A new dimension has been added to employer liability under the Family and Medical Leave Act (FMLA), long a subject of confusion and concern. Despite the often sporadic nature of overtime hours, the First Circuit Court of Appeals ruled in a case of first impression that the FMLA allows employees to recover damages for lost overtime as part of a back pay award in an FMLA lawsuit. The case is Pagan-Colon v. Walgreens of San Patricio, Inc. and it is a valuable lesson to employers that non-compliance costs can come from many areas.
Juan Pagan-Colon (“Pagan”) was fired as an assistant manager at a Walgreens in Puerto Rico after taking a medical leave for a serious health condition. Pagan sued Walgreens, in part, for FMLA retaliation and the jury awarded him $100,000 in damages. The trial court reduced the award to $47,145 to match Pagan’s “estimated” lost wages, including $20,637 in lost overtime pay. In calculating Pagan’s lost overtime, the trial court estimated that Pagan would have worked 6.5 overtime hours per week based on evidence he introduced at trial showing he averaged this much overtime during the four months preceding his termination. The court apparently concluded that the four month average was more accurate than the smaller 12-month average suggested by Walgreens.
On appeal, the First Circuit ruled that lost overtime pay is recoverable in an FMLA lawsuit stating:
Although we have not previously addressed the issue, we see no reason why overtime pay should not be included in an award of backpay under the FMLA. The FMLA provides that an employee may recover ‘any wages, salary, employment benefits, or other compensation denied or lost……by reason of the violation.’ 29 U.S.C. § 2617 (a) (1) (A) (i) (I). Overtime certainly falls into the category of ‘other compensation.’ This conclusion is consistent with the way in which damages are calculated for violations of other employment laws, as ‘back-pay awards often include payment for overtime work that an employee would have performed but for her employer’s violation of employment laws.’
With little explanation, the First Circuit also upheld the trial court’s calculation of Pagan’s lost overtime and affirmed the amount of back pay due him.
This Pagan-Colon decision was not surprising as federal appellate courts have allowed lost overtime wages to be recovered in employment discrimination lawsuits filed under Title VII of the Civil Rights Act and in failure to reinstate cases filed under the Uniformed Services Employment and Reemployment Rights Act. Additionally, courts will look at all sources of lost compensation in calculating an employee’s back pay including wages, bonuses, commissions, and benefits, often leading to costly damage awards against employers who allegedly violate the law. It is therefore critical for employers stay current and in compliance with the FMLA and other employment laws or face potentially expensive lawsuits from employees.