Paul DeCamp, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Washington, DC office, was quoted in the Bloomberg Law Daily Labor Report, in “Virus Link to ‘Double Damages’ Rollback Skewered by Obama Alums,” by Ben Penn.
Following is an excerpt:
When the Labor Department quietly rolled out a new policy this week to limit when companies will be on the hook for double penalties in wage settlements, it said the move stemmed from an executive order directing agencies to remove “barriers to economic prosperity as America strives to defeat the economic effects of Covid-19.”
But that explanation obscures the extended history of a contentious action that had been discussed within the Trump administration since at least 2017, and that wage-hour practitioners say will transform the landscape of how the federal government negotiates settlements with employers accused of stiffing workers on pay.
The new directive, published deep inside a DOL webpage on Wednesday, culminates a concerted push by the business lobby to get the Trump administration to drop an Obama-era policy of seeking liquidated damages in pre-litigation wage settlements, which double the amount of back pay workers receive. The DOL’s Wage and Hour Division as of July 1 will seek regular back pay, and not liquidated damages, except in limited circumstances and with approval from two top agency officials.
“Since the early days of the current administration, stakeholders have encouraged WHD to revert to the agency’s historical practice—consistently followed since the 1930s—of not seeking liquidated damages outside of litigation,” said Paul DeCamp, who ran the WHD under President George W. Bush and now represents employers at Epstein Becker Green. …
Effect on Courts
Prominent members of the management bar have decried what they described as the inconsistent application of liquidated damages, and Pizzella’s memo faulted the Obama administration for not issuing guidance to support its policy.
DeCamp and other management lawyers who regularly negotiate settlements with the Wage and Hour Division said they frequently advised clients to push back when investigators assessed double damages. This would prolong cases, sometimes taking disputes to court that would’ve otherwise been resolved much sooner.