Souryavong v. Lackawanna Cnty.

• Citation: 872 F.3d 122
• Decision Date: 20 September 2017
• Docket Number: Nos. 15-3895 & 16-2214.,s. 15-3895 & 16-2214.
• Parties: Michael SOURYAVONG; Edwin Velez v. LACKAWANNA COUNTY; Lackawanna County Deputy Sheriffs Association Nelson Rolon v. Lackawanna County; Lackawanna County Deputy Sheriffs Association Michael Souryavong and Nelson Rolon, Appellants
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

872 F.3d 122

Michael SOURYAVONG; Edwin Velez

v.LACKAWANNA COUNTY; Lackawanna County Deputy Sheriffs Association^*

Nelson Rolon

v.Lackawanna County; Lackawanna County Deputy Sheriffs Association^*

Michael Souryavong and Nelson Rolon, Appellants

Nos. 15-3895 & 16-2214.

United States Court of Appeals, Third Circuit.

Argued March 28, 2017

Filed: September 20, 2017

Cynthia L. Pollick, Esq. [ARGUED], The Employment Law Firm, 363 Laurel Street, Pittston, PA 18640, Counsel for Appellants

Harry T. Coleman, Esq. [ARGUED], 41 North Main Street, Suite 316, Carbondale, PA 18407, Counsel for Appellee

Before: AMBRO, VANASKIE, and RESTREPO, Circuit Judges

OPINION

VANASKIE, Circuit Judge.

This employee-overtime appeal raises questions as to the nature of the evidence that is sufficient to create a jury question on the purported "willfulness" of an employer's non-payment of overtime. The question matters because a finding of willfulness expands the limitations period for claims under the Fair Labor Standards Act ("FLSA"), in effect permitting a plaintiffto receive a larger award. Here only the willfulness question was contested—Appellee Lackawanna County conceded the basic overtime violations—and at trial Appellants Michael Souryavong and Nelson Rolon presented some evidence on the question but not enough to avoid a directed verdict in the County's favor. We find no error in the District Court's decision because the evidence presented did not suggest the County was subjectively aware of the FLSA problem at the time of the violations, at least with respect to Souryavong and Rolon. Additionally, Souryavong and Rolon challenge the District Court's calculation of attorney's fees, but we find that decision appropriate as well. We will affirm.

I.

Souryavong and Rolon were among a class of individuals working in two separate part-time capacities for Lackawanna County. The County apparently tracked and paid these employees for each of their individual jobs, but in 2011 the County became aware that it had failed to aggregate the hours in both jobs, resulting in a failure to pay the overtime rate for hours beyond 40 hours per pay period.

In June 2013, Souryavong, Rolon, and Edwin Velez filed complaints in the Middle District of Pennsylvania alleging several claims, including the only one relevant here, a claim against Lackawanna County for non-payment of overtime in violation of the FLSA, 29 U.S.C. § 207(a)(1). By 2015, it was undisputed that the County had violated the FLSA's overtime provisions at various times from 2008 to 2012. Still disputed, however, was whether the County's violation was "willful."

In November 2015, the case went to trial on the willfulness question and damages. At trial the employees presented evidence that included (1) documents showing the County's failure to pay proper overtime, a failure that apparently lasted into January 2012 for Velez; (2) testimony from County Chief Financial Officer Thomas Durkin stating that "from 2007 onward" the County was generally "aware" of its obligations under the FLSA (App. 266); (3) testimony from County Human Resources Director Nancy Pearson stating that she was also generally aware of the FLSA and its requirements; and (4) a March 28, 2011 email from Pearson, sent to two other county officials, with the subject line reading "County wage and hour issues," and the body of the email discussing certain county employees who were working "second jobs." (App. 152.) Pearson's email highlighted two employees, one of whom was Edwin Velez, as examples of the issue, and she noted how these employees had each worked more than 40 hours per week by serving the County in two part-time capacities: "Velez works 50 plus hours a [two-week] pay period for the booking center and up to sixty hours a pay period for the sheriff's department. This sampling is not infrequent, irregular or scattered." (App. 152.) The email concluded by raising the prospect that these employees might file labor grievances:

[A]ll employees who work for the County should only be working in one position. That brings us to the next point on dealing with those individuals who may file a grievance for back pay for overtime for being paid straight time. Who would you like involved in a further conversation about this matter so this can be resolved?

(App. 152 (emphasis added).)

At the close of the employees' case, the County made an oral motion for entry of judgment as a matter of law, arguing the employees' evidence was insufficient to create a jury question on willfulness. The Court immediately held oral argument on the motion, and the employees' Attorney Cynthia Pollick argued that their evidence was sufficient. In support, she cited (1) "testimony from Nancy Pearson" and (2) "the fact that [the County] did not correct" the overtime issue over the course of "four years" of violations. (App. 9–10.) At the close of argument, the District Judge ruled from the bench. He stated the employees' evidence did not "measure up," and granted the County's motion and entered judgment in its favor on the willfulness question. (App. 21.)

The damages question still remained, the case went to the jury, and it awarded $5,588.30. The Court then addressed several post-trial motions, two of which are relevant here. First, the plaintiffs moved for liquidated damages under 29 U.S.C. § 216.¹ The County opposed the motion and argued liquidated damages were inappropriate because the County had operated in "good faith" and its FLSA violations were inadvertent. See 29 U.S.C. § 260 (stating liquidated damages shall not be awarded if an employer operated in "good faith" and "had reasonable grounds for believing that his act or omission was not a violation of the [FLSA]"). The employees disagreed, and argued the County's violation was "intentional." (App. 83.) The Court sided with the employees and granted the motion, but rather than grounding its ruling on "intentionality," as the employees had argued that it should, the court reasoned in its memorandum opinion that the County had presented "no evidence" to show that it had taken any "affirmative steps to ascertain the FLSA's requirements" prior to the at-issue overtime violations, or that the County had "acted in ‘good faith.’ " (App. 84.) In support of this determination, the District Court correctly followed Martin v. Cooper Elec. Supply Co. , 940 F.2d 896, 910 (3d Cir. 1991), in which we held that an employer's failure to take "affirmative steps to ascertain the legality of its pay practices" mandates an award of liquidated damages.

In another motion, the employees moved for attorney's fees and costs, requesting an award of $166,162.50. They based their request on a fee rate for Attorney Pollick's work of $400 per hour, 367.6 hours of legal work, and additional legal-assistant time and costs. The Court found the proper rate for Attorney Pollick to be significantly lower—$250 per hour—and that only 278.2 hours were compensable, for a lodestar of $69,550.00. It then deviated downward from the lodestar to a final award of $55,852.85—approximately one-third of what the employees initially requested—after an analysis of the factors laid out in Hensley v. Eck erh art , 461 U.S. 424, 430 n.3, 434–37, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983). The court recorded its analysis in a meticulous and thorough opinion.

This appeal followed, with Souryavong and Rolon filing a joint notice of appeal. Velez—Souryavong and Rolon's co-plaintiff in the District Court—did not join Souryavong and Rolon's notice of appeal and did not file his own. Velez is therefore not a party to this appeal.²

II.

The District Court had federal question jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291.

III.

Souryavong and Rolon's appeal presents two issues: (1) whether the District Court was right to grant judgment as a matter of law on the willfulness question; and (2) whether the Court erred in its calculation of attorney's fees.

A.

On the issue of whether the District Court should have entered judgment as a matter of law on the FLSA "willfulness" question, we apply de novo review. Brownstein v. Lindsay , 742 F.3d 55, 63 (3d Cir. 2014). Although willfulness is a "question of fact," Bianchi Trison Corp. v. Chao , 409 F.3d 196, 208 (3d Cir. 2005), a district court may take the question from the jury and grant a Rule 50(a) motion for judgment as a matter of law if "there is no legally sufficient evidentiary basis for a reasonable jury to find for" the non-moving party, Rego v. ARC Water Treatment Co. , 181 F.3d 396, 400 (3d Cir. 1999).

Under the FLSA, whether an employer "willfully" violates the statute is of import because such a finding extends the FLSA's limitations period from two years to three, bringing another year of lost pay within the scope of the worker's claim. 29 U.S.C. § 255(a). The Supreme Court defines "willfulness" to include situations when the employer, at the time of its FLSA violation, either "knew" its conduct was prohibited by the FLSA or "showed reckless disregard for the matter." McLaughlin v. Richland Shoe Co. , 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). Acting only "unreasonably" is insufficient—some degree of actual awareness is necessary. Id. at 135 n.13, 108 S.Ct. 1677.

Here, no pre-violation awareness of the two-job-FLSA problem was shown by the evidence that Souryavong and Rolon presented at trial. They argue otherwise based on: a series of overtime violations that continued into January 2012 with respect to Velez; Nancy Pearson's raising of the overtime issue with other County employees in her March 28, 2011 email; and the County's general awareness of the FLSA's requirements at all relevant times, as indicated by Durkin's testimony. But these three bits of evidence do nothing to show that the County was (i) specifically aware of the two-job FLSA overtime problem (ii) as it related to Souryavong and Rolon (iii) prior to the dates of the violations. Durkin's testimony, for example, is...