Stone v. Troy Construction LLC, No. 18-1825 (3d Cir. 2019)Annotate this Case
Stone sued Troy Construction, on behalf of herself and others similarly situated, alleging a willful violation of the Fair Labor Standards Act (FLSA). She claims that Troy paid local employees per diem compensation that should have been classified as wages and included in the regular rate of pay, which would have affected the calculation of overtime pay. The district court granted Troy summary judgment, holding that there had been no willful violation of the FLSA. Whether a violation is willful determines the length of the applicable statute of limitations; the court applied a two-year statute of limitations and concluded that Stone’s claims were time-barred. The Third Circuit vacated. The district court required a showing of conduct worse than recklessness while recognizing that Troy “appear[ed] to agree that excluding per diem[s] when calculating overtime rates for [out-of-state] employees is acceptable under the statute.” Troy therefore knew that per diems for non-local employees were implicated and permissible under the FLSA, but Troy’s professed ignorance about the implications of the same per diems paid to local employees did not meet the court’s standard. That analysis did not give Stone the benefit of a fair inference that Troy did recognize the implication of the per diems paid to local employees.