Wage Theft and Civil Consequences

I recently presented oral argument at the Ninth Circuit Court of Appeals in Veronica Danielson v. Megan Brennan, et al, No. 17-35928. There I argued, my client, a United States Postal Service letter carrier, had been retaliated against by her management team for complaining about wage theft. The wage theft was undisputed, as my client had properly filed a grievance on the wage theft issue through her union. That wage theft issue was resolved through the grievance process. However, from that point on, my client alleged her management team began an ongoing campaign of retaliation against her.

When the client originally contacted me, I was not even aware that the Federal Labor Standards Act (“FLSA”) had an anti-retaliation chapter, and a civil right of action. That chapter states in relevant part:

[I]t shall be unlawful for any person … to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted or caused to be instituted any proceeding under or rel

ated to this chapter[.]

29 U.S.C. § 215(a)(3).

In short, asserting a claim for wage theft is protected activity, and for purposes of the FLSA, a person can bring a retaliation action, and claim general compensatory damages, just as one could claim under any other recognized discrimination/retaliation theories.

In that case, the Ninth Circuit should have decided what test to use to establish a prima facie case of retaliation under 29 U.S.C. 215(a)(3). Both sides agreed that the proper test is the common McDonnell Douglas/Burdine formula, which is the commonly accepted test for discrimination claims, but the Ninth Circuit did not answer the question in its opinion, leaving us still to wonder what is the proper test.

Wage theft claims in state courts are quite different. Instead of a retaliation provision, the state statute deals with voluntary theft of wages by allowing the plaintiff to sue for double the amount of damages rebated, plus attorney’s fees. See the relevant portion below:

Any employer and any officer, vice principal or agent of any employer who shall violate any of the provisions of RCW 49.52.050 (1) and (2) shall be liable in a civil action by the aggrieved employee or his or her assignee to judgment for twice the amount of the wages unlawfully rebated or withheld by way of exemplary damages, together with costs of suit and a reasonable sum for attorney’s fees: PROVIDED, HOWEVER, That the benefits of this section shall not be available to any employee who has knowingly submitted to such violations.

RCW § 49.52.070.

The well of damages is narrower in the state statute. It does not allow for a retaliation type cause of action, and therefore, the damages are logically attached to the actual economic damages suffered. That said, in cases where the amount of wages rebated is great, the double damage recovery can be significant, and the attorney’s fees can also be quite significant.

Another thing that happens often in these wage theft claims with state jurisdiction, is that, the employer often terminates the employee as a result of the employee complaining of improperly rebated wages. Where this is the case, it is undisputed that an employee complaining of wage theft is a protected public policy of the State of Washington, in which case, a plaintiff can then sue for Wrongful Termination in Violation of a Public Policy. See Little v. Windermere Relocation, Inc., 301 F.3d 958, 971 (9th Cir. 2002).

As a plaintiff’s employment lawyer, I see improper wage theft quite often. I favor broadening a person’s ability to bring a claim for wage theft because typically victims are vulnerable workers from vulnerable populations. Because, the amount of damages is often modest, and the ability to recovery monetarily on these cases can be difficult, many lawyers avoid these claims.