Human Resources News & Insights

FLSA, overtime lawsuits just got a lot more expensive

Employers now have even more incentive to make sure they abide by wage-and-hour laws. 

Now, in addition to liquidated (a.k.a., double) damages and even jail time, Fair Labor Standards Act (FLSA) violators can be hit with emotional distress damages as well.

That’s what the U.S. Court of Appeals for the Fifth Circuit just ruled in a case involving Santiago Pineda, a maintenance worker, and his employer/landlord JTCH Apartments.

Here’s what happened.

Lawsuit filed, eviction notice issued

As part of Pineda’s compensation package with JTCH, he received discounted rent. So when he filed a wage-and-hour lawsuit against the apartment complex to recover overtime pay for work he performed, JTCH reacted by evicting Pineda and his wife.

The notice to vacate that Pineda and his wife received cited the reason for eviction as being a failure to pay rent in an amount equal to the discount he’d received.

Now facing the prospect of losing his home, Pineda tacked an emotional distress claim onto his overtime lawsuit.

The court was then tasked with determining whether the FLSA allows for the recovery of emotional distress damages.

The court’s ruling? The language in the FLSA’s damages provision, which allows for “such legal or equitable relief as may be appropriate,” is expansive language that should be read to include the compensation for emotional distress damages, the court said.

The court then remanded the case back to a jury to determine the exact amount of emotional distress damages to which Pineda would be entitled.

That jury had already ruled that JTCH owes Pineda $6,600 for overtime and retaliation, plus a whopping $76,000 in attorney fees. But in light of the court’s conclusion on Pineda’s emotional distress claims, the bill is about to get a lot steeper for JTCH.

Blueprint for future lawsuits

The troubling aspect of this case is it has brought an issue to light that, while receiving similar verdicts from other circuit courts in the past, hadn’t been in the public eye.

Now, employees who feel they’ve been wronged have been shown another avenue for collecting damages from their employers — as well as a blueprint for how to do it.

As a result, you can bet more workers who are shorted overtime — or been a victim of some other wage-and-hour violation — will try to tack emotional distress damages onto their FLSA claims in the future.

Cite: Pineda v. JTCH Apartments LLC

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