Perez v. Oak Grove Cinemas, Inc., 03:13–CV–00728–HZ.

• Decision Date: 17 December 2014
• Docket Number: No. 03:13–CV–00728–HZ.,03:13–CV–00728–HZ.
• Parties: Thomas E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff, v. OAK GROVE CINEMAS, INC., an Oregon domestic business corporation; Barrington Management, LLC, an Oregon domestic limited liability company; Barrington Venture, LLC, an Oregon domestic limited liability company; and David Emami, an individual and in his official capacity, Defendants.
• Court: U.S. District Court — District of Oregon

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Thomas E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff
v.
OAK GROVE CINEMAS, INC., an Oregon domestic business corporation; Barrington Management, LLC, an Oregon domestic limited liability company; Barrington Venture, LLC, an Oregon domestic limited liability company; and David Emami, an individual and in his official capacity, Defendants.

No. 03:13–CV–00728–HZ.

United States District Court, D. Oregon.

Signed Dec. 17, 2014.

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Janet M. Herold, Regional Solicitor, Bruce L. Brown, Associate Regional Solicitor, Susan Brinkerhoff, Trial Attorney, Katherine M. Kasameyer, Trial Attorney,

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Office of the Solicitor, U.S. Department of Labor, Seattle, WA, for Plaintiff.

Edwin A. Harnden, Richard C. Hunt, Damien T. Munsinger, Barran Liebman LLP, Portland, OR, for Defendants.

Opinion

HERNANDEZ, District Judge:

In this wage action brought under the Fair Labor Standards Act, 29 U.S.C. §§ 201 –219 (FLSA), Plaintiff Thomas Perez, the United States Secretary of Labor, brings three claims against Defendants Oak Grove Cinemas, Inc., Barrington Management LLC, Barrington Venture LLC, and David Emami. Plaintiff first brings a claim against all Defendants for failure to pay overtime wages to thirty-five individuals¹ who performed work for one or more of the Defendant companies. Second, Plaintiff brings a recordkeeping violation claim against all Defendants. Third, Plaintiff brings a retaliation claim against David Emami.

This Court conducted a four-day bench trial in October 2014. These are my Findings of Fact and Conclusions of Law. Fed.R.Civ.P. 52(a)(1). As explained herein, Plaintiff established that all Defendants violated the FLSA's overtime and recordkeeping provisions and further established that David Emami violated the anti-retaliation provision. As a result, Plaintiff is awarded $512,290.26 in damages as well as injunctive relief.

FINDINGS OF FACT

David Emami is the sole shareholder of Oak Grove Cinemas, Inc. (OGC), and is that company's president. He also has a one-percent ownership interest in the two Barrington companies. His wife, Diana Emami, owns the remaining ninety-nine percent interest in the Barrington companies. OGC operates a movie theater. Barrington Management manages and leases different properties owned by the Emamis. The nature of Barrington Venture's business was not clearly established at trial although it appears to also manage properties.

David Emami has a master's degree in applied economics from Portland State University. He has owned or managed businesses in Oregon since at least the 1980s. He has been associated with at least thirty-three different business entities in Oregon. Ex. 31. He is familiar with wage and hour laws including minimum wage and overtime exemptions for movie theater employees. He also knows that independent contractors do not receive overtime wages. Diana Emami has a business administration degree from Vilnius University. OGC employs Diana Emami to do its payroll work. In this capacity, she adds up hours of its employees, submits payroll information to a third party, and distributes paychecks. Diana Emami performs similar bookkeeping functions for both Barrington companies.

During the relevant time period from February 2010 through February 2013, OGC employed several individuals who did no work for its movie theater operations. Instead, these workers performed construction, maintenance, landscaping, and similar tasks at OGC and various properties owned by the Emamis, including their personal residences and commercial properties managed by the Barrington companies. David Emami testified that all three Defendant companies shared employees.

Several of the workers who testified explained that they kept two time cards for each pay period. On one they recorded their morning start time and then later, in mid-afternoon, they recorded their end

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time. However, they then immediately “clocked in” on another time card which they would use to record the remainder of that day's hours. E.g., Ex. 17 at 4 (time cards for July 16–31, 2012 for Filemon Santos Camarillo with one showing hours worked for OGC from 6:00 a.m.–2:30 p.m., with a thirty-minute lunch from 12–12:30, and the other showing hours worked for Barrington on the same dates from 2:30 p.m. to anywhere from 5:30 to 7:30 p.m., as well as hours on weekends). The workers clocked in and out by placing time cards in a punch-type time clock or by handwriting their time on time cards.

For all hours worked, these workers typically received two checks each time they were paid—one check from OGC and one check from Barrington. E.g., Ex. 15 at 5 (paychecks to Osbaldo Perez from OGC and Barrington Management dated March 5, 2010); Id. at 6 (paychecks to Osbaldo Perez from OGC and Barrington Venture dated July 5, 2012). Most of the workers testified that they did not know why they received two checks each time. However, Armando Beas explained that David Emami told him that the workers received two checks because David Emami did not want more than 40 hours per week on the OGC payroll and thus, additional hours were paid with a Barrington Management or Barrington Venture check. The workers did not consider themselves to be employed by two separate companies. They thought they were employed by the Emamis, and paid little attention to the actual employing enterprise. The tasks and jobs they performed were consistent throughout the day and did not change when they clocked out and then back in again. Their rate of pay did not change. Their work location did not change.

David Emami hired workers for all of the Defendant companies. He determined the rate of pay, sometimes after obtaining input from other subcontractors he hired. He determined where workers would work on any particular day. He regularly visited the various sites where his workers were located, providing instruction to the workers and sometimes exhorting them to work faster. Although David Emami tried to downplay his supervisory role and his presence at the various work sites, I reject this testimony as not credible. The consistent testimony of the workers that David Emami had them fill out job applications, frequently told them where to work, and frequently visited them at the work sites is more reliable than David Emami's testimony indicating that he stayed at his Lake Oswego home doing some sort of unspecified “work.”

The testifying workers acknowledged that they used some of their own small tools such as hammers and nail bags. However, David Emami provided all of the landscaping equipment and tools as well as other construction tools such as saws, levels, drills, and screw guns, either directly or through his subcontractors. Workers also used forklifts or bobcats which they did not provide themselves. The testifying workers stated that they held no other jobs nor had their own companies when they worked for OGC and Barrington. They did not have their own clients. Armando Beas testified that he never received a Form 1099 from Defendants.

David and Diana Emami both testified that the workers asked to become independent contractors. As a result, they treated the workers as employees while working for OGC, but as independent contractors while working for Barrington, even though there was no difference in location, pay, or duties. The Emamis' testimony on this issue is not credible when weighed against the consistent testimony of the workers that they were employees of the Emamis. If the workers had sought to be independent

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contractors, they would have likely requested the appropriate tax forms and would have demonstrated at least some indicia of independent contractor status. Additionally, it is illogical that if the workers wanted to be independent contractors, the Emamis would have kept them as employees of OGC for part of the time they worked each day. Instead, they would have treated the workers as independent contractors for all hours worked.

Six workers testified at trial. They all kept time cards. E.g., Exs. 10, 11, 15, 16, 17, 19 (various time and pay records for Armando Beas, Pedro Camarillo, Osbaldo Perez, Luis Tuyub, Filemon Santos Camarillo, and Jhonny Zuloaga). According to Diana Emami, she used the time cards to prepare the payroll. For time attributed to OGC, she added up the hours and sent the information to Quick Books payroll service along with the hourly rate. Quick Books calculated the appropriate deductions, prepared the payroll checks, and sent them back to Diana Emami electronically. Diana Emami printed the checks and the pay stubs, or what she referred to as the “check stubs,” on paper stock especially formatted for this purpose. The pay stub contained deduction information and was separated from the actual paycheck by a perforated line. Diana Emami stated she folded the paper on the perforated line and put the folded paper, meaning both the pay check and the pay stub, in an envelope for the employee. She also testified that the information she received from Quick Books contained, in a single page, the pay check, the pay stub, and then a duplicate of the pay stub. Diana Emami removed the duplicate of the pay stub...