Excessive “Buy Out” Clauses Turn Foreign Nurses into Indentured Servants

Many of the foreign nurses and physical therapists in New York City were recruited by staffing agencies with the promise of good pay and working visas.  In return, the foreign workers signed employment contracts requiring them to work for a certain number of years. If they leave before the end of the contract term, they must pay a “buy-out” fee or "liquidated damages" to the recruiter.

These types of fees are enforceable as “liquidated damages” if the amounts are reasonably related to the actual costs incurred by the recruiters.  The reasonable costs may include money spent on visa applications, travel and lodging for the foreign worker.

A problem arises when the “buy out” fees are much higher than the recruiters’ actual costs. Excessive “buy out” fees are not only unenforceable penalties.  Courts have held that they may create illegal contracts of indentured servitude if they unduly coerce the employee to continue working for the recruiter.

We have brought several lawsuits challenging the enforceability of “buy out” fees ranging from $20,000 to $30,000.  In each case, federal judges in New York agreed that the fees were unenforceable penalties because they were not reasonably related to the actual costs incurred by the recruiter to bring the nurse or physical therapist to this country.  In some cases, the nurses and physical therapists had paid for most of the costs themselves, including their own visa processing, airfare and lodging. 

We have also brought claims for damages and injunctive relief against recruiters who abused foreign workers and used the “buy out” fees to deter them from leaving.  The abuses included not paying the agreed upon wages, not paying overtime, refusing to process the appropriate visa applications, and filing fraudulent visa applications. 

In one case, Judge William F. Pauley III held that our complaint stated a claim for violations of both the Trafficking Victims Protection Act and the Racketeering Influenced and Corrupt Organizations Act (RICO).  See Javier v. Beck, No. 13-CV-2926 (WHP), 2014 WL 3058456 (S.D.N.Y. July 3, 2014).

In another case, Judge Jesse M. Furman entered judgment against a foreign labor recruiter for violations of the Trafficking Victims Protection Act and common law fraud.  See Macolor v. Libiran, 14-CV-4555 (JMF) (S.D.N.Y. Apr. 13, 2016).

Foreign workers who have been abused and threatened by their employers should know that the U.S. justice system will protect them.  Do not simply acquiesce to your employer’s threats.  Get legal advice and stand up for your rights.

To schedule a free and confidential consultation, call John Howley, Esq. at (212) 601-2728.

Government Alleged Female Director Was Paid Less Than Male Counterparts in Violation of the Equal Pay Act and Title VII
 
Two logistics and warehouse companies have agreed to pay $45,000 to settle claims that they paid a female director less than her male counterparts.
 
According to the EEOC, a female director of intermodal operations for the companies was paid less than three male directors.  The woman learned that she was being paid less than the men when she came across a pay stub of a male counterpart after he was fired and she took over his position.
 
The Equal Pay Act prohibits companies from paying women less than men for work requiring equal skill, effort and responsibility that is performed under the same or similar working conditions.  Pay discrimination also violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on sex.
 
The $45,000 settlement will be paid to the victim to compensate her for the discriminatory pay differential.  The companies also agreed to provide anti-discrimination training and post an equal employment opportunity notice at the workplace.
 
If you have been discriminated against in terms of compensation, promotions, or job assignments, you should consult with an experienced employment lawyer to protect your rights.  You may be entitled to compensation for back pay, future pay and other damages.
 
To schedule a free and confidential consultation, call John Howey, Esq. at (212) 601-2728.

Government Charges that Gay and Lesbian Employees Were Subjected to Hostile Work Environments Because of Their Sexual Orientation

The U.S. Equal Employment Opportunity Commission (EEOC) has filed two lawsuits alleging that gay and lesbian employees were subjected to sexual harassment and a hostile work environment.  These are the first sexual orientation discrimination lawsuits brought by the government under Title VII of the Civil Rights Act.

In one lawsuit against Scott Medical Health Center, the EEOC alleges that a gay male employee was subjected to a hostile work environment because of his sexual orientation.  The complaint alleges that the employee’s manager referred to him using anti-gay epithets and made other highly offensive comments about his sexuality and sex life.  The company allegedly failed to take any action after the employee complained.  Ultimately, the employee quit to avoid further harassment.

In the other lawsuit against IFCO Systems, the EEOC alleges that a lesbian employee was subjected to a hostile work environment because of her sexual orientation.  Her supervisor allegedly made comments about her appearance and sexual orientation, such as "I want to turn you back into a woman" and "You would look good in a dress."  The employee was fired shortly after she called an employee hotline to complain.

Title VII of the Civil Rights Act prohibits harassment in the workplace based on a person’s sex.  Until now, the government has only pursued lawsuits for harassment based on an employee’s gender.  It has not pursued discrimination or sexual harassment lawsuits based on an employee’s sexual orientation.

Last year, however, the EEOC determined that sexual orientation discrimination is, by its very nature, discrimination based on sex.  That was an administrative proceeding involving a government employee.  The new lawsuits have been filed in courts against private employers.  

The EEOC explained three rationales for finding that sexual orientation discrimination constitutes sex discrimination under Title VII.  First, sexual orientation discrimination is necessarily based on an employee’s sex, because sexual orientation as a concept cannot be understood without reference to sex.  Second, sexual orientation discrimination is based on the employee’s perceived non-compliance with sex stereotypes and gender norms, and employment decisions based on such stereotypes and norms have long been prohibited under Title VII.  Third, sexual orientation discrimination punishes workers because of their close personal association with members of a particular sex, such as marital and other personal relationships.

The new lawsuits are significant because the EEOC is challenging the conduct of private employers in court.  The EEOC hopes that by bringing these lawsuits, courts will recognize that sexual orientation discrimination is a form of sex discrimination.

If you have faced harassment in the workplace because of your sex, sexual orientation or gender identity, you should consult with an experienced employment lawyer to understand and protect your rights.  To schedule a free and confidential consultation, call John Howley, Esq. at (212) 601-2728.