Acosta v. Foreclosure Connection, Inc.

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT August 15, 2018
_________________________________
Elisabeth A. Shumaker
Clerk of Court
R. ALEXANDER ACOSTA, Secretary of
Labor, United States Department of Labor,
Plaintiff - Appellee,
v. No. 17-4111
(D.C. No. 2:15-CV-00653-DAK)
FORECLOSURE CONNECTION, INC.; (D. Utah)
JASON WILLIAMS,
Defendants - Appellants.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before TYMKOVICH, Chief Judge, LUCERO and HARTZ, Circuit Judges.
_________________________________
Jason Williams and Foreclosure Connection, Inc. (“FCI”) appeal the district
court’s judgment in favor of the Secretary of Labor. Exercising jurisdiction under 28
U.S.C. § 1291, we affirm.
I
FCI is a Utah company that buys real estate, renovates homes, and rents or
resells properties. Williams is the manager and part owner of FCI. He is responsible
for hiring and firing decisions. Jack Erickson is FCI’s foreman. He assigns work to
construction workers at the company’s properties pursuant to Williams’ instructions.
*
This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Mychal Barber Sr. and his teenaged son, Mychal Scott Barber Jr., began doing
construction work for FCI in the summer of 2015. The Barbers became dissatisfied
with working conditions at FCI, and in particular, with the company’s failure to pay
overtime wages. On July 7, 2015, they submitted a complaint to the Wage and Hour
Division of the Department of Labor (“DOL”), alleging that FCI’s failure to pay
overtime wages violated the Fair Labor Standards Act (“FLSA”).
The following morning, on July 8, Erickson told the Barbers not to report to
work because there was not enough work for them to do. Later that day, DOL
investigator Sheffield Keith met with Williams at FCI’s offices. Keith requested
certain records, including information on FCI’s employees. Williams responded that
FCI did not have any employees, and that all of its workers were independent
contractors. Later that night, the Barbers called Erickson, who told them they were
terminated. Erickson explained that Williams blamed the Barbers for reporting the
company to DOL.
On July 15, an employee surreptitiously recorded a meeting Williams held
with his workers. Williams instructed the group to refuse to cooperate in DOL’s
investigation. He also circulated independent contractor agreements to the workers,
requested that they sign the agreements but leave them undated, and told them to
claim they could not remember when they signed. FCI submitted contractor
agreements to DOL, including an agreement for Barber Sr. with what appeared to be
a forged signature.
2
In September 2015, DOL filed a complaint alleging that FCI had obstructed its
investigation and retaliated against its employees, including the Barbers. Defendants
consented to the entry of a preliminary injunction barring any additional retaliation or
obstruction. Following a bench trial, the district court ruled in favor of DOL. It
imposed a permanent injunction, awarded $3,530.23 in back pay to Barber Jr. plus an
equal amount of liquidated damages, and awarded $80,992.55 in back pay to Barber
Sr. plus an equal amount of liquidated damages. Defendants timely appealed.
II
Following a bench trial, “we review the district court’s factual findings for
clear error and its legal conclusions de novo.” Keys Youth Servs., Inc. v. City of
Olathe, 248 F.3d 1267, 1274 (10th Cir. 2001). We will reverse under the clear error
standard only if the district court’s finding “is without factual support in the record or
if, after reviewing all the evidence, we are left with a definite and firm conviction
that a mistake has been made.” Id. (quotations omitted).
A
Defendants argue that DOL failed to demonstrate FCI was an enterprise
engaged in commerce. Under FLSA, employees are entitled to overtime pay if they
work more than forty hours per week and are “employed in an enterprise engaged in
commerce.” 29 U.S.C. § 207(a)(1). “‘Commerce’ means trade, commerce,
transportation, transmission, or communication among the several States or between
any State and any place outside thereof.” § 203(b).
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However, the anti-retaliation provision of FLSA does not refer to an enterprise
engaged in commerce. It states that “it shall be unlawful for any person . . . to
discharge or in any other manner discriminate against any employee because such
employee has filed any complaint . . . related to [FLSA].” § 215(a)(3) (emphasis
added). A person is defined as “an individual, partnership, association, corporation,
business trust, legal representative, or any organized group of persons.” § 203(a).
Several circuit courts have thus concluded that FLSA’s prohibition on
retaliation applies regardless of whether an employer qualifies as an enterprise
engaged in commerce. The Third Circuit held that although the portions of FLSA
“relating to wages and to hours do apply only to employers,” the “prohibitions
expressed in [§ 215] . . . are applicable to any person.” Bowe v. Judson C. Burns,
Inc., 137 F.2d 37, 38 (3d Cir. 1943) (quotation omitted). Commenting that FLSA “is
carefully drawn and every term is used as a term of art,” that court noted that the
wage and hour provisions consistently use “employer” but the anti-retaliation and
willful violation sections always use “person.” Id.; see also id. at 39 (“The
congressional intent is very plain and the pattern of the statute is perfect.”).
Similarly, in Meek v. United States, 136 F.2d 679 (6th Cir. 1943), the Sixth
Circuit upheld the criminal conviction under FLSA of a defendant who claimed he
was no longer an employer at the time an employee was fired. Id. at 679. The court
held that “the differentiation between the prohibitions in other sections of the Act
directed to the ‘employer,’ and those here directed to ‘any person,’ is significant of
the intent of the Congress. The language is clear and conforms to the pattern of the
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Act.” Id. at 680. And in Wirtz v. Ross Packaging Co., 367 F.2d 549 (5th Cir. 1966),
the Fifth Circuit held that “the clear and unambiguous language” of FLSA, which
contains the terms “any employee” and “any person” in its anti-retaliation provision,
does not require that either party “be engaged in activities covered by the Act’s wage
and hour provisions in order for the strictures against discriminatory discharge to be
invoked.” Id. at 550-51.
More recent decisions are in accord. In Sapperstein v. Hager, 188 F.3d 852(7th Cir. 1999), the court held that a retaliation claim could go forward even though
the employer did not qualify as an enterprise. Id. at 856. The court explained that,
even if an employee’s complaint turned out not to be a violation of FLSA, the anti-
retaliation provision does not require an actual violation to be proved. Id. at 856-57.
It provided the following policy rationale for this rule:
Determining whether there is an actual violation can mislead even an
experienced district court, and a sensible employee who knew he had to
be right to enjoy whistleblower protection would think twice about
reporting conduct which might turn out to be lawful. Congress instead
wanted to encourage reporting of suspected violations by extending
protection to employees who filed complaints, instituted proceedings, or
indeed, testified in such proceedings, as long as these concerned the
minimum wage or maximum hour laws.
Id. at 857.
Finally, in Arias v. Raimondo, 860 F.3d 1185 (9th Cir. 2017), the Ninth
Circuit explained that the wage and hour sections of FLSA sensibly apply only to
employers because only employers control wages. Id. at 1189. The court contrasted
FLSA’s anti-retaliation provision, which Congress enacted “to enable workers to
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avail themselves of their statutory rights in court by invoking the legal process
designed by Congress to protect them.” Id. at 1190. That purpose would not be
served by limiting liability to employers. Because “the difference in reach between
FLSA’s substantive economic provisions and its anti-retaliation provision is
unmistakable . . . , Congress clearly means to extend section 215(a)(3)’s reach
beyond actual employers.” Id. at 1191-92.
We are persuaded by the foregoing authorities and hold that the anti-retaliation
provisions of FLSA apply to any person regardless of whether that person is an
enterprise engaged in commerce.1 Accordingly, we reject defendants’ first claim of
error.
B
Defendants also contend that the district court clearly erred in finding a causal
connection between the Barbers’ protected activity and their terminations. They
point to the district court’s reference to July 7 as “the last day before the Barbers
were fired,” in arguing that the Barbers were terminated on the morning of July 8,
before Williams was aware that DOL had been contacted. “As we have explained, an
employer’s action against an employee cannot be because of that employee’s
1
Although defendants cite the Commerce Clause, U.S. Const., art. I, § 8, cl. 3,
they do not advance any substantive constitutional argument on this issue, instead
dedicating their opening brief to statutory analysis. We therefore do not address any
constitutional argument regarding the scope of FLSA’s application to the events at
issue in this case. See United States v. Gordon, 710 F.3d 1124, 1150 (10th Cir. 2013)
(arguments are waived if they “are presented in a perfunctory and conclusory
fashion” because “we are rightly hesitant to definitively opine on . . . legally
significant issues when they have received . . . cursory treatment”).
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protected opposition unless the employer knows the employee engaged in protected
opposition.” Zokari v. Gates, 561 F.3d 1076, 1081 (10th Cir. 2009) (quotation,
brackets, and emphasis omitted).
However, Barber Jr. testified that there were two interactions with Erickson on
July 8. In the morning, Erickson told them not to come in that day because there was
no work. They called back “later that night” to find out if they should report the
following day and Erickson “said that [the Barbers] weren’t working anymore” and
that the Barbers “were terminated.” We thus interpret the district court’s statement
as finding the termination occurred on July 8, after Keith met with Williams.
Defendants also argue that DOL failed to establish pretext. They point to a
recorded call in which Erickson states that the Barbers were fired for making a report
to city inspectors. But a plaintiff may prove FLSA retaliation “either through the use
of direct evidence or by showing that [the employer’s] proffered non-retaliatory
reasons for terminating him were pretextual.” Conner v. Schnuck Markets, Inc.,
121 F.3d 1390, 1396 (10th Cir. 1997). The record contains direct evidence that the
Barbers were fired because of their complaints to DOL: Barber Jr. testified that
Erickson told him that Williams blamed them for the report during the phone call in
which they were terminated. In any event, the district court could permissibly infer
pretext because of the inconsistent reasons provided for the terminations. See
Richmond v. ONEOK, Inc., 120 F.3d 205, 209 (10th Cir. 1997).2
2
Defendants did not challenge the DOL’s authority to seek back pay and
liquidated damages for retaliation in their briefing to this court or in the district court.
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III
AFFIRMED.
Entered for the Court
Carlos F. Lucero
Circuit Judge
See 29 U.S.C. §§ 216, 217. Accordingly, any such challenges are waived. See
United States v. Porter, 405 F.3d 1136, 1141-42 (10th Cir. 2005) (“We do not
consider issues not presented to the district court, and they are deemed waived.”);
Coleman v. B-G Maint. Mgmt. of Colo., Inc., 108 F.3d 1199, 1205 (10th Cir. 1997)
(“Issues not raised in the opening brief are deemed abandoned or waived.”).
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