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Are Emotional Distress Damages Available in Retaliation Cases?

Another federal appeals court has held that employees who have faced illegal retaliation at work are eligible to recover damages for emotional distress under the Fair Labor Standard Act (FLSA). The FLSA governs wage and hour laws, such as overtime and minimum wage, for businesses across the United States. This holding could have significant implications for employers throughout the country.

Employees who bring claims against their employers under the FLSA, or employees who cooperate in an FLSA investigation, have the right to be free from retaliation. Retaliatory acts could include termination, demotion, harassment or other adverse actions.

Available damages under the FLSA

Aggrieved employees could always seek the following damages for retaliation in an FLSA claim.

  • Lost wages
  • Liquidated damages in an amount equal to lost wages
  • Reinstatement

As stated above, a number of federal appeals courts have held that employees could also recover damages for emotional distress. The most recent case in the 5th U.S. Circuit Court of Appeals stated that the FLSA's language regarding damages is broad, allowing for plaintiffs in these cases to request emotional damages as necessary. Perhaps most importantly from an employer's point of view, emotional damages are not subject to limits. This can make retaliation claims even more expensive for employers.

What can employers do to minimize the risk of an employment retaliation claim?

First off, every business should institute an anti-retaliation policy if it does not have one. Secondly, supervisors and managers should be made aware of employee complaints. Employees should be encouraged to come forward with wage and hour complaints, and should be made aware that the business will not retaliate against employees who bring these concerns to the company's attention.

Documenting and investigating an employee's underlying wage and hour claim is critical. Equally critical is documenting any actions the individual employee takes while an investigation is under way. Any action that could be construed as retaliatory in nature must be supported by evidence, federal and state law, and the company's existing policies.

Legal analysts note that the 5th Circuit is generally a more business-friendly circuit. This could bode poorly for businesses in other parts of the country. Any business facing FLSA or retaliation claims needs to align with skilled legal counsel as early as possible. For years, the lawyers of Thatcher Law Firm have effectively represented businesses across Maryland in a wide range of employment claims.

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