I went to the dentist this week and was reminded of the time a few years ago when I ignored a toothache for a while, mostly because I hate going to the dentist.
It's nothing against my dentist, but the sound of the drill, the poking with a sharp stick, etc. I could live with a little pain, knowing I would get to it later. Well, because I waited, the toothache turned into a root canal.
A recent lawsuit filed under the Families First Coronavirus Response Act ("FFCRA") looks like a simple toothache when you first read the allegations, but it quickly turned into a litigation root canal for the employer. The great poet Ogden Nash once mused, "Some tortures are physical, And some are mental, But the one that is both, Is dental." Perhaps the same can be said of employment litigation.
Lawsuits claiming violations of the FFCRA are in full swing all over the country. Last year, nearly 3,000 lawsuits were filed under the FFCRA. One of those cases caught my attention, not so much because of the immediate lessons it teaches about how to comply (or not comply) with the FFCRA, but instead because of the lessons it teaches about how badly things can turn when an employer's policies and practices get put under the microscope.
Cheryl and Judy worked for the same company in the retail industry. They also happened to be very good friends and next-door neighbors. When one of Cheryl's kids got COVID-19, everyone in both families quarantined. Cheryl and Judy both sought leave from their employer, and each of them also received medical treatment. Cheryl was out of work for just over three weeks, and Judy was out for about a month. Although the company granted a leave of absence to each of the employees, Cheryl and Judy claimed they did not get any COVID-19 pay under the FFRCA.
Eventually, Cheryl quit, and Judy was fired. You will not be surprised to learn that Cheryl and Judy hired a lawyer. What may be surprising, however, is what at first appeared to be an FFCRA toothache, turned into a litigation root canal. We could have anticipated a lawsuit under the FFCRA, but once Cheryl and Judy saw a lawyer, things got much worse. Both Cheryl and Judy were nonexempt employees under the Fair Labor Standards Act ("FLSA"), so they were entitled to overtime after working 40 hours in a week.
Cheryl and Judy claimed their company only paid them for "scheduled" hours of work, instead of the hours they actually worked. Even when they were scheduled to work more than 40 hours in a week, they said they did not get overtime pay because the employer also had a practice of paying overtime only when an employee worked more than 80 hours in a two-week payroll period.
Cheryl and Judy also claimed their employer "docked" their pay for any shortages of cash that occurred during their shift. They said the employer had a written policy which stated: "If the money in the register is short/over at the end of your shift, then it will come out of your paycheck."
The company also had a written policy, according to Cheryl and Judy, that stated if you failed to give two weeks notice of quitting, "your final check will be held for two weeks." Unfortunately, the employer also did not have lawfully signed wage deduction/assignment forms, according to Cheryl and Judy. Cheryl and Judy also said that if the company did not get the money for shortages deducted from an employee's paycheck, the employee had to pay the company for those shortages out of pocket, in cash. Cheryl's and Judy's lawyer called these payments "illegal kickbacks" under the FLSA because the required payments violated the company's obligation to pay minimum wages and overtime pay.
All of this, Cheryl and Judy claimed, was done not in ignorance, but in "bad faith" by their employer. We all recognize that all these allegations made by Cheryl and Judy are just that -- allegations. Just because something is alleged to have occurred in a lawsuit, that certainly does not make it true. Often what is alleged in a complaint is far different from the actual evidence. However, when it was all said and done, Cheryl and Judy sued under the FFCRA, the FLSA, the state wage payment statute and the state wage claims statute. They asked the court to order damages for unpaid regular wages, unpaid overtime wages, unpaid minimum wages, repayment for illegally deducted wages, damages for late payment of wages, triple the amount of wages under state wage laws, liquidated damages under federal law, front pay, reimbursement for the costs of bringing the lawsuit, and, of course, attorney's fees.
It would be difficult to count the number of conversations we lawyers have had with clients over the last year talking about the "risks" of violating the FFCRA. Although employers were trying to do their best to meet their obligations to comply with a new law and hundreds of pages of regulations (which were changing and expanding, almost daily at times), an employer could always look at the situation and say, "even if we get it wrong, the risks are limited because the FFCRA only provides limited pay for a limited period of time."
There are some additional remedies available under the FFCRA, but it's true enough. So, at first blush, the Cheryl and Judy problem was an FFCRA toothache. But there are more and better lessons here. This employment lawsuit took what was a relatively straightforward FFCRA toothache and turned it into the equivalent of a litigation root canal: the more you dig, the more you find that must be fixed.
Most employees don't challenge their employer's policies and practices, that is until they get fired. And many employers don't really dig into their policies and practices, until they get sued. And because statutes of limitations are so long in employment cases, anywhere from 300 days to three years, former employees' long memories prompt an in-depth scrutiny of every policy and every practice they have ever run into. The same way a toothache becomes a root canal, an FFCRA misunderstanding becomes a multiple count federal court lawsuit challenging every pay practice and every employment policy.
It was probably not until the lawsuit was filed that Cheryl's and Judy's employer determined that perhaps its pay practices should be reviewed, that its wage deduction policies may have been questionable, and that its payroll deduction authorization forms may have been out of date. The result was not a lawsuit limited to the FFCRA, but instead a lawsuit that covered virtually every aspect of Cheryl's and Judy's entire careers with the company.
Things often look fine from a distance, but that may be simply because they have not been looked at closely for a long time. This FFCRA case is a reminder that the time to review your policies and practices is before you get sued. It is time well-spent and may keep the toothache from becoming a root canal. With apologies to Ogden Nash: Policies should be read Bad practices make companies blue Review both with your lawyer Before you get sued.
For more information about the FFCRA, please contact Paul Sinclair or the labor & employment attorney with whom you normally work. This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.