McKenzie v. Renberg's Inc., 94-5197

• Decision Date: 04 September 1996
• Docket Number: No. 94-5197,94-5197
• Citation: 94 F.3d 1478
• Parties: 132 Lab.Cas. P 33,441, 3 Wage & Hour Cas.2d (BNA) 769 Lori G. McKENZIE, Plaintiff-Appellant, v. RENBERG'S INC., and Robert Renberg, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1478

94 F.3d 1478

132 Lab.Cas. P 33,441, 3 Wage & Hour Cas.2d

(BNA) 769

Lori G. McKENZIE, Plaintiff-Appellant, v. RENBERG'S INC., and Robert Renberg, Defendants-Appellees.

No. 94-5197.

United States Court of Appeals Tenth Circuit.

Sept. 4, 1996.

James C. Hodges of Eller & Detrich, Tulsa, Oklahoma (Charles L. Richardson and Brad Smith of Richardson & Stoops, with him on the brief), for Plaintiff/Appellant.

Larry D. Henry of Arrington, Kihle, Gaberino & Dunn, Tulsa, Oklahoma (Patrick W. Cipolla, with him on the brief), for Defendants/Appellees.

Before SEYMOUR, Chief Judge, TACHA and EBEL, Circuit Judges.

EBEL, Circuit Judge.

Plaintiff-Appellant Lori G. McKenzie brought this action against her former employer, Renberg's Inc., and its president, Robert Renberg (collectively "defendants"), asserting claims for retaliatory discharge in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 215(a)(3), and wrongful discharge in violation of Oklahoma public policy. The district court dismissed McKenzie's state law wrongful discharge claim prior to trial under Fed.R.Civ.P. 12(b)(6). McKenzie received a favorable jury verdict on her retaliation claim, but the district court thereafter entered judgment as a matter of law for defendants. McKenzie now appeals these two rulings. ¹ We have jurisdiction under 28 U.S.C. § 1291 and we affirm. ² We hold that McKenzie did not engage in protected activity under § 215(a)(3) when, in her capacity as personnel director, she undertook to advise Renberg's that its wage and hour policies were in violation of the FLSA.

BACKGROUND

Renberg's, Inc. ("the company") hired McKenzie as a receptionist in July 1984. She was promoted to Assistant Personnel Director in October 1984, and in May 1985, she became the company's Personnel Director. As Personnel Director, McKenzie was responsible for monitoring compliance with state and federal equal employment opportunity laws, wage and hour laws, and other laws regulating the workplace.

In August 1991, a co-worker of McKenzie, Marsha McElroy, attended a seminar on wage and hour laws and returned with various informational materials. McElroy gave these materials to McKenzie, who, after reviewing them, became concerned that certain employees of the company were not receiving proper compensation for working overtime. McKenzie discussed the matter with McElroy, and then decided to disclose her concerns to the company attorney, Steve Andrew. McKenzie and McElroy met with Andrew on September 4, 1991, and later that same day, McKenzie also discussed the wage and hour problem with Robert Renberg ("Renberg"), the company president. Sixteen days later, on September 20, 1991, McKenzie was terminated by Renberg.

Believing she had been retaliated against for reporting the company's possible wage and hour violations, McKenzie filed suit in the United States District Court. In her complaint, McKenzie asserted an FLSA retaliatory discharge claim under 29 U.S.C. § 215(a)(3). This statutory provision makes it unlawful for an employer

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 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). McKenzie also asserted a state law claim for wrongful discharge in violation of Oklahoma public policy, see Burk v. K-Mart Corp., 770 P.2d 24 (Okla.1989). ³ The district court dismissed the Burk public policy claim under Fed.R.Civ.P. 12(b)(6). The FLSA retaliation claim was tried to the jury.

The parties vigorously disputed the facts at trial. McKenzie testified that the defendants were not very open to her concerns about the company's possible FLSA violations. According to McKenzie's testimony McKenzie testified that her uneasiness continued during the next few weeks, as Andrew would not return her repeated phone calls. On September 20, 1991, Renberg came to McKenzie's office and fired her. McKenzie testified that Renberg's only stated reason for firing her was his "loss of confidence" in her. McKenzie later discovered that she had been under investigation by an internal security officer since September 12, 1991, eight days after she first reported the FLSA violations to Andrew. Renberg testified that he had personally requested the investigation of McKenzie, and that McKenzie was the only employee he specifically remembered ever having asked to be investigated. Finally, McKenzie testified that she had received no warnings or complaints from the defendants about her performance, despite a general company policy that required progressive counseling about performance problems before termination.

Andrew seemed not to understand her concerns and would not examine the seminar materials she had brought to the September 4, 1991 meeting. McKenzie testified that at one point in the meeting, Andrew drew a line on a legal pad--apparently representing the symbolic line between "right" and "wrong"--and indicated to McKenzie that he was not afraid to cross that line. After the meeting with Andrew, McKenzie spoke with Renberg. McKenzie testified that Renberg also seemed indifferent to the wage and hour problem. She had the impression that Renberg had already spoken to Andrew about the FLSA issue. McKenzie testified that after these meetings she began to feel uneasy and feared for her job.

The defendants disputed much of McKenzie's testimony at trial. Andrew testified that the company did not have a progressive discipline system in place, nor did it have an employee's manual at the time of McKenzie's discharge. In addition, the defendants sought to rebut McKenzie's claim of retaliation by offering evidence that Marsha McElroy, who attended the FLSA seminar and who also raised the possible FLSA violations with Andrew, was not terminated.

Renberg denied that McKenzie's discharge was in retaliation for her protected FLSA activity. Renberg testified that he fired McKenzie for two legitimate reasons: (1) for disclosing confidential information in her role as personnel director; ⁴ and (2) for notarizing a "contract" between two company employees for sexual favors. The "contract," which was entered into by Brenda Jagels, an on-call sales clerk, and David Childers, a company vice-president, provided in relevant part as follows:

AREA OF CONTENTION: Renberg's Christmas Bonus

TERMS OF THE AGREEMENT: Should Christmas bonuses not be paid in their usual manner to the employees of Renberg's Inc., a company operating in Tulsa, Oklahoma, then David Childers will provide Brenda Jagels with the following:

(1) Fendi Parfum 1.4 oz.

(1) Fendi EDT

(1) Fendi Body Lotion or Creme

(1) Erno Laszlo Eye Creme

However, should Christmas bonuses be paid then Brenda Jagels will provide David Childers with a very special and provocatively intimate evening; time, place and duration to be negotiated.

PAYMENT: Made on or before December 25, 1989.

Brenda, this letter is intended to be a binding contract. Please signify your agreement with the foregoing provisions by signing below and returning one copy for my file.

At trial, McKenzie admitted that she had notarized the sex contract, but stated that she had neither read it nor was aware of its content when she notarized it. McKenzie also admitted that she had made a mistake by notarizing the contract.

The trial was conducted in three stages, with the question of FLSA liability decided first, followed by the jury's determination of back pay and compensatory damages, and After the district court entered a corresponding judgment in favor of McKenzie, the defendants filed a Motion for Judgment as a Matter of Law under Fed.R.Civ.P. 50, or in the alternative, a Motion for New Trial under Fed.R.Civ.P. 59. The district court granted the Motion for Judgment as a Matter of Law, and ruled that the Motion for New Trial was moot. McKenzie now appeals.

finally, of punitive damages. After the liability phase, the jury concluded that the defendants' asserted non-retaliatory reasons for discharging McKenzie were pretextual and returned a special interrogatory finding that McKenzie was terminated in retaliation for reporting her belief that Renberg's was in violation of the Fair Labor Standards Act. After the two damages phases of the trial, the jury returned verdicts awarding McKenzie $100,000 in back pay, $175,000 in emotional distress damages, and $50,000 in punitive damages. The district court deferred entry of judgment on the jury's verdict and ordered further briefing from the parties on the question whether emotional distress and punitive damages were authorized under the FLSA. On July 15, 1994, the district court issued its findings of fact and conclusions of law, pursuant to which the court: (1) reduced McKenzie's back pay award to $50,983.04; (2) granted McKenzie an additional equal amount of $50,983.04 as liquidated damages; (3) denied McKenzie's request for front pay under the equitable doctrine of "unclean hands"; and (4) (apparently) ruled that emotional distress and punitive damages were not available under the FLSA as a matter of law.

DISCUSSION

I. Motion for Judgment as a Matter of Law

McKenzie first challenges the district court's decision to grant the defendants judgment as a matter of law on her FLSA retaliation claim. We review de novo the grant or denial of a motion for judgment as a matter of law, applying the same legal standard as the district court. Clark v. R.E.L. Prods., Inc., 972 F.2d 317, 317 (10th Cir.1992). In conducting this review, we must determine whether, " 'viewing the evidence in the light most favorable to the nonmoving party, the evidence and the inferences to be drawn from it are so clear that reasonable minds could not differ on the conclusion.' " Pytlik v. Professional Resources, Ltd., 887 F.2d 1371, 1380 (10th Cir.1989) (quotin...