The fight continues! On July 10, 2019, Chief Judge Terrence W. Boyle of the U.S. District Court for the Eastern District of North Carolina issued a ruling that allows plaintiffs, represented by Outten & Golden LLP and our co-counsel, the North Carolina Justice Center and Patterson Harkavy LLP, to notify all people allegedly harmed by the defendants’ compensation practices to join this class and collective action.
According to the complaint, filed on September 27, 2018, Defendant Recovery Connections Community (RCC) is a residential substance abuse recovery provider that operates five substance abuse rehabilitation homes in North Carolina. Individuals with substance abuse and addiction disorders live in RCC homes where they are promised assistance in the form of substance abuse education, assessments, life skills and vocational training, participation in community support groups, and animal and equine therapy. Over the standard two-year enrollment period, RCC residents are required to perform labor for RCC and at local offsite businesses (including several restaurants and adult care facilities) that contract with RCC.
The class action claims that while RCC operates under the guise of a residential substance abuse recovery provider, it fails to provide the promised therapeutic treatment and training to its residents. More disturbing, RCC significantly profits from the work it requires residents to perform for the local offsite businesses – work that often lasts as many as 16 hours each day without pay, the complaint alleges. The offsite businesses pay RCC a negotiated rate for the residents’ labor, knowing that the residents receive no compensation for their work, according to the complaint.
The lawsuit alleges that the defendants violated the federal Fair Labor Standards Act (FLSA) and the North Carolina Wage and Hour Act by withholding minimum wage and overtime pay from RCC residents. The plaintiffs also assert that the defendants engaged in unfair and deceptive trade practices and were unjustly enriched by converting the residents’ wages to their own benefit.
Class and collective actions are an efficient means for large groups of plaintiffs to pursue their allegations collectively and far more economically than through individual lawsuits. In every collective action under the FLSA, the putative plaintiffs must establish they are “similarly situated” with respect to the legal and factual issues to proceed as a group. In this case, where the local businesses argued that they are separate entities and not joint employers, Judge Boyle nonetheless found that the plaintiffs are similarly situated, enabling the plaintiffs to now notify the potentially hundreds of RCC residents who have participated in the program since September 27, 2015, of their right to join the lawsuit and seek damages from RCC and the other defendants for unpaid wages and overtime.