Wold v. Taher, Inc.

Filing 27

ORDER granting in part and denying in part 18 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 3/3/2014. (KC)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
SHARON WOLD,

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Plaintiff,
vs.
TAHER, INC.,
Defendant.

CIV. 12-4079-KES

ORDER GRANTING IN PART AND
DENYING IN PART DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT

Defendant, Taher, Inc., moves the court for summary judgment on all of
plaintiff, Sharon Wold’s, claims. Wold resists the motion on all claims except
her breach of contract claim. For the following reasons, the court grants in part
and denies in part Taher’s motion.
BACKGROUND
The facts, viewed in the light most favorable to Wold, the nonmoving
party, are as follows:
Taher is a food service management company with roughly 2,600
employees nationwide. The company contracts with businesses, schools,
correctional facilities, and nursing homes to provide food and vending services
at client locations.
Wold began working for Taher in June 2005 as a part-time cashier at
Hutchinson Technologies, Inc., in Sioux Falls, South Dakota. In April 2006,

Wold moved to a vending1 position at the Hutchinson location. Taher paid Wold
an hourly wage in both her cashier and vending positions.
In April 2007, Taher promoted Wold to the position of food service
director at its Hutchinson location. The food service director at each Taher
location is responsible for kitchen management, financial and accounting
management, administrative tasks, food production, sanitation and safety, and
management of personnel within that location, in addition to regular duties
within the cafeteria. See Docket 22-12. The position is a salaried position. Tom
Johnson, Taher’s district manager, was Wold’s direct superior.
In mid-2009, Hutchinson closed its business in Sioux Falls. Several
Taher employees, including Wold, were transferred to Taher’s operation at
Premier Bankcard, also in Sioux Falls. Wold continued to work part time at
Hutchinson in May and June of 2009 to wrap up Taher’s operation there, in
addition to working five hours per day at Premier Bankcard. After Taher’s
operation at Hutchinson was fully closed, Wold began working full time at the
Premier Bankcard location.
Paul Grunewaldt was Taher’s food service director at Premier Bankcard
in 2009. Because Taher already had a food service director at Premier
Bankcard, Taher created a new position for Wold called cashier/catering

1

Wold indicates that the vending position encompassed dealing with
fresh food, chips, drinks, and candy sold in vending machines. Docket 22-1 at
3.
2

coordinator. Although Wold was no longer a salaried employee, Taher set her
hourly wage based on her previous salary, and continued Wold’s dental
insurance. On September 30, 2010, Taher reduced Wold’s hourly rate by
10 percent.2
Also in September 2010, Grunewaldt’s employment with Taher ended. At
that time, Taher divided Grunewaldt’s duties between Wold and Deb Hardin.
Wold took over some of the management duties, including payroll and
supervision of employees, while Hardin took over the duties of head chef. Both
Wold and Johnson stated that Taher changed Wold back to a salaried employee
when she was promoted, but the record is unclear on exactly when or if that
transition happened. Compare Docket 22-1 at 10 (statement by Wold that she
was eventually salaried as a food service director at Premier Bankcard) and
Docket 22-5 at 11 (statement by Johnson that Wold was salaried while Hardin
remained hourly) with Docket 22-11 (payroll change summary noting no change
from hourly to salaried compensation while Wold was food service director at
the Premier Bankcard location).

2

The payroll change notice for Wold’s wage reduction, Docket 22-17,
does not list a reason for the change, but Johnson stated in his deposition the
reduction was because “the position that [Wold] held was outside the pay scale
of what that normal position is.” Docket 22-5 at 20. Taher’s payroll department
did not receive the payroll change notice, however, so the decrease in pay did
not take effect until after Wold returned to work in February of 2011, following
her injury. See Docket 22-18.
3

On November 23, 2010, Wold was pushing a catering cart and injured
her leg. Wold’s injury required medical treatment, and she was hospitalized for
nearly one month. While Wold could not work, Hardin took over Wold’s
responsibilities at Premier Bankcard. Wold obtained a letter from her doctor
stating that she could return to work on January 27, 2011, but Johnson told
her she could not return until her doctor filled out a workability report. Wold
got the required form completed on February 4, 2011, and returned to work the
following Monday, February 7, 2011.
When Wold returned to work, Hardin continued to manage Taher’s
operation at Premier Bankcard. Wold was placed in the position of cashier,
under Hardin’s supervision. The 10 percent reduction to Wold’s hourly pay rate
dated September 30, 2010, was implemented on February 8, 2011. On April 7,
2011, Wold filed a claim for workers’ compensation with the South Dakota
Department of Labor stemming from her leg injury.
Sometime in the fall of 2011, Premier Bankcard removed the change
machine from its facility. Wold needed change during one of her shifts and
attempted to get change at a Premier Bank branch facility located nearby. The
bank refused to provide change because Wold was not a bank customer. After
the incident at the bank, Wold saw Miles Beacom, Premier’s president, outside
of a boardroom while she was serving a catered event. Wold asked Beacom to
stop by her station in the cafeteria when he got a chance because she had a
quick question for him.
4

On or around November 9, 2011, Wold spoke to Beacom about getting
change in Premier’s branch bank. Hardin was nearby or present for the
conversation. The conversation was friendly and Beacom said he would look
into the issue. Subsequently, Taher’s contact at Premier Bankcard, David
McCoy, told Hardin that Wold behaved inappropriately by not following the
proper channels in resolving an issue between Taher and its client, Premier
Bankcard. McCoy also called Johnson to express the same concern. Hardin
emailed McCoy’s report to Johnson as well.
Johnson reported Wold’s conversation with Beacom to Judy Cameron,
his superior. Taher suspended Wold on November 10, 2011. Johnson advised
Cameron to terminate Wold, and she did so on November 18, 2011. Following
her termination at Taher, Wold filed this suit, alleging claims for failure to pay
overtime in violation of the Fair Labor Standards Act, retaliation, wrongful
discharge, and breach of contract.
STANDARD OF REVIEW
Summary judgment is appropriate when the movant “shows that there is
no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); Muor v. U.S. Bank Nat’l
Ass’n, 716 F.3d 1072, 1076 (8th Cir. 2013). The moving party must present
admissible evidence showing there is no dispute of material fact or that the
nonmoving party has not presented admissible evidence to support an element
of the case on which it bears the ultimate burden of proof. Celotex Corp. v.
5

Catrett, 477 U.S. 317, 322-23 (1986); Fed. R. Civ. P. 56(c). Once the moving
party has met its burden, “[t]he nonmoving party may not ‘rest on mere
allegations or denials, but must demonstrate on the record the existence of
specific facts which create a genuine issue for trial.’ ” Mosley v. City of
Northwoods, Mo., 415 F.3d 908, 910 (8th Cir. 2005) (quoting Krenik v. Cnty. of
Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995)).
Summary judgment should not be granted if there is a dispute about a
material fact that could affect the outcome of the case. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a summary judgment
motion, the court views the facts and the inferences drawn from such facts “in
the light most favorable to the party opposing the motion.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986).
DISCUSSION
I.

Overtime Pay
In Count I, Wold alleges that Taher failed to pay her overtime as required

by the Fair Labor Standards Act, 29 U.S.C. § 207(a), for the periods from April
to June of 2009, September to November of 2010, and March to November of
2011.
A. April–June, 2009
Wold argues that she was misclassified as an exempt employee in April
and May of 2009 when she was the food service director at Hutchinson, and
that she worked in excess of forty hours per week as a nonexempt hourly
6

employee in May and June of 2009. Docket 24 at 7-11. Taher argues that
Wold’s claim is barred by the statute of limitations contained in the FLSA, that
Wold cannot rely on contradictory supplemental interrogatory answers to create
a genuine issue of material fact, and that Wold was properly classified as an
exempt employee.
The FLSA states that a suit to enforce a cause of action under that act
“shall be forever barred unless commenced within two years after the cause of
action accrued, except that a cause of action arising out of a willful violation
may be commenced within three years after the cause of action accrued.” 29
U.S.C. § 255(a). In the context of the FLSA, the Supreme Court has stated that:
In common usage the word “willful” is considered synonymous with
such words as “voluntary,” “deliberate,” and “intentional.” . . . The
word “willful” is widely used in the law, and, although it has not by
any means been given a perfectly consistent interpretation, it is
generally understood to refer to conduct that is not merely
negligent. The standard of willfulness that was adopted in [Trans
World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985)]—that the
employer either knew or showed reckless disregard for the matter
of whether its conduct was prohibited by the statute—is surely a
fair reading of the plain language of the [FLSA].
McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988) (internal citation
omitted). In determining whether civil monetary penalties are appropriate, “an
employer’s conduct shall be deemed to be in reckless disregard of the
[FLSA] . . . if the employer should have inquired further into whether its
conduct was in compliance with the Act, and failed to make adequate further
inquiry.” 29 C.F.R. § 578.3(c)(3). The Eighth Circuit has held, though, that a
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failure to consult legal counsel does not by itself demonstrate a willful violation.
See Hanger v. Lake Cnty., 390 F.3d 579, 584 (8th Cir. 2004). To extend the
statute of limitations from two to three years, the employee bears the burden of
proving willfulness. See Brown v. Fred’s, Inc., 494 F.3d 736, 743 (8th Cir. 2007)
(“[I]f the employee shows a willful violation, then the statute of limitations is
extended from two to three years . . . .”); Lochiano v. Compassionate Care, LLC,
No. 10-01089-CV-W-DKG, 2012 WL 4059873, at *7 (W.D. Mo. Sept. 14, 2012)
(“The plaintiff bears the burden of proving that a violation is willful.”).
Because Wold filed her claim under the FLSA more than two years after
the alleged violations, Docket 1 at 1, she can only recover for alleged violations
in April to June of 2009 if she demonstrates that Taher willfully violated the
FLSA. To demonstrate willfulness, an employee must do more than show that
an employer had general knowledge of the FLSA and its requirements. See
Hanger v. Lake Cnty., 390 F.3d 579, 583 (8th Cir. 2004) (applying McLaughlin’s
willfulness standard in the context of the Family and Medical Leave Act).
Similarly, a violation of the FLSA that could “result from negligence or a goodfaith, incorrect assumption about a statute’s applicability just as easily as it
could result from recklessness” is not sufficient to show a willful violation of the
FLSA. See id. at 584 (citing McLaughlin, 486 U.S. at 135).
Wold claims that, for part of the time period at issue, she was
misclassified as exempt and is entitled to compensation for overtime worked
while she was the food service director at Hutchinson. In support of that claim,
8

Wold introduced evidence regarding her various job duties and argues that
because her duties were largely manual and routine, she was not a bona fide
executive employee. But evidence of a potential FLSA violation does not
demonstrate that Taher knew or showed reckless disregard for whether Wold’s
exempt classification violated the FLSA. See id. (holding that, where a county
board of commissioners failed to take the “prudent” action of determining
whether its conduct would violate the FMLA, such a failure was insufficient to
show recklessness). Therefore, even if Wold could prove Taher misclassified her
as she claims, Wold has not introduced any other evidence that would allow a
rational trier of fact to find that Taher willfully violated the FLSA with respect to
her classification. Id. (“[I]t may be the case that [the plaintiff] identified an FMLA
violation. However, we find nothing to suggest recklessness on the part of the
[defendant].”).
Wold also claims that during her transition from Hutchinson to Premier
Bankcard she was a nonexempt employee and worked more than forty hours
per week, entitling her to compensation for those overtime hours. In support of
this claim, Wold stated that during her transition, she was scheduled to work
five hours per day, five days a week as an hourly employee at Premier
Bankcard. In addition, Wold was scheduled to work two hours a day at
Hutchinson to wrap up Taher’s operations at that location, although Wold
testified that her work there often took more than the allotted two hours per
day. See Docket 22-1 at 8 (stating that Wold was scheduled to work two hours
9

per day at Hutchinson “even though it took longer to do that [than the time
scheduled]”). She also stated that Pat Ernst, a manager at Hutchinson, directed
her work and requested that Wold come in extra hours to finish her work.
Finally, Wold stated that she did not record her hours worked at Hutchinson
because she had never done so and she thought there was an agreement
between Johnson and Ernst that Wold would work as many hours as
necessary. Docket 22-16 at 2.3
Wold and Johnson both testified that Taher scheduled Wold to work from
6 a.m. to 8 a.m. at Hutchinson, and from 8 a.m. to 2 p.m. at Premier Bankcard.
Wold testified that when she returned, at Ernst’s request, to work at
Hutchinson after 2 p.m., no other Taher employees were present. Additionally,
Wold has not introduced any evidence that she told Johnson, or anyone else at
Taher, that she was working extra hours at Hutchinson. Nor has Wold
indicated that Johnson told her she was to work as many hours as Ernst
requested, or that Johnson indicated there was some arrangement to
compensate Wold for additional hours. Absent some showing of actual or
constructive knowledge on the part of Taher that Wold was working in excess of

3

The court need not resolve whether Wold’s supplemental interrogatory
answer conflicts with her earlier interrogatory answer and her deposition
testimony because even if Wold’s supplemental answer is considered, it is
insufficient to create a genuine dispute of material fact on whether Taher
willfully violated the FLSA. See Lykken v. Brady, 622 F.3d 925, 933 (8th Cir.
2010) (reaffirming that a party cannot offer contradictory testimony to
artificially create a genuine issue of material fact).
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forty hours per week, Wold cannot show that Taher knew or recklessly
disregarded whether its conduct violated the FLSA.
Wold has not shown the existence of a genuine issue of material fact on
whether Taher’s alleged FLSA violations were willful. Accordingly, the two-year
statute of limitations applies and bars her claims from April to June of 2009.
B. September–November, 2010
Wold claims she was misclassified as an exempt employee in September,
October, and November of 2010 when she was the food service director at
Premier Bankcard. Taher contends Wold was an exempt executive or
administrative employee during that time.
1. Executive Employee
The FLSA creates an exemption to its wage and hour requirements for
“any employee employed in a bona fide executive, administrative, or
professional capacity . . . .” 29 U.S.C. § 213(a)(1). An employee qualifies as an
executive if that employee (1) is compensated on a salary basis at a rate of not
less than $455 per week; (2) has a primary duty of management of the
enterprise or a department or subdivision of the enterprise; (3) customarily and
regularly directs the work of two or more other employees; and (4) has the
authority to hire or fire other employees, or has input in hiring or firing that is
given particular weight. 29 C.F.R. § 541.100(a).
When Wold was the food service director at Hutchinson, she was
compensated at a rate of $1333.33 and later $1420 semimonthly. Docket 2211

11. That rate of compensation would satisfy the first part of the executive
employee test under the regulations, but the record is unclear on whether Wold
was in fact a salaried employee during her brief time as the food service director
at Premier Bankcard. See, e.g., id. (classifying Wold as an hourly employee
beginning on May 16, 2009, and reflecting no subsequent change to a salaried
employee). Additionally, Taher reduced Wold’s hourly rate on September 30,
2010, to take effect on October 16, 2010. Docket 22-17. Although both Wold
and Johnson testified that Wold was supposed to be salaried, the lack of any
records showing Wold was changed to a salaried employee, combined with the
reduction in her hourly wage during the time she was supposed to be salaried,
casts doubt on whether Wold was, in fact, a salaried employee while serving as
the food service director at Premier Bankcard.
An employee’s primary duty is “the principal, main, major or most
important duty that the employee performs.” 29 C.F.R. § 541.700(a).
Generally, management includes, but is not limited to, activities
such as interviewing, selecting, and training of employees; setting
and adjusting their rates of pay and hours of work; directing the
work of employees; maintaining production or sales records for use
in supervision or control; appraising employees’ productivity and
efficiency for the purpose of recommending promotions or other
changes in status; handling employee complaints and grievances;
disciplining employees; planning the work; determining the
techniques to be used; apportioning the work among the
employees; determining the type of materials, supplies, machinery,
equipment or tools to be used or merchandise to be bought,
stocked and sold; controlling the flow and distribution of materials
or merchandise and supplies; providing for the safety and security
of the employees or the property; planning and controlling the
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budget; and monitoring or implementing legal compliance
measures.
29 C.F.R. § 541.102. Concurrent performance of exempt and nonexempt work
does not necessarily disqualify an employee from the executive exemption. 29
C.F.R. § 541.106. The Eighth Circuit has recognized that an employee in charge
of a store can have management as a primary duty, even if the majority of that
employee’s time is spent on nonexempt work. Murray v. Stuckey’s Inc., 939 F.2d
614, 618 (8th Cir. 1991). The record demonstrates that Wold exercised
discretion in the supervision of employees, managed scheduling and hours, had
input in hiring and firing, and generally was responsible for the administration
of Taher’s Premier Bankcard facility. But Wold also testified that the majority of
her time was spent on routine, repetitive, or nonexempt tasks. Additionally,
Wold shared some management duties with Hardin. The amount of time spent
on exempt versus nonexempt duties is a factual question. See Jones v.
Dolgencorp, Inc., 789 F. Supp. 2d 1090, 1104 (N.D. Iowa 2011) (citing Icicle
Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986)).
During Wold’s time as food service director, she regularly directed the
work of four other employees. Docket 22-1 at 10. Wold also stated that she had
the authority to hire employees, although she did not do so during her time at
Premier Bankcard. Id. Although Taher has shown there are no genuine issues
of material fact with respect to the third and fourth elements of the test for an
executive employee, questions of fact remain as to whether Wold was salaried

13

and whether her primary duty was management. Therefore, issues of material
fact exist on the executive employee exemption issue to the FLSA’s overtime
requirements, and Taher is not entitled to summary judgment.
2. Administrative Employee
Alternatively, Taher claims that Wold was an exempt administrative
employee. An exempt administrative employee is an employee (1) who is
compensated on a salary or fee basis at a rate not less than $455 per week;
(2) whose primary duty is the performance of office or non-manual work directly
related to the management or business operations of the employer; and
(3) whose primary duty includes the exercise of discretion and independent
judgment with respect to matters of significance. 29 C.F.R. § 541.200(a).
As the court noted when discussing the executive employee exemption,
Wold’s salary status is unclear. Whether she was, in fact, ever a salaried
employee is a factual question that must be answered before it can be
determined if Wold was an exempt administrative employee. With respect to
Wold’s primary duty, federal regulations state:
Work directly related to management or general business
operations includes, but is not limited to, work in functional areas
such as tax; finance; accounting; budgeting; auditing; insurance;
quality control; purchasing; procurement; advertising; marketing;
research; safety and health; personnel management; human
resources; employee benefits; labor relations; public relations[;]
government relations; computer network, internet and database
administration; legal and regulatory compliance; and similar
activities.

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29 C.F.R. § 541.201(b). To qualify for an administrative exemption, the
administrative work must also include the exercise of discretion and
independent judgment in light of all the facts involved. See 29
C.F.R. § 541.202(b). Wold performed some administrative tasks, such as
accounting, budgeting, quality control, purchasing, safety and health
regulation, and personnel management. But she also did a substantial amount
of nonadministrative work, such as food preparation, stocking vending
machines, and operating a cash register. Furthermore, some of the
administrative work performed by Wold, such as daily cash reports, did not
include the exercise of significant discretion. Hardin handled developing menus
and other food-related aspects of Taher’s operation. “Disputes regarding the
nature of an employee’s duties are questions of fact . . . .” Jarrett v. ERC Props.,
Inc., 211 F.3d 1078, 1081 (8th Cir. 2000). Therefore, a genuine issue of
material fact exists with respect to what percentage of time Wold spent on
exempt administrative work, whether such work qualifies as her primary duty,
and whether it included the exercise of discretion and independent judgment.
Genuine issues of material fact exist with respect to whether Wold was
properly classified as an exempt employee, either in an executive or
administrative capacity. Accordingly, summary judgment on Wold’s FLSA claim
alleging she was misclassified from September to November 2010 is denied.

15

C. March–November, 2011
The FLSA requires employers to pay nonexempt employees at least one
and a half times their regular wage for hours worked in excess of forty hours
per week. 29 U.S.C. § 207(a)(1). “An employee must be compensated for duties
‘before and after scheduled hours . . . if the employer knows or has reason to
believe the employee is continuing to work and the duties are an integral and
indispensable part of the employee’s principal work activity.’ ” Hertz v.
Woodbury Cnty., Iowa, 566 F.3d 775, 781 (8th Cir. 2009) (alteration in original)
(quoting Mumbower v. Callicott, 526 F.2d 1183, 1188 (8th Cir. 1975)); 29 C.F.R.
§ 785.11 (“Work not requested but suffered or permitted is work time. For
example, an employee may voluntarily continue to work at the end of the
shift. . . . The reason is immaterial.”). To recover on her overtime claim, Wold
would have to prove that she worked more than forty hours in a week without
compensation for her overtime, and that Taher knew or should have known
that she was working overtime without compensation. See Hertz, 566 F.3d at
781.
Wold claims that she worked a total of 17 hours and 40 minutes of
overtime in various weeks from March 7, 2011, to November 4, 2011, without
compensation. See Docket 22-26. Wold also states that, although she was paid
for the overtime hours she recorded during that time period, she and Hardin
sometimes falsified her reported hours to avoid putting down extra hours.
Docket 1 at 17.
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Taher contends that it did not have actual or constructive knowledge of
Wold’s unpaid overtime, and that Wold was paid for all the overtime she did
report. Docket 26 at 10-11. Additionally, Taher interprets the actions of Hardin
and Wold as attempts to avoid going over daily hourly budgets for the Premier
Bankcard location as a whole, rather than a total of forty hours in a given week
for Wold individually. Id. at 11-12. Therefore, Taher takes the position that it
was entitled to rely on the hourly reports submitted by Wold and has complied
with its burden under the FLSA. Id. at 13.
Wold was paid for the overtime she submitted on her time sheets from
March to November 2011. Docket 22-37. But she expressed concern that Taher
would “nag” employees for exceeding scheduled hours. Docket 22-1 at 17. Wold
claims she came in earlier than she was scheduled. Id. at 16. At one point,
Johnson called Hardin and instructed her to tell Wold that Wold should not
come in early or work more hours than she was scheduled. Id.; Docket 22-3 at
6. Despite Johnson’s instructions, Wold testified that she would come in early,
and that she and Hardin would figure out ways to record her hours to avoid
scrutiny. Docket 22-1 at 17; Docket 25-1 at 16-18. Hardin stated that Wold did
not record her hours daily, so she would help Wold record her hours for each
pay period, although Hardin denied that they manipulated Wold’s hours to
avoid paying her overtime. Docket 22-3 at 6.
Taher cites several cases for the proposition that an employer does not
violate the FLSA if an employee fails to accurately record his or her time
17

worked. See Docket 26 at 10-12 (citing Reich v. Stewart, 121 F.3d 400 (8th Cir.
1997); Wood v. Mid-Am. Mgmt. Corp., 192 F. App’x 378 (6th Cir. 2006);
Holzapfel v. Town of Newburgh, 145 F.3d 516 (2d. Cir. 1998); Forrester v. Roth’s
I.G.A. Foodliner, Inc., 475 F. Supp. 630 (D. Or. 1979)). But those cases
conclude that an employer cannot be liable for an FLSA violation of which it
does not have actual or constructive knowledge. Because Wold has evidence
that Taher knew or should have known of Wold’s overtime, the authority cited
by Taher does not preclude Taher’s liability. If Taher had actual or constructive
knowledge of Wold’s unrecorded overtime, it is obligated to compensate Wold
for her time worked even though she did not record it. See Reich, 121 F.3d at
407.
Even if Hardin did not know that Wold was working more hours than she
was scheduled, she knew that Wold was not recording her hours in accordance
with Taher’s policy. See Docket 22-19 at 7 (requiring employees to record hours
daily). Hardin also knew, from Johnson’s phone call, that Wold had been
reporting to work outside of her scheduled hours on some occasions. During
this time period, Hardin was Taher’s on-site manager, and her duties included
supervision of employees and the development and maintenance of work
schedules. Docket 22-12 at 3 (outlining the duties of food service director).
Between Hardin’s knowledge of Wold’s practice of recording her time at the end
of each pay period rather than daily, Wold’s testimony that Hardin knew Wold’s
records were sometimes deliberately inaccurate, and Wold’s testimony
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regarding corporate pressure to avoid overtime, Wold has introduced sufficient
evidence to create a genuine issue of material fact as to whether Taher knew or
should have known that Wold was working hours in addition to those she
recorded on her time sheets.
Wold has pointed to specific evidence in the record that creates a
question of fact on whether she actually worked more overtime than the time
for which she was paid, and whether Taher either knew or should have known
that Wold was working hours in excess of forty hours per week for which she
was not compensated. Accordingly, Taher is not entitled to summary judgment
on Wold’s FLSA claim relating to overtime from March to November of 2011.
II.

Wrongful Discharge
The parties do not dispute that Wold’s claims for wrongful discharge and

retaliation arise under South Dakota law. Therefore, South Dakota substantive
law applies to Wold’s claims for wrongful discharge and retaliation. See
Witzman v. Gross, 148 F.3d 988, 990 (8th Cir. 1998) (holding that state
substantive law controls on supplemental state-law claims).
In Count III of the complaint, Wold alleges she was wrongfully discharged
for filing a workers’ compensation claim, in violation of SDCL 62-1-16. South
Dakota is an employment at-will state. SDCL 60-4-4; Anderson v. First Century
Fed. Credit Union, 738 N.W.2d 40, 45 (S.D. 2007). South Dakota has recognized
exceptions to the employment at-will doctrine where a termination is contrary
to public policy. See Johnson v. Kreiser’s, Inc., 433 N.W.2d 225, 227 (S.D. 1988)
19

(holding that an employee who was discharged in retaliation for refusing to
commit an unlawful act could state a cause of action for wrongful discharge);
Niesent v. Homestake Min. Co., 505 N.W.2d 781, 784 (S.D. 1993) (extending the
public policy exception to include retaliation for filing a workers’ compensation
claim); Dahl v. Combined Ins. Co., 621 N.W.2d 163, 167 (S.D. 2001) (extending
the public policy exception to cover whistleblowing). Following the South
Dakota Supreme Court’s decision in Niesent, the South Dakota Legislature
adopted SDCL 62-1-16, which states that “[a]n employer is civilly liable for
wrongful discharge if it terminates an employee in retaliation for filing a lawful
workers’ compensation claim. The burden of proof is on the employee to prove
the dismissal was in retaliation for filing a workers’ compensation claim.”
South Dakota applies the burden-shifting framework set forth in
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), to actions for wrongful
discharge. Lord v. Hy-Vee Food Stores, 720 N.W.2d 443, 449-50 (S.D. 2006).
Under the McDonnell Douglas framework, a plaintiff alleging wrongful discharge
must first establish a prima facie case of wrongful discharge. Id. If the plaintiff
establishes a prima facie case, a burden of production shifts to the defendant to
articulate a legitimate, nonretaliatory reason for the discharge. Id. at 450. If the
defendant produces a legitimate, nonretaliatory reason for its actions, the
burden shifts back to the plaintiff to introduce evidence that the proffered
reason is pretext for retaliation. Id.

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A. Prima Facie Case
To state a claim for wrongful discharge, Wold must show (1) she engaged
in a protected activity; (2) she subsequently suffered an adverse employment
action; and (3) there is a causal link between engaging in the protected activity
and the adverse employment action.4 Leslie v. Hy-Vee Foods, Inc., 679 N.W.2d
785, 789 (S.D. 2004) (citing Palesch v. Mo. Comm’n on Human Rights, 233 F.3d
560, 569 (8th Cir. 2000)). The parties do not dispute that Wold engaged in a
protected activity, namely, filing a workers’ compensation claim. Similarly, the
parties do not dispute that Wold suffered an adverse employment action when
she was terminated. Therefore, the critical question in determining whether
Wold has stated a prima facie case of wrongful discharge is whether Wold has
shown a causal link between her workers’ compensation claim and her
termination.
A causal link is “a showing that an employer’s ‘retaliatory motive played a
part in the adverse employment action[.]’ ” Kipp v. Mo. Highway & Transp.
Comm’n, 280 F.3d 893, 896-97 (8th Cir. 2002) (quoting Sumner v. United States
Postal Service, 899 F.2d 203, 208-09 (2d Cir. 1990)). Evidence establishing an
inference of a retaliatory motive is sufficient to establish a causal link. Id. at
897. “[C]ourts have not required a claimant to prove that the protected activity

4

Although Leslie applies this three-step test to an activity protected
under Title VII, both parties here urge the court to apply this test to an activity
protected under South Dakota law. See Docket 19 at 17; Docket 24 at 17.
21

was the sole cause of the adverse employment action. Instead, they require a
plaintiff to show that the . . . complaint was ‘merely a contributing factor’ in the
decision to terminate . . . employment.” Lord, 720 N.W.2d at 450 (citing Wiehoff
v. GTE Directories Corp., 61 F.3d 588, 598 (8th Cir. 1995)).
Wold contends that following her injury, and up through her termination,
she was engaged in a process of seeking compensation for her work-related
injury. Docket 24 at 17. To support her claim of a causal link between her
workers’ compensation claim and her termination, Wold asserts that (1)
Johnson had at least constructive, if not actual, knowledge of her workers’
compensation claim because Johnson filled out an injury report following
Wold’s injury in November of 2010; and (2) the fact that Wold was suspended
while she was on her way to her deposition for her workers’ compensation claim
implies a causal link between her deposition and her termination.
In circumstances where an employee relies on the timing of an adverse
employment action to show causation, the Eighth Circuit has stated:
Generally, “more than a temporal connection is required to present
a genuine factual issue on retaliation,” . . . and only in cases where
the temporal proximity is very close can the plaintiff rest on it
exclusively. . . . As more time passes between the protected
conduct and the retaliatory act, the inference of retaliation
becomes weaker and requires stronger alternate evidence of
causation. . . . The inference vanishes altogether when the time gap
between the protected activity and the adverse employment action
is measured in months.

22

Tyler v. Univ. of Ark. Bd. of Trustees, 628 F.3d 980, 986 (8th Cir. 2011) (internal
citations omitted); see also Muor, 716 F.3d at 1079 (rejecting an inference of a
retaliatory motive when the bulk of the alleged adverse actions occurred
roughly eight months after the employee’s protected activity). Wold filed her
workers’ compensation claim with the South Dakota Department of Labor on
April 7, 2011, and was terminated on November 18, 2011. Even if Johnson had
constructive knowledge of Wold’s workers’ compensation claim in November of
2011, Wold has not introduced any other evidence supporting a causal link or
retaliatory motive. Because more than seven months elapsed between the time
Wold filed her workers’ compensation claim and her termination, there is no
inference of a causal link between the filing of Wold’s claim and her
termination.
Wold’s suspension occurred on the day of her deposition related to her
workers’ compensation claim, and her termination occurred shortly thereafter.
Docket 22-1 at 23; Docket 24 at 19-20. Wold asserts that this temporal
proximity between an integral part of her protected activity (pursuing her
workers’ compensation claim) and her suspension and termination creates an
inference of causation. Wold also introduced an email from Johnson to
Cameron regarding Wold’s conversation with Beacom in which Johnson writes:
“It’s time to suspend Sharon and let go! She crossed the line. When it rains it
pours!” Docket 22-28. Johnson’s final sentence in his email to Cameron,
though cryptic, is not sufficient to show actual or constructive knowledge of
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Wold’s deposition. See Buettner v. Arch Coal Sales Co., Inc., 216 F.3d 707, 716
(8th Cir. 2000) (“A plaintiff must show the employer had actual or constructive
knowledge of the protected activity in order to establish a prima facie case of
retaliation.”). Because Wold has not introduced any evidence that anyone at
Taher knew of her workers’ compensation deposition, she cannot establish that
the timing of her suspension is anything more that a “mere coincidence of
timing[.]” Kipp, 280 F.3d at 897. Thus, Wold has not stated a prima facie case.
B. Taher’s Justification as Pretext
If Wold had made her prima facie case, then the burden shifts to the
employer to produce a “legitimate, non-discriminatory reason for the adverse
action.” Leslie, 679 N.W.2d at 789. “If the employer meets this burden, the
complainant must prove the proffered reason is a pretext for retaliation.” Id.
Taher has consistently maintained that Wold’s termination was due to
her failure to follow proper channels in communicating with a client. McCoy,
Johnson, and Cameron all testified that Taher did not permit employees to
discuss business-related issues with client employees. Instead, Taher
employees were supposed to deal with McCoy for all client-related issues
because he was their client contact. See, e.g., Docket 22-6 at 3 (“But [Taher
employees] don’t file complaints with [Premier Bankcard employees] or ask
questions of that nature. If they want to talk weather, family, sports, that’s
fine.”).

24

Courts have identified several methods of proving that an employer’s
proffered justification is pretext:
An employee may prove pretext by demonstrating that the
employer’s proffered reason has no basis in fact, that the employee
received a favorable review shortly before [s]he was terminated,
that similarly situated employees who did not engage in the
protected activity were treated more leniently, that the employer
changed its explanation for why it fired the employee, or that the
employer deviated from its policies.
Phillips v. Mathews, 547 F.3d 905, 913 (8th Cir. 2008) (quoting Stallings v.
Hussmann Corp., 447 F.3d 1041, 1052 (8th Cir. 2006)). Wold has not
introduced any evidence showing a positive performance review prior to
termination, nor has she shown that similarly situated employees were treated
differently. Wold does argue that Taher has changed its explanation for
terminating her because Taher initially relied on its complaint resolution
procedure, which is inapplicable, or alternatively, that Taher failed to follow its
complaint resolution procedure. Wold also argues that Taher’s justification is
pretext because the conversation between Wold and Beacom was friendly and
did not suggest any type of confrontation between the two, undermining the
justification’s factual basis.
Taher’s complaint resolution procedure is a process to deal with conflicts
between Taher employees. Docket 22-27. Taher has consistently argued that
Wold violated its chain of command for client interaction, not its internal
conflict resolution procedure. Docket 22-2 at 6-7; Docket 22-5 at 19.

25

Furthermore, the incident for which Wold was terminated was brought to
Taher’s attention by McCoy’s complaints to Hardin and Johnson. McCoy does
not work for Taher. The fact that disciplinary proceedings were instigated based
on a report from someone outside Taher weakens any retaliatory inference.
Finally, Wold’s relationship with Beacom and the friendly tenor of the
conversation between the two fails to show pretext because Wold does not
dispute that the conversation took place, which is the factual basis for the
proffered justification. Wold has not shown that Taher’s stated reason for her
termination was pretext.
Wold has not demonstrated a causal link between her termination and
her protected activity. Even if Wold could show a causal link, Wold has not
shown that Taher’s articulated reason for her termination is false, nor has she
offered evidence sufficient for a reasonable trier of fact to infer that retaliation
was the real reason for her termination. Accordingly, summary judgment is
granted in favor of Taher on Wold’s wrongful discharge claim.
III.

Retaliation
In Count II of the complaint, Wold claims Taher retaliated against her for

pursuing her workers’ compensation claim and requests relief under the public
policy exception to the employment at-will doctrine applied to workers’
compensation claims in Niesent. Wold pursues this claim in addition to her
claim under SDCL 62-1-16 because Wold contends Taher retaliated against her

26

by delaying her return to work after her injury, by demoting her, and by
reducing her pay once she returned.
In Niesent, the South Dakota Supreme Court stated that “[t]he lawmakers
of this state clearly intend that workers injured in the course of employment be
compensated without interference.” Niesent, 505 N.W.2d at 784. Following
Niesent, the South Dakota legislature enacted SDCL 62-1-16, which on its face
is limited to instances in which an employee is terminated in retaliation for
filing a workers’ compensation claim. Wold argues that, based on the broad
language in Niesent,5 employees who suffer adverse employment actions short
of termination should still have a cause of action against an employer as a
matter of public policy.
Assuming without deciding that the South Dakota Supreme Court would
allow employees to pursue retaliation claims for adverse employment actions
short of termination, Wold would still have to establish a prima facie case for
retaliation, including a causal link between her workers’ compensation claim
and the adverse employment actions, and she would also have to show that any
proffered nonretaliatory justifications are a pretext for retaliation. See Johnson
v. Kreiser’s, Inc., 433 N.W.2d 225, 227-28 (S.D. 1988) (establishing that actions

5

In the past, this court has interpreted the public policy exception set
forth in Niesent to extend to employees terminated in retaliation for activity
protected by the FMLA and the Americans with Disabilities Act. See Jones v.
Bracco Ltd. P’ship, Civ. No. 11-4117-KES, 2013 WL 696381 (D.S.D. Feb. 26,
2013).
27

for wrongful discharge based on public policy should utilize a burden-shifting
framework).
Wold filed her workers’ compensation claim on April 7, 2011. Docket 2230. Her wage reduction was signed on September 30, 2010, before her
underlying injury had happened. Both her demotion and Johnson’s insistence
that she fill out a workability report before returning occurred before her
workers’ compensation claim was filed. Because her demotion, pay cut, and
alleged delay in returning to work all happened before Wold filed her workers’
compensation claim, Wold cannot establish a causal link between those
adverse employment actions and her future protected activity.
Additionally, Taher provided legitimate, nonretaliatory reasons for each
adverse employment action. With respect to her pay cut, Johnson testified that
her hourly wage was out of line with her duties, and that her wage had initially
been set to reflect her previous salary as food service director at Hutchinson.
With respect to her demotion, Johnson and Cameron both testified that Hardin
performed well in Wold’s absence and they made the business decision to keep
Hardin in charge when Wold returned rather than revert to the split
management arrangement. Finally, with respect to the delay in allowing Wold to
return to work, Taher introduced evidence showing that Johnson’s initial
refusal to allow Wold to return to work was due to the fact that Wold had not
provided Taher with the company’s required workability report, and that once
Wold provided that form, she was allowed to return to work immediately. Wold
28

has introduced no evidence to indicate that Taher’s justifications are pretext for
retaliation.
Therefore, even if the court were to decide that the South Dakota
Supreme Court would expand on the public policy found in SDCL 62-1-16 and
allow employees to pursue workers’ compensation retaliation claims based on
adverse employment actions other than termination, Wold has not shown either
a causal link or that Taher’s proffered reasons are pretext for retaliation. Taher
is entitled to summary judgment on Wold’s workers’ compensation retaliation
claim.
IV.

Breach of Contract
In Count IV of the complaint, Wold seeks damages for breach of contract

arising from Taher’s alleged refusal to allow Wold to use vacation days. Wold
concedes that Taher’s employee handbook does not constitute a contract and
states that as a result she is no longer pursuing her breach of contract claim.
Docket 24 at 1. Accordingly, Taher is entitled to summary judgment on
Count IV.
CONCLUSION
Wold has not introduced sufficient evidence to support a finding that
Taher willfully violated the FLSA, an element on which she has the burden of
proof. Wold has, however, shown that genuine issues of material fact exist with
respect to her alleged misclassification under the FLSA and her alleged unpaid
overtime. Under the McDonnell Douglas framework applicable to Wold’s
29

retaliation and wrongful discharge claims, Wold has not demonstrated a
genuine issue for trial with respect to establishing a causal link or proving
pretext. Accordingly, it is
ORDERED that Taher’s motion for summary judgment (Docket 18) is
granted with respect to Wold’s Fair Labor Standards Act claim arising from
April to June 2009, in Count I, Wold’s retaliation claim in Count II, Wold’s
wrongful discharge claim under SDCL 62-1-16 in Count III, and Wold’s breach
of contract claim in Count IV.
IT IS FURTHER ORDERED that Taher’s motion for summary judgment is
denied with respect to Wold’s Fair Labor Standards Act claims arising from
September to November 2010, and from March to November 2011, in Count I.
Dated March 3, 2014.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

30