Summary
denying summary judgment when parties disputed the existence of a notice, defendants had submitted a number of affidavits stating that they had posted the required notice, and plaintiffs sought additional discovery on the issue
Summary of this case from Lin v. BrennanOpinion
99 Civ. 5818 (TPG).
December 7, 2000.
OPINION
The court has before it the issue of whether defendants are entitled to summary judgment dismissing the claims of plaintiffs under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. Defendants argue that these claims are barred by the statute of limitations.
This action was commenced on July 21, 1999. At that time thirteen plaintiffs joined in the action. An additional four plaintiffs entered the action on August 31, 1999; two on September 22, 1999; one on November 19, 1999; and ten on August 24, 2000.
The FLSA has a two-year statute of limitations except for willful violations, in which case the period is three years. 29 U.S.C. § 255(a).
Plaintiffs' claims under the FLSA are that they were not paid wages required by the FLSA when they were participating in a program conducted by the Grand Central Partnership. That program was entitled Pathways to Employment ("PTE"). It commenced in 1989 and ended by July 1996. The present record does not contain complete information regarding when each of the plaintiffs worked in the program and when their wage claims under the FLSA are said to have accrued. However, in light of the program's termination by July 1996 and the July 21, 1999 date of the commencement of this action, it is conceded that, in the absence of any tolling, plaintiffs' claims would be barred even by the three-year statute of limitations for willful violations.
The issue that is now raised before the court is whether defendants are precluded from asserting the statute of limitations because of the doctrine of equitable tolling or the doctrine of equitable estoppel. Since defendants are seeking summary judgment, the court must decide whether the present record conclusively demonstrates that equitable tolling and equitable estoppel have no effect.
In discussing these issues, the court will not attempt to give a full description of the facts that are established or of the evidence relating to contested issues of fact. However, a circumstance of great importance must be noted. This case is the sequel to a case asserting the same kind of claims on behalf of 194 persons. Archie v. Grand Central Partnership. Inc. (95 Civ. 0694). This action was commenced in 1995. Judge Sotomayor tried it without a jury, and decided in favor of the plaintiffs in her case in an opinion issued on March 18, 1998. 997 F. Supp. 504 (S.D.N.Y 1998). The judge did not address the statute of limitations defense, ruling that it had been waived. Subsequently, the Archie case was settled. One provision of the settlement was that the court's opinion was vacated. The settlement was approved by an order dated October 5, 2000. The present case was brought by plaintiffs who were not parties to theArchie case.
The court will now discuss the two theories under which plaintiffs in the present case argue that defendants cannot have the benefit of the statute of limitations.
Equitable Tolling
Equitable tolling may be utilized by a court where a defendant's conduct "concealed from the plaintiff the existence of the cause of action." Cerbone v. Int'l Ladies Garment Workers' Union, 768 F.2d 45, 48 (2d Cir. 1985).
Important to the issue of equitable tolling in an FLSA case is a regulation under that statute which provides:
Every employer employing any employees subject to the Act's minimum wage provisions shall post and keep posted a notice explaining the Act, as prescribed by the Wage and Hour Division, in conspicuous places in every establishment where such employees are employed so as to permit them to observe readily a copy.29 C.F.R. § 516.4.
There is authority to the effect that the failure to post the required notice equitably tolls the statute of limitations unless and until an employee has actual notice of his rights. Kamens v. Summit Stainless. Inc., 586 F. Supp. 324, 328 (E.D. Pa. 1984).
Defendants have submitted a number of affidavits stating that Grand Central Partnership posted the required notice at all relevant times. Plaintiffs' counsel has submitted an affidavit to the effect that there was a failure to post the notice properly, based on information from employees. Plaintiffs' counsel asserts that plaintiffs have not had discovery on this issue and that they are entitled to such discovery before any final decision is made on the statute of limitations issue, including the equitable tolling issue.
There is also the issue of when plaintiffs became aware of their rights, apart from the matter of the notice. For one thing, it would seem clear that anyone who gained knowledge of the features of the Archie case would thereby become aware of his rights under the FLSA. It would seem likely that the parties would wish to obtain evidence not now in the record on the issue of knowledge.
In view of these circumstances, the court rules that the portion of the summary judgment motion relating to equitable tolling is denied, with leave to renew upon a fuller record following discovery relating to this issue.
Equitable Estoppel
Equitable estoppel may toll a statute of limitations where plaintiff knew of the existence of his cause of action, but a defendant's misconduct caused plaintiff to delay in bringing suit. Buttry v. General Signal Corp., 68 F.3d 1488 (2d Cir. 1995). However, equitable estoppel does not extend the limitations period indefinitely. A plaintiff "must show that he brought his action within a reasonable time after the facts giving rise to the estoppel have ceased to be operational." Id. at 1494.
Plaintiffs allege that there was indeed misconduct by defendants which caused plaintiffs to delay in bringing suit. It is alleged that defendants promised certain types of enhanced training and employment which lulled some plaintiffs into believing that they did not need to assert any rights under the FLSA, which promises were subsequently broken. It is also alleged that defendants threatened to fire certain employees if they participated in legal action against defendants.
The problem is that the allegations of broken promises and threats to fire all relate to persons who were participants in the PTE program prior to July 1996 and to misconduct allegedly occurring during the time of that program and not afterwards.
Thus there was at least a full three years for plaintiffs (depending on their time of program participation) in which they were not subjected to any of the alleged misconduct. There is no reasonable basis for asserting equitable estoppel as to any period of time after July 1996. This is shown conclusively, beyond any triable issue of fact.
Defendants are entitled to summary judgment striking plaintiffs' argument under the doctrine of equitable estoppel.
Conclusion
Defendants' motion for summary judgment on the statute of limitations issue, as applied to the Fair Labor Standards Act claims of plaintiffs, is denied in part and granted in part. The court rules that such claims are barred except insofar as there is equitable tolling or equitable estoppel. In response to defendants' arguments about the latter two theories, the court denies summary judgment striking the equitable tolling argument, with leave to renew upon a fuller record following discovery on this issue. The court grants summary judgment striking plaintiffs' equitable estoppel claim.