Labor and Employment

Labor and employment law concerns the relationships between employers and their employees. Topics in employment law include compensation and wage matters, contractual obligations, discriminatory and hostile work environments, premises liability and safety in the workplace, workers' compensation, and termination events. Depending on the nature of the business and the issues involved, employment issues may be tightly controlled by regulations, while other areas may be left wide open to the parties to decide the scope of the employment relationship. Employers and employees knowledgeable about their obligations to each other are less likely to wind up in litigious proceedings, and will be in better positions to enforce their rights in the event of an inevitable lawsuit.

Compensation and Wage Matters

In theory, an employer and an employee can contractually agree to any amount of compensation and manner of compensation (can pay an employee in fruit if agreed to). But based on the vast majority of real world agreements and needs of employees, virtually all compensation packages will include a cash wage, which is typically the main form of compensation. An employee's cash wage must meet or exceed the federal and state's minimum wage requirements. As long as the cash wage meets the minimum wage standards, any other legal form or means of compensation can be agreed to contractually between the parties.

The federal minimum wage law is governed by the Fair Labor Standards Act ("FLSA"). Currently, the FLSA and its accompanying regulations establish a minimum wage of $7.50 per hour. State law minimum wages can be higher than the federal requirement. In Virginia, the state's current minimum wage remains the same as the federal requirement of $7.50 per hour. The minimum wage does not need require that an employee be paid on an hourly basis, but it does mean that salaried employees' salaries when calculated out over the course of a year's work on an hourly basis meets or exceeds the minimum wage requirement. There are many ways that the minimum wage requirements are calculated for different jobs such as tip-based positions (bartenders, gaming dealers, waitresses), and there are also many exemptions to the minimum wage such as professional positions (doctors, lawyers, teachers). Notably, a state's minimum wage exemptions and requirements can vastly differ from the federal law. If an employer hires for positions that pay at or near the minimum wage, it is important for the employer to know exactly what is required to comply with minimum wage standards.

Additionally, overtime regulations are governed by the FLSA and state law. Generally, an employee who works more than 40 hours per week must be paid their regular wage rate multiplied by 1.5 per hour exceeding 40 hours. An example would be if an employee was paid $10 per hour as her regular wage rate, and she worked 45 hours in a week, that employee would have to be paid her 40 hours at $10 per hour ($400) plus 5 hours of overtime compensation at the overtime rate of $15 per hour (regular rate of $10 x 1.5 = $15 per hour) totaling $475.00 ($400 for regular pay + $75 for overtime pay) for the week. Like the minimum wage requirements, there are alternative methods of calculating overtime and exemptions from the regulations depending on the profession. [Virginia does not have a wage law related to overtime, thus the FLSA controls this issue in Virginia.]

A frequent issue raised in FLSA cases is whether an employee is actually an employee or an independent contractor. The safest solution is for a business to consult an attorney when unsure whether a person should be labeled an employee or independent contractor. A mistake in classifying a person (or whole group of people) as an independent contractor when the courts would consider her an employee can lead to a very expensive lawsuit. Employers should be aware that a FLSA lawsuit has a variety of cost-increasing events that if not handled appropriately can exponentially increase the cost of resolving a wage dispute:

  • An employer who knew or should have known about properly paying the minimum wage or overtime can have liquidated damages equal to the owed wages assessed against it (ex: $100 unpaid wages + $100 liquidated damages equal to unpaid wages)
  • Owners, managers, and corporate officers can be personally liable as "employers"
  • Two-year statute of limitations for unpaid wages; three-year statute of limitations if defendant found "willful" (knowingly violating the law)
  • An employee's claims that there were other employees in the same position can lead to a conditional class certification which operates similar to a class action lawsuit so that other employees who are "similarly situated" must be notified of the lawsuit and given an opportunity to opt-in
  • Reasonable attorney's fees must be paid for by the defendant


FLSA lawsuits have been consistently increasing in number since 1990 , and are not expected to abate. Both employers and employees should consult legal resources to understand exactly how the FLSA impacts their work environment.

The Commonwealth of Virginia has effectively given up control of wage-related law issues to the federal governmentThe Virginia Minimum Wage Act. has its own limitations on who are considered employees , different from the FLSA, and requires defendants of employees who were not paid the minimum wage to pay the employees their owed wages, 8% interest on those unpaid wages from the date that the wages were owed, and reasonable attorneys . Unlike the FLSA, Virginia does specifically require employers to pay wages within a statutorily prescribed timeline and in a legal form of tender . Since the FLSA gives employee-plaintiffs more litigation tools against defendant-employers, it is rare for employees to pursue private lawsuits based on state law.

Discrimination and Hostile Work Environments

Although Virginia is an "employment-at-will" state, meaning that employers and employees are permitted to terminate employment at anytime for any reason or no reason, an employer is cannot discriminate against or terminate an employee based on race, religion, color, national origin, sex, religion, disability, age, genetic information [all of the prior classes are protected under federal laws], marital status, and pregnancy, childbirth and related medical conditions [the last categories are protected under the Virginia Human Rights Act ]. A hostile work environment can prompt a discrimination lawsuit when the employer permits a pervasively offensive workplace that interferes with an employee's job performance and infringes upon a federally-protected right.

If an employee is discriminated against or terminated based on one or more of the federally-protected categories, the employee can sue the employer in a private lawsuit. Depending on the nature of the discrimination, remedies may include requiring the employer to promote the employee or provide responsibilities that were passed over the employee based on discriminatory reasons, provide backpay (including all wages and fringe benefits from the date that the discrimination occurred until the date the discrimination was remedied in court), "frontpay" (pay for the time a plaintiff acting with reasonable diligence should be able to obtain a job and position similar to the prior position with the defendant-employer), injunctions to prevent future discrimination, preferential quotas (affirmative actions), compensatory and consequential damages including emotional damage, payment of a plaintiff's attorneys' fees, and punitive damages in cases where an employer demonstrates a malicious intent or reckless indifference for others' federally protected rights.

Employees should know that in order to file a lawsuit based on federally-protected classes, the employee must first report the alleged discrimination to the Equal Employment Opportunity Commission ("EEOC") within 180 days of the date that the alleged discrimination took place. The EEOC will conduct its own investigation (be careful with what is provided to the EEOC since that information can come up again later in a lawsuit), and will issue a decision with a "Right to Sue" letter. If 180 days pass and the EEOC has not provided the plaintiff with a "Right to Sue" letter, the plaintiff can request a "Right to Sue" letter from the EEOC, and the EEOC must provide it regardless of the investigation's incompleteness. No matter what the EEOC decides during its investigation, the plaintiff cannot file a lawsuit until the EEOC delivers the "Right to Sue" letter (except in cases based on the Equal Pay Act where the plaintiff can file at anytime, and age discrimination lawsuits as long as 60 days have passed since the complaint was filed with the EEOC). Generally, a lawsuit must be filed within 90 days of when the plaintiff receives the "Right to Sue" letter.

Employers also cannot retaliate against employees who exercise their rights to notify appropriate regulatory authorities of workplace violations by discriminating against them in some way. A retaliation claim can be commenced by an employee even if no discrimination occurred in the first place.

Discrimination lawsuits are difficult to prove due to most cases being circumstantial in nature. It is very rare for employers to be caught in an e-mail or recorded conversation discussing discriminatory employment decisions. Instead, plaintiffs must often prove discrimination based on circumstantial evidence such as how the plaintiff was the only person who suffered an adverse event and was also the only person who was a member of a federally-protected category. Plaintiffs often must rely on deposing the persons responsible for the adverse event, and establishing that the employer's reasons for adversely affecting the employee were pretextual and that no other reason exists but for unlawful discrimination. These evidentiary hurdles must be discussed between prospective plaintiffs and their attorneys at the first meeting so that reasonable expectations can be established, and an effective litigation strategy can be developed.

While it is difficult for plaintiffs to prove discrimination lawsuits, it is equally frustrating to employers defending these cases. Most employers make job-related decisions based on valid criterion, but even an appearance of discrimination or a misinterpreted statement can encourage plaintiffs to pursue these claims. Disgruntled ex-employees typically do not feel any loyalty to employers that they feel abandoned them and may have no reservations suing their formal employers. For these reasons, it is critical for businesses to develop and adhere to policies and procedures that will minimize the risk of unlawful discrimination in the workplace, and give employers opportunities to remedy any perceived discrimination.

Workers' Compensation and Workplace Safety

Employee injuries sustained while performing work for an employer or in the employer's workplace are governed by the Virginia Workers' Compensation Act . In the vast majority of employee injury cases, employees must bring their claims before the Virginia Workers' Compensation Commission ("VWCC") where the Commission will decide on what compensation and medical expenses to pay an injured employee for. As long as an employer maintained Workers' Compensation insurance at the time the employee was injured, the employee generally cannot bring a lawsuit against his employer. If

Hearings held by the VWCC can operate like trials despite being administrative dispute resolution proceedings . If the VWCC has concerns that an employee's claim for workers' compensation benefits contains false statements, is exaggerated, does not appear to accurately reflect the employee's medical condition, or otherwise may be denied on grounds related to whether the injury occurred within the scope of employment, a hearing may be held which can require the claimant, the employer and its agents, medical personnel, and other persons with knowledge of the claimant's injury to attend and testify. Evidence may be obtained from various federal and state agencies depending on which agencies the employee may be seeking disability or other similar benefits from as a result of her injuries. The legal nature of these proceedings can become very complicated for a non-attorney to prosecute a claim on their own, and thus if the injury is substantial, an employee should consult and hire an experienced Virginia Workers' Compensation attorney. The VWCC regulates and pays reasonable attorney's fees for a claimant's attorney, thus hiring counsel can be affordable for most employees.

Although employers are generally protected from personal injury lawsuit by their employees, employers will still face harsh financial costs by seeing increasing insurance premiums whenever an employee files for workers' compensation benefits. It is important for employers to create and enforce reasonable safety workplace policies and procedures. An employee's failure to adhere to company safety rules that are regularly followed can become a defense to a workers' compensation claim and give the VWCC a basis to deny the claim. Merely writing policies is not enough; an employer must ensure that its employees follow it and have the equipment and training necessary to work in a safe manner.

Breaches of Contract and Wrongful Discharges

Despite the protections at-will employment provide employers when making firing decisions, many employers stress about terminating their employees when needed, and are even more concerned about follow-up lawsuits resulting from that termination. In Virginia, wrongful termination lawsuits must be based on one of two legal theories: (1) unlawful discrimination based on public policy (discussed in the first section of this page); or (2) breach of contract.

Other states have chipped away at "at-will" employment principles by embedding a "covenant of good faith and fair dealing" (ex: employer cannot fire at-will employee without "good cause") into every employment relationship, or by implying the existence of a contract based on an employee's reasonable understanding of an employer's representation (ex: employee handbook describing terminations occur only for "just cause"). Virginia does not follow either of these judicial interpretations of employment law. This means a private sector employee can be fired for any reason or no reason at all as long it does not violate a public policy or the provisions in the employee's express contract.

Since most Virginia ex-employees cannot rely on the doctrine of good faith and fair dealing, nor the existence of an implied contract, employers are often in strong positions to defend against most wrongful discharge lawsuits. But employers can lose that edge if a negotiated contract or terms of employment strongly indicate an employee's retention for a duration of time, or indefinite retention so long as conditions are satisfied. It is critical for both employers and employees to closely review drafts of employment contracts, and be sure that the contract accurately reflects the parties' understandings of each other's duties, compensation terms, duration, termination events, and for any conditions that can trigger changes in the parties' rights. In contracts, the devil is in the details, and thus whether it is an employer or employee, it is advisable to consult an attorney regarding how a contract's language can affect the parties' obligations to each other.

If you have an employment law matter that you believe should be reviewed by an attorney, please contact our office.