As Tennessee Law Blog foresaw in the early months of last year in Tennessee Wage and Hour Cases on the Rise, wage-and-hour lawsuits have continued to explode across the county. In one report by a national employment law firm, non-government wage and hour settlements in 2009 grew 44% over 2008’s lawsuits.
Settlements for wage and hour lawsuits also increased in 2009. For those filed in federal court under the Fair Labor Standards Act (FLSA), lawsuit settlement amounts rose from $253 million in 2008 to $364 million in 2009 for the top 10 wage and hour cases of those years. The greatest growth in wage and hour lawsuits was along the coasts – California, Washington New Jersey, New York, Massachusetts – though the trend was upward in other states as well.
One reason cited for this increase in lawsuits to return unpaid wages is the letter of FLSA law, which governs wage pay and was written to protected blue collar workers who started and ended their shift to the sounds of a steam whistle. These days, employees now find themselves connected to work electronically–and not paid for all the hours they work. And the incentive for some employers to squeeze more out of their wage employees is too great.
Experts on the side of business often suggested rises in wage-and-hour lawsuits are attributable to employee layoffs and lack of job security or job satisfaction during a recession. What they forget, what a Tennessee employment lawyer such as myself has to yell (figurative, most days) to be heard, is that during a recession, businesses meet margins by finding creative, and sometimes illegal, ways to underpay their employees.
Further, by this business logic that only employees during economic hard times sue, this would mean unfairly paid, underpaid, or unpaid workers are fine with their low wages during economic booms and only sue when times are tough. If you’re a mis-categorized employee not receiving overtime or have your portions of your tips illegally taken from you or are forced to work off the clock, times are probably tough no matter what the condition of the larger world or Tennessee economy.
In recent weeks of this year, Staples Inc. agreed to pay $42 million to settle several wage-and-hour lawsuits dating back to 2002 that allege the office supply company misclassified assistant store managers to avoid paying them overtime wages.