Wage Hour Claims and Casuto v. Town of Greenwich: The Department of Labor Investigation Is Not The End of The Story

LR-Conference-Table-Men-FolderEmployers who have been through an investigation by the Connecticut Department of Labor Wage & Workplace Standards Division unfortunately have intimate knowledge of the potential burdens of defending against employee wage claims.  To make things even less joyous for employers facing such claims, the Connecticut Superior Court’s recent decision in Casuto v. Town of Greenwich, 2013 WL 7020504 (Conn. Super. December 20, 2013) highlights the fact that the remedies available to employees through such an investigation and through a lawsuit are not mutually exclusive.

In Casuto, fourteen current and former public school food service employees alleged that their employer (the Town of Greenwich and its Board of Education) had for several years failed to compensate them for their fifteen-minute breaks.  After the  Connecticut Department of Labor found this practice to be illegal, the employer remitted to the employees unpaid wages, with interest.  Nevertheless, the employees still brought a lawsuit.  The employer moved to dismiss, asserting that 1) the matter was moot because the employees had already received compensation from the employer for the withheld wages (with interest) as a result of the Department of Labor’s investigation, and 2) employees claiming unpaid wages may seek the assistance of the Department of Labor or file suit, but not both.

The Superior Court denied the motion to dismiss.  The Court noted that under Connecticut General Statutes §31–72, the employees may be entitled to receive twice the unpaid wages plus costs and reasonable attorneys’ fees if the employer’s actions in withholding the wages are found in bad faith, arbitrary, or unreasonable.  As such, the employees were not seeking the “whole apple again, just that part they have not yet received but to which they are potentially entitled under the statute.”  Next, the Court rejected the claim the Department of Labor’s actions in investigating the matter (and getting payment of owed wages to the employees) precluded a lawsuit.  The Court ruled that an employee continues to retain the right to file suit even after the Department of Labor has commenced collecting the unpaid wages, as long as the Department has not yet commenced a wage collection action in court.  As the Department of Labor had not exercised its authority to file suit, the employees in Casuto retained the right to file suit to recover damages (beyond those wages already paid) under Connecticut General Statutes §31–72. 

WHY IS THIS CASE IMPORTANT AND WHAT LESSON IS TO BE LEARNED:  Employers are often cajoled during the Department of Labor investigation process to consider settlement of unpaid wages claims.  Obviously, many factors play into the settlement decision (the likelihood of success or failure, avoiding future litigation costs, avoiding further administrative hassles, peace of mind and closure).  In light of both the significant civil and (yes) even criminal penalties that may exist as a result of an unpaid wage claim, there may be a tendency to consider settling the claims at face value and calling it a day.  However, it is truly not over until it is over.  Unless the employer secures a release by the employee of (at least) claims related to the payment/non-payment of wages, then the employee may still come after the employer for double damages and attorneys’ fees via a lawsuit under Connecticut General Statute §31-72.  While the employee would have the potentially heavy burden of proving that the non-payment of wages was a result of “bad faith, arbitrariness, or unreasonableness,” the employer would still have to endure the time, energy and expense involved in defending itself against a suit.  Thus, it is imperative that employers attempt to acquire full closure via an appropriate release when seeking to resolve wage claims at the administrative/investigatory level.