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S.D.Tex.: Plaintiff’s Prior Acceptance Of Check For Backwages, Following DOL Investigation, Not A Waiver Of Her FLSA Rights; No Waiver/Release Was Ever Signed
Alvarez v. 9ER’s Grill @ Blackhawk, L.L.C.
In November of 2008 Alvarez went to the Department of Labor (“DOL”) to complain about the lack of overtime pay. Alvarez identified the establishment about which she was complaining as 9ER’s Grill, 1315 Grand Parkway, Katy, Harris County, Texas, and identified Mr. Ali Qattom and Mrs. Ghapa Qattom as the owners of the establishment. Qattom met with a DOL investigator and agreed to pay back wages to Alvarez. The funds to pay the back wages to Alvarez came from Jaser and 9ER’s Grill @ Blackhawk. Since Jaser was out of the country at the time, Qattom “handled the making of the payment [ ].” Alvarez received a cashier’s check for $1,690, but never signed any forms or receipts for the check. The Court denied Defendants’ Motion, finding that under the circumstances, Plaintiff did not waive her right to pursue a private right of action, simply by cashing a check issued by Defendants, resulting from the prior DOL investigation.
Addressing the settlement/waiver issue the Court stated,
“Defendants Jaser and 9ER’s Grill @ Blackhawk contend that they are entitled to summary judgment because Alvarez settled any FLSA claim that she may have against them by accepting payment made at the conclusion of an investigation by the DOL.
(a) Applicable Law
The FLSA provides for a waiver of an additional recovery when settlement payments have been supervised by the Secretary of Labor. 29 U.S.C. § 216(c). For such a waiver to be valid, the employee must agree to accept the payment that the Secretary determines to be due and there must be payment in full. See Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537 (5th Cir.1977). In Sneed, 545 F.2d at 539, the court held there was adequate supervision where the DOL official investigated the claim for back wages, determined the amount owed the employee, presented the check to the employee on the employer’s behalf, and required the employee to sign a receipt waiving his right to sue. Id. 545 F.2d at 538-40.
(b) Application of the Law to the Facts
Citing the Back Wages Disbursement and Pay Evidence Instructions that they received from the DOL, defendants argue that Alvarez’s claims “are barred by settlement of the claims prior to the filing of this lawsuit.” The DOL Back Wages Disbursement and Pay Evidence Instructions instructed the employers “to make the full payment of back wages by 09/03/2008 …” and also instructed the employers to “Send the Wage and Hour Division copies of the signed WH-58 Receipt Form to the Houston TX District Office as they are returned to you.” Alvarez states in her declaration, “I received a cashiers check in certified mail. There was nothing in the envelope with the check. I was never asked to sign any forms to receive my check. I did not sign any forms to receive my check.” Defendants do not dispute Alvarez’s statements that she neither received nor signed any form releasing her right to bring this action. Instead, Jaser states in his affidavit that
[t]he payments would not have been made if we had realized that the Plaintiff [ ] would take the money and then file a lawsuit … Based on the DOL material provided to us, it was my understanding the Plaintiffs were provided with a release and knew that by cashing the checks each was releasing any claims against each of their respective employers.
Because defendants have failed to present any evidence that they either provided Alvarez a form WH-58 to sign, or that Alvarez ever signed such a form releasing her FLSA claims, the court is not persuaded that her claims against Jaser and/or 9ER’s Grill @ Blackhawk are barred by settlement of the claims prior to the filing of this action.
(c) Conclusions
For the reasons explained above, the court concludes that 9ER’s Grill @ Blackhawk and 9ER’s Grill @ 359 are subject to enterprise treatment under the FLSA, and that neither Jaser nor 9ER’s Grill @ Blackhawk has presented evidence showing that the claims asserted against them in this action are barred by prior settlement.”
S.D.Miss.: FLSA Prohibits Offset Based On Paying Employees 11 Minutes Per Day For Time Not Worked
Agee v. Wayne Farms LLC
The litigation in this case arises from the allegations that the Defendant has violated the Fair Labor Standards Act (“FLSA”) by failing to compensate a number of its employees for work-related activities. See generally29 U.S.C.S. § 201 et seq. The Plaintiffs in this case contest a specific pay practice: the use of a master time card to track the work hours of employees assigned to a processing line at the Defendant’s Laurel, Mississippi plant. The Plaintiffs contended that this pay practice allows the Defendant to forego paying them for time spent on activities that are compensable under the FLSA. The case was before the Court on Defendant’s motion for partial summary judgment. Finding that Defendant’s could not properly off-set time worked by Plaintiffs but not properly paid by Defendant, the Court denied Defendant’s Motion.
The Plaintiffs filed this action against Wayne Farms claiming violations of the minimum wage and maximum hour (overtime) requirements of the FLSA. see29 U.S.C. §§ 206, 207. In their motion for summary judgment, Defendant contended that the Plaintiffs’ complaints ignored Defendant’s practice of paying each employee for 11 extra daily minutes in addition to those minutes actually worked. Six of these eleven extra daily minutes are paid as “personal time.” Defendant alleged that it “adds another five paid minutes to each day by giving Laurel plant employees a thirty-five minute lunch break, while deducting only thirty of those minutes from paid time.” Defendant contended that when the additional 11 daily minutes are factored in, the 17 Plaintiffs listed above no longer allege viable FLSA claims.
Addressing this argument, deemed one of first impression by the Court, the Court explained, “[e]ven assuming that Wayne Farms has established that there is no genuine issue of material fact, this Court cannot grant the instant motion for summary judgment unless it is convinced that Wayne Farms is also entitled to judgment as a matter of law. FED R. CIV. P. 56(b). Wayne Farms has failed to cite even a single legal authority supporting its contention that it need not compensate its employees for work performed but can simply credit it against payments made to its employees for a paid lunch period or a paid personal time period . In light of Wayne Farms’ utter failure to cite legal authority in support of its contention, combined with the results of the Court’s independent research, the Court is not convinced that Wayne Farms would be entitled to judgment as a matter of law even if the facts of the case are as Wayne Farms represents them to be.
The question of whether an employer can lawfully credit “personal time” payments and “paid lunch” payments against compensation due to the employees under the FLSA appears to be one of first impression in this district. The Court notes, however, that one district court in this circuit has considered and rejected a similar argument. In addition, at least one circuit court has rejected a similar argument.
Section 207(h) of the FLSA governs compensation creditable toward minimum wage and overtime compensation. See§ 207(h)(1). Generally, “sums excluded from the regular rate … shall not be creditable” toward such wages. Id. Instead, only the “[e]xtra compensation paid as described in [§ 207(e)(5)–(e)(7) ] shall be creditable ….” § 207(h)(2).Sections 207(e)(5) through (e)(7) list only the “extra compensation provided by a premium rate” and are therefore inapplicable in the case at bar. As a result, the Court concludes that § 207(h) prohibits the manner of offsetting that Wayne Farms seeks to employ.
In Duplessis v. Delta Gas, Inc., 640 F.Supp. 891 (E.D.La.1986), a district court in this circuit interpreted § 207(h) with similar results. In Duplessis, the defendants sought “a credit against [the] plaintiffs’ award of overtime compensation for the extra compensation paid for nonproductive time and year end bonuses.”Id. at 896.Noting that the payments made were not “related to the performance of overtime, and instead [were] ‘payments made for occasional periods when no work is performed’ ” the Duplessis court held that the payments were not creditable as overtime. Id. at 897 (citing §§ 207(e)(2), (e)(3), and (h)).
The United States Court of Appeals for the Ninth Circuit held that an employer could not “lawfully credit the ‘paid lunch’ time payments against overtime compensation due the employees.” Ballaris v. Wacker Siltronic Corp., 370 F.3d 901, 903, 913-14 (9th Cir.2004). In Ballaris, the plaintiff employees received two meal periods: a 30-minute unpaid meal period and a 30-minute paid meal period. Id. at 906.The court noted that “the parties treated the half-hour paid lunch period as non-working time.”Id. at 909.Consequently, the court found “that the payments for the lunch periods constituted an additional benefit for employees and not compensation for hours worked.”Id. Denying the defendant’s request to credit the “paid lunch” compensation against the compensation required by the FLSA, the court relied primarily on § 207(h).See id. at 913-14.The court noted that “compensation for paid lunch periods is excluded from the regular rate under section 7(e)(2)” and that, as a result, any “offset of wages or overtime compensation due for hours worked is in direct violation of the express provisions of section 7(h).”Id at 913.In addition, the court noted that such a practice “would undermine the purpose of the FLSA” and would constitute a “false and deceptive ‘creative’ bookkeeping.” Id. at 914.
As these non-binding cases are consistent with this Court’s interpretation of the FLSA, the Court concludes that the motion for summary judgment should be denied.”
S.D.Fla.: Defendant’s Generalized Affirmative Defenses Struck; FLSA Plaintiff Entitled To Attorneys’ Fees If Prevails
Romero v. Southern Waste Systems, LLC
This case was before the Court pursuant to Plaintiffs Motion to Strike Defendant’s Affirmative Defenses to Plaintiff’s Complaint. Plaintiff moved to strike several affirmative defenses, including a generalized reference to all “white collar” exemptions, a generalized exemption that the Plaintiff was paid pursuant to the parties’ “agreement,” set-off (alleging no facts to support same), and a claim that Plaintiff was not entitled to prevailing attorneys’ fees under the FLSA. Additionally, the Answer had a request for Defendant’s attorney fees without basis. The Court struck all the affirmative defenses, which were the subject of the opinion, some with leave to re-plead and other without.
Addressing each of the Defendant’s disputed affirmative defenses, the Court stated, “Defendant’s Third Affirmative Defense claims that Plaintiff was exempt from overtime compensation pursuant to the 29 U.S.C. § 213(a) (1) exemption to the FLSA. Plaintiff complains that this affirmative defense fails to allege any facts that would put Plaintiff on notice of the basis of Defendant’s claim. This provision encompasses the executive exemption, the administrative exemption, the outside sales exception, the learned professional exemption and the creative professional exemption. Defendant has agreed to amend his defense to state that Plaintiff was exempt pursuant to the executive and/or administrative exemption pursuant to 29 U.S.C. § 216(b). Leave to amend is granted.
The Court notes that 29 U.S.C. § 216(b) prescribes damages under the FLSA and is unrelated to the exemptions to the FLSA. When Defendant amends this affirmative defense, the Court instructs Defendant to be clear regarding the provision of the FLSA that forms the basis for the claimed exemption(s).”
The Seventh Affirmative Defense alleges that Defendant paid Plaintiff “all monies owed per the agreement between them.”Plaintiff takes this defense to be a restatement of the defense of accord and satisfaction. This defense is not appropriate under the FLSA because an individual cannot waive entitlement to FLSA benefits. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 902 (1945) (“No one can doubt but that to allow waiver of statutory wages by agreement would nullify the purposes of the [FLSA].”). Defendant clarifies that the agreement to which the Seventh Affirmative Defense refers is the agreement that Plaintiff would be paid a salary. The Court requests that Defendant clarify this affirmative defense to make it clear that the “agreement” to which it refers is merely the “agreement” that Plaintiff would receive a salary.
The Tenth Affirmative Defense states that “Defendant is entitled to a credit/set-off for any compensation paid to Plaintiff to which he was not otherwise entitled to the extent such credits/set-off are permissible under the FLSA.”Plaintiff claims that this defense is conclusory in that it fails to allege any facts in support of any sort of set-off. Certain set-off defenses are allowable under the FLSA. Brennan v. Heard, 491 F.2d 1, 4 (5th Cir.1974), for instance, permits district courts to apply a set-off where the set-off would not reduce a plaintiff’s wages to an amount below the statutory minimum. Not all set-offs are permissible, however. This Court has previously ruled that “amounts loaned by an employer to an employee””cannot be applied to offset unpaid wages [under the FLSA].” Morrison, 434 F.Supp.2d at 1322 (citing Donovan v. Pointon, 717 F.2d 1320, 1323 (10th Cir.1983)).See also Hutton v. Grumpie’s Pizza & Subs, Inc., Case No. 07-81228-CIV-MIDDLEBROOKS, 2008 WL 1995091, *4 (S.D.Fla. May 7, 2008) (holding that a set-off defense for money employee allegedly stole from employer was inappropriate in FLSA). The Tenth Affirmative Defense does not state what, if any, compensation Plaintiff received to which he was not otherwise entitled, much less the nature of this compensation. The Tenth Affirmative Defense is stricken, but Defendant shall have leave to amend same.
The Sixteenth Affirmative Defense states that “[t]he Complaint fails to state a claim against [Defendant] upon which attorneys’ fees or costs can be awarded.”The FLSA provides that the Court “shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”29 U.S.C. § 216(b). The Sixteenth Affirmative Defense is stricken without leave to amend.
Defendant also requests attorneys’ fees pursuant to 28 U.S.C. § 1927, which provides for awards of attorney’s fees where
[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct.
There is no allegation of such conduct in the Answer. Accordingly, the request for fees pursuant to 28 U.S.C. § 1927 is stricken, but with leave to amend.”
S.D.N.Y.: General Release Signed Following DOL Audit, Not Supervised By DOL, Not A Valid Waiver Of FLSA Rights
Wright v. Brae Burn Country Club, Inc.
Plaintiffs brought suit under the FLSA for alleged unpaid overtime wages. Defendants moved to dismiss Plaintiff’s complaint on several grounds. Since, all parties submitted proof outside of the four corners of the pleadings, the Court addressed the Motion as one for summary judgment. While dismissing the New York State Labor Law claims based on a valid waiver, the Court denied the portion of Defendants’ Motion seeking Judgment on Plaintiffs’ FLSA claims.
Describing the pertinent facts, the Court stated: “[a]t some point during or after plaintiffs’ employment with the Club, the United States Department of Labor (the “DOL”) conducted a wage and hour audit of the Club and determined that additional compensation was due employees. Wright was found to have been entitled to an additional $119.10, and a check for that amount, minus applicable taxes, was sent to Wright in May 2008. Plaintiffs do not dispute that Wright received a check from the Club in May 2008.”
Defendants claimed Wright waived his FLSA and NYLL claims by executing the General Release signed in the settlement of his prior claim against the Club. While Wright agreed that he had been “paid in full” by the Club in the Release and agreed to waive any “wage hour” claims he might have against defendants, courts have held that individuals’ rights under the FLSA are non-waivable, except in certain circumstances. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706-07 (1945); Simel v. JP Morgan Chase, No. 05 Civ. 9750(GBD), 2007 WL 809689, at *4 (S.D.N.Y. March 19, 2007); Le v. SITA Information Networking Computing USA, Inc., No. 07 Civ. 86(JS) (MLO), 2008 WL 724155, at *1 (E.D.N.Y. March 13, 2008). The exceptions include situations where the waiver or release of FLSA rights is given as part of a settlement supervised by a court or the Secretary of Labor. Simel, 2007 WL 809689, at *4.
Here, although Wright signed the General Release in settlement of his prior claim against the Club, the Release was not executed as part of a court or DOL-supervised settlement. Accordingly, the Court held that Wright cannot be deemed to have waived his rights under the FLSA.
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