In April 2013, a Massachusetts auto repair shop, Advanced Auto, Inc., hired Robert Lambirth as an automotive technician. He earned well over the minimum wage, but he did not receive time-and-a-half for hours he worked over 40 in any work week, presumably because “garagemen” are exempt from overtime under Massachusetts law (the federal Fair Labor Standards Act contains no such exemption). Advanced Auto subsequently terminated Mr. Lambirth’s employment, and he filed suit against the company, its president, Luke Malo, and its treasurer, Jason Malo, for unpaid overtime under the FLSA and a claim for failure to timely pay wages under the Massachusetts Wage Act.
Advanced Auto and its officers asked a Massachusetts federal court to dismiss Mr. Lambirth’s claim under the Wage Act. They argued that since Mr. Lambirth is exempt from overtime under the Massachusetts Overtime Act, he cannot recover damages for unpaid overtime under the Massachusetts Wage Act.
In a recent ruling, the court disagreed. The court reasoned that the Wage Act entitles an employee to receive all wages owed to him, regardless of the source of those wages. Therefore, even though Mr. Lambirth was not entitled to overtime pay under Massachusetts law, and even though he did not even claim a violation of Massachusetts’ overtime law, Mr. Lambirth could still sue under the Massachusetts Wage Act for his employer’s failure to pay overtime. In other words, the source of the right to the unpaid wages sought to be collected is immaterial to a claim under the Wage Act – if an employee is owed wages under any statute, state or federal, he or she may seek to recover those wages under the Wage Act.
This may sound like a lot of legal nonsense. “So the guy can recover his overtime wages,” you may be thinking. “Who cares which statute he uses?” But employers in Massachusetts should care. Federal and state law differ not just with respect to which employees are exempt from overtime; they also differ in terms of the amount an employee who sues for overtime can recover if he wins. Under the FLSA, an employee seeking to recover unpaid overtime has the right to collect up to two years of back overtime doubled, and a third year (also doubled) if he or she can prove that the employer’s violation of the overtime rules was “willful.” Under the Massachusetts Overtime Act, that same employee can collect up to two years of back overtime wages tripled, and without having to prove willfulness. And if the Lambirth court’s decision survives a potential appeal, that employee will be able to collect up to three years of back overtime wages tripled.
Of course, if the employee has no right to overtime under state law, as in Lambirth, he must allege a right to overtime under the FLSA, but he does not have to prove that the employer’s violation was willful to be eligible for the third year or to have his entire award trebled as a penalty to the employer. That’s the equivalent of nine years of damages for what may have been a rational, or even justifiable mistake. Indeed, the Malos may well have relied on the “garagemen” exemption as the basis for their understandable, though mistaken, belief that Mr. Lambirth was not eligible for overtime under either state or federal law, and they may now have to pay dearly for that error.
Moral of the story? Overtime violations are becoming even more expensive, particularly with the rising tide of overtime class actions, so employers should consult with labor and employment counsel if there is any doubt as to whether an employee is exempt or non-exempt from the overtime requirements of state or federal law.