HR Corner: Jury Issues $22 million Verdict Against Manufacturer on Overtime Claim: What Happened?
By Attorney Nick Zaino of Carmody Torrance Sandak & Hennessey LLP
East Penn Manufacturing is one of the largest battery manufacturers in the world. On May 9, 2023, a federal jury in Pennsylvania awarded $22 million in back wages to over 7,500 employees. According to the United States Department of Labor (US DOL), the award is the largest recorded jury verdict ever obtained by the US DOL for claims under the federal Fair Labor Standards Act (FLSA). And that’s not all. The US DOL has stated that it intends to ask the federal court to award an equal amount in liquidated damages for the affected employees, and the US DOL will seek an injunction requiring future FLSA compliance.
The US DOL first investigated East Penn in 2016 after a worker complained that he was not being paid for all his working time. In its investigation the US DOL found that, typically, East Penn only paid employees for their scheduled eight-hour daily shifts and did not pay employees for the additional time it took them to put on and remove protective equipment or to shower to avoid the dangers of lead exposure and other hazards. The US DOL contended this time was compensable and, when that time was added to other working time, employees were working more than 40 hours per week, but not being paid overtime.
After a 30-day trial with testimony from 39 employees, the jury sided with the US DOL, finding that East Penn failed to pay employees for all their compensable working time and failed to pay overtime. The jury’s verdict was significantly less than the $110 million in back wages (plus an equal amount in liquidated damages) that the US DOL was seeking.
This case is a reminder to employers to be careful about paying workers for all hours worked. While this sounds obvious and simple, that is not always the case. Hours worked may include, time spent by employees changing into (donning) and changing out of (doffing) work clothes such as uniforms, protective gear or equipment. And, as the East Penn case illustrates, it may also include other activities, such as showerer, that are necessary for employees to avoid work hazards and dangers. Work time may also include time spent by employees being on-call, time spent attending lectures, meetings and training programs, travel time, and certain rest and meal periods. There are detailed federal and Connecticut regulations on when an such time is compensable.
While the specific amount of work time at issue may be small, the total liability can be compounded when it results in other violations, such as failure to pay overtime, and impacts numerous current and former employees. Employers are well-advised to err on the side of caution when deciding what constitutes “working time."
This information is for educational purposes only to provide general information and a general understanding of the law. It does not constitute legal advice and does not establish any attorney-client relationship.
By Research Services 5 Brothers, LLC
The United States Department of Justice recommends utilizing consumer reporting agencies as a source to receive the most up-to-date and accurate information regarding criminal cases, as the FBI maintained system is missing an astonishing fifty percent of the final dispositions on their records. You may be asking yourself why does the FBI not have access to all records in real-time. The FBI system was created for the use of the government, then gradually allowed the use of their system for employment purposes. Not having the most up-to-date information on cases is a local and state-level issue. Believe it or not, it is entirely possible to commit a crime in one county of a state, and then commit a crime in another county, and the jurisdictions may not make the connection between the two through fingerprinting alone. This is due in part to privatized fingerprinting companies and a lack of connectivity between jurisdictions. Not all cities connect with their state, and not all states connect with other states (including their surrounding states). An example of this, that only recently changed would be Houston, Texas. Houston is the largest city in Texas and the fourth largest in the country. Houston is located in Harris County, however previously Harris County and Houston had separate fingerprinting vendors and they were not sharing information universally. Another example of this lack of connectivity shines a light on how criminals can continue at the cost of public safety. Alabama had an unfortunate event of a robbery and homicide. They were able to successfully pull a print from the crime scene, however, they did not have connectivity to the FBI. This resulted in ten more fatalities from someone you may know as the “DC Sniper”. There were prints on file for this person in the immigration and naturalization database. Those deaths could have been avoided had they had the proper connection. There are an estimated 600 systems between federal, state, and local levels. Until the government enforces a cohesive connection between all three levels, it is imperative to use the aid of a consumer reporting agency.
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Breaking the Bank and the Funny Bone: How Employee Injuries Can Cost You More Than Just Laughter
By Tracey Blackman, Owner of Floor Friction
Did you know that slip and falls are the number one reason for worker's compensation claims? And, when an employee gets injured, it can actually cost your business a lot of money. It's not just about the pain and suffering of the employee, it can hit your bottom line too. Here are a few ways that employee injuries can affect your bottom line:
Call Floor Friction (www.floorfriction.com) today at 203-649-8720 to test your floor safety and recommend remediation, so your employees stay safer, and so they stay working.
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