Knowing Your Rights
Every successful lawsuit begins with an employee who knows – or wants to know – his or her rights under the labor laws.
Generally speaking, as an employee you have the right to be paid the federal minimum wage of $7.25 per hour (or higher, if state law provides), and 1.5 of your regular rate of pay for overtime. The Fair Labor Standards Act (“FLSA”) and most stage wage laws require wages to be paid regularly and on time.
When employers fail to adhere to these requirements, employees may be owed wages. Under federal law an employee can recover their wages, plus an equal amount as “liquidated” damages, as well as attorneys’ fees and costs. Additional remedies may be available under the laws of states with more protective wage-and-hour laws, such as California, Colorado, and New York.
Retaining an Attorney
It is important to consult with an experience wage-and-hour attorney as soon as you suspect your employer is violating labor laws. The FLSA and corresponding state laws contain many exemptions and nuances that employees may not fully understand without the guidance of experienced professionals.
The attorneys at the Wage Authority Group provide free consultations for purposes of evaluating potential representation for unpaid wage lawsuits. The information you provide during the consultation will remain confidential.
If an attorney is interested in taking your case, you will typically be sent a “retainer” agreement to review and sign. Many retainer agreements in wage-and-hour cases provide for “contingent” fees, meaning the employee owes no fees or expenses if the case does not result in a recovery.
Once you’ve retained an attorney to represent you, he or she will want to hear your account of the facts in greater detail, to assess how to pursue your claims. Generally, the attorney will want to know information about your work schedule, your job duties, the amount of pay you’ve received, and any important policies maintained by the employer.
If you have documents reflecting the employer’s violations, you should have the attorney review them, as payroll records can often by confusing and even misleading. However, if you do not have documentary proof, do not be discouraged – your word alone may be enough to convince an attorney to further investigate your case.
Pre-Suit Demand Letters
A common way for wage-and-hour attorneys to help employees recover wages is through pre-suit demand letters. A pre-suit demand letter requests that the employer have its attorney contact your attorney to discuss trying to settle your claims before a lawsuit is filed.
From the employer’s perspective, reaching a settlement before a lawsuit is filed can save legal fees – both to the employer’s attorney as well as your attorney, who the FLSA allows to recovery attorneys’ fees if your case is successful.
However, the downside of pre-suit demand letters is that they do not stop the running of your statute of limitations under the FLSA (2 years, or 3 years for a willful violation), and the employer is not required to respond.
Commencing a Lawsuit
In order to stop your statute of limitations from running and compel a response from your employer, you must file a claim in court. FLSA claims can be filed in federal and state courts, either in the state where you worked or the state in which the employer is headquartered or incorporated.
Generally the way to file a claim is through a complaint, which your attorney drafts and has you review before filing in court. After the complaint is filed, your attorney has it served on the employer, who is then required to file an “answer.” If the defendant fails to file an answer on time, the court may award judgment to the employee.
The employer’s answer will indicate whether it admits or denies the allegations in your complaint, as well as a statement of the employer’s “defenses.” In some cases, employers raise frivolous defenses, like claiming that the employee agreed to a subminimum wage and/or did not work fast enough. Defenses in FLSA cases are strictly construed against the employer.
The Collective Action Process
A “collective action” lawsuit is similar to a class action lawsuit, in that it involves a group of employees all seeking recovery for common harm.
If your claims are already being addressed in a pending “collective action,” you can file your claims, and stop your statute of limitations from running, simply by signing a written “consent” form that your attorney files in the pending case, provided that the deadline to do so has not passed.
A collective action consists of “named plaintiffs,” who initiate and guide the case, and “opt-in” plaintiffs, i.e. employees who join the case by filing written “consent” forms. In many cases, opt-in plaintiffs join the case after receiving a court-approved notice in the mail or by e-mail.
Collective actions benefit employees by allowing them to pool their resources and rely on a core set of documents and witnesses to prove their case.
In addition to collective actions filed in court, many wage-and-hour claims are also brought as individual arbitration proceedings. “Arbitration” refers to a legal proceeding in which a private attorney decides the case instead of a judge.
Many employees are required to proceed in arbitration rather than court due to provisions in their employee agreements and/or handbooks. These provisions will typically state that any claims must be resolved through arbitration. If you believe you may have signed such a provision, you should make sure your attorney knows so that they can file your claim in the proper forum.
Arbitration is generally less formal than a court proceeding, and can be a quicker process. Many arbitrators require the employer to pay their fees, which can lead to early settlements. However, proceeding in arbitration has disadvantages to employees too, who often must forgo the right to bring collective actions and have their claims heard by a jury.
If your claim is filed, you will be a plaintiff in the lawsuit and will have to comply with applicable court and/or arbitrator’s rules regarding discovery, including preserving and potentially producing documents to the employer.
Discovery is the part of the case in which each side gets to collect evidence and statements from the opposing side and its witnesses.
The discovery provided by employers in wage-and-hour cases typically includes time and payroll records, your personnel file, and the employers’ wage-and-hour compliance policies.
Employees are typically requested to provide any documents they have from their employment such as paystubs or work schedules, as well as to provide information and estimates regarding the wages they allege they are owed. In some cases, employees are required to attend depositions, which means answering questions under oath posed by the employer’s attorney.
Due to the prevalence of collective actions, in which only a small subset of employees have to provide testimony, as well as the costs of defending such cases and the pressure this imposes on employers to settle, it is common for employees to obtain recoveries without answering discovery, producing documents, or sitting for depositions.
Like lawsuits of all types, most wage-and-hour cases settle – eventually. In collective action cases, the named plaintiffs and their attorneys will generally negotiate a settlement amount to be divided up against the group of employees that has joined the case.
If your case is in the settlement phase, it is important to understand the range of monetary amounts your attorney is seeking on your behalf, as well as the other terms of the settlement. It is important that your attorney know of all circumstances that may be impacted by a settlement agreement, such as any other pending or potential claims you have against the employer.
In some cases, the settlement agreement is submitted to the court for approval before the settlement payment is made, usually at the insistence of the employer or if required by the particular court. The purpose of court approval is to make sure your recovery is fair.
If your case does not settle, and the Court finds that there is too much conflicting evidence and testimony to decide your case on the papers, the case will proceed to trial. At a trial, the judge and jury hear the live testimony of witnesses and presentation of evidence. If your claim involves a he-said/she-said situation, the jury will decide which side is telling the truth and award judgment accordingly.
If you prevail at trial or otherwise obtain a judgment against your employer for unpaid wages, the fight may still not be over. In all too many cases, employers refuse to pay and hide assets in order to make themselves “judgment” proof. Employers can also use the protection of bankruptcy laws to erase their liability to you.
Notwithstanding these risks, the attorneys Wage Authority Group remains committed to pursuing employees’ wage-and-hour claims to the fullest extent possible.