486 U.S. 128 (1988), 86-1520, McLaughlin v. Richland Shoe Co.

Docket Nº:No. 86-1520
Citation:486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115, 56 U.S.L.W. 4433
Party Name:McLaughlin v. Richland Shoe Co.
Case Date:May 16, 1988
Court:United States Supreme Court
 
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486 U.S. 128 (1988)

108 S.Ct. 1677, 100 L.Ed.2d 115, 56 U.S.L.W. 4433

McLaughlin

v.

Richland Shoe Co.

No. 86-1520

United States Supreme Court

May 16, 1988

Argued February 24, 1988

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

Syllabus

The Fair Labor Standards Act (FLSA) requires that a civil enforcement action be commenced within two years after the cause of action accrued, except that a cause of action arising out of a "willful" violation may be commenced within three years. In the Secretary of Labor's enforcement action based on respondent's alleged failure to pay overtime compensation required by the FLSA, the District Court rejected respondent's claim that the 2-year statute of limitations applied, finding the 3-year exception applicable under the standard of Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, whereby an action is "willful" if there is substantial evidence that the employer "knew or suspected that his actions might violate the FLSA," i.e., if he merely knew that the FLSA was "in the picture." Vacating the judgment against respondent and remanding, the Court of [108 S.Ct. 1679] Appeals rejected the Jiffy June standard in favor of the test employed in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111.

Held: The standard of willfulness adopted in Thurston -- that the employer either knew or showed reckless disregard as to whether its conduct was prohibited by the FLSA -- must be satisfied in order for the 3-year statute of limitations to apply. This standard represents a fair reading of the Act's plain language, since it comports with the general understanding that the word "willful" refers to conduct that is "voluntary," "deliberate," or "intentional," and not merely negligent. In contrast, the statute's plain language does not support the Jiffy June standard, which effectively limits the normal 2-year statute of limitations to employers who are unaware of the FLSA and its potential applicability, and thereby virtually obliterates the distinction between willful and nonwillful violations which Congress obviously intended to draw. Also rejected is the alternative, two-step standard espoused by the Secretary, whereby an FLSA violation would be deemed "willful"

if the employer, recognizing it might be covered by the FLSA, acted without a reasonable basis for believing that it was complying with the statute.

This standard would permit a finding of willfulness to be based on nothing more than negligence, or, perhaps, on a completely good faith but incorrect assumption that a pay plan complied with the FLSA in all respects,

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and thereby fails to give effect to the plain statutory language. Pp. 131-135.

799 F.2d 80, affirmed.

STEVENS J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O'CONNOR, SCALIA, and KENNEDY, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which BRENNAN and BLACKMUN, JJ., joined, post, p. 135.

STEVENS, J., lead opinion

JUSTICE STEVENS delivered the opinion of the Court.

The question presented concerns the meaning of the word "willful" as used in the statute of limitations applicable to civil actions to enforce the Fair Labor Standards Act (FLSA). The statute provides that such actions must be commenced within two years "except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued." 61 Stat. 88, 29 U.S.C. § 255(a).

I

Respondent, a manufacturer of shoes and boots, employed seven mechanics to maintain and repair its equipment. In 1984, the Secretary of Labor (Secretary) filed a complaint alleging that, "in many work weeks," respondent had failed to pay those employees the overtime compensation required by the FLSA. As an affirmative defense, respondent pleaded the 2-year statute of limitations. The District Court found, however, that the 3-year exception applied because respondent's violations were willful, and entered judgment requiring

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respondent to pay a total of $11,084.26, plus interest, to the seven employees. Donovan v. Richland Shoe Co., 623 F.Supp. 667 (ED Pa.1985).

In resolving the question of willfulness, the District Court followed Fifth Circuit decisions that had developed the so-called Jiffy June standard. The District Court explained:

The Fifth Circuit has held that an action is willful when

there is substantial evidence in the record to support a finding that the employer knew or suspected that his actions might violate the FLSA. Stated most simply, we think the test should be: Did the employer know the [108 S.Ct. 1680] FLSA was in the picture?

Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir.)[, cert. denied, 409 U.S. 948 (1972)].

This standard requires nothing more than that the employer has an awareness of the possible application of the FLSA. Id.; Castillo v. Givens, 704 F.2d 181, 193 (5th Cir.)[, cert. denied, 464 U.S. 850 (1983)].

An employer acts willfully and subjects himself to the three-year liability if he knows, or has reason to know, that his conduct is governed by the FLSA.

Brennan v. Heard, 491 F.2d 1, 3 (5th Cir.1974) (emphasis in original). See also Donovan v. Sabine Irrigation Co., Inc., 695 F.2d 190, 196 (5th Cir.)[, cert. denied, 463 U.S. 1207 (1983)].

623 F.Supp. at 670-671.

On appeal, respondent persuaded the Court of Appeals for the Third Circuit "that the Jiffy June standard is wrong because it is contrary to the plain meaning of the FLSA." Brock v. Richland Shoe Co., 799 F.2d 80, 82 (1986). Adopting the same test that we employed in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125-130 (1985), the Court of Appeals held that respondent had not committed a willful violation unless "it knew or showed reckless disregard for the matter of whether its conduct was prohibited by the FLSA." 799 F.2d at 83 (emphasis in original). Accordingly, it vacated

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the District Court's judgment and remanded the case for reconsideration under the proper standard.

The Secretary filed a petition for certiorari asking us to resolve the post-Thurston conflict among the Circuits concerning the meaning of the word "willful" in this statute.1 The petition noted that the statute applies not only to actions to enforce the overtime and recordkeeping provisions of the FLSA, but also to the Equal Pay Act,2 the Davis-Bacon Act,3 the Walsh-Healey Act,4 and the Age Discrimination in Employment Act (ADEA).5 Somewhat surprisingly, the petition did not endorse the Jiffy June standard that the Secretary had relied on in the District Court and the Court of Appeals, but instead invited us to adopt an intermediate standard. We granted certiorari, 484 U.S. 813 (1987), and now affirm.

II

Because no limitations period was provided in the original 1938 enactment of the FLSA, civil actions brought thereunder were governed by state statutes of limitations. In the Portal-to-Portal Act of 1947, 61 Stat. 84, 29 U.S.C. §§...

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