Soler v. G & U, INC.
| Decision Date | 13 February 1986 |
| Docket Number | 78 Civ. 5257 (CHT),No. 78 Civ. 6252 (CHT),78 Civ. 6258 (CHT),78 Civ. 6259 (CHT),78 Civ. 6260 (CHT) and 78 Civ. 6261 (CHT).,78 Civ. 6252 (CHT) |
| Citation | 628 F. Supp. 720 |
| Parties | Francisco SOLER, et al., Plaintiffs, v. G & U, INC., Charles Gratz, d/b/a Charles Gratz Farm, Defendants. Jann S. FLING, et al., Plaintiffs, v. PEAT-GRO FARMS, INC., Defendant. Pablo LIVAS, et al., Plaintiffs, v. BIERSTINE FARMS, INC., Defendant. Gilberto GONZALEZ, et al., Plaintiffs, v. CEDAR VALLEY GROWERS, INC., Defendant. Freddy VALENTIN, et al., Plaintiffs, v. Raymund MYRUSKI, Defendant. Cecelio ENCARNACION, et al., Plaintiffs, v. W.K.W. FARMS, INC., Defendant. |
| Court | U.S. District Court — Southern District of New York |
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Farmworker Legal Services of New York, Inc., Newburgh, N.Y., for plaintiffs; Howard Schell Reilly, Thomas A. Harnett, of counsel.
Keane & Beane, P.C., White Plains, N.Y., for defendants; Edward F. Beane, of counsel.
The plaintiffs, approximately 100 migrant farmworkers, brought this action under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (1982) ("FLSA" or "Act"), seeking to recover certain wage deductions made by the defendants, six farm owners. The plaintiffs alleged that the defendants had violated the FLSA by deducting rent from the plaintiffs' wages for housing provided in the defendants' labor camps during the 1978-1983 growing seasons.
In a recent opinion, the Court granted the plaintiffs' motion for summary judgment against the defendants. See 615 F.Supp. 736 (S.D.N.Y.1985). The Court held that housing costs could not be computed as part of the plaintiffs' minimum wage under the FLSA because the housing was provided for the employers' benefit, rather than for the benefit of the workers.
The plaintiffs now argue that (1) the defendants' violations of the FLSA were "willful" so that the three year limitations period provided in 29 U.S.C. § 255(a) ("§ 255(a)") should be applied, and (2) liquidated damages should be awarded under 29 U.S.C. § 216(b) ("§ 216(b)"). The Court agrees for the reasons set forth below.
The plaintiffs also move pursuant to Fed. R.Civ.P. ("Rule") 15(a) and (d) for permission to amend their complaint for the fifth time, in order to correct certain errors contained in the Fourth Amended Complaint, and to add new plaintiffs in accordance with Rule 21. The plaintiffs further seek to amend their complaint in order to add supplemental claims for 1983-1984. The plaintiffs' request for permission to amend the complaint is denied in terms of adding new parties, but the plaintiffs may correct the pertinent errors, and they may add the supplemental claims.
Section 255(a) of the FLSA provides that an action brought under the Act must 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 after the cause of action accrued." For the reasons set forth below, the Court concludes that the violation in this case was "willful", and, therefore, the three year limitations period is applicable.
The Second Circuit has made it clear that, for the purposes of § 255, a violation is willful if the employer (1) knows or has reason to know that his business is subject to the provisions of the FLSA, and (2) his practice does not conform to FLSA requirements. See Donovan v. Carls Drug Co., Inc., 703 F.2d 650, 652 (2d Cir.1983). See also Marshall v. Erin Food Services, Inc., 672 F.2d 229, 231 (1st Cir.1982); Donovan v. Kaszycki & Sons Contractors, Inc., 599 F.Supp. 860, 870 (S.D.N.Y.1984). Thus, a violation is willful if the employer knew that the FLSA was "in the picture," and would govern his conduct. See Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142 (5th Cir.1971), cert. denied, 409 U.S. 948, 93 S.Ct. 292, 34 L.Ed.2d 219 (1972).
In this case, it is undisputed that the defendants knew that their conduct was subject to the FLSA. The FLSA did not apply to the farming industry before 1978, and it was specifically amended in order to extend protection to farmworkers. The growers readily admit to knowing that the FLSA became effective in the farming industry in 1978, and that they were bound by its provisions. The Court has already concluded that the growers' conduct did not conform to the FLSA requirements. Thus, both prongs of the willfulness standard are satisfied.1
The defendants argue, however, that the willfulness standard set forth by the Second Circuit is not applicable in this case because the defendants consulted with their attorneys and with officials of the Department of Labor, and affirmatively attempted to comply with FLSA regulations. Essentially, the defendants are trying to assert a "good faith" defense. This argument, however, cannot succeed since § 255 does not provide a good faith defense. Even if the growers acted in good faith and believed that the wage deductions they made were lawful, such conduct does not shield them from the additional year of liability.2 See Donovan v. Carls Drug Co., 703 F.2d at 652; Donovan v. Kaszycki, 599 F.Supp. at 870. See also Donovan v. BelLoc Diner, Inc., 780 F.2d 1113 (4th Cir. 1985) ().3 Thus, the defendants are subject to the three year limitation period.
Section 216(b) of the FLSA directs that an employer who violates the minimum wage provisions of the Act "shall be liable to the ... employees affected in the amount of their unpaid minimum wages ... and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). It is well established that, under this provision, liquidated damages are compensatory rather than punitive. See Heiar v. Crawford County, Wis., 746 F.2d 1190, 1202 (7th Cir.1984); cert. denied, ___ U.S. ___, 105 S.Ct. 3500, 87 L.Ed.2d 631 (1985); Thompson v. Sawyer, 678 F.2d 257, 281 (D.C.Cir. 1982); Marshall v. Brunner, 668 F.2d 748, 753 (3rd Cir.1982). Such damages are intended to compensate for any losses which a worker might suffer because of the wrongful retention of his pay. See Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 65 S.Ct. 895, 89 L.Ed. 1296 (1945). Liquidated damages are not intended to be a penalty or punishment. See Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 583-84, 62 S.Ct. 1216, 1222-23, 86 L.Ed. 1682 (1942).
Section 11 of the Portal-to-Portal Act ("Portal Act"), 29 U.S.C. § 260 ("§ 260"), permits employers to assert a good faith defense to the FLSA's liquidated damages provision. Section 11 provides in relevant part:
If the employer shows to the satisfaction of the court that the act or omission giving rise to the 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, the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.
In order to prevail on this defense, the employer must show (1) subjective good faith and (2) objectively reasonable grounds for believing that he was acting in compliance with the provisions of the FLSA. See Thompson v. Sawyer, 678 F.2d at 282. The employer bears the burden of proving good faith and reasonableness. If the employer fails to satisfy those requirements, the district court is without discretion to deny liquidated damages. See Williams v. Tri-County Growers, Inc., 747 F.2d 121, 129 (3rd Cir.1984); Laffey v. Northwest Airlines, Inc., 567 F.2d 429, 465 (D.C.Cir. 1976), cert. denied, 434 U.S. 1086, 98 S.Ct. 1281, 55 L.Ed.2d 792 (1978).
In the case at bar, the Court concludes that the farmworkers are entitled to liquidated damages for wages deducted from 1978 to 1983, when the Administrator of the Department of Labor ("Administrator") issued his decision in the case. The growers have failed to discharge their burden of proving good faith. It appears that the growers deducted housing costs from the farmworkers' wages in a deliberate attempt to circumvent the minimum wage requirements of the FLSA.
The good faith defense provided by the Portal Act was intended to protect an employer who innocently and to his detriment followed the law as it was laid down to him by a government agency, where the agency's interpretation of the law subsequently turned out to be erroneous or invalid. See Equal Employment Opportunity Comm'n v. Home Ins. Co., 672 F.2d 252, 263 (2d Cir.1982). The defendants argue that they followed the advice of the Bronx office of the Wage and Hour Division of the Labor Department, and they had the approval of the Employment and Training Division of the Labor Department. The defendants knew, however, that neither agency had the authority to determine whether the defendants' conduct complied with the FLSA.4
In the prior opinion granting summary judgment, the Court rejected the growers' contention — which is reasserted here — that they properly relied on the advice of appropriate government agencies. See 736 F.Supp. at 746-49. Only the Administrator of the Labor Department could make that determination, and the defendants knew that a hearing before the Administrator was pending. Thus, although the defendants argue that they believed they were entitled to make the pertinent deductions under the provisions of the FLSA, they cannot show they had reasonable grounds for that belief.5 In effect, the growers were applying their own interpretation of the Act. That interpretation cannot insulate the growers from liability.
Even if the growers did act in good faith, however, the Court is convinced that liquidated damages are appropriate in the instant case.6 The Act's liquidated damages provision was intended to be compensatory and should be construed in light of the humanitarian purpose of this legislation. See Donovan v. I and J, Inc., 567 F.Supp. 93, 98 (D.N.M.1983); 20 C.F.R. § 790.2 (1985).7
In this case, liquidated...
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