Wolfe v. Clear Title, LLC

This case was before the Court on Defendant’s Motion for Summary Judgment.  In resolving the Motion in favor of the Plaintiff, the Court also held that punitive damages are permissible to a Plaintiff in an FLSA retaliation case brought pursuant to 29 U.S.C. 215(a), after acknowledging a split of authority on the issue between Circuit courts and trial level courts within the Eighth Circuit as well.

“The prohibition on retaliation is stated in 29 U.S.C. § 215(a)(3), which makes it unlawful to discharge or in any other manner discriminate against any employee because the employee has filed a complaint or instituted or caused to be instituted a proceeding under the FLSA. The majority of circuits have held that this provision protects an employee who makes an internal complaint to the employer. Kasten v. Saint-Gobain Performance Plastics Corp. ., 570 F.3d 834, 838 (7th Cir.2009). The Eighth Circuit has interpreted the statute to prohibit discrimination against an employee who asserts or threatens to assert FLSA rights. Brennan v. Maxey’s Yamaha, Inc., 513 F.2d 179, 183 (8th Cir.1975). That interpretation has been criticized as contrary to the plain language of subsection 215(a)(3). See Kasten, 570 F.3d at 840 (holding that the phrase “file any complaint” requires a plaintiff employee to submit some sort of writing). Needless to say, the holding of the Eighth Circuit in Brennan v. Maxey’s Yamaha, Inc., is binding on this Court. Here, the conduct of which Wolfe complains falls within the prohibition of subsection 215(a)(3) as broadly interpreted by the Eighth Circuit.

The courts are divided on the issue of whether the FLSA provides for punitive damages for employees who are subject to retaliation for claiming their rights under that statutory scheme. The Seventh Circuit has held that punitive damages are available in FLSA retaliation cases. Travis v. Gary Community Mental Health Ctr., 921 F.2d 108, 112 (7th Cir.1990). The only other circuit to address the issue thus far is the Eleventh Circuit, which held that punitive damages are not available in FLSA retaliation cases. Snapp v. Unlimited Concepts, Inc., 208 F.3d 928 (11th Cir.2000), cert. denied, 532 U.S. 975, 121 S.Ct. 1609, 149 L.Ed.2d 474 (2001).^FN1 The only district courts in the Eighth Circuit to address the issue are the Eastern and Western Districts of Missouri, and they, too, have reached opposite conclusions. The Eastern District of Missouri has followed the Eleventh Circuit in two cases. Huang v. Gateway Hotel Holdings, 520 F.Supp.2d 1137, 1143 (E.D.Mo.2007); Tucker v. Monsanto Co., 2007 WL 1686957 (E.D.Mo. June 8, 2007). Even before the Eleventh Circuit decided Snapp, the Eastern District of Missouri had held, without discussion, that the FLSA does not provide for punitive damages in retaliation cases. Waldermeyer v. ITT Consumer Fin. Corp., 782 F.Supp. 86, 88 (E.D.Mo.1991). On the other hand, the Western District of Missouri followed the Seventh Circuit in one case decided before Snapp, O’Brien v. Dekalb-Clinton Counties Ambulance Dist., 1996 WL 565817, at *6 (W.D.Mo. June 24, 1996) (“In the absence of conflicting interpretation of the amended section 16(b) by another circuit, the court is persuaded to follow the Seventh Circuit’s reasoning and hold that compensatory and punitive damages are available for violation of the FLSA’s anti-retaliation provision.”). See also Johnston v. Davis Security, Inc., 217 F.Supp.2d 1224, 1230-31 (D.Utah 2002) (holding that punitive damages are not recoverable under subsection 216(b)); Lanza v. Sugarland Run Homeowners Ass’n, Inc., 97 F.Supp.2d 737, 739-42 (E.D.Va.2000) (same). But see Marrow v. Allstate Sec. & Investigative Services, 167 F.Supp.2d 838, 842-46 (E.D.Pa.2001) (holding that punitive damages are recoverable in a claim for retaliation under the FLSA).

The remedies for violating the FLSA are set out in 29 U.S.C. § 216. Subsection 216(a) provides:

Any person who willfully violates any of the provisions of section 215 of this title shall upon conviction thereof be subject to a fine of not more than $10,000, or to imprisonment for not more than six months, or both. No person shall be imprisoned under this subsection except for an offense committed after the conviction of such person for a prior offense under this subsection.

Subsection 216(b) provides, in pertinent part:

Any employer who violates the provisions of section 215(a)(3) of this title shall be liable for such legal or equitable relief as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including without limitation employment, reinstatement, promotion, and the payment of wages lost and an additional equal amount as liquidated damages.

In Travis, the Seventh Circuit held that this provision authorizes legal relief, “a term commonly understood to include compensatory and punitive damages.” Travis, 921 F.2d at 111. Otherwise, the analysis in Travis was fairly cursory.

In Snapp, the Eleventh Circuit engaged in a lengthy, detailed analysis of the statutory scheme and arrived at a conclusion opposite from that reached in Travis. The court held in Snapp that the term “legal relief” ordinarily would include punitive damages, but interpreting the statute in the light of the principle of ejusdem generis, the court said that the term “legal relief” in subsection 216(b) should be construed to include only compensatory relief, not punitive damages, because the specific items listed in that subsection as “legal or equitable relief” were all designed to make plaintiffs whole.   Snapp, 208 F.3d at 934. The court also said that the statute was structured so that punitive sanctions were covered in subsection 216(a), while subsection 216(b) provided remedies for making aggrieved employees whole. Id. at 935.

The most thorough critique of the Eleventh Circuit’s reasoning in Snapp appears to be the critique of the Eastern District of Pennsylvania in Marrow. There, the court said that application of the maxim of ejusdem generis to subsection 216(b) was inappropriate because the subsection prefaces its list of various forms of relief with the phrase “including without limitation.” Marrow, 167 F.Supp.2d at 844 (emphasis by the Marrow court). “The most sensible reading of that phrase leads to the conclusion that by listing several potential forms of relief, Congress did not mean to exclude others.” Id. Moreover, Marrow reasoned, the purpose of subsection 215(a)(3) is not purely compensatory but is intended to deter employers from engaging in retaliation, so that limiting subsection 216(b) to remedies designed to make the plaintiff whole would not fully implement the intent of Congress. Id. The court in Marrow also found unpersuasive the argument that because Congress provided criminal sanctions in subsection 216(a) it could not have meant to include punitive damages in subsection 216(b). Id.

Although the issue is obviously not free from doubt, the undersigned is persuaded by the reasoning Marrow. Subsection 216(b) was drafted broadly to authorize “such legal or equitable relief as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including without limitation….” As Snapp noted:

“Legal relief” is certainly a broad formulation. It would have almost no boundary were it not for the commonly understood decision between the “legal” and “equitable” powers of a court. Where such an expansive term is used, we look for clues within the statute to help us understand the exact nature of the “legal relief” that Congress intended; and we are not disappointed when we look to section 216(b).Snapp, 208 F.3d at 934. The only limitation on the term “legal relief” stated in subsection 216(b) is that it be “appropriate to effectuate the purposes of section 215(a)(3)….” The ordinary meaning of “legal relief” as including punitive damages is consistent with that limitation because punitive damages may be appropriate in some cases to effectuate the purposes of subsection 215(a)(3). It is contrary to the legislative intent, as expressed in this broadly worded provision, to exclude punitive damages from the relief authorized by subsection 216(b). The maxim of ejusdem generis is an aid to ascertaining legislative intent and should not be employed to defeat legislative intent, to make general words meaningless, or to reach a conclusion inconsistent with other rules of construction. Donovan v. Anheuser-Busch, Inc., 666 F.2d 315, 326 (8th Cir.1981); United States v. Clark, 646 F.2d 1259, 1265 (8th Cir.1981).

Nor is the undersigned persuaded by the argument in Snapp that punitive sanctions are covered in subsection 216(a), while subsection 216(b) is designed to make plaintiffs whole. In Snapp, the court said, “Congress has already covered punitive damages in section 216(a); and there is simply no reason to carry the punitive element over from section 216(a) to section 216(b), a provision intended to compensate not punish.” Snapp, 208 F.3d at 935. Section 216 has five subsections: subsection 216(a) provides for criminal sanctions; subsection 216(b) provides for civil actions by aggrieved employees; subsection 216(c) provides for civil actions by the Secretary of Labor to recover unpaid minimum wages or overtime compensation on behalf of employees to which those wages are owed; subsection 216(d) states certain narrow exceptions to “liability or punishment” under the FLSA; and subsection 216(e) authorizes civil penalties for child labor violations. Section 216 is not structured so as to have a punishment section and a compensation section; instead, the structure includes a section providing for criminal prosecution by the government prosecuting attorneys, a section providing for civil actions by aggrieved employees, a section providing for civil actions by the Secretary of Labor to recover minimum wages and overtime on behalf of employees, and a section providing for civil penalties for child labor violations. The fact that in subsection 216(a) Congress provided criminal sanctions for willful violations of section 215 supports rather than undercuts the notion that the remedies available under subsection 216(b) include punitive damages, for it shows that Congress regarded willful violations as serious enough to warrant punishment and as a form of misconduct that stands in need of deterrence-which is to say that Congress determined that in some cases punishment would be “appropriate to effectuate the purposes of section 215(a)(3).” Moreover, that subsection 216(e) provides for penalties shows that subsection 216(a) was not intended as an exhaustive statement of the punishment available for violations of the FLSA.

In summary, subsection 216(b) was intended to authorize civil actions by aggrieved employees in which the employees could recover any form of legal or equitable relief that might be appropriate to effectuate the purposes of subsection 215(a)(3). In some cases, punitive damages might be appropriate to effectuate the purposes of that subsection. Therefore, punitive damages may in the proper case be recoverable under subsection 216(b).”