photo: Charles Leeuwenburg
Employees claiming FLSA retaliation may also seek compensation for emotional suffering. Although courts are divided over whether such damages are available, four federal circuit courts have ruled that the FLSA does permit such damages, and more federal district courts are adopting this view. These developments make it more important than ever that employers both pay attention to developing litigation and proceed carefully when disciplining and/or terminating their employees. If emotional distress can be compensated, the cost of losing an FLSA case will be both emotionally and financially distressing to employers.
Recently, a Maryland court joined the 6th, 7th, 8th and 9th U.S. Circuit Courts of Appeals in finding that compensatory damages for emotional distress are available under the FLSA’s anti-retaliation section. The case involved two sales representatives of ADT Security Services (Randolph v. ADT Sec. Services, Inc., No. DKC 09-1790 (D. Md. June 14, 2012)). When they were hired, both received information on the confidential nature of certain information. The plaintiffs later were dissatisfied with their pay and complained to ADT managers.
Then the plaintiffs contacted the Maryland Department of Labor, Licensing and Regulation. As part of their complaint, the plaintiffs gave DLLR documents, including ADT’s handbook and sales reports. When ADT learned that, it suspended and subsequently fired the plaintiffs for violating its confidentiality policy.
The plaintiffs then filed an FLSA retaliation claim against ADT, including a request for emotional distress compensation related to the retaliatory firing.
Historically, courts have been reluctant to award damages for emotional distress because those damages are difficult to prove and assess. Nevertheless, some courts have begun allowing such recovery and now there is a split over what circumstances, if any, permit emotional distress damages under the FLSA.
The courts that allow compensatory damages for emotional distress do so because they read the FLSA to permit awarding damages liberally. On the other hand, the courts that do not permit such damages sometimes do so because they view such damages as punitive rather than compensatory.
The Maryland court fell in the first category of courts. It noted that “full compensation is the evident purpose and paramount policy” in an FLSA retaliation action. As a result, it would be a “more reasoned approach” to allow a plaintiff who proves emotional distress to recover damages for that distress.
This is not good and will require intervention, much like was the case in California when the courts ruled Emotional Distress Damages were part of Worker’s Comp liability and the legislature had to step in because suddenly everyone was filing claims because they had a bad boss.
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