In Brooklyn Savings Bank v. O'Neil (1944), the US Supreme Court ruled that an employee cannot waive his right to receive liquidated damages under the Fair Labor Standards Act of 1938, even if he has received all due wages upon termination. The case involved a bank teller who had worked more than forty hours per week without receiving overtime pay as required by law. Upon her resignation, she accepted full payment for unpaid regular and overtime wages but did not receive additional compensation for liquidated damages as mandated by the FLSA in cases of willful violation. She later sued the bank to recover these damages. The court held that allowing waiver of such rights would nullify the deterrent effect intended by Congress when it enacted this provision into law.

In the dissenting opinion for Brooklyn Savings Bank v. O'Neil, Justice Robert H. Jackson argued that the majority's decision to award liquidated damages in addition to actual damages was a departure from established legal principles and precedent. He contended that this ruling would lead to unjust enrichment of employees at the expense of employers who may have made honest mistakes or minor infractions regarding wage payments under Fair Labor Standards Act (FLSA). Furthermore, he expressed concern about potential abuse by opportunistic litigants seeking windfall profits through litigation rather than fair compensation for actual harm suffered. In his view, such an interpretation of FLSA could discourage employment and undermine economic stability during a time when job creation should be encouraged.