`
`TRACY ELLIS, individually and on behalf
`of all others similarly situated,
`
`
`v.
`
`PEPSICO, INC.
`
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW JERSEY
`
`Case No. _______________________
`
`FED. R. CIV. P. 23 Class Action
`
`
`
`
`
`
`CLASS ACTION COMPLAINT
`
`SUMMARY
`
`
`
` 1.
`
`Like many other companies across the United States, PepsiCo’s timekeeping
`
`and payroll systems were affected by the hack of Kronos in 2021.
`
`
`
` 2.
`
`That hack led to problems in timekeeping and payroll throughout PepsiCo’s
`
`organization.
`
`
`
` 3.
`
`As a result, PepsiCo’s workers who were not exempt from the overtime
`
`requirements under New Jersey law, were not paid for all hours worked or were not paid
`
`their proper overtime premium after the onset of the Kronos hack.
`
`
`
` 4.
`
`
`
` 5.
`
`Tracy Ellis is one such PepsiCo worker.
`
`PepsiCo could have easily implemented a system for recording hours and
`
`paying wages to non-exempt employees until issues related to the hack were resolved.
`
`
`
` 6.
`
`But it didn’t. Instead, PepsiCo used prior pay periods or reduced payroll
`
`estimates to avoid paying wages and proper overtime to these non-exempt hourly and
`
`salaried employees.
`
`
`
` 7.
`
`PepsiCo pushed the cost of the Kronos hack onto the most economically
`
`vulnerable people in its workforce.
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`
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`
`
`
`
` 8.
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`The burden of the Kronos hack was made to fall on front-line workers—
`
`average Americans—who rely on the full and timely paymet of their wages to make ends
`
`meet.
`
`
`
` 9.
`
`PepsiCo’s failure to pay wages, including proper overtime, for all hours
`
`worked violates the New Jersey State Wage and Hour Law (NJSWHL), N.J. Stat. Ann.
`
`§ 34:11-56a, et seq.
`
`
`
` 10.
`
`Ellis brings this lawsuit to recover these unpaid overtime wages and other
`
`damages owed by PepsiCo to him and the non-overtime-exempt workers like him, who were
`
`the ultimate victims of not just the Kronos hack, but also PepsiCo’s decision to make its
`
`front line workers bear the economic burden for the hack.
`
`
`
` 11.
`
`This action seeks to recover the unpaid wages and other damages owed by
`
`PepsiCo to all these workers, along with the penalties, interest, and other remedies provided
`
`by New Jersey law.
`
`JURISDICTION & VENUE
`
`
`
` 12.
`
`This Court has original subject matter jurisdiction pursuant to 28 U.S.C.
`
`§ 1332(a)(1) because complete diversity of citizenship exists between the Parties and the
`
`amount in controversy exceeds $75,000.
`
`
`
` 13.
`
`Venue is proper in this Court pursuant to 28 U.S.C. § 1391(b), because a
`
`substantial part of the events at issue occurred in this District.
`
`
`
` 14.
`
`
`
` 15.
`
`
`
` 16.
`
`Ellis worked for PepsiCo in this District.
`
`PARTIES
`
`Plaintiff Tracy Ellis is a natural person.
`
`Ellis is a resident and citizen of New Jersey.
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`
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`
`
` 17.
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`
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` 18.
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`
`
` 19.
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`
`
` 20.
`
`Ellis has been, at all relevant times, an employee of PepsiCo.
`
`Ellis has worked for PepsiCo since about 1998.
`
`Ellis’s written consent is attached as Exhibit 1.
`
`Ellis represents a class of similarly situated workers under New Jersey law
`
`pursuant to Federal Rule of Civil Procedure 23. This “New Jersey Class” is defined as:
`
`All current or former hourly and salaried employees of PepsiCo,
`including its subsidiaries and alter egos, who were not exempt from
`overtime pay and who worked for PepsiCo in New Jersey at any
`time since the onset of the Kronos ransomware attack, on or about
`December 11, 2021, to the present.
`
`
`
` 21.
`
`Throughout this Complaint, the New Jersey Class Members are also referred
`
`to as the “Similarly Situated Workers.”
`
`
`
` Defendant PepsiCo, Inc. (“PepsiCo”) is a New Jersey corporation. 22.
`
`York.
`
`
`
` 23.
`
`
`
` 24.
`
`PepsiCo maintains its headquarters and principal place of business in New
`
`PepsiCo conducts business
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`in a systematic and continuous manner
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`throughout New Jersey and this District.
`
`
`
` 25.
`
`PepsiCo may be served by service upon its registered agent, The Corporation
`
`Trust Company, 820 Bear Tavern Road, West Trenton, NJ 08628, or by any other method
`
`allowed by law.
`
`
`
` At all relevant times, PepsiCo exerted operational control over its subsidiaries 26.
`
`and alter egos.
`
`
`
` At all relevant times, PepsiCo substantially controlled the terms and 27.
`
`conditions of employment for workers of its subsidiaries and alter egos.
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`- 3 -
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`
`
`
`
` At all relevant times, PepsiCo had a common control and management of 28.
`
`labor relations regarding employees of its subsidiaries and alter egos.
`
`
`
` 29.
`
`PepsiCo employed and/or jointly employed, with its subsidiaries and alter
`
`egos, Ellis and the Similarly Situated Workers.
`
`
`
` 30.
`
`PepsiCo and its respective subsidiaries and alter egos are joint employers for
`
`purposes of New Jersey law.
`
`
`
` 31.
`
`PepsiCo is a food, snack, and beverage corporation.
`
`FACTS
`
`
`
` Many of PepsiCo’s employees are paid by the non-overitme-exempt hourly 32.
`
`and salaried workers.
`
`
`
` 33.
`
`Since at least 2021, PepsiCo has used timekeeping software and hardware
`
`operated and maintained by Kronos.
`
`
`
` On or about December 11, 2021, Kronos was hacked with ransomware. 34.
`
`
`
` 35.
`
`The Kronos interfered with its clients, including PepsiCo’s, ability to use
`
`Kronos’s software and hardware to track hours and pay employees.
`
`
`
` 36.
`
`Since the onset of the Kronos hack, PepsiCo has not kept accurate track of
`
`the hours that Ellis and Similarly Situated Workers have worked.
`
`
`
` 37.
`
`Instead, PepsiCo has used various methods to estimate the number of hours
`
`Ellis and Similarly Situated Workers work in each pay period.
`
`
`
` 38.
`
`For example, PepsiCo issued paychecks based on the workers’ scheduled
`
`hours, or simply duplicated paychecks from pay periods prior to the Kronos hack.
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`- 4 -
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`
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`
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` 39.
`
`This means that employees who were non-exempt and who worked overtime
`
`were in many cases paid less than the hours they worked in the workweek, including
`
`overtime hours.
`
`
`
` 40.
`
`Even if certain overtime hours were paid, the pay rate would be less than the
`
`full overtime premium.
`
`
`
` Many employees were not even paid their non-overtime wages for hours 41.
`
`worked before 40 in a workweek.
`
`
`
` 42.
`
`
`
` 43.
`
`Ellis is one such employee.
`
`Instead of paying Ellis for the hours he actually worked (including overtime
`
`hours), PepsiCo simply paid based on estimates of time or pay, or based upon arbitrary
`
`calculations and considerations other than Ellis’s actual hours worked and regular pay rates.
`
`
`
` 44.
`
`In some instances, Ellis was paid portions of overtime hours worked, but the
`
`overtime rate was not at the proper overtime premium of at least 1.5x the regular rate of
`
`pay, including required adjustments for shift differentials and non-discretionary bonsuses.
`
`
`
` 45.
`
`In properly calculating and paying overtime to a non-exempt employee, the
`
`only metrics that are needed are: (1) the number of hours worked in a day or week, and
`
`(2) the employee’s regular rate, taking into account shift differentials, non-discretionary
`
`bonuses, and other adjustments required by law.
`
`
`
` 46.
`
`PepsiCo knows they have to pay proper overtime premiums to non-exempt
`
`hourly and salaried employees.
`
`
`
` 47.
`
`PepsiCo knows this because, prior to the Kronos hack, it routinely paid these
`
`workers for all overtime hours at the proper overtime rates.
`
`
`
` 48.
`
`PepsiCo knows it has to pay the wages it agreed to pay its employees.
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`- 5 -
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`
`
`
`
` 49.
`
`PepsiCo knows this because, prior to the Kronos hack, it routinely paid these
`
`workers for all hours worked at the rates it agreed to pay them.
`
`
`
` 50.
`
`PepsiCo could have instituted any number of methods to accurately track and
`
`timely pay its employees for all hours worked.
`
`
`
` 51.
`
`Instead of accurately tracking hours and paying employees wages and
`
`overtime, PepsiCo decided to arbitrarily pay these employees, without regard to the wages
`
`and overtime they were owed.
`
`
`
` 52.
`
`It was feasible for PepsiCo to have its employees and managers report
`
`accurate hours so they could be paid for the work they did for the company.
`
`
`
` 53.
`
`
`
` 54.
`
`But they didn’t do that.
`
`In other words, PepsiCo pushed the effects of the Kronos hack onto the backs
`
`of their most economically vulnerable workers, making sure that it kept the money owed to
`
`those employees in its own pockets, rather than take steps to make sure its employees were
`
`paid on time and in full for the work they did.
`
`
`
` 55.
`
`Ellis is one of PepsiCo’s employees who had to shoulder the burden of this
`
`decision by PepsiCo.
`
`Ellis was and is a non-exempt hourly employee of PepsiCo.
`
`Ellis regularly works over 40 hours per week for PepsiCo.
`
`Ellis’s normal, pre-Kronos hack hours are reflected in PepsiCo’s records.
`
`Ellis had contractual agreement with PepsiCo to pay him for all hours
`
`
`
` 56.
`
`
`
` 57.
`
`
`
` 58.
`
`
`
` 59.
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`worked.
`
`
`
` 60.
`
`Ellis’s contractual agreement with PepsiCo required him to be paid for all
`
`hours worked at an amount equal to his regular rate for hours up to 40 in a workweek, and
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`- 6 -
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`
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`at an overtime premium of no less than 1.5x his regular rate of pay for hours over 40 in a
`
`workweek.
`
`
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` 61.
`
`Since the Kronos hack, PepsiCo has not paid Ellis for him actual hours
`
`worked each week.
`
`
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` 62.
`
`Since the hack took place, PepsiCo has not been accurately recording the
`
`hours worked by Ellis and its other workers.
`
`
`
` 63.
`
`Since the Kronos hack, PepsiCo has not paid Ellis and its other workers
`
`pursuant to its contractual agreement with them.
`
`
`
` 64.
`
`Even though PepsiCo has had Ellis record and submit him hours, PepsiCo
`
`have not issued proper payment for all hours worked.
`
`
`
` 65.
`
`Even when PepsiCo has issued payment to Ellis for any overtime, the
`
`overtime is not calculated based on Ellis’s regular rates, as required by New Jersey law.
`
`
`
` 66.
`
`
`
` 67.
`
`PepsiCo was aware of the overtime requirements of New Jersey law.
`
`PepsiCo nonetheless failed to pay the full overtime premium owed to certain
`
`non-exempt hourly and salaried employees, such as Ellis.
`
`
`
` 68.
`
`PepsiCo’s failure to pay overtime to these non-exempt workers was, and is, a
`
`willful violation of the NJSWHL.
`
`
`
` 69.
`
`The full overtime wages owed to Ellis and the Similarly Situated Workers
`
`became “unpaid” when the work for PepsiCo was done—that is, on Ellis and the Similarly
`
`Situated Workers’ regular paydays.
`
`
`
` At the time PepsiCo failed to pay Ellis and the Similarly Situated Workers in 70.
`
`full for their overtime hours by their regular paydays, PepsiCo became liable for all
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`- 7 -
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`
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`prejudgment interest, liquidated damages, penalties, and any other damages owed under
`
`New Jersey law.
`
`
`
` 71.
`
`In other words, there is no distinction between late payment and nonpayment
`
`of wages under the law.
`
`
`
` 72.
`
`The untimely payment of overtime wages, in itself, does not resolve a claim
`
`for unpaid wages under the law.
`
`
`
` Nor does the untimely payment of wages, if any, compensate workers for the 73.
`
`damages they incurred due to PepsiCo’s acts and omissions resulting in the unpaid wages in
`
`the first place.
`
`
`
` 74.
`
`Ellis and the Similarly Situtated Workers remain uncompensated for the
`
`wages and other damages owed by PepsiCo under New Jersey law.
`
`CLASS ACTION ALLEGATIONS
`
`Ellis incorporates all other allegations.
`
`The illegal practices PepsiCo imposed on Ellis were likewise imposed on the
`
`
`
` 75.
`
`
`
` 76.
`
`New Jersey Class Members.
`
`
`
` Numerous other individuals who worked for PepsiCo were were not properly 77.
`
`compensated for all hours worked, as required by New Jersey law.
`
`
`
` 78.
`
`The New Jersey Class is so numerous that joinder of all members of the class
`
`is impracticable.
`
`
`
` 79.
`
`PepsiCo imposed uniform practices and policies on Ellis and the New Jersey
`
`Class members regardless of any individualized factors.
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`- 8 -
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`
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`
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` 80.
`
`Based on him experience and tenure with PepsiCo, as well as coverage of the
`
`Kronos hack, Ellis is aware that PepsiCo’s illegal practices were imposed on the New Jersey
`
`Class members.
`
`
`
` New Jersey Class members were all not paid proper overtime when they 81.
`
`worked in excess of 40 hours per week.
`
`
`
` New Jersey Class members were all not paid their contractually agreed wages. 82.
`
`
`
` 83.
`
`PepsiCo’s failure to pay wages and overtime compensation in accordance with
`
`New Jersey law results from generally applicable, systematic policies, and practices which
`
`are not dependent on the personal circumstances of the New Jersey Class Members.
`
`
`
` 84.
`
`PepsiCo’s
`
`failure
`
`to pay contractually agreed wages and overtime
`
`compensation results from generally applicable, systematic policies, and practices which are
`
`not dependent on the personal circumstances of the New Jersey Class Members.
`
`
`
` 85.
`
`Ellis’s experiences are therefore typical of the experiences of the New Jersey
`
`Class members.
`
`
`
` 86.
`
`Ellis has no interest contrary to, or in conflict with, the members of the New
`
`Jersey Class. Like each member of the proposed class, Ellis has an interest in obtaining the
`
`unpaid wages and other damages owed under the law.
`
`
`
` A class action, such as this one, is superior to other available means for fair 87.
`
`and efficient adjudication of the lawsuit.
`
`
`
` Absent this action, many New Jersey Class members likely will not obtain 88.
`
`redress of their injuries and PepsiCo will reap the unjust benefits of violating New Jersey
`
`law.
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`- 9 -
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`
`
`
`
` 89.
`
`Furthermore, even if some of the New Jersey Class members could afford
`
`individual litigation against PepsiCo, it would be unduly burdensome to the judicial system.
`
`
`
` Concentrating the litigation in one forum will promote judicial economy and 90.
`
`parity among the claims of individual members of the classes and provide for judicial
`
`consistency.
`
`
`
` 91.
`
`The questions of law and fact common to each of the New Jersey Class
`
`members predominate over any questions affecting solely the individual members. Among
`
`the common questions of law and fact are:
`
`a. Whether the New Jersey Class Members were not paid overtime at 1.5
`times their regular rate of pay for hours worked in excess of 40 in a
`workweek;
`
`b. Whether PepsiCo’s failure to pay overtime at the rates required by law
`violated the NJSWHL.
`
`
`
` 92.
`
`Ellis’s claims are typical of the New Jersey Class members. Ellis and the New
`
`Jersey Class members have all sustained damages arising out of PepsiCo’s illegal and
`
`uniform employment policies.
`
`
`
` 93.
`
`Ellis knows of no difficulty that will be encountered in the management of
`
`this litigation that would preclude its ability to go forward as a class action.
`
`
`
` Although the issue of damages may be somewhat individual in character, 94.
`
`there is no detraction from the common nucleus of liability facts. Therefore, this issue does
`
`not preclude class action treatment.
`
`CAUSE OF ACTION—VIOLATIONS OF THE NJWHL
`
`Ellis incorporates all other allegations.
`
`The conduct alleged in this Complaint violates the NJWHL.
`
`PepsiCo was and is an “employer” within the meaning of the NJWHL.
`
`
`
` 95.
`
`
`
` 96.
`
`
`
` 97.
`
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`
`
`
`
` At all relevant times, PepsiCo employed Ellis and the other New Jersey Class 98.
`
`Members as “employees” within the meaning of the NJWHL.
`
`
`
` 99.
`
`The NJWHL, N.J. Stat. Ann. § 34:11-56a4(b), requires an employer like
`
`PepsiCo to pay overtime to all non-exempt employees.
`
`
`
` Ellis and the other New Jersey Class Members are non-exempt employees 100.
`
`who are entitled to be paid overtime for all overtime hours worked.
`
`
`
` The NJWHL, N.J. Stat. Ann. § 34:11-56a4(b), requires overtime to be paid at 101.
`
`a rate of no less than 1.5x the employee’s regular hourly rate for each hour of working time
`
`in excess of 40 each week.
`
`
`
` Within the applicable limitations period, PepsiCo had a policy and practice of 102.
`
`failing to pay proper overtime to the New Jersey Class Members for their hours worked in
`
`excess of 40 hours per week.
`
`
`
` As a result of PepsiCo’s failure to pay proper overtime to Ellis and the New 103.
`
`Jersey Class Members for work performed in excess of 40 hours in a workweek, PepsiCo
`
`violated the NJSWHL.
`
`
`
` Ellis and the New Jersey Class Members are entitled to overtime wages under 104.
`
`the NJSWHL in an amount equal to 1.5x their rates of pay, liquidated damages, attorney’s
`
`fees, costs, penalties, interest, and all other legal and equitable relief provided by the
`
`NJSWHL, N.J. Stat. Ann. § 34:11-56a25, and the New Jersey Administrative Code, § 12:56-
`
`1.5.
`
`Ellis prays for judgment against PepsiCo as follows:
`
`RELIEF SOUGHT
`
`a.
`
`For an order certifying a class action for the New Jersey law claims;
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`
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`b.
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`c.
`
`d.
`
`e.
`
`f.
`
`g.
`
`h.
`
`For an order finding PepsiCo liable for violations of state wage laws
`with respect to Ellis and all New Jersey Class members covered by this
`case;
`
`For a judgment awarding all unpaid wages, fringe benefits, liquidated
`damages, and penalties, to Ellis and all New Jersey Class members
`covered by this case;
`
`For an equitable accounting and restitution of wages due to Ellis and
`all New Jersey Class members members covered by this case;
`
`For a judgment awarding costs of this action to Ellis and all New
`Jersey Class members covered by this case;
`
`For a judgment awarding attorneys’ fees to Ellis and all New Jersey
`Class members covered by this case;
`
`For a judgment awarding pre- and post-judgment interest at the highest
`rates allowed by law to Ellis and all New Jersey Class members
`covered by this case; and
`
`For all such other and further relief as may be necessary and
`appropriate
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By: /s/ Andrew R. Frisch
`Andrew R. Frisch, Esq.
`MORGAN & MORGAN, P.A.
`8151 Peters Road
`Suite 4000
`Plantation, FL 33324
`Telephone: (954) WORKERS
`Facsimile:
`(954) 327-3013
`Email: AFrisch@forthepeople.com
`
`By: _/s/ Ryan Morgan
`C. Ryan Morgan, Esq.
`FBN 24069719
`MORGAN & MORGAN, P.A.
`20 N. Orange Ave., 16th Floor
`PO Box 4979
`Orlando, FL 32802-4979
`Telephone:
`(407) 420-1414
`Facsimile:
`(407) 867-4791
`Email: rmorgan@forthepeople.com
`
`
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`
`
`Matthew S. Parmet
`TX Bar # 24069719
`(seeking admission pro hac vice)
`PARMET PC
`3 Riverway, Ste. 1910
`Houston, TX 77056
`phone 713 999 5228
`matt@parmet.law
`
`Attorneys for Plaintiff
`
`- 13 -
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`