Barfield v. New York City Health & Hospitals Corp.
537 F.3d 132 (2d Cir. 2008)
United States Court of Appeals, Second Circuit · August 8, 2008
What the court decided
An employer escapes liquidated damages only by showing that it acted in subjective good faith AND had objectively reasonable grounds for believing it was not violating the law. Good faith is conduct, not a state of mind: the employer must show it "took active steps to ascertain the dictates of the FLSA and then act to comply with them." The court called the burden "a difficult one," with "double damages [as] the norm and single damages the exception."
Who won
The worker won. A certified nursing assistant referred to Bellevue Hospital by staffing agencies was held, as a matter of law, to be jointly employed by the hospital, and the liquidated damages award was upheld because the hospital could not establish both halves of the defense.
Why it matters for salespeople
This is the clearest Second Circuit statement of the two-part good-faith test. A New York employer that says it sincerely believed the commission plan controlled has satisfied at most half of it.
Key passage: 537 F.3d 132 (2d Cir. 2008) at 150.
Read the decision (PDF) Marked with official reporter pages for citation.
Source of the text: United States Court of Appeals for the Second Circuit (official slip opinion) — https://ww3.ca2.uscourts.gov/decisions/OPN/06-4137-cv_opn.pdf. This page summarizes the decision in plain language; the court’s own words are in the PDF above.