A Look Inside an Overtime Pay Lawsuit

March 31st, 2016 by Trey Barrineau

A lawsuit in Florida demonstrates some of the labor-law challenges facing door and window dealers when it comes to overtime pay.

A court in South Florida recently issued a summary judgment that Window Mart Inc. and WM International Group LLC, and its owners, Liliana and Luis A. Morales, were not subject to the Fair Labor Standards Act (FLSA) of 1938 and thus did not have to pay overtime wages to a former employee, a window installer.

Window Mart’s lawyers argued successfully that the worker did not engage individually in interstate commerce, and because of that, the defendants were also not subject to the FLSA under the “enterprise coverage” theory.

The former worker claimed that Window Mart had failed to pay him overtime while he was employed there from August 2013 through December 2014. Window Mart’s lawyers proved that the plaintiff’s work did not involve any interstate commerce because he only assembled and installed windows locally in Miami-Dade County, and that the defendants did not gross more than $500,000 per year in each of 2013 and 2014 – the years the plaintiff alleged to have worked for the defendants. Because of that, the defendants were not subject to the FLSA for those years.

“The facts in the case were largely clear to us from the outset, but had to be shown through depositions and documentary evidence,” said attorney Adi Amit of the Lubell Rosen law firm, who represented Window Mart. “Unfortunately, this was another example of how former employees and their attorneys abuse the overtime/minimum wage laws against small, family-owned businesses in an attempt to force those businesses to settle, even when the case was entirely without merits. I am satisfied that the judge agreed with us, without the need to go to trial that these defendants did nothing wrong.”

According to another attorney involved in the case, South Florida is Ground Zero for these lawsuits.

“In 2015, nearly one in every seven new FLSA cases nationwide was filed in South Florida,” said Mark L. Rosen, a partner at Lubell Rosen. “Florida’s Southern District had more new FLSA complaints filed — 1,289 cases — than anywhere else in the U.S.”

If the government changes the rules on who qualifies for overtime pay, it could become a big issue across many industries.

Earlier this month,  Rep. Tim Walberg (R-Mich.) and Sen. Tim Scott (R-S.C.) introduced the Protecting Workplace Advancement and Opportunity Act into the U.S. House of Representatives. The bill would require the U.S. Department of Labor (DOL) to conduct a comprehensive economic analysis on the impact of mandatory overtime expansion to small businesses, non-profits and public employers.

The bill was introduced in response to concerns that dramatic changes proposed will not only result in an estimated cost of $8.4 billion per year, but will also reduce opportunity and flexibility for millions of executive, professional and administrative employees. As proposed, the salary level under which employees qualify for overtime pay will increase from $455 per week ($23,360 annually) to an estimated $970 per week ($50,440 annually).

 

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