HR Management & Compliance

Back Pay Damages Include Overtime in FMLA Retaliation Claim, Courts Rule

Employers should be aware that back pay sometimes can entail more than base compensation. The 1st U.S. Circuit Court of Appeals provided that reminder through its recent holding that overtime compensation may be included in an award of back pay. The case is Pagán-Colón v. Walgreens of San Patricio, Inc., Nos. 11-1089, 11-1091 (1st Cir. Sept. 4, 2012); the court rendered this judgment for a discharged assistant store manager in an FMLA retaliation claim.

Walgreens had filed for an amended judgment on the $47,145 award, which the U.S. District Court for the District of Puerto Rico had reduced from $100,000 in compensatory damages awarded to Pagán-Colón by a trial jury.

On appeal, Walgreens argued that Pagán-Colón presented insufficient evidence to establish the company’s liability under the Family and Medical Leave Act and asserted that back pay for overtime is not available under FMLA. The appellate court disagreed with both assertions and sided with the district court’s decision to compensate Pagán-Colón for his estimated lost wages, including overtime.

The circuit court in Pagán-Colón found that “overtime certainly falls into the category of ‘other compensation’ [under FMLA],” and noted that its conclusion is consistent with the way in which damages are calculated for violations of other employment laws.

Walgreens offered “no authority for the proposition that back pay for overtime is categorically unavailable to a successful FMLA plaintiff,” the circuit court opined.

In addressing the example that Walgreens attempted to use as legal precedent — a court decision in which overtime back pay was not granted in an FMLA retaliation claim  (Thorson v. Gemini, Inc., Nos. 99-1656, 99-1708 and 99-2059, 8th Cir. March 2000), the 1st Circuit dismissed the position that Thorson’s outcome made back pay for overtime under FMLA “categorically unavailable.”

The Thorson court found the facts of that particular case too speculative to award overtime, the circuit judges said.

The district court estimated the amount of overtime it awarded ($20,637) based on the year-to-date average of Pagán-Colón’s weekly overtime hours of 46.5 hours (from the beginning of the year until Pagan’s termination in May), rather than Pagán-Colón’s prior 12-month average of 43.5 hours. On appeal, the 1st Circuit found that the year-to-date average included a reasonably large sample size and upheld the district court’s use of that average.

Both courts denied Pagán-Colón’s request for liquidated damages, finding that the termination was a “rookie mistake” by the supervisor and not a situation in which the employer “either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.”

Compliance Matters

FMLA entitles employees to recover wages, salary, employment benefits or “other compensation” that is denied or lost because of an employer’s FMLA violation (29 U.S.C. § 2617(a)(1)(A)(i)(I)).

In addition, if the employee did not lose any benefits or wages, the employer can be liable for any actual monetary losses the employee sustained as a result of the violation, such as the cost of providing care for a covered family member, up to a sum equal to 12 weeks of the employee’s wages. (For more on claims and penalties, see ¶500 in Thompson’s Family and Medical Leave Handbook.)

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