Carrillo et al v. Borges Construction, LLC
Filing
61
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 9/30/2016. (jf3s, Deputy Clerk)
,
IN THE UNITED STATES DISTRICEF r Othif
e
FOR THE DISTRICT OF MARYL-AND 3fl FE 3% I 9
Southern Division
JUAN PABLO CARRILLO, etal.,
Plaintiffs,
5E7UTY
Case No.: CJH-I3-641
v.
• BORGES CONSTRUCTION, LLC etal.,
Defendants.
MEMORANDUM OPINION
In this action, Juan Pablo Carrillo, Julio Cesar Sanchez, Luis David Castro, Enrique
Patricio Correa, Roger A. Ramos, Carlos Humberto Calderon and Melvin Omar Lemus
(collectively,"Plaintiffs") allege violations of the Fair Labor Standards Act ("FLSA-) 29 U.S.C.
§§ 201 et seq., the Maryland Wage and Hour Laws, ("MWHL"), Md. Code Ann., Lab & Empl.
§§ 3-401 el seq., and the Maryland Wage Payment and Collection Law ("M WPM), Md. Code
Ann., Lab & Empl. §§ 3-501 el seq.. against their former employer, Borges Construction, LLC;
its successor corporations, Lu-Ma Construction, LLC, Deco Inc., and LMS Contractors Inc.; and
the officers of said corporations, Silvestre Borges, Maria Nicoladle, and Salomon Nicolalde in
their individual capacities (collectively, "Defendants"). ECF No. 45. This Memorandum Opinion
and accompanying Order address Plaintiffs' Motion for Default Judgment. ECF No. 56. A
hearing is unnecessary. See Loc. R. 105.6 (D. Md.). For the reasons stated herein, Plaintiff's
Motion will be granted in part, and denied, in part.
I.
BACKGROUND
Defendant Borges Construction is a waterproofing and construction contractor and
subcontractor, performing services in Maryland, Virginia and the District of Columbia. ECF No.
45 ¶ 12. It is a Maryland limited liability company with its principal place of business located in
Gaithersburg, Maryland. Id. ¶ 3. During the relevant time period, Defendants Silvestre Borges,
Maria Nicoladle, and Salomon Nicolalde were officers and active owners of Borges
Construction. Id ¶ 8. Plaintiffs worked for Defendants as constructions workers and laborers
from 2010 through 2013.1 See ECF Nos. 56-3 through 56-8, 60-1 If 2. Plaintiffs' hours varied,
working an average of 52 hours each week. ECF No. 56-1 at 9-182; see also e.g. ECF No. 56-3
4. During their employment, Plaintiffs allege that Defendants "willfully and systematically
directed and forced Plaintiffs" to underreport the hours they worked each week on preliminary
and postliminary work duties. ECF No. 45 11¶ 55 - 60. According to the Third Amended
Complaint, each morning, Defendants required Plaintiffs to arrive at Defendants' place of
businesses and load Defendants' work trucks before proceeding to the job location. Id. ¶ 56.
Similarly, at the conclusion of Plaintiffs' work duties at the job site, Defendants required
Plaintiffs to drive Defendants' equipment back to Defendants' place of business and return the
equipment to a secure location. Id. ¶ 57. Plaintiffs allege that these work duties, including driving
time, were performed by the Plaintiffs primarily for the benefit of Defendants and with
Defendants' knowledge. Id. in 58-59. Plaintiffs attest that these duties accounted for
approximately seven additional unreported hours each week. ECF No. 56-1 at 10-18. Plaintiffs
maintain that they were never paid overtime wages for these duties, calculated at one and one
half time their regular wages. ECF No. 45 if 62.
I One Plaintiff, Mr. Carrillo, began working for the Defendants in 2008 but his claims are limited by the applicable
statute of limitations.
2 All pin cites to documents filed on the Court's electronic filing system (CM/ECF) refer to the page numbers
generated by that system.
2
Plaintiffs further allege that Defendants sought to shield themselves from liability by
creating a series of successor corporations. Id.11 64- 67. Plaintiffs state that around the time of
the commencement of this lawsuit. Defendants ceased or substantially limited their operations as
Borges Construction and began operating through the entity of Defendant Lu-Ma Construction, a
Maryland limited liability company with its principal place of business in Gaithersburg,
Maryland. Id. ¶ 4,64. Furthermore, on or about May 20, 2013, Plaintiffs' allege that
Defendants ceased or substantially limited their operations as lau-Ma Construction. LLC and
began operating through the entity of Defendant Deco Inc., also a Maryland corporation with its
principal place of business in Rockville, Maryland. /din 5, 65. Finally, in or about February
2014, in an alleged further attempt to limit their liability, Defendants ceased or substantially
limited their operatiens as Lu-Ma Construction, LLC, Deco Inc., and Borges Construction and
began operating through the entity of Defendant LMS Contractors Inc., also a Maryland
corporation with its principal place of business in Rockville, Maryland. Id. ¶1J 6, 66. Plaintiffs
allege that all of the above referenced corporate defendants share a common identity of officer,
director and stockholders; hold themselves out to the public as identical or near identical
businesses and the entities perform the same or similar services for the same clientele. Id.111164 —
67.
At all times during the period of Plaintiffs' employment, Plaintiffs claim that Defendants
were their "employers" for the purposes of the FLSA. MWHL and MWI?CL. Id. 1122.
Furthermore, Plaintiffs' allege that Defendants were engaged in commerce or in the production
of goods within the meanings of Section 3(s)(I) of the FLSA, 29 U.S.C. § 203(s)(1). Id. III 23.
Finally, Plaintiffs state that they were employees who engaged in commerce or the production of
good for commerce, under the FLSA, 29 U.S.C. § 207. Id. ¶ 24.
3
On Februar'y 28, 2013, Plaintiffs filed a Complaint for unpaid wages, liquidated damages
and reasonable attorney's fees under the FLSA, M WEIL, and MWPCL, ECF No. 1, which they
have subsequently amended three times. Ea' Nos. 3, 19 and 45. On August 17;2016, Plaintiffs
filed a Motion for Clerk's Entry of Default, Ea' No. 54, and the presently pending Motion for
Default Judgment was filed the next day. ECF No. 56. An Order of Default was entered by the
Clerk of the Court against Defendants on September 8.2016. ECFNos. 57-59.
IL
STANDARD OF REVIEW
"A defendant's default does not automatically entitle the plaintiff to entry of a default
judgment: rather, that decision is left to the discretion of the court."Choice Hotels Intern., Inc. v.
Savannah Shalai Carp., No. DKC-11-0438, 2011 WL 5118328 at * 2 (D. Md. Oct..25, 2011)
(citing Dow v. Jones, 232 F.Supp.2d 491.494 (D. Md. 2002)). Although "[t]he Fourth Circuit
has a 'strong policy' that 'cases be decided on their merits,'" id.. (citing United Stales v. Shaffer
Equip. Co., 11 F.3d 450, 453 (4th Cir.1993)), "default judgment may be appropriate when the
adversary process has been halted because of an essentially unresponsive party[.]" Id. (citing
S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).
"Upon default, the Well-pled allegations in a complaint as to liability are taken as true,
although the allegations as to damages are not." S.E.C. Lawbaugh, 359 F. Supp. 2d 418, 422
(D. Md. 2005). Rule 54(c) of the Federal Rules of Civil Procedure limits the type ofjudgment
that may be entered based on a party's default: "A defaulLjudgment must not differ in kind from,
or exceed in amount, what is demanded in the pleadings." In entering default judgment, a court
cannot, therefore, award additional damages "because the defendant could not reasonably have
expected that his damages would exceed the] amount [plead in the complaint]." In re Gene.sys
Data Techs., Inc., 204 F.3d 124, 132 (4th Cir. 2000). Where a complaint does not specify an
aniount, "the court is required to make an independent determination of the sum to be awarded."
4
Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (citing 5. E.G. v. Management Dynamics.
Inc. 515 17.21:1801, 814 (2nd Cir. 1975); Au Bon Pain Corp. v. Arica. Inc., 653 I7.2d 61,65 (2nd
Cir. 1981)). While the Court may hold a hearing to prove damages, it is not required to do so; it
may rely instead on "detailed affidavits or documentary evidence to determine the appropriate
sum." Adkins, 180 F.Supp.2d at 17 (citing United Artists Corp. v. Freeman, 605 F.2d 854, 857
(5th Cir. 1979)); see also Laborers District Council Pension, et al. v. EG.S.. Inc., No. WDQ09-3174, 2010 WL 1568595, at t3 (D. Md. Apr.16, 2010) ("[O]n default judgment, the Court
may only award damages without a hearing if the record supports the damages requested.").
In considering a Motion for Default Judgment, the Court accepts as true the well-pleaded
factual allegations in the Complaint as to liability, but nevertheless "must determine whether
[those] allegations ... support the relief sought in th[e] action." Intl Painters & Allied Trades
Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F. Supp. 2d 680, 685 (D. Md.
2013) (citation and internal quotation marks omitted).
DiSCUSSION
A. Preliminary and Postliminary Activities as Compensable
Work under the FLSA
Here, Plaintiffs allege that Defendants failed to pay them overtime pay for compensable
preliminary and postliminary work duties they completed, as required under the FLSA and
MWHL. The FLSA requires that an employee must receive compensation "at a rate not less than
one and onerhalf times the regular rate at which he is employed" for any hours worked in excess
of forty hours per week. 29 U.S.C. § 207(a)(1). "The MWHI., similarly requires that employers
pay ...an overtime wage of at least 1.5 times the usual hourly wage for each hour worked in
excess of forty hours per week." McFeeley v. Jackson St. Entm'I. LLC, 47 F. Supp. 3d 260, 27576 (D. Md. 2014) (internal quotation marks and citations omitted). "The MWHL is the State
5
parallel to the FLSA, and the requirements of that provision mirror those of the federal law.
Thus, Plaintiffs' claim[s] under the MWHL stand[] or fall[] on the success of their claims under
the FLSA." Brown v. While's Ferry, Inc., 280 F.R.D. 238, 242 (D. Md. 2012) (internal citation
and quotations omitted). "To prove a prima facie violation of this provision, a plaintiff must
show the following: (1) that the plaintiff worked overtime hours for the employer and did not
receive the prescribed compensation; (2) the number of overtime hours worked; and (3) that the
employer had actual or constructive knowledge that the plaintiff worked those hours." See
Orelkina v. Cienna Properties, LI,C, No. CIV.A. JKB-11-25 I 5, 2012 WL 203421, at *2 (D. Md.
Jan. 23, 2012)
As Plaintiffs claims rest upon the allegation that Defendants "willfully and systematically
directed and forced Plaintiffs" to underreport the hours they worked each week on "preliminary
and postliminary work duties," ECF No. 45 ¶J 55 —60, the Court must first determine whether
such activities properly constitute compensable work.
The Portal-to-Portal Act, 29 U.S.C. § 254, was passed by Congress to clarify the meaning
of "work," left undefined under the FLSA. See Integrity Staffing So/s., Inc. v Busk, 135 S. Ct.
513, 51 6-1 7 (2014). Among other things, the Portal—to—Portal Act "exempted employers from
liability for future claims based on... activities which are preliminary to or postliminary to said
principal activity or activities.. .which occur either prior to the time on any particular workday at
which such employee commences, or subsequent to the time on any particular workday at which
he ceases, such principal activity or activities." Id. at 517(intental quotations omitted).
Liability under the FLSA thus turns on whether or not an activity can be defined as a
"principal activity" under the Portal-to-Portal Act. See Jones v. Holfberger Moving Servs. LLC,
92 F. Supp. 3d 405, 410 (D. Md. 2015). "The Supreme Court has interpreted the term 'principal
activity' to 'embrace[ ] all activities which are an integral and indispensable part of the principal
6
activities.'" Id. (internal citation omitted). Recently in Integrity Staffing, the Supreme Court held
that an activity is integral and indispensable "if it is an intrinsic element of those activities and
one with which the employee cannot dispense if he is to perform his principal activities."
Integrity Staffing Sots.. Inc., 135 S. Ct. at 519 (2014).
Plaintiffs contend that Defendants violated the FT,SA by requiring Plaintiffs to arrive at
Defendants' place of businesses and load Defendants' work trucks before proceeding to the job
location and to drive Defendants' equipment back to Defendants' place of business at the end of
the day. ECF No. 45 ¶ij 56-57. Plaintiffs were employed by Defendants as day laborers and
construction workers, work that could not been completed without access to the appropriate
tools. Thus, the employers could not have disposed of the disputed activity, here the loading and
unloading of equipment and tools, "without impairing their employee's ability to perform the
work they were employed to perform." cf. Jones, 92 F. Supp. 3d at 410 (discussing example
where employer could dispose of the disputed activity). Indeed, several district courts, postIntegral Staffing, have held that similar preliminary equipment loading is considered "integral
and indispensable" to an employees work activities. See. e.g.. Gaylen y G&G Landscaping
Constr., Inc., 145 F. Supp. 3d 320, 325 (D.N..I. 2015)Rholding that "loading trucks with
necessary tools and materials" for landscaping jobs is compensable time under the l'1_,SA); Jones,
92 F. Supp. 3d at 412 (D. Md. 201 5)(holding that time spent loading trucks with moving
.
equipment at company's warehouse was integral and indispensable to Plaintiffs' principal
activities of loading and unloading Defendants' trucks at job sites). Thus, the Court finds that
Plaintiffs' work loading and unloading equipment from Defendants' work trucks is integral and
7
indispensable to their principal activity as laborers and construction workers and Plaintiffs
should have been compensated accordingly.3
Having established that Plaintiffs are owed compensation for their preliminary and
postliminary work activities. the Court next turns to whether or not those hours consisted of
overtime work. Here, Plaintiffs allege that they worked an average of 52 hours per week, ECF
Nos. 56-3 through 56-8112-4 and ECF No. 60-1 Iflj 2-4, including approximately seven hours of
preliminary and postliminary work duties for which they were never compensated. ECF Nos. 563 through 56-8 ¶ 8; ECF No. 60-1 If 8. Plaintiffs also allege that at all times during their
employment, Defendants Silvestre Borges, Maria Nicoladle and Salomon Nicoladle were the
owners of Borges Construction, LLC and had the power to set their work schedules. Id. at
in
10,12. They also allege that Defendants "willfully and systematically directed and forced
Plaintiffs- to underreport the hours they worked each week on "preliminary and postliminary
work duties.- ECF No. 45 11 55 -60. Together, this is sufficient to demonstrate that Defendants
had actual or constructive knowledge of the hours Plaintiffs worked. Therefore, Plaintiffs have
established a pr ma fiwie case of violations of the FLSA overtime provisions.4
B. Liability
Having met their prima facie case. the Court will now address the liability of each
Defendant. Plaintiffs assert claims against four corporate defendants, Borges Construction, LLC,
and its successor corporations, Lu-Ma Construction, LLC, Deco Inc., and LMS Contractors Inc.;
It is unclear, and Plaintiffs have not briefed, whether or not liability under the MWHL may be interpreted more
expansively than the new, narrower, standard of liability under the FLSA articulated in Integrity Staffing. However,
as the Court finds that Defendants are liable under the FLSA, there is no need to address any such discrepancy right
now.
3
These facts are also sufficient to establish a violation of the MWPCL. which requires that an employer pay "all
wages due for work that the employee performed before the termination of employment, on or before the day on
which the employee would have been paid the wages if the employment had not been terminated." Md. Code Ann.,
Lab. & Empl. j 3-505. "The Maryland Court of Appeals has held that 'both the [M]WHL and the [M]WPCL are
vehicles for recovering overtime." Juan Flores, etal., v. Environmental Trust Solutions Inc., etal.,, No. PWG-153063, 2016 WL 5459106, at *2 (D. Md. Sept. 28, 2016)(quoting Peters v. Early Healthcare Giver, Inc., 97 A.3d
621, 625-26 (Md. 2014)).
4
8
along with the officers of said corporations, Silvestre Borges, Maria Nicoladle, and Salomon
Nicola1de in their individual capacities. The Court will first discuss the liability of the corporate
defendants and then that of the individual defendants.
1. Corporate Defendants
"Ordinarily, a corporation that merely purchases the assets of another corporation will
not be liable for the debts or other liabilities of that corporation. However...1*e exception
involves 'the continuation of business theory,' also known as the 'mere continuation' of business
exception." Progressive Septic, Inc. v. SeptiTech. LLC, No. CIV.A. ELH-09-03446, 2011 WL
939022, at *10 (D. Md. Mar. 15, 2011)(internal citations omitted)(discussing the concept of
successor liability generally in the context of a breach of contract case). This exception applies
"when the transferee corporation is merely a continuation or reincarnation of the transferor
corporation'; to wit, a change in corporate form, but not in substance, has occurred." Id.
While the Fourth Circuit has not opined on whether or not successor liability is available
under the FLSA, "the trend among the courts that have decided the question is to recognize
successor liability in FLSA cases" including various district courts, along with the Ninth and
Seventh Circuits. Valdez v. Celerity Logistics, Inc., 999 F. Supp. 2d 936, 941(N.D. Tex. 2014);
see Steinbach y Hubbard, 51 F.3d 843, 845 (9th Cir. 1995)("we conclude that successorship
liability exists under the FLSA-); Teed v. Thomas & Betts Power Sols.. L.L.C.,711 F.3d 763,
766 (7th Cir. 2013)( "We suggest that successor liability is appropriate in suits to enforce federal
labor or employment laws"). This trend has also been noted within this district. See Lippe y
TJML, LLC, No. CIV.A. DKC 12-0260, 2013 WL 179217, at *5 n. 9 (D. Md. Jan. 16,
2013)(vacated as to one Defendant on unrelated grounds)(1a]s a matter of law, other circuit and
district courts have extended liability under the FLSA to successor entities."). Thus. this Court
finds that successor liability is appropriate under the FLSA.
9
While there is not a consensus as to how the Court should determine successor liability,
both the Seventh and Ninth Circuits have noted that the Court should inquire into whether or not
there was a continuity of business. See Teed, 711 F.3d at 766 ("Whether there is continuity
between the operations and work force of the predecessor and the successor, as there is in this
case, which favors successor liability on the theory that nothing really has changed); see also
Steinbach, 51 F.3d at 845-46 ("Under the NLRA, successor liability can attach when 1) the
subsequent employer was a bona fide successor and 2) the subsequent employer had notice.of the
potential liability. Whether.an employer qualifies as a bona fide successor will hinge principally
on the degree of business continuity between the successor and predecessor.")(internal citation
omitted). Furthermore, the Fourth Circuit, in constructing CERCLA, another federal remedial
statute, also relied on a business continuity analysis to determine whether or not successor
liability should apply. See United States v. Carolina Transformer Co., 978 F.2d 832, 837-38 (4th
Cir. 1992). Thus, without articulating a formal rule, the Court finds that allegations that a
corporation was "merely a continuation or reincarnation of the transferor corporations,"
Progressive Septic. Inc., 2011 WL 939022, at *10, support a finding of successor liability.
Here. Plaintiffs allege exactly that, stating that Defendants Lu-Ma Construction, LLC,
Deco Inc., and LMS Contractors Inc were "merely a continuation or reincarnation of the
transferor corporation," Borges Construction, LLC, ECF No. 56-1 at 7, created to shield them
from liability. Ea' No. 45 ¶11 64-67. In support of their claims, Plaintiffs state that around the
time of the commencement of this lawsuit. Defendants ceased or substantially limited their
operations as Borges Construction and began operating through the entity of Defendant Lu-Ma
Construction. Id. 111 4,64. Furthermore, on or about May 20, 2013, Defendants ceased or
substantially limited their operations as Lu-Ma Construction, LLC and began operating through
the entity of Defendant Deco Inc. /dill 5,65. Finally in or about February 2014, Defendants
10
ceased or substantially limited their operations as Lu-Ma Construction, LLC, Deco Inc. and
Borges Construction and began operating through the entity of Defendant LMS Contractors, Inc.
Id. ¶ 6, 66. Plaintiffs also allege that all of the above referenced corporate defendants share a
common identity of officer, director and stockholders; hold themselves out to the public as
identical or near identical businesses, and the entities perform the same or similar services for the
same clientele. Id. 11164 — 67.
These facts, taken as true, demonstrate the exact situation that successor liability was
intended to address, that is "preventing corporations from using asset sales to place those assets
out of the reach of creditors." Progressive Septic, Inc., 2011 WL 939022, at *10. Thus, the Court
finds that Plaintiffs have sufficiently pled successor liability as to corporate defendants Lu-Ma
Construction, LLC, Deco Inc., and LMS Contractors Inc. As Plaintiffs have sufficiently
established a prima facie case of FLSA overtime violations as to Defendant Borges Construction,
the Court finds that its successor corporations are also liable under the FLSA. As "the MWHL is
the State parallel to the FLSA, and the requirements of that provision mirror those of the federal
law," Defendants are also held liable Under the MWHL. See Brown, 280 F.R.D. at 242 (internal
citation omitted).5
2. Individual Defendants
Plaintiffs also seek to hold Silvestre Borges, Maria Nicoladle, and Salomon Nicolalde,
officers of the above-referenced corporate defendants, liable in their individual capacities. The
FLSA and MWHL define an "employer, in a similar manner as either "any person acting
5 These facts are also sufficient to establish successor liability under the MWPCL, which defines "employer" as
"any person who employs an individual in the State or a successor of the person." Md. Code Ann., Lab. & Empl. §
3-50I(emphasis added). While noting that "[] the Payment Law does not define the term 'successor; and [ [there
are no published Maryland decisions analyzing successor liability for violations of the Payment Law' the Court of
Special Appeals of Maryland found Nissen Corp's analysis of successor liability, including its adoption of the "mere
continuation" of business exception, persuasive in reviewing a MWPCL arbitration decision. Grindstone Capital,
LLC v. Atkinson, No. 1579 SEPT.TERM 2014, 2015 WL 6093213, at *3 (Md. Ct. Spec. App. Sept. 23,
2015)(discussing Nissen Corp. v. Miller, 323 Md. 613, 617 (1991)).
11
directly or indirectly in the interest of an employer in relation to an employee,- 29 U.S.C. §
203(d), or "a person who acts directly or indirectly in the interest of another employer with an
employee.- Md. Code Ann., Lab & Empl. § 3-401(b). Furthermore, federal courts have
interpreted the definition of an employer "broadly to achieve Congress's intent to provide a
remedy to employees for their employers' wage and hour violations." Guzman y D & S Capital,
LLC, No. MAB 14-CV-01799, 2015 WL 772797, at *4 (D. Md. Feb. 20, 2015)(quoting Hurd y
NDL, Inc., No. CIV. CCB-11-1944, 2012 WL 642425, at *5 (D. Md. Feb. 27, 2012)).
"Whether a person qualifies as an employer turns on the 'economic reality' of the
relationship between the employee and the putative employer." Guzman, 2015 WL 772797, at
*4. This includes an examination of multiple factors "such as the person's job description, his or
her financial interest in the enterprise, and whether or not the individual exercises control over
the employment relationship.- Id. Here, Plaintiffs allege, and produce affidavits to support, that
Defendants exercised control over the employment relationship by having the power to hire and
fire Plaintiffs, the power to set and determine Plaintiffs' rate and method of pay, the power to set
and control their work schedule, and the power to assign and supervise Plaintiffs' work duties.
See ECF Nos. 56-3 through 56-8 and ECF No. 60-1 411111 1-14. Thus, the Court finds that Plaintiffs
have alleged facts sufficient to show that Defendants Silvestre Borges, Maria Nicoladle, and
Salomon Nicolalde are liable under the FLSA and MWHL in their individual capacities.°
While the MWPCL's definition of employer is "more restrictive than the definition in the FLSA and the MWFIL"
individual liability has been found where, as here, the individual employers owned the corporation in question and
exercised significant control over the employment relationship, for example by having the power to hire and fire the
employees and set their rate of pay. Reynolds V. Solo & AD, Inc., No. CV CBD-15-2021, 2015 WL 5882053, at *3 *4 (D. Md. Oct. 2,2015). Thus, the individual defendants here would also be liable under the MWPCL.
6
12
3. Willful Violation
Plaintiffs also request that a three year statute of limitations apply to their claims because
Defendants' violations of the FLSA were willful. ED? No. 56-1 at 3.7 The standard FLSA statute
of limitations is two years. but it may be extended to three years if the violation of the Act was
willful. See 29 U.S.C. § 255(a). An employer is willful in its violation of the FLSA if the
employer knows, or shows reckless disregard as to whether, its conduct is prohibited by the
FLSA. See McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1998). Negligent conduct is
not enough to constitute "willful" conduct. See id. Plaintiffs, as the employees, "bea[] the
burden of proof when alleging that a violation is willful." See Robinson v. Empire Equity Grp..
Inc., No. CIV. WDQ-09-1603, 2014 WL 6698407, at *5 (D. Md. Nov. 24, 2014). Here, Plaintiffs
specifically allege that they worked an average of fifty-two hours each week and were "directed
and forced to underreport" the hours they worked. See ECF Nos. 56-3 through 56-8 and 60-1 VI
4-5. Assuming the truth of these allegations, Plaintiffs establish that Defendants knew they were.
working overtime and "permit the reasonable inference that Defendants were either actively or
recklessly disregarding the requirements of the FLSA." Aguilar v. ALCOA Concrete & Masonry.
Inc., No. CV TDC-15-0683, 2015 WL 6756044; at *2 (D. Md. Nov. 4, 2015); see also Buller v.
DirectSal USA. LLC, 800 F. Supp. 2d 662, 669 (D. Md. 2011)(finding that Plaintiffs who alleged
that they were directed to record less time than they actually worked stated a claim for willful
violation of the FLSA). Therefore, the three year of statute of limitations will be applied to
Plaintiffs' claims. Plaintiffs filed their initial Complaint on February 28, 2013, E'CI: No. 1, and
thus their claims of FLSA overtime violations will be granted with respect to claims that
occurred on or after February 28, 2010.
The statute of limitations for MWHL claims is three years. See Md. Code Ann.. Cts. & Jud. Proc. § 5-161 ("A civil
action at law shall be tiled within three years from the date it accrues...).
13
C. Relief
1. Liquidated Damages under the FLSA
In addition to unpaid wages, Plaintiffs also request liquidated damages under the FLSA.
ECF No 45 1174. Pursuant to the FLSA, an employer who violates overtime requirements "shall
be liable to the employee or employees affected in the amount of their ...unpaid overtime
compensation.. and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b).
"Liquidated damages are not seen as punitive, but as compensation for damages otherwise 'too
obscure and difficult of proof
Rogers v. Say. Firs! Morlg, LLC, 362 F. Supp. 2d 624, 637 (D.
Md. 2005) (quoting Brooklyn Say. Bank y. O'Neil, 324 U.S. 697, 707-08 (1945)). Courts have
routinely held that there is a presumption in favor of an award of liquidated damages when it is
determined that the employer has violated the FLSA. Id.; see also Lanza y Sugarland Run
Homeowners Assoc.. Inc., 97 F. Supp. 2d. 737, 739 n.9 (E.D. Va. 2000). Defendants have not
responded and therefore have failed to meet their "plain and substantial burden of persuading the
court by proof that [their] failure to obey the statute was both in good faith and predicated upon
such reasonable grounds that it would be unfair to impose upon [them] more than a
compensatory verdict." Wright v Carrigg, 275 F.2d 448, 449 (4th Cir. 1960). Thus, liquidated
damages shall be awarded.
2. Enhanced Damages under State Law
Plaintiffs also seek treble damages under the MWPCL. ECF No. 45 1f 88. The MWPCL
states that if "a court finds that an employer withheld the wage of an employee in violation of
this subtitle and not as a result of a bona fide dispute, the court may award the employee an
amount not exceeding 3 times the wage, and reasonable counsel fees and other costs." Md. Code
Ann., Lab. & Empl. § 3-507.2(b). A bona fide dispute is "a legitimate dispute over the validity of
the claim or the amount that is owing" such that the employer had a good faith basis for
14
withholding payment. Admiral Mortg., Inc. v. Cooper, 357 Md. 533, 543 (2000). Although the
statute is silent on which party bears the burden of proof on this issue, the Maryland Court of
Appeals has placed the burden on the employer to prove the bona fide dispute. Peters v. Early
Healthcare Giver, Inc.. 439 Md. 646, 658 (2014) ("Mt is not difficult to conclude that the
employer, as the party withholding the wages, is uniquely qualified to offer evidence about its
reason for doing so.").
Nonetheless, ."an employee is not presumptively entitled to enhanced damages, even if
the court finds that wages were withheld without a bona fide dispute." Id. at 662. Rather, trial
courts are simply "encouraged to consider the remedial purpose of the [M]WPCL when deciding
whether to award enhanced damages to employees' Id at 663. "[I]t has become customary in this
district to award double damages under the FLSA, but not treble damages under the MWPCL,
when the 'defendants [do] not offer any evidence of a bona fide dispute to make liquidated
damages inappropriate, [but the] plaintiffs [do] not offer any evidence of consequential damages
suffered because of the underpayments.' Villatoro v. CTS Sc Associates, Inc., No. CV DKC 141978, 2016 WL 2348003, at *3 (D. Md. May 4, 2016)(quoting Clancy V. Skyline Grill, LLC,No.
CIV. ELH-12-1598, 2012 WL 5409733, at *8 (D. Md. Nov. 5, 2012). While Defendants have
not responded and thus have failed to offer evidence of a bona fide dispute, Plaintiffs have
similarly failed to offer any evidence of consequential damages suffered. Thus, the Court will
deny Plaintiffs request for treble damages under the MWPCL.
3. Damage Calculations
Plaintiffs assert that they are owed amounts ranging from approximately $3,000 to
$24.000 in unpaid wages for overtime work completed on or after February 28, 2010. ECF No.
56-9. In Affidavits attached to the Motion for Default Judgment, each Plaintiff attests that the
Plaintiffs' Damages Worksheet, ECF No. 56-9, is a "correct and accurate representation - of their
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unpaid wages.8 See e.g. ECF Nos. 56-3 IT 9; 56-4 ¶ 9. '[An employee's statement under oath 'as
to his recollection of the hours he worked and the pay he received, if considered credible by the
trier of fact, is sufficient to establish a prima facie case of wages owed,' and if the employer does
not successfully rebut the employee's statement, `[t]he Court may award damages based on
Plaintiffs' testimony even though the amounts claimed are only approximated and not perfectly
accurate.— Calderon Recinos v. BIZ Consir., LLC, No. CV DKC 15-0406, 2016 WL 3162820,
at *3 (D. Md. June 7, 2016)(internal citation omitted).
Specifically, Plaintiff Juan Pablo Carrillo attests that he worked for Defendant from 2008
through approximately February 16, 2013, working an average of 52 hours per week and getting
paid at a rate of $15.00 per hour. ECF No. 56-3 TT 2-4. Each week, he spent approximately seven
hours on preliminary and postliminary work duties for which he was never compensated, totaling
154 weeks within the statutory period. ECF Nos. 56-3 1] 8; 56-9.9 Plaintiff Julio Cesar Sanchez
attests that he worked for Defendant from approximately February 1, 2012 through
approximately February 16, 2013, working an average of 52 hours each week and getting paid at
a rate of $11.00 per hour. ECF No. 56-4 ill 2-4. Each week, he spent approximately seven hours
on preliminary and postliminary work duties for which he was never compensated, totaling 54
weeks within the statutory period. ECF Nos. 56-4 It 8; 56-9. Plaintiff Luis David Castro attests
that he worked for Defendant from approximately July 1, 2012 through approximately July 12,
2013, working an average of 52 hours per week and getting paid at a rate of $11.00 per hour.
ECF No. 60-1 TT 2-4. Each week, he spent approximately seven hours on preliminary and
postliminary work duties for which he was never compensated, totaling 53 weeks within the
statutory period. ECF Nos. 60-1 It 8; 56-9.
8 The Affidavit of Plaintiff Luis David Castro was submitted via a supplemental filing to Plaintiff's Motion for
Default Judgment. ECF No. 60-1.
9 Although Plaintiff Juan Carrillo attests that he started working for Defendant in 2008, his claims begin on February
28, 201. ECF No. 56-1 at 10 n. 4.
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Similarly, Plaintiff Enrique Patricio Correa attests that he worked for Defendant from
approximately December 1,2012 through approximately June 28, 2013, working an average of
52 hours per week and getting paid at a rate of $11.00 per hour. ECF No. 56-5 11112-4. Each
week; he spent approximately seven hours on preliminary and postliminary work duties for
which he was never compensated, totaling 30 weeks. within the statutory period. ED' Nos. 56-5
11 8; 56-9. Plaintiff Roger Ramos attests that he worked for Defendant from approximately
January 1,2011 through approximately November 30, 201. 2, working an average Of 52 hours per
week and getting paid at a rate of $11.00 per hour. ECF No. 56-6 111112-4. Each week, he spent
approximately seven hours on preliminary and postliminary work duties for which he was never
compensated, totaling 100 weeks within the statutory period. ED? Nos. 56-6 118; 56-9. Plaintiff
Carlos Humberto Calderon attests that he worked for Defendant from approximately September
1, 2010 through approximately April 30, 2013, working an average of 52 hours per week and
getting paid at a rate of $13.00 per hour. ECF No. 56-7 1111 2-4. Each week, he spent
approximately seven hours on preliminary and postliminary work duties for which he was never
compensated, totaling 139 weeks within the statutory period. ECF Nos. 56-7 ¶ 8 56-9. Finally,
Plaintiff Melvin Omar ',emus attests that he worked for Defendant from approximately July I,
2012 through approximately January 31, 2013, working an average of 52 hours per week and
getting paid at a rate of $13.00 per hour. EC!' No. 56-8 11 2-4. Each week, he spent
approximately seven hours on preliminary and postliminary work duties for which he was never
compensated, totaling 30 weeks within the statutory period. ECF Nos. 56-8 118; 56-9.
Accordingly, Plaintiffs are entitled to overtime wages as follows: Juan Pablo Carrillo is
owed $24,255.00 in unpaid wages; I° Julio Cesar Sanchez is owed $6,237.00 in unpaid wages;
I° As an example. Mr. Carrillo's damages are calculated as follows: $15.00 (standard hourly wage) x 1.5 = $22.50
(overtime hourly wage). $22.50 (overtime hourly wage) x 7 (hours spent on uncompensated preliminary and
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Luis David Castro is owed $6,121.50 in unpaid wages; Enrique Patricio Correa is owed
$3,465.00 in unpaid wages; Roger Ramos Carlos is owed $11.550.00 in unpaid wages; Carlos
Huberto Calderon is owed $18,973.50 in unpaid wages; and Melvin Omar Lemus is owed
$4,095.00 in unpaid Wages.
Plaintiffs will be awarded an equal amount in liquidated damages under the FLSA. I I
Thus, Juan Pablo Carrillo is owed a total of $48,510.00 in unpaid wages and liquidated
damages; i2 Julio Cesar Sanchez is owed a total of $12,474.00 in unpaid wages and liquidated
damages, Luis David Castro is owed $12,243 in unpaid wages and liquidated damages; Enrique
Patricio Correa is owed $6,930.00 in unpaid wages and liquidated damages; Roger Ramos is
owed $23,100.00 in unpaid wages and liquidated damages; Carlos Humberto Calderon is owed
$37,947.00 in unpaid wages and liquidated damages; and Melvin Omar Lemus is owed
$8,190.00 in unpaid wages and liquidated damages.
4. Attorney's Fees and Costs
Plaintiffs also request an award of reasonable attorney's fees and costs. ECF No. 45 If 74,
80. Such relief is proper under both the FLSA, 29 U.S.C. § 216(b) and the MWHL, Md. Code
Ann., Lab. & Empl. § 3-427(d). The amount of reasonable attorney's fees is "within the sound
discretion of the trial court," Burnley v. Short, 730 F.2d 136, 141 (4th Cir. 1984), and is
determined by multiplying "the number of reasonable hours expended times a reasonable rate".
Robinson Y Equil ax Info. Servs., LLC,
560 F.3d 235, 243 (4th Cir. 2009). In determining a
postliminary duties each week) x 154 (weeks in the statutory period) = $24,255.00. The remaining Plaintiffs'
damages were calculated using the same formula. See ECF No. 56-9.
Because Plaintiffs are not permitted to recover multiple times for the same injury, Plaintiffs will receive one
payment under all applicable statutes and not a separate payment for each statute violated. See Clancy v. Skyline
Grill, LLC., No. ELFI-12-1598, 2012 WL 5409733, at *5 (D. Md. Nov. 5,2012), report and recommendation
adopted. No. ELH-12-1598, 2013 WL 625344 (D. Md. Feb. 19,2013) (IA] party may not recover twice for one
injury, even if the party asserts multiple, consistent theories of recovery.").
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As an example, Mr. Carrillo's liquidated damages are calculated as follows: $24.255.00 (total unpaid wages) x 2 =
$48,510.00. The remaining Plaintiffs' damages were calculated using the same formula. See ECF No. 56-9.
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reasonable rate, "the Fourth Circuit has instructed district courts to consider certain factors
including:
(1) the time and labor expended; (2) the novelty and difficulty of the questions
raised; (3) the skill required to properly perform the legal services rendered; (4)
the attorney's opportunity costs in pressing the instant litigation; (5) the customary
fee for like work; (6) the attorney's expectations at the outset of the litigation; (7)
the time limitations imposed by the client or circumstances; (8) the amount in
controversy and the results obtained; (9) the experience, reputation and ability of
the attorney; (10) the undesirability of the case within the legal community in
which the suit arose: (11) the nature and length of the professional relationship
between attorney and client; and (12) attorneys' fees awards in similar cases.
Calderon Recinos, 2016 WL 3162820, at *4 (quoting Robinson, 560 F.3d at 243-44).
In support of their claim for attorneys' fees and costs, Plaintiffs submit the declaration of
their attorney, Jason D. Friedman, ECF No. 56-10, and an invoice specifying the hourly billing
by Friedman and his paralegal with respect to the instant lawsuit and information regarding costs
spent on process service. ECF No. 56-11. These materials indicate that Friedman's firm spent
32.63 hours on this case on behalf of Plaintiffs, at a rate of $135 per hour for paralegal time and
$225 per hour for attorney time. ECF No 56-10 $$ 1, 5. Friedman further attests that he has been
barred since 2012 and that his practice is "heavily focused on employment law." Id. 11 1. These
rates are fair considering the local guidelines, which note that a reasonable rate for lawyers
admitted to the bar for less than five years is between $150 and $225 an hour. See Local Rule
App. B (D. Md. 2016). Friedman also states that his firm has agreed to represent Plaintiffs on a
contingency fee basis and has worked for three years, without compensation, to pursue Plaintiffs'
claims, at significant opportunity cost to the firm. ECF No. 56-10 $$ 8-9. In light of the multiple
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Plaintiffs and Defendants involved in this case, along with its duration, the Court finds that
Friedman's well-documented attorney's fees are reasonable. Thus, Plaintiffs are awarded
$6,856.00 in attorneys' fees.
The record also substantiates the following expenses: $160 for service of process and
$350 for tiling fees. ECF No. 56-11. Thus, Plaintiffs are awarded $510.00 in costs.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs' Motion for Default Judgment, ECF No. 56, is
granted in full with respect to Plaintiffs' FLSA and MWHL claims. As for Plaintiffs' MWPCL
claims, Plaintiffs' Motion is granted as to liability but denied with respect to their request for
treble damages. Plaintiffs will therefore be awarded the following judgment: Juan Pablo Carrillo
is awarded $48.510.00 in unpaid wages and liquidated damages; Julio Cesar Sanchez is awarded
a total of $12,474.00 in unpaid wages and liquidated damages, Luis David Castro is awarded
$12,243 in unpaid wages and liquidated damages; Enrique Patricio Correa is awarded $6,930.00
in unpaid wages and liquidated damages; Roger Ramos is awarded $23,100.00 in unpaid wages
and liquidated damages: Carlos Humberto Calderon is awarded $37,947.00 in unpaid wages and
liquidated damages; and Melvin Omar Lemus is awarded $8,190.00 in unpaid wages and
liquidated damages.
Plaintiffs will also be awarded $6,856.00 in attorney's fees and $510.00 in costs. A
separate Order follows.
Dated: September3?2016
GEORGE J. HAZEL
United States District Judge
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