Dana Mohammadi v. Augustine Nwabuisi

Case: 14-50115 Document: 00512981776 Page: 1 Date Filed: 03/25/2015
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-50115
United States Court of Appeals
Fifth Circuit
FILED
DANA D. MOHAMMADI, March 25, 2015
Lyle W. Cayce
Plaintiff - Appellee Clerk
v.
AUGUSTINE NWABUISI; ROSE NWABUISI; RESOURCE HEALTH
SERVICES, INCORPORATED, doing business as Resource Home Health
Services, Incorporated; RESOURCE CARE CORPORATION,
Defendants - Appellants
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:12-CV-42
Before BARKSDALE, SOUTHWICK, and HIGGINSON, Circuit Judges.
PER CURIAM:*
Primarily at issue in this action under the Fair Labor Standards Act
(FLSA) is which of two limitations periods applies: two years for an ordinary,
or three years for a willful, violation. On cross-motions for summary judgment
in Dana D. Mohammadi’s FLSA action against former employers Augustine
Nwabuisi, Rose Nwabuisi (Nwabuisi), Resource Health Services and Resource
* Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5th Cir.
R. 47.5.4.
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No. 14-50115
Care Corporation (collectively Resource), see generally 29 U.S.C. § 201 et seq.,
the district court, inter alia, awarded Mohammadi partial summary judgment
on liability, liquidated damages, and the three-year limitations period, and
awarded her damages following a bench trial. Resource challenges these
decisions. AFFIRMED IN PART; REVERSED IN PART; REMANDED.
I.
Mohammadi worked for Resource from June 2009 to October 2010, and
in November 2011, as a licensed vocational nurse case manager, which
required her to perform and coordinate marketing functions, skilled-nursing
visits, and provider visits to the elderly or infirm. Among other work-related
items, she attended events, lunches, and dinners outside of the normal eight-
hour shift she was expected to work (with 30 minutes allowed for lunch), which
she asserts comprises uncompensated work hours, and which Nwabuisi
counters were social engagements. Nwabuisi accompanied her during several
of these activities. It is undisputed that Resource’s written policies prohibit
overtime compensation without prior authorization, and that Mohammadi did
not obtain it.
In claiming, inter alia, Resource failed to pay her overtime wages, in
violation of the FLSA, Mohammadi challenges, inter alia, Resource’s overtime-
prohibition policy, asserting she worked overtime for which she was not
properly compensated. The court awarded her partial summary judgment on,
inter alia, liability, liquidated damages, and the applicable limitations period
(ruled three, instead of two, years applied). (The court awarded summary
judgment for Resource on several points; they are not at issue here.) Following
a bench trial, the court made detailed findings of fact and conclusions of law in
awarding Mohammadi damages.
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II.
At issue are the partial summary judgment granted Mohammadi on
FLSA liability, liquidated damages, and the three-year limitations period, as
well as the damages awarded following the bench trial.
A.
A summary judgment is reviewed de novo, by the same standards as
applied by the district court. E.g., Rogers v. Bromac Title Servs., L.L.C., 755
F.3d 347, 350 (5th Cir. 2014) (citation omitted). Summary judgment is
appropriate “if the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law”. Fed.
R. Civ. P. 56(a). “The evidence should be viewed in the light most favorable to
the non-moving party, and this court should refrain from making credibility
determinations or from weighing the evidence.” Gray v. Powers, 673 F.3d 352,
354 (5th Cir. 2012) (citation and quotation marks omitted). A genuine dispute
of material fact exists “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party”. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986).
Concerning the applicable standard of review, in its post-bench-trial
findings and conclusions on damages, the court referenced its partial summary
judgment on two points: liquidated damages; and the limitations period. For
the former, it stated that Resource failed to present any evidence during the
trial to call into question the summary judgment on that point. For the latter,
it simply noted that, as concluded in the summary judgment, the limitations
period was three years. These comments about the two points do not establish
they were re-tried in the bench trial. Accordingly, the above-discussed de novo
review applies for the partial summary judgment awarded Mohammadi not
only for liability, but also for these two points.
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1.
For the FLSA liability and liquidated-damages issues, the summary
judgment is affirmed essentially for the reasons stated by the district court in
its detailed and well-reasoned opinion. Mohammadi v. Nwabuisi, No. 5:12-
CV-00042-DAE, slip op. at 23-31 (N.D. Tex. 10 May 2013).
2.
For the limitations-period issue, however, and as discussed below,
genuine disputes of material fact preclude summary judgment. The issue
arises out of FLSA claims being subject to a two-year period for ordinary, but
a three-year period for willful, violations. 29 U.S.C. § 255(a). In that regard,
although the employer has the burden of demonstrating good faith and
reasonableness to avoid assessment of liquidated damages, e.g., Mireles v. Frio
Foods, 899 F.2d 1407, 1415 (5th Cir. 1990), the employee has the burden of
demonstrating willfulness for the three-year limitations period to apply, e.g.,
Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir. 1990).
In her deposition, Nwabuisi stated: employees working over 40 hours a
week are entitled to time-and-a-half compensation (she was not asked,
however, when she acquired that knowledge); and Resource would not pay it
without prior approval. Her deposition testimony also reveals her knowledge
of Mohammadi’s working outside of business hours. But, neither knowledge of
the FLSA’s potential applicability nor negligent or unreasonable conduct
necessarily establishes willfulness. E.g., McLaughlin v. Richland Shoe Co.,
486 U.S. 128, 132-33 (1988); Trans World Airlines, Inc. v. Thurston, 469 U.S.
111, 127-28 (1985); Mireles, 899 F.2d at 1416. For example, an employer that
“act[s] without a reasonable basis for believing that it was complying with the
[FLSA]” is merely negligent, McLaughlin, 486 U.S. at 134-35, as is an employer
that, without prior notice of an alleged violation, fails to seek legal advice
regarding its payment practices, e.g, Mireles, 899 F.2d at 1416.
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In contrast, willfulness occurs where the employer “knew or showed
reckless disregard for the matter of whether its conduct was prohibited by the
statute. . . ”. McLaughlin, 486 U.S. at 133. For example, employers act
willfully when they know their pay structures violate the FLSA or ignore
complaints brought to their attention. See, e.g., Ikossi-Anastasiou v. Bd. of
Supervisors of La. State Univ., 579 F.3d 546, 553 & n.24 (5th Cir. 2009) (citing
cases).
For summary-judgment purposes, and consistent with the above-quoted
standard from McLaughlin, the court ruled Resource knew that, or showed
reckless disregard for whether, its policies violated the FLSA. The court
improperly construed against Resource, however, that it was on notice of the
FLSA violation because it had been in business for over 15 years and was
required to comply with federal law. This no more favors a finding of
willfulness than a finding of negligence.
The court also found Resource’s policy against paying overtime
permitted the inference that it violated the FLSA willfully; but, Nwabuisi
testified she believed that, because one of Resource’s clients – the State of
Texas – would not pay overtime for certain nursing services to nursing
companies, Resource was exempt from paying its employees overtime even if
they worked more than 40 hours in a week. Furthermore, although the court
faulted Resource for not consulting an attorney about possible violations, the
record is unclear whether Nwabuisi did so. As noted, failure to consult an
attorney, without prior notice of alleged FLSA violations, does not constitute
willfulness. E.g., Mireles, 899 F.2d at 1416. To the extent an earlier FLSA
action against Resource, relied upon by Mohammadi in seeking summary
judgment, may have put Resource on such notice, that action was settled. In
Mohammadi’s action, Nwabuisi testified in her deposition that the earlier
action was frivolous, and she believed she was not required to pay overtime.
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Viewing the evidence in the requisite light most favorable to Resource, whether
the action put Resource on notice is a genuinely disputed material fact.
Genuine disputes of material fact exist for the issue of willfulness.
Accordingly, whether the three-year-limitations period applies must be
resolved by trial.
B.
Regarding the damages award made following the bench trial,
evidentiary rulings are reviewed for abuse of discretion. E.g., Green v. Adm’rs
of Tulane Educ. Fund, 284 F.3d 642, 660 (5th Cir. 2002), abrogated on other
grounds by Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006). The
court’s factual findings are reviewed for clear error; its legal conclusions, de
novo. E.g., Kona Tech. Corp. v. S. Pac. Transp. Co., 225 F.3d 595, 601 (5th Cir.
2000).
The damages were, inter alia, approximately $38,000 each for unpaid
wages and liquidated damages. But, obviously, had the two-year-limitations
period been applied, the damages would have been less. Essentially for the
reasons stated in its findings and conclusions on damages, the district court
did not commit reversible error in calculating the amount of damages for each
of the three years. Mohammadi v. Nwabuisi, No. 5:12-CV-00042-DAE, slip op.
(N.D. Tex. 2 Jan. 2014). On the other hand, of course, the damages are subject
to modification following trial on the applicable limitations period if the court
concludes the two, instead of the three, year period applies. In other words, if
the former applies, the damages must be reduced accordingly.
III.
For the foregoing reasons, the judgment is AFFIRMED IN PART and
REVERSED IN PART; this matter is REMANDED for further proceedings
consistent with this opinion.
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