ADT buffeted on two fronts--labor, AMPS--in the courts

Thursday, November 6, 2008

BOCA RATON, Fla.--There's no rest for ADT on the legal front this month.
A Florida federal court has allowed one lawsuit related to the AMPS sunset to proceed against ADT, and on Oct. 28, an unrelated lawsuit regarding ADT's employment practices was filed in Texas federal court.
The Texas lawsuit alleges that ADT failed to pay employees for overtime and therefore violated the Federal Labor Standards Act. The lead attorney, David Showalter of Richmond, Texas, filed a proposed class-action suit on behalf of a group of ADT service and maintenance technicians and installers, including Bryan Champion, Ronnie Danage, John Engleke, Curtis Green, Max Murphy and David Thompson.
The suit says that the ADT employees were "required to take their company vehicles home and were dispatched to customers' locations directly from their homes." It says supervisors engaged in unlawful conduct because they "failed to record" their employees' overtime and travel time.
The case is reminiscent, in some ways, of a case in Washington where Brink's employees successfully sued to be paid for time spent driving company vehicles to and from work. The important difference is that the Brink's employees sought compensation under a state law, not under the Federal Labor Standards Act. (Search "Lesson from Brink's case: Check your state's wage laws" at for more on that case.)
Attorney Showalter was not immediately available for comment on why the ADT employees chose to go the legal route they did.
Mark Neuberger is an attorney with Foley and Lardner, who specializes in employment law and has extensive experience in the security industry. He could not comment on this particular lawsuit or its claims, but said these types of Federal Labor Standards Act lawsuits are "the most commonly filed form of employment lawsuit filed today in federal court." He said he sometimes sees "as many as five to 10 filed in one day," and said they're popular with lawyers because if they are able to prove that the plaintiff is due compensation, the lawyer automatically receives attorney's fees as a matter of law. He also noted that the the FLSA was passed during the Great Depression and "has not kept up with changes in the modern workplace."
The other lawsuit, regarding the AMPS sunset, was originally filed in the U.S. District Court of the Southern District of Florida, West Palm Beach Division, in October 2007. Also a proposed class action suit, it alleges that ADT violated Florida's Deceptive and Unfair Trade Practices Act, saying that ADT sold and installed analog alarm equipment "without notifying those customers that its equipment would cease to function after Feb. 18, 2008. ADT intentionally concealed from consumers the material fact that it knew its equipment would stop working on Feb. 18, 2008."
The latest development occurred on Oct. 6 when the court denied ADT's motion to dismiss the suit.
Sarah Engel, a partner with Harke and Clasby of Miami, the plaintiffs' attorney, said, "we've overcome a major roadblock in the case and we look forward to having the case heard on its merits." The judge now needs to decide whether the case will get class-action status. Engel said she expects word on this issue "within the next few months."
Ann Lindstrom, ADT director of communications said that ADT does not comment on pending litigation and noted, "ADT has complied with all applicable laws and regulations and is awaiting rulings on motions pending with the court, including a motion for summary judgment and a motion seeking denial of class certification."
Gray Finney, former general counsel for ADT and an attorney with Finney Law Firm of Mobile, Ala., which specializes in security industry matters, told Security Systems News that "in my opinion this is a serious case for ADT and potentially the industry at large," but added, "I think ADT is in a stronger position than the plaintiff."
In a nutshell, he said, "the plaintiffs argue that technology resellers such as ADT must possess clairvoyant abilities with respect to future technological developments and must warn consumers of the obvious fact that today's technology might be less valuable tomorrow, next year, or even five years from now. Further, the plaintiffs argue that any failures by such technology resellers to possess these clairvoyant abilities with respect to future technological developments and disclose future technological changes are 'deceptive, unfair and unjust,' even when the changes are made beyond the technology reseller's control by third-parties such as the cellular carrier industry."