Allied Universal Security Failed to Properly Pay Workers Following Kronos Data Breach, Lawsuit Alleges

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Allied Universal Security Services and a slew of affiliates face a proposed class and collective action that claims they’ve failed to properly pay employees in the wake of a 2021 data breach that crippled the companies’ timekeeping system.

The 23-page case says that after Kronos, the defendants’ timekeeping and payroll system, became inoperable in December 2021 due to a cyberattack, Allied Universal failed to take the necessary steps to accurately track workers’ hours and pay them due overtime wages.

“Allied Universal could have easily implemented a system to accurately record time and properly pay non-exempt hourly and salaried employees until issues related to the hack were resolved,” the complaint alleges. “But it didn’t.”

Instead of paying workers for their actual hours, Allied Universal based their wages on prior pay periods or “reduced payroll estimates” that failed to account for some of the workers’ time, the lawsuit claims.

As a result, the economic burden of the Kronos data breach was placed on the shoulders of “front-line workers—average Americans—who rely on the full and timely payment of their wages to make ends meet,” the suit contends.

The case alleges Allied Universal’s apparent failure to pay employees the entirety of their wages, including overtime, violates the federal Fair Labor Standards Act (FLSA) and several California statutes.

The lawsuit relays that Allied Universal, a security services company who employs over 800,000 workers, has used the Kronos timekeeping and payroll system since at least December 11, 2021, when the system was the target of a ransomware attack. In the wake of the breach, the defendants have used various methods to estimate workers’ hours, including by paying them according to their scheduled hours or simply duplicating a prior paycheck, the case states.

Per the suit, this practice has many times resulted in workers being paid less than they were owed, especially for overtime hours.

The plaintiff in the case, who works for Allied Universal in California, claims to have been paid for overtime “[i]n some instances” but not at the proper rate because the defendants failed to make the required adjustments for shift differentials and non-discretionary bonuses.

“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 factors allowed under the law,” the suit specifies.

The case contends that Allied Universal was well aware of its obligation to pay overtime at the proper rates given it had “routinely” done so prior to the Kronos hack. Per the suit, the defendants’ failure to pay workers at the correct rates and for every hour worked was “willful.”

The plaintiff looks to represent current or former non-exempt employees of Allied Universal (including of its subsidiaries and alter egos) who worked in the U.S. at any time since the onset of the Kronos ransomware attack on or around December 11, 2021 to the present.

The following entities are named as defendants in the suit:

• C&D Security Management, Inc. (doing business as Allied Universal Security Services);
• C&D Enterprises, Inc. (doing business as Allied Universal Security);
• Universal Protection Services, LLC (doing business as Allied Universal Security Services, LLC);
• SOS Surcurity LLC (doing business as SOS Security LLC, who does business as Allied Universal Risk Advisory and Consulting Services);
• Securadyne Systems Intermediate LLC (doing business as Allied Universal Technology Services);
• Allied Barton Security Services, LLC (doing business as Allied Universal Security Services); and
• Universal Services of America, LP (doing business as Allied Universal Security Services).

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