Thought Leaders: The right of employees to bring lawsuits for unpaid wages
What every business should know
On December 7, 2017, the Nevada Supreme Court issued a decision settling a previously unanswered question under Nevada law that directly impacts Nevada employers; namely, whether employees have a private right of action against their employers to recover unpaid wages under Chapter 608 of the Nevada Revised Statutes. The Court answered that question in the affirmative and clarified years of conflicting caselaw and ambiguity.
Chapter 608 of the Nevada Revised Statutes governs the payment and collection of wages, as well as other benefits of employment. Specifically, NRS 608.016 governs the failure to pay overtime wages, NRS 608.018 governs the failure to timely pay all wages due and owing, and NRS 608.020 through 608.050 govern payment upon termination. In addition, NRS 608.180 specifically grants the Labor Commissioner power to enforce the professions described in NRS 608.005 to 608.195. However, the wage and hour statutes are silent as to whether an employee has a private right of action to enforce their terms.
Under Nevada law, if a statute does not expressly mention whether an individual may privately enforce one of its terms, an individual may only pursue his or her claims if a private right of action is implied. In the case of Baldonado v. Wynn Las Vegas, LLC, the Nevada Supreme Court examined whether NRS 608.160, which prohibits employers from taking employee tips, implies a private cause of action to enforce its terms. The court concluded that, “in light of the statutory scheme requiring the Labor Commissioner to enforce the labor statutes and the availability of an adequate administrative remedy for those statutes’ violations, the Legislature did not intend to create a parallel private remedy for NRS 608.160.” Thus, the court found “appellants…failed to overcome the presumption that no private cause of action was intended.” However, in a footnote, the Baldonado court opined, “a private cause of action to recover unpaid wages is entirely consistent with the express authority under NRS 608.140 to bring private actions for wages unpaid and due.”
In relevant part, NRS 608.140 provides that “[w]henever an…employee shall have cause to bring suit for wages earned and due according to the terms of his or her employment, and shall establish by decision of the court or verdict of the jury that the amount for which he or she has brought suit is justly due,” the court shall allow the plaintiff to recover reasonable attorneys’ fees incurred for bringing suit, along with the amount found due for wages and penalties. In light of the Baldonado footnote, employees bringing suit for unpaid wage claims against employers in district court attempted to bootstrap a private right to enforce other provisions of Chapter 608.
The Baldonado footnote spawned significant discussion by courts and resulted in conflicting decisions. For example, the United States District Court for the District of Nevada found that “§608.140 does not imply a private right of action to enforce the labor statutes…Instead, §608.140 implies a private right of action to recover in contract only.”
In a separate case, the court also found, “NRS 608.140 does not create a vehicle for privately enforcing the legal rights conferred by the other provisions of Chapter 608; it merely establishes a fee-shifting mechanism in an employee’s ‘suit for wages earned and due according to the terms of his or her employment.’”
Nearly ten years after Baldonado was decided, the Nevada Supreme Court finally put the issue to rest when John Neville, Jr. filed a petition for a writ of mandamus challenging the district court’s dismissal of his NRS Chapter 608 wage claims on the basis that no private right of action exists. Mr. Neville was employed as a cashier at a Las Vegas convenience store owned by Terrible Herbst, Inc. Terrible Herbst enforces a time-rounding policy whereby it rounds the time recorded and worked by all hourly employees to the nearest 15 minutes for the purposes of calculating wages. As a result of the time-rounding policy, Mr. Neville alleged he did not receive wages for work actually performed.
On appeal, the Nevada Supreme Court discussed the Baldonado footnote and found that NRS 608.140 demonstrates the Legislature’s intent to create a private cause of action for unpaid wages. The Nevada Supreme Court stated, “[i]t would be absurd to think that the Legislature intended a private cause of action to obtain attorney fees for an unpaid wages suit but no private cause of action to bring the suit itself.” Because Neville’s Chapter 608 claims involved allegations that wages were unpaid and due, and he tied his Chapter 608 claims with NRS 608.140, the Nevada Supreme Court found Neville properly stated a private cause of action for unpaid wages.
In light of the Nevada Supreme Court’s decision in the Neville case, there will likely be increased numbers of employees bringing civil lawsuits – including class actions – in Nevada courts for unpaid wages and attorneys’ fees. Because of the unknown outstanding financial obligation to employees and the significant costs of litigation, it is crucial that Nevada employers comply with Nevada’s wage and hour requirements. Employers are advised to consult with qualified legal counsel to ensure the adoption of policies and practices that comply with NRS Chapter 608.
This article was written by Emilee N. Sutton, an associate attorney with Allison MacKenzie in Carson City, which sponsors this content.