Via
TO THOSE WHO RECEIVED PRIOR COMMUNICATION REGARDING
LABOR READY LITIGATION:
Re: OVERTIME
CLASS ACTION VERSUS LABOR READY
Romer, et al. v. Labor Ready, Inc., et al. (Romer II)
Dear Class Member:
On
We therefore ask that before you take any action in response to
Mr. Cagney’s letter, (which we believe could ultimately harm your claim against
Labor Ready), that you read this letter so that you can make an informed
decision about how you may wish to proceed.
Our law firm (Morris Polich & Purdy
LLP) and the law firm of Pierry Moorhead McAdams & Shenoi LLP commenced the
first lawsuit against Labor Ready back in February, 2003 to rectify Labor
Ready’s failure to pay its employees wages for overtime hours they worked. This lawsuit alleges that Labor Ready
misclassified its CSR IIIs, Account Representatives (“ARs) and Branch Managers
(BMs) as exempt from overtime, when in fact they were not exempt under the law
and therefore were entitled to be paid overtime. Our lawsuit also alleges that Labor Ready did
not pay CSR Is and CSR IIs who were paid on an hourly all of their overtime.
Several months later, the Cagney group
filed a separate action against Labor Ready.
They have followed by filing three additional lawsuits. As we describe
below, we believe that all of the lawsuits commenced by the Cagney group have problems
and do not serve your best interests.
First, because our action was filed first,
it has the longest statute of limitations period, which means a longer
potential period of recovery for each of you.
Second, the class representatives in our
action represent all of the classes
(CSR Is, IIs, IIIs, ARs, and BMs). This is an absolute requirement for any
class action. The Cagney lawsuits do not
meet this requirement. Indeed, it was only after we filed briefs pointing out
this potential problem, that they unsuccessfully tried to present the Court
with a stipulation signed in cooperation
with Labor Ready to amend their original complaint. When the Los Angeles Superior Court refused
their stipulation, the Cagney group just recently filed a new and entirely
separate lawsuit in late September, 2004 naming a branch manager.
This latest case was the fourth separate lawsuit that the Cagney
group has brought against Labor Ready to try and address some of the same wage
and hour issues that we have raised in our one complaint. Even this most recent Cagney group complaint
does not provide a representative for all of the classes. And, of course, this most recent complaint
cuts off nineteen months of back wages that BMs could get, as compared to our
action filed back in February, 2003.
In
case you may be wondering about the Cagney group’s record in its prior lawsuits,
we provide the following. The Cagney
group’s first lawsuit against Labor Ready alleging a nationwide class was
dismissed completely by the United States District Court after Labor Ready
claimed that the case had to be filed in
The Cagney group’s second lawsuit was
filed in Los Angeles Superior Court.
Labor Ready then removed that case to the same federal court that had dismissed
the Cagney group’s first case. Even
though we ultimately showed that there were good legal grounds to challenge the
removal, the Cagney group chose not do so.
When we filed papers in that
case challenging the federal court’s jurisdiction over the Cagney group’s case,
they objected. Despite their objections, and because of
the “serious” jurisdictional issues we had raised, the federal court ordered
the Cagney group and Labor Ready to justify why the case was in her court. While that order was pending against them,
Labor Ready and the Cagney group agreed among themselves to send the case back
to the Los Angeles Superior Court, which is where we said it belonged from the
beginning. That was done in August 2004.
The third Cagney group lawsuit was filed
in the federal court in
As stated, the fourth Cagney lawsuit was filed
just six weeks ago. It also does not
have a representative for all of the classes, and potentially lops off over
nineteen months of recovery for Labor Ready BMs because of the later filing
date.
Now with all these actions being filed,
you might want to compare what work has been done by the lawyers two groups of
lawyers involved. For our part, we have
noticed over 100 depositions and actually taken approximately 40 depositions in
To see the relative lack of activity in
the Cagney group’s cases, use the same procedure, but insert case numbers
BC321600 and BC303374.
The work that we have done has forced
Labor Ready to turn over critical documents and information. Moreover, after the Court, at our request,
ordered Labor Ready to “let the sunshine in” in March, 2004, and permitted us
access to Labor Ready staff at Labor Ready branch offices during working hours,
we went to virtually all of the Labor Ready branches in California, and several
in New Jersey, Nevada, and in other states.
We have interviewed over 300 witnesses.
To our knowledge, in the first, second,
third and fourth lawsuits that the Cagney group filed, they have not taken a single
deposition or filed a single motion to compel Labor Ready to produce any
information. Instead, to our knowledge,
they have relied solely on what Labor Ready has volunteered to give them, which
we have been informed, includes work that we performed.
We offer no opinion on why Labor Ready
would voluntarily provide the Cagney group with the fruits of our hard work in
discovery, or why Labor Ready voluntarily provided your name and address to the
Cagney group, which Mr. Cagney’s letter admits, but refused to give us the same
information? Indeed, we had to force the
Court compel Labor Ready to give us this information.
What we can say is that we believe that
that what is really important is your claims.
Mr. Cagney’s letter does not tell you, for instance, that there is a
real question as to whether the correct defendants are even named by the Cagney
group in their four separate lawsuits. None of the Cagney group’s four lawsuits, for
instance, named Labor Ready Southwest, Inc. as a defendant, or any other of
Labor Ready, Inc.’s regional subsidiaries.
Yet, Labor Ready has claimed that it is Labor Ready Southwest, Inc. that
is the employer of its
Mr.
Cagney’s letter also does not tell you that we defeated Labor Ready’s effort to
enforce its arbitration clause, and then defeated Labor Ready’s attempt to move
this action from the Los Angeles Superior Court to its hometown of
Most importantly, however, the Cagney
group’s October 11 letter does not even mention that several months ago, back
in July, 2004, the Cagney group purported to enter into a “settlement” with
Labor Ready for all of the California classes for $3.1 million, or that the Cagney
group reserved for themselves $ 600,000 in attorneys fees.
Please know that the Cagney group entered
into this “deal” without our help and over our strenuous objection. Further, that deal was struck when the Cagney
group’s complaint did not even have a representative for all of the classes on
whose behalf the Cagney group proposed to settle, and in a circumstance where
the Cagney group had apparently done little or no discovery on its own. Indeed, Labor Ready has stated that the Cagney
firm was relying on our work when it reached its “settlement.” If they did, they should not have suggested
this paltry settlement.
The “settlement” is not final,
however. This is because all class
action settlements must be approved by the court. In this case, the judge handling the matter has
already said in open court that he thinks the settlement has “problems.” We agree. Indeed, we have told the Court that we
believe that the settlement is patently inadequate and that Labor Ready is
using the Cagney cases as a vehicle to settle the stronger claims made in our
case.
Evidence of this fact is that the Cagney group
has allowed Labor Ready to design its settlement around the allegations of our
case and not their case. As stated,
their claim was for only CSR IIIs, yet the “settlement” they reached attempts to include all of our claims for CSR
Is, IIs, IIIs, BMs and ARs, and extend tries to back to our statute of
limitations. And, while this course of
action clearly favors the interests of the Cagney group of attorneys, who hope
to receive $600,000 in legal fees, we believe the “deal” works squarely against
the interests of the very class members (you) they purport to represent.
It was after the Cagney group announced
they had entered into this so called “deal” with Labor Ready, that we alerted
the federal court in which they first announced their deal that there never was
federal jurisdiction over their wage and hour claims against Labor Ready, and
that under the holding of a recent case, they should not even get any
attorneys’ fees for allowing the case to remain in a court that clearly lacked
jurisdiction.
Despite our demonstrating what the federal
judge later called “serious” concerns regarding the court’s jurisdiction, the
Cagney group and Labor Ready together persisted to try and have that deal
approved in the federal court. When the
federal court ultimately agreed with us that the case should be put back to the
Los Angeles Superior Court on August 23, 2004, the Cagney then group quickly
proposed to submit their settlement to that court for approval even though
there was a prior court order barring them from doing so until after our motion
for class certification had been heard.
We successfully defeated in court the Cagney
group’s attempt to change the order in which the motions would be heard, and
the Superior Court again ruled that it will first hear the motion for class
certification in our case. That motion
is set for
You probably are asking now what is your case
worth? Under the proposed settlement
that Labor Ready and Mr. Cagney’s firm collectively want to bind you to, each
class member would receive roughly one fifth of the overtime pay that we
believe you are entitled to under the law.
We firmly believe that this amount is hopelessly inadequate for each and
every one of you and that any settlement should be much, much larger.
An example of how a generic claim is
calculated should aid you. In a
nutshell, we contend that Labor Ready must pay all overtime wages that are due
to each of these classes of employees for a four year period going back to
Thus, if an improperly designated exempt
employee had a wage equivalent to $ 12 per hour and worked 10 hours overtime
per week, at 1 and ˝ times the hourly wage, he or she has a base claim for $160
per week. This is about $ 8,000 each
year. For hourly employees, they would
receive overtime for the amount that Labor Ready improperly wrote down. To this amount, you add prejudgment interest
of 10% and the potential for other penalties.
Attorneys fees can be awarded on top of that. We are of the opinion that Labor Ready, which
as a net worth of over $ 100 million and had profits in the last quarter of
over $ 5 million, can and should pay you fully for the hours you
worked.
As we noted above, we have pending a
motion to certify the classes that is set to be heard by the Superior Court on
We also believe the recent landmark August
25, 2004 California Supreme Court opinion in Sav-on Drug Stores, Inc. v.
Superior Court, that you may
have read about in the newspaper, is another reason why Labor Ready was in such
a rush to settle with the Cagney group back in August.
In that case,
the Supreme Court unanimously approved
a class action consisting of all managers of Sav-On drugstores that had been
salaried employees that were not paid overtime. We have extensively argued the
applicability of Sav-On to our case. Indeed, you
can visit our web page devoted to this case at www.mpplaw.org to see a copy of this brief and others. Further, even Labor Ready has helped out our
cause. More specifically, prior to the
issuance of the Sav-On opinion, Labor
Ready stated in a brief it filed with the Court that our case “is a Sav-On Case.” Obviously, Labor Ready wrongly predicted what
the Supreme Court would do. We are
confident that now that the Supreme Court has gone against Labor Ready’s
position, our Court will hold Labor Ready to its own words, which
strongly endorse the class action procedure for wage and hour claims such as
yours.
Given the Sav-On opinion and the strength of our evidence Romer II case, we
believe that the Cagney group’s “settlement” should be declared dead on arrival. Indeed, we find it amazing that in spite of
this great new law from the California Supreme Court, the Cagney group is still
trying to cling to a deal they “negotiated” prior to that decision’s coming to
light.
We find it even more amazing, however, that the Cagney group’s October 11 letter to you never even mentions their
“settlement,” or mentions that long before they contacted you, they and
Labor Ready had filed a joint motion
in August 2004 to approve of its terms. Nor
does Mr. Cagney’s letter tell you that your responses on the questionnaire
could be seen by Labor Ready and worse, could bind you to the answers you give,
when you were not fully informed of your rights before you were asked to fill
out the questionnaire.
If you have questions about anything in
this letter, about any of the cases, or simply wish to talk with us, we
encourage you to call the following lawyers: (1)
Finally, please feel free to share this
letter with present or former Labor Ready employees as the list of names that
we received from Labor Ready on October 20 supposedly only applies to ten
percent of certain of the class members.
Many may not know how to reach us with their questions. As stated, you can also visit our web page
devoted to this case at www.mpplaw.org.
This letter will be posted there along with other materials, including our
submission that we filed regarding the effect of the recent Supreme Court
opinion in Sav-on Drug Stores, Inc. v. Superior Court on this case.
We apologize for
the length of this letter, but we hope that in its length, we have provided you
with a fuller understanding of the claims that are being made against Labor
Ready and their history. Understand that
we have been battling Labor Ready toe-to-toe in this case (and in another class
action case alleging Labor Ready agreed with one of its customers to
discriminate against women by using the code word “Big Hands” for male workers
and “Little Hands” for female workers) for more than two years. We believe that we have a very good
understanding of how Labor Ready works and thinks. Based on that understanding, it has always
been our belief that Labor Ready will not pay any real money until its back is
truly against the wall. That wall, in
our view, is our class certification motion that is currently pending for
hearing on November 17.
Again, we encourage you to contact
us to share your experiences at Labor Ready and/or for us to answer any
questions that you may have.
Sincerely,
MORRIS
POLICH & PURDY LLP
David J. Vendler