Tuesday, August 19, 2014

Maryland's Highest Court Rules That Triple Damages are Recoverable for Unpaid Overtime

I have long tracked the debate over whether triple damages are recoverable for overtime under the Maryland Wage Payment and Collection Law.   Maryland's highest Court, the Court of Appeals, put the issue to bed in Muriel Peters v. Early Healthcare Giver, Inc.  The Court ruled (as predicted) that triple damages are recoverable for unpaid overtime.   The Court ruled that way because in 2010 the Maryland General Assembly amended the law to add the word "overtime" to the definition of wages. Several Federal Court decisions, nonetheless, held that triple damages were not recoverable if they were never promised to the employee.  The Maryland Court of Appeals rejected those cases and held triple damages are available for unpaid overtime.

The Court in Peters also held:

  • A judge or jury must first find that the employer withheld the employee's wages in bad faith before awarding additional -- up to triple -- damages to the employee; 
  • There is no outright presumption in favor of an award of enhanced damages; 
  • The employer has the initial burden to prove it withheld wages in good faith.  The burden then shifts to the employee who must ultimately persuade the judge or jury that the employer withheld the wages in bad faith; and
  • The maximum award the plaintiff can receive is three times the unpaid wages.  If the employee is owed $1 in wages, the maximum he or she can recover is $3 (there had been an argument that he or she should be able to recover $4 -- the owed wages plus triple damages).