The Law @ Work

Back Pay Award Includes Lost Overtime Wages

Damages for back pay are among the remedies available to employees who succeed in employment-related lawsuits.  Calculating the total back pay owed, however, might not be as simple as it sounds.  For example, if an employee puts in overtime in the months preceding a discharge, should the prospect of future overtime be added in when determining back pay?  A recent federal court decision says “Yes.”

Juan Pagan-Colon worked as an assistant manager at Walgreens.  He reported to work as usual on May 10, 2008, but started experiencing chest pains and heart palpitations shortly after he arrived.  Pagan went to the emergency room at a local hospital because of his condition and ultimately was hospitalized for seven days while he underwent a necessary cardiac catheterization.

Pagan’s condition qualified as a ‘serious health condition’ and entitled him to protected leave under the Family and Medical Leave Act.  (We previously discussed an absence that did not qualify for FMLA protection because the employee was not suffering from a serious health condition.)

While he was hospitalized, Pagan’s wife called the Walgreens store manager several times to update the manager on her husband’s status.  When Pagan got out of the hospital, he went to the store to pick up a prescription and drop off a medical certificate explaining his absence.  Pagan was ordered by his doctor to take another week off to recuperate.

In a rash (and costly) decision, Walgreens fired Pagan for absenteeism.  Pagan’s manager claimed that Pagan never dropped off the medical certificate.  Unfortunately for Walgreens, video surveillance showed otherwise.  Pagan sued, claiming that his employer fired him in retaliation for using FMLA leave.  Not surprisingly, the jury found in favor of Pagan.  He was awarded $47,000 in lost wages, which included $20,600 in prospective overtime wages. The overtime figure was an estimate based on previous overtime earnings.

Walgreens appealed the award of lost overtime wages, but to no avail.  The employer argued that the lower court was wrong for essentially guessing that Pagan would have logged future overtime pay.  In response, the appeals court pointed out that the lost overtime award was based on the fact that Pagan had worked an average of 6.5 hours of overtime each week during the five months prior to his termination.  Using this 6.5-hour figure to estimate future overtime made sense to the court.  In addition, the Family and Medical Leave Act provides that employees who are wronged can recover wages and other compensation lost because of the employer’s violation.  According to the court, lost overtime fits neatly into this category of “other compensation.”

This case demonstrates that courts will look to various sources of potential earnings when calculating back pay.  Whether it’s lost overtime, commissions, bonuses, or other benefits, these prospective earnings could be tacked on to a lost wages award for employers who run afoul of the FMLA.

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