By Olivia Z. Weisman and Reed L. Russell
The statute of limitations for a lawsuit under the Fair Labor Standards Act (“FLSA”) is two years, unless the plaintiff proves that the employer’s conduct was willful, in which case the limitations period is three years. See 29 U.S.C. § 255(a). Conduct is willful if the employer knew its conduct violated the FLSA or showed reckless disregard for compliance with the FLSA. See McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988).
In Ojeda-Sanchez v. Bland Farms, LLC, No. 11-13835 (11th Cir. Nov. 29, 2012), the Eleventh Circuit Court of Appeals affirmed a district court’s ruling that Bland Farms, LLC (“Bland Farms”), a company that had been sued six times over the past sixteen years by farmworkers for violations of the FLSA, did not act willfully with respect to the instant FLSA lawsuit. As a result, the two-year rather than three-year FLSA statute of limitations applied.
The appellant farmworkers planted and harvested onions for Bland Farms during the 2004-2008 seasons. They claimed that Bland Farms’s supervisors did not accurately record the farmworkers’ work hours and, as a result, they were significantly underpaid. They also claimed that Bland Farms’s inaccurate recordkeeping was willful and undertaken in bad faith.
During an eight-day bench trial, the farmworkers initially attempted to prove that Bland Farms engaged in an intentional scheme to forge pay records in order to underpay the farmworkers. Once the evidence did not bear out this theory, the farmworkers abandoned this claim. Bland Farms’s field supervisors, however, did admit to numerous shortcuts, omissions, and estimates in their time-keeping records. As such, the district court concluded that the farmworkers’ were underpaid, but by an amount substantially less than originally claimed by the farmworkers.
The farmworkers then sought to establish that Bland Farms’s violation of the FLSA was willful. Having abandoned their forgery theory, the farmworkers argued that willfulness was proven by the fact that Bland Farms had been sued six previous times over the past sixteen years by seasonal workers. The district court disagreed, noting that although Bland Farms had previously been sued under the FLSA, there had never been a single finding that Bland Farms violated the FLSA. Rather, each of the prior lawsuits was settled prior to trial. Additionally, Bland Farm’s accounting practices demonstrated that Bland Farms was on notice of its FLSA obligations and that it sought to ensure they were met. As such, the district court concluded, and the Eleventh Circuit affirmed, that the farmworkers did not establish willfulness.
Employers involved in FLSA suits will often encounter requests for discovery on prior FLSA lawsuits and Department of Labor investigations. The plaintiffs’ goal in issuing such requests is often to use this information to support a claim of willfulness (and to prevent an employer from demonstrating the good faith defense to reduce liquidated damages). The Bland Farms case shows that where those prior lawsuits do not result in judgments, being repeatedly sued for FLSA violations, and even settling the cases, does not suffice on its own to demonstrate willfulness. This development is important given the continued proliferation of FLSA lawsuits, particularly in the Eleventh Circuit and Florida. The number of FLSA lawsuits filed in federal district courts in 2012 was a record high of more than 7,400. Nearly half of the lawsuits were filed within the Eleventh Circuit alone, with the majority of those lawsuits filed in Florida. Thus, while employers may be increasingly subjected to FLSA lawsuits, the Bland Farms case provides some relief that the filing of these lawsuits alone, and even when they are settled, does not expose the employer to a willfulness finding and a longer statute of limitations.