Plaintiffs’ lawyers have a new strategy for bringing wage and hour collective actions.  In addition to familiar claims under the Fair Labor Standards Act (“FLSA”) and state specific wage and hour laws, a group of New York lawyers is now adding RICO violations to their pleadings.  RICO or Racketeer Influenced and Corrupt Organizations Act claims have traditionally been utilized by government attorneys to convict individuals for participating in legitimate business acts that further white collar or organized crime. 

This group of New York plaintiffs’ lawyers, however, has brought three FLSA putative collective actions, each with RICO allegations, against Pittsburgh-area medical centers.  The three complaints manage to mold standard improper wage deduction claims into allegations of illegal conduct by an enterprise-employer through a pattern of racketeering activity.  Each of the three Pittsburgh-area FLSA-RICO actions has survived defensive motions to dismiss under the Supreme Court’s Bell Atlantic Corp. v. Twombly’s heightened pleadings requirement.  Conditional certification has also been granted in all three cases, resulting in notification to approximately 100,000 current and former hospital workers.  The plaintiffs’ lawyers’ website indicates that similar cases will follow against medical centers in Boston, Buffalo, Syracuse and Philadelphia. 

This latest trend of including RICO claims in wage and hour cases is particularly troubling for employers because of the potential effect on damages awards.  In addition to double damage awards for willful violations and the extension of the look back period from two to three years in FLSA cases, verdicts in RICO cases could result in the trebling of liquidated damages awards.  As a result, employers would be well-served to confirm that their pay practices comport with state and federal laws governing the payment of wages.  Kilpatrick Stockton’s team of wage and hour lawyers have best practice methodologies and audit materials to assist employers with this very issue. 

For more information, contact your Kilpatrick Stockton employment lawyer or a member of the wage and hour team: 

     Randy Avram         919-420-1812   RAvram@kilpatrickstockton.com

     Tom Christopher    404-815-6385   TChristopher@kilpatrickstockton.com

     Jim Coil                 404-815-6348   JCoil@kilpatrickstockton.com

     Lou Doherty          336-607-7312   LDoherty@kilpatrickstockton.com

     David Lindsay         919-420-1811   DLindsay@kilpatrickstockton.com

     Leah Moore           919-420-1741   LMoore@kilpatrickstockton.com

     Susan Pangborn     404-815-6305   SPangborn@kilpatrickstockton.com

     Chuck Rice            404-815-6413   CRice@kilpatrickstockton.com

     GP Sykes              404-815-6083   GSykes@kilpatrickstockton.com