Maria Teresa Davila v. Maria Claudia Menendez ( 2013 )


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  •                Case: 12-11049       Date Filed: 06/10/2013      Page: 1 of 14
    [PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT
    ________________________
    No. 12-11049
    ________________________
    D.C. Docket No. 1:10-cv-21282-TEB
    MARIA TERESA DAVILA,
    Plaintiff - Appellant,
    versus
    MARIA CLAUDIA MENENDEZ,
    RUDOLFO MENENDEZ,
    Defendants - Appellees.
    ________________________
    Appeal from the United States District Court
    for the Southern District of Florida
    ________________________
    (June 10, 2013)
    Before TJOFLAT and PRYOR, Circuit Judges, and ROTHSTEIN, ∗ District Judge.
    PRYOR, Circuit Judge:
    This appeal presents two issues: first, whether a jury should have decided if
    an employer willfully violated federal and state minimum wage laws after a former
    ∗
    Honorable Barbara Jacobs Rothstein, United States District Judge for the Western District of
    Washington, sitting by designation.
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    employee introduced evidence, viewed in the light most favorable to the former
    employee, that the employer was aware of and disregarded those laws, sometimes
    paid the former employee in cash, failed to record her hours of work, and made
    comments about her status as an alien; and second, whether the district court may
    deny an employee’s request for liquidated damages before a jury decides whether
    her employer willfully violated federal and state minimum wage laws. Maria
    Teresa Davila appeals a judgment that Maria Claudia and Rudolfo Menendez did
    not willfully violate federal minimum wage laws, 
    29 U.S.C. § 206
    (a), and the
    minimum wage laws of Florida, Fla. Const. Art. 10, § 24(e), and that Davila was
    not entitled to liquidated damages under the Fair Labor Standards Act, 
    29 U.S.C. § 216
    . Davila argues that the Menendezes failed to pay her the minimum wage
    under federal and state law while she served as the nanny for their child from 2004
    until 2010. At trial, the jury found that the Menendezes violated the minimum
    wage laws and owed Davila unpaid wages, but the district court granted a
    judgment as a matter of law in favor of the Menendezes and against Davila’s claim
    that they willfully violated the minimum wage laws. If the jury had found that the
    Menendezes willfully violated the minimum wage laws, the time for which Davila
    could have recovered unpaid wages would have been extended from four years to
    five years. See Fla. Const. Art. 10, § 24(e). Davila also argues that the district
    court erred when it denied her motion for liquidated damages. Because Davila
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    introduced sufficient evidence for a reasonable jury to find that the Menendezes
    willfully violated the minimum wage laws and because the district court cannot
    rule on Davila’s motion for liquidated damages before the jury decides whether the
    Menendezes willfully violated the minimum wage laws, we vacate and remand for
    further proceedings.
    I. BACKGROUND
    In 2004, the Menendezes hired Davila as a nanny for their five-month-old
    son. The Menendezes expected Davila to dress the child each morning, cook his
    breakfast, and prepare him to leave the family’s one-bedroom apartment and each
    evening to cook the child’s dinner and put him to bed. While the Menendezes
    lived in the small apartment, Davila arrived for work early every weekday
    morning, left in the evenings after she put the child to bed, and babysat
    occasionally on Friday and Saturday evenings. When the Menendezes later moved
    into a two-bedroom apartment, Davila lived with the Menendezes from Sunday
    evening through Friday afternoon. When she first started to work for the
    Menendezes, Davila requested a salary of $350 a week, and the Menendezes
    agreed to pay that rate. Approximately two-and-a-half years later, the Menendezes
    increased Davila’s salary to $400 a week.
    In February 2008, Davila visited her daughter in Canada. Davila remained
    in Canada for eight months and obtained status as a legal resident to enroll for
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    Medicare in Canada. In October 2008, Davila returned to the Menendez home. In
    March 2010, the Menendezes fired Davila.
    In April 2010, Davila filed a complaint against the Menendezes for violating
    the federal minimum wage laws. Davila alleged that she had “worked an average
    of 100 hours a week between . . . July 28, 2004 through . . . February 14, 2008,”
    and been “paid $3.50 per hour for all hours of work.” Davila also alleged that she
    had “worked an average of 75 hours a week between . . . October 10, 2008
    through . . . March 26, 2010,” and been “paid $4.00 per hour for all hours of
    work.” And Davila alleged that the Menendezes had “willfully and intentionally
    refused to pay . . . or post[] any notice . . . of her rights to minimum wages.” In an
    amended complaint, Davila also alleged that the Menendezes had violated the
    minimum wage provision of the Florida Constitution. Davila sought “double
    damages and reasonable attorney fees” or “as much as allowed” under federal law
    and the Florida Constitution, “whichever is greater.”
    At trial, the Menendezes and Davila disagreed about the number of hours
    that she had worked and her duties in the Menendez home. The Menendezes
    testified that Davila had worked an average of 38 hours each week, but Davila
    testified that she had worked 100 hours each week before she left for Canada and
    70 hours each week between the time that she returned to the United States and her
    termination. The Menendezes testified that Davila had arrived voluntarily on
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    Sunday evenings because she did not have a permanent residence for weekdays
    and began her work early on Monday morning, but Davila testified that the
    Menendezes had required that she arrive on Sunday evening. The Menendezes
    stated that Davila had no duties after the child left for school or after she put the
    child to bed, but Davila testified that she had worked all but four hours at night
    when the child slept. Davila testified that, during the day, she had cleaned the
    Menendezes’ apartment, prepared meals, and run errands for Claudia Menendez
    and, at night, she had slept in the child’s bedroom. Claudia testified that maids, not
    Davila, had been responsible for cleaning the apartment. Claudia also testified that
    she had vacationed with her son at least twice a year in Colombia and that their
    absence had temporarily relieved Davila from her duties.
    The Menendezes testified that Davila had been paid according to the
    minimum wage laws, and that Davila had never complained about her
    compensation. The Menendezes further testified that they had hired Davila at the
    rate of $350 a week, paid her when the child had been on vacation with Claudia,
    gave Davila money for living expenses and to pay taxes, paid medical expenses
    incurred by Davila’s relative in Colombia, paid Davila’s credit card bills while she
    was in Canada, and paid for her airplane ticket to return to the United States.
    Rudolfo Menendez testified that he “[had] an idea of what minimum wage was,”
    that the rate “might have been about $6 an hour,” and that he “always thought that
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    [the family had] pa[id] [Davila] way above minimum wage.” Rudolfo testified that
    he had required Davila to file tax returns, but he had not “inquire[d] whether [his]
    payments to Ms. Davila were in sync with the minimum wage laws,” and “didn’t
    know [that he was] supposed” to file W-2 forms for Davila. Rudolfo also testified
    that he had recommended his certified public accountant to Davila and that the
    accountant “would [not] risk his license to do anything unethical.”
    Davila testified that she would have continued to work for the Menendezes
    had they not fired her, although she thought they were dishonest. Davila testified
    that, during her first meeting with the Menendezes, Rudolfo questioned why an
    “illegal” would charge $350 a week, mentioned several times that he was “with the
    government,” and told Davila that she “should not be charging that much.” Davila
    also testified that she “never received again $400 [a week]” after she returned from
    Canada. Davila stated that the Menendezes cheated on their taxes and used their
    accountant to report falsely Davila’s income. Davila also testified that, during a
    trip Davila took to a hospital for a job-related accident, Claudia told Davila not to
    mention that she was an employee of the Menendezes because they had not
    provided health insurance for her.
    In their cross-examination of Davila, the Menendezes introduced documents
    that Davila provided to the hospital to obtain free medical care: a copy of her 2008
    tax return, which understated her income; a power bill that listed the Menendezes’
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    address; and a letter from Claudia stating that she was “in charge of all the living
    expenses for . . . Davila.” The Menendezes also introduced canceled checks to
    establish that, after Davila returned from Canada, she was paid $520, $350, and
    $400 on three separate weeks in December 2009, and $1,000 for one week in
    February 2010. Davila acknowledged that the Menendezes had helped her pay for
    her plane ticket from Canada, but Davila testified that most of the large checks had
    been advances on her weekly salary. And Davila further acknowledged that she
    had used Claudia’s debit card to pay for household expenses and to withdraw cash
    to pay her weekly salary. The Menendezes also submitted copies of tax returns
    that Davila had filed for tax years 2009 and 2010 in which she had substantially
    understated her income.
    At the close of all the evidence, the Menendezes “move[d] for a directed
    verdict on the issue of intentional reckless or willful behavior on the part of the
    defendants,” and the district court granted the motion. The district court ruled that
    the “testimony . . . that [the Menendezes] were aware of the requirements of paying
    a minimum wage, . . . in and of itself, under the circumstances in this case, . . .
    [does not] give rise to a jury question . . . of whether they intentionally violated the
    minimum wage requirement or showed reckless disregard.” The district court
    concluded that the Menendezes’ “failure to go and investigate further is [not] a
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    requirement [nor does it] give[] rise, in and of itself, to creating a jury question
    here” about willfulness.
    The jury returned a verdict in favor of Davila and found that the Menendezes
    owed Davila $33,025 in unpaid minimum wages. Davila moved for liquidated
    damages, but the district court denied Davila’s motion. The district court ruled that
    the Menendezes “acted in good faith in compensating [Davila] for all hours
    worked in their employment,” and the district court “exercise[d] its discretion in
    declining to award punitive damages.”
    II. STANDARDS OF REVIEW
    We review de novo the judgment as a matter of law that the Menendezes did
    not willfully violate the minimum wage laws, and we construe the evidence in the
    light most favorable to Davila. See Thorne v. All Restoration Servs., Inc., 
    448 F.3d 1264
    , 1266 (11th Cir. 2006). “[W]hether [the employer] had reasonable
    grounds for believing that [its] act or omission was not a violation of the [Act] [is]
    mixed questions of fact and law.” Dybach v. Fla. Dep’t of Corr., 
    942 F.2d 1562
    ,
    1566 (11th Cir. 1991). “We review such questions de novo to the extent they
    involve application of legal principles to established facts, and for clear error to the
    extent they involve an inquiry that is essentially factual.” 
    Id.
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    III. DISCUSSION
    We divide our discussion in two parts. First, we explain why the district
    court erred when it granted a judgment as a matter of law against Davila on the
    issue of willfulness. Second, we explain why the district court must reconsider its
    decision that Davila is not entitled to liquidated damages.
    A. The District Court Erred When It Entered a Judgment as a Matter of Law
    Against Davila on the Issue of Willfulness.
    A district court may enter a judgment as a matter of law when there is no
    legally sufficient evidentiary basis for a reasonable jury to find for a party on an
    issue. Fed. R. Civ. P. 50(a); see Thorne, 
    448 F.3d at 1266
    . The district court must
    view the evidence in the light most favorable to the non-moving party and must
    refrain from “decid[ing] the credibility of witnesses []or weigh[ing] the evidence.”
    Mich. Millers Mut. Ins. Corp. v. Benfield, 
    140 F.3d 915
    , 921 (11th Cir. 1998).
    Where there exists a “substantial conflict in the evidence, such that reasonable and
    fair-minded persons in the exercise of impartial judgment might reach different
    conclusions, [a] motion [for a judgment as a matter of law] must be denied.”
    Christopher v. Florida, 
    449 F.3d 1360
    , 1364 (11th Cir. 2006) (internal quotation
    marks omitted); see also EEOC v. Massey Yardley Chrysler Plymouth, Inc., 
    117 F.3d 1244
    , 1250 (11th Cir. 1997) (holding that a judgment as a matter of law “can
    be [entered] only when the evidence favoring the [movant] is so one-sided as to be
    of overwhelming effect”).
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    Davila argues that the Menendezes willfully violated the minimum hourly
    wage laws of Florida and that their willful violation extended by one year the time
    for which she can recover unpaid wages. The Florida Constitution provides that
    “[a]ctions to enforce [the minimum wage laws of Florida] . . . shall be subject to a
    statute of limitations of four years or, in the case of willful violations, five years.”
    Fla. Const. Art. 10, § 24(e). Although section 24 does not define the term
    “willful,” it provides that “case law, administrative interpretations, and other
    guiding standards developed under the federal [Fair Labor Standards Act] shall
    guide the construction of this amendment.” Id. § 24(f).
    An employer willfully violates the Act if he should inquire as to whether his
    actions violate the Act, but fails to do so. The Supreme Court held in McLaughlin
    v. Richland Shoe Co., 
    486 U.S. 128
    , 
    108 S. Ct. 1677
     (1988), that a willful violation
    of the Act occurs when an employer either knows that his conduct is prohibited by
    or “show[s] reckless disregard for” the minimum wage laws, 
    id. at 133
    , 
    108 S. Ct. at 1681
    . See 
    29 C.F.R. § 578.3
    (c)(1). An employer knowingly violates the Act if
    he disregards the minimum wage laws deliberately or intentionally, McLaughlin,
    
    486 U.S. at 133
    , 
    108 S. Ct. at 1681
    , such as by ignoring “advice from a responsible
    official . . . that the conduct in question is not lawful,” 
    29 C.F.R. § 578.3
    (c)(2). An
    employer acts with reckless disregard for the Act if the employer’s conduct is more
    than “merely negligent,” McLaughlin, 
    486 U.S. at 133
    , 
    108 S. Ct. at 1681
    , and is
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    blameworthy “if the employer should have inquired further into whether [his]
    conduct was in compliance with the Act, and failed to make adequate further
    inquiry,” 
    29 C.F.R. § 578.3
    (c)(3); see 
    5 C.F.R. § 551.104
    . In other words, an
    employer does not commit a willful violation if he “acts unreasonably, but not
    recklessly, in determining [his] legal obligation” under the Act. McLaughlin, 
    486 U.S. at
    135 n.13, 
    108 S. Ct. at
    1682 n.13. The burden rests with the employee to
    “prove by a preponderance of the evidence” that her employer acted willfully.
    Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 
    515 F.3d 1150
    , 1162–63
    (11th Cir. 2008); see also Rodriguez v. Farm Stores Grocery, Inc., 
    518 F.3d 1259
    ,
    1274 (11th Cir. 2008).
    The district court erred when it entered a judgment as a matter of law that
    the Menendezes did not willfully violate the minimum wage laws. Davila
    introduced evidence from which a reasonable jury could have found that the
    Menendezes willfully violated the minimum wage laws. See Alvarez Perez, 515
    F.3d at 1162–63. Davila elicited from the Menendezes that they knew of the
    hourly wage laws, but failed to investigate whether they had complied with those
    laws. Davila testified that the Menendezes did not sign a contract with Davila, did
    not record her working hours, and paid her in cash. And Davila further testified
    that Rudolfo made threatening comments about her alien status and his work for
    the government. Despite the Menendezes’ assertions that they were ignorant of
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    their obligations under the minimum wage laws, a reasonable jury could have
    drawn a contrary inference from the evidence, and the district court erred when it
    refused to submit the issue of willfulness to the jury. Davila is entitled to a new
    trial before a jury to determine whether the Menendezes willfully violated the
    minimum wage laws.
    B. The District Court Must Reconsider Whether Davila Is Entitled to
    Liquidated Damages.
    Because Davila is entitled to a new jury trial to determine whether the
    Menendezes willfully violated federal and state minimum wage laws, the district
    court must reconsider whether Davila is entitled to liquidated damages. An
    employee ordinarily is entitled to liquidated damages if her employer violated the
    minimum wage laws. By statute, an award of liquidated damages equals the
    compensatory damages assessed by the jury. 
    29 U.S.C. § 216
    (b) (“Any employer
    who violates the provisions of [the Fair Labor Standards Act] shall be liable to the
    employee . . . affected in the amount of their unpaid minimum wages . . . in an
    additional equal amount as liquidated damages.”). But the Act establishes the
    following good-faith defense and leaves to the discretion of the district court
    whether to award liquidated damages:
    [I]f 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 Fair Labor Standards Act . . . the court may, in its
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    sound discretion, award no liquidated damages or award any amount
    thereof not to exceed the amount specified in [section 216].
    
    Id.
     § 260. “To satisfy the subjective ‘good faith’ component, the employer has the
    burden of proving that it had an honest intention to ascertain what the Act requires
    and to act in accordance with it.” Dybach, 
    942 F.2d at 1566
     (alterations, citations,
    and internal quotation marks omitted). If the employer fails to prove that he acted
    with both subjective and objective good faith, “liquidated damages are
    mandatory.” 
    Id. at 1567
    .
    Before making a determination as to Davila’s entitlement to liquidated
    damages, the district court was required to await the finding of the jury about
    willfulness. “The willfulness or good faith question [must be] answered first by
    the jury to determine the period of limitations and then, if there is a verdict for the
    employee, again by the [district court] to determine whether to award liquidated
    damages.” Alvarez Perez, 515 F.3d at 1162. If the jury finds that the Menendezes
    acted willfully, then their good-faith defense would necessarily fail, and Davila
    would be entitled to liquidated damages. See id. at 1166 (“[I]n [a Fair Labor
    Standards Act] case a jury’s finding in deciding the limitations period question that
    the employer acted willfully precludes the court from finding that the employer
    acted in good faith when it decides the liquidated damages question.”). But if the
    jury finds that the Menendezes did not willfully violate federal and state minimum
    wage laws, that determination would not necessarily mean that they acted in good
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    faith. “Because the burden of proof is placed differently [for issues of willfulness
    and good faith], a finding that willfulness was not present may co-exist peacefully
    with a finding that good faith was not present.” Rodriguez, 
    518 F.3d at 1274
    . The
    Menendezes admittedly did not inquire about their obligations under the hourly
    wage laws, and the district court could infer that the Menendezes lacked
    “reasonable grounds for believing that [their] conduct comported with the Act.”
    Dybach, 
    942 F.2d at 1567
    .
    IV. CONCLUSION
    We VACATE the judgment that the Menendezes did not willfully violate
    the minimum wage laws and that Davila was not entitled to liquidated damages,
    and we REMAND for further proceedings consistent with this opinion.
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