Hernadez v. City Wide Insulation of Madison, Inc.

• Decision Date: 07 September 2007
• Docket Number: No. 05-C-303.,05-C-303.
• Citation: 508 F.Supp.2d 682
• Parties: Nau HERNANDEZ, Jose L. Hernandez, Luis E. Martinez, Francisco Valladolid, Oscar F. Cruz, Herberto Ramirez and Saul Morales, Plaintiffs, v. CITY WIDE INSULATION OF MADISON, INC. d/b/a Builder's Insulation, Mark Murphy and Troy Wetzel, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

Page 682

508 F.Supp.2d 682

Nau HERNANDEZ, Jose L. Hernandez, Luis E. Martinez, Francisco Valladolid, Oscar F. Cruz, Herberto Ramirez and Saul Morales, Plaintiffs, v. CITY WIDE INSULATION OF MADISON, INC. d/b/a Builder's Insulation, Mark Murphy and Troy Wetzel, Defendants.

No. 05-C-303.

United States District Court, E.D. Wisconsin.

September 7, 2007.

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Amy Elizabeth Paluch-Epton, Gregory N. Freerksen, Karen M. Rioux, Leonard Saphire-Berstein, Terrance B. McGann, Travis J. Ketterman, Whitfield & McGann, Chicago, IL, for Plaintiffs.

Daryll J. Neuser, John H. Zawadsky, Reinhart Boerner Van Deuren SC, Madison, WI, Christopher P. Banaszak, Reinhart Boerner Van Deuren SC, Milwaukee, WI, for Defendants.

DECISION AND ORDER

LYNN ADELMAN, District Judge.

Plaintiffs Nau Hernandez ("N.Hernandez"), Jose Hernandez ("J.Hernandez"), Luis Martinez, Francisco Valladolid, Oscar Cruz, Herberto Ramirez and Saul Morales bring this action against City Wide Insulation of Madison ("CWI"), its owner Mark Murphy and its agent Troy Wetzel under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Plaintiffs, insulation installers, allege that defendants failed to pay them overtime wages and retaliated against them for complaining about it. All defendants now move for partial summary judgment as to each plaintiff's retaliation claim.

I. BACKGROUND

Plaintiffs worked for CWI installing insulation in new homes in the Germantown area until they were fired or quit. Troy Wetzel manages CWI's Germantown branch and is assisted in doing so by Alfonso Casillas, who — among other things — translates for CWI's primarily Mexican workforce. When plaintiffs worked for CWI, they would arrive each morning at the CWI office, receive their work orders from Wetzel and Casillas and then drive equipment trucks to the various job sites to work. Plaintiffs allege that they generally worked about sixty hours per week, though defendants dispute this figure.

In November 2002, CWI's approximately twenty-five employees voted to join a carpenter's union. A few months later, CWI changed its compensation system. Previously, employees had been paid by the hour; as of January 2003, they were paid under a "job-rate" system of compensation. Under this system, pay was determined by objective factors, including the square footage and geographic location of a job, and by the subjective difficulty of the job as determined by Wetzel. Apparently, most or all CWI employees disliked the new compensation system. Plaintiffs allege that defendants failed to pay them any earned overtime during the job-rate compensation period. Plaintiffs allege that they regularly complained to Wetzel, Casillas and others about paychecks that inaccurately represented the number of hours they worked, low pay and lack of overtime pay.

On September 30, 2004, Wetzel held an employee meeting to discuss several policy matters. Wetzel, through the interpretation of Casillas, told employees (among other things) that they would have to obtain permission before working overtime hours, would have staggered start times and would have to fuel the company vehicles after, rather than before, going to their assignments. The workers became angry and, after conferring with union representatives Gregory Sefcik and Arcadio Perez, walked off the job. In subsequent days, the employees picketed work sites. After this strike, CWI agreed to temporarily return to an hourly wage, though with strict production requirements.

Also after the strike, the union filed an unfair labor practice charge with the National Labor Relations Board ("NLRB" or "board"). Some of the present plaintiffs filed affidavits and testified before the board on behalf of the union, while some other employees filed affidavits supporting CWI. The affidavits generally related to the circumstances surrounding the walkout and strike and to claims of retaliation against union supporters. The parties do not explain the precise issue before the NLRB or indicate what became of the case. However, ultimately, each plaintiff either quit or was terminated, and the remaining employees voted to decertify the union.

I will cite to additional facts in the course of my decision.

II. SUMMARY JUDGMENT STANDARD

Summary judgment is required "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that, there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c). For a dispute to be genuine, the evidence must be such that a "reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In evaluating a motion for summary judgment, I must draw all inferences in a light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

III. FLSA RETALIATION STANDARD

The Fair Labor Standards Act, first enacted in 1938, sets federal standards for a minimum wage and maximum working hours, requires equal pay for men and women, and regulates child labor. Its overtime provision requires employers to compensate employees for hours worked over 40 per week at a rate not less than one and one-half times the regular rate. 29 U.S.C. § 207. Where an employer pays an employee on a "piece-rate" basis, i.e. by the job or by the product, FLSA regulations establish a mathematical method for determining the proper overtime rate of pay and require that the employer pay such rate for each hour worked over forty per week. 29 C.F.R. § 778.111.

The FLSA prohibits employers from retaliating against an employee who has asserted his FLSA rights. Specifically, an employer may not discriminate against an employee who has (1) filed a complaint or instituted a proceeding under or related to FLSA; (2) testified or is about to testify in an FLSA proceeding; or (3) served or is about to serve on an industry committee. 29 U.S.C. § 215(a)(3). A retaliation plaintiff may survive summary judgment in one of two ways. First, he can point to evidence from which a jury could directly find retaliation. Second, he can use the familiar McDonnell Douglas burden-shifting method. Under either method, the plaintiff must show that he participated in FLSA-protected activity and that he suffered an adverse action. Under the direct method, the plaintiff additionally must provide substantial evidence that the employer was motivated at least in part by the plaintiffs protected conduct. In the past, there has been some confusion as to whether the direct method of proof required direct, rather than circumstantial, evidence. However, the Seventh Circuit has made it clear that, notwithstanding the use of the term "direct," the direct method of proof may rely on strong circumstantial evidence. Sylvester v. SOS Children's Villages Ill., 453 F.3d 900, 902-04 (7th Cir.2006).¹

Under the McDonnell Douglas framework, after showing that he engaged in protected activity and thereafter suffered an adverse action, a plaintiff must establish a prima facie case of retaliation by showing that he was performing his job satisfactorily and that a similarly situated employee who did not engage in the protected activity was not subjected to the adverse employment action. Stone v. City of Indianapolis Pub. Utils. Div., 281 F.3d 640, 642-44 (7th Cir.2002); see also Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 810 (7th Cir.2005) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-804, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)). If the plaintiff establishes a prima facie case under this method, the burden then shifts to the defendant to offer a legitimate reason for the adverse action. Stone, 281 F.3d at 644. If the defendant does so, and the plaintiff does not rebut the defendant's evidence, then the defendant is entitled to summary judgment. Id. If there is a genuine dispute of material fact as to whether the employer's proffered reason is pretextual then summary judgment is inappropriate. Id.

IV. DISCUSSION

Defendants argue that § 215(a)(3) is inapplicable because plaintiffs can point to no evidence that they engaged in FLSA-protected activity or that they suffered any adverse action. In addition, they assert that plaintiffs are unable to avoid summary judgment using either the direct or the indirect method of proof.

A. Protected Activities

1. Applicable Law

A majority of courts, including eight federal circuit courts, have interpreted § 215(a)(3) as protecting not only formal complaints to the Labor Department but also informal complaints to an employer. Lambert v. Ackerley, 180 F.3d 997, 1003 (9th Cir.1999) (collecting cases). The Second and Fourth Circuits have found otherwise. Lambert v. Genesee Hosp., 10 F.3d 46, 55 (2d Cir.1993); Ball v. Memphis Bar-B-Q Co. Inc., 228 F.3d 360, 364 (4th Cir.2000). The Seventh Circuit has not directly addressed the issue. See Crowley v. Pace Suburban Bus Div. of Reg'l Transp. Auth., 938 F.2d 797, 798 n. 3 (7th Cir.1991) (stating that this question did not need to be resolved in the case). However, it has affirmed a broad interpretation of FLSA's retaliation provision, see, e.g., Sapperstein v. Hager, 188 F.3d 852, 857 (7th Cir.1999); Avitia v. Metro. Club, 49 F.3d 1219, 1225-26 (7th Cir.1995), and district courts in this circuit have sided with the majority, Skelton v. Am. Intercont'l Univ. Online, 382 F.Supp.2d 1068, 1076 (N.D.Ill.2005); Wittenberg v. Wheels, Inc., 963 F.Supp. 654, 658 (N.D.Ill.1997).

I agree with the majority of courts that § 215(a)(3) covers informal complaints to an employer. The plain text of the section is quite broad. It prohibits an employer from retaliating against an employee who "has filed any complaint ... under or related to this chapter." § 215(a...