Scalia v. Samir Ghosn, Individually, & the Chateau of Lawton, Inc.

• Decision Date: 02 April 2020
• Docket Number: Case No. CIV-19-242-PRW
• Parties: Eugene SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff, v. Samir GHOSN, individually, and the Chateau of Lawton, Inc., a corporation, Defendants.
• Court: U.S. District Court — Western District of Oklahoma

451 F.Supp.3d 1215

Eugene SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff,

v.Samir GHOSN, individually, and the Chateau of Lawton, Inc., a corporation, Defendants.

Case No. CIV-19-242-PRW

United States District Court, W.D. Oklahoma.

Signed April 2, 2020

Karen E. Bobela, US Dept. of Labor Solicitor Ofc., Denver, CO, for Plaintiff.

J. Blake Dutcher, Jr., Godlove Joyner Mayhall Dzialo Dutcher & Erwin, Lawton, OK, for Defendants.

ORDER

PATRICK R. WYRICK, UNITED STATES DISTRICT JUDGE

Plaintiff claims that Defendants willfully violated the Fair Labor Standards Act's¹ minimum wage, overtime, and recordkeeping provisions, and as a result are liable for $22,819.06 in damages plus an equal amount of liquidated damages.² Plaintiff argues that the undisputed material facts entitle him to an order granting summary judgment and enjoining future violations of the FLSA. For the reasons outlined below, the motion is granted in part and denied in part.

Background

The Chateau of Lawton is a retirement and assisted living facility operated by Defendants Samir Ghosn and The Chateau of Lawton, Inc.³ Plaintiff initiated an investigation into the employment practices at the Chateau of Lawton in August 2017.⁴ The investigation was performed in large part by wage and hour inspector Cheryl Masters, who concluded from December 2015 through December 2017, many of the Chateau of Lawton's employment practices violated the FLSA.⁵ In particular, she concluded the employment practices of the Chateau of Lawton violated the FLSA's minimum wage, overtime, and recordkeeping provisions.⁶ As a result, Plaintiff brought this suit for these alleged FLSA violations against Defendants and now move for summary judgment on all claims.

Standard of Review

Fed. R. Civ. P. 56(a) provides that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." In deciding whether summary judgment is proper, the court does not weigh the evidence and determine the truth of the matter asserted, but determines only whether there is a genuine dispute for trial before the fact-finder.⁷ The movant bears the initial burden of demonstrating the absence of a genuine, material dispute and an entitlement to judgment.⁸ A fact is "material" if, under the substantive law, it is essential to the proper disposition of the claim.⁹ A dispute is "genuine" if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way.¹⁰

If the movant carries the initial burden, the nonmovant must then assert that a material fact is genuinely in dispute and must support the assertion by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials"; by "showing that the materials cited [in the movant's motion] do not establish the absence ... of a genuine dispute"; or by "showing ... that an adverse party [i.e., the movant] cannot produce admissible evidence to support the fact."¹¹ The nonmovant does not meet its burden by "simply show[ing] there is some metaphysical doubt as to the material facts,"¹² or by theorizing a "plausible scenario" in support of its claims.¹³ "Rather, ‘the relevant inquiry is whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.’ "¹⁴ If there is a genuine dispute as to some material fact, the district court must consider the evidence and all reasonable inferences from the evidence in the light most favorable to the nonmoving party.¹⁵

The Court's local rule governing summary judgment also provides "[t]he brief in opposition to a motion for summary judgment ... shall begin with a section responding, by correspondingly numbered paragraph, to the facts that the movant contends are not in dispute and shall state any fact that is disputed...."¹⁶ Each individual statement "shall be followed by citation, with particularity, to any evidentiary material that the party presents in support of its position pursuant to Fed. R. Civ. P. 56(c)."¹⁷ If this procedure is not followed, then "[a]ll material facts set forth in the statement of material facts of the movant may be deemed admitted for the purpose of summary judgment...."¹⁸

Analysis

Procedural & Evidentiary Matters

1. Plaintiff's list of undisputed material facts is deemed admitted

Defendants did not comply with the summary judgment procedure mandated by LCvR56.1 because they did not cite to any evidentiary material to dispute Plaintiff's material facts.¹⁹ As a result, Plaintiff's material facts are deemed admitted.²⁰ These facts and any inferences are still, however, viewed in the light most favorable to Defendants.

2. Anonymous employee statements underlying affidavit of WHI Masters are not hearsay and informer's privilege remains in effect

The bulk of Plaintiff's evidentiary support is found in WHI Masters' affidavit. The factual statements contained within are largely based not on WHI Masters' personal knowledge, but rather on interviews she conducted with 17 anonymous employees.²¹ Defendants argue such portions of the affidavit accordingly must be stricken, and as a result, summary judgment is inappropriate, because Plaintiff fails to submit admissible evidence.²² Plaintiff disagrees, arguing that the interviews are not hearsay because they are " ‘offered against an opposing party and ... made by the party's agent or employee on a matter within the scope of that relationship while it existed.’ "²³ In support, Plaintiff cites cases where courts have admitted employee statements against an employer in the context of alleged FLSA violations.²⁴

But whether the statements are hearsay is not the only issue. The employee statements are anonymous, and the cases cited by Plaintiff do not deal with anonymous employee statements as we have here. The employees interviewed by WHI Masters and referenced in her affidavit are anonymous because the government has asserted its informer's privilege, which allows it "to withhold from disclosure the identity of persons who furnish information of violations of law to officers charged with enforcement of that law" to further and protect "the public interest in effective law enforcement."²⁵ This privilege "is recognized in FLSA cases, where enforcement is dependent on the cooperation and statements given by employees."²⁶ It is a qualified, rather than absolute, privilege "limited by the underlying purpose of the privilege as balanced against the fundamental requirements of fairness and disclosure in the litigation process."²⁷ Thus, "[w]here the disclosure of an informer's identity ... is essential to a fair determination of a cause, the privilege must give way."²⁸

Defendants have not motioned the Court to require disclosure of the anonymous employees, nor have they made an argument about why the privilege should be lifted. Instead, Defendants argue parts of WHI Masters' affidavit relying on anonymous employee statements must be stricken because they are not based on WHI Masters' personal knowledge. But these statements are not hearsay pursuant to Fed. R. Evid. 801(d)(2)(D) because Plaintiff offers them against Defendants and they were made by Defendants' own employees on matters like wages and breaks, which are within the scope of the employee-employer relationship while it existed. These anonymous employee statements accordingly constitute admissible evidence as they are not hearsay, and the government's unchallenged invocation of the informer's privilege protects the identities of the anonymous employees.

Substantive Matters

1. Violations of 29 U.S.C. §§ 206(a), 207(a)(1), & 15(a)(2)

Defendants concede that they violated §§ 206(a), 207(a)(1), & 15(a)(2) by improperly converting hours on payroll, misclassifying non-exempt employees as exempt,²⁹ failing to include non-discretionary bonuses into employees' regular rates of pay, improperly making deductions, and failing to use the proper overtime rate.³⁰ Plaintiff supports these violations with evidentiary material.³¹ As a result, there is no genuine issue of material fact as to Plaintiff's claims that Defendants violated §§ 206(a), 207(a), and 15(a)(2) and Plaintiff is accordingly entitled to judgment as a matter of law as to liability and damages in the stipulated amount of $5,389.52.³²

Automatic deduction of meal periods

Plaintiff alleges Defendants automatically deducted meal periods from time worked even when employees were not free from duty during these meal periods.³³ In addition, Plaintiff asserts employees were not allowed to leave work during their meal periods and they were not provided a place to go to be away from residents, their guests and family members, or other staff.³⁴ Again, these allegations are deemed admitted.³⁵ Plaintiff continues that "[s]ince employees were on the clock and not free from duty during these times, all of the automatic deductions should be added back and employees should be compensated accordingly as work time."³⁶

Defendants assert that its practice of automatically deducting meal times does not violate the FLSA.³⁷ They cite a non-binding case for the proposition that "free from duty" does not mean completely free from duty or any interruptions, and so long as an employee's meal time is not predominately for the employer's benefit, the employee is not engaged in "substantial duties," and the employee can pursue mealtime adequately and comfortably.³⁸ In Defendants' view, even if employees could not leave the premises and had no place to go during meal times, these facts do not establish employees were not free from duty.³⁹

Pursuant to 29 C.F.R. 785.19, bona fide meal periods are not counted as work time.⁴⁰...