Opinion
Civ. A. No. 91-1461.
March 30, 1992
ORDER AND REASONS FOR RULING
1. Plaintiffs Motion for Partial Summary Judgment was decided this date on memoranda. For the reasons stated below, plaintiffs motion is GRANTED in part and DENIED in part.
FACTS
Most of the facts of this case are not disputed.
Defendant Licata's Seafood Restaurant (Licata's) is an establishment doing business in St. Tammany Parish, Louisiana which has more than two employees engaged in commerce and in the production of goods for commerce. It is not contested that Licata's is an "employer" under the Fair Labor Standards Act (FLSA).
Vernell Stevens began working as a dishwasher at Licata's in 1988. The plaintiff, Vanessa McQueen, was, at the time, his fiancée (the two are now married). From on or about October 1988 until May 11, 1989, plaintiff was permitted by Licata's to help Mr. Stevens with his work. Plaintiff received no compensation during this period. Plaintiff claims that she worked 1,450 hours during this period, which comes out to about 48 hours per week. Defendant claims that plaintiff typically came in late at night to help Mr. Stevens finish up his work, and thus, could not have worked nearly this many hours in that period.
Plaintiff was formally hired as a dishwasher on May 11, 1989, and worked at Licata's until September 30, 1989. She was the only female dishwasher during this period of time. As a formal employee, plaintiffs hours worked were recorded by a punch-card clock system. In addition to her recorded "on the clock" hours worked, plaintiff claims that she worked many hours "off the clock" for which she was not compensated.
It is not disputed that plaintiff and Mr. Stevens worked together and their work was similar. Both of them washed dishes, emptied garbage cans, mopped floors, cleaned the kitchen area, peeled shrimp and performed yard work and other tasks if assigned by the management of Licata's. The only difference in their work was that Mr. Stevens would occasionally, when requested by restaurant management, lift some heavy items such as sacks of oysters from delivery trucks.
From May 11, 1989 to June 2, 1989, plaintiff was paid $3.35 per hour while Mr. Stevens was paid $3.50 per hour for each hour compensated. From June 3, 1989 to September 30, 1989, plaintiff was paid $3.50 per hour while Mr. Stevens was paid $3.75 per hour. Both plaintiff and Mr. Stevens were fired on September 30, 1989.
It is not disputed that Licata's has no written seniority system or merit system, or any other written system on which to measure performance or base pay raises and promotions. Defendant argues that it is a factual question as to whether Licata's had an unwritten seniority or merit system. However, it is undisputed that employees were not informed regularly or in advance of what was necessary to obtain a pay raise.
WORK PERFORMED "VOLUNTARILY"
It is not disputed that plaintiff did work with Vernell Stevens at Licata's at various times between October 1988 and May 11, 1989. It is also undisputed that plaintiff volunteered, and was permitted, to work at Licata's during that period. However, there is a factual dispute as to whether she expected to be paid for this work. The question before the Court is whether such a worker is an "employee," and, thus, entitled to compensation under the provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq.
2. The FLSA defines an employee as "any individual" who is "suffered or permitted" to work by an employer. 29 U.S.C. §§ 203(e)(1), (g). In this case, plaintiff has clearly been "permitted" to work by Licata's.
However, the Supreme Court has held that "an individual who, 'without promise or expectation of compensation, but solely for his personal purpose or pleasure, worked in activities carried on by other persons either for their pleasure or profit,' is outside the sweep of the Act." Tony Susan Alamo Foundation v. Sec'y of Labor, 471 U.S. 290, 295 (1984) ( citing Wailing v. Portland Terminal Co., 330 U.S. 148, 152 (1947)). In determining whether a worker is an "employee" under this standard, the court is to focus on the "economic reality" of the situation. Alamo, 471 U.S. at 301; Watson v. Graves, 909 F.2d 1549, 1553 (5th Cir. 1990). The essence of the "economic reality" test is whether the worker expects to receive compensation in return for her efforts, and whether she is economically dependent upon the employer. Alamo, 471 U.S. at 301; Patel v. Vargo, 803 F.2d 632, 635 (11th Cir. 1985).
In the Alamo case, a nonprofit religious institution operated various commercial businesses staffed by its "associates," most of whom were former drug addicts, derelicts or criminals who were being rehabilitated by the defendant institution. Alamo. ,471 U.S. at 292. Although the associates received no monetary compensation, they did receive numerous benefits, most notably food and lodging. The Court upheld the District Court's finding that the associates were employees, noting that the associates were "entirely dependent upon the Foundation for long periods, in some cases several years." Id. at 301. "Under the circumstances," the Court concluded, the District Court's finding that the associates must have expected to receive in-kind benefits-and expected them in exchange for their services-is certainly not clearly erroneous." Id.
In Griffin v. Daniel, 768 F.Supp. 532 (W.D.Va. 1991), the court faced a factual situation analogous in some ways to the case at bar. The plaintiff, Mr. Griffin, worked at his brother-in-law's (Mr. Daniel's) truck stop without pay, but was housed and fed by him. Relying on Alamo, the court determined that the "economic reality" of the situation was that Griffin was an employee of Daniel. The court concluded that he did not perform "such services voluntarily-as a friend might do for a friend," but did so "out of a sense of obligation for the room and board he received from Daniel." 768 F.Supp. at 539.
In this case, it is questionable whether Ms. McQueen expected to receive compensation for her efforts. In her memorandum in support of this motion, plaintiff does contend that her "services were always rendered with the full expectation of payment." Memorandum in support of plaintiffs motion for partial summary judgment, pp. 8-9. However, plaintiffs deposition testimony raises grave doubts as to whether she expected to be paid:
3. Q. Did you expect to get paid for that [helping Mr. Stevens]?
A. No.
Q. You weren't expecting any pay. You were helping Vernell so he could get out of there soon; is that correct?
A. Yes.
* * *
Q. You didn't expect to get paid when you were doing it [helping Mr. Stevens]?
A. No. Because I just helping him to get through to come home.
McQueen Deposition, pp. 24-25. This deposition testimony indicates that there is a factual dispute over whether Ms. McQueen expected to be compensated for her services.
The question of whether a worker is an employee for purposes of the FLSA is a question of law. However, it is heavily dependent upon the factual determination of whether plaintiff expected to receive compensation. A reasonable jury could certainly find that plaintiff worked at Licata's prior to May 11, 1989 "without promise or expectation of compensation" and with the "personal purpose" of helping her fiancé, Mr. Stevens, finish work earlier. Accordingly, plaintiff's request for summary judgment on the issue of compensation for her services performed prior to May 11, 1989 must be denied.
THE EQUAL PAY CLAIM Liability
The FLSA requires that employers pay employees of different sexes equal pay for equal work. 29 U.S.C. § 206(d)(1). At all times that she was employed, Ms. McQueen was paid less than her male counterpart, Mr. Stevens.
"No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor than sex . . ."
In this case, it is undisputed that Ms. McQueen and Mr. Stevens performed essentially the same services at Licata's. The only difference is that Mr. Stevens was occasionally required to lift heavy objects, but this only happened once every one to five weeks.
The Fifth Circuit has promulgated specific criteria to consider in determining whether a two similar jobs are "equal" where one requires a few additional tasks:
jobs do not entail equal effort, even though they entail most of the same routine duties, if the more highly paid job involves additional tasks which (1) require extra effort, (2) consume a significant amount of time of all those whose pay differentials are justified in terms of them, and (3) are of an economic value commensurate with the pay differential.
Hodgson v. Brookhaven Gen. Hosp., 436 F.2d 719, 725 (5th Cir. 1970). See also, Hodgson v. Behrens Drug Co., 475 F.2d 1041, 1049 (5th Cir. 1973).
In this case, Mr. Stevens' job did require some extra effort. However, the extra tasks did not consume a significant amount of time. Furthermore, they were not of an economic value commensurate with the pay differential, as Mr. Stevens was paid $.15 to $.25 more every hour than Ms. McQueen, and performed the extra tasks at most only once every week. "Employers must not be permitted to frustrate the purposes of the Act by calling for extra duty from male employees only occasionally . . ." Behrens Drug, 475 F.2d at 1049. Consequently, Mr. Stevens and Ms. McQueen performed equal work within the meaning of the FLSA.
Once the plaintiff establishes a prima facie case of discrimination, as Ms. McQueen has, the burden is on the defendant to come up with a non-discriminatory reason for the discrepancy. Corning Glass Works v. Brennan, 417 U.S. 188, 196 (1974); Peters v. City of Shreveport, 818 F.2d 1148, 1153 (5th Cir. 1987). The Act provides four such non-discriminatory rationales for pay discrepancies: (i) a seniority system, (ii) a merit system, (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any factor other than sex. 29 U.S.C. §§ 206(d)(1)(i) to (iv).
4. These non-discriminatory rationales "are affirmative defenses on which the employer has the burden both of production and of persuasion." Peters, 818 F.2d at 1153. These rationales must be expressly pleaded and included in the pretrial order. Equal Employment Opportunity Commission v. White and Son Enterprises, 881 F.2d 1006, 1009 n. 4 (11th Cir. 1989); Kouba v. Allstate Ins. Co., 691 F.2d 873, 875 (9th Cir. 1982). This is in accordance with the general rule that affirmative defenses not pled are considered waived. Marine Overseas Services, Inc. v. Crossocean Shipping Co., Inc., 791 F.2d 1227, 1233 (5th Cir. 1986); Fed.R.Civ.Proc. 8(c).
Defendants do assert that there is a factual question as to whether Licata's employed a seniority or merit system within the meaning of the FLSA. Defendants' Memorandum in Opposition, p. 2. However, the record reveals that the defendants have never pled either of these rationales as an affirmative defense. In fact, the defendants have not raised this issue as a contested question of fact or law in the proposed Pre-Trial Order submitted to the Court. The only reference to the issue in the proposed Pre-Trial Order is a stipulation to the uncontested fact that Licata's had no formal seniority or merit system. "When the defendant has waived his affirmative defense by failing to allege it in his answer, or have it included in a pre-trial order . . . that supersedes the pleadings, he cannot revive the defense in a memorandum in support of a motion for summary judgment." Funding Systems Leasing Corp. v. Pugh, 530 F.2d 91, 96 (5th Cir. 1976). Under a literal interpretation of Fed.R.Civ.Proc. 8(c), these defenses have been waived.
The Pre-Trial Order submitted to the Court was rejected on this date for reasons unrelated to defendants' failure to include these affirmative defenses.
"(c) Licata's Seafood Restaurant has no written seniority system. Licata's Seafood Restaurant has no written merit system. Licata's Seafood Restaurant has no other written system on which to measure performance or base pay raises and promotions. Employees were not informed regularly or in advance of what was necessary to obtain a pay raise." Proposed Pre-Trial Order, p. 7.
In light of the Fifth Circuit's preference for a very liberal construction of Fed.R.Civ.Proc. 8(c), this Court prefers "not to rest [its] holding on this question of waiver" because the Court holds, in any event, that a rational trier of fact could not infer from the evidence presented that Licata's had a merit or seniority system. Resolution Trust Corp. v. Murray, 935 F.2d 89, 94 (5th Cir. 1991). See also Haralson v. E.F. Hutton Group, Inc., 919 F.2d 1014, 1035 (5th Cir. 1990).
The Fifth Circuit has held that a merit or seniority system, for purposes of exemption under the FLSA, must be "administered, if not formally, at least systematically and objectively." Brookhaven Gen. Hosp., 436 F.2d at 726. Furthermore, the Fourth Circuit, expanding on the Fifth Circuit's holding in Brookhaven Hospital, has held that where a merit system is not written, the employees must be aware of it. Equal Employment Opportunity Commission v. Aetna Ins. Co., 616 F.2d 719, 725 (4th Cir. 1980). The Court finds this reasoning persuasive, as allowing a FLSA exemption for employers with unwritten merit or seniority systems of which no employees are aware would enable them to circumvent the Equal Pay Act at will.
Vincent Licata's deposition testimony indicates that there was no "systematically and objectively administered" merit system at Licata's. Licata testified that his employees were evaluated periodically, but it was not done systematically:
5. Q. Now, how exactly [was] the pay of employees determined at Licata's Seafood during the period of '88 to '89 and even today if it's the same as during that period?
A . . . [I]f we hire somebody in a dishwasher position, they start off at minimum wage. After they show up for work, see how they work, see how they show up for work, that all depends upon me giving a person a raise. Management comes to me or somebody in there and we'll make that decision . . .
Vincent Licata deposition, p. 10. A merit system has to be based on something more than a manager's "gut feeling" about an employee. Grove v. Frostburg Nat. Bank, 549 F.Supp. 922, 934 (D.Md. 1982). "Some evidence of systematic employee evaluation is necessary." Maxwell v. City of Tucson, 803 F.2d 444, 447 (9th Cir. 1986). Defendants have not submitted any such evidence. Furthermore, it is undisputed that the employees at Licata's were not aware of any merit system. As noted above, an unwritten merit system of which the employees were not aware is insufficient for the FLSA exemption.
Licata's did not have a seniority system, either. Vincent Licata testified that it was possible that a more experienced dishwasher would be paid more than a less experienced dishwasher:
Q. [W]ould . . . a dishwasher [who had been working for two years] be paid more than a dishwasher who had just . . . came in today?
A. Sure, that's possible.
Q. That's possible?
A. Yes.
Q. Was this a standard procedure used by Licata's?
A. Well, I go through dishwashers like-I mean they might be hired today and not even show up tomorrow, you know. If somebody stuck with me and did a good job, I gave them a little raise.
Q. Would someone be paid more if that individual was working longer at the restaurant than someone who had just been hired?
A. Well, yes. In that position, yes. They possibly could.
Licata's seniority system, if any, was not "systematic" or "objective." It is not enough that it be "possible" for a dishwasher to be paid more based on seniority. The fact that Mr. Stevens was hired at $3.50/hour and Ms. McQueen was hired at $3.35/hour, also refutes the suggestion that Licata's had a seniority "system." Finally, the employees were not aware of any such system. An employer with an unwritten seniority system of which no employees are aware cannot avail itself of the FLSA exemption.
If the party opposing a summary judgment motion fails to establish an essential element of its case, summary judgment is appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Defendants have provided no evidence indicating that Licata's had a seniority or merit system as defined by the FLSA jurisprudence. Accordingly, plaintiffs motion for summary judgment on the issue of liability for violation of the Equal Pay Act for the period from May 11, 1989 to September 30, 1989 must be granted.
Damages
There is no dispute about the amount of the wage discrepancy in this case. For the period from May 11, 1989 to September 30, 1989, the total pay discrepancy is $131.11. However, plaintiff claims liquidated damages and attorney's fees in addition to compensatory damages.
6. The FLSA provides that any employer who violates the Equal Pay provisions of section 206 shall be liable to the employees affected in the amount of their unpaid wages due, plus an additional equal amount in liquidated damages. 29 U.S.C. § 216(b). However, the court has the discretion to award no liquidated damages where the employer shows that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the FLSA. 29 U.S.C. § 260. See Mireles v. Frio Foods, Inc., 899 F.2d 1407 (5th Cir. 1990). A "substantial" burden is on the defendant to establish that he acted in good faith and had reasonable grounds for believing that he did not violate the Act. Id. at 1415.
In this case, the facts are such that one could reasonably infer that the defendants acted in good faith and did not believe they were violating the FLSA. For example, Vincent Licata, in his affidavit, testified that he paid Mr. Stevens more because of his "seniority" and "reliability." Although the defendants have a substantial burden in proving good faith, one could draw sufficient inferences from this and other evidence to find good faith. Consequently, summary judgment is precluded on this question.
An award of attorney's fees to the prevailing party in a FLSA action is mandatory. 29 U.S.C. § 216(b). Thus, plaintiff is entitled to recover a reasonable attorney's fee. The amount of the fee is left to the discretion of the Court. Id. The plaintiff will be awarded reasonable attorney's fees once all her claims have been adjudicated on the merits.
THE LOUISIANA WAGE PAYMENT ACT
The Louisiana Wage Payment Act requires employers to pay their employees all wages due them not later than three days following the date of the employee's discharge or resignation. La.Rev.Stat.Ann. § 23:631(A). An employer failing to do so shall be held liable to the employee for penalties of ninety days' wages at the employee's daily rate of pay and attorney fees. La.Rev.Stat.Ann. § 23:632.
However, in the event of a good faith dispute as to the amount due, "the employer shall pay the undisputed portion of the amount due . . ." La.Rev.Stat.Ann. § 23:631(B). The burden is on the plaintiff to prove that the employer was in bad faith. Urian v. Bullard, 380 So.2d 707, 710 (La.App. 2nd Cir. 1980); Robertson v. International Motor Co. of Houma, Inc., 314 So.2d 531, 534 (La.App. 4th Cir. 1975). In this case, Licata's did pay Ms. McQueen the undisputed portion of her wages. The question is whether there was a genuine dispute over whether she was entitled to the same wage as Mr. Stevens.
A rational trier of fact could find that there was a good faith dispute as to whether Licata's had any obligation to pay Ms. McQueen the same wage as Mr. Stevens. As noted above, Vincent Licata testified that he paid Mr. Stevens more than Ms. McQueen because of his seniority and reliability. One could infer from this evidence that there was a real dispute over what was due, as opposed to those cases where the only "dispute" arises from the employer forcing the employee to sue for his paycheck. Cf. Potvin v. Wright's Sound Gallery, Inc., 568 So.2d 623, 627-28 (La.App. 2nd Cir. 1990); Agusiegbe v. Petroleum Associates, 486 So.2d 314, 316 (La.App. 3rd Cir. 1986). Since a rational factfinder could find that there was a good faith dispute as to what was owed by Licata's, summary judgment is inappropriate on this issue.
CONCLUSION
7 For the reasons stated above,
IT IS ORDERED that plaintiff's Motion for Partial Summary Judgment is GRANTED on the issues of liability, compensatory damages and attorney's fees for defendants' violation of the Equal Pay Act between May 11, 1989 and September 30, 1989, and DENIED on all other issues.
FN1. "No employer having employees subject to any provisions of this section shall discriminate, within any establishment in which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at his act or omission was not a violation of the FLSA. 29 U.S.C. § 260. See Mireles v. Frio Foods, Inc., 899 F.2d 1407 (5th Cir. 1990). A "substantial" burden is on the defendant to establish that he acted in good faith and had reasonable grounds for believing that he did not violate the Act. Id. at 1415.
In this case, the facts are such that one could reasonably infer that the defendants acted in good faith and did not believe they were violating the FLSA. For example, Vincent Licata, in his affidavit, testified that he paid Mr. Stevens more because of his "seniority" and "reliability." Although the defendants have a substantial burden in proving good faith, one could draw sufficient inferences from this and other evidence to find good faith. Consequently, summary judgment is precluded on this question.
An award of attorney's fees to the prevailing party in a FLSA action is mandatory. 29 U.S.C. § 216(b). Thus, plaintiff is entitled to recover a reasonable attorney's fee. The amount of the fee is left to the discretion of the Court. Id. The plaintiff will be awarded reasonable attorney's fees once all her claims have been adjudicated on the merits.
THE LOUISIANA WAGE PAYMENT ACT
The Louisiana Wage Payment Act requires employers to pay their employees all wages due them not later than three days following the date of the employee's discharge or resignation. La.Rev.Stat.Ann. § 23:631(A). An employer failing to do so shall be held liable to the employee for penalties of ninety days' wages at the employee's daily rate of pay and attorney fees. La.Rev.Stat.Ann. § 23:632.
However, in the event of a good faith dispute as to the amount due, "the employer shall pay the undisputed portion of the amount due . . ." La.Rev.Stat.Ann. § 23:631(B). The burden is on the plaintiff to prove that the employer was in bad faith. Urian v. Bullard. 380 So.2d 707, 710 (La.App. 2nd Cir. 1980); Robertson v. International Motor Co. of Houma, Inc., 314 So.2d 531, 534 (La.App. 4th Cir. 1975). In this case, Licata's did pay Ms. McQueen the undisputed portion of her wages. The question is whether there was a genuine dispute over whether she was entitled to the same wage as Mr. Stevens.
A rational trier of fact could find that there was a good faith dispute as to whether Licata's had any obligation to pay Ms. McQueen the same wage as Mr. Stevens. As noted above, Vincent Licata testified that he paid Mr. Stevens more than Ms. McQueen because of his seniority and reliability. One could infer from this evidence that there was a real dispute over what was due, as opposed to those cases where the only "dispute" arises from the employer forcing the employee to sue for his paycheck. Cf. Potvin v. Wright's Sound Gallery, Inc., 568 So.2d 623, 627-28 (La.App. 2nd Cir. 1990); Agusiegbe v. Petroleum Associates, 486 So.2d 314, 316 (La.App. 3rd Cir. 1986). Since a rational factfinder could find that there was a good faith dispute as to what was owed by Licata's, summary judgment is inappropriate on this issue.
CONCLUSION
7 For the reasons stated above,
IT IS ORDERED that plaintiffs Motion for Partial Summary Judgment is GRANTED on the issues of liability, compensatory damages and attorney's fees for defendants' violation of the Equal Pay Act between May 11, 1989 and September 30, 1989, and DENIED on all other issues.