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Fast v. Cash Depot Ltd.

United States District Court, E.D. Wisconsin

November 6, 2017

TIMOTHY J. FAST, Plaintiff,
CASH DEPOT LTD., Defendant.


          William C. Griesbach, Chief Judge United States District Court

         This case presents the important question of whether an employer accused of violating the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (FLSA) in calculating the wages due its employees is required to incur the substantial costs and attorneys fees of a collective or class action even when it acknowledges the violations and promptly attempts to remedy them. Cash Depot, Ltd., is a Wisconsin company that sells, leases, rents, installs, ships, and services Automated Teller Machines (ATMs). Plaintiff Timothy Fast was employed by Cash Depot as a Field Service Technician for a little over a year between July 6, 2015 to July 29, 2016. On December 29, 2016, Fast brought this collective action against his former employer on behalf of himself and all other similarly situated current and former non-exempt Field Service Technicians employed by Cash Depot, alleging violations of the FLSA.

         Relatively early in the case, Cash Depot reached the conclusion that it had been underpaying its employees based upon a wage audit conducted by its accountant. Cash Depot then issued payroll checks for the underpayment calculated by its accountants to its current and former employees. On July 7, 2017, the court approved the parties' stipulation staying all proceedings for sixty days to allow Fast's counsel to review Cash Depot's calculations regarding the amounts owed to Fast. Counsel for Fast disputes Cash Depot's calculation of his client's underpayment, but refuses to tell Cash Depot what he believes the correct amount is or how he arrived at it. Currently before the court are Cash Depot's motions to dismiss Fast's claims on mootness grounds and for summary judgment. The stay was continued pending resolution of the pending motions.


         Fast alleges in his complaint that Cash Depot violated the FLSA by failing to lawfully compensate current and former non-exempt field service technicians at a correct rate of overtime pay and for all overtime hours worked at that overtime rate of pay. Id. ¶ 4. The FLSA requires that non-exempt employees be paid overtime at a rate of one-and-a-half times their regular rate of pay. 29 U.S.C. § 207(a)(1). Fast's hourly rate for regular hours of work during his employment at Cash Depot was $15.00 per hour. Cash Depot paid him at a rate of one-and-a-half times that amount, or $22.50 per hour, for overtime hours. Bradley Decl. ¶ 15, ECF No. 24. What Cash Depot apparently did not realize, however, is that the FLSA defines “regular rate” of pay to include “all remuneration for employment paid to, or on behalf of, an employee, ” subject to several exceptions not relevant here. Id. at § 216(e). Fast alleged that Cash Depot failed to include non-discretionary bonuses and on-call premiums in calculating its employees' regular rates of pay for purposes of determining the amount of overtime compensation its employees should receive each workweek.

         Sometime after Fast filed the instant action, Cash Depot's legal counsel retained Schenck SC, an accounting firm, to review Cash Depot's payroll practices concerning the payment of on-call premiums, shift premiums, bonuses, and overtime to its employees for the time period of December 2013 through February 2017. Bradley Decl. ¶ 3. Even though Fast's complaint only considered overtime payments to field service technicians, Schenck audited the payroll records for all Cash Depot employees. Id. ¶ 7. Schenck learned that Cash Depot paid its field service technicians a $75 on-call premium each week the technicians were on call but did not pay them shift premiums. Id. ¶ 9. Schenck also reviewed Cash Depot's definitions of “workweek” and “on-call week.” Cash Depot defined its workweek as Sunday through Saturday and its on-call week as Monday through Sunday. Based on these designations, the $75 on-call premium spanned two workweeks. Id. ¶ 10. The field service technicians' on-call week began on Monday, the second day of the workweek, and ended Sunday, the start of the following workweek. After considering Cash Depot's payroll materials, Schenck concluded Cash Depot did not correctly factor the on-call premiums into its employees' regular rates of pay when computing overtime and began calculating the proper amounts Cash Depot owed its employees.

         Schenck calculated the overtime compensation amount for Fast by reviewing his daily and weekly time reports and payroll report. Id. ¶ 13. It noted which weeks Fast earned an on-call premium and divided the premium between the two workweeks. Schenck concluded Fast should receive $64.29 for the Monday through Saturday he was on call and $10.71 for Sunday, his last on call day but the start of Cash Depot's workweek. Id. ¶ 14. Schenck then verified the workweeks Cash Depot paid Fast overtime for all hours worked in excess of forty hours. It found that Cash Depot had already compensated Fast for overtime at his regular hourly rate of $15.00 per hour, so it developed a formula to calculate the additional overtime owed to him based on the on-call premiums. Id. ¶ 16. To determine this number, Schenck divided the on-call premium by the number of hours Fast worked in a given workweek. Based on these calculations, Schenck concluded Cash Depot owed Fast an additional $167.50 in overtime wages for the on-call premiums it paid him throughout his employment. Id. ¶ 17.

         Schenck also found that Cash Depot failed to pay Fast overtime compensation for a $700 non-discretionary bonus he received in August 2015 for meeting the company's transaction goals in July 2015. Schenck divided $700 by the number of hours Fast worked during the month of July and determined Cash Depot owed Fast $22.88 in overtime compensation for the 11.15 hours of overtime he worked in July 2015. Id. In all, Schenck found Cash Depot owed Fast $190.38 in overtime compensation related to the on-call premiums and non-discretionary bonuses Cash Depot did not previously factor into his regular rate of pay. Id. ¶ 18.

         Schenck contends that it not only audited Cash Depot's payroll records for Fast, but also the records for all of Cash Depot's current and former employees, even those who were not employed as field service technicians, who worked during the December 2013 through February 2017 time period. After calculating the additional overtime compensation due to each employee, Schenck calculated interest payments on those amounts. Id. ¶ 24. Schenck determined Cash Depot owed its employees a total of $21, 986.47, including those payments owed Fast. Id.

         After receiving a spreadsheet from Schenck itemizing these figures, Cash Depot processed payments to all of its current and former employees. Although the payments did not include liquidated damages in accordance with the FLSA, they comprised any overtime wages and interest due to the employee. With respect to employees who Cash Depot owed less than $10, the company elected to pay those employees $10.00. Cash Depot electronically deposited these funds with its current employees during the May 20, 2017 pay period and mailed checks to its former employees. Reis Decl. ¶ 13, ECF No. 19. In all, Cash Depot issued 63 paychecks to its current and former employees, excluding Fast, totaling $21, 983.53. Id.

         As to Fast himself, Cash Depot determined it was obligated to pay him $380.76, which represented the amount owed to him in overtime compensation plus the amount of liquidated damages afforded under the FLSA. On June 6, 2017, Cash Depot's counsel mailed a letter to Fast's counsel, Attorney James Walcheske, enclosing a payroll check in the amount of $338.98-the total owed less federal and state taxes. Labs Decl. ¶ 5, ECF No. 21; ECF No. 21-1. This correspondence advised Fast and his counsel that Cash Depot would also pay the costs and attorneys' fees associated with advancing Fast's FLSA claim and enclosed formal discovery requests regarding those amounts. ECF Nos. 21-1 & 21-2.

         On June 21, 2017, Cash Depot's counsel served Fast's counsel with Defendant's Responses to Plaintiff's First Set of Interrogatories and Request for Production of Documents, which included a spreadsheet summarizing Schenck's overtime compensation calculations as they related to Fast. Labs Decl. ¶ 7. Cash Depot's responses did not provide any information relating to the putative class, asserting that the information is “irrelevant, primarily due to the fact Cash Depot has paid its field service technicians all wages owed to them, including overtime.” ECF No. 35-1 at 10. Cash Depot also did not provide Fast with an itemized list of the payments it made to all current and former employees. Walcheske Decl. ¶ 13, ECF No. 35.

         Fast's counsel was unaware Cash Depot would be sending Fast a check for the amounts owed to him and requested that the parties discuss the status of the case on June 23, 2017. Id. ¶ 14; Labs Decl. ¶ 8. In a telephone conference on June 28, 2017, Fast's counsel suggested that, based on his calculations, Cash Depot underpaid Fast. Id. ¶ 9. Cash Depot's counsel advised that if it did underpay its employees, it would simply disburse additional checks to Fast and the putative collective to supplement their compensation. During the conference, Cash Depot's counsel offered to arrange a meeting with a Schenck representative and Fast's counsel to discuss Schenck's calculations as they related to Fast. Id.; Walcheske Decl. ¶ 21.

         On July 6, 2017, the parties filed a stipulation, approved by the court, to stay proceedings for sixty days to allow them to evaluate the accuracy of Schenck's calculations and Cash Depot's payments. ECF Nos. 14-15. That same day, Fast's counsel emailed a letter to Cash Depot's counsel regarding Cash Depot's previous discovery responses and attached Plaintiff's Second Set of Interrogatories and Requests for Production of Documents. Walcheske Decl. ¶ 23. Even though the parties agreed to stay all proceedings in the case, Fast's counsel indicated he expected responses to the requests by July 17, 2017. ...

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