The Eleventh Circuit Court of Appeals recently held that the standard for awarding plaintiffs liquidated damages for a retaliation claim under the Fair Labor Standards Act (FLSA) is different from that used in claims for failing to pay the minimum wage or overtime. In Moore v. Appliance Direct, Inc., No. 11-15227, (11th Cir. February 13, 2013), a case of first impression, the court affirmed a Florida district court’s decision not to award liquidated damages because the lower court determined liquidated damages would not be appropriate.
In claims for failure to pay overtime or minimum wages, the plaintiff must be awarded liquidated damages unless an employer can show proof of a reasonable good faith exception. “Good faith” has a special meaning under this provision of the FLSA, and requires that employers have made specific investigation of the application of the FLSA to particular types of employees. Liquidated damages are the rule, not the exception. But, in Moore, the Eleventh Circuit held that under the retaliation provision of 29 U.S.C. § 216(b) the district court has discretion to award, or not to award, liquidated damages, after determining whether doing so would be appropriate under the facts of the case.
The case involved Leonard Moore and two other plaintiffs who worked as delivery truck drivers for Appliance Direct, Inc. They had filed an earlier lawsuit for overtime violations by the company and its chief executive officer. While that suit was pending, Appliance Direct outsourced its services and changed the status of its employees to independent contractors. The company did not offer the plaintiffs the opportunity to become independent contractors, and it also allegedly prevented the independent contractors from hiring the plaintiffs as drivers. The plaintiffs filed a separate lawsuit, which resulted in the appeal to the Eleventh Circuit. They alleged that Appliance Direct and its chief executive officer retaliated against them for filing the previous lawsuit. The jury awarded each plaintiff $30,000 in economic damages.
The Eleventh Circuit joins the Sixth and the Eighth Circuit in holding that an employer does not have to show proof of a reasonable good faith exception in order to avoid assessment of liquidated damages in an FLSA retaliation claim. The court reasoned that the second sentence in 29 U.S.C. § 216(b), which allows such damages “as may be appropriate to effectuate the purposes of [the retaliation provision]” creates a separate, discretionary, standard of damages for FLSA retaliation claims. In the Moore case, the trial court awarded damages to the plaintiffs as if they had gone through a reduction in force and were discriminated against during the hiring process. The Eleventh Circuit held that the lower court did not abuse its discretion in determining this constituted appropriate damages to effectuate the purposes of the FLSA retaliation provision.
Key Takeaway for Employers
With this new development, employers may still have to pay liquidated damages, but the employee will have the initial burden of showing that awarding liquidated damages is appropriate to effectuate the purposes of the retaliation provision.