Thomas E. Perez v. Nuzon corporation et al

REPLY NOTICE OF MOTION AND MOTION for Partial Summary Judgment as to Fourth Claim for Relief 202

C.D. Cal.February 4, 2019

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT Jehan N. Jayakumar, State Bar No. 224148 jehan@cjattorneys.com Andrew E. Saxon, State Bar No. 227344 andrew@cjattorneys.com CARLSON & JAYAKUMAR LLP 2424 S. E. Bristol, Suite 300 Newport Beach, California 92660 Telephone: (949) 222-2008 Facsimile: (949) 222-2012 Attorneys for Defendants Nuzon Corporation, Margaret’s Villa, Inc., Geraldo Ortiz, Lilibeth Ortiz, Fil-Lyd Investments, LLC, and Juanjo Investments, LLC UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff, v. NUZON CORPORATION et al. Defendants. Case No. 8:16-CV-00363-CJC-KES Hon. Cormac J. Carney, Courtroom 7C DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT Hearing Date: February 25, 2019 Time: 1:30 p.m. Court: 7C Judge: Hon. Cormac J. Carney Trial: April 16, 2019 Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 1 of 10 Page ID #:6344 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT I. SUMMARY OF REPLY The facts as depicted by the Department of Labor (“DOL”) do not support the kind of “extreme coercion” that the DOL contends exist here to justify what no court has yet done—delineate the bounds of liability for violating the Fair Labor Standards Act (“FLSA”) on a dispositive motion in connection with an employer’s interviewing unrepresented witnesses and seeking declarations to defend against an enforcement action. While it is not clear what the DOL means by “extreme coercion,” it is clear what it should not mean. “Extreme coercion” should not turn on the exact words someone used when seeking an interview and whether the exact word “voluntary” was explicitly used or not. “Extreme coercion” should not turn on whether the employer offered the employee a ride to the interview. “Extreme coercion” does not hinge on the lawyer-drafted “feelings” set forth in the DOL’s self-serving declarations of unknown employees— declarations which, themselves, could have been obtained under “coercive” circumstances. “Extreme coercion” should not turn on which “basic facts” or how much of the DOL’s position the employer’s lawyers disclose in an interview setting. This case does not come close to “extreme coercion.” Nor does this case come close to the kinds of facts other cases found to justify – not the far more stringent burden of proving FLSA liability – but lesser orders, such as preliminary relief or restrictive notices. Yet here we are, sifting through the DOL’s brief to look for all the purported “requirements” alleged as hidden mandates within the FLSA (we count fifteen requirements, see section II(A), infra). By doing so, the DOL violates separation of powers principles by choosing court proceedings to announce new rules rather than abide by rule-making requirements. The FLSA does not impose requirements that run contrary to the procedures authorized under the Federal Rules of Civil Procedure and Evidence. Instead, the FLSA precludes employers from adverse actions that would “dissuade[] a reasonable worker from making or supporting” a claim of the FLSA violation. Burlington N. & Santa Fe Ry Co. v. White, 548 U.S. 53 (2006). The Court should not let the DOL dictate court proceedings by imposing the DOL’s ad hoc set of fifteen manufactured Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 2 of 10 Page ID #:6345 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT “requirements.” Nor should the Court do so because the DOL persuaded another two other district courts on preliminary injunction motions—particularly where one of which is currently under review. Instead, the Court should apply binding precedent of what retaliation means under the FLSA. The Court should apply the “reasonable employee” standard, and here that describes an employee who has been in contact with DOL representatives for years, whose job and residence are more protected than most by virtue of the extreme scrutiny under which the Defendants have operated for years, and who has a hotline to DOL investigators. Any concerned employed asked to attend an interview certainly had opportunity to contact the DOL. Apparently, at least three did so. The “reasonable employee” is not going to suddenly retract his or willingness to continue to cooperate with the DOL simply because he or she was purportedly “forced” to meet with an attorney at a coffee shop and review a draft declaration to edit and sign, if willing. Many did not. In sum, the DOL wants an uneven playing field to disadvantage employers from defending against enforcement actions and to prevent lawyers from zealously advocating for their clients. The DOL is surely capable of resuscitating any witnesses impeached by a prior statement. Defendants request that the Court allow the Federal Rules of Civil Procedure and Evidence to govern the use and admissibility of impeachment evidence at trial. The FLSA’s anti-retaliation provision is ill-suited to notify an employer of the bounds of unrepresented witness interviewing. The Court need not hold a trial on these issues. II. ARGUMENT A. The Court Should Not Apply the DOL’s Made Up Set of Fifteen Requirements The DOL dances around the fact that it cannot offer a single case that applies an FLSA retaliation theory to the instant facts on a dispositive motion or trial. What is settled, and what the parties agree upon, is the general meaning of the anti-retaliation provision of the FLSA, namely, to establish an adverse action, the court must find that Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 3 of 10 Page ID #:6346 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT the employer’s actions would have “dissuaded a reasonable worker from making or supporting” a claim of the FLSA violation. Burlington N. & Santa Fe Ry Co. v. White, 548 U.S. 53 (2006). Without guiding precedent, Defendants at least offered a set of reasonable principles where courts have addressed these types of issues (preliminary injunction cases and restrictive notices in class action settings)—none involving actual determinations of liability for breaking federal law. See Defs’ Memorandum of Points and Authorities in Support of Motion [Dkt. 202-1], at 13:22 to 15:3. There, Defendants recited authority confirming that (i) there is nothing inherently improper about an employer defending its case by interviewing unrepresented employees; (ii) the inherently coercive setting of employer-employee communication is insufficient to establish coercion; (iii) employers must not use false pretenses to actively mislead employees; and (iv) courts demand more fulsome disclosures that lead to actual waiver of rights such as release agreements or class opt-outs. Id. The DOL ignores nearly all the authority cited in support of these principles. Instead, the DOL relies almost exclusively on two district court decisions on preliminary injunctions, one currently under review by the Ninth Circuit, to suggest that precedent unambiguously confirms the meaning of “coercion” for purposes of FLSA liability in this context. (Opp. at 13:22-28, citing Acosta v. Austin Elec. Servs. LLC, 322 F. Supp. 3d 951, 958 (D. Ariz. 2018) and Acosta v. Sw. Fuel Mgmt., Inc., 2018 WL 2207997, at *4 (C.D. Cal. Feb. 2, 2018). The DOL does not tell the Court that the Southwest Fuel Management, Inc. was, first, a TRO decision that was later vacated with no dispositive motion addressing FLSA liability. The DOL does not tell the Court that the Austin Elec. Services LLC case is a preliminary injunction order currently under review, and that even there, the district court relied chiefly on, of course, Southwest Fuel Management, Inc. Austin Elec. Servs., 322 F. Supp. 3d at 957. With no binding precedent to cite, the DOL simply manufacturers the following set of fifteen requirements that do not exist in any statute or regulation. According to the DOL’s, Defendants were required by law to comply with the following: Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 4 of 10 Page ID #:6347 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT (1) disclose the “basis facts about the case” (Opp. at 6:15-16); (2) explain that the purpose of the interview was “to draft declarations against workers’ interests” (Opp. at 5:7-8); (3) explain all of the employees’ “rights” (Opp. at 6:15-16, 7:8-9); (4) explain that the DOL previously “found” that the employee was owed back wages, what a DOL “finding” means, and in what amounts (Opp. at 6:18- 20); (5) explain that Defendants and their attorneys have interests “adverse” to the employees and explain what that means (Opp. at 6:21-22), (6) explain that merely participating in the interviews “might have an adverse effect on the employee’s recovery of back wages” (Opp. at 6:23-24); (7) explain that signing a declaration “would likely reduce the amount of back wages” employees would recover (Opp. at 6:25-28); (8) explain that the employees have a right to consult with an attorney (Opp. at 7:1-2); (9) explain that the employees have a right to consult with the DOL (Opp. at 5:10-11, 7:1-2); (10) explain that the employees have a right to have either an attorney or the DOL present at any interview with an employer’s representative (Opp. at 5:9-11); (11) explain any prior admissions made in the case (Opp. at 17:22-25); (12) provide employees with the ability to “anonymously opt-out” (Opp. at 16:16-18); (13) not drive employees to the interview (even if the employee asks for a ride) (Opp. at 17:3-6); (14) make available the signed declaration to the employee by a physical copy, rather than a scanned version, which the DOL contends is insufficient as a matter of law (Opp. at 18:5-8); and /// Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 5 of 10 Page ID #:6348 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT (15) the employer must provide a written consent form before interviewing (Opp. at 7:8-9). A federal agency cannot simply announce new legal requirements through positions taken in judicial proceedings. Doing so violates separation of powers principles and due process rights of employers. See Union Pac. R. Co. v. Surface Transp. Bd., 863 F.3d 816, 822 (8th Cir. 2017) (agency action in excess of its statutory authority “implicates core notions of the separation of powers”); Util. Reg. Grp. v. EPA, 134 S. Ct. 2427, 2445-46 (2014) (“reaffirm[ing] the core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate”). And of course, it is unclear whether compliance with these purported requirements would be enough to appease the DOL. The Court, here, should not be persuaded by the DOL’s erroneous contention that the FLSA imposes a set of fifteen or more hoops an employer must jump through before evening speaking with unrepresented witnesses. The Court should instead focus on the basic principles set forth in the Motion and essentially unanswered by the DOL. As argued in the Motion, the Defendants complied with the fundamental principles. B. The Inadmissible, Unsigned “Worker Declarations” Do Not Create Disputed Material Facts as to the Issue before the Court – Whether a Reasonable Employee Would Feel Dissuaded from Cooperating with the Government We are years into the DOL’s investigation and this lawsuit. Its investigators have interviewed Defendants’ employees countless times. Yet now, the DOL here attempts to defeat summary judgment by submitting three purported “worker declarations” – from whom Defendants do not know, nor can Defendants tell if these declarations are even signed. Yet these declarations are supposed to create disputed facts to prevent the Court from adjudicating a legal question based upon an objective, “reasonable employee” standard. The declarations are inadmissible in their entirety and should be disregarded, as argued in the accompanying Objections. Further, the Defendants request that the Court Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 6 of 10 Page ID #:6349 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT allow Defendants opportunity to cross-examine the workers who signed these declarations. See accompanying Notice of Request to Cross-Examine Workers, Opposition to Application for Leave to File in Camera, and Declaration of Andrew E. Saxon. The Court can properly apply the legal standard to the facts presented here. Three unknown employees who supposedly declared that they “felt” that the interviews and declarations were mandatory do not answer the question of whether it was reasonable for an employee to feel dissuaded from continuing to cooperate with the DOL when Defendants’ employees have been cooperating with the DOL from the very beginning. What does the DOL actually have? A few employees “felt” that they were required to meet with attorneys, and “felt” that they could not decline to sign a declaration. But indisputably some employees did decline to sign them, and some did make changes, without any “retaliation” for any conduct in connection with the request for interviews or declarations. Moreover, Defendants, too, can argue that it is certainly plausible that the DOL witnesses were themselves coerced by the DOL into signing these declarations. After all, the DOL investigator admitted that the employees were nervous when she spoke with them. (See Salazar Depo Testimony 75:24-76:2, Exhibit A to the Supplemental Declaration of Jehan Jayakumar in Support of Motion (“Supp. Jayakumar Decl.”) at ¶ 2.) That same investigator, Sylvia Salazar, is the investigator whose declaration led this Court to allow the DOL leave to file this additional claim based on a declaration that she could not even authenticate (id. at 16:20-17:8, 43:5-15), where apparently the DOL lawyers slapped her e-signature on the declaration. The DOL enjoys apparent immunity from its own improper litigation tactics while seeking to impose federal liability over an employer’s trial tactics. In sum, the Court should not allow minimal disputes over admissibility of impeachment evidence to deprive this court from taking opportunity to actually reduce a few of these tangential issues at trial. Trial has enough issues to deal with, and the DOL will still have opportunity to tell its alleged retaliation story based on the alleged eviction Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 7 of 10 Page ID #:6350 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT efforts. Marching lawyers and numerous employees up to the stand over short interviews at mostly coffee shops is unnecessary given the marginal showing of “coercion” that the DOL makes. C. The Declarations Are Not False The DOL continues its smear-campaign against the reputation of Defendants’ attorneys with allegations of securing false declarations. The DOL’s arguments are not persuasive, first because the employee’s declaration reflects the employee’s own recollections and beliefs, often times in support of conclusions that the DOL is more than capable of attacking at trial with objections, and second, the DOL offers no admissible proof to support its abusive arguments. Instead, the DOL relies only on the inadmissible worker declarations and a few excerpts of deposition testimony taken out of context and mischaracterized to support the four alleged falsities in the declarations. The Court should reject the misuse of evidence. First, the DOL argues that statements in the declarations that, prior to 2014, the handwritten time sheets properly reflected hours worked, were false. (Opp. at 8:7-19). The DOL cites to deposition testimony of Mrs. Ortiz and Mr. Ortiz, supposedly admitting that the time records did not reflect hours worked. But Mrs. Ortiz testified that she did know what the time records reflect and could not recall. (Nuzon Depo, Vol III, at 232:4- 7; 232:20-233:3 [Dkt. 205-16].) Mr. Ortiz testified that it was employees, not him, who complete the forms, and his testimony regarding any alterations to the records lacked foundation because he testified that employees fill out the forms (Margaret’s Villa Depo, Vol II, at 219:1-4 [Dkt. 205-14]) despite his belief that the employees were, themselves, including inaccurate information. Second, the DOL argues that statements in a declaration that the employee was paid for overtime properly after the introduction of the time clock system were also false. (Opp. at 9:1-13.) The DOL cites to one of the inadmissible worker declarations, which should be disregarded. Defs’ Objections Nos. 1-4. The DOL also relies on testimony of Mr. Ortiz supposedly to the effect that other persons “altered the timecards,” but he has Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 8 of 10 Page ID #:6351 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT no foundation to testify as to what other persons did to allegedly “alter” the clock records. Defs’ Objection No. 65. And, in fact, Mrs. Ortiz also testified that she corrected time records based on upon discussions with employees: “What kind of corrections would be made to time cards? A. Sometimes they did not clock out for their lunch break. So I will ask them “Did you take a lunch break?” So if they said yes, that we will have to put that entry.” (Nuzon Corp. Depo. Vol III 159:9-160:7, Exhibit B to Supp. Jayakumar Decl., ¶ 3.) Third, the DOL points to supposedly false statements in the declarations that the declarant was paid correctly. (Opp. at 9:13-16.) The DOL argues that such statements are contradicted by certain responses to request for admissions, but in those response, Defendant was asked only if “some” employees received a salary and if “some” employees received conceded that “some” employees received salary and “some” employees received incorrect overtime pay (see Song Decl., Ex U, at RFA responses 7, 20). Defendant admitted those requests, but the RFA response does not identify any specific employees, nor does the DOL’s redacted, unsigned “Worker Declarations” which employees are supporting such charges. Fourth, the DOL argues that a declarant’s statement that he or she had “always been paid for all of the hours as reflected on my timecards” was also false. (Opp. at 10:6-7.) But the only citation is to Mrs. Ortiz’ testimony whose testimony lacks foundation, and Mrs. Ortiz testified that she would increase the number of hours submitted to payroll because staff often fail to include time that she knows they worked. (Nuzon Depo, Vol. III, 185:23-186:7 [Dkt. 205-16].) /// /// /// /// /// /// Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 9 of 10 Page ID #:6352 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 DEFENDANTS’ REPLY TO OPPOSITION TO MOTION FOR PARTIAL SUMMARY JUDGMENT III. CONCLUSION As set forth in the Motion and above, the DOL cannot meet its burden in proving that a reasonable worker would feel dissuaded from cooperating with the DOL. Defendants request that the Court grant this motion. DATED: February 4, 2019 CARLSON & JAYAKUMAR LLP By: /s/ Andrew E. Saxon Jehan Jayakumar Andrew E. Saxon Attorneys for Defendants Nuzon Corporation, Margaret’s Villa, Inc., Geraldo Ortiz, Lilibeth Ortiz, Fil-Lyd Investments, LLC, and Juanjo Investments, LLC Case 8:16-cv-00363-CJC-KES Document 209 Filed 02/04/19 Page 10 of 10 Page ID #:6353