Posted on June 19, 2013

most common employment lawsuits

When it comes to employment law, employers have many questions—the most important being, “How do I avoid them?” We asked employment attorney Jim Langendorf to answer some common employer questions about employee lawsuits. The insight Jim provides in the Q&A below gives employers helpful knowledge on how to reduce their risk.

Q: What are the claims that you, as an employment lawyer, take the most seriously?

A: Wage and hour claims. These are claims filed under the Fair Labor Standards Act, which has been around since 1938. From a plaintiff attorney’s perspective, they are the most powerful claims we can file against an employer, and it is clearly the most dangerous for employers. They are also the most filed federal court claim—over 7,000 wage and hour claims were filed in 2012, not including claims filed in state courts.

In harassment cases, there’s always a “he said, she said” component. In wage and hour cases, there is none of that. Your employees come to work, they do work and they are entitled to be compensated. If you don’t pay them the minimum wage for their work—I win. If you don’t pay them overtime if they work over 40 hours—I win. If you didn’t keep records of the hours they worked, they get to decide how many hours were worked, they get to tell the judge, and that’s what the judge will believe—again, I win. And not only do I win back wages for them, but if it turns out you were acting in bad faith or with carelessness, I get liquidated damages for the same amount of the back wages. That adds up significantly. In addition, I get my attorney’s fees that you have to pay, plus your own attorney’s fees. Wage and hour claims are incredibly powerful.

Q: It sounds like wage and hour claims are the ones employers need to be worried about, and that they can add up. Do you have any examples of recent cases?

A: A few years ago, there was a case with a group of employees, truck drivers and salesmen for a used car lot. No records had ever been kept of their hours worked, and there was no doubt that they were not exempt from overtime. The employers refused to believe they had any responsibility to pay more than they did. They did not have any evidence or any records, so I ended up winning the employees a six-figure award, more than half of which was attorneys’ fees.

It is incumbent upon you to keep records and make sure you are paying your employees correctly. Failing to pay them correctly can end up coming back to bite you, and costing you more money than it would to pay them correctly in the first place.

Q: When it comes to wage and hour lawsuits, when do they have the potential to become class action suits?

A: As an attorney, I want to turn every wage and hour suit that comes through my door into a class action suit. The Fair Labor Standards Act doesn’t provide for that, though. In the forties, unions were bringing many class action suits without having the agreement of people who were allegedly injured by the employer’s failure to pay. Congress decided that class action suits under the Fair Labor Standards Act could only be brought if the entire group of employees agreed to it. They each have to sign a document and appear personally in that lawsuit—it’s called a collective action. However, under many state laws, these requirements do not apply. It’s enough for just one employee to claim that all her coworkers were also injured. All employees are included in the state-level class action unless they opt out.

Q: Are there ways in which employers might put themselves at more risk for a class action suit?

A: If there’s a common injury to a group of people, you could be subject to a class action. Anything that is system-wide that violates the law can trigger a class action. The risk is always there. And the cost of a class action is significantly larger than that of a single plaintiff. A recent case I had against a bank started with just one employee, but turned into a class action, and resulted in awards over $6.5 million. The risk and potential cost associated with a class action suit is exponentially larger. Every plaintiff’s counsel is going to try to turn a claim into a class action, the goal being to provide maximum relief for the client.

Jim’s answers to these questions provide you with an overview of the risks associated with employment law. Fortunately, Paycor can help you mitigate some of those risks:

* HR Support Center: Affordable online knowledgebase to help you reduce the likelihood of a lawsuit. Access documentation templates, materials such as a termination checklist and the FLSA Fair Pay Exemption checklist, and even a three-minute HR audit to assess your risk.
* HR On Demand: Call or email an HR professional for answers to your specific questions for a fraction of the cost of legal counsel.
* HR application: Store all your employee documentation electronically in one place for easier tracking and quick access in case of an investigation.
* Time tracking solutions: Tracking employee hours worked is critical, especially if you find yourself in a wage and hour lawsuit. Make sure your employee isn’t the only one who gets to tell the judge how many hours he worked.

Learn more about employment lawsuits by watching Jim’s webinar. To find out more about how Paycor solutions can help you mitigate your risk of an employment lawsuit, get in touch with us today.

Source: Jim Langendorf, Langendorf Law Firm

This content is intended for informational purposes only and should not be considered legal advice.