No treble damages under Overtime Wage Act

A demand for treble damages under the Virginia Overtime Wage Act was rejected after a federal judge found that recent amendments applied retroactively.

Judge Raymond A. Jackson of the Eastern District of Virginia limited the claimant’s relief to damages available under the Fair Labor Standards Act, or FLSA.

“The court finds that the changes to VOWA are procedural in nature and foreclose plaintiff’s ability to seek treble damages,” the judge wrote.

The decision is Meharg v. York Operations LLC (VLW 022-3-493).

Overtime complaint

Gwendolyn Meharg worked in the sales and marketing office of York Operations, which operates nursing homes and assisted living facilities. According to Meharg, she worked several overtime hours in 2020 which York failed to pay her for.

Meharg filed a complaint in April 2022, seeking multiple damages under the Virginia Overtime Wage Act, or VOWA, and FLSA.

York moved to dismiss the claim for triple damages under the VOWA. It argued that the act, as amended, only allows a plaintiff to recover damages available under the FLSA, which doesn’t permit triple damages, and that the amendments were procedural in nature and therefore retroactive.

Wage Act damages

Prior to July 2022, the VOWA allowed for an award of triple the amount of wages due if the court found that the employer knowingly failed to pay wages.

However, the 2022 amendment limited overtime damages to those offered under the FLSA.

Jackson explained that, in Virginia, a statutory change “is generally considered prospective, unless the statute contains explicit terms demonstrating its retroactive effect, or the statute’s amended terms affect remedial or procedural rights rather than substantive or vested rights.”

The judge pointed to a Supreme Court of Virginia case which “articulated the distinction between substantive provisions of law, which cannot be applied retroactively, and procedural or remedial statutes, which may be applied retroactively.”

While “substantive rights encompass statutes which create duties, rights, or obligations … ‘procedural or remedial’ statutes set for the methods of obtaining redress or enforcement of rights,” he wrote.

Jackson noted that courts in Virginia have applied procedural amendments to statutes retroactively “when amended language in the statute does not ‘confine[] its operations to either past or future awards [under the statute], but both are included.’”

“The use of broad, ‘all-inclusive’ language shows a retrospective intent for the retroactive application of procedural and remedial changes that do not impede on substantive rights,” the judge added.

“The current version of VOWA incorporates the procedural and remedial aspects of FLSA and does not alter the substantive right to bring a claim for unpaid overtime in state court. Further, the amendments to VOWA consist of all-inclusive language evidenced of retrospective intent as it [provides that] ‘[a]ny employer that violates the overtime pay requirements’ of FLSA shall be liable to the employee for the applicable remedies available under FLSA.”

— U.S. District Court Judge Raymond A. Jackson

Here, Jackson found that “the current version of VOWA incorporates the procedural and remedial aspects of FLSA and does not alter the substantive right to bring a claim for unpaid overtime in state court.”

“Further, the amendments to VOWA consist of all-inclusive language evidenced of retrospective intent as it [provides that] ‘[a]ny employer that violates the overtime pay requirements’ of FLSA shall be liable to the employee for the applicable remedies available under FLSA.” As a result, Jackson dismissed the plaintiff’s claim for treble damages.

‘Much-needed clarity’

Nick Johnson, a partner at Berenzweig Leonard in McLean, said there was uncertainty after the wage act was amended.

“This decision brought some much-needed clarity to Virginia employers in terms of potential exposure and available damages,” he told Virginia Lawyers Weekly.

Johnson also noted the amendment “clarified that the three-year look back is only for willful violations and further reflects on the legislative realignment to have this statute be in line with the FLSA, at least with respect to remedies.”

Fairfax employment litigator Broderick Dunn, a partner at Cook Craig & Francuzenko, disagreed with the decision and believes that claims under the VOWA shouldn’t be limited to FLSA damages.

He said some jurisdictions, such as the District of Columbia, “have minimum wage acts that go above and beyond the FLSA.”

In Dunn’s view, the legislature’s intent in enacting the 2020 amendments “was to encourage good employer behavior, because they are now facing treble damages and attorneys’ fees.”