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,
Page 486 U. S. 129
and thereby fails to give effect to the plain statutory
language. Pp.
486 U. S.
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.
486 U. S.
135.
JUSTICE STEVENS delivered the opinion of the Court.
The question presented concerns the meaning of the word
"willful" as used in the statute of limitations applicable to civil
actions to enforce the Fair Labor Standards Act (FLSA). The statute
provides that such actions must be commenced within two years
"except that a cause of action arising out of a willful violation
may be commenced within three years after the cause of action
accrued." 61 Stat. 88, 29 U.S.C. § 255(a).
I
Respondent, a manufacturer of shoes and boots, employed seven
mechanics to maintain and repair its equipment. In 1984, the
Secretary of Labor (Secretary) filed a complaint alleging that, "in
many work weeks," respondent had failed to pay those employees the
overtime compensation required by the FLSA. As an affirmative
defense, respondent pleaded the 2-year statute of limitations. The
District Court found, however, that the 3-year exception applied
because respondent's violations were willful, and entered judgment
requiring
Page 486 U. S. 130
respondent to pay a total of $11,084.26, plus interest, to the
seven employees.
Donovan v. Richland Shoe
Co., 623 F.
Supp. 667 (ED Pa.1985).
In resolving the question of willfulness, the District Court
followed Fifth Circuit decisions that had developed the so-called
Jiffy June standard. The District Court explained:
"The Fifth Circuit has held that an action is willful when"
"there is substantial evidence in the record to support a
finding that the employer knew or suspected that his actions might
violate the FLSA. Stated most simply, we think the test should be:
Did the employer know the FLSA was in the picture?"
"
Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139, 1142
(5th Cir.)[,
cert. denied, 409 U.S. 948 (1972)]."
"This standard requires nothing more than that the employer has
an awareness of the possible application of the FLSA.
Id.;
Castillo v. Givens, 704 F.2d 181, 193 (5th Cir.)[,
cert.
denied, 464 U.S. 850 (1983)]."
"An employer acts willfully and subjects himself to the
three-year liability if he knows, or has reason to know, that his
conduct is
governed by the FLSA."
"
Brennan v. Heard, 491 F.2d 1, 3 (5th Cir.1974)
(emphasis in original).
See also Donovan v. Sabine Irrigation
Co., Inc., 695 F.2d 190, 196 (5th Cir.)[,
cert.
denied, 463 U.S. 1207 (1983)]."
623 F. Supp. at 670-671.
On appeal, respondent persuaded the Court of Appeals for the
Third Circuit "that the
Jiffy June standard is wrong
because it is contrary to the plain meaning of the FLSA."
Brock
v. Richland Shoe Co., 799 F.2d 80, 82 (1986). Adopting the
same test that we employed in
Trans World Airlines, Inc. v.
Thurston, 469 U. S. 111,
469 U. S.
125-130 (1985), the Court of Appeals held that
respondent had not committed a willful violation unless "it knew or
showed reckless disregard for the matter of whether its
conduct was prohibited by the FLSA." 799 F.2d at 83 (emphasis in
original). Accordingly, it vacated
Page 486 U. S. 131
the District Court's judgment and remanded the case for
reconsideration under the proper standard.
The Secretary filed a petition for certiorari asking us to
resolve the post-
Thurston conflict among the Circuits
concerning the meaning of the word "willful" in this statute.
[
Footnote 1] The petition noted
that the statute applies not only to actions to enforce the
overtime and recordkeeping provisions of the FLSA, but also to the
Equal Pay Act, [
Footnote 2] the
Davis-Bacon Act, [
Footnote 3]
the Walsh-Healey Act, [
Footnote
4] and the Age Discrimination in Employment Act (ADEA).
[
Footnote 5] Somewhat
surprisingly, the petition did not endorse the
Jiffy June
standard that the Secretary had relied on in the District Court and
the Court of Appeals, but instead invited us to adopt an
intermediate standard. We granted certiorari, 484 U.S. 813 (1987),
and now affirm.
II
Because no limitations period was provided in the original 1938
enactment of the FLSA, civil actions brought thereunder were
governed by state statutes of limitations. In the Portal-to-Portal
Act of 1947, 61 Stat. 84, 29 U.S.C. §§ 216, 251-262, however, as
part of its response to this Court's expansive
Page 486 U. S. 132
reading of the FLSA, [
Footnote
6] Congress enacted the 2-year statute to place a limit on
employers' exposure to unanticipated contingent liabilities.
[
Footnote 7] As originally
enacted, the 2-year limitations period drew no distinction between
willful and nonwillful violations.
In 1965, the Secretary proposed a number of amendments to expand
the coverage of the FLSA, including a proposal to replace the
2-year statute of limitations with a 3-year statute. The proposal
was not adopted, but in 1966, for reasons that are not explained in
the legislative history, Congress enacted the 3-year exception for
willful violations. [
Footnote
8]
The fact that Congress did not simply extend the limitations
period to three years, but instead adopted a two-tiered statute of
limitations, makes it obvious that Congress intended to draw a
significant distinction between ordinary violations and willful
violations. It is equally obvious to us that the
Jiffy
June standard of willfulness -- a standard that merely
requires that an employer knew that the FLSA "was in the picture"
-- virtually obliterates any distinction between
Page 486 U. S. 133
willful and nonwillful violations. As we said in
Trans World
Airlines, Inc. v. Thurston, supra, at
469 U. S. 128,
"it would be virtually impossible for an employer to show that he
was unaware of the Act and its potential applicability." Under the
Jiffy June standard, the normal 2-year statute of
limitations would seem to apply only to ignorant employers, surely
not a state of affairs intended by Congress. [
Footnote 9]
In common usage the word "willful" is considered synonymous with
such words as "voluntary," "deliberate," and "intentional."
See Roget's International Thesaurus § 622.7, p. 479; §
653.9, p. 501 (4th ed.1977). The word "willful" is widely used in
the law, and, although it has not by any means been given a
perfectly consistent interpretation, it is generally understood to
refer to conduct that is not merely negligent. The standard of
willfulness that was adopted in
Thurston -- that the
employer either knew or showed reckless disregard for the matter of
whether its conduct was prohibited by the statute -- is surely a
fair reading of the plain language of the Act.
The strongest argument supporting the
Jiffy June
standard is that it was widely used for a number of years.
[
Footnote 10] The
Page 486 U. S. 134
standard was not, however, consistently followed in all
Circuits. [
Footnote 11] In
view of the fact that even the Secretary now shares our opinion
that it is not supported by the plain language of the statute, we
readily reject it. [
Footnote
12]
We also reject the intermediate alternative espoused by the
Secretary for the first time in this Court. Relying on the opinion
of the Court of Appeals for the District of Columbia Circuit in
Laffey v. Northwest Airlines, Inc., 185 U.S.App.D.C. 322,
352-354, 567 F.2d 429, 461-462 (1976),
cert. denied,
434 U. S.
1086 (1978), she argues that we should announce a
two-step standard that would deem an FLSA violation 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."
Brief for Petitioner 41. This proposal differs from
Jiffy
June because it would apparently make the issue in most cases
turn on whether the employer sought legal advice concerning its pay
practices.
Page 486 U. S. 135
It would, however, 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. We believe the Secretary's new proposal, like
the discredited
Jiffy June standard, fails to give effect
to the plain language of the statute of limitations. [
Footnote 13]
Ordinary violations of the FLSA are subject to the general
2-year statute of limitations. To obtain the benefit of the 3-year
exception, the Secretary must prove that the employer's conduct was
willful as that term is defined in both
Thurston and this
opinion. [
Footnote 14]
The judgment of the Court of Appeals is
Affirmed.
[
Footnote 1]
Compare Russo v. Trifari, Krussman & Fishel, Inc.,
837 F.2d 40, 45 (CA2 1988) (applying
Thurston standard);
Peters v. Shreveport, 818 F.2d 1148, 1167-1168 (CA5 1987)
(overruling
Jiffy June, applying
Thurston),
cert. dism'd, 485 U.S. 930 (1988); and
Walton v.
United Consumers Club, Inc., 786 F.2d 303, 308-311 (CA7 1986)
(applying
Thurston),
with Brock v. Shirk, 833
F.2d 1326, 1329 (CA9 1987) (adhering to
Jiffy June);
Crenshaw v. Quarles Drilling Corp., 798 F.2d 1345,
1349-1350 (CA10 1986) (adhering to
Jiffy June);
Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113, 1117 (CA4
1985) (adhering to
Jiffy June);
Secretary of Labor v.
Daylight Dairy Products, Inc., 779 F.2d 784, 789 (CA1 1985)
(adhering to
Jiffy June); and
Brock v. Georgia
Southwestern College, 765 F.2d 1026, 1038-1039 (CA11 1985)
(adhering to
Jiffy June; no mention of
Thurston).
[
Footnote 2]
See 52 Stat. 1062,
as amended, 29 U.S.C. §
206(d)(3)
[
Footnote 3]
46 Stat. 1494,
as amended, 40 U.S.C. § 276(a)
et
seq.
[
Footnote 4]
49 Stat. 2036,
as amended, 41 U.S.C. § 35
et
seq. (1982 ed. and Supp. IV).
[
Footnote 5]
See 81 Stat. 604,
as amended, 29 U.S.C. §
626(e)(1).
[
Footnote 6]
See Lorillard v. Pons, 434 U.
S. 575,
434 U. S. 581,
n. 8 (1978).
[
Footnote 7]
The Portal-to-Portal Act also made the award of liquidated
damages discretionary, rather than mandatory, and authorized
exemptions for certain types of wage plans. In this case,
respondent contended that one of those exemptions -- the exemption
for "Belo" plans,
see 29 U.S.C. § 207(f) -- was
applicable.
[
Footnote 8]
Petitioner directs us to a memorandum placed in the
Congressional Record by Senator Taft during a 1974 debate over
amendments to the FLSA that did not alter the language at issue
here.
See Brief for Petitioner 32. The memorandum
described the
Jiffy June standard as the then-prevailing
interpretation of § 255(a).
See 120 Cong.Rec. 4710 (1974).
Petitioner concludes that,
"[n]otwithstanding that explicit focus on the judicial
construction of willfulness, Congress amended Section 255 without
addressing the 'willful violation' standard of Section 255(a)."
Brief for Petitioner 33. This passing reference to the
then-prevailing standard is too slender a reed, we think, to
support the inference petitioner would have us draw, namely, that
Congress approved the
Jiffy June standard in enacting the
1974 amendments by mentioning it as the current interpretation and
failing to amend that reading.
[
Footnote 9]
The ease with which the
Jiffy June standard can be met
is exemplified in this case. As the District Court wrote:
"[T]he vice president and general manager of the defendant was
aware that the FLSA existed and that it governed overtime systems
such as that used for the Richland mechanics. . . . Thus, although
Isenberg did not state that he thought that the system used was
contrary to the provisions of the FLSA, he did state that he knew
that the FLSA applied. I believe that this admission is sufficient
to satisfy the liberal willfulness requirement of the FLSA."
Donovan v. Richland Shoe Co., 623 F.
Supp. 667, 671 (ED Pa.1985).
[
Footnote 10]
See, e.g., Coleman v. Jiffy June Farms, Inc., 458 F.2d
1139, 1142 (CA5 1971),
cert. denied, 409 U.S. 948 (1972);
Brennan v. Heard, 491 F.2d 1, 3 (CA5 1974);
Marshall
v. Union Pacific Motor Freight Co., 650 F.2d 1085, 1091-1093
(CA9 1981);
Marshall v. Erin Food Services, Inc., 672 F.2d
229, 231 (CA1 1982);
Donovan v. Carls Drug Co., Inc., 703
F.2d 650, 652-653 (CA2 1983);
EEOC v. Central Kansas Medical
Center, 705 F.2d 1270, 1274-1275 (CA10 1983).
[
Footnote 11]
See, e.g., Hodgson v. Cactus Craft of Arizona, 481 F.2d
464, 467 (CA9 1973) (willful violation after two prior warnings and
unkept promises of compliance);
Laffey v. Northwest Airlines,
Inc., 185 U.S.App.D.C. 322, 352-355, 567 F.2d 429, 459-462
(1976) (intermediate standard;
see text following this
footnote),
cert. denied, 434 U. S.
1086 (1978);
Donovan v. KFC National Management
Co., 682 F.2d 603, 605 (CA6 1982) (voluntary conduct that
employer knows might violate Act is willful).
[
Footnote 12]
The Secretary's present opinion of the
Jiffy June
standard is expressed in her brief:
"As this Court found in
Thurston (469 U.S. at
469 U. S. 128), the 'in the
picture' standard seems to give too little effect to Congress's
express intent to create two tiers of liability in the FLSA
limitations provision. Among employers eventually found to have
violated the FLSA, it would seem that there are not many who did
not know that the Act was 'in the picture.' It may be 'virtually
impossible for an employer to show that he was unaware of the Act
and its potential applicability' (
ibid.). In addition, the
Jiffy June standard would"
"impose a third year of liability even on those employers who
firmly and reasonably (albeit wrongly) believe that their pay
practices are lawful, a result that seems counter to the concerns
expressed in the legislative process during the 89th Congress."
Brief for Petitioner 39-40 (footnote omitted).
[
Footnote 13]
We recognize that there is some language in
Trans World
Airlines v. Thurston, 469 U. S. 111
(1985), not necessary to our holding, that would seem to permit a
finding of unreasonableness to suffice as proof of knowing or
reckless disregard, and thus that would render petitioner's
standard an appropriate statement of the law.
See id. at
469 U. S. 126.
Our decision today should clarify this point: If an employer acts
reasonably in determining its legal obligation, its action cannot
be deemed willful under either petitioner's test or under the
standard we set forth. If an employer acts unreasonably, but not
recklessly, in determining its legal obligation, then, although its
action would be considered willful under petitioner's test, it
should not be so considered under
Thurston or the
identical standard we approve today.
[
Footnote 14]
Of course, we express no view as to whether, under the proper
standard, respondent's violation was "willful." That determination
is for the District Court to make on remand from the Court of
Appeals.
JUSTICE MARSHALL, with whom JUSTICE BRENNAN and JUSTICE BLACKMUN
join, dissenting.
The Court today imports into a limitations provision of the Fair
Labor Standards Act (FLSA) the "knowing or reckless" definition of
"willful" that we previously adopted in construing a liquidated
damages provision of the Age Discrimination in Employment Act of
1967 (ADEA), 81 Stat. 602,
as amended, 29 U.S.C. § 621
et seq. See Trans World
Page 486 U. S. 136
Airlines, Inc. v. Thurston, 469 U.
S. 111 (1985). In doing so, the Court departs from our
traditional contextual approach to the definition of the term
"willful," ignores significant differences between the relevant
provisions of the two Acts, and fails to accommodate the remedial
purpose of civil actions under the FLSA. For these reasons, I would
accept the slightly more expansive definition of "willful" urged by
the Secretary of Labor and adopted by the District of Columbia
Circuit in
Laffey v. Northwest Airlines, Inc., 185
U.S.App.D.C. 322, 354-355, 567 F.2d 429, 461-462 (1976),
cert.
denied, 434 U. S.
1086 (1978). Under this latter standard, a violation of
the FLSA is "willful" and therefore subjects an employer to a
3-year rather than a 2-year statute of limitations if the employer
knew that there was an appreciable possibility that it was covered
by the Act and failed to take steps reasonably calculated to
resolve the doubt.
I have no quarrel with the opinion of the Court to the extent
that it rejects the "in the picture" standard of willfulness
elaborated in
Coleman v. Jiffy June Farms, Inc., 458 F.2d
1139, 1142 (CA5 1971),
cert. denied, 409 U.S. 948 (1972).
As the Court succinctly explains, by permitting a finding of
willful violation every time an employer knew that the FLSA was "in
the picture," the
Jiffy June standard "virtually
obliterates any distinction between willful and nonwillful
violations."
Ante at
486 U. S.
132-133. But the Court's focus on the shortcomings of
the
Jiffy June standard is disingenuous, because neither
party in the instant case urged the adoption of that standard
before this Court. Rather, the dispute in this case pits the
Thurston "knowing or reckless" standard, adopted by the
Third Circuit in this case and urged by respondent Richland Shoe,
against the
Laffey standard, adopted by the D.C. Circuit
in an earlier case and urged by petitioner Secretary of Labor. The
Court does not address this dispute until the penultimate page of
its opinion, and its reasons for embracing the former standard over
the latter are not convincing.
Page 486 U. S. 137
The Court seems to rely in part on "common usage" of the word
"willful" in adopting the "knowing or reckless" standard.
Ante at
486 U. S. 133,
citing Roget's International Thesaurus § 622.7, p. 479; § 653.9, p.
501 (4th ed.1977). The Court fails to acknowledge, however, that
the dictionary includes a wide variety of definitions of "willful,"
ranging from "malicious" to "not accidental," and including
precisely the intermediate definition urged by the Secretary --
under which an act is willful if it is "done without ground for
believing it is lawful." Black's Law Dictionary 1434 (5th ed.1979);
see United States v. Murdock, 290 U.
S. 389,
290 U. S. 394
(1933) (acknowledging all three possible meanings of "willful"). By
refusing to recognize the various meanings that the term "willful"
has come to bear in different legal settings, the Court today
departs from our previous contextual approach to defining that
term. In
Spies v. United States, 317 U.
S. 492,
317 U. S. 497
(1943), this Court explained that "willful" is a word "of many
meanings, its construction often being influenced by its context."
Since
Spies, we consistently have looked to the statutory
context in which the word appears in order to determine its proper
meaning.
See, e.g., Screws v. United States, 325 U. S.
91,
325 U. S.
101-103 (1945);
United States v. Bishop,
412 U. S. 346,
412 U. S.
356-361 (1973). The Court's apparent abandonment of this
approach in favor of a nonexistent "plain language" definition of
"willful,"
ante at
486 U. S. 133,
is unprecedented and unwise.
Had the Court properly applied the traditional contextual
approach, I believe it would have adopted the willfulness standard
urged by the Secretary. Such an approach would have revealed that
the definition of "willful" adopted previously in the context of
the ADEA in
Trans World Airlines, Inc. v. Thurston, supra,
does not transplant easily to the context of the FLSA. In
Thurston, this Court explicitly acknowledged that its
choice of the "knowing or reckless" definition of "willful" was
influenced by the "punitive" nature of the double damages that flow
from a finding
Page 486 U. S. 138
of willfulness under the ADEA.
Id. at 125. In the
instant case, a finding of willfulness leads not to a punitive
sanction, but merely to an extended period during which an
unlawfully underpaid employee may recover compensatory damages.
What is at stake here is the applicability of the remedial
provisions of the FLSA in the first instance. Perhaps recognizing
this crucial distinction, the Court in
Thurston expressly
left open the possibility that the "knowing or reckless" definition
of "willful" adopted for the ADEA might not be appropriate for the
FLSA statute of limitations.
See id. at 127-128, and n.
21. The answer that the Court provides today may have an attractive
tidiness, but it fails to recognize the contextual differences that
call for different standards of willfulness in varying provisions
of the two Acts. * As a result, the Court has adopted a definition
of "willful" that is improperly narrow in light of its effect on
the remedial scope of the FLSA.
Just how narrow that definition is remains to be seen. It is not
entirely clear that the "knowing or reckless" definition of
willfulness adopted by the Court will differ significantly in
practical application from the approach that I would adopt.
Employers who know that there is an appreciable possibility that
the FLSA covers their operations but fail to take reasonable
measures to resolve their doubts may well be deemed "reckless" in
many cases under the
Thurston standard. Although it is
difficult to foretell, it appears to me unlikely that a large
number of FLSA defendants will fall into the narrow category of
employers who "unreasonably" but not "recklessly" fail to apprise
themselves of the requirements of the
Page 486 U. S. 139
Act.
See ante at
486 U. S. 135,
n. 13. Despite the potentially small significance of our different
interpretations, however, I cannot agree with the Court's approach
to or resolution of the willfulness issue in this case. I therefore
respectfully dissent.
* The Court bases its adoption of the
Thurston standard
of willfulness on the fear that the Secretary's alternative
standard, like the
Jiffy June standard, would undermine
Congress' two-tiered liability scheme by permitting a finding of
willfulness on a showing of "nothing more than negligence."
Ante at
486 U. S. 135.
This fear is ungrounded. In order for a violation to be "willful"
under the Secretary's standard, an employer must operate in the
face of a known risk that the FLSA covers its operation, without
taking reasonable steps to ensure its compliance. This state of
mind is sufficiently different from mere negligence to maintain the
two-tiered structure of the FLSA.