Court Denies Overtime Defendant's Efforts to Expand FLSA Suit

When employers are sued for overtime pay, they sometimes attempt to assert counterclaims against the employee(s) to gain leverage in the lawsuit.  Such efforts are almost always unsuccessful, as courts have ruled that counterclaims in FLSA lawsuits are usually improper.  A defendant in an overtime pay suit in Dallas recently tried to assert third party claims but was rebuffed by the district court.  The defendant, California Construction, filed a Motion for Leave to File a Third Party Complaint against its former employee, Jesus Maldonado (“Maldonado”), who worked as a job foreman. Maldonado’s responsibilities included tracking time sheets for independent contractors like Plaintiffs and submitting them to California Construction for payment. California Construction’s proposed third party complaint asserted multiple legal claims against Maldonado, alleging that Maldonado perpetrated a scheme to defraud California Construction by submitting false overtime sheets on behalf of independent contractors in order to receive kickbacks from the overpayment. The proposed third party complaint alleged that Plaintiffs Mora and Mesa were a part of the scheme, but that numerous other California Construction employees also participated.

The Court, in ruling on the motion, noted that it had “wide discretion” in ruling on a motion to file a third party complaint, and denied the motion.  The basis for the Court’s ruling was as follows:

It is important to emphasize at the outset that the FLSA is what gives this Court jurisdiction over Plaintiffs’ Original Complaint. Courts have generally resisted attempts to expand FLSA lawsuits beyond the narrow focus of FLSA claims. The Fifth Circuit has stated that “[t]he only economic feud contemplated by the FLSA involves the employer’s obedience to minimum wage and overtime standards. To clutter [FLSA] proceedings with the minutiae of other employer/employee relationships would be antithetical to the purposes of the Act.” The FLSA does not give a defendant-employer the right to seek indemnification from an employee.  Courts have also declined to allow defendantemployers to file counterclaims against plaintiff employees.

To grant California Construction leave to implead a third party and allege a variety of state law claims that far exceed the scope of Plaintiffs’ original FLSA claims would conflict with the narrow focus of the FLSA. Plaintiffs’ Original Complaint narrowly alleges that Plaintiffs are entitled to wages for actual overtime work, which they were not paid in violation of the FLSA. The proposed third party complaint lists at least eight claims under state law arising out of Maldonado’s alleged scheme to defraud California Construction. The alleged scheme involves an unknown number of potential participants and much larger total sums of money. Exercising the discretion afforded by Rule 14, this Court chooses not to insert these additional claims into this lawsuit (citations omitted).

Thus, the defendant’s efforts to expand the FLSA lawsuit beyond the overtime claims themselves were rejected.  The lesson learned here is that in most cases, the only claims that will be considered by the court are the overtime pay claims asserted by the plaintiff.

About the author: Josh Borsellino represents workers to get them the overtime pay they deserve.  If you have questions about overtime pay, or for a free consultation regarding your overtime pay issues, call Josh Borsellino at 817.908.9861 or 432.242.7118, or complete this online form.

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