A US District Court in California has denied a motion to remand the case to state court filed by the lead plaintiff in a putative class action lawsuit that alleges LabCorp failed to pay employees for overtime and meal allowances.
Ms. Rita Varsam filed this suit on behalf of herself and “all persons who worked as non-exempt Patient Service Technicians for Defendants in California, within four years prior to the filing of this complaint until date of certification” in the Superior Court of California, County of San Diego on June 3, 2014.
She alleged eight causes of action:
- Violation of California Labor Code §§ 510 and 1198 (unpaid overtime)
- Violation of California Labor Code §§ 1194, 1197, and 1197.1 (unpaid minimum wages)
- Violation of California Labor Code §§ 226.7 and 512(a) (unpaid meal period premiums)
- Violation of California Labor Code § 226.7 (unpaid rest period premiums)
- Violation of California Labor Code §§ 201 and 202 (wages not timely paid upon termination)
- Violation of California Labor Code § 226(a) (non-complaint wage statements)
- Violation of California Labor Code §§ 2698, et seq. (Private Attorney General’s Act or “PAGA”)
- Violation of California Business & Professions Code §§ 17200, et seq. (unfair and harmful business practices)
LabCorp removed the case to federal court in November 2014 pursuant to the Class Action Fairness Act of 2005 (CAFA) due to the fact LabCorp is a citizen of Delaware and North Carolina and the plaintiff is a California citizen, the proposed class has more than 100 members, and the amount in controversy exceeds $5 million.
Ms. Varsam filed a motion to remand the case back to California court, arguing LabCorp failed to prove both the amount in controversy is greater than $5 million and that there is “minimal diversity of citizenship”.
The judge relied on the deposition of the lead plaintiff and the declarations of Daniel Lontay, an expert for LabCorp who analyzed time and pay data, and Joseph Martin, LabCorp’s Senior Human Resources Information Management Specialist, to determine the amount in controversy. Mr. Martin apparently already had put time and pay data together for another California class action lawsuit against LabCorp, and that data overlapped with the time period at issue here.
Ms. Varsam alleges class members were “required to work for periods longer than five (5) hours without a meal period of not less than thirty (30) minutes”. Employers that violate this California labor law must pay the employee an extra hour of wages. Mr. Lontay determined that between June 3, 2010 and April 24, 2014, there were 145,723 shifts in which a LabCorp patient service technician (PST) ate a meal after the fifth hour of the shift, the meal break was less than 30 minutes in duration, or a meal break was not recorded at all. This represented about 25% of all PST shifts greater than six hours in duration. Given the average hourly wage of LabCorp PSTs of $17.48, the amount in controversy for this claim is at least $2.547 million.