Groupon agrees to $2.5M Settlement for Unpaid Overtime to Sales Representatives

A federal judge approved a proposed class action settlement for $2.5 million between Groupon and over 2,024 sales representatives for wage theft and unpaid overtime violations under the Fair Labor Standards Act (“FLSA”). Employees worked an average of 2.18 hours of overtime per week, which amounts to an average of $778 for each class member. The Complaint alleges that Groupon failed to pay non-exempt inside sales representatives their due overtime wages. Groupon contended that the employees fell into an overtime exemption and were not entitled to overtime pay for hours worked in excess of 40 each week. The Complaint also claims that Groupon employed more than one hundred sales representatives after August 23, 2011. Sales reps at Groupon were responsible for “cold calling” businesses within a geographic market and selling those merchants on the benefits of offering discounted coupons on Groupon’s website, as well as “securing commitments from those merchants to run discounted coupons on Groupon’s website.” The employees claim that Groupon failed to include earned commissions in their regular rates of pay for purposes of computing earned overtime wages from April 1, 2011 to August 22, 2011. Employees also claim that since August 23, 2011, Groupon has not paid sales representatives any overtime wages when they worked in excess of 40 hours in individual work weeks. Further, the Complaint states that “[i]n August 2011, Groupon directed sales reps to stop recording their hours worked in Groupon’s time keeping system.” A hearing is set for November 10, 2016, where Judge Edmond E. Chang of  the U.S. District Court for the Norther, District of Illinois will hear arguments for and against final approval. Employees eligible to join the lawsuit are currently being notified about the proposed settlement.