TRC Companies Pays $2.2M to Settle Wage Class Action

Case Background

In a significant move resolving claims against a national engineering and environmental services firm, TRC Companies, Inc., and TRC Companies, LLC, agreed to pay, to settle a high-profile class action lawsuit in California. The legal action, originally filed by Plaintiff Robert Estrada, sought to hold the Defendants accountable for widespread labor code violations involving alleged underpayment and failure to provide legally mandated breaks to a large class of non-exempt employees. The parties reached this settlement before the case proceeded to a full jury trial, thereby bringing the contentious litigation to a close.

Cause

The core of the dispute centered on the Defendants' business practices regarding their California hourly workforce. The complaint asserted that TRC Companies failed to adhere strictly to the numerous, detailed requirements of the California Labor Code, which provides some of the strongest worker protections in the country. Estrada claimed these failures resulted from systemic issues in the companies’ payroll, scheduling, and time-tracking systems.

Injury

The Plaintiff and the putative class members alleged they suffered financial injury due to the Defendants’ employment practices. This injury included lost wages from unpaid minimum wages and overtime, a lack of required compensation for missed meal and rest periods, and statutory penalties stemming from inaccurate pay stubs and delayed final paychecks upon separation from the company. The lawsuit argued that these labor code violations constituted a direct and calculable economic loss for hundreds of past and current employees.

Damages Sought

The initial complaint demanded a substantial financial remedy for the aggrieved employees. The relief sought included compensatory damages, aiming to recover all actual unpaid wages and overtime. The Plaintiffs also requested statutory penalties, which California law imposes for specific violations, such as waiting time penalties for delayed final checks and penalties associated with inaccurate wage statements. Additionally, the suit pursued restitution for funds the Defendants had allegedly saved or acquired through their non-compliant labor practices, as well as an order for the company to cover the Plaintiffs’ considerable attorneys' fees and litigation costs.

Key Arguments and Proceedings

The lawsuit, which Estrada filed on October 1, 2021, established itself as a complicated wage and hour case requiring extensive review of employment records and company policy. The proceedings moved quickly from the initial complaint filing to the Defendant's formal denial of the claims, signaling a long and costly legal battle ahead, which the subsequent settlement preempted.

Legal Representation

Plaintiff(s): Robert Estrada (individually and on behalf of all others similarly situated)

·       Counsel for Plaintiff(s): Kane Moon | Allen Feghali | Edwin Kamarzarian

Defendant(s): TRC Companies, Inc. | TRC Companies, LLC.

·       Counsel for Defendant(s): Creighton Sebra | Lisa Reimbold | Saige Shaw | Jose G. Cabada

Key Arguments or Remarks by Counsel

The legal arguments focused primarily on whether the Defendants' labor practices, particularly their record-keeping and compensation policies, had created systemic non-compliance with state law.

Claims

Estrada’s legal team presented a total of eight causes of action, which they framed both as a Class Action on behalf of the entire body of similarly situated employees and as a Representative Action under California’s Private Attorneys General Act (PAGA).

Unpaid Minimum and Overtime Wages The primary wage claim asserted that the Defendants failed to compensate employees for all hours worked. This included allegations that off-the-clock work and certain preparatory duties went unrecorded and, therefore, unpaid, driving the effective hourly rate below the state-mandated minimum wage. The complaint further maintained that the company failed to accurately track and pay the statutory overtime rate of one-and-a-half or double an employee’s regular rate when they worked over eight hours a day or forty hours a week.

Missed Breaks and Compensation A significant portion of the complaint tackled California’s stringent requirements for rest and meal periods. Plaintiffs alleged that the company either did not provide the required 30-minute uninterrupted meal periods and 10-minute rest periods or pressured employees to cut those breaks short, forcing them to work without proper rest. The complaint sought an hour of premium pay for each missed break, as mandated by state law.

Pay Stub and Final Pay Violations The claims extended to administrative violations, including the failure to issue accurate written wage statements that clearly detailed all required information, such as gross wages earned, all hours worked, and net wages paid. This inaccurate record-keeping provided the basis for a distinct statutory violation. Furthermore, the complaint alleged the company had failed to immediately pay all earned wages to employees who resigned or were terminated, triggering "waiting time" penalties calculated based on the employee's daily wage for up to thirty days.

Defense

Attorneys for TRC Companies offered a vigorous defense in their formal answer to the complaint, denying the central allegations of widespread non-compliance. The Defendants asserted that they had compensated Estrada and all other employees for all hours worked, including overtime, and had provided employees with the opportunity to take all required meal and rest breaks. The defense team raised several legal counterarguments, including that the Plaintiff had failed to state a valid claim and that the company was entitled to offset any amount it might owe with previous payments or credits. In essence, TRC Companies maintained that its employment practices and policies fully complied with all California labor laws.

Settlement

The parties successfully concluded the litigation through a comprehensive settlement, which the court later approved as a fair and reasonable resolution for the entire class. TRC Companies, Inc., and TRC Companies, LLC, paid a total of $2,200,000 to resolve all claims asserted in the Class Action Complaint.

The settlement represented a compromise, allowing the Defendants to avoid the considerable financial uncertainty and enormous expense associated with defending a class action through trial, while providing substantial and guaranteed relief to the class members. The funds covered the payments to the estimated class members for their alleged lost wages and penalties, and it also funded the associated settlement administration costs and the Plaintiffs agreed-upon attorneys' fees and costs. The final agreement formally ended the legal dispute, marking a critical and costly outcome for the Defendant companies in their employment practices within California.

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