FMLA Liquidated Damages and the Good Faith Defense

What are liquidated damages under the FMLA?

FMLA liquidated damages are a second award, equal to the employee’s lost pay and benefits plus interest, added on top of them. An employer that violates the FMLA pays the amount twice unless it proves to the court that it acted in good faith and had reasonable grounds to believe it was not violating the statute.

The rule is in 29 U.S.C. § 2617(a)(1)(A)(iii), which makes a violating employer liable for “an additional amount as liquidated damages equal to the sum of the amount described in clause (i) and the interest described in clause (ii).” The violation can be interference: the FMLA makes it unlawful “to interfere with, restrain, or deny the exercise of or the attempt to exercise, any right provided under this subchapter.” 29 U.S.C. § 2615(a)(1). It can also be firing or disciplining an employee for using leave, which courts call retaliation or discrimination. The same clause then sets out the exception for an employer that proves good faith and reasonable grounds, covered below.

The Department of Labor’s regulation states it in its own words: “An amount equaling the preceding sums may also be awarded as liquidated damages unless such amount is reduced by the court because the violation was in good faith and the employer had reasonable grounds for believing the employer had not violated the Act.” 29 C.F.R. § 825.400(c). The FMLA reaches an employer “who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.” 29 U.S.C. § 2611(4)(A)(i). The count can include more than one company: when separate entities meet the integrated employer test, “the employees of all entities making up the integrated employer will be counted in determining employer coverage and employee eligibility,” 29 C.F.R. § 825.104(c)(2), and the term employer includes “any successor in interest of an employer,” 29 U.S.C. § 2611(4)(A)(ii). Public agencies and schools follow a different rule: “Public agencies are covered employers without regard to the number of employees employed.” 29 C.F.R. § 825.104(a). Even at a covered employer, an employee is eligible only after 12 months of employment and 1,250 hours of service in the prior 12 months. The definition also excludes an employee at a worksite where the employer has fewer than 50 employees within 75 miles. 29 U.S.C. § 2611(2). The basics of coverage are on my page on FMLA compliance for Minnesota employers.

How is the FMLA damages award calculated?

The award starts with what the employee lost because of the violation, adds interest, and then adds the same total again as liquidated damages. Reinstatement and the employee’s attorney fees come on top of that.

Under 29 U.S.C. § 2617(a)(1)(A), the pieces are:

1. Lost compensation. “Any wages, salary, employment benefits, or other compensation denied or lost to such employee by reason of the violation.” If nothing of that kind was lost, the employee recovers “any actual monetary losses sustained by the employee as a direct result of the violation, such as the cost of providing care, up to a sum equal to 12 weeks (or 26 weeks, in a case involving leave under section 2612(a)(3) of this title) of wages or salary for the employee.”
2. Interest. “The interest on the amount described in clause (i) calculated at the prevailing rate.” The Eighth Circuit said in Hite v. Vermeer Mfg. Co., 446 F.3d 858 (8th Cir. 2006) that “Section 2617 indicates that the award of such interest is mandatory.”
3. Liquidated damages. The sum of items 1 and 2, a second time.
4. Equitable relief. “Such equitable relief as may be appropriate, including employment, reinstatement, and promotion.” 29 U.S.C. § 2617(a)(1)(B).
5. Fees and costs. The court “shall, in addition to any judgment awarded to the plaintiff, allow a reasonable attorney’s fee, reasonable expert witness fees, and other costs of the action to be paid by the defendant.” 29 U.S.C. § 2617(a)(3).

The fee item can outrun the rest. In Smith v. AS America, Inc., 829 F.3d 616 (8th Cir. 2016), the employer had fired Thomas Smith, who died while his lawsuit was pending. His wife, Jamie Smith, continued the suit as the personal representative of his estate. The trial court “awarded Jamie Smith $13,865.84 in lost pay up to July 20, 2011, and $13,865.84 in liquidated damages. The court also granted Smith $159,944.66 in attorney’s fees and costs.” The Eighth Circuit affirmed the liquidated damages and the fees, and it rejected the employer’s argument that the fees should be cut because they were out of proportion to the damages. On Jamie Smith’s cross-appeal, it also held that the finding behind the July 20, 2011, cutoff on lost pay was clearly erroneous and sent that issue back to the trial court. So the lost pay, and the liquidated damages that equal it, could change on remand. At the trial court’s figures, the fees and costs were more than five times the lost pay and liquidated damages combined.

What must an employer prove to avoid double damages?

An employer avoids double damages only by proving two things: that it acted in subjective good faith, and that it had an objectively reasonable belief that what it did was lawful. Both are the employer’s burden, and the proof goes to the judge, not the jury.

The statute puts the burden on the employer: the reduction is available only if the employer “proves to the satisfaction of the court that the act or omission which violated section 2615 of this title was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of section 2615 of this title.” 29 U.S.C. § 2617(a)(1)(A)(iii).

The Eighth Circuit splits that into two tests. In Jackson v. City of Hot Springs, 751 F.3d 855 (8th Cir. 2014), it said the employer “bore the burden of establishing that it acted with subjective good faith and that it had an objectively reasonable belief that its conduct did not violate the law.” The first test asks what the decision maker actually believed. The second asks whether a reasonable employer could have believed it.

Good faith also has content. The court in Hite said “The good faith requirement demands that the defendant establish that it honestly intended to ascertain the dictates of the FMLA and to act in conformance with it.” I suggest keeping evidence that the company tried to learn what the statute required before it acted, such as the leave policy it applied, the regulation it read, or the advice it received.

Why is the good faith defense so hard to win after a retaliation verdict?

After a jury finds intentional retaliation for taking FMLA leave, the jury has already rejected the employer’s reasons for its decision. Those reasons cannot then supply the good faith the defense needs. The Eighth Circuit has called good faith after such a verdict “a very high bar to clear, if indeed it can be.”

That phrase comes from Hite, where a supervisor had called the FMLA “bad for the company,” “routinely transferred Hite to different machines upon her return from leave” that were “more difficult for Hite to operate,” and told her that her job would be in jeopardy if she kept using it. The jury found intentional retaliation, and the court of appeals upheld liquidated damages.

Jackson shows the same rule from the employer’s side. There, a city refused to rehire a worker after his FMLA leave ran out. The jury found retaliation but also answered a question saying the city acted in good faith, and the district judge agreed and denied liquidated damages. The Eighth Circuit reversed. It found that the city “did not point to any evidence that demonstrated it acted in good faith or with reasonable grounds for believing that its refusal to rehire Jackson did not violate the FMLA.” The only possible evidence was the city’s reasons for not rehiring him, and the jury had rejected those reasons. The court concluded: “Because Hot Springs cites no evidence in support of the district court’s finding that it acted in good faith in refusing to rehire Jackson and because we can find none, we reverse the district court’s denial of liquidated damages.”

I suggest building the good faith record before any discipline decision, because a retaliation verdict means the jury has rejected the employer’s stated reasons, as it did in Jackson. My page on disciplining an employee on FMLA leave covers that line, and my page on Minnesota’s retaliation statutes covers the state claims that can be brought alongside an FMLA claim.

What evidence has supported a good faith finding?

The Eighth Circuit upheld a good faith finding where the law was new, the employer’s owner had tried to get the interim regulations to update the employee manual, and a court’s first ruling had favored the employer. The employer still lost on liability; it avoided only the doubling.

In Thorson v. Gemini, Inc., 205 F.3d 370 (8th Cir. 2000), an employer fired an employee with a history of absences. The Eighth Circuit upheld the trial court’s good faith finding on three facts:

• The law was new. It “had been in effect for just over six months when Gemini terminated Thorson’s employment.”
• The owner tried to comply. The owner, who made the firing decision, “was aware of the new law and had made efforts to get a copy of the interim regulations so as to include information about the FMLA in the March 1994 revision of Gemini’s employee manual.”
• A court had agreed with the employer. The district court first granted summary judgment to the employer. The Eighth Circuit called that first ruling “compelling evidence of Gemini’s objectively reasonable belief, to the extent such belief may be relevant, that it was not violating the FMLA when it terminated Thorson.”

The same opinion shows the limit. “It is true that Gemini neglected to ask Thorson for certification of her “serious health condition,” and that omission has proved to be a problem for Gemini on the question of FMLA liability.” A missed step can create the violation even when the employer’s effort to comply saves it from the doubling. The FMLA has been in force since 1993, so the first Thorson fact is not available to an employer today. The second and third describe the kind of evidence the court credited.

Why can a court double damages even after good faith is shown?

Proving good faith and reasonable grounds does not guarantee a reduction. The statute says the court “may, in the discretion of the court, reduce” the award, so the court can still decline to reduce it.

The words come from 29 U.S.C. § 2617(a)(1)(A)(iii). In Smith, the Eighth Circuit said “a court retains the discretion to award liquidated damages even when an employer shows it acted in good faith and “should exercise its discretion consistently with the strong presumption under the statute in favor of doubling.”” The same court in Thorson described the default as an “otherwise mandatory call for liquidated damages.”

On appeal, the question is whether the trial judge abused that discretion, which gives the trial-court ruling real weight in either direction. In Smith, the employer fired Thomas Smith under a no-fault attendance policy before it “even received, let alone reviewed, Smith’s application for FMLA leave.” The court of appeals found the trial court “acted well within its discretion in awarding liquidated damages.” Because the appeals court reviews only for abuse of discretion, I suggest building the good faith record in the trial court, before the judge rules.

How does Minnesota Paid Leave copy the FMLA doubling rule?

Since January 1, 2026, Minnesota Paid Leave carries its own liquidated damages remedy, with a doubling clause in nearly the same words as the FMLA’s, for an employer that violates its job protections. The amount doubled is set in its own terms, and the statute also reaches employers far below the FMLA’s 50-employee line, adds penalties, and guarantees the employee a jury trial.

Minn. Stat. § 268B.09, subd. 8 makes a violating employer liable for “an additional amount as liquidated damages equal to the sum of the amount described in item (i) and the interest described in item (ii).” That liability comes with the same exception: the court “may, in the discretion of the court, reduce” the award. The reduction is available if the employer proves “the act or omission which violated the provisions of this section was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation.” The base that gets doubled is not limited to the FMLA’s list of lost pay or capped money losses. The employer is liable, “In addition to any other remedies available to an employee in law or equity,” for “any and all damages recoverable by law,” reasonable interest, and liquidated damages equal to their sum. The section is new, and I found no Minnesota appellate decision applying it yet. The doubling clause’s words track the FMLA, but I found no decision saying whether the federal cases above will guide how Minnesota courts read it.

The rest of the Minnesota statute raises the stakes:

• Who is covered. Minn. Stat. § 268B.01, subd. 18 defines an employer as an entity “having any individual in covered employment,” with no 50-employee floor.
• What is not covered. The section does not “allow an employee to recover damages from an employer for the denial of benefits under this chapter by the department, unless the employer unlawfully interfered with the application for benefits under subdivision 2.” Minn. Stat. § 268B.09, subd. 8.
• What is prohibited. Minn. Stat. § 268B.09, subd. 1 bars an employer from acting to “discharge, discipline, penalize, interfere with, threaten, restrain, coerce, or otherwise retaliate or discriminate against an employee for requesting or obtaining benefits or leave.” Subdivision 2 bars an employer from acting to “obstruct or impede an application for leave or benefits.”
• Penalties on top. The commissioner of labor and industry “may also issue a penalty to the employer of not less than $1,000 and not more than $10,000 per violation, payable to the employee aggrieved.” Minn. Stat. § 268B.09, subd. 1.
• Fees. The court “must, in addition to any judgment awarded to the plaintiff or plaintiffs, allow reasonable attorney fees, reasonable expert witness fees, and other costs of the action to be paid by the defendant.” Minn. Stat. § 268B.09, subd. 8.
• Jury trial. “An employee cannot waive their right to a jury trial under this section including, but not limited to, by signing an agreement to submit claims to arbitration.” Minn. Stat. § 268B.09, subd. 8.

Minnesota’s older Pregnancy and Parenting Leave Act is different. It covers an employer “that employs one or more employees,” Minn. Stat. § 181.940, subd. 3, and bars retaliation “for requesting or obtaining a leave of absence,” Minn. Stat. § 181.941, subd. 3. Its remedy section lets an injured employee “recover any and all damages recoverable at law, together with costs and disbursements, including reasonable attorney’s fees,” Minn. Stat. § 181.944, but it contains no doubling formula. More on Minnesota Paid Leave obligations and Minnesota’s pregnancy and parenting leave law.

How should an employer build a good faith record before acting?

I suggest building the good faith record before the leave decision, because a record made after a lawsuit cannot show what the employer believed when it acted. A decision to deny, count, or end leave should rest on a written record of what the company checked and why. Jackson turned on an employer that could point to no evidence at all.

The FMLA regulations name steps where an employer can create the violation itself:

• Eligibility on the right date. “The determination of whether an employee meets the hours of service requirement and has been employed by the employer for a total of at least 12 months must be made as of the date the FMLA leave is to start.” 29 C.F.R. § 825.110(d). The hours test counts “at least 1,250 hours of service during the 12-month period immediately preceding the commencement of the leave,” and the employee must be employed “at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite.” 29 C.F.R. § 825.110(a). I suggest writing down the hours and dates used, because a denial based on the wrong date is hard to call reasonable.
• The required notices. When an employee asks for leave or the employer learns the leave may qualify, “the employer must notify the employee of the employee’s eligibility to take FMLA leave within five business days, absent extenuating circumstances.” 29 C.F.R. § 825.300(b). The same regulation treats all absences for the same qualifying reason as a single leave, so eligibility for that reason does not change during the applicable 12-month period. “The designation notice must be in writing.” 29 C.F.R. § 825.300(d). The consequence of a miss: “Failure to follow the notice requirements set forth in this section may constitute an interference with, restraint, or denial of the exercise of an employee’s FMLA rights.” 29 C.F.R. § 825.300(e).
• Attendance points. FMLA leave cannot “be counted under no fault attendance policies.” 29 C.F.R. § 825.220(c). Interference also includes “not only refusing to authorize FMLA leave, but discouraging an employee from using such leave.” 29 C.F.R. § 825.220(b). The employer in Smith fired Thomas Smith under a points policy before it had reviewed his leave application, and it had tried to rescind leave it granted earlier. The district court rejected its good faith claim, and the Eighth Circuit affirmed the liquidated damages.
• The legal question. Some answers are unclear: whether a condition qualifies, whether an absence is covered, or whether intermittent leave was approved. For those, I suggest recording what source the company relied on and when, because Hite defines good faith as an honest effort to learn and follow the statute.

For intermittent leave, where these questions arise one absence at a time, my page on documenting intermittent FMLA leave covers the paperwork.

What Does the Good Faith Defense Mean for Your Business?

Liquidated damages turn an FMLA mistake into twice the lost pay, plus the employee’s attorney fees, unless the employer can show the judge a record of good faith and a reasonable legal position. Minnesota Paid Leave now applies a doubling clause in nearly the same words at employers of every size. My employment law page covers the related issues for Minnesota employers. If you are weighing a leave decision or facing an FMLA claim, email me at aaron@aaronhall.com with a brief, general description. I can tell you whether your leave records would support a good faith defense.