Little v. Technical Specialty Products, LLC et al

Filing 135

MEMORANDUM OPINION. Signed by Magistrate Judge Amos L. Mazzant on 10/23/2013. (baf, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

DALE LITTLE

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V.
TECHNICAL SPECIALTY PRODUCTS
LLC, et. al.

CASE NO. 4:11-CV-717

MEMORANDUM OPINION
Plaintiff filed suit under the Fair Labor Standards Act (“FLSA”) alleging, among other
things, that he was discharge in retaliation for his complaints about his employer’s overtime
policy. Beginning on April 29, 2013, the Court held a jury trial on this claim. On May 2, 2013,
the jury returned a verdict finding that Defendant Technical Specialty Products, LLC (“TSP”)
fired Plaintiff in violation of the FLSA and awarded Plaintiff $105,366.25 in back pay (Dkt.
#113). The Court requested briefing on the remaining issues of liquidated damages and front pay
(Dkt. #115).
On May 17, 2013, Plaintiff filed his Trial Brief on Liquidated Damages and Front Pay
(Dkt. #116). On May 28, 2013, Defendants filed their Brief in Opposition to the Award of
Liquidated Damages and Front Pay (Dkt. #118).
A. Liquidated Damages
29 U.S.C. § 216(b) states in pertinent part:
Any employer who violates the provisions of section 206 or section 207 of this
title [minimum wage or overtime provisions] shall be liable to the employee or
employees affected in the amount of their unpaid minimum wages, or their unpaid
overtime compensation, as the case may be, and in additional equal amount as
liquidated damages. Any employer who violates the provisions of section
215(a)(3) of this title [retaliation provision] shall be liable for such legal or
equitable relief as may be appropriate to effectuate the purposes of section
215(a)(3) of this title, including without limitation employment, reinstatement,

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promotion, and the payment of wages lost and an additional amount as liquidated
damages.
Plaintiff contends that an award of liquidated damages is mandatory in retaliation cases
under Section 215(a)(3). Plaintiff argues that the Fifth Circuit has repeatedly held that liquidated
damages are mandatory, and must be awarded in the amount of back pay and retaliation
damages. In addition, Plaintiff asserts that Defendants failed to plead or prove any defense to
liquidated damages.

Thus, Plaintiff contends that an additional amount of $105,366.25 is

appropriate to award Plaintiff for liquidated damages.
Defendants contend that an award of liquidated damages in cases where the jury finds the
employer retaliated against the employee under Section 215(a)(3) is not mandatory at all, but
rather, in the discretion of the Court to enter judgment “for such legal and equitable relief as may
be appropriate.” 29 U.S.C. § 216(b). Defendants argue that an award of liquidated damages is
not appropriate in this case to effectuate the purposes of Section 215(a)(3), because (1) the FLSA
is not intended to provide an employee with a windfall, (2) Plaintiff did not in good faith believe
that he engaged in protected activity. Defendants further argue that Plaintiff should not receive
an equal amount to the back pay awarded by the jury because Plaintiff cannot show that his
wages were earned, but unpaid. Defendants also contend that they sufficiently pleaded and
proved a good faith defense to an award of liquidated damages.
Turning first to the plain language of the statute itself, the first sentence applies only to
violations of the minimum wage and overtime provisions of the FLSA. The first sentence
mandates that for violations of these provisions, the employer “shall be liable…in the amount
of… unpaid minimum wages, or … unpaid overtime compensation… and in an additional equal
amount as liquidated damages.” (emphasis added). There is nothing left to the discretion of the
trial judge.
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The second sentence applies only to violations of the retaliation provisions of the FLSA,
section 215(a)(3), and provides that an employer “shall be liable for such legal or equitable relief
as may be appropriate to effectuate the purposes of section 215(a)(3) of this title, including
without limitation employment, reinstatement, promotion, and the payment of wages lost and an
additional equal amount as liquidated damages.” (emphasis added). It is clear from the plain
language of the statute that in retaliation cases there are more types of relief available to an
employee who has been retaliated against for participating in a protected activity; however, it is
equally as clear that this relief is discretionary, requiring a finding that any relief is appropriate to
effectuate the purposes of the retaliation section of the law.

To find liquidated damages

mandatory, the Court would also have to find reinstatement, promotion, or front pay mandatory.
There is no support for this interpretation of the statute.
Other courts considering this issue have also found that an award of liquidated damages
in retaliation cases is not mandatory, but rather discretionary. See Moore v. Appliance Direct,
Inc., 708 F.3d 1233 (11th Cir. 2013); Braswell v. City of El Dorado, 187 F.3d 954 (8th Cir.
1999); Blanton v. City of Murfreesboro, 856 F.2d 731 (6th Cir. 1988); York v. City of Wichita
Falls, Texas, 763 F. Supp. 876 (N.D. Tex. 1990). Plaintiff relies on Lowe v. Southmark Corp.,
998 F.2d 335, 337-38 (5th Cir. 1993), for the proposition that liquidated damages are mandatory
in retaliation cases, and that an award of liquidated damages must be awarded in equal amount of
actual damages in the Fifth Circuit. However, in Lowe, the Fifth Circuit did not analyze the
FLSA provision regarding damages, it simply noted in dicta that the jury awarded damages
arising out of unpaid minimum wages or unpaid overtime compensation. In Lowe, an award of
liquidated damages for a violation a violation of the minimum wage or overtime compensation
provisions was then mandatory. The Fifth Circuit also noted that the jury found a violation of

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the Equal Pay Act, as well as Section 215(a)(3) of the FLSA. For this reason, the Court finds
this Fifth Circuit decision does not pertain to this issue, and is not persuasive to the Court’s
analysis. See also Moore, 708 F.3d at 1238-40 (finding Lowe unpersuasive on this issue due to
its generalized holding and failure to analyze the language of the damages statute). Therefore,
the Court finds that an award of liquidated damages in retaliation cases is only appropriate when
it may be appropriate to effectuate the purposes of Section 215(a)(3).
The Court will now turn to whether an award of liquidated damages is appropriate in this
case. 29 U.S.C. § 260 states that in any action to recover liquidated damages:
if the employer shows to the satisfaction of the court that the act or omission
giving rise to such action was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation of the [FLSA}, the court
may, in its sound discretion award no liquidated damages or award any amount
thereof.
Plaintiff contends that Defendants did not plead a good faith defense to retaliation in their
Answer or in the Joint Final Pretrial Order. However, the Court finds that in the Joint Final
Pretrial Order, Defendants assert that one of the contested issues of law and fact include
“[w]hether TSP’s good faith reliance precludes Plaintiff’s claim for liquidated damages,
including attorneys’ fees, as a matter of law” (Dkt. #98 at 8). The Court finds that this is
sufficient.
In order to show Defendants acted in good faith, Defendants must demonstrate an honest
intention to ascertain what the FLSA requires and to act in accordance with it, which is a
subjective inquiry. Laffey v. Northwest Airlines, Inc., 567 F.2d 429, 464 (D.C. Cir. 1976)1; York
v. City of Wichita Falls, 763 F. Supp. 876, 880-81 (N.D. Tex. 1990). The second prong requires
that the employer’s belief that the offending act complied with the FLSA’s requirements be
objectively reasonable. Laffey, 567 F.2d at 464; York, 763 F. Supp. at 880.

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The Fifth Circuit cited Laffey with approval in Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1415 (5th Cir. 1990).

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At trial, Defendants presented evidence that Keith Lear, Owner and CEO of TSP,
consulted with an attorney via an internet seminar prior to changing their overtime pay practices.
However, this is irrelevant to the issue of whether Defendants acted in good faith when, as the
jury found, they fired Plaintiff in retaliation for complaining about the new overtime policy.
Defendants now contend that they acted in good faith because they believed that Plaintiff never
engaged in a protected activity under the FLSA. Defendants now argue, as they also did at the
time of trial, that Plaintiff padded his timesheets, exaggerated his hours, and that he was fired for
these reasons. Defendants contend that Plaintiff exaggerated his time worked on his timesheets,
Defendants were aware of the inaccuracies, and Defendants terminated him for this reason.
However, the jury in this case found that Defendants intentionally terminated Plaintiff in
retaliation for his complaints about the overtime policy. There is no indication that Defendants
consulted an attorney or did any research whatsoever into what the FLSA requires as far as
terminating an employee. Further, there is no evidence that the Defendants’ act of termination
was reasonable under the circumstances. For these reasons, the Court finds that Defendants’
good faith defense fails as a matter of law.
The Court finds that an award of liquidated damages in the amount of $105,366.25 is
appropriate to effectuate the purposes of Section 215(a)(3). The purpose of Section 215(a)(3) “is
not merely to vindicate the rights of complaining parties, but to foster an environment in which
employees are unfettered in their decision to voice grievances without ‘fear of economic
retaliation’ or reprisal.” Saffels v. Rice, 40 F.3d 1546, 1549 (8th Cir. 1994); see also Mitchell v.
DeMario Jewelry, 361 U.S. 288, 292 (1960); Dunlop v. Carriage Carpet Co., 548 F.2d 139, 145
(1977). As stated above, the jury found that Plaintiff was terminated in retaliation for his
complaints regarding the new overtime policy implemented by Defendants. At trial, evidence

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was presented that Plaintiff consistently opposed the policy, and made his complaints known to
Defendants on several occasions. Plaintiff was the only employee who complained about the
overtime policy. Although Defendants contend that Plaintiff padded his timesheets, and that was
the reason for his termination, there was evidence that Defendants knew for several months that
Plaintiff was padding his timesheets and Defendants did nothing to remedy the situation.
Defendants did not fire him when they first discovered evidence of Plaintiff padding his
timesheets. Therefore, for these reasons, the Court finds that an award of liquidated damages in
the amount of $105,366.25 is appropriate to effectuate the purposes of Section 215(a)(3) to not
only vindicated Plaintiff’s rights, but also to encourage an environment where employees may
voice grievances without fear of economic retaliation.
B. Front Pay
Future wages, or front pay, are recoverable as an alternative to reinstatement where
reinstatement is not feasible. Palasota v. Haggar Clothing Co., 499 F.3d 474, 489 (5th Cir.
2007). “Reinstatement is a preferable remedy to front pay; however, where reinstatement is not
feasible, the Court may consider front pay as an alternative.” Junaid v. McHugh, No. 2:11-CV00226, 2013 WL 321567, at *1 (S.D. Tex. January 28, 2013) (citing Julian v. City of Houston,
314 F.3d 721, 728 (5th Cir. 2008)). Reinstatement is not feasible in this case due to the high
level of animosity between the parties in this case. Defendants testified that they would not
rehire Plaintiff because he was untrustworthy, padded his timesheets, was difficult to work with,
and often displayed a bad attitude. See, e.g., Junaid, 2013 WL 321567, at *1 (collecting cases
which demonstrate that reinstatement is not feasible when there is hostility between the parties).
“In calculating an appropriate award of front pay, the Court must engage in ‘intelligent
guesswork’ due to the fact such damages are awarded prospectively.” Id. (citing Sellers v.

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Delgado College, 781 F.2d 503, 505 (5th Cir. 1986) (“we recognize its speculative character by
according wide latitude in its determination to the district courts.”). The Fifth Circuit has set
forth several non-exclusive factors that the Court may consider in making this determination,
including the length of Plaintiff’s employment with Defendant, the permanency of the position
Plaintiff held, the nature of Plaintiff’s work, Plaintiff’s age and physical condition, the possibility
of the consolidation of jobs, and any other non-discriminatory factors that could have impacted
the employment relationship. Reneau v. Wayne Griffin & Sons, Inc., 945 F.2d 869, 870 (5th Cir.
1991).
Plaintiff was employed at Defendant TSP for approximately 6 months.

This is a

substantially shorter period of time than in other cases where courts have awarded substantial
front pay. See, e.g. Tyler v. Bethlehem Steel Corp., 958 F.2d 1176 (2d Cir. 1992) (26 years);
Cummings v. Standard Register Co., 265 F.3d 56 (1st Cir. 2001) (17 years). This is not an
extended period of employment, and thus cannot demonstrate security or permanency of the
position held by Plaintiff. There is no evidence that Plaintiff’s position was secure. In fact, there
is substantial evidence indicating that Plaintiff’s position was not secure, considering the
evidence presented by Defendants that Plaintiff was having significant problems at Defendant
TSP. For example, there was evidence that Plaintiff failed to arrive at worksites on time, padded
his timesheets, obtained an “obscene” amount of overtime, failed to get his GPS fixed in a timely
fashion after multiple reminders, submitted receipts with amounts that were not approved for
reimbursement or that did not clearly indicate that it was an approved amount, and overall not
getting along well with some of the employees. This indicates that Plaintiff’s position was not
secure or permanent.

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At the time of trial, Plaintiff was thirty-one (31) years old. Plaintiff asserted that he
planned to continue to work at TSP for a long time. “A court cannot, however, base an award of
front pay solely on a subjective statement of intent.” Junaid, 2013 WL 321567, at *2 (citation
omitted). Given Plaintiff’s young age, and the significant problems he was having with the
owners at TSP, the Court finds it is not likely that Plaintiff would have remained at TSP for a
long career.
“The Court must also consider whether Plaintiff was diligent in seeking other
employment after his termination, as an award of front pay may be wholly denied or
appropriately reduced where a plaintiff fails to take reasonable steps to mitigate his damages and
find substantially equivalent employment.” Id. at *3 (citing Vaughn v. Sabine County, 104 F.
App’x 980, 986 (5th Cir. 2004) (“a plaintiff must use reasonable diligence to find substantially
equivalent employment to justify awarding front pay”)).
[F]ront pay awards… must be reduced by the amount plaintiff could earn using
reasonable mitigation efforts…[T]he plaintiff’s duty to mitigate must serve as a
control on front pay damage awards… Thus, front pay is intended to be temporary
in nature. An award of front pay does not contemplate that a plaintiff will sit idly
by and be compensated for doing nothing.
Cassino v. Reichhold Chemicals, Inc., 817 F.2d 1338, 1347 (9th Cir. 1987) (internal quotations
and citations omitted).
Plaintiff testified that after a diligent 10-month job search, he enrolled in school to
enhance his job prospects and remains enrolled there.

Plaintiff is an individual with two

professional degrees, and currently attending Southern Methodist University to obtain his
master’s degree. At trial, Plaintiff testified that he engaged in a diligent 10-month job search.
However, he was unable to indicate any specific positions for which he applied. Instead, he
testified that he searched for jobs on various websites, such as www.monster.com, and found

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nothing. Plaintiff was not required to seek out and accept just any job. Junaid, 2013 WL
321567, at *4. “As a professional, Plaintiff was entitled to limit his search to substantially
equivalent positions that shared such characteristics with his former position as salary,
promotional opportunity, responsibilities, and status.” Id. (citation omitted). However, there is
no evidence before the Court that Plaintiff did any of these things. There is simply no evidence
that he applied for any jobs, or diligently attempted to obtain employment. Given this fact, as
well as the short employment Plaintiff had with Defendant and the relative impermanence of his
position there, the Court finds that an award of front pay is unreasonable under the
circumstances. Therefore, the Court declines to award front pay.
CONCLUSION
Based on the foregoing, the Court finds that an award of liquidated damages in the

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amount of $105,366.25 is appropriate to effectuate the purposes of 29 U.S.C. § 215(a)(3). The
Court also finds that an award of front pay is unreasonable under the facts of this case, and
declines to award front pay.
SIGNED this 23rd day of October, 2013.

___________________________________
AMOS L. MAZZANT
UNITED STATES MAGISTRATE JUDGE

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