Shivani Poddar, Partner

Herrick litigation partner Shivani Poddar spoke to Law360 Employment Authority about key wage-hour court decisions in 2023 and what they mean for employers moving forward. 

The article highlighted how the Second Circuit changed the pleading standard that a worker is required meet for a lawsuit claiming unpaid overtime, which in turn dismissed retail workers' complaint against high-end brand Comme des Garçon stating that the workers' claims lacked details.

Shivani noted that the decision is likely to make it harder to get a case dismissed by reducing what a worker needs to allege to make a lawsuit viable.

"It actually changes the pleading standard," she said. "The Second Circuit has clarified that while there is some level of detail that's needed in the complaint, it's not a requirement that a specific week be alleged because many times plaintiffs don't have this information."

How the ruling gets applied in lower courts will be important to keep an eye on, Shivani added.

"There isn't total guidance from the court as to what level of specificity you actually do need in order to overcome a motion to dismiss," she said. "It's going to be challenging for district court judges to really decide what level of detail is sufficient."

The article discussed how New York City lost its appeal of an $18 million judgment for failing to pay fire department emergency medical technicians and paramedics overtime when they performed tasks before and after their shifts.

Shivani said the court's ruling can expose employers that try to do the right thing to liability when employees fail to follow their protocols for reporting work time.

"Even if employers have robust policies in place, even if they have mechanisms in place that you have to get preapproval before working overtime, it's a really difficult standard for employers to meet now," she said. "Despite all of that in place, if employees don't follow the policy, employers are somehow tasked with knowing when somebody's working overtime."

The ruling weakens a defense employers had been able to rely on, which is that the only way they would have known about some extra hours is if workers reported them, she said. It would be hard to hold an employer liable for failing to pay for work it has no reason to know about, she said.

"One defense that the employer has is it did not have constructive notice because it has these policies in place and the policies weren't followed," Shivani said.

Putting the onus on an employer to detect when someone has performed work is a compliance headache, she said.

"It's going to make the landscape very difficult to understand when overtime is worked and when it should be paid for, despite employees not following policies," Shivani concluded. 

Read the full article in Law360 Employment Authority here. Access may require a subscription.