How a $50 Garnishment Error Spawned a Class Action Lawsuit

Kollman & Saucier
Kollman & Saucier

This case should serve as yet another example of the long and winding road that litigation can take when a seemingly minor issue is seen as something more.

Maryland’s Court of Appeals recently issued its opinion in Bonita Marshall v. Safeway, Inc., No. 56, September Term.    In Safeway, Ms. Marshall was an employee of Safeway who was subject to a creditor’s wage garnishment in 2009.  When presented with the garnishment, Safeway calculated the amount of Ms. Marshall’s wages that could legally be garnished as it would in any wage garnishment.  However, as the Court of Appeals notes in its opinion, there were three different formulae in effect at that time: (a) the formula set forth in Maryland Code, Commercial Law § 15-601.1(b); (b) the formula set forth in 15 U.S.C. § 1673; and (c) the formula set forth on the preprinted District Court garnishment form.  Not surprisingly, Safeway picked the wrong formula and overpaid the creditor by $45.24.

Upon Ms. Marshall filing suit and, after learning of the error, Safeway changed its payroll garnishment system and tendered to Ms. Marshall the $45.25 it owed her, plus interest.  One would think that would have ended the matter.  But, in the words of Lee Corso, not so fast.  Ms. Marshall claimed in her lawsuit not only the $45.25 wrongfully paid, but also treble damages and attorneys’ fees and, more importantly, she sought class action status.  The trial court ultimately dismissed Ms. Marshall’s claims for monetary damages and denied class certification.

The case then wound its way through the Court of Special Appeals (which affirmed the trial court) and to the Court of Appeals.  While the Court of Appeals affirmed, it disagreed with the lower courts and ruled that an improper deduction by an employer can give rise to a private cause of action under Maryland’s Wage Payment and Collection Law, which provides for treble damages and attorneys’ fees.  The Court of Appeals also clarified that the proper standard for determining the wage exemption is the greater of 75% of disposable wages or 30 times the FLSA minimum hourly wage.

While the legal issues are not too complicated, this case should be a stark reminder that even small and innocent mistakes can spawn litigation that can take years and cost significant sums.  Here, Safeway improperly deducted less than $50, which error Safeway acknowledged and tendered to the employee.  Notwithstanding, the case took several years to wind its way through the trial and appellate courts.  One can assume that Safeway can absorb the costs; others may not be able to.

No Comments
prev next
Email Updates

Enter your email address to subscribe to this blog and receive notifications of new posts by email.