Alert

Louisiana employers can be responsible for employees’ garnishments on behalf of creditor

November 29, 2022

Buried deep in the Louisiana Code of Civil Procedure is a little-known law which gives creditors the right to seek wage garnishments from a borrower’s employer if the borrower fails to satisfy a loan obligation. In a recent case, Tower Credit, Inc. v. Williams, 2022-0106 (La. App. 1 Cir. 9/16/22), after failing to respond timely (within 15 days) to garnishment interrogatories from an employee’s creditor and failing to appear at a hearing, an employer was held responsible for the full amount of a judgment rendered against its employee.

The creditor in this case went about this by seeking a Judgment Pro Confesso, a legal process which occurs when a judgment creditor is attempting to collect the amount awarded by a money judgment against a defendant borrower. The creditor will often seek to garnish the wages of the borrower by sending interrogatories to the defendant’s employer. According to Art. 2413 of the Civil Code, the employer is required to withhold a certain percentage of its employee’s wages and remit those withholdings to be applied to the defendant’s judgment.

Unfortunately, employers will quite often ignore these interrogatories and fail to respond within the legal time allowed. The judgment creditor will then file a Motion for Judgment Pro Confesso, in which the employer is called to appear in court and present evidence as to the amount which it should have withheld since receiving the interrogatories. By the time an attorney or business receives notice of a Judgment Pro Confesso, it is usually too late to contest the process. 

In the case cited above, the employer was held responsible for the full amount of judgment rendered against its employee. Although such a decision is a frustrating and somewhat harsh result, the trial judge and the First Circuit followed the applicable law. (Louisiana Revised Statute 13:3923 does provide the ability for the court to reopen the case in order to consider additional evidence presented by the employer as to why it failed to timely answer the garnishment interrogatories, or failed to appear for the hearing. However, reopening the case is at the discretion of the court.)

Is Louisiana’s law on Judgments Pro Confesso archaic? Possibly, but until this law is changed by our legislature, every business must accept its responsibility to respond to garnishment interrogatories within the timeframe provided by law. If the deadline is missed, it is imperative that the business seeks legal counsel and appears for the Judgment Pro Confesso hearing. By ignoring both, a business is leaving its fate in the court’s hands.

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During the 2022 legislative session, the Legislature considered a bill that would have removed employers’ ability to appeal to the court to reopen these cases once initially ruled. Lucas Schenk proactively advocated for Louisiana employers via numerous direct discussions with Rep. Franklin Foil. He communicated to Rep. Foil that if passed, the bill would remove employers’ recourse against predatory collections practices targeting them as parties completely unrelated to the original transaction/infraction. Lucas’s advocacy was instrumental in having that language stripped from the version of legislation that was passed.