $2,000 and $4,000 in benefits to a Class of around 500 detention officers and sergeants who say that they were denied breaks and not paid enough. The $3.5 million will also cover the plaintiffs’ attorneys’ fees.

In December, Judge Miller granted preliminary approval of the settlement and certified the plaintiff Class for settlement purposes only. He determined that there were enough commonalities in the claims of the workers to merit Class certification, noting that these similarities outweighed differences in how much the workers had allegedly been underpaid.

The Management & Training Corp. wage and hour class action lawsuit was filed in 2017 by plaintiffs Carlos L. and Angel A. They claimed that their employer did not pay for meal breaks as is required under California law, and rounded down the time an employee worked in a way that was “not fair and neutral.” According to the workers, these policies financially injured workers, because they were not compensated for all of the time they worked.

California Labor Laws Governing Paid Breaks

SHRM explains that California labor laws require that workers not work more than five hours without receiving a paid meal period for 30 minutes. According to law, the meal break must be free from duties, and must be uninterrupted. If a worker works an excess of ten hours in a work day, they are eligible for a second meal break.

Workers not exempt from overtime are entitled to one hour of pay for each day that they do not receive their legally required meal break.

There are some exceptions to the law. Some worker who work less than six hours can give up their right for a meal break. SHRM notes that this can occur when an employee cannot be relieved of their duties during a meal break, so may need to eat their meals while on duty. These agreements between the employer and the worker that they will waive their right to take a meal break are usually put put in writing.

SHRM addresses another issue at play in the Management & Training Corp. lawsuit. Under the Fair Labor Standards Act, employers may round time that their employees worked, as long as that rounding “will not result, over a period of time, n failure to compensate the employees properly for all the time they have actually worked.” Under the FLSA, rounding is usually acceptable as long as it averages out.

In the Management & Training Corp. class action lawsuit, workers had argued that the company’s rounding policy did not average out — rather, they claimed the company consistently rounded hours down so workers were paid less than they should have been. 

The Management & Training Corp. California Wage and Hour Violation Class Action Lawsuit is Lopez et al. v. Management & Training Corp. et al., Case No. 3:17-cv-01624, in the U.S. District Court for the Southern District of California.

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