American Freight Settles California Wage Case for $398K

Case Background

Charles Harris and Yaseen Abdulrahmaan launched a class action in the Superior Court of California, County of Sacramento, against American Freight Management Company LLC and American Freight Management Co. They represented current and former employees who worked at the company’s California retail locations. They claimed the company ran a statewide pay system that violated several California wage-and-hour laws.

The lawsuit focused on the period beginning November 10, 2018, and covered workers who served as managers, assistant managers, and other hourly employees. During the early stages of the case, the Court certified a class and two subclasses. After nearly three years of litigation, the parties decided to resolve the matter before trial. On the eve of the final hearing, the parties finalized a settlement designed to compensate employees for unpaid wages, missed meal periods, inaccurate wage statements, and related penalties.

Cause

The case centered on a series of wage-and-hour violations tied to the company’s handling of overtime, meal break rules, and wage statements. Harris and Abdulrahmaan stated the company used bonus programs and other nondiscretionary payments but did not include those amounts in the regular rate of pay. As a result, overtime wages fell short of what California law required.

They also claimed the company often failed to provide uninterrupted, timely meal breaks during long shifts. They said many workers stayed on the sales floor through breaks, worked without relief, or received late meal periods during busy hours. When employees received meal-break premiums, the company did not factor in nondiscretionary pay when calculating the premium rate.

The complaint also accused the company of issuing wage statements that did not correctly show pay rates, overtime calculations, or hours worked, leaving employees with inaccurate records. The Plaintiffs said this pattern of conduct broke the state’s wage-statement statute and created a wider unfair-competition issue under California’s Business and Professions Code.

Injury

Harris, Abdulrahmaan, and the class said they lost wages every pay period because overtime calculations excluded nondiscretionary bonuses. They described regular situations where they worked through meal periods without receiving the correct premium pay. Workers also reported confusion and frustration when their wage statements did not reflect accurate pay details, which made it difficult to track their actual earnings.

The Plaintiffs stressed that these violations built up over time and affected hundreds of workers. They argued that the lost wages, unpaid premiums, and inaccurate statements created a financial burden, especially for employees who relied on consistent and predictable paychecks. They also said the company’s practices caused stress and uncertainty when workers tried to understand what they earned and whether their pay complied with the law.

Damages Sought

The Plaintiffs sought unpaid overtime, missed-meal-break premiums, statutory penalties, waiting-time penalties for former employees, and restitution under the unfair-competition statute. They also requested attorney’s fees and costs. Because the case covered several years and many affected workers, the overall claimed damages spanned multiple categories.

Key Arguments and Proceedings

The litigation moved through the standard stages of a California wage-and-hour class action. After filing the complaint, the Plaintiffs produced declarations, payroll samples, and internal documents that supported their claims. They stated they worked long hours, earned bonuses, and received incomplete information about overtime calculations. They also argued the company set policies that encouraged managers to keep staffing lean, which increased the likelihood of late or skipped meal periods.

The defense denied these claims and argued the company maintained lawful compensation practices. They said the company trained managers on wage compliance and provided workers with opportunities to take timely meal periods. They also stated the payroll system captured all worked hours and calculated overtime correctly.

As the case moved forward, the Court certified the class and allowed the claims to proceed. Both sides exchanged payroll records, policy documents, and company communications. The parties then attended mediation, where the discussions narrowed the issues. They later returned for additional negotiations, which resulted in the proposed settlement. The settlement allowed employees to receive compensation without facing the delays and risks of a full trial.

Legal Representation

Plaintiff(s): Charles Harris | Yaseen Abdulrahmaan

Counsel for Plaintiff(s): Edward W. Choi, Esq. | David J. Lee, Esq. | Brandon M. Banks, Esq.

Defendant(s): American Freight Management Company LLC |American Freight Management Co.

Counsel for Defendant(s): Not Mentioned

Key Arguments or Remarks by Counsel

Claims

The Plaintiffs’ counsel said the company used a system that failed to follow California wage laws. They argued overtime pay never matched the correct rate because nondiscretionary bonuses were excluded from the regular-rate calculation. They said this flaw appeared in nearly every pay period across years of payroll records.

They also described the meal-period violations as a direct result of operational demands. Workers reportedly went long periods without full breaks, and when the company issued premiums, the amount rarely matched the law because bonus earnings were left out of the formula.

On wage statements, the Plaintiffs argued the records did not show accurate information, which prevented employees from verifying their pay. They said these errors created violations of statutory requirements and supported restitution claims under the unfair-competition statute.

Defense

The defense insisted the company complied with state law. They argued employees frequently took breaks, even if they chose to take them late. They also stressed that the company compensated workers properly and that any irregularities were isolated issues rather than a systematic problem.

The defense also questioned whether the Plaintiffs' class-wide evidence applied to every worker. They argued that individual situations varied, making it difficult to prove class-wide liability. Despite these positions, the defense eventually agreed to settle the matter to avoid prolonged litigation and the uncertainty of trial.

Settlement

The case did not reach a jury verdict. Instead, the parties entered a class action settlement. The Court reviewed the proposed terms, evaluated the class definition, and confirmed that the agreement fell within a fair and reasonable range based on the evidence.

The final settlement totaled $398,620. This amount covered payments to the class members, administrative costs, attorney’s fees, and a service award for the named Plaintiffs. Individual payments varied based on each member’s work history, pay records, and the number of workweeks they spent in covered positions.

The settlement concluded the dispute and closed the claims for overtime, meal-period violations, wage-statement errors, waiting-time penalties, and unfair-competition allegations. The agreement allowed the workers to receive compensation without further Court proceedings and brought an end to a multi-year conflict over California wage-and-hour practices.

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