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Liquidated Damages are Discretionary in FLSA Retaliation Case

3/22/13

By: Joyce Mocek
The Eleventh Circuit Court of Appeals recently held that the standard for awarding plaintiffs liquidated damages in a retaliation claim under the Fair Labor Standards Act (FLSA) is different from that used for claims of minimum wage or overtime violations. In Moore v. Appliance Direct, Inc., No. 11-CV-15227 (11^th Cir. Feb. 13, 2013), the Eleventh Circuit, in a case of first impression, affirmed a Florida district court’s decision not to award liquidated damages, because such damages would not be appropriate. Although the plaintiffs won on their FLSA retaliation claim, the court held that they were not able to recover liquidated damages because these damages were discretionary, not mandatory.
Under the FLSA, for claims for failure to pay overtime or minimum wages, the plaintiff shall be awarded liquidated damages unless an employer can show proof of a reasonable good faith exception.  Liquidated damages are generally the rule, not the exception.  In Moore, the Eleventh Circuit held that the district court had the discretion after reviewing the facts of the retaliation FLSA claims to determine whether it was appropriate to award, or not to award, liquidated damages. With this ruling, the Eleventh Circuit joins the Sixth and Eighth Circuits in holding that an employer does not have to show proof of a reasonable good faith exception to avoid liquidated damages in an FLSA retaliation claim. Thus, employers may still have to pay liquidated damages, but the burden is initially on the employee to show that awarding liquidated damages is appropriate. This is an important development for employers since FLSA claims are on the rise.
The Court in Moore also reviewed the issue of whether owners and executives can be held individually liable under the FLSA and maintained that the CEO (who was a 75 percent owner of the company) could be held individually liable to the plaintiffs for the FLSA retaliation claims. Thus, although company officials or managers cannot be held individually liable under several employment laws, the Court reminded owners that control their business that depending on the circumstances they can still be held liable in FLSA retaliation cases.