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Under the Fair Labor Standards Act (FLSA), all but the smallest employers have to pay minimum wage and overtime to their employees who are not exempt under the Act. If you are not an exempt employee and your employer fails to pay you minimum wage or overtime, you can bring a lawsuit against your employer to recover the amount owed. Your employer has several possible defenses to the lawsuit.
Plaintiff’s Burden of Proof
In a lawsuit brought under the FLSA, the plaintiff employee has the burden of proving three elements:
- The existence of an employer-employee relationship
- Coverage under the Act, and
- A violation of statutory standards
The defendant employer must plead and prove an exemption or other affirmative defense under the Act. Exemptions are construed narrowly against the employer. If the employer makes his case for exemption, the employee can then prove that the exemption does not apply or that exceptions to the exemption apply. For example, if the employer asserts the executive exemption to defeat claims for minimum wages and overtime, the employee may prove that he performed nonexempt work for more than 20% of his time during each workweek under review and, therefore, that the exemption does not apply.
The Good Faith Defenses
There are two good faith defenses available to employers facing wage-hour claims. These are based on §§ 10 and 11 of the Portal-to-Portal Act, 29 U.S.C. § 251 et seq.
The good faith defense based on § 10 of the Portal-to-Portal Act excuses non-compliance with FLSA minimum wage and overtime requirements if the employer pleads and proves that the challenged actions or omissions were taken in good faith, in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation of the Wage and Hour Division of the U.S. Department of Labor, or any administrative practice or enforcement policy of the Division with respect to the class of employers to which he belonged.
Section 10 reliance must relate to a written ruling, policy, regulation or order of the Wage and Hour Administrator. It cannot be based on conversations between an attorney and a district director of the Wage and Hour Division. Nor can the reliance relate to the rulings or regulations of another governmental agency.
A further requirement for § 10 reliance is that the employer’s actions conform to the ruling, regulation or order on which it relied. If there are material differences between the facts underlying the ruling and those in the case at issue, the defense will be defeated. Reliance is done in good faith if the employer acted as a reasonably careful person would have acted under the same or similar circumstances. Proof of the § 10 good faith defense will preclude any legal action for unpaid wages.
If an employer is unclear as to whether a particular course of conduct is appropriate under the FLSA, he may provide the Wage and Hour Division with all pertinent facts of the situation and request a written opinion letter. Reliance on the advice so rendered falls within the purview of the good faith defense.
The good faith defense based on § 11 of the Portal-to-Portal Act allows courts to deny liquidated damages or reduce them in actions where the employer proves that it acted in good faith and with reasonable grounds to believe that it was not violating the Act.
The § 11 defense has two components:
- Subjective good faith, defined as honesty of intention and no actual or constructive notice of an FLSA violation
- The employer’s reasonable grounds to believe that its conduct complies with the Act
Other affirmative defenses provided by the statute or case law include:
- The existence of an age certificate in a child labor case
- An appropriate written assurance in a “hot goods” (goods illegally produced by child labor) case
- Voluntary or involuntary waivers of an individual employee’s right to sue for back wages
- Time limitations for filing a lawsuit
- Failure to arbitrate where an employment contract compels arbitration of statutory claims prior to suit
Employers must, likewise, prove the reasonableness of any deductions from paychecks that reduce an employee’s net pay to below the minimum wage.
In collective FLSA claims, defendants may make an offer of judgment for attorney’s fees and the amount of the plaintiff’s claim before any other individuals join the action. Under these circumstances, some courts have held that the offer of judgment render the case moot and supports the dismissal of an FLSA lawsuit.
Questions for Your Attorney
- What does the employee have to prove in a lawsuit brought under the Fair Labor Standards Act?
- In a lawsuit under the FLSA, what does an employer have to prove in a good faith defense under § 10 of the Portal-to-Portal Act?
- Can I rely on a good faith defense under § 10 of the Portal-to-Portal Act if the facts of my case are different from the ruling on which I relied?