State Statutory Penalty Plus FLSA Liquidated Damages Does Not Constitute Double Recovery: Tenth Circuit

Practical Law Legal Update w-001-0737 (Approx. 4 pages)

State Statutory Penalty Plus FLSA Liquidated Damages Does Not Constitute Double Recovery: Tenth Circuit

by Practical Law Labor & Employment

Published on 15 Dec 2015 • USA (National/Federal)

In Evans v. Loveland Automotive Investments, Inc., the US Court of Appeals for the Tenth Circuit held that recovering both compensatory liquidated damages under the Fair Labor Standards Act (FLSA) and a statutory penalty under a state law does not constitute double recovery.

On December 10, 2015, in Evans v. Loveland Automotive Investments, Inc., the US Court of Appeals for the Tenth Circuit held that recovering liquidated damages under the FLSA and a penalty under the Colorado Wage Claim Act (CWCA) did not constitute double recovery because the FLSA provision was compensatory and the CWCA provision was punitive ( (10th Cir. Dec. 10, 2015)).

Evans, who worked for Loveland as a truck driver, sued the company under the FLSA and CWCA, claiming that the employer did not pay him timely wages. After Loveland failed to file an appropriate response to the complaint, the district court entered a final default judgment in favor of Evans. The district court stated that the claims gave rise to overlapping damages and that Evans should receive liquidated damages only under the statute that provided greater relief. The court did not explain why it believed that the CWCA provided greater relief, but awarded Evans a penalty under that law. The court also awarded Evans pre-judgment interest on his compensatory damages. Evans appealed the denial of the FLSA damages.

The Tenth Circuit held that:

It was permissible to award both FLSA liquidated damages and a CWCA penalty.
On remand, the district court was to recalculate the damages in light of its determination.

The Tenth Circuit noted that:

The FLSA authorizes liquidated damages to be paid equal to the wages owed to the employee, unless the employer shows that it acted in good faith and had reasonable grounds to believe that its actions did not violate the FLSA (Doty v. Elias, 733 F.2d 720, 725-26 (10th Cir. 1984)).
Liquidated damages under the FLSA are not punitive, but are to compensate the employee for the delay in receiving wages caused by the employer's violation (Jordan v. U.S. Postal Service, 379 F.3d 1196, 1202 (10th Cir. 2004)).
Other jurisdictions have held that awarding both FLSA liquidated damages and a state statutory penalty does not constitute a double recovery (Mathis v. Housing Authority, 242 F. Supp. 2d 777, 790 (D. Or. 2002); Morales v. Cancun Charlie's Restaurant, , at *9 (D. Conn. Nov. 23, 2010) (unpublished); Do Yea Kim v. 167 Nail Plaza, , at *3 (S.D.N.Y. July 7, 2008) (unpublished)).
A party may not recover both liquidated damages and prejudgment interest, since both serve the same purpose of compensating the party for being deprived of his wages from the time of the loss to the payment of the judgment (Greene v. Safeway Stores, Inc., 210 F.3d 1237, 1247 (10th Cir. 2000); Doty, 733 F.2d at 726)).

The Tenth Circuit found that:

The issue of whether awarding both FLSA liquidated damages and a state statutory penalty constituted a double recovery was a matter of first impression.
The FLSA allows for additional compensatory damages as liquidated damages, while the CWCA:
- imposes a penalty on an employer who receives an employee's written demand for payment and fails to make the payment within 14 days; and
- increases the penalty against an employer that willfully failed to pay.
Other circuits awarded liquidated damages under both a state and federal law.
If, on remand, the district court awarded FLSA liquidated damages, it must vacate its award of prejudgment interest.

State Statutory Penalty Plus FLSA Liquidated Damages Does Not Constitute Double Recovery: Tenth Circuit | Practical Law