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Hugler v. We stside Drywall, Inc.

United States District Court, D. Oregon

March 14, 2017

EDWARD C. HUGLER, Acting Secretary of Labor, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
v.
WE STSIDE DRYWALL, INC., a corporation; and MOHSEN SALEM, an individual, Defendant.

          JANET M. HEROLD Regional Solicitor CHARLES C. SONG Associate Regional Solicitor DONNA F. BOND United States Department of Labor Office of the Solicitor Attorneys for Plaintiff

          KYLE D. SCIUCHETTI LAURA CALDERA TAYLOR Bullivant Houser Bailey, Attorneys for Defendants

          OPINION AND ORDER

          ANNA J. BROWN, United States District Judge

         This matter comes before the Court on the Motion (#42) for Summary Judgment filed by Defendants Westside Drywall, Inc., and Mohsen Salem[1] on December 1, 2016.

         For the reasons that follow, the Court GRANTS in part and DENIES in part Defendants' Motion.

         BACKGROUND

         The following facts are taken from the Joint Statement of Agreed Upon Facts (#36}, the Complaint (#1) filed by the Department of Labor (DOL), and the parties' materials submitted in support of this Motion and are undisputed unless otherwise noted.

         Westside is an Oregon corporation that performs drywall and insulation work and has its principal place of business in Hubbard, Oregon. Salem is the President and Chief Executive Officer of Westside. Westside employs piece-rate, hourly, and salaried employees.

         In January 2012 DOL investigated Westside for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201, et seq. The investigation focused on Westside's failure to maintain accurate employment records and to pay overtime compensation to piece-rate employees. DOL conducted surveillance of Westside's headquarters, subpoenaed Westside's employment records, and took statements from employees. The investigation continued through September 2015.

         On December 28, 2016, DOL filed a Complaint in this Court against Defendants. DOL alleges Defendants willfully and repeatedly violated and continue to violate §§ 7 and 15(a)(2) of the FLSA, 29 U.S.C. §§ 207 and 215(a)(2), by failing to pay employees overtime compensation when employees work more than forty hours a week. DOL also alleges Defendants willfully and repeatedly violated and continue to violate §§ 11 and 15(a) (5) of the FLSA, 29 U.S.C. §§ 211 and 215(a)(5), by failing to maintain, to keep, to make available, and to preserve records of employees' hours and wages. DOL seeks back wages on behalf of 100 identified employees and liquidated damages equal to the amount of back wages owed. Although DOL does not state the exact amount of damages sought, DOL has indicated the amount in controversy is "over $800, 000." Joint Sum. of Disputed Disc. Issues (#41) at 34.

         On December 1, 2016, Defendants filed a Motion for Summary Judgment as to all of DOL's claims against them.

         STANDARDS

         Summary judgment is appropriate when '"there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Washington Mut. Ins. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). See also Fed. R. Civ. P. 56(a). The moving party must show the absence of a dispute as to a material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir. 2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine dispute as to a material fact for trial. Id. "This burden is not a light one. . . . The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citation omitted).

         A dispute as to a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002} (quoting Anderson v. Liberty Lobby, Inc., 411 U.S. 242, 248 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010). "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir. 2004)(citation omitted). A "mere disagreement or bald assertion" that a genuine dispute as to a material fact exists "will not preclude the grant of summary judgment." Deering v. Lassen Cmty. Coll. Dist., No. 2-.07-CV-1521-JAM-DAD, 2011 WL 202797, at *2 (E.D. Cal., Jan. 20, 2011) (citing Harper v. Wallingford, 877 F.2d 728, 7 31 (9th Cir. 1989)). When the nonmoving party's claims are factually implausible, that party must "come forward with more persuasive evidence than otherwise would be necessary." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009)(citation omitted).

         The substantive law governing a claim or a defense determines whether a fact is material. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006). If the resolution of a factual dispute would not affect the outcome of the claim, the court may grant summary judgment. Id.

         DISCUSSION

         Defendants contend they are entitled to judgment as a matter of law inasmuch as DOL cannot meet its burden to show that Defendants violated the FLSA by failing to pay their employees overtime wages and to maintain employment records. In the alternative, Defendants contend (1) DOL is limited to recovery of back wages for either a two-year or three-year statute-of-limitations period; (2) the back-wage computation for each employee should be reduced by the 10 hours DOL attributed to unreported travel on the ground that there was not any unreported, compensable travel time; and (3} Defendant Salem is not individually liable under the FLSA as a matter of law.

         I. A genuine dispute of material fact exists as to whether Defendants violated the FLSA.

         Defendants argue DOL cannot meet its burden to prove that Defendants violated the FLSA. In any event, Defendants contend there is not a genuine dispute of material fact, and, therefore, they are entitled to judgment as a matter of law as to this issue.

         A. The FLSA

         Section 7 of the FLSA, 29 U.S.C. § 207(a), sets out the obligation of an employer regarding the maximum hours an employee is allowed to work and the compensation required for overtime:

(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

Section 11 of the FLSA, 29 U.S.C.§ 211(c), sets out the duty of an employer to maintain employee work records:

Every employer subject to any provision of this chapter or of any order issued under this chapter shall make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records for such periods of time, and shall make such reports therefrom to the Administrator as he shall prescribe by regulation or order as necessary or appropriate for the enforcement of the provisions of this chapter or the regulations or orders thereunder.

         B. DOL's failure to ...


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