Nacht Law Prevails at Michigan Department of Labor for Auto Mechanic Illegally Required to Pay for Car Damage Nacht Law Attorneys Ann Arbor Michigan

Nacht Law Prevails at Michigan Department of Labor for Auto Mechanic Illegally Required to Pay for Car Damage

Posted by: Staff NachtLaw
September 27, 2011
Topic: Nacht Law in the News

The Nacht Law employment lawyers racked up another victory for workers' rights in a final agency decision ruling that refusing to pay employer "kickbacks" is protected conduct and employees may not be fired or retaliated against. Nacht Law attorney David Blanchard filed the claim with Michigan's Department of Labor and Economic Growth on behalf of a client who was fired for refusing to pay an insurance deductible to cover alleged damage to a car where he was working as a mechanic. The case against Lexus of Ann Arbor is remarkable as the first known case upholding the retaliation provisions of the Wage and Fringe Benefits Act to award back pay and reinstatement for an employee who refused to pay illegal kick backs to his employer.

Blanchard said that the case represents a significant victory, even though the letter of the law seems clear on its face: "The plain language of the law should be easy enough to enforce. Unfortunately, several rulings of the Michigan courts have unnecessarily clouded the issue and made it difficult for employees to bring legal claims for what should be a clear right under Michigan law."

The language of the WFBA broadly prohibits any Michigan employer from demanding any "remuneration or consideration" as a condition of employment. Section 13 of the WFBA states that: "An employer shall not discharge ... an employee because of the exercise by the employee on behalf of an employee or others of a right afforded by this act." MCL 408.483. Mr. Honeycutt exercised the right to not be forced to pay "remuneration or consideration, as a condition of ... continuation of employment" and was terminated for this action. The Michigan Supreme Court affirmed the far-reaching nature of this prohibition in Sands Appliance Servs. v. Wilson, 463 Mich. 231 (2000). In Sands, the plaintiff-employer had sued for enforcement of a "tuition contract" that required its former employee to pay back $50 per week in return for training during his first six years of employment. Under the terms of the contract, the employee owed his former employer $6,500 when he quit his employment. The Supreme Court determined that the contract was not enforceable because it violated Section 8 of the WFBA. The Court held that the statute indicates an intention to "prevent kickbacks or payments of any kind to an employer in return for employment or its continuation." Sands, 463 Mich. at 247 (emphasis added).

Illegal kickbacks are a common problem in many Michigan workplaces, and may lead to wrongful termination for employees that refuse to pay their employers' request for a kickback. Some employers even have explicitly adopted "repayment policies" in violation of the law. Employees commonly impacted by this illegal practice include:

Auto and tire mechanics charged penalties for alleged damage to cars or vehicles.
Temporary day workers required to pay a percentage of their day job pay in order to be recalled.
Food service workers who are charged back for customers who "dine and dash"

The DLEG ruling against Lexus of Ann Arbor finally makes clear that the Michigan Department of Labor has authority to sanction such actions and also require back pay and reinstatement for victims of unlawful job retaliation. Unfortunately, the system set up by the Michigan Wage and Fringe Benefit Act also requires that those wrongfully fired have to file a claim with the agency within 30 days, while the right to bring a WFBA lawsuit in court remains unclear. If you are the victim of a retaliatory job termination for refusing to pay your employer a kickback, filing a timely claim with DLEG is essential. Workers should contact an employment lawyer immediately to seek advice and representation.

Nacht Law Prevails at Michigan Department of Labor for Auto Mechanic Illegally Required to Pay for Car Damage