In Cohen v. Consilio LLC, the court considered whether employees could seek a personal remedy of penalties for violation of the Minnesota pay statutes. The Plaintiff, Bruce Cohen (Plaintiff) worked as an hourly document review attorney at the Minnesota offices of the Defendant, Consilio LLC (Defendant), a nationwide legal document review company. During the Plaintiff’s employment, the Defendant implemented a policy that eliminated premium overtime pay, effectively limiting the pay of Plaintiff and other review attorneys to their regular base rate for all hours worked.

The Plaintiff  brought a class action under Minnesota law claiming multiple wage law violations, including, violation of the Minnesota Fair Labor Standards Act (MFLSA) section 177.25  which requires overtime  compensation  at a rate of at least 1-1/2 times the employees regular hourly rate for hours worked over 48 hours in a week. The  Plaintiff sought overtime pay, liquidated damages and civil penalties.

The Defendant paid an amount to cover the overtime and liquidated damages, a portion of which was received by the Plaintiff.  As part of these payments the parties stipulated that Plaintiff had been fully compensated for  “all overtime wages”  and liquidated damages he alleged he was owed.  Despite this stipulation, the Plaintiff maintained he was owed penalties under several pay statutes including the MFLSA.  Defendant argued  the MFLSA did not permit payment of  penalties to a Plaintiff and moved for summary judgement on that issue. The district court granted summary judgment on the issue of penalties.

On review, the Eighth Circuit Cout of Appeals vacated the summary judgment with respect the claim for penalties under MFLSA. The Court found that the Plaintiff had received  compensation for wages and liquidated damages owed under MFLSA, noting the parties had agreed on that point via the stipulation. The court further found the parties had agreed that any penalties imposed under MFLSA were paid to the Commissioner of Labor and Industry (Commissioner), not to the Plaintiff.  As there did not appear to be further remedies available to the Plaintiff under the MFLSA, the court questioned whether the Plaintiff had a viable claim and whether the court had jurisdiction to hear the matter.

In discussing whether Plaintiff may have any continuing claims to preserve standing, the court noted there was disagreement about whether the Defendant had truly ended the policy, which raised the possibility the same unlawful actions could recur and give rise to claims. Alternatively, if the policy had been  eliminated and it “was absolutely clear the wrongful conduct would not recur,” Plaintiff may no longer have a viable claim and the issue of whether Plaintiff was entitled to penalties would be moot. The court remanded the matter to the district court for further consideration, the outcome of which remains to be seen.

This case is an example of the complexity of pay laws in terms of both compliance and the consequences of non-compliance. When evaluating compensation structures, employers must be diligent in considering obligations under multiple pay laws authorizing a broad range of remedies to both employees and government entities. If you or your organization have questions regarding pay policies and compliance with statutory compensation requirements, contact Wiley Reber Law for advice that works.