BOSTON — A group of employees who filed an overtime class action suit against Pepsi under Massachusetts labor law and the Fair Labor Standards Act (FLSA) has asked a federal court to approve a proposed $3 million settlement agreement. Under the proposed settlement, the named plaintiff would receive a $15,000 incentive award and the approximately 4,349 class members would receive their prorated cut of the remaining funds based on when they worked for the company and whether they did so in Massachusetts. Additionally, the plaintiff’s attorneys will collect $1 million for their fees from the settlement, if approved.
The class action suit claims that Pepsi failed to pay employees overtime by improperly using a fluctuating workweek system to calculate their wages. Under this system, Pepsi calculated overtime pay by dividing employees’ wages for a week by the number of hours worked, and then divided the subsequent hourly rate in half to reach the amount to pay for each hour of work above 40 hours in a week. However, the named plaintiff claimed that he and other bulk customer representatives received varied pay, such as lower wages on holidays, nondiscretionary commissions and “sixth and seventh day pay” of at least $175 or $200 for additional days worked during a week.
Class Coverage and Award Distribution
Award distribution is based on whether the class members qualify for either damages under FLSA or under Massachusetts labor law. Members of the FLSA class, covering a period from May 2011 to when their work location switches away from using a fluctuating work week system, would receive 50% less for weeks worked during the period’s first year. According to the settlement, this would compensate for the uncertainty of being able to prove that Pepsi acted willfully under the FLSA.
However, members of the Massachusetts class, which covers a period from May 2012 to when their work location discards the fluctuating workweek system, would get three times as much as their FLSA counterparts. This is because Massachusetts labor law requires that aggrieved employees who prevail in a wage suit be awarded three times the damage award as liquidated damages for any lost wages and other benefits.
The use of alternative workweeks may hide various violations of wage and hour laws. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you believe your wage rights have been violated. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.