McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988)

McLaughlin v. Richland Shoe Co.

No. 86-1520

Argued February 24, 1988
Decided May 16, 1988
486 U.S. 128

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

Syllabus

The Fair Labor Standards Act (FLSA) requires that a civil enforcement action 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. In the Secretary of Labor’s enforcement action based on respondent’s alleged failure to pay overtime compensation required by the FLSA, the District Court rejected respondent’s claim that the 2-year statute of limitations applied, finding the 3-year exception applicable under the standard of Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, whereby an action is "willful" if there is substantial evidence that the employer "knew or suspected that his actions might violate the FLSA," i.e., if he merely knew that the FLSA was "in the picture." Vacating the judgment against respondent and remanding, the Court of Appeals rejected the Jiffy June standard in favor of the test employed in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111.

Held: The standard of willfulness adopted in Thurston -- that the employer either knew or showed reckless disregard as to whether its conduct was prohibited by the FLSA -- must be satisfied in order for the 3-year statute of limitations to apply. This standard represents a fair reading of the Act’s plain language, since it comports with the general understanding that the word "willful" refers to conduct that is "voluntary," "deliberate," or "intentional," and not merely negligent. In contrast, the statute’s plain language does not support the Jiffy June standard, which effectively limits the normal 2-year statute of limitations to employers who are unaware of the FLSA and its potential applicability, and thereby virtually obliterates the distinction between willful and nonwillful violations which Congress obviously intended to draw. Also rejected is the alternative, two-step standard espoused by the Secretary, whereby an FLSA violation would be deemed "willful"

if the employer, recognizing it might be covered by the FLSA, acted without a reasonable basis for believing that it was complying with the statute.

This standard would permit a finding of willfulness to be based on nothing more than negligence, or, perhaps, on a completely good faith but incorrect assumption that a pay plan complied with the FLSA in all respects, and thereby fails to give effect to the plain statutory language. Pp. 131-135.

799 F.2d 80, affirmed.

STEVENS J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, O’CONNOR, SCALIA, and KENNEDY, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which BRENNAN and BLACKMUN, JJ., joined, post, p. 135.