Schlosser v. Retail Services WIS Corp: $893K PAGA Settlement

Case Background

Kim Marie Schlosser filed a representative action complaint against Retail Services WIS Corp, a Delaware corporation that operates as a global inventory and data collection services company. Schlosser worked as an Inventory Associate for the company starting in May 2022. She brought this lawsuit on behalf of herself and other similarly situated hourly employees throughout California under the Private Attorneys General Act (PAGA).

The complaint was filed on June 5, 2023, in Sacramento County Superior Court. The case was assigned to Judge Richard K. Sueyoshi in Department 53 for law and motion matters and to Judge Thadd A. Blizzard in Department 43 for case management.

Cause

Schlosser alleged that Retail Services WIS Corp systematically violated California labor laws through its payroll and workplace policies. The Plaintiff claimed the company failed to properly calculate overtime rates, did not pay sick leave at the correct legal rate, denied compliant meal and rest periods, and issued inaccurate wage statements to employees.

Injury

The Plaintiff and aggrieved employees suffered financial harm through underpayment of wages. Schlosser provided a specific example from her own pay records showing that during the pay period from September 9, 2022, to September 15, 2022, her wage statement listed an overtime premium of $7.5750 per hour. However, based on her base rate of $15.25 per hour, her overtime premium should have been $7.625 per hour. This discrepancy demonstrated a pattern of systematic underpayment affecting the entire workforce.

Damages Sought

The Plaintiff sought civil penalties on behalf of the State of California and aggrieved employees under PAGA. This included $100 for each initial violation and $200 for each subsequent violation per employee per pay period. The complaint also requested attorneys' fees and costs as permitted under Labor Code Section 2698 and Code of Civil Procedure Section 1021.5.

Key Arguments and Proceedings

Legal Representation

Plaintiff: Kim Marie Schlosser, on behalf of herself and all similarly situated aggrieved employees

·       Counsel for Plaintiff: Joshua S. Falakassa | Mehrdad Bokhour

Defendant: Retail Services WIS Corp, a Delaware Corporation

·       Counsel for Defendant: Jody A. Landry | Sarah Boxer

Key Arguments or Remarks by Counsel

Plaintiff's counsel argued that Retail Services WIS Corp maintained uniform payroll policies and practices that deprived employees of their rightful wages under California law. The attorneys contended that the company's failure to include non-discretionary bonuses, shift differentials, and incentive pay when calculating the regular rate of pay resulted in systematic underpayment of overtime, sick pay, and meal and rest period premiums.

Claims

Overtime Wage Violations: The Plaintiff alleged the Defendant failed to pay all overtime compensation at the correct regular rate of pay. The company did not include non-discretionary bonuses, shift differentials, and incentive pay when calculating overtime rates as required by California Labor Code Section 510.

Sick Pay Violations: The complaint stated the company paid sick time at employees' base rate rather than the regular rate of pay as mandated by Labor Code Section 246.

Meal Period Violations: Schlosser claimed employees were often unable to take timely and uninterrupted 30-minute meal periods before the end of the fifth hour of work. When second meal periods were required for shifts exceeding ten hours, those were also denied.

Rest Period Violations: The Plaintiff alleged employees did not receive 10-minute rest periods for every four hours worked or major fraction thereof. The company's policy failed to provide rest period premium payments at the regular rate of pay.

Wage Statement Violations: Due to the underpayments, the Defendant's wage statements failed to accurately identify gross wages earned, total hours worked, net wages earned, and applicable rates of pay in violation of Labor Code Section 226.

Final Wage Violations: The complaint alleged the company failed to timely pay all final wages to employees upon separation from employment in violation of Labor Code Sections 201 through 203.

Defense

Retail Services WIS Corp filed its answer on July 27, 2023, denying all allegations in the complaint. The company asserted 27 affirmative defenses challenging the Plaintiff's claims. Key defenses included failure to state a claim, statute of limitations, good faith compliance with wage laws, and arguments that any alleged violations were not knowing or intentional. The Defendant also raised arbitration defenses, claiming the Plaintiff was subject to an arbitration agreement requiring individual resolution of her claims. The company further argued that the requested penalties would violate constitutional protections against excessive fines and that the Plaintiff lacked standing to pursue certain PAGA claims.

Settlement

The parties reached a settlement agreement resolving all claims in this representative action. Retail Services WIS Corp agreed to pay a total settlement amount of $893,754 to resolve the PAGA claims brought on behalf of the State of California and the aggrieved employees. Under PAGA, 75 percent of the civil penalties recovered goes to the Labor and Workforce Development Agency, while the remaining 25 percent is distributed to the aggrieved employees. The settlement also covered attorneys' fees and costs incurred by Plaintiff's counsel in prosecuting the action.

This settlement resolved claims for all hourly aggrieved employees who worked for Retail Services WIS Corp in California from November 8, 2021, through the date of settlement approval. The class included Inventory Associates, Drivers, Inventory Supervisors, and all other non-exempt positions throughout the state.

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