Clients often ask “why me?” Why did my business get targeted by this attorney or regulatory agency? Here’s what I tell them (my answer assumes that they’re a good employer that doesn’t intentionally break the law; they acted in good faith).
In short, we’re a litigious society.
You’re caught up in what’s largely become a racket. That is, there are a lot of employee side attorneys, worker associations & labor unions out there that canvass disgruntled workers, or that stir things up among regular or good employees to further their ends of either unionizing or making money off of contingency fees & attorneys’ fees awards & liquidated damages (double damages), etc.
A lot of worker associations like Midwest Workers Association, Affiliated Workers Association & United Workers, although they’re not traditional labor unions, engage in pamphletting & marketing among disadvantaged socioeconomic groups & other classes. Ultimately, their goal is unionization by stirring up trouble between employers & employees. It doesn’t matter whether you’re a good employer or not. If you employ people in their target demographic, then your business is automatically a target too.
The laws that they “enforce,” federal, state & local wage & hour laws generally don’t permit employers to discuss these issues with their own employees, unless an internal complaint is filed, because it’s assumed that when a 3rd party complaint is filed, employers will only act to further their interests & cheat their employees. It’s presumed that employer communications, no matter how sincere, result in some sort of retaliatation against those employees, even if no adverse action is taken against those employees.
Again, it’s irrelevant whether your a good employer. Moreover, it’s irrelevant whether the workers association or union is corrupt, under funded (desperate for money themselves) or mistaken. These laws exist to protect employees & provide for awards of attorneys’ fees & liquidated (double) damages. Consequently, even if I can prove to opposing counsel that nothing is owed, that may not deter them from filing a lawsuit as a shakedown (extortion).
Another way to look at this is that generally the only people who come out ahead in these disputes are the attorneys. However, it’s traditional in these types of cases for there to be a “lead plaintiff.” And in these cases, it’s typical for the lead plaintiff to get some sort of reward above & beyond backpay & liquidated damages. This reward can be anywhere from a few thousand to 20+ thousand dollars. Consequently, there’s extra motivation for someone like Phil Intheblank to canvass other employees for a class action.
However, even if we do prove that nothing, or even a minimal amount is owed, & they still sue, then we can go after them for my attorney fees, court costs & sanctions.
There are insurance companies that provide insurance for these types of disputes. Usually this insurance costs extra compared to the general employment practices liability insurance (EPLI) policies that many businesses carry. EPLI usually covers only harassment & discrimination claims & don’t apply to payroll or union disputes.