Emotional Distress Damages Allowed Under FLSA

Emotional Distress Damages Allowed Under FLSA

Count the Fifth Circuit among the latest to allow emotional distress damages to employees who successfully sue for retaliation under the Fair Labor Standards Act.  In a December 19, 2016 opinion, the Fifth Circuit held that the district court should have allowed the jury to receive an instruction on emotional distress damages when it was considering an employee’s FLSA retaliation claim.  In the same opinion, however, the Fifth Circuit did clarify that only employees can bring claims under the FLSA.

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The Case

Plaintiffs Santiago Pineda and Maria Pena are a married couple who lived together in an apartment owned by the defendant, JTCH Apartments.  Pena leased the apartment from JTCH.  Pineda performed maintenance work around the complex.  As part of Pineda’s compensation, JTCH discounted Pena’s rent.  After Pineda brought a claim seeking unpaid overtime under the FLSA, JTCH served Pena with a notice to vacate for nonpayment of rent in the exact amount that it had discounted for Pineda’s maintenance work.  Upon receiving the notice, Pineda amended his lawsuit to assert a retaliation claim.  Pena joined the lawsuit to assert her own FLSA retaliation claim.

During trial, the district court awarded JTCH judgment as a matter of law against Pena on the ground that she was not JTCH’s employee and only employees could file suit under the FLSA.  The jury found in Pineda’s favor on his claims, but the district court refused his request that the jury receive an instruction on emotional distress damages for his FLSA claim.  Both Pineda and Pena appealed.

The Fifth Circuit held that the jury should have received the instruction on emotional distress damages.  The court focused on language in the FLSA’s anti-retaliation provision stating that an employer who violates it shall be liable for “such legal or equitable relief as may be appropriate” to effectuate the statute’s purpose.  The court noted that this language was added to the statute concurrently with a 1977 amendment granting employees the right to bring retaliation claims.  Prior to that amendment, employees could only sue under the FLSA for minimum wage and overtime violations and their recovery was limited to lost pay, liquidated damages, and attorney fees.  The Fifth Circuit concluded that the expansive language, “and such legal or equitable relief as may be appropriate,” should be read “to include the compensation for emotional distress that is typically available for intentional torts like retaliatory discharge.”  The court noted its holding was in line with similar holdings by both the Sixth and Seventh Circuits.

The decision did provide some good news to employers, however.  In affirming the dismissal of Pena’s retaliation claim, the Fifth Circuit held that the FLSA only offers protection to employees, not their spouses.  Relying on Title VII cases (prohibiting discrimination in employment), Pena argued that an employee’s spouse who is retaliated against because of the employee’s complaints is “within the zone of interests the statute protects.”  The Fifth Circuit distinguished such cases on the ground that Title VII permits any “person claiming to be aggrieved” to file suit whereas the FLSA only makes it unlawful to retaliate against “any employee because such employee” files a complaint.

Takeaway for Employers

Employers should be aware that potential liability for FLSA retaliation claims, at least in the Fifth, Sixth, and Seventh Circuits, is now significantly greater in light of the possible award of emotional distress damages.  Until another court holds to the contrary, employers in the remaining circuits should also reasonably expect that they may be subject to emotional distress awards on FLSA retaliation claims.  Employers should take some comfort, however, in knowing that they can move to quickly dismiss any such claims that are filed by non-employees.

Contributor:  Lukas J. Clary, Attorney at Law | Weintraub Tobin