Employer Exposure Increases: Emotional Distress Damages in FLSA Cases

Posted in Employment Litigation, Wage & Hour

The number of federal courts allowing plaintiffs to recover emotional distress damages in Fair Labor Standards Act (FLSA) retaliation cases is expanding, with the Fifth Circuit Court of Appeals last month joining two other circuits that have permitted such damages. The case Pineda v. JTCH Apartments, L.L.C. (5th Circuit December 19, 2016), involved maintenance employee Santiago Pineda, who lived and worked at an apartment complex owned by the defendant, JTCH Apartments, LLC. As part of his compensation, Pineda received a discount on his rent.

During his employment, Pineda filed a lawsuit against JTCH for unpaid overtime wages. Three days after being served with the complaint, JTCH issued Pineda a notice to vacate the apartment for nonpayment of rent. The unpaid rent amount was equal to the rent reductions he had received during his employment. Upon receiving the notice to vacate, Pineda moved out of the apartment complex and amended his complaint to include a claim for retaliation under the FLSA.

During the trial, Pineda requested a jury instruction on emotional distress damages for his FLSA retaliation claim. He testified that he experienced marital discord, sleepless nights, and anxiety about his living situation. The court denied Pineda’s jury instruction request. The jury then returned a verdict in Pineda’s favor on his unpaid overtime and retaliation claims. Pineda appealed the trial court’s decision to deny his request for a jury instruction on emotional distress damages for his FLSA retaliation claim.

The appellate court said a question asking whether Pineda had proven any damages for emotional distress should have been submitted to the jury. The court noted that the FLSA provides that an employer who violates the retaliation provides “shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including without limitation employment, reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). The court seized upon the clause “such legal or equitable relief as may be appropriate” as providing the authority for emotional distress damages. The Fifth Circuit held that “this expansive language … should be read to include the compensation for emotional distress that is typically available for intentional torts like retaliatory discharge.” The court noted that while the question was a new one for the Fifth Circuit, the Sixth and Seventh Circuit Courts of Appeal have already held that emotional distress damages are allowed for FLSA retaliation cases, and the First, Eighth, and Ninth Circuit Courts of Appeal have maintained such awards in FLSA retaliation cases even though the legal question was not raised as an issue during the appeal. The Eleventh Circuit has not issued an opinion addressing emotional distress damages in FLSA retaliation cases. However, the Eleventh Circuit has maintained awards of emotional distress damages in FLSA retaliation cases even though the legal question was not raised on appeal, and courts in the Eleventh Circuit, such as the Middle District of Florida, have expressly allowed for such recovery.

The Takeaway For Employers

With the expanding acceptance of emotional distress damages in FLSA retaliation cases, employers should be mindful of increased exposure. Employers could be on the hook not only for back pay and an equal amount as liquidated damages, but also for emotional distress damages. As a result, employers should be vigilant when altering an employee’s terms or conditions of employment after the employee has made a complaint regarding compensation. Even small changes in an employee’s working conditions may lead an employee to claim retaliation.

Medical Marijuana and the Workplace

Posted in Disability, Employee Handbooks & Policies, Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & Retaliation, Employment Litigation, Workplace Safety & OSHA

With the growing list of states legalizing marijuana, are workplace drug policies up in smoke? As the new year begins, Arkansas, Florida and North Dakota join the growing list of states that have legalized medical marijuana. Currently, 28 states* and Washington, D.C., have legalized marijuana use for certain medicinal purposes, and eight states** and the District of Columbia have legalized marijuana for recreational purposes to some extent. The rules and regulations implementing these changes won’t be finalized and put into effect immediately – for instance, the Florida Department of Health has until July 3, 2017 to promulgate regulations for licensing and distribution and until October 3, 2017 to begin issuing medical marijuana identification cards. Even so, it’s best to analyze the impact of the changing marijuana landscape now and prepare for the future. Continue Reading

Minimum Wages Climb

Posted in Wage & Hour

Workers will now receive higher minimum wages mandated by state law in 19 states, effective this month. Florida’s minimum wage increased to $8.10 an hour from $8.05 an hour, effective January 1. Tipped employees in Florida are now entitled to receive a minimum of $5.08 an hour. Workers in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, Michigan, Missouri, Montana, New Jersey, New York, Ohio, South Dakota, Vermont, and Washington also will see higher minimum wages. Two other states and Washington, D.C. are slated to implement minimum wage increases later this year.

In addition to the increases required by state laws, covered employees working on federal contracts are entitled to receive $10.20 per hour, effective January 1, 2017, and covered tipped employees working on such contracts must be paid at least $6.80 per hour.

The federal minimum wage set at $7.25 an hour in 2009, remains unchanged.

 

EEOC Updates Guidance on National Origin Discrimination

Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & Retaliation, Immigration Planning & Compliance

As we observed (here), the heated tone of the recent presidential election poses unprecedented challenges for employers attempting to manage employee interactions in the workplace, especially when issues related to immigration and national origin inevitably come up. Right on cue, on November 21, 2016, the EEOC, emphasizing the rising numbers of immigrant workers in many of the United States’ fastest-growing professions, issued updated enforcement guidance on national origin discrimination for the first time in 14 years. Continue Reading

Employers Should Keep An Eye On the Non-Compete Reform Movement

Posted in Non-Compete & Trade Secret Litigation, Uncategorized

Employers who require all employees to sign a form non-competition agreement regardless of the state in which the employee is located or the type of work performed by the employee should think twice before doing so. Recent legislation focused on reform of non-competition agreements at the state level may signal a trend. In light of those changes and variations from state to state in enforceability, employers are well advised to conduct an individualized assessment to determine whether to require an employee to sign a non-compete agreement as a condition of initial or continued employment. Continue Reading

The New Salary Regulations: The Saga Continues

Posted in Employment & Consulting Contracts, Employment Counseling & Workplace Claims Prevention, Uncategorized, Wage & Hour

While employers took solace from the Nov. 22 nationwide preliminary injunction which blocked implementation of a controversial rule increasing the salary threshold for employees to be exempt from overtime, the battle is not over. The Department of Labor filed its notice of appeal December 1, the same day the new salary regulations were to take effect. Continue Reading

Managing Employee Interactions in the Wake of the Trump Election

Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & Retaliation

You may have been able to keep politics away from the annual Thanksgiving gathering of relatives with diverging viewpoints, but the workplace requires daily interaction. What’s an employer to do with emotions still running high from a divisive election?  Employers should be vigilant and insist that all employees act with professionalism and respect. Employers should ensure that each employee, regardless of political persuasion, feels that he or she is a valued team member and is treated accordingly. Continue Reading

Catch-22 for Franchisors: The Joint Employment Dilemma

Posted in Disability, Employment & Consulting Contracts, Employment Counseling & Workplace Claims Prevention, Employment Litigation

As government agencies steadily expand the concept of  joint employment, franchisors increasingly find themselves in a difficult position. Since August 2015, when the NLRB ruled in Browning-Ferris that entities with the ability to exercise direct or indirect control over workers can be joint employers (prior blog post here), franchisors have experienced increased scrutiny from both federal agencies and the courts. Indeed, on the heels of the NLRB’s decision, the Department of Labor issued guidance concerning the FLSA which announced a similarly broad understanding of joint employment (prior blog post here). Moreover, in a recent amicus brief submitted in connection with litigation challenging the Browning-Ferris decision, the EEOC advised the D.C. Circuit Court of Appeals that the NLRB’s interpretation is consistent with the EEOC’s interpretation of joint employment with respect to Title VII.  Continue Reading

Employers Can Be Thankful: New Salary Regulation Delayed

Posted in Employee Benefits, Employment & Consulting Contracts, Wage & Hour

Providing employers with a piece of good news, a Texas court has issued a nationwide preliminary injunction that delays the December 1 implementation of the controversial final rule that increased the salary level for exempt employees to $47,476, more than double what it had been. The court found that the 21 states challenging the rule showed both that they were likely to succeed on the argument that the Department of Labor’s salary level under the rule and the automatic updating mechanism are without statutory authority, and that they would suffer irreparable harm. Conversely, the court said that the DOL failed to show harm if implementation were delayed until a final hearing.  Continue Reading

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