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Brock v. Casey Truck Sales Inc.

decided: January 29, 1988.


Appeal from a judgment of the Circuit Court for the Western District of New York (John T. Elfvin, Judge), after a bench trial, ordering defendants to pay back wages and interest to five former employees and to offer reinstatement to one employee in a suit for violations of the Fair Labor Standards Act.

Van Graafeiland, Meskill, and Newman, Circuit Judges.

Author: Newman

JON O. NEWMAN, Circuit Judge:

This appeal from a judgment for violations of the Fair Labor Standards Act concerns primarily the determination of motivation for conduct alleged to be unlawful, a matter that has been troublesome in a variety of cases, especially those involving employee discharges. Defendants-appellants Casey Truck Sales, Inc., Casey Truck Salvage World, Inc., and John C. Caselinuovo appeal from a judgment of the District Court for the Western District of New York (John T. Elfvin, Judge), after a bench trial, ordering them to pay $164,811.72 in back wages and interest to five former employees and to offer one of those employees reinstatement upon a finding that the employees had been discharged in violation of section 15(a)(3) of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 215(a)(3) (1982). The District Court also permanently enjoined the defendants from discharging employees in retaliation for exercising their statutory rights under the FLSA. The judgment rested on the Court's findings that the employees were discharged several weeks after a Department of Labor investigation concluded that these and other employees of Casey Truck Sales, Inc. were owed back wages for overtime and that defendant Caselinuovo, the company's owner, discharged the employees upon their refusal to take a "loyalty oath" requiring them to repudiate their rights to these back wages. Defendants contend primarily that the trial judge applied the incorrect standard of proof in an FLSA retaliatory discharge case. Defendants also challenge on both legal and factual grounds the trial court's determination that their conduct violated section 15(a)(3). Finally, defendants argue that the restitutionary relief ordered in this case, including reimbursement for lost wages, reinstatement, and prejudgment interest, was improper in various respects. We reject these contentions and affirm.


Defendant Casey Truck Sales, Inc. ("Casey Sales") is a New York corporation previously engaged in the business of reconditioning, rebuilding, and selling used trucks and truck parts. Though never formally dissolved, Casey Sales ceased doing business in 1983, at which time defendant Casey Truck Salvage World, Inc. ("Casey Salvage") was formed to succeed Casey Sales.*fn1 Defendant John C. Caselinuovo is the president and sole officer and shareholder of both Casey Sales and Casey Salvage.

Prior to May 1981, Caselinuovo and his employees had an informal agreement allowing the employees to work unlimited overtime hours at straight-time pay. In April 1981, a compliance officer of the United States Department of Labor, Angelo Sorci, was prompted by a complaint to investigate Casey Sales' compliance with the overtime pay provision of the FLSA. See 29 U.S.C. § 207 (1982). After reviewing Casey Sales' overtime pay records, Sorci went to its business premises and interviewed nine employees, including the five discharged employees, Lawrence H. Bala, Raymond Matthews, Daniel J. Frank, Carmen Nappo, and David Fears (who died prior to trial). On May 8, 1981, Sorci informed Caselinuovo of his conclusion that Casey Sales was in violation of the FLSA because its employees had not been properly paid for their overtime work. Sorci also alleged that the company's records had been falsified in an attempt to hide its wrongdoing. Caselinuovo first denied the allegations but soon admitted they were true and agreed to pay overtime wages in the cumulative amount of $23,925.19 to twenty-seven employees, eleven of whom were still employed by Casey Sales.

It is undisputed that Caselinuovo was deeply disturbed by the outcome of the Department of Labor's investigation because of the "gentleman's agreement" that had existed between him and his employees respecting overtime pay. Various policies affecting the working conditions at Casey Sales were soon changed; lunch break was shortened, coffee breaks eliminated, and the unlimited overtime rule was rescinded. Caselinuovo later testified that he had considered the Department of Labor's determination "morally wrong" and desired an opportunity to ventilate his frustration.

On or about June 9, 1981, Caselinuovo convened a meeting of the eleven current Casey Sales employees owed back overtime wages. Employees not owed back wages were not included. At the meeting, Caselinuovo stated that he felt hurt and "betrayed" by the outcome of the investigation and opined that "anyone that felt that they really deserved those monies to me would be a parasite." Some of those present testified at trial that Caselinuovo also stated that he would "appreciate" the return of the payments and that he could determine "who his friends were" and who were "the loyal ones" by who returned the payment. Caselinuovo disputes that he ever sought return of the money owed to his employees. Rather, he claims he only wanted to know that their "sentiments" were with him. By all accounts, Caselinuovo requested that each of the employees speak to him individually and inform him of their answer to this question, in his own words: "Did they feel that they deserved the monies that were going to be coming to them . . .?"

On June 12, Lawrence Bala went to Caselinuovo and expressed his belief that he was entitled to the overtime repayment and his intention to keep it. Bala then left for a one-week vacation. He was fired upon his return on June 22, 1981. On June 12, 1981, Daniel Frank also went to Caselinuovo and stated his intention to keep the money because he was entitled to it. Frank was fired one week later on June 19, 1981. David Fears likewise informed Caselinuovo that he felt legally and morally entitled to the money and that he would keep it. He was fired on June 19, 1981. Caselinuovo twice approached Carmen Nappo about the overtime payments, and on both occasions Nappo avoided any direct response to the question of entitlement. He was also fired on June 19, 1981. Raymond Matthews met with Caselinuovo during the week following the group meeting and stated that he would return the money if he would otherwise lose his job. He refrained from stating that he felt no entitlement to the money. Matthews was fired on June 19, 1981. Of those employees due overtime payments who were retained by Caselinuovo, all but one told him that they did not feel entitled to keep the money owed to them.*fn2

The defendants contended at trial that Caselinuovo fired the five employees for reasons not associated with the Department of Labor's overtime wage investigation and without regard to their answers to his own subsequent loyalty investigation. Caselinuovo charged that Bala, an employee for two years, was terminated primarily because of his antagonistic and condescending attitude toward both customers and co-workers. Similarly, Frank and Nappo, employees since late 1980, were allegedly fired due to "attitude" problems. Frank's performance and outlook reportedly deteriorated sharply following the imposition of the post-investigation changes in working conditions at Casey Sales, and Nappo had been abusive and uncooperative generally. Nappo and Bala were also suspected by Caselinuovo of stealing parts from the shop on occasions in early 1981. Matthews, an employee for a total of approximately six years, was allegedly discharged on account of job absenteeism, tardiness, and unsafe work habits. Fears, who had been steadily employed by Casey Sales since 1977, was discharged for various "irritating" work habits, primarily a slow performance rate.

The District Court found that the five employees were discharged because of their refusal to comply with Caselinuovo's expressed desire that they repudiate their claims to the overtime wages. Though the Court noted that each of the five employees could lawfully have been discharged for deficiencies unrelated to the Department of Labor's overtime investigation, the "inescapable conclusion is that the 'straw that broke the camel's back' was the proper insistence (or non-waiver) by these five employees on their right to such [overtime] wages." Memorandum and Order of August 22, 1986, at 9. The Court thus concluded that the discharges violated section 15(a)(3) of the FLSA, which prohibits employment discrimination against any employee "because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified . . . in any such proceeding." 29 U.S.C. § 215(a)(3) (1982).

Upon finding that a violation of section 15 had occurred, the trial judge awarded damages for back pay to the five employees, totalling $107,208.75, and prejudgment interest of $57,602.97. The District ...

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