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SOLER v. G & U

February 13, 1986

FRANCISCO SOLER, et al., Plaintiffs, against G & U, INC., CHARLES GRATZ, d/b/a CHARLES GRATZ FARM, Defendants; JANN S. FLING, et al., Plaintiffs, -against- PEAT-GRO FARMS, INC., Defendant; PABLO LIVAS, et al., Plaintiffs, -against- BIERSTINE FARMS, INC., Defendant; GILBERTO GONZALEZ, et al., Plaintiffs, -against- CEDAR VALLEY GROWERS, INC., Defendant; FREDDY VALENTIN, et al., Plaintiffs, -against- RAYMUND MYRUSKI, Defendant; CECELIO ENCARNACION, et al., Plaintiffs, -against- W.K.W. FARMS, INC., Defendant


The opinion of the court was delivered by: TENNEY

TENNEY, J.

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.

 DISCUSSION

 I. Limitations Period

 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 (lst 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, 34 L. Ed. 2d 219, 93 S. Ct. 292 (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 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. *fn1"

 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. *fn2" See Donovan v. Carls Drug Co., 703 F.2d at 652; Donovan v. Kaszycki, 599 F. Supp. at 870. See also Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113 (4th Cir. 1985) (rejecting a more stringent definition of willfulness). *fn3" Thus, the defendants are subject to the three year limitation period.

 II. Liquidated Damages

 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, 472 U.S. 1027, 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, 89 L. Ed. 1296, 65 S. Ct. 895 (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, 86 L. Ed. 1682, 62 S. Ct. 1216 (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 ...


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