Free Brief - District Court of Colorado - Colorado

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 1 of 10

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-CV-2474-WYD-PAC CHARLOTTE SCHNEIDER and DEAN WYMER, Plaintiffs, v. LANDVEST CORPORATION, a Kansas corporation, And DAVID MASON, individually Defendants. _____________________________________________________________________ Plaintiffs' Brief Re: Calculation of Damages

Plaintiffs' counsel believes some confusion may have been created by her failure to submit a revised proposed Order for Entry of Judgment when the revised proposed Findings of Fact and Conclusions of Law were submitted on October 24, 2005. The Plaintiffs' proposed Order for Entry of Judgment which was filed before trial does not track Findings of Fact and Conclusions of Law which were submitted on October 24, 2005. Plaintiffs now submit a proposed "Order for Entry of Judgment" which tracks the revised proposed Findings of Fact and Conclusions of Law which were submitted on October 24, 2005 after the trial concluded. In addition, Plaintiffs submit the following in response to the Court's Order of December 27, 2005:

1

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 2 of 10

Regular Rate/ Overtime Rate The regular rate must be calculated before an overtime rate can be calculated. Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 422 (1945). I. Cash Remuneration Ordinarily the regular rate is calculated by dividing the amount paid per week by the number of hours in the normal, non overtime work week. 29 C.F.R. § 778.108; Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S. 419, 422 (1945). However, when a fixed salary is paid for a fluctuating work week there must be a "clear mutual understanding of the parties that the fixed salary is compensation... for the hours worked each work week." 29 C.F.R. § 778.114. For the reasons explained in Plaintiffs' proposed Findings of Fact paragraphs 19, 23, 34, 36, 37, 47-51, 63-66 there was no clear mutual understanding between the parties in this case as to which hours were paid by the salary. Under these circumstances 29 C.F.R. § 778.113 applies and the Court is required to determine the number of hours "the salary is (was) intended to compensate." 29 C.F.R. § 778.113(a). For the reasons explained in Plaintiffs' proposed Findings of Fact paragraphs 19, 23, 34, 36, 37, 47-51, 63-66 the salary was intended to compensate for 22 hours per week. The bi-weekly salary of the Plaintiffs was $415.39, Plaintiffs' Exhibit 18-000138-18-000139. The weekly salary was $207.70 ($415.39/2 = $207.70). The weekly salary, $207.70, divided by 22 hours equals $9.44. Plaintiffs' regular rate at Landvest was therefore $9.44 per hour (cash value before non cash remuneration is considered).

2

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 3 of 10

II.

Non cash Remuneration As originally enacted the federal Fair Labor Standards Act did not define the

"regular rate." In 1949 the Act was amended to define "the regular rate" as "all remuneration for employment paid to, or on behalf of, the employee" excluding seven specific types of payments. 29 U.S.C.A. § 207 (e) 1-7. Lodging is not excluded by the statute and its value must therefore be included in the calculation of the regular hourly rate. The reasonable cost of lodging must be added to the cash wages before the regular rate is calculated. 29 C.F.R. § 778.116. In their proposed Findings of Fact and Conclusions of Law Plaintiffs' valued the lodging at $1.08 per hour for the following reasons: Defendant valued the apartment at $4,500.00. See MEA, Plaintiffs' Exhibit 12. $4,500.00 divided by 2 employees sharing one apartment is $2,250.00, divided by 52 weeks is $43.27 per week, divided by 40 hours per week is $1.08 per hour. For purposes of valuing lodging, Plaintiffs used non overtime hours actually worked (40 per week) rather that the number of hours the salary was intended to compensate (22 hours per week). Because there is no specific regulation directing whether "non overtime hours actually worked" should be used to calculate the value of lodging or whether the "number of hours the salary was intended to compensate" should be used, Plaintiffs selected "non overtime hours actually worked" (40 hours) which yields a lower hourly value for lodging and eliminates an appeal issue should the Plaintiffs prevail. The overtime rate was calculated by adding $9.44 + $1.08 = $10.52 X 1.5 = $15.78.

3

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 4 of 10

Exact Number of Hours and Weeks for which Plaintiffs seek Overtime Compensation Schneider's Claim Plaintiff Schneider has requested damages based on her testimony of her regular working office hours and work performed outside working hours on a regular basis as explained in proposed Findings of Fact paragraph # 152. She has not claimed documented overtime which was recorded and denied by Landvest (24 hours denied according to her time sheets, Defendant's Exhibit A1). Because it was not possible to determine on a week-by -week basis whether the hours recorded and not paid are the same as the hours she claims below based on her testimony of work performed outside of office hours and in order to avoid duplication, those 24 hours are not claimed. According to the schedule below she worked 18 unpaid non overtime hours during 52 work weeks. She claims unpaid non overtime hours for 50 work weeks (not 52) so as to not overstate her claim. Plaintiff Wymer also bases his claim on his testimony of work regularly performed during office hours as well as on Sundays, on his days off and after work on week days. According to the schedule below he worked 18 unpaid non overtime hours during 52 work weeks. He claims unpaid non overtime hours for 50 work weeks (not 52) so as to not overstate his claim. Plaintiffs seek back wages and overtime compensation for the following weeks:

4

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 5 of 10

Week#

Date (week beginning)

Uncompensated Nonovertime hours@ $9.44 Schneider/Wymer

Uncompensated Overtime hours@ $15.78/hr Schneider 0 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ Wymer 0 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Week 17 Week 18

April 7, 2002 April 14, 2002 April 21, 2002 April 28, 2002 May 5, 2002 May 12, 2002 May 19, 2002 May 26, 2002 June 2, 2002 June 9, 2002 June 16, 2002 June 23, 2002 June 30, 2002 July 7, 2002 July 14, 2002 July 21, 2002 July 28, 2002 August 4, 2002

18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 5

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 6 of 10

Week 19 Week 20 Week 21 Week 22 Week 23 Week 24 Week 25 Week 26 Week 27 Week 28 Week 29 Week 30 Week 31 Week 32 Week 33 Week 34 Week 35 Week 36 Week 37 Week 38 Week 39

August 11, 2002 August 18, 2002 August 25, 2002 September 1, 2002 September 8, 2002 September 15, 2002 September 22, 2002 September 29, 2002 October 6, 2002 October 13, 2002 October 20, 2002 October 27, 2002 November 3, 2002 November 10, 2002 November 17, 2002 November 24, 2002 December 1, 2002 December 8, 2002 December 15, 2002 December 22, 2002 December 29, 2002 6

18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18 18

5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 5½ 9½ 9½ 9½ 9½ 9½ 9½ 9½ 9½

4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 7 of 10

Week 40 Week 41 Week 42 Week 43 Week 44 Week 45 Week 46 Week 47 Week 48 Week 49 Week 50 Week 51 Week 52

January 5, 2003 January 12, 2003 January 19, 2003 January 26, 2003 February 2, 2003 February 9, 2003 February 16, 2003 February 23, 2003 March 2, 2003 March 9, 2003 March 16, 2003 March 23, 2003 March 30, 2003

18 18 18 18 18 18 18 18 18 18 18 18 18

9½ 9½ 9½ 9½ 9½ 9½ 9½ 9½ 9½ 9½ 9½ 5½ 0

4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 4½ 0

The foregoing schedule documents 32 weeks for which Plaintiff Schneider claims 5 ½ hours of overtime per week and 18 weeks for which she claims 9 ½ hours of overtime per week. She testified that her facility was open all but one Sunday (date unknown) between November 10th and March 23, 2003. For that reason, although 19 weeks are identified above as weeks when she worked 9 ½ hours of overtime only 18 weeks are claimed. For the reasons explained more fully in the Plaintiffs' Findings of Fact paragraph # 152 she claims that for 32 weeks she should have been paid for 5 ½ hours of overtime per week (32 weeks X 5 ½ hours = 176 hours X $15.78 = $2,777.28) and that for 18 weeks she should have been 7

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 8 of 10

paid for 9 ½ hours of overtime per week (18 weeks X 9 ½ hours = 171 hours X $15.78 = $2,698.38). Total overtime claimed $5,475.66. Total non overtime claimed 18 hours X 50 weeks X $9.44 = $8,496.00. Dean Wymer Dean Wymer's testimony was that the number of hours he worked per week did not change when the facility was opened on Sundays. His work routine remained the same whether the facility was opened on Sunday or not. His claim is that he should have been paid for 4 ½ hours of overtime for 50 weeks. (4 ½ hours X 50 weeks = 225 hours X $15.78 = $3,550.50). Total overtime claimed $3,550.50. Total non overtime claimed 18 hours X 50 weeks X $9.44 = $8,496.00. Liquidated Damages Plaintiffs should be awarded liquidated damages in the amount of 100% of the unpaid overtime compensation. Section 216(b) of Fair Labor Standards Act provides that an employer who fails to pay overtime compensation as required by the statute "shall be liable" to the employees concerned not only for their unpaid overtime wages, but also for "an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The provision for an award of liquidated damages in cases under the federal Fair Labor Standards Act is mandatory unless the District Court finds that the employer acted reasonably and in good faith, as provided in 29 U.S.C. § 260, see, e.g. Crenshaw v. Quarles Drilling Corporation, 798 F.2d 1345, 1351 (10th Cir. 1986) (case involving overtime provision of FLSA); Doty v. Elias, 733 F.2d 720, 725-26 (10th Cir. 1984) (case involving minimum wage provision of FLSA). In

8

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 9 of 10

this case Defendants neither pled nor proved a good faith defense. In any event, in order to successfully assert a defense under 29 U.S.C. § 260 , "the employer must show (1) subjective good faith and (2) objectively reasonable grounds for believing that he was acting in compliance with the provisions of the FLSA." Soler v. G & U, Inc., 628 F.Supp. 720, 724 (S.D.N.Y. 1986); 29 C.F.R. § 790.22(b). The employer bears the burden of establishing both of these elements to the satisfaction of a reasonable fact-finder. Brock v. Wilamowsky, 833 F.2d 20 (2nd Cir. 1987). If the employer fails to make the required showing, the court must award the full amount of liquidated damages provided by statute. Id. at 19. Good faith requires the employer demonstrate an 'honest intention to ascertain what [FLSA] requires and to act in accordance with it." Kinney v. District of Columbia, 301 U.S. App. D.C.279, 994 F.2d 6, 12 (D.C. Cir. 1993). The provisions which were violated in this case, beginning with the duty to keep accurate records of hours worked and to keep a record of regular rates of pay, are established by regulation. Had these elemental provisions been obeyed there would have been no need for the instant litigation. Under these circumstances the §260 defense does not apply because Defendants cannot show that they made an honest attempt to ascertain the law and act in accordance with it. Because the statute, 29 U.S.C. § 216(b), refers specifically to a award of "unpaid overtime compensation" and "an additional equal amount as liquidated damages." Plaintiffs seek here an award of liquidated damages equal to the amount of unpaid overtime compensation only. In other words, they do not seek liquidated damages on the $8,496.00 in

9

Case 1:03-cv-02474-WYD-PAC

Document 140

Filed 12/29/2005

Page 10 of 10

unpaid non overtime wages. Accordingly, Plaintiff Schneider should be awarded $5,475.66 in liquidated damages (the amount of her unpaid overtime wages) and Plaintiff Wymer should be awarded $3,550.50 in liquidated damages (the amount of his unpaid overtime wages). Respectfully submitted, this 29th day of December, 2005.

s/ Donna Dell"Olio Donna Dell'Olio, #10887 Ian D. Kalmanowitz, #32379 Cornish & Dell'Olio 431 N. Cascade Avenue, Suite 1 Colorado Springs, CO 80903 Telephone: (719) 475-1204 FAX: (719) 475-1264 E-mail: [email protected] Attorneys for Plaintiffs

CERTIFICATE OF SERVICE I hereby certify that on this 29th day of December, 2005, I caused a true and correct copy of the above and foregoing PLAINTIFFS' BRIEF RE: CALCULATION OF DAMAGES was served, via the United States District Court electronic filing system and/or mailed via U.S. Mail, upon the following: Alan Rupe Stacia G. Boden Kutak Rock 8301 East 21st Street North, Suite 370 Wichita, KS 67206-2295 Heather Davis Kutak Rock 1801California Street, Suite 3100 Denver, CO 80202

s/Esther Kumma Abramson Esther Kumma Abramson 10