A class action has been filed against Rolling Frito-Lay Sales, LP by the company's California delivery drivers, who allege that Frito-Lay improperly calculated their overtime wages based on a "fluctuating work week method," which violates California law. The drivers also claim that Frito-Lay failed to pay overtime on income deemed "commission sales" and illegally deducted income from commission sales for products that were returned. Additionally, the drivers allege that Frito-Lay did not pay overtime wages within the 72-hour requirement of California law upon the termination of an employee.
The drivers are seeking compensatory damages for unpaid overtime, 30 days' wages in penalty for all terminated employees who were not paid overtime wages within the 72-hour requirement, disgorgement of profits wrongfully obtained, declaratory relief, an order enjoining Frito-Lay from continuing unlawful payroll deductions, interest and attorney's fees.
Under California law, overtime is due at a rate of one and one-half times the regular rate of pay for every hour in excess of eight per day. Additionally, workers are entitled to pay amounting to twice the normal rate for all hours worked in excess of 12 per day and in excess of eight hours on the seventh consecutive day of work. Frito-Lay paid overtime based on a "fluctuating work week method"--a driver's total hours worked were divided into his or her fixed salary per week and then the driver was paid an additional one half times the number of hours after 40 worked. This is lawful under federal law, but not so under the California Labor Code.
Additionally, the drivers were not paid overtime on what Frito-Lay considered commission sales, although the drivers' duties (primarily restocking Frito-Lay products along their delivery routes) did not fit the definition of "sales" in the conventional or legal meaning of the word. The drivers also had wages removed from their paychecks for items that were returned to Frito-Lay without fault. This "charging back" is not allowed under California law for employees who are not primarily engaged in a sales activity.
This case was originally filed in California state court, but was removed to federal court by Frito-Lay on October 1, 2003, where it is currently pending.