Greathouse v. JHS Security Inc. et al

Filing 46

OPINION & ORDER: Accordingly, finding no error, let alone clear error, the Court adopts the Report in its entirety. The Court awards Greathouse $21,450 in back pay; $21,450 in liquidated damages; $10,000 for emotional distress damages; and $10,000 in punitive damages, yielding a total sum of $62,900 in damages against defendants on the retaliation claim. For the foregoing reasons, the Court adopts Judge Gorenstein's Report and Recommendation in its entirety. The Court will enter judgment for Greathouse in a separate order. (As further set forth in this Opinion) (Signed by Judge Paul A. Engelmayer on 8/29/2016) (kl) Modified on 8/29/2016 (kl).

I.

Background1
A.

Procedural History

On November 2, 2011, Greathouse filed a complaint against JHS and Wilcox, alleging
violations of the FLSA, 29 U.S.C. §§ 201–219, and the New York Labor Law, §§ 190–199, 650–
665. Dkt. 1. On November 28, 2011, Greathouse served JHS and, on January 9, 2012, served
Wilcox. Dkts. 2, 8. Neither defendant appeared or answered. The Court accordingly entered a
default judgment in favor of Greathouse and referred the case to Judge Gorenstein to conduct an
inquest into damages. Dkts. 15–16. On September 7, 2012, Judge Gorenstein issued a Report
and Recommendation, Dkt. 26 (the “Initial Report”), tabulating damages on the various claims.
On October 9, 2012, Greathouse filed objections to the Initial Report. Dkt. 28. Relevant here,
Greathouse objected to the Initial Report’s recommendation that Greathouse be denied damages
on his retaliation claim. Id.
On October 19, 2012, the Court, adopting the Initial Report, entered judgment against
defendants, and awarded damages for most of Greathouse’s claims. Dkts. 30–31. The Court,
however, agreed with Judge Gorenstein that Greathouse was ineligible for damages based upon
his retaliation claim. Dkt. 30. As Judge Gorenstein recognized, the Second Circuit’s thenbinding decision in Lambert v. Genesee Hosp., 10 F.3d 46, 55 (2d Cir. 1993), squarely precluded
recovery by a plaintiff, such as Greathouse, who had made only informal oral complaints to a
supervisor. Id. at 5.
On April 20, 2015, on Greathouse’s appeal, the Second Circuit overruled Lambert. See
Greathouse v. JHS Sec. Inc., 784 F.3d 105, 107 (2d Cir. 2015). Accordingly, it vacated and

The summary of the facts is drawn from the detailed account in the Report and from the Court’s
review of the case record.
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remanded this Court’s decision adopting the Initial Report insofar as the Report had relied on
Lambert to deny Greathouse relief on his retaliation claim. Id. The Second Circuit otherwise
affirmed.
The sole issue here on remand, therefore, is the amount of damages to which Greathouse
is due on his retaliation claim. On May 18, 2015, the Court again referred this case to Judge
Gorenstein for an inquest into the amount of retaliation damages. Dkt. 36–37. On May 26,
2015, Judge Gorenstein ordered Greathouse to supplement the record regarding his claim for
such damages, Dkt. 38, which Greathouse did, Dkts. 41, 43. On November 16, 2015, Judge
Gorenstein issued a final Report and Recommendation. Dkt. 45. No objections to the Report
were received.
B.

Facts Relevant to Greathouse’s Retaliation Damages

Greathouse worked as a JHS security guard between September 2006 and approximately
October 14, 2011. He sued JHS and Wilcox, claiming, inter alia, that they had effectively
discharged him in retaliation upon, and for, his October 2011 complaint to Wilcox that he had
not been paid for more than six months. Specifically, Greathouse claimed, he called Wilcox to
request the unpaid wages, and Wilcox asked Greathouse to come to his house. There, Wilcox
told Greathouse, “I’ll pay you when I feel like it,” and pointed a gun at Greathouse. Report at 3.
Greathouse claimed that Wilcox’s response was an effective termination, and that, as a
result of it, he suffered lost wages and anxiety and emotional distress. Specifically, he claimed,
he found it difficult to ride the train or bus, and to find new work, feeling uncomfortable with
new employers. About a year after Wilcox pointed the gun at him, Greathouse found a new job,
and has been employed ever since, in the construction field. Id. at 3–4.

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On his claim for retaliation damages resulting from his termination, Greathouse sought
$21,450 in back pay; $20,000 in emotional distress damages; liquidated damages for both back
pay and emotional distress in amounts matching each award; and $214,500 in punitive damages.
Id. at 5. Judge Gorenstein’s Report carefully addressed each category, seeking to ascertain the
amount of damages with reasonable certainty. It recommended awarding Greathouse $21,450 in
back pay; $10,000 in emotional distress damages; $21,450 in liquidated damages, i.e., matching
the back pay award but not the emotional distress damages; and $10,000 in punitive damages.
These total $62,900. Id. at 16.
II.

Discussion
After a magistrate judge has issued a Report and Recommendation, a district court may

“accept, reject, or modify, in whole or in part, the findings or recommendations made by the
magistrate judge.” 28 U.S.C. § 636(b)(1). To accept the portions of a report to which no timely
objection has been made, “a district court need only satisfy itself that there is no clear error on
the face of the record.” Acevedo v. Lempke, No. 10 Civ. 5285 (PAE) (HBP), 2014 WL 4651904,
at *3 (S.D.N.Y. Sept. 17, 2014) (quoting King v. Greiner, No. 02 Civ. 5810 (DLC), 2009 WL
2001439, at *4 (S.D.N.Y. July 8, 2009)). When a timely and specific objection has been made,
the court is obligated to review the contested issues de novo. See id.; Fed. R. Civ. P. 72(b)(3);
Hynes v. Squillace, 143 F.3d 653, 656 (2d Cir. 1998).
As the Report recognized, although defendants defaulted, a plaintiff’s allegations of
damages are not admitted by virtue of the default. See Greyhound Exhibitgroup, Inc. v. E.L.U.L.
Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). Instead, a district court must undertake an
inquiry to determine the amount of damages with “reasonable certainty.” Credit Lyonnais Sec.
(USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). A plaintiff’s request for damages

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must be supported with some evidentiary basis, and a district court may conduct a hearing or
review detailed affidavits and documentary evidence to determine damages. See Cement and
Concrete Workers Dist. Council Welfare Fund, Pension Fund, Annuity Fund, Education and
Training Fund and Other Funds v. Metro Found. Contractors Inc., 699 F.3d 230, 234 (2d Cir.
2012); see also Fed. R. Civ. P. 55(b)(2). The party seeking damages is entitled to all reasonable
inferences suggested by the evidence presented. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61,
65 (2d Cir. 1981).
Here, Judge Gorenstein’s Report analyzed each category of damages Greathouse sought
—back pay, emotional distress damages, liquidated damages, and punitive damages—in light of
the evidence and the relevant legal standards. Because there were no objections to the Report,
the Court reviews it for clear error.
A.

Back Pay

Greathouse first seeks back pay for the year of unemployment that followed his
termination. As the Report recognized, an employer who violates the FLSA’s anti-retaliation
provision, 29 U.S.C. § 215(a)(3), is “liable for such legal or equitable relief as may be
appropriate to effectuate the purposes of section 215(a)(3) of this title, including without
limitation . . . the payment of wages lost and an additional equal amount as liquidated damages.”
29 U.S.C. § 216(b). Although a plaintiff generally has a duty to use reasonable diligence in
finding new suitable employment to mitigate damages, see Ford Motor Co. v. E.E.O.C., 458 U.S.
219, 231 & n.15 (1982), the burden is on the defendant to establish a plaintiff’s failure to satisfy
this duty, Dailey v. Societe Generale, 108 F.3d 451, 456 (2d Cir. 1997).
Here, Greathouse did not secure new employment for a year after Wilcox effectively
terminated him. The weekly rate of pay adopted by the Court in this case is $412.50, which,

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multiplied by 52 weeks, yields $21,450 in back pay. Report at 6. Because defendants did not
come forward with any evidence calling into question Greathouse’s diligence in securing new
employment after he was terminated, the Report properly concluded that Greathouse is entitled
to damages of $21,450 in back pay.
B.

Emotional Distress Damages

Greathouse seeks damages for the emotional distress he suffered after Wilcox pointed a
gun at him and refused to pay him. As the Report observed, while the Second Circuit has not yet
addressed whether damages for emotional distress are available for retaliation claims under the
FLSA, numerous other courts have so held, although there is contrary authority. See Report at
6–7. Having reviewed the issue, the Court, substantially for the reasons stated in the Report,
holds that emotional distress damages are allowable under § 216(b), the FLSA’s remedial
section. That section permits “legal or equitable relief as may be appropriate to effectuate the
purposes” of the anti-retaliation provision, see 29 U.S.C. § 216(b), and “[a]ppropriate legal relief
includes damages,” including for emotional distress and punitive damages, Travis v. Gary Cmty.
Mental Health Ctr., Inc., 921 F.2d 108, 112 (7th Cir. 1990). See also Moore v. Freeman, 355
F.3d 558, 564 (6th Cir. 2004) (holding compensation for emotional damages available under
§ 216(b)).
Although Greathouse sought $20,000 in damages for emotional distress, the Report
recommended awarding $10,000, and Greathouse did not object to that recommendation. In
recommending $10,000 in such damages, the Report reasonably explained that Greathouse had
neither substantiated his distress with medical documentation nor alleged physical symptoms,
and that his claims of nervousness and anguish situated his case within the lower end of the
category of “garden variety” emotional distress claims, for which courts tend to award amounts

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of between $5,000 and $30,000. Report at 7–8. Because Greathouse was threatened with a gun,
“an obviously traumatic event,” the Report concluded an award of $10,000, as opposed to a
lower award, is justified. Id. at 8–9. Far from being clear error, this analysis is persuasive.
C.

Liquidated Damages

Greathouse seeks liquidated damages matching his back pay and emotional distress
damages awards. Section 216(b) of the FLSA provides that violators are “liable for such legal or
equitable relief as may be appropriate . . . including without limitation . . . the payment of wages
lost and an additional equal amount of liquidated damages.” 29 U.S.C. § 216(b). A court may,
however, reduce or eliminate the liquidated damages award if the employer shows its actions
were in good faith and that it had reasonable grounds to believe its act or omission was not a
violation of the FLSA. See 29 U.S.C. § 260. The employer has the burden of showing such
facts. Reich v. Southern New England Telecomm. Corp., 121 F.3d 58, 71 (2d Cir. 1997). Here,
as the Report properly concluded, defendants, having defaulted, did not make the required
showing to negate a claim for liquidated damages. Report at 9. As such, the Court agrees with
the Report that Greathouse is entitled to liquidated damages in an amount equal to his back pay
award, $21,450.
The Report, however, did not recommend a liquidated damages award to match the
award for emotional distress. The Report observed that § 216(b)’s text provides for liquidated
damages only for back pay, and that FLSA anti-retaliation liquidated damages are meant to be
compensation for losses suffered for not receiving timely pay, see Reich, 121 F.3d at 70 n.4.
Greathouse did not object to this construction of § 216(b), with which the Court also does not
find clear error.

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D.

Punitive Damages

Finally, Greathouse seeks punitive damages. As the Report noted, the FLSA does not
expressly authorize imposition of punitive damages, and the Second Circuit has not yet held
whether they are available under the statute. Report at 9–10. On its own review of this issue,
however, the Court joins Judge Gorenstein in finding that punitive damages are available for
violations of the FLSA’s anti-retaliation provision.
This issue is the subject of a circuit split. Compare Travis, 921 F.2d at 111–12 (holding
punitive damages available for FLSA retaliation claims), with Snapp v. Unlimited Concepts, Inc.,
208 F.3d 928, 934 (11th Cir. 2000) (holding punitive damages not available). The Eleventh
Circuit in Snapp construed § 216(b)’s use of the broad term “legal . . . relief” by utilizing the
interpretive canon of ejusdem generis; it thus read § 216(b) to contemplate only compensatory
relief, precluding punitive damages. See Snapp, 208 F.3d at 934–35. Because § 216(a) provides
only for criminal fines and imprisonment, and § 216(b) ostensibly is limited to compensatory
damages, the Eleventh Circuit found no charter in § 216(b) to authorize punitive damages. Id. at
934–40.
As the Seventh Circuit in Travis—and the Report here—both recognized, however, the
construction of § 216(b) as limited to compensatory damages does not comfortably follow. As
originally enacted in 1938, the FLSA did not speak in terms of either compensatory or punitive
damages. Instead, it provided for statutory wage and overtime compensation along with an equal
amount of liquidated damages, along with attorney’s fees. But, in 1977, Congress amended
§ 216(b) to add its broadly worded second sentence, providing for “such legal or equitable relief
as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including
without limitation employment, reinstatement, promotion, and the payment of wages lost and an

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additional equal amount as liquidated damages.” See Travis, 921 F.2d at 111. As the Seventh
Circuit reasoned, this change “does away with the old limitations without establishing new
ones.” Id. at 112. Critically, too, the statute as amended must be read in light of the tenet that
courts “presume the availability of all appropriate remedies unless Congress has expressly
indicated otherwise,” Franklin v. Gwinnett Cty. Pub. Sch., 503 U.S. 60, 66 (1992), and the
background principle that “[c]ompensation for emotional distress, and punitive damages, are
appropriate for intentional torts such as retaliatory discharge,” Travis, 921 F.2d at 112. For these
reasons, the Court concludes, with the Report, that the broad language of § 216(b) encompasses
punitive damages for violations of the anti-retaliation provision.
As to whether to impose punitive damages, the FLSA does not contain a standard guiding
this inquiry. The Report reasonably looked to 42 U.S.C. § 1981a(b)(1), which sets the standard
for Title VII claims and which closely approximates the standard under 42 U.S.C. § 1983, as a
guidepost. See Kolstad v. American Dental Ass’n, 527 U.S. 526, 535–36 (1999). This standard
inquires whether the defendant acted—here, whether it retaliated—“with malice or with reckless
indifference to the federally protected rights of an aggrieved individual,” 42 U.S.C.
§ 1981a(b)(1). On the undisputed facts, that standard is easily met here: When Greathouse
raised a valid claim of unpaid wages, JHS supervisor Wilcox threatened Greathouse with a gun
and refused to pay Greathouse his long-unpaid salary.
As to the amount of punitive damages, the Report thoughtfully considered this issue,
applying familiar standards. Report at 12–16. Whereas Greathouse sought $214,500 in punitive
damages, the Report recommended awarding $10,000. The Court finds the Report’s reasoning in
pruning this request to $10,000 persuasive, and finds no clear error in its assessment that such an

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