News

Downtown Streets Team settles wage theft lawsuit for $170K

Nonprofit to pay 72 employees for uncompensated overtime, failure to allow meal and rest breaks

Downtown Streets, which employs the homeless and low wage workers for street cleaning services, settled a wage theft lawsuit in June 2021. Embarcadero Media file photo by Sammy Dallal.

A class-action lawsuit filed by a former employee against Downtown Streets Inc. for nonpayment of wages was preliminarily settled on June 25 for $170,000, according to court documents filed in San Francisco Superior Court. A final settlement could be decided by the court on Sept. 23.

The nonprofit corporation runs the Downtown Streets Team, which provides street cleaning services in Palo Alto and other Bay Area cities to help uplift homeless and low wage workers to find employment and housing.

Jaclyn Epter, a former employment specialist at the nonprofit, filed the class-action lawsuit in December 2019 on behalf of herself and other employment specialists and case managers. The legal action alleged wage theft or wage abuse for nonpayment of overtime, break and lunch time compensation and late payment of wages after termination or resignation between Oct. 11, 2015, and March 31, 2020. Epter is represented by the law firm Advocates for Worker Rights LLP.

The nonprofit allegedly misclassified its employment specialists and case managers, who support its programs, as salary workers who are "exempt" from the protections of the California Labor Code.

Under the labor code, certain salaried employees such as executives, administrators and professionals aren't protected by laws requiring additional compensation if they work more than 40 hours a week. The lawsuit alleged the employment specialist and case manager "salaried" pay rate was below statutory levels to qualify them as exempt employees. These employees didn't receive overtime pay and lawful rest and meal breaks, and they weren't given accurate, itemized wage statements in accordance with labor laws, the lawsuit claimed.

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Epter claimed she was specifically instructed by Downtown Streets leadership to only write down her work as eight hours in a day or 40 hours in a week, regardless of how many hours she worked. Employees were also discouraged from taking meal and rest breaks, the lawsuit alleged.

Under California labor law, employees who aren't taking a meal or rest period are entitled to a full hour of extra pay. An employee who works in excess of eight hours a day or 40 hours per week is entitled to one-and-a-half times their regular rate of pay and two times their pay if working in excess of 12 hours in a day. An employee who works eight hours on the seventh consecutive day is entitled to "double time" pay.

An estimated 72 employees were affected by the pay disparities, according to the settlement agreement.

The allegations claimed millions of dollars in losses, Downtown Streets board member Owen Byrd said by phone on Wednesday. The $170,000 settlement was therefore a good one, he said.

No public agency funds are being used to pay the settlement, including any from Palo Alto, he added. "The settlement money was raised from private donors," he said.

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Byrd said some employees had written their hours from 9 a.m. to 5 p.m. on their pay sheets without accounting for clocking in and out for lunch, breaks and overtime.

"Staff didn't catch it. To minimize the potential exposure for the organization, the board voted to settle," he said.

Under the settlement agreement, Downtown Streets denied the allegations. The nonprofit will examine its records for any additional employees who were improperly compensated.

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Downtown Streets Team settles wage theft lawsuit for $170K

Nonprofit to pay 72 employees for uncompensated overtime, failure to allow meal and rest breaks

by / Palo Alto Weekly

Uploaded: Thu, Aug 19, 2021, 9:50 am

A class-action lawsuit filed by a former employee against Downtown Streets Inc. for nonpayment of wages was preliminarily settled on June 25 for $170,000, according to court documents filed in San Francisco Superior Court. A final settlement could be decided by the court on Sept. 23.

The nonprofit corporation runs the Downtown Streets Team, which provides street cleaning services in Palo Alto and other Bay Area cities to help uplift homeless and low wage workers to find employment and housing.

Jaclyn Epter, a former employment specialist at the nonprofit, filed the class-action lawsuit in December 2019 on behalf of herself and other employment specialists and case managers. The legal action alleged wage theft or wage abuse for nonpayment of overtime, break and lunch time compensation and late payment of wages after termination or resignation between Oct. 11, 2015, and March 31, 2020. Epter is represented by the law firm Advocates for Worker Rights LLP.

The nonprofit allegedly misclassified its employment specialists and case managers, who support its programs, as salary workers who are "exempt" from the protections of the California Labor Code.

Under the labor code, certain salaried employees such as executives, administrators and professionals aren't protected by laws requiring additional compensation if they work more than 40 hours a week. The lawsuit alleged the employment specialist and case manager "salaried" pay rate was below statutory levels to qualify them as exempt employees. These employees didn't receive overtime pay and lawful rest and meal breaks, and they weren't given accurate, itemized wage statements in accordance with labor laws, the lawsuit claimed.

Epter claimed she was specifically instructed by Downtown Streets leadership to only write down her work as eight hours in a day or 40 hours in a week, regardless of how many hours she worked. Employees were also discouraged from taking meal and rest breaks, the lawsuit alleged.

Under California labor law, employees who aren't taking a meal or rest period are entitled to a full hour of extra pay. An employee who works in excess of eight hours a day or 40 hours per week is entitled to one-and-a-half times their regular rate of pay and two times their pay if working in excess of 12 hours in a day. An employee who works eight hours on the seventh consecutive day is entitled to "double time" pay.

An estimated 72 employees were affected by the pay disparities, according to the settlement agreement.

The allegations claimed millions of dollars in losses, Downtown Streets board member Owen Byrd said by phone on Wednesday. The $170,000 settlement was therefore a good one, he said.

No public agency funds are being used to pay the settlement, including any from Palo Alto, he added. "The settlement money was raised from private donors," he said.

Byrd said some employees had written their hours from 9 a.m. to 5 p.m. on their pay sheets without accounting for clocking in and out for lunch, breaks and overtime.

"Staff didn't catch it. To minimize the potential exposure for the organization, the board voted to settle," he said.

Under the settlement agreement, Downtown Streets denied the allegations. The nonprofit will examine its records for any additional employees who were improperly compensated.

Comments

FormerDSTemployee
Registered user
another community
on Aug 19, 2021 at 11:21 am
FormerDSTemployee, another community
Registered user
on Aug 19, 2021 at 11:21 am

Wow! Another blatant example of fraud by DST! But sure Palo Alto, keep giving them money! So far they've been caught stealing from their employees via wage theft, harassing their employees, using public money for alcohol fueled escapades, and their board of directors chief Owen Byrd was caught lying in a City Council meeting in order to secure additional funding. Still want to be in bed with them? What else is coming?

BTW the minimum salary for an employee to be considered exempt is $58,240. DST starts their female case managers off around $45k and their male case managers around $50k. A quick google search could have avoided millions in wage theft of their employees making less than $58k a year in the SF Bay Area while working with homeless individuals. Their CEO Eileen Richardson (noted harasser) makes about $200k a year, not sure what her son and Chief Programs Officer Chris Richardson (noted harasser) makes but my guess is close to $150k and their COO Elfreda Styrdom (noted lack of HR experience that got them into this pickle) probably makes about the same.


JB
Registered user
Evergreen Park
on Aug 19, 2021 at 1:54 pm
JB, Evergreen Park
Registered user
on Aug 19, 2021 at 1:54 pm

This is so disappointing. I love what this group does, but this further example of bad management makes me question whether I should donate to them again. Maybe if they change management. So sad.


Chuck Jagoda
Registered user
Barron Park
on Aug 19, 2021 at 2:35 pm
Chuck Jagoda, Barron Park
Registered user
on Aug 19, 2021 at 2:35 pm

How about we all agree that DST makes mistakes? And continue to watch them/us learn and grow and continue doing the good work they do. Unless you have some ideas of who else to get to do the work DST does.

I've been a DST team member and found it very beneficial. They helped me get housing-- which I'm enjoying and very grateful for. And they have great and helpful programs in: employment, self-empowerment, job-education, and, in general, improvement in one's ability to rebuild and improve one's life.

Homelessness if largely about lack of family. The Downtown Streets Team and the caseworkers, the Richardsons, and the members, and supporters ARE a family. Not perfect but an improving work in progress. Have you contributed lately?

Chuck Jagoda


felix
Registered user
Another Palo Alto neighborhood
on Aug 19, 2021 at 7:08 pm
felix, Another Palo Alto neighborhood
Registered user
on Aug 19, 2021 at 7:08 pm

Interesting that DST allows Owen Byrd to continue to be associated with the organization, even as spokesperson. This after he was caught blatantly lying to City Council in the attempt to get $300,000+ in City funding for DST.

Here Byrd only thinks to point out that DST got a pretty sweet deal. It doesn’t occur to him to apologize for any hardship caused by withholding this pay from it’s homeless workers.
Conclusion - DST has learned no lessons and has no intention to get its house in order. It’s organizational judgement has not improved since The Big Lie, impugning of a veteran Palo Alto Weekly reporter or this lawsuit resolution. It is incapable of repairing itself. No more funding should go to it.


Jennifer
Registered user
another community
on Aug 19, 2021 at 7:42 pm
Jennifer, another community
Registered user
on Aug 19, 2021 at 7:42 pm

Any organization that commits wage theft should be ashamed. It's not "bad management" or "mistakes." It's a civil matter but it should be criminal because theft is criminal. Wage theft is intentional, and it's underreported in California. It's not uncommon for low wage, vulnerable employees. It could happen to any employee if your boss or the owner of the company isn't honest. And it's not just overtime or unpaid breaks or lunch. There are employers who skim money off the top. They're con men, and they assume you won't report them to the Labor Board, if for no other reason they have your name, address and SSN. Wage theft is pathetic. Most of us work hard for our money and you shouldn't have to beg for your paycheck. It's absurd.


rita vrhel
Registered user
Crescent Park
on Aug 20, 2021 at 5:20 pm
rita vrhel, Crescent Park
Registered user
on Aug 20, 2021 at 5:20 pm

Interesting statement by Mr. Byrd: "The allegations claimed millions of dollars in losses, Downtown Streets board member Owen Byrd said by phone on Wednesday. The $170,000 settlement was therefore a good one, he said." losses= unpaid wages.

Isn't this the same man who lied to the City Council when he denied any wrong doing on DST's part related to another lawsuit? And then had to apologize?

DST's accomplishments are wonderful BUT when management withholds pay from homeless and other employees that really is a new low. Rather than bragging about a "great settlement", DST should have determined and payed wages owed, published a sincere apology and instituted detailed accounting measures to prevent future wage payment inaccuracies. Not to do so, shows to me, continued arrogance and ignorance.

Please City Council demand management changes before donating any additional funds to this organization. Thank you.


Over it!
Registered user
Stanford
on Aug 21, 2021 at 7:34 am
Over it!, Stanford
Registered user
on Aug 21, 2021 at 7:34 am

Former employee here. This organization relied (and continues to rely) on hiring a pipeline of new grads who didn’t know better about hr protocols. They fostered a start-up like culture where employees often were made to feel like they should be SO grateful to even have a job at DST, that we owed them, when they said jump we should absolutely say how high, and that we should never bite the hand that feeds us. To be critical was disloyal.

For the love of god when will we be able to rely on local government and “responsible” Bay Area (mostly tech) corps to defund this unethical ponzi scheme that doesn’t even make the impact it claims and exploits everyone while doing it.


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