In Miles v. HSC-Hopson Services Company, an employee alleged that his employer had not paid him all of the overtime wages he was owed under the Federal Labor Standards Act (FLSA). Under the FLSA, a non-exempt employee must be paid one-and-a-half times the employee's regular pay rate for overtime hours (generally for hours in excess of forty hours per week). Generally, the statute of limitations under the FLSA for unpaid overtime compensation is two years; however, if an employer is found to have "willfully" violated the FLSA, the statute of limitations is extended to three years. Additionally, liquidated damages for a FLSA violation depends on a determination of whether the employer acted in good faith. In the case at bar, the employer argued that its violation of the FLSA was not willful because it had relied upon an "E-law website" to put together its company policies on employee compensation, but the appeals court affirmed that the employer had willfully violated the FLSA.

In Miles v. HSC-Hopson Services Company, no. 14-11237, 2015 U.S. App. LEXIS 16216 (5th Cir. 2015), Donald Miles brought suit against employer HSC-Hopson Services Company ("HSC") and Dannis Hopson ("Hopson"), the owner of HSC, for not paying all of the overtime wages that he was owed during his employment. From 2005-2013, Miles worked as a plumber for HSC, which was a 24-hour plumbing business located in Dallas County, Texas. During his employment with HSC, Miles was directed to arrive at HSC's shop at 7:30 a.m. to load the work truck and receive his first assignment, but Miles was never paid for the time between 7:30 a.m. and 8:00 a.m. Miles was also not paid for his time after the last job of the day, even though he was required to drive the work truck back to the shop, unload the equipment, and lock up HSC's shop.

During the jury trial, Hopson testified that HSC employees reported to work at 7:30 a.m. but, pursuant to company policy, were not paid for the half hour between 7:30 a.m. and 8:00 a.m. Additionally, the company policy stated that employees were not paid after they had completed the last job of the day. Hopson further testified that, in attempting to comply with the FLSA, he had accessed an "E-law" website and, based on the information there, determined that his company's policy complied with FLSA guidelines. He did not consult with a lawyer; nor did he contact the Department of Labor for guidance on FLSA compliance. An action under the FLSA for unpaid overtime, unpaid minimum wages, or liquidated damages generally has a statute of limitations of two years.

The statute of limitations can be extended to three years, however, if the jury finds that the employer acted "willfully". An employer acts willfully if the employer "either knows or showed reckless disregard for…whether its conduct was prohibited by statute."

A finding of "willfulness" may affect the liquidated damages that an employer must pay to its employee for a FLSA violation. 29 U.S. Code § 260 of the FLSA states that if an employer shows to the satisfaction of the court that its actions (or omissions) were performed in "good faith" or based on "reasonable grounds", for believing that the actions or omissions were not violations of the FLSA, the court may choose to award no liquidated damages or other penalties exceeding the amounts specified in § 216 of title 29. Although a lack of "willfulness" is not equivalent to "good faith," the majority of courts have held that a finding of "willfulness" precludes a finding of "good faith."

What Hopson was trying to demonstrate when he testified to his reliance on a "E-law" website was that, if HSC had violated the FLSA, HSC had not done so willfully. Regardless of Hopson's testimony, the jury determined that HSC had, in fact, willfully violated the FLSA. HSC and Hopson appealed, contending, amongst other things, that the trial was unfair because Hopson had "acted in good faith reliance on the U.S. Department of Labor regulations to comply with the FLSA." The Court of Appeals was not persuaded by the Defendants and, in its September 8, 2015 opinion, the Court affirmed that the Defendants had willfully violated the FLSA. In explaining the reasoning behind its determination of "willfulness," the Court noted that Hopson had not consulted an attorney or the Department of Labor, but had only used an E-law website. This evidence supported the jury's verdict that Hopson's conduct was a willful violation of the FLSA.

With the rise of the Internet, the information that we need is often only a click away. Indeed, the Internet is a wonderful resource for employers and employees, clients and attorneys alike. However, employers should exercise caution when relying on internet websites as the basis for company policies regarding minimum wage, overtime pay, liquidated damages, and other topics that fall within the scope of the FLSA.