On December 19, 2016, the United States Court of Appeals for the Fifth Circuit (Court) held that “an employee may recover for emotional injury resulting from retaliation” under the Fair Labor Standards Act (FLSA) in Pineda, et al. v. JTCH Apartments, L.L.C., 2016 WL 7367799 (5th Cir. 2016). A copy of the Court’s opinion may be found here.

Background

Santiago Pineda lived with his wife in an apartment owned by JTCH Apartments, L.L.C. (JTCH). Pineda performed maintenance work for JTCH and received discounted rent as part of his compensation. Pineda filed a lawsuit against JTCH in the Northern District of Texas alleging unpaid overtime compensation. Shortly after JTCH was served with Pineda’s complaint, JTCH ordered Pineda and his wife to vacate their apartment for nonpayment of rent, where rent equated to the discount JTCH provided to Pineda and his wife. Pineda then amended his complaint to include a claim of FLSA retaliation.

At trial, Pineda unsuccessfully requested a jury instruction on emotional distress damages for his retaliation claim. After securing a verdict in his favor on the unpaid overtime and retaliation claims, he appealed the district court’s refusal to instruct the jury on his claim for emotional distress.

Appeal

On appeal, the Court reviewed the FLSA’s damages provision for retaliation claims, which was added to the FLSA in 1977 and states that employers “shall be liable for such legal or equitable relief as may be appropriate….” The Court ruled that “this expansive language … should be read to include the compensation for emotional distress that is typically available for intentional torts like retaliatory discharge.” In its analysis, the Court cited opinions of the Sixth and Seventh Circuits that have held emotional distress damages are available under the FLSA and cited opinions of the First, Eighth and Ninth Circuits that have upheld jury awards that included emotional harm damages in FLSA retaliation cases.

Impact

Employers should be cautious when altering an employee’s terms or conditions of employment once the employee has made a complaint regarding his or her compensation. With most courts now acknowledging that emotional distress damages are available in FLSA retaliation cases, the relatively fixed cost of a pay violation can exponentially increase to include an award for pain and suffering.