Wage Cases

The Fort Lauderdale wage attorneys at the Mavrick Law Firm have extensive experience in the successful defense of clients who are sued for overtime and other wages.

Mr. Mavrick defends wage cases by first carefully examining whether anything is owed to the former employee. If something is truly owed, Mr. Mavrick recommends paying what is owed. In some cases, former employees are owed nothing because they are exempt from the wage law requirements or their wages were properly calculated. In other cases, former employees have exaggerated what they are owed in order to get revenge against their former employer who terminated them. Such cases often are vigorously defended. The Fort Lauderdale wage attorneys at the Mavrick Law Firm have been successful in securing summary judgment and trial victories on behalf of employers, as wells as settling cases where appropriate. In a January 2016 victory in federal court, Mr. Mavrick represented a Florida corporation and its president who prevailed in a lawsuit claiming they owed overtime wages. In an August 2013 trial victory in Broward County, Florida, the Mavrick Law Firm successfully defended an employer being sued for overtime and other wages. The Mavrick Law Firm achieved a verdict that no wages were owed to the former employee. In a July 2012 federal court trial in Miami, Florida, the Mavrick Law Firm successfully defended an employer by obtaining judgment as a matter of law that nothing was owed to the former employee. The Mavrick Law Firm also settles many cases for businesses, for substantially less than the amount demanded by the former employee.

Mr. Mavrick has successfully defended many businesses that have been sued or threatened with a lawsuit over wages. South Florida is a hotbed of wage claims. The United States District Court for the Southern District of Florida (which covers Port St. Lucie County, Palm Beach County, Broward County, Miami-Dade County, and Monroe County (i.e., the Florida Keys) is often considered “ground zero” for overtime and minimum wage claims because more claims are filed in this federal court district than any other federal court district in the entire United States. South Florida has a confluence of many small and medium-sized businesses and a very active group of attorneys representing employees in bringing such claims. It is rather common for employers to be targeted with such lawsuits with either meritless or exaggerated demands for back wages plus attorney’s fees and costs. Mr. Mavrick has successfully advised and defended clients in a variety of industries, including engineering services firms, physicians and medical services firms, telecommunications firms, accountants, law firms, construction services firms, restaurants, bakeries, transportation and trucking companies, publishing and marketing firms, cleaning and janitorial businesses, window washing businesses, and technology companies, among others.

The Fort Lauderdale wage attorneys at the Mavrick Law Firm have also successfully represented employers when defending against attempts to get class certification of claims under the Fair Labor Standards Act. Such claims are referred to as “collective actions” which seek to group a large number of employees together to act as a group or “class” when suing the employer. Unlike traditional class actions under Rule 23 of the Federal Rules of Civil Procedure, which allow a representative plaintiff to represent an entire class of persons who may or may not know about the claim, “collective actions” operate only with consent of the potential class members. The federal courts have developed a large body of law articulating rules of what is and is not allowed in a collective action. Most importantly, there is not a “representative member” as in a typical class action. Instead, a collective action requires written consent of each member of the class to be filed with the court for that class member to be part of the case. Knowing this rule, plaintiffs’ attorneys often seek court permission to contact potential class members to advise them of the claim and ask them if they want to join the lawsuit against their current or former employer. Employers understandably want to minimize such class members because a larger class can increase the employer’s potential liability and the expense of legal defense. The Fort Lauderdale wage attorneys at the Mavrick Law Firm have been successful in defeating motions filed to contact class members to join the lawsuit in every case that the firm represented an employer (however, please be advised that past results do not guarantee future outcomes and past cases have particular factual and legal issues that are particular to those cases and are not necessarily going to be the same in future cases). For example, in August 2016, Mr. Mavrick successfully defended a national truck transportation company based in Miami, Florida in a class certification motion for a large group of current and former employees claiming overtime wages. Mr. Mavrick in June 2017 again successfully defended the same employer in yet another class certification motion and the Judge denied the plaintiff’s motion “with prejudice” so that it could not be brought again. In previous years, Mr. Mavrick has defeated other class notice motions under the Fair Labor Standards Act.

Mr. Mavrick has also successfully defended South Florida businesses sued for overtime and minimum wage claims under the Fair Labor Standards Act when employees have tried to evade the applicable statute of limitation with claims of “equitable tolling.” While the normal statute of limitations for a federal overtime or minimum wage claim is either two years or up to three years (in cases of “intentional” or “reckless” violations of the law), some employees try to go back beyond three years by claiming there should be “equitable tolling” of the statute of limitations, asserting that the employer should not be allowed to defend on the grounds of the statute of limitations barring the wage claim as untimely because the employer is guilty of “misleading” the employee to not assert his or her claim for wages. The Mavrick Law Firm has defeated such claims of equitable tolling. In the federal courts in Florida, the legal standard for equitable tolling is more difficult to satisfy than in certain other federal jurisdiction in the United States. The Mavrick Law Firm has been able to defeat such claims due to its familiarity with the case law and how the Florida federal law is more restrictive than the law in other non-Florida jurisdictions cited by plaintiffs’ attorneys.

Some “wage-hour” lawsuits deal with employees who are actually “exempt” from the law. Exemptions include managers, administrators (a specialized term which the FLSA and case law defines), professionals (such as doctors, lawyers, engineers, registered nurses), commissioned sales employees, among others that are part of a long list. There are many enumerated exemptions under the FLSA.

One of the surprisingly more common claims is former managers and assistant managers seeking overtime compensation from their former employers.

There are some cases where former managers seek overtime wages despite the existence of a specific FLSA exemption covering managers. Some former managers and assistant managers argue that they were misclassified as managers when they truly were mere lower level employees. The executive exemption applies to managers who meet the following criteria

1. They are compensated on a salary basis at a rate of at least $455/week
2. Their primary duty is management of the enterprise;
3. They customarily and regularly direct the work of two or more other employees; and
4. They have the authority to hire or fire other employees or their suggestions and recommendations as to the hiring, firing, advancement, promotion and any other change of status of other employees are given “particular weight” by the employer.

The central question regarding application of the executive exemption is whether the Plaintiff’s “primary duty” was “management.” One source of evidence of a bogus FLSA claim is what the former employee wrote on his or her resume about being a manager. See, for example, Jackson v. Advance Auto Parts, Inc., 362 F.Supp.2d 1323 (N.D. Ga. 2005) (granting summary judgment for employer on executive exemption for a claim brought by assistant manager-plaintiffs, in part because the plaintiffs described their employment as assistant managers as being “management” on their resumes). Courts also consider whether the plaintiff received more pay than individuals that he or she supervised. When this occurs courts view this as a key indicator that plaintiff was a manager. One federal court explained as follows:

Whether the Plaintiff received more pay than the individuals he supervised is still a criterion with respect to the manager exemption … Plaintiff was paid significantly more than his subordinates and was paid a bonus structure to award his effective management of the store (for all three positions), thereby indicating that Plaintiff was a manager when he worked each of those positions.

Brillas v. Bennett Auto Supply, Inc., 675 F.Supp.2d 1164, 1168 (S.D. Fla. 2009).

Numerous courts have held that when considering the question concerning whether management was an employee’s “primary duty,” a more useful question is whether the employee’s managerial duties constituted the primary value the employer placed on the employee. For example, one federal appellate court held that the plaintiff was a manager whose “principal value to [the employer] was directing the day-to-day operations of the park even though they performed a substantial amount of manual labor.”

For this reason, the time the employee spent performing non-exempt tasks does not necessarily determine whether an employee is exempt. While he Department of Labor’s regulations provided that an employee who spent more than 50 percent of his or her time performing managerial duties had management as a primary duty, that measure was only a good rule of thumb because an employee who spent less than half of his or her time on management could and often was still classified a “manager.” One federal case arising in the Southern District of Florida granted summary judgment and held that an employee who spent as much as 90% of his time on non-exempt work was nevertheless exempt under the executive exemption. Moore v. Tractor Supply Co., 352 F.Supp.2d 1268, 1272-1279 (S.D. Fla. 2004).

Assistant managers sometimes also seek to avoid the executive exemption. However, cases interpreting the applicable Department of Labor regulation have held that assistant managers are exempt when they performed some management tasks and their management duties were considered as the primary value to the employer.

Several factors, many of which are not listed here, determine whether an employee is exempt or non-exempt. However, some exemptions such as the executive employee and administrative employee exemption require a salary basis as to qualify for exempt status under the Fair Labor Standards Act.

The salary basis test requires, among other things, that 1) the employee must be paid at least $455 per week; and 2) the employee must receive a predetermined, fixed salary that is not subject to reduction due to variations in quality or quantity of work performed. These salary requirements do not apply to outside sales employees, teachers, and employees practicing law or medicine. Exempt computer employees may be paid at least $455 on a salary basis or on an hourly basis at a rate not less than $27.63 an hour.

Salary deduction for exempt workers must be lawful, and improper deductions can impair the existence of the exemption. Salary deduction for exempt workers must be lawful, and improper deductions can impair the existence of the exemption.

Subject to the exceptions, an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee's predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.

Deductions from pay may be made when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability. Deductions from pay may be made for absences of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability. Employer can offset any amounts received by an employee as jury fees, witness fees or military pay for a particular week against the salary due for that particular week without loss of the exemption. Deductions from pay of exempt employees may be made for penalties imposed in good faith for infractions of safety rules of major significance. Deductions from pay of exempt employees may be made for unpaid disciplinary suspensions of one or more full days imposed in good faith for infractions of workplace conduct rules. An employer is not required to pay the full salary for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. Rather, when an exempt employee takes unpaid leave under the Family and Medical Leave Act, an employer may pay a proportionate part of the full salary for time actually worked.

An employer who makes improper deductions will lose the exemption if “the facts demonstrate that the employer did not intend to pay employees on a salary basis.” See 29 C.F.R. § 541.603(a). An “actual practice” of making improper deductions generally satisfies the intent requirement. But even if the employer is shown to have an “actual practice” of making improper deductions, the exemption is lost only “during the time period in which the improper deductions were made for employees in the same job classification working for the same managers responsible for the actual improper deductions.” See 29 C.F.R. § 541.603(b).

The Eleventh Circuit Court of Appeals has held that isolated or inadvertent deductions will not destroy the exemption if the employer reimburses the employees for such improper deductions. See 29 C.F.R. §541.603(c). Watkins v. City of Montgomery, Ala., 775 F.3d 1280, 1284 (11th Cir. 2014). There is a “window of correction” in which reimbursement can be made by the employer. There is no established time frame within which the reimbursement must take place in order for an employer to avail itself of the window of correction. See Davis v. City of Hollywood, 120 F.3d 1178 (11th Cir. 1997) (recognizing a regulatory “window of correction” that preserves the salary basis of pay in certain circumstances, such that “the exemption will not be considered to have been lost if the employer reimburses the employee for such deductions and promises to comply in the future”).

An employer can make its reimbursement to the employee up to the time of a Court’s decision on a motion for summary judgment. In the federal court case of Crabtree v. Volkert, Inc., No. CIV.A. 11-0529-WS-B, 2012 WL 6093802 (S.D. Ala. Dec. 7, 2012), approximately one year after discovering that improper partial-day deductions were implemented for salaried and exempt employees, the employer reimbursed the employees for those improper deductions.

A “clearly communicated policy under subsection (d) is one that prohibits the improper pay deductions specified in subsection (a) and includes a complaint mechanism. 29 C.F.R. § 541.603(d) [hereinafter “subsection (d)”]. Further, according to subsection (d): “[t]he best evidence of a clearly communicated policy is a written policy that was distributed to employees prior to the improper pay deductions by, for example, providing a copy of the policy to employees at the time of hire, publishing the policy in an employee handbook or publishing the policy on the employer's Intranet.” 29 C.F.R. § 541.603(d).

In the case of Ellis v. J.R.'s Country Stores, Inc., 779 F.3d 1184 (10th Cir. 2015), the federal appellate court held that what is required is a clear and particularized policy which effectively communicates that deductions will be made in specified circumstances. A policy that incorporates by reference the deductions covered by FLSA rather than reiterating the full governing law is sufficient. An employment handbook discussing “open door communications” which provides a mechanism for employees to make complaints to a supervisor and if not satisfied, make complaints to the President; is sufficient to establish a complaint mechanism.

The FLSA provides an exemption for outside salespersons regarding the overtime and minimum wage requirements. Employees who work as outside salespersons do so individually and without restrictions on the times they work. These salespersons earn as much or as little depending on the range of their ability and ambition. Peter Mavrick is an employment law attorney who has extensive experience with defending businesses against overtime claims.

An outside salesperson’s extra compensation comes in the form of commissions, not overtime wages, and because most of the salesperson’s work is performed away from the employer’s place of business, the employer often has no way of knowing how many hours he/she worked. There is no statutory definition of what constitutes an “outside salesperson” under the FLSA. However, the courts are guided by regulations of the Department of Labor (DOL), which defines “outside salesman” to be any employee:

(1) Whose primary duty is (i) making sales within the meaning of section [203(k) of the FLSA], or (ii) obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and

(2) Who is customarily and regularly engaged away from the employer’s place or places of business in performing such primary duty.

29 C.F.R.§541.500(a)(1)-(2).

A “primary duty” is defined as the principal, main, major or most important duty the employee performs. 29 C.F.R.§541.500(a).

In the case of Meza v. Intelligent Mexican Marketing, Inc., 720 F.3d 577 (5th Cir. 2013), an employee, Meza, sued his former employer alleging that he was entitled to minimum wage and overtime compensation under the FLSA. Intelligent Mexican Marketing, Inc. (“IMM”), the former employer, is a company that sells and delivers food and beverage items to convenience stores. IMM claimed Meza was exempt from the FLSA’s overtime and minimum wage requirements because he was an outside salesman. Meza was a route salesman for IMM, who took the job with the understanding that he would be doing marketing and sales work for the company.

Meza’s duties with IMM had many of the characteristics listed in the DOL’s definition of an outside salesmen. For example, Meza was the only sales contact between the employer and the customers he visited, he called on customers and took orders for products, he delivered products, and he received compensation proportionate to the volume of products he sold. In addition, he obtained or solicited orders for IMM products from persons who had authority to make purchasing decisions. He also called prospective customers along his route and attempted to sell IMM products and services to them.

Meza claimed that even if he began his employment as an outside salesman, the nature of the work changed over the course of time. By the end of his employment, Meza had so many stops on his route, leaving him with time only to make deliveries and make a list of items to be restocked at each convenience store. IMM argued that even if Meza was making more deliveries than sales, he still fit into DOL definition of an outside salesman. The trial court found that even if Meza’s assertion was accurate, he was still the only sales contact between IMM and the convenience stores on his route, and any sales that were made were “significantly affected” by Meza. The trial court entered a summary judgment in favor of the employer and the appellate court affirmed the decision.

Time keeping systems should allow some interaction whereby the employee verifies/confirms these are his/her hours either in writing or electronically. Written policies are critical. Employers should have a written and clear policy stating that:

1. nobody has authority to work “off the clock”;
2. meal breaks must be uninterrupted, and if the meal break is not taken, then the employee must not deduct any break time from the time reported; and
3. if anyone hinders or prevents an employee from taking genuine meal breaks or attempts to require the employee to work without pay, the employee must complain in writing to the appropriate company official.

This policy will contradict employee claims that they were compelled to work during breaks or off the clock to evade the FLSA.

Defending Business Owners and Their Managers Sued As "Employers" Under the FLSA

It is not unusual for employees to sue both the business for whom they worked as well as the business owners and sometimes managers.  Under general principles of corporate law, a lawsuit against a company as well as its owners/managers would generally not be permitted because the the purpose of the corporate form is to shield owners and agents from liability.  The Fair Labor Standards Act (FLSA), however, defines the word "employer" in a peculiar manner that defies common sense.  The FLSA defines the term "employer" to include "any person acting directly or indirectly in the interest of an employer in relation to an employee."  29 U.S.C. § 203(d).  The United States Supreme Court has emphasized the "expansiveness" of the FLSA's definition of employer.  Falk v. Brennan, 414 U.S. 190 (1973).  Another federal appellate court has explained that "[a]bove and beyond the plain language, moreover, the remedial nature of the statute further warrants an expansive interpretation of its provisions so that they will have the 'widest possible impact on the national economy.'"  RSR Sec. Servs. Ltd., 172 F.3d 132 (2d Cir. 1999).  

The FLSA contemplates that there can be several simultaneous employers who may be responsible for compliance with the FLSA.  Florida employers are governed by the Eleventh Circuit Court of Appeals, which has explained that"[t]he overwhelming weight of authority is that a corporate officer with operational control of a corporation's covered enterprise is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid wages."  Patel v. Wargo, 803 F.2d 632 (11th Cir. 1986).  Corporate officers have "operational control" when they are "involved in the day-to-day operation or have some direct responsibility for the supervision of the employee."  Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150 (11th Cir. 2008).

Although the FLSA broadly defines the meaning of the term "employer," many lawsuits against corporate officers and owners have been unsuccessful because courts have held that such persons are not liable as employers.  For example, the Eleventh Circuit Court of Appeals in Patel v. Wargo held that the defendant, who was both the president of the company as well as a director and a principal stockholder, was not an employer under the FLSA.  The appellate court reached this conclusion becasue the defendant did not "have operational control of significant aspects of [the company's] day-to-day functions, including compensation of employees or other matters in relation to an employee."  In making this finding, the appellate court focused on the actual role the company president played in the company, instead of the theoretical role the company president could have played, which the appellate court acknowledged was much greater.  The Mavrick Law Firm has successfully represented many businesses and their officers and owners in Miami, Fort Lauderdale, Palm Beach, Fort Meyers, Naples, and Tampa who have been sued for overtime wage and other wage claims.

As another example, the Eleventh Circuit Court of Appeals likewise held in Patel v. Wargo that a corporate officer and majority shareholder of the company was not an employer under the FLSA.  The appellate court reached this conclusion because "[t]here was insufficient evidence for a jury reasonably to conclude that [defendant] was either involved in the day-to-day operations of the [company] or was directly responsible for the supervision of employees during the relevant years."  Instead, the uncontradicted evidence showed it was defendant's son who operated the company and made all the decisions about hiring, firing, and compensation during the relevant time period.

However, federal courts have held that even occasional participation in the day-to-day operations of a business and exercise of direct supervision of employees can be sufficient to be deemed an "employer" under the FLSA.  For example, in Olivas v. A Little Havana Check Cash, Inc., 324 FedlAppx. 839 (11th Cir. 2009), the appellate court held that a corporate officer and co-owner of a business could be an employer because she occasionally participated in the day-to-day operations of a money services business and exercised direct supervision of employees. In Olivas, a husband and wife were co-owners of a company where the husband, Mr. Rodriguez, regularly controlled the day-to-day operations of the business.  At issue in Olivas was whether the wife, Mrs. Rodriguez, also qualified as an employer under the FLSA.  The appellate court explained in pertinent part:

Here, Mrs. Rodriguez's status as a co-owner, corporate officer, and shareholder of the business is undisputed.... Mr. Rodriguez also testified that Mrs. Rodriguez was a signatory to the company's operating bank account during the relevant period.... Further, Mrs. Rodriguez gave instructions, answered questions, and resolved problems that arose during work.... A former employee testified that Mr. Rodriguez instructed employees to call Mrs. Rodriguez with questions whenever he was out of the country.... Additionally, Olivas stated that when Mr. Rodriguez was out of the country Mrs. Rodriguez "would come in and sit there everyday and watch," and would ask for the balance of the previous day to account for all of the money....[The trial court] determined that Mrs. Rodriguez's involvement in the business was insufficient to meet the requirements [to qualify as an FLSA employer] ....  The [trial] court concluded that "simply answering questions from Ms. Olivas when Mr. Rodriguez wasn't there is not enough to constitut[e] operational control in light of all of the other facts and circumstances in this case.'... The court also concluded that Mrs. Rodriguez "did nothing to pay overtime; ... was not the one who hired ... Olivas; [and was] not the one who told ... Olivas what to do generally.

The federal appellate court reversed the trial court and held that a jury could reasonably conclude that Mrs. Rodriguez was an employer under the FLSA because occasional control does not diminish the significance of the existence of such control.  

Mr. Mavrick also has successfully defended businesses in claims for breach of employment contracts and for sales commissions allegedly owed. Florida law has a developed body of law regarding when commissions must be paid versus when an employer has no further liability for commissions after the employment relationship has ended.

The Mavrick Law Firm’s Fort Lauderdale wage attorneys have also successfully represented employers who are being audited by the United States Department of Labor into the payment of wages to their employees. Often the audits demand far more than what is owed, and legal assistance can frequently reduce the financial impact of the audit.

Mr. Mavrick successfully defended a group of businesses and their owner and a manager of the businesses from a large lawsuit brought by the United States Department of Labor that sought, among other things, to shut down the businesses for alleged repeated violations of federal wage laws governing payment of minimum and overtime wages. Mr. Mavrick vigorously defended the businesses, their owner, and their manager and was able to show that the businesses were being falsely accused of large-scale alleged violations that amounted to nothing more than false allegations of some disgruntled former employees.

The Mavrick Law Firm also helps bring many businesses into compliance with Federal and Florida employment laws concerning wages, including overtime wages and minimum wages. Businesses want to avoid the time and expense of lawsuits by complying with often technical obligations imposed by the law.

The following are wage law articles prepared by Peter Mavrick:

• Successor Corporations Could be Liable for Predecessors’ Federal Wage Law Violations
• Retaliation Claims Under The Federal Wage Law
• “Independent Contractor” vs. “Employee” Under the Fair Labor Standards Act
• Overtime Wage Law: Employees Working From Home
• Arbitration Agreements and the FLSA: The Effect of Fee-Splitting and Fee-Shifting Provisions
• Unpaid Overtime: The Retail Service Commissions Exception and Tipped Employees
• Recent Amendments to Federal and State Labor & Employment Laws
• Defending Against Employee Wage and Hour Claims
• Minimum Wage and Overtime: What Employers Should Know
• Paying Overtime: What Employers Need to Know
• Federal Appellate Court Overrules Employer’s Argument that Illegal Aliens were not Employees Under Overtime Wage Law
• Eleventh Circuit Affirms Summary Judgment for Shuttle Company’s Defense to Overtime Wage Case