Like most people in the Richmond and Hampton-Roads area, if you've turned on the television in the past few months, you've probably noticed advertisements asking questions such as:
1. Have there been weeks when you worked over 40 hours and did not get overtime?
2. Have there been times when your employer has required to work but not paid you for doing so?
3. Has your job title changed but not your rate of pay?
While you may not be surprised that many people answer "Yes" to at least one of these questions, you may be surprised by who is asking them—a local personal injury law firm. In fact, this particular personal injury law firm alone has filed over 20 lawsuits against Virginia companies since July 2009 under the Fair Labor Standards Act ("FLSA") for alleged wage and hour violations. The marked increase of FLSA filings in such a short amount of time is particularly alarming because, traditionally, the overall volume of FLSA lawsuits brought in our area has been relatively low compared to other jurisdictions. Notably, the defendants in these cases range from small local businesses to nationwide corporations.
It is clear that this personal injury firm is attempting to expand its practice base and gain a foothold in an area of the law which has proven to be very lucrative for other small plaintiffs' firms. Personal injury lawyers are soliciting potential clients by advertising on local television, and workers hard hit by a worsening economy are easy targets. For this reason, as long as the economy remains stagnant, the number of wage and hour lawsuits will continue to rise. Indeed, employers across the country have been forced to pay millions of dollars to settle FLSA cases and, in some cases, have had multimillion dollar judgments entered against them following lengthy (and costly) trials.
In some circumstances, the plaintiffs in these local cases have successfully certified a "collective" or "class" action—a litigation tool that permits multiple (sometimes hundreds) of individual cases to be tried together, a potentially debilitating scenario for any defendant employer, especially if the plaintiffs' win the case. Moreover, should a plaintiff in any type of FLSA case prevail, the law generally requires the defendant employer to pay the plaintiff's attorneys' fees in addition to money damages. For the defendant employer, the key is to fight the formation or "certification" of the class at the outset and with vigor, as it is very expensive to defend a collective action once the class has been certified.
Because of the recent up-swing of these types of cases, employers must become more focused on their wage and hour practices and ensure their compliance with wage and hour laws. One specific target on which plaintiffs and their lawyers are focusing is overtime exemptions under the FLSA. In many of these recent cases, the plaintiffs have asserted that they have frequently worked more than 40 hours in a workweek, but were not paid overtime for those hours. Employers need to make certain that they have their employees properly classified as exempt or non-exempt. It is a common misconception that all employees who are paid a salary are not entitled to overtime. In fact, just because someone is paid a salary does not necessarily mean that he or she is exempt; rather, the exempt status of an employee usually depends on their specific job duties and responsibilities. Thus, employers must carefully evaluate the duties of each position when making decisions concerning exemptions.
Another target of these lawsuits has been employers who require their employees to perform "off the clock" work. While 10 minutes here and there may not seem like much, when a large group of plaintiffs sue an employer for violations going back two or three years, the potential for a large recovery quickly becomes evident. Thus, employers should also ensure that proper policies are adopted and followed to ensure proper timekeeping for all employees – especially those who are classified as non-exempt – and that these policies are followed at all times.
The recent trend of filings in its federal courts strongly suggests that the number of FLSA lawsuits in Virginia will only increase. Employers who are prepared and who have properly and thoroughly addressed wage and hour issues stand a much better chance of defending against such claims.
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