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Moore, et.al. v. Appliance Direct, Inc. and Sei Pak

In Moore, et.al. v. Appliance Direct, Inc. and Sei Pak, 2013 U.S. App. LEXIS 3047 (11th Cir. Feb. 13, 2013), Plaintiffs were former truck drivers with Appliance Direct who had previously filed suit against their employer, alleging overtime violations under the FLSA.  While that suit was pending, Appliance Direct began outsourcing their truck driver services to another company, thereby transferring many of its drivers’ employment status from “employee” to “independent contractor.”  Plaintiffs, however, were not given this opportunity and were instead terminated.  This action resulted in Plaintiffs filing a separate lawsuit alleging retaliation in violation of the FLSA, specifically, that the employees who participated in the overtime lawsuit were not given the opportunity to be employed as independent contractor drivers.  Ultimately, the case only proceeded against Sei Pak, the CEO of Appliance Direct, as the company filed for bankruptcy.  The jury returned a verdict for the Plaintiffs, awarding them $30,000 each in economic damages only.  Both Pak and Plaintiffs appealed the verdict.

This appeal centers around two issues: 1) whether the Court erred in considering Pak an “employer” under the FLSA; and 2) whether an award of liquidated damages is mandatory or discretionary for retaliation claims.  This second issue is a question of first impression for the Eleventh Circuit.

On the first issue, the Court found that Pak is, in fact, an “employer” under the FLSA, holding that a “corporate officer is personally liable as an FLSA employer if he has ‘operational control of a corporation’s covered enterprise.’”  Some of the relevant factors considered by the Court were that Pak: 1) was the CEO and 75% owner; 2) guided company policy; 3) was the ultimate decision maker; 4) negotiated leases and vendor contracts; and 5) directed that the Plaintiffs not be given subcontracts for delivery services.

On the second issue, Plaintiffs argued that the Court does not have discretionary authority to deny liquidated damages, as this award is required by statute.  The Court examined the language of the relevant provisions in undertaking this analysis.

Damages for Minimum Wage or Overtime Violations:

Any employer who violates the provisions of section 206 or section 207 of this title shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. (“first sentence”)

Damages for Retaliation:

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 liquidates damages. (“second sentence”)

29 U.S.C. §216(b) (emphasis added).

The Court determined that the language of the second sentence (which was added as an amendment to the FLSA) was decidedly different from the first sentence.  As there is no dispute over whether the first sentence mandates liquidated damages for minimum wage or overtime violations, the choice of words used to craft the second sentence led the Court to conclude that the Act does not mandate liquidated damages for retaliation claims.  “There is no more basis in the language of the second sentence for holding that liquidated damages are required to be awarded in a retaliation case, than there would be for requiring reinstatement, or promotion, or front pay.”

The Court found the Plaintiffs’ argument that the reasonable good faith exception applies to the retaliation provision to be equally unconvincing.  The reasonable good faith exception is available for actions “to recover unpaid minimum wage, unpaid overtime compensation, or liquidated damages.” 29 U.S.C. §260.  Further, even after being amended, the exception language contains no reference to the retaliation provision.  As such, the Court held that the good faith exception has no applicability to the retaliation provision.

Having found that an award of liquidated damages is purely discretionary for retaliation claims, the Court ultimately upheld the jury’s award of $30,000 for each Plaintiff.  More importantly, this holding provides valuable guidance to lower courts when this issue inevitably arises again in the future.

Author: Leslie L. Tucker, Esq.


IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION
CHARLES MOORE,
Plaintiff,
v.
PEMBROOKE TOWNHOMES HOMEOWNERS ASSOCIATION MANAGEMENT, INC. and PHILLIP MARTIN,
Defendants.
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Civil Action No.
JURY TRIAL DEMANDED
COMPLAINT FOR DAMAGES
COMES NOW Plaintiff Charles Moore (hereinafter “Plaintiff”), and files this lawsuit against Pembrooke Townhomes Homeowners Association Management, Inc. (hereinafter “Defendant Pembrooke”) and Phillip Martin (hereinafter “Defendant Martin”)(collectively, “Defendants”), and shows the following:
I. Nature of Complaint
1.
Plaintiff brings this action to obtain full and complete relief and to redress the unlawful employment practices described herein.
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2.
This action seeks declaratory relief, liquidated and actual damages for Defendants’ failure to pay federally mandated overtime wages to Plaintiff in violation of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §201 et seq. (hereinafter “FLSA”) during Plaintiff’s employment with Defendants (hereinafter referred to as the “relevant time period”).
II. Jurisdiction and Venue
3.
The jurisdiction of this Court is invoked pursuant to 29 U.S.C. §216(b), and 28 U.S.C. §1343(4).
4.
Defendant Pembrooke is a Georgia corporation, and the unlawful employment practices described herein occurred at 5790 Hwy. 85 Suite 3011, Riverdale, GA, 30274. Accordingly, venue in this Court is proper pursuant to 29 U.S.C. §216(b); LR 3, Northern District of Georgia.
III. Parties
5.
Plaintiff is a resident of the State of Georgia and is subject to the jurisdiction of this Court.
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6.
Plaintiff was an “employee” (as defined under FLSA §3(e), 29 U.S.C. §203(e)) for Defendants, and, in any workweek, was engaged in commerce within the definitions of 29 U.S.C. §§ 206(a) and 207(a).
7.
Plaintiff performed non-exempt labor for the Defendants within the last three years in excess of forty (40) hours per work week and was not paid an overtime wage differential, as required by 29 U.S.C. §207.
8.
Defendants employed the named Plaintiff during the relevant time period.
9.
Defendant Pembrooke is a private employer engaged in interstate commerce, and its gross revenues exceed $500,000 per year.
10.
Defendant Pembrooke Townhomes Homeowners Association Management, Inc. is an “employer” within the definition of FLSA §3(d), 29 U.S.C. §203(d).
11.
Defendant Pembrooke is governed by and subject to FLSA §7, 29 U.S.C. §204 and §207.
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12.
Defendant Pembrooke can be served through its Registered Agent, Phillip Martin, at 1742 Caswell Parkway, Marietta, Georgia 30060.
13.
Defendant Martin is the owner of Pembrooke Townhomes Homeowners Association Management, Inc. During all times relevant to this action, Defendant Martin had authority to create and alter the policies of Defendant Pembrooke, and to hire and fire any employees of Defendant Pembrooke.
14.
Defendant Martin was a decision-maker as to Plaintiff’s compensation, Plaintiff’s job duties, and the termination of Plaintiff’s employment. Defendant Martin had discretion over Plaintiff’s payroll and overtime compensation. Defendant Martin works both directly and indirectly in the interest of Defendant Pembrooke and was in a supervisory position over Plaintiff during Plaintiff’s employment.
15.
Defendant Martin is an “employer” within the definition of the FLSA, 29 U.S.C. § 203(d). Defendant Martin is governed by and subject to the FLSA, 29 U.S.C. § 204 and § 207.
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16.
Defendant Martin can be served with process by delivering a copy of the Summons and Complaint to Defendant Martin, personally, at his place of employment, at 1742 Caswell Parkway, Marietta, Georgia 30060.
IV. Facts
17.
Plaintiff worked for the Defendants within the past three years.
18.
Plaintiff was hired by Defendants on June 23, 2007 as a Security Guard. At the time of his termination on July 17, 2013, Plaintiff held the position of Assistant Manager.
19.
Plaintiff’s every day job duties included monitoring the front desk, showing rooms, general office work, and providing security to the property.
20.
Plaintiff’s primary tasks did not require the exercise of discretion and independent judgment.
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21.
Plaintiff worked an average of fifty (50) hours per work week and was not paid an overtime differential.
22.
Plaintiff was paid at the rate of approximately $14.00 per hour.
23.
Throughout his employment, Plaintiff complained to Defendant Martin that he was not paid time and a half for hours he worked over forty in a work week.
24.
Plaintiff was also on-call 24 hours per day, 7 days a week.
25.
Plaintiff was required to assist with on-site emergencies multiple times a week and was not compensated for time he worked after-hours when an emergency arose.
26.
During Plaintiff’s employment with the Defendants, Plaintiff was not paid the overtime wage differential required by FLSA §7, 29 U.S.C. §207 on the occasions that Plaintiff worked over forty (40) hours in a workweek.
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V. Violation of the Overtime Wage Requirement of
the Fair Labor Standards Act.
27.
Defendants have violated FLSA §7, 29 U.S.C. §207, by failing to pay overtime wages for time that Plaintiff worked in excess of forty (40) hours in a workweek.
28.
Defendants suffered and permitted Plaintiff to routinely work more than forty (40) hours per week without overtime compensation.
29.
Defendants’ actions, policies and/or practices violate the FLSA’s overtime requirement by regularly and repeatedly failing to compensate Plaintiff at the required overtime rate.
30.
Defendants knew, or showed reckless disregard for the fact that they failed to pay Plaintiff overtime compensation in violation of the FLSA.
31.
Defendants failed to accurately report, record and/or preserve records of hours worked by Plaintiff, and thus has failed to make, keep and preserve records
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with respect to each of their employees sufficient to determine their wages, hours and other conditions and practices of employment, in violation of the FLSA.
32.
Defendants’ conduct was willful and in bad faith.
33.
Pursuant to FLSA §16, 29 U.S.C. §216, Plaintiff brings this lawsuit to recover overtime wage differential, liquidated damages in an equal amount, attorneys’ fees, and the costs of this litigation.
VII. Prayer for Relief
WHEREFORE, Plaintiff respectfully requests that this Court:
(A) Grant Plaintiff a trial by jury as to all triable issues of fact;
(B) Enter judgment awarding Plaintiff unpaid wages pursuant to the FLSA §7, 29 U.S.C. §207, FLSA § 6, 29 U.S.C. § 206(d), liquidated damages as provided by 29 U.S.C. §216, pre-judgment interest on unpaid wages pursuant to 29 U.S.C. §216, and court costs, expert witness fees, reasonable attorneys’ fees as provided under FLSA §16 and all other remedies allowed under the FLSA; and,
(C) Grant declaratory judgment declaring that Plaintiff’s rights have been violated;
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(D) Award Plaintiff such further and additional relief as may be just and appropriate.
Respectfully submitted the 1st day of November, 2013.

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