3rd Circuit Tackles Definition of Willful Conduct Under FLSA

The U.S. 3rd Circuit Court of Appeals—which covers Delaware, New Jersey, and Pennsylvania—recently ruled that Lackawanna County’s failure to pay county employees overtime was not “willful” under the Fair Labor Standards Act (FLSA), even though an e-mail from the county acknowledged that it had “wage and hour issues.”FLSA

The court reasoned that for an employer’s withholding of overtime to be willful, the employee must present evidence that it was specifically aware of an FLSA overtime problem or showed reckless disregard for the matter. General awareness of an overtime problem, according to the court, wasn’t sufficient.


Several employees of Lackawanna County filed a lawsuit against the county for not paying overtime in violation of the FLSA. They had been working in two separate part-time capacities. While the county paid them for each of the individual jobs, it didn’t aggregate the hours in those jobs and failed to pay them the overtime rate for the hours they worked beyond the 40-hour pay period.

During the lawsuit, the county didn’t dispute that it had violated the overtime provisions of the FLSA from 2008 to 2012, but it disputed that the violation was “willful.” The question of willfulness is relevant because if an employer’s violation was willful, the FLSA’s statute of limitations is extended from 2 years to 3 years, which allows the employees to recover an extra year of lost pay.

The case proceeded to trial on the question of whether the county’s violation was willful and what the appropriate damages were. The county asked the court to enter judgment in its favor on the grounds that the evidence presented by the employees, even if true, didn’t establish a willful violation. The trial judge agreed and granted the request. The employees appealed.


The 3rd Circuit affirmed the trial court’s decision. The U.S. Supreme Court has previously ruled that an employer acts “willfully” when it knew at the time of the violation that its conduct was barred by the FLSA or “showed reckless disregard for the matter.” An employer that acts “unreasonably” in failing to pay overtime doesn’t rise to the level of willful.

The Lackawanna employees didn’t offer any evidence that the county knew its conduct was barred by the FLSA. However, they did present the following evidence to support their argument:

  • Documents demonstrating that the county had failed to pay overtime required by the FLSA for a period of years;
  • Testimony from the county’s chief financial officer and HR director that, during the relevant time period, they were generally aware of the county’s obligations under the FLSA; and
  • A March 28, 2011, e-mail from the HR director to two county officials titled “County wage and hour issues,” which stated that the employees working more than one job who hadn’t been paid overtime might file labor grievances.

The court ruled that evidence wasn’t sufficient to rise to the level of willfulness. It reasoned that although the HR director’s e-mail identified overtime problems, it didn’t “indicate an awareness of an FLSA overtime problem specifically.”

Moreover, the court ruled that even if the HR director’s e-mail predated some of the failures to pay overtime, there was no “egregiousness,” which other federal circuit courts have required in analyzing the question of willfulness. The court found it compelling that the county addressed the failure to pay overtime to the two-job employees within a year of the HR director’s e-mail.

Bottom Line

There are several important takeaways from this decision.

First, it’s a helpful reminder of the need to aggregate the hours of employees working multiple jobs for purposes of calculating and paying overtime under the FLSA. If the county had a policy in place that was compliant with the FLSA, it wouldn’t have found itself in the middle of this federal court lawsuit.

Second, the case shows that employees will try to use your words against you to demonstrate that the failure to pay overtime was willful under the FLSA. This could expose you to an additional year’s worth of damages.

Third, the HR director’s e-mail provides a lesson all on its own. When there are issues of potential legal violations—whether FLSA violations or violations of some other law—it’s always best to have those discussions with legal counsel so that they are protected by the attorney-client privilege and don’t later serve as the basis of a case against the employer.

Gregory J. Wartman, and editor of Pennsylvania Employment Law Letter, can be reached at gwartman@saul.com or 215-972-7548.