Liquidated damages are a type of punitive damages, where the penalty amount for a proven violation of a law or a contract provision is designated in advance. Under the law, a penalty amount such as "double damages" or "treble damages" is a common liquidated damages penalty. For example, while the Age Discrimination in Employment Act (ADEA) and the Fair Labor Standards Act (FLSA) do not provide for punitive damages, liquidated damages of up to twice the amount of back pay may be awarded in the event of a "willful" violation, if the employee proves that employer knowingly violated the ADEA or acted in "reckless disregard" of its provisions, or willfully violated the FLSA. (For more information, see our site's pages on age discrimination and pay and hours.) Liquidated damages provisions are also common in contracts. For example, if you settle your lawsuit against your employer with a confidentiality provision, which requires you to keep the amount and certain facts about the resolution of your case a secret, the settlement agreement may have a liquidated damages clause which requires you to pay the employer a pre-designated amount for violating the agreement. Although a liquidated damages provision eliminates the need to prove damages of a particular amount, if the liquidated damages amount is unreasonable and excessive when compared to the damage for which it was designed to compensate, it may be declared void.