Hoosier High Court Bolsters Worker Pay Cases

April 24, 2002 (PLANSPONSOR.com) - The Indiana Supreme Court guaranteed workers a shot at larger court awards if employers fail to pay them the full amount of their paychecks.

The unanimous ruling clears up a decade of conflicting lower-court rulings, some of which suggested that workers weren’t entitled to damages as long as they received at least a portion of their wages, according to a news report in the Indianapolis Star.

In a decision written by Justice Robert Rucker, the court wryly noted that such an interpretation would allow employers to pay only $1 per paycheck no matter how much a worker was owed.
Consequently, the court determined that legal disputes over the frequency and/or timing of wage payments may result in workers being awarded damages three times the amount of the unpaid wages, plus attorney fees.

Workers and labor lawyers hailed the ruling. They said employees now have a powerful tool to fight corporate shortchangers.

Suit Started By Doctor

“Hopefully, this will make things easier for everybody except employers who want to screw employees,” said Dr. Robert Steele, who filed the lawsuit involved in the ruling.

The court ruled in his favor, determining that St. Vincent Hospital violated his employment contract and shorted him more than $280,000 over three years.

The hospital had argued that changes in federal Medicaid and Medicare rules required it in good faith to withhold part of Steele’s pay.

The ruling upheld lower-court decisions that said Steele was due triple damages in the amount of $881,349, plus attorney fees.  The decision has wide implications for common laborers, the Star said.

“People who make more modest wages probably couldn’t afford to sue employers without the promise of triple damages and attorney fees,” said Bill Groth, an attorney for the Indiana State Building and Construction Trades Council told the Star. “They’d just be out of their pay.”