Both sides claim win in historic $22 million East Penn overtime verdict

The historic awarding of $22 million in back wages to employees of East Penn Manufacturing is a win for the worker, said Elizabeth Kuschel, senior trial attorney for the regional Office of the Solicitor in Philadelphia. 

Kuschel was one of the attorneys representing the department of labor on charges that the Berks County battery manufacturer did not pay overtime for employees pre and post shift preparation. Employees need to put on protective equipment and shower to protect themselves from being exposed to lead contamination on the job. 

“This matter came to the Department of Labor from receiving employees’ complaints that they weren’t being paid for their pre and post work preparations,” she said. “Employees were key to a successful investigation and prosecution.” 

Kuschel said the ruling in federal court also sends a message to employers that the state is watching. 

“I think it’s important because it educates other employers on the Fair Labor Standards Act and puts them on notice that we will prosecute them to the fullest extent of the law,” she said. 

But while the $22 million finding was described as among the highest ever that the state has received for an FLSA violation, it was far less than the $212 million the DOL was seeking.  

The jury determined that the back wages owed to uniformed employees who worked for East Penn in Lyon Station from November 2015 to September of 2021 was the significantly lower $22.25 million figure. 

The DOL said that while the jury awarded less than what the Department estimated, “we believe that this is a significant recovery for the workers.”
 

East Penn’s attorney, Hunton Andrews Kurth LLP, said that lowering of the fine was a win for the client. 

“We are pleased that the jury saw the government’s overreaching in this case, in particular as to its claims that employees must be paid to put on and take off everyday protective items such as safety shoes, safety glasses, and earplugs that supposedly start and end the workday,” said Hunton Andrews Kurth partner Michael J. Mueller, who led the defense for East Penn. “In the damages portion of the trial, the jury’s various findings are a rejection of 90% of the government’s wage claim because the jury agreed with us that East Penn did not willfully violate the FLSA and rejected the government’s unsupported high time estimates. On all the remaining liability issues, the jury agreed with our position entirely.” 

While the attorney said he was pleased with the result, a spokesman for the company would not entirely rule out the possibility that either East Penn or the DOL could appeal the verdict. 

Either way, the matter isn’t entirely settled yet. 

In addition to the money already awarded, Kuschel said her office plans to pursue an equal amount — $22 million – in liquidated damages for the employees and will also file an injunction against East Penn to make sure that it does not fail to pay its employees proper overtime compensation in the future.