Williams-Sonoma Escapes Unpaid Overtime Lawsuit

A federal judge has dismissed an unpaid overtime lawsuit against Williams-Sonoma, finding that the plaintiffs were not that company’s employees.

The claims will continue against MXD Group Inc., the company directly oversees the work plaintiffs, which allege they were misclassified as contractors instead of employees and had therefore been shorted on overtime pay required by New Jersey wage and hour laws.

The plaintiffs originally filed this unpaid overtime class action lawsuit in September 2012 in New Jersey state court. The plaintiffs and their purported class members are a group of truck drivers hired to deliver furniture to customers from a Williams-Sonoma facility in Monroe, New Jersey.

The drivers say they were compensated only with a flat daily rate and customer tips. The daily rate was paid by the transportation companies who contracted with MXD to provide delivery services, they said.

The drivers argue they should have been paid an overtime rate according to New Jersey wage and hour law. The alleged underpayment resulted from their being misclassified as independent contractors instead of employees of both Williams-Sonoma and MXD, they argue.

The unpaid overtime lawsuit required the court to determine whether an employer-employee relationship existed between the plaintiffs and any defendants. The plaintiffs argued that Williams-Sonoma acted as their employer in the way it controlled the manner in which they performed their assigned duties.

The drivers said they were required to wear Williams-Sonoma logo uniforms while they worked and that they also received training on how to resolve customers’ issues.

Judge Anne E. Thompson found Williams-Sonoma was too distantly related to the plaintiffs to be considered their employer, however. The judge noted that the plaintiffs and Williams-Sonoma were separated by both MXD and the companies that paid the plaintiffs – with the exception of one plaintiff, Jose C., who had only a one-level separation from Williams Sonoma. The retailer never had more than occasional interaction with any of the plaintiffs, the judge said.

Judge Thompson also noted that several factors under the “economic realities test” of the Fair Labor Standards Act suggested that Williams-Sonoma was not the drivers’ employer. She noted the retailer did not maintain records on the drivers, determine their compensation, or exercise hiring and firing authority over them.

The evidence that MXD could be their employer was another story, however – enough to let the unpaid overtime lawsuit go forward against that company. Judge Thompson noted MXD exercised some selection over which drivers would or would not be allowed to work by conducting background checks and turning down drivers whose records were not up to snuff. The drivers had also said that they worked under direction of an MXD dispatcher throughout each workday.

No Class Certification for Unpaid Overtime Lawsuit

In the same decision, Judge Thompson denied certification of the plaintiff class. The judge found that each potential plaintiff had a unique relationship with MXD, with MXD exercising widely varying amounts of control over each driver. These varying degrees of control would require the employment relationship to be determined on a case-by-case basis for each potential plaintiff, preventing the plaintiffs from bringing their claim as a single, unified class.

The Williams-Sonoma Unpaid Overtime Class Action Lawsuit is Case No. 3:15-CV-06441 in the U.S. District Court for the District of New Jersey.

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