What employers can learn from the Oakland Raiders and its cheerleaders
- Russell Berger, attorney at Offit Kurman
The Oakland Raiders, an NFL franchise long known for the litigious nature of its former owner Al Davis, now finds itself playing defense against a lawsuit alleging unlawful pay practices. In a case that has captured national attention, Lacy T., a Raiders cheerleader, alleges the team failed to comply with applicable wage laws. Employers should take heed at the important lessons the case provides for workplaces nationwide. Lacy T. claims in the Jan. 22 suit that the Raiders violated her rights as an employee under state labor laws (which closely track federal labor laws.) Specifically, she alleges that the Raiders failed to pay her the required minimum wage for all hours worked and the appropriate premium for overtime. Instead, Lacy T. alleges the Raiders paid her a flat amount of $125 per game and unlawfully withheld her pay until the end of the season. She also contends that the Raiders made unlawful deductions from her pay for infractions such as forgetting to bring the correct pom poms to practice. If successful, Lacy T. would not only obtain damages in an amount to bring her pay over the last three seasons into conformity with the law, but may also obtain double this amount in accordance with a penalty provision contained in the law. The lawsuit also seeks to be certified as a class action. If Lacy T. is able to obtain class certification, the lawsuit would expand to include the claims of current Raiderettes as well as former Raiderettes going back several years, a group totaling 100. Any losses may come in terms of dollars, public opinion, and relationships with its current and future employees. In all likelihood, these losses could have been avoided by correcting pay practices at a cost far less than that of class litigation. Whether Lacey T. wins or loses, the case highlights important lessons that prudent employers should heed:
- Be sure to pay at least minimum wage. While this seems like a no-brainer, it is not always so cut and dry. There can be circumstances where an employer can unintentionally pay less than minimum wage (such as causing pay to fall below the minimum wage by fining employees for various infractions – such as bringing the wrong pom poms to practice). This may also occur when the employer fails to pay for all hours worked (such as time spent in getting into uniforms, time spent taking calls beyond the work day, etc.) In these cases, a well-meaning employer may inadvertently fail to pay the minimum wage.
- Pay in a timely manner. Each state defines “timely” differently. In Maryland, most categories of employees must be paid either every other week or at least twice per month.
- Reimburse for work related expenses. Certain costs incurred by the employee for the benefit of the employer must be reimbursed if failure to do so causes the employee’s pay to fall below the minimum wage.
- Make sure that you pay for overtime for non-exempt employees. To this end, you should make sure you accurately capture and track all hours worked by non-exempt employees.
- Make sure you have correctly classified employees. Many class action suits get filed due to misclassification of non-exempt employees as exempt. The Department of Labor estimates that the majority of employers misclassify employees. Making sure that those who work for you are correctly classified as exempt or non-exempt is the first step to making sure you are not exposed to suits like that filed by Lacy T.
Employers would be wise to pay attention to wage and hour laws and other wage payment laws. As evidenced by the lawsuit brought by Lacy T., a suit brought by one employee that could have been avoided at only a minor increase in cost can quickly escalate into a class action, claiming damages on behalf of all who are similarly situated, including both current and former employees. The final costs of defending a minimum wage or overtime lawsuit are significant given the number of potential employees that can join the suit, the extra damages and fees permitted by the law, and the costs of paying for a defense. These actual costs, when coupled with the intangible costs of having to devote time and resources to a defending the claim and rehabilitating your image in the public and with employees, suggests that a more prudent approach is to periodically review your pay practices in order to increase compliance and reduce the risk of finding yourself in the same position as the Oakland Raiders. Russell Berger is an associate focused on labor and employment law at Offit Kurman in Baltimore. He can be reached at email@example.com