Armstead v. Jay Shree Umiya Inc

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ALABAMA

NORTHWESTERN DIVISION

SHEKIRA ARMSTEAD, )

)

Plaintiff, )

)

vs. ) Civil Action No. 3:19-CV-00658-CLS

)

JAY SHREE UMIYA, INC. d/b/a )

JACKSON MARKET, FUEL )

CITY, and JACKSON EXPRESS; )

and NITINKUMAR PATEL, )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff, Shekira Armstead, worked as a clerk at a convenience store and

gasoline station operated by the defendant “Jay Shree Umiya, Inc.,” a corporate entity

that is wholly owned by defendant Nitinkumar Patel. Plaintiff alleges that she was

not paid either a minimum wage for her regular working hours, or overtime for all

hours worked in excess of forty, both in violation of the Fair Labor Standards Act, 29

U.S.C. §§ 201 et seq. (“FLSA”). The case is before the court on “Plaintiff’s Motion

for Partial Summary Judgment on Individual and Company Liability and Defendants’

Good Faith Defense” (doc. no. 19).

Federal Rule of Civil Procedure 56 provides that a court “shall grant summary

judgment if the movant shows that there is no genuine dispute as to any material fact

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The

Supreme Court added a gloss to the language of that Rule, saying that summary

judgment is proper “after adequate time for discovery and upon motion, against a

party who fails to make a showing sufficient to establish the existence of an element

essential to that party’s case, and on which that party will bear the burden of proof at

trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “In making this

determination, the court must review all evidence and make all reasonable inferences

in favor of the party opposing summary judgment.” Chapman v. AI Transport, 229

F.3d 1012, 1023 (11th Cir. 2000) (en banc) (quoting Haves v. City of Miami, 52 F.3d

918, 921 (11th Cir. 1995)). Inferences in favor of the non-moving party are not

unqualified, however. “[A]n inference is not reasonable if it is only a guess or a

possibility, for such an inference is not based on the evidence, but is pure conjecture

and speculation.” Daniels v. Twin Oaks Nursing Home, 692 F.2d 1321, 1324 (11th

Cir. 1983) (alteration supplied). Moreover,

[t]he mere existence of some factual dispute will not defeat summary

judgment unless that factual dispute is material to an issue affecting the

outcome of the case. The relevant rules of substantive law dictate the

materiality of a disputed fact. A genuine issue of material fact does not

exist unless there is sufficient evidence favoring the nonmoving party

for a reasonable jury to return a verdict in its favor.

Chapman, 229 F.3d at 1023 (quoting Haves, 52 F.3d at 921) (emphasis and alteration

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supplied). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)

(asking “whether the evidence presents a sufficient disagreement to require

submission to a jury or whether it is so one-sided that one party must prevail as a

matter of law”).

I. FACTS

“Jay Shree Umiya, Inc.,” operates a 24-hour gasoline station and convenience

store under the trade name of “Jackson Express.”1 The corporate entity is wholly

owned by Nitinkumar Patel.2 Patel hired Shekira Armstead to work as a clerk at that

location on March 1, 2016.3 She remained so employed for eighteen-and-a-half

months, until September 15, 2018.4 She was supervised by Mr. Patel,5 who trained

her on how to operate the cash register, conduct inventory, and record her time.6

Patel provided plaintiff with time sheets to manually record her start and stop times.7

1 According to defense counsel, the trade name of the gasoline station and convenience store

at which plaintiff worked was, prior to defendant Nitinkumar Patel’s purchase of the entity, “Jackson

Market,” and he changed the name to “Jackson Express.” “Fuel City” is the trade name of a separate

entity that owns the physical property on which the “Jackson Express” convenience store is located

and supplies the gasoline and diesel fuels sold at that location. See also doc. no. 21-1 (Shekira

Armstead Affidavit), ¶ 1 (stating that she was hired to work at “Jackson Express”).

2 See doc. no. 23-1 (Affidavit of Nitinkumar Patel), ¶ 2.

3 See doc. no. 21-1 (Affidavit of Shekira Armstead), ¶ 2.

4 See doc. no. 8 (Answer), ¶ 32.

5 See doc. no. 21-1 (Affidavit of Shekira Armstead), ¶ 4.

6 Id. ¶¶ 6-9.

7 See doc. no. 21-3 (Handwritten time records); doc. no. 21-4 (Handwritten time records

continued).

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Plaintiff’s work schedule changed according to her availability, and Mr. Patel

testified that he strove to accommodate her childcare responsibilities.8

At the beginning of plaintiff’s employment, she was paid a wage of $7.50 an

hour every two weeks by means of a check.9 In late June of 2016, however, plaintiff

approached Patel and asked him to pay her a lower hourly wage, in cash, for the

purpose of permitting her to maintain the same level of governmental assistance and

benefits she then was receiving through the Florence Housing Authority, her food

stamps, and her government-subsidized cellular telephone and service.10 The record

reflects that plaintiff never disclosed her employment with defendants to the Florence

Housing Authority.11

Plaintiff was paid in cash at a rate of $6.50 an hour from at least July of 2016

through the end of June 2017.12 Then, from the beginning July 2017 through the end

8 See doc. no. 23-1 (Nitinkumar Patel Affidavit), 4.

9 Id. ¶ 7.

10 Id. Armstead does not formally dispute this fact as instructed in the court’s uniform initial

order (see doc. no. 10, at 16), but she does claim it is not supported by the evidence in the argument

section of her reply. See doc. no. 24 (Plaintiff’s Reply), at 4-5. According to Patel, however,

plaintiff explicitly stated that cash payments would allow her to maintain her government-subsidized

housing through the Florence Housing Authority, her food stamps, and her government-subsidized

cellular telephone and service. Doc. no. 23-1 (Nitinkumar Patel Affidavit), ¶ 8.

11 See, e.g., doc. no. 23-8 (Defendants’ Exhibit B), at 3-5 (2017 Annual Recertification for

Section 8 Housing Voucher listing no employment); id. at 11-13 (2016 Annual Recertification for

Section 8 Housing Voucher listing no employment); id. at 24-25 (July 6, 2016 Housing Choice

Voucher Program Status Change Form stating Armstead is no longer working).

12 See doc. no. 21-3 (Handwritten time records), at 10-21 (multiplying the number of hours

Ms. Armstead worked by $6.50).

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of plaintiff’s employment on or about September 15, 2018, she was paid in cash at a

rate of $7.00 an hour.13 Plaintiff was never paid overtime at the statutory rate of one-

and-a-half times her hourly wage.14

There are only three pay stubs in the record, accounting for five weeks of work

from June 12, 2017, through July 23, 2017.15 Those pay stubs indicate that plaintiff

was paid $7.50 an hour for at least those pay periods,16 a rate that was only slightly

above the federal minimum wage of $7.25 an hour.17

Plaintiff worked approximately 233 overtime hours during her employment

with defendants,18 but she was not paid at the statutory “time-and-a-half” overtime

rate for those hours.

II. DISCUSSION

Plaintiff’s motion for partial summary judgment raises three issues: i.e., (1) are

defendants liable for their failure to pay plaintiff minimum and overtime wages; (2)

is defendant Nitinkumar Patel an “employer” within the meaning of that term under

13 Id. at 22-37 (multiplying the number of hours Ms. Armstead worked by $7.00).

14 See generally id.

15 See doc. no. 21-3 (Pay stubs), at 5-7.

16 Id.

17 See Minimum Wage, U.S. Department of Labor, Wage and Hour Division,

https://www.dol.gov/agencies/whd/minimum-wage.

18 The court calculated the hours over forty for each week as written in the time cards in doc.

no. 21-3, at 8-37.

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the Fair Labor Standards Act and, thus, individually liable; and (3) are defendants

entitled to assert a “good-faith defense”? See doc. no. 20 (Brief in Support of Motion

for Partial Summary Judgment).

A. Plaintiff’s Contention that Defendants Violated the Minimum Wage and

Overtime Provisions of the Fair Labor Standards Act

Section 206 of the Fair Labor Standards Act of 1939 (“FLSA”) requires

employers to pay all covered employees at least a statutorily-prescribed minimum

wage for each hour worked. 29 U.S.C. § 206(a)(1). Section 207 of the Act requires

employers to pay employees one-and-one-half times their regular wage for every hour

worked in excess of forty during each workweek. 29 U.S.C. § 207(a)(1) (alterations

and emphasis supplied). “Any employer who violates the provisions of section 206

or section 207 . . . shall be liable to the employee or employees affected in the amount

of their unpaid minimum wages, or their unpaid overtime compensation, as the case

may be, and in an additional equal amount as liquidated damages.” 29 U.S.C. §

216(b).

The FLSA was enacted “to aid the unprotected, unorganized and lowest paid

of the nation’s working population; that is, those employees who lacked sufficient

bargaining power to secure for themselves a minimum subsistence wage.” Brooklyn

Savings Bank v. O’Neil, 324 U.S. 697, 707 n.18 (1945). For that reason, Congress

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made the provisions of the FLSA mandatory, which means that the rights created by

that Act “cannot be abridged by contract or otherwise waived because this would

nullify the purposes of the statute and thwart the legislative policies it was designed

to effectuate.” Barrentine v. Arkansas-Best Freight Systems, Inc., 450 U.S. 728, 740

(1981) (internal quotation marks omitted).

In accordance with the FLSA’s legislative purposes, a prima facie case of

either a minimum or overtime wage violation simply requires a plaintiff to show that,

“as a matter of just and reasonable inference . . . the wages paid to [the plaintiff] did

not satisfy the requirements of the FLSA.” Donovan v. New Floridian Hotel, Inc.,

676 F.2d 468, 475 n.12 (11th Cir. 1982) (alteration and ellipsis supplied).19 Plaintiff

bears the burden of proving a prima facie case. See Allen v. Board of Public

Education for Bibb County, 495 F.3d 1306, 1314-15 (11th Cir. 2007).

Plaintiff submitted handwritten time records to show that her hours of work

were multiplied by either $6.50 or $7.00 an hour to calculate her bi-weekly pay. Both

rates are below the federally-mandated minimum wage of $7.25 an hour.20 Plaintiff’s

handwritten time records also show that she often worked more than forty hours in

19 See also Eleventh Circuit Pattern Jury Instruction 4.14, at 240 (2020) (requiring plaintiff

to prove two things: (1) plaintiff was an employee of defendants and was engaged in commerce; and

(2) defendants failed to pay plaintiff the minimum wage and overtime wage required by law).

20 See Minimum Wage, U.S. Department of Labor, Wage and Hour Division,

https://www.dol.gov/agencies/whd/minimum-wage.

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a week, and her pay for those hours was calculated at the same rate of pay as those

hours under forty.21 Accordingly, plaintiff has met her prima facie burdens.

Defendants do not deny that plaintiff can establish prima facie cases for both

of her FLSA claims.22 In fact, they admit in the first paragraph of their response brief

that: “Under most circumstances, [plaintiff] would likely prevail on her claims

because evidence does suggest that she was paid less than federally-mandated

minimums.” Doc. no. 23, at 1-2 (alteration supplied). Instead, defendants argue that

plaintiff should be barred from submitting evidence to establish the amount of her

damages because she never reported the income from her employment with

defendants to the Florence Housing Authority, the local housing authority which

provided her a federally-funded Section 8 housing voucher. Defendants assert two

affirmative defenses to support that contention: judicial estoppel; and, the so-called

“Hinkle rule.”

1. Judicial estoppel

The doctrine of judicial estoppel precludes a party from “asserting a claim in

a legal proceeding that is inconsistent with a claim taken by that party in a previous

proceeding.” Ajaka v. Brooksamerica Mortgage Corp., 453 F.3d 1339, 1344 (11th

21 See doc. no. 21-3, at 8-37.

22 See doc. no. 23 (Defendants’ Response in Opposition to Motion for Summary Judgment),

at 2-3 (contesting only facts related to Patel’s status as plaintiff’s “employer”).

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Cir. 2006) (quoting Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1285 (11th Cir.

2002)). Courts normally consider the following factors when determining whether

to apply the doctrine: “First, the allegedly inconsistent positions must have been

taken under oath in a prior proceeding, and second, they must have been calculated

to make a mockery of the judicial system.” Palmer & Cay, Inc. v. Marsh &

McLennan Companies, Inc., 404 F.3d 1297, 1307 n.16 (11th Cir. 2005) (internal

citations omitted). “These factors are not exhaustive,” id., but defendants’

accusations in this case fail to satisfy either of those factors. Plaintiffs allegedly

inconsistent claim was not made under oath during a prior court proceeding, and there

is no evidence that plaintiff's failure to report her income to the Florence Housing

Authority was “calculated to make a mockery of the judicial system.” /d.

Nevertheless, and despite the facial inapplicability of the doctrine of judicial

estoppel, defendants argue that “the principle of the rule should hold true when a

party has taken a position with a government agency contrary to one taken in a

subsequent legal proceeding.” Doc. no. 23 (Response in Opposition to Summary

Judgment), at 10. Defendants do not cite any authority to support their argument.”

°° Tn fact, other district courts within the Eleventh Circuit have held the opposite in a similar

situation. Specifically, the Southern District of Florida has held that a plaintiff's failure to pay

federal income taxes on certain employment — that is, lying to a federal agency about his

employment — did not prevent him from asserting he was so employed in an FLSA lawsuit.

See Torres v. Rock & River Food Inc., No. 15-22882-Civ-Scola, 2016 WL 8716674, at *2 (S.D. Fla.

May 11, 2016) (rejecting the in pari delicto defense) (citing Solano v. A Navas Party Production,

Fundamentally, however, the doctrine of judicial estoppel and other equitable

defenses generally do not apply to bar FLSA claims, because the statutory rights

established by that Act cannot be waived. See, e.g., Bailey v. TitleMax of Georgia,

Inc., 776 F.3d 797, 803-04 (11th Cir. 2015) (“If an employer knew . . . that its

employee underreported his hours, it cannot escape FLSA liability by asserting

equitable defenses based on that underreporting.”); Perez-Nunez v. North Broward

Hospital District, No. 08-61583-CIV, 2009 WL 723873, at *2 (S.D. Fla. Mar. 13,

2009) (“The doctrines of waiver, estoppel and laches are generally not applicable to

FLSA claims.”).24

Even so, the former Fifth Circuit once applied the doctrine of equitable

estoppel in a FLSA case. See Brumbelow v. Quality Mills, Inc., 462 F.2d 1324 (5th

Cir. 1972).25 The plaintiff in Brumbelow sued to recover unpaid overtime

compensation for hours she had worked, but not fully reported in an effort to hide that

it was taking her longer than expected to perform her work. See id. at 1325. The

Inc., 728 F. Supp. 2d 1334, 1339-40 (S.D. Fla. 2010); Martinez-Pinillos v. Air Flow Filters, Inc., 738

F. Supp. 2d 1268, 1276 n.8 (S.D. Fla. 2010)).

24 See also Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 704 (1945) (“Where a private

right is granted in the public interest to effectuate a legislative policy, waiver of a right so charged

or colored with the public interest will not be allowed where it would thwart the legislative policy

which it was designed to effectuate.”); id. at 707 (“No one can doubt but that to allow waiver of

statutory wages by agreement would nullify the purpose of the [FLSA].”) (alteration supplied).

25 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), the

Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down

prior to the close of business on September 30, 1981.

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former Fifth Circuit found that there was

no evidence that the company in any manner encouraged workers to

falsely report (unless we were to infer an illegal or improper

encouragement from the mere existence of a norm, which we decline to

do), and no evidence that it knew or should have known that appellant,

unable to perform up to the employer’s standard, was giving false

information to conceal that fact in order to hold her job.

Id. at 1327. In the absence of evidence showing that the defendant-employer was

aware of the plaintiff-employee’s underreporting and “[o]n the narrow facts of [that]

case,” the former Fifth Circuit held that the district court was correct to bar plaintiff

from presenting evidence of the unreported overtime hours in support of her FLSA

claim, and thereby profiting “from her own wrong in furnishing false data to the

employer.” /d. (alterations supplied).

The Eleventh Circuit distinguished the Brumbelow holding from cases in which

evidence shows that the employer “knew or had reason to know that its employee

underreported” work hours. Bailey v. TitleMax of Georgia, Inc., 776 F.3d 797, 801-

04 (11th Cir. 2015). More broadly, the Eleventh Circuit held that, because of the

FLSA’s deterrent purpose, when “an employer knew or had reason to know that its

employee underreported his hours, it cannot invoke equitable defenses based on that

underreporting to bar the employee’s FLSA claim.” /d. at 805.

The present case is much more like Bailey than Brumbelow. Defendants are

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not arguing that plaintiff misled them on the number of hours she worked, only to

turn around and sue them. Instead, they admit that they paid plaintiff less than the

minimum wage mandated by the FLSA, and never compensated her for overtime

hours worked, but contend that plaintiff's misrepresentations to a third-party should

prevent her from recovering the wages she should have been paid under federal law.

Defendants’ admission that they knew plaintiff was receiving neither the federally-

mandated minimum-wage nor overtime compensation prevents them from asserting

any equitable defense, including the doctrine of judicial estoppel.

2. The “Hinkle rule”

The “Hinkle rule” is a doctrine created by the Alabama Supreme Court which

stands for the proposition that “[a] person cannot maintain a cause of action if, in

order to establish it, he must rely in whole or in part on an illegal or immoral act or

transaction to which he is a party.” Hinkle v. Railway Express Agency, 6 So. 2d 417,

421 (Ala. 1942) (alteration supplied). That state-law rule “derives principally not

from consideration for the defendant, but from a desire to see that those who

transgress the moral or criminal code shall not receive aid from the judicial branch

of government.” Oden vy. Pepsi Cola Bottling Co., 621 So. 2d 953, 955 (Ala. 1993)

(internal citation omitted). The Oden opinion clarified that the Alabama Supreme

Court interprets the rule created in Hinkle as barring “any action seeking damages

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based on injuries that were a direct result of the injured party’s knowing and

intentional participation in a crime involving moral turpitude.” Id. Accordingly,

defendants contend that this court should estop plaintiff from “using her criminal

activity for civil gain.” Doc. no. 23 (Response in Opposition to Summary Judgment),

at 13.

Specifically, defendants argue that plaintiff committed theft of government

property by not reporting her full income to the Florence Housing Authority, and that

she should not now benefit from that theft and deception. See id. at 14-15. Notably,

plaintiff has not been charged with any such crime — at least, not yet.

The Hinkle rule does not apply for three additional reasons. First, plaintiff

does not have to rely on her alleged crime to prevail on the claims she asserts in this

case. The evidence that defendants did not pay her minimum or overtime wages

stands apart from her misrepresentations to the Florence Housing Authority. Second,

the rule created by the Alabama Supreme Court has not been applied in any FLSA

case, or to bar any federal cause of action. Finally, application of the rule would be

contrary to this court’s interpretation of the Eleventh Circuit’s bar on equitable

defenses when the employer knew it was violating the FLSA. See Bailey, 776 F.3d

at 805. Accordingly, plaintiff will not be estopped from presenting evidence that she

was not paid the wages to which she was entitled under the FLSA by the Hinkle rule.

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B. Plaintiff’s Contention that Defendant Nitinkumar Patel Is an “Employer”

Within the Meaning of the FLSA and, Thus, Individually Liable

The term “employer” is defined by the FLSA as “any person acting directly or

indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. §

203(d). “The overwhelming weight of authority is that a corporate officer with

operational control of a corporation’s covered enterprise is an employer along with

the corporation, jointly and severally liable under the FLSA for unpaid wages.” Patel

v. Wargo, 803 F.2d 632, 637-38 (11th Cir. 1986) (quoting Donovan v. Agnew, 712

F.2d 1509, 1511 (1st Cir. 1983)). A corporate officer must also “be involved in the

day-to-day operation or have some direct responsibility for the supervision of the

employee.” Id. at 638. Defendant Nitinkumar Patel meets those standards.

He owned and operated the gas station at which plaintiff was employed.26 He

hired plaintiff, and had the ability to fire her.27 He supervised plaintiff and taught her

how to perform the duties of her job.28 Although Patel claims that he worked with

plaintiff to set her work schedule, and that she requested the hourly rate she was

paid,29 he still issued her pay checks and had the power to change either plaintiff’s

26 See doc. no. 23-1 (Nitinkumar Patel Affidavit), ¶ 2.

27 See doc. no. 21-1 (Shekira Armstead Affidavit), ¶¶ 2, 5.

28 See id. ¶¶ 4, 6-10.

29 See doc. no. 23-1 (Nitinkumar Patel Affidavit), ¶¶ 4-8.

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schedule or rate of pay.30 Accordingly, Patel can be held individually liable as

plaintiff’s “employer” under the FLSA.

C. Plaintiff’s Contention that Defendants Are Not Entitled to Assert a “Good

Faith” Defense

The FLSA provides that an employee who proves violations of the Act is

entitled to recover the aggregate amount of unpaid minimum wages and overtime

compensation, as well as “an additional equal amount as liquidated damages.” 29

U.S.C. § 216(b). Even so,

if the employer shows to the satisfaction of the court that the act or

omission giving rise to such action was in good faith and that he had

reasonable grounds for believing that his act or omission was not a

violation of the [FLSA], the court may, in its sound discretion, award no

liquidated damages . . . .

29 U.S.C. § 260 (alteration and ellipsis supplied).

Plaintiffs seek a ruling that defendants are not entitled to a good faith defense

against liquidated damages. Defendants did not respond to plaintiff’s argument.

Issues and contentions not raised in a party’s brief are deemed to have been

abandoned. E.g., Continental Technical Services, Inc. v. Rockwell International

Corp., 927 F.2d 1198, 1199 (11th Cir. 1991) (“An argument not made is waived.”).

In our adversary system, in both civil and criminal cases, in the

first instance and on appeal, we follow the principle of party

presentation. That is, we rely on the parties to frame the issues for

30 See id. ¶ 7 (stating that he initially paid plaintiff via check then later paid her in cash).

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decision and assign to courts the role of neutral arbiter of matters the

parties present.

Greenlaw vy. United States, 554 U.S. 237, 243 (2008). See also, e.g., Chapman v. AI

Transport, 229 F.3d 1012, 1027 (11th Cir. 2000) (en banc) (“Parties opposing

summary judgment are appropriately charged with the responsibility of marshaling

and presenting their evidence before summary judgment is granted, not afterwards.”).

Accordingly, defendants abandoned the good faith defense on summary

judgment, and they will not be allowed to raise it at trial on the issue of damages.

HI. CONCLUSION

In accordance with the foregoing, the court concludes that plaintiff's motion

for partial summary judgment is due to be, and it hereby is, GRANTED, and it is

CONSIDERED, ORDERED, and ADJUDGED that judgments on the issues of

liability, defendant Nitinkumar Patel’s individual liability, and defendants’ use of a

good faith defense are entered in favor of plaintiff, Shekira Armstead, and against

defendants Jay Shree Umira and Nitinkumar Patel. Plaintiffis granted leave to prove

damages.

The court is not currently conducting jury trials, and will not conduct such

trials until it is safe to gather large groups of persons in small spaces. The court will

issue an order setting a date and time for pretrial conference on the issue of the

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amount of damages to be awarded plaintiff when it believes that it is safe to do so.

In the meantime, the court ORDERS the parties to attempt to resolve the controversy

through mediation.

DONE and ORDERED this 22nd day of March, 2021.

ys United States District Judge

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