No double damages in wage-and-hour case

The plaintiffs in this class action won their trial alleging they were denied minimum and overtime wages. They won under state and federal law. The district court said the plaintiffs are not able to recover liquidated damages under both statutes. The Court of Appeals affirms.

The case is Tapia v. BLCH 3rd Avenue, decided on October 1. The trial court awarded liquidated, or double, damages under the state law claim. But federal law also provides for these double damages. Why can't plaintiffs get liquidated damages under state and federal law? Because, the Second Circuit says, the Fair Labor Standards Act does not allow for duplicative liquidated damages. The Court of Appeals said that in Rama v. Islam, 887 F.3d 118 (2d Cir. 2018). The Court reaffirms Rama in this brief opinion.

Plaintiffs also appeal because they want damages against an individual, Sharma. The trial court said Sharma was not personally liable because plaintiffs could not satisfy the relevant factors guiding that inquiry, including whether Sharma had control over the plaintiffs' employment. The multi-factor test is inherently factual, and since the Court of Appeals will not second-guess the district court's factual findings if they have some basis in the record, the ruling in Sharma's favor stands.

Judge Calabresi concurs. He writes that he is "happy" to do so on these issues, but he adds that the Court has never held that the FLSA bars a state from awarding double or even treble damages for labor law damages in cases like this. Instead, "our holding [in Rama] is limited to reading the FLSA to vacate the federal damage award, given the existence of state labor law damages." What bothers Judge Calabresi is that Rama could be read to mean that the FSLA damages should be vacated because state law does not allow double recovery. He worries that other federal courts "will read Rama as making a holding as to what is required by New York state labor law," which would "create all sorts of problems." He thinks the State Court of Appeals should take on this issue through Second Circuit certification. But while that may happen, it will not happen in this case.