Guess what?  Wage suits are increasing.  Hardly a surprise.  A recent study shows that wage-hour lawsuits were up about 8 percent over last year, which may stem (in part) from the recent USDOL initiatives on revising the FLSA exemption regulations and its “white paper” on independent contractor issues.  There is also the problem with applying a law born of the Great Depression to the modern workplace and all the new technology issues.

Increase in wage hour lawsuits
Copyright: tiero / 123RF Stock Photo

The study, with data derived from the Federal Judicial Center, shows that (as of the end of September), almost 9000 wage-hour suits had been filed, up from the 8000 filed the previous year.  The data included FLSA cases filed in federal courts and similar-type state-law suits removed to federal court.

There has been a lot of publicity about raising the minimum wage in many areas, such as the $15 per hour minimum wage in Seattle and the directive from Governor Andrew Cuomo to raise the minimum wage for fast-food workers to $15 per hour.  The President has called for the federal minimum wage to rise to $10.10.  It is also an issue in presidential politics.

The USDOL has also proposed changing the exemption rules, in favor of more employees getting overtime.  The agency has also issued a formal Interpretation in July 2015 that greatly limited the kinds and numbers of people that can be validly deemed “independent contractors.”  There is a march of technology and it is difficult to meld the law with the technology.  Commentators have noted that “trying to fit a law designed at a very different time to address different problems and a different type of economy and workplace is difficult, and raises issues.”

There has also been a geometric rise in “off the clock” working time cases.  The issues of preliminary and postliminary “work” generate many controversies.  The email/PDA cases persist and flourish; they are another example of the clash of law and technology.  It is really the general “theme” of what constitutes “work” in today’s world that skews the number of suits upwards.

The Takeaway

I have always preached that an employer cannot prevent lawsuits being filed against it.  If you fire someone, that disgruntled employee may seek out a lawyer or file a DOL complaint and then the litigation wheel starts spinning.  The best defense is to be proactive and undertake an objective examination (an internal audit) of all a company’s compensation practices, e.g. classification issues, working time policies, bonus, commission, vacation policies.

Fix what is broken and start eroding away, softly, the statutes of limitation.

As an employer’s, i.e. a defendant’s attorney, I just want to win the case and I don’t care how (within ethical parameters, naturally).  Not too often, however, can an employer argue that the workers who are suing are not even covered by the Fair Labor Standards Act.  In a recent case, an employer was able to do just that because it successfully argued that the suing workers were engaged in “agriculture,” which is an exempt industry under the FLSA.  The case is entitled (Barks v. Silver Bait, LLC  and was decided by the Sixth Circuit Court of Appeals.

Copyright: belchonock / 123RF Stock Photo
Copyright: belchonock / 123RF Stock Photo

The suing workers were employed at a Tennessee facility that raises worms to sell for bait.  The Sixth Circuit concluded (affirming the lower court) that the FLSA definition of agriculture was meant broadly to reach “farming in all its branches” and applied to this sizeable company which cultivated worms for sale to retailers.  Although “worm farming” was not agriculture in a traditional sense, the Court (as other courts) held that the definition is intended to evolve and that the “ordinary meaning” of farming applied to the “entire field of farming.”

The Court examined the FLSA definitions of “farming” and had some difficulty categorizing the activity.  The Court looked at the covered commodities (e.g. milk, wool, eggs, honey) and stated that “the list of included and excluded commodities is instructive in that worms are more like the included cultivated commodities than the excluded wild ones.”  The Court also noted that raising worms was not “expressly exempt” under any FLSA example.  The Court then examined the scope of the “unlisted” farming activities and concluded that the raising of bait worms “has much in common with traditional farms.”  It shared “the same basic purpose” as traditional farms, to raise animals for sale as commodities.”

The Court finally observed that “although not a specifically enumerated farming activity, there is little to distinguish Silver Bait from a traditional farm other than the unfamiliarity of worm farming.”  Thus, the Court found that the growing and raising of worms is a form of farming within the FLSA’s agricultural exemption.

The Takeaway

A win is a win.  The lesson here is always to look at issues like jurisdiction or statute of limitations or some other perhaps, purely procedural, hyper-technical (dare I say gimmicky?) way to win the case especially in its early stages. i.e. motion to dismiss, summary judgment motion.  Here, the defendant convinced the court to stretch the meaning of the word “farming” as defined under the FLSA by arguing that the meaning of farming was not frozen in time and had changed with the times.

As does the need/desire to find creative ways out of a case…