2nd Circuit Clarifies Liquidated Damages are Not "Cumulative" in Wage-Hour Cases

New York City is home to people from all over the world. Unfortunately, some of these people are here under less-than-ideal employment circumstances. Many foreign nationals are lured to the U.S. with the false promise of well-paying jobs, only to be forced to work in conditions akin to slavery. In response, Congress has passed tough anti-human trafficking laws. Victims may also be entitled to seek damages under more conventional overtime and wage hour laws such as the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL).

Court Upholds Default Civil Judgment Against Bangladeshi Diplomat for Human Trafficking

The New York-based U.S. Second Circuit Court of Appeals recently addressed a human trafficking case to clarify the issue of how to properly award damages to victims. The plaintiff in this lawsuit is a native of Bangladesh. He was brought to the U.S. by the defendants, a Bangladeshi diplomat and his wife, to serve as a domestic worker. The plaintiff said he was promised a monthly salary of $3,000, but in fact he was not paid despite being forced to work over 115 hours per week. In addition, the plaintiff said the diplomat resorted to physical violence and threats to maintain control over him.

By the time the plaintiff filed his lawsuit, alleging violations of the FLSA, NYLL, and numerous other U.S. labor laws, the defendants had left the United States for another diplomatic posting. In the words of the trial judge, the defendants refused “to participate in their own defense,” leading to the withdrawal of their own attorneys from the case and, eventually, an entry of default judgment in the amount of $922,597.31.

The defendants did manage to file an appeal. The Second Circuit said it lacked jurisdiction to reconsider the default judgment. But it did reverse part of the damages award.

The district court awarded the plaintiff $66,062 in liquidated damages under the FLSA, and another $144,677.64 under the NYLL. As the Second Circuit explained, trial judges in this circuit have been inconsistent when it comes to deciding whether a plaintiff is entitled to “cumulative liquidated damages awards” under both laws. The Second Circuit took this opportunity to clarify they are not.

In plain English, a plaintiff can only collect liquidated damages under either the FLSA or the NYLL “for the same course of conduct.” Since the defendants here never bothered to argue which set of damages should apply in this case, the Second Circuit decided the plaintiff should receive the larger award under the NYLL, i.e. the $144,677.64. The appeals court further clarified that it was not establishing a fixed rule with regard to whether a plaintiff “should always receive the larger” award.

Speak With a New York Overtime and Wage Lawyer Today

The Second Circuit's decision does not significantly alter a worker's rights under either federal or state law. Instead, it simply establishes that a worker cannot “double dip” when it comes to a liquidated damages award. If you have been the victim of wage and hour violations in your own workplace and need advice from a qualified New York employment attorney on how to respond, contact the Law Offices of White, Nisar & Hilferty, LLP, today.


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