‘Misclassified’: Current, Former Package Agents Allege Utah Dept. of Alcoholic Beverage Control Owes Unpaid Overtime

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Thirteen plaintiffs have signed onto a proposed collective action in which they allege the Utah Department of Alcoholic Beverage Control (DABC) and several officials have failed to pay proper overtime wages. 

The plaintiffs, current and former Utah DABC package agents, allege in the 52-page complaint that they’re owed unpaid time-and-a-half overtime for every hour worked in excess of 40 each week due to being paid a contracted rate, rather than an hourly rate, regardless of how many hours they put in or whether those hours surpassed 40 during a given workweek. According to the lawsuit, Utah DABC package agents have been misclassified as independent contractors, rather than bona fide employees protected by the federal Fair Labor Standards Act, given the all-encompassing level of control the defendants are alleged to have over their day-to-day operations and duties. 

In addition to allegedly unpaid overtime wages, the plaintiffs also seek to recover other separate monetary damages, including but not limited to unpaid benefits, such as Utah Retirement System benefits, stemming from the Utah DABC and the defendants’ “fraudulent and negligent misrepresentation of the Plaintiffs’ employment status,” as well as damages for the defendants’ apparent breach of its implied employment contract with current and former package agents. 

Per the suit, the Utah DABC is the agency responsible for managing and directing the sale and distribution of alcoholic beverages throughout the state. The case relays the Utah DABC contracts with package agents on a yearly basis, with the contract renewal process running automatically for, in some instances, several decades. Utah is one of 18 U.S. jurisdictions that maintains a monopoly on alcoholic beverage sales.

As the lawsuit tells it, the defendants closely control nearly every aspect of package agents’ day-to-day work lives, including by, among other aspects: 

• Providing the workers with a detailed handbook governing required day-to-day operations;
• Requiring and providing extensive training for package agents on Utah DABC policies and procedures and their obligations as agents under Utah and federal laws;
• Requiring package agents to prepare and send daily, weekly, monthly and quarterly reports, and to submit such on the defendants’ own software in ways dictated by the DABC;
• Requiring package agents to use equipment and software owned by the Utah DABC for all transactions and other business functions;
• Requiring the workers to attend training sessions;
• Exclusively setting prices for the purchase and sale of all inventory sold by package agents;
• Setting a minimum number of hours package agents must work each week;
• Setting must-follow procedures for opening and closing, counting and ordering inventory, receiving liquor on schedule and setting pricing; 
• Requiring workers to place DABC signage on the outside of their stores, identifying them as a “State Liquor Agency”;
• Requiring package agents to use DABC-owned credit card terminals and merchant accounts;
• Prohibiting any political activity;
• Forbidding package agents from having their own websites, promotions or advertisements of DABC-owned liquor;
• Requiring package agents to use a specific kind of brown bag for the sale of all liquor;
• Prohibiting workers from receiving tips or other compensation outside of their monthly salaries; 
• Limiting the clients they can have to only the Utah DABC; and 
• Mandating that package agents provide the defendants with the unrestricted right to enter their property at any time to review records, check inventory or for any other reason. 

According to the lawsuit, the plaintiffs and other members of the proposed collective, around July 2020 and March 2021 and on “other multiple occasions,” advised the defendants of their concern that “the level of control exerted has created an employer-employee relationship.” After investigating these claims at the behest of the plaintiffs, the defendants relayed to package agents that they, the Utah Attorney General’s Office and/or the Utah Labor Commission “had investigated the claims and concluded that Plaintiffs and Collective Members were properly classified as independent contractors,” the lawsuit says. 

The case claims the defendants falsely represented to the plaintiffs their true employment status, and the workers were left with no choice but to “acquiesce to the terms unilaterally imposed by Defendants to maintain their salaries from Defendants.” 

Among the defendants named in the case are the state of Utah; Deputy DABC Director Cade Meier; John Barrand, Executive Director of the Dept. of Human Resource Management; DABC Executive Director Tiffany Clason; former DABC Executive Director Salvador Petilos; Package Agent Program Director Jeff L. Colvin; DABC Compliance Director Angela Micklos; former Compliance Director RuthAnne Oakey Frost; former Internal Auditor Tim Beardall; and former Finance Director Man Diep. 

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