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Sterling Employment Law

Groupon hit with wage-and-hour suit

Readers in Detroit are probably familiar with Groupon, the Internet-based coupon supplier that sends notices of deals to e-mail inboxes across the country each day. In general, things are looking good for the company; it is moving toward an initial public offering, which could earn it a lot of money, and is outpacing its competitors in terms of customer familiarity and name recognition.

But one former Groupon employee is not happy. The former account executive has sued the Chicago company, alleging that Groupon engaged in unfair payment practices. The right to be paid the proper amount for work performed is, of course, one of the primary employee rights we are entitled to enjoy in this country.

The woman and her attorney are seeking to have the claim certified as a class-action suit. If certification is achieved, the plaintiff's counsel said he expects about 2,000 current and former employees of Groupon who were or are in a situation similar to hers will join in as plaintiffs.

Specifically, the plaintiff is claiming that Groupon did not pay its account executives overtime when their work weeks spanned beyond 40 hours, which they apparently often did, since account executives spent so much time cold-calling potential clients.

Furthermore, the plaintiff contends that when Groupon did begin paying overtime, which it did this year, the rate it paid was too low and did not comply with federal wage laws.

If the plaintiff's allegations are true, they would violate the Fair Labor Standards Act.

A spokesman for Groupon released a statement saying the lawsuit was without merit. He also added that other large companies, like Cisco, Salesforce and Nortel have faced similar suits in the past.

Source: Dow Jones New Sires, "Ex-Groupon employee files potential class-action suit for overtime pay," John Letzing, Sept. 12, 2011.

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