Luna v. Chanel, Inc.

Three employees (plaintiffs) of Chanel, Inc. (defendant) worked from 9 a.m. until 6 p.m. in the shipping department of a Beverly Hills boutique. Managers in the shipping department and employees from other departments often required the employees to continue working after 6 p.m. without paying for their overtime work. Chanel created checklists of daily tasks for the shipping-department employees to complete that allocated an amount of time to complete each task. One task did not have any time allocated for its completion. The daily tasks did not list rest breaks or allocate any time for rest breaks. The managers told the employees to work with a sense of urgency although the employees handled expensive items and the managers did not tolerate mistakes. The employees had to stay after hours and skip rest breaks to complete the tasks for which an insufficient amount of time was allocated. One of the employees complained about the lack of rest breaks to Chanel’s human resources (HR) department. The HR department posted a schedule for daily breaks and lunches in the employees’ shipping department. The managers did not change the daily task requirements or workflow, the employees did not receive the lunch breaks or rest breaks, the schedule was taken down after two weeks, and the employees were never offered a rest break again. The employees brought an action against Chanel, alleging a violation of § 207(a)(1) of the Fair Labor Standards Act (FLSA) based on the failure to pay the employees overtime compensation in the amount of 1.5 times the employees’ regular wages. The employees moved for class certification under § 216(b) of the FLSA to allow similarly situated Chanel shipping employees nationwide to opt into the collective action. Chanel provided statements from its shipping employees nationwide who had not experienced any underpayment of overtime wages due to the employer’s policies.