Dana Herra Dec. 3, 2015, 11:30pm

A federal judge was not swayed by Family Video’s “creative” arguments against granting class certification in a lawsuit filed by a group of the retailer’s former employees, allowing the litigation to move forward under both federal and Illinois wage and hour laws.

U.S. District Judge John Z. Lee ruled Nov. 19 in federal court in Chicago, siding with Family Video employees in a key motion and point of contention between the workers and their former employer.

The ruling stemmed from a lawsuit filed in 2011 by the former employees, who alleged Family Video Movie Club, which operates DVD and video game rental stores in Illinois and 18 other states, required employees to work off the clock and failed to include sales commissions in its calculation of overtime pay.

The employees claimed the company’s actions violated the federal Fair Labor Standards Act and the Illinois Minimum Wage Law. After the court denied their first motion for certification of their state law claims under Federal Rule of Civil Procedure 23, the employees dropped one set of claims – that employees were required to perform tasks such as helping customers, stocking shelves and cleaning stores off the clock – and its corresponding class definition. They also provided the court with evidence supporting class certification of their remaining claims, according to court documents, leading Lee to grant the Rule 23 motion.

The Fair Labor Standards Act provides the calculation that must be used to determine overtime pay, but the employees claimed Family Video miscalculated their pay by not factoring in commissions they made on sales.

The employees have also asserted Family Video violated the Illinois Minimum Wage Law by requiring employees to clock out before making the store’s bank deposits, a policy the employees were able to show was codified in store manuals used throughout the company.

The court first approved the FLSA claim, and denied a motion by Family Video to decertify it. In his opinion, Lee noted “the standards for certification under Rule 23 and the FLSA … have ‘largely merged,’” saying if an action has been certified under one standard, it is likely to be certified under the other. The two types of actions differ in that, in an FLSA class, members must actively choose to opt in, whereas they are automatically included in a Rule 23 class unless they actively opt out.

In arguing against the class certification, Family Video claimed members of the proposed class could not be definitively ascertained through the employee records the plaintiffs said they plan to use.

“Essentially, Defendant’s argument is that class certification should be denied because the company may have failed to pay its employees for even more work than Plaintiffs rely upon to identify class members,” Lee wrote. “This argument is creative but unavailing. The Court agrees with Plaintiffs that Defendants should not benefit any more than is necessary from its own allegedly poor record keeping.”

Family Video also said it will not be possible to determine which employees made bank runs or how long they took, though the plaintiffs say the company’s own time studies and deposit records can provide at least a starting point. In his opinion, Lee wrote that Family Video’s focus on the strength of the plaintiffs’ evidence is “misplaced.”

“The ascertainability requirement is not about evidence; it is about whether the proposed class definitions are based on objective criteria,” he wrote.

The plaintiffs covered by the two classes in the lawsuit are current and former employees of Family Video’s 115 Illinois stores who were paid hourly, worked more than 40 hours a week, and did not receive appropriate overtime pay; and current and former employees of the Illinois stores who worked more than 40 hours a week and made company bank deposits off the clock. The workers to be included in the class action would have been employed between March 14, 2008, and March 14, 2011.

The employees are represented in the action by attorneys with the Gibbs Law Group, in Oakland, Calif., and the firm of Hagens Berman Sobol Shapiro, of Chicago.

Family Video is defended by the firm of Baker & Hostetler, of Chicago.

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Organizations in this Story

Baker and Hostetler
191 North Upper Wacker Drive
Chicago, IL 60606

Hagens Berman Sobol Shapiro, LLP
455 N Cityfront Plaza Dr
Chicago, IL 60611

Gibbs Law Group
1 Kaiser Plaza Ste. 1125
Oakland, CA 94612

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