The panel affirmed the district court’s summary judgment entered in favor of the Secretary of Labor in an action challenging four companies’ failure to pay overtime to employees who worked more than 40 hours in a workweek in violation of the Fair Labor Standards Act (“FLSA”).
Employer Solutions Staffing Companies (“ESSG”) contracts with other companies to recruit employees and place them at jobsites for which ESSG handled administrative tasks. ESSG conceded that it qualified as an “employer” of the recruited employees under FLSA. ESSG contracted with Sync Staffing, which placed the recruited employees at a jobsite run by TBG Logistics. One of ESSG’s employees, Michaela Haluptzok, was responsible for processing the TBG Logistics payroll. A Sync employee told Haluptzok to pay overtime hours as “regular” hours, which was a FLSA violation.
Consistent with the law of agency, the panel imputed Haluptzok’s actions to ESSG. The panel held that because Haluptzok admitted that she knew the recruited employees were not being paid overtime owed to them, the district court correctly found no dispute of material fact as to ESSG’sultimate liability under the FLSA.
Ordinarily, a two-year statute of limitations applies to claims under FLSA, but for a “willful violation,” the limitations period extends to three years. The panel held that through its agent, Haluptzok, ESSG recklessly disregarded the possibility that it was violating FLSA. Accordingly, the three-year statute of limitations applied to the Secretary’s claim, making the action timely.
FLSA mandates liquidated damages in an amount equal to the unpaid overtime compensation claims unless the employer acted in “good faith” and had “reasonable grounds” to believe it was not violating FLSA. The panel held that because ESSG’s violations were willful, it could not have
acted in good faith. Accordingly, the panel affirmed the award of liquidated damages.
The panel held that there was no indication that Congress intended to create a right to contribution or indemnification for liable employers from another employer under FLSA. The panel further held that no right to contribution or indemnification arose under federal common law.
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