Guadalupe Comonfort Pastrana v. Meiji Rest.
| Decision Date | 16 August 2021 |
| Docket Number | 20-cv-470 |
| Parties | GUADALUPE COMONFORT PASTRANA and RODRIGO NERI-BELTRAN, Plaintiffs, v. MEIJI RESTAURANT, LLC, CAI HUANG, and QIN YUN WU, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
DECISION AND ORDER
Plaintiffs are proceeding on claims for back wages against Defendants their former employers, who they allege violated the Fair Labor Standards Act (“FLSA”) and Wisconsin state law. Specifically, Plaintiffs allege that they were not properly compensated for overtime hours. Plaintiffs have moved for partial summary judgment as to liability and seek liquidated damages plus application of a three-year statute of limitations. As explained below, the motion is GRANTED in part and DENIED in part.
Plaintiffs worked as cleaners at Meiji Restaurant, LLC (“Meiji”) from March 2017 to December 2019. ECF No. 32 (Defendant's response to Plaintiffs' PFOF) ¶ 1.[2] Plaintiffs were normally scheduled to work from 11 a.m. to 10 p.m. with a meal break from 3 p.m. to 4:15 p.m., six days per week from Monday through Saturday. Id., ¶ 4. In return, Plaintiffs were paid monthly based on the number of days worked; wages included lodging and food, however the parties dispute whether any qualifying transportation was provided. See id., ¶¶ 5-7, 15-18; ECF No. 35, ¶ 9. However, this monthly payment would sometimes be the same amount for months where Plaintiffs worked a different number of Fridays and Saturdays, which were days when they would accumulate overtime pay in a given workweek. See ECF No. 32, ¶ 4; ECF No. 27-1, ¶ 1. Defendants do not dispute that Plaintiffs are entitled to some amount of unpaid overtime wages. ECF No. 31 at 2 ().
Defendants Cai Huang and Qin Yun Wu, owners and operators of Meiji, were responsible for setting Plaintiffs' hours, rate of pay, and work assignments. ECF No. 32, ¶¶ 2-3, 24-27; ECF No. 35 (), ¶ 1. Huang and Wu are of Chinese descent and moved to the United States in 1993. ECF No. 35, ¶ 2. Neither are fluent in English and both need an interpreter when speaking to a non-Chinese speaking person. Id., ¶ 4. They assert that while they have a general knowledge of wage laws, they are not savvy businesspersons who have received training or instruction in the various legal intricacies of owning a business. Id., ¶ 5. While they generally understand the difference between standard and overtime, they are “not trained in the detailed calculations required by the FLSA”; they developed the compensation plan with Plaintiffs directly and believed that it complied with state and federal wage requirements based on their previous experience. Id., ¶¶ 5-12. See also ECF No. 33 (declaration of Cai Huang), ¶¶ 6-13.
Plaintiffs dispute Defendants' assertions as to the extent of their knowledge of the FLSA. Specifically, Plaintiffs argue that the existence of a prior U.S. Department of Labor (“DOL”) investigation of Meiji shows that Defendants were aware of the relevant FLSA requirements. See ECF No. 27-3 (correspondence with DOL).
Summary judgment is required where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). I view the evidence in the light most favorable to the non-movant and must grant the motion if no reasonable juror could find for that party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Defendants do not dispute that overtime wages are owed or that their system violated the FLSA, ECF No. 31 at 2, [3] but they oppose Plaintiffs' requests for liquidated damages and a three-year statute of limitations.[4]
Under the FLSA, a defendant-employer who is liable for unpaid overtime shall also be liable for an additional equal amount as liquidated damages. See 29 U.S.C. § 216(b); Uphoff v. Elegant Bath, Ltd., 176 F.3d 399, 405 (7th Cir. 1999). However, 29 U.S.C. § 260 provides that “if the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA], the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.” Employers must show that they took affirmative steps to ascertain FLSA requirements; showing that the violations were not willful is not enough. See Pautlitz v. City of Naperville, 874 F.Supp. 833, 835 (N.D. Ill. 1994) (citing Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 908-09 (3d Cir. 1991)). The burden of proving both good faith and reasonable belief falls on the employer. Uphoff, 176 F.3d at 405 (citing Shea v. Galaxie Lumber & Constr. Co., 152 F.3d 729, 733 (7th Cir. 1998)). A district court's discretion in deciding the liquidated damages issue must be Id. (quoting Shea). See also Bankston v. State of Illinois, 60 F.3d 1249, 1254 (7th Cir. 1995) () (emphasis added).[5]
Defendants argue that liquidated damages are inappropriate because they are laypersons who “relied on their general knowledge of minimum wage and overtime wage laws in calculating the compensation for their employees.” ECF No. 31 at 3. They are not knowledgeable of the various intricacies of FLSA requirements and were not trying to dodge any applicable wage laws, genuinely believing that their compensation plan was adequate and lawful. Id. They also emphasize that they are of Chinese descent, cannot speak much English, and have a limited knowledge of the American legal system. Id.
Even viewing the facts in the light most favorable to Defendants, I conclude that Plaintiffs are entitled to liquidated damages. Beyond their professed good faith, Defendants have not provided any evidence suggesting an objectively reasonable belief in their plan's compliance with the FLSA for overtime wages: at no point did they consult with or seek advice from a lawyer, accountant, or other qualified person (such as another restaurant owner), instead relying only on their own general experience and knowledge in crafting their compensation plan. See, e.g., Berger v. Perry's Steakhouse of Illinois, LLC, 430 F.Supp.3d 397, 409 (N.D. Ill. 2019) (imposing liquidated damages where the defendant failed to demonstrate “any ‘affirmative step' taken to ensure compliance”); Pautlitz, 874 F.Supp. at 835 (). While I appreciate their belief in and desire to maintain compliance, Defendants' lack of investigation (i.e., “affirmative steps”) as to applicable wage laws that they are obligated to follow as employers and mere informal conversation with Plaintiffs doom any effort to overcome the high bar for avoiding liquidated damages, which are “presumptively appropriate for FLSA violations, ” Urnikis-Negro v. Am. Fam. Prop. Servs., 616 F.3d 665, 672 (7th Cir. 2010). See also Walton v. United Consumers Club, 786 F.2d 303, 312 (7th Cir. 1986) (); Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981) (); Hussein, 502 F.Supp.3d at 1375 ().
Defendants cite one case, from the Sixth Circuit, as an instance where liquidated damages were denied based on the defendants' reliance on their accountant's advice (with whom they met frequently) and the prior owner's practices. See ECF No. 31 at 3 (citing Acosta v. Min & Kim, Inc., 919 F.3d 361, 366-67 (6th Cir. 2019)). This decision does not support Defendants on this issue: at no point did they affirmatively seek guidance on FLSA requirements like the Acosta defendants. See ECF Nos. 31 & 33. They simply offer no such evidence necessary to overcome the strong presumption of liquidated damages.
Because no reasonable jury could find that Defendants had reasonable grounds for believing that their practices for overtime pay did not violate the FLSA, the motion is granted on this issue. Plaintiffs are entitled to liquidated damages in the full amount.
“The statute of limitations for FLSA violations is two years unless there was a ‘willful violation,' in which case the limitations period is three years.” Caraballo v. City of Chicago, 969 F.Supp.2d 1008, 1024 (N.D. Ill. 2013) (citing 29 U.S.C. § 255(a)). A violation is willful “if the defendant either knew he was violating the Act or was indifferent to whether he was violating it or not (and therefore ‘reckless').” E.E.O.C. v. Madison Cmty. Unit Sch. Dist., 818 F.2d 577, 585 (7th Cir. 1987). See also Walton, 786 F.2d at 308-09 (“[Willfulness] denotes some highly culpable mental state[, ] either actual knowledge that one's acts violate the law or reckless indifference to the law.”) (emphasis added); McDonald v. Vill. of Palatine, Ill., 524 Fed.Appx. 286, 289 (7th...
To continue reading
Request your trial