Dive Brief:
- A federal jury found battery maker East Penn Manufacturing Co. violated federal labor laws by failing to pay employees overtime pay at its manufacturing facility in Lyons Station, Pennsylvania, according to a Department of Labor release last week.
- East Penn Manufacturing was ordered to pay $22.25 million in back wages to the Labor Department for more than 7,500 employees who worked at the Lyons Station plant from November 2015 to September 2021.
- The case is the largest Fair Labor Standards Act jury verdict in the Labor Department’s history, a department spokesperson told Manufacturing Dive in an email. However, the agency plans to file a motion for an equal amount of liquidated damages, which may double the workers’ compensation.
Dive Insight:
The lawsuit, filed in 2018, followed a 2016 investigation conducted by the Labor Department’s Wage and Hour Division regarding the company’s payroll practices.
In response to the verdict, the battery manufacturer stood by its actions and how it compensated employees.
“East Penn had made every effort to comply with the laws as it understood them,” the company said in a statement. “As a company, it stands behind the time paid to employees to put on and take off uniforms and to shower. The company believes it provided proper compensation for these activities and was fair in determining the reasonable time required to perform them.”
During the trial, a jury heard testimony from 39 employees who confirmed they and their coworkers performed unpaid work. Experts also offered testimony on the approximate amount of time spent on unpaid work, as well as the estimated amount of back wages workers were owed.
The jury ruled that East Penn Manufacturing only paid workers for their eight-hour scheduled shift, failing to compensate them for additional time needed to put on and remove protective equipment and to shower to avoid lead exposure and other hazards.
“Despite being well aware that the employees’ time clock hours typically exceeded 40 per week, usually due to the need to engage in these compensable activities, Defendant only paid them for a fixed number of hours per day,” the Labor Department said in the 2018 complaint. “Thus, Defendant knowingly failed to pay these employees the required overtime premium for those additional hours that were over 40 in a workweek.”
In addition to back wages and liquidated damages, the Labor Department also intends to seek an injunction requiring East Penn’s Lyons Station facility to comply with the Federal Labor Standards Act in the future.
“The jury’s verdict will go a long way towards making the employees whole and serves as a stark reminder for employers like East Penn to think twice before instituting policies designed to skirt the law,” Solicitor of Labor Seema Nanda said in a statement.
