Braxton v. Eldorado Lounge, Inc. et al

Filing 249

MEMORANDUM OPINION. Signed by Magistrate Judge Beth P. Gesner on 8/9/2018. (kw2s, Deputy Clerk)(c/m 8.10.18)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
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BRAXTON et al.,
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Plaintiffs,
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v.

Civil No.: BPG-15-3661
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EL DORADO LOUNGE, INC. et al.,
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Defendants.
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MEMORANDUM OPINION

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A jury trial was held in this case from July 23 to July 26, 2018. At the conclusion of the
trial, the jury returned a verdict for the plaintiffs. (ECF No. 241). The issues remaining for the
court are to determine whether: (1) in light of the jury’s finding that the defendants did not act
willfully in withholding wages from plaintiffs, the amount of wages awarded by the jury that are
applicable are those wages for work performed after specific dates noted on the verdict sheet;
and (2) the court should award liquidated damages under the Fair Labor Standards Act
(“FLSA”). After the trial, the court requested briefing from the parties on these two issues (ECF
No. 244) and the parties submitted responsive letters. (ECF Nos. 246 and 247).
As to the first issue, the verdict sheet required the jury to apportion the amount of wages
awarded to plaintiffs between wages earned before and after a specific date. The reason for this
apportionment was that plaintiffs were only entitled to wages prior to the specific date if the jury
found that defendants acted willfully in withholding wages from plaintiffs. Given that the jury

did not so find, there appears to be no dispute that the amount of wages that are applicable are as
follows: (1) Plaintiff Braxton–$5,000; (2) Plaintiff Scott–$910; and (3) Plaintiff Gamble–$210.1
The remaining issue for the court is whether the court should award liquidated damages
in an additional equal amount to the unpaid wages awarded by the jury in accordance with 29
U.S.C. Sections 216(b) and 260.

An employer who violates the FLSA minimum wage

provisions is liable to the employee in the amount of their unpaid wages, and in an additional
equal amount as liquidated damages. 29 U.S.C. § 216(b). The awarding of liquidated damages
is mandatory unless the employer shows to the satisfaction of the court that the employer acted in
good faith and had reasonable grounds for believing its conduct was not a violation of the FLSA.
29 U.S.C. § 260. Good faith under this statute “requires that an employer first take active steps
to ascertain the dictates of the FLSA and then move to comply with them.” Pruisin v. Canton’s
Pearls, LLC, No. JKB-16-0605, 2017 WL 5126156 (D. Md. Nov. 6, 2017) (quoting Lockwood v.
Prince George’s Cty., 217 F.3d 839 (4th Cir. 2000)).
Here, defendants argue that efforts to comply with the FLSA were undertaken in good
faith. The basis of their claim is Mr. Jackson’s testimony that he had been compensating the
dancers in this fashion for a long time and his accountant never informed him that he was
classifying his employees incorrectly. He further asserted that he noted these payments on his
tax returns and the IRS never told him he was wrong in his treatment. The IRS is, of course, not
tasked with interpretations or enforcement of the FLSA. 2 Defendants never sought legal advice
or took any active steps to ensure compliance. The fact that no one ever informed defendants
that they were not in compliance with the FLSA does not permit them to now claim good faith or

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Neither party addressed the first issue in their letters to the court.

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The court observes that, defendants’ letter (ECF No. 247) is largely unresponsive to the court’s inquiry, and
misstates evidence at trial and rulings of the court.

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that their grounds for inaction were reasonable.

Defendants’ conduct falls short of the

affirmative “active steps” required by an employer to understand what is required by the FLSA
and adjust its practices to comply with those requirements. As such, defendants’ conduct does
not fall within the good faith exception under the statute. See Pruisin, 2017 WL 5126156 at *14
(citing Burnley v. Short, 730 F.2d 136, 140 (4th Cir. 1984)) (defendants cannot now claim their
“ostrichlike attitude of self-delusion” as a good faith attempt to comply with the FLSA).
Accordingly, I conclude that an award of liquidated damages in an additional equal amount to
the unpaid wages awarded by the jury is appropriate in this case.

Date: August 9, 2018

______/s/__________________
Beth P. Gesner
Chief United States Magistrate Judge

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