[gyardley]

Completely misleading title - it should read 'Groupon Salesperson Files Class-Action Suit'. You only need one person to file a lawsuit, class-action or otherwise, and there's no indication in any of the docs that any other members of Groupon's sales team are involved.

From the filing (in Justia - http://docs.justia.com/cases/federal/district-courts/illinoi...) it looks to my completely-not-an-expert-eyes like Groupon's mistake here was not treating its salaried employees like salaried employees - on rare occasions it gave them overtime pay, and on the attached pay stub hours and an hourly rate ($15.62) are clearly recorded. Whoops.

[tptacek]

If that's true, it's a pretty common error. Most tech companies operate under the (usually valid) assumption that their employees are all salaried and exempt from OT comp. But it's usually to the benefit of all those employees to be classified "hourly", and theres a bunch of innocuous things employers can do to make that happen.

More common than breaking people's status with overtime payments: threatening to dock pay for coming in late or missing days.

[tedunangst]

California, a few years ago, cracked down on this. Entry level programmers are not exempt. I think because they lack responsibility or skill or somesuch. I found this out only when I had to start filling out time sheets. I became exempt again after a raise, apparently there's some salary floor at which point they assume you have to have responsibility because you're paid too much not to.

FWIW, CA appears to exempt outside sales but not inside sales, so probably all groupon salespeople in CA have a case.

[tptacek]

This is shocking to me. Are you sure? Being non-exempt is a big deal. And it cuts both ways: it also means your employer can dock you when you show up late. Are you sure about this? Are junior devs literally punching timecards?

[tedunangst]

Certainly I was literally filling in boxes on physical paper with a physical pen, but there was no giant steam whistle involved. California has revved the laws a few times, and I'm not an employment lawyer, but all I know is I worked two weeks on salary before I was told there'd been a mistake. That was 2004, not long after CA went around to a bunch of businesses and explained that "college degree === exempt professional" was no longer going to be the order of the day. Made me happy, it meant more money. The hours were as flexible as ever.

[bmm6o]

Yes: http://www.paymeovertime.com/overtime-pay.php. The law changed sometime around the end of the .com bubble.

[tptacek]

"This is why every computer and IT employee who is classified as exempt, should speak to a California labor law attorney to review their employment matter."

Gag.

[bmm6o]

> Gag.

I can't tell if you're objecting to the law or the messenger. The site is obviously trying to drum up business, but their advertizing tactics aren't really germane.

[ak217]

I think this is it:

http://www.management-advantage.com/products/overtime-exempt...

1. "Minimum Salary Test" The minimum salary level for exempt white collar employees according to A.B. 60 is "no less than two times the state minimum wage for full time employment." "White collar" exemptions refer to the executive, administrative, learned professional, creative professional, computer employee, and outside sales exemptions specified in the Fair Labor Standards Act (FLSA) as amended effective 8/23/2004. Computing the California minimum salary level for January 2009 we do the following: Current minimum wage = $8.00 per hour X 2,080 hours in a year = $16,640, multiplied by 2 times the minimum wage = $33,280

[tedunangst]

You must already be exempt for that test to apply. It doesn't mean anyone making $16/hr becomes exempt.

[tptacek]

So that seems to boil down to: interns are non-exempt.

[ltamake]

> In a filing in Chicago federal court this week, former salesperson Ranita Dailey confirmed she will be lead plaintiff on behalf of Groupon employees who seek to recoup overtime that the company allegedly failed to pay.

Just because she's the lead plantiff doesn't mean the others aren't involved.

[tptacek]

(i) Sales staff are usually salaried exempt. I would be interested in a specific counterexample (ie, "inside sales at Airbnb is non-exempt!").

(ii) As a result, OT compensation for sales staff is usually zero.

(iii) This filing claims Groupon paid OT comp in the past. That was probably dumb. They don't have to.

(iv) By doing that, they created a basis for sales staff to argue that they were in fact non-exempt. But see (i): the expectation among sales professionals is that they are exempt.

(v) The other specific complaint in this filing is that Groupon didn't include commissions (variable comp) in the calculation for time-and-a-half overtime. In other words, they paid time-and-a-half overtime, which (see (iii)) they didn't need to do, but didn't do it to someone's satisfaction.

How legit does this case seem to you? It looks like a gotcha case over FLSA status. You think the whole sales team signed on for that?

I'm not saying they're going to lose (it'll probably settle out). But does the core issue in here really seem legit to you? It doesn't to me.

[DanLivesHere]

FLSA also isn't a "class action" statute -- it's "collective action." The distinction is that you have to opt-in to be a plaintiff under the FLSA, while most class actions are opt-out.

[tedunangst]

(i) For CA, see http://www.management-advantage.com/products/overtime-exempt... which is probably clearer than reading the actual laws. Key requirement: "Usually work away from the employer's place of business".

[tptacek]

I don't know about the specific statutes in California, but from experience I'm pretty sure most tech inside sales reps are salaried.

[tedunangst]

Probably because most employees don't know their rights, nor would they be particularly interested in flexing them if they did. Not long ago you might have said that most long term contractors get invited to the company picnic. Not anymore.

[tptacek]

I really don't think this is as cut-and-dry as you seem think it is. There's a downside to being non-exempt. And companies can easily avoid paying overtime.

[rprasad]

The key phrase, of course, is that sales people are "usually" but not always exempt employees.

Actions speak louder than words, and treating a purported-exempt employee as a non-exempt employee (i.e., compensating them based on hours worked, or docking pay for not working specific hours) is pretty much all you need to do (as an employer) for the employee to be classified as non-exempt. The laws, and especially the NLRB administrative decisions, favor the employees in this regard.

The "expectations" bit doesn't matter in this case, because the specific actions of Groupon make those industry-standard expectations irrelevant. It's about what Groupon did, not what everyone else does.

Once Groupon began treating the sales staff as non-exempt employees, they became non-exempt employees, and Groupon became obligated to compensate them for time-and-a-half overtime.

Based on the facts currently available in the linked article and other sources online, I am saying that Groupon would lose if it gets to a hearing. But chances are better than 99% that they'll settle (or go bankrupt before the case gets anywhere in the court system).

[tptacek]

I don't really have an opinion about any of this. All I'm saying is, if you want to read tea leaves on how much this filing has set the whole Groupon sales force on fire, it's helpful to know that it's taking advantage of a technicality.