Charles: Can that be extended beyond two years?
Joseph L.: Yes that can be extended to three years, if you can show that the employer had no good faith basis for compensating an employee the way they did in failing to pay overtime.
Charles: In determining what a good faith basis is, what are some arguments that an employee may make that an employer must be prepared to defend against to extend that statute of limitations from two years to three years?
Joseph C.: There have been a number of cases on top of them. Some of them include, the situation happened before, previous lawsuit, some of them included failure to consult legal counsel. Courts held that failing to consult in depth with an attorney about this specific job duty, for this class of employees. Failure to do that is enough to show that the violation was willful under the influence of extending the statute.
Charles: You mentioned consulting attorney, is that a reason that an employer has to say, “Look we didn’t act in bad faith, we acted in good faith,” because you spoke with our attorney.
Joseph C.: It can be as long as it’s not a mere rubberstamp. There’s cases that if you just call your attorney and say, “Hey, they are paying me without overtime, is that okay? They’ll say, “Yeah, it sounds fine.” That’s not going to work. There has to be a detailed analysis of the specific job duties of that particular employee.
Charles: That’s an interesting point Joe Lanza because if an employer relies on the advice of the lawyer to whether to determine if the employees have title it all the time or not. As we know, communications between a client and employer are protected by the attorney-client privilege. What is an employer to do in that position to show that, “Yes, we consulted an attorney? Yes, we had a basis for it?” Without the destroying the attorney client privilege.
Joseph L.: Well that circumstance with the employer relying upon consultation with an attorney to support the exemption, the employer is going have to make what’s called a limited waiver of the attorney client privilege, limited gesture that narrows specific issues or not to other communications between the attorney and the employer.
Charles: What are some documents that an employer should make sure that it has from his attorney in determining whether the employees are exempt or not? What are the key documents?
Joseph C.: Probably document number one is going to be an accurate job description, not a nearly job description. An accurate job description based on with those employees and their managers.
The second is going to be, probably what you would call an opinion letter, which is a letter from the attorney to the employer saying, “We’ve evaluated these particular set of facts against the FLSA and based on our analysis these employees are in fact exempted.”
Charles: As I understand it, the attorney has to read the job description to find out the parameters of the discussion will be and prepare us an opinion letter that says, “Based on the information that have been given it appears your employee is exempt or un-exempted.”
Joseph C.: Exactly.
Charles: Thank you for joining us today on our discussion regarding calculating damages under the Fair Labor Standards Act.
Joseph C.: Your problem is our business.
Charles: For more information about calculating damages please see our website at www.vethanlaw.com. We will see you next time.