Ford v. Sharp, 84-4408
| Decision Date | 26 March 1985 |
| Docket Number | No. 84-4408,84-4408 |
| Citation | 758 F.2d 1018 |
| Parties | 27 Wage & Hour Cas. (BN 257, 102 Lab.Cas. P 34,667, 1 Fed.R.Serv.3d 966, 17 Fed. R. Evid. Serv. 1227 Ford B. FORD, Under Secretary of Labor, United States Department of Labor, Plaintiff-Appellee, v. James SHARP, Jr., d/b/a Parkside Washateria, Defendant-Appellant. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
James Sharp, Jr., Carl Van Sharp, Monroe, La., for defendant-appellant.
Linda Jan S. Pack, U.S. Dept. of Labor, Anne Fugett, Washington, D.C., for plaintiff-appellee.
Appeal from the United States District Court for the Western District of Louisiana.
Before RUBIN, RANDALL, and TATE, Circuit Judges.
An employer who has two employees is subject to the Fair Labor Standards Act (FLSA) 1 even if they work at separate hours so that only one employee is on duty at a time. We, therefore, affirm the judgment against an employer for failing to pay wages in accordance with the requirements of the Act, finding the other attacks on the procedure and the judgment to be without merit. We remand, however, for a determination of the amounts due two employees whose names were listed in the pretrial order but not in the complaint.
Briefly summarized, the evidence at trial showed that James Sharp operated a coin-operated, self-service laundry under the trade name Parkside Washateria. Sharp's employees sold detergent, cleaned up, and provided security. From May, 1978 through May, 1980, Sharp at all times had at least two employees. These employees were paid less than the minimum hourly wage and they regularly worked more than forty hours per week without receiving overtime compensation. When he learned of the Secretary's investigation of his business in May 1980, Sharp removed his business from the purview of the Act by reducing his staff to one employee.
During the trial, the district court refused to admit evidence of the hours and wages of three of Sharp's employees, Barbara Banks, Willie Mae Reese and Evoria Gardner. The court reasoned that Sharp had not received sufficient notice of the Secretary's claims with respect to these three employees. The court noted that none of these employees' names were included in any of the Secretary's pleadings, and stated that they "should have been formally made part of the demand by amendment of the complaint." Although Banks and Reese were listed in the pretrial order as witnesses who would testify as to their duties, salaries and working conditions, Gardner was not named as either a witness or affected employee in the pretrial order, and none of Sharp's employees were named in the complaint.
The suit was dismissed by the district court for failure to prosecute, then, on motion of the Secretary, reinstated. Sharp contends that the court violated its own Local Rule 14 by dismissing the case with the proviso that the parties could reopen the case for good cause. Sharp states that although the 1983 version of Local Rule 14, in force when the Secretary moved to reopen the case, explicitly allowed such a proviso, the 1982 version, in force when the court dismissed the case, did not. Sharp also contends that the Secretary did not show good cause to reopen the case.
Even assuming that a local rule might have prevented the district court from reopening the case, Sharp's first contention is frivolous. Both the 1982 and 1983 versions of Local Rule 14 expressly provided for reinstatement for good cause.
Sharp's second contention also is meritless. Whether or not to dismiss an action under Fed.R.Civ.P. 41(b) for failure to prosecute is an inherent power of the court, to be exercised in the district court's discretion. 2 The court's decision to reopen the case was based on adequate reasons. The Secretary stated in his motion that he had completed his discovery in February, 1982 and was advised by court personnel that trial would take place in August, 1982. Trial was not set because of Sharp's failure to file an answer.
The district court would have acted improperly had it dismissed the action with prejudice, as Sharp in essence urges it should have. In this Circuit, a Rule 41(b) dismissal with prejudice is proper only when there is " 'a clear record of delay or contumacious conduct by the plaintiff,' ..., and ... lesser sanctions would not serve the best interests of justice." 3 This court examines " 'aggravating factors,' such as (1) the extent to which the plaintiff, as distinguished from his counsel, was personally responsible for the delay, (2) the degree of actual prejudice to the defendant, and (3) whether the delay was the result of intentional conduct." 4 Sharp has made no showing of prejudice or intentional delay. Furthermore, although the employees are not plaintiffs, the Secretary brought this suit primarily for their benefit and they were in no way responsible for the delay.
Sharp argues that the Act does not cover his business because he had only one employee on duty at a time. He also appears to argue that his washateria did not do enough business to come under the Act's coverage.
The arguments are frivolous. The minimum wage and overtime provisions of the Act apply to any
enterprise which has employees engaged in commerce or in the production of goods for commerce, or employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person, and which ... (3) is engaged in laundering, cleaning, or repairing clothing or fabrics. 5
Sharp stipulated at trial that the goods his employees handled moved in interstate commerce. He does not deny that, during all relevant times, he had at least two full-time employees. The Act simply requires more than one employee. 6 Sharp cites no authority for the proposition that the Act applies only if two or more employees worked at the same time, and the regulations make clear that no such requirement exists. It is enough that two employees worked "regularly." 7 Sharp also cites no authority for the proposition that Congress did not intend the Act to apply to a business as small as his washateria. The D.C. Circuit has concluded that Congress intended to extend coverage to coin-operated laundries, noting that the House rejected an amendment that would have excluded them. 8 The district court, therefore, correctly concluded that the Act applied to Sharp.
Sharp next argues that the wage and hour provisions are unconstitutional on their face and as applied to him. He contends that they constitute a taking of property without compensation. He also contends that the distinction between businesses with two employees and those with one violates due process.
Sharp's arguments, for which he again cites no authority, are meritless. The mere fact that a statutory economic regulation reduces the value of property or the risks of doing business does not render it a taking of property. 9 Sharp has not been required to sell or surrender his property. 10 Furthermore, the Supreme Court has upheld the constitutionality of the wage and hour provisions under the Due Process Clause. 11 The Court also has held that Congress may exempt certain businesses from FLSA coverage on the basis of size without violating the Fifth Amendment. 12 "Congress may weigh relative needs and restrict the application of a legislative policy to less than the entire field." 13 Sharp has made no showing that Congress lacked a "rational basis" for its choice of a regulatory scheme. 14
The district court did not err when it excluded evidence of the Secretary's employment practices. Rule 403, Fed.R.Evid., provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
Decisions whether to exclude evidence under Rule 403 lie within the district court's sound discretion and will be reversed only for clear abuse of discretion. 15 Evidence of the lack of black employees in the Secretary's area offices would have had at the most an indirect and speculative bearing on Sharp's claim of discriminatory prosecution and would have led the course of the trial far astray of the primary issues by obliging the Secretary to present evidence explaining his hiring practices.
Sharp finally argues that the statute of limitations bars this action. He contends that the district court erred in finding his violation to be willful, and thus applying a three-year rather than a two-year limitations period. Sharp also appears to argue that the time period should be calculated backward from the time the district court reopened the case rather than from the time the Secretary originally filed the complaint. Only if both arguments succeed will this action be entirely barred. Application of the two-year period would eliminate only the recovery of back wages from the period before April, 1979. Calculation based on the date the case was reopened would eliminate all of the recovery except that for April and May of 1980.
Suits under the Act are subject to a two-year statute of limitations unless the violation is willful, in which case the period is three years. 16 It is not necessary that an employer have actual knowledge that the Act is applicable to his business for a willful violation to occur; he need know only that the Act is "in the picture." 17 Stated otherwise, "An employer acts willfully and subjects himself to the three year liability provision if he knows, or has reason to know, that his conduct is governed by the [Act]." 18
The district court had sufficient evidence upon which to base its finding of willfulness. Sharp has been an attorney since 1952 and took a course on labor law in law school. He also testified that he was aware of the existence of a federal minimum wage law but had never...
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