UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

Transcription

1 CASE 0:15-cv Document 1 Filed 05/20/15 Page 1 of 46 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA Duniyo Hussein, Naima Omar Issa, Leyla Yusuf, Raymond Deshler, Assiongbonvi Luc Kangnigan, Melvin Holmes, Abraham Quevedo Orantes, Leticia Zuniga Escamilla, on behalf of themselves, the Proposed Rule 23 Class, and others similarly situated, Plaintiffs, Court File No. 15-cv-2498 CLASS ACTION COMPLAINT (JURY TRIAL DEMANDED) v. Capital Building Services Group, Inc., Defendant. Plaintiffs Duniyo Hussein ( Plaintiff Hussein ), Naima Omar Issa ( Plaintiff Issa ), Leyla Yusuf ( Plaintiff Yusuf ), Raymond Deshler ( Plaintiff Deshler ), Assiongbonvi Luc Kangnigan ( Plaintiff Kangnigan ), Melvin Holmes ( Plaintiff Holmes ), Abraham Quevedo Orantes ( Plaintiff Quevedo ), and Leticia Zuniga Escamilla ( Plaintiff Zuniga ) (collectively, Plaintiffs ), on behalf of themselves, the proposed Rule 23 Class, and others similarly situated, by and through their attorneys, Nichols Kaster, PLLP, bring this action for damages and other relief for Defendant s violations of the Fair Labor Standards Act and Minnesota state law. PRELIMINARY STATEMENT 1. This case is about the victims of the subcontracted labor market, in which the workers who keep Minnesota s businesses safe and clean no longer work for those businesses. Increasingly, Minnesota businesses subcontract out to the lowest bidder labor

2 CASE 0:15-cv Document 1 Filed 05/20/15 Page 2 of 46 traditionally performed by their own employees. The result is a classic race-to-thebottom, where unscrupulous subcontractors compete for contracts by exploiting vulnerable workers to keep costs low. In this new fissured workplace, 1 some of the most egregious mistreatment of workers occurs right under the noses of some of Minnesota s most esteemed businesses and retail establishments. 2. Plaintiffs work at Macy s and Herberger s department stores throughout Minnesota. Plaintiffs work to keep the stores clean and presentable cleaning bathrooms, polishing floors, emptying the trash, and maintaining store fixtures. On paper, however, Plaintiffs are not employed by Macy s or Herberger s. Instead, Plaintiffs are employed by Defendant Capital Building Services Group, Inc. ( Defendant or Capital ), who has contracted with Macy s and Herberger s to clean their stores. 3. Companies like Capital are essentially middlemen who exist to sell a single product: labor. These companies operate in an extremely competitive market environment, typically bidding for cleaning jobs by the square foot against other similar companies. As a consequence, companies like Capital come under enormous economic pressure to cut corners when it comes to following labor and employment laws. The math is simple: in order to turn a profit, companies like Capital must keep their expenses overwhelmingly wage payments made to employees below their contractually agreedupon income from store contracts. To undercut their competitors, and turn a profit on 1 See David Weil, The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It 7, 76 (2014); Richard B. Freeman, The Subcontracted Labor Market, 18 Labor and Employment Relations Association: Perspectives on Work 38, 38 (2014). 2

3 CASE 0:15-cv Document 1 Filed 05/20/15 Page 3 of 46 their contracts, companies like Capital routinely fail to pay their workers for all hours worked, pay less than minimum wage, and skimp on overtime premiums. By doing so, companies like Capital gain a competitive advantage in the marketplace by breaking the law. 4. Companies like Macy s and Herberger s benefit tremendously from this arrangement. Macy s and Herberger s get their stores cleaned for much less than it would otherwise cost to pay their own employees, legally, to do the same work. At the same time, Macy s and Herberger s effectively turn a blind eye to widespread violations of state and federal employment laws happening under their own roofs. 5. To make this scheme work, Capital typically hires employees who live at the margins of economic life. Many of Capital s employees are recent immigrants with limited English proficiency. Others have undergone long periods of unemployment. For these reasons and others, employees are often willing to accept substandard and illegal conditions of employment for the simple reason that having a job is better than having no job. 6. Capital s violations of state and federal wage and hour laws are systematic and severe. Capital tells its employees they will be paid minimum wage, but in practice their employees wages fall well short of minimum wage in some cases as little as $4 or $5 an hour. Employees are generally not paid overtime when they work over forty hours in a workweek. Workers paychecks frequently come up short, given the regular time and overtime actually worked. Meal breaks are systematically deducted from employees hours worked, even when those breaks are not actually taken. Some employees have to 3

4 CASE 0:15-cv Document 1 Filed 05/20/15 Page 4 of 46 purchase their own cleaning supplies, and these unreimbursed expenses cause employees wages to drop even further below minimum wage. When employees are asked to clean a store where they do not normally work, their time is seldom tracked, and often unpaid. Travel time between stores is not compensated. Workers have no choice but to be paid with debit cards, and thus must pay ATM fees in order to access their own wages. Beginning in their second pay period, employees only other option is to receive direct deposit, which is not an option for workers who do not have bank accounts. On numerous occasions, terminated employees were not paid for work performed during their final pay periods. 7. There is no paper trail to document most of these violations. Minnesota and federal law require employers to maintain accurate employment records and supply pay stubs to employees. Capital did neither, effectively keeping its employees in the dark and minimizing evidence of its repeated violations of the law. 8. Many Capital employees complained about the company s illegal labor practices to managers and corporate representatives. Nothing was ever done in response to these complaints. 9. Capital s severe and pervasive violations of the law hurt everyone involved. They harm Capital s employees, who are forced to work under substandard conditions. They put other companies that unlike Capital follow the rules at an unfair competitive disadvantage in the marketplace. And they hurt unemployed workers, who are forced to compete for jobs that fall far below the minimum standards established by law. 4

5 CASE 0:15-cv Document 1 Filed 05/20/15 Page 5 of Plaintiffs bring this class action on behalf of themselves and all individuals employed by Defendant as hourly cleaning workers in the State of Minnesota in the three years prior to the filing of this Complaint (the proposed Rule 23 Class ) pursuant to Rule 23 of the Federal Rules of Civil Procedure to remedy violations of Minnesota state law, including but not limited to the Minnesota Payment of Wages Act, Minn. Stat , et seq. ( PWA ), and supporting regulations, and the Minnesota Fair Labor Standards Act, Minn. Stat , et seq. ( MFLSA ), and supporting regulations. 11. Plaintiffs, on behalf of themselves and others similarly situated (the proposed FLSA Collective ) bring this collective action consisting of all hourly cleaning workers employed by Defendant in the State of Minnesota at any time within three years prior to the filing of the Complaint against Defendant pursuant to the Fair Labor Standards Act, 29 U.S.C. 201, et seq. ( FLSA ) for failure to pay minimum wage and overtime compensation for all hours worked. 12. Defendant has willfully engaged in a pattern, policy, and practice of unlawful conduct for the actions alleged in this Complaint, in violation of the federal and state rights of Plaintiffs, members of the proposed Rule 23 Class, and other similarly situated workers. PARTIES Plaintiffs 13. Plaintiff Issa is an adult resident of Minnesota. Plaintiff Issa was employed by Defendant as a cleaner from approximately September 2013 to March 2015 and worked at the Mall of America Macy s store. 5

6 CASE 0:15-cv Document 1 Filed 05/20/15 Page 6 of Plaintiff Yusuf is an adult resident of Minnesota. Plaintiff Yusuf was employed by Defendant as a cleaner from approximately December 1, 2014 to January 2, Plaintiff Yusuf worked at the Mall of America and Southdale Macy s stores. 15. Plaintiff Hussein is an adult resident of Minnesota. Plaintiff Hussein has been employed as a cleaner by Defendant from approximately December 2013 to January 2015, and from March 2015 to the present. She works primarily at the Mall of America Macy s but has also worked at the Roseville and Maplewood Macy s stores. 16. Plaintiff Deshler is an adult resident of Minnesota. Plaintiff Deshler has been employed as a cleaner by Defendant from approximately March 2014 to the present. Plaintiff Deshler works at the Herberger s Clearance Center in Maplewood, Minnesota and has worked at the Macy s store in Maplewood. 17. Plaintiff Kangnigan is an adult resident of Minnesota. Plaintiff Kangnigan was employed by Defendant as a cleaner from approximately October 2014 to March Plaintiff Kangnigan worked at the Burnsville and Mall of America Macy s stores. 18. Plaintiff Holmes is an adult resident of Minnesota. Plaintiff Holmes has been employed by Defendant as a cleaner and crew leader from approximately 2012 to the present. Plaintiff Holmes works primarily at the Macy s store in Maplewood, but has worked at many Macy s and Herberger s stores throughout Minnesota in his capacity as a crew leader. 19. Plaintiff Quevedo is an adult resident of Minnesota. Plaintiff Quevedo has been employed by Defendant as a cleaner, crew leader, and area manager from January 2011 to the present. As a cleaner and crew leader, Plaintiff Quevedo has worked primarily 6

7 CASE 0:15-cv Document 1 Filed 05/20/15 Page 7 of 46 at the Blaine and Edina Southdale Herberger s locations, and currently works as a cleaner at the Edina Southdale Herberger s. As an area manager, Plaintiff Quevedo worked at twenty different Macy s and Herberger s stores throughout Minnesota. 20. Plaintiff Zuniga is an adult resident of Minnesota. Plaintiff Zuniga has been employed by Defendant as a cleaner and crew leader from approximately April 2012 to the present. She worked at the Herberger s in Blaine but now works at the Edina Southdale Herberger s. Defendant 21. Defendant Capital Building Services Group, Inc. provides commercial cleaning services to retail, corporate, commercial, industrial, banking, and educational venues. Defendant is an Illinois corporation with corporate headquarters at 540 Capital Drive, Suite 100, Lake Zurich, IL Defendant provides commercial cleaning services to retail, corporate, commercial, industrial, and educational business venues facilities in 25 different states. 23. At all relevant times, Defendant has had an annual gross volume of sales made or business done in excess of $500, JURISDICTION AND VENUE 24. This Court has subject matter jurisdiction pursuant to 28 U.S.C because this action involves a federal question, 29 U.S.C. 216(b). 25. This Court also has supplemental jurisdiction over Plaintiffs state law claims pursuant to 28 U.S.C because Plaintiffs state and federal claims are so related that they form part of the same case or controversy. 7

8 CASE 0:15-cv Document 1 Filed 05/20/15 Page 8 of Venue is proper in the United States District Court, District of Minnesota, pursuant to 28 U.S.C. 1391, because Defendant resides or conducts business in this District and because the unlawful practices described herein were committed in this District. FACTUAL ALLEGATIONS Common Factual Allegations 27. Failure to provide paystubs. Until the filing of this lawsuit was imminent, Defendant had never furnished Plaintiffs with a single paper paystub. Plaintiffs and other Capital employees have made repeated requests to their supervisors, managers, and to Defendant s corporate office for paystubs, but every request was denied or ignored. Plaintiffs have not been provided with on-the-job computer access to electronic paystubs. 28. Underreporting of hours worked. Defendant purports to have a timekeeping system, but Defendant does not compensate its employees according to any timekeeping entries. Based upon Plaintiffs net pay, admissions by Defendant s managers, and Plaintiffs own experience working in managerial positions, Plaintiffs have learned that Defendant systematically underreports Plaintiffs hours worked. It is not uncommon for entire shifts to disappear, especially when Plaintiffs work at a store other than their usual store, or the time would have put Plaintiffs over forty hours for the week. Defendant creates a budget of cleaning hours for each of its stores that sets a limit on the number of hours of labor Defendant wants to compensate each week. When Plaintiffs actual hours worked for the week exceeds this budget, Defendant frequently underreports Plaintiffs hours to keep payroll costs in line with the budget. 8

9 CASE 0:15-cv Document 1 Filed 05/20/15 Page 9 of Working though breaks. Defendant automatically deducts meal breaks from Plaintiffs hours worked regardless of those breaks were actually taken. Plaintiffs are frequently not permitted to take a lunch break. When they are permitted to take breaks, Plaintiffs breaks are often interrupted by calls on the radio to perform work. Plaintiffs are expected to remain on-call throughout lunch breaks. 30. Unreimbursed expenses. Several Capital employees are required to purchase their own cleaning supplies. Defendant does not reimburse those expenses, and does not take the expenses into account when calculating whether Plaintiffs have been paid at the applicable state or federal minimum wage rate. 31. Debit cards. Defendant pays Plaintiffs by giving them prepaid debit cards with Plaintiffs net pay added as the card s balance. Plaintiffs are unable to access the funds on these cards without paying ATM/bank fees. Defendant does not give Plaintiffs the ability to withdraw the balance on the card free of fees. Plaintiffs are permitted to receive direct deposit after the first pay period working for Capital, but that method of payment is not available to those Plaintiffs who do not have a bank account. Plaintiffs have made numerous requests for payment through paper paychecks (preferably with attached paystubs), and those requests have been denied. 32. Travel time. Some Plaintiffs are required to clean multiple stores during one shift, or are required to report to one store and then travel to a different store to perform their work duties. Defendant does not compensate Plaintiffs for their travel time between work sites. 9

10 CASE 0:15-cv Document 1 Filed 05/20/15 Page 10 of Refusal to pay wages upon termination. Defendant has terminated multiple employees and subsequently refused to pay employees for the hours worked during their last pay period. 34. Minimum wage violations. Defendant claims to pay Plaintiffs and other cleaners minimum wage. Before August 1, 2014, cleaners were supposedly paid the federal minimum wage of $7.25 per hour. Since August 1, 2014, Defendant alleges it has paid its cleaners $8 per hour to comply with Minnesota s minimum wage. But as a result of Defendant s numerous illegal pay practices outlined above, Plaintiffs wages systematically fell below the state and federal minimum wage rates. Though it is difficult to document these minimum-wage violations with exactitude without paystubs or timekeeping records, an employee earning $8 an hour should generally receive take home pay of $7.38 per hour after taxes. 2 An employee earning the federal minimum wage of $7.25 per hour should generally receive take home pay of $6.70 per hour after taxes. 3 2 This assumes Social Security and Medicare deductions of 6.2 percent and 1.45 percent, respectively, and no federal or state income tax withholding. Generally, a single person without children working full-time for $8 per hour will have $.50 per hour withheld for federal income taxes, while a married person will not have income taxes withheld. See IRS Publication 15 (2015) at 47, 49, available at (showing federal income tax withholding for an employee earning $320 per weekly pay period ($8 times 40 hours) depending on number of exemptions and filing status). 3 This assumes Social Security and Medicare deductions of 6.2 percent and 1.45 percent, respectively, and no federal or state income tax withholding. Generally, a single person without children working full time and earning $7.25 per hour will have $.40 per hour withheld for federal income taxes, while a married person with similar earnings would not have income taxes withheld. See IRS Publication 15 (2015) at 47, 49, available at (showing federal income tax withholding for an 10

11 CASE 0:15-cv Document 1 Filed 05/20/15 Page 11 of 46 Plaintiffs net take home pay, based on the total number of hours actually worked and the amount of wages actually paid, systematically fell below these levels. 35. Overtime violations. Several Plaintiffs have been told by their district manager that Defendant will not pay them overtime. Defendant s practice matches the words of its managers. When Plaintiffs work more than 40 hours in a workweek, their net pay does not reflect an overtime premium, as required by law. 36. Defendant s willful and repeated violations. Defendant has knowledge of the violations of the PWA, FLSA, and MFLSA described in this Complaint. Defendant and its managers were responsible for: entering the amount of time worked by employees; failing to provide paystubs; paying employees with prepaid debit cards; interrupting employees lunch breaks; automatically deducting breaks even when those breaks had been interrupted or were never taken; and refusing to pay certain terminated employees. Furthermore, Plaintiffs made numerous complaints to Defendant s managers and employees at its corporate office regarding Defendant s illegal policies and practices but Defendant failed to institute any remedy. 37. Defendant s conduct alleged in this Complaint was willful and in bad faith. Defendant did not have a good faith basis to believe the objectionable policies and practices identified in this Complaint complied with the law. employee earning $290 per weekly pay period ($7.25 times 40 hours) depending on number of exemptions and filing status). 11

12 CASE 0:15-cv Document 1 Filed 05/20/15 Page 12 of 46 Plaintiffs Employment Experiences Plaintiff Hussein 38. Plaintiff Hussein works for Defendant as a cleaner at the Mall of America Macy s. She worked for Defendant from December 2013 to January 2015, resumed working for Defendant in March 2015, and is currently employed by Defendant. Defendant hired her at a rate of $7.25 per hour, and her alleged rate was increased to $8.00 per hour on August 1, Plaintiff Hussein never received a written earnings statement for any of the pay periods that she worked for Defendant until March 2015, when Defendant became aware that this litigation was imminent. Plaintiff Hussein was never provided with access to an employer-owned computer during her regular working hours to review or print earnings statements. 40. Defendant would automatically deduct lunch breaks that weren t actually taken. The lunch breaks that Plaintiff Hussein did actually take were frequently interrupted by calls on the radio requiring her to perform work. 41. Plaintiff Hussein was routinely not paid for all of the hours that she worked. Her take-home pay was lower than it should have been based upon the number of hours she worked. For example, her net pay for the pay period from June 18, 2014 to July 1, 2014 was $539.12, despite having worked 130 hours during that two-week pay period. That works out to only $4.14 an hour. 42. Plaintiff Hussein occasionally worked more than forty hours in a workweek but was not paid one-and-one-half times her regular rate of pay for hours worked in 12

13 CASE 0:15-cv Document 1 Filed 05/20/15 Page 13 of 46 excess of forty in a workweek. For example, in the pay period from June 18, 2014 to July 1, 2014, Plaintiff Hussein worked approximately 130 hours but only received net pay of $ for the two-week pay period well short of the time-and-a-half owed on the hours worked over 40 a week. 43. Plaintiff Hussein was not compensated for several days of work that she performed. During the pay period from March 12, 2014 to March 26, 2014, Plaintiff Hussein worked two 8-hours shifts at the Macy s in Roseville and one 7-hour shift at the Macy s in Maplewood, but received no wages for the 23 hours of work that she performed on those three days. Plaintiff Issa 44. Plaintiff Issa worked for Defendant as a cleaner at the Mall of America Macy s from approximately September 2013 to March Capital hired her at a wage of $7.25 per hour. On August 1, 2014, her wage rate was allegedly increased to $8.00 per hour. Plaintiff Issa was paid every two weeks. 45. Plaintiff Issa never received a written earnings statement for any of the approximately 40 pay periods that she worked for Defendant. She was never provided access to an employer-owned computer during her regular working hours to review or print earnings statements. 46. Defendant automatically deducted lunch breaks from her hours worked, even though much of the time Plaintiff Issa was never able to take a lunch break, or her break was interrupted by calls on the radio demanding that she perform job duties. 13

14 CASE 0:15-cv Document 1 Filed 05/20/15 Page 14 of Plaintiff Issa s take-home pay was significantly less than it should have been based on the number of hours that she worked. Plaintiff Issa complained about this to her managers but no action was taken. 48. Plaintiff Issa worked more than forty hours in several workweeks but was never paid overtime wages. For example, in the two-week pay period ending January 14, 2014, Plaintiff Issa worked hours, but only received net pay of $703.49, equal to net pay of $6.48 per hour. Given that she worked at least 28 hours of overtime, Plaintiff Issa s net pay should have been much higher than the $ she received. Plaintiff Yusuf 49. Plaintiff Yusuf worked for Defendant as a cleaner from December 1, 2014 to January 2, She worked 57 hours total during that time. Plaintiff Yusuf was only paid $ for her hours worked, which works out to $4.05 per hour. Plaintiff Yusuf never received a paystub, and was never given the ability to view or print her paystubs on a computer during her working hours. 50. Initially, Capital failed to pay Plaintiff Yusuf for the work performed during her first pay period working for Capital. On approximately January 2, 2015, Plaintiff Yusuf called Rudy Hanuman, the district manager at Capital, to complain about not receiving any pay. Plaintiff Yusuf told him that she could not continue to work at Capital unless the company made arrangements to ensure she would get paid in the near future for the hours she had worked. Plaintiff Yusuf called several other times that day to try and reach Hanuman, but reached his voice mail each time. Plaintiff Yusuf s district manager called her back the next day, and told her that he would find another person to do the job. 14

15 CASE 0:15-cv Document 1 Filed 05/20/15 Page 15 of After Plaintiff Yusuf was terminated, Capital mailed her a debit card with a balance of $ Given the number of hours she had worked, Plaintiff Yusuf realized this amount was below minimum wage and less than what Capital had promised to pay her. Plaintiff Yusuf called the district manager several more times about the money she was still owed, and left several messages. The district manager never responded to these demands. Plaintiff Deshler 52. Plaintiff Deshler has worked for Defendant as a cleaner at the Herberger s Clearance Center in Maplewood and Maplewood Macy s since March Defendant agreed to pay him $7.25 per hour prior to August 1, Plaintiff Deshler believes he is currently being paid $7.75 an hour. 53. Plaintiff Deshler has never received a paystub. Plaintiff Deshler was never provided electronic access to his paychecks, and was never provided with access to an employer-owned computer during her regular working hours to review or print earnings statements. Plaintiff Deshler wrote to Defendant asking for copies of his pay stubs, but Defendant failed to respond. 54. Plaintiff Deshler s wages are paid via prepaid debit card. He is forced to incur ATM fees and other charges to access his wages. In addition, Plaintiff Deshler is frequently unable to withdraw all his wages on or shortly after his pay day. 55. Plaintiff Deshler is required to buy his own cleaning supplies, such as toilet bowl cleaner, tire cleaner, window cleaner, carpet cleaners, rags, sponges, and mops, to perform his job duties. Plaintiff Deshler has complained to multiple managers about 15

16 CASE 0:15-cv Document 1 Filed 05/20/15 Page 16 of 46 being forced to purchase cleaning supplies to do his job, but no action has ever been taken. Plaintiff Kangnigan 56. Plaintiff Kangnigan worked for Defendant as a cleaner at the Mall of America and Burnsville Macy s stores from October 2014 until March His wage rate was allegedly $8 an hour while he worked for Defendant. 57. Plaintiff Kangnigan was not paid for his first two weeks working for Defendant and was not paid for his last two weeks working for Defendant. 58. Plaintiff Kangnigan never received a paystub. He was never given access to a computer at work to view or print out his pay stubs. 59. Plaintiff Kangnigan was routinely required to work through his breaks, but breaks were still deducted from his hours worked. 60. Defendant did not pay Plaintiff Kangnigan for all his hours of work. For example, during multiple pay periods in December 2014 and January 2015, based upon his net pay, Plaintiff Kangnigan was paid less than the state and federal minimum wage, even after taking employment taxes and income tax withholding into account. 61. Plaintiff Kangnigan worked over 40 hours in several workweeks during December 2014 and January 2015, and over 50 hours at least once, but was not paid a time-and-a-half overtime premium for hours worked in excess of 40 in a workweek. Plaintiff Holmes 62. Plaintiff Holmes has worked as a cleaner and crew leader from approximately 2012 to the present. He works primarily at the Maplewood Macy s, but in 16

17 CASE 0:15-cv Document 1 Filed 05/20/15 Page 17 of 46 his capacity as crew leader has been required to clean Macy s and Herberger s stores throughout Minnesota. 63. Plaintiff Holmes was hired at a pay rate of $7.25 per hour. His rate was allegedly increased to $8 per hour three months after he was promoted to the position of crew leader. He was supposedly given two pay increases since that time, and is told that his pay rate is currently $9.75 per hour. 64. Plaintiff Holmes has never received a paystub from Capital. He was never given access at work to a computer to view his paystubs, nor was he ever given the ability to print out his paystubs while at work. Beginning earlier in 2015, Plaintiff Holmes was able to view his paystubs online. However, the online statements do not show the number of works worked; they only show my gross pay and net pay. 65. Plaintiff Holmes net pay is consistently lower than it should be based upon his hours worked. For example, Plaintiff Holmes was required to work a 23-hour shift on Black Friday in 2014, after his district manager Rudy Hanuman called him at 2:00 AM and threatened to fire him if did not work through the next day. Despite Plaintiff Holmes sacrifice, most of those 23 hours were not reflected on his next paycheck. When he asked his district manager about the hours for which he was not paid, his district manager said, as he usually did in similar situations, that he would make it up to Plaintiff Holmes on the next paycheck. But, as has typically occurred in similar situations, Plaintiff Holmes was not paid for those Black Friday hours, on the next paycheck or any other. 66. Plaintiff Holmes has made numerous inquiries to his current and former district managers about underreporting of hours, underpayment of wages, and the lack of 17

18 CASE 0:15-cv Document 1 Filed 05/20/15 Page 18 of 46 written paystubs. On each occasion, they either refused to address his concerns or told him to call Amy Lowe, who supposedly is responsible for running payroll for Capital. Every time Plaintiff Holmes tried to call her, his call would either go to voice mail, or she would dismiss his concerns. 67. Plaintiff Holmes frequently works more than 40 hours in a workweek. However based upon his net pay, Plaintiff Holmes is not being paid overtime rates for his hours worked in excess of forty in a workweek. For example, during the two-week pay period in 2014 that included Thanksgiving and Black Friday, Plaintiff Holmes worked approximately 120 hours, but was not paid overtime compensation for his hours worked in excess of forty in each workweek. Plaintiff Quevedo 68. Plaintiff Quevedo has worked for Capital as a cleaner, crew leader, and area manager from approximately January 2, 2011 to the present. He first worked at the Mall of America Macy s store. He then began working at the Blaine Herberger s store, and in April 2011 while working at the Blaine Herberger s was promoted to crew leader. Plaintiff Quevedo worked at the Blaine Herberger s store as a crew leader for approximately two years. He was then promoted to area manager in approximately January 2014, and held that position for approximately eight to nine months. As area manager, Plaintiff Quevedo oversaw twenty stores in Minnesota consisting of nine Macy s stores and eleven Herberger s stores. He moved back to the position of cleaner in approximately September Plaintiff Quevedo has been a cleaner from September 18

19 CASE 0:15-cv Document 1 Filed 05/20/15 Page 19 of to the present, and presently works primarily at the Edina Southdale Herberger s store. 69. While Plaintiff Quevedo was area manager, all payroll was run by the district manager Rudy Hanuman. Hanuman refused to allow Plaintiff Quevedo to get involved with managing payroll. Plaintiff Quevedo received frequent complaints from employees at several different stores regarding missing hours and inadequate pay, and was instructed to tell them to check the computer, even though Defendant had never given these employees a way to view their earnings statements online or at a work computer. 70. While working as an area manager, Plaintiff Quevedo was classified as exempt from overtime pay and told he would receive a salary of $36,000 per year. While working as an area manager, Plaintiff Quevedo experienced wage theft. Despite being a salaried employee, his take home pay in given pay period varied from $950 to $ Plaintiff Quevedo s classification as an exempt employee was improper his primary job duty consisted of traveling between stores to perform cleaning tasks when a cleaner was missing from work. These duties primarily consisted of mopping and waxing floors, emptying garbage, vacuuming, and cleaning bathrooms. Plaintiff Quevedo did not make hiring decisions and did not have the authority to terminate employees. 72. As area manager, Plaintiff Quevedo systematically worked overtime. He generally worked seven days a week from 6:00 AM to 4:00 or 5:00 PM, averaging approximately 70 hours per week. 19

20 CASE 0:15-cv Document 1 Filed 05/20/15 Page 20 of As a cleaner, Plaintiff Quevedo was subject to the same illegal practices as other cleaners. When he was hired as a cleaner, Defendant agreed to pay Plaintiff Quevedo $7.25 per hour, then stated his pay would be increased to $8.50 per hour when he was promoted to crew leader. He was promised pay of $10.00 per hour after being demoted from area manager to the position of cleaner. Plaintiff Quevedo recently discovered that his actual rate of pay after his demotion was only $9.25 per hour. 74. Plaintiff Quevedo has never received a paystub. He was never given access to a computer at work where he could view his earnings statements or print them out. Near the beginning of 2015, Plaintiff Quevedo was given the ability to see his paystubs online when Capital switched its payroll to the company Employco. However Plaintiff Quevedo is only able to see his gross and net pay, not his hours worked. 75. Plaintiff Quevedo experienced the same wage theft as the other members of the class. For example, as a cleaner at the Southdale Herberger s, it takes Plaintiff Quevedo and his wife, Plaintiff Zuniga, about four hours apiece to clean the store, or 28 hours per week. Based upon his net pay, Plaintiff Zuniga does not believe he is being paid for all of these hours. Plaintiff Quevedo has been told by the District Manager that Capital has budgeted only 44 hours of cleaner time to cleaning the Southdale Herberger s. Plaintiff Quevedo believes he is not being paid for all of his hours worked in an attempt to keep the store within its budget for cleaner hours. 76. As a cleaner, Plaintiff Quevedo occasionally works more than 40 hours per workweek. For example, over the workweek in 2014 including Thanksgiving in Black 20

21 CASE 0:15-cv Document 1 Filed 05/20/15 Page 21 of 46 Friday, Plaintiff Quevedo worked over 40 hours but was not paid any overtime compensation for those hours in excess of forty. Plaintiff Zuniga 77. Plaintiff Zuniga has worked at Capital as a cleaner and crew leader from approximately April 2012 to the present. She became a crew leader in Capital agreed to pay her $7.25 when she was hired, then agreed to give her a raise to $9.00 per hour when she was promoted to crew leader. However, Plaintiff Zuniga recently learned that her hourly wage is only $8.50 per hour. 78. Plaintiff Zuniga has never received a paystub from Capital. She was never given access to a computer at work to view her earnings statements, nor was she given the ability to print out her paystubs while at work. 79. As described above, based upon her net pay, Plaintiff Zuniga is not paid for all of her works worked. She works approximately 28 hours per week at the Edina Southdale Herberger s, but based upon her net pay, it appears that she is not being compensated for several hours of her time worked each week. 80. Plaintiff Zuniga occasionally works overtime hours, but is not paid overtime compensation. For example, during the workweek including Black Friday and Thanksgiving, she worked more than 40 hours, but was not paid an overtime premium for hours worked in excess of 40 in a workweek. 81. Defendant had knowledge of these violations of the PWA, FLSA, and MFLSA. Defendant and its managers were responsible for: entering the amount of time worked by employees; failing to provide paystubs; paying employees with prepaid debit 21

22 CASE 0:15-cv Document 1 Filed 05/20/15 Page 22 of 46 cards; interrupting employees lunch breaks; automatically deducting breaks even when those breaks had been interrupted or were never taken; and refusing to pay certain terminated employees. Furthermore, Plaintiffs made numerous complaints to Defendant s managers and employees at its corporate office regarding Defendant s illegal policies and practices but Defendant failed to institute any remedy. 82. Defendant s conduct alleged in this Complaint was willful and in bad faith. Defendant did not have a good faith basis to believe the objectionable policies and practices identified in this Complaint complied with the law. CLASS ACTION ALLEGATIONS 83. Plaintiffs bring Counts One, Four, Five, Six, Seven, and Eight individually and as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure. The proposed Rule 23 Class is defined as: All individuals employed by Defendant as cleaners (including crew leads) in Minnesota at any time within three years prior to the filing of this Complaint. 84. The persons in the proposed Rule 23 Class are so numerous that joinder of all of the proposed Rule 23 Class members is impracticable. While the precise number of class members has not been determined at this time, upon information and belief, Defendant has employed at least one hundred cleaners in Minnesota during the applicable limitations period. Plaintiffs and the proposed Rule 23 Class have been similarly affected by Defendant s unlawful practices and policies. 22

23 CASE 0:15-cv Document 1 Filed 05/20/15 Page 23 of There are questions of law and fact common to the proposed Rule 23 Class that predominate over any questions solely affecting individual members of the proposed Rule 23 Class, including but not limited to: a. whether Defendant violated the MFLSA, specifically Minn. Stat (and accompanying regulations) by failing to pay employees the required minimum wage for all hours worked; b. whether Defendant violated Minn. Stat , , and by failing to pay current and former employees all earned wages; c. whether Defendant violated Minn. Stat (and accompanying regulations) by failing to pay employees an overtime premium of one-andone-half times their regular hourly rate for hours worked in excess of fortyeight in a workweek; d. whether Defendant violated Minn. Stat by failing to provide paystubs to its employees; e. whether Defendant violated Minn. Stat , subd. 4, , by employing an illegal method of paying employees; f. whether Defendant violated Minn. Stat , by failing to maintain accurate timekeeping records for all its employees; g. whether Defendant violated Minn. Stat (and accompanying regulations) by improperly deducting rest and meal breaks from employees hours worked; h. the proper measure of compensatory damages, liquidated damages, and civil penalties; and i. whether Defendant should be enjoined from such violations in the future. 86. Plaintiffs claims are typical of those of the proposed Rule 23 Class. Plaintiffs, like other members of the proposed Rule 23 Class, were subjected to Defendant s unlawful policies and practices, resulting in a multitude of violations of the 23

24 CASE 0:15-cv Document 1 Filed 05/20/15 Page 24 of 46 PWA and the MFLSA. Plaintiffs and members of the proposed Rule 23 Class have sustained similar injuries as a result of Defendant s actions. 87. Plaintiffs will fairly and adequately protect the interests of the Rule 23 Class, and have retained counsel experienced in complex wage and hour class action litigation. 88. This action is properly maintainable as a class action under Fed. R. Civ. P. 23(b)(1)(A) because prosecuting separate actions by individual class members would create a risk of inconsistent or varying adjudications with respect to individual class members that would establish incompatible standards of conduct for Defendant. 89. This action is properly maintainable as a class action under Fed. R. Civ. P. 23(b)(2) because Defendant has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole. 90. This action is properly maintainable as a class action under Fed. R. Civ. P. 23(b)(3) because questions of law or fact predominate over any questions affecting individual class members, and a class action is superior to other methods in order to ensure a fair and efficient adjudication of this controversy because, in the context of wage and hour litigation, individual plaintiffs lack the financial resources to vigorously prosecute separate lawsuits against large corporate defendants. Class litigation is also superior because it will preclude the need for unduly duplicative litigation resulting in inconsistent judgments pertaining to Defendant s policies and practices. There do not appear to be any difficulties in managing this class action. 24

25 CASE 0:15-cv Document 1 Filed 05/20/15 Page 25 of Plaintiffs intend to send notice to the proposed Rule 23 Class to the extent required by Fed. R. Civ. P. 23(b)(3). COLLECTIVE ACTION ALLEGATIONS 92. Plaintiffs bring Counts Two and Three on behalf of themselves and all individuals similarly situated. The proposed FLSA Collective is defined as: All individuals employed by Defendant as cleaners (including crew leads) in Minnesota within the three years prior to the filing of this Complaint. 93. Plaintiffs each consent in writing to be a part of this action pursuant to 29 U.S.C. 216(b). (See Ex. A.) 94. Plaintiffs and the FLSA Collective are victims of Defendant s widespread, repeated, and systematic illegal policies and practices that have resulted in failure to pay minimum wages as required by the FLSA, causing significant damage to Plaintiffs and the FLSA Collective. 95. Defendant has willfully engaged in a pattern of violating the FLSA in ways including, but not limited to, failing to pay members of the proposed FLSA Collective the federal minimum wage for all hours worked and failing to pay them one-and-a-half times their regular rate of pay for all hours worked in excess of forty in a workweek. 96. Defendant s conduct constitutes a willful violation of the FLSA within the meaning of 29 U.S.C Defendant is liable under the FLSA for failing to properly compensate Plaintiffs and others similarly situated, and, as such, notice should be sent to the proposed FLSA Collective. There are numerous similarly-situated current and former employees of 25

26 CASE 0:15-cv Document 1 Filed 05/20/15 Page 26 of 46 Defendant who have suffered from the common policies and practices of Defendant, and who would benefit from the issuance of a Court-supervised notice of the present lawsuit and the opportunity to join in the present lawsuit. Those similarly situated employees are known to Defendant and are readily identifiable through Defendant s payroll and timekeeping records. CAUSES OF ACTION COUNT I MINIMUM WAGE (Minnesota Fair Labor Standards Act, Minn. Stat , et seq.) On Behalf of Plaintiffs and the Proposed Rule 23 Class 98. Plaintiffs and members of the proposed Rule 23 Class were or are employees of Defendants within the meaning of Minn. Stat , subd. 7, Defendants were or are employers of Plaintiffs and members of the proposed Rule 23 Class within the meaning of Minn. Stat , subd. 6, subd. 1(a)(1) Defendant is a large employer within the meaning of Minn. Stat , 101. After August 1, 2014, Plaintiffs were entitled to be paid no less than $8.00 per hour for each hour they worked for Defendant. Minn. Stat , subd. 1(b) (2014) Defendant was prohibited from requiring Plaintiffs to purchase consumable supplies required in the course of... employment where the cost of those supplies would reduce Plaintiffs wages below the minimum wage. Minn. Stat , subd

27 CASE 0:15-cv Document 1 Filed 05/20/15 Page 27 of Defendant was prohibited from deducting a lunch break from Plaintiffs hours worked in instances where the lunch break is less than twenty minutes, where the employee was interrupted by calls to duty, or where the employee did not actually take the break in question. Minn. Stat ; Minn. R , subp Plaintiffs were entitled to compensation at the statutory minimum wage for all hours worked including travel time between job sites. Minn. R , subp. 1, Defendant has violated Minn. Stat by failing to pay Plaintiffs and members of the proposed Rule 23 Class wages at a rate of at least $8.00 per hour for all hours worked after August 1, Defendant s actions were willful and not the result of mistake or inadvertence. See Minn. Stat (5) As a direct and proximate result of Defendant s unlawful conduct, Plaintiffs and members of the proposed Rule 23 Class have suffered damages in an amount to be determined at trial Plaintiffs and members of the proposed Rule 23 Class seek damages in the amount of back pay at the statutorily guaranteed minimum wage for all hours worked, liquidated damages pursuant to Minn. Stat , subd. 8, reasonable attorneys fees and costs for this action, pre- and post-judgment interest, injunctive relief, and such other legal and equitable relief as the Court deems proper. 27

28 CASE 0:15-cv Document 1 Filed 05/20/15 Page 28 of 46 COUNT II MINIMUM WAGE (Fair Labor Standards Act, 29 U.S.C. 201, et seq.) On Behalf of Plaintiffs and the Proposed FLSA Collective 109. At all relevant times, Plaintiffs and others similarly situated were employees of Defendant within the meaning of 29 U.S.C. 203(e)(1) At all relevant times, Defendant was an employer of Plaintiffs and members of the proposed FLSA Collective within the meaning of 29 U.S.C. 203(d) The FLSA, 29 U.S.C. 206, requires employers to pay minimum wages to their employees. It provides that Plaintiffs and those similarly situated were to be compensated by Defendant at a rate of no less than $7.25 per hour beginning July 24, For an employer to deduct a lunch break from an employee s hours worked, the employee must be completely relieved of his or her duties during the break. Thus, an employee must be compensated for any meal break that is interrupted by a request that the employee perform work duties. 29 C.F.R Travel from job site to job site must be counted as hours worked. 29 C.F.R Monies paid to an employee that must be used to purchase supplies required for the performance of the employer s particular work are not considered wages for purposes of determining whether an employee has been paid proper minimum wages. 29 C.F.R (c);

29 CASE 0:15-cv Document 1 Filed 05/20/15 Page 29 of Prior to August 1, 2014, Defendant agreed to pay Plaintiffs and the proposed FLSA collective $7.25 per hour. After August 1, 2014, Defendant agreed to pay Plaintiffs and the proposed FLSA Collective $8 per hour However, as detailed throughout the Complaint, though Defendant purported to pay Plaintiffs at a rate at least equal to the federal minimum wage, as a result of Defendant under-reporting Plaintiffs hours, deducting time for breaks that were not actually taken or that were compensable, refusing to compensate Plaintiffs for travel time between worksites, requiring Plaintiffs to purchase their own cleaning supplies, and not paying terminated employees for work performed during their last pay period, Defendant failed to pay Plaintiffs and those similarly situated the minimum wage required by the FLSA for all hours worked in violation of 29 U.S.C The foregoing conduct, as alleged, constitutes a willful violation of the FLSA within the meaning of 29 U.S.C As a direct and proximate result of Defendant s willful conduct, Plaintiffs and members of the proposed FLSA Collective have suffered and will continue to suffer damages in an amount to be determined at trial Plaintiffs, on behalf of themselves and members of the proposed FLSA Collective, seek damages in the amount of their unpaid minimum wages for all hours worked, liquidated damages pursuant to 29 U.S.C. 216, reasonable attorneys fees and costs for this action, pre-judgment interest to the extent liquidated damages are not awarded, and such other legal and equitable relief as the Court deems proper. 29

30 CASE 0:15-cv Document 1 Filed 05/20/15 Page 30 of 46 COUNT III OVERTIME (Fair Labor Standards Act, 29 U.S.C. 201, et seq.) On Behalf of Plaintiffs and the Proposed FLSA Collective 120. At all relevant times, Plaintiffs and others similarly situated were employees of Defendant within the meaning of 29 U.S.C. 203(e)(1) At all relevant times, Defendant was an employer of Plaintiffs and members of the proposed FLSA Collective within the meaning of 29 U.S.C. 203(d) The FLSA, 29 U.S.C. 207, requires employers to pay non-exempt employees one and one-half times the regular rate of pay for all hours worked over forty (40) hours per workweek As described in the preceding paragraphs, Defendant suffered and permitted Plaintiffs and the members of the proposed FLSA Collective to routinely work more than forty (40) hours a workweek without paying them overtime compensation Plaintiffs and the FLSA Collective are paid on an hourly basis and are not exempt from the overtime requirements of the FLSA. See 29 U.S.C As the direct and proximate result of Defendant s unlawful conduct, Plaintiffs and members of the proposed FLSA Collective have suffered and will continue to suffer a loss of income and other damages in an amount to be determined at trial The foregoing conduct, as alleged, constitutes a willful violation of the FLSA within the meaning of 29 U.S.C. 255(a). Defendant knew or showed reckless disregard for the fact that its compensation practices were in violation of the FLSA Plaintiffs, on behalf of themselves and members of the proposed FLSA Collective, seek damages in the amount of their unpaid overtime compensation, 30

31 CASE 0:15-cv Document 1 Filed 05/20/15 Page 31 of 46 liquidated damages as provided by the FLSA, 29 U.S.C. 216(b), prejudgment interest to the extent liquidated damages are not awarded, reasonable attorneys fees and costs incurred in connection with this claim, and such other legal and equitable relief as the Court deems proper. COUNT IV OVERTIME (Minnesota Fair Labor Standards Act, Minn. Stat , et seq.) On Behalf of Plaintiffs and the Proposed Rule 23 Class 128. Plaintiffs and members of the proposed Rule 23 Class were or are employees of Defendants within the meaning of Minn. Stat , subd. 7, Defendants were or are employers of Plaintiffs and members of the proposed Rule 23 Class within the meaning of Minn. Stat , subd. 6, subd. 1(a)(1) Defendant is a large employer within the meaning of Minn. Stat , 131. Defendant was required to compensate Plaintiffs at a rate of one-and-onehalf their regular rate of pay for all hours worked in excess of 48 in a workweek. Minn. Stat , subd Defendant was prohibited from deducting a lunch break from Plaintiffs hours worked in instances where the lunch break is less than twenty minutes, where the employee was interrupted by calls to duty, or where the employee did not actually take the break in question. Minn. Stat ; Minn. R , subp Plaintiffs were entitled to compensation for all hours worked including travel time between job sites. Minn. R , subp. 1, 2. 31