180 F.3d 997 (9th Cir. 1999), 96-36017, Lambert v. Ackerley

Docket Nº:96-36017, 96-36266, 96-36267
Citation:180 F.3d 997
Opinion Judge:REINHARDT, Circuit Judge:
Party Name:LAURA A. LAMBERT; ESTHER ACKLEY; STEVE BELLING; PAT COOKE; LETITIA SELK; and CHUCK VILTZ, Plaintiffs-Appellees-Cross-Appellants, v. BARRY ACKERLEY; WILLIAM ACKERLEY; SEATTLE SUPERSONICS, INC., a former Washington Corporation; SSI SPORTS, INC., a Washington Corporation; and FULL HOUSE SPORTS & ENTERTAINMENT, INC., a Washington Corporation, Defendant
Attorney:Spencer Hall, Jr., John W. Widell, and Kathryn Y. Kim, Mundt, MacGregor, Happel, Falconer, Zulauf & Hall, Seattle, Washington, for the plaintiffs-appellees-cross-appellants. Eric M. Rubin, Walter Diercks, Rubin, Winston, Diercks, Harris & Cooke, Washington, D.C., Andrew L. Frey, Mayer, Brown & Pl...
Judge Panel:Before: James R. Browning, Harry Pregerson, Stephen Reinhardt, Ferdinand F. Fernandez, Pamela Ann Rymer, Thomas G. Nelson, A. Wallace Tashima, Sidney R. Thomas, Barry G. Silverman, Kim M. Wardlaw, William A. Fletcher, Circuit Judges. Opinion by Judge Reinhardt; Partial Concurrence and Partial Dis...
Case Date:June 10, 1999
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 997

180 F.3d 997 (9th Cir. 1999)

LAURA A. LAMBERT; ESTHER ACKLEY; STEVE BELLING; PAT COOKE; LETITIA SELK; and CHUCK VILTZ, Plaintiffs-Appellees-Cross-Appellants,

v.

BARRY ACKERLEY; WILLIAM ACKERLEY; SEATTLE SUPERSONICS, INC., a former Washington Corporation; SSI SPORTS, INC., a Washington Corporation; and FULL HOUSE SPORTS & ENTERTAINMENT, INC., a Washington Corporation, Defendants-Appellants-Cross-Appellees

Nos. 96-36017, 96-36266, 96-36267

United States Court of Appeals, Ninth Circuit

June 10, 1999

Argued and Submitted: February 6, 1998.

Decided: October 1, 1998.

Rehearing En Banc Granted and Opinion Withdrawn: March 9, 1999.

Argued and Submitted, San Francisco, California: April 22, 1999.

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the Western District of Washington. D.C. No. CV-95-00039-BJR. Barbara J. Rothstein, District Judge, Presiding.

Spencer Hall, Jr., John W. Widell, and Kathryn Y. Kim, Mundt, MacGregor, Happel, Falconer, Zulauf & Hall, Seattle, Washington, for the plaintiffs-appellees-cross-appellants.

Eric M. Rubin, Walter Diercks, Rubin, Winston, Diercks, Harris & Cooke, Washington, D.C., Andrew L. Frey, Mayer, Brown & Platt, New York, New York, Robert P. Davis, Donald M. Falk, Miriam R. Nemetz, Mayer, Brown & Platt, Washington, D.C., for the defendants-appellants-cross-appellees.

Before: James R. Browning, Harry Pregerson, Stephen Reinhardt, Ferdinand F. Fernandez, Pamela Ann Rymer, Thomas G. Nelson, A. Wallace Tashima, Sidney R. Thomas, Barry G. Silverman, Kim M. Wardlaw, William A. Fletcher, Circuit Judges. Opinion by Judge Reinhardt; Partial Concurrence and Partial Dissent by Judge Rymer.

OPINION

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REINHARDT, Circuit Judge:

This case presents a question of considerable importance to the workers in this circuit who rely on the protections afforded by the Fair Labor Standards Act (" FLSA" or the " Act" ). We must resolve whether the anti-retaliation provision of that Act protects employees who complain to their employers about wage and hour violations. Based on the guiding purpose and design of the FLSA and the language of the statute, we join six other circuits and hold that complaints made to employers are within the ambit of the FLSA's anti-retaliation clause. Because we reject the other arguments that the defendants have raised on appeal, we affirm the decision of the district court.

I. Facts and Procedural History

The plaintiffs in this action are six former ticket sales agents of the Seattle SuperSonics, a National Basketball Association team. As " account executives" for the Sonics, the plaintiffs were responsible for selling season tickets, multi-game packages, and group-ticket packages. They also were responsible for staffing a season ticket information booth at Sonics basketball games. Beginning in 1991, the agents were paid a base salary of $ 13,000, and received the remainder of their compensation through commissions earned for their ticket sales. Rather than paying overtime in accordance with the actual number of hours worked by each employee, the Sonics paid each account executive $ 2000 per year for " overtime." Under the Sonics' plan, each employee was paid $ 166.67 per month regardless of the overtime actually worked by the account executive.

In 1993, however, apparently because the Sonics had sold almost all of their tickets, the account executives' workweek was reduced to 20 hours, and the monthly " overtime" payments were discontinued. In 1994, plaintiff Laura Lambert became concerned that she and her fellow account executives had not been paid for all of the overtime hours they had actually worked. Accordingly, in May of 1994, she left a note with Sonics Controller Brian Dixon requesting a meeting to discuss overtime wages. Lambert also telephoned the United States Department of Labor and requested information regarding federal overtime laws. After speaking with the Labor Department, Lambert raised the issue of unpaid overtime with the Sonics head of ticket sales, Bob Boustead. Boustead told Lambert that the overtime question was a " dead issue." According to Lambert's testimony, Boustead also said " if you want to sue the Sonics, go ahead and do us all a favor." (SER 190).

On May 20, 1994, the Department of Labor informed Lambert that the Sonics' overtime scheme did in fact violate the overtime provisions of the Fair Labor Standards Act. Lambert told Dixon of the Labor Department's conclusion and Dixon, according to Lambert's testimony, told her that " his hands were tied" because William Ackerley (Chief Operating Officer of Ackerley Communications, Inc., the corporate parent of the defendant corporations) " will not pay overtime and doesn't care what the laws are." (SER 192-94). Dixon then told Lambert that if she continued to press for her statutory right to overtime pay:

you will definitely not have a job here, you will be fired. The decision is up to you. Everyone else in the office will love you, but you are jeopardizing your job. Is it worth it to you for a thousand dollars?

(SER 195-96).

In June 1994, the account executives decided that Lambert and plaintiff Chuck Viltz should be their representatives in dealing with the Sonics management. (SER 202). Boustead confirmed that " Chuck and Laura were the spokespersons for the sales folks." (SER 265). Around this same time, Lambert hired an attorney. On June 17, 1994, Lambert's attorney sent Barry Ackerley (CEO and

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Chairman of the Board of Ackerley Communications) a letter requesting that the Sonics pay Lambert and the other account executives overtime as required by law. The letter also specifically requested that Ackerley instruct his managers " to refrain from retaliation or threats of retaliation against Ms. Lambert and other employees." (ER 118). On July 6, 1994, Lambert's attorney delivered a complaint for unpaid overtime wages to the Sonics.

The Sonics eventually settled the overtime claims with Lambert, and paid the other account executives the amounts due them for overtime. Less than a week later, on October 12, 1994, John Dresel, the Sonics Executive Vice President, wrote a memo to William Ackerley informing him that he was planning to lay off all of the account executives by November 30, 1994. In October of 1994, Full House Sports & Entertainment, Inc. was organized to, among other things, run the Sonics ticket sales operations. Dresel was named as President. In December 1994, Dresel discharged nine of the ten account executives, including the six plaintiffs here. The one sales agent not discharged was the one agent who had never complained about the overtime violations. (SER 271-274).

Following their discharge, the plaintiffs filed suit, alleging that they had been fired in retaliation for their complaints about the defendants' failure to comply with federal overtime requirements, in violation of the FLSA, 29 U.S.C. § 215 (a)(3), and in violation of the public policy of the state of Washington. Wash. Rev. Code § 49.46.100(2). Following a three-week trial, the jury returned a verdict for the plaintiffs on both the federal and state causes of action and awarded $ 697,000 for lost wages, and $ 75,000 to each plaintiff for emotional distress. The jury further awarded $ 12 million in punitive damages on the FLSA claim. 1 The defendants moved for judgment as a matter of law, or in the alternative for a new trial and/or a remitittur of damages. The district court remitted the punitive damages award to $ 4,182,000, but denied all other defense motions. The district court also awarded the plaintiffs $ 389,117.50 in attorneys' fees, and later awarded them an additional $ 44,075 in supplemental fees in connection with the post-trial motions.

The defendants appealed the district court's denial of their motion for judgment as a matter of law, and a three-judge panel of this court reversed with respect to the federal claim on the ground that the anti-retaliation provision of the FLSA does not apply to complaints made to an employer. The panel then affirmed in part on the state claim and remanded it for further proceedings. See Lambert v. Ackerly, 156 F.3d 1018 (1998), withdrawn and reh'g en banc granted, 169 F.3d 666 (9th Cir. 1999). The plaintiffs filed a suggestion for rehearing en banc, and a majority of the non-recused active judges of this court voted to rehear the case en banc in order to consider the scope of the anti-retaliation provision of the FLSA. Having withdrawn the panel opinion, we now affirm the judgment of the district court on the federal cause of action. 2

II. The Reach of the Anti-Retaliation Provision

The Fair Labor Standards Act anti-retaliation provision provides that it is unlawful:

To discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about

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to testify in any such proceeding, or has served or is about to serve on an industry committee.

29 U.S.C. § 215(a)(3). In this case, we must determine whether the FLSA's prohibition on terminating an employee who has " filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter" protects an employee who complains to his employer about violations of the Act. The district court, in denying the defendants' motion for judgment as a matter of law, held that the statute extends protection to employees who make such complaints. The defendants contend, to the contrary, that the anti-retaliation provision protects only those employees who file formal proceedings with...

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