Harris v. Jie et al

Filing 73

ORDER granting pltf's 65 Motion for preliminary inj and sanctions by Judge Robert S. Lasnik.(RS) cc fin'l

1
2
3
4
5
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

6
7
8
9

THOMAS E. PEREZ, SECRETARY OF
LABOR, UNITED STATES
DEPARTMENT OF LABOR,

10
11
12
13

Plaintiff,
v.
HUANG “JACKIE” JIE, et al.,

Case No. C13-877RSL
ORDER GRANTING MOTION
FOR PRELIMINARY
INJUNCTION AND
SANCTIONS

Defendants.

14
15

This matter comes before the Court on Plaintiff’s “Motion for Reinstatement of

16

Preliminary Injunction Hearing and for Sanctions.” Dkt. # 65. On February 25, 2014,

17
18
19

the Court granted Plaintiff’s motion to reinstate the preliminary injunction hearing and
ordered Defendants to show cause why a preliminary injunction should not issue and
why sanctions should not be imposed for failure to comply with the Court’s order
requiring Defendants to produce certain payroll records for Plaintiff’s review.

20
21
22
23

Defendants have not submitted a response to the Court’s order to show cause. The
Court held a hearing on March 27, 2014. Having reviewed Plaintiff’s motion and
supporting documents, and having considered the evidence presented during the hearing,
the Court finds as follows:

24
25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 1

I. BACKGROUND

1
2

This employment case arises out of Defendants’ alleged failure to comply with

3

the minimum wage, overtime, and recordkeeping requirements of the Fair Labor

4

Standards Act (“FLSA”). Dkt. # 44 at 7-9. Plaintiff, the U.S. Secretary of Labor, also

5
6
7

alleges that Defendants Pacific Coast Foods, Inc., dba J & J Mongolian Grill (“J & J
Mongolian Grill”), J & J Comfort Zone, Inc., dba Spa Therapy (“Spa Therapy”), and
their owners, Huang Jie and his wife, Zhao Zeng Hong, violated the anti-retaliation
provision of the FLSA. Id. at 9-10. Plaintiff contends that Defendants’ violations were

8
willful, id. at 10, and he seeks to recover unpaid wages owed to Defendants’ employees,
9
10
11

liquidated damages, and an injunction prohibiting Defendants from committing future
violations of the FLSA. Id. at 10-11.
In May 2013, Plaintiff sought a temporary restraining order and preliminary

12

injunction enjoining Defendants from violating the FLSA. Dkt. # 2. The Court denied

13

Plaintiff’s motion for a temporary restraining order, dkt. # 9, and held a preliminary

14

injunction hearing. Dkt. # 23. After hearing testimony and receiving evidence, the

15

Court continued the hearing to September 12, 2013. Id. On August 30, 2013, the Court

16

granted Defendants’ motion to dismiss for failure to state a claim and struck the

17

continued hearing date. Dkt. # 42. Plaintiff filed a Second Amended Complaint and

18

moved to reinstate the preliminary injunction proceedings. Dkt. # 44; Dkt. # 46.

19
20
21

In December 2013, the Court denied Plaintiff’s motion. Dkt. # 62 at 6-8. There
was nothing in the record that suggested that Defendants were not complying with the
FLSA’s recordkeeping requirements or the FLSA’s anti-retaliation provisions. Id. To
enable Plaintiff and the Court to assess whether Defendants were in fact complying with

22
the FLSA, the Court ordered Defendants to make available their July, August, and
23
24

September 2013 payroll records for certain employees within 30 days of the date of that
order. Id. at 7-8.

25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 2

Plaintiff has submitted evidence that Defendants have failed to produce complete

1
2

records and asks the Court to impose sanctions for failure to comply with this Court’s

3

order. Dkt. # 65 at 4-5; Dkt. # 66. Even though Defendants produced approximately 50

4

pages of documents in January 2014, the documents produced included payroll

5
6
7

summaries and time cards for Spa Therapy for September 2013 only. Dkt. # 66 ¶ 8.
Similarly, the only time cards produced for J & J Mongolian Grill were those for
September - December 2013. There were no time cards produced for either July or
August 2013. Id. ¶¶ 9, 11. In addition, the records provided did not account for each

8
employee identified in Exhibit A attached to the Second Amended Complaint, or include
9
10
11

the total number of hours worked each workweek by the employees, the total daily or
weekly straight-time earnings, or the date on which payments were made to the
employees. Id. ¶ 13.

12
13
14

II. DISCUSSION
A.

Preliminary Injunction
Generally, a party seeking a preliminary injunction must establish the following

15

four requirements: “that he is likely to succeed on the merits, that he is likely to suffer

16

irreparable harm in the absence of preliminary relief, that the balance of equities tips in

17

his favor, and that an injunction is in the public interest.” Winter v. Natural Res. Def.

18

Council, 555 U.S. 7, 20 (2008). When, however, the moving party seeks an injunction

19
20
21

to prevent a violation of a federal statute and that statute specifically provides for
injunctive relief, the Ninth Circuit does not require a showing of irreparable harm.
United States v. Odessa Union Warehouse Co-op, 833 F.2d 172, 175 (9th Cir. 1987);
see also Antoninetti v. Chipotle Mexican Grill, Inc., 643 F.3d 1165, 1175-76 (9th Cir.

22
2010) (“the standard requirements for equitable relief need not be satisfied when an
23
24
25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 3

1

injunction is sought to prevent the violation of a federal statute which specifically

2

provides for injunctive relief.”) (internal quotation marks and citations omitted).1

3
4
5
6
7

The evidence presented during the hearing reveals that Defendants’ records do
not comply with the FLSA’s recordkeeping requirements in several ways. For example,
the records do not identify the employees’ regular hourly pay rates, the total number of
hours worked each day, or the total straight-time and overtime wages earned during the
workday or workweek. See 29 C.F.R. § 516.2. Based on the investigators’ surveillance
of the Defendants and their employees and the inconsistencies between the records

8
produced and the activity observed by the investigators, Plaintiff has demonstrated a
9
10
11

likelihood of success on the merits.
In this case, there is no question that the balance of equities tips in Plaintiff’s
favor and an injunction is in the public interest. In cases involving the Secretary of

12

Labor , the Court “must give substantial weight to the fact that the Secretary seeks to

13

vindicate a public, and not a private right.” Marshall v. Chala Enterprises, Inc., 645

14

F.2d 799, 808 (9th Cir. 1981). During the hearing, Plaintiff clarified that the only

15

equitable relief he seeks at this time is an order requiring Defendants to provide notice

16

to their employees of the FLSA’s anti-retaliation requirement. Specifically, Plaintiff

17

seeks an order requiring Defendants to post a notice in the workplaces, provide a copy

18

of the notice to each employee with his or her paycheck, and permit a Department of

19
20
21

Labor (“DOL”) representative to read the notice aloud to Defendants’ employees.
Under the circumstances presented, the Court finds that Plaintiff has satisfied his burden
and therefore, GRANTS Plaintiff’s motion for preliminary injunction.

22
23
24

1

The FLSA provides that “[t]he district courts. . .shall have jurisdiction, for cause
shown, to restrain violations of section 215 of this title.” 29 U.S.C. § 217.

25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 4

1

B.

Request for Sanctions
Plaintiff urges this Court to impose sanctions against Defendants pursuant to its

2
3

inherent authority. See, e.g., Chambers v. NASCO, Inc., 501 U.S. 32 (1991).2 Under its

4

inherent power, a court may sanction an attorney or party who has acted (1) in bad faith

5
6
7

or (2) in willful disobedience of a court order. Id. at 45-46 (internal quotation marks and
citations omitted); Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1035 (9th
Cir. 2012). In the case of bad faith or improper motive, the court must make an explicit
finding of bad faith; whereas, a court may impose sanctions for failure to obey a court

8
order without proof of bad faith or improper motive. Evon, 688 F.3d at 1035. In either
9
10
11
12

circumstance, the inherent authority to sanction is not a broad power, but a narrow,
implied power that must be exercised with restraint and discretion. Chambers, 501 U.S.
at 44.
Plaintiff has not demonstrated that Defendants have acted in bad faith.

13

Nevertheless, the record in this case shows that Defendants have failed to comply with

14

this Court’s order requiring production of full payroll records for certain employees for

15

the months of July, August, and September 2013. Dkt. # 66 ¶¶ 6-13. Defendants have

16

had ample time to collect these records, as they first agreed to provide them to Plaintiff

17

in August 2013. Dkt. # 46-2 at 1. Under these circumstances, the Court finds the

18

imposition of sanctions appropriate. Defendants have multiplied the proceedings

19
20

unnecessarily and forced Defendants to bring the present motion. Defendants are
hereby ordered to produce complete July, August, and September payroll records for the

21
2

22
23
24

The Court may also impose sanctions in this case under Local Civil Rule 11, which
provides that “[a]n attorney or party who without just cause fails to comply with any of the
Federal Rules of Civil or Criminal procedures, these rules, or an order of the court . . . or who
otherwise so multiplies or obstructs the proceedings in a case may, in addition to or in lieu of
the sanctions and penalties provided elsewhere in these rules, be required by the court to satisfy
personally such excess costs and may be subject to such other sanctions as the court may deem
appropriate.” LCR 11(c).

25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 5

1

employees identified in Exhibit A to the Second Amended Complaint (Dkt. # 45) within

2

14 days of the date of this Order. Defendants are sanctioned in the amount of $250.00.

3

III. CONCLUSION

4
5
6
7

For all of the foregoing reasons, Plaintiff’s motion for preliminary injunction and
for sanctions (Dkt. # 65) is GRANTED. Defendants shall, within ten days of the date of
this Order, submit to the Clerk’s Office a check made payable to the Clerk of Court
along with a copy of this Order.
Within 30 days from the date of this Order, Defendants must permit a DOL

8
representative to read aloud the following statement in English and Mandarin to
9
10
11
12
13
14
15
16
17
18
19
20
21

Defendants’ employees during working hours:
You are protected by the Fair Labor Standards Act and have the right to
participate freely in the investigation, and the lawsuit arising from that
investigation that the U.S. Government is bringing against Huang “Jackie
Jie, Zhao “Jenny” Zeng Hong, Pacific Coast Foods, Inc. dba J & J
Mongolian Grill, and J & J Comfort Zone, Inc. dba Spa Therapy and others
(“Lawsuit”), alleging failure to pay wages as required by law.
If Huang “Jackie” Jie, Zhao “Jenny” Zeng Hong, Pacific Coast
Foods, Inc. dba J & J Mongolian Grill, and J & J Comfort Zone, Inc. dba
Spa Therapy or anyone acting on his, her or their behalf approached or
approaches you regarding the U.S. Department of Labor’s investigation
and Lawsuit alleging violations of the Fair Labor Standards Act, you have
a right to be free of any coercion from him, her or them. The Court
reminds you that you have a right to speak with investigators or other
officials from the U.S. Department of Labor and to testify truthfully and
free from coercion and that you should not be concerned, intimidated, or
restrained by any statement Huang “Jackie” Jie, Zhao “Jenny” Zeng Hong,
Pacific Coast Foods, Inc. dba J & J Mongolian Grill, and J & J Comfort
Zone, Inc. dba Spa Therapy made to you under coercive circumstances.
Defendants shall post two copies of this statement, one in English and one in
Mandarin, at each of Defendants’ work sites. Defendants shall also include two copies
of this statement, one in English and one in Mandarin, with each employee’s paycheck.

22
23
24
25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 6

1

DATED this 31st day of March, 2014.

2
3
4
5

A

Robert S. Lasnik
United States District Judge

6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

ORDER GRANTING MOTION FOR PRELIMINARY
INJUNCTION AND SANCTIONS - 7