By: Jacob J. Roes and Kyle D. Nelson
In the ever-evolving landscape of employment law, Washington employers find themselves at the crossroads of compliance and litigation, especially when it comes to handling wage complaints. The recent Washington State Supreme Court opinion involving Cannabis Green, LLC, sheds light on the intricate dance between employers and the Department of Labor and Industries (L&I).
A Tale of Informal Directives
Imagine you’re the captain of a ship, navigating through the stormy seas of wage and hour laws. Suddenly, you receive a message from the lighthouse—it’s L&I, signaling potential violations. But here’s the twist: the message isn’t a formal decree, nor does it specify the exact amount of treasure (wages) owed. Instead, it’s an informal directive to resolve the alleged wage violations for an unspecified amount.
In the case of Cannabis Green, LLC, an employee alleged that the company failed to pay her overtime wages for hours worked across all three of its stores. During its investigation, L&I uncovered potential wage and hour violations affecting other employees. According to L&I, Cannabis Green failed to fully comply with L&I’s demands for payroll records and work schedules. In August 2021, L&I proposed a settlement agreement, which Cannabis Green rejected. L&I then brought suit alleging various wage claims, including those uncovered in the investigation.
The Spokane County Superior Court ultimately dismissed L&I’s complaint, agreeing with Cannabis Green that L&I was required to first issue a formal order directing the employer to pay a specific amount before initiating legal action. The Court of Appeals affirmed the dismissal, holding that L&I must make a formal determination and order the payment of wages owed prior to filing suit.
However, the recent Washington Supreme Court’s decision revealed that such informal directives are not just whispers in the wind; they hold the power to fulfill statutory requirements, allowing L&I to initiate legal action without a formal order. At the heart of the Supreme Court’s order was its reasoning that L&I may not be able to calculate a specific sum if the employer withholds records during the investigation.
The Court’s Compass
The Supreme Court reversed the lower courts’ decisions, which had dismissed L&I’s complaint due to the absence of a formal order. This ruling underscores the importance of taking any informal signals from L&I seriously.
Implications for Employers: A Call to Action
For Washington employers, it’s a reminder that the absence of a formal order doesn’t equate to safety from litigation. Employers should ensure they have robust systems in place to address wage complaints promptly and thoroughly. If such complaints end up in an L&I investigation, the employer should be aware that its decision to defend itself against L&I’s informal directives could lead to full blown litigation. Finding a way to cooperate with L&I, which may include providing documents and information that the employer believes is burdensome or beyond the scope of the investigation, can be the difference between smooth sailing and a costly legal storm.
The Cost of Ignoring the Lighthouse
The opinion also highlights a crucial aspect: if L&I prevails in such cases, it is entitled to recover its attorneys’ fees. This adds another layer of urgency for employers to focus on wage and hour compliance, including addressing internal wage complaints before they ever get to L&I. e.
Conclusion: Steering Towards Compliance
As Washington employers navigate the complex waters of wage complaints, the Supreme Court’s opinion serves as both a map and a warning. It’s a story of informal directives wielding formal power, urging employers to steer their ships towards compliance and away from the rocky shores of litigation. So, as you chart your course, remember to keep an eye on the lighthouse and its compliance signals.
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