Two employers operating related restaurants must pay liquidated damages to employees who were not properly paid for overtime while working in dual restaurants, the Eighth Circuit rules.

The employers had no policy prohibiting employees from working at more than one location; each restaurant manager independently hired and scheduled employees without input from other restaurants or senior management. However, the applications completed by the employees, as well as the hiring manager and area director affirmed that management knew that employees were working at more than one location. Moreover, the payroll service used by the employers did not track whether employees worked at more than one location, and as a result, the employers never combined the hours worked by a dual-restaurant employee for overtime purposes. A lower court awarded the employees $90,055.67 in unpaid overtime plus liquidated damages for violation of the Fair Labor Standards Act.

The owners appealed the liquidated damages, arguing that they did not have knowledge employees worked at multiple locations, and that no employees complained about overtime pay. “Lack of knowledge is not sufficient to establish good faith,” the Court says in affirming the award. “The fact that an employer has broken the law for a long time without complaints from employees does not demonstrate the requisite good faith required by the statute.” Chao v. Barbeque Ventures, LLC