Lucky pennies or retaliatory conduct?

By Jeff Jones
Special to the UCBJ

Most of us read the story a few months ago about an employer in Georgia paying an employee his final paycheck in a pile of more than 91,000 greasy pennies weighing roughly 500 pounds.  

Some of you may not have read the story about the U. S. Department of Labor, Wage and Hour Division subsequently suing the employer and alleging that the method of payment constituted retaliatory conduct by the employer for the employee having complained to the Wage and Hour Division (WHD) about not receiving his final paycheck. The lawsuit also said the employer included a note with an expletive on the pile of pennies and posted defamatory remarks about the former employee on the firm’s website. Failure to pay overtime to employees is a further element of the WHD’s lawsuit.

So, what should we take from this? Obviously, the U.S. Department of Labor (DOL) is no longer only looking exclusively at employers’ compliance with the monetary requirements of the Fair Labor Standards Act (FLSA) for payment of minimum wage and overtime. An employer’s treatment of employees who assert their rights under the FLSA is also turning out to be an element for consideration.

In addition to this Georgia case, the DOL has pursued FLSA legal action in recent months against at least five other employers for retaliatory activity against employees, for asserting their rights.  The employers range from the auto repair store in Georgia to a bakery in Connecticut to a construction company in Massachusetts. The retaliatory actions were instigated against employees for such things as:

  • Complaining to a supervisor about not receiving overtime; 
  • Being suspected of complaining to WHD; 
  • Cooperating with the WHD during an investigation; and 
  • Cashing a back-wage check issued as the result of a WHD investigation. 

As a result of these employee actions, employers variously engaged in the following types of retaliatory behavior:

  • Harassed employees;
  • Threatened termination;
  • Threatened to report employees to immigration; or 
  • Threatened to blacklist them.  

Punitive damages are being sought by the DOL, and in two instances, courts have already awarded $75,000 and $100,000 respectively in purely punitive damages for the retaliatory actions.

While these legal actions by the DOL are a very strong cautionary warning against an employer doing­ anything that could be considered retaliatory against an employee who asserts his or her rights under the FLSA, they also serve as a very strong signal of the likelihood that the WHD is going to be taking a more aggressive approach to enforcement than we have seen in the last four years.

Further signals of this approach are a proposed $30 million increase in the 2022 WHD budget, and the rescinding of three Final Rules issued by the Trump administration (on independent contractors, joint employers and tipped employee requirements). All three of the Final Rules that were rescinded were more employer-friendly than the ones that have replaced them.  

Another indication of the likelihood of a more aggressive enforcement attitude, is the appointment of David Weil (not yet confirmed by the Senate, as of the time of this writing) as the WHD Administrator. Mr. Weil was the WHD Administrator under the Obama administration and was known for a forceful approach, particularly with regard to the types of employer actions that were found to be a willful failure to comply with FLSA requirements. A determination of willfulness results in higher back-wages and penalties.  

So, that pile of pennies might be a metaphor that the WHD is going to be more hard-hitting and employee-friendly than what we have known recently.

Jeffrey G. Jones is a regional managing member for Wimberly Lawson Wright Daves & Jones PLLC. He can be reached at jjones@wimberlylawson.com.

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