A misinterpretation of the applicable law and actions reliant upon that interpretation are not grounds for tolling the statute of limitations under the Fair Labor Standards Act of 1938. See Shunney v. Fuller Co., 111 F. Supp. 543 (D.R.I. 1953) (FLSA statute of limitations is not tolled where alleged misrepresentations were misrepresentations of law).
See also Simons v. Southwest Petro-Chem, Inc., 28 F.3d 1029 (10th Cir. 1994) (under Title VII of the Civil Rights Act of 1964, statute of limitations is not tolled absent a showing of active deception).
If an employer acts reasonably in determining its legal obligation under the the Fair Labor Standards Act of 1938, its action cannot be deemed willful for purposes of the three-year limitations period. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S. Ct. 1677, 100 L. Ed. 2d 115 (1988).
Good faith and reasonableness, including a putative employer's consultation with an attorney, are defenses to allegations of willfulness. See Halferty v. Pulse Drug Co., 826 F.2d 2 (5th Cir. 1987).
Good faith dictates that an employer must have "an honest intention to ascertain and follow the dictates of the Act." Quirk v. Baltimore County, Maryland, 895 F. Supp. 773, 788 (D. Md. 1995).
This requires some investigation of potential liability under the Fair Labor Standards Act.
The burden is on the party alleging willfulness to prove that the actions taken were knowing or in reckless disregard of the Fair Labor Standards Act. See Gilligan v. City of Emporia, Kansas, 986 F.2d 410 (10th Cir. 1993).