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Tuesday, Jun 18, 2024

Law Firm Wins $89 Million Suit

A Los Angeles County Superior Court judge recently awarded nearly $90 million in an employment class-action case brought by a Woodland Hills law firm. Roxborough, Pomerance, Nye & Adreani LLP, a 12-attorney firm, prevailed over a division of multinational giant ABM Industries Inc., a $4 billion publicly-traded corporation. Los Angeles County Superior Court Judge John S. Wiley awarded $89.7 million in wages, interest and penalties to approximately 15,000 former and present security guards in the case of Augustus v. ABM Security Services. The court ruled that the guards werebreaks in violation of California labor law. ABM, which was founded in California and is headquartered in New York City, provides security, janitorial, engineering and parking services for commercial, industrial, institutional, governmental and retail facilities. The company has more than 100,000 employees, the vast majority of them service workers, in more than 20 countries. ABM’s December 2011 quarterly filing with the SEC reflects additional legal actions and a settlement in other states also involving alleged employee rest break violations. In the Augustus case, ABM acknowledged that its guards are required to remain “on call” during their rest periods, a practice the court found illegal. However, the company’s general counsel said in a written statement that ABM “firmly disagrees” with the court’s ruling and plans to appeal the decision. Lead counsel for the security guards, Drew Pomerance and Michael Adreani, were elated with the July 6 judgment, which is the largest the firm has obtained since it was formed in 1996. Previously, the firm’s largest class-action recovery was $24 million. “ABM’s conduct is the poster-child for how California businesses should not behave, and it’s very satisfying to see a court finally hold them accountable,” Pomerance said. “Saying that someone is ‘on break’ when he can be called back to work at any moment is like saying someone is a little bit pregnant. Either you are or you aren’t.” The court order stated: “Put simply, if you are on call, you are not on break. That has been the law for many years.” ABM maintained that when an employee’s break was interrupted, the company provided another break to compensate for the lost time. However, the employee had to remain available or “on duty” during the second break. The court found that nonsensical, said Adreani, noting, “To interrupt an illegal break to start another illegal break is illegal.” Jennifer Augustus, 49, of Winnetka, the lead plaintiff who originally brought the issue to Adreani, no longer works in the security guard industry and is pursuing her bachelor’s degree in psychology. She said, in an interview, that she loved her job at ABM, which she left six years ago, and misses it “to this day.” Augustus said she cried for hours when she learned about the judgment. “It could have been one dollar awarded to me, and I’d have been happy. The important thing is that I was heard and that this will make a difference for so many people,” she said. ‘Tremendous victory’ Because the court did not limit its ruling to the security guard industry, the case could have wider implications. Calling the ruling “a tremendous victory for workers’ rights,” attorney Dan Stormer, an internationally recognized expert in civil rights and employment law, said, “This sends a very strong and clear message to all employers that they must follow the law. Unless the meal and rest breaks are uninterrupted and free from the employer, it is not a break.” Stormer, a partner with Hadsell Stormer Richardson & Renick LLP in Pasadena, was not involved in the case. He said he has never heard of such a large award being decided on summary judgment in a case of this type and considers it significant that it was decided on a motion rather than at trial. “That means this employer clearly attempted to make a profit off its workers by violating the law. The judgment tells us that the courts will not countenance such egregious violations of the law,” he said. The court noted that California law gives advance notice of the penalties for depriving workers of rest breaks. “Those penalties are straightforward and chastening,” wrote Wiley in his order. “When the view is clear and the exposure chastening, the rational hiker steers clear of the cliff.” Pomerance labeled ABM “arrogant” for taking a risk in not renewing a previous exemption from the law it had obtained. California law allows employers that need constant coverage in a work station, such as toll booth operators, to apply for an exemption from uninterrupted rest breaks. After its exemption expired, ABM continued to require employees to carry a radio during breaks. ABM maintained in court documents that because it had to provide constant security for its clients, it was necessary for its guards to remain on duty at all times. Pomerance said that could have been achieved by using “rovers,” a common practice in the industry, by which drivers on roving vehicles cruise the premises and stop to relieve a guard who needs a rest break. During the two to three years she worked for ABM, Augustus said, “No one was ever there to relieve me, so I never got a break. I was constantly on my feet, always on the go.” One evening she took a restroom break and was “written up for not being at my post,” she said, adding that the incident, among others, prompted her to seek legal action. The judgment The judgment was based on a simple mathematical computation set by law. The court calculated the wages that the security guards should have been paid during their rest periods when they were on call at $55,887,565 and added $33,854,561 in interest and penalties. Marina Vitek, a senior associate who litigated the case with Adreani and Pomerance, said the nearly $90 million will be divided among the class members, each of whom will receive approximately $6,000 if the award stands on appeal. (None of the money goes to the attorneys; they will make a separate fee request to the court at a Sept. 6 hearing.) Adreani, whose firm worked seven years on the case, said, “Given the amount of work put in and the results obtained, if the court agrees with us the total judgment against ABM could exceed $100 million.” Linnea McCord, an associate professor of business law at the Graziadio School of Business and Management at Pepperdine University and a former practicing corporate attorney, said she finds the judgment irrational. “We’re going to tell security companies that they can’t contact a guard during a break? How are these companies supposed to stay in business?” she asked. “Our courts have to uphold the law, but we have to have reasonable judgments. This case is an example of law on steroids, which the California courts have become known for. This is what drives businesses out of California.” ABM vowed to appeal the judgment. Contending, in a written statement, that it provides its employees with rest breaks “conforming both to the letter and spirit of the law,” Sarah McConnell, the company’s general counsel, said ABM “firmly disagrees with the ruling, its interpretation of California rest period law and California class certification standards.” In a filing with the SEC on July 9, ABM disclosed the judgment, saying it “anticipates the amount of the award will be in excess of $89 million” and that the amount “does not include plaintiff’s counsel’s fees.” It also noted that it intends to “vigorously appeal” the decision. denied off-duty rest

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