$552K Settlement in CA Wage Theft & Discrimination Case

Case Background

A major class action lawsuit in Sacramento County Superior Court recently concluded, resolving widespread allegations of California labor code violations and claims of disability discrimination. The case, Naveen Prasad v. RCG Logistics LLC, began when former non-exempt employee Naveen Prasad filed the complaint on behalf of himself and numerous colleagues who had worked for the logistics company.

Mr. Prasad served as a coordinator, a role that required him to coordinate cargo loads with truckers. He alleged that throughout his employment, from April 2021 to January 2023, the company-maintained policies that systematically short-changed employees on wages, denied proper breaks, and violated anti-discrimination laws. In addition to seeking class action status for wage and hour claims, Mr. Prasad included individual claims of discrimination and retaliation under California’s Fair Employment and Housing Act (FEHA). Before filing the lawsuit, the Plaintiff exhausted his administrative remedies with the Civil Rights Department, which issued a right-to-sue notice.

Cause

The core of the legal action revolved around RCG Logistics’ failure to properly compensate its employees and its management of work time, especially for employees who had earned incentive commission payments (ICPs).

Wage and Hour Violations

The complaint contended that RCG Logistics did not incorporate the incentive commissions, which employees received monthly in separate paychecks, into the “regular rate of pay”. California law mandated that companies calculate overtime and sick leave payments using an employee’s true regular rate of pay, which includes most forms of non-discretionary bonuses and commissions. By failing to include the commissions, the company paid employees less than they were owed for overtime hours, sick leave, and meal and rest period premiums.

Break Violations

The lawsuit asserted that employees routinely missed legally mandated meal and rest periods. Because their jobs often required them to field phone calls to obtain cargo quotes, employees could not abruptly end calls to take breaks. Furthermore, supervisors encouraged workers to edit their time records to reflect breaks they had not taken, and some employees worked during meal periods for which they were clocked out. In some instances, supervisors interrupted rest breaks, which prevented the employees from receiving their full, uninterrupted time off.

Unreimbursed Expenses

RCG Logistics failed to reimburse employees for necessary business expenses. Mr. Prasad claimed that he and his colleagues had used their personal cell phones to communicate with managers via Microsoft Teams, access the Gusto payroll system to clock in and out, and operate the KISI application used to lock and unlock the office doors. The company never provided compensation for the business use of these personal devices.

Disability Discrimination and Retaliation

The individual claims involved serious allegations of workplace discrimination. Mr. Prasad had a diagnosis of Autism Spectrum Disorder, which caused auditory sensitivity, particularly to repetitive noise and music with heavy base. He received an initial accommodation, but after his team moved under a new manager, Marcus Allsmuth, the manager played rap music that triggered his condition. Mr. Prasad informed the manager of his disability and prior accommodation, but the manager refused to allow him to change the music, effectively taking away the accommodation. RCG Logistics terminated Mr. Prasad shortly after he complained about the lack of proper accommodation, which formed the basis of his retaliation and failure to accommodate claims.

Injury

The company's practices caused substantial financial and emotional injury to the employees. The primary financial harm resulted from the chronic failure to pay all wages owed, including overtime and premium pay, and the refusal to reimburse work-related cell phone costs. Additionally, Mr. Prasad suffered emotional distress, mental pain, and anxiety from the alleged failure to accommodate his disability, which eventually led to the loss of his job.

Damages Sought

The complaint sought full recovery for all damages the employees suffered. This included compensatory damages to cover unpaid overtime, minimum wages, and sick leave wages, along with statutory penalties for the unreimbursed expenses. The Plaintiff also demanded penalties for the inaccurate wage statements and 'waiting time' penalties for employees who did not receive all final wages upon separation. In the disability claims, Mr. Prasad requested compensatory damages for lost wages, emotional distress, and punitive damages against RCG Logistics.

Key Arguments and Proceedings

The lawsuit advanced through the Sacramento Superior Court, with the parties engaging in extensive discovery and motion practice.

Legal Representation

Plaintiff(s): Naveen Prasad, individually and on behalf of all other similarly situated and aggrieved employees.

·       Counsel for Plaintiff(s): Galen T. Shimoda | Justin P. Rodriguez | Renald Konini

Defendant(s): RCG Logistics LLC | DOES 1 to 100.

·       Counsel for Defendant(s): Not Mentioned

Key Arguments or Remarks by Counsel

The Plaintiff’s attorneys argued that RCG Logistics had maintained a business model that relied on minimizing employee compensation through illegal pay practices, most notably the exclusion of commissions from the regular rate of pay. They asserted that the company’s termination of a disabled employee who had sought a reasonable accommodation demonstrated a corporate indifference to state civil rights law.

Claims

Plaintiff’s counsel stated that the company’s alleged conduct violated numerous provisions of the California Labor Code and the Fair Employment and Housing Act (FEHA). They contended that the sheer volume of claims ranging from failure to pay minimum wage and overtime to retaliation indicated systematic, rather than isolated, corporate failures.

Defense

Since the Court filings only included the complaint, the specifics of RCG Logistics’ formal defense did not become public record, as the case resolved before a full trial. Generally, Defendants in such cases assert that they operated in good faith, had proper policies in place, and that any alleged issues were isolated incidents or the result of employee failure to follow procedure.

Settlement

The high-stakes litigation ultimately concluded not with a jury verdict, but with a comprehensive settlement agreement that the parties negotiated. The parties submitted the agreement to the Sacramento Superior Court for review and final approval.

To resolve all outstanding class action and individual claims, RCG Logistics LLC agreed to pay a total of $552,795. This substantial sum covered all alleged losses, including the unpaid overtime and premium wages the class members had earned, the statutory penalties for Labor Code and PAGA violations, and Mr. Prasad’s individual claims for disability discrimination and retaliation.

The Court reviewed the settlement terms and determined that the resolution was fair, reasonable, and adequate, providing meaningful relief to the class members without the risk, expense, and delay of a continued trial. The final judgment formally closed the book on this complex dispute, bringing an end to the claims and ensuring that class members received compensation for the wages and premiums the company had failed to pay.

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