Opinion
Civil Action No: 01-2434, Section: "R"(1)
January 29, 2002
ORDER AND REASONS
Before the Court is defendant's motion for summary judgment. For the following reasons, the Court grants the motion.
I. Background
Plaintiff Diedra Gettridge worked for the Holiday Inn Downtown-Superdome as an accounts payable and payroll manager from September 1987 until March 19, 1999. In the fall of 1998, following a Department of Labor audit, defendant reviewed the exempt status of its salaried employees and decided to change plaintiff's classification from a salaried employee to an hourly employee, effective March 10, 1999. Defendant also paid plaintiff for the overtime pay she would have received during the previous two years had she been paid on an hourly basis during that period. On March 19, 1999, defendant fired plaintiff for insubordination. The termination is not a grounds for any of the claims in this lawsuit.
On April 27, 2001, plaintiff sued in state court alleging that she is owed back wages from 1987 through March 1999 because defendant failed to pay her overtime in accordance with the Fair Labor standard Act ("FLSA"), 29 U.S.C. § 201, et seq., and the Louisiana Wage Statute, Louisiana Revised Statute § 20:631, et seq., Defendant removed the case to this Court on August 10, 2001. Defendant asserts this motion for summary judgment on the grounds that plaintiff's claim is time-barred under the FLSA's two-year statute of limitations, or, in the alternative, that defendant already paid plaintiff any amount she might have been owed. Defendant also asserts that plaintiff's state law claim is preempted by the FLSA. Plaintiff argues that defendant's failure to classify her as an hourly employee was a willful disregard of the FLSA, and therefore she is entitled to the three-year statute of limitations under the FLSA. Plaintiff further contends that despite defendant's attempt to rectify its violation of the FLSA, it miscalculated the amount of overtime pay it owed her.
II. Discussion
A. Legal Standard
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 2552 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511 (1986)). The moving party bears the burden of establishing that there are no genuine issues of material fact.
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325, 106 S.Ct. at 2554; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue exists for trial. See id. at 325, 106 S.Ct. at 2553-54; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1996)
B. FLSA Statute of Limitations
The FLSA contains a two-year statute of limitations, unless the violation of the FLSA was willful:
[E]very such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising our of a willful violation may be commenced within three years after the cause of action accrued . . . 29 U.S.C. § 255(a).
In McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S.Ct. 1677 (1988), the Supreme Court stated the test for determining whether a party acted willfully under the FLSA. The Court held that violations of the FLSA are willful if the employer "knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Richland Shoe, 486 U.S. at 133, 108 S.Ct. at 1681.
Plaintiff argues that there is a genuine issue of fact whether defendant willfully violated the FLSA. Plaintiff contends that defendant was aware that it was violating the FLSA in October 1997. In support of her contention, plaintiff presents the affidavit of Judith Carse, who served as Human Resource Director for defendant from October 1992 to November 1997. Carse testifies that after a September 1997 meeting with defendant's legal counsel, Michael Mitchell, they discussed whether managers at defendant's hotel should receive overtime wages as non-exempt employees and that she informed defendant's general manager of her conversation with Mitchell. According to Carse, on October 7, 1997, Mitchell sent her a letter explaining the difference between "exempt" and "non-exempt" employees and how employees are classified. Carse further testifies that she shared the letter with defendant's general manager and controller and was told to keep quiet about the information.
In Reich v. Bay, Inc., 23 F.3d 110 (5th Cir. 1994), the Fifth Circuit held that an employer willfully violated the FLSA when evidence showed that a Wage and Hour representative had contacted the employer and informed it that its overtime payment practices violated the FLSA, and the employer continued its payment practice without further investigation into the alleged violation. 23 F.3d at 117. On the other hand, in Mireles v. Frio Foods, Inc., 899 F.2d 1407 (5th Cir. 1990), the Fifth Circuit affirmed a district court's finding that an employer had not acted with reckless disregard as to whether its conduct violated the FLSA despite findings that the employer discussed minimum wage requirements with the Texas Employment Commission and reviewed some "brochures and pamphlets" on the topic. 899 F.2d at 1416. Here, defendant's actions are more akin to those of the employer in Mireles. The letter from defendant's legal counsel did not state that defendant's payment practices were in violation of the FLSA. Nor did the letter mention plaintiff or plaintiff's position, much less analyze whether plaintiff's position should be classified as salaried or hourly. Indeed, counsel denies ever having made such an analysis or having given such an opinion. See Def.'s Ex. A, Mitchell Affidavit. The letter merely addresses the differences between "exempt" and "nonexempt" employees and mentions a few examples of the types of employees who are usually exempt ("executive, administrative, professional and sales positions"). In fact, Ms. Carse's affidavit does not state that the attorney gave an opinion orally or in writing that plaintiff's position should be classified as hourly. Nor does she state that she ever advised management (1) that she had received such an opinion, or (2) that she herself was of the opinion that plaintiff should be classified as an hourly employee. If defendant's attorney had given such an opinion to Ms. Carse, or if she had advised management of her views, surely she would have said so in her affidavit. This evidence falls short of the type of notice required to demonstrate that defendant showed reckless disregard for whether it was in violation of the FLSA. Furthermore, defendant's reclassification of plaintiff as an hourly employee and its payment of back overtime pay after the Department of Labor audit is not evidence that defendant willfully violated the FLSA. See Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir. 1990) (employer's decision to return employee from salaried to hourly payment rate upon advice of counsel was not evidence of willful violation of FLSA). Therefore, the Court finds that there is no issue of fact as to whether defendant willfully violated the FLSA. Accordingly, the Court applies the two-year statute of limitations to plaintiff's FLSA claim and finds that the claim is time-barred because plaintiff filed this lawsuit more than two years after she was terminated, the last possible date that a cause of action could have accrued under the FLSA.
C. State Law Claim
Plaintiff also alleges that defendant violated the Louisiana Wage Statute, Louisiana Revised Statute Section 20:631, et seq. The district court may decline to exercise supplemental jurisdiction over a claim in an action brought under federal question jurisdiction if the court has dismissed all claims over which it has original jurisdiction. See 28 U.S.C. § 1367(c)(3). The general rule is that state claims should be dismissed once the federal claims that were the basis for federal jurisdiction are dismissed. See Parker Parsley Petroleum v. Dresser Ind., 972 F.2d 580, 585 (5th Cir. 1992). Courts should consider the following factors to determine whether to retain jurisdiction once the federal claims have been disposed: judicial economy, convenience, fairness, federalism, and comity. See id.; Newport Ltd. v. Sears, Roebuck Co., 941 F.2d 302, 307 (5th Cir. 1991), cert. denied, 502 U.S. 1096, 112 S.Ct. 1175 (1992). At this stage in the proceedings, five and a half months after removal, this court has no substantial familiarity with this case beyond this summary judgment motion. See Id. at 587-88 (reversing district court's failure to dismiss state claims where case was pending for nine months and was only a few weeks from trial). Furthermore, dismissal will not cause undue inconvenience to the litigants because any discovery that has been conducted is usable in a state proceeding. See Id. Finally, the interests of federalism and comity point strongly towards dismissal. In light of the foregoing considerations, the Court declines to exercise jurisdiction over the pendant state law claim.
III. Conclusion
For the reasons stated above, the Court GRANTS defendant's motion for summary judgment on plaintiff's FLSA claim. Plaintiff's state law claim is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.