$455K Settlement for Wage Theft in Logistics Class Action

Case Background

A major labor dispute in the Superior Court of California, County of Alameda, concluded recently, settling class action and PAGA claims against East Bay Logistics, Inc. The lawsuit, Oscar Armando Maravilla v. East Bay Logistics, Inc., began in July 2022 when Mr. Maravilla, a former non-exempt employee, filed the complaint on behalf of himself and a large group of fellow employees. Mr. Maravilla asserted that the logistics company had maintained a business model that systematically violated California’s strict wage and hour laws, costing hundreds of workers thousands of dollars in lost wages and penalties. The Plaintiff sought to represent the entire class of current and former employees who faced similar labor infractions, positioning the case as a high-stakes legal challenge to the company’s employment practices.

Cause

The lawsuit detailed a wide range of labor code violations, all stemming from the company’s alleged failure to properly track, schedule, and compensate its non-exempt workforce.

Failure to Pay Wages and Overtime

The complaint contended that East Bay Logistics, Inc. failed to pay employees for all hours they had worked. This alleged practice extended to both regular pay and overtime wages. The company did not properly calculate the hours worked, particularly when employees worked through breaks or performed tasks before or after their scheduled shifts. The company’s systemic underpayment meant that employees received less than both the state-mandated minimum wage and the required time-and-a-half rate for overtime hours.

Denial of Meal and Rest Periods

The company instituted policies and practices that prevented employees from receiving their legally mandated, uninterrupted meal and rest periods. Employees routinely skipped 30-minute meal breaks and 10-minute rest breaks, often because the demands of their jobs required them to remain on duty. When the company failed to provide these breaks, it also neglected to pay the premium wages the California Labor Code required as compensation for the missed time.

Inaccurate Wage Statements

The Plaintiff asserted that the wage statements East Bay Logistics provided to its employees contained numerous inaccuracies. These statements did not list the correct number of hours worked, the applicable hourly rates, or the premium payments for missed breaks. Because the statements did not provide accurate information, employees could not verify that the company had paid them correctly, which itself constituted a separate violation of the Labor Code.

Failure to Reimburse Expenses

The complaint further stated that the company required employees to use their personal property and devices, such as their cell phones, to perform necessary work duties, but never provided full and timely reimbursement for the expenses they incurred for this mandatory business use.

Injury

The alleged actions by East Bay Logistics, Inc. caused direct and measurable financial injury to Mr. Maravilla and the entire class of workers. This harm included the loss of earned minimum and overtime wages, lost premium pay for the denial of breaks, and out-of-pocket costs for unreimbursed business expenses. The failure to pay all final wages to employees who left the company also triggered statutory 'waiting time' penalties, which represented additional financial loss for those individuals.

Damages Sought

The lawsuit sought significant financial recovery for the class, targeting various legal avenues for relief. Mr. Maravilla asked the Court to award compensatory damages for all unpaid minimum and overtime wages. He also demanded statutory penalties for the uncompensated meal and rest periods, and 'waiting time' penalties for employees who did not receive their full and final paychecks upon separation. Additionally, the suit requested restitution under the Unfair Competition Law for funds the company had wrongfully acquired, along with the recovery of all attorneys' fees and litigation costs.

Key Arguments and Proceedings

The litigation progressed through the Alameda County Superior Court, where the parties engaged in discovery before ultimately resolving the dispute.

Legal Representation

The parties retained legal teams experienced in complex wage and hour class actions to conduct the litigation and settlement negotiations.

Plaintiff(s): Oscar Armando Maravilla, individually and on behalf of other similarly situated employees, and as an aggrieved employee under PAGA.

·       Counsel for Plaintiff(s): Kane Moon | Allen Feghali | Lannie Pham

Defendant(s): EAST BAY LOGISTICS, INC. | DOES 1 through 10.

·       Counsel for Defendant(s): Hieu T. Williams | Michelle C. Freeman

Key Arguments or Remarks by Counsel

The initial filings established the strongly opposing viewpoints that defined the case proceedings.

Claims

The Plaintiff’s attorneys contended that the company's labor practices were a clear and widespread violation of California law. They argued that the sheer number of violations ranging from wage theft to inadequate documentation justified the imposition of severe statutory penalties and substantial compensation for the entire class.

Defense

Counsel for East Bay Logistics, Inc. responded by formally denying every substantive allegation of wrongdoing. The defense asserted numerous affirmative defenses, stating that the company had acted in good faith and that any alleged violations resulted from errors or employee conduct, not corporate policy. The Defendant also argued that the claims were barred because the Plaintiffs failed to exhaust administrative remedies and that the company had proper policies in place to ensure labor compliance.

Settlement

The complex and contentious lawsuit concluded with an Amended Order and Judgment Granting Final Approval of a class action and PAGA settlement, which the Alameda Superior Court approved in September 2024. The parties had negotiated the final agreement outside of Court.

To resolve all class and representative claims, East Bay Logistics, Inc. agreed to pay a total settlement amount of $455,000. This comprehensive payment covered all back wages, statutory penalties, PAGA penalties, and the attorneys' fees and costs the Plaintiff's counsel had incurred. Judge Michael Markman reviewed the terms of the settlement, which included notifying all class members and providing them an opportunity to object or opt out. The Court determined that the resolution was fair, reasonable, and adequate, providing substantial relief to the class while avoiding the substantial risk and delay a full trial would have required. The final judgment formally discharged East Bay Logistics from all liability related to the claims asserted in the lawsuit.

Court documents are available upon request at jurimatic@exlitem.com