7 FAPPX 543 - Ackler v. Cowlitz County

KLEINFELD, Circuit Judge.

¶1I concur in the portion of the memorandum disposition which affirms the computation of the overtime award at 50% of straight time pay. I also concur in the determination that the district court did not abuse its discretion regarding the reasonableness of the attorneys’ fees and properly applied Rule 68 of the Federal Rules of Civil Procedure regarding the effect of the settlement offer on the fee.

¶2Regarding liquidated damages, the good faith of the employer is adequately supported by the record, and the district judge’s determination that the employer acted in good faith cannot seriously be questioned.1 The employer’s “honest in*546tention” to comply with the law is shown by its immediate recalculation and issuance of checks as soon as it received a complaint and determined that the employees were entitled to the additional money.2 Appellants argue otherwise, but they neither claim nor demonstrate that the judge’s findings of fact were clearly erroneous, and we are bound by those findings of fact.

¶3Nevertheless, the statutory requirement that the employer “had reasonable grounds” for believing that it was in compliance with the FLSA is the hard part of the liquidated damages issue.3 It is the employer’s burden to prove not only good faith but also a reasonable basis,4 and the employer in this case has not demonstrated such a basis for believing that it was in compliance. True, the Teamsters Union did not object, but a collective bargaining agreement cannot waive the requirements of the Fair Labor Standards Act,5 and an employer negotiating with the Teamsters Union cannot entirely delegate its own responsibility to comply with the Fair Labor Standards Act to the Union’s negotiators. Therefore, I am compelled to concur in the majority’s determination regarding liquidated damages.

¶4I dissent from that portion of the memorandum disposition reversing the district court’s application of the two-year rather than the three-year statute of limitations. The majority concedes that the three-year statute can only be applied to “willful” violations.6 And the majority concedes that willfulness requires that the employer either knew or “showed reckless disregard for the matter of whether its conduct was prohibited by the statute.”7

¶5The district court found absence of willfulness. This case is not a dismissal or summary judgment. It is an appeal from findings of fact and conclusions of law and judgment thereon after the case went to trial. We are required to grant more deference than the majority disposition does to the district court’s factual determinations.8

¶6The majority misses the distinction between willfulness and mere negligence. Negligence allows for liquidation damages, but the statute requires willfulness, not mere negligence, for an extension of the statute of limitations to three years. The *547Supreme Court has made it clear that mere awareness of the FLSA is not sufficient to prove willfulness and that it is also not “willful” if an employer acts unreasonably, but not recklessly, in determining its legal obligation.9 Congress made a considered policy choice that the two-year statute applies in the absence of willfulness.10 We are not entitled to substitute a different policy choice.

¶7The district judge made an express finding of fact that the employer’s personnel director “simply tried to abide by the parties’ CBA and the schedule already in place,” and that his “conduct does not demonstrate willfulness to deprive the deputies of money rightfully owed them.”11 Moreover, the district judge also made an express finding that Mr. Anderson “could have reasonably believed that the County was not in violation of the FLSA” because the policy gave the deputies very long weekends, and no deputy had ever filed any grievance about any overtime issue.12 And the district judge found that as soon as the issue arose in the 1997 contract negotiations, Mr. Anderson promptly “sought legal advice, determined the county was in violation of FLSA,” immediately calculated how much was owed for overtime, and issued checks for it.13

¶8Given these factual findings, which were not shown to be clearly erroneous, the county’s behavior was the very opposite of willfulness.14 A willful violator is the sort of employer who tells his employees to work 50 hours a week, doesn’t care what the FLSA requires of him, and tells them that if they don’t like it, they can try to get a job somewhere else. Some employers do that, but this one most assuredly did not.

¶9. See Bratt v. County of Los Angeles, 912 F.2d 1066, 1072 (9th Cir.1990) (explaining that *546courts may deny liquidated damages if the employer proves that it acted in subjective good faith with objectively reasonable grounds for believing that the failure to pay was not a violation of the FLSA).

¶10. See id..; ER316.

¶11. 29 U.S.C. § 260.

¶12. See Local 246 Utility Workers Union v. Southern California Edison Co., 83 F.3d 292, 297-98 (9th Cir.1996).

¶13. See Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 740-41, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981); Local 246 Utility Workers Union v. Southern California Edison Co., 83 F.3d 292, 297 (9th Cir.1996) (stating that the FLSA's "minimum wage and overtime provisions are guarantees to individual workers that may not be waived through collective bargaining”).

¶14. 29 U.S.C. § 255(a); Maj. op. at 545.

¶15. McLaughlin v. Richmond Shoe, 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988); Maj. op. at 545.

¶16. See Fed.R.Civ.P. 52(c) ("Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.”); Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714, 106 S.Ct. 1527, 89 L.Ed.2d 739 (1986) (holding that courts of appeals should review the facts necessary to determine whether an exemption to the FLSA applies in a particular under the “clearly erroneous” standard).

¶17. See McLaughlin v. Richmond Shoe, 486 U.S. 128, 133, 135 n. 13, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988).

¶18. See 29 U.S.C. § 255(a).

¶19. ER 317.

¶20. Id.

¶21. Id.

¶22. See Black’s Law Dictionary 1539 (7th ed.1999) (defining "willful” as "voluntary and intentional but not necessarily malicious”).