Petition for Writ of Certiorari — Ackerley v. Lambert

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f 99 681 OCT 20 1999

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Jn the Supreme Court of the Gnited States

BARRY ACKERLEY, WILLIAM ACKERLEY, FULL HOUSE

SPORTS & ENTERTAINMENT, INC., AND SEATTLE

SUPERSONICS, INC..,

PETITIONERS,

LAURA A. LAMBERT, ESTHER ACKLEY, STEVE BELLING.

PAT COOKE, LETITIA SELK, AND CHUCK VILTZ, RESPONDENTS.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Ninth Circuit

PETITION FOR A WRIT OF CERTIORARI

ERIC M. RUBIN ANDREW L. FREY*

WALTER E. DIERCKS ROBERT P. DAVIS

Rubin, Winston, Diercks, DONALD M. FALK

Harris & Cooke, L.L.P. ROBERT L. BRONSTON

1155 Connecticut Ave. NW ELIZABETH A. CLARK

6th Floor Mayer, Brown & Platt

Washington, DC 20036 1909 K Street, NW

202) 861-0870 Washington, DC 20006

(202) 263-3000

* Counsel of Record

Counsel for the Petitioners

\\ERY

QUESTIONS PRESENTED

In this case, the Ninth Circuit held the petitioner

corporations and their chief corporate officers liable for

compensatory and punitive damages for violation of Section

15(a)(3) of the Fair Labor Standards Act, which prohibits an

employer from retaliating against an employee “because such

employee has filed any complaint or instituted or caused to be

instituted any proceeding under or related to” the Act. The

questions presented are:

1. Whether the Ninth Circuit correctly held, in conflict

with the Second Circuit, that Section 15(a)(3) extends to an

employee who complains only to her employer and not to a

court or government labor-regulatory agency.

2. Whether the principal officers of large, solvent

corporations may be held personally and separately liable for

retaliation based solely on their authority to control the

operating unit in which the complaining employee worked.

3. Whether the Ninth Circuit violated due process and

deprived petitioners of their right to a jury trial by entering

judgment for the respondents based on the sufficiency of the

evidence supporting a legal theory that was never presented to

the jury.

(i)

PARTIES TO THE PROCEEDING

All parties are listed in the caption. Petitioner Seattle

SuperSonics, Inc. was formerly known as SSI Sports, Inc., and

was so named in the complaint.

RULE 29.6 STATEMENT

Petitioners Full House Sports & Entertainment, Inc., and

Seattle SuperSonics, Inc. are wholly owned subsidiaries of The

Ackerley Group, Inc. The Ackerley Group, Inc. is a publicly

traded corporation that was known as Ackerley Communi-

cations, Inc. until October 1, 1996.

TABLE OF CONTENTS

Page

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STATUTES AND CONSTITUTIONAL PROVISIONS

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A. Statutory Background .........cccccecceeess 2

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IO go is ogc tecce ne eeneseaeas 7

REASONS FOR GRANTING THE PETITION ......... 9

I. THIS COURT SHOULD RESOLVE THE

CONFLICT AMONG THE CIRCUITS OVER THE

SCOPE OF THE FLSA ANTI-RETALIATION

| EES Na ery ar ee ere roe See Ee 10

A. The Circuits Are Divided On The Scope Of

ee ee aera 1]

B. The Scope Of Section 15(a)(3) Is An Important

And Recurring Question Of Federal Law On

Which Uniformity Is Important .............. 13

TABLE OF CONTENTS — Continued

Page

C. The Ninth Circuit Violated Virtually Every

Principle Of Statutory Construction In Allowing

Its Misreading Of The “Animating Spirit” Of The

FLSA To Override The Ordinary Meaning Of

Eine Statalory LANMUIOS oooh cee cidaanes 15

I. THE NINTH CIRCUIT COMPOUNDED ITS

ERROR BY CONSTRUING THE FLSA TO

RENDER CORPORATE OFFICERS PERSONALLY

LIABLE FOR THEIR) SUBORDINATES’

ERM EEEIEE ince cyacustetucdeureisate 20

Hl. THE NINTH CIRCUIT VIOLATED PETITIONERS’

JURY TRIAL RIGHT BY AFFIRMING A FINDING

ON A DISPUTED, ESSENTIAL ELEMENT OF

LIABILITY ON A BASIS NOT FOUND BY THE

SE ks bene e ALTER OR eee a

ea 2 22.826 8 « Cee

& & Eo), ee re ere re a kee 28

TABLE OF AUTHORITIES

Page(s)

Cases:

Addison v. Holly Hill Fruit Products, Inc.,

Far Ue GOT NE a 4h Oe eee 16, 20

Ball v. Memphis Bar-B-Q Co., 34 F. Supp.2d 342

(E.D. Va. a a Mee eek aes ]2

Barrentine v. Arkansas-Best Freight System,

RIO SSS. Fares. kp osad waked setae eee 17

Baystate Alternative Staffing, Inc. v. Herman,

1G5 F.36 Ge COG, FSGGE ance cea eceks cecesas 21

Beacon Theaters, Inc. v. Westover, 359 U.S. 500

(ROSS x odue ade kdcbe eee 0 eee 27

Bevins v. Dollar General Corp., 952 F. Supp. 504

188 CR | . 2) errr me Fe Lae 13

Blackie v. Maine, 75 F.3d 716 (Ast Cir. 1996) .......... 28

BMW v. Gore, 517 U.S. 559 (1996) ............ 20s 24

Bonnette v. California Health & Welfare Agency,

704 F.20 $065 (5 Cor, WORF on on cn hc asceadeiass 9

Booth v. Intertrans Corp., 68 Fair Emp. Prac. Cas.

(BNA) 433, 1995 WL 324631 (E.D. La. 1995) ..... 13

Booze v. Shawmut Bank, Connecticut, _ F. Supp.2d _,

1999 WL 613313 (D. Conn. 1999) .............. 13

Bradley v. United States, 410 U.S. 605 (1973) ......... 15

Brennan v. Maxey's Yamaha, Inc., 513 F.2d 179

CORN. BSS? ss weeks (Sa beau see) veer secu 12

Brock v. Richardson, 812 F.2d 121 (3d Cir. 1987) ...... 12

Clevinger v. Motel Sleepers, Inc., 36 F. Supp.2d 322

(WD. S| eee re ee re re 12

Conner v. Schnuck Markets, 121 F.3d 1390

$3) To A) oj GRA rrr rr ar 13

TABLE OF AUTHORITIES — Continued

Page(s)

Cuevas v. Monroe Street City Club, Inc..

752 F. Supp. 1405 C6.D. Bh. T99OD. oss sscuawaeuss 13

D.A. Schulte, Inc. v. Gangi, 328 U.S. 108 (1946) ....... 17

Daniel v. Winn-Dixie Atlanta, Inc., 611 F. Supp. 57

(NLD. Ge FSGS) cess ccc s inns esaneee eae 13

Digiore v. State of Illinois, 962 F. Supp. 1064

(N. Da BB. 1OBT) .h0s0 vases nnnteeeaeee ees 25

Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962

(Gir Cor. 1DPT) i ince cies ene 0446555005 eee

Donovan v. Agnew, 712 F.2d 1509 (1st Cir. 1983) ... 21,24

Donovan v. Grim Hotel Co., 747 F.2d 966

(Ss Cie, TRUE). voc cakes sch aesectpees ee 2]

EEOC v. Romeo Community Schools, 976 F.2d 985

(Gt Coe. SRE) ove skvsvcetskseeevee ne 11,12

EEOC v. White & Son Enterprises, 881 F.2d 1006

4b) Le, err te ie 12

Elbaz v. Congregation Beth Judea, Inc., 812 F. Supp. 802

(ND. TH BSR) coc scvkcsceceevobecen vere 13

Faragher v. City of Boca Raton, 118 S. Ct. 2275

(3DFS) oo annccaueads ceaeeeke cae eee 14

Fegley v. Higgins, 19 F.3d 1126 (6th Cir. 1994) ........ 24

Feltner v. Columbia Pictures Television, Inc., 7

Pi bee Bye, it, | Rewer ma ee 27 :

Fry v. lowa City, 538 N.W.2d 302 (lowa App. 1995) .... 13 !

Hayes v. McIntosh, 604 F. Supp. 10 (N.D. Ind. 1984) ... 13

Henry v. United States, 251 U.S. 393 (1920) ........... 15

Herman v. RSR Security Services Litd., 172 F.3d 132

(let Cie, TP. vc icvveneetcitscse pee 21,25

Vii

TABLE OF AUTHORITIES — Continued

Page(s)

Hughes Aircraft Co. v Jacobson, 119 S. Ct. 755

ENE cide ek conan ant eae FAP ee 17

Iselin v. United States, 270 U.S. 245 (1926) ........... 20

Johns v. Cianbro Corp., 1999 WL 200699

ee MND ob Seed dee Ge Re re ca es 13

Jones v. Westside-Urban Health Center, Inc.,

760 F. Supp. 1575 (S.D. Ga. 1991) .........0.... 13

Knickerbocker v. City of Stockton, 81 F.3d 907

Coy SOD © 6 escata Os oe Ew <b x0 die eee sede 13

Kowalski v. Kowalski Heat Treating Co., 920 F. Supp.

fe gk sg, | a a! Pr oe ene aes are 13

Laird v. Chamber of Commerce. 4 Wage & Hour Cas.2d

(BNA) 1629, 1998 WL 240401 (E-D. La. 1998) ..... 13

Lambert v. Genesee Hospital, 10-F.3d 46

(2d Cir. 1993), cert. denied, 511 U.S. 1052

CRONE hd naa Cae cao bh ae desk weeks 8.11

Lee v. Coahoma County, 937 F.2d 220 (Sth Cir. 1991) .. 24

Lins v. Children’s Discovery Centers, 976 P.2d 168

Ce I as oe ewe te nwa ka Was Xs 27

Love v. Re/Max of America, Inc., 738 F.2d 383

errr re Peer rer renee 12

Loving v. United States, 517 U.S. 748 (1996) .......... 19

Lyni1's Food Stores, Inc. v. United States,

Fe Fe Pe EAR Ge EEE). ccs oben ccasdcdes 17

McKenzie v. Renberg’s, Inc., 94 F.3d 1478

PE UNS os aaa a bas exe un ait kW ote 13

Mitchell v. DeMario Jewelry, Inc., 361 U.S. 288

SE 85a oe es oe eee kk

Vill

TABLE OF AUTHORITIES — Continued

Page(s)

O'Neill v. Allendale Mutual Ins. Co., 956 F. Supp.

ee SO EE 6 kg eo lnaces neers 12

Patel v. Wargo, 804 F.2d 632 (11th Cir. 1986) ......... 24

Prewitt v. Factory Motor Parts, Inc., 747 F. Supp.

Ee I ED nes dasa es We an ks 13

Rodriguez v. United States, 480 U.S. 522 (1987) ....... 16

Saffels v. Rice, 40 F.3d 1546 (8th Cir. 1994) .......... 12

Sandt v. Holden, 698 F. Supp. 64 (M.D. Pa. 1988) ...... 13

Sappersteinv. Hager, _F.3d__, 1999 WL 623907

qe 2 ee ee rer oe 18

Textron Lycoming Division, Avco Corp. v. UAW,

Rae Oe ee DN aos Fa Sete eees ia Bes 18

United States Department of Labor v. Cole

Enterprises, Inc., 62 F.3d 775 (6th Cir. 1995) ...... 21

United States v. Gaudin, 515 U.S. 506 (1995) ......... 27

Valerio v. Putnam Associates Inc., 173 F.3d 35

Ca SE oS e aA Caine ooh anus bee 12

Walters v. Metropolitan Educational Enterprises,

SE: TE 8 tke Peete a ee 15

Walton v. United Consumer Club, Inc., 786 F.2d

Fone, oS Cnn ere rr rere 16,17

West Virginia University Hospitals v. Casey,

oo te Be cP.) a ee ee ea 18, 20

Wittenberg v. Wheels, Inc., 963 F. Supp. 654

Re SO ar ek bids ca SE Ca ee ak e's 13

TABLE OF AUTHORITIES — Continued

Page(s)

Statutes:

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PN I Wied Caches a hnda sae ke aN ak aa coee 2

Rs EY shou hia K oud cKeeskeeuben ss 1,3, 22

EE cic gad he hake no Ce 10 sOR aca ec 18

Pe ED sR e Scses OCs BaWe kw es we 14

EE i 5 Cog icc sa kuys wana e sek AAO RAS 14

aE RS PNK chee eT awa hs ewan 14

rs RED 0 a4 A Sacco ben ven cdvencecans 18

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Re ee I ha accede eek aks evanaes 18

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WU CHIT PUES ok aoc s cu sccannsensdasvctene 19

RR a er re eer 14

TABLE OF AUTHORITIES — Continued

Page(s)

Pub. L. No. 99-150, § 8, 99 Stat. 791 (1985) ........... 19

Wash. Rev. Code § 49.46.100(2) ................. 8, 25

DO SA ee Se eh vec he C06 a ae okt er ee 28

Miscellaneous:

Hearings on the Fair Labor Standards Amendments

Subcomim. on Labor, 95m Cong. ist Sess (1977) .... 3

H. Conf. Rep. No. 2738, 75th Cong., 3d Sess. (1938),.2, 3, 16

H.R. Rep. No. 1452, 75th Cong., Ist Sess. (1937) ....... 2

S. 2475, § 22(c), 83 Cong. Rec. 1577 (1937) ....... 13,19

1 M. ROTHSTEIN, ef al., EMPLOYMENT LAW (1994) ...... 17

U.S. Dep’t of Labor, Handy Reference Guide to the

Fair Labor Standards Act (Oct. 1996) ......... 15,24

U.S. EEOC. Compliance Manual, Section 8 (1998) ..... 1]

PETITION FOR A WRIT OF CERTIORARI

} Barry Ackerley, William Ackerley, Full House Sports &

: Entertainment, Inc., and Seattle SuperSonics, Inc. respectfully

P petition for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Ninth Circuit in this

case.

OPINIONS BELOW

The opinion of the en banc court of appeals (App., infra,

la-37a) is reported at 180 F.3d 997. The opinion of the court of

appeals panel (App., infra, 38a-52a) is reported at 156 F.3d

1018. The opinions of the district court (App., infra, 53a-76a)

are unreported.

JURISDICTION

The judgment of the court of appeals was entered on June

10, 1999. App., infra, 1a. A timely petition for rehearing was

denied on July 22, 1999. App., infra, 77a. The jurisdiction of

this Court is invoked under 28 U.S.C. § 1254(1).

STATUTES AND CONSTITUTIONAL PROVISIONS

INVOLVED

The pertinent statutes and constitutional provisions are

reproduced in the Appendix. The statutes involved are 29

U.S.C. §§ 203(d), 215(a)(3), and 216(b). The constitutional

provisions involved are the Fifth and Seventh Amendments.

STATEMENT

‘ This case presents questions of broad practical importance

: to the administration of the Fair Labor Standards Act

(“FLSA”), 29 U.S.C. § 201 et seg. The Ninth Circuit effec-

tively set aside the language of the relevant statutory provision

in favor of policies that the court believed would better serve

the goals of the Act. Its reading extends a prohibition on the

discharge of an employee who “has filed any complaint or

instituted or caused to be instituted any proceeding under or

| related to” the FLSA to employees who complain only to their

employer.

OO ————OEOEeEeEeEe

The Ninth Circuit also permitted punitive damages to be

imposed not only on the employing corporation but separately

and additionally on individual corporate officers, based on their

“significant control” over the company’s business operations.

This ruling sustained $2.8 million of personal punitive liability

despite the fact that there was no jury finding (and, indeed, no

evidence) that either defendant knew of, approved, or condoned

any unlawful retaliatory discharge.

A. Statutory Background

Congress enacted the FLSA in 1938 to serve four goals: (1)

to provide workers a subsistence wage; (2) to eliminate exploit-

ative child labor; (3) to minimize, through economic disincen-

tives for overtime work, any deleterious effects of an over-

worked labor force; and (4) to increase employment by making

it more attractive at the margin to hire an additional person than

to require existing employees to work overtime. See generally

29 U.S.C. § 202(a); H. Conf. Rep. No. 2738, 75th Cong., 3d

Sess. 21 (1938); H.R. Rep. No. 1452, 75th Cong., Ist Sess. 5-7

(reprinting President's message to Congress), 6-8 (1937). The

Department of Labor has primary responsibility to administer

and enforce the Act.

The FLSA employed two means of ensuring an adequate

flow of information to the Labor Department. First, Congress

imposed recordkeeping obligations enforceable by injunction

and criminal penalties. 29 U.S.C. §§ 211, 215(a)(5), 216(a).

Second, it “chose to rely on information and complaints

received from employees seeking to vindicate rights claimed to

have been denied.” Mitchell v. DeMario Jewelry, Inc., 361 U.S.

288, 292 (1960). As this Court explained, effective enforcement

of this scheme “could * * * only be expected if employees felt

free to approach officials with their grievances.” Jbid. To

prevent obstruction of the administration and enforcement of

the FLSA, Section 15(a)(3) of the Act, 29 U.S.C. § 215(a)(3),

intruded narrowly upon the traditional at-will employment

relationship by forbidding employers to discharge or otherwise

discriminate against any employee who initiated or testified in

a proceeding under the FLSA. See H. Conf. Rep. No. 2738,

supra, at 33. This “prohibition * * * against discharges and

other discriminatory practices was designed to serve” the “end”

of maintaining employee access to enforcement “officials.” De

Mario Jewelry, 361 U.S. at 292.

Under the FLSA as originally enacted, employees could

bring private actions to recover unpaid minimum wages and

overtime; but only the Secretary of Labor could sue to preserve

the interests in effective administration and enforcement of the

FLSA protected by the retaliatory discharge prohibition of

Section 15(a)(3). In 1977, however, the Secretary, concerned

about limitations on the enforcement capabilities of the

Department, proposed expanding the private right of action in

Section 16(b) of the FLSA, 29 U.S.C. § 216(b), to include

retaliatory discharge cases. “The kind of problem we are

concermed about here,” the Solicitor of Labor told the Senate,

“is where an employee complains to us * * * [,] we bring a suit

on his behalf and on behalf of his coworkers, and we win, * * *

but a month later that employee loses his job.” Hearings on the

Fair Labor Standards Amendments of 1977, Senate Comm. on

Human Resources, Subcomm. on Labor, 95th Cong., Ist Sess.

17 (1977). Congress agreed, and created a private action for

retaliatory discharge by adding a sentence to Section 16(b).

B. Factual Background

1. Respondents were employed by petitioner Full House

Sports & Entertainment, Inc., as ticket sales account executives

(“AEs”) for the Seattle SuperSonics basketball team. Petitioner

Seattle SuperSonics, Inc. (“Sonics”) previously employed some

of the respondents, and at trial was treated collectively with

Full House (“Corporations”). Petitioner Barry Ackerley was

the CEO and Chairman of the Board of Ackerley Communica-

tions, Inc. (“ACI”), the publicly traded corporate parent of the

Corporations. ACI had six operating subsidiaries and more

than 1,000 employees in a variety of businesses throughout the

United States. CR 121, Ex. A:4-8 (Form 10-k).' Barry

Ackerley also was CEO of the Sonics and Chairman of the

Board of the Sonics and Full House. Petitioner William Acker-

ley was ACI’s Chief Operating Officer, and vice-president and

a director of both the Sonics and Full House. ER 356-357.

Respondents took telephone orders and made telephone

solicitations for Sonics season tickets, multi-game packages,

and group sales. App., infra, 2a. Beginning in 1991, ticket

sales agents were paid a $13,000 base salary, receiving most of

their compensation by commission. /d. at 2a-3a. Under that

arrangement, respondent Lambert earned $91,438 for the 1993-

94 year, and other respondents earned over $60,000. ER 277;

Ex. A-344.

Respondents’ compensation included season tickets to the

basketball games, but they also had occasional work assign-

ments at the games. ER 189. Before each game and at inter-

mission, two AEs staffed a season ticket information booth. ER

208-211. In 1991, the Sonics began paying AEs an allowance

of up to $2,000 for overtime work at basketball games and

other special events. App., infra, 3a. At some point, the Sonics

began paying routine semi-monthly $166.67 installments

during the basketball season, regardless of overtime actually

worked. /hid.

In March 1994, John Dresel, Sonics Executive Vice-

President, authorized a restructuring of the sales operations to

unify the ticket sales operation in which respondents were

employed with the ticketing function, emphasize customer

service, and rationalize the compensation system across

different sales functions. ER 122-125. Concluding that, at

$60,000 to $90,000 per year, the ticket sales AEs were over-

paid, Senior Vice-President of Sales Laura Kussick decided to

' Record citations follow the abbreviations used in the court of appeals for

the Excerpts of Record (ER), Supplemental Excerpts of Record (SER),

Clerk’s Record (CR), and Reporter’s Transcript (RT).

——eEE—————————————

bring the AEs’ compensation structure in line with that of other

NBA teams, where salespersons performing similar functions

earned no more than $40,000. ER 152, 212-213. Kussick and

ticket sales director Bob Boustead discussed the new compen-

sation plan with each AE and had follow-up discussions with

Lambert and Viltz, whom the ticket sales agents had chosen “to

sort of represent the group.” ER 287-288. Overtime issues

were not raised during these talks. ER 195.

2. Basketball season ticket sales are, of course, highly

seasonal. By December of the 1993-94 season, when Sonics

tickets were largely sold out, the AEs had little to do beyond

clerical follow-up on group sales. The AEs’ work week was

cut to 20 hours plus game nights. App., infra, 3a. Because AEs

were working fewer than 40 hours per week, the Sonics

discontinued the automatic $166.67 overtime payments. /bid.

Lambert eventually realized that, not having worked

overtime throughout the season, she had not received the full

$2,000. On May 2, 1994, she left a note with Sonics controller

Brian Dixon requesting a meeting about overtime payments.

App., infra, 3a. She raised the matter with Boustead that day,

and again at a ticket sales staff meeting on May 16. ER 166-

170.

Two days later, Lambert telephoned the Department of

Labor to ask for information. App., infra, 3a. Following that

conversation, she spoke again with Boustead, who informed her

that the overtime payments were a “dead issue.” Jbid. Lambert

then telephoned the Department again and asked for written

information about overtime requirements. ER 174-175.

Lambert presented that information to Dixon on May 20.

App., infra, 3a. Lambert was permitted to testify at trial that

Dixon told her that he “knew the Sonics were breaking the

laws” but that “his hands were tied [because] Bill Ackerley

w[ould] not pay overtime and did not] believe” — or “care,”

depending on the retelling — “what the laws [were].” Jbid.; ER

176. Lambert claimed that Dixon warned her that she would be

fired if she pursued the overtime issue. App., infra, 3a-4a.’

On June 17, Lambert’s attorneys sent Barry Ackerley a

letter detailing her overtime complaints. ER 117-118. In the

letter — which began, “We represent Laura Lambert” (ER 117)

— the attorneys did not purport to represent anyone other than

Lambert, although they did point out that the violations to

which they referred affected other employees as well as

Lambert. On the same day, Dresel wrote Barry Ackerley’s

name in his calendar, along with references to “Laura Lam-

bert,” “season ticket sales/renewals,” and “new building

sponsorships.” ER 141. About a week later, Dresel notified

ACI’s general counsel of Lamberi’s complaints; assuming that

Barry Ackerley would be informed of this as well, Dresel wrote

“Barry being told” on a notepad. ER 121, 254-255.

Lambert invited the other AEs to join her in a lawsuit, but

they all declined. RT [2/8]:165-167. On July 6, 1994, Lambert

delivered to the Sonics (but did not file) a draft complaint for

unpaid overtime for herself alone, naming Barry Ackerley,

William Ackerley, and the Sonics as liable parties. App., infra,

4a; RT [2/8}:150-151. On October 6, the Sonics settled this

claim in exchange for a full release. App., infra, 4a. The

Sonics also paid other employees (including respondents

Ackley, Cooke and Viltz) amounts calculated to be due them

for overtime, and obtained releases from them. Jhid.

3. Full House, with Dresel as president, took over the

business operations of the Sonics on October 17, 1994. RT

{2/16]:753. During the 1994-95 season, the Sonics played in

the Tacoma Dome while a new arena was built in Seattle. ER

268A-270. Anticipating another mid-season decline in AE

Dixon flatly denied having made any such statement, he acknowledged

having told Lambert she might be “jeopardizing her future with the organiza-

tion,” but testified that this comment related to the “threatening approach”

she was taking. ER 314-317.

work, Dresel had told William Ackerley shortly before the Full

House conversion that there likely would be insufficient work

to keep the AEs busy and that he planned to lay off the entire

staff by November 30. ER 113. The Tacoma Dome group

sales staff could handle the Sonics’ light workload until the

playoffs approached in the spring. See ER 243-244, 297-298.

Dresel discharged the ticket sales staff in early December

1994. App., infra, 4a. The discharged AEs were offered

severance packages that included a lump sum payment and

continued medical coverage for several months, but employees

who wished to reserve the right to apply for the new post-

restructuring positions were not eligible for severance compen-

sation. ER 114-116. The six respondents each declined the

severance package, although none in fact applied for the four

restructured, narrower AE positions (or the three group sales

jobs) that Full House began to fill in March 1995. ER 205,

223-224; RT [2/8]:212-213. Instead, they brought this action.

C. Proceedings Below

1. Respondents sued petitioners in state court for unpaid

overtime compensation and for retaliatory discharge under the

FLSA and Washington law. Petitioners removed the case to the

Western District of Washington. The district court granted

summary judgment to respondents on liability for unpaid

overtime, and the parties deferred the determination of the

aggregate amount (agreed to be between $5,000 and $15,000).

ER 358-359; CR 103.

The retaliatory discharge claims were tried to a jury, which

awarded damages of more than $13,000,000: $697,000 for lost

earnings; $450,000 for emotional distress (an even $75,000 per

respondent); and a whopping $12,000,000 in punitive damages

($5,000,000 against the Corporations, $4,000,000 against Barry

Ackerley, and $3,000,000 against William Ackerley). See CR

203. The district court denied motions for judgment as a matter

of law on liability and damages, but remitted each of the

punitive damage awards to $1,394,000, for a total of

$4,182,000. App., infra, at 53a-76a.

2. A unanimous panel of the Ninth Circuit (Brunetti,

Rymer, and Kleinfeld, JJ.) reversed in part. App., infra, 38a-

52a. The panel agreed with the Second Circuit that the lan-

guage of 29 U.S.C. § 215(a)(3) was “plain and unambiguous.”

Id. at 45a (citing Lambert v. Genesee Hospital, 10 F.3d 46, 50

(2d Cir. 1993), cert. denied, 511 U.S. 1052) (1994)). That plain

language, the panel held, “limits the cause of action to retalia-

tion for filing formal complaints, instituting a proceeding, or

testifying, but does not encompass complaints made to a

supervisor.”” Jbid. (quoting Genesee Hospital, 10 F.3d at 50).

The panel explicitly rejected the approach of several courts of

appeals that had “extend[ed] the language of § 215(a)(3)

beyond its plain meaning so as to effectuate the broad remedial

purposes of the FLSA.” /d. at 48a (internal quotation marks

omitted). Because respondents had not engaged in any conduct

enumerated in that section, the panel held that they had “failed

to state a retaliation claim under the FLSA.” Jd. at 47a.

The panel affirmed the portion of the judgment resting on

Washington law because — unlike the FLSA — “Washington

law prohibits retaliation against an employee who ‘has made

any complaint to [her] employer.’” App., infra, 48a (quoting

Wash. Rev. Code § 49.46.100(2)). Because Washington law

does not allow for punitive damages in wrongful termination

cases, the panel had no need to address punitive damages. The

panel also vacated the identical awards of $75,000 to each

respondent in emotional distress damages as excessive and

unsupported. Jd. at 50a-51a.

3. Respondents sought rehearing en banc, which was

granted. The Equal Employment Opportunity Commission

supported the request, observing that “the scope of the anti-

retaliation provision is an issue of exceptional importance on

which national uniformity is vital.” EEOC C.A.. Br. 2. (The

—ESESEa_aaaeaE

EEOC enforces the Equal Pay Act, 29 U.S.C. § 206(d) et seq.,

which is an amendment to the FLSA.)

On rehearing — where respondents also attracted amicus

support from the Secretary of Labor — the Ninth Circuit

affirmed the judgment of the district court in an opinion written

by Judge Reinhardt. App., infra, 1a-27a. Acknowledging that

the language of the FLSA was “possibly subject to differing

interpretations” (id. at 9a), the majority declared that

“§ 215(a)(3) protects from retaliation employees who complain

to their employer about alleged violations of the Act.” Jd. at

17a. In assigning an expansive scope to the statutory prohibi-

tion, the majority relied on “the guiding purpose and design of

the FLSA” (id. at 2a) and “the animating spirit of the Act” (id.

at 8a).

Finding that respondents had stated a claim under the

FLSA, the en banc majority addressed petitioners’ other argu-

ments. The court ruled, inter alia, that it was permissible to

impose separate, additive punishment on Barry Ackerley and

William Ackerley because, as Judge Reinhardt put it, the

statutory definition of “employer” should receive an “expansive

interpretation in order to effectuate the FLSA’s broad remedial

purposes.” Jd. at 25a (quoting Bonnette v. California Health &

Welfare Agency, 704 F.2d 1465, 1469 (9th Cir. 1983)).

Judge Rymer dissented in part, joined by Judge Fernandez.

She observed that “[w]hile the majority’s view that 29 U.S.C.

§ 215(a)(3) protects employees who complain to an employer

about overtime may well modernize the FLSA, * * * this is for

Congress — not the courts — to do.” App., infra, 27a-28a. The

dissent adopted and reproduced the bulk of the vacated panel

opinion.

REASONS FOR GRANTING THE PETITION

The Ninth Circuit has cut the FLSA loose from its moor-

ings in important respects that warrant review by this Court.

Although the language of Section 15(a)(3) addresses only the

formal administration and enforcement of the FLSA, the Ninth

Circuit — in square conflict with the Second Circuit — held

that the provision should be construed to cover complaints

made only to employers. As the EEOC has acknowledged,

national uniformity on the point is vital.

In addition, the Ninth Circuit held that individual officers

of the corporate employer were separately liable for damages

based on their routine exercise of executive authority over the

employing corporation. The court of appeals did not require a

finding or proof that the individual violated the Act — or,

indeed, personally authorized, condoned, or even knew of the

violation.

Finally, in an egregious violation of established procedures

and of petitioners’ jury trial rights, the court of appeals rejected

petitioners’ challenge to a jury instruction that eliminated a

crucial element of liability on the ground that the evidence was

sufficient to support liability.

This Court’s review is warranted to resolve the circuit

conflict and to forestall further distortion of the FLSA.

I. THIS COURT SHOULD RESOLVE THE CONFLICT

AMONG THE CIRCUITS OVER THE SCOPE OF

THE FLSA ANTI-RETALIATION PROVISION

Section 15(a)(3) of the FLSA prohibits retaliation against

three seemingly clearly delineated categories of conduct. An

employer may not discharge or discriminate against an em-

ployee because that employee (1) “filed any complaint or

instituted or caused to be instituted any proceeding under or

related to this chapter,” (2) “testified or is about to testify in

any such proceeding,” or (3) “served or is about to serve on an

industry committee.” 29 U.S.C. § 215(a)(3). Only the first

category is even arguably applicable here.* The Ninth Circuit,

> The “industry committee[s]” that once helped determine wage and hour

standards for certain industries now exist only in some overseas territories.

re re ereere

i a a hae A,

in square conflict with the Second Circuit, extended the first

category beyond its plain terms by ruling that the statute covers

“employees who complain to their employer about alleged

violations of the [FLSA].” App.. infra, 17a. This Court should

resolve the conflict.

A. The Circuits Are Divided On The Scope Of Section

15(a)(3)

The Ninth Circuit acknowledged (App., infra, 6a-7a, 11a)

that its decision conflicts with the decision of the Second

Circuit in Lambert v. Genesee Hospital, 10 F.3d 46 (2d Cir.

1993), cert. denied, 511 U.S. 1052 (1994). The current EEOC

Compliance Manual also recognizes the conflict among the

Circuits. U.S. EEOC, Compliance Manual, Section 8-II (B)(1),

at 8—3 n.12 (1998). In Genesee Hospital, the Second Circuit

held that informal complaints to a supervisor do not qualify as

protected conduct under the FLSA’s anti-retaliation provision.

Id. at 55-56.* That court began and ended its statutory analysis

with the unambiguous language of Section 15(a)(3), which “on

its face prohibits retaliation based on ‘three expressly enumer-

ated types of conduct.’” Jd. at 55 (quoting EEOC v. Romeo

Community Schools, 976 F.2d 985, 990 (6th Cir. 1992)

(Surheinrich, J., dissenting)). Accordingly, the Second Circuit

held, “[t]he plain language of this provision limits the cause of

action to retaliation for filing formal complaints, instituting a

proceeding, or testifying, but does not encompass complaints

made to a supervisor.” Jbid.

Several federal courts have followed that common sense

interpretation. In addition to the unanimous Ninth Circuit panel

that originally heard this case and “adopt[ed] the Second

Circuit’s analysis,” see App., infra, 45a, three district courts in

* Genesee Hospital addressed a complaint under the Equal Pay Act, but that

difference is immaterial because that Act “is an amendment to the FLSA and

is codified under the same chapter,” making Section 15(a)(3) applicable

equally to both categories of cases. 10 F.3d at 55.

the Fourth Circuit have recognized that Section 15(a)(3) “could

scarcely be clearer * * *. [T]he well-defined universe of

protected activities does not encompass * * * informal,

unofficial protests.” O'Neill v. Allendale Mutual Ins. Co., 956

F. Supp. 661, 664 (E.D. Va. 1997); see Ball v. Memphis Bar-B-

O Co., 34 F. Supp.2d 342, 346 (E.D. Va. 1999); Clevinger v.

Motel Sleepers, Inc., 36 F. Supp.2d 322, 324 (W.D. Va. 1999).

A number of other circuits, like the en banc Ninth Circuit

in this case, have preferred to subordinate the narrow language

of Section 15(a)(3) to their view of the “animating spirit” of the

FLSA. App., infra, 8a; Valerio v. Putnam Associates Inc., 173

F.3d 35, 43 (1st Cir. 1999). Those courts have held, notwith-

standing the clear language of the FLSA’s anti-retaliation

provision, that informal complaints to an employer also qualify

as protected conduct. See EEOC v. Romeo Community

Schools, 976 F.2d 985 (6th Cir. 1992); Brennan v. Maxey’s

Yamaha, Inc., 513 F.2d 179 (8th Cir. 1975); Love v. Re/Max of

America, Inc., 738 F.2d 383 (10th Cir. 1984); EEOC v. White

& Son Enterprises, 881 F.2d 1006 (11th Cir. 1989).

The Eighth Circuit, which began the process in Maxey’s,

has forthrightly explained that these “courts, in an effort to

further the goals of the FLSA, have extended § 15(a)(3)’s

application to employee conduct not expressly covered in the

act.” Saffels v. Rice, 40 F.3d 1546, 1548 (8th Cir. 1994); see

also White & Son, 881 F.2d at 1011 (courts have extended

Section 15(a)(3) to protect employees who “did not perform an

act that is explicitly listed in the FLSA’s anti-retaliation

provision”).

Indeed, the Third and Eighth Circuits have gone so far as

to hold that there need not have been any protected conduct at

all, only a (mistaken) belief by the employer that such conduct

occurred. See Brock v. Richardson, 812 F.2d 121 (3d Cir.

1987); Saffels, 40 F.3d at 1549-1551; see id. at 1551 (Hansen,

J., dissenting) (viewing courts as “not authorized * * * to

amend the statute by effectively adding * * * words”). Those

ssaencaincineiiaiiiaiaisiiaaaaniaiiauniiel

courts did not attempt to reconcile their view with Congress's

decision mot to prohibit retaliation based on the fact that an

“employer believes” an employee had taken any of the enumer-

ated acts. S. 2475, § 22(c), 83 Cong. Rec. 1577 (1937).

The conflict among the circuits is ripe for resolution.

B. The Scope Of Section 15(a)(3) Is An Important

And Recurring Question Of Federal Law On

Which Uniformity Is Important

There can be no question that the issue presented in this

case is recurrent. The cases cited above are only a fraction of

the recent cases presenting the issue in the federal courts.°

The importance of the issue is equally clear. The EEOC,

which administers the Equal Pay Act amendments to the FLSA,

advised the Ninth Circuit that “the scope of the anti-retaliation

provision is an issue of exceptional importance on which

national uniformity is vital.” EEOC C.A. Br. 2.

* E.g., Conner v. Schnuck Markets, 121 F.3d 1390 (10th Cir. 1997);

McKenzie v. Renberg’s, Inc., 94 F.3d 1478 (10th Cir. 1996); Booze v.

Shawmut Bank, Connecticut, _ F. Supp.2d __, 1999 WL 613313 (D. Conn.

July 23, 1999); Johns v. Cianbro Corp., 1999 WL 200699 (D. Conn. March

29, 1999); Laird v. Chamber of Commerce, 4 Wage & Hour Cas.2d (BNA)

1629, 1998 WL 240401 (E.D. La. 1998); Wittenberg v. Wheels, Inc., 963

F. Supp. 654 (N.D. Ill. 1997); Bevins v. Dollar General Corp., 952 F. Supp.

504, 509 n.4 (E.D. Ky. 1997); Kowalski v. Kowalski Heat Treating Co., 920

F. Supp. 799 (N.D. Ohio 1996); Booth v. Intertrans Corp., 68 Fair Emp.

Prac. Cas. (BNA) 433, 1995 WL 324631 (E.D. La. 1995); Elbaz v.

Congregation Beth Judea, Inc., 812 F. Supp. 802 (N.D. Ill. 1992); Jones v.

Westside-Urban Health Center, Inc., 760 F. Supp. 1575 (S.D. Ga. 1991);

Cuevas v. Monroe Street City Club, Inc., 752 F. Supp. 1405 (N.D. Ill. 1990);

Prewitt v. Factory Motor Parts, Inc., 747 F. Supp. 560 (W.D. Mo. 1990);

Sandt v. Holden, 698 F. Supp. 64 (M.D. Pa. 1988); Daniel v. Winn-Dixie

Atlanta, Inc., 611 F. Supp. 57 (N.D. Ga. 1985); Hayes v. McIntosh, 604

F. Supp. 10 (N.D. Ind. 1984); Fry v. Jowa City, 538 N.W.2d 302 (lowa App.

1995). See also Knickerbocker v. City of Stockton, 81 F.3d 907, 910, 912

n.3 (9th Cir. 1996) (noting that district court had reached the issue).

As the EEOC aptly observed (Br. 2-3), differing inter-

pretations of Section 15(a)(3) “give [some] employers an unfair

advantage over other employers who are subject to broad

prohibitions against retaliation.” That is because Section

15(a)(3) effectively determines significant aspects of the

employment-at-will doctrine in any given jurisdiction. The

Ninth Circuit and the other courts reaching the same result have

made it practically impossible to terminate employees who

have invoked state or federal overtime laws in complaining to

their employers about overtime pay. It is intolerable for federal

law to subject employers in California to stringent limitations

on the discharge of employees when employers in New York

encounter no such federal limitation. In light of this Court’s

emphasis on appropriate employer compliance policies, e.g.,

Faragher v. City of Boca Raton, 118 S. Ct. 2275, 2293 (1998),

the split of authority produces an additional and inappropriate

burden on multistate employers, who must vary their policies

according to the site of each facility.

Moreover, as the Secretary of Labor pointed out to the

Ninth Circuit (Secretary of Labor C.A. Br. 2), the importance

of Section 15(a)(3) transcends the FLSA:

Principles at issue here could also affect antiretaliation

provisions in other statutes the Secretary administers. See,

e.g., 29 U.S.C. 660(c) (Occupational Safety and Health

Act); id. § 1140 (Employee Retirement Income Security

Act); id. § 1855(a) (Migrant and Seasonal Agricultural

Worker Protection Act); 33 U.S.C. 1367(a) (Clean Water

Act); 49 U.S.C. 31105(a) (Surface Transportation Assis-

tance Act).

Because the scope of the FLSA’s anti-retaliation provision

is an important and recurring question as to which there should

be a uniform national rule, further review is warranted.

C. The Ninth Circuit Violated Virtually Every Princi-

ple Of Statutory Construction In Allowing Its

Misreading Of The “Animating Spirit” Of The

FLSA To Override The Ordinary Meaning Of The

Statutory Language

Review by this Court is appropriate for the additional

reason that the Ninth Circuit exacerbated the error of other

circuits in extending the FLSA anti-retaliation provision

beyond its plain language. Those decisions fly in the face of

this Court’s modern jurisprudence of statutory construction.

They also fail to consider the statutory context and legislative

history of the FLSA.

1. Undefined statutory terms must bear their “ordinary,

contemporary, Common meaning.” Walters v. Metropolitan

Educational Enterprises, 519 U.S. 202, 207 (1997). “[T]he law

uses familiar legal expressions in their familiar legal sense.”

Bradley v. United States, 410 U.S. 605, 609 (1973) (quoting

Henry v. United States, 251 U.S. 393, 395 (1920) (Holmes, J .)).

The “familiar legal sense” of “file any complaint” is to submit

a formal claim with a court or enforcement authority. That

point is not fairly subject to dispute.®

The Ninth Circuit instead relied on its vision of the

“animating spirit” (App., infra, 8a) of the FLSA in deciding

that Section 15(a)(3), despite its terms, was “designed to

prevent’ employees from being “unprotected by the FLSA

against retaliatory discharge when they complain to their

employers.” App., infra, 9a. But this Court has squarely

disapproved judicial efforts “[t]o draw on some unexpressed

spirit outside the bounds of the normal meaning of the words”

* Indeed, the materials that the Department of Labor provides to the public

straightforwardly state that Section 15(a)(3) forbids retaliation against “an

employee for filing a complaint or for participating in a legal proceeding

under FLSA.” U.S. Dep’t of Labor, Handy Reference Guide to the Fair

Labor Standards Act 13 (Oct. 1996) (emphasis added). There is no hint that

griping to employers is protected.

of the FLSA. Addison v. Holly Hill Fruit Products, Inc., 322

U.S. 607, 617 (1944). And, more recently, it has described as

flatly “impermissibl[e]” a court’s reliance on “its understanding

of the broad purposes” of a statute to expand the meaning of

Statutory terms whose meanings are already “sufficiently clear

in * * * context.” Rodriguez v. United States, 480 U.S. 522,

525, 526 (1987) (internal quotation marks omitted).

In a legal or administrative context — which is the context

of the FLSA — the terms “file any complaint” and “institute

any proceeding” have clear and precise meanings that connote

formal involvement of the courts or the regulatory agency

whose investigative and prosecutorial efforts Section 15(a)(3)

was enacted to protect. This Court made clear that Section

15(aX(3) was intended to protect employees in their “[rJesort to

statutory remedies. DeMario Jewelry, 361 U.S. at 293

(emphasis added). The limited intrusion on the at-will employ-

ment relationship descnbed by the language of Section 15(a)(3)

reflects Congress’s focused purpose: to prohibit conduct that

might “obstruct [the] administration” of the FLSA. H.R. Conf.

Rep. No. 2738, supra, at 33. As this Court has recognized,

Section 15(a)(3) was “designed to serve” the goal of “effective

enforcement by freeing employees “to approach officials with

their grievances.” DeMario Jewelry, 361 U.S. at 292 (emphasis

added). Indeed, even the Ninth Circuit had to admit that

“Congress intended the anti-retaliation provision of the FLSA

to provide an incentive for employees to report wage and hour

violations by their employers,” App., infra, 7a (emphasis

added), not to complain about them fo their employers.

That limitation accords with the statutory scheme of the

FLSA. Rather than encouraging private, informal resolution of

overtime disputes, the FLSA “is designed to prevent consenting

adults from transacting about minimum wages and overtime

pay.” Walton v. United Consumer Club, Inc., 786 F.2d 303,

306 (7th Cir. 1986) (Easterbrook, J.) (emphasis added). The

FLSA places so much emphasis on government involvement

that employees cannot validly settle minimum-wage or over-

time disputes with their employers without the approval of

either the Department of Labor or a court. See Lynn’s Food

Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir.

1982); 1 M. ROTHSTEIN, et al., EMPLOYMENT LAW 373 (1994):

see also D.A. Schulte, Inc. v. Gangi, 328 U.S. 108, 116 (1946)

(invalidating private settlements); see generally Barrentine v.

Arkansas-Best Freight System, 450 U.S. 728, 740-745 (1981).

“The idea” of the FLSA “‘is that federal supervision replaces

private bargaining.” Walton, 786 F.2d at 306. In that context,

interpreting Section 15(a)(3) according to its terms to channel

employees into formal enforcement procedures makes perfect

sense — far more so than the Ninth Circuit’s construction,

which embraces informal complaints to an employer about

overtime that “need not refer to the statute by name.” App.,

infra, 17a.

2. Although statutory construction properly “begins with

‘the language of the statute,” Hughes Aircraft Co. v Jacobson,

119 S. Ct. 755, 760 (1999), the Ninth Circuit instead began

with its preferred result and worked backwards. The court did

conclude, almost as an afterthought, that the language of the

statute was “fully consistent” with its interpretation. App.,

infra, 9a. But it could do so only by employing a strained and

artificial method of linguistic analysis that has been specifically

disapproved by this Court.

The Ninth Circuit first dismembered the common phrase

“file any complaint” into its constituent parts “file,” “any,” and

“complaint” — ignoring the well-established meaning of those

words when they are used together. See App., infra, 9a-10a.

It then selected a tertiary definition of the word “file” and the

non-legal definition of “complaint.” Jbid. The court also

inferred unlimited breadth from the word “any,” ibid, deciding

that “any complaint” must include complaints made to employ-

ers — not merely unmeritorious as well as meritorious com-

plaints “under or relating to [the FLSA]” that were actually

“filed,” as the statutory context suggests. And it interpreted the

term “under or related to [the FLSA]” to encompass private

complaints on the ground that “or related to” otherwise would

be “superfluous.” /d. at 10a. That effort reads too much into

boilerplate that applies both to “complaint[s]” and

“proceeding[s].” Moreover, private lawsuits, particularly in

state court, might be filed under state law but still “relate to”

FLSA violations. Indeed, an employee who files a formal

minimum wage or overtime complaint with the labor depart-

ment of a State clearly does not file a complaint under the

federal FLSA, but just as clearly files a complaint that is

related to that Act. See, e.g., Sappersteinv. Hager, _F.3d_,

1999 WL 623907 (7th Cir. Aug. 17, 1999).

The Ninth Circuit’s dissecting approach contravenes well-

established principles of statutory construction. There is no

room for judicial alteration of “a phrase that * * * has a clearly

accepted meaning in both legislative and judicial practice.”

West Virginia University Hospitals v. Casey, 499 U.S. 83, 98

(1991). In the context of a statute setting forth legal obligations

or remedies, the phrase “filed any complaint” has a “clearly

accepted meaning” — i.e., filed a formal complaint, regardless

of merit, with a court or administrative agency — that cannot

be obscured by artificially parsing each word. See Textron

Lycoming Division, Avco Corp. v. UAW, 118 S. Ct. 1626, 1629

(1998) (“It is not the meaning of ‘for’ we are seeking here, but

the meaning of ‘[s]uits for violation of contracts.””’).

The proper interpretation of Section 15(a)(3) becomes even

clearer when the language of that provision is contrasted with

the language used in the anti-retaliation provisions in other

federal statutes. When Congress wanted to draft an expansive

anti-retaliation provision, it knew how to do so. In Title VII

and in the Age Discrimination in Employment Act, for exam-

ple. Congress forbade employers from retaliating against any

employee who “has opposed any practice” those laws make

illegal. 42 U.S.C. § 2000e-3(a); 29 U.S.C. § 623(d); see also 29

U.S.C. § 2615(a)(2) (Family and Medical Leave Act) (“for

opposing any practice”). That language — not the very differ-

ent FLSA language at issue here — aims at protecting all

beeen

“employees [in] asserting their rights” to their employers.

App., infra, 9a. Other anti-retaliation provisions trace the

language of Section 15(a)(3) but additionally protect employees

who “participate in any manner * * * in any other action to

carry out the purposes” of a statute. E.g., 42 U.S.C. §§ 300j-

9(i)(1)(c) (drinking water pollution), 5851(a)(1)(F) (nuclear

facilities), 7622(a)(3) (air pollution). Congress has not seen fit

to add similar language to the FLSA.

3. To the contrary, in enacting the FLSA Congress in fact

rejected a proposal that would have removed the requirement

of actual, formal invocation of enforcement procedures. The

Senate version of the FLSA would have prohibited discharges

“because such employer believes that such employee has done

or may do any of” the acts specified in Section 15(a)(3).

S. 2475, § 22(c), 83 Cong. Rec. 1577 (1937) (emphasis added).

This language would plainly have reached the conduct of

respondent Lambert in this case. But the language of the

Senate bill was rejected in conference, and it was the House

version, which required the actual filing of a complaint, that

was enacted into law. Neither the Ninth Circuit nor any other

court reaching the same result has even acknowledged, let

alone addressed, this legislative history.

The narrow scope of Section 15(a)(3) is confirmed by the

understanding expressed in subsequent legislation, an under-

standing that is “entitled to great weight.” Loving v. United

States, 517 U.S. 748, 770 (1996). In 1985, after this Court

upheld application of the FLSA to state and local government

employees, Congress perceived a special need to protect such

employees during the initial period of adjustment to FLSA

requirements. It accordingly enacted a temporary statute broad-

ening the retaliation prohibition to protect public employees

who merely “asserted [FLSA] coverage” to their employers.

Pub. L. No. 99-150, § 8, 99 Stat. 791 (1985). If the Ninth

Circuit were correct that Section 15(a)(3) already covers

employees who complain to their employers about “an alleged

FLSA violation” (App., infra, 17a), the 1985 enactment would

have been superfluous.

Section 8 of the 1985 law further specified that, once it

expired in August 1986, protection against retaliation would

extend “only” to “an employee who takes an action described

in” Section 15(a)(3) (emphasis added). That provision too

would have been entirely unnecessary if informal complaints to

employers were already covered by Section 15(a)(3). The

Ninth Circuit’s response, distinguishing assertions of coverage

from complaints of violations (App., infra, 12a n.4), makes no

sense: an assertion of FLSA coverage, made to an employer

being faulted for not complying with the FLSA requirement, is

ipso facto an informal complaint that the employer is not

complying with the FLSA.

This Court has warned that, in interpreting the FLSA,

courts “must avoid that retrospective expansion of meaning

which properly deserves the stigma of judicial legislation.”

Addison, 322 U.S. at 618 (internal quotation marks omitted).

What the Ninth Circuit and other, like-minded courts have done

is “not a construction of [the] statute, but, in effect, an enlarge-

ment of it by the court, so that what was omitted, presumably

by inadvertence, may be included within its scope.” West

Virginia Hospitals, 499 U.S. at 101 (quoting Jselin v. United

States, 270 U.S. 245, 250-251 (1926) (Brandeis, J.)). Such an

effort “[t]o supply omissions * * * transcends the judicial

function.” Jbid.

Il. THE NINTH CIRCUIT COMPOUNDED ITS ERROR

BY CONSTRUING THE FLSA TO RENDER CORPO-

RATE OFFICERS PERSONALLY LIABLE FOR

THEIR SUBORDINATES’ RETALIATION

The Ninth Circuit distorted the FLSA in another respect. It

not only upheld nearly $1.4 million in punitive damages against

the corporation that was respondents’ employer under any

conventional analysis, but it sustained an additional $2.8

million in punitive damages imposed on two corporate officers

personally, without requiring a jury finding — or, indeed, any

evidence — that the individuals undertook, authorized, or

condoned an action prohibited by Section 15(a)(3). Instead, the

officers’ personal liability was based solely on their supposed

status as “employers” of the respondents, defined with

exceptional breadth as any “individual [who] exercises ‘control

over the nature and structure of the employment relationship,’

or ‘economic control over the relationship’” (App., infra, 25a).

The Ninth Circuit’s analysis would render the CEO or other

top-level executives of any large, publicly traded corporation

separately and individually liable for virtually any violation of

the FLSA committed by a subordinate with respect to a

function that falls within the executives’ ultimate area of

responsibility, even though the executive did not participate in

or even know of the violation. The sweeping implications of

this ruling make it one that warrants further review.

A. The court of appeals relied (App., infra, 25a) on

Section 3(d) of the FLSA, 29 U.S.C. § 203(d), which includes

in the definition of “employer” “any person acting directly or

indirectly in the interest of an employer in relation to an

employee.” Broad as that language is, it is doubtful that it was

intended to make an officer of a large corporation the personal

and separate employer of those employees whose activities the

officer is empowered to direct or supervise.’

” As the First Circuit has observed, “[i]t is difficult to accept, * * * as some

courts have apparently held, that Congress intended that any corporate

officer or other employee with ultimate operational control over payroll

matters be personally liable.” Donovan v. Agnew, 712 F.2d 1509, 1513 (Ist

Cir. 1983). See also Baystate Alternative Staffing, Inc. v. Herman, 163 F.3d

668, 679 (1st Cir. 1998). Cases sustaining personal liability for back wages

or damages — none of which involved punitive damages — have generally

concemed individuals who dominated the affairs of a partnership or closely

held corporation. E.g., Herman v. RSR Security Services Ltd., 172 F.3d 132

(1st Cir. 1999); United States Department of Labor v. Cole Enterprises, Inc.,

62 F.3d 775 (6th Cir. 1995); Dole v. Elliott Travel & Tours, Inc., 942 F.2d

962 (6th Cir. 1991); Donovan v. Grim Hotel Co., 747 F.2d 966 (Sth Cir.

Whether or not corporate officers may be the employers of

corporate employees for some purposes under the FLSA,

Section 16(b) of the Act, 29 U.S.C. § 216(b), imposes liability

for damages only on “[a]ny employer who violates the

provisions” of Section 15(a)(3) by discharging or otherwise

retaliating against an employee because the employee engaged

in protected activity. In this case, neither the district court nor

the Ninth Circuit required any jury finding that the individual

defendants in this case had personally “discharge[d]” any of the

plaintiffs, or authorized or approved their discharge, as a

retaliation for activity protected by the FLSA.

Instead, in instructions approved by the court of appeals,

the jury was charged that any “corporate officer or director with

significant control of * * * a corporation” that employed

respondents was “liable if you find in favor of the plaintiffs on

their FLSA claims.” ER 361-362.° Thus, petitioners Barry and

William Ackerley could be found individually liable so long as

(1) respondents had been discharged in violation of the FLSA

and (2) the officers had “significant authority” over the

company that employed respondents. ER 361-362; SER 25.

Given the individual petitioners’ positions in the companies, the

instruction effectively directed verdicts against them if the

corporation was found liable.

The Ninth Circuit’s recitation of the meager evidence

supporting punitive liability (App., infra, 26a) shows how little

it requires to find a corporate official personally liable for

retaliation. The court relied on (1) evidence that the Sonics had

1984).

Contrary to the Ninth Circuit’s retelling (App., infra, 25a), the various

factors included in the instruction were explicitly identified as “[e]xamples”

(ER 361, SER 25), most emphatically not as prerequisites to a finding of

“employer” status. All the jury had to find was that the individuals had

“significant control,” which sufficed under the instructions to render them,

like the corporate employer, vicariously liable for the actions of John Dresel.

not paid overtime until 1990 — four years before the events at

issue here — when a new manager implemented an overtime

system (see SER 279-280); (2) a prior FLSA lawsuit resolved

in the Sonics’ favor as time-barred (ER 86; RT [2/26]:183-

184); (3) evidence that Barry Ackerley was made aware of

Lambert’s overtime concerns five months before the discharges

(ER 121); and (4) the double hearsay statement that allegedly,

six months before the discharges, attributed to William

Ackerley an unwillingness to pay overtime (see p. 5, supra).°

In the Ninth Circuit’s view, the items it identified

represented “extensive testimony that both Ackerleys * * *

were involved in the decision to terminate the sales staff.”

App., infra, 26a. But whatever these circumstances establish,

they plainly do not show personal involvement in a decision to

discharge the AEs in retaliation for an act protected by

Section 15(a)(3). There was not a shred of evidence that Barry

Ackerley even knew of the plans to discharge the AEs, or that

William Ackerley had the slightest idea that Dresel’s action

was being taken to retaliate for Lambert’s overtime complaint

(see pp. 6-7, supra; see also ER 113), which to all appearances

had been fully resolved some weeks earlier. Even the Ninth

Circuit shied away from explicitly resting liability on William

Ackerley’s receipt of Dresel’s memo stating plans to “layoff the

entire ticketing staff” because the “seasonal” workload left

them with “insufficient work to keep [them] busy.” ER 113.

Thus, in the Ninth Circuit, being informed of a termination

decision beforehand (in the case of William Ackerley), or even

afterward (in the case of Barry Ackerley), is sufficient to hold

an individual liable for retaliation — and for separate,

The Ninth Circuit did not identify any evidence supposedly providing

“strong[] support{]” for “the jury’s determination that both Ackerleys

actually exercised economic and operational control over the employment

relationship with the sales agents.” App., infra, 25a-26a. No wonder:

William Ackerley had not even met most of the AEs (ER 329-330, 338-340),

and Barry Ackerley had still less involvement with them.

individual punitive damages exacted in addition to those

imposed on the corporate employer — without any evidence

that the individual ordered the termination of any employee,

much less did so “because such employee” had engaged in

activity that is protected under Section 15(a)(3). Incredibly, the

Ninth Circuit relied on these factors to exact millions of real

dollars from real people.

The imposition of vicarious liability on individual cor-

porate officers is especially problematic in the context of an

award of separate and additional punitive damages. To date,

other courts have concluded only that an individual “deemed an

employer under the FLSA * * * may be jointly and severally

liable for damages.” Lee v. Coahoma County, 937 F.2d 220,

226 (Sth Cir. 1991); see, e.g., Fegley v. Higgins, 19 F.3d 1126,

1131 (6th Cir. 1994) (individual held “jointly liable for all

damages’”’); Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962,

965 (6th Cir. 1991); Patel v. Wargo, 804 F.2d 632, 637-638

(11th Cir. 1986); Donovan v. Agnew, 712 F.2d 1509, 1511 (1st

Cir. 1983). The Ninth Circuit’s significant expansion of the

liability of individual co-employees of FLSA plaintiffs appears

to be unprecedented."°

The problems created by the Ninth Circuit’s decision are

particularly troubling because the issue will most often arise in

a private cause of action, such as that here. In such circum-

stances, one simply cannot rely upon the exercise of sound

‘0 The unfairness of imposing personal punitive liability in this case is

especially pronounced when (1) no prior decision had given notice that

individual corporate officers may be held vicariously liable for punitive

damages under the FLSA, and (2) the language of Section 15(a)(3) gave no

express indication that its protections are activated by informal “compiaints”

that are “filed” with the employer; the Labor Department’s Handy Reference

Guide likewise suggested that only formal legal or administrative complaints

are protected (see p. 15 n.6, supra), and the courts themselves could not

agree on the scope of the provision. Under such circumstances,

constitutionally required notice of potential punitive consequences has not

been afforded. See BMW v. Gore, 517 U.S. 559, 574 (1996).

prosecutorial discretion to curb abusive or vindictive suits

against individual corporate officers.'' Further review is

warranted to remedy promptly the gross distortion of the FLSA

that this decision approves.

Ill. THE NINTH CIRCUIT VIOLATED PETITIONERS’

JURY TRIAL RIGHT BY AFFIRMING A FINDING

ON A DISPUTED, ESSENTIAL ELEMENT OF LIA-

BILITY ON A BASIS NOT FOUND BY THE JURY

Section 15(a)(3) imposes liability only for retaliation

against “any employee because such employee has filed any

complaint or instituted or caused to be instituted any

proceeding under or related to” the FLSA (emphasis added).

The analogous provision of Washington law similarly applies

only to “such employee” as takes enumerated action. Wash.

Rev. Code § 49.46.100(2).

The only one of the six respondents who actually

communicated with the company regarding the subject of

overtime was Lambert. Petitioners accordingly resisted the

claims of respondents Ackley, Belling, Cooke, Selk, and Viltz

on the ground that none of them had taken an action to which

the anti-retaliation provision applies (even under the expansive

reading given it by the courts below). Over petitioners’

objection, however, the jury instructions read the words “such

employee” out of the statute:

It is mot necessary to show that each plaintiff engaged in

protected activity. A showing that one plaintiff engaged in

protected activity is sufficient so long as there is a showing

'' For example, in Digiore v. State of Illinois, 962 F. Supp. 1064, 1078-

1079 (N. D. Ill. 1997), the court, having expansively defined “employer”

under Section 3(d) and having found the State of Illinois immune from

FLSA liability, permitted the lawsuit to proceed against the Illinois Secretary

of State and Director of the Department of Police, aimed solely at those

officers’ personal assets. See 172 F.3d 454 (7th Cir. 1999) (affirming later

grant of summary judgment for individuals on other grounds).

that adverse employment action was taken against each

plaintiff and that the protected activity was a substantial

motivating factor in the adverse employment action as to

that plaintiff.

ER 360 (emphasis added). This instruction effectively directed

a verdict on this element for all plaintiffs so long as the jury

found that “one plaintiff engaged in protected activity.” /bid.

The Ninth Circuit affirmed the judgment in favor of all six

plaintiffs. It did so not because the instruction was correct, but

because there was sufficient evidence to support a finding that

‘‘Lambert complained on behalf of the named plaintiffs and that

sufficient evidence was therefore presented to support a

retaliation claim with respect to all the plaintiffs.” App, infra,

at 22a.'° The court was not deterred by the fact that the jury

had not been asked to make any such finding. Rather, in its

haste to affirm the judgment, the Ninth Circuit arrogated to

itself the role of factfinder.

That the court of appeals’ disposition of this issue violated

petitioners’ constitutional rights to due process and to a jury

trial can hardly be subject to fair dispute. The Seventh

Amendment provides that “the night of trial by jury shall be

'2 In fact, this conclusion rested on the slimmest of foundations. The June

meetings in which Lambert and Viltz had been chosen “‘to sort of represent

the group” (ER 287-288; see SER 265) concerned the restructuring of AE

compensation, not overtime (ER 195, 212-213, SER 201-204). The very

first sentence in the letter from Lambert’s attorney to Barry Ackerley — on

which the Ninth Circuit relied heavily (App., infra, 22a) — declared: “We

represent Laura Lambert” and not anyone else. ER 117. Likewise the

complaint delivered to the Sonics (but never filed) was solely on behalf of

Lambert (RT [2/8]:150-151). Indeed, when Lambert asked the other AEs to

join with her in the contemplated lawsuit, every one of them refused. RT

[2/8]:165-167. The scantiness of the evidence is apparent from the Ninth

Circuit’s need to include a snippet from Dresel’s trial testimony commenting

that “the whole group [wa]s now lumped together” in a press release issued

after the lawsuit was filed (see ER 264), as well as a reference to Lambert

as a “ringleader” in petitioners’ opening statement. See App., infra, 22a-23a.

preserved.” Under this Amendment, together with the Fifth

Amendment’s Due Process Clause, findings of liability require

jury determinations of every reasonably disputed element of the

cause of action. Appellate courts cannot take that function

upon themselves.

As this Court has explained, “the Seventh Amendment

provides a right to a jury trial on all issues pertinent to”

liability. Feltner v. Columbia Pictures Television, Inc., 118

S. Ct. 1279, 1281 (1998) (emphasis added). Accord Beacon

Theaters, Inc. v. Westover, 359 U.S. 500, 508 (1959) (ensuring

that mixed issues of law and fact be tried first to the jury, to

“giv(e] * * * a full jury trial of every * * * issue.”). The Court

had to remind the lower courts of this principle in a criminal

case only four years ago. See United States v. Gaudin, 515

U.S. 506, 510 (1995) (Fifth Amendment and Sixth Amendment

“require criminal convictions to rest upon a jury determination

that the defendant is guilty of every element of the crime with

which he is charged * * *.”). The Ninth Circuit apparently

needs to be reminded that the same safeguards apply to

disputed issues of fact in civil cases tried to a jury.

It is beyond dispute that whether a plaintiff has engaged in

protected behavior under the FLSA is an essential element of

a Claim for retaliation. A claim under Section 15(a)(3) requires

proof that “the plaintiff engaged in statutorily protected acti-

vity,” as well as that “his employer thereafter subjected him to

an adverse employment action” that was “a reprisal for having

engaged in the protected activities.” Blackie v. Maine, 75 F.3d

716, 722 (1st Cir. 1996). Similarly, Washington law requires

proof that “the particular employee’s activity” was protected

and caused the plaintiff's discharge. Lins v. Children’s

Discovery Centers, 976 P.2d 168, 172 (Wash. App. 1999).

If these statutory requirements may be satisfied by showing

that one plaintiff complained on behalf of others, then it was

incumbent on plaintiffs to prove that this is indeed what

occurred, and it was essential that the jury be charged on that

theory of liability. That did not happen here. The fatal defect

in the instructions may not be overcome by post hoc judicial

factfindings that the jury never made and that were far from

conclusively established by the evidence.

This issue was repeatedly called to the court of appeals’

attention (see Pet. Reh’g at 1-5; Appellants’ Opening Brief at

23-25; Reply and Answering Brief at 9-13) but simply swept

under the rug in Judge Reinhardt’s opinion. It involves

millions of dollars of liability for petitioners. The court of

appeals’ handling of it “so far depart[s] from the accepted and

usual course of judicial proceedings” (Sup. Ct. R. 10(a)) and

from settled law that it calls for correction through the exercise

of this Court’s power — indeed, responsibility — to supervise

the actions of the lower federal courts.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

ERIC M. RUBIN ANDREW L. FREY*

WALTER E. DIERCKS ROBERT P. DAVIS

Rubin, Winston, Diercks, DONALD M. FALK

Harris & Cooke, L.L.P. ROBERT L. BRONSTON

1155 Connecticut Ave., NW ELIZABETH A. CLARK

6th Floor Mayer, Brown & Platt

Washington, DC 20036 1909 K Street, NW

(202) 861-0870 Washington, DC 20006

(202) 263-3000

* Counsel of Record

Counsel for the Petitioners

OCTOBER 1999

APPENDICES

APPENDIX A

LAURA A. LAMBERT; ESTHER ACKLEY; STEVE BELLING;

PAT COOKE; LETITIA SELK; AND CHUCK VILTZ,

Plaintiffs-Appellees-Cross-Appellants,

BARRY ACKERLEY; WILLIAM ACKERLEY; SEATTLE

SUPERSONICS, INC., A FORMER WASHINGTON CORPORATION;

SSI Sports, INC., A WASHINGTON CORPORATION; AND

FULL HOUSE SPORTS & ENTERTAINMENT, INC.,

A WASHINGTON CORPORATION,

Defendants-Appellants-Cross-Appellees.

NOS. 96-36017, 96-36266 AND 96-36267.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Feb. 6, 1998.

Decided Oct. 1, 1998.

Rehearing En Banc Granted and

Opinion Withdrawn March 9, 1999.

Argued and Submitted April 22, 1999.

Filed June 10, 1999.

Spencer Hall, John W. Widell, Hall Zanzig Widell PLLC,

Seattle, Washington, and Kathryn Y. Kim, Mundt MacGregor

L.L.P., Seattle, Washington, for the plaintiffs- appellees-

cross-appellants.

Eric M. Rubin, Walter Diercks, Rubin, Winston, Diercks,

Harris & Cooke, Washington, D.C., Andrew L. Frey, Mayer,

Brown & Platt, New York, New York, Robert P. Davis,

Donald M. Falk, Miriam R. Nemetz, Mayer, Brown & Platt,

Washington, D.C., for the defendants-appellants-cross-appel-

lees.

Jennifer S. Goldstein, U.S. Equal Employment

Opportunity Commission, Office of General Counsel,

Washington, D.C., for amicus curiae.

Appeal from the United States District Court for the

Western District of Washington; Barbara J. Rothstein, District

Judge, Presiding. D.C. No. CV-95-00039-BJR.

Before: BROWNING, PREGERSON, REINHARDT,

FERNANDEZ, RYMER, T. G. NELSON, TASHIMA,

THOMAS, SILVERMAN, WARDLAW, and FLETCHER,

Circuit Judges.

REINHARDT, Circuit Judge:

This case presents a question of considerable importance

to the workers in this circuit who rely on the protections

afforded by the Fair Labor Standards Act (“FLSA” or the

Act’). We must resolve whether the anti-retaliation provision

of that Act protects employees who complain to their

employers about wage and hour violations. Based on the

guiding purpose and design of the FLSA and the language of

the statute, we join six other circuits and hold that complaints

made to employers are within the ambit of the FLSA’s

anti-retaliation clause. Because we reject the other arguments

that the defendants have raised on appeal, we affirm the

decision of the district court.

Facts and Procedural History

The plaintiffs in this action are six former ticket sales

agents of the Seattle SuperSonics, a National Basketball

Association team. As “account executives” for the Sonics, the

plaintiffs were responsible for selling season tickets,

multi-game packages, and group-ticket packages. They also

were responsible for staffing a season ticket information booth

at Sonics basketball games. Beginning in 1991, the agents

were paid a base salary of $13,000, and received the

remainder of their compensation through commissions earned

for their ticket sales. Rather than paying overtime in

accordance with the actual number of hours worked by each

employee, the Sonics paid each account executive $2000 per

year for “overtime.” Under the Sonics’ plan, each employee

was paid $166.67 per month regardless of the overtime

actually worked by the account executive.

In 1993, however, apparently because the Sonics had sold

almost all of their tickets, the account executives’ workweek

was reduced to 20 hours, and the monthly “overtime”

payments were discontinued. In 1994, plaintiff Laura Lambert

became concerned that she and her fellow account executives

had not been paid for all of the overtime hours they had

actually worked. Accordingly, in May of 1994, she left a note

with Sonics Controller Brian Dixon requesting a meeting to

discuss overtime wages. Lambert also telephoned the United

States Department of Labor and requested information

regarding federal overtime laws. After speaking with the

Labor Department, Lambert raised the issue of unpaid

overtime with the Sonics head of ticket sales, Bob Boustead.

Boustead told Lambert that the overtime question was a “dead

issue.” According to Lambert’s testimony, Boustead also said

“{i]Jf you want to sue the Sonics, go ahead and do us all a

favor.” (SER 190).

On May 20, 1994, the Department of Labor informed

Lambert that the Sonics’ overtime scheme did in fact violate

the overtime provisions of the Fair Labor Standards Act.

Lambert told Dixon of the Labor Department’s conclusion and

Dixon, according to Lambert’s testimony, told her that “his

hands were tied” because William Ackerley (Chief Operating

Officer of Ackerley Communications, Inc., the corporate

parent of the defendant corporations) “will not pay overtime

and doesn’t care what the laws are.” (SER 192-94). Dixon

then told Lambert that if she continued to press for her

statutory right to overtime pay:

you will definitely not have a job here, you will be fired.

The decision is up to you. Everyone else in the office

will love you, but you are jeopardizing your job. Is it

worth it to you for a thousand dollars?

(SER 195-96).

In June 1994, the account executives decided that Lambert

and plaintiff Chuck Viltz should be their representatives in

dealing with the Sonics management. (SER 202). Boustead

confirmed that “Chuck and Laura were the spokespersons for

the sales folks.” (SER 265). Around this same time, Lambert

hired an attorney. On June 17, 1994, Lambert’s attorney sent

Barry Ackerley (CEO and Chairman of the Board of Ackerley

Communications) a letter requesting that the Sonics pay

Lambert and the other account executives overtime as required

by law. The letter also specifically requested that Ackerley

instruct his managers “to refrain from retaliation or threats of

retaliation against Ms. Lambert and other employees.” (ER

118). On July 6, 1994, Lambert’s attorney delivered a

complaint for unpaid overtime wages to the Sonics.

The Sonics eventually settled the overtime claims with

Lambert, and paid the other account executives the amounts

due them for overtime. Less than a week later, on October

12, 1994, John Dresel, the Sonics Executive Vice President,

wrote a memo to William Ackerley informing him that he was

planning to lay off all of the account executives by November

30, 1994. In October of 1994, Full House Sports &

Entertainment, Inc. was organized to, among other things, run

the Sonics ticket sales operations. Dresel was named as

President. In December 1994, Dresel discharged nine of the

ten account executives, including the six plaintiffs here. The

one sales agent not discharged was the one agent who had

never complained about the overtime violations. (SER

271-274).

Following their discharge, the plaintiffs filed suit, alleging

that they had been fired in retaliation for their complaints

about the defendants’ failure to comply with federal overtime

requirements, in violation of the FLSA, 29 U.S.C. § 215(a)(3),

and in violation of the public policy of the state of

Washington. Wash. Rev.Code § 49.46.100(2). Following a

three-week trial, the jury returned a verdict for the plaintiffs

on both the federal and state causes of action and awarded

$697,000 for lost wages, and $75,000 to each plaintiff for

emotional distress. The jury further awarded $12 million in

punitive damages on the FLSA claim.' The defendants moved

for judgment as a matter of law, or in the alternative for a

new trial and/or a remittitur of damages. The district court

remitted the punitive damages award to $4,182,000, but

denied all other defense motions. The district court also

awarded the plaintiffs $389,117.50 in attomeys’ fees, and later

awarded them an additional $44,075 in supplemental fees in

connection with the post-trial motions. ’

The defendants appealed the district court’s denial of their

motion for judgment as a matter of law, and a three-judge

panel of this court reversed with respect to the federal claim

on the ground that the anti-retaliation provision of the FLSA

does not apply to complaints made to an employer. The panel

then affirmed in part on the state claim and remanded it for

further proceedings. See Lambert v. Ackerly, 156 F.3d 1018

(1998), withdrawn and reh’g en banc granted, 169 F.3d 666

(9th Cir.1999). The plaintiffs filed a suggestion for rehearing

en banc, and a majority of the non-recused active judges of

this court voted to rehear the case en banc in order to consider

the scope of the anti-retaliation provision of the FLSA.

Having withdrawn the panel opinion, we now affirm the

judgment of the district court on the federal cause of action.”

' The district court’s jury instruction allowed punitive damages

to be assessed only for a violation of the federal law. (SER 33).

? Because we uphold the judgment in favor of the plaintiffs under

the FLSA, and because greater relief was awarded under that statute

Il.

The Reach of the Anti-Retaliation Provision

The Fair Labor Standards Act anti-retaliation provision

provides that it is unlawful:

[Tjo discharge or in any other manner discriminate

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 or is about to testify in any such proceeding, or

has served or is about to serve on an industry committee.

29 U.S.C. § 215(a)(3). In this case, we must determine

whether the FLSA’s prohibition on terminating an employee

who has “filed any complaint or instituted or caused to be

instituted any proceeding under or related to this chapter”

protects an employee who complains to his employer about

violations of the Act. The district court, in denying the

defendants’ motion for judgment as a matter of law, held that

the statute extends protection to employees who make such

complaints. The defendants contend, to the contrary, that the |

anti-retaliation provision protects only those employees who

file formal proceedings with the Department of Labor or in a |

federal court. Our court has never before addressed this

question, although we did reserve it in Knickerbocker v. City

of Stockton, 8) F.3d 907, 912 n.3 (9th Cir.1996). To date,

however, seven other Circuits have reached the specific

question raised here. The First, Third, Sixth, Eighth, Tenth,

and Eleventh circuits have all held that complaints similar to,

and even far more “informal” than those lodged by the

plaintiffs here entitle the employee to coverage under the

anti-retaliation provision of the FLSA. See Valerio v. Putnam

Assocs. Inc., 175 F.3d 35 (1st Cir.1999); Brock v. Richardson,

than 1s available under the state cause of action, we need not

determine the validity of the judgment on the state claim. ;

812 F.2d 121, 124-25 (3d Cir.1987); EEOC v. Romeo Com-

munity Schools, 976 F.2d 985, 989 (6th Cir.1992); Brennan v.

Maxey’s Yamaha, Inc., 513 F.2d 179, 181 (8th Cir. 1975);

Love v. RE/MAX of Am., Inc., 738 F.2d 383, 387 (10th Cir.

1984); EEOC v. White & Son Enterprises, 881 F.2d 1006,

1011 (11th Cir.1989). The Second Circuit is the only circuit

to reach the contrary conclusion, although it did so in a case

in which the only complaint made was an oral complaint to a

supervisor that a pay disparity was “not fair.” See Lambert v.

Genesee Hosp., 10 F.3d 46, 55 (2d Cir.1993).

Over fifty years ago, the Supreme Court determined the

approach that must be followed in construing the provisions

of the Fair Labor Standards Act. A number of the other

circuits have explicitly followed that approach. It is a simple

one, often used in construing statutes designed to protect

individual rights. In Tennessee Coal, Iron & R. Co. v.

Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 88

L.Ed. 949 (1944), the Court explained that because the FLSA

is a remedial statute, it must be interpreted broadly. As the

Tennessee Coal Court wrote:

[The FLSA is] remedial and humanitarian in purpose.

We are not here dealing with mere chattels or articles of

trade but with the nghts of those who toil. .. . Those are

nghts that Congress has specifically legislated to protect.

Such a statute must not be interpreted or applied in a

narrow, grudging manner.

Id. (emphasis added). More specifically, in Mitchell v. Robert

DeMario Jewelry, Inc., 361 U.S. 288, 292-93, 80 S.Ct. 332,

4 L.Ed.2d 323 (1960), the Court explained that Congress

intended the anti-retaliation provision of the FLSA to provide

an incentive for employees to report wage and hour violations

by their employers. As the Court wrote:

For weighty practical and other reasons, Congress did not

seek to secure compliance with prescribed standards

through continuing detailed federal supervision or

inspection of payrolls. Rather it chose to rely on

information and complaints received from employees

seeking to vindicate rights claimed to have been denied....

[I]t needs no argument to show that fear of economic

retaliation might often operate to induce aggrieved

employees quietly to accept substandard conditions.

Id. at 292, 80 S.Ct. 332.

The implication of Tennessee Coal and Mitchell is clear.

Based on the principles illustrated by these two cases, the

Third Circuit, for example, concluded that “the [Supreme]

Court has made clear that the key to interpreting the [FLSA’s]

anti-retaliation provision is the need to prevent employees’

‘fear of economic retaliation’ for voicing grievances about

substandard conditions.” Brock, 812 F.2d at 123-24. The

Eleventh Circuit has similarly held that “[t]he anti-retaliation

provision of the FLSA was designed to prevent fear of

economic retaliation by an employer against an employee who

chose to voice such a grievance,” and that “[b]y giving a

broad construction to the anti-retaliation provisions to include

{informal complaints made to employers], its purpose will be

further promoted.” White & Son, 881 F.2d at 1011. Most

recently, the First Circuit reached the following conclusion:

A narrow construction of the anti-retaliation provision

could create an atmosphere of intimidation and defeat the

Act’s purpose in § 215(a)(3) of preventing employees’

attempts to secure their rights under the Act from taking

on the character of ‘a calculated nsk.’ Such circumstances

would fail to ‘foster a climate in which compliance with

the substantive provisions of the Act would be enhanced.’

Hence we, like many of our sister circuits, conclude that

the animating spirit of the Act is best served by a

construction of § 215(a)(3) under which the filing of a

relevant complaint with the employer no less than with a

court or agency may give rise to a retaliation claim.

Valerio, 173 F.3d at 43 (quoting Mitchell, 361 U.S. at 292.

293, 80 S.Ct. 332).

We agree with the other circuits that have given a broad

construction to the statutory provision. The FLSA’s anti-

retaliation clause is designed to ensure that employees are not

compelled to risk their jobs in order to assert their wage and

hour rights under the Act. Construing the anti-retaliation

provision to exclude from its protection all those employees

who seek to obtain fair treatment and a remedy for a

perceived violation of the Act from their employers would

jeopardize the protection promised by the provision and

discourage employees from asserting their rights. As is

obvious from this very case, such a construction would leave

employees completely unprotected by the FLSA against

retaliatory discharge when they complain to their employers

about violations of the Act — exactly what the anti-retaliation

provision was designed to prevent. We hold, therefore, that

in order for the anti-retaliation provision to ensure that “fear

of economic retaliation” not “operate to induce aggrieved

employees quietly to accept substandard conditions,” Mitchell,

361 U.S. at 292, 80 S.Ct. 332, it must protect employees who

complain about violations to their employers, as well as

employees who turn to the Labor Department or the courts for

a remedy.

Although possibly subject to differing interpretations, the

language of § 215(a)(3) is fully consistent with this

conclusion. By its terms, the anti-retaliation provision

prohibits retaliation against an employee who has “filed any

complaint or instituted or caused to be instituted any

proceeding under or related to this chapter.” 29 U.S.C.

§ 215(a)(3). First, we conclude that “any complaint” related

to the FLSA includes complaints made to employers. If “any

complaint” means “any complaint,” then the provision extends

to complaints made to employers. Second, we are also

convinced that the statutory term “filed” includes the filing of

complaints with employers. When drafting the language of

10a

§ 215(a)(3), it 1s reasonable to assume that Congress was

aware of the practice, in many union and non-union

workplaces, of requiring employees to “file” grievances and

complaints with their union and/or employer before instituting

any further internal or external proceedings. Given the

widespread use of the term “file” to include the filing of

complaints with employers, it is therefore reasonable to

assume that Congress intended that term as used in

§ 215(a)(3) to include the filing of such complaints. Finally,

we note that § 215(a)(3) protects employees who file

complaints “under or related to this chapter.” The defendants’

construction of the statute would render the “or related to”

language superfluous. As we read the statute, complaints filed

“under” the FLSA are those complaints provided for in the

Act, i.e., those complaints filed with the Department of Labor

or the federal court as specified in the Act. Complaints that

are not “under” the FLSA but are “related to” it, on the other

hand, are those complaints filed outside of court and the

Department of Labor that relate to the subject matter of the

FLSA, for example, those complaints filed with an employer.

In sum, the statutory grant of protection to employees who

“file[ ] any complaint” “related to” the FLSA extends to

employees who complain to their employer about an alleged

violation of the Act.’

The construction we give § 215(a)(3) is also dictated by our

decision in MacKowiak v. University Nuclear Sys., Inc., 735 F.2d

1159 (9th Cir.1984), where we held that a similar, although facially

more restrictive, anti-retaliation provision of the Energy

Reorganization Act (“E.R.A.”) extended protection to employees

filing complaints with an employer. The E.R.A. provision applied

when an employee:

(1) commenced, caused to be commenced, or is about to

commence or cause to be commenced a proceeding under this

chapter ...;

(2) testified or is about to testify in any such proceeding or;

lla

The defendants rely on the fact that Title VII’s

anti-retaliation provision, 42 U.S.C. § 2000e-3(a), contains

language broader in scope than the language contained in the

FLSA provision. In Genesee, the Second Circuit reached the

conclusion that the FLSA does not protect employees who

complain internally to their employers by contrasting

§ 215(a)(3) with Title VII’s anti-retaliation provision. See

Genesee, 10 F.3d at 55. With all due respect to the Second

Circuit, we disagree that the breadth of Title VII’s

anti-retaliation provision dictates the construction we should

give the FLSA provision. The FLSA was drafted some

sixty-two years ago, at a time when statutes were far shorter

and less detailed, and were written in more general and

simpler terms. The fact that Congress decided to include a

more detailed anti-retaliation provision more than a generation

later, when it drafted Title VII, tells us little about what

Congress meant at the time it drafted the comparable provision

of the FLSA. In short, we find the view suggested by the

(3) assisted or participated or is about to participate in any

manner in such a proceeding.

42 U.S.C. § 5851(a)(1982). In reaching our holding in MacKowiak,

we noted that the Energy Reorganization Act’s anti-retaliation

provision has the “broad, remedial purpose of protecting workers

from retaliation.” /d. at 1163. As we have shown, the same is true

of the FLSA. See, e.g., Tennessee Coal, 321 U.S. at 597, 64 S.Ct.

698. The MacKowiak court also observed that “{i]f the regulatory

scheme is to function effectively, inspectors must be free from the

threat of retaliatory discharge for identifying safety and quality

problems.” 735 F.2d at 1163. The same need to be free from

threats of retaliatory discharge exists with respect to the FLSA, if

that statute is to “function effectively.” Jd. It follows, a fortiori,

from our holding in MacKowiak that a statute like the FLSA that

(1) expressly covers the filing of complaints, and is not limited to

the institution of actual proceedings, and (2) applies to actions

related to, and not just commenced under, the Act covers internal

complaints filed with employers.

l2a

defendants — that Congress’ choice of words in 1964 can

resolve the meaning of words chosen in 1937 — to be

unpersuasive.*

* Equally unpersuasive is the defendants’ argument regarding the

1985 amendments to the FLSA. See 99 Stat. 787 § 8. The

amendments, passed in response to the Supreme Court's

determination that the FLSA applies to states and municipalities, see

Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105

S.Ct. 1005, 83 L.Ed.2d 1016 (1985), contained a provision dictating

that states and municipalities may not discriminate against any

employee “because on or after February 19, 1985 [the date of

Garcia }, the employee asserted coverage under section 7 of the Fair

Labor Standards Act.” The amendment went on to state that “[t}he

protection against discrimination afforded by the preceding sentence

shall be available after August 1, 1986, only for an employee who

takes an action descnbed in section 15(aX(3) of such Act.” The

defendants argue that the phrase “asserted coverage” expanded the

range of partes to whom protected complaints could be made (e.g.,

employers, not just courts and agencies), and that such expansive

coverage terminated on August 1, 1986. We disagree. The most

natural reading of the amendment 1s that it temporanly extended

protection to employees who “asserted” that their state and

municipal employers were “cover[ed]” by the Act dumng the initial

penod following a controversial and hotly disputed Court decision.

For example, the amendment extended protection to umon

representatives and others who, dunng the post-Garcia penod of

adjustment, attempted to persuade a local government agency that

it was subject to the FLSA. Following the initial penod of

adjustment, however, only complaints regarding specific violations

of the Act were covered, i.e., complaints covered by § 215(a)(3).

Contrary to the defendants’ assertion, therefore, the 1985

amendment effected a temporary expansion of the subject matter of

complaints protected by the Act. The amendment said nothing,

however, about the range of parties to whom protected complaints

could be made. Accordingly, the amendment is irrelevant to our

analysis here.

l3a

Our decision today is in line with the routine construction

given similar anti-retaliation provisions by the federal courts

of appeals. In Phillips v. Interior Bd. of Mine Operations

Appeals, 500 F.2d 772 (D.C.Cir.1974), for example, the D.C.

Circuit held that the whistle-blower provision of the Federal

Mine Health and Safety Act (“FMHSA”) covers complaints

made to employers. The FMHSA provision is analogous to,

although again more limited than, the FLSA provision.’

Despite the absence of express language in the statute

extending protection to employees who complain to their

employer, the D.C. Circuit held that “the coverage of the Act

begins when the miner notifies his foreman and/or safety

committeeman of possible safety violations.” Jd. at 778

(emphasis added).°

* The FMHSA provision applies on its face only to governmental

proceedings. It reads:

No person shall discharge or in any way discriminate or cause

to be discharged or discriminated against any miner or any

authorized representative of miners by reason of the fact that

such miner or representative (A) has notified the Secretary or

his authorized representative of any alleged violation or danger,

(B) has filed, instituted, or caused to be filed or instituted any

proceeding under this chapter, or (C) has testified or is about

to testify in any proceeding resulting from the administration

or enforcement of the provisions of this chapter.

30 U.S.C. § 820(b)(1) (cited in id. at 777 n.17).

° Significantly, in reaching this holding, the court pointed out

that:

The parallels between the Mine Safety Act and other protective

labor acts are significant. The Safety Act provision which we

here construe was introduced with the announced intention of

giving to miners ‘the same protection against retaliation which

we give employees under other Federal labor laws.’

Specifically, the ... Fair Labor Standards Act....

l4a

In Rayner v. Smirl, 873 F.2d 60, 64 (4th Cir.1989), the

Fourth Circuit reached the same conclusion with respect to the

Federal Railroad Safety Act, a statute with an anti-retaliation

provision indistinguishable from the FLSA’s.’ — Again,

although the anti-retaliation provision of this Act lacked

explicit reference to complaints made to employers, the court

concluded that it protected such complaints. As the Smirl

court wrote, “[t]he distinction between intra-corporate

complaints and those made to outside agencies is . . . an

artificial one. Both serve to promote rail safety and both are

within the contemplation of § 441." /d. at 64.

In Passaic Valley Sewerage Comm'rs v. Department of

Labor, 992 F.2d 474 (3rd Cir.1993), moreover, the Third

Circuit held that the Clean Water Act’s whistle-blower

provision extended protection to employees who complain to

their employer. See id. at 478.* In an eloquent decision, the

Id. at 782 (quoting 115 Cong.Rec. 27948 (1969)).

* The relevant section of that Act read:

A common carrier by railroad ... may not discharge or in any

manner discriminate against any employee because such

employee ... (1) filed any complaint or instituted or caused to

be instituted any proceeding under or related to the

enforcement of the Federal railroad safety law; or (2) testified

or 1s about to testify in any such proceeding.

45 U.S.C. § 441(a).

* The language of the statute was, again, more limited than that

of the FLSA. Section 507(a) of the Clean Water Act provides:

No person shall fire, or in any other way discriminate against

... any employee ... by reason of the fact that such employee

... has filed, instituted, or caused to be filed or instituted any

proceeding under this chapter, or has testified or is about to

testify in any proceeding resulting from the administration or

enforcement of the [Clean Water Act].

lSa

Third Circuit wrote with respect to the Clean Water Act’s

provision:

The whistle-blower provision was enacted for the broad

remedial purpose of shielding employees from retaliatory

actions taken against them by management to discourage

or to punish employee efforts to bring the corporation

into compliance... . If the regulatory scheme is to

effectuate its substantive goals, employees must be free

from threats to their job security in retaliation for their

good faith assertions of corporate violations of the statute.

Section 507(a)’s protection would be largely hollow if it

Were restricted to the point of filing a formal complaint

with the appropriate external law enforcement agency.

Employees should not be discouraged from the normal

route of pursuing internal remedies before going public

with their good faith allegations.

Id. at 478 (emphasis added).°

As the above discussion demonstrates, federal courts have

consistently construed anti-retaliation provisions analogous to

the FLSA’s as extending protection to complaints made by

employees to their employers. By holding that the

anti-retaliation provision of the FLSA similarly extends

protection to employees who complain of alleged violations to

33 U.S.C. § 1367(a).

” The list goes on. See, e.g., Clean Harbors Envtl. Servs.. Inc.

v. Herman, 146 F.3d 12 (1st Cir.1998) (construing analogous

anti-retaliation provision of the Surface Transportation Assistance

Act to include internal employee complaints); Bechtel Constr. Co.

v. Secretary of Labor, 50 F.3d 926, 931-33 (llth Cir. 1995)

(construing the Energy Reorganization Act anti-retaliation provision

as extending to internal employee complaints); Kansas Gas & Elec.

Co. v. Brock, 780 F.2d 1505, 1510-12 (10th Cir.1985) (same).

loa

their employers, we follow a course well tread both by our

court and the other circuits."”

Of course, in order to find protection under § 215(a)(3),

an employee must actually communicate a complaint to the

employer. In Valerio, after holding that § 215(a)(3) extends

to complaints filed with an employer, the First Circuit went on

to state that “not all abstract grumblings will suffice to

constitute the filing of a complaint with one’s employer,” and

that ““[t}here is a point at which an employee’s concerns and

comments are too generalized and informal to constitute

‘complaints’ that are ‘filed’ with an employer within the

meaning of the [statute}]."" 173 F.3d 35 at 44 (quoting Clean

Harbors, 146 F.3d at 22). We agree that not all amorphous

expressions of discontent related to wages and hours constitute

complaints filed within the meaning of § 215(a)(3). The

actions taken by the plaintiffs here, however, were in no way

amorphous and, given our holding today, clearly constitute the

filing of a complaint within the meaning of the statute.

Again, the plainuffs not only complained orally to their

employers about the failure to pay adequate overtime wages,

and specifically alleged a violation of the FLSA, they also

contacted the Department of Labor (which informed them that

‘We reject the defendants’ argument that the cases we have

cited are inapposite because they involve health or safety while the

present case involves economic rights. First, the defendants’

contention misses the central point that the anti-retaliation

provisions of all these statutes have analogous purposes. As the

D.C. Circuit noted in Phillips, the safety statutes at issue were

designed to give employees “the same protection against retaliation”

as afforded by the FLSA. 500 F.2d at 782. Second, we disagree

that clean water, for example, see, e.g., Passaic Valley, 992 F.2d at

478, is necessarily a more important or more pressing objective than

ensuring that workers receive the minimum wages which the law

guarantees them. Certainly, Congress has made no_ such

determination.

17a

their employer's practices were illegal), hired an attorney to

assist them with their claim, and notified their employer in

writing of the specific FLSA violation they were alleging.

While these actions unquestionably amount to the filing

of a complaint within the meaning of § 215(a)(3), less formal

and detailed communications also fit the statutory definition.

Although we need not, and indeed could not, describe the

minimum specificity with which an employee must assert an

alleged FLSA violation in order to find protection under

§ 215(a)(3) —- and we agree with the First Circuit that such

questions are to be resolved as a matter of factual analysis on

a case-by-case basis — it is clear that so long as an employee

communicates the substance of his allegations to the employer

(e.g., that the employer has failed to pay adequate overtime,

or has failed to pay the minimum wage), he is protected by

§ 215(a)(3). As several circuits have held, moreover, the

employee may communicate such allegations orally or in

writing, and need not refer to the statute by name. See, e.¢.,

Romeo Community Schs., 976 F.2d at 989 (employee who

communicated substance of allegations to employer and stated

that she believed the employer was “breaking some sort of

law,” is protected by § 215(a)(3)).

In short, § 215(a)(3) protects from retaliation employees

who complain to their employer about alleged violations of

the Act. Accordingly, the plaintiffs here engaged in protected

conduct and stated a valid claim under the FLSA.

Ill.

Remaining Claims

A. Liability Instruction

Having resolved the central issue raised by this appeal, we

now address the defendants’ remaining claims. The

defendants first argue that the district court erred in instructing

the jury on mixed-motives liability under the FLSA. At trial,

the defendants argued that the plaintiffs were discharged not

18a

because they complained about overtime violations, but

because the Somics, on account of purely economic

considerations, needed to “restructure” their ticket sales

operations. The jury was instructed that in order to prevail on

their retaliation claim, the plaintiffs had to show:

1. That the defendant was aware of one or more

plainuffs’ participation in protected activity;

2. That an adverse employment action was taken against

the plaintiffs; and

3. That the protected activity was a_ substantial

motivating factor in the adverse employment action

as to that plainuff.

(SER 20). Relying on Knickerbocker v. City of Stockton, 81

F.3d 907, 911 (9th Cir.1996), the defendants contend that the

district court erred by failing to give an affirmative defense

instruction; namely, that the defendants could escape liability

by proving that “the plaintiffs would have been discharged

regardless of any protected activity.” (Opening Brief at 27).

We need not decide whether the district court erred, however,

because we conclude that any error was “more probably than

not harmless.” See, e.g., Mockler v. Multnomah County, 140

F.3d 808, 812 (9th Cir.1998).

As we have explained on numerous occasions, an error in

instructing the jury in a civil case does not require reversal if

the error was “more probably than not harmless.” Coursen v.

A.H. Robins Co., 764 F.2d 1329, 1337 (9th Cir.1985)."' In

Benigni v. City of Hemet, 879 F.2d 473, 480 (9th Cir.1988),

we held that the district court’s failure to give an instruction

requested by the defendant was harmless because “the

The harmless error standard applied in civil cases is far “less

stringent” than that applied in cnminal cases. Mockler, 140 F.3d at

813.

ete Sete ty

Sisal

Re Renn ed.

19a

evidence would have supported a verdict for the plaintiff even

with th[e requested] instruction.” The same is true here.

The evidence clearly supports the conclusion that the

defendants would not have discharged the plaintiffs in the

absence of the protected conduct. First, the jury heard

testimony that Brian Dixon, the Sonics Controller and the

person in charge of finance for the organization, had told

Lambert that she would “definitely not have a job” and would

“be fired” if she continued to press for her rights under the

FLSA. (SER 195-96).'* Such direct evidence, rare as it may

be in mixed-motives cases, strongly supports the determination

that the Sonics fired the plaintiffs because of their protected

conduct, and that they would not have done so in the absence

of the overtime complaints. Second, the jury had before it

evidence that the entire sales group was fired except for the

one agent who did not complain about the overtime

violations.’ This evidence makes it wholly implausible that

the discharges were the result of a “restructuring” driven by

economic considerations. Third, the jury had before it

evidence that immediately after the discharge of the entire

sales staff (except Novak), the Sonics announced new job

openings for Ticket Sales Account Executives with job

descriptions identical to those previously held by the plaintiffs.

(SER 161). Had the discharges actually been based on an

‘* The district court admitted Lambert's testimony regarding

Dixon's statements after rejecting an objection raised in an in limine

motion. The court did not abuse its discretion in admitting the

evidence as Dixon was an agent of the defendants at the time he

made the statements. See Fed.R.Evid. 801(d)(2)(D); see also

Hoptowit v. Ray, 682 F.2d 1237, 1262 (9th Cir.1982).

'’ The record makes clear that the only member of the sales staff

not fired was Randy Novak. Plaintiff Letitia Selk testified that

Novak had never complained about the overtime violations, and had

never associated himself with the group of sales agents who had

expressed concern over these violations. (SER 271-72).

oO vee

| MPEP IRRRET SAR LE a

20a

economic need to “restructure” ticket sales operations, it is

unclear why these plaintiffs would have been discharged and

replaced in identical jobs by other sales agents. The alacrity

with which the new job postings were listed suggests strongly

that the motivation behind the discharges was retaliation and

not a need for economic restructuring.

In short, the evidence before the jury strongly supports

the conclusion that the plaintiffs were discharged in retaliation

for their overtime complaints and that they would not have

been discharged had they not engaged in this protected

conduct. Under these circumstances, any instructional error

was more probably than not harmless. See Benigni, 879 F.2d

at 480.

There is another reason why we conclude that the failure

to give the instruction requested by the defendants was at most

harmless error — that is, the jury’s decision to award $12

million in punitive damages. In several cases we have held an

instructional error regarding liability to be harmless in light of

a punitive damages award. See, e.g., Larez v. Holcomb, 16

F.3d 1513, 1518 (9th Cir.1994); see also Benigni, 879 F.2d at

480. In Larez, for example, the plaintiff brought a § 1983

action alleging that she had been arrested and held without

probable cause. After the jury returned a verdict for the

plaintiff, the defendant appealed and argued that the court had

erred in instructing the jury as to the burden of proving that

Larez had voluntarily consented to the detention. Although

we concluded that the court’s instruction was erroneous, we

held that the error was harmless in light of the jury’s award of

punitive damages. As we explained:

[I]t is highly significant that, in this case, the jury not

only found Holcomb liable, but also assessed a punitive

award against him. In order to award any punitive

damages, the jury had to find that Holcomb had engaged

in ‘extraordinary misconduct.” The court’s instruction on

this point was unambiguous. The jury’s implicit finding

2la

of extraordinary misconduct provides a strong indication

that the jury did not find Holcomb’s account [of the

events underlying the plaintiff's allegations] persuasive.

Id. at 1518.

As in Larez, the court’s punitive damages instruction here

was unambiguous. In order to award punitive damages, the

jury had to find that “the defendants’ conduct was malicious,

or in reckless disregard of plaintiffs’ rights.” (SER 33). The

court explained that “in this context, conduct is malicious if

it is accompanied by ill will, or spite, or if it is for the

purpose of injuring another. Conduct is in reckless disregard

of a party’s rights if, under the circumstances, it reflects

complete indifference to the rights of others.” (SER 33). The

jury’s award of $12 million in punitive damages reflects its

determination that, in discharging the plaintiffs, the defendants

acted maliciously, or in reckless disregard of the plaintiffs’

rights; that the discharge was for the purpose of injuring the

plaintiffs, or that it reflected a complete indifference to the

plaintiffs’ rights. Given this determination, it is, at the least,

more likely than not that the jury did not believe the

defendants’ explanation for the discharges. That is, given the

award of punitive damages, it is more likely than not that the

jury simply did not believe that the discharges were driven, in

Whole or in part, by economic restructuring. In fact, the

punitive damages award makes it quite plain that the jury

concluded that the defendants would not have discharged the

plaintiffs in the absence of protected conduct. Accordingly,

for this reason also, the district court’s failure to instruct the

jury that the defendants could escape liability by proving that

they “would have taken the adverse action if the proper reason

alone had existed,” Knickerbocker, 81 F.3d at 911, was at

most harmless error. See Mockler, 140 F.3d at 812.

B. Liability as to the other plaintiffs

The defendants next argue that even if Lambert’s actions

were protected by § 215(a)(3), there was no evidence that the

22a

remaining plaintiffs complained about overtime violations.

Accordingly, the defendants argue, there is no evidentiary

support for the jury’s verdict that these plaintiffs were

discharged in retaliation for protected activity. In denying the

defendants’ motion for judgment as a matter of law on this

ground, the district court concluded that the plaintiffs had

complained about the overtime violations as a group and that

Lambert had acted in a representative capacity when she filed

her complaints with the employer. We agree with the district

court that Lambert complained on behalf of the named

plaintiffs and that sufficient evidence was therefore presented

to support a retaliation claim with respect to all the plaintiffs.'*

Perhaps most important, the original letter sent to the

Sonics by Lambert's attorney referred both to Lambert’s

overtime complaints and to those of her co- workers. For

instance, the letter stated that “when Ms. Lambert and other

employees have inquired about overtime compensation,

managers have told them that overtime compensation is not

required.” (SER 117). The letter went on to explain that

“(t]he Department [of Labor] told Ms. Lambert that she and

other employees are entitled to one and one-half times their

regular rate of pay for each hour over forty worked in a

week.” (SER 117). The letter concluded with this request:

“{W]e ask that you instruct your managers to refrain from

retaliation or threats of retaliation against Ms. Lambert and

other employees.” (SER 118). In short, Lambert’s complaints

were lodged not only on her own behalf, but on behalf of the

rest of the ticket sales staff, including all of the plaintiffs here.

The defendants had direct and specific notice that Lambert and

'* We note that the three-judge panel that initially heard this case

also concluded that Lambert had acted in a representative capacity

when she filed her overtime complaints with the employer. See

Lambert v. Ackerly, 156 F.3d 1018, 1024 (9th Cir.1998), reh’g en

banc granted and opinion withdrawn, 169 F.3d 666 (9th Cir.1999).

23a

her co-workers were making demands for overtime

compensation in accordance with the FLSA.

The testimony of both plaintiff and defense witnesses

supports this conclusion. At trial, Lambert testified she and

plaintiff Chuck Viltz acted as representatives of the group of

sales agents. She stated that “(t]he sales staff as a whole

decided to have two members of the sales staff go and talk to

the director of sales and the vice-president of sales and

sponsorship, and Chuck Viltz and I were picked to do that.”

(SER 202). The defendants confirmed Lambert’s account.

For example, Bob Boustead, the Sonics head of ticket sales.

testified that “Chuck [Viltz] and Laura [Lambert] were the

spokespersons for the sales folks.” (SER 265). Dresel. the

Sonics Vice President, testified that it was difficult for him to

distinguish amongst the plaintiffs because “the whole group is

now lumped together.” (ER 264). Finally, in his opening

statement to the jury, the defendants’ counsel referred to

Lambert as the plaintiffs’ “ringleader.” (SER 163). As the

evidence supports the conclusion that Lambert was acting on

behalf of the plaintiffs as a group, the jury’s verdict on behalf

of each plaintiff is sound.

C. Damages

The defendants also object to two parts of the damages

award. They first contend that punitive damages are not

available under the FLSA.'° The only circuit to address this

question has concluded that punitive damages are available

under the Act. See Travis v. Gary Comm. Mental Health

Ctr., Inc., 921 F.2d 108, 112 (7th Cir.1990). Although the

'S The defendants also argue that the award of punitive damages

was excessive. The district court remitted a $12 million award to

just over $4 million. In light of the conduct engaged in by the

defendants and in light of the defendants’ substantial financial

assets, the $4 million award that the plaintiffs ultimately accepted

was not, by any means, excessive.

EE 0 TNT Sa NO 9 Tr ET

24a

Seventh Circuit's reasoning is persuasive, we do not reach the

question because the defendants have waived the issue of the

availability of punitive damages by failing to raise it below.

Indeed, the defendants proposed the punitive damages

instruction that was ultimately delivered by the district court,

and never objected to the instruction after they proposed it.

Although the defendants contended that no punitive damages

instruction was “necessary,” and although their trial brief

stated that punitive damages “should not be allowed,” the

district court reasonably construed these statements as

arguments that these particuiar plaintiffs had not made out a

sufficient case of malice and/or recklessness to warrant an

award of punitive damages. (ER 79-80). We agree with the

district court, and conclude that the defendants failed to raise

any objection that punitive damages are not available under

the FLSA. We therefore treat the argument as waived.

The defendants next contend that the award of damages

for emotional distress was excessive, and that the award was

the product of passion and prejudice. We may reverse a

jury’s finding of the amount of damages if the amount is

grossly excessive or monstrous, see, ¢.g., Los Angeles Mem’l

Coliseum Comm'n v. NFL, 791 F.2d 1356, 1360 (9th Cir.

1986). The jury awarded each plaintiff $75,000 in emotional

distress damages. Each plaintiff testified to the emotional toll

that the illegal discharge had taken on his or her life. Given

the evidence that was before the jury, we cannot conclude that

the award of emotional distress damages was either grossly

excessive or monstrous. Los Angeles Mem'l Coliseum, 791

F.2d at 1360.

The defendants’ argument that the award was based on

passion or prejudice depends entirely on the fact that each

plaintiff was awarded the same amount of emotional distress

damages. A review of the evidence, however, demonstrates

that the emotional distress suffered by each plaintiff was, in

fact, quite similar. We agree with the district court, moreover,

that the jury likely concluded that the emotional harm to each

25a

plaintiff was roughly equal given the similar treatment each

plaintiff suffered at the hands of the defendants. (ER 94).

Accordingly, w— also reject the defendants’ argument that the

emotional distress award was the result of passion or

prejudice.

D. Individual Defendants

The defendants’ final contention concerns the individual

defendants William and Barry Ackerley. Their first argument

is that the Ackerleys cannot be liable for the discharges

because they are not “employers” within the meaning of the

FLSA.'® We have held that the definition of “employer”

under the FLSA is not limited by the common law concept of

“employer,” but “is to be given an expansive interpretation in

order to effectuate the FLSA’s broad remedial purposes.”

Bonnette v. California Health & Welfare Agency, 704 F.2d

1465, 1469 (9th Cir.1983). Where an individual exercises

“control over the nature and structure of the employment

relationship,” or “economic control” over the relationship, that

individual is an employer within the meaning of the Act, and

is subject to liability. Jd. at 1470. The district court

instructed the jury that it could find the individual Ackerleys

liable only if it determined that they had a “significant

ownership interest with operational control of significant

aspects of the corporation’s day-to-day functions; the power

to hire and fire employees; [the power to] determin[e]|[

]salaries; [the responsibility to] maintain [ ] employment

records.” (SER 25). This instruction is entirely consistent

with our interpretation of “employer” under the FLSA, and

Was in no way erroneous. See Bonnette, 704 F.2d at 1468-70.

The evidence, moreover, strongly supports the jury’s

'° Although their arguments are not altogether clear, the

defendants appear to object to the jury instruction on this point, and

to allege that there was insufficient evidence to Support a finding

that the Ackerleys were employers within the meaning of the Act.

26a

determination that both Ackerleys exercised economic and

operational control over the employment relationship with the

sales agents, and were accordingly employers within the

meaning of the Act.

The defendants also argue there was insufficient evidence

to support an award of punitive damages against these

individual defendants. We cannot disturb the jury’s verdict if

it is supported by substantial evidence. See, e.g., Murray v.

Laborers Union Local 324, 55 F.3d 1445, 1452 (9th Cir.

1995). Substantial evidence is “such reasonable evidence as

reasonable minds might accept as adequate to support a

conclusion even if it is possible to draw two inconsistent

conclusions from the evidence.” Landes Constr. Co. v. Royal

Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987). The

recerd makes clear that the jury’s award of punitive damages

against the Ackerleys was supported by substantial evidence.

The jury heard testimony that the Ackerleys had a

long-standing policy of refusing to pay overtime as required

by federal law. (SER 279-80). Indeed, the jury was informed

that the Ackerleys had been the subject of a previous federal

lawsuit for overtime violations. (ER 86). The jury also heard

extensive testimony that both Ackerleys were aware of and

participated in the overtime dispute with the plaintiffs here,

and were involved in the decision to terminate the sales staff.

For example, the letter from Lambert’s attorney was

hand-delivered to Barry Ackerley’s office, and Dresel’s notes

from a June 22nd meeting at which the overtime complaints

were discussed stated that “Barry [was] being told.” (ER

121). Finally, the jury heard testimony that William Ackerley

had told his chief financial officer that he “doesn’t care what

the laws are,” that he believed “the law was not made for [his]

business,” and that he would not pay overtime but would

“wait until someone sues [him].” (SER 194). Such evidence

reasonably supports the jury’s determination that the Ackerleys

acted with reckless disregard for the plaintiffs’ rights. There

27a

was, accordingly, sufficient evidence to support the award of

punitive damages against the individual defendants.

IV.

Attorneys Fees

Following trial, the district court awarded the plaintiffs

$389,117.50 in attorneys fees. Following the resolution of the

post-trial motions, the plaintiffs applied for $141,080 in

supplemental fees, and the district court awarded them

$44,075. The plaintiffs cross-appeal the district court’s

supplemental award, claiming that the court abused its

discretion by failing to award them the full $141,080

requested. Parties are entitled to fees only for work related to

issues on which they prevail, and here thie plaintiffs failed to

prevail on an extremely important post-trial issue — the

remittitur with respect to punitive damages. The district

court’s fee awards were all carefully considered, and the court

did not abuse its discretion by awarding the plaintiffs only

$44,075 in supplemental fees. We therefore affirm the fee

awards.

Conclusion

The plaintiffs were discharged in retaliation for activity

protected by the Fair Labor Standards Acct. Accordingly, the

judgment of the district court is affirmed in all respects.

Interest shall be awarded from the date of final judgment.

AFFIRMED.

RYMER, Circuit Judge, with whom FERNANDEZ,

Circuit Judge, joins, dissenting in part and concurring in the

judgment in part:

While the majority’s view that 29 U.S.C. § 215(a)(3)

protects employees who complain to an employer about

overtime may well modernize the FLSA, I believe this is for

28a

Congress-net the courts-to do. And I continue to agree with

the panel opinion, and the Second Circuit, that this

interpretation is an option the plain language of § 215(a)(3) ;

makes unavailable. Section 215(a)(3) says that it is unlawful

to discharge an employee because he or she “has filed any

complaint.” It does not say “has complained to the employer”

or “has made any complaint to the employer.”

Washington law does say that. It prohibits an employer

from discharging an employee who “has made any complaint

to his employer.” Wash. Rev.Code § 49.46.100(2).’

Sidi AR ee GPL asee se

If the federal statute and the state statute mean the same

. thing, as the court has now held, then words mean anything

we say they do.’ I therefore dissent for the reasons set forth

in Parts II, III and IV of the panel opinion, authored by Judge

Brunetti, which I adopt:*

' Nor does it matter whether or not Congress meant to include ;

grievances “filed” with the employer, as the majority suggests, for

no such thing happened in this case. More importantly, the jury

was instructed (and so could have returned its verdict based on

finding) that complaining to an employer or requesting information

from the government suffices.

> See infra note 6 for full statutory text.

> See Lewis Carroll, Through the Looking Glass. As Humpty

Dumpty responded to Alice’s question “whether you can make

words mean so many different things,” “The question is ... which

is to be master-that’s all.”

* Judge Kleinfeld and I joined the opinion, Parts II, II and IV of

which I reproduce in full here because the opinion was

automatically withdrawn pursuant to our rules when the court voted

to rehear the case en banc. I concur in the judgment to the extent

that it affirms on liability and wages, but I would do so only under

Washington law.

29a

II. Liability

The plaintiffs alleged that they were retaliated against in

violation of both the federal FLSA and the public policy of

the state of Washington. We [would] now hold that the

plaintiffs failed to state a valid claim under federal law, but

were properly allowed to proceed with their claims under

Washington law.

A. Retaliation for Informal Complaints Is Not

Covered Under the FLSA

The FLSA’s anti-retaliation provision makes it unlawful

“to discharge or in any other manner discriminate 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 or is about to testify in

any such proceeding, or has served or is about to serve on an

industry committee.” 29 U.S.C. § 215(a)(3). Defendants urge

us to strictly construe this provision, so as to exclude the

present plaintiffs’ informal complaints from its coverage.

“As in all cases of statutory interpretation, our starting

point in determining Congress’s intent must be the language

of the statute itself.” Fernandez v. Brock, 840 F.2d 622, 632

(9th Cir.1988); Dunn v. CFTC, 519 U.S. 465, 117 S.Ct. 913,

916, 137 L.Ed.2d 93 (1997) (“[A]bsent any ‘indication that

doing so would frustrate Congress’s clear intention or yield

patent absurdity, our obligation is to apply the statute as

Congress wrote it’”’); see also West Virginia University

Hospitals, Inc. v. Casey, 499 U.S. 83, 100-01, 111 S.Ct.

1138, 113 L.Ed.2d 68 (1991); Union Bank v. Wolas, 502 U.S.

151, 158, 162, 112 S.Ct. 527, 116 L.Ed.2d 514 (1991).

At trial, the district court instructed the jury that “[a]n

employee has participated in protected activity if the employee

has either complained to superiors regarding any issues related

to the Fair Labor Standards Act or requested information from

the government about minimum wages or overtime

30a

compensation.” We [would] hold that this instruction was

incorrect under federal law. ‘

The question of whether § 215(a)(3) covers informal

complaints has never before been addressed by this court. See

Knickerbocker v. City of Stockton, 81 F.3d 907, 912 n.3 (9th

Cir.1996) (declining to decide whether internal complaints are

protected conduct under the FLSA). However, this issue was

recently considered by the Second Circuit, which held that

“(t]he plain language of [section 215(a)(3)] limits the cause of

action to retaliation for filing formal complaints, instituting a

proceeding, or testifying, but does not encompass complaints

made to a supervisor.” See Lambert v. Genesee Hospital, 10

F.3d 46, 50, 55 (2d Cir.1993), cert. denied, 511 U.S. 1052,

114 S.Ct. 1612, 128 L.Ed.2d 339 (1994). Because we agree

with the Genesee court that the language of the FLSA’s

anti-retaliation provision is plain and unambiguous, we

[would] now adopt the Second Circuit’s analysis.

In Genesee, certain female employees alleged that they

were retaliated against in violation of the Equal Pay Act

(EPA).° Specifically, the female employees claimed that the

promotion of a male employee to manager was in retaliation

for the female employees’ complaints to their supervisors

about the denial of equal pay and for other complaints of

discrimination. /d. at 51. Because the Genesee plaintiffs’

retaliation claims all arose out of informal, oral complaints to

a supervisor, the Second Circuit held that the plaintiffs failed

to state a cause of action under § 215(a)(3). Genesee, 10 F.3d

at 54-56.

In reaching this conclusion, the court contrasted Title

VII’s broad anti-retaliation provision with the FLSA’s

* The EPA is an amendment to the FLSA and is codified under

the same chapter. Therefore, retaliation for filing EPA complaints,

like retaliation for filing overtime complaints, is analyzed under §

215(aX(3). See Genesee, 10 F.3d at 55.

“3

ict

‘3

“

3la

narrower coverage. Under Title VII, it is an unlawful

employment practice for an employer to discriminate against

an employee “because he has opposed any practice made an

unlawful employment practice by this subchapter, or because

he has made a charge, testified, assisted, or participated in any

manner in an investigation, proceeding, or hearing under this

subchapter.” 42 U.S.C. § 2000e-3(a) (emphasis added). The

“opposition” language in Title VII’s anti-retaliation provision

clearly encompasses an employee’s complaint to supervisors,

regardless of whether the employee also files a formal charge

with the Equal Employment Opportunity Commission.

Genesee, 10 F.3d at 55 (citation omitted). No such broad

language is found in the FLSA’s anti-retaliation provision.

The Second Circuit also distinguished its earlier case of

Brock v. Casey Truck Sales, Inc., 839 F.2d 872 (2d Cir.1988).

In Casey, a DOL investigator, acting on a worker’s overtime

complaint, found that the employer had not properly paid

overtime and had falsified its records in an attempt to hide its

wrongdoing. /d. at 874-75. After the employer eventually

admitted the violations and agreed to pay overtime wages, the

employer nonetheless asked the employees to return the back

overtime wages. Those who refused were fired. Noting the

connection between the earlier formal proceedings and the

retaliatory conduct, the court stated that the protection against

retaliation under the FLSA “would be worthless if an

employee could be fired for declining to give up the benefits

he is due under the Act.” /d. at 879. Thus, it was clear in

Casey that there had been a formal complaint made to the

DOL by an employee, a formal investigation, and a finding of

overtime violations.

Similarly, in Brennan v. Maxey’s Yamaha, Inc., 513 F.2d

179 (8th Cir.1975), a company was ordered to pay back wages

after a DOL investigation disclosed minimum wage and

maximum hour violations. The company later insisted that

employees endorse back the back wage checks. An employee

protested this as unlawful conduct on the company’s part and

32a

was fired. The court held that the employee’s protest was an

act protected from reprisals, finding that “[h]er discharge was

a direct result of her insistence upon receiving retroactive

benefits required under the Act.” /d. at 181.

In contrast, in Genesee, the acts for which the employer

allegedly retaliated did not in any way grow out of the formal

filing of a complaint. Genesee, 10 F.3d at 55-56. Rather,

there were “simply oral complaints to a supervisor that an

employee was being paid less than the complainants thought

she should have been.” /d. at 56.

The present case is much more closely analogous to

Genesee than to Casey. Here, neither Lambert nor any of the

other plaintiffs actually “filed” a formal complaint or instituted

or testified in an FLSA proceeding. Rather, Lambert merely

complained about overtime to her supervisor and to other Full

House employees; called the DOL for information, and

informed her superiors that she had done so; had her lawyers

send a letter to Barry Ackerly regarding the overtime issue;

and had a complaint delivered to the Sonics. Because such

conduct is not encompassed by the plain and unambiguous

language of § 215(a)(3), the plaintiffs have failed to state a

retaliation claim under the FLSA.

We recognize that several other circuits have come to the

conclusion that informal complaints and requests for

information from the DOL do constitute protected activities

under § 215(a)(3). See E.E.0O.C. v. Romeo Community

Schools, 976 F.2d 985, 989 (6th Cir.1992) (holding that

complaining to a school district of unlawful sex discrimination

and expressing the belief that the law is being broken are

sufficient to state a retaliation claim); E.E.O.C. v. White &

Son Enterprises, 881 F.2d 1006, i011 (11th Cir.1989)

(holding that unofficial complaints to an employer about

unequal pay constitute an assertion of rights protected under

the statute); Brock v. Richardson, 812 F.2d 121, 124-25 (3d

Cir.1987) (holding that retaliation based on employer’s mere

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33a

belief that an employee filed a formal complaint is sufficient

to bring employer’s conduct under the FLSA); Love v.

RE/MAX of America, Inc., 738 F.2d 383, 387 (10th Cir.1984)

(holding that it is the assertion of Statutory rights, not the

filing of a formal complaint, which triggers a retaliation

claim); Crowley v. Pace Suburban Bus Div., 938 F.2d 797,

798 (7th Cir.1991) (broadly construing the statute to protect

against retaliation for an employee’s assertion of rights under

the FLSA); Brennan, 513 F.2d at 181. These circuits have

reached this conclusion by extending the language of

§ 215(a)(3) beyond its plain meaning so as to “effectuate the

broad remedial purposes of the FLSA.” We [should],

however, reject this approach in light of the clear language of

the statute.

B. Washington Law Covers Informal Overtime

Complaints

Regardless of their failure to state a valid retaliation claim

under federal law, the plaintiffs have asserted in their

complaint state law claims for violation of public policy.

Washington law prohibits retaliation against an employee who

“has made any complaint to [her] employer” or who “has

caused to be instituted or is about to cause to be instituted any

proceeding under or related to the [Washington wage and

overtime laws].” Wash. Rev.Code § 49.46.100(2) (emphasis

added)." Since there is no dispute that Lambert complained to

* Wash. Rev.Code § 49.46.100(2) provides in full that

Any employer who discharges or in any manner discriminates

against any employee because such employee has made any

complaint to his employer, to the director, or his authorized

representative that he has not been paid wages in accordance

with the provisions of this chapter, or that the employer has

violated any provision of this chapter, or because such

employee has caused to be instituted or is about to cause to be

instituted any proceeding under or related to this chapter, or

34a

her superiors about the lack of overtime pay, and threatened

on several occasions to file suit, Lambert has stated a valid

retaliation claim under Washington law.

C. All of the Plaintiffs Have Stated a Valid Cause of

Action Under Washington Law

Defendants argue that because all of the plaintiffs other

than Lambert predicate their retaliation claims on Lambert’s

overtime complaints, they are covered by neither § 215(a)(3)

nor Washington law, both of which impose liability for the

discharge of “such employee” as engaged in protected

conduct.

According to defendants, if the court is to give the words

“such employee” any meaning, those words must be held to

confine liability to the discharge of the employee who herself

: was engaged in the protected conduct. We [would] hold,

however, that sufficient evidence was presented in this case to

support a retaliation claim on behalf of all of the plaintiffs.

The AEs have clearly shown that they complained as a group

about overtime violations, and that Lambert pursued her claim

for the benefit of the entire group. For instance, in their

original letter to the Sonics, Lambert’s attorneys referenced

both Lambert’s overtime complaints and those of the other

employees. Thus, the defendants were on notice, specifically

and directly, that Lambert and the other employees were

making demands for overtime compensation. Moreover,

Lambert, as well as Sonics officials, testified at trial that

Lambert and Viltz were acting as spokespersons for the whole

group of AEs in negotiations over their compensation.

because such employee has testified or is about to testify in

any such proceeding shall be deemed in violation of this

chapter and shall, upon conviction therefor, be guilty of a gross

misdemeanor.

35a

Because the evidence supports a finding that Lambert and

Viltz were acting as representatives for the AEs in

complaining about overtime compensation, all of the present

plaintiffs were entitled to protection against retaliation under

Washington law.

This case was tried under federal law with the assumption

that Washington law also governed the plaintiffs’ claims.

Because the district court only considered the plaintiffs’ claims

under the FLSA when considering defendants’ motion for

judgment as a matter of law, we [would] now remand to the

trial court to reconsider the defendants’ motion for judgment

as a matter of law by reassessing the jury’s finding of liability,

taking into account only Washington law. Specifically, the

district court must decide under Washington law whether the

plaintiffs met their burden of proof as to causation and

retaliatory intent, and whether or not the Ackerlys can be

considered “employers” subject to personal liability.

Ill. Damages

In light of the failure of plaintiffs’ retaliation claims under

§ 215(a)(3), the parties’ arguments as to the availability of

punitive damages under the FLSA are. moot.

There is no dispute that Washington law does not allow

for punitive damages in wrongful termination cases, see

Dailey v. North Coast Life Ins. Co., 129 Wash.2d 572, 919

P.2d 589 (1996); therefore, the punitive damages award

[should be] reversed.

Turning to the emotional distress damages, each plaintiff

was awarded $75,000 by the jury for emotional distress.

Defendants argue that this must have been the product of

speculation because the different plaintiffs manifested different

symptoms, some physical and some purely mental, and none

of the plaintiffs provided any corroborating evidence. See

Brady v. Gebbie, 859 F.2d 1543, 1558 (9th Cir.1988), cert.

denied, 489 U.S. 1100, 109 S.Ct. 1577, 103 L.Ed.2d 943

36a

(1989) (plaintiff presented psychiatric testimony of emotional

distress and permanent psychological damage). Plaintiffs

respond that the defendants mistreated all of the AEs in the

same way, thereby justifying identical awards. The district

court agreed with the plaintiffs, finding that “the jury must

have concluded that the emotional harm to each plaintiff was

roughly equal given their similar treatment by defendants.”

A reviewing court must uphold the jury’s finding of the

amount of damages unless the amount is “grossly excessive

or monstrous,’ clearly not supported by the evidence, or ‘only

based on speculation or guesswork.’” Los Angeles Memorial

Coliseum Comm’n v. NFL, 791 F.2d 1356, 1360 (9th

Cir.1986) (citations omitted).

We agree with defendants that $75,000 for emotional

distress is grossly excessive given that the symptoms

manifested by the plaintiffs were not particularly severe. See

Avitia v. Metropolitan Club of Chicago, Inc., 49 F.3d 1219,

1230 (7th Cir.1995) (finding unreasonable a $21,000 award

for emotional distress in an FLSA retaliation case); see also

Hetzel v. County of Prince William, 89 F.3d 169, 171 (4th

Cir.1996), cert. denied, 519 U.S. 1028, 117 S.Ct. 584, 136

L.Ed.2d 514 (reversing a $500,000 award for emotional

distress arising out of retaliation in violation of the First

Amendment). Moreover, that plaintiffs were all awarded the

same amount, despite the fact that their distress levels varied

widely, suggests that the awards were the product of

guesswork.

We therefore [would] reverse with respect to the

emotional distress damages and remand for determination of

a reasonable amount should the district court find the

defendants liable on remand.

37a

IV. Attorneys’ Fees

Because the district court [should] be required on remand

to redetermine the appropriate attorneys’ fee awards in light

of its decision as to liability, we express no opinion at this

time on the attorneys’ fee issues raised by the parties.

38a

APPENDIX B

LAURA LAMBERT; ESTHER ACKLEY; STEVE BELLING;

PAT COOKE; LETITIA SELK; CHUCK VILTZ,

Plaintiffs-Appellees-Cross-Appellants,

Barry Ackerly, William Ackerly; Seattle SuperSonics Inc.,

a former Washington corporation; Full House Sports &

Entertainment Inc., a Washington corporation; SSI Sports

Inc., a Washington corporation,

Defendants-Appellants-Cross-Appellees.

Nos. 96-36017, 96-36266 and 96-36267.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Feb. 6, 1998.

Decided Oct. 1, 1998.

Andrew L. Frey, Mayer, Brown & Platt, Washington, DC,

for defendants-appellants-cross-appellees.

Spencer Hall, Jr. and John W. Widell, Mundt,

MacGregor, Happel, Falconer, Zulauf and Hall, Seattle, WA,

for plaintiffs-appellees-cross-appellants.

Appeals from the United States District Court for the

Western District of Washington; Barbara J. Rothstein, District

Judge, Presiding. D.C. No. CV-95-00039-BJR.

Before: BRUNETTI, RYMER, and KLEINFELD, Circuit

Judges.

BRUNETTI, Circuit Judge:

Defendants appeal a verdict in favor of plaintiffs on

plaintiffs’ claims that they were discharged by defendants in

retaliation for complaining about overtime compensation, in

violation of the federal Fair Labor Standards Act (FLSA),

39a

29 U.S.C. § 215(a)(3), and in violation of the public policy of

the state of Washington. Plaintiffs, six former ticket sales

account executives for the Seattle SuperSonics professional

basketball team, were awarded compensatory and punitive

damages as a result of the jury’s finding that defendants, the

Seattle SuperSonics, Inc., Full House Sports & Entertainment

Inc., and Barry and William Ackerly, unlawfully discharged

plaintiffs in retaliation for their overtime complaints.

The district court denied defendants’ motion for judgment

as a matter of law, but remitted plaintiffs’ punitive damages

award. The district court also awarded plaintiffs attorneys’

fees. The defendants now appeal both the denial of their

motion for judgment as a matter of law and the attorneys’ fee

award. Plaintiffs cross-appeal with respect to the issue of

attorneys’ fees.

FACTS

Plaintiffs Esther Ackley, Steve Belling, Pat Cooke, Laura

Lambert, Letitia Selk, and Chuck Viltz were all employed by

Full House Sports & Entertainment, Inc. (Full House) as ticket

sales account executives (AEs) for the Seattle SuperSonics, a

team in the National Basketball Association. The corporate

defendants are the Seattle SuperSonics, Inc. (the Sonics)

(formerly known as SSI Sports, Inc.) and Full House.' The

individual defendants are Barry Ackerly and his son William

Ackerly, corporate officers and directors of the corporate

defendants.

As AEs, plaintiffs solicited orders for Sonics season

tickets, multi-game packages, and group sales. They also

' At the time of their discharge, the plaintiffs were employed by

Full House. Prior to the time Full House was organized to run the

SuperSonics, the AEs were employed by the entity known as the

Seattle SuperSonics, Inc. The two corporate entities were treated

collectively at trial.

40a

staffed a season ticket information booth at Sonics basketball

games. Beginning in 1991, AEs were paid a base salary of

$13,000, with most of their compensation based on

commissions. Also in 1991, the Sonics began paying AEs a

$2,000 allowance for overtime worked at basketball games

and other events. Any employee who exhausted this overtime

was required to stop working or to take compensatory time.

The Sonics paid this $2000 allowance in semi-monthly

installments of $166.67 during the basketball season,

regardless of overtime actually worked. By December of the

1993-94 season, with Sonics tickets largely sold out, the AEs’

workweek was cut back to 20 hours plus game nights, and the

automatic overtime payments were discontinued.

In March 1994, John Dresel, Sonics Executive Vice

President, authorized Laura Kussick, Sonics Semor Vice

President of Sales, to restructure ticket sales operations.

Kussick concluded that the AEs, who were earning

$60,000-$90,000 per year, were overpaid. Thereafter, Kussick

and Ticket Sales Director Bob Boustead discussed a plan to

alter the AEs’ compensation structure with plaintiffs Lambert

and Viltz, who had been chosen by the AEs to represent the

group in discussions with Sonics management about

compensation. A new compensation system was put into

effect in June 1994, and in August 1994, Boustead instituted

a fixed 8:30 a.m. to 5:30 p.m. workday for the AEs.

Meanwhile, after realizing that she had not been paid the

full $2000 in overtime compensation for the 1993-94 season,

Lambert left a note with Sonics Controller Bnan Dixon on

May 2, 1994, requesting a meeting. Lambert also raised the

overtime issue with Boustead that day. On May 4, 1994,

Lambert phoned the U.S. Department of Labor (DOL) to ask

for information regarding overtime laws. Following that

phone conversation, Lambert again spoke with Boustead, who

said that overtime compensation was a “dead issue.”

4la

At a May 16, 1994 ticket sales department meeting, the

AEs complained about the lack of overtime compensation, and

were told by Boustead that they would receive no overtime the

following year. Lambert then called the DOL again and asked

for documentation regarding overtime requirements. Lambert

presented this information to Dixon and to Sonics Payroll

Manager Eddie Roldan on May 20, 1994. Dixon allegedly

told Lambert that he knew the Sonics were breaking the law,

but that William Ackerly did not care, and would not pay

overtime. According to Lambert, Dixon threatened to fire her

if she continued to pursue the overtime issue.

On June 17, 1994, Lambert’s attorneys sent Barry Ackerly

a letter requesting that the Sonics compensate Lambert and the

other employees for overtime, in accordance with Washington

law. Then, on July 6, 1994, Lambert delivered, but did not

file, a complaint for unpaid overtime on her own behalf,

naming Barry and William Ackerly and the Sonics as liable

parties. On October 6, 1994 the Sonics settled Lambert’s

claim in exchange for a full release. At the same time, the

Sonics paid other employees, including several of the present

plaintiffs, amounts due them for overtime.

Less than a week after settling the overtime claims, on

October 12, 1994, Dresel wrote a memo to William Ackerly

informing Ackerly that, in anticipation of a mid-season decline

in AE work, Dresel was planning to layoff the entire ticketing

staff by November 30, 1994. Near the end of October 1994,

the Sonics required each AE except Lambert to sign a

memorandum stating that he or she had been paid overtime

compensation for October 1992 through October 1994, and

that he or she was not owed any further compensation.

On October 17, 1994 Full House was organized to run the

Sonics business organization, and Dresel was named as

President. Full House executives decided to restructure the

ucket sales staff and to implement a “fluctuating workweek,”

whereby anyone working more than eight hours in one day

42a

had to take corresponding compensatory time that week.

Under this plan, only Dresel could authorize overtime.

During the 1994-95 season, the Sonics played in the

Tacoma Dome while a new Key Arena was being built in

Seattle. According to defendants, ticket demand was much

smaller in Tacoma, and Kussick determined that the Tacoma

Dome’s group sales staff, which had ties to Tacoma com-

panies, could better manage group sales. Thus, on December

2, 1994, Dresel held a meeting with the AEs at which he

discharged nine of the ten employees on the Sonics ticket

sales staff, including the six present plaintiffs. Three days

prior to the announcement of the layoffs, Sonics management

held a meeting with their public relations director and

developed a strategy memorandum for explaining the

impending layoffs.

Full House offered the discharged AEs severance

packages, available only to those employees who signed a

release of all claims and who agreed not to reapply for new

AE positions after the restructuring of the ticket sales staff.

The AEs all declined the package, but none applied for the

restructured positions that Full House began to fill in March

1995. Rather, the AEs filed the present suit in state court.

Thereafter, the case was removed to federal district court by

the defendants.

A three-week jury trial was held before the district court

on plaintiffs’ claims that they were discharged by defendants

in retaliation for complaining about the lack of overtime

compensation, in violation of the FLSA, 29 U.S.C.

§ 215(a)(3), and in violation of the public policy of the state

of Washington, as embodied in Wash. Rev. Code

§ 49.46.100(2). Prior to tral, defendants conceded that

certain of their overtime practices were in violation of

applicable laws, and the district court granted partial summary

judgment as to this issue.

43a

The trial resulted in a general jury verdict for plaintiffs in

the amount of combined wage losses of $697,000, emotional

distress damages totaling $450,000, and a total of $12 million

in punitive damages ($5 million against the corporate

defendants, $4 million against Barry Ackerly, and $3 million

against William Ackerly).

After trial, defendants moved for judgment as a matter of

law, or in the alternative, for a new trial and/or remittitur. On

August 12, 1996, the district court entered an order denying

the motion for judgment as a matter of law, but finding that

the punitive damages verdict was excessive, and therefore

remitting it to $1,394,000 per defendant, for a total of

$4,182,000 in punitive damages. In addition, the district court

awarded plaintiffs attorneys’ fees in the amount of

$389,117.50. On October 24, 1996, the district court awarded

plaintiffs supplemental attorneys’ fees in connection with the

post-trial motion in the amount of $44,075.

DISCUSSION

Standard of Review

This court reviews the district court’s grant or denial of

a renewed motion for judgment as a matter of law de novo.

E.E.0.C. v. Pape Lift Inc., 115 F.3d 676, 680 (9th Cir.1997);

Forrett v. Richardson, 112 F.3d 416, 419 (9th Cir.1997). The

reviewing court’s role is the same as that of the district court.

Forrett, 112 F.3d at 419. Judgment as a matter of law is

proper if the evidence, construed in the light most favorable

to the nonmoving party, permits Only one reasonable

conclusion, and that conclusion is contrary to the jury’s. /d.

(citation omitted).

44a

Il.

Liability

The plaintiffs alleged that they were retaliated against in

violation of both the federal FLSA and the public policy of

the state of Washington. We now hold that the plaintiffs

failed to state a valid claim under federal law, but were

properly allowed to proceed with their claims under

Washington law.

A. Retaliation for Informal Complaints Is Not

Covered Under the FLSA

The FLSA’s anti-retaliation provision makes it unlawful

“to discharge or in any other manner discriminate 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 or is about to testify in

any such proceeding, or has served or is about to serve on an

industry committee.” 29 U.S.C. § 215(a)(3). Defendants urge

us to strictly construe this provision, so as to exclude the

present plaintiffs’ informal complaints from its coverage.

“As in all cases of statutory interpretation, our starting

point in determining Congress’s intent must be the language

of the statute itself.” Fernandez v. Brock, 840 F.2d 622, 632

(9th Cir.1988); Dunn v. CFTC, 519 U.S. 465, 117 S.Ct. 913,

916, 137 L.Ed.2d 93 (1997) (“[A]bsent any ‘indication that

doing so would frustrate Congress’s clear intention or yield

patent absurdity, our obligation is to apply the statute as

Congress wrote it’); see also West Virginia University

Hospitals, Inc. v. Casey, 499 U.S. 83, 100-01, 111 S.Ct.

1138, 113 L.Ed.2d 68 (1991); Union Bank v. Wolas, 502 U.S.

151, 158, 162, 112 S.Ct. 527, 116 L.Ed.2d 514 (1991).

At trial, the district court instructed the jury that “[a]n

employee has participated in protected activity if the employee

has either complained to superiors regarding any issues related

to the Fair Labor Standards Act or requested information from

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the government about minimum wages or overtime

compensation.” We hold that this instruction was incorrect

under federal law.

The question of whether § 215(a)(3) covers informal

complaints has never before been addressed by this court. See

Knickerbocker v. City of Stockton, 81 F.3d 907, 912 n. 3 (9th

Cir.1996) (declining to decide whether internal complaints are

protected conduct under the FLSA). However, this issue was

recently considered by the Second Circuit, which held that

“[t]he plain language of [section 215(a)(3)] limits the cause of

action to retaliation for filing formal complaints, instituting a

proceeding, or testifying, but does not encompass complaints

made to a supervisor.” See Lambert v. Genesee Hospital,

10 F.3d 46, 50, 55 (2d Cir.1993), cert. denied, 511 U.S. 1052,

114 S.Ct. 1612, 128 L.Ed.2d 339 (1994). Because we agree

with the Genesee court that the language of the FLSA’s

anti-retaliation provision is plain and unambiguous, we now

adopt the Second Circuit’s analysis.

In Genesee, certain female employees alleged that they

were retaliated against in violation of the Equal Pay Act

(EPA).’ Specifically, the female employees claimed that the

promotion of a male employee to manager was in retaliation

for the female employees’ complaints to their supervisors

about the denial of equal pay and for other complaints of

discrimination. Jd. at 51. Because the Genesee plaintiffs’

retaliation claims al] arose out of informal, oral complaints to

a supervisor, the Second Circuit held that the plaintiffs failed

to state a cause of action under § 215(a)(3). Genesee, 10 F.3d

at 54-56.

* The EPA is an amendment to the FLSA and is codified under

the same chapter. Therefore, retaliation for filing EPA complaints,

like retaliation for filing overtime complaints, is analyzed under

§ 215(a)(3). See Genesee, 10 F.3d at 55.

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In reaching this conclusion, the court contrasted Title

VII’s_ broad anti-retaliation provision with the FLSA’s

narrower coverage. Under Title VII, it is an unlawful

employment practice for an employer to discriminate against

an employee “because he has opposed any practice made an

unlawful employment practice by this subchapter, or because

he has made a charge, testified, assisted, or participated in any

manner in an investigation, proceeding, or hearing under this

subchapter.” 42 U.S.C. § 2000e-3(a) (emphasis added). The

“opposition” language in Title VII’s anti- retaliation provision

clearly encompasses an employee’s complaint to supervisors,

regardless of whether the employee also files a formal charge

with the Equal Employment Opportunity Commission.

Genesee, 10 F.3d at 55 (citation omitted). No such broad

language is found in the FLSA’s anti-retaliation provision.

The Second Circuit also distinguished its earlier case of

Brock v. Casey Truck Sales, Inc., 839 F.2d 872 (2d Cir.1988).

In Casey, a DOL investigator, acting on a worker’s overtime

complaint, found that the employer had not properly paid

overtime and had falsified its records in an attempt to hide its

wrongdoing. Jd. at 874-75. After the employer eventually

admitted the violations and agreed to pay overtime wages, the

employer nonetheless asked the employees to return the back

overtime wages. Those who refused were fired. Noting the

connection between the earlier forma! proceedings and the

retaliatory conduct, the court stated that the protection against

retaliation under the FLSA “would be worthless if an

employee could be fired for declining to give up the benefits

he is due under the Act.” Jd. at 879. Thus, it was clear in

Casey that there had been a formal complaint made to the

DOL by an employee, a formal investigation, and a finding of

overtime violations.

Similarly, in Brennan v. Maxey’s Yamaha, Inc., 513 F.2d

179 (8th Cir.1975), a company was ordered to pay back wages

after a DOL investigation disclosed minimum wage and

maximum hour violations. The company later insisted that

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employees endorse back the back wage checks. An employee

protested this as unlawful conduct on the company’s part and

was fired. The court held that the employee’s protest was an

act protected from reprisals, finding that “[h]er discharge was

a direct result of her insistence upon receiving retroactive

benefits required under the Act.” Jd. at 181.

In contrast, in Genesee, the acts for which the employer

allegedly retaliated did not in any way grow out of the formal

filing of a complaint. Genesee, 10 F.3d at 55-56. Rather,

there were “simply oral complaints to a supervisor that an

employee was being paid less than the complainants thought

she should have been.” Jd. at 56.

The present case is much more Closely analogous to

Genesee than to Casey. Here, neither Lambert nor any of the

other plaintiffs actually “filed” a formal complaint or instituted

or testified in an FLSA proceeding. Rather, Lambert merely

complained about overtime to her supervisor and to other Full

House employees; called the DOL for information, and

informed her superiors that she had done so; had her lawyers

send a letter to Barry Ackerly regarding the overtime issue;

and had a complaint delivered to the Sonics. Because such

conduct is not encompassed by the plain and unambiguous

language of § 215(a)(3), the plaintiffs have failed to state a

retaliation claim under the FLSA.

We recognize that several other circuits have come to the

conclusion that informal complaints and requests for

information from the DOL do constitute protected activities

under § 215(a)(3). See E.E.0.C. v. Romeo Community

Schools, 976 F.2d 985, 989 (6th Cir.1992) (holding that

complaining to a school district of unlawful sex discrimination

and expressing the belief that the law is being broken are

sufficient to state a retaliation claim); E.E.O.C. v. White &

Son Enterprises, 881 F.2d 1006, 1011 (11th Cir.1989)

(holding that unofficial complaints to an employer about

unequal pay constitute an assertion of rights protected under

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the statute); Brock v. Richardson, 812 F.2d 121, 124-25 (3d

Cir.1987) (holding that retaliation based on employer’s mere

belief that an employee filed a formal complaint is sufficient

to bring employer’s conduct under the FLSA); Love v.

RE/MAX of America, Inc., 738 F.2d 383, 387 (10th Cir.1984)

(holding that it is the assertion of statutory rights, not the

filing of a formal complaint, which triggers a retaliation

claim); Crowley v. Pace Suburban Business Div., 938 F.2d

797, 798 (7th Cir.1991) (broadly construing the statute to

protect against retaliation for an employee’s assertion of rights

under the FLSA); Brennan, 513 F.2d at 181. These circuits

have reached this conclusion by extending the language of

§ 215(a)(3) beyond its plain meaning so as to “effectuate the

broad remedial purposes of the FLSA.” We, however, reject

this approach in light of the clear language of the statute.

B. Washington Law Covers Informal Overtime

Complaints

Regardless of their failure to state a valid retaliation claim

under federal law, the plaintiffs have asserted in their

complaint state law claims for violation of public policy.

Washington law prohibits retaliation against an employee who

“has made any complaint to [her] employer” or who “has

caused to be instituted or is about to cause to be instituted any

proceeding under or related to the [Washington wage and

overtime laws].” Wash. Rev.Code § 49.46.100(2) (emphasis

added).* Since there is no dispute that Lambert complained to

* Wash. Rev. Code § 49.46.100(2) provides in full that

Any employer who discharges or in any manner discriminates

against any employee because such employee has made any

complaint to his employer, to the director, or his authorized

representative that he has not been paid wages in accordance

with the provisions of this chapter, or that the employer has

violated any provision of this chapter, or because such

employee has caused to be instituted or is about to cause to be

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her superiors about the lack of overtime pay, and threatened

on several occasions to file suit, Lambert has stated a valid

retaliation claim under Washington law.

C. All of the Plaintiffs Have Stated a Valid Cause of

Action Under Washington Law

Defendants ar

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