Metro Eighteen Settles $495K Wage Rounding Lawsuit

Case Background

A legal dispute centered on claims of unpaid wages for retail employees concluded when Metro Eighteen, Inc., the operator of multiple clothing and accessory stores, agreed to pay a settlement amount to settle a class action lawsuit. Plaintiff David Cancino originally filed the action in the Los Angeles Superior Court, asserting that the company had systematically violated California Labor Laws by failing to pay its non-exempt, hourly employees correctly. The settlement, which the Court approved in September 2024, resolved the complex litigation, allowing the company to avoid a costly trial and providing financial relief to the hundreds of workers affected by the alleged violations.

Cause

The core cause of the lawsuit, as described in the complaint, arose from the company's time-keeping and payroll policies. The Plaintiff contended that Metro Eighteen, Inc. had improperly used a rounding policy for employee work hours. This practice, Cancino alleged, led to the systematic under-recording of time worked, resulting in workers not getting paid for all minutes they spent on the clock. This policy failure, the complaint asserted, was the direct reason for the wage violations across the company's California stores.

Injury

The injury to the workers was direct and financial. The Plaintiff and the class members claimed they had lost wages because the company's rounding practice failed to capture every minute they worked, ultimately resulting in an overall lower effective hourly pay. Beyond the unpaid wages, the employees sought compensation for the statutory penalties state law imposes on employers for violations like failing to issue accurate pay stubs that reflected all hours actually worked. These financial injuries affected every employee subject to the company's time-rounding policies.

Damages Sought

The complaint demanded that the Court order Metro Eighteen to pay damages that would fully compensate the employees for their losses. The financial demands included:

Compensatory Wages and Penalties The lawsuit sought recovery of all unpaid minimum wages and overtime wages that the rounding practice had effectively stolen from the workers. It also demanded that the company pay all statutory and liquidated damages, which California law allows to penalize employers for failing to pay wages promptly and correctly.

Restitution and Injunctive Relief The Plaintiff also asked the Court to order restitution, forcing the company to give back all profits or funds it had wrongfully acquired through its non-compliant labor practices. Additionally, the complaint sought injunctive relief, asking the Court to order Metro Eighteen to change its time-keeping systems and employment policies immediately to prevent any future violations of the Labor Code.

Key Arguments and Proceedings

David Cancino filed the class action complaint on November 29, 2022, challenging the company’s wage practices across multiple claims. The case required a detailed forensic analysis of the company's digital time records to calculate the exact amount of time the rounding policy had cost the employees. The parties engaged in comprehensive, good-faith negotiations that ultimately led to the proposed settlement, which the Court reviewed for fairness to the class.

Legal Representation

Plaintiff(s): David Cancino, on his own behalf and for all others similarly situated

·       Counsel for Plaintiff(s): Kevin A. Lipeles | Thomas H. Schelly

Defendant(s): Metro Eighteen, Inc.

·       Counsel for Defendant(s): Denis S Kenny | Lough John Bosco Jr

Key Arguments or Remarks by Counsel

Claims

The Plaintiff focused on a single, pervasive issue the company's time-rounding practice which led to three distinct legal claims:

Rounding to the Detriment of Employees The primary claim was the alleged improper use of time-rounding. The lawsuit asserted that the company's system rounded employee clock-in and clock-out times to the nearest quarter hour (15 minutes). While rounding is sometimes permissible, the Plaintiff claimed that the system had systematically favored the employer over time, effectively shaving off minutes from employees recorded work hours, resulting in unpaid minimum wages and overtime.

Inaccurate Wage Statements Because the time-rounding policy led to an incorrect recording of total hours worked, the resulting pay stubs contained false information regarding the total hours and pay periods. The complaint asserted that this constituted a direct violation of the Labor Code, which requires employers to provide accurate, written wage statements detailing all compensation elements.

Unfair Business Practices The final claim asserted that the company’s alleged actions amounted to unfair business practices under California's Business and Professions Code. The Plaintiffs contended that the company had gained an unfair financial advantage over its competitors and benefited unjustly from the money it had withheld from its employees.

Defense

Attorneys for Metro Eighteen, Inc., filed a denial of all claims. The defense maintained that the company had always intended to comply with state law and that the use of a time-rounding system was a standard, industry-wide practice. They argued that any alleged wage loss was minimal, isolated, or not recoverable due to other legal defenses. The company consistently denied that its policy had led to the systematic deprivation of wages, arguing that the system balanced out over time and that the company had acted in good faith.

Settlement

The Court formally approved the final settlement on September 23, 2024. Metro Eighteen, Inc. paid a total of $495,000 to resolve all claims asserted in the class action. The settlement provided money to the class members, compensating them for the alleged unpaid time and statutory penalties. The gross settlement also covered the costs of administering the settlement and the attorneys' fees and litigation costs the Plaintiff's counsel had incurred. The Court's approval finalized the terms of the settlement, successfully ending the litigation.

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