$3 Million Settlement as Result of Failure to Reimburse Employees for Business Expenses

-3 Million Settlement as Result of Failure to Reimburse Employees for Business Expenses (Article 1)In April 2015, medical device company Stryker Corp. and its subsidiary Howmedica Osteonics Corp. settled a class action labor lawsuit for $3 million. The plaintiffs in the suit, Tanner Trosper v. Stryker Corporation, alleged Stryker and Howmedica violated California labor codes and unfair competition laws by failing to reimburse sales associates for business expenses. The settlement agreement was filed in a California federal court.

The lead plaintiff in the case was Tanner Trosper. He worked as a sales representative for Howmedica from November 2008 through May 2011. Trosper brought suit against the company in February 2013, claiming he incurred numerous expenses in the course of his employment and for the benefit of his employer. These ranged from costs associated with operating his personal vehicle, such as mileage, travel expenses, such as airfare, lodging, and local transportation, and other business expenses such as telephone costs and office supplies.

In 2011 and 2012, Howmedica instituted various policy changes with regard to reimbursement of business expenses to sales associates. Prior to those changes, however, there was sufficient evidence of a “blanket policy” of not reimbursing sales representatives. Trosper argued that this was a violation of California Labor Code § 2802, which requires employers to, “indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties.” He also claimed the defendants’ policy of not reimbursing employees constituted an “unfair” and “unlawful” business practice in violation of California’s Unfair Competition Law, (Bus. and Prof. Code § 17200 et seq.).

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The class action suit grew to see 134 class participants, who will each be paid an average gross payment of $22,000. The settlement deal allows for Trosper to receive an incentive award of $7,500.

Although the settlement does not attribute fault to Stryker and Howmedica, it should be noted that California employers have a duty to do their best to make sure employees are reimbursed for reasonable work-related expenses.  An employer could face consequences for not reimbursing an employee that has incurred work-related expenses, even if the employee did not request reimbursement.

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Labor Law Office, APC

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2017-12-13T21:46:40+00:00 June 24th, 2015|Class Action, General Labor Law, Wage and Hour|