Brown, Vivian v. Family Dollar Stores

In the

United States Court of Appeals

For the Seventh Circuit

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No. 06-3529

VIVIAN BROWN,

Plaintiff-Appellant,

v.

FAMILY DOLLAR STORES OF INDIANA, LP,

Defendant-Appellee.

____________

Appeal from the United States District Court

for the Southern District of Indiana, Indianapolis Division

No. 04 C 2015—Larry J. McKinney, Judge.

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ARGUED NOVEMBER 9, 2007—DECIDED JULY 15, 2008

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Before CUDAHY, RIPPLE, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge. Plaintiff-Appellant Vivian Brown

brought an action against her former employer, Family

Dollar Stores of Indiana, LP (“Family Dollar”), alleging

that Family Dollar failed to pay in a timely manner over-

time wages due her in violation of the Fair Labor Stand-

ards Act, (“FLSA”), 29 U.S.C. 201 et seq., the Indiana

Wage Payment Statute, Ind. Code § 22-2-5-1 et seq., and

the Indiana Wage Claim Statute, Ind. Code § 22-9-1 et seq.

The district court granted Family Dollar’s motion for

summary judgment on the FLSA claim and the state

2 No. 06-3529

claim for an unpaid incentive bonus, and dismissed the

remaining state claims without prejudice. Brown now

appeals that decision, and we reverse.

Family Dollar owns and operates a chain of retail

stores. Brown was hired as a cashier/stock person in

August 2003. She subsequently was promoted to assistant

manager, with a corresponding increase in hourly pay. On

approximately November 24, 2003, Family Dollar termi-

nated the manager at the store in which Brown worked.

As assistant manager, Brown then took on some of the

responsibilities of the store manager, but remained an

employee paid on an hourly basis and eligible for over-

time pay. There were two other employees who worked

at the store in addition to Brown, but they filled the

positions of clerk and stock persons. The store remained

without a store manager until January 8, 2004, when

Family Dollar promoted Brown to store manager. Pursuant

to Brown’s request, she was transferred to a different

Family Dollar store in April 2004, and in May 2004,

she was terminated by the company.

Brown alleged that she was not properly compensated

for overtime during the time she worked at Family

Dollar. The FLSA provides that employees who work

more than forty hours in a week must be paid for the

excess hours at one and one-half times the regular rate

of pay. 29 U.S.C. § 207(a)(1). An employee bears the burden

of proving that she performed overtime work for which

she was not properly compensated. Anderson v. Mt.

Clemens Pottery Co., 328 U.S. 680, 686-87 (1946), super-

seded by statute on other grounds as stated in IBP, Inc. v.

Alvarez, 546 U.S. 21, 41 (2005). The district court held that

“ ‘while this burden is not an insurmountable one, an

employee who brings suit for unpaid overtime compensa-

No. 06-3529 3

tion bears the burden to prove, with definite and certain

evidence, the she performed work for which she was not

properly compensated.’ ” Dist. Ct. op. at 5-6, citing Ander-

son, 328 U.S. at 686-87; Reeves v. IT & T Corp., 616 F.2d

1342, 1351 (5th Cir. 1980), implicitly overruled on other

grounds as recognized in Heidtman v. County of El Paso, 171

F.3d 1038, 1042 n.4 (5th Cir. 1999). Brown was unable

to identify with specificity the hours or even days for

which she worked overtime that was not properly paid.

Accordingly, the district court concluded that Brown’s

general allegations were insufficient to meet that burden

and granted summary judgment in favor of Family Dollar.

Anderson, however, does not set forth a new “definite and

certain evidence” standard but merely recognized the

established requirement that damages be proven. Anderson

recognized that once a plaintiff establishes a violation of

the FLSA, the plaintiff must establish damages, and that

the task is not a difficult one where the employer has

kept time records in compliance with the requirements

of the FLSA. In that circumstance, the accurate time

records will establish the amount of damages, and the

general rule that precludes recovery of uncertain and

speculative damages is appropriate. Anderson, 328 U.S. at

688. That is a recognition of the need to quantify damages,

not a new, more burdensome standard. Anderson also

articulated, however, a different standard that was to

apply where the employer’s records did not provide that

accurate record of time worked.

Anderson recognized that where an employer failed to

keep the proper and accurate records required by the

FLSA, the employer rather than the employee should

bear the consequences of that failure. To place the burden

on the employee of proving damages with specificity

4 No. 06-3529

would defeat the purpose of the FLSA where the em-

ployer’s own actions in keeping inadequate or inaccurate

records had made the best evidence of such damages

unavailable. The Court accordingly held that “[i]n such a

situation, . . . an employee has carried out his burden if

he proves that he has in fact performed work for which

he was improperly compensated and if he produces

sufficient evidence to show the amount and extent of that

work as a matter of just and reasonable inference.” Id. at

687-88. The burden then would shift to the employer to

produce evidence of the precise amount of work performed

or to negate the reasonableness of the inference to be

drawn from the employee’s evidence. Id. If the employer

fails to meet that burden, a court may award damages

even though they are approximations. Id. at 688.

The district court in this case recognized the just and

reasonable inference test set forth in Anderson, but deemed

it inapplicable because it concluded that “Brown does

not allege that Family Dollar’s records are not in accord

with FLSA requirements.” The record, however, demon-

strates that Brown presented evidence that the records

were not in compliance with the FLSA and could not be

trusted. First, Brown introduced evidence that the rec-

ords were accurate when submitted by employees, but

were subsequently altered by management prior to issu-

ance of the paychecks. Specifically, Brown testified in her

deposition that managers, district managers, and assistant

district managers could manipulate the records of times

worked in the computer system. She testified that as a

manager, she personally observed employees pay-

checks that were not reflective of the times in the printouts

and e-mails that she had sent to payroll. She further

declared that when she reported that a person’s check

No. 06-3529 5

was short, she was given the response that they were not

going to get paid. Finally, Brown also testified that she

had the same experience when LaTasha Holder was the

store manager, with Brown’s own paycheck not reflecting

the hours on the printout. That evidence alone is sufficient

to raise a genuine issue of fact regarding the accuracy of

the records kept by Family Dollar, but Brown provided

additional evidence that the time records were inade-

quate or inaccurate.

Brown provided evidence that the hours in the em-

ployer’s time records could not have been accurate be-

cause they did not conform with the hours that she

would have had to have been at the store given the store’s

hours of operations. The district court acknowledged that

the manager of the Family Dollar store at which Brown

worked was terminated on approximately November 24,

2003, and that Brown continued to serve as assistant

manager but also took on the managerial duties. Brown

testified that she was the only person with the key to

open and close the store. The only other persons at the

store were two associates who were clerks and stock

persons, and only assistant managers or managers had

the responsibility of opening and closing stores. She fur-

ther testified that if she did not come in, the store would

not be open for business, and that on one occasion when

she injured her finger, she had to return from the emer-

gency room to reopen the store or it would not have

been open for business. Brown testified that it took approx-

imately 1-1 ½ hours to open the store, and an additional

1-2 hours to close it. Closing a store involved myriad

duties, that could include redoing a display wall, putting

up new SKU (stock keeping unit) numbers, and rearrang-

ing shelves or end caps. During the holiday period from

6 No. 06-3529

Thanksgiving to Christmas, the store had extended hours

and closing would take longer. The hours in the em-

ployer’s records, however, were not reflective of those

hours. For instance, in numerous instances, the recorded

time would have allowed significantly less than the 1-2

hours that closing the store requires. The store closed

at 8:00 p.m. every day but Sunday, when it closed at 6:00

p.m. The following clock-out times were inconsistent

with the 1-2 hours of work required to close the store:

Closing time of 6:00 p.m.—clock-out time:

10-19-03 6:30

Closing time of 8:00 p.m., clock-out time:

10-20-03 8:18

11-7-03 8:34

11-15-03 8:30

11-20-03 8:27

11-25-03 8:29

12-27-03 8:06

01-08-04 8:21

More tellingly, the clock-out times for the dates during the

holiday hours between Thanksgiving and Christmas had

Brown clocking out at times before the store would have

even closed:

Closing time of 9:00—clock-out time:

11-28-03 8:18

11-29-03 8:11

12-6-03 8:37

12-13-03 8:10

No. 06-3529 7

Closing time 7:00—clock-out time:

11-30-03 6:21

Closing time 10:00—clock-out time:

12-17-03 8:11

The failure of the employer’s time records to conform

with the hours that Brown would have had to have been

in the store further casts doubt on the accuracy and ade-

quacy of the employer’s records under the FLSA, and

therefore the Anderson just and reasonable inference

standard is appropriate.

The Anderson test addresses whether there is a reason-

able basis to calculate damages, and assumes that a vio-

lation of the FLSA had been shown. The damages issue is

the one before the court at this time, but we should note

that the evidence cited above regarding the holiday

hours, Brown’s responsibilities, and the failure to pay

her for those hours raises a genuine issue of fact as to

whether she was not properly paid overtime in violation

of the FLSA. Therefore, the remaining question is wheth-

er that Anderson standard is met.

The holiday hours, as well as her testimony regarding

the time it took to open and close the store, provide a

basis for arriving at a just and reasonable inference as to

the uncompensated hours. As noted above, there is evi-

dence in the record that she was the only person able to

open and close the store, and that she spent at least 1-2

hours before and after those store hours preparing the

store for business. Comparison of the hours for which

she was paid with the hours of operation for the store,

8 No. 06-3529

would yield a basis for determining the amount and extent

of work as a matter of just and reasonable inference.

Accordingly, the district court erred in requiring Brown

to provide definite and certain evidence of her damages,

and the evidence establishes a genuine issue of fact con-

cerning damages under the proper standard.

In fact, the evidence presented here is similar to evid-

ence recently considered sufficient by the Eleventh Circuit

in Allen v. Board of Public Educ. for Bibb Cty., 495 F.3d

1306 (11th Cir. 2007). In Allen, a group of persons who

were bus drivers, bus monitors, paraprofessionals, secretar-

ies and custodians sued the county board of public educa-

tion (the “Board”) alleging that they were owed unpaid

overtime compensation under the FLSA. Id. at 1309. In

determining the proper standard to apply, the Allen court

held that deposition testimony called into question the

trustworthiness of the Board’s records, and therefore

that the just and reasonable inference standard was

appropriate. Specifically, the court noted that some em-

ployees testified that they were told not to record their

overtime because the Board would not pay it, that some

who recorded overtime were told to resubmit time

sheets without the overtime, and that some time sheets

were otherwise rejected or altered if overtime was noted.

Id. at 1316. The court concluded that those facts, if true,

indicated that the time records of the Board could not

be trusted, and that the just and reasonable inference

standard was appropriate.

Those facts are similar to those presented by Brown,

in her allegations that overtime hours that were sub-

mitted on time sheets were not paid, that she was informed

that the overtime would not be compensated, and in the

evidence that the managers had access to the time records

in the computer system and altered them to the em-

No. 06-3529 9

ployee’s detriment. As with the evidence in Allen, that

evidence casts doubt on the trustworthiness of the em-

ployer’s time records, and invokes the just and reasonable

inference standard.

Similarly, the type of evidence deemed sufficient to

raise that inference in Allen is comparable to that in the

present case. In Allen, the court recognized that hours

worked could be proven indirectly, through other “trigger-

ing factors” that would have signaled extended work

hours. For instance, one employee who could not pro-

duce any documentation of her overtime work, could

point to triggering factors such as occasional after-school

ice cream sales and dances that would help her recall dates

in which she worked overtime. Similarly, she noted that on

the dates of PTO (Parent-Teacher Organization) meetings,

she would be at school from the time school ended until

after the meeting around 7:30 or 8:00. The court noted that

she could obtain the date of those meetings, and therefore

provide a basis for inferring the extra hours worked. Id. at

1317. That is similar to the evidence presented by

Brown that she opened and closed the store, that she

worked for 1-2 hours before opening and after store

closing, and that the store was open for extended

holiday hours from Thanksgiving to Christmas. Those

dates are readily ascertainable, and a comparison of time

records with those hours would allow an approximation

as to the hours omitted from the time records and the

unpaid compensation.

In response to this evidence, Family Dollars argues that

we should not consider her testimony that the store had

extended hours during that holiday season. Although

that would seem to be readily obtainable information,

Family Dollar has not proffered any evidence rebutting

that claim. Instead, Family Dollar seizes upon her state-

10 No. 06-3529

ments during a deposition, and argues that her later

interrogatory responses cannot be considered as they

conflict with the deposition testimony. We have recog-

nized that a person cannot manufacture a genuine issue of

fact by submitting an affidavit that contradicts prior

deposition testimony. Velez v. City of Chicago, 442 F.3d

1043, 1049 (7th Cir. 2006). There is, however, no such

outright conflict here.

Brown was asked in her deposition whether store

hours changed seasonally, and she stated that the store

would close early on Christmas Eve or New Year’s Eve.

The issue was then explored further:

Q: How about, like, black Friday, the Friday after

Thanksgiving, would you open early and stay late?

A: I don’t know anything about that holiday?

Q: Well, it’s not a holiday. It’s the day after

Thanksgiving. It’s the busiest shopping time of

the year. Did the store have different hours of

business—

A: Not that I recall.

Q: —between Thanksgiving and Christmas?

A: That I recall, we closed early on Christmas Eve or

Thanksgiving Eve or New Year’s Eve.

That does not present the type of contradictory testi-

mony that would require us to ignore her subsequent

statements via affidavit as to the extended holiday hours.

First, the questioning was somewhat misleading, in that

she was first questioned regarding a specific day, Black

Friday, and as she was answering that, was asked about

hours between Thanksgiving and Christmas. It appears

No. 06-3529 11

from her answer that she was focusing on the hours for

the actual holidays, not for the period of time in between

the holidays. See id. (noting that even a contradictory

affidavit may be considered if the deposition question was

phrased in a confusing manner). In any case, she never

stated that there were no holiday hours between

Thanksgiving and Christmas. Family Dollar could of

course argue that her acknowledgment of holiday hours

for Thanksgiving Eve and Christmas Eve implies that

there were no other holiday hours, but that is an implica-

tion, not a contradiction.

The decision of the district court granting summary

judgment is reversed, and the matter remanded for fur-

ther proceedings consistent with this opinion. The Appel-

lant’s Motion to Strike portions of appellee’s brief is

denied.

USCA-02-C-0072—7-15-08