Court Moves Forward ERISA Recordkeeping Claim

September 8, 2011 ( – The U.S. District Court for Northern District of California denied the motion to dismiss two employees’ claims that their employer violated the Employee Retirement Income Security Act (ERISA) by failing to keep a record of the hours they worked.

Plaintiffs Semmantha Chie and Jennifer Dessin filed suit against Reed Elsevier, Inc., Lexis/Nexis, Inc. and Matthew Bender & Company, Inc. for violations of the Fair Labor Standards Act (FLSA), the California Labor Code, and ERISA.

Chie was employed with the company since June 2001 and Dession since August 2000. In January 2005, Chie was promoted to Coordinator of Publishing Operations, and Dessin was promoted to the same position in August 2006. At the time of their promotions, both employees were notified they would be reclassified as exempt from overtime. In May 2010, both learned their positions had been misclassified, and a human resources representative for the company informed them they would be paid for the overtime they had worked (more than 40 hours) during the preceding two years. It was later decided the company would pay overtime pay incurred for a longer period of time, back to May 10, 2006. In March 2011 both Chie and Dessin received checks for approximately $30,000 each. The plaintiffs never cashed the checks, indicating the settlement offers were being declined. 

In April 2011, both plaintiffs received new checks, Chie’s was for more than $43,000 and Dessin’s was more than $31,000. Once again the checks were not cashed, indicating rejection of the settlement offers.

Shortly after the plaintiffs initiated a lawsuit against the company, asserting 11 different causes of action. In turn, the defendants were seeking a dismissal of some of the claims. The defendants specifically moved to dismiss the wage-and-hour claims (under federal and state law), the claim for violation of the California Labor Code Private Attorney’s General Act (PAGA), the intentional misrepresentation claim, and the claims for violation of ERISA.

The court did not agree with the defendants that their checks offered the plaintiffs more than they could be rewarded for their claims. The court stated, even if it were to take into account the shorter statutes of limitations under federal and state law, it is far from clear that the plaintiffs would not be entitled to more than the amounts offered by the defendants. The court noted the defendants were offering compensation only for unpaid overtime hours, and not for over damages claimed by the plaintiffs as part of this litigation. The court also noted, under the FLSA, an employer who fails to pay the overtime owed is held liable not only for the unpaid overtime, but also “an additional equal amount as liquidated damages.” Therefore, if the plaintiffs establish a willful violation under the FLSA, they could be compensated for there years of overtime, which would then be doubled.  

Also, the plaintiffs asserted a claim for not only the overtime pay, but also for unpaid “straight time” occasions when the plaintiffs worked more than their 35 hour work week, but less than 40 hours. The Plaintiffs also requested prejudgment interest and attorney’s fees, both of which may be awarded under the California Labor Code.   

The final decision from the court denies the motion to dismiss the wage-and-hour claims and the recordkeeping/reporting ERISA claim. However, the court granted the motion to dismiss the PAGA claim, the claim for intentional misrepresentation, and the ERISA Claim for breach of fiduciary duty.

The case is Chie v. Reed Elsevier, Inc., N.D. Calif., No. C-11-1784 (EMC).