A more difficult situation presents itself as regards William Albrecht, who denies that he has previously violated the Act, either individually or as a partner in Ann Brite Fashions. William Albrecht argues that no willfulness may be imputed to him, "even if he was aware of the prior violation by Shirley Ann Albrecht." The court cannot agree with this reasoning. If Mr. Albrecht was in fact aware of the previous violation, then he could indeed fall under the Richland Shoe standard that the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Nothing in the caselaw requires Mr. Albrecht to have been the actual person who had previously violated the Act in order for willfulness to be imputed to him. Under that standard the court finds that Mr. Albrecht was in a position to know about the previous violations, and the his violation of the statute was willful.
The standard for summary judgment applies to each of the defendants equally with regards to the burden of coming forth to refute the assertions of the moving party, in this case the Secretary. While the movant bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact, Rule 56(c) requires the entry of summary judgment "after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Therefore, the party opposing the motion must come forward with "more than a mere scintilla of evidence in its favor" and "cannot simply reassert factually unsupported allegations contained in its pleading." Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989).
Under this standard the defendants appear to fall far short of meeting their burden in order to withstand the motion for summary judgment. Initially it can be said that the Secretary has adequately informed the court of the basis for her motion, and has identified the portions of the record which demonstrate the absence of a genuine issue of material fact. On the other hand, the court cannot discern more than a mere scintilla of evidence which the defendants have produced to combat the assertions in the motion. Defendant Shirley Albrecht has failed to respond to the motion, and defendant William Albrecht basically reasserts factually unsupported allegations that he failed to act "willfully" because he believed that each seamstress was an independent contractor. See Williams, supra at 460. Neither defendant has made a sufficient showing to meet the burden of coming forward under Rule 56(c). Therefore, the court determines that the defendants have violated the provisions of the Fair Labor Standards Act, and that such violations were in fact willful, and according to 29 U.S.C. § 255(a), defendants are liable for payment of three years of backwages from the date of the filing of the Secretary's complaint.
The defendants' lack of diligence in coming forward with sound reasons for failing to comply with the FLSA also works to their detriment when confronted with the issue of liquidated damages as mandated under Section 16(b) of the Act. The issue of liquidated damages was addressed with great particularity by Judge Nygaard in the recent case of Martin v. Cooper Electric Supply Co., 940 F.2d 896 (3d Cir. 1991). When an employer violates the overtime wage provisions of the Act, section 216(b) provides for payment of both unpaid wages and an equivalent amount of mandatory liquidated damages.
Any employer who violates the provisions of . . . section 207 . . . shall be liable to the employee or employees affected in the amount of . . . their unpaid overtime compensation . . . and in an additional equal amount as liquidated damages . . .
29 U.S.C. § 216(b) (emphasis in original) Id. Under the Act, liquidated damages are compensatory, not punitive in nature. Congress provided for liquidated damages to compensate employees for losses they might suffer by reason of not receiving their lawful wage at the time it was due. Id., quoting Marshall v. Brunner, 668 F.2d 748, 753 (3d Cir. 1982).
The court then examines how Congress granted the courts "some discretion" regarding the award of liquidated damages. Section 11 of the Portal-to-Portal Act provides:
In any action . . . to recover . . . unpaid overtime compensation, or liquidated damages under the FLSA . . . of the employer shows . . . 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 FLSA . . . the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in 29 U.S.C. § 216. 29 U.S.C. § 260.
The court then points out that the exception applies "if, and only if, the employer shows that he acted in good faith and that he had reasonable grounds for believing that he was not violating the Act." Id. quoting Brunner. Furthermore, before a district court exercises discretion it "must make findings. . . that the employer acted in good faith and with reasonable grounds." Williams v. Tri-County Growers, Inc., 747 F.2d 121, 129 (3d Cir. 1984) (emphasis added, quoting from Guthrie v. Lady Jane Collieries, Inc., 722 F.2d 1141, 1149 (3d Cir. 1983).
Judge Nygaard then examines the "plain and substantial burden" for the employer to prove that he is entitled to discretionary relief from the FLSA's mandatory liquidated damages provision. He again quotes Tri-County Growers as standing for the proposition that an employer must prove:
that his failure to obey the statute was both in good faith and predicated upon such reasonable grounds that it would be unfair to impose upon him more than a compensatory verdict . . .
The good faith requirement is a subjective one that "requires that the employer have an honest intention to ascertain and follow the dictates of the Act." . . . The reasonableness requirement imposes an objective standard by which to judge the employer's . . . conduct. . . Ignorance alone will not exonerate the employer under the objective reasonableness test . . .
If the employer fails to come forward with plain and substantial evidence to satisfy the good faith and reasonableness requirements, the district court is without discretion to deny liquidated damages. 747 F.2d at 128-29, Id. at 908.
To carry his burden, a defendant employer must show that he took affirmative steps to ascertain the Act's requirements, but nonetheless, violated its provisions. The employee need not establish an intentional violation of the Act to recover liquidated damages. Tri-County Growers, supra at 129. A defendant employer's burden of proof is "a difficult one to meet" Brock v. Wilamowsky, 833 F.2d 11, 19 (2d Cir. 1987). "Double damages are the norm, single damages the exception." Walton V. United Consumers Club, Inc., 786 F.2d 303, 310 (7th Cir. 1986), Martin at 908.
The Martin court describes itself as "quoting at length" from the cases dealing with liquidated damages under FLSA in order to point out that the district court's reasoning could not support its findings of reasonable good faith violations. Using the Tri-County Grower's standard that an employer "must affirmatively establish that he acted in good faith by attempting to ascertain the Act's requirements," the Third circuit found that the company's failure to inquire into the Act's overtime pay requirements precludes a determination that the company's subjective good faith was reasonable. Accordingly, the district court's reasonableness finding was legal error, and it holiding was reversed. Martin at 909. The court concluded that the district court had no discretion to deny liquidated damages because, first and foremost, the company had not demonstrated that it took affirmative steps to ascertain the legality of its pay practices before Labor's investigation. Id.
This court feels that the reasoning of the Third circuit in Martin dictates the result we must reach as to liquidated damages. The court has nothing before it other than William Albrecht's bald assertion "that his violations were committed in good faith." This is exactly the type of assertion good faith that the Martin court went to such painstaking lengths to describe as wholly inadequate. Although Martin describes a defendant employer's burden of proof as a difficult one to meet, defendant William Albrecht has made only the most cursory attempt to meet his burden. Defendant Shirley Ann Albrecht has not even made that perfunctory effort, failing to respond at all to the Secretary's motion. According to Martin, this court has no discretion to deny liquidated damages because their is nothing in the record before the court to demonstrate that the defendants took affirmative steps to ascertain the legality of their pay practices before the Labor Department's investigation. Id. at 909. Accordingly, an award of $ 24,059.82 in liquidated damages, an amount equal to the amount of compensatory damages, will be entered against the defendants.
The compensatory damages were determined by the compliance officer for the Secretary by calculating backwage liability of $ 24,059.82 in minimum wage and overtime pay for the period January, 1989 to September, 1989. He computed backwages by totaling the number of hours each employee worked and multiplying that total by the applicable minimum wage to arrive at the backpay owed. If an employee paid for equipment in a week where such purchase brought her below the minimum wage, the compliance officer added the cost of the equipment to the backwages. In weeks where an employee worked over 40 hours per week, the compliance officer multiplied her regular rate by one half to arrive at backwages due for overtime.
The defendants have not disputed the calculations put forth by the compliance officer to determine amounts owed in minimum wage and backpay. Fed.R.Civ.P. 56(d) declares, "It (the court) shall thereupon make an order specifying the facts that appear without substantial controversy, including the event to which the amount of damages or other relief is not in controversy . . . The court finds the calculations of damages by the plaintiff to be credible, and there appears to be no substantial controversy as to their validity, and as a result the court's order will include the calculations of damages as mandated by Rule 56(d).
The Secretary is also asking the court to enjoin the defendants from violating the FLSA in the future. Defendant William Albrecht in his response avers that he will consent to such an order enjoining future violations of the FLSA. As defendant Shirley Ann Albrecht has failed to respond to the government's motion, the court must assume that she also is willing to be enjoined against committing future violations.
Lastly, the court agrees that Fed.R.Civ.P. 37 requires the defendants to answer plaintiff's First Set of Interrogatories and Request for Documents regarding payroll records for the period subsequent to September, 1989. As a result, the court will grant the plaintiff's motion to compel.
An appropriate order will follow.
ORDER OF COURT
AND NOW, this 30th day of September, 1992,
IT IS HEREBY ORDERED that the motion of the plaintiff, Lynn Martin, Secretary of Labor, United States Department of Labor, for partial summary judgment is GRANTED.
The court finds that defendants, William Albrecht, Individually, and Shirley Ann Albrecht, Individually, both as co-partners t/a Ann Brite Fashions, have violated the Fair Labor Standards Act of 1938 as amended, 29 U.S.C. § 201, et seq.
As a result of said violations, it is hereby determined that the defendants have incurred backwage liability in the amount of $ 24,059.82 in minimum wage and overtime pay for the period January, 1989 to September, 1989.
This court also finds that the defendants are liable for liquidated damages in an amount of $ 24,059.82.
IT IS ORDERED that a judgment in the amount of $ 48,119.64 is entered against defendants, William Albrecht, Individually and Shirley Ann Albrecht, Individually, both as co-partners t/a Ann Brite Fashions. Plaintiff shall distribute the monetary proceeds of the judgment to employees or their estates according to the amounts listed on Schedule A.
IT IS FURTHER ORDERED that defendants shall provide to the plaintiff, on or before October 30, 1992, responses to plaintiff's First Set of Interrogatories for all time periods after September, 1989.
IT IS FURTHER ORDERED that the defendants are enjoined from violating the provisions of Sections 6, 7, 11(c), 11(d), 15(a)(2) and 15(a)(5) of the Fair Labor standards Act of 1938, 29 U.S.C. § 201, et seq.
Glenn E. Mencer
United States District Judge
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