In a recent case before the Third Circuit, the Court upheld the willfulness standard necessary to extend the limitations period for FLSA claims while allowing a good faith standard for awarding liquidated damages. Souryavong v. Lackawanna Cty., 872 F.3d 122 (3d Cir. 2017). Plaintiffs filed suit against Defendant, Lackawanna County, for failing to pay overtime wages in violation of the FLSA. The employee Plaintiffs each worked two part time jobs for Defendant, who tracked the hours worked for each Plaintiffs’ jobs individually but neglected to aggregate the hours between the jobs resulting in a failure to pay overtime wages. Plaintiffs appealed from a lower court decision finding that Defendant did not willfully violate the FLSA but still awarded liquidated damages due to Defendant’s lack of good faith attempts of compliance to the FLSA.
The Court upheld the lower court’s decision that Defendant did not willfully violate the FLSA. Finding a willful violation is important for an FLSA claim because it extends the limitations period from two years to three years thereby enabling the plaintiff to recover an additional year of lost pay. To show willfulness, plaintiff cannot just show that defendant had a general awareness of the FLSA, but plaintiff must show actual awareness of the specific FLSA violation. Here, the Court upheld the lower court’s finding that Defendant did not meet the willfulness standard, and thus Plaintiffs were not eligible for an extension of the FLSA limitations period.
While the Court found that Defendant did not willfully violate the FLSA, they upheld that Defendant was liable for liquidated damages under a good faith standard. In the lower court, Plaintiffs argued that Defendant was liable for liquidated damages because they willfully violated the FLSA. To the contrary, Defendant argued that they were not liable for liquidated damages because they acted in good faith and the FLSA violations were unintentional. The lower court found that Plaintiffs were entitled to liquidated damages; however, their ruling was based on Defendant’s failure to prove good faith rather than Plaintiff’s willfulness argument. In this case, Plaintiffs argued that the lower court’s finding in favor of liquidated damages reaffirmed their assertion that Defendant was willful and thereby entitled them to the extended limitations period in addition to liquidated damages. However, the Third Circuit held that the lower court’s ruling had no bearing on the extension of the limitations period because it was based merely on Defendant’s lack of evidence of good faith attempts at FLSA compliance and not on their willfulness.
Overall, the Third Circuit reaffirmed the need to show willfulness to extend the limitations period for overtime violations claims under the FLSA. However, if an employer cannot provide sufficient evidence of good faith attempts at FLSA compliance, then employees are entitled to liquidated damages.