The Acting Secretary of Labor sued Los Cocos Mexican Restaurant, Inc. and three individual defendants in the United States District Court for the District of Kansas for violations of the Fair Labor Standards Act (FLSA), including failure to pay minimum wages, overtime, and operating an unlawful tip pool. The matter came before the court on the parties’ briefing regarding liquidated damages and injunctive relief following a jury trial.
Factual Overview
The Department of Labor alleged that from May 2017 through December 2022, the defendants violated various FLSA provisions. Prior to trial, the court granted partial summary judgment to the plaintiff, finding defendants violated overtime provisions for servers and failed to maintain required records, awarding $16,734.08 in back wages. The court also determined that tolling agreements were enforceable against Los Cocos and two individual defendants but not against defendant Alvaro. A jury trial was held in August 2024, resulting in a verdict for the plaintiff on all claims. The jury found all defendants acted willfully in violating the FLSA and awarded $957,323.75 in back wages. Following the verdict, the plaintiff sought liquidated damages of $974,057.83 and injunctive relief.
Legal Analysis
Liquidated Damages Analysis: The court examined whether defendants could establish both good faith and reasonable grounds for believing their conduct did not violate the FLSA, which would allow the court to exercise discretion in awarding liquidated damages. The court found the defendants failed to meet this burden. Particularly significant was evidence that defendants had previously been found in violation of FLSA for similar practices in 2009, yet failed to seek legal counsel or expert advice before implementing similar policies again. The defendants’ argument that they believed their practices were lawful was undermined by their failure to take reasonable steps to verify compliance.
Injunctive Relief Analysis: Despite defendants’ objection that they were now in compliance with FLSA, the court determined injunctive relief was warranted. The court based this conclusion on the jury’s findings of violations, evidence of repeated violations, and defendants’ continued insistence that their practices did not violate FLSA even after the jury’s verdict.
The court awarded liquidated damages of $974,057.83 and issued a permanent injunction prohibiting defendants from violating various FLSA provisions.
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