Chellen v. John Pickle Co., No. 02-CV-85-EA (M).

• Decision Date: 26 August 2004
• Docket Number: No. 02-CV-85-EA (M).
• Citation: 344 F.Supp.2d 1278
• Parties: Babu Thanu CHELLEN, et al., Plaintiffs, v. JOHN PICKLE CO., INC., and John Pickle, Jr., Defendants. Equal Employment Opportunity Commission, Plaintiff, v. John Pickle Company, Inc., Defendant.
• Court: U.S. District Court — Northern District of Oklahoma

Page 1278

344 F.Supp.2d 1278

Babu Thanu CHELLEN, et al., Plaintiffs, v. JOHN PICKLE CO., INC., and John Pickle, Jr., Defendants.

Equal Employment Opportunity Commission, Plaintiff, v. John Pickle Company, Inc., Defendant.

No. 02-CV-85-EA (M).

United States District Court, N.D. Oklahoma.

August 26, 2004.

Richard D. Marrs, Fred Everett Stoops, Sr., Keith Allen Ward, Mark Louis Collier, Richardson, Stoops, Richardson & Ward, Jeff Nix, Eddie D. Ramirez, Bill K. Felty, Tulsa, OK, Joe W. McDoulett, Oklahoma City, OK, for Plaintiffs.

J. Thomas Mason, Philip James McGowan, Linda Cole McGowan, Carpenter, Mason & McGowan, Robert A. Canino, Dallas, TX, Michelle Robertson, Oklahoma City, OK, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW (PHASE ONE)

EAGAN, District Judge.

In these consolidated cases, the fifty-two individual plaintiffs (collectively referred to herein as the "Chellen" plaintiffs for first-named plaintiff Babu Thanu Chellen) brought an action against defendants John Pickle Company, Inc. ("JPC") and John Pickle, Jr. ("John Pickle") for (1) violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219; (2) race discrimination; (3) deceit; (4) false imprisonment; (5) intentional infliction of emotional distress; (6) violation of Title VII of the Civil Rights Act of 1964; and (7) violation of the Immigration Reform and Control Act of 1986 ("IRCA"). The Court previously dismissed the Chellen plaintiffs' claims for violation of Title VII because they failed to exhaust their administrative remedies. It also dismissed the Chellen plaintiffs' claims for violation of the Immigration Reform and Control Act of 1986. The EEOC has brought an action against JPC for violations of the FLSA, Title VII of the Civil Rights Act of 1964, as amended ("Title VII"), 42 U.S.C. § 2000e-5(f)(1) and (3), and Section 102 of the Civil Rights Act of 1991, 42 U.S.C. § 1981A.

The Court has chosen to proceed in three phases. First, the Court will determine whether the Chellen plaintiffs were "trainees" or "employees" under the FLSA. If the Court determines that they were "employees," the Court will proceed to a determination of liability on all claims. If defendants are found liable, the Court will proceed to a determination of damages. The Court held a non-jury trial in the first phase of these proceedings September 8-18, 2003.

INTRODUCTION

The Chellen plaintiffs, who are all citizens of India, came to work at JPC's Tulsa, Oklahoma facility in 2001. They allege that defendants made false representations when they recruited the Chellen plaintiffs for JPC employment, required them to work in excess of forty hours per week, paid them below minimum wage, compelled them to eat and sleep at the JPC facility, restricted their ability to leave or travel freely to other locations, placed armed guards at the gates of the facility to discourage their travel or compel them to stay at the facility when they were not on duty or working, and held them unlawfully against their will within the confines of the JPC facility. Defendants deny most of the allegations and allege, in defense, that the Chellen plaintiffs were employed by an Indian company, AL Samit International ("AL Samit"), to be trained in the United States by JPC for work at a JPC-affiliated company in Kuwait. Defendants contend that the Chellen plaintiffs entered the United States with visas authorizing entry into the United States for the sole purpose of receiving training at JPC. Defendants maintain that JPC provided dormitories where the Chellen plaintiffs could sleep, and a cafeteria, staffed by Indian cooks, where the Chellen plaintiffs could eat. Whether the Chellen plaintiffs were "trainees" or "employees" is significant because, if they were "employees," they were entitled to minimum wage and overtime compensation.

FINDINGS OF FACT

Any conclusion of law which is more appropriately characterized as a finding of fact is incorporated herein.

JPC's Expansion into the Middle East

1. Prior to ceasing all operations on or about October 30, 2002, JPC designed and fabricated products for use in the petrochemical and power industries. JPC divided the fabrication of custom-made products into four areas: pressure vessel, structural, production equipment, and special products. In the late 1990s, JPC began developing business in Kuwait and the Middle East. To complete orders for its expanding business, JPC trained 6 individuals from Kuwait in 1999, and 20 individuals from India and Pakistan in 2001, at the JPC facility in Tulsa, Oklahoma. The training program for these individuals was structured and successful in equipping workers for JPC's Middle East business venture. John Pickle made remarks indicating that the training program was also a "good deal" for JPC because the trainees provided "cheap labor." (See Pl.Ex. 68; Tr. 268-69.)¹

2. Thereafter, JPC entered into a joint venture, John Pickle Middle East ("JPME"), with a company known as Kuwait Pipe Industries and Oil Services Company ("KPIOS"). (Pl.Ex. 4.) KPIOS employed and paid all employees working at JPME. KPIOS recruited twenty welders and fitters from India, who signed employment agreements with KPIOS to work at JPME in Kuwait following the completion of their training at the JPC facility in Tulsa.

AL Samit's Recruitment

3. Defendants contend that 51 of the 52 Chellen plaintiffs were recruited for the same purpose as the 20 who signed employment agreements with KPIOS: to work at JPME in Kuwait upon completion of their training in Tulsa.² Unfortunately, this purpose was not communicated to the Chellen plaintiffs when they were hired by AL Samit in 2001, and both KPIOS and defendants denied this purpose in an agreement to terminate and settle the JPME joint venture in November 2002. (Pl.Ex. 70.) JPC contracted with AL Samit for AL Samit to recruit, pre-screen, and arrange for testing of the Chellen plaintiffs and others.

4. AL Samit required large payments of money from the men who desired jobs with JPC, and it led them to believe that they would be able to obtain permanent jobs with JPC in the United States if they performed satisfactorily. (See, e.g., Tr. 440-42, 687-88, 690.) Specifically, the Chellen plaintiffs were told that: they would be given free room and board; their medical expenses and insurance would be paid by JPC; the job would be for at least two years, but could be long-term thereafter; and the job would pay from $650 per month plus overtime, with pay increases after six months, to $1,200 per month after 18 months.³ (Tr. 441-43.) AL Samit prepared the Chellen plaintiffs' visa applications and obtained their signatures thereon. (Pl. Exs. 16A-16AAA; e.g., Tr. 456, 722.) Many of these plaintiffs left good jobs or their own successful businesses, and some obtained loans from family and friends to pay large "fees" required by AL Samit. (E.g., Tr. 444-48, 463-65, 683-86, 687-88, 694-97.) Some also traveled long distances, at their own expense, for testing and application purposes. (E.g., Tr. 457, 688-89.)

5. JPC's principal recruiter and Director of Marketing, Ray Murzello, testified that he sought workers with a track record working production equipment or with pressure vessels in a reputable indian company. He specifically sought persons with five to ten years of experience — some with large industrial corporations such as Larsen & Toubro. The men he recruited were experienced, skilled workers who, in his opinion, simply needed to learn to work faster, more efficiently, and more independently. (Jt.Ex. 1, Depo. Tr. 38-42.) He described them as "excellent" workers who could work independently. He also explained that JPC would not want workers who could not perform fabrication work on the vessels JPC produced for customers, because JPC could not risk losing business by tolerating unsatisfactory work product. (Id. 98-99.) Murzello described the Chellen plaintiffs as "professional" workers and not workers in "apprenticeship." (Id. at 107.) The Chellen plaintiffs' employment histories and qualifications substantiate and confirm the expertise of the Chellen plaintiffs in their respective trades; some had won national competitions for their work skills. (Pl. Exs. 19A-19YY; Tr. 433-34.)

6. In a letter to the former United States Immigration and Naturalization Service ("INS"), Murzello represented that the training period for the Indian nationals would be for a period up to 12 months, and the Indian nationals would be returned to India upon completion of their training. (Pl.Ex. 52.) In letters to the United States Consulate in India, Murzello repeatedly detailed the long-term financial benefits to JPC of the JPC "training program." (Pl.Exs.10, 38, 39.)

7. John Pickle traveled to India for a personal meeting with each of the Chellen plaintiffs, and a general meeting with all of them. He communicated through various translators, including AL Samit's owner, Gulam Peshimam, to confirm the terms of the Chellen plaintiffs' agreement to work at the JPC facility. In addition, John Pickle stated that the Chellen plaintiffs might be able to obtain drivers' licenses if they had driving experience, and they would be afforded the promised amenities according to American standards. After their meetings with John Pickle, the Chellen plaintiffs returned to their homes or stayed in Bombay and awaited instructions from AL Samit as to their departure dates. (Tr. 451-56, 688-92.)

Departure from India

8. When the Chellen plaintiffs arrived in Bombay for departure, AL Samit required each Chellen plaintiff to sign an "offer letter" as a condition of obtaining a position at the JPC facility. (Def.Exs.1E-48E, 49D-53D.) The Chellen plaintiffs were required to sign these and other documents before they boarded the airplane departing India for the United States. (Tr. 458, 464-65, 693-95.) AL Samit and defendants also required the Chellen plaintiffs to sign an "undertaking," which stated that they did not pay money to AL...