Scalia v. World Marble & Granite Corp.

• Court: U.S. District Court — District of Massachusetts
• Writing for the Court: BURROUGHS, D.J.
• Decision Date: 17 June 2021
• Docket Number: Civil Action No. 19-cv-11211-ADB
• Citation: Scalia v. World Marble & Granite Corp., Civil Action No. 19-cv-11211-ADB (D. Mass. Jun 17, 2021)
• Parties: EUGENE SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff, v. WORLD MARBLE AND GRANITE CORP. and JOAO MARTINS NETO, Individually, Defendants.

EUGENE SCALIA, Secretary of Labor, United States Department of Labor, Plaintiff, v. WORLD MARBLE AND GRANITE CORP.and JOAO MARTINS NETO, Individually, Defendants.

Civil Action No. 19-cv-11211-ADB

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

June 17, 2021

MEMORANDUM AND ORDER ON PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT

BURROUGHS, D.J.

The Secretary of the U.S. Department of Labor ("Plaintiff") brings this action against World Marble and Granite Corp. ("World Marble") and Joao Martins Neto ("Neto") (collectively "Defendants") asserting violations of the Fair Labor Standards Act of 1938 ("FLSA"). [ECF No. 1]. Currently before the Court is Plaintiff's motion for partial summary judgment on five issues related to those alleged violations. [ECF No. 22]. For the reasons set forth below, Plaintiff's motion is GRANTED in part and DENIED in part.

I. BACKGROUND

A. Local Rule 56.1

As a preliminary matter, Plaintiff argues that the facts in his statement of undisputed material facts, [ECF No. 24 ("SUMF")], should be deemed admitted in their entirety because Defendants did not file the concise statement of disputed material facts required by Local Rule 56.1. [ECF No. 31 at 2].

Local Rule 56.1 requires that "[a] party opposing [a] motion [for summary judgment] shall include a concise statement of the material facts of record as to which it is contended that there exists a genuine issue to be tried, with page references to affidavits, depositions and other documentation." L.R. 56.1. "Local Rule 56.1 was adopted to expedite the process of determining which facts are genuinely in dispute, so that the court may turn quickly to the usually more difficult task of determining whether the disputed issues are material." Brown v. Armstrong, 957 F. Supp. 1293, 1297 (D. Mass. 1997), aff'd, 129 F.3d 1252 (1st Cir. 1997).

"Where a party opposing a motion for summary judgment fails to comply with Local Rule 56.1, the court has the discretion to decide whether to impose the sanction of deeming the moving party's factual assertions to be admitted." Butters v. Wells Fargo Advisors, LLC, No. 10-cv-10072, 2012 WL 5959986, at *2 (D. Mass. Nov. 27, 2012) (citing Swallow v. Fetzer Vineyards, 46 F. App'x 636, 638-39 (1st Cir. 2002)); see also Summers v. City of Fitchburg, 940 F.3d 133, 138 (1st Cir. 2019) ("Here, the [non-moving party] flouted Local Rule 56.1 and allowed the [the moving party] to map the boundaries of the summary judgment record. Such actions have consequences, and the district court deemed the [moving party's] statement of undisputed material facts admitted. Given the clarity of Local Rule 56.1 and the important function that it serves, the district court was fully justified in limiting the summary judgment record to the four corners of the [moving party's] statement of undisputed material facts." (first citing United States v. McNicol, 829 F.3d 77, 80-81 (1st Cir. 2016); then citing Schiffmann v. United States, 811 F.3d 519, 524-25 (1st Cir. 2016))).

The Court finds that Defendants failed to comply with Local Rule 56.1. Defendants filed an opposition to Plaintiff's motion for partial summary judgment, [ECF No. 30], but did not file a counterstatement of material facts in accordance with Local Rule 56.1 or otherwise assist the Court in determining which facts are genuinely in dispute. Consequently, the portions of Plaintiff's statement of undisputed material facts that are not specifically controverted with support in the record are deemed admitted.

B. Factual Background¹

Plaintiff is the Secretary of the U.S. Department of Labor ("DOL"). [ECF No. 1 at 1]. World Marble is a corporation, with an office and place of business in Franklin, Massachusetts, that at all relevant times engaged in the business of fabricating, selling, and installing marble and granite kitchen and bathroom countertops. [SUMF ¶ 2]. World Marble employs and has employed workers as fabricators, granite cutters, polishers, driver/installers, and ceramic tile installers. [Id. ¶ 4]. At all times relevant to this litigation, Neto was the sole owner of World Marble. [Id. ¶10]. World Marble and Neto hired, fired, supervised, and assigned work to World Marble's employees. [Id. ¶¶ 6, 11]. World Marble and/or Neto also issued paychecks, set work schedules, rates of pay, and methods of compensation, and established policies related to compensation. [Id. ¶¶ 5, 12].

1. The DOL's Wage and Hour Division's Investigations

The DOL's Wage and Hour Division ("Wage and Hour Division") has twice investigated Defendants' compliance with the FLSA's requirements. [SUMF ¶ 19]. During the period covered by the first investigation, June 2, 2012 through May 31, 2014, Defendants' employees worked an average of 43.5 hours a week and were paid a set amount each week, even though the number of overtime hours they worked varied from week to week. [Id. ¶¶ 19, 20]. After investigating Defendants' pay practices, the Wage and Hour Division determined that under the FLSA's overtime provisions, Defendants owed seven of their employees a total of $12,885.16 in back wages and an equal amount in liquated damages. [Id. ¶¶ 21, 42]. Defendants did not contest the determination and agreed to pay the overtime wages and liquidated damages to the seven employees. [Id. ¶¶ 22, 45]. On August 19, 2014, Neto signed a settlement agreement stating that Defendants' "employment practices are currently in compliance with all applicable provisions of the [FLSA] as interpreted by the [Plaintiff]" and that they "will continue to comply with all applicable provisions of the [FLSA] in the future." [Id. ¶¶ 46-47]. In connection with this first investigation, Defendants were told by the Wage and Hour Division to begin recording their employees' work start and stop times. [Id. ¶ 44].

After the first investigation, Defendants did not consult with counsel, perform research, or undertake any other efforts to determine how to comply with the FLSA's overtime provisions or to ensure that their employees were properly paid. [SUMF ¶¶ 50-51].

The Wage and Hour Division initiated a second investigation, which covered the period from May 18, 2015 to May 13, 2018. [SUMF ¶ 19]. During this time period, employee work hours fluctuated from week to week, but averaged between 43.5 and 45 hours per week. [Id. ¶¶ 23, 25]. During the second investigation period, Defendants again generally paid their employees a set amount per week, basing an employee's weekly set amount on that employee's experience and work performance. [Id. ¶¶ 26-27]. Defendants did not give employees any compensation other than their biweekly paychecks. [Id. ¶¶ 28-29]. If an employee worked fewer than 40 hours in a week, however, then the employee was paid less than the weekly set amount. [Id. ¶ 30].

On August 21, 2018, the parties entered into a Statute of Limitations Tolling Agreement ("Tolling Agreement"). [ECF No. 31-1 ¶ 3; ECF No. 31-2 at 4].² In relevant part, the Tolling Agreement states:

The Secretary of Labor, U.S. Department of Labor, ("the Secretary") has conducted an investigation of World Marble and Granite Corporation and Joao Martins Neto, an individual, (collectively, the "Employers") pursuant to the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. 201, et seq. ("FLSA" or "the Act"), concerning the period beginning on June 2, 2012 through May 31, 2014 and the period beginning August 11, 2014 through August 6, 2017, plus any necessary update period. The Secretary and the Employers want the opportunity to discuss this matter further, to attempt to reach a settlement, to attempt to resolve outstanding disputes, and to further investigate where appropriate. Accordingly, the Secretary and the Employers, in consideration of the promises and statements made herein, understand and agree as follows:

1. The Secretary may ultimately bring legal proceedings under the Act as a result of the Secretary's findings from this investigation; however, the statute of limitations set forth at Section 6 of the Portal-to-Portal Act, 29 U.S.C. 255, and/or other applicable statutes of limitations, may bar the assertion of certain rights under the Act in legal proceedings brought by the Secretary.

2. In exchange for the Secretary's agreement to withhold immediate filing of legal proceedings under the Act and to allow time for the Secretary and the Employers to discuss and to attempt to resolve this matter, the Employers agree to toll the running of the statute of limitations as follows.

3. The Secretary and the Employers agree that the statute of limitations will be tolled beginning on August 14, 2018 (the "Tolling Date"). Any legal or equitable proceedings that may be brought against the Employers as a result of the Secretary's findings from this investigation or by affected employees will be deemed to have been filed on the Tolling Date.

[. . .]

5. The Employers agree that this Tolling Agreement ("Agreement") (or any copy thereof) may be introduced into evidence as proof of the waiver and tolling agreed to herein, in all legal proceedings that may be brought pursuant to Sections 15, 16(b), 16(c), 16(e) and/or 17 of the Act.

[ECF No. 31-2 at 2-3].

2. Damages Calculations for Violations of the FLSA's Overtime Requirements

The Wage and Hour Division concluded that Defendants owe a total of $20,433.53 in back wages to seven employees for overtime violations during the second investigation period. [ECF No. 31-3 ¶ 3]. To calculate the damages owed, the Wage and Hour Division performed a workweek-by-workweek calculation that was based upon an "average of hours worked per week figure." [SUMF ¶¶ 33, 36]. When employers do not maintain records of the hours worked by employees, the Wage and Hour Division's "procedures" permit calculating damages based on an average of the hours worked. [Id. ¶ 33]. The Wage and Hour Division determined that Defendants' employees worked an average of 44.25 hours per week. [Id. ¶ 34]. The Wage and Hour Division used 44.25 hours because it is...