The Eleventh Circuit joined the Sixth and Eighth Circuits in holding that liquidated damages awards for FLSA retaliation claims are discretionary, not mandatory. Moore v. Appliance Direct, Inc., No. 11-cv-15227 (11th Cir. Feb. 13, 2013). Though encouraging for employers, the decision does not specifically enumerate factors courts should consider in exercising discretion with respect to awarding or denying liquidated damages.
Background: Plaintiffs, who were truck drivers, filed an FLSA overtime complaint against Appliance Direct (“Employer”) and its CEO. While that suit was pending, the Employer allegedly changed the status of its truck drivers from employee to independent contractor. It allegedly offered its current drivers independent contractor status, except for the named plaintiffs, who lost their jobs when their positions were outsourced to independent contractors. Those individuals then claimed retaliation. The U.S. District Court for the Middle District of Florida found the CEO liable for retaliation under the FLSA (the suit was stayed vis-a-vis the Employer, which had filed for bankruptcy), but declined to award liquidated damages.
Ruling: On appeal, the Eleventh Circuit considered whether the retaliation provision of the FLSA mandates a liquidated damages award where liability is found. It found the first sentence in the applicable provision (in 29 U.S.C. § 216) mandated an award of liquidated damages for minimum wage and overtime violations. But, it noted that the second sentence in that provision carved out retaliation, and concluded that the language and purpose of Section 216(b) show a different Congressional intent for retaliation claims. Relying further on legislative history and decisions from the Sixth and Eighth Circuits, the Eleventh Circuit held that liquidated damages awards are discretionary for retaliation claims. It affirmed both the retaliation judgment against the CEO and the denial of liquidated damages.
This is a positive advancement for employers saddled with FLSA retaliation claims, which is important since such claims are on the rise. Check out our related posts, which can be accessed here and here.