A federal court has ordered a restaurant company to pay a group of employees liquidated damages under the Fair Labor Standards Act (FLSA). In Dobson, et al, v. Timeless Restaurants, Inc. d/b/a Denny’s, a number of diner servers sued their employer for failure to pay unpaid minimum wages and overtime. According to the restaurants workers, they were required to participate in a tip pool that redistributed a portion of their earnings to other employees whose wages were not tip-based.
After a jury found Timeless Restaurants violated the FLSA, the court considered whether to award the workers liquidated damages. The employees argued that such an award was merited under the FLSA because the jury determined that Timeless acted willfully when it failed to pay wait staff minimum and overtime wages. Timeless, on the other hand argued that the jury’s determination was not determinative and the company “had reasonable grounds to believe that its acts or omissions did not violate the FLSA.”
According to the court, liquidated damages are not required under the FLSA if an employer who failed to pay a worker the appropriate wages acted in good faith. Still, the statute places the burden for demonstrating such a good faith belief on the employer. According to the district court, Fifth Circuit precedent states that an employer may not demonstrate it acted in good faith after a jury has determined the employer willfully violated the FLSA. As a result, Timeless was ordered to pay liquidated damages for its willful FLSA violations.
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