I recently read a posting by Julie Badel on the Wage & Hour Defense Blog and felt so moved that I am compelled to comment on it.  She wrote about a Fifth Circuit case in which the USDOL was sanctioned because “the government here chose to defend the indefensible in an indefensible manner.”  The employer was awarded attorneys’ fees because of the Department of Labor’s bad faith.  I find this a teachable moment, not only for the government, but for all parties engaged in any FLSA litigation.  The case is entitled Gate Guard Services, L.P. v. Perez, 792 F.3d 554 (5th Cir. 2015).

As Julie notes, this case was off the wall.  A drinking buddy of a DOL investigator told his friend that he had been misclassified as an independent contractor.  The investigator conducted a superficial, quickie investigation and then destroyed his original notes.  He assessed six million dollars in wages against the Company, notwithstanding that he had violated several internal guidelines.  Then, the agency learned that courts, in very similar cases, had held that these kinds of workers were, in fact, independent contractors.

The Fifth Circuit was less than pleased with this pattern of behavior.  It observed that the “government’s intransigence in spite of its legally deteriorating case, combined with extreme penalty demands and outrageous tactics, together support a bad faith finding.”

The Takeaway

My numerous dealings with the Departments of Labor (both federal and state) have been marked by cordiality and professionalism, 99% of the time. The agencies have always acted in a reasonable manner and have, in general, been willing to listen to what I say, as an employer’s advocate.  That is why I believe that this case is aberrational and the conduct at issue herein is probably unlikely to be repeated.

With that said, an employer-defendant should be on the lookout for what might seem to be excessive behavior, especially in the course of litigation.   If the DOL actively and intensely pursues a case it should not, for motives that may be problematic, defense counsel should not hesitate in seeking to vindicate its position on these fronts, at the same time maybe sending a message of deterrence to the government.