When employees recently sued a failed company for their final pay and the employer failed to answer discovery until the very end, the federal court in Maryland imposed a triple-damages penalty because of the employer’s delay and denial tactics. (Skripchenko v. VIRxSYS Corp., 2014 U.S. Dist. LEXIS 136423, at *31-*34 (D. Md. Sept. 26, 2014).
The defending employer, VIRxSYS Corp., had financial troubles — i.e, it had no funds — yet the court did not permit this poverty to become an excuse for the employer to ignore discovery and barely defend the case. Instead, the court awarded most owed wages plus penalty damages. (Id. at *14-*33.)
In Skripchenko, former employees sued for owed wages and also owed bonus payments from a struggling “biotech company” under the Maryland Wage Payment and Collection Law (“MWPCL”). The Law provides for triple damages as punishment, at the discretion of a judge. (MWPCL § 3-507.2; see also Peters v. Early Healthcare Giver, Inc., 439 Md. 646, 97 A.3d 621 {2014} {interpreting the MWPCL}).
Triple damages means that if an employee owes $1,000 in wages, with penalty damages, the employee may be awarded up to $3,000 total, if the judge imposes a penalty. (See Peters, 439 Md. 646, 97 A.3d 621.)
Here, VIRxSYS claimed it had no funds to defend the case and answer discovery. All employment records, for instance, had been seized by the company’s landlord, the employer claimed. Yet after the employees filed motions for sanctions, and the summary judgment motion before the court , the employer did produce some evidence, bit by bit, with gaps. (Skripchenko, 2014 U.S. Dist. LEXIS 136423, at *1-*16.)
In the end, the court awarded the employees their owed wages on summary judgment, due to the absence of any employer’s evidence, despite claims of poverty. (See id.) Where the employer did produce some evidence concerning only bonus pay, the court ordered additional discovery and delayed judgment for later. (Id. at *14-*30.)
The Skripchenko takeaway: Courts will not tolerate employers ‘hiding the ball’ when employees pursue their owed wages claims. What's more regarding penalty damages, employees who suffer needless delay and denial tactics in court should be awarded penalty damages.
As the Skripchenko court stated: This case demonstrates both the need for remedial action to encourage employers to pay their employees in full and the "practical difficulties that employees have in bringing lawsuits to recover wages owed."
Throughout the litigation, VIRxSYS has not even attempted to identify a legal basis for its failure to pay their employees their earned wages. Yet it has also required Plaintiffs to endure the difficulties of modern civil litigation: it failed to provide substantive responses to Plaintiffs' interrogatories, requiring Plaintiffs to file a Motion for Sanctions that was granted by the U.S. Magistrate Judge, Order on Mot. Sanctions, then it continued to withhold information required to be disclosed. (Id. at *33.)
We at Lebau & Neuworth, LLC, bring unpaid wages claims to court regularly. If your employer has not paid you, or paid late with excuses, give us a call. You may be entitled to owed wages plus penalty damages and attorney’s fees. Visit us at www.joblaws.net.
