EMPLOYEE WINS CASE BECAUSE EMPLOYER DID NOT ASSERT ITS DEFENSE ON TIME

In a recent December 2010 Eleventh Circuit case, an employer had a favorable jury verdict overturned for failure to timely assert a crucial affirmative defense. In Diaz v. Jagmar Management Group, LLC, 2010 U.S.App.LEXIS 25361 (11th Cir. December 13, 2010), the Eleventh Circuit reversed a jury’s verdict that the employee was exempt from the federal overtime wage law under the “administrative exemption.” The employer did not identify the administrative exemption as an affirmative defense in its answer. In the 14 months before trial, the employer never moved to amend its answer to include the administrative exemption, nor did it raise it during discovery. The appellate court stated: “If there were a classic case of waiver, this is it!”

This was apparently an otherwise winnable case for the employer. But it appears there was a failure of appropriate legal research at the early stage of the case, and that apparent error was not avoided by catching the error during the 14 month discovery process.

A lesson of this case is not to presume that the case will settle and thereby refrain from conducting appropriate legal research and analysis at the early stages of the case. In this case, the employer apparently did not carefully re-examine its legal defenses during the discovery process and instead waited until just before trial to attempt to assert the defense. The trial judge even allowed the employer to assert the defense at trial, and on that basis the employer won the case at trial. But the case did not end there. The employee appealed.

The appellate court concluded that this was a mistake by the trial judge because the employer waited too long to identify the administrative exemption affirmative defense. The employer was required to assert its legal defense well in advance of trial to avoid unfair surprise to the employee’s attorney.

Overtime wage cases can be very simple if they settle at early stages. However, sometimes the employee demands compensation that the employer has no obligation to pay and is unwilling to pay. If there is a valid affirmative defense, be cautious and assert it early in the case.

Attorney Peter Mavrick advises management regarding various problems they encounter with employees, including issues involving employee compensation, misconduct, performance problems, demotion, and termination. Mr. Mavrick also has successfully represented many employers when current or former employees threaten legal action. Mr. Mavrick regularly studies changes in federal and Florida labor and employment laws, including legal trends affecting the interests of management.