Groupon Employee Files Class Action Overtime Lawsuit
September 13, 2011
Our Costa Mesa, California employment attorneys have been following a current wage and hour lawsuit filed against the online coupon firm, Groupon, where a former employee is accusing the company of illegal pay practices and violations of the Fair Labor Standards Act, (FLSA).
The potential class-action wage and hour lawsuit was filed recently by Ranita Daily, a former employee who is accusing Groupon of failing to pay overtime compensation to hundreds of former and current sales employees whose responsibilities include cold-calling businesses to encourage them to sign them up for the online coupon service.
This lawsuit reportedly adds to a list of current issues the three-year old company is facing, including multiple lawsuits regarding the rules for coupons and whether they violate consumer-protection laws put into place for gift cards, along with the decision to move forward with Groupon's initial public offering.
According to Crain's Chicago Business, this wage and hour lawsuit could be a potential problem for the company, as 4,800 of Groupon's nearly 10,000 employees are sales representatives throughout the world. Nearly 1,000 of the sales representatives are working in the United States, and covered by federal wage and hour laws--which could create potential overtime payout of around $2 million or more.
The Groupon sales representatives are reportedly compensated with around $32,500 per year, plus commissions that come from the value of the savings deals that they line up with local businesses and restaurants. Groupon is being accused of failing to compensate these sales employees with overtime, from the time of the company's inception until last spring.
Once the overtime issue was discovered, employees were informed of the overtime oversight but former employees reported that these payments never happened. The lawsuit claims that once Groupon started paying overtime to the sales representatives, the compensation was too low and not up to federal overtime regulations under the FLSA.
Dailey reportedly left the company last month, and is seeking back wages for three years and punitive damages for not paying the overtime compensation.
Contact our experienced attorneys at Howard Law, PC today to discuss your state and federal wage and hour rights, so we can help you with your Orange County, California recovery.
UPDATE: Ex-Groupon Employee Files Potential Class-Action Suit For Overtime Pay, Wall Street Journal, September 9, 2011
Groupon faces employee suit over overtime, Chicago Tribune, September 9, 2011
Groupon sued over unpaid overtime, Crain's Chicago Business, September 9, 2011
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