OT would have been cheaper: L.A. company owes $3.2 million

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in Employment Law,Firing,Human Resources

Los Angeles sportswear manufacturer Tapout would have been better off paying up in the first place. All former employee Michelle Thomas originally wanted was overtime pay and some disputed commissions she said she had earned.

But now that a California Superior Court jury in L.A. has ruled, Tapout is on the hook for $3.2 million, including $2.4 million in punitive damages.

The high price resulted from a big mistake on the company’s part: retaliation. After Thomas complained about being shortchanged on pay, the company fired her. That’s when she sued.

Tapout tried to defend the underpayment by saying it offered compensatory time off in lieu of overtime pay. Just one problem there—that’s illegal for private employers under the federal Fair Labor Standards Act.

Note: Even if Thomas’ wage-and-hour claim had been meritless, Tapout sealed its fate by firing her. Retaliation claims often outlive a plaintiff’s original complaint—and juries love to hand out big awards when they believe employees have been wronged.

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