Employees who assert wage demands available only under the federal Fair Labor Standards Act (FLSA) cannot recover the greater remedies available under the Massachusetts Wage Act (MWA), said the Supreme Judicial Court of Massachusetts. Devaney vs. Zucchini Gold, LLC2022 Mass. LEXIS 156 (Mass. April 14, 2022).
In that decision, the High Court overturned the finding of several lower court decisions that had allowed such state law remedies for violations of the FLSA.
Differences Between Massachusetts and Federal Wage Law
Although the MWA mirrors the FLSA in many ways, they are not identical. Under the FLSA, a two- or three-year statute of limitations applies, depending on whether the plaintiff can show that the employer acted “willfully”. In addition, a successful plaintiff is entitled to costs, attorneys’ fees, and potential damages equal to the amount of lost wages (that is to say, double damage). However, under Massachusetts state law, all claims are subject to a three-year statute of limitations and, in addition to attorneys’ fees and costs, violations are subject to mandatory treble damages.
Another difference is in the types of exemptions to the overtime requirements of the respective laws. For example, all employees who work in a restaurant, hotel, hospital, or gas station are exempt from the overtime requirements of Massachusetts law, whereas such exemptions do not exist under the FLSA.
Plaintiff Rutchada Devaney was an employee of the Rice Barn, a Needham, Massachusetts restaurant owned by the defendant company. She and several other employees filed suit against the company, alleging FLSA violations for nonpayment of overtime; MWA violations for failure to pay overtime on time; and violations of the MWA and FLSA for failure to properly pay minimum wage.
The evidence showed that these plaintiffs regularly worked well over 40 hours per week, but were paid at a day rate, which was reduced when the plaintiffs were absent for part of the day and of which only half was paid the weekend, when the restaurant was only open for dinner.
As a result of the pre-trial discovery, the superior (trial) court granted summary judgment to the plaintiffs on their FLSA and MWA overtime claims. Based on the judge’s instructions in a separate damages trial, a jury awarded each of the plaintiffs actual overtime damages at one and a half times their “normal rate” for all overtime hours worked. The judge then tripled the plaintiffs’ actual damages and awarded them attorneys’ fees and costs. The defendant appealed.
High Court decision
On appeal, the Supreme Judicial Court quashed and remanded the case, finding that the trial court had both improperly instructed the jury on calculating actual damages and awarding treble damages. under the MWA for overtime claims that were only viable under the RSA.
With respect to the calculation of plaintiffs’ actual damages, the Supreme Judicial Court found that since plaintiffs were paid daily, the correct calculation of their overtime is set forth in 29 CFR § 778.112, which provides the method of calculation for employees who are paid “a lump sum for a day’s work…regardless of the number of hours worked in the day…and [who] receive[ ] no other form of compensation for the services. In these circumstances, the employee’s “normal rate” is determined by adding together all the sums received at these daily rates … in the work week and dividing by the total number of hours actually worked” and the employee “is then entitled to additional half-time pay at this rate for all hours worked in excess of [forty] in the working week.
This is so because the employee’s day rate was intended to compensate him for all hours worked. Indeed, they were already paid at their regular rate for the non-overtime hours they worked each week. Thus, they were entitled only to the supplement a half their regular unpaid overtime rate.
More importantly, the Supreme Judicial Court further held that the trial court had wrongly awarded treble damages under the MWA when the plaintiffs had only asserted their overtime claims in under the LSF. As noted above, the plaintiffs worked in a restaurant and therefore were exempt from the overtime provisions of the MWA. Therefore, their claims for unpaid overtime were only viable under the RSA.
While acknowledging that the FLSA does not entirely override state wage and hour laws and, in fact, the statute expressly states that it does not, the High Court found that “allowing a employee harmed by a violation of the federal overtime law to elect state wage law remedies for untimely payments of wages owed solely under the FLSA would present an “impediment to the fulfillment and execution of all the aims and objectives “of the LSF” (quoting Sawash v. Suburban Welders Supply Co., 407 Mass. 311, 314 (1990)). Thereby,
while “federal courts are all over the map as to whether plaintiffs can sue [S]legal claims in addition to FLSA claims for the same conduct, … [t]The common thread is that when the FLSA provides corrective action, it conflicts with similar actions. [S]rule on the causes of action and therefore anticipate them; where the RSA does not provide for corrective action, there is no preemption.
In this case, the FLSA unquestionably provides a comprehensive redress system for overtime pay violations that significantly conflicts with the redress provisions of the MWA. In addition to the difference in the amount of liquidated damages available, the FLSA provides a defense to those liquidated damages where the employer can demonstrate a reasonable and good faith basis for their actions, while the MWA imposes strict liability. for established violations. Additionally, the FLSA’s standard statute of limitations is two years, with a third year only available if the plaintiff can demonstrate “willful” conduct on the part of the defendant, while the MWA’s statute of limitations is three years for all claims. Therefore, the Supreme Judicial Court concluded, the only way to avoid a conflict between the two statutes is to allow only the remedies available under the FLSA when claims are asserted solely under that federal statute.
The Supreme Court Judicial decision should be good news for employers, who no longer have to face claims for the greater damages available under state law when the sole basis of liability is the LSF.