Lyle v. Food Lion, Inc.
| Decision Date | 02 March 1992 |
| Docket Number | Nos. 91-1524,91-1525,s. 91-1524 |
| Citation | 954 F.2d 984 |
| Parties | 30 Wage & Hour Cas. (BNA) 1217, 120 Lab.Cas. P 35,593, 123 Lab.Cas. P 35,702 Belinda Faye LYLE, Plaintiff-Appellee, v. FOOD LION, INCORPORATED, Defendant-Appellant, v. Wayne TEW, Third Party Defendant-Appellee. Wayne TEW, Plaintiff-Appellee, v. FOOD LION, INCORPORATED, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fourth Circuit |
David R. Simonsen, Jr., Richmond, Va., argued, for defendant-appellant.
James McDaniel Johnson, Bryan, Jones, Johnson & Snow, Dunn, N.C., argued, for plaintiffs-appellees.
Before PHILLIPS and WILKINS, Circuit Judges, and WARD, Senior District Judge for the Middle District of North Carolina, sitting by designation.
Food Lion, Inc., appeals the adverse judgment of the district court in actions brought by appellees Belinda Lyle and Wayne Tew, former Food Lion employees, to recover unpaid overtime compensation, liquidated damages, attorney's fees, and costs under § 16(b) of the Fair Labor Standards Act, as amended, 29 U.S.C. § 201 et seq. (FLSA). After a bench trial, the district court ruled in favor of Lyle and Tew, awarding them $8,802 and $44,550, respectively, in unpaid overtime compensation and liquidated damages, attorney's fees in the amount of 20 percent of the judgment award, and costs. We affirm the judgment of the district court in all respects except the amount awarded in attorney's fees.
Belinda Lyle and Wayne Tew were both employed by Food Lion at Store No. 123 on Legion Road, Fayetteville, North Carolina, during the period for which they sought to recover for uncompensated overtime hours they allegedly worked. Tew was the meat market manager at Store No. 123 and Lyle was a meat wrapper. Tew was Lyle's direct supervisor.
Both Tew and Lyle were full-time, hourly employees of Food Lion. Food Lion has an elaborate scheduling system by which it sets the number of hours each hourly employee is authorized to work each week, and employees must complete the duties assigned to them within the hours authorized. Tew and Lyle consistently found that they were unable to complete their duties in accordance with Food Lion standards in the time allotted by the scheduling system. Their inability to meet these standards within the hours scheduled came up against Food Lion policies both minimizing the number of overtime hours store management could authorize hourly employees to work and prohibiting hourly employees from working "off the clock"--i.e., unscheduled and unreported overtime work. Obviously, employees could be fired for work that did not meet Food Lion standards; they could also be fired for working off the clock. Tew and Lyle were aware of the policy against off-the-clock work, but worked off the clock anyway in order to complete their assigned duties in accordance with Food Lion standards. For Tew and Lyle, the possibility of dismissal for substandard work was greater, they thought, than that for getting caught working off the clock.
In May 1989, Tew and Lyle both admitted to Food Lion upper management that they had been regularly working off the clock since August 1987. Both were transferred to another Food Lion store and Tew was demoted from meat market manager to meat cutter. Both Tew and Lyle voluntarily left their employment with Food Lion in August 1989.
In actions brought against Food Lion pursuant to § 16(b) of the FLSA, Tew and Lyle sought to recover for the uncompensated overtime hours they allegedly worked from August 1987 to May 1989. In response to Tew's complaint, Food Lion counterclaimed against Tew for breach of contractual and fiduciary duties to Food Lion, and in response to Lyle's complaint, Food Lion filed a third-party complaint against Tew alleging breach of contractual and fiduciary duties in Tew's supervision of Lyle and seeking indemnity against Tew for any liability to Lyle. Both the counterclaim and the third-party complaint were dismissed by the district court.
Tew alleged in his complaint that he had worked an average of 18 hours per week off the clock during the period from August 1987 to May 1989, but sought to recover for only 15 hours per week. Lyle alleged that she had worked an average of 10 off-the-clock hours per week during the same period, but sought to recover for only 6 hours per week. The district court found it credible that Tew and Lyle had worked at least as many uncompensated overtime hours as they sought to recover for, and also found that Food Lion, through its store managers and assistant store managers, had actual or constructive knowledge of Tew and Lyle's off-the-clock work, the evidence showing, among other things, that on numerous occasions, store management personnel gave Tew and Lyle keys to the store so that they could let themselves in to work off the clock before regular store hours. The court awarded Tew and Lyle $44,550 and $8,802, respectively, half of which was back pay for uncompensated overtime hours worked. The other half was liquidated damages that were awarded because the court found that Food Lion, in violating the FLSA, had not acted in good faith.
The district court allowed Tew and Lyle to recover for the entire claimed period of 90 weeks under a three-year statute of limitations provided by 29 U.S.C. § 255(a) for willful violations of the FLSA, which the court found in this case. Without benefit of the three-year statute of limitations (the standard period is two years), Tew and Lyle would have been able to recover for only 68 of the 90 weeks of uncompensated overtime work they claimed. 756 F.Supp. 238.
Finally, the court awarded Tew and Lyle attorney's fees of 20 percent of the judgment award--$10,670.40--and costs of $499. This appeal followed.
Food Lion makes various assignments of error in this appeal challenging (1) the dismissal of its counterclaim and third-party complaint against Tew; (2) the judgment in favor of plaintiffs on their claim; and (3) the award of attorney's fees. We consider each in turn.
Food Lion counterclaimed and filed a third-party complaint against Tew on the ground that he breached his contract with Food Lion and his fiduciary duty to the company as a meat market manager by himself violating and allowing Lyle, an employee under his supervision, to violate Food Lion's policy against off-the-clock work. Both the counterclaim and the third-party complaint were dismissed by the district court. In effect, Food Lion sought to indemnify itself against Tew for its own violation of the FLSA, which the district court found, and we agree, is something the FLSA simply will not allow. As the Fifth Circuit has noted, "[t]o engraft an indemnity action upon this otherwise comprehensive federal statute would run afoul of the Supremacy Clause of the Constitution" and "would undermine employers' incentives to abide by the Act." LeCompte v. Chrysler Credit Corp., 780 F.2d 1260, 1264 (5th Cir.1986). We hold, therefore, that it was proper for the district court to dismiss the counterclaim and third-party complaint Food Lion filed against Tew.
To prevail in the district court, Tew and Lyle had to prove by a preponderance of the evidence that they worked overtime hours without compensation and that Food Lion knew of such work. Pforr v. Food Lion, Inc., 851 F.2d 106, 109 (4th Cir.1988); Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir.1986). Moreover, if an employer is found to have violated the FLSA's overtime pay provisions, it is liable in the amount of the proven unpaid overtime compensation plus an additional equal amount as liquidated damages. 29 U.S.C. § 216(b). However, if the employer acted in good faith and had reasonable grounds for believing that it was not violating the FLSA, the court, in its discretion, can award a smaller amount of liquidated damages or none at all. 29 U.S.C. § 260. And where the violation of the FLSA is found to be willful, the applicable statute of limitations is three years. 29 U.S.C. § 255(a).
Food Lion contends on appeal that the evidence before the district court was not sufficient to prove that the off-the-clock hours allegedly worked by Tew and Lyle were overtime hours, or that Food Lion suffered or permitted them to work these hours. Food Lion also contends that the district court erred in holding that Food Lion did not act in good faith and that its violation of the FLSA was willful. These contentions take issue with what were essentially the district court's findings of fact in this case. The district court noted that
[t]his case hinges on a credibility determination. The plaintiffs testified that they regularly worked off-the-clock with the knowledge of Food Lion officials at the store level. These officials testified that they had no such knowledge and that it would have been impossible for the plaintiffs to have worked off-the-clock without their knowledge. The court believes the plaintiffs and not the store managers.
J.A. at 380. As this court has recognized, a trial judge's decision about which of conflicting testimony to credit may "virtually never" be declared clear error so long as the testimony credited is "coherent and facially plausible" and "is not contradicted by extrinsic evidence." Dwyer v. Smith, 867 F.2d 184, 189 (4th Cir.1989) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985)). We are satisfied that under that test the dispositive credibility determinations made by the district court in this case were not clearly erroneous, and we therefore affirm that portion of the resulting judgment which found Food Lion liable to Tew and Lyle for unpaid overtime compensation, liquidated damages, and costs.
As successful parties in their action against Food Lion, Tew and Lyle were also entitled to an award of reasonable attorney's fees under the FLSA. 29 U.S.C. § 216(b). In Hensley v. Eckerhart, 461 U.S. 424, ...
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