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CarMax Overtime Claim Remains In Federal Court

SAN FRANCISCO — A putative class action overtime lawsuit against CarMax Auto Superstores California LLC will remain in federal court after a U.S. District Court judge ruled in CarMax’s favor. The mechanics, detailers and other CarMax employees had asked the court to return the case to state court. But the judge determined the estimated amount of money in question, nearly $8 million, made the case better suited for federal court.

The Employees’ Claim

Three former CarMax employees filed the lawsuit in March of this year. The three former employees, who received nonexempt piece-rate pay, seek to represent current and former California CarMax painters, detailers, mechanics and other employees who received piece-rate wages over the last four years. According to their lawsuit, the potential class members were not compensated for the time they were required to be at work without piece-work projects to complete. While they did receive some payment for their non-piece-work time, they believe they should have received twice the minimum wage for this time.

The former employees did not provide an estimate on how much they believe CarMax owes the potential class members. But, CarMax provided its estimates when it requested the case be moved to federal court. CarMax estimated the employees’ claims amount to more than $2 million for minimum wage violations, around $1.4 million for overtime wages, and more than $3 million penalties for other related wage-and-hour laws violations. Since CarMax provided the only estimate on the amount in controversy, the court determined the amount was reasonable and exceeded the $5 million threshold for removal to federal court.

State or Federal Court

In many cases, employees are protected by both state and federal labor laws. As a result, employees usually have the option of filing their overtime and other wage violations in either state or federal court. The decision on which is the best court for filing is based on many factors. For instance, in some states the employees prefer to file in state court because the state laws and state court are more favorable for the employee than the federal ones. Also, in some cases, the employer is only accused of violating a state law so a state court is better suited to decide the matter. But, there are some instances where federal court is the only option.

Federal courts are better suited to handle cases where the amount of money in question is more than $5 million and cases where the parties are from different states. Large companies will usually request state courts “remove” a case from state court into federal court, if the company is not headquartered in the state in which the case is filed. This removal makes a potential trial easier for the company because federal court rules, procedures, and previous decisions on similar cases are more uniform than state courts.

If you believe you are owed unpaid wages or overtime you may be able to recover back wages and overtime under either state or federal law. Call our top-rated team of overtime pay lawyers today at (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page and our knowledgeable legal team will evaluate your case and filing options. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.

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