“Not Willful” Is Not The Same As “No Bad Faith” – A Lesson In FLSA Liquidated Damages

Kollman & Saucier
Kollman & Saucier

After a jury verdict was returned in favor of a group of Baltimore nightclub exotic dancers for their claims under the Fair Labor Standards Act and Maryland wage and hour law against the nightclub owner and the two nightclub entities, the presiding Magistrate Judge also awarded liquidated damages to the plaintiffs.  The club owner appealed on various grounds including questioning how the judge was able to award liquidated damages when the jury had not found the wage and hour violations were willful.

The Fourth Circuit confirmed that the club owner was conflating the jury’s finding that defendants did not act willfully with a finding that defendants did not act in bad faith.  The FLSA requires a district court to award liquidated damages equal to the amount of unpaid wages or overtime compensation unless the court determines, in its discretion, that the “employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the FLSA.”  Good faith, moreover, is an affirmative defense to be raised in defense of liquidated damages and requires more than remaining “blissfully ignorant” of the FLSA’s requirements and taking an “ostrich-like” approach to compliance.  As such, the magistrate judge acted appropriately in awarding liquidated damages and the club owner was on the hook, despite the jury’s finding that he did not willfully violate the FLSA.  The case is Braxton v. Jackson, No. 18-2051 (4th Cir. July 31, 2019).

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