Defend Yourself in an Overtime Wage Violation Lawsuit

Federal law requires that employers pay overtime for any qualified employee who works over 40 hours in a workweek. Under current federal law, overtime must be calculated as at least time and a half the regular rate of pay. Your state may also set overtime rules if they are more generous to workers. If you are sued for failing to pay overtime properly, then you will need to contact a lawyer. You should take an overtime wage violation lawsuit seriously. If the federal government gets involved, you could be ordered to pay a steep penalty or even face jail time.

Steps

Answering the Complaint

1. Read the complaint. A lawsuit can be filed by either the employee or the government agency in charge of enforcing wage and hour laws. This person or entity will be the “plaintiff.” For the federal government, the Department of Labor enforces wage and hour laws. There is also an agency in your state which enforces the state’s laws.
   • The lawsuit begins with a complaint. The plaintiff will file the complaint in court and send you a copy. The complaint outlines the facts that gave rise to the lawsuit and makes a request to the court for relief (usually back pay). Read the complaint carefully.
   • You will also receive a summons with the complaint. This document tells you the deadline for responding to the lawsuit. Make careful note of the deadline, as you do not want to miss it.
2. Identify the overtime violation. The complaint will tell you what law you violated—state or federal. As soon as you read the complaint, you need to calculate whether you actually failed to pay overtime.
   • Find the employee’s timesheets. You should go over the employee’s timesheets and check for hours worked over 40 in a week. Depending on your state, you might also have to pay overtime for any time worked over eight hours in a day. Look at the timesheets carefully.
   • If you are sued because you didn’t pay enough overtime, then properly calculate the proper rate of pay. For information on how to calculate overtime, see Calculate Overtime Pay.
   • Check if the employee qualifies for overtime. Federal and state laws exempt certain workers from overtime. You can visit the Department of Labor’s website at http://webapps.dol.gov/elaws/whd/flsa/screen75.asp to see what workers are exempt from federal overtime law. State law may also exempt different workers. There should also be an explanation on your state’s Department of Labor website.
3. Come up with defenses. The best defense you can raise is that you properly followed the law. For example, if the employee is exempt, then you can raise that as a defense. Other common defenses include:
   • The employee waited too long to file. An employee cannot wait around forever to file a lawsuit. Instead, the employee must file the lawsuit within two years, which can be extended to three years if you willfully violated the law. If your employee waited too long, then you can move to dismiss the case.
   • The employee is exempt from overtime. The most common exemption is for salaried “white collar” professionals. You do not have to pay overtime to an employee who earns at least $455 a week in salary and whose job duties are managerial or consist of high-level business decisions. You also don’t typically have to pay overtime if the job duties require an advanced degree. You should look at the employee’s job description to see if he or she falls under this category.
   • You acted in good faith. Making a reasonable, good faith defense will not relieve you of liability. However, you will not have to pay double damages if the jury decides against you.
4. Consult with an attorney. You will put forward a stronger defense if you hire an experienced labor attorney than if you try to represent yourself. A lawyer can talk to you about the situation and identify your strongest defenses.
   • Most large companies have lawyers on the staff. This is probably your general counsel. Call and schedule an appointment as soon as you get a copy of the complaint.
   • Smaller businesses often have a lawyer “on retainer,” which simply means that you have an ongoing relationship with a lawyer. In exchange for paying a monthly fee, the lawyer is always ready to help you defend against a lawsuit. Your supervisor should know if you have a lawyer on retainer.
   • Should you need to hire a lawyer, then contact your state’s bar association, which should run a referral program. Ask for a referral to a wage and hour attorney.
5. Gather documents for your consultation. So that your attorney can properly advise you, gather the following documents to take with you to your consultation:
   • the employee’s job description
   • copies of the employee’s timesheets
   • copies of payment to the employee
   • a copy of the complaint and summons
6. Answer the complaint. You must file an “answer” with the court. In this document, you respond to each allegation made by the plaintiff in the complaint. You should go through each numbered allegation and state whether you agree, disagree, or have insufficient knowledge to agree or disagree with each allegation.
   • Your lawyer can draft the answer for you. However, if you want to defend yourself, then you should check whether your court as a “fill in the blank” answer form. If the court does, then you can use the form.
   • You might have to draft your own answer if no form is available. Read Answer a Civil Lawsuit for tips.
7. File your answer. Take your completed answer to the court clerk to file. Make sure to have several copies made and ask the clerk to stamp your copies with the date.
   • There shouldn’t be a fee to file an answer. However, if there is and you cannot afford it, then request a fee waiver form.
8. Serve a copy of the answer. Send a copy of the answer to the employee’s lawyer (if he has one) or to the employee.
   • Typically, you can mail the answer certified mail, return receipt requested. You might also have someone hand-deliver the copy to the plaintiff or lawyer. Ask the court clerk for what methods of service are allowed.
9. Defend against a class action. Overtime violation lawsuits can be brought as class actions. In a class action, the plaintiffs sue as a group because they have a common injury. Employees do not have a right to sue in a class action; instead, they need the judge to “certify” the class action so that it can go forward.
   • You will help yourself enormously if you can keep the class from being certified. If you succeed, then each plaintiff will need to sue individually. In many situations, the amount a plaintiff might be able to sue for is so low that he or she won’t even bother suing you.
   • See Defend Yourself in a Class Action Lawsuit for information on how to prevent a class from being certified.
10. File a motion for summary judgment. You can get a lawsuit dismissed if you file and win a motion for summary judgment. In this motion, you argue that there are no factual issues which need to be resolved at trial. You further argue that judgment in your favor is appropriate as a matter of law.
    • You should have a lawyer draft the summary judgment motion. These are complicated legal documents which require an attorney’s skill.

Settling the Lawsuit outside Court

1. Participate in negotiation. Many judges are now requiring that employers and employees meet to try and settle the dispute before going to trial. You should make a good faith attempt to reach a settlement. If you go to trial, then the employee could win double the amount of overtime pay you have improperly withheld.
   • If you want to participate in settlement discussions, then you should probably have an attorney help you.
2. Decide how much you are willing to settle for. Effective negotiation requires knowing your “walk away” number. Discuss with your attorney how strong your case is and how much you should be willing to pay. In negotiation, each party has to give up something, so you shouldn’t expect to exit negotiations without paying the plaintiff money.
   • However, you might have a very strong defense. If so, you might not want to settle for more than 50% of the employee’s claim.
   • By contrast, you might have a weak defense. In this situation, you might want to pay up to 80% of what the employee is suing for. If she is suing for $10,000, then you might be willing to settle for $8,000.
3. Propose mediation. Mediation is a form of settlement negotiations. In mediation, you and the employee will meet with a neutral third party, called the mediator. The mediator is not a judge and does not say who should win the lawsuit. Instead, the mediator tries to help guide you and the employee to a mutually acceptable resolution.
   • Mediation, like settlement negotiations, is voluntary. You or the employee can walk away at any time. Accordingly, if you think that there is a chance you could settle, then you don’t lose anything by participating in mediation.
   • Your courthouse might maintain a list or database of mediators. Stop in and ask.
   • You can also call your state’s bar association for a mediation referral.
4. Sign a settlement agreement. If you come to an agreement, then write up a settlement agreement. If you were in mediation, then the mediator can help you draft one. There are also sample settlement agreements on the Internet. Find one which a lawyer has posted online.
   • The settlement agreement should contain a full and final waiver from the employee. This waiver is a promise not to sue you in the future for the overtime violation. If the employee goes back on that promise, then he has violated the settlement agreement. You can then raise the agreement as a defense to get the case dismissed.
5. File your settlement agreement. If you want to enforce the employee’s waiver and release, then you need to file your settlement agreement with the court. If you do file, then be aware that the settlement becomes public knowledge as court records are open to the public.
   • Some employers gamble and refuse to file. However, filing the settlement is now required in some federal courts for all wage and hour lawsuits. In these courts, you don’t even have a choice.

Going to Trial

1. Observe a trial. Court can be intimidating, especially if you’ve never participated in a trial or hearing before. You might want to sit in on a trial a week or two before your scheduled court date. Watch how the parties talk to the judge and how they dress.
   • If you are in small claims court, then try to get a copy of any handbook or information packet that is available. Sometimes these are published on the court’s website.
2. Gather your exhibits. You should go through your paperwork and find documents you want the judge or jury to see. For example, you might want to show them the employee’s timesheets.
   • Affix an exhibit sticker. You can get stickers from the court clerk or from an office supply or stationer’s store.
   • You will then number your exhibits as you introduce them at trial: 1, 2, 3, etc.
3. Choose the jury. Jury selection is called “voir dire.” During this process, the judge will ask prospective jurors questions in order to uncover any hidden bias. If you think a juror cannot be fair, then you will need to ask the judge to remove the juror “for cause.”
   • For example, you might think a juror is biased because she has admitted as much or because she knows either you or the plaintiff.
   • You can also use a certain number of “peremptory challenges” to remove jurors without having to give a reason. You also don’t need the judge’s approval unless the employee alleges that you are excluding jurors on the basis of race, sex, or ethnicity.
   • You might want to use peremptory challenges to exclude jurors who aren’t professionals or managers. Professionals and managers might be sympathetic to you since they don’t typically qualify for overtime.
4. Deliver your opening statement. The employee will start the trial with an opening statement. You will give yours second. An opening statement is a roadmap of the evidence you will present. Tell the jury what evidence will be presented and what it will show.
   • Don’t argue in the opening statement. Instead, stay as objective as possible.
   • For example, you don’t want to say, “And the evidence will show I am innocent.” Instead, you should say, “As the plaintiff’s timesheets will show, she worked over 40 hours a week only twice in the past year. And as the evidence will also show, she earned time and a half for all overtime hours.”
5. Cross-examine the employee’s witnesses. As the plaintiff, the employee presents witnesses first. He or she will ask the witness questions, and then you can do a cross-examination. You also can cross-examine the employee if he or she testifies.
   • You might not cross-examine every plaintiff witness, which is okay. You only need to ask questions if you think the witness can help you in some way or if you need to clarify what the witness has said.
   • For example, the plaintiff might claim that she worked an extra half-hour every morning. On cross- examination, you can then show the employee her timesheets and ask where on the timesheet it shows an extra half-hour worked each day.
6. Testify in your own defense. You probably will testify at trial. In particular, you will need to testify if you claim that you failed to pay overtime in “good faith.” This means that you thought you were complying with the overtime laws but made an innocent mistake.
   • If you have an attorney, he or she will ask you questions. If you are representing yourself, then you might deliver your testimony in the form of a speech to the jury.
   • The employee’s attorney will be able to cross-examine you. To be an effective witness, follow these tips:
     • Dress professionally. The judge and jury will form assumptions about you based on your appearance. You want to look your best. If you don’t know how to dress for court, see Dress for a Court Hearing.
     • Speak in a clear, confident voice. You want the jury to hear you and to trust you.
     • Never guess. Ask the lawyer to rephrase a question if you don’t understand it. When you don’t know the answer, say, “I don’t know” or “I can’t remember.”
     • Tell the truth. Half-truths and white lies will be exposed at trial. You should always tell the truth.
7. Deliver your closing argument to the jury. Your closing argument is your chance to convince the jury that the evidence supports your position. Make sure that you remind jurors of specific pieces of evidence.
   • For example, if the employee’s timesheets support your case, then show them to the jury again during your closing argument.
   • If you can afford it, then you might want to enlarge pieces of evidence and use it as an exhibit during your closing argument. This is a powerful way to focus the jury’s attention on a piece of evidence.
8. Await the jury’s verdict. When closing arguments have finished, the judge reads instructions to the jury. The instructions will tell the jury what law to apply. After hearing the instructions, the jury will retire to deliberate.
   • If you are in federal court, then the jury’s verdict must be unanimous. In some states, however, the employee can win if three-quarters of the jurors vote against you.
9. File an appeal. You might want to appeal if you lose at trial. To do so, you need to fill out a Notice of Appeal form, which you can get from the court clerk.
   • If you want to appeal, then you should file the Notice of Appeal quickly. For example, in some states (such as Missouri), you only have 10 days to file the Notice of Appeal.
   • Make sure to discuss with your lawyer whether you want to appeal. Appeals typically take a year or longer to be resolved. Also, you might have to pay the court’s judgment against you as you wait for the decision on appeal. Because an appeal is costly and time-consuming, you might not want to bring one if your lawyer thinks your case is weak.

References

See also

• Sue the Government for Discrimination
• Claim Age Discrimination for Apprenticeship Programs
• Help Avoid Employee Lawsuits
• Verify Rehab Treatment for an Employee
• Handle Disciplinary Actions
• Claim Weight Discrimination
• Know if You Should Sign a Covenant Not to Sue
• Defend Yourself in a Wrongful Termination Lawsuit
• File Charges With EEOC
• Defend Yourself in an Asbestos Exposure Lawsuit

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