# Opposition Brief — Ho Fat Seto v. McLaughlin > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0183%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1989 - **Citation:** 488 U.S. 1040 ## Text a a Or! ) IL ED DEC 28 1988 1 E. SPANIOL, JR, CLERK sO em 8) — No. 88-519 In the Supreme Court of the Gnited States OCTOBER TERM, 1988 Ho FAT SETO DBA HO FAT OF CALIFORNIA, PETITIONER v. ANN MCLAUGHLIN, SECRETARY OF LABOR ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE RESPONDENT IN OPPOSITION CHARLES FRIED Solicitor General Department of Justice Washington, D.C. 20530 (202) 633-2217 GEORGE R. SALEM Solicitor of Labor ALLEN H. FELDMAN Associate Solicitor MARY-HELEN MAUTNER Counsel for Appellate Litigation ELLEN L. BEARD Attorney Department of Labor Washington, D.C. 20210 Ot OSt!7 tt i ee———oorcwoeeeeererreerereerrroorrrrerrrrrrrerrerrreenneeeeeS Ba Tet, FA nc hours per week ! three months; 46 hours per week for three months; a : ] week for three months (Pet. App. D6) 5 a matter of just and reasonable inference,’ /d., that all of the employees regularly worked over eight hours on week- days and over six hours on many Saturdays” (Pet. App. A5). Because that testimony “directly supports” the dis- trict court’s finding that “all” petitioner’s employees regularly worked more than 40 hours per week, the court of appeals held that the 23 nontestifying employees had also established a prima facie case that they had worked unreported hours (/bid.). Next, the court of appeals held that petitioner had failed to meet its burden under Mr. Clemens Pottery to negate the reasonable inference from the testimony that all ot petitioner’s employees were similarly situated (Pet. App. AS). The court afforded “great deference” to the trial court’s determination that petitioner’s witnesses were not credible, and found that credibility determination “not clearly erroneous” (id. at AS-A6). As petitioner did not contest the district court’s tinding that its payroll records were false and inaccurate, there was no credible evidence to negate the ‘reasonable inferences” drawn trom the Secretary's case (id. at A4, A6). Finally, the court of appeals affirmed the disirict court’s damages award, applying the Mr. Clemens Pottery stand- ard that, if an employer tails to carry its burden ot estab- lishing the precise amount of work performed, damages are to be awarded “even though the result may be only ap- proximate” (Pet. App. A6 (quoting Mir. Clemens Pottery, 328 U.S. at 688)). Noting that the district court had “con- sidered the inconsistencies in the testimony of the Secre lary’s witnesses when it tormulated the awards,” the cour concluded that the damages awarded were “properly based upon reasonadie inferences [rom (the emy mony” (:bid.) 6 ARGUMENT The decision of the court of appeals is correct and does not conflict with any decision of this Court or of any other court of appeals. Accordingly, no further review is war- ranted. 1. In Mt. Clemens Pottery, this Court held that, if an employer has failed to keep proper records of wages and hours as required by law, an employee seeking to prove a violation of the FLSA need only “prove[ ] that he has in fact performed work for which he was improperly com- pensated” and “produce[ ] sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference” (328 U.S. at 687). Thereafter, the burden shifts to the employer “to come forward with evi- dence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee’s evidence” (id. at 687-688). It the employer fails to meet that burden, damages may be awarded “even though the result be only approximate” (id. at 688). That allocation of the burden of proof “proper{ly] and fair[{ly]” avoids penalizing employees by “plac[ing] a premium on an employer’s failure to keep proper records in conformity with his statutory duty” (id. at 687).? > Petitioner’s contention that each employee must testify in order to establish the “fact of overtime work” (Pet. 9 (emphasis omited)) is simply wrong. See, e.g., Donovan v. Bel-Loc Diner, Inc., 780 F.2d 1113, 1116 (4th Cir. 1985); Donovan v. Simmons Petroleum Corp., 725 F.2d 83, 86 (10th Cir. 1983); Donovan v. New Floridian Hotel, Inc., 676 F.2d 468, 472 (11th Cir. 1982); Brennan v. General Motors Acceplance Corp., 482 F.2d 825, 829 (Sth Cir. 1973). Indeed, Af. Clemens itself was a suit by a local union and seven of its members on behalf of some 300 similarly situated employees, only eight of whom testified at trial. See M/7. Clemens Pottery Co. v. Anderson, 149 F.2d 461, 462 (6th Cir. 1945), rev’d, 328 U.S. 680 (1946). The award of back wages to 23 nontestifying employees in this case is fully consistent with the uniform application of Mt. Clemens Pottery to permit recovery of back wages on behalf of nontestifying employees, based on the repre- sentative testimony of other similarly situated employees. ? As the Eleventh Circuit recently explained, “(t]he fact that several employees do not testify does not penalize their claim; it is clear that each employee need not testify in order to make out a prima facie case of the number of hours worked as a matter of just and reasonable infer- ence.” Brock v. Norman’s Country Market, Inc., 835 F.2d 823, 828 (1988) (internal quotation marks and citations omitted), cert. denied, No. 87-1593 (June 20, 1988). In- stead, “[cJourts have frequently granted back wages under the FLSA to non-testifying employees based upon the representative testimony of a small percentage of the employees,” as long as that testimony is “fairly repre- sentational” of the larger group (Donovan v. Bel-Loc Diner, Inc., 780 F.2d at 1116). “The Secretary is not re- quired to present each employee as a witness”; and it is “in- adequate” to compensate only employees who “chose or were chosen to testify” if other employees were also im- > Donovan v. Bel-Loc Diner, Inc., supra (testimony of 22 em- ployees supports award to 98 employees); Donovan v. Williams Oil Co., 717 F.2d 503 (10th Cir. 1983) (testimony of 19 employees sup- ports award to 34 employees at nine separate service stations); Castillo Vv. Givens, 704 F.2d 181 (5th Cir.) (testimony of 13 employees supports award to 39), cert. denied, 464 U.S. 850 (1983); Donovan v. New Floridian Hotel, Inc., supra (testimony of 23 employees supports award to 207); Brennan \. General Motors Acceptance Corp., 482 F.2d 825 (Sth Cir. 1973) (testimony of 16 employees supports award to 27); Marshall vy. Brunner, 500 F. Supp. 116 (W.D. Pa. 1980) (testimony of 48 employees supports award to 93), aff'd, 668 F.2d 748 (3d Cir. 1982). properly paid. Brock v. Tony & Susan Alamo Foundation, 842 F.2d 1018, 1019-1020 (8th Cir. 1988).4 The obvious pragmatic basis for permitting reliance on such representative testimony is to avoid burdening the trial courts with unending parades of cumulative wit- nesses. See, e.g., Donovan v. Burger King Corp., 672 F.2d 221, 225 (Ist Cir. 1982) (approving a significant limitation on the number of witnesses in an FLSA case as within the trial court’s broad discretion under Fed. R. Evid. 403 to prevent the “needless presentation of cumulative evidence”). In this case, as in Burger King, the district court itself decided to hear only five employee witnesses called by the Secretary because further testimony would have been cumulative (Pet. App. D2-D3). The court of ap- peals, after reviewing the record, concluded that the testi- mony of these five employees “directly supports the district court’s findings that all [petitioner’s] employees regularly worked over forty hours per week” and estab- lished a prima facie case on behalf of the 23 nontestifying employees (Pet. App. A5). Since that prima facie case was not rebutted, all 28 named employees were awarded back wages. * None of the cases on which petitioner relies (Pet. 11) in any way undermines the general validity of representative testimony in FLSA cases. Gilbert v. Old Ben Coal Co., 407 N.E.2d 170 (Ill. App. 1980), Was not a pattern and practice case at all, but merely an unpersuasive claim by two individual plaintiffs. In Marshall vy. R & M Erectors, 429 F. Supp. 771 (D. Del. 1977), the court actually awarded benefits to 12 identified, nontestifying employees based on testimony by 11 other employees, denying relief only to 11 unidentified employees as to whom there was virtually no record evidence. In Brennan v. Parnham, 366 F. Supp. 1014 (W.D. Pa. 1973), the court also awarded back wages to unidentified employees. Here, of course, the Secretary sought relief only for 28 employees specifically named in her com- plaint, whose periods of employment and wages were reflected on petitioner’s payroll records (Pet. App. B6, D11). 9 Petitioner also complains that in this case there was “no reliable, admissible evidence of the fact of damage” to the 23 nontestifying employees, contending that the claim on their behalf was supported only by “insubstantial, bald hearsay” (Pet. 10). That argument is plainly wrong. The Secretary’s five witnesses testified concerning the hours worked by themselves and their fellow workers based on personal knowledge and direct observation.* On appeal, petitioner did not challenge either the admissibility of that evidence or its reliability as to the hours worked by the testifying employees. Nor was that evidence “hearsay”: the witnesses testified based on personal observation of their coworkers’ presence in the garment factory, not by repeat- ing their coworkers’ out-of-court statements that they had worked overtime. See Fed. R. Evid. 801(c); E. Cleary, Mc- Cormick on Evidence § 246 (3d ed. 1984) (definitions of hearsay). The district court did not err by admitting and crediting the testimony of the Secretary’s witnesses about their coworkers’ hours. 2. Petitioner now asks this Court to “re-examine[ }” Mt. Clemens Pottery by holding, contrary to the unani- mous opinion of the courts of appeals, that it does not authorize recovery of back wages under the FLSA on behalf of nontestifying employees (Pet. 9). Instead, peti- tioner wants this Court to require, for the first time, that each employee on whose behalf an award of back wages is sought “testify briefly in open court,” adding that “since the statute directs the Secretary to pay each employee his 5 The Secretary’s witnesses not only testified as to their own hours of work, but also stated that their fellow employees worked the same hours that they did (Tr. 29, 78-79, 187, 366-367 (naming other em- ployees who worked the same hours as testifying employees)). Cf. Beliz v. McLeod & Sons Packing Co., 765 F.2d 1317, 1331 45th Cir. 1985) (representative witnesses may testify based on personal knowl- edge of the work performed by their nontestifying coworkers). 10 share of the recovery, it seems ludicrous to allow any recovery for an employee whose whereabouts are un- known” (Pet. 14). Mt. Clemens Pottery, however, needs no reassessment; it has stood well the test of time and has been faithfully and sensibly applied by the lower courts. An employer who fails to keep accurate records as re- quired by the FLSA “ ‘cannot be heard to complain’ ” if an award of damages lacks “ ‘precision of measurement.’ ” Brock v. Seto, 790 F.2d 1446, 1448 (9th Cir. 1986) (quoting Mt. Clemens Pottery, 328 U.S. at 688). An honest employer has nothing to fear from the rule that reasonable inferences about nontestifying workers’ hours can be drawn from the testimony of other workers. Only because petitioner’s records were “false and inaccurate” (Pet. App. D4) was it necessary to engage in any process of inference in order to reconstruct his employees’ hours. Petitioner now seeks to benefit from the falsity and inac- curacy of his own records. As the Mr. Clemens Court held (328 U.S. at 687), no such benefit is due.°® * Moreover, the FLSA expressly authorizes awards of back wages that are unclaimed by employees after three years to revert to the Treasury of the United States (29 U.S.C. 216(c)). That rule, and the tull disgorgement ordered against petitioner in this case, serve not only to ensure that an emplover will lack the incentive to underpay employees in the hope that they cannot be found later, but also to “eliminate the competitive advantage enjoyed by goods produced under sudstandard conditions.” Circorp Industrial Credit, Inc. v. Broce, No. 86-88 (June 22, 1987), slip op. 8; see 29 U.S.C. 202(a). 11 CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. CHARLES FRIED Solicitor General GEORGE R. SALEM Solicitor of Labor ALLEN H. FELDMAN Associate Solicitor MARY-HELEN MAUTNER Counsel for Appellate Litigation ELLEN L. BEARD Altorney Department of Labor DECEMBER 1988 S GOVERNMENT PRINTING OFFICE 1956--241 699 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_0183%3A2. Public record. Not legal advice.