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Groupon Expected to Respond to Lawsuit on Monday

  |  September 9, 2011   |  Comments

Sales force sues daily deals player in overtime pay dispute.

Groupon is expected on Monday to respond to a class action lawsuit filed that could include a sizable chunk of the daily deals site’s sales force, Doug Werman, the Chicago-based lawyer representing the group, told ClickZ News on Friday. Werman explained that up to 1,000 people may end up taking part in the suit, which centers on overtime pay.

"I think it will likely end up exceeding that number," he said. While a significant portion of the salespeople reside in Illinois, the lawyer said “it's a national plaintiff collective action lawsuit."

Werman said the plaintiffs were not paid in accordance to Illinois state law for hours exceeding 40 a week. Even if the sales people reside in other states, he said, Groupon is not exempt from Illinois' overtime laws.

Groupon, Werman said, at one point attempted to fix its payment system to resolve the salespeople's complaints. But the tweak, he said, didn't properly calculate what the employees were owed for both hourly wages and sales commissions.

His firm, Werman Law Office, filed the suit on Aug. 19 for Ranita Dailey, who recently left Groupon, in U.S. District Court, seeking retroactive overtime pay plus 2 percent in damages. Since then, he said, a mix of current and former Groupon sales people have joined the suit. When asked, Werman wouldn't state the current number of plaintiffs. His law firm, according to Chicago Business Daily, won the largest wage-and-hour case in Illinois history in 2009, with an $11-million judgment against staffing firm Kelly Services.

In an email to ClickZ News, Groupon spokesperson Julie Mossler responded to the lawsuit. “We never comment on litigation but we plan to fight this vigorously,” she said.

From a broader view, the lawsuit appears to underscore the headaches daily deals players endure because of the need for a national sales force to get local businesses on board. That reality could have been partly responsible for Facebook shuttering its Deals feature two weeks ago.

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ABOUT THE AUTHOR

Christopher Heine

Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.

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