I have a couple unpaid overtime cases in the complaint stage. It is my understanding that the federal courts are feeling seriously underfunded. The pending government shutdown is threatening to freeze pay and lead to furloughs. This potential slowdown in my wage and hour forum of choice has me concerned. While the Fair Labor Standards Act provides concurrent jurisdiction to state courts, neither judges, nor counsel who are commonly called to appear in county common pleas courts seem well versed in the procedures and risks presented by FLSA litigation.
The state courts do allow things to move along more quickly in the early stages of the case, particularly with discovery. Federal rules of procedure prohibit formal discovery prior to the discovery plan conference which may not be for ninety days or more after the complaint is served. Under Ohio rules, interrogatories and other paper discovery can be served with the complaint.
I think that under the circumstances of threatened funding for federal courts, a diversion to state court may be the way to go. It requires more time spent educating the court and counsel not used to FLSA litigation, but the cases will not be held hostage to congressional foolishness.
Ironically, my state court is smack in the middle of House Speaker John Boehner's Ohio district. If he were able to do his job, then I could rely on the federal courts. But he can't. So neither can I.
Thursday, September 26, 2013
Wednesday, September 11, 2013
Personal Injury
People get in car accidents all the time. They get hurt, and then they sue the driver of the other car. On a daily basis, thousands of lawyers are looking for the opportunity to represent someone who was injured. They're known as trial lawyers, personal injury lawyers, accident lawyers, wrongful death lawyers, Plaintiff's lawyers, even ambulance chasers and shysters. All are titles attached to those who work, usually on no more than the belief that they will prevail, to recover medical costs, lost wages and an amount of money to compensate an injured client for their pain and suffering.
I do not work in the personal injury area of law. Almost never. However, in the course of representing people fighting about their pay and employment rights, an occasional car accident affects my employee client and I am asked to help.
In a car accident, the driver doing the injuring is usually protected by an insurance company. Insurance companies, contrary to their television commercials, are not good hands, problem solving, double check discounting, Aussie geckos. They are businesses with ruthless, bottom line driven employees whose job is literally to keep an injured party's recovery to an absolute minimum. Insurers seem to view every injured person as a fraud, cheat and liar. They are out there, but the generalization has made the process painful.
Remember, insurance companies take money in from their customers and then invest that money, called a premium. The less they pay out in losses, the more the insurance company and its employees get in profits, bonuses and perks. I don't begrudge a business its profits, but you gotta understand insurance is designed to deny the existence or size of a loss.
My client was recently reminded of that business purpose. She was injured in a car accident. She had no obvious injuries, but had pain for years. She still does. Sadly, her evidence and the location of the court and its stingy jury pool, along with the costs of medical testimony made the likelihood of her prevailing in a court case very small. The neighborly insurance company that was there with a minimal amount of money and a big smirk knew the cost of litigation would outweigh the likely verdict. So rather than pay a fair amount of compensation for the loss, the company bet the farm that my client would not risk her farm. The insurer was right.
You can't see the pain of a toothache on an X-ray. Nor can medicine say with certainty whether any other pain is present. Doctors can't test grief and depression with an MRI. Sometimes the pain and suffering and despair from an injury simply cannot be seen by modern medicine. Is it any less real? Is it any less painful for its camouflage? No. But to insurers, their captive and well paid doctors, and to many jury pools, it might as well be a big lie.
It may be a fight worth having. The battle to show that pain is real even without shattered bones or lost blood. But not by me. I am back to my arena now. Saddened, chastened and glad to not be a PI lawyer.
I do not work in the personal injury area of law. Almost never. However, in the course of representing people fighting about their pay and employment rights, an occasional car accident affects my employee client and I am asked to help.
In a car accident, the driver doing the injuring is usually protected by an insurance company. Insurance companies, contrary to their television commercials, are not good hands, problem solving, double check discounting, Aussie geckos. They are businesses with ruthless, bottom line driven employees whose job is literally to keep an injured party's recovery to an absolute minimum. Insurers seem to view every injured person as a fraud, cheat and liar. They are out there, but the generalization has made the process painful.
Remember, insurance companies take money in from their customers and then invest that money, called a premium. The less they pay out in losses, the more the insurance company and its employees get in profits, bonuses and perks. I don't begrudge a business its profits, but you gotta understand insurance is designed to deny the existence or size of a loss.
My client was recently reminded of that business purpose. She was injured in a car accident. She had no obvious injuries, but had pain for years. She still does. Sadly, her evidence and the location of the court and its stingy jury pool, along with the costs of medical testimony made the likelihood of her prevailing in a court case very small. The neighborly insurance company that was there with a minimal amount of money and a big smirk knew the cost of litigation would outweigh the likely verdict. So rather than pay a fair amount of compensation for the loss, the company bet the farm that my client would not risk her farm. The insurer was right.
You can't see the pain of a toothache on an X-ray. Nor can medicine say with certainty whether any other pain is present. Doctors can't test grief and depression with an MRI. Sometimes the pain and suffering and despair from an injury simply cannot be seen by modern medicine. Is it any less real? Is it any less painful for its camouflage? No. But to insurers, their captive and well paid doctors, and to many jury pools, it might as well be a big lie.
It may be a fight worth having. The battle to show that pain is real even without shattered bones or lost blood. But not by me. I am back to my arena now. Saddened, chastened and glad to not be a PI lawyer.
Sunday, September 8, 2013
NSA intercepts everything - no privilege is safe
Well the National (in)Security Agency has mucked it up. With this revelation NSA cracks all it is clear that the Internet's most familiar service, i.e., email, is NOT a method of secure communication with clients or other counsel.
Back to US Mail and Fed Ex. The Internet revolution was just perverted by our friends in Washington. I appreciate a fair and well enforced scheme of laws, rules and regulations. Most lawyers count on that stew to make a living. However, I cannot accept, support or appreciate an unbridled abrogation of my legitimate privacy expectations.
This delusional and self protecting government madness leaves many frustrated and in despair. I am at a loss myself. The helplessness is unwelcome and unfamiliar. I am unsure how to fix this pervasive problem, but I will be looking for a solution. I hope everyone else is too.
Back to US Mail and Fed Ex. The Internet revolution was just perverted by our friends in Washington. I appreciate a fair and well enforced scheme of laws, rules and regulations. Most lawyers count on that stew to make a living. However, I cannot accept, support or appreciate an unbridled abrogation of my legitimate privacy expectations.
This delusional and self protecting government madness leaves many frustrated and in despair. I am at a loss myself. The helplessness is unwelcome and unfamiliar. I am unsure how to fix this pervasive problem, but I will be looking for a solution. I hope everyone else is too.
Friday, August 30, 2013
Contractor or employee? Still a burning question.
While I generally represent employees in wage and hour lawsuits, I sometimes represent employers. They want my expertise and my perspective as a plaintiff's attorney. I am often reluctant to do so, because it forecloses them as potential defendants in the future. Nonetheless, some small companies are my clients and I can help.
These little companies are start ups, or they were started by a single man or woman doing a job who then needed help. They put someone to work and then pay them like they themselves had been paid. That is to say with a flat rate, as a contractor. These new employers often believe that if they pay someone like a contractor, and tell their employees that they are actually contractors, then voila, they are contractors.
Oy vey.
In fact, the employer and employee can't make that decision between themselves. An employee can't waive his status as an employee, nor can he release his employer from liability to pay overtime or SSN benefits, or Medicare, or payroll taxes etc. If the employers are wrong, then they can find themselves facing hefty IRS claims with fines and penalties, and similar claims by state taxing
authorities asking about where all the withholdings are. In addition, some of these new employers are in businesses that lead to on-the-job injuries. If the employer was calling their roofing workers contractors, for instance, and not paying workers compensation insurance, and that worker falls and hurts himself, and then wants medical expenses and lost wages, then the employer will suddenly find that saving a few bucks on payroll taxes has ballooned into a major loss.
The question is control. States often have statutory definitions of employees and contractors. They usually employ a control test. Basically stated, if the person paying for the work provides the work, the tools and resources, controls the worker's hours of work and can discharge the worker for any reason, then the worker is controlled and is an employee. That classification triggers statutory responsibilities and extra costs. But the extra costs are a fraction of what they could be if the employees are misclassified.
Often the employer and the "contractor" are okay with their relationship. The employer has no costs other than paying a straight wage to the worker, and the worker pays no taxes or other withholdings up front. They may even be getting paid cash. Everybody is happy. It's when the relationship sours, usually when someone gets fired or hurt, that the wages of sin are collected. And it can be an unholy amount of wages.
It is much safer, and less costly and dangerous, not to mention ethically superior, to err on the side of employer/employee rather than contractor/sub contractor. If it's close, make them employees. If you have any questions about what's close, then email or phone me. www.langendorflaw.com.
These little companies are start ups, or they were started by a single man or woman doing a job who then needed help. They put someone to work and then pay them like they themselves had been paid. That is to say with a flat rate, as a contractor. These new employers often believe that if they pay someone like a contractor, and tell their employees that they are actually contractors, then voila, they are contractors.
Oy vey.
In fact, the employer and employee can't make that decision between themselves. An employee can't waive his status as an employee, nor can he release his employer from liability to pay overtime or SSN benefits, or Medicare, or payroll taxes etc. If the employers are wrong, then they can find themselves facing hefty IRS claims with fines and penalties, and similar claims by state taxing
The question is control. States often have statutory definitions of employees and contractors. They usually employ a control test. Basically stated, if the person paying for the work provides the work, the tools and resources, controls the worker's hours of work and can discharge the worker for any reason, then the worker is controlled and is an employee. That classification triggers statutory responsibilities and extra costs. But the extra costs are a fraction of what they could be if the employees are misclassified.
Often the employer and the "contractor" are okay with their relationship. The employer has no costs other than paying a straight wage to the worker, and the worker pays no taxes or other withholdings up front. They may even be getting paid cash. Everybody is happy. It's when the relationship sours, usually when someone gets fired or hurt, that the wages of sin are collected. And it can be an unholy amount of wages.
It is much safer, and less costly and dangerous, not to mention ethically superior, to err on the side of employer/employee rather than contractor/sub contractor. If it's close, make them employees. If you have any questions about what's close, then email or phone me. www.langendorflaw.com.
Thursday, August 8, 2013
The FLSA loves employees and their lawyers.
The federal Fair Labor Standards Act, also known as FLSA (pronounced Full-sa), is the law that requires employers to pay employees overtime wages for weekly hours worked in excess of forty. It has been around since 1938, with some modifications on the way.
Several employee friendly clauses were built into the law and its regulations. There have also been thousands of court decisions that have added weight to the statute. All that being said, the FLSA has become an extremely useful tool for employee representatives.
A couple of quirks that a lawyer or an employee should know: Employers can't shield themselves from personal liability. Very often large and small businesses are incorporated into corporations or limited liability companies. These legal creations usually insulate officers and owners from financial liability for actions of the corporation. However, the FLSA broadly defines "employer" as any entity or person that has control or influence over the employees' hours of work and pay. I have surprised many owners and managers and their lawyers by attaching personal liability for unpaid wages.
Next on the list of powerful benefits is the requirement that employers maintain records of hours
worked by, and payments made to, their employees. The law requires a rolling three year maintenance of this information. When there is a dispute about whether an employee worked overtime, an employer's failure to produce the records of hours worked and pay earned is a killer. The law specifically requires that the employer maintain them. Courts have consistently held, over decades, that in the absence of contemporaneously created records, the employee's estimate of hours worked controls. In the absence of specific evidence to contradict the employee's estimate (like time cards) the Court will allow the employee's estimate to stand as the amount of hours worked. An employer can't complain about the estimate when they fail to keep the lawfully required records.
Even employees who are classified as salary exempt should have time records maintained for them. At a minimum the smart employer will record that they worked the expected amount of hours in a work week. If there is any doubt about whether the employee is exempt from overtime, even a shred of doubt, then the conservative employer will keep detailed records.
Rounding out this incomplete list of unique FLSA features is the liquidated damage and attorney's fees provision. Under §216 of the FLSA, an employer who is shown to have violated the law is required to pay the back wages, an equal amount in additional damages, and the employee's attorney's fees. Congressmen in 1938 expected that the unpaid wages may be less than the attorney's fees, and Courts have consistently awarded fees based on comparable attorney rates in the geographic area where the case is tried. Needless to say, the awards of fees can be significant.
An employer and his lawyer ought to take claims of unpaid overtime very seriously from the first moment they are raised. The risks of allowing litigation to proceed can well exceed an early payment of the wages that should have been paid on demand and investigation.
I had a case a few years ago where I was trying to get the employer's attorney to discuss a settlement for my six employee clients. The attorney was unaware of the FLSA risks and finally said "you're being tiresome, go ahead and sue us." I did and got an award the defendant is still paying, with attorney's fees in excess of the back wages.
The FLSA is the best friend to an employee and the employee's lawyer. It is still not very well known by employers and their lawyers, but 7,000 federal cases a year are bringing them around. The bottom line is that is best to take allegations of FLSA violations very seriously and very quickly, before attorney's fees exceed what any employer would have anticipated.
More information available on my website: www.LangendorfLaw.com
Several employee friendly clauses were built into the law and its regulations. There have also been thousands of court decisions that have added weight to the statute. All that being said, the FLSA has become an extremely useful tool for employee representatives.
Next on the list of powerful benefits is the requirement that employers maintain records of hours
Even employees who are classified as salary exempt should have time records maintained for them. At a minimum the smart employer will record that they worked the expected amount of hours in a work week. If there is any doubt about whether the employee is exempt from overtime, even a shred of doubt, then the conservative employer will keep detailed records.
Rounding out this incomplete list of unique FLSA features is the liquidated damage and attorney's fees provision. Under §216 of the FLSA, an employer who is shown to have violated the law is required to pay the back wages, an equal amount in additional damages, and the employee's attorney's fees. Congressmen in 1938 expected that the unpaid wages may be less than the attorney's fees, and Courts have consistently awarded fees based on comparable attorney rates in the geographic area where the case is tried. Needless to say, the awards of fees can be significant.
An employer and his lawyer ought to take claims of unpaid overtime very seriously from the first moment they are raised. The risks of allowing litigation to proceed can well exceed an early payment of the wages that should have been paid on demand and investigation.
I had a case a few years ago where I was trying to get the employer's attorney to discuss a settlement for my six employee clients. The attorney was unaware of the FLSA risks and finally said "you're being tiresome, go ahead and sue us." I did and got an award the defendant is still paying, with attorney's fees in excess of the back wages.
The FLSA is the best friend to an employee and the employee's lawyer. It is still not very well known by employers and their lawyers, but 7,000 federal cases a year are bringing them around. The bottom line is that is best to take allegations of FLSA violations very seriously and very quickly, before attorney's fees exceed what any employer would have anticipated.
More information available on my website: www.LangendorfLaw.com
Wednesday, July 31, 2013
Glorious blatant misclassification
Employees misclassified as independent contractors present great opportunities for major recoveries of unpaid wages and overtime.
Undercapitalized or greedy contractors bid jobs low on the basis of low cost labor. They will bid low because they know they can pay their laborers straight time for their hours, no matter how many, and most of those laborers will be glad to be getting paid.
Some contractors tell their employees that they will be classified as contractors and will not get unemployment insurance or workers comp. or have taxes taken from their pay, or get overtime. The employees think this is fine. All they hear is "no taxes."
Prevailing wage states require contractors working on state funded jobs to pay their employees an inflated wage similar to what the local union members would get for the same work. It's an incentive to hire union members. The catch is that independent contractors don't have to receive prevailing wage. They get paid for the job. So, unscrupulous subcontractors purposely mis-classify their employees as subcontractors and then deny them the prevailing wages they are due on the grounds that they are not employees and are merely getting paid for the job.
Even when they think they are right, they are wrong. Some of these contractors will even issue paychecks from their in-house payroll system, to their "independent contractor" employees, showing pay for say 56 hours at regular pay for a week. This is printed above the "overtime" line which shows 0 hours and $0. That's 16 hours of overtime paid at the regular rate. This violation sets up damages equal to 16 hours at the regular rate. And that is just for one week. Think three years of this nonsense, for multiple employees, and add in attorney's fees. That's right, it gets big fast.
These willful violations of the Federal Fair Labor Standards act lead to three years of trailing liability and liquidated damages, not to mention attorney's fees. Thanks to Zavala v. Wal Mart Stores, an unpaid overtime case out the federal District Court of New Jersey, liability for unpaid wages can extend to the general contractor or the owner of the job.
This kind of case makes me tingle all over.
Undercapitalized or greedy contractors bid jobs low on the basis of low cost labor. They will bid low because they know they can pay their laborers straight time for their hours, no matter how many, and most of those laborers will be glad to be getting paid.
Some contractors tell their employees that they will be classified as contractors and will not get unemployment insurance or workers comp. or have taxes taken from their pay, or get overtime. The employees think this is fine. All they hear is "no taxes."
Prevailing wage states require contractors working on state funded jobs to pay their employees an inflated wage similar to what the local union members would get for the same work. It's an incentive to hire union members. The catch is that independent contractors don't have to receive prevailing wage. They get paid for the job. So, unscrupulous subcontractors purposely mis-classify their employees as subcontractors and then deny them the prevailing wages they are due on the grounds that they are not employees and are merely getting paid for the job.
Even when they think they are right, they are wrong. Some of these contractors will even issue paychecks from their in-house payroll system, to their "independent contractor" employees, showing pay for say 56 hours at regular pay for a week. This is printed above the "overtime" line which shows 0 hours and $0. That's 16 hours of overtime paid at the regular rate. This violation sets up damages equal to 16 hours at the regular rate. And that is just for one week. Think three years of this nonsense, for multiple employees, and add in attorney's fees. That's right, it gets big fast.
These willful violations of the Federal Fair Labor Standards act lead to three years of trailing liability and liquidated damages, not to mention attorney's fees. Thanks to Zavala v. Wal Mart Stores, an unpaid overtime case out the federal District Court of New Jersey, liability for unpaid wages can extend to the general contractor or the owner of the job.
This kind of case makes me tingle all over.
Saturday, July 20, 2013
Offers of Judgment
Rule 68 of the federal rules of civil procedure operates to put plaintiffs suing for damages on a defensive footing. If a defendant wants to shake a poorly financed plaintiff off their attack, then the defendant will make an offer of judgement. In an unpaid overtime case brought under the Fair Labor Standards Act the offer has to include an amount of damages AND an offer to pay the plaintiff's attorneys fees. This damages plus requirement is a function of the mandatory fee shifting required by the FLSA.
The offer has strict time limits and because it is made by letter from defendant's counsel to plaintiff's counsel with varying terms, it can be confusing in its form. Offers are enforced using the principles of contract law and they are often effective.
I hate them.
The offer has strict time limits and because it is made by letter from defendant's counsel to plaintiff's counsel with varying terms, it can be confusing in its form. Offers are enforced using the principles of contract law and they are often effective.
I hate them.
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