Bailey v. Alpha Technologies Incorporated et al

Filing 60

ORDER granting in part and denying in part Defendants' 48 Motion for Summary Judgment. It is DENIED as to Plaintiff's wrongful termination claim and Defendants' motion to strike evidence. It is GRANTED as to Plaintiff's FLSA and MWA claims, willful withholding of wages claim, defamation claim and as to Defendant Borsari's breach of contract counterclaim. Signed by U.S. District Judge John C Coughenour.(TH)

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Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 1 of 15 THE HONORABLE JOHN C. COUGHENOUR 1 2 3 4 5 6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 8 9 YVETTE BAILEY, 10 Plaintiff, CASE NO. C16-0727-JCC ORDER v. 11 ALPHA TECHNOLOGIES INCORPORATED, et al., 12 13 Defendants. 14 15 This matter comes before the Court on Defendants’ motion for summary judgment (Dkt. 16 17 18 19 20 No. 48) and motion to strike evidence (Dkt. No. 57 at 12–13). Having thoroughly considered the parties’ briefing and the relevant record, the Court finds oral argument unnecessary, and, for the reasons explained herein, GRANTS in part and DENIES in part Defendants’ motion. I. Yvette Bailey (“Bailey”) filed this suit against Defendants, her former employers, 21 22 23 24 25 26 BACKGROUND 1 alleging wrongful discharge, failure to pay overtime wages as required by state and federal law, willful withholding of wages, defamation, and emotional distress claims. (Dkt. No. 1 at 10–12.) Upon Defendants’ prior motion, the Court dismissed Bailey’s emotional distress claims. (Dkt. No. 10; Dkt. No. 16 at 11–15.) Defendant Grace Borsari (“Borsari”) subsequently 1 This section presents the facts in the light most favorable to the non-moving party (Bailey). ORDER PAGE - 1 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 2 of 15 1 counterclaimed for breach of contract. (Dkt. No. 23.) Bailey has voluntarily dismissed her 2 defamation claim. (Dkt. No. 53 at 3.) Defendants now seek summary judgment on all remaining 3 claims. (Dkt. No. 48.) 4 Altair Advanced Industries, Inc. (“Altair”) and Alpha Technologies, Inc. (“Alpha”) are 5 privately held companies owned and headed by Borsari and Defendant Fredrick Kaiser 6 (“Kaiser”) respectively. (Dkt. No. 50 at 1–2.) Telecomponents & Supply, Ltd. (“TCS”) is a 7 purchasing agent for Altair, and is wholly owned by Kaiser. (Dkt. No. 50 at 1.) Bailey worked 8 for Defendants Altair and Alpha for more than 25 years before her employment was terminated 9 in August 2015. (Dkt. No. 54 at 2.) Bailey was a senior international buyer, whose duties 10 included “negotiating the purchase price of components, sub-assemblies, and finished products 11 with the contract manufacturers in Asia (mostly China).” (Id. at 3.) 12 Bailey’s primary responsibility as a purchaser was to negotiate the price of parts from 13 contract manufacturers. (Id. at 6.) She would then relay the negotiated price to TCS and TCS 14 would purchase the parts at that price. (Id. at 3.) The prices that TCS was willing to pay for 15 goods were set by TCS, and Bailey had no discretion or authority over what TCS was willing to 16 pay. (Id. at 4.) Once TCS purchased the parts, they were sold to Altair at a markup. (Id.) 17 Bailey was aware of the higher prices that Altair would pay for the same goods she had 18 negotiated to buy for less. (Id.) Kaiser told Bailey that the markup between the negotiated price 19 that TCS paid and the price Altair paid should not exceed 20–25% because there would be 20 adverse tax consequences that could get the company in trouble with the IRS. (Id. at 5.) As one 21 of the only people with access to both price lists, Bailey reviewed the lists to make sure the 22 markups did not exceed the designated percentages. (Id.) 23 In January 2015, Bailey discovered that some of the markups recorded on the TCS price 24 list were 50–60% higher than the price she had negotiated. (Id.) Bailey reported the discrepancy 25 to Borsari who in-turn notified Kaiser. (Id.) Borsari insisted Bailey delete any email 26 correspondence about the high markup and ensure other recipients did also. (Id.) In a later in- ORDER PAGE - 2 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 3 of 15 1 person meeting, Kaiser and Borsari reminded Bailey not to disclose the markup concerns, and 2 told Bailey that it was “unfortunate” she knew the information. (Id.) In that meeting, Kaiser and 3 Borsari told Bailey she would be transferred from Altair to Alpha. (Id. at 10.) She moved offices 4 and received a raise, but, her job duties did not change. (Id.) 5 Bailey did not understand the move because she had been doing the same work for Altair 6 for years, and found it odd she was moved immediately after reporting the high markups. (Id.) In 7 July 2015, TCS released a new price list which again showed markups of 50-60%. (Id.) Bailey 8 again reported the markups, but this time Kaiser insisted that Bailey travel with him to the 9 Bahamas to meet with Peter Turnquest, a TCS employee, to fix the price list. (Id.) Kaiser also 10 asked Bailey to bring her husband. (Id. at 12.) Bailey found both requests odd because she had 11 met Turnquest before and thought the issue could be sorted out over the phone. (Id. at 11–12.) 12 In the Bahamas, during a brief meeting, Kaiser instructed Bailey and Turnquest to review 13 the price list. (Dkt. No. 54 at 12.) Turnquest instead had an associate work with Bailey on the 14 price list. (Id.) This was the only meeting Bailey attended in the Bahamas, and she was otherwise 15 free to do what she pleased. (Id.) Days after returning, Kaiser received an email from Turnquest 16 alleging Bailey and her husband had solicited drugs at their hotel while making “outlandish” 17 claims about Turnquest and TCS. (Dkt. No. 50 at 16.) Days later, Kaiser fired Bailey. (Id.) 18 Bailey was not given an opportunity to explain herself. (Dt. No. 54 at 14.) Kaiser claims he 19 terminated Bailey’s employment because of the content of the email, and Turnquest’s insistence 20 that he no longer wanted to work with Bailey. (Dkt. No. 50 at 16.) Bailey denies Turnquest’s 21 allegations and believes they were fabricated to allow Kaiser to fire her. (Dkt. No. 54 at 14–15.) 22 Separate from Bailey’s termination, in 2013 and 2014, Borsari loaned Bailey $6,400 23 using several promissory notes. (Dkt. No. 52 at 223–226.) Each promissory note contained an 24 acceleration clause that allowed Borsari the option to collect the outstanding loan balance in full 25 if Bailey became delinquent. (Id. at 223–226.) When Bailey was unable to pay the loans when 26 they became due, Borsari told her to pay when she could. (Dkt. No. 54 at 17.) After Bailey filed ORDER PAGE - 3 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 4 of 15 1 this lawsuit, Borsari sent her a letter requesting payment in full. (Dkt. No 56-3 at 70.) Bailey has 2 still made no payments on any of the loans. (See Dkt. No. 54 at 17.) 3 II. DISCUSSION 4 A. Summary Judgment Standard 5 The Court shall grant summary judgment if the moving party shows that there is no 6 genuine dispute as to any material fact and that the moving party is entitled to judgment as a 7 matter of law. Fed. R. Civ. P. 56(a). In making such a determination, the Court must view the 8 facts and justifiable inferences to be drawn therefrom in the light most favorable to the 9 nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986). Once a motion for 10 summary judgment is properly made and supported, the opposing party must present specific 11 facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. 12 Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Material facts are those that may affect the 13 outcome of the case, and a dispute about a material fact is genuine if there is sufficient evidence 14 for a reasonable jury to return a verdict for the non-moving party. Anderson, 477 U.S. at 248-49. 15 Ultimately, summary judgment is appropriate against a party who “fails to make a showing 16 sufficient to establish the existence of an element essential to that party’s case, and on which that 17 party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). 18 B. 19 As an initial matter, the Court addresses Defendants’ motion to strike all evidence 20 mentioned in Plaintiff’s response brief regarding the Defendants’ 2004 criminal tax case. 2 (Dkt. 21 No. 57 at 12–13.) Defendants ask this Court to strike the evidence as irrelevant and improper 22 “other acts” evidence in violation of Federal Rules of Evidence 402 and 404(b), or in the 23 alternative, as unfairly prejudicial under Rule 403. (Id.) 24 Motion to Strike Evidence The Court has not considered that evidence in making its decision on Defendants’ 25 2 26 Defendants first raised this issue in the final section of their reply brief. (Dkt. No. 57 at 12–13.) The Court did not order, and the Plaintiff has not provided, a surreply to this issue. ORDER PAGE - 4 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 5 of 15 1 summary judgment motion. Even without considering that evidence, the Court finds that the 2 Plaintiff has presented evidence that creates a genuine dispute of material fact as it relates to her 3 wrongful termination claim. The Defendants’ motion to strike is therefore DENIED without 4 prejudice. Defendants can bring their motion again prior to trial. 5 C. Bailey’s Wrongful Termination Claim 6 “The tort for wrongful discharge in violation of public policy is a narrow exception to 7 the at-will doctrine.” Thompson v. St. Regis Paper Co., 685 P.2d 1081 (Wash. 1984). “To state a 8 cause of action, the plaintiff must plead and prove that his or her termination was motivated by 9 reasons that contravene an important mandate of public policy.” Id. In Washington, it is 10 11 12 13 generally accepted that wrongful discharge claims are limited to four public policy concerns: (1) where employees are fired for refusing to commit an illegal act; (2) where employees are fired for performing a public duty or obligation, such as serving jury duty; (3) where employees are fired for exercising a legal right or privilege, such as filing workers’ compensation claims; and (4) where employees are fired in retaliation for reporting employer misconduct, i.e., whistle blowing. 14 Becker v. Cmty. Health Sys., Inc., 359 P.3d 746, 749 (Wash. 2015). “Under each scenario, the 15 plaintiff is required to identify the recognized public policy and demonstrate that the employer 16 contravened that policy by terminating the employee.” Rose v. Anderson Hay & Grain Co., 358 17 P.3d 1139, 1142 (Wash. 2015). 18 For wrongful dismissal claims, Washington uses a burden-shifting framework. Id. “The 19 first step is for a plaintiff to make out a prima facie case for retaliatory discharge. To do so, a 20 plaintiff must show that protected activity was ‘a cause’ of his or her termination.” Rickman v. 21 Premera Blue Cross, 193 Wash. App. 1048, at *3 (2016). “Causation in a wrongful discharge 22 claim is not an all or nothing proposition. The employee need not attempt to prove the 23 employer's sole motivation was retaliation.” Rickman v. Premera Blue Cross, 358 P.3d 1153, 24 1160 (Wash. 2015). Indeed, an employee must only produce evidence, circumstantial or 25 otherwise, “that the actions in furtherance of public policy” were “a substantial factor motivating 26 the employer to discharge the employee.” Id. ORDER PAGE - 5 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 6 of 15 1 If the employee presents a prima facie case, the burden shifts to the employer to offer a 2 nonretaliatory reason for terminating the employee. Wilmot v. Kaiser Aluminum & Chem. Corp., 3 821 P.2d 18, 28 (Wash. 1991). If the employer provides a legitimate reason for termination, the 4 burden shifts back to the employee to offer evidence to show that the nonretaliatory reason was 5 pretextual. Rickman, 193 Wash. App. at *3. “For summary judgment purposes, this is a burden 6 of production, not persuasion, and the plaintiff need only offer sufficient evidence to create a 7 genuine issue of material fact.” McFarland v. BNSF Ry. Co., 2017 WL 2218332, at *3 (E.D. 8 Wash. Feb. 2, 2017) (citation omitted). An employee may show “that the [proffered] reason has 9 no basis in fact, it was not really a motivating factor for the decision,” or that retaliation was a 10 substantial motivating factor. Id. at 547. “The employee is not required to produce evidence 11 beyond that already offered to establish a prima facie case.” Scrivener v. Clark Coll., 309 P.3d 12 613, 617 (Wash. Ct. App. 2013) (rev’d on other grounds). 13 1. Bailey’s Prima Facie Case 14 Bailey alleges she was fired in retaliation for bringing to light conduct that could have 15 had negative tax consequences for Defendants. (Dkt. No. 20 at 2.) The parties agree that Bailey’s 16 claim falls within the recognized public policy category of whistleblowing. (Dkt. No. 48 at 14– 17 15, Dkt. No. 53 at 17.) It is generally accepted that activities in violation of a statute or law are in 18 contravention of public policy. See Dicomes v. State, 782 P.2d 1002, 1007 (Wash. 1989) 19 (holding that Washington courts “consider whether the employer’s conduct constituted either a 20 violation of the letter or policy of the law” when determining “whether a discharge contravenes 21 the public policy of protecting employees who report employer misconduct”). 22 To establish that her actions were in furtherance of a public policy concern, Bailey relies 23 on her belief that the markups she reported could have gotten the Defendants in trouble with the 24 IRS. (Dkt. No. 53 at 17–18.) She cites the federal tax code to support her argument that 25 compliance with tax laws is a public policy concern. (Id.) Bailey provided evidence that when 26 she first reported the excessive markups Kaiser told her there could be adverse tax implications ORDER PAGE - 6 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 7 of 15 1 and that the company could get in trouble with the IRS. (Dkt. No. 53 at 5–6.) After reporting, 2 Kaiser instructed Bailey to delete the email referencing the markups, to tell another employee to 3 delete the email and not to speak to anyone else about it. (Dkt. No. 54 at 9–10.) 4 When Bailey reported markups for a second time, she had already been warned by Kaiser 5 that markups might have negative tax implications. (Id. at 11.) Although Bailey never used the 6 terms “tax fraud” or “tax evasion” when she reported the discrepancy, she reported the markups 7 because she didn’t want Defendants to get in trouble with the IRS. (Id. at 15.) Viewing all facts 8 and justifiable inferences in the light most favorable to Bailey, the Court finds that she believed 9 she was reporting information that could have been a potential violation of federal tax law, which 10 11 would represent conduct in contravention to public policy. As to causation, Bailey provided circumstantial evidence to support her argument that 12 reporting the markups was a significant factor in her termination. (See Dkt. No. 54 at 9–14.) 13 Bailey’s argument relies on reasonable inferences that can be drawn when considering the series 14 of events that transpired once she reported the markups, the behavior of Borsari and Kaiser in 15 response to her reporting, and the explanations provided for such behavior. (Id.) When Bailey 16 first discovered excessive markups and reported them to Defendants, they told her to keep that 17 information to herself. (Id.) Kaiser instructed Bailey to delete any related emails and to make 18 sure anyone else she emailed about the discrepancy deleted the email as well. (Id.) Bailey was 19 told it was “unfortunate” she knew the information and that the markups could get the 20 Defendants in trouble with the IRS. (Id.) Bailey was one of two people, other than Kaiser, who 21 had access to the pricelist showing the markups. (Dkt. No. 53 at 21.) Defendants almost 22 immediately transferred Bailey to report directly to Kaiser. (Dkt. No. 54 at 14.) 23 When Bailey pointed out markups for a second time in July 2015, Kaiser initiated a series 24 of unusual events that quickly led to her termination. (Id. at 11–14.) After reporting the markups: 25 (1) Bailey and her husband were taken to the Bahamas by Kaiser; (2) Bailey was told the trip 26 was to conduct business with Turnquest that could be done over the phone; (3) She spent only a ORDER PAGE - 7 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 8 of 15 1 few minutes with Turnquest and spent minimal time on the purported issue for which the trip 2 was taken; (5) Bailey was fired days after returning based on an email Turnquest sent to Kaiser 3 alleging unspecific claims about Bailey, of which neither man had first-hand knowledge; and (6) 4 She was not given an opportunity to explain herself before being fired. (Id. at 11–14; Dkt. No. 52 5 at 183; Dkt. No. 52 at ) Bailey was terminated the month after reporting the excessive markups. 6 (Id.) This sequence of events allows for a reasonable inference that Bailey’s continued reporting 7 of the markups was a substantial factor in her firing. 8 2. Defendants’ Nonretaliatory Reason 9 It is undisputed that Defendants have offered a nonretaliatory reason for firing Bailey. 10 (Dkt. No. 48 at 16, Dkt. No. 53 at 21.) Defendants allege Bailey was fired because of the 11 “extremely damaging content of the email [from Turnquest], which reflected an irremediable 12 rupture in the relationship between Ms. Bailey and TCS’s then-Managing Director.” (Dkt. No 50 13 at 6.) However, Bailey argues the reason is entirely pretextual. (Dkt. No. 53 at 21.) 14 3. Bailey’s Argument for Pretext 15 In addition to the evidence presented for her prima facia case—all of which can be 16 considered for establishing pretext—Bailey disputes Defendants’ nonretaliatory reasons for 17 firing her. Bailey and her husband deny all of the statements made by Turnquest in his email to 18 Kaiser. (Dkt. No. 54 at 14–15, Dkt. No. 53 at 21.) After Bailey was told she was being 19 terminated, Kaiser refused to let her defend herself against any allegations and denied her the 20 opportunity to take a drug test, despite being accused of soliciting drugs. (Dkt. No. 54 at 14.) 21 Additionally, Kaiser informed Bailey that she could no longer perform her job functions 22 because no one at TCS was willing to work with her. (Id.) However, Bailey points out that 23 Kaiser owns TCS and is likely the one who dictates business relationships. (Dkt. No. 53 at 21.) 24 Also, Kaiser made no efforts to move Bailey to a different department which would prevent her 25 from interacting with TCS. (Id.) Bailey argues that there is an inference of pretext based on the 26 Defendants’ actions each time she reported an excessive markup and Defendants’ reliance on ORDER PAGE - 8 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 9 of 15 1 2 unsubstantiated information in deciding to fire her. (See Dkt. No. 53 at 21.) The Court again considers Bailey’s evidence of pretext against the Defendant’s basis for 3 terminating her employment. Kaiser’s primary basis for firing Bailey—an employee with 26 4 years of service with Altair and Alpha—was an email from Turnquest containing claims about 5 Bailey’s unprofessional behavior in the Bahamas—claims of which neither man had firsthand 6 knowledge. (Dkt. No 52. at 183, 192, 197.) Viewing these facts and all justifiable inferences in 7 the light most favorable to Bailey, the Court finds that there are genuine issues of material fact as 8 to whether or not Defendants’ nonretaliatory reason for terminating Bailey was pretextual. 9 Accordingly, Defendants’ motion for summary judgment on Bailey’s wrongful termination claim 10 is DENIED. 11 D. 12 Defendants contend they are entitled to judgment as a matter of law on Bailey’s overtime FLSA and MWA Claims 13 claims because Bailey was correctly classified as an exempt employee. (Dkt. No. 48 at 17.) 14 Bailey asserts that she was misclassified as administratively exempt and thus owed overtime 15 wages wrongfully withheld during her tenure working for Defendants. (Dkt. No. 53 at 22.) 16 Under the Federal Fair Labor Standards Act (“FLSA”) and the Washington Minimum 17 Wage Act (“MWA”) employers are required to pay overtime wages for “non-exempt” employees 18 who work in excess of 40 hours a week. 29 U.S.C. § 207, Wash. Rev. Code § 49.46.120. 19 However, both Acts exempt persons who are employed in a “bona fide executive, administrative, 20 or professional capacity.” 29 U.S.C. § 213(a)(1), Wash. Rev. Code § 49.46.130(1). Exemptions 21 under the FLSA and MWA are narrowly construed against the employer. Stahl v. Delicor of 22 Puget Sound, Inc., 64 P.3d 10, 12 (Wash. 2003); Bothell v. Phase Metrics, Inc., 299 F.3d 1120, 23 1125 (9th Cir. 2002). Thus, the employer bears the burden of showing that exemption applies. Id. 24 Whether an employee’s duties exclude her from the overtime benefits of the FLSA is a question 25 of law appropriate for determination on summary judgment. Bothell, 299 F.3d at 1124. 26 Under the FLSA and MWA, an employee is administratively exempt if, in addition to ORDER PAGE - 9 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 10 of 15 1 other factors 3, the employee’s “primary duty includes the exercise of discretion and independent 2 judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a)(3); Wash. Admin. 3 Code § 296-128-520(4)(b). Because the MWA was modeled after the FLSA, and the exemption 4 “primary duty” tests are nearly identical, FLSA regulations are instructive when considering 5 MWA as well. Roe v. Debt Reduction Servs., Inc., 2007 WL 1266151, at *6 (E.D. Wash. Apr. 6 30, 2007). An employee exercises discretion and independent judgment when he or she makes a 7 decision after comparing and evaluating all potential courses of conduct. 29 C.F.R. § 541.202(a). 8 When determining whether an employee exercised “discretion and independent judgment” as to 9 “matters of significance” the court should consider the following factors: whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree . . . whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters 10 11 12 13 14 29 C.F.R. § 541.202(b). 15 16 17 18 19 Defendants argue that Bailey, as a senior international buyer, falls squarely into the category of an administratively exempt employee based on the applicable regulations. (Dkt. No. 48 at 21.) In response, Bailey argues that she possessed limited discretion because her work was largely guided by her supervisors. (Dkt. No. 53 at 8.) The Court believes that the undisputed facts establish that Bailey was properly classified as an administratively exempt employee. 20 21 22 23 24 There is no dispute about Bailey’s primary duties. As a senior international buyer, Bailey’s main role was to negotiate the prices of materials that Altair used to make its products. (Dkt. No. 54 at 3.) (“My primary role as the senior international buyer for Altair was to negotiate the purchase price of components. . .) Bailey coordinated with contract manufacturers and TCS to ensure cost effective procurement and delivery of products. (Id. at 3–4.) Nor is there a genuine 25 3 26 The parties are in agreement that Bailey’s work satisfied the first two requirements of the administrative exempt test for both the FLSA and MWA. (Dkt. No. 53 at 23, Dkt. No. 48 at 18.) ORDER PAGE - 10 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 11 of 15 1 dispute about whether Bailey’s duties dealt with matters of significance—as both parties 2 acknowledge, Bailey dealt with critical aspects of Defendants’ multinational businesses. (See 3 Dkt. No. 53 at 8.) (“Bailey’s work was important.”) (Dkt. No. 49 at 3.) (Bailey’s job dealt with 4 “multiple areas of significance to both of those companies.”) The only dispute, is whether Bailey 5 exercised discretion and independent judgment in her role as a senior international buyer. 6 Viewing the undisputed facts in light of the applicable regulations demonstrates that 7 Bailey was properly classified as administratively exempt. Bailey compared and evaluated 8 different courses of conduct by choosing the method of delivery for the products she negotiated 9 to buy. (Dkt. No 49 at 3.) She carried out major assignments in conducting the operations of the 10 business by negotiating directly with contract manufacturers to obtain the materials Altair needed 11 to build its products. (Dkt. No. 54 at 3.) Bailey had authority to commit the Defendants to 12 matters of significant financial impact based on her unfettered discretion to purchase up to 13 $10,000 of production inventory materials from outside manufacturers. (Dkt. No. 49 at 3.) She 14 would negotiate, agree to, and sign non-cancelable, non-returnable (“NCNR”) agreements that 15 would make Altair and Alpha obligated to contract manufacturers. (Dkt. No. 52 at 373.) 16 Indeed, Bailey’s job template is closely analogous to the description of a “purchasing 17 agent” as defined by the federal regulations. 29 C.F.R. § 541.203(f). In its administrative 18 exemptions examples section, the Department of Labor specifies that “[p]urchasing agents with 19 authority to bind the company on significant purchases generally meet the duties requirements 20 for the administrative exemption even if they must consult with top management officials when 21 making a purchase commitment for raw materials in excess of the contemplated plant needs.” 22 Id. 4 Courts are to give deference to the interpretation of FLSA regulations by the agency charged 23 with its administration. See Bratt v. Cnty. of Los Angeles, 912 F.2d 1066, 1070 (9th Cir.1990). 24 Bailey points out that in some aspects of her job she did not exercise discretion and 25 4 26 Defendant’s point to a similar Washington State regulation that includes “purchasing agents” and “buyers” as examples of administratively exempt employees. (Dkt. No. 48 at 19.) ORDER PAGE - 11 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 12 of 15 1 independent judgment. (See Dkt. No. 53 at 7–8.) Bailey did not choose which products to buy 2 and was limited to negotiate with only certain vendors. (Dkt. No. 54 at 6.) She had to seek a 3 supervisor’s approval to deviate from certain purchase prices. (Id. at 7.) Final purchase prices 4 were constrained by the TCS price list. (Id.) Bailey argues that she merely applied well- 5 established techniques and procedures dictated to her by company policy. (Id. at 24.) 6 Just because Bailey’s discretion was limited by policy and supervisors in some areas of 7 her job does not mean she did not exercise discretion and independent judgment in other aspects 8 of her work. Bailey has not rebutted the fact that in the areas of negotiation, procurement, and 9 delivery of products discussed supra, she was not constrained by her supervisors. (Dkt. No. 49 at 10 3.) Even if she was required to seek management’s approval in some aspects of her work, she 11 still possessed autonomy to make decisions within her sphere of authority. (Id. at 3–5.) 12 Moreover, Bailey misstates the applicable standard when she frames the issues as “whether [she] 13 exercised sufficient independent judgement and discretion to qualify for the administrative 14 exemption.” (Dkt. No. 53 at 23) (emphasis added). The relevant question is whether Bailey’s 15 primary duties included the exercise of discretion and independent judgment, not the degree to 16 which she exercised discretion or independent judgment. 29 C.F.R. § 541.200(a)(3). 17 When viewing the facts in the light most favorable to Bailey, there is no genuine dispute 18 of material fact as to whether her primary duties involved the exercise of discretion and 19 independent judgment as to matters of significance—they did. Therefore, the Defendants have 20 met their burden of establishing that Bailey was administratively exempt, as a matter of law, and 21 the Court GRANTS Defendants’ motion as to the FLSA and MWA claims. 22 E. Wrongful Withholding of Wages 23 Defendants contend they are entitled to judgment as a matter of law on the willful 24 withholding of wages claim because Bailey was an administratively exempt employee under 25 FLSA and MWA and, as such, there were no overtime wages that could have been wrongfully 26 withheld. (Dkt. No. 48 at 17.) The claim is effectively derivative of the wage claims. (Id. at 23.) ORDER PAGE - 12 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 13 of 15 1 Given that the Court has ruled for Defendants on the wage claims, the Court GRANTS 2 Defendants’ motion on the willful withholding claim. 3 F. Breach of Contract Counterclaim 4 Defendant Borsari moves for summary judgment on her breach of contract counterclaim. 5 (Dkt. No. 48 at 26.) Bailey borrowed a total of $6400 from Borsari via four signed promissory 6 notes, entered from October 2013 to June 2014. (Dkt. Nos. 54 at 17, 56-3 at 55–70.) Bailey has 7 not repaid any of the money. (Dkt. No. 56-3 at 55–70.) The parties now disagree whether Borsari 8 waived her rights under the promissory notes and is in breach of her obligations under the notes. 9 “Waiver is an intentional and voluntary relinquishment of a known right.” Panorama 10 Residential Protective Ass’n v. Panorama Corp. of Washington, 640 P.2d 1057, 1060 (Wash. 11 1982). “Waiver can be unilateral and without consideration.” (Id.) However, “to constitute a 12 waiver, other than by express agreement, there must be unequivocal acts or conduct evincing an 13 intent to waive. Intent cannot be inferred from doubtful or ambiguous factors.” Wagner v. 14 Wagner, 621 P.2d 1279, 1284 (Wash. 1980). “The mere withholding of the enforcement of a 15 right to payment is not a waiver.” White Pass Co. v. St. John, 427 P.2d 398, 402 (Wash. 1967). 16 Bailey argues that Borsari waived her rights under the promissory notes by not requiring 17 her to make payments when they came due. (Dkt. No. 53 at 25.) In her sworn declaration, Bailey 18 stated that Borsari told her to pay when she could and never attempted to enforce the terms of the 19 promissory notes. (Dkt. No. 54 at 17.) Borsari has not provided any evidence that she asked 20 Bailey to make payments when they came due. (See Dkt. No. 56-3 at 63.) 21 Nevertheless, Borsari’s inaction in seeking payment from Bailey was not a waiver based 22 on the plain terms of the acceleration clause in each promissory note. Each note was a single 23 page document signed by Bailey and Borsari containing the following acceleration clause: 24 5. Acceleration. In the event any payments required by this Note are not paid when due, and such default remains uncured after a date specified by a notice to the Maker, then the whole sum of both principal and interest shall become due and payable at once without further notice, at the option of the Holder. The date specified shall not be less than thirty (30) days from the date the notice is given to 25 26 ORDER PAGE - 13 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 14 of 15 Maker. 1 (Id.) (emphasis added). As the holder of the notes, Borsari had the option to require 2 3 4 5 6 7 8 9 10 11 Bailey to make timely payments or, if Bailey became delinquent, to force her to pay the balance of the notes within 30 days after providing notice. (Id.) By its very terms, Borsari could choose to trigger the acceleration clause without waiving her right to seek payment from Bailey. See e.g., Meyers Way Dev. Ltd. P'ship v. Univ. Sav. Bank, 80 Wash. App. 655, 671 (1996) (“The Bank did not waive its known right. It asserted it, by electing to accelerate the note in accord with the terms of the contract. Summary judgment on this issue was proper.”); Seattle-First Nat. Bank v. Westwood Lumber, Inc., 65 Wash. App. 811, 826 (1992) (“The note's terms clearly contemplated that, on default, the holder could either forgo collection or demand immediate payment. We do not view the holder's choice of one option as a waiver of the other.”) Therefore, when Borsari sent Bailey the demand letter requiring full payment under the 12 13 14 15 16 17 terms of the contract, she wasn’t reinstating an obligation she had waived, she was simply exercising her rights under the acceleration clause. Bailey cites to caselaw that deals with contract waiver outside the context of a party enforcing the agreed upon terms of an optional acceleration contract. (Dkt. No. 53 at 25–26.) As that precedent is inapplicable to this case, there is no genuine dispute of material fact about whether Borsari waived her rights under the contract. Bailey has not created a genuine issue of material fact as to whether she was in breach of 18 19 20 21 22 23 24 25 26 contract. (See id.) Bailey does not dispute that she signed every promissory note, that she never paid anything toward the principle, or that the terms of the notes were invalid. (Dkt. No. 54 at 17; 52 at 223–226.) Based on Borsari’s demand letter of April 2017, the Court finds that Bailey is in breach, and owes to Borsari the whole sum of principal and interest outstanding. The Court GRANTS Defendants motion for summary judgment on the breach of contract counterclaim. III. CONCLUSION For the foregoing reasons, Defendants’ motion for summary judgment (Dkt. No. 48) is DENIED in part and GRANTED in part. It is DENIED as to Plaintiff’s wrongful termination ORDER PAGE - 14 Case 2:16-cv-00727-JCC Document 60 Filed 09/19/17 Page 15 of 15 1 claim and Defendants’ motion to strike evidence. It is GRANTED as to Plaintiff’s FLSA and 2 MWA claims, willful withholding of wages claim, defamation claim and as to Defendant 3 Borsari’s breach of contract counterclaim. 4 5 DATED this 19th day of September 2017. 6 A 7 8 9 John C. Coughenour UNITED STATES DISTRICT JUDGE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER PAGE - 15

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