Where the manager of a restaurant effectively enslaved an intellectually disabled person by forcing him to work over 100 hours per week without pay, the restitution order should have included both unpaid minimum wages and overtime compensation computed under the Fair Labor Standards Act, or FLSA, as well as liquidated damages, in order to fully compensate the victim for his losses.
From 2009 to 2014, Bobby Edwards, the manager of J&J Cafeteria in Conway, South Carolina, effectively enslaved “Jack,” forcing him to work at the restaurant over 100 hours per week without pay. Edwards effected this forced labor by taking advantage of Jack’s intellectual disability and keeping Jack isolated from his family, threatening to have him arrested and verbally abusing him. His control over Jack also involved physical abuse.
After Edwards was reported to the authorities, he pleaded guilty to forced labor, in violation of the Trafficking Victims Protection Act, or TVPA. The district court sentenced Edwards to 120 months’ imprisonment and ordered him to pay restitution of roughly $273,000, representing unpaid minimum wages and overtime compensation computed under the FLSA.
While the court did order restitution of the full amount of those wages and overtime compensation, it did not include, as requested by the government, an “additional equal amount as liquidated damages,” as provided by the FLSA, for when minimum wages and overtime compensation have not been paid as required. The court concluded that liquidated damages under the FLSA were “statutory punitive damages” that were available only in civil cases. The government appealed, contending that the district court erred in failing to include liquidated damages in its restitution award.
The TVPA mandates that a court order a person found guilty of obtaining forced labor to compensate the victim for the “full amount of the victim’s losses,” including, as one option of measurement, “the value of the victim’s labor as guaranteed under the minimum wage and overtime guarantees of the [FLSA].” The question is whether that “value” of labor includes an award of “liquidated damages” for an employer’s failure to pay minimum wages and overtime compensation on time.
The court’s analysis begins with the text. The TVPA mandates that the court order restitution in “the full amount of the victim’s losses” resulting from the forced labor. And, as defined, the “full amount” includes, as one option of measurement, “the value of the victim’s labor as guaranteed under the minimum wage and overtime guarantees of the Fair Labor Standards Act (29 U.S.C. § 201 et. seq.).” This section references the entire FLSA, not just §§ 206 and 207 of the Act, which address minimum wages and overtime compensation, respectively. To be sure, §§ 206 and 207 do fix the amount for compensating employees, but when the employer fails to comply with those provisions, the FLSA adds to that compensation liquidated damages of an amount equal to the unpaid wages and overtime compensation.
Awarding liquidated damages for violations of the FLSA’s minimum-wage and overtime provisions is the “norm.” They are awarded to provide employees full compensation for violations of the FLSA and are therefore part of “the value of the victim’s labor as guaranteed” by the FLSA. Therefore, they must be included when calculating restitution under the TVPA according to “the value of the victim’s labor.”
Indeed, it would be inconsistent with the TVPA’s requirement of providing restitution in “the full amount of the victim’s losses” not to compensate a victim for losses incurred as a result of the delay in paying required wages and overtime compensation. And failing to compensate for delay would be particularly egregious in this case, where Jack was not paid for many years.
In reaching the opposite conclusion, the district court reasoned that FLSA liquidated damages are punitive and apply only in civil cases. Edwards joins in that argument, adding that reimbursing Jack for the withheld minimum wages and overtime compensation addresses “all of [Jack’s] actual losses that [Edwards] caused, but no more.” But this argument fails to understand that liquidated damages are generally an amount determined to be a reasonable estimation of actual damages that might be difficult to estimate or calculate, and that is their role in the FLSA.
Vacated in part and remanded.
United States v. Edwards (Lawyers Weekly No. 001-084-21, 9 pp.) (Paul V. Niemeyer, J.) Case No. 19-4903. April 21, 2021. From D.S.C. (R. Bryan Harwell, C.J.) Eric S. Dreiband, Alexander V. Maugeri, Tovah R. Calderon and Elizabeth P. Hecker for Appellant.