Janitors Represented By Nichols Kaster, PLLP Settle Lawsuit Against Capital Building Services Group, Inc. for $425,000

Suit alleged pattern and practice of wage theft from vulnerable workers cleaning Macy’s and Herberger’s stores in Minnesota; Settlement forces changes to company pay practices moving forward

On February 16, 2016, a group of janitors announced a proposed settlement of their class action lawsuit alleging unfair labor practices at Macy’s and Herberger’s stores in Minnesota. The settlement requires the employer to pay workers $425,000 in lost wages and change a number of business practices moving forward.

In 2015, a group of janitors working at Macy’s and Herberger’s stores in Minnesota filed a class action lawsuit accusing their employer of shortchanging their wages. The lawsuit, which was filed in Minnesota federal district court by attorneys at Nichols Kaster, PLLP, detailed a wide range of state and federal labor violations, including failure to pay minimum wage and overtime compensation.

The lawsuit did not name Macy’s or Herberger’s as a defendant, however. Instead, the suit targeted those companies’ policies of contracting out their store cleaning to the lowest bidder, policies which, according to the complaint, allow “unscrupulous subcontractors [to] compete for contracts by exploiting vulnerable workers.” Under this so called “fissured workplace” scheme, “some of the most egregious mistreatment of workers occurs right under the noses of some of Minnesota’s most esteemed businesses and retail establishments,” according the complaint.

The complaint named Capital Building Services Group, Inc., the company that holds cleaning contracts with Macy’s and Herberger’s, as the defendant. But companies like Macy’s and Herberger’s “benefit tremendously from this arrangement,” according the complaint: “Macy’s and Herberger’s get their stores cleaned for much less than it would otherwise cost to pay their own employees, legally, to do the same work. At the same time, Macy’s and Herberger’s effectively turn a blind eye to widespread violations of state and federal employment laws happening under their own roofs.”

The lawsuit described a workplace where basic employment protections are disregarded. According to the complaint, “Capital tells its employees they will be paid minimum wage, but in practice their employees’ wages fall well short of minimum wage—in some cases as little as $4 or $5 an hour.” In addition, the complaint alleged that employees were not paid overtime when they work over forty hours in a workweek, and meal breaks were systematically deducted from employees’ hours worked, even when those breaks are not actually taken. Some employees had to purchase their own cleaning supplies, and these unreimbursed expenses caused employees’ wages to drop even further below minimum wage, according to the complaint. Employees were not provided pay stubs, according to the complaint, itself a violation of Minnesota labor law.

The proposed settlement, if accepted by the court, will improve working conditions moving forward, according to Plaintiffs’ attorney Adam Hansen. Among the changes required under the terms of the settlement:

1) Capital will provide all workers with paystubs every two weeks, so workers can review their hours and check for missing time.

(2) Capital will create an internal mechanism for employees to report missing wages, and for the company to pay those wages.

(3) Capital will prohibit the practice of requiring employees to purchase their own cleaning supplies.

(4) Capital will provide all employees the opportunity to be paid by check, and will not require employees to receive pay on a debit card unless employees agree.

(5) Capital will compensate employees for time spent traveling between two or more stores in a single work day.

Plaintiffs’ attorney Hansen stated, “Unfortunately, these unfair labor practices are all too common in the retail cleaning industry. We are pleased that the proposed settlement recovers the employees’ lost wages. And just as important, we are satisfied that the settlement requires the company to make changes that will make it much more difficult to perpetuate these same violations in the future.”

Plaintiffs are represented by Adam W. Hansen, Carl F. Engstrom, and Paul J. Lukas from Nichols Kaster, PLLP in Minneapolis, Minnesota.

The case is entitled Hussein, et al. v. Capital Building Services Group, Inc., Case No. 0:15-cv-02498 (D. Minn.)