Hajiani v. ESHA USA Inc. et al (TV1)
MEMORANDUM OPINION: Defendants' Motion for Partial Summary Judgment [Doc. 36 ] and Motion to Dismiss [Doc. 38 ], the latter of which the Court treats as a motion for summary judgment [Doc. 46 ], will both be GRANTED. The Clerk of Court will be DIRECTED to CLOSE this case. ORDER ACCORDINGLY. Signed by Chief District Judge Thomas A Varlan on 11/7/17. (JBR) Modified to reflect copy mailed to Salim Hajiani on 11/7/2017 (JBR).
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
ESHA USA, INC., et al.,
This civil action is before the Court on defendants’ Motion for Partial Summary
Judgment [Doc. 36] and Motion to Dismiss [Doc. 38], the latter of which the Court
converted to a motion for summary judgment under Federal Rule of Civil Procedure 12(d)
because defendants attached and relied upon an exhibit [Doc. 46]. Plaintiff, proceeding
pro se, responded in opposition to these motions [Docs. 42–43]. Defendants then filed
replies [Docs. 44–45], to which plaintiff responded yet again [Doc. 47]. Defendant’s
motions are thus fully briefed and ready for disposition. For the reasons stated below, the
Court will grant defendants’ motions for summary judgment.
This case concerns allegations of unpaid overtime wages under the federal Fair
Labor Standards Act (the “FLSA”), 29 U.S.C. §§ 201–19, along with various other civil
wrongs. Plaintiff Salim Hajiani alleges that defendants employed him in their gas-station
convenience store from approximately October 10, 2011, to January 10, 2012 [Doc. 1
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 1 of 34 PageID #: 228
¶¶ 12–13]. The store is owned by defendant ESHA USA, Inc. (“ESHA”), a Tennessee
corporation, and plaintiff alleges that defendants Sameer Ramjee and Jamaludin Sayani
own ESHA and control its operations [Id. ¶¶ 2, 25–28]. Plaintiff asserts that he routinely
worked over forty hours per week as a cashier, but did not receive overtime pay for this
work [Id. ¶¶ 15–16]. Plaintiff further alleges that he regularly sold goods moving in
interstate commerce as part of his work [Id. ¶¶ 17–21]. Plaintiff submits that Ramjee and
Sayani supervised and controlled his work schedule and activities [Id. ¶¶ 30–33].
In addition, plaintiff alleges that, after some time passed, he began to demand
payment of unpaid regular and overtime wages from defendants [Id. ¶¶ 38–39]. Plaintiff
claims that defendants terminated his employment on January 10, 2012, in retaliation for
making these demands [Id. ¶ 40]. Further, plaintiff asserts that Ramjee and Sayani made
derogatory remarks to other potential employers who called for a reference—specifically,
that plaintiff was a “bad worker” who would sue them—and that these remarks have made
it difficult for plaintiff to find other work [Id. ¶¶ 41–42]. Plaintiff also asserts that
defendants denied him the rest and meal breaks mandated by Tennessee law and required
him to live nearby and stay on-call from 6:00 a.m. to midnight, every day [Id. ¶¶ 32–54].
Plaintiff alleges that he generally worked five to six days per week [Id. ¶ 55].
All parties concede that they entered into a Confidential Settlement Agreement and
Release (the “Settlement Agreement”) relating to some or all of plaintiffs’ allegations in
February 2012 [See Doc. 38 p. 2; Doc. 43 p. 1]. Plaintiff was then represented by counsel,
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 2 of 34 PageID #: 229
though he has represented himself in this litigation [Doc. 44 p. 2]. One provision of the
Settlement Agreement provides as follows:
Hajiani hereby releases and forever discharges ESHA USA, Inc. and
RAMJEE, their agents, employees, insurers, predecessors, successors,
assigns, and all other persons or entities in any way related to or affiliated
with ESHA USA, Inc. and RAMJEE of and from any and all complaints,
claims, demands, causes of action, obligations, damages or any other fault or
liability, in contract, by statute, or in tort, however, described, whether or not
now known, suspected, or claimed, direct or indirect, which Hajiani has had,
currently has or may have against ESHA USA, Inc. and RAMJEE arising
from the payment of wages, including overtime wages, and all claims
asserted or which could have been asserted under the FLSA.
[Doc. 37-1 ¶ 3]. Defendants argue that this Settlement Agreement should be dispositive of
this action [Doc. 37 p. 2; Doc. 38 p. 2]. Plaintiff concedes that he signed the Settlement
Agreement, but contends that this agreement did not fully compensate him for the
violations of federal and state law defendants committed, and thus did not constitute a total
release of his claims against them [Doc. 43 p. 1].
On December 22, 2014, plaintiff filed a complaint against defendants in this Court,
seeking monetary relief for failure to pay overtime wages in violation of the FLSA,
retaliatory discharge, defamation, unjust enrichment, breach of contract, and other theories
[Doc. 1]. After various case-administration and discovery disputes, defendants filed a
motion for partial summary judgment and accompanying memorandum of law on May 4,
2017 [Docs. 36–37]. That same day, defendants filed a motion to dismiss, to which they
attached an exhibit—a copy of the Settlement Agreement discussed above [Docs. 38,
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 3 of 34 PageID #: 230
38-1]. Plaintiff filed responses to these motions on July 19, 2017 [Docs. 42–43], to which
defendants then replied [Docs. 44–45].
Then, on July 26, 2017, the Court entered an order providing notice to the parties
that, because defendants had attached an exhibit to their motion to dismiss and relied upon
it therein [Docs. 38, 38-1], the Court would treat this motion as one for summary judgment
pursuant to Federal Rule of Civil Procedure 12(d) [Doc. 46]. In compliance with Sixth
Circuit case law, see, e.g., Bruce v. Corr. Med. Servs., Inc., 389 F. App’x 462, 465 (6th
Cir. 2010), the Court permitted the parties fourteen days from entry of that order to file any
additional materials pertinent to the resolution of defendants’ motion [Doc. 46 p. 2].
Plaintiff filed a short additional response on August 11, 2017 [Doc. 47], but the parties
have not otherwise filed any supplemental materials pertaining to defendants’ dispositive
motions. Thus, the Court will resolve defendants’ motions—treating both as motions for
summary judgment—on the record as it currently stands.
Standard of Review
Summary judgment under Federal Rule of Civil Procedure 56 is proper “if 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). The moving party bears
the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v.
Catrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Cos., 8 F.3d 335, 339 (6th
Cir. 1993). All facts and inferences to be drawn from the record before the Court must be
viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 4 of 34 PageID #: 231
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 301 F.3d 937, 942
(6th Cir. 2002).
Yet, “[o]nce the moving party presents evidence sufficient to support a motion under
Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations.”
Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421, 1423 (E.D. Tenn.
1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of
a particular element, the nonmoving party must point to evidence in the record upon which
a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve
facts that might affect the outcome of the suit under the governing law. Id.
The Court’s function at the point of summary judgment is limited to determining
whether sufficient evidence has been presented to make the issue of fact a proper question
for the factfinder. Id. at 250. The Court does not weigh the evidence or determine the truth
of the matter. Id. at 249. Nor does the Court search the record “to establish that it is bereft
of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479–
80 (6th Cir. 1989). Thus, “the inquiry performed is the threshold inquiry of determining
whether there is a need for a trial—whether, in other words, there are any genuine factual
issues that properly can be resolved only by a finder of fact because they may reasonably
be resolved in favor of either party.” Anderson, 477 U.S. at 250.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 5 of 34 PageID #: 232
Defendants have raised various arguments as to why they are entitled to judgment
as a matter of law under Federal Rule of Civil Procedure 56 on plaintiff’s claims against
them [Docs. 36–38, 44–45]. The Court will address each of these arguments, along with
plaintiff’s responses [Docs. 42–43, 47], in turn. As explained below, the Court finds that
defendants are entitled to summary judgment on all seven of plaintiff’s claims.
The Settlement Agreement
First, defendants argue that Counts I, II, IV, and V of the complaint—those arising
under the FLSA—are barred because plaintiff released these claims in the Settlement
Agreement [Doc. 37 p. 2; Doc. 38 p. 2]. Defendants assert it is undisputed that plaintiff
expressly agreed to release all of his claims “in contract, by statute, or in tort, . . . arising
from the payment of wages, including overtime wages, and all claims asserted or which
could have been asserted under the FLSA” [Doc. 37 p. 2; Doc. 37-1 ¶ 3]. Thus, defendants
submit that there is no “genuine dispute as to any material fact” regarding their
“entitle[ment] to judgment as a matter of law” on these claims. Fed. R. Civ. P. 56(a).
Plaintiff responds that, although he did enter into the Settlement Agreement, he
“was not fully compensated for his claims. Plaintiff was paid just $5350.00 (which
included attorney fees)” [Doc. 42-1 p. 2]. Plaintiff asserts that, because this figure does
not cover all of his FLSA claims, the release “should be deemed null and void at this stage”
[Id.]. In a later brief, plaintiff further explains that the Settlement Agreement compensated
him only for his regular-time work and corresponding overtime wages—not his on-call
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 6 of 34 PageID #: 233
time, corresponding overtime wages, or his other claims [Doc. 47 p. 1]. Plaintiff alleges
that defense counsel originally drafted an agreement broadly releasing all of plaintiff’s
claims, but that plaintiff refused to sign that version and the current language was adopted
instead [Id. at 1–2].
Defendants respond that plaintiff’s claim that the Settlement
Agreement should be deemed null and void is untenable because plaintiff did not raise this
argument in his complaint [Doc. 44 pp. 1–2].
Were the Court to consider only the arguments described above, the Court would
be inclined to agree with defendants that plaintiff released Counts I, II, IV, and V in the
Settlement Agreement. “A settlement agreement is a type of contract and is governed ‘by
reference to state substantive law governing contracts generally.’” Cogent Solutions Grp.,
LLC v. Hyalogic, LLC, 712 F.3d 305, 309 (6th Cir. 2013) (quoting Bamerilease Capital
Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992)). Under Tennessee law,1 ordinary
principles of contract law “govern disputes concerning the formation, construction, and
enforceability” of settlement agreements. Waddle v. Elrod, 367 S.W.3d 217, 222 (Tenn.
2012). Accordingly, “[t]he literal meaning of the contract language controls if the language
is clear and unambiguous.” Dick Broad. Co. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 659
(Tenn. 2013); accord 84 Lumber Co. v. Smith, 356 S.W.3d 380, 383 (Tenn. 2011) (“The
intention of the parties is based on the ordinary meaning of the language contained within
the four corners of the contract.”).
In addition to having been executed and performed in Tennessee, the Settlement
Agreement contains a choice-of-law clause specifying Tennessee law [Doc. 37-1 ¶ 11].
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 7 of 34 PageID #: 234
Here, contrary to plaintiff’s reading, the Settlement Agreement released all of
plaintiff’s “complaints, claims, demands, causes of action, obligations, damages or any
other fault or liability” against defendants “arising from the payment of wages, including
overtime wages, and all claims asserted or which could have been asserted under the
FLSA” [Doc. 37-1 ¶ 3 (emphasis added)]. Thus, the agreement purports to release all
claims arising from the payment of wages—whether or not rooted in the FLSA—and is not
limited to wages for “regular time,” as opposed to “on call time” [Doc. 47 p. 1]. Moreover,
permitting plaintiff to now claim that the compensation he received under the bargainedfor terms of the Settlement Agreement was insufficient would undermine the purpose of
the agreement and defendants’ reasonable expectations in executing it. See Lopez v.
Taylor, 195 S.W.3d 627, 632 (Tenn. Ct. App. 2005) (noting that a central purpose of
contract law is to “protect the parties’ reasonable expectations and their right to receive
the benefits of the agreement they entered into”).
But that is not the end of the analysis. In reviewing pertinent FLSA case law, the
Court has determined that a critical question concerning the Settlement Agreement’s
enforceability remains unresolved. The parties have not briefed or even mentioned this
issue—i.e., whether the Settlement Agreement is void under the FLSA, as discussed further
below. The Court is, however, mindful of its duty to “liberally construe the briefs of pro
se litigants and apply less stringent standards to parties proceeding pro se than to parties
represented by counsel.” Bouyer v. Simon, 22 F. App’x 611, 612 (6th Cir. 2001). Given
plaintiff’s pro se argument that the Settlement Agreement is “null and void” [Doc. 42-1
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 8 of 34 PageID #: 235
p. 2], as well as the significant concerns of federal public policy implicated here, the Court
finds it appropriate to consider this issue at this time.
The FLSA requires employers engaged in interstate commerce to provide overtime
compensation, at a rate of at least one-and-a-half times the normal pay rate, to covered
employees who work more than forty hours in a week. 29 U.S.C. § 207(a)(1). Employers
who violate this duty are liable for both the unpaid overtime wages and statutory liquidated
damages. Id. § 216(b). Congress adopted the FLSA out of “recognition of the fact that
due to the unequal bargaining power as between employer and employee, certain segments
of the population required federal compulsory legislation to prevent private contracts on
their part which endangered national health and efficiency.” Brooklyn Sav. Bank v. O’Neil,
324 U.S. 697, 706 (1945). Thus, as a general rule, “FLSA rights cannot be abridged by
contract or otherwise waived because this would nullify the purposes of the statute and
thwart the legislative policies it was designed to effectuate.” Craig v. Bridges Bros.
Trucking LLC, 823 F.3d 382, 388 (6th Cir. 2016) (quoting Barrentine v. Ark.-Best Freight
Sys., Inc., 450 U.S. 728, 740 (1981)). Specifically, permitting waiver of FLSA rights
through private bargaining would undermine the FLSA’s goal of “protect[ing] workers
from substandard wages and oppressive working hours,” given the “often great inequalities
in bargaining power between employers and employees.” Nasrallah v. Lakefront Lines,
Inc., No. 1:17-cv-69, 2017 WL 2291657, at *4 (N.D. Ohio May 25, 2017).
In light of the above principles, the circuit courts of appeals generally agree that
“[t]here are only two ways in which back wage claims arising under the FLSA can be
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 9 of 34 PageID #: 236
settled or compromised by employees.” Lynn’s Food Stores, Inc. v. U.S. Dep’t of Labor,
Emp’t Standards Admin., Wage & Hour Div., 679 F.2d 1350, 1352 (11th Cir. 1982). First,
29 U.S.C. § 216(c) authorizes the Secretary of Labor to supervise the payment of unpaid
overtime wages, and “the agreement of any employee to accept such payment shall upon
payment in full constitute a waiver . . . of any right he may have under [the FLSA].”
Second, “[w]hen employees bring a private action for back wages under the FLSA, and
present to the district court a proposed settlement, the district court may enter a stipulated
judgment after scrutinizing the settlement for fairness.” Lynn’s Food Stores, 679 F.2d at
1353; see also D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 113 n.8 (1946) (noting in dicta
that “the requirement of pleading the issues and submitting the judgment to judicial
scrutiny may differentiate stipulated judgments from compromises by the parties”).
Outside of these oversight mechanisms, however, the circuits are largely in
agreement that private settlements of FLSA claims are invalid. See Cheeks v. Freeport
Pancake House, Inc., 796 F.3d 199, 204–05 & n.5 (2d Cir. 2015) (noting that the Second,
Fourth, Seventh, Eighth, and Eleventh Circuits agree on this point). While the Sixth Circuit
has yet to address this issue, district courts in this circuit have followed the general
consensus described above. See, e.g., Nasrallah, 2017 WL 2291657, at *6 (refusing to find
that a private settlement agreement waived a later FLSA claim); McConnell v. Applied
Performance Techs., Inc., No. C2-01-1273, 2002 WL 483540, at *6 (S.D. Ohio Mar. 18,
2002) (same); cf. Simmons v. Matthis Tire & Auto Serv., Inc., No. 13-2875-STA-tmp,
2015 WL 5008220, at *1 (W.D. Tenn. Aug. 20, 2015) (approving a private settlement
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 10 of 34 PageID #: 237
agreement that the parties negotiated through mediation—after the start of litigation—and
then submitted for the court’s approval).
But an exception to the general rule may exist, as two decisions of the United States
Supreme Court have suggested. First, in Brooklyn Savings, the Court considered the claim
of a night watchman that he was entitled to liquidated damages under FLSA § 216(b)
because his employer, a bank, had failed to pay him overtime wages. 324 U.S. at 699–700.
Two years after his employment had ended, the bank offered the watchman a check for
$423.16—representing his total unpaid overtime wages—in exchange for a release of all
his rights under the FLSA. Id. at 700. The Court held that the watchman’s acceptance of
this offer did not preclude a later claim for liquidated damages, at least absent a “bona fide
dispute between the parties with respect to coverage or amount due under the [FLSA].” Id.
at 703. The Court expressly left unresolved the question “whether parties could privately
settle FLSA claims if such settlements resolved ‘a bona fide dispute between the parties.’”
Cheeks, 796 F.3d at 202 (quoting and construing Brooklyn Savings, 324 U.S. at 703).
Second, D.A. Schulte concerned the claims of service and maintenance employees
that they were entitled to overtimes wages under the FLSA. 328 U.S. at 111. Their
employer initially refused to pay—on the ground that it was not covered under the FLSA
because it was not engaged in interstate commerce—but then acceded to the employees’
demands in exchange for a release of liability. Id. When the employees later sued for
liquidated damages, the Court answered the question left open in Brooklyn Savings in part
by holding that “the remedy of liquidated damages cannot be bargained away by bona fide
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 11 of 34 PageID #: 238
settlements of disputes over coverage.” Id. at 114 (emphasis added). But the Court still
declined to address “the possibility of compromises in other situations . . . , such as a
dispute over the number of hours worked or the regular rate of employment.” Id. The
Court has yet to return to that question. See Lynn’s Food Stores, 679 F.2d at 1354.
The Eleventh Circuit in Lynn’s Food Stores concluded that bona fide disputes as to
the amount due are amenable to settlement—but only if the parties execute the agreement
after litigation begins and then submit their bargain for court approval. See id. at 1354.
The employer in that case was actually the party that brought suit, seeking judicial approval
of a private agreement it had negotiated with affected employees. Id. at 1352. The court
held that the agreement was invalid, however, because “to approve an ‘agreement’ between
an employer and employees outside of the adversarial context of a lawsuit brought by the
employees would be in clear derogation of the letter and spirit of the FLSA.” Id. at 1354.
Indeed, the court noted that the record contained strong evidence of employer overreaching
and manipulative tactics during the negotiation process, amounting to “a virtual catalog of
the sort of practices which the FLSA was intended to prohibit.” Id. The Seventh, Eighth,
and Ninth Circuits have come to the same conclusion, albeit after more limited analysis.
See, e.g., Walton v. United Consumers Club, Inc., 786 F.2d 303, 306 (7th Cir. 1986);
Copeland v. ABB, Inc., 521 F.3d 1010, 1014 (8th Cir. 2008); Seminiano v. Xyris Enter.,
602 F. App’x 682, 683 (9th Cir. 2015).
The Fifth Circuit, on the other hand, has taken a more a permissive view of private
settlements of FLSA claims. In Martin v. Spring Break ’83 Productions, L.L.C., the court
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 12 of 34 PageID #: 239
upheld the validity of a private settlement agreement that a union had executed with its
members’ employer in a dispute concerning overtime wages. 688 F.3d 247, 257 (5th Cir.
2012). The court adopted an exception to the general ban on private FLSA settlements,
holding that “a private compromise of claims under the FLSA is permissible where there
exists a bona fide dispute as to liability” as a factual matter. Id. at 255 (quoting Martinez
v. Bohls Bearing Equip. Co., 361 F. Supp. 2d 608, 634 (W.D. Tex. 2005)). The court also
noted that the concerns underlying Brooklyn Savings, D.A. Schulte, and Lynn’s Food Stores
as to unequal bargaining power were not implicated, as the plaintiffs, “with counsel,
personally received and accepted compensation for the disputed hours.” Id. at 257.
The Fifth Circuit retreated from this expansive rule somewhat in Bodle v. TXL
Mortgage Corp., 788 F.3d 159 (5th Cir. 2015). In Bodle, the plaintiffs had formerly
executed a broad release of liability in the defendant’s favor as part of the private settlement
of an earlier, unrelated state-court action. Id. at 161–62. The Fifth Circuit held that this
release—which did not specifically mention the FLSA—did not bar the present action for
overtime wages. Id. at 165. The court found that the Martin exception did not apply
because, “not only did the prior state court action not involve the FLSA, the parties never
discussed overtime compensation or the FLSA in their settlement negotiations.” Id. Thus,
absent “factual development of the number of unpaid overtime hours,” the state-court
settlement agreement was ineffective to bar a later FLSA claim. Id.
Here, neither of the two classic exceptions to the general ban on private FLSA
settlements applies. Nasrallah, 2017 WL 2291657, at *4. The Secretary of Labor did not
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 13 of 34 PageID #: 240
supervise the transaction between plaintiff and defendants, and no party has submitted a
settlement agreement executed in the course of litigation for this Court’s approval. Thus,
the Settlement Agreement is unenforceable unless the Court adopts the exception
recognized in Martin and then finds that it applies here.
However, after careful
consideration of the authorities cited above, the Court finds that existing Supreme Court
and Sixth Circuit precedent does not support such an exception.
First, the Court notes that the Supreme Court in D.A. Schulte expressly held that
FLSA rights “cannot be bargained away by bona fide settlements of disputes over
coverage.” 328 U.S. at 114. Thus, even if employer and employee (1) actually disputed
FLSA coverage, and (2) entered into a bona fide settlement agreement in light of that
dispute, such an agreement would still be void against public policy. Id. While the Court
declined to reach the question whether this same logic applies to disputes over the number
of hours or rate of pay, see id., the Court finds little reason to think it should not. Consider
two employers, both of whom enter private settlement negotiations with a former employee
outside of litigation. The first asserts during the course of negotiations that it owes nothing
to the employee under the FLSA because it is not engaged in interstate commerce. The
second asserts that it owes nothing because the employee never worked more than forty
hours per week. Both of these hypothetical situations may feature the same “unequal
bargaining power as between employer and employee.” Brooklyn Sav. Bank, 324 U.S. at
706. Both may exhibit the same employer overreaching, psychological and economic
pressure, and other “invidious practices.” Lynn’s Food Stores, 679 F.2d at 1354–55. In
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 14 of 34 PageID #: 241
other words, the employer’s choice of legal argument does not affect the disparity in
bargaining power that led Congress to enact the FLSA and the Supreme Court to declare
its protections non-waivable. See Brooklyn Sav. Bank, 324 U.S. at 707 n.18 (“[T]he prime
purpose of the legislation was to aid the unprotected, unorganized and lowest paid of the
nation’s working population; that is, those employees who lacked sufficient bargaining
power to secure for themselves a minimum subsistence wage.”).
Furthermore, while the Court is cognizant of the federal policy “favoring private
resolution of labor disputes,” Mauget v. Kaiser Eng’rs, Inc., 546 F. Supp. 486, 490 (S.D.
Ohio 1982), private negotiations of the kind involved here are not the only path to mutually
beneficial dispute resolution. Federal courts have long approved fair and reasonable
settlements of FLSA claims that employer and employee execute after the latter brings suit
in federal court. Nasrallah, 2017 WL 2291657, at *4. As the Eleventh Circuit reasoned,
“initiation of the action by the employee provides some assurance of an adversarial
context.” Lynn’s Food Stores, 679 F.2d at 1354. The employee will likely be represented
by counsel, and the resulting agreement “is more likely to reflect a reasonable compromise
of disputed issues than a mere waiver of statutory rights.” Id. Thus, this route to private
settlement—along with supervision by the Department of Labor under 29 U.S.C.
§ 216(c)—strikes the proper balance between the need for efficient resolution of labor
disputes and the FLSA’s goal of equalizing the parties’ bargaining power.
Moreover, the Court finds that its holding aligns with the decisions of other district
courts within this circuit. While not binding on this Court, these decisions support the
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 15 of 34 PageID #: 242
conclusion the Court has reached in this case. In Simmons, the Western District of
Tennessee noted that “[c]ourts approve FLSA settlements when they are reached as a result
of contested litigation to resolve bona fide disputes concerning a plaintiff’s entitlement to
compensation under the FLSA.” 2015 WL 5008220, at *1 (emphasis added). The
agreement in Simmons was the product of “the parties’ good faith participation in
mediation with an experienced wage and hour mediator” in an employee-initiated suit. Id.
Here, by contrast, the Settlement Agreement arose free of the substantive and procedural
safeguards of “contested litigation.” The parties’ settlement negotiations in this case took
place in February 2012 [Doc. 38 p. 2; Doc. 43 p. 1], but plaintiff did not bring suit until
December 2014 [Doc. 1]. In addition, the fact that plaintiff had the aid of counsel in
executing the Settlement Agreement is of no moment. Both Nasrallah and McConnell
considered—and rejected—arguments that the ban on private FLSA settlements did not
apply because the employee was represented by counsel during negotiations. Nasrallah,
2017 WL 2291657, at *6; McConnell, 2002 WL 483540, at *5. Indeed, in McConnell, the
employee was “an educated and experienced businessman.” 2002 WL 483540, at *5. Both
courts held that this fact did not trump the FLSA’s strong preference for resolution of FLSA
disputes in the open air of contested litigation.2
The Court notes that both cases mention the Martin exception for private settlements of
bona fide liability disputes. Nasrallah, 2017 WL 2291657, at *4; McConnell, 2002 WL 483540,
at *5. But neither decision actually adopts the exception, and Nasrallah even refers to Martin as
reflecting “perhaps the most liberal view” of FLSA settlements, in contrast to the majority of other
circuits to have considered the matter. 2017 WL 2291657, at *4.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 16 of 34 PageID #: 243
Finally, the Court notes that defendants’ invocation of the Settlement Agreement
constitutes a claim of release, or perhaps accord and satisfaction—both affirmative
defenses under Federal Rule of Civil Procedure 8(c). The party asserting such a defense
bears the burden of proving, by a preponderance of evidence, that the defense bars the
plaintiff’s claim. Scipio v. Sony Music Entm’t, 173 F. App’x 385, 394 (6th Cir. 2006)
(citing Ward v. Wilkinson, No. 01A01-9803-CH-151, 1999 WL 221843, at *1 (Tenn. Ct.
App. Apr. 19, 1999)). Thus, defendants have moved for summary judgment on a theory
for which they bear the burden of proof. See Celotex Corp. v. Catrett, 477 U.S. 317, 331
(1986) (Brennan, J., concurring) (“If the moving party will bear the burden of persuasion
at trial, that party must support its motion with credible evidence—using any of the
materials specified in Rule 56(c)—that would entitle it to a directed verdict if not
controverted at trial.” (emphasis omitted)). Federal Rule of Civil Procedure 50(a)(1)
provides that a party is entitled to judgment as a matter of law—i.e., a directed verdict—if
the other party has been fully heard on an issue and “a reasonable jury would not have a
legally sufficient evidentiary basis to find for the [other] party on that issue.”
The Court finds that, even if it were to adopt the Martin exception discussed above,
defendants have failed to prove that any reasonable jury would necessarily agree that the
Settlement Agreement was the product of a “bona fide dispute about time worked and not
. . . a compromise of guaranteed FLSA substantive rights.” Martin, 688 F.3d at 255.
Specifically, defendants have failed to attach Rule 56(c) materials—i.e., depositions,
affidavits, stipulations, discovery responses, or other sworn materials—detailing any
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 17 of 34 PageID #: 244
“factual development of the number of unpaid overtime hours or of compensation due
for unpaid overtime” during the parties’ settlement negotiations. Bodle, 788 F.3d at 165.
The only qualifying material defendants have supplied in support of their motion is the
Settlement Agreement itself, which does not meaningfully address this question [See Doc.
36-1]. As a result, the record is currently unclear as to whether the parties actually
negotiated and then compromised a bona fide dispute concerning the number of overtime
hours plaintiff worked and the resulting compensation defendants owed him.
Therefore, defendants are not entitled to judgment as a matter of law on their
affirmative defense. See Fed. R. Civ. P. 56(a).
The FLSA Statute of Limitations
Second, defendants argue that Counts I, II, IV, and V of the complaint are barred as
untimely by the FLSA statute of limitations [Doc. 38 pp. 2–3]. For the reasons explained
below, the Court finds that defendants are correct on this point.
The FLSA contains a two-year limitations period for minimum- and overtime-wage
claims, “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). “A cause of
action for overtime compensation under the FLSA accrues at the regular payday
immediately following the work period during which services were rendered and for which
overtime compensation is claimed.” Hasken v. City of Louisville, 234 F. Supp. 2d 688, 691
(W.D. Ky. 2002). And the FLSA specifically provides that an action for unpaid overtime
wages “shall be considered to be commenced on the date when the complaint is filed.” 29
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 18 of 34 PageID #: 245
U.S.C. § 256. Ordinarily, “[b]ecause the statute of limitations is an affirmative defense,
the burden is on the defendant to show that the statute of limitations has run.” Campbell
v. Grand Trunk W.R.R. Co., 238 F.3d 772, 775 (6th Cir. 2001). If the defendant meets this
burden, “the burden shifts to the plaintiff to establish an exception to the statute of
limitations.” Id. (citing Drazan v. United States, 762 F.2d 56, 60 (7th Cir. 1985)). On the
other hand, “[a] plaintiff that argues the three year statute of limitations is applicable and
alleges willful conduct bears the burden” of coming forward with sufficient evidence that
the defendant acted willfully. Bacon v. Eaton Aeroquip, LLC, No. 11-cv-14103, 2014 WL
5090825, at *8 (E.D. Mich. Oct. 9, 2014) (citing Dole v. Elliott Travel & Tours, Inc., 942
F.2d 962, 967 (6th Cir. 1991)).
The Supreme Court has defined “willfulness” in this context to require that “the
employer either knew or showed reckless disregard for the matter of whether its conduct
was prohibited by the [FLSA].” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133
(1988) (citing Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985)); accord Elwell
v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 842 (6th Cir. 2002). Courts in the Sixth
Circuit have found willfulness “where the defendant had previous Department of Labor
[“DOL”] investigations regarding overtime violations, prior agreements to pay unpaid
overtime wages, and assurances of future compliance,” along with situations where “the
employer deliberately chose to avoid researching the laws’ terms.” Thomas v. Doan
Constr. Co., No. 13–11853, 2014 WL 1405222, at * 14 (E.D. Mich. Apr. 11, 2014)
(quoting Cook v. Carestar, Inc., 11–00691, 2013 WL 5477148, at *13 (S.D. Ohio Sept. 13,
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 19 of 34 PageID #: 246
2013)); see also Byrd v. ABC Prof’l Tree Serv., Inc., 832 F. Supp. 2d 917, 920 (M.D. Tenn.
2011) (noting that the Sixth Circuit has “repeatedly [held] that previous DOL investigations
regarding overtime violations are evidence that subsequent FLSA violations are willful”).
The willfulness determination is proper for the Court to make on summary judgment.
See Herman v. Palo Grp. Foster Home, Inc., 183 F.3d 468, 474 (6th Cir. 1999); Abadeer
v. Tyson Foods, Inc., 975 F. Supp. 2d 890, 907 (M.D. Tenn. 2013).
Here, plaintiff alleges that his employment with defendants began on October 10,
2011, and ended on January 10, 2012 [Doc. 1 ¶ 13]. Defendants do not contest these dates
[Doc. 35 ¶ 13]. Defendants originally asserted that, even assuming their violation of the
FLSA was willful—which defendants dispute—plaintiff’s action is untimely under either
the two-year period or the three-year period because he did not file his complaint until
January 15, 2015 [Doc. 38 p. 3]. Plaintiff responded (correctly) that he actually filed his
complaint on December 22, 2014 [Doc. 43 pp. 1–2].
Plaintiff further asserts that
“[o]bviously defendants committed a willful violation of the FLSA” and that “their
action[s] were in reckless disregard” of the FLSA [Id. at 2]. Defendants did not address
the statute of limitations issue further in their reply briefs [See Docs. 44–45].
After carefully considering the parties’ positions on this matter, the Court finds that
the two-year limitations period under § 255(a), rather than the three-year period for willful
violations, governs plaintiff’s claims. The Court finds, as an initial matter, that defendants
have satisfied their burden under Rule 56(c) as the moving party. Namely, defendants have
pointed out that the record contains no evidence that they acted knowingly or recklessly
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 20 of 34 PageID #: 247
with regard to their alleged FLSA violations [See Doc. 38 pp. 2–3]. The burden then shifted
to plaintiff to specify evidence in the record upon which a reasonable finder of fact could
find in his favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Plaintiff
has failed to carry this burden. Only one sentence in plaintiff’s three briefs responding to
defendants’ dispositive motions addresses the willfulness issue. That sentence merely
states, without citation to any Rule 56(c) materials in the record, that “[o]bviously
defendants committed a willful violation of the FLSA” and that “their action[s] were in
reckless disregard to the Law” [Doc. 43 p. 2]. Such a conclusory statement is, without
more, insufficient. See Curtis Through Curtis v. Universal Match Corp., 778 F. Supp.
1421, 1423 (E.D. Tenn. 1991) (noting that the nonmoving party responding a Rule 56
motion “is not entitled to a trial merely on the basis of allegations”).
The Court is, of course, cognizant that plaintiff is proceeding in this matter pro se.
The Court also notes that, under Rule 56(c)(3), it “need consider only the cited materials,
but it may consider other materials in the record.” Having independently reviewed the
record in this matter, however, the Court can locate no evidence of willfulness as the Sixth
Circuit has conceived of that term. See Dole, 942 F.2d at 967 (finding willfulness based
on evidence of an employer’s “earlier [FLSA] violations, his agreement to pay unpaid
overtime wages, and his assurance of future compliance with the FLSA”). Here, the record
is devoid of any evidence that defendants had violated the FLSA minimum- or overtimewage provisions in the past, had previously agreed to repay such wages, or had promised
(and then failed) to comply with the FLSA. There is also no evidence that defendants
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 21 of 34 PageID #: 248
deliberately chose to avoid learning about the FLSA’s provisions. See Thomas, 2014 WL
1405222, at * 14. Plaintiff’s complaint alleges that defendants “failed to post the legally
required notice of plaintiff’s rights under the FLSA” [Doc. 1 ¶ 36],3 but unsworn
allegations in an unverified complaint “lack the force and effect of an affidavit for
purposes of responding to a motion for summary judgment,” Zainalian v. Memphis Bd. of
Educ., 3 F. App’x 429, 431 (6th Cir. 2001).
Likewise, the Eastern District of Michigan in Thomas granted summary judgment
for defendants on the issue whether the two- or three-year limitations period applied. 2014
WL 1405222, at * 14. The court found that summary judgment was proper because the
This same paragraph states that, as a result of this failure, “the statute of limitations
applicable to plaintiff[‘s] claim should be equally tolled” [Doc. 1 ¶ 38]. The Court assumes that
plaintiff refers here to equitable tolling. That doctrine “permits courts to extend the statute of
limitations on a case-by-case basis to prevent inequity.” Baden-Winterwood v. Life Time Fitness,
484 F. Supp. 2d 822, 826 (S.D. Ohio 2007). The plaintiff bears the burden of proving entitlement
to equitable tolling. See McClendon v. Sherman, 329 F.3d 490, 494 (6th Cir. 2003). The Sixth
Circuit has cautioned that federal courts should “sparingly bestow equitable tolling,” and that the
doctrine generally “applies only when a litigant’s failure to meet a legally-mandated deadline
unavoidably arose from circumstances beyond [her] control.” Graham-Humphreys v. Memphis
Brooks Museum of Art, Inc., 209 F.3d 552, 560–61 (6th Cir. 2000). Relevant factors include (1)
the plaintiff’s lack of actual or constructive notice of the filing requirements, (2) the plaintiff’s
diligence in pursuing her rights, (3) whether the defendant(s) will suffer any prejudice, and (4)
whether the plaintiff’s ignorance of the filing requirements was reasonable. See Cook v. Comm’r
of Soc. Sec., 480 F.3d 432, 437 (6th Cir. 2007).
Here, outside of the vague reference to equitable tolling in his complaint, plaintiff has never
specifically requested that the Court invoke the doctrine. Notably, plaintiff did not request such
relief in responding to defendants’ statute-of-limitations arguments in their dispositive motions.
And even if the Court were to construe paragraph 38 of the complaint as a sufficient request,
plaintiff has made no effort to carry his burden of “demonstrating why he . . . is entitled to equitably
toll the statute of limitations in [this] particular case.” Struck v. PNC Bank, N.A., 931 F. Supp. 2d
842, 846 (S.D. Ohio). The Court is likewise unaware of any facts suggesting the appropriateness
of equitable tolling. Indeed, the Court notes that plaintiff was involved in settlement negotiations
as early as February 2012 concerning his right to overtime wages under the FLSA. Thus, the Court
will decline to equitably toll the statute of limitations under § 255(a) in this case.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 22 of 34 PageID #: 249
plaintiff “ha[d] not brought forth any evidence that Defendant had any prior violations of
the FLSA or that she ever complained to Defendant about overtime.” Id.4 The court also
specifically rejected the plaintiff’s argument that sufficient evidence of willfulness was
apparent in the defendant’s failure to seek out legal advice or DOL documentation
concerning the FLSA. Id. The evidence of willfulness here is equally lacking.
Therefore, there is no genuine dispute as to whether defendants willfully violated
the FLSA that is apparent on the record before the Court. As such, the Court finds that the
two-year limitations period under § 255(a) applies to plaintiff’s FLSA allegations. Plaintiff
filed his complaint with this Court on December 22, 2014, thus tolling the statute of
limitations on that date. See 29 U.S.C. § 256. But all agree that plaintiff’s employment
with defendants ended by approximately January 10, 2012. Thus, the statute of limitations
on all possible claims for unpaid minimum5 and overtime wages under the FLSA had run
almost a full year before plaintiff filed his complaint. And, although few courts have
addressed this issue, the general FLSA limitations period under § 255(a) appears to also
govern FLSA retaliation claims. See Humphrey v. Rav Investigative & Sec. Servs. Ltd.,
169 F. Supp. 3d 489, 502 (S.D.N.Y. 2016). A theory of retaliation based on plaintiff’s
Although plaintiff’s complaint alleges that at some point he complained to defendants
about a lack of overtime pay, the complaint does not specify when or to whom he made these
remarks [See Doc. 1 ¶¶ 38–40]. But more importantly, as noted above, unsworn allegations in an
unverified complaint do not constitute Rule 56(c) materials sufficient to survive a motion for
summary judgment. See Zainalian, 3 F. App’x at 431. Conclusory assertions are not enough.
The Court notes that Count V alleges that defendants failed to pay plaintiff the minimum
wage required under 29 U.S.C. § 206. The parties do not discuss this claim in their briefings on
defendants’ dispositive motions. But because the FLSA statute of limitations under § 255(a)
applies equally to claims for unpaid minimum and overtime wages, the result is the same.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 23 of 34 PageID #: 250
January 10, 2012, termination is thus time-barred. As for plaintiff’s claim that defendants
retaliated by discouraging other employers from hiring him, the Court will discuss that
theory below, in the context of plaintiff’s defamation claim. See infra Section III.D.
Therefore, the Court finds that Counts I, II, IV, and V of the complaint are untimely
under § 255(a). Defendants are thus entitled to summary judgment on these claims.6
Plaintiff’s Breach of Contract Claim7
Third, defendants argue that they are entitled to summary judgment on Count VII
[Doc. 38 p. 3], which alleges that defendants breached their employment contract with
The Court notes that, even if it were to find that the three-year limitations period under
§ 255(a) applied, most alleged violations of the FLSA during the two-year period of plaintiff’s
employment would still be time-barred. The Sixth Circuit has explicitly rejected the “continuing
violation” theory of FLSA violations. Anderson v. City of Bristol, 6 F.3d 1168, 1174 (6th Cir.
1993). In other words, “because each violation of the FLSA gives rise to a new cause of action,
each failure to pay overtime begins a new statute of limitations period as to that particular event.”
Hasken, 234 F. Supp. 2d at 691 (citing Knight v. Columbus, 19 F.3d 579, 582 (11th Cir. 1994)).
As a result, FLSA plaintiffs in the Sixth Circuit are entitled to recover back pay only for the pay
periods falling within the limitations period—whether two or three years. See Fulkerson v.
Yaskawa Am., Inc., No. 3:13-cv-130, 2015 WL 6408120, at *1 (S.D. Ohio Oct. 23, 2015). Plaintiff
here would thus only be able to recover back pay for the three-week period between December 22,
2011, and January 10, 2012—if that period contained any FLSA violations at all.
Because the Court has now dismissed all of plaintiff’s claims arising under federal law,
the Court has discretion to decline to exercise supplemental jurisdiction over plaintiff’s remaining
state-law claims, pursuant to 28 U.S.C. § 1367(c)(3). In exercising this discretion, district courts
must “consider the interests of judicial economy and the avoidance of multiplicity of litigation and
balance those interests against needlessly deciding state law issues.” Stevens v. Saint Elizabeth
Med. Ctr., 533 F. App’x 624, 633 (6th Cir. 2013) (quoting Harper v. AutoAlliance Int’l, Inc., 392
F.3d 195, 211 (6th Cir. 2004)). Here, this case has been on the Court’s docket for almost three
years, the parties have had ample opportunity to conduct discovery, and the parties have fully
briefed the merits of defendants’ dispositive motions on plaintiff’s state-law claims. Moreover,
the Court is closely familiar with the facts underlying plaintiff’s allegations, and these claims raise
no novel or complex issues of state law. Thus, “[o]n balance, the interests of judicial economy
support [a] decision to resolve [plaintiff’s] state-law claims.” See id. (affirming a district court’s
decision to resolve pendent state-law claims on the merits based on the same considerations).
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 24 of 34 PageID #: 251
plaintiff [Doc. 1 ¶¶ 93–99]. Defendants assert that plaintiff has failed to provide a copy of
any written contract for employment and has offered only conclusory allegations that they
failed to pay plaintiff all wages due at the agreed-upon rate of $10 per hour [Doc. 38 p. 3
(citing Rowe v. Register, No. 1:07-cv-20, 2008 WL 2009186, at *3 (E.D. Tenn. May 8,
2008) (“A conclusory allegation of breach of contract of employment is not enough to
defeat a Rule 12(b)(6) motion to dismiss the complaint when there are no underlying
factual allegations in the complaint that support and state a claim for breach of contract of
employment that is plausible on its face.”))].
Plaintiff responds that the parties “entered into an express and/or implied contract
of employment” and that “[i]t was an oral contract and no written form of contract ever
existed” [Doc. 43 p. 2]. Plaintiff asserts that he will prove these facts at trial. Defendants
reply that plaintiff has still failed to plead—much less prove—all material elements of
breach of contract, and thus has failed to adequately state a claim on such a theory [Doc.
44 pp. 2–3 (citing Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2008) (noting
that, under Rule 12(b)(6), “[c]onclusory allegations or legal conclusions masquerading as
factual allegations will not suffice”))]. Plaintiff’s further “rebuttal” then indicates that he
“is in the process of conducting discovery” and will “file subsequent motions clarifying
the situation” once additional facts are uncovered [Doc. 47 p. 2].
The Court finds that plaintiff has failed to carry his burden as the nonmoving party
under Rule 56, and that defendants are accordingly entitled to summary judgment on Count
VII. The essential elements of a breach of contract claim under Tennessee law are: “(1)
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 25 of 34 PageID #: 252
the existence of an enforceable contract, (2) nonperformance amounting to a breach of the
contract, and (3) damages caused by the breach of the contract.” Ingram v. Cendant
Mobility Fin. Corp., 215 S.W.3d 367, 374 (Tenn. Ct. App. 2006) (quoting ARC LifeMed,
Inc. v. AMC-Tenn., Inc., 183 S.W.3d 1, 26 (Tenn. Ct. App. 2005)). Here, while defendants
do not dispute the existence of an at-will employment relationship with plaintiff [see
Doc. 35 ¶ 13], the Court agrees with defendants that plaintiff has come forward with no
other evidence demonstrating that—or even suggesting how—defendants breached this
contract. The complaint itself contains only the bare assertion that defendants “fail[ed] to
pay plaintiff all wages due” [Doc. 1 ¶ 95]. And plaintiff has failed to produce any Rule
56(c) materials relating to the second and third elements of this claim: breach and damages.
See Curtis Through Curtis v. Universal Match Corp., 778 F. Supp. 1421, 1423 (E.D. Tenn.
1991) (“The nonmoving party is required to come forward with some significant probative
evidence which makes it necessary to resolve the factual dispute at trial.”).
Furthermore, despite plaintiff’s assertion that he is still in the process of conducting
discovery, the Court notes that it expressly ordered the parties to produce all materials
pertinent to defendants’ dispositive motions within fourteen days of entry of the Court’s
July 26 order [Doc. 46]. Plaintiff filed no materials or motions in response. Plaintiff did
not, for example, seek an extension of time in which to produce pertinent materials. Nor
did he seek relief under Rule 56(d). See Fed. R. Civ. P. 56(d) (“If a nonmovant shows by
affidavit or declaration that, for specified reasons, it cannot present facts essential to justify
its opposition, the court may . . . defer considering the motion or deny it . . . [or] allow time
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 26 of 34 PageID #: 253
to obtain affidavits or declarations or to take discovery . . . .”); see also Wallin v. Norman,
317 F.3d 558, 564 (6th Cir. 2003) (holding that the district court erred by deferring
consideration of a summary judgment motion when the nonmoving party had failed to file
the explanatory affidavit required by Rule 56(d)); Emmons v. McLaughlin, 874 F.2d 351,
356 (6th Cir. 1989) (noting that a party invoking Rule 56(d) “must do so in good faith by
affirmatively demonstrating why he cannot respond to a movant’s affidavits . . . and how
postponement of a ruling on the motion will enable him, by discovery or other means, to
rebut the movant’s showing” (quoting Willmar Poultry Co. v. Morton-Norwich Prods.,
Inc., 520 F.2d 289, 297 (8th Cir. 1975))).8 The Court further notes that this case has been
pending before the Court for almost three years and that the parties have had ample time
to conduct discovery. Thus, the Court finds that resolution of defendants’ dispositive
motions is proper at this time.
Indeed, even if the Court had not converted defendants’ motion to dismiss to one
for summary judgment, the Court would still find that Count VII is alternatively subject to
dismissal under Rule 12(b)(6). As in Rowe, the complaint here lacks any “underlying
factual allegations . . . that support and state a claim for breach of contract of employment.”
2008 WL 2009186, at *3. Plaintiff never specifies what portion, if any, of his ordinary,
$10-per-hour pay defendants have failed to provide him.9 Thus, the Court is left merely to
See also E.D. Tenn. L.R. 83.13 (“Parties proceeding pro se shall be expected to be familiar
with and follow the Federal Rules of Civil Procedure and [the Local Rules].”).
To the extent that Count VII might be premised on defendants’ failure to pay minimum
or overtimes wages under the FLSA, such a theory is time-barred. See supra Section III.B.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 27 of 34 PageID #: 254
speculate as to how defendants may have breached plaintiff’s unwritten employment
contract. See Bell Atl. Corp. v. Twombly, 500 U.S. 544, 555 (2007) (noting that the
complaint’s “[f]actual allegations must be enough to raise a right to relief above the
speculative level” (citations and footnote omitted)).
Therefore, the Court finds that defendants are entitled to judgment as a matter of
law in their favor on Count VII of the complaint.
Plaintiff’s Defamation Claim
Fourth, defendants argue that they are entitled to summary judgment on Count III:
plaintiff’s defamation claim [Doc. 38 pp. 3–5]. The complaint alleges that, after plaintiff’s
termination, defendants informed prospective employers who contacted defendants for a
reference that plaintiff was a “bad worker” who would sue them [Doc. 1 ¶¶ 41–42, 75–78].
Plaintiff claims these statements were both false and damaging to his reputation [Id.].
To make out a prima facie case of defamation under Tennessee law, the plaintiff
must demonstrate that: “ a party published a statement;  with knowledge that the
statement is false and defaming to the other; or  with reckless disregard for the truth of
the statement or with negligence in failing to ascertain the truth of the statement.” Sullivan
v. Baptist Mem’l Hosp., 995 S.W.2d 569, 571 (Tenn. 1999); see also Pate v. Serv. Merch.
Co., 959 S.W.2d 569, 573 (Tenn. Ct. App. 1996) (“The plaintiff must establish that a false
and defamatory statement was published concerning the plaintiff.”). Furthermore, while
the ultimate question whether the statement harmed the plaintiff’s reputation is for the jury,
the threshold question whether the statement is defamatory at all “is a question of law to
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 28 of 34 PageID #: 255
be determined by the court.” Memphis Publ’g Co. v. Nichols, 569 S.W.2d 412, 419 (Tenn.
And statements of opinion are actionable only if they “may reasonably be
understood to imply the existence of undisclosed defamatory facts justifying the opinion.”
Revis v. McClean, 31 S.W.3d 250, 253 (Tenn. Ct. App. 2000). The limitations period for
slander, i.e., spoken defamation, is six months, and no discovery rule applies; by contrast,
the limitations period for libel, i.e., written defamation, is one year. Quality Auto Parts
Co. v. Bluff City Buick Co., 876 S.W.2d 818, 821 (Tenn. 1994).
Here, defendants argue that plaintiff has failed to plead and establish a prima facie
case of slander under Tennessee law [Doc. 38 pp. 3–6]. Defendants submit that the
complaint provides little more than a formulaic recitation of the elements of a defamation
cause of action. Alternatively, defendants assert that Count III is barred by the applicable
statute of limitations. Defendants note that, although plaintiff never states when (or
precisely to whom) they allegedly made these defamatory remarks, a fair inference is that
the remarks did not occur within one year of the filing of this action, given that plaintiff
was terminated on January 10, 2012. Plaintiff’s response brief contains only one sentence
concerning his defamation claim, stating it is “not time barred, as the defamatory
statements were made within one year of filing this lawsuit” [Doc. 43 p. 1]. Plaintiff’s later
“rebuttal” brief asserts only that he is continuing to conduct discovery regarding his breach
of contract and defamation claims [Doc. 47 p. 2].10
The Court finds that to defer ruling on defendants’ dispositive motions with regard to
this claim would be improper for the same reasons identified with regard to plaintiff’s breach of
contract claim. See supra Section III.C.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 29 of 34 PageID #: 256
After considering the parties’ respective positions on this issue, the Court concludes
that summary judgment is warranted as to Count III. Plaintiff’s complaint fails to outline
“enough facts to state a claim to relief that is plausible on its face” under the Rule 12(b)(6)
pleading standard, Twombly, 550 U.S. at 570, but beyond that, plaintiff has failed to
provide any Rule 56(c) materials demonstrating that a genuine factual dispute remains for
trial on this claim. As the record stands, plaintiff has offered nothing more than his
conclusory assertions that defendants—at unknown times, to unknown parties, and in
unknown contexts—said he was a poor and litigious employee. The record is even
insufficient for the Court to determine whether plaintiff’s allegations are time-barred: Not
only is it unclear when these statements were allegedly made, but plaintiff has failed to
even offer evidence whether the remarks were oral or written, which is dispositive of the
length of the limitations period. See Tenn. Code Ann. §§ 28-3-103 (six-month limitations
period for slander); 28-3-104(a)(1)(A) (one-year limitations period for libel).
Yet plaintiff bore the burden, as the party responding to a Rule 56 motion for
summary judgment, of pointing to affirmative evidence in the record to establish that a
reasonable juror could find in his favor on a defamation claim. See Anderson, 477 U.S. at
248. Plaintiff has not done so, and could not have done so because the record contains no
such evidence. This paucity of proof also prevents the Court from exercising its threshold
duty of determining whether defendants’ alleged statements that plaintiff was a “bad” and
litigious employee [Doc. 1 ¶ 41] were actionable defamation or mere opinion. See Revis,
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 30 of 34 PageID #: 257
31 S.W.3d at 253. In short, no reasonable juror could find for plaintiff on his defamation
claim on the basis of the evidence now before the Court.
Therefore, Count III is subject to dismissal under either the Rule 12(b)(6) standard
for failure to state a claim or the Rule 56(a) standard for summary judgment.
Plaintiff’s Unjust Enrichment Claim
Finally, defendants argue that they are entitled to summary judgment on Count VI
[Doc. 38 pp. 5–6], which asserts an equitable claim for unjust enrichment [Doc. 1 ¶¶ 90–
92]. The complaint alleges that defendants “received the benefits of plaintiff’s work,
without compensating plaintiff,” and that “defendant[s] should not be allowed to prosper
at the expense of plaintiff” [Id. ¶ 91].
Defendants first argue that plaintiff received consideration for a release of any claim
to unpaid compensation in the Settlement Agreement. Alternatively, defendants argue that
plaintiff has not satisfied the Tennessee-law requirement of demonstrating that he
exhausted all remedies against defendants [Doc. 38 p. 5 (citing Freeman Indus. v. Eastman
Chem. Co., 172 S.W.3d 512, 525 (Tenn. 2005))]. Plaintiff responds that an unjust
enrichment claim is proper here because he has not been compensated for all his work for
defendants [Doc. 43 p. 3]. Plaintiff also asserts that the Settlement Agreement does not
bar this theory because plaintiff received consideration only for releasing claims based on
certain FLSA violations, not a claim based on unjust enrichment.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 31 of 34 PageID #: 258
The Court finds that defendants are entitled to summary judgment on Count VI of
the complaint. First, to the extent this claim rests on an allegation that defendants were
unjustly enriched by failing to pay minimum or overtime wages,11 such a theory is merely
duplicative of plaintiff’s FLSA claims, discussed above. See supra Sections III.A–B.
Thus, this theory would be time-barred under 29 U.S.C. § 255(a). Further, to the extent
this claim rests on an allegation of unpaid regular-time pay at the agreed-upon rate of $10
per hour, the Court finds that the Settlement Agreement bars such a theory. As noted
above, plaintiff admits that he executed the Settlement Agreement with the advice of
counsel and received consideration for doing so [See Doc. 43 p. 1]. Although that
agreement is ineffective to waive his FLSA rights, see supra Section III.A, this same
reasoning does not extend to state-law equity claims for unpaid wages, see Lynn’s Food
Stores, 679 F.2d at 1354 (noting that what the FLSA precludes is waiver of an employee’s
“statutory rights”). Plaintiff has not argued that the Settlement Agreement is substantively
or procedurally unconscionable, void against Tennessee public policy, or otherwise
unenforceable. And any fair reading of the Settlement Agreement’s language must result
in the conclusion that plaintiff released all claims to compensation arising out of his
employment with defendants, except to the extent barred by the FLSA [See Doc. 37-1 ¶ 3
(releasing defendants from any “fault or liability, in contract, by statute, or in tort, however,
It is unclear what forms of allegedly unpaid compensation constitute the basis for Count
VI. Given plaintiff’s pro se status and the Court’s duty to liberally construe his pleadings, Bouyer,
22 F. App’x at 612, the Court will consider both alternatives plaintiff may be alleging—i.e., unpaid
regular-time pay or unpaid FLSA benefits.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 32 of 34 PageID #: 259
described, . . . arising from the payment of wages, including overtime wages”)]. Thus,
there is no genuine factual dispute that the Settlement Agreement bars Count VI.
Even if that were not true, the Court notes that unjust enrichment is not a viable
independent cause of action in this case. Unjust enrichment is a remedy that Tennessee
courts may, in their discretion, invoke when no valid contract exists at law, yet some relief
is warranted in equity. See Whitehaven Cmty. Baptist Church v. Holloway, 973 S.W.2d
592, 596 (Tenn. 1998) (“Unjust enrichment is a quasi-contractual theory or is a contract
implied-in-law in which a court may impose a contractual obligation where one does not
exist.” (emphasis added)); accord Freeman, 172 S.W.3d at 525. Here, however, the parties
agree that a valid employment contract existed. See supra Section III.C. Thus, plaintiff’s
only recourse is under the terms of his former contract with defendants, not under a quasicontract theory. See Metro. Gov’t of Nashville & Davidson Cty. v. Cigna Healthcare of
Tenn., Inc., 195 S.W.3d 28, 32 (Tenn. Ct. App. 2005) (noting that quasi-contract relief is
unavailable if a valid express or implied-in-fact contract exists). But because the Court
has granted summary judgment in defendants’ favor on plaintiff’s breach of contract
claim, this claim must likewise fail.
Therefore, the Court finds that defendants are entitled to judgment as a matter of
law in their favor on Count VI of the complaint.
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 33 of 34 PageID #: 260
Accordingly, for the reasons stated above, defendants’ Motion for Partial Summary
Judgment [Doc. 36] and Motion to Dismiss [Doc. 38], the latter of which the Court treats
as a motion for summary judgment [Doc. 46], will both be GRANTED. The Clerk of
Court will be DIRECTED to CLOSE this case.
s/ Thomas A. Varlan
CHIEF UNITED STATES DISTRICT JUDGE
Case 3:14-cv-00594-TAV-HBG Document 48 Filed 11/07/17 Page 34 of 34 PageID #: 261
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?