Javansalehi v. BF & Associates, Inc. et al
Filing
56
OPINION & ORDER: For the reasons set forth in this opinion, (i) to the extent defendants' Motion 42 addresses Javansalehi's Section 652.355 claim for wage-claim retaliation, it is construed in part as a motion for reconsider ation, the constructive motion for reconsideration is Granted, and on reconsideration of my prior decision denying partial summary judgment in connection with the Section 652.355 claim, the court's prior decision is Reversed and partial summa ry judgment is Granted as to that claim; (ii) to the extent defendants' motion addresses the method by which Javansalehi's FLSA damages should be calculated, the motion is construed as a motion in limine and the constructive motion is Gra nted; (iii) Javansalehi's Section 652.355 claim is Dismissed with prejudice and Javansalehi's informal request for leave to amend her pleading to state an ERISA claim in its stead is Denied; (iv) the proper method for calculating J avansalehi's FLSA damages is to multiply the number of overtime hours worked times one half Javansalehi's regular hourly rate of pay; and (v) defendants' motion is otherwise Denied as Moot. Signed on 5/2/12 by Magistrate Judge Paul Papak. (gm)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
LESLIE JAVANSALEHI,
Plaintiff,
3:1O-CV-850-PK
OPINION AND
ORDER
v.
BF & ASSOCIATES, INC., BABAK
FALLAZADEH, and MOHAMMEDREZALOTFI,
Defendants.
PAPAK, Magistrate Judge:
Plaintiff Leslie Javansalehi (uJavansaheli U ) filed this action against BF & Associates, Inc.,
Costco Wholesale Corporation, Babak Fallazadeh, and Mohammed-Reza Lotfi on July 20, 2010.
Javansalehi voluntarily dismissed Costco as a defendant on September 7, 2010.
BF & Associates, doing business as Atlas ImpOlis, employed Javansalehi as a sales
representative at a Hillsboro, Oregon, retail location from approximately Janumy 10, 2009,
Page 1 - OPINION AND ORDER
through May 26,2009. Javansalehi's husband, Ahad Javansalehi ("Ahad") was also an employee
ofBF & Associates ("Atlas"), as was her son (and Ahad's stepson) Josh Sumrell. Fallazadeh is
(and at all material times was) the principal and owner/manager of Atlas, and Lotfi is (and at all
material times was) an employee of Atlas. Javansalehi filed eleven separate causes of action
against the defendants arising out of the termination of her employment by Atlas and out of the
tenTIS and conditions of her employment prior to her termination. Specifically, Javansalehi filed
claims alleging Atlas' liability for wrongful discharge in violation of Oregon common law, Atlas'
and Fallazadeh's liability for failure to pay overtime in violation of the federal Fair Labor
Standards Act (29 U.S.C. § 216(b», failure to pay Javansalehi final wages due and owing
following the termination of her employment within the time specified for doing so under Or.
Rev. Stat. 652.140(1), retaliation for complaining about wage discrimination in violation of Or.
Rev. Stat. 652.355, retaliation in response to whistle-blowing activity in violation of Or. Rev.
Stat. 659A.199, family relationship discrimination in violation of Or. Rev. Stat. 659A.309, and
retaliation for opposing unlawful practices in violation of Or. Rev. Stat. 659A.030(1)(f), all
defendants' liability for aiding and abetting discrimination and/or retaliation in violation of Or.
Rev. Stat. 659A.030(1 )(g), intentional interference with prospective economic relations while
acting within the scope of their employment duties and/or as Javansalehi's employer, and
defamation, and Fallazadeh's and Lotfi's liability for intentional interference with existing
economic relations while acting outside the scope of their employment duties.
On August 18, 2011, defendants moved for partial summary judgment as to nine of
Javansalehi's eleven claims. Specifically, defendants sought summmy adjudication of
Javansalehi's three retaliation claims (brought under Sections 652.355, 659A.199, and
Page 2 - OPINION AND ORDER
659A.030(1)(f)), family relationship discrimination claim (brought under Section 659A.309),
aiding and abetting claim (brought under Section 659A.030(1 )(g)), common-law wrongful
discharge claim, two common-law intentional interference claims, and connnon-law defamation
claim. At oral argument in connection with defendants' motion of August 18, 2011, the parties
advised the court that the parties had settled J avansalehi's Section 140(1) claim for failure to
make timely payment of final wages, and counsel for Javansalehi advised the court that
Javansalehi had abandoned her claim for intentional interference with prospective economic
relations in its entirety, her claim for intentional interference with existing economic relations to
the extent alleged against Fallazadeh, and her claim for defamation to the extent alleged against
Atlas and Fallazadeh. On November 1,2011, these chambers granted defendants' motion in part
and denied it in part, granting summaty judgment in defendants' favor as to Javansalehi's Section
659A.199 claim for whistle-blower retaliation, her Section 659A.309 claim for familyrelationship discrimination, her Section 659A.030(1)(f) claim for unlawful-practice-opposition
retaliation, her Section 659A.030(1)(g) aiding and abetting claim, her wrongful discharge claim,
her intentional interference with prospective economic relations claim, and her intentional
interference with existing economic relations claim, and otherwise denying defendants' motion.
This court has federal question jurisdiction over Javansalehi's FLSA oveliime claim pursuant to
28 U.S.C. § 1331, and supplemental jurisdiction over her state-law claims pursuant to 28 U.S.C.
§ 1367 .
. Now before the court is defendants' second motion (#42) for patiial summaty judgment,
by and through which defendants seek summary adjudication (i) of Javansalehi's Section 652.355
claim for wage-claim retaliation and (ii) of her FLSA oveliime claim to the extent she seeks
Page 3 - OPINION AND ORDER
damages in connection with that claim calculated at a rate in excess of one half the normal hourly
rate at which her time was compensated while she was employed by Atlas. I have considered the
motion, all of the pleadings and papers on file, and oral argument on behalf of the pmiies. For
the reasons set forth below, (i) to the extent defendants' motion addresses Javansalehi's Section
652.355 claim for wage-claim retaliation, it is construed in part as a motion for reconsideration,
the constructive motion for reconsideration is granted, and on reconsideration of my prior
decision denying pmiial summary judgment in connection with the Section 652.355 claim, I
reverse my prior decision and grant pmiial summmy judgment as to that claim; (ii) to the extent
defendants' motion addresses the method by which Javansalehi's FLSA damages should be
calculated, the motion is construed as a motion in limine and the constructive motion is granted;
(iii) Javansalehi's Section 652.355 claim is dismissed with prejudice and Javansalehi's infonnal
request for leave to amend her pleading to state an ERISA claim in its stead is denied; (iv) I find
that the proper method for calculating Javansalehi's FLSA damages is to multiply the number of
overtime hours worked times one half Javansalehi's regular hourly rate of pay; and (v)
defendants' motion is otherwise denied as moot.
LEGAL STANDARD
Summary judgment is appropriate "if the pleadings, depositions, answers to
intenogatories, and admissions on file, together with the atlidavits, if any, show that there is no
genuine issue as to any material fact and that the moving pmiy is entitled to a judgment as a
matter of law." Fed. R. Civ. P. 56(c). Summmy judgment is not proper if material factual issues
exist for trial. See, e.g., Celotex Corp. v. Catrett, 477 U.S. 318, 322 (1986); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Warren v. City a/Carlsbad, 58 F.3d 439,441 (9th Cir.
Page 4 - OPINION AND ORDER
1995), cert. denied, 116 S.Ct. 1261 (1996). In evaluating a motion for summary judgment, the
district courts of the United States must draw all reasonable inferences in favor of the nonmoving
party, and may neither make credibility determinations nor perfOlID any weighing ofthe
evidence. See, e.g., Lytle v. Household lvifg., Inc., 494 U.S. 545, 554-55 (1990); Reeves v.
Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000).
FACTUAL BACKGROUND'
Atlas is in the business of selling handmade impOlied rugs at retail. A significant portion
of Atlas' business is conducted in stores located within retail establishments operated by fOlIDer
defendant Costco. Atlas' Hillsboro location, where Javansalehi was employed, is such a store.
In September 2007, Atlas hired Ahad, Javansalehi's husband, as the sales manager at
Atlas' Hillsboro location. ShOlily thereafter, Atlas hired defendant Lotfi and third-pmi)' Josh
Sumrell (Javansalehi's son) to work under Ahad in the Hillsboro location.
In or around December 2008 or January 2009, Atlas moved Sumrell from his position in
the Hillsboro location to a "roadshow" position, which required him to travel to Costco stores
lacking a permanent Atlas presence and to spend one to two weeks selling rugs in each such
location. Effective approximately Janua,y 10, 2009, Atlas hired Javansalehi to fill the sales
position left vacant by Sumrell's departure from the Hillsboro location. Atlas initially required
Javansalehi to work six days per week at the Hillsboro location, at a monthly salary of $4,000.
Defendants offer Fallazadeh's testimony that, shortly after Javansalehi's hire, he began to
suspect that Javansalehi and Ahad were colluding to reduce the number of hours each spent
Except where otherwise indicated, the following recitation constitutes my construal of
the evidentiary record in light of the legal standard goveming motions for summmy judgment
under Federal Civil Procedure Rule 56.
I
Page 5 - OPINION AND ORDER
working in the Hillsboro location, while continuing to draw their full salaries. Fallazadeh
emphasizes that, because Atlas' business model assumed a low volume of high-profit sales, it
was essential that salespeople be ready and available at all times to serve customers on those
relatively infrequent occasions when customers entered the store. Fallazadeh testifies that Atlas'
delivery employees would report the Javansalehis' unanticipated absence from the store when
deliveries were made, and that when Fallazadeh would call Ahad's mobile phone to ask questions
about inventOlY, Ahad would frequently claim to be unable to answer the question because he
was serving a customer, and would only call back to respond 30 to 45 minutes later (that is, after
the lapse of sufficient time to permit travel to the Hillsboro store). Defendants take the position
that Ahad's proffered explanation for the need to call back is inherently implausible, in that a
salesman generally will not take a phone call while serving a customer, but rather will usually
wait until the customer has been served before taking or returning calls.
On a weekend day some time in the first three months of2009, Fallazadeh made a
"surprise visit" to the Hillsboro location, and found that Ahad was absent despite being scheduled
to work. Javansalehi called Ahad and advised him that Fallazadeh was in the store. While
Fallazadeh waited for Ahad to return, Fallazadeh observed Javansalehi serving customers.
Defendants offer Fallazadeh's testimony that his observation of Javansalehi's sales methods
established that she was not a "qualified" salesperson and that she was "bad" at selling rugs.
Some time thereafter, Fallazadeh asked Lotfi to "keep an eye on the Javansalehis' attendance"
and to report to him if they continued to miss work.
According to Fallazadeh's testimony, it was Atlas' practice to offer health insurance to
those of its employees employed on a full-time basis, after they had worked for the company for
Page 6 - OPINION AND ORDER
three months. In or around April 2009, after Javansalehi had been working for Atlas for
approximately three months, J avansalehi complained to Ahad that Atlas was not providing her
with health benefits. Ahad subsequently brought the complaint to Ahad's attention. According
to Fallazadeh's testimony, Fallazadeh had at that time already made a decision to reduce
Javansalehi's work schedule to four days per week - making her ineligible for health insurance
benefits - but had not yet either implemented the decision or communicated it to Javansalehi. It
appears undisputed that Fallazadeh so advised Ahad at that time. Although initially a disputed
question of fact, it is now
similarl~
undisputed that Javansalehi began inquiring about her
entitlement to receive health benefits prior to completion of her first ninety days in Atlas' employ,
and that she continued to make such inquiries and to request inclusion in Atlas' health benefits
plan following passage of the probationmy ninety-day period (making at least one such inquilY in
writing after the end of the probationmy period). Atlas subsequently reduced Javansalehi's work
schedule to four days per week, and declined to provide her with health insurance benefits.
At some unspecified time during the tenure of Javansalehi's employment by Atlas,
Javansalehi had a discussion with Lotfi regarding the fact that Lotfi (like Javansalehi) was not
paid overtime. Javansalehi told Lotfi that his pay stubs constituted evidence that Atlas was
violating federal wage and hour law by failing to pay Lotfi oveliime. Javansalehi subsequently
repOlied having had that conversation with Lotfi to her husband, Ahad, and to no other person.
Ahad warned J avansalehi not to press the matter fmiher and not to tell anyone else that the
conversation had taken place. Neither Ahad nor Lotfi reported the conversation to any other
person, and Fallazadeh did not learn that the conversation had taken place until after this action
had been filed.
Page 7 - OPINION AND ORDER
In late May 2009, Lotfi repOlied to Fallazadeh that Ahad and Javansalehi were both
absent from the workplace despite being scheduled to work. Lotfi fuliher advised Fallazadeh at
that same time of his opinion that Javansalehi was a poor salesperson. At or around that time,
Fallazadeh made the decision to terminate both Ahad's and Javansalehi's employment. It appears
undisputed that the last day Javansalehi worked for Atlas was May 26,2009.
ANALYSIS
I.
Javansalehi's Claim for Wage-Claim Retaliation (Or. Rev. Stat. 652.355 )
Defendants move for partial summary judgment as to Javansalehi's cause of action for
wage-claim retaliation in violation of Or. Rev. Stat. 652.355. Section 652.355 provides that
employers may not discharge or otherwise discriminate against employees for, among other
things, making a wage claim:
(1)
An employer may not discharge or in any other manner discriminate
against an employee because:
(a)
(b)
The employee has caused to be instituted any proceedings under or
related to DRS 652.310 to 652.414.
(c)
(2)
The employee has made a wage claim or discussed, inquired about
or consulted an attorney or agency about a wage claim.
The employee has testified or is about to testify in any such
proceedings.
A violation of this section is an unlawful employment practice under DRS
chapter 659A. A person unlawfully discriminated against under this
section may file a complaint under ORS 659A.820 with the Commissioner
of the Bureau of Labor and Industries.
Or. Rev. Stat. 652.355. The Oregon Comi of Appeals has noted that Or. Rev. Stat. 652.320(7)
defines a wage claim for purposes of Section 652.355 as "an employee's claim against an
Page 8 - OPINION AND ORDER
employer for compensation for the employee's own personal services ... ," including a claim for
"wages, compensation, damages or civil penalties provided by law to employees in connection
with a claim for unpaid wages." Perri v. Certified Languages In!'l, LLC, 187 Or. App. 76, 88-89
(2003), quoting Or. Rev. Stat. 652.320(7). The Perri court went on to specifY that:
"Compensation" means "payment for value received or service rendered."
Webster's Third New Int'l Dictionary 463 (unabridged ed 1993) (emphasis added).
That definition, which employs a past tense verb, suggests that compensation
is payment for work previously performed. That interpretation of the telm
"compensation" also is consistent with the second clause of the subsection. Under
that clause, in addition to "wages" and "compensation," a claimant may recover
damages and civil penalties. He or she may do so, however, only "in connection
with a claim for unpaid wages." (Emphasis added.) Thus, although the second
clause of ORS 652.320([7]) pelmits recovelY of amounts that are not themselves
compensation for work, to the extent that those amounts are available in the
context of a wage claim, the use of the past tense ("unpaid wages") again indicates
that the wage claim must pertain to work previously performed.
Id at 89 (bolded emphasis supplied; footnote omitted).
In her complaint, Javansalehi premised her claim for wage-claim retaliation solely on her
conversation with Lotfi regarding Lotfi's entitlement to overtime compensation and Atlas' failure
to pay such compensation to Lotfi. Because the subject of lavansalehi's statements to Lotfi was
compensation due to Lotfi for his services to Atlas, and not compensation due to lavansalehi for
her own personal services, however, as a clear matter of law her claim so premised and so pled
was patently non-viable. See id at 88.
In opposition to defendants' previous partial summary judgment motion, lavansalehi
adopted the novel position that her cause of action for wage-claim retaliation was premised, not
on her conversation with Lotfi, but rather on her complaint to Ahad, subsequently conveyed to
Fallazadeh by Ahad, regarding Atlas' failure to provide lavansalehi with health insurance
Page 9 - OPINION AND ORDER
benefits, a factual predicate not referenced in any manner in lavansalehi's pleading. I construed
lavansalehi's opposition argument as constituting a motion for leave to amend her pleading to
state that factual predicate, and granted the construed motion. In considering the merits of
defendants' previously filed motion for partial summaty judgment in connection with
lavansalehi's Section 652.355 claim to the extent premised on the novel predicate, I found on the
record then available to me that the evjdence did not permit any conclusion as to whether, at the
time lavansalehi made her complaints regarding entitlement to health benefits, her entitlement
had already accrued or, altematively, was contemplated to accrue in the future 2 (a complaint
regarding entitlement to health benefits is not a wage complaint for purposes of Section 652.355
unless the benefits would constitute compensation for work previously performed, see id. at 89),
and on that basis denied defendants' motion as to the Section 652.355 claim.
Defendants now move for dismissal of lavansalehi's Section 652.355 claim on the
primary ground that her claim is preempted by ERISA. 3 Although she opposes defendants'
motion, in the altemative to her opposition arguments lavansalehi requests that, in the event this
The pat1ies have since submitted evidence tending to establish that lavansalehi made
complaints regarding her entitlement to health insurance benefits both before and after that
entitlement accrued.
2
3 Defendants additionally argue, in the altemative, that because health insurance benefits
provide coverage "for future treatment," such benefits are "inherently prospective" and therefore
do not constitute compensation for services already provided by an employee. On that basis,
defendants argue that lavansalehi has failed to state a claim under Section 355, because her
complaints were necessarily forward-looking and therefore not a "wage claim" for purposes of
Section 355. However, because it is clear that lavansalehi's complaint regarding her entitlement
to health insurance benefits was not a complaint regarding entitlement to future medical
treatment, but rather a complaint regarding entitlenient to the benefit of the health insurance
premiums Atlas paid for its employees under its benefits plan, it is clear that defendants'
altemative theory necessarily fails as a matter oflaw.
Page 10 - OPINION AND ORDER
court agrees with defendants that the Section 652.355 claim is preempted, she be granted leave to
amend her pleading to restate her claim as an ERISA claim. In response to that request,
defendants argue that any such claim would now necessarily be time-bmTed, and that any
amendment of her pleading to state an ERISA claim would not relate back to the date she filed
her original complaint because such amendment would require the allegation of new facts not
alleged in Javansalehi's original pleading.
Defendants' argument in support of their ERISA-preemption theOlY appears well taken.
ERISA expressly provides that its provisions are intended broadly to preempt state-law causes of
action relating to employee benefit plans:
Except as provided in subsection (b) of this section, the provisions of this
subchapter and subchapter III of this chapter shall supersede any and all State laws
insofar as they may now or hereafter relate to any employee benefit plan described
in section 1003 (a) of this title and not exempt under section 1003 (b) of this title.
29 U.S.C. § 1144(a)(ERISA § 514(a)): Moreover, "[i]t is well-settled in this circuit that a
wrongful tel1nination claim based on the theory that the employer intended to avoid pension or
insurance payments is preempted by ERISA." Felton v. Unisollrce Corp., 940 F.2d 503, 508 (9th
Cir. 1991) (citations omitted); see also, e.g., Ingersoll-Rand Co. v. }vfcClendon, 498 U.S. 133,
482, 484, 484-485 (1990). Nevel1heless, for the following reasons I need not reach, and do not
reach, defendants' ERISA preemption argument, but rather dismiss Javansalehi's Section 652.355
claim on the grounds that I improvidently denied defendants' previous motion for pm1ial
summary judgment as to that claim.
If correct, defendant's argument that there could be no relation back if Javansalehi were to
The statutOly exceptions to ERISA's broad preemptive force all appear clearly
inapplicable to Javansalehi's claim.
4
Page 11 - OPINION AND ORDER
amend her complaint to state an ERISA claim (because such amendment would require the
allegation of new facts not alleged in Javansalehi's original pleading) applies with equal force to
my previous decision to grant Javansalehi's constructive motion to amend her pleading to allege
the then-novel factual predicate that Javansalehi had made complaints to Ahad and other Atlas
employees regarding her entitlement to health insurance benefits. I therefore construe that
argument as an implicit motion for reconsideration of my disposition of defendants' previous
motion for paliial summary judgment as to the Section 652.355 claim.
An order that resolves fewer than all of the claims among all of the parties "is subject to
revision at any time before the enlly of judgment adjudicating all the claims and the rights and
liabilities of all the parties." Fed. R. Civ. P. 54(b). Where reconsideration of a non-final order is
sought, the couli has "inherent jurisdiction to modify, alter or revoke it." United States v. iYiartin,
226 F.3d 1042, 1048-1049 (9th Cir. 2000). To succeed in a motion to reconsider, a pmiy must
set forth facts or law of a strongly convincing nature to induce the cOUli to reverse its prior
decision. See, e.g., Kern-Tulare Water Dist. v. City o/Bakersfield, 634 F. Supp. 656, 665 (E.D.
Cal. 1986). Generally, "[r]econsideration is appropriate if the district court (1) is presented with
newly discovered evidence, (2) committed clear error or the initial decision was manifestly
unjust, or (3) if there is an intervening change in controlling law." Sch. Dist. No.1 J, ll-iultnomah
County, Oregon v. ACANDS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993). Here, it is defendants'
implicit position that I committed clear enor when I implicitly ruled that Javansalehi's
constructive amendment of her pleading related back to the date she filed her complaint in this
action.
An amendment "relates back to the original pleading" when it "asselis a claim or defense
Page 12 - OPINION AND ORDER
that arose out of the conduct, transaction, or occulTence set out - or attempted to be set out - in
the original pleading." Fed. R. Civ. P. 15(c)(I). "Claims arise out of the same conduct,
transaction, or OCCUlTence if they 'share a common core of operative facts' such that the plaintiff
will rely on the same evidence to prove each claim." Williams v. Boeing Co., 517 F3d 1120,
1133 (9th Cir. 2008), Citing lvlartell v. Trilogy Ltd, 872 F.2d 322, 325-326 (9th Cir. 1989).
"When a plaintiff seeks to amend a complaint to state a new claim against an original defendant
... the court compares the original complaint with the amended complaint and decides whether
the claim to be added will likely be proved by the 'same kind of evidence' offered in support of
the original pleading." Percy v. San Francisco Gen'I Hosp., 841 F2d 975,978 (9th Cir 1988),
quoting Rural Fire Protection Co. v. Hepp, 366 F.2d 355, 362 (9th Cir. 1966). "Thus,
amendment of a complaint is proper if the original pleading put the defendant on notice of the
'particular transaction or set of facts' that the plaintiff believes to have caused the complained of
injury." Id at 979, quoting Santana v. Holiday Inns, Inc., 686 F.2d 736, 739 (9th Cir. 1982).
Where a complaining party must "include additional facts" in the party's amended pleading in
order to support the new claim, "there is no common core of operative facts between" the new
and old claims. Williams, 517 F3d at 1133.
Here, as noted above, Javansalehi's complaint as originally filed makes no reference to
any complaint regarding her entitlement to health insurance benefits. In consequence, under
Federal Civil Procedure Rule 15 (c)((I) and Williams, supra, no amendment of her complaint to
allege that such complaints took place, whether in suppOli of a claim brought under Section
652.355 or an ERISA claim, can relate back to the date Javansalehi originally filed her complaint
in this action. Because Javansalehi filed the memorandum that contained the argument I
Page 13 - OPINION AND ORDER
construed as a motion for leave to amend on September 22,2011, her claim is timely (whether
brought as a Section 652.355 or an ERISA claim) only if it could have been timely filed as of that
date.
The limitations period applicable to a Section 652.355 claim is one year. See Or. Rev.
Stat. 659A.875. Moreover, the same limitations period govems any ERISA claim lavansalehi
might have brought arising out of her complaints regarding entitlement to health insurance
benefits. ERISA § 510, codified at 29 U.S.C. § 1140, provides in relevant pmi as follows:
It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or
discriminate against a participant or beneficiary for exercising any right to which
he is entitled under the provisions of an employee benefit plan ... or for the
PlUllose of interfering with the attainment of any right to which such participant
may become entitled under the plan....
29 U.S.C. § 1140. The statute of limitations applicable to a Section 510 claim is found by
reference to the "most analogous" statute of limitations provided under the law of the state in
which the ERISA claim is brought. Felton v. Unisollrce Corp., 940 F.2d 503, 510 (9th Cir.
1991) (citations omitted). Here, the state statute providing the claim "most analogous" to the
Section 510 claim lavansalehi might have brought is clearly Section 652.355. Both claims are
therefore subject to the same limitations period.
lavansalehi's complaints were made in and around April and May 2009. Defendants have
offered into evidence a partially executed tolling agreement PlUll01iing to toll "all applicable
statutes of limitations for any and all potential claims that may be connected with or raised by ...
lavansalehi ... in connection with [he]r employment with Atlas ... for a period of sixty (60)
days, effective February 22, 2010." Assuming without deciding that such an agreement was
executed between the parties and enforceable, regardless of whether lavansalehi were to proceed
Page 14 - OPINION AND ORDER
with a Section 652.355 or Section 510 claim, any such claim became time-barred in or around
late July 2010, more than a year before she constructively sought to amend her complaint to
allege the requisite factual predicate. It follows that I improvidently denied defendants' first
motion for pmiial summary judgment as to Javansalehi's Section 652.355 claim. On
reconsider&tion of that decision, I now grant the motion as to that claim, and dismiss with
prejudice Javansalehi's cause of action under Section 652.355 for wage-claim retaliation.
Defendants' pending motion for partial summmy judgment is therefore denied as moot as to
Javansalehi's Section 652.355 claim, and Javansalehi's informal request for leave to amend her
pleading to state an ERISA Section 510 claim is denied on grounds of tutility.
II.
Javansalehi's Prayer for Damages in Connection with her FLSA Overtime Claim
(29 U.S.C. § 216(b))
In connection with her FLSA overtime claim, Javansalehi seeks damages measured at
$37.50 per hour, or 1.5 times her regular hourly rate of pay, alleged to be $25.00. Defendants
argue that her overtime damages should properly be calculated at a rate of$12.50 per hour, or
one half her regular hourly rate. Defendants move for summmy adjudication of the appropriate
rate at which Javansalehi's overtime compensation damages should be calculated.
As a preliminmy matter, I note that the proper method of calculating overtime damages is
neither a claim or defense at issue in this action nor an element of such a claim or defense. As
such, I am unaware of authority to suggest that the proper method of calculating damages is or
could be a fit matter for summmy adjudication under Federal Civil Procedure Rule 56. However,
because the proper method for calculating damages is clearly a fit subject for a motion in limine,
I construe defendants' motion for partial summmy judgment, to the extent it addresses the method
Page 15 - OPINION AND ORDER
for calculating Javansalehi's overtime damages, as a motion in limine.
Where an employee is paid a fixed salmy as compensation for all hours worked during
the workweek, regardless of their number, rather than for a set number of hours, because the
fixed salary is intended to pay for all hours worked, the employee is only entitled to additional
half-time pay for overtime hours worked (since the employee is presumed already to have been
compensated at the normal rate for all hours worked, including the overtime hours). See 29
C.F.R. § 778.114. By contrast, when an employee is paid a fixed salary for only for a set number
of hours, the employee is entitled to compensation for any oveliime hours worked at the full
applicable overtime rate. See id.; see also 29 U.S.c. § 207.
In an opinion letter dated January 14, 2009, the United States Depmiment of Labor
opined as follows:
Under the fluctuating workweek method of payment an employee may be paid a
fixed salmy that serves as compensation for all hours worked if it is sufficient to
compensate the employee for all straight time hours worked at a rate not less than
the minimum wage and the employee is paid an additional one-half of the regular
rate for all overtime hours. See 29 C.F .R. § 778.1l4(a). The regular rate of pay
will vary due to the fluctuating hours worked week to week. See id. § 778.114(b).
The full salmy must be paid even when the full schedule of hours is not worked.
See id. § 778 .114(c). Finally, there must be a "clear mutual understanding of the
parties that the fixed salary" is "compensation for however many hours the
employee may work in a particular week, rather than for a fixed number of hours
per week." Clements v. Serco, Inc., 530 F.3d 1224, 1230 (10th Cir. 2008); see 29
C.F.R. § 778.114(a). As stated in Wage and Hour Opinion Letter FLSA-772 (Feb.
26,1973),
[a]n agreement or understanding need not be in writing in order to validate
the application of the fluctuating workweek method of paying overtime.
Where an employee continues to work and accept payment of a salary
for all hours of work, her acceptance of payment of the salary will
validate the fluctuating workweel{ method of compensation as to her
employment.
Page 16 - OPINION AND ORDER
FUlihelmore, the Depmiment's regulations do not require that the "clear and
mutual understanding" extend to the method used to calculate the oveliime pay.
See Valerio v. Putnam Associates Inc., 173 F.3d 35,40 (Ist Cir. 1999) ("The
parties must only have reached a 'clear mutual understanding' that while the
employee's hours may vary, his or her base salary will not."). Rather, 29
C.F.R § 778.114 only requires that the employees have a "clear and mutual
understanding that they would be paid 011 a salary basis for all hours
worked." Clements, 530 F.3d at 1230.
U.S. Dep't of Labor Wage alld Hour Opinion Letter FLSA-2009-3 (Jan. 14,2009) (emphasis
supplied; alternations original).
Here, by and through her complaint Javansalehi alleged in part as follows:
16.
Throughout Plaintiffs employment, EMPLOYER misclassified Plaintiff
as an exempt salaried employee and agreed to compensate Plaintiff at a
rate of $4,000.00 per month.
17.
Beginning immediately, EMPLOYER required Plaintiff to work an
excessive number of hours each week. Plaintiff regularly worked well in
excess of 40 hours per week.
18.
Upon information and belief, Plaintiff reasonably estimates that she
worked a total of285 hours of oveliime for EMPLOYER during her
employment with EMPLOYER.
19.
Despite Plaintiff s regular work in excess of 40 hours per week,
EMPLO YER did not provide Plaintiff extra compensation, in addition to
her salary, for all hours worked in excess of 40 hours per week.
20.
Beginning on or about April 19, 2009, EMPLOYER modified Plaintiffs
employment contract such that Plaintiff would work 4 days per week and
eam a monthly salmy of $3,000.00.
Complaint, ~~ 16-20. It thus appears from Javansalehi's allegations that from the beginning of
Javansalehi's employment, Javansalehi accepted a fixed monthly salaty for a variable number of
hours worked. This conclusion is bome out by analysis of Javansalehi's deposition testimony, in
which she repeatedly affirms that she accepted a fixed salmy for the hours she worked for Atlas,
Page 17 - OPINION AND ORDER
see, e.g., Deposition oflavansalehi at 78:13-14,118:4-6,119:13-121:3, and that the number of
hours she actually worked for Atlas in any given week were subject to variation, see, e.g., id. at
80:2-4,107:13-15,107:25-108:114,109:5-21,113:3-5, 114:4-11, 116:8-9, 116:23-24. There
appears therefore to be no question but that, under 29 C.F.R. § 778.114 and U.S. Dep't of Labor
Wage and Hour Opinion Letter FLSA-2009-3 (Jan. 14,2009), Atlas and Javansalehi had a clear
mutual understanding that Javansalehi would be paid on a salary basis for all hours worked.
Because the evidentiary record compels the conclusion that Javansalehi was paid a fixed
salary as compensation for all hours worked during the workweek, regardless oftheir number,
under 29 C.F.R. § 778.114, I find that the proper method for calculating Javansalehi's entitlement
to overtime compensation is one half Javansalehi's regular rate of pay times the number of
ovcl1ime hours worked. Defendants' constructive motion in limine is therefore granted.
CONCLUSION
For the reasons set f011h above, (i) to the extent defendants' motion (#42) addresses
Javansalehi's Section 652.355 claim for wage-claim retaliation, it is construed in part as a motion
for reconsideration, the constructive motion for reconsideration is granted, and on
reconsideration of my prior decision denying partial summary judgment in connection with the
Section 652.355 claim, the court's prior decision is reversed and partial summary judgment is
granted as to that claim; (ii) to the extent defendants' motion addresses the method by which
Javansalehi's FLSA damages should be calculated, the motion is construed as a motion in limine
and the constructive motion is granted; (iii) Javansalehi's Section 652.355 claim is dismissed
with prejudice and Javansalehi's informal request for leave to amend her pleading to state an
ERISA claim in its stead is denied; (iv) the proper method for calculating Javansalehi's FLSA
Page 18 - OPINION Al'lD ORDER
damages is to multiply the number of oveliime hours worked times one half Javansalehi's regular
hourly rate of pay; and (v) defendants' motion is otherwise denied as moot.
(
Dated this 2nd day of May, 2012.
'\
...
)\.
( .)\
Ii \
\()JJl Sa :paj~
Honorable Paul Papak
United States Magistrate Judge
Page 19 - OPINION AND ORDER
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