Veteran could proceed with claim employer reduced his salary by disability benefits amount

Refusing to dismiss a former marine’s USERRA discrimination claim, a federal district court in Florida found that he sufficiently alleged that the employer reduced his pay by the amount of disability benefits he received from the Department of Veterans Affairs (VA), which was the same as claiming that military service was the “motivating factor” for the adverse decision. The employee’s FLSA overtime claim also advanced. As to both claims, the court rejected the owner’s assertion that he could not be individually liable, because the employee claimed the owner exercised control over the terms of employment and was the individual who made the adverse pay decision

Pay reduced due to VA benefits.

The employee, a disabled military veteran, was hired by Mucky Duck as a nonexempt, hourly paid parking lot attendant. He also received disability benefits from the VA. According to the employee, before he was paid, the company owner asked how much he received in VA benefits and then made the decision to reduce his pay by that same amount.

Not paid for all overtime worked.

Although the employee’s title never changed, he was later given additional duties, including maintenance work, grounds keeping, plumbing, and electrical work. His duties did not change when he was eventually made a salaried employee. From October 2013 to January 2015, while an hourly employee, he received most of his overtime, though the employer deducted one hour daily for a lunch break that the employee never received. That resulted in six hours of unpaid overtime per week. He also occasionally was not paid one and one half times his regular rate of pay for hours he worked in excess of 40 in a week. When he was made a salaried employee, the employer stopped paying him overtime at all.

USERRA claim.

Denying the employer’s motion to dismiss the employee’s USERRA discrimination claim, the court rejected its argument that wages or salary are not considered a “benefit of employment” under the Act. As the employee pointed out, a 2010 amendment modified the definitional language to specifically include wages and salary as a “benefit of employment.” Also rejected was the employer’s argument that he failed to plead his military service was a “motivating factor” in the decision to reduce his pay. To the contrary, the employee clearly alleged that the employer reduced his pay because of his military benefits, which sufficiently alleged that his military service was a motivating factor for the adverse action.

FLSA overtime claim.

The motion to dismiss was also denied as to the employee’s FLSA overtime claim. Though the employer argued that he did not specify which time period or the number of hours he was allegedly denied overtime compensation, the court disagreed. The employee plausibly claimed he was not paid proper overtime from at least October 2013 through November 2016, and that the employer failed to pay six hours of overtime per week during that period. Additional amounts might be revealed through discovery, but this allegation was enough to defeat the employer’s motion.

Owner could be individually liable.

The court also denied the company owner’s motion to dismiss the FLSA and USERRA claims against him. The FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee” and under Eleventh Circuit authority, an owner who is “involved in the day-to-day operation” of the company and has “some direct responsibility for the supervision of the employee” can be held liable as an employer. Likewise, USERRA’s definition of “employer” includes any “person” who “pays salary or wages for work performed or that has control over employment opportunities including . . . a person . . . to whom the employer has delegated the performance of employment related responsibilities.”

Here, the employee claimed the owner regularly exercised authority to hire, fire, and discipline employees, and he supervised and controlled the employee’s schedule, conditions of employment, and rate of pay. He also alleged that the owner was his supervisor and actually made the adverse decision to reduce his pay in the amount of his military benefits. That was enough to support his FLSA and USERRA claims against the owner individually.

SOURCE: Rimbey v. The Mucky Duck, Inc., (DC FL), No. 2:17-cv-103-FtM-99MRM, June 29, 2017.
Visit our News Library to read more news stories.