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Maryland Court of Appeals finds that Maryland’s Wage Payment and Collection Law applies to claims for overtime wages

Peters v. Early Healthcare Giver, Inc.
No. 86 (Md. August 13, 2014)
by Wayne C. Heavener, Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.mdcourts.gov/opinions/coa/2014/86a13.pdf

In Peters v. Early Healthcare Giver, Inc., the Maryland Court of Appeals held that Maryland’s Wage Payment and Collection Law (“WPCL”) covered claims for overtime wages, despite any federal authority to the contrary. Writing for the Court, Judge Sally D. Adkins held that there was no bona fide dispute as to whether the plaintiff was entitled to the overtime wages that plaintiff claimed she was owed. As a result, the plaintiff could recover treble damages at the discretion of the trial court. The Court held that if the trial court awarded treble damages on remand, then they these enhanced damages should include plaintiff’s contested wages (rather than being in excess thereto).

This case grew out of a dispute between Muriel Peters (“Plaintiff”) and her former employer, Early Healthcare Giver, Inc. (“Defendant”). When employed by Defendant, Plaintiff provided in-home care for an elderly patient. When Plaintiff left her employment with Defendant, she filed a lawsuit in the Circuit Court for Montgomery County alleging that Defendant had wrongfully withheld her overtime wages. Defendant argued that Plaintiff’s work fell within the Fair Labor Standards Act (“FLSA”) because Defendant operated under a federal Medicaid program. Defendant argued that the FLSA’s “companionship services” exemption applied, and that Plaintiff was, therefore, not entitled to overtime pay. The trial court held that the FLSA preempted state wage laws. Plaintiff appealed, and the Court of Special Appeals held that the trial court erred in finding that federal law preempted state wage laws.

On remand, Plaintiff filed an unopposed memorandum seeking overtime wages under the WPCL and Maryland Wage and Hour Law. Plaintiff requested treble damages under Section 3-507 (b) of the WPCL, which permits the trebling of damages when the alleged withheld wages were not the result of a bona fide dispute. MD. CODE ANN., LAB. & EMPL. § 3-507.2. Without, apparently, holding a hearing on the matter, the Circuit Court awarded Plaintiff the requested unpaid overtime wages, but denied her request for treble damages. Plaintiff appealed to the Court of Special Appeals and also filed a Petition for Writ of Certiorari to the Court of Appeals. Before the intermediate appellate court could hear the case, the Court of Appeals granted Plaintiff’s petition. In her appeal, Plaintiff argued that she was entitled to treble damages in addition to her overtime wages. Defendant did not participate in the appeal. The Commissioner of Labor and Industry (the “Commissioner”) filed as amicus curiae in support of the application of the WPCL to overtime wages, but in opposition to Plaintiff’s position that enhanced damages should be awarded in addition to unpaid wages.

The Court of Appeals reversed the trial court’s decision. As a threshold matter, the Court held that the WPCL applied to overtime wages, despite certain federal case law to the contrary. The Court stated that the Legislature’s 2010 amendments to the WPCL clarified this matter, and removed any doubt as to whether it covered overtime wages. The Court found that there was no evidence presented as to a bona fide dispute over the contested overtime wages. The burden of production on the issue of a bona fide dispute rested upon the Defendant, as the employer and the party in the best position to bring forward evidence concerning its own subjective belief. Defendant adduced no evidence at trial to support a bona fide dispute, and did not file any opposition to Plaintiff’s memorandum in support of her state law claims.

Despite its holding that there was no bona fide dispute, the Court remanded the case because the trial court failed to make any finding as to whether there was a bona fide dispute as to Plaintiff’s wages. The Court refused to hold that the trial court abused its discretion in failing to award treble damages, but instructed the trial court on remand to keep in mind the WPCL’s remedial purpose in determining whether to apply enhanced damages. On the point of treble damages, the Court sided with the Commissioner, and held that treble damages were not to be awarded in addition to Plaintiff’s overtime wages. An award for treble damages would include Plaintiff’s withheld wages. Hence, the total award available to an employee proceeding under the WPCL is three (3) time the allegedly withheld wages.