Opinion
SA-22-CV-104-JKP (HJB)
07-29-2024
AUGUSTIN PRUNEDA, III Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. BEXAR COUNTY, TEXAS, Defendant.
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Henry J. Bemporad United States Magistrate Judge.
To the Honorable United States District Judge Jason K. Pulliam:
This Report and Recommendation concerns Plaintiffs' Motion for Partial Judgment on The Pleadings or, Alternatively, for Partial Summary Judgment as to Liability (Docket Entry 38), and the Opposed Motion for Leave to File Second Amended Answer (Docket Entry 56), filed by Defendant Bexar County, Texas (“the County”). Nondispositive pretrial and scheduling matters in this case have been referred to the undersigned by the District Court's general order (see Docket Entry 7), and Plaintiffs' dispositive motion was specifically referred to the undersigned for consideration (see Text Order June 6, 2024.) For the reasons set out below, I recommend that the County's motion (Docket Entry 56) be GRANTED IN PART and DENIED IN PART, and, as a result, that Plaintiffs' motion (Docket Entry 38) be DENIED AS MOOT IN PART and DENIED WITHOUT PREJUDICE IN PART.
I. Jurisdiction.
Plaintiffs filed this action under the Fair Labor Standards Act (“FLSA”) 29 U.S.C. § 201 et seq. (Docket Entry 1.) The Court exercises jurisdiction over federal questions pursuant to 28 U.S.C. § 1331. The undersigned issues this Report and Recommendation pursuant to 28 U.S.C. § 636(b).
II. Factual and Procedural Background.
This collective FLSA action was brought by Bexar County Deputy Sheriffs for overtime compensation. In their seven-count complaint, Plaintiffs allege that they and other similarly situated employees regularly work in excess of forty hours per week but were neither paid overtime nor properly awarded compensatory time for the excess hours they worked. (Docket Entry 1.) They seek back wages, liquidated damages, attorney's fees, interest, and costs. (Id. at 14.)
Plaintiffs filed their complaint on February 7, 2022; the complaint was served on Defendant Bexar County on February 11, 2022. (Docket Entry 6.) The County did not answer the complaint, but on March 7, 2022, it filed a motion to compel arbitration of Plaintiffs' claims, and to stay the litigation pending the resolution of arbitration proceedings. (Docket Entry 9.) The undersigned held a hearing on the motion, and denied it in a written order entered on May 17, 2022. (Docket Entry 15.) The parties then agreed to the issuance of notice of the collective action, and on July 7, 2022, the Court entered an order which issued notice to the agreed “collective,” which was defined to include “all lieutenants and captains employed by Bexar County in the Sheriff's Department during the last three years who worked more than forty hours in any one or more workweeks.” (Docket Entry 20, at 1.) Eventually, a total of 37 Plaintiffs joined in the action. (See Docket Entries 23-31.)
At the Court's request, the parties submitted scheduling recommendations, including a deadline for filing amended pleadings. (Docket Entry 34.) As requested, the undersigned ordered a pleading deadline of February 24, 2023. (Docket Entry 35.) The undersigned subsequently granted the parties' request to extend the discovery, mediation, and motions deadlines in the case. (Docket Entry 37.) However, the parties never requested, and the Court never ordered, that the pleading deadline be extended.
During all this course of time, the County never answered or otherwise responded to Plaintiffs' complaint. On January 22, 2024, Plaintiffs moved for judgment on the pleadings, or in the alternative, for partial summary judgment. (Docket Entry 38.) Plaintiffs noted that the County had never answered the lawsuit, and therefore should be deemed to have admitted the allegations in the complaint, waived any exemption defenses it may have wished to raise, and waived any good-faith defenses under the FLSA. (See id. at 5, 8-9.) The County responded in opposition to the motion on February 20, 2024. (Docket Entry 42.)
On February 22, 2024-more than two years after being served with Plaintiffs' complaint, nearly a year after the pleading amendment deadline had passed, and well after the discovery and motions deadlines had passed-the County moved for leave to file an answer and affirmative defenses. (Docket Entry 43.) The undersigned granted the motion to file an answer in part, permitting the County to file an answer to Plaintiffs' claims but holding in abeyance the request to raise affirmative defenses. (Docket Entry 49.)
After additional settlement negotiations failed, the County-now represented by new counsel-filed a motion for leave to file an amended answer. (Docket Entry 56.) The new proposed answer raised affirmative defenses, including that Plaintiffs were exempt from FLSA protections under the executive, administrative, and highly-compensated-employee exemptions; that the County acted in good faith; that certain limitations defenses applied; and that the Plaintiffs' claims would be barred in whole or in part, by waiver, release, credit, setoff, and estoppel. (Id. at 10.) Plaintiffs again opposed granting leave to amend. (Docket Entry 60.)
III. Analysis.
Because the decision whether to allow the County to amend its answer directly impacts upon Plaintiffs' motion for judgment on the pleadings or partial summary judgment, this Report and Recommendation discusses the amendment issue first.
A. The County's Motion to Amend its Answer.
1. Applicable legal standards.
Disposition of the County's motion to amend requires the Court to consider the applicable rules of federal procedure in the context of FLSA litigation. This Report and Recommendation first sets out the applicable FLSA standards before addressing which rules are applicable.
a. The FLSA.
The County's motion to amend raises issues of liability, affirmative defenses, limitations, and damages. The law generally applicable to each of these issues is set out below.
Liability and exemptions. Generally, the FLSA requires an employer to pay overtime compensation to any employee working more than 40 hours in a workweek. See 29 U.S.C. § 207(a)(1). “The overtime-pay rule is subject to several enumerated exemptions, however.” White v. U.S. Corr., L.L.C., 996 F.3d 302, 307 (5th Cir. 2021); see 29 U.S.C. § 213. The exemptions include those for employees working “in a bona fide executive, administrative, or professional” capacity, 29 U.S.C. § 213(a)(1), as well as for certain highly compensated employees, 29 U.S.C. § 541.601. It is well settled that “the employer bears the burden” to establish that an asserted exemption applies to an employee. Dalheim v. KDFW-TV, 918 F.2d 1220, 1224 (5th Cir. 1990).
Limitations. Normally, an FLSA unpaid-overtime claim must be brought “within two years after the cause of action accrued.” 29 U.S.C. § 255(a). However, “a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.” Id. The plaintiff bears the burden of showing that an employer's violation was willful and thus that a three-year statute of limitations is appropriate. Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir. 1990). Under the FLSA, the statute of limitations period runs until a plaintiff files suit or a putative class member opts-in to a collective action. 29 U.S.C. § 256; Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 916-17 (5th Cir 2008).
To demonstrate a willful violation, the plaintiff “must show that the employer either knew or showed reckless disregard as to whether its conduct was prohibited by the [FLSA].” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). A negligent violation of the FLSA cannot constitute a willful violation. Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1416 (5th Cir. 1990). Nor can a willful violation be shown by “a good faith but incorrect assumption that a pay plan complied with the FLSA.” McLaughlin, 486 U.S. at 135.
Liquidated damages. In addition to unpaid overtime, an employer who violates the overtime-compensation requirements “shall be liable to the employee or employees affected” for “an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). There is a strong presumption in favor of liquidated damages, and the doubling of an award “is the norm, not the exception.” Shea v. Galaxie Lumber & Constr. Co., Ltd., 152 F.3d 729, 733 (5th Cir. 1998). To avoid liquidated damages, the employer may assert the affirmative defense (1) “that the act or omission giving rise to such action was in good faith” and (2) “that [it] had reasonable grounds for believing that [its] act or omission was not a violation of the [FLSA].” 29 U.S.C. § 260; Barcellona v. Tiffany Eng. Pub., Inc., 597 F.2d 464, 468 (5th Cir. 1979). The burden is on the employer to prove that the two-pronged test has been met. See 29 U.S.C. § 260. And the “burden of demonstrating good faith and a reasonable belief that its actions did not violate the FLSA” is a “substantial” one. Singer v. City of Waco, Tex., 324 F.3d 813, 823 (5th Cir. 2003).
Just as a good-faith violation of the FLSA cannot be considered willful, a finding of a willful violation would preclude application of the “good faith” exception to liquidated damages found in § 260. Cruz v. Maverick Cnty., 957 F.3d 563, 573 n.2 (5th Cir. 2020); see also Singer, 324 F.3d at 823 (“In this case, the jury found the City's actions to be willful. As a result, the City could not show that it acted in good faith.”)
b. Federal Rules of Civil Procedure.
In contesting whether the County should be permitted to amend its pleading to raise defenses, the parties have identified three legal standards that might apply: (1) the liberal amended-pleading standard under Federal Rule of Civil Procedure 15(a); (2) the excusable-neglect standard for untimely filing under Federal Rule of Civil Procedure 6(b); and (3) the good-cause standard for amending scheduling order deadlines under Federal Rule of Civil Procedure 16(b)(4). (See Docket Entry 56, at 4-5; Docket Entry 60, at 3-6.) The Fifth Circuit has made clear, however, “that Rule 16(b) governs amendment of pleadings after a scheduling order deadline has expired.” S&W Enters., L.L.C. v. S. Tr. Bank of Ala., NA, 315 F.3d 533, 536 (5th Cir. 2003); Valcho v. Dall. Cnty. Hosp. Dist., 658 F.Supp.2d 802, 814 (N.D. Tex. 2009). Only upon the movant's demonstration of good cause to modify the scheduling order will the more liberal standard of Rule 15(a) apply to the district court's decision to grant or deny leave. Accordingly, this Report and Recommendation will consider the County's motion under the Rule 16(b) good-cause standard before turning, if necessary, to the Rule 15 standard.
Federal Rule of Civil Procedure 6(b) states that, “[w]hen an act may or must be done within a specified time, the court may, for good cause, extend the time . . . on motion made after the time has expired if the party failed to act because of excusable neglect.” While this standard may have applied to the original motion to file an answer out of time, it does not apply to the current motion to amend pleadings, because the amendment deadline “was set out in the scheduling order.” Newsome v. Int'l Paper Co., No. 4:20-cv-1481, 2024 WL 495266, at *6 (S.D. Tex. Feb. 8, 2024). Accordingly, “the correct standard is found in Rule 16(b)(4).” Id.
Good cause. Rule 16 provides that deadlines in a scheduling order “may be modified only for good cause and with the judge's consent.” FED. R. CIV. P. 16(b)(4). “The good cause standard requires the ‘party seeking relief to show that the deadlines cannot reasonably be met despite the diligence of the party needing the extension.' ” S&W Enters., L.L.C., 315 F.3d at 535 (quoting 6A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 1522.1 (2d ed. 1990)); accord Marathon Fin. Ins., Inc., RRG v. Ford Motor Co., 591 F.3d 458, 470 (5th Cir. 2009). In making the good cause determination, courts consider four factors: (1) the explanation for the failure to timely comply with the scheduling order; (2) the importance of the modification; (3) potential prejudice in allowing the modification; and (4) the availability of a continuance to cure such prejudice. Springboards To Educ., Inc. v. Hous. Indep. Sch. Dist., 912 F.3d 805, 819 (5th Cir. 2019). Courts consider the four factors holistically and “does not mechanically count the number of factors that favor each side.” EEOC v. Serv. Temps, Inc., No. 3:08-CV-1552, 2009 WL 3294863, at *3 (N.D. Tex. Oct. 13, 2009), aff'd, 679 F.3d 323 (5th Cir. 2012). Ultimately, whether a party has met the standard under Rule 16(b)(4) is an issue committed to the Court's “sound discretion.” S&W Enters., L.L.C., 315 F.3d at 537.
Amendment of pleadings. “Rule 15(a) requires a trial court to grant leave to amend freely, and the language of this rule evinces a bias in favor of granting leave to amend.” Jones v. Robinson Prop. Grp., LP, 427 F.3d 987, 994 (5th Cir. 2005) (citation and internal quotation marks omitted). While leave to amend is not automatic, the Court must possess a “substantial reason” to deny a party's request for leave to amend. Id. The Court is entrusted with the discretion to grant or deny a motion to amend and may consider a variety of factors, including “undue delay, bad faith or dilatory motive on the part of the movant, repeated failures to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party . . ., and futility of the amendment.” Id. (citation omitted). “In the context of affirmative defenses, an amended pleading is ‘futile' if the asserted defenses fail to provide a basis for relief.” Stock Bldg. Supply of Tex., L.P. v. Richardson, No. SA-06-CA-192-FB, 2007 WL 9702864, at *4 (W.D. Tex. May 23, 2007).
2. Analysis.
Applying the above standards to the present case, the Court must first decide whether the County's proposed untimely amendment meets the good-cause standard under Rule 16(b)(4), before considering the more liberal amendment standard applicable under Rule 15(a)(2). In considering these issues, this Report and Recommendation first addresses the exemption-based affirmative defenses before turning to the limitations, good-faith, and the other asserted defenses.
a. The exemption defenses.
As to the exemption defenses, the County cannot meet the requirements of Rule 16(b)(4); accordingly, its request to amend should be denied without consideration of the liberal-pleading standard of Rule 15(a).
Under Rule 16(b)(4), “[t]he most important factor bearing on the ‘good cause' inquiry . . . is whether the party seeking to modify the scheduling order can show that it has been diligent in pressing its claims but despite its diligence could not reasonably have met the scheduling deadline.” Brinkley v. Timco Logistics Sys. LLC, No. 3:22-CV-98, 2023 WL 2586307, at *2 (S.D. Tex. Mar. 21, 2023) (quotation omitted). On this factor, the record weighs heavily against the County. In its original motion for leave to file an answer, the County's previous counsel candidly conceded the County “failed to file an Answer and Defenses because it had appeared in the case and [counsel] forgot to file an Answer once all the Plaintiffs had appeared in the lawsuit.” (Docket Entry 40, at 2.) New counsel provides no better explanation, stating simply that the “County's prior counsel negligently or mistakenly failed to file an answer in 2022 and only discovered such when Plaintiffs raised it . . . in their Motion for Partial Judgment on the Pleadings filed on January 22, 2024.” (Docket Entry 66, at 3.)
These assertions fail the Rule 16(b) standard. Under the Rule, “merely proffering an explanation is not enough.” Banks v. Spence, 105 F.4th 798, 800 (5th Cir. 2024). The explanation “has to be ‘adequate,' and an ‘adequate' explanation is something more than ‘inadvertence.'” Id. (citation omitted). For this reason, “a party's failure to meet a deadline due to mere inadvertence is tantamount to no explanation at all.” STMicroelectronics, Inc. v. Motorola, Inc., 307 F.Supp.2d 845, 850 (E.D. Tex. 2004) (quotation omitted). Had the County acted with reasonable diligence, it would have presented its affirmative defenses in a timely answer-or at least an answer filed within the pleading amendment deadline. But it did not raise any affirmative defenses until two years after the deadline for answering the case, and nearly a year after the deadline to amend pleadings had passed. The County's failure, therefore, “strongly militates against allowing . . . leave to amend.” Brinkley, 2023 WL 2586307, at *2 (denying leave to raise an affirmative FLSA defense “approximately seven months after the deadline [for seeking leave to amend] expired”).
In Banks, the Fifth Circuit makes clear that an inadequate explanation for delay is in itself a sufficient basis to deny a requested extension under the abuse-of-discretion standard applicable to Rule 16(b)(4) determinations. 105 F.4th at 800. However, in exercising that discretion in the first instance, the District Court should consider all four Rule 16(b)(4) factors, considering the factors holistically. See Serv. Temps, Inc., 2009 WL 3294863, at *3. Accordingly, this Report and Recommendation considers the remaining three factors infra.
The second Rule 16(b)(4) factor “asks whether the amendment is important to the broader litigation.” Harrison v. Aztec Well Servicing Co., Inc., No. 1:20-CV-00038-H, 2021 WL 5280956, at *4 (N.D. Tex. Nov. 12, 2021). “Courts deem amendments to be important where they potentially provide additional grounds for a party to avoid liability or directly affect a party's prospects of ultimate success.” Id. (collecting cases). If successful, Defendants' exemption defenses could be case-dispositive in their favor. Thus, this factor weighs in favor of granting leave for the County to amend its answer. See Brinkley, 2023 WL 2586307, at *3.
“The third factor asks whether allowing the late amendment will prejudice the [Plaintiff].” Brinkley, 2023 WL 2586307, at *3. This case has been pending for more than two years; the deadlines for producing discovery and filing dispositive motions have long since come and gone. Allowing the County “to assert . . . new affirmative defense[s] unquestionably prejudices [Plaintiff], as it would, in essence, restart the lawsuit for amended pleadings, discovery, and motions.” See Brinkley, 2023 WL 2586307, at *3 (quotation and alteration omitted); see also Mayeaux v. La. Health Serv. and Indem. Co., 376 F.3d 420, 427 (5th Cir. 2004) (noting that an amendment that “would fundamentally alter the nature of the case” may be denied). Accordingly, this factor weighs against granting leave to amend.
In arguing that Plaintiffs would not be prejudiced, the County relies on the Fifth Circuit's decision in Taylor v. HD and Assoc., L.L.C., in which the Court found no waiver of an FLSA exemption defense in part on the ground that “FLSA defendants need not plead specific exemptions because plaintiffs are ‘put on notice by the very nature of the suit that these exemptions would be relevant to the determination of . . . liability.'” 45 F.4th 833, 838 (5th Cir. 2022) (per curiam) (citation omitted). Taylor is inapposite for two reasons. First that case was presented to the Court of Appeals on review of the district court's decision to permit the defendant to raise the exemption defense; thus, the court of appeals' review was for abuse of discretion only. See Taylor v. HD and Assoc., L.L.C., No. 19-10635, 2020 WL 7075348, at *6 (E.D. La. Dec. 3, 2020), aff'd, 45 F.4th 833. Second, and more importantly, the defendant in Taylor had timely pled “statutory exclusions, exceptions, setoffs, or credits under the FLSA” as an affirmative defense; i.e., the only question before the Court was the specificity of the defendant's pleadings. Id. For this reason, the Fifth Circuit did not consider Rule 16(b), but instead ruled merely that “a technical failure to comply precisely” with the affirmative-defense-pleading rule of Rule 8(c) was “not fatal” to the asserted exemption.
Finally, the fourth factor “asks whether a continuance would cure any prejudice to the [Plaintiffs] caused by the late amendment.” Brinkley, 2023 WL 2586307, at *4. “Although a continuance could mitigate the prejudicial effect of the proposed amendment, requiring [Plaintiffs] to participate in discovery on the additional defense(s) would undoubtedly result in delay and additional cost.” Brinkley, 2023 WL 2586307, at *4 (quotation omitted). And permitting an amendment to the pleadings “this late in the litigation process runs the risk of endorsing dilatory litigation tactics.” Moreno v. Silvertip Completion Servs. Operating, LLC, No. 7:19-CV-00240-DC-RCG, 2020 WL 6867056, at *3 (W.D. Tex. Nov. 13, 2020). This is particularly the case here, where the County did not file any answer for two years, and never sought to extend the pleadings deadline, even though the Court granted leave to extend the other deadlines in the case. A two-year delay in pleading, based on inadvertence and absent any circumstances beyond the control of the movant, simply cannot meet the standard for relief under Rule 16(b)(4).
b. The other defenses.
In addition to the exemption defenses discussed above, the County's latest motion to amend seeks permission to raise general good faith and limitations defenses, as well as a defense for credit or set-off for any discretionary leave used and paid by Plaintiffs during the applicable period, and specific limitations and release defenses as to particular opt-in Plaintiffs in the case. (Docket Entry 56 at 6-11.)
General good faith and limitations defenses. As noted above, the good-faith defense to liquidated damages and the determination of the appropriate limitations period are often closely-related issues: if an employee shows that a violation was willful (to extend the limitations period to three years), then the employer cannot show that the violation was committed in good faith, and vice versa. See Part III(A)(1)(a), supra. Because these defenses are so closely related to an issue to be proved by Plaintiff at trial, the Rule 16(b)(4) factors point to a different result with regard to them. While the first factor still militates against permitting the amendment, the other factors support it. The issue is important; the prejudice to Plaintiffs is greatly lessened; and there is no obvious need for a continuance to address the question at trial, since Plaintiffs will already be seeking to show a willful, non-good-faith violation to the jury. Additionally, while “the determination of willfulness is an issue of fact for the jury, the determination of good faith for purposes of establishing liquidated damages is a question of law for the court to decide at its discretion.” Badon v. Berry's Reliable Res., LLC, No. 19-12317, 2022 WL 18671140, at *2 (E.D. La. Nov. 17, 2022) (citing 29 U.S.C. § 260). For all these reasons, the County has met the Rule 16(b)(4) standard as to its limitations and good-faith defenses, and the Court should therefore address the request to amend under the more liberal Rule 15(a)(2) standard.
Under that standard, the amendment should be granted, as Plaintiffs have not overcome the “bias in favor of granting leave to amend.” Jones, 427 F.3d at 994. Although there has clearly been undue delay in raising the defenses, there is no evidence of bad faith or dilatory motive on the part of the County. And, for the reasons expressed above, there is no undue prejudice to the opposing party. See id. The County should therefore be permitted to raise its general limitations and good-faith defenses.
The undersigned recognizes that, in attempting to show good faith to avoid liquidated damages, the County may seek at trial to rely on one or more of the very exemptions that this Report and Recommendation would disallow. See Part III(A)(2)(a), supra. For the reasons previously addressed, however, it is appropriate for the Court to exercise its discretion to distinguish between the exemption defenses themselves and good-faith reliance on the exemptions as a defense to liquidated damages. At trial, Plaintiffs will have the burden of showing a willful violation of the FLSA. See Cox, 919 F.2d at 356. In responding to the Plaintiffs' evidence, the County should be permitted to show that it made “a good faith but incorrect assumption” that its “pay plan complied with the FLSA.” McLaughlin, 486 U.S. at 135. As the same showing could, in the Court's discretion, provide a defense to liquidated damages, raising that defense should likewise be permitted.
Plaintiffs note that there are two “good-faith” defenses that could potentially be at issue here: the defense to liquidated damages in 29 U.S.C. § 260, and a separate defense to liability under 29 U.S.C. § 259(a), if “the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation” of the Wage and Hour Division of the Department of Labor. (See Docket Entry 64, at 9.) It does not appear that the County seeks to raise a § 259(a) defense in its single reference to good faith in its proposed amended complaint; it mentions only the liquidated-damages defense in its motion and proposed amendment (see Docket Entry 56, at 7; Docket Entry 56-1, at 9), and it makes no reference whatsoever to any “written administrative regulation, order, ruling, approval, or interpretation” on which it relied so as to invoke § 259(a). Even if the County did intend to raise a § 259(a) defense, its unspecific and conclusory assertion is plainly insufficient to give fair notice of the defense, and as such should not be allowed.
Set-off. The County states that, in preparing for mediation, it discovered that Plaintiffs “were seeking to obtain payment at time-and-a-half for all discretionary leave hours accrued since February 1, 2019, without taking into account any discretionary leave hours the Plaintiffs had used and for which they had been paid.” (Docket Entry 56, at 9.) The County asks that it be permitted to raise the set-off to reduce the damages in the case, noting that, without a set-off, Plaintiffs would be unjustly enriched by being paid twice for the same hours. (Id.) Plaintiffs make no specific response on this issue. As it appears that this defense only recently came to light, and that it would directly relate to the proof of Plaintiff's wage claims, the County should be permitted to present it. See Brunet v. GB Premium OCTG Servs., LLC, No. 4:21-CV-1600, 2024 WL 1235571, at *5 (S.D. Tex. Feb. 7, 2024) (holding offset claims “directly relate to . . . wage claims,” in that “they challenge the amount of overtime hours worked and wages due”) (quoting Scherer v. BOK Fin. Corp., No. 4:21-CV-00449, 2023 WL 123792, at *3 (S.D. Tex. Jan. 6, 2023)).
Specific defenses to particular opt-in Plaintiffs. The County also raises defenses specific to certain opt-in Plaintiffs in the case. As to Plaintiffs Janette Torres and Diana Rodriguez, the County argues that they ended their employment more than three years before they opted into the lawsuit, barring any claims they might have even under the extended FLSA limitations period. (Docket Entry 56, at 8.) Plaintiffs make no response to this argument. Considering that these Plaintiffs, if employed on the dates alleged by the County, fall outside of the collective to which the parties stipulated (see Docket Entry 20, at 1), there can be neither surprise nor prejudice in permitting the County to raise this defense. Accordingly, it should be allowed.
Finally, counsel for the County indicates that, during the mediation held on May 13, 2024, she learned that opt-in Plaintiff Michele Mathai had signed a release of all claims she had against the County as part of the settlement of another lawsuit on April 30, 2024. (Docket Entry 56, at 10.) It is far from clear that this release would affect Mathai's claims in this case since, as a general rule, “FLSA claims . . . for unpaid overtime . . . cannot be waived.” Bodle v. TXL Mortg. Corp., 788 F.3d 159, 164 (5th Cir. 2015). The Fifth Circuit has made an exception for the resolution of bona fide FLSA disputes over hours worked or compensation owed. Id. at 165 (citing in Martin v. Spring Break '83 Prods., L.L.C., 688 F.3d 247, 255 (5th Cir. 2012)). In Martin, the Court of Appeals reasoned that such a narrow exception would not undermine the purpose of the FLSA because the plaintiffs would “not [have] waive[d] their claims through some sort of bargain but instead received compensation for the disputed hours.” Bodle, 788 F.3d at 165. However, “where overtime pay was never specifically negotiated, there is no guarantee that the plaintiffs have been or will be compensated for the overtime wages they are allegedly due under the Act.” Id. Although the County cites Martin in its motion (Docket Entry 56, at 10 n.3), it provides no information as to whether the overtime-compensation in this case was negotiated and resolved in the other action.On the other hand, Plaintiffs do not dispute the County's assertions. Accordingly, the County should be permitted to raise a release defense as to this Plaintiff, subject to the Court's determination that the standards of Martin and Bodle have been met.
Although the deadline for discovery has passed, see note 7 infra Plaintiffs should be permitted to conduct limited discovery as to the release defense as to opt-in Plaintiff Mathei if necessary to avoid undue prejudice. Such limited discovery should not affect a trial or other settings in the case.
The County's proposed amended answer also raises the defenses that the case does not meet the standards for a collective action, and that waiver, credit, and estoppel apply. (Docket Entry 56-1, at 10.) To the extent that the County seeks to decertify the collective to which notice was issued, it has forfeited this relief by failing to file a motion within the extended motions deadline. To the extent the other listed defenses concern issues other than those addressed by the County in its motion, the County has provided no basis for the allowing a belated amendment under Rule 16(b)(4). Accordingly, except as discussed in the text, these other defenses should not be allowed.
B. Plaintiffs' Motion for Judgment on the Pleadings or Partial Summary Judgment .
In their motion, Plaintiffs ask the Court to impose judgment as to liability in the case, including as to any affirmative defenses the County may have, and to set an evidentiary hearing on the question of damages. (Docket Entry 38, at 19.) Plaintiffs base the request on the County's failure to answer their complaint. (Id. at 18-19.)
As the undersigned has permitted the County to answer Plaintiff's claims, its request for judgment as to those claims is moot. (See Docket Entry 49.) As to the County's proposed affirmative defenses, if the District Court adopts the undersigned's recommendation that certain defenses should be disallowed, then the motion would also be moot as to the defenses not allowed. As to the defenses that the District Court does allow, if any, the motion should be denied without prejudice to a request for judgment as a matter of law, if Plaintiffs show “that a reasonable jury would not have a legally sufficient evidentiary basis to find” for the County as to those defenses. FED. R. CIV. P. 50(a)(1).
In responding to Plaintiffs' motion, the County requested that deadlines be extended in this case-particularly the deadline to complete discovery. (See Docket Entry 42, at 11.) As Plaintiffs' motion is moot, so is the County's request. The County never filed a separate motion to extend the deadlines in the case, and discovery deadline it proposed in its response has passed. In such circumstances, the County has failed to show good cause to further extend any deadlines in the case. That being said, the parties are free to engage in post-deadline discovery by agreement. See W.D. TEX. R. CV-16(e).
IV. Conclusion and Recommendation.
For the foregoing reasons, I recommend that the County's Opposed Motion for Leave to File Second Amended Answer (Docket Entry 56) be GRANTED IN PART and DENIED IN PART. Leave should be GRANTED for the County to answer Plaintiffs' claims; to raise the general affirmative defenses of good faith and limitations to the extent noted above; and to raise the specific defenses of set-off, limitations, and release discussed in this Report and Recommendation. Leave should be DENIED as to the County's proposed exemption defenses and the other defenses it seeks to raise.
I further recommend that Plaintiffs' Motion for Partial Judgment on The Pleadings or, Alternatively, for Partial Summary Judgment as to Liability (Docket Entry 38) be DENIED AS MOOT IN PART and DENIED WITHOUT PREJUDICE IN PART. The motion should be DENIED AS MOOT with regard to the matters on which leave to amend was denied; as to the remaining matters, the motion should be DENIED WITHOUT PREJUDICE to seeking judgment as a matter of law at trial pursuant to Federal Rule of Civil Procedure 50.
V. Notice of Right to Object.
The United States District Clerk shall serve a copy of this Report and Recommendation on all parties by either (1) electronic transmittal to all parties represented by attorneys registered as a “filing user” with the Clerk of Court, or (2) by mailing a copy to those not registered by certified mail, return receipt requested. Written objections to this Report and Recommendation must be filed within fourteen (14) days after being served with a copy of the same, unless this time period is modified by the District Court. 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72(b).
The parties shall file any objections with the Clerk of the Court and serve the objections on all other parties. An objecting party must specifically identify those findings, conclusions, or recommendations to which objections are being made and the basis for such objections; the district court need not consider frivolous, conclusory, or general objections. Battle v. U.S. Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings, conclusions, and recommendations contained in this Report and Recommendation shall bar the party from a de novo review by the District Court. Thomas v. Arn, 474 U.S. 140, 149-52 (1985); Acuna v. Brown & Root, Inc., 200 F.3d 335, 340 (5th Cir. 2000). Additionally, failure to file timely written objections to the proposed findings, conclusions, and recommendations contained in this Report and Recommendation shall bar the aggrieved party, except upon grounds of plain error, from attacking on appeal the unobjected-to, proposed findings and conclusions accepted by the district court. Douglass v. United Servs. Auto. Ass'n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).