Go On, Take the Money and Run - PowerPoint Presentation

Slide1

Go On, Take the Money and Run

An overview of wage litigation processes and practicalities

Austin Kaplan, Kaplan Law Firm, PLLC

May 2, 2018

Slide2

Practical Tip for Employers

to Avoid Contested Wage Claims

Convince the company to:

Pay employees whatever it told them it would pay them; and

Pay by whenever it told the employees it would pay

If possible, separate on amicable terms

Loss of a job is traumatic (

layoffs more than double the risk of heart attack and stroke among older workers

). Slide3

Should Plaintiff File a Wage Claim?

TWC Wage Claims pros and cons:

Good for plaintiffs:

Efficient for recovering:

unpaid last paycheck,

unpaid vacation time (if in writing),

unpaid commissions

Extra remedies for judgment proof companies and against individuals

No filing fee

Little downside

No attorney necessary

Bad for plaintiffs:

No fee hook

180 day Statute of Limitations.

Tex. Lab. Code

65.051(c)

TWC’s scheduleSlide4

Election of Remedies

Must plaintiff ultimately choose

either

TWC Wage Claim or Court as a remedy for contract claims?

Yes

-

Igal

v. Brightstar Info. Tech. Group, Inc

., 250 S.W.3d 78, 86 (Tex. 2008)

Also, no private cause of action for Payday Act violations.

Ihegword

v. Harris County Hosp. Dist

., 929 F. Supp. 2d 635 (S.D. Tex. 2013)

Is there a way out after an adverse TWC ruling?

Yes - unless and until

TWC's determination becomes final plaintiff can request withdrawal

Timing

Tricon Tool & Supply, Inc. v.

Thumann

, 226 S.W.3d 494, 512 (Tex. App. Houston 1st Dist. 2006) (must withdraw before decision is final, even if not yet notified it’s final)

Scope

Johnson v. Oxy USA, Inc.,

[14

th

Dist

Houston -- 2016] (if TWC explicitly does not reach claims, no final judgment on those claims, no res judicata)

Loss at TWC – admissible?Slide5

Some Potential Causes Of Action

FLSA / Chapter 62 Minimum Wage Act

Express or Implied Contract:

Breach of contract (written, oral, implied)

Quantum

Meruit

Tort:

Unjust enrichment

Negligent misrepresentation

Other:

Fraud

Lien

NLRA?

Securities claims?Slide6

FLSA – Blocking and Tackling*

1938 law requiring minimum wage and overtime

Allows for the recovery of back wages, liquidated (double) damages, and attorneys’ fees

Many exemptions to the overtime requirement

Allows plaintiffs to pursue claims on behalf of a class of “similarly situated” individuals

*slide courtesy of Daniel VerrettSlide7

FLSA - Covered Entities

Most Private Employers - includes individuals pursuant to

Gray v. Powers

Governmental Employers – but only via DOL

Generally excluded from FLSA coverage:

Independent Contractors,

Volunteers, and

Close relativesSlide8

FLSA Exemptions

No pay puts salary basis at risk

Limited non-salary basis exemptions:

Outside sales employees

Commissioned Retail Sales

Teachers

Employees practicing law or medicine (medical interns and residents)Slide9

Minimum Wage Act

Gap Filler

FLSA limits - enterprise liability and reach of commerce clause

Gap-filler/alternative claim: Chapter 62 of the Texas Labor Code Slide10

Venue

Plaintiff has options:

JP

County Court at Law

District Court

Federal Court

Arbitration (if pursuant to agreement)Slide11

Venue Cont’d

Services performed outside Texas or HQ outside of Texas?

Review the choice of law / choice of venue

Limitations on venue selection:

Cannot waive a Texas HQ wand to make California employment claims disappear.

Verdugo v.

Alliantgroup

, LP

, 237 Cal. App. 4th 141 - Cal: Court of Appeal, 4th Appellate Dist., 3rd Div. 2015 (denying motion to transfer venue on wage and hour case where employer’s choice of venue and law specified Texas and HQ was in Texas, but employee worked in CA)Slide12

Timing / Exhaustion

FLSA / Chapter 62 Minimum Wage Act (should file opt-in)

Express or Implied Contract:

Breach of contract (written, oral, implied)

Quantum Meruit

Tort:

Negligent misrepresentation

Other:

Unjust enrichment

Fraud

Lien

NLRA?

Securities claims? Slide13

Damages

FLSA / Chapter 62 Minimum Wage Act (should file opt-in)

Express or Implied Contract:

Breach of contract (written, oral, implied)

Quantum Meruit

Tort:

Negligent misrepresentation

Other:

Unjust enrichment

Fraud

Lien

NLRA?

Securities claims? Slide14

Collections

Default judgment

Post-judgment collections

Piercing the corporate veil

No automatic statutory lien, freeze and levy, execution, or AG lawsuit

Bankruptcy – you are likely an unsecured

creditor

Priority for wages earned within 180 days of the bankruptcy or when the business ended

If claims against company and individual, both would have to file bankruptcy to avoid paying a judgmentSlide15

Company Bankruptcy:

Individual Still on the Hook

Hernandez v. Larry Miller Roofing, Inc

. (5th Cir 2016) (Furthermore, the Ninth Circuit has explained, and we agree, that a company's bankruptcy has no effect on the ability of a plaintiff to bring a FLSA claim against an officer. Boucher v. Shaw, 572 F.3d 1087, 1093 (9th Cir. 2009) ("[O]

ur

case law regarding guarantors, sureties and other non-debtor parties who are liable for the debts of the debtor leaves no doubt about the answer: the [debtor's] bankruptcy has no effect on the claims against the individual managers at issue here."))Slide16

War Story 1Slide17

War Story 2Slide18

War Story 2 Cont’d

Allegation: all resigned after unpaid work: 6 months, 8 months, and two years.

Causes of Action in 2d Am

Compl

.:

FLSA

Breach of Contract

Quantum Meruit

Prohibited Distribution (101.206 of the Texas Business Organizations Code)

Fraud

Attorneys FeesSlide19

Avoid Contested Claims

Keep employees happy and informed – no surprisesSlide20

www.myworklawer.com

Austin Kaplan

Kaplan Law Firm, PLLC

512-553-9390

akaplan@Kaplanlawatx.com