I was recently explaining to a potential client that the law that potentially provided her protection (the FMLA (Family and Medical Leave Act)) did not permit the recovery of compensatory damages or punitive damages. (She had inquired whether she could recover compensation for the emotional harm she contended she had sustained).
In lieu of compensatory damages and punitive damages, I explained that the FMLA, as well as a number of other federal employment laws (e.g. ADEA (Age Discrimination in Employment Act) and FLSA (Fair Labor Standards Act)) permit the recovery of liquidated damages.
Under the ADEA, FMLA, and FLSA, an award of liquidated damages essentially means a certain sum of damages that will be awarded in addition to the economic damages recovered in the case. Importantly, the standard for awarding liquidated damages under the ADEA differs from the standard for awarding damages under the FMLA and FLSA.
The ADEA’s liquidated damages provision states “that liquidated damages shall be payable only in cases of willful violations of this chapter.” 29 U.S.C. 626(b). According to Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985), a violation is “willful” under the ADEA occurs if the employer knew its conduct was prohibited by the ADEA or showed a “reckless disregard” for whether it was prohibited, but not if the employer simply knew of the potential applicability of the ADEA or that ADEA was “in the picture.” Thus, an award of liquidated damages under the ADEA is not mandatory.
Under the FMLA, 29 U.S.C. 2617(a)(1)(A)(iii) provides that an employer shall be liable for an amount of liquidated damages equal to the amount of wages, salary, employment benefits, or other compensation denied or lost to an employee, plus interest, by reason of the employer’s violation. Importantly, the district court may reduce the liquidated damages award only if the employer “proves to the satisfaction of the court that the act or omission which violated section 2615 of this title was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of section 2615.” 29 U.S.C. § 2617(a)(1)(A)(iii). The employer must therefore show both good faith and reasonable grounds for the act or omission to avoid the imposition of an award of punitive damages. Chandler v. Specialty Tires of America (Tennessee), Inc., 283 F.3d 818, 827 (6th Cir. 2002).
Likewise, under the FLSA, 29 U.S.C. 216(b) provides that an employer who violates the overtime compensation provisions of the FLSA “shall be liable” for liquidated damages in an amount equal to unpaid back wages. A court may, in its discretion, refuse to award liquidated damages, but “only if, the employer shows that he acted in good faith and that he had reasonable grounds for believing that he was not violating the Act.” Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 968 (6th Cir.1991).