[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
U.S. COURT OF APPEALS
____________ ELEVENTH CIRCUIT
March 6, 2008
THOMAS K. KAHN
Nos. 06-13186 & 06-13303 CLERK
_____________
D.C. Docket No. 02-22451-CV-DMM
LORENDA RODRIGUEZ,
VILMA THOMAS, et al.,
Plaintiffs-Appellees,
versus
FARM STORES GROCERY, INC.,
Defendant-Third-Party-
Plaintiff-Counter-
Defendant-Appellant,
versus
OASIS OUTSOURCING, INC.,
Third-Party-Defendant-
Counter-Claimant.
______________
Appeals from the United States District Court
for the Southern District of Florida
_____________
(March 6, 2008)
Before EDMONDSON, Chief Judge, CARNES and FAY, Circuit Judges.
CARNES, Circuit Judge:
We deny Farm Stores Grocery, Inc.’s petition for rehearing but withdraw
our previous opinion dated January 28, 2008, and published at ___ F.3d ___, and
substitute the following opinion in its place:
This appeal in a Fair Labor Standards Act, 29 U.S.C. §§ 201–19, case
involves a number of issues arising under that statute. It also presents us with an
interesting issue that is not FLSA-specific. Without objection from either party,
the district court gave the jury an erroneous instruction on how to calculate
damages. The jury compounded the error by returning a verdict for a larger
amount of damages than the erroneous instruction would permit. Is the correct
remedy a remittitur, reducing the damages down to the maximum amount that
could have been awarded under the erroneous but unobjected to instruction, or a
new trial with a proper instruction on calculating damages?
I.
Farm Stores operates a chain of 103 full-service, free-standing, drive-
through grocery stores throughout Florida. Each store employs between three and
six workers. One worker at each store is given the title “store manager” and is
paid a weekly salary, unlike the others who are “sales associates” and are paid an
2
hourly wage. Each store manager reports to a “district manager” who supervises
between ten and twenty stores. Twenty-six of the twenty-eight plaintiffs are
former store managers who were terminated during a company-wide
reorganization in 2002.1
After they were terminated for reasons unrelated to hours and wages, the
store managers brought this Fair Labor Standards Act lawsuit in federal district
court. Their complaint sought back pay for overtime they claim Farm Stores owes
them pursuant to 29 U.S.C. § 207(a)(1), which requires that employers pay time
and a half for each hour an employee works beyond forty each week. Generally,
employees may only recover up to two years of back pay under the FLSA’s statute
of limitations. 29 U.S.C. § 255(a). However, the complaint alleged that Farm
Stores’ violation of the FLSA was willful, which would entitle the plaintiffs to as
much as one additional year of back pay.
Farm Stores’ answer asserted that the store managers were exempt from the
FLSA’s overtime provision because they fell within the Act’s “executive
exemption.” That exemption applies to employees who earn a salary of at least
1
Two employees with the title “associate manager” are also plaintiffs. The jury returned
a separate verdict form in favor of those two plaintiffs, and the district court included their
damages award in the total amount of its final judgment. Farm Stores has explicitly abandoned
any contention that there was error in the judgment insofar as it involved the two associate
managers.
3
$250 a week, whose primary duty is management of a recognized department or
subdivision, and who regularly direct two or more employees. 29 C.F.R. §
541.1(f) (2002).2 Farm Stores also asserted that it had not willfully violated the
FLSA.
After the close of discovery, both Farm Stores and the store managers
moved for summary judgment on the issue of whether the store managers were
covered by the executive exemption. The district court denied both parties’
motions, explaining that: “It is impossible to grant summary judgment for either
party because the record does reveal very hotly disputed facts concerning what
[the store managers] did in their day-to-day duties as ‘store managers,’ and
whether those activities bring them within the relevant exemptions as a matter of
law.” The case then proceeded to a jury trial.
The main issue at trial was whether the store managers fell within the
executive exemption. Both sides presented evidence on the question of whether
the store managers’ primary duty was management. On the one hand, Farm Stores
introduced evidence that the store managers interviewed, hired, trained, evaluated,
2
Although the Department of Labor has since revised 29 C.F.R. § 541.1, the version in
place in 2002 applies to this case. See Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22,122,
22,122–23 (Apr. 23, 2004) (to be codified at 29 C.F.R. pt. 541).
4
and disciplined employees; maintained store inventory; and were relatively free
from supervision of their daily activities. Additionally, its expert witness testified
that, based on his review of the store managers’ job descriptions, their primary
duty was management.
On the other hand, the store managers testified that their primary duties
were sales related, not managerial. They explained that they spent almost no time
performing managerial tasks during most weeks, that they lacked real authority
over their stores and employees, and that they were required to consult their
district managers before making management decisions. They also testified that
their hourly rate of pay, calculated by dividing their weekly salary by the total
number of hours they worked each week, was essentially the same as the hourly
rate of pay for sales associates. Their expert witness testified that, based on his
review of affidavits from the store managers, as well as their job descriptions, their
primary duty was not management.
On the issue of damages, each store manager also testified about the average
number of hours he worked each week and the amount of his weekly salary from
1999 to 2002. Their counsel asked each store manager what his regular rate of pay
was and asked most of them how they calculated it. The store managers were
virtually unanimous in testifying that they calculated their regular rate of pay by
5
dividing their weekly salary by the total number of hours they worked each week.
This method is the one that counsel for the store managers used to explain and
argue damages to the jury in his opening statement and closing argument. It is
also the way the district court instructed the jury to calculate damages. Neither
side asked for or objected to the instruction.
The jury returned a verdict finding that the store managers did not fall
within the executive exemption and awarding damages to each individual store
manager. The jury also found that Farm Stores’ violation of the FLSA overtime
provision was not willful, a finding which had the effect of limiting the store
managers to a maximum of two years of back pay. The total amount of damages
the jury awarded was $297,700.00.
Farm Stores filed two post-trial motions. In the first one it sought judgment
as a matter of law or, in the alternative, a new trial, under Federal Rule of Civil
Procedure 50 on the ground that the jury’s finding on the executive exemption was
not supported by the evidence. In the second motion Farm Stores sought a
remittitur of the verdict because the damages the jury awarded exceeded the
amount established by the evidence. The district court summarily denied both of
those motions.
6
The store managers also filed a post-trial motion, seeking an award of
liquidated damages equal to the amount of the jury award under 29 U.S.C. § 216.
The district court granted that motion. This is Farm Stores’ appeal.
II.
Farm Stores first contends that the district court erred in denying its Rule 50
motion because store managers, at least those who are assigned to separate
locations, categorically fall within the executive exemption and therefore are not
entitled to overtime under the FLSA. Alternatively, it contends that the evidence
presented at trial is insufficient to sustain the jury’s finding regarding that
exemption. The store managers counter that the executive exemption is an
inherently fact-based inquiry that turns on the individual circumstances of each
case, and that they presented sufficient evidence for the jury reasonably to
conclude that these specific store managers were not exempt employees.
Generally, the FLSA requires employers to pay their employees time and a
half for all the work they do over forty hours a week, 29 U.S.C. § 207(a)(1), but
that requirement does not apply to “any employee employed in a bona fide
executive . . . capacity,” id. § 213(a)(1). The Department of Labor has
promulgated regulations defining who is an “executive” for purposes of the FLSA.
Under the applicable regulation, an employee is an “executive” if he earns at least
7
$250.00 per week and: (1) is paid on a salary basis; (2) manages, as his primary
duty, a recognized department or subdivision; and (3) regularly directs two or
more employees. 29 C.F.R. § 541.1(f) (2002).
Before trial, the parties stipulated that the store managers were paid a salary
of at least $250.00 per week. After hearing the evidence, the jury found that the
store managers “customarily and regularly directed the work of two (2) or more
employees at his or her store,” and the store managers do not contest that finding.
Accordingly, the overtime wages issue turns on whether the store managers’
primary duty was management. The jury found that it was not, but Farm Stores
argues that finding is not supported by the evidence.
The sufficiency of the evidence on that issue must be viewed against the
applicable DOL regulation, which sets out five factors to use in determining
whether an employee’s primary duty is management. The factors are: (1) the
amount of time spent performing managerial duties; (2) the relative importance of
an employee’s managerial and non-managerial duties; (3) the frequency with
which an employee may exercise discretionary powers; (4) the employee’s relative
freedom from supervision; and (5) the relationship between the purportedly
exempt employee’s wages and the wages paid to other employees performing
similar, non-exempt work. 29 C.F.R. § 541.103 (2002).
8
In the face of the regulation, Farm Stores insists that the store managers are
exempt employees “as a matter of law.” What we understand that to mean is that
any employee who has the responsibility over a free-standing business location, as
these plaintiffs did, must come within the executive exemption. Farm Stores cites
a number of decisions where courts concluded that managers of free-standing
business units fell within the executive exemption, but in each of those cases the
court reached that conclusion only after thoroughly reviewing the specifics of each
employee’s duties. None of the courts simply slapped on a talismanic phrase.
Take, for example, Baldwin v. Trailer Inns, Inc., 266 F.3d 1104 (9th Cir.
2001), which affirmed the district court’s grant of summary judgment in favor of
an employer, concluding that the managers in question fell within the executive
exemption. Id. at 1117. In analyzing the primary duty requirement, the Baldwin
court discussed in detail the evidence concerning the amount of time the managers
spent performing managerial duties, the importance of those duties, the managers’
independence and discretionary authority, and the difference between the
managers’ salaries and the wages paid to other employees. Id. at 1113–16. The
Baldwin opinion illustrates the necessarily fact-intensive nature of the primary
duty inquiry. That particularized approach is consistent with the DOL regulation,
which provides that the “determination of whether an employee has management
9
as his primary duty must be based on all the facts in a particular case.” 29 C.F.R.
§ 541.103 (2002). When it comes to deciding whether an employee is an
executive within the meaning of the FLSA, the answer is in the details. We reject
Farm Stores’ categorical approach.
Farm Stores’ fallback argument is that even if the exemption issue is one to
be decided on the particulars of the evidence, in this case there was not enough
evidence to support the jury’s finding that the store managers were not exempt
employees. This argument primarily focuses on the evidence from which the jury
could have found in Farm Stores’ favor on this issue. We agree with Farm Stores
that it presented abundant documentary evidence and testimony at trial indicating
that the store managers’ primary duty was management. We would affirm a jury
verdict in that direction, but that is not what we have.
Where an issue turns on the particular facts and circumstances of a case, it is
not unusual for there to be evidence on both sides of the question, with the result
hanging in the balance. The result reached must be left intact if there is evidence
from which the decision maker, the jury in this instance, reasonably could have
resolved the matter the way it did. See Pickett v. Tyson Fresh Meats, Inc., 420
F.3d 1272, 1278 (11th Cir. 2005); Collado v. United Parcel Serv., Co., 419 F.3d
1143, 1149 (11th Cir. 2005); Bogle v. Orange County Bd. of County Comm’rs,
10
162 F.3d 653, 659 (11th Cir. 1998). The issue is not whether the evidence was
sufficient for Farm Stores to have won, but whether the evidence was sufficient for
it to have lost. It was.
We won’t recount all of the testimony and other evidence supporting the
verdict, but a few examples will illustrate how the jury reasonably could have
determined that the store managers’ primary duty was not management. One store
manager testified that in a typical week his time was allocated as follows: “[A]n
average 30 percent as regards cleaning, 50 percent customer attention or service,
10 percent in merchandise receiving, another 10 percent approximately in stacking
up the racks, but the main point was customer sales.” From his testimony a jury
reasonably could conclude that at least some of the store managers spent no time
performing managerial duties during most weeks. While other managers conceded
that they spent some time each week performing managerial tasks, all of them
insisted it was not the majority of their work, and more than one testified to
spending only about ten percent of their time on management-related duties.
The jury also heard testimony that the store managers lacked authority and
discretion over their respective stores and employees. Some of the store managers
testified that their stores were actually run by district managers. They told how
employee evaluation forms that they were required to sign were actually filled out
11
by district managers, and how they could not make any management decisions
without first seeking permission from their district manager. Several store
managers testified that their hourly rate of pay (computed by dividing their weekly
salary by the number of hours they worked each week) was comparable to, and in
one case actually less than, those of the sales associates or assistant managers at
their stores.
Finally, the store managers’ expert witness, after reviewing their job
descriptions and affidavits, concluded with “a reasonable degree of professional
certainty” that Farm Stores could not claim the store managers as exempt under
the executive exemption because “their primary duty was that of being engaged in
sales and sales related activities,” not management.
Considering the evidence as a whole, and viewing it in the light most
favorable to the verdict, there was enough for the jury reasonably to find, as it
explicitly did, that the primary duty of the store managers was not management.
The district court did not err in denying Farm Stores’ post-verdict motion for
judgment as a matter of law, or in the alternative, a new trial on this ground.
III.
The next issue arises from the district court’s denial of Farm Stores’ motion
for a remittitur. The court instructed the jury that if it found that Farm Stores had
12
violated the FLSA overtime provision, it must award back pay damages in the
amount of the unpaid overtime. The court’s instruction about how those damages
should be calculated included this key passage:
The employee’s “regular rate” during a particular
week is the basis for calculating any overtime pay due to
the employee for that week. The “regular rate” for a
week is determined by dividing all of the hours worked
into the total wages paid for those hours. The overtime
rate, then, would be one-half of that rate and would be
owing for each hour in excess of 40 hours worked during
the work week.
Neither party objected to any part of that instruction, including the second
sentence of it, which as we shall see, is problematic.
Farm Stores’ chief argument for a remittitur is that, even viewing the
evidence in the light most favorable to the store managers, the damages the jury
calculated are nearly twice the amount the evidence supports if the formula laid
out in the damages instruction is applied. If the jury had calculated each store
manager’s regular rate of pay, in the manner it was instructed, Farm Stores insists
that the jury would have returned an aggregate damages award of no more than
$158,281.66, instead of the $297,700.00 it did.
13
A.
As a general rule, “a remittitur order reducing a jury’s award to the outer
limit of the proof is the appropriate remedy where the jury’s damage award
exceeds the amount established by the evidence.” Goldstein v. Manhattan Indus.,
Inc., 758 F.2d 1435, 1448 (11th Cir. 1985); see also Frederick v. Kirby Tankships,
Inc., 205 F.3d 1277, 1284 (11th Cir. 2000) (“The rule in this circuit states that
where a jury’s determination of liability was not the product of undue passion or
prejudice, we can order a remittitur to the maximum award the evidence can
support.”).
To determine whether the jury’s award is within the range dictated by the
evidence, we view the evidence in the light most favorable to the store managers
and apply the district court’s instructions, which were not objected to by either
party. After independently reviewing the testimony and evidence presented at
trial, we have no doubt that the jury’s damages verdict far exceeds the maximum
amount that could have been awarded based on the evidence and the instructions.
The jury’s award to Miguel Lavastida illustrates the errors. Taking the
evidence in the light most favorable to him, it established that he worked an
average of 60 hours per week and that his weekly salary was $458. Both parties
agree that, if Lavastida is owed any overtime, he is entitled to 78 weeks of it.
14
Applying the formula from the district court’s instruction, Lavastida’s weekly
salary of $458 should be divided by 60, which is the number of hours he actually
worked. This yields a regular hourly rate of $7.63. His overtime rate would be
$3.82, half his regular hourly rate. Because Lavastida worked 60 hours a week, he
is entitled to 20 hours of overtime per week. And $3.82 multiplied by 20 is
$76.40, which is the amount of overtime pay he would be entitled to each week.
Therefore, Lavastida’s total award should have been $5,959.20 ($76.40 multiplied
by 78). The jury, however, awarded him $11,700, almost twice the amount he was
entitled to under the jury instruction.
The jury’s award to Claribel Altamirano provides another example. She
testified that she worked on average 52 to 60 hours a week for a weekly salary of
$430. The parties agree that if Altamirano is owed any overtime, she is entitled to
82 weeks of it. Applying the formula contained in the district court’s instruction,
Altamirano’s weekly salary of $430 should be divided by some number of hours
between 52 and 60. That would yield an hourly rate between $7.17 and $8.26 per
hour. Her overtime rate would be between $3.59 and $4.13, half her regular
hourly rate. She would be entitled to between 12 and 20 hours of overtime per
week. The amount awarded to her in back pay, therefore, should have been
between $4,063.92 and $5,887.60. The jury, however, returned a verdict of
15
$12,350, which is more than three times the low-end of the possible range and
more than double the high-end of it. We have tried to reproduce the jury’s
damages number by performing all of the calculations ourselves, but have not been
able to do so.
The fact that the verdict exceeds the maximum amount under the calculation
theories on which the case was tried is also evidenced by the closing argument of
the store managers’ own counsel. After discussing Farm Stores’ liability and the
method for calculating damages, he proceeded to list the amounts he thought the
store managers were entitled to receive based on his view of what the evidence
would support. The total of the damages awards that he advocated for his clients,
the store managers, was only $197,310.793—approximately $100,000 less than the
3
The amount counsel sought was actually $295,966.18, but that total assumed a jury
finding that Farm Stores had willfully violated the FLSA. As counsel explained to the jury: “If
for some reason you think this was a simple mistake, then you would deduct 33 percent from
these numbers, which would bring it down to the two year level. At three years there’s a certain
number and two years is 33 percent less than that.” Because the jury did not find a willful
violation, the amount requested had to be reduced by one-third, as counsel explained. The figure
we have used in the text, $197,310.79, reflects that reduction.
That total is the sum of the following individual damages awards requested by their
counsel: Aida Betancourt, $7,362.67; Aurora Caraballo, $9,004.32; Xiomara Celiz, $8,320; Aida
Chaviano, $7,446.40; Maria Chaviano, $10,233.33; Emigdlo Flandor, $7,644; Rhina Fonesca,
$6,791.20; Violeta Gonzalez, $11,044.80; Edith Guillen, $8,195.20; Francisco Herrera,
$8,486.40; Maria Incer, $4,160; Miguel Lavastida, $9,355.33; Rosa Marin, $8,985.60; Ruth
Matus, $6,777.67; Aida Morales, $9,360; Teresa Ortega, $3,186; Gladys Ortiz, $9,178; Lillian
Paiz, $6,853.33; Manuel Sirlas, $6,260.67; Maria Rivera, $6,733.33; Carlos Rodriguez,
$9,736.67; Lorena Rodriguez, $9,100; Ruth Romero, $7,768.80; Sandra Shaw, $1,154.40; Vilma
Thomas, $5,010.67; and Sandra Velasquez, $9,162. Again, counsel actually requested one-third
16
$297,700 awarded by the jury. Thus the jury’s total damages verdict substantially
exceeds the amount that the store managers’ own attorney thought they were
entitled to receive.
The store managers have not even attempted to defend the jury’s damages
verdict to this Court using the instructions the jury was given. Instead, they
contend that we should apply the applicable DOL interpretative bulletin, which
contained a different formula for calculating the regular rate of pay. We will have
more to say about that bulletin later. For the time being, it is enough to say that
even assuming that we can apply the bulletin’s formula, which was not applied at
trial, the damages verdict still cannot stand. For nine of the twenty-six store
managers, the jury’s verdict exceeds by $1,000 or more their own
calculations—contained in their brief to us—of what they are entitled to receive
under the formula in the interpretative bulletin. To give the most extreme
example, for one of the store managers, their calculations under that formula
would result in an award of $307.50. The jury, however, returned a verdict of
more than each of these figures, assuming that the jury would find a willful violation, but we
have reduced each number by a third to reflect the effect of the jury’s finding that the violations
were not willful.
17
$11,700 for that manager—an award thirty-eight times greater than the managers
themselves say should result from applying the bulletin’s formula.
We recognize, of course, that the jury had to make approximations and
estimates in order to arrive at a damages verdict because Farm Stores did not
maintain payroll records documenting the number of hours each store manager
worked. The jury was required, however, to operate within the bounds of the
evidence presented at trial and to calculate damages using the formula they were
instructed to apply. Each store manager testified to the average number of hours
he worked each week and to his salary; sometimes they testified to ranges, such as
52 to 60 hours per week. In that and other ways the evidence gave the jury some
flexibility in coming up with a dollar amount of damages for each store manager.
Unfortunately, the jury’s damages verdict ended up well outside the boundaries of
the evidence. Whether the error resulted from disregarding the evidence, a
mathematical mistake, confusion, or some other reason, it is still error. As our
predecessor Court observed, we cannot “permit damage speculation where the
formula for calculation is articulable and definable. Flexibility beyond the range
18
of the evidence will not be tolerated.” Jamison Co. v. Westvaco Corp., 526 F.2d
922, 936 (5th Cir. 1976).4 The damages award must be set aside.
B.
If the district court’s jury instruction on calculating damages had accurately
reflected the law, we could stop here. We would reverse the order denying Farm
Stores’ motion for a remittitur and remand the case with instructions that the
district court reduce the award to the maximum amount established by the
evidence. See Goldstein, 758 F.2d at 1448; see also Frederick, 205 F.3d at 1284.
We cannot do that in this case, however, because of the erroneous instruction.
The district court instructed the jury that it should use the total number of
hours the store managers worked in order to calculate their regular rate of pay.
That is not the law. An interpretative bulletin promulgated by the DOL provides
4
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), we
adopted as binding precedent all decisions of the former Fifth Circuit that were rendered prior to
October 1, 1981.
19
the correct method for calculating an employee’s regular rate of pay.5 That
interpretative bulletin specifies that:
If the employee is employed solely on a weekly salary basis, his
regular hourly rate of pay, on which time and a half must be paid, is
computed by dividing the salary by the number of hours which the
salary is intended to compensate. If an employee is hired at a salary
of $182.70 and if it is understood that this salary is compensation for
a regular workweek of 35 hours, the employee’s regular rate of pay is
$182.70 divided by 35 hours, or $5.22 an hour, and when he works
overtime he is entitled to receive $5.22 for each of the first 40 hours
and $7.83 (one and one-half times $5.22) for each hour thereafter. If
5
In our initial opinion in this case, we characterized 29 C.F.R. § 778.113(a) as a
“regulation.” That is exactly how both parties, in their briefs and at oral argument, characterized
it. They and we were wrong. And not for the first time. See Wethington v. City of
Montgomery, 935 F.2d 222, 227 n.6 (11th Cir. 1991) (calling the same provision a regulation).
As Farm Stores has belatedly pointed out in its rehearing petition, 29 C.F.R. § 778.113(a) is in
fact an interpretative bulletin, not a regulation. It is therefore not entitled to deference under
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778
(1984), but is instead entitled to the more limited Skidmore type deference. See Skidmore v.
Swift & Co., 323 U.S. 134, 140, 65 S. Ct. 161, 164 (1944) (“We consider that the rulings,
interpretations and opinions of the Administrator under this Act, while not controlling upon the
courts by reason of their authority, do constitute a body of experience and informed judgment to
which courts and litigants may properly resort for guidance. The weight of such a judgment in a
particular case will depend upon the thoroughness evident in its consideration, the validity of its
reasoning, its consistency with earlier and later pronouncements, and all those factors which give
it power to persuade, if lacking power to control.”). In this case, neither party has offered any
reason why we should not defer to the DOL’s interpretative bulletin in determining what an
employee’s “regular rate” of pay is.
In its petition for rehearing, Farm Stores also contends for the first time that 29 C.F.R. §
778.109, instead of § 778.113(a), applies in calculating a store manager’s regular rate of pay.
This contention is flatly contrary to the position Farm Stores took in its initial and reply briefs,
where it cited § 778.113(a) as the controlling provision for calculating a store manager’s regular
rate of pay. A petition for rehearing is not the appropriate vehicle for switching positions. In any
event, we remain convinced that § 778.113(a) applies in this case because the store managers
were “employed solely on a weekly salary basis.” 29 C.F.R. § 778.113(a).
20
an employee is hired at a salary of $220.80 for a 40-hour week his
regular rate is $5.52 an hour.
29 C.F.R. § 778.113(a) (2002). In the situation here, where the employee is paid
solely on a weekly salary basis, the number of hours the employee’s pay is
intended to compensate—not necessarily the number of hours he actually
works—is the divisor.
Farm Stores argues that we should instruct the district court on remand to
order a remittitur notwithstanding the error in the jury instructions, because the
store managers’ weekly salary was intended to cover all of the hours they worked.
If that is so, then the error in the instructions would have no effect, because the
divisor and the result will be the same, anyway. The flaw in this argument is that
it requires us to assume as a fact that the weekly salary was intended to
compensate the store managers for however many hours they actually worked.
The evidence at trial does not compel that finding, but conflicts.
The evidence on Farm Stores’ side of this issue included the testimony of its
chief operating officer that the company intended for its store managers to work as
many hours as needed to fulfill their responsibilities, and for their salary to
compensate them for as many hours as that took. On the other side, when asked
how many hours store managers were required to work, one district manager
21
testified: “48 hours.” There was also testimony that the company required the
store managers to put 40 hours on the time sheets they filled out each week. The
number of hours the store managers’ salaries were intended to compensate is an
unresolved factual issue.
We are also unpersuaded by the store managers’ argument that despite the
error in the district court’s jury instruction, and the fact that the jury was never
asked to address the issue, we should find that it decided that the store managers’
weekly salary was intended to compensate them for a forty-hour work week. The
argument is that even though the court got the law wrong in its instructions, and
the store managers’ own attorney got the law wrong in his opening statement and
closing argument, the jury somehow divined that they were to follow the DOL
interpretative bulletin’s approach even though it was never mentioned to them.
We will not presume that the jury knows more about the law than the judge and
lawyers do, especially where virtually all of the testimony was framed in terms of
the erroneous standard, and all of the store managers’ arguments reinforced it.
C.
Insisting that the jury’s damages verdict, even if it cannot be explained
under the district court’s instruction, is consistent with the evidence and the
DOL’s interpretive bulletin, the store managers argue that we should apply the
22
“right for the wrong reasons” principle and affirm the district court’s order. At
oral argument, counsel for the store managers directed us to a line of Florida cases
applying that principle, which is also known by the delightful title of the “tipsy
coachman” doctrine, to the review of judicial rulings and decisions.6 See
Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150, 1152 (Fla. 1979)
(“The written final judgment by the trial court could well be wrong in its
reasoning, but the decision of the trial court is primarily what matters, not the
reasoning used. Even when based on erroneous reasoning, a conclusion or
decision of a trial court will generally be affirmed if the evidence or an alternative
theory supports it.”); see also Muhammad v. State, 782 So. 2d 343, 359 (Fla.
2001) (“[T]he trial court’s ruling on an evidentiary matter will be affirmed even if
the trial court ruled for the wrong reasons, as long as the evidence or an alternative
theory supports the ruling.”). We are all for rules that promote judicial economy
6
The first time the Florida courts used that name was in Carraway v. Armour & Co.,
156 So. 2d 494 (Fla. 1963), where the Florida Supreme Court quoted from Oliver Goldsmith’s
poem “Retaliation,” these lines:
The pupil of impulse, it forc’d him along,
His conduct still right, with his argument wrong;
Still aiming at honour, yet fearing to roam,
The coachman was tipsy, the chariot drove home . . . .
Id. at 497. The Georgia Supreme Court had quoted the same poem for the same rule of law more
than eighty years before. See Lee v. Porter, 63 Ga. 345 (1879).
23
and efficiency, but even assuming that the doctrine can be applied to jury verdicts,
it cannot save the one in this case. The record in this case reminds us less of a
tipsy coachman arriving at the right destination than of a blind one who ends up at
the wrong place.
As we have explained this is not a case where the jury, confused by an
erroneous instruction, still drove the chariot to the right home. Nine of the twenty-
six awards exceeded by $1,000 or more the maximum amount that the evidence
would support if the correct rule of law had been applied. Where one-third of the
awards are greater than even the store managers’ best take on the evidence, the
result cannot fairly be characterized as correct.
Attempting to push wrong closer to right, the store managers resourcefully
point to the testimony of one of them stating that he actually worked an extra five
hours each week beyond those he spent working at the store. That extra time, he
explained, was spent making bank deposit runs. However, that was the testimony
of only one of the store managers. The others did not say that the total hours they
estimated working excluded any of the time they spent performing duties for the
company. In any event, adding five hours to every store manager’s work week
would only reduce the degree of error in the jury’s damages verdict, not remove it
entirely. As counsel for the store managers conceded at oral argument, we cannot
24
“affirmatively tell what [the jury’s] reasoning was.” What we do know is that it
did not faithfully apply the district court’s instruction—erroneous as it was—to
the evidence. The chariot wound up at the wrong house. We can neither chart its
course nor let stand its destination.
D.
Having concluded that the jury’s verdict exceeds the outer bounds of the
evidence under the district court’s erroneous instruction, and under the correct rule
of law as well, we arrive at the question we posed at the beginning of this opinion:
Should we direct the district court to order a remittitur based on the incorrect jury
instruction, thereby reducing the damages award to the maximum that could have
been awarded under the erroneous instruction that was given without objection, or
should we order a new trial on damages where the correct standard would be
applied?
We have found no decision by this Court directly answering that question,
but our decisions in cases where district courts have given unclear or confusing
jury instructions provide some guidance. Consider, for example, Overseas Private
Investment Corp. v. Metropolitan Dade County, 47 F.3d 1111 (11th Cir. 1995),
where a jury found two defendants liable under breach of contract, negligence, and
strict liability theories for supplying toxic fertilizer to a farming operation. Id. at
25
1115–16. Although the same damages should have been awarded under each
theory, the jury returned a different damages verdict on the strict liability theory.
Id. at 1115. After reviewing the verdicts, special interrogatories, and jury
instructions, we concluded that “the jury instructions . . . were confusing and
unclear, resulting in confusing damage awards.” Id. at 1116. As is the case here,
though, “the liability issues were properly and clearly decided by the jury.” Id.
Where liability was properly decided by the factfinder but an erroneous damages
verdict was returned, we held that “the remedy . . . [was] to remand the case to the
district court for a new trial on the amount of damages only.” Id.
Similarly, in King v. Exxon Co., 618 F.2d 1111 (5th Cir. 1980), we
concluded that the district court gave the jury an incorrect instruction for
determining the period for which the plaintiff was entitled to damages under an
employment contract. Id. at 1118–19. Because the correct instruction would have
required the jury to determine an inherently fact-based question that it had not
decided, we refused to order a remittitur. Id. at 1119. Instead, we remanded for a
new trial on the damages question, directing the district court to properly instruct
the jury about how to calculate the damages period. Id.
In both OPIC and King, we concluded that a remittitur was not an
appropriate way to remedy the erroneous damages verdict because the jury’s
26
calculations had come after erroneous instructions. As in those cases, the jury’s
verdict in this one is excessive when measured against the evidence presented at
trial—here it is excessive when measured against the erroneous instruction and
against the correct rule of law. Whatever the cause of the damages verdict in this
case, it is confusing and erroneous. The best way to remedy it is to start over on
damages, give the jury the correct legal standard to apply, and hope for the best.
Because of the contemporaneous objection rule, we probably would have
affirmed the judgment in this case if the only error were in the instruction—if the
jury had correctly applied the erroneous standard to which no one objected. The
twist here is that the jury did not correctly apply the wrong standard, but instead
compounded the error. The jury in effect took the error to a different level, one
beyond the level of error insulated by the contemporaneous objection rule. There
was no failure to object to the erroneous application of the erroneous standard.
Farm Stores promptly and properly raised that second level error in its motion for
a remittitur and is entitled to have that issue decided, as we are doing.
We do not believe that our review of this second level error issue rewards
either party for failing to object to the erroneous jury instruction, which was the
first level error. Farm Stores came to us asking that we order a remittitur under the
erroneous standard; we are not doing that. The store managers asked us to affirm
27
the damages award that was returned; we are not doing that either. Both parties
would have been better off if they had recognized the error in the jury instruction
and objected to it, so that the damages part of the case could have been decided
under the correct standard to begin with.
On remand, when it conducts a new trial on the issue of damages, the court
should instruct the jury according to the regular rate of pay standard contained in
the applicable DOL interpretive bulletin. See 29 C.F.R. § 778.113(a). Although we
leave the final decision on this detail to the discretion of the experienced district
court judge, he might wish to propound specific interrogatories to the jury that
include these questions as to each store manager: the weekly salary, the number of
hours that salary was intended to compensate, and the number of hours actually
worked. If the district court decides to use special interrogatories, it would be free
to phrase the questions and include any additional ones it believes relevant to
deciding the amount of damages.
IV.
There is one issue left for us to decide. Farm Stores contends that the
district court erred by awarding the store managers liquidated or “double”
damages under 29 U.S.C. § 216(b). We review the district court’s ultimate
decision to award liquidated damages only for an abuse of discretion. See 29
28
U.S.C. § 260 (“[A district] court may, in its sound discretion, award no liquidated
damages or award any amount thereof not to exceed the amount specified in
section 216 of [the FLSA].”); Dybach v. Fla. Dep’t of Corr., 942 F.2d 1562, 1566
(11th Cir. 1991) (explaining that whether an employer acted in good faith and with
a reasonable belief that it was in compliance with the FLSA is a mixed question of
law and fact, but that once an employer establishes these elements, “the district
court’s refusal to award liquidated damages is reviewed for abuse of discretion”
(citations omitted)).
Under the FLSA a district court generally must award a plaintiff liquidated
damages that are equal in amount to actual damages. The statute provides: “Any
employer who violates the provisions of [the FLSA] . . . shall be liable to the . . .
employees affected in the amount of their . . . unpaid overtime compensation . . .
and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b).
The Portal to Portal Act, 29 U.S.C. §§ 251–62, which amended the FLSA,
provides a safe harbor for an employer who can establish that it acted in good faith
and under the reasonable belief that it was in compliance with the FLSA. Id. §
260. The safe harbor provision provides:
In any action . . . to recover . . . unpaid overtime compensation, or
liquidated damages, under the [FLSA] . . . , if the employer shows to
the satisfaction of the court that the act or omission giving rise to
29
such action was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation . . . the court
may, in its sound discretion, award no liquidated damages . . . .
Id. An employer who violates the FLSA’s overtime provision carries the burden
of proving its entitlement to the safe harbor. Joiner v. City of Macon, 814 F.2d
1537, 1539 (11th Cir. 1987). To satisfy the good faith requirement, an employer
must show that it acted with both objective and subjective good faith. Dybach,
942 F.2d at 1566–67.
Farm Stores advances several arguments about why the district court abused
its discretion in awarding liquidated damages. First, it contends that the court held
it to an excessively high evidentiary standard. According to Farm Stores, to sail
within the safe harbor all an employer must do is demonstrate good faith; it need
not furnish documentary evidence of its good faith. Second, Farm Stores suggests
that the district court order imposed a safe harbor precondition that employers
consult with the DOL before declining to pay overtime, and asserts that there is no
basis for requiring that.
We do not share Farm Stores’ view of the district court’s order. The court
did not read a documentary evidence or DOL consultation requirement into the
safe harbor. Instead, it reasoned that the absence of documentary evidence or
testimony that Farm Stores consulted the DOL or an FLSA expert before or during
30
the period of the violation weighed against a finding of objective good faith. That
is self evident from the fact that documentary evidence or consultation with the
DOL or an outside expert would have weighed in Farm Stores’ favor. The court
did not indicate that the only evidence that would persuade it of Farm Stores’ good
faith was documentary evidence or proof of consultation. The court’s examples
were not intended as an exhaustive list.
Farm Stores also contends that under the evidence that was presented, the
district court erred by finding that it had not shown objective good faith. Farm
Stores did present an expert (it had not consulted before the litigation began) who
gave his opinion that the store managers fit within the executive exemption to the
overtime requirement. That expert’s testimony, however, was not uncontested.
The store managers presented their own expert who reached the opposite
conclusion. The district court was not required to credit Farm Stores’ expert, even
to the point of establishing a good faith difference of opinion. The district court
heard the testimony of the experts, as well as that of the President of Farm Stores,
on the issue of good faith, and it was in a much better position than we are to
decide this fact-intensive issue and exercise its discretion accordingly
Finally, Farm Stores contends that in deciding the liquidated damages issue,
the district court was barred from finding that the company had not acted in good
31
faith by the jury’s prior finding on the statute of limitations issue that it had not
willfully violated the Act. This argument is two-fold: the absence of willfulness
is inconsistent with the absence of good faith; and, where there is evidence on
both sides of a factual issue, the court cannot make findings inconsistent with
those of the jury.
The parties cite the decisions of three circuits showing a clear split over
whether the standards for finding willfulness and for finding the absence of good
faith are the same so that the jury’s finding on the former issue controls the judge’s
finding on the latter one. Compare Brinkman v. Dep’t of Corr., 21 F.3d 370, 373
(10th Cir. 1994) (“The same willfulness standard for the statute of limitations
issue applies to the liquidated damages issue.” (citation omitted)), with Broadus v.
O.K. Indus., Inc., 226 F.3d 937, 944 (8th Cir. 2000) (noting that the “jury’s
decision on willfulness is distinct from the district judge’s decision to award
liquidated damages” (citation omitted)), and Fowler v. Land Mgmt. Groupe, Inc.,
978 F.2d 158, 162 (4th Cir. 1992) (“[T]he explicit language of [the safe harbor
provision] expressly vest[s] discretion to award liquidated damages in the hands of
the trial judge. We do not believe that, in light of this clear delegation of
authority, Congressional intent would be effectuated by a scheme in which, in
every case, the trial court’s discretion to award liquidated damages would be
32
completely constrained by the jury’s determination on ‘willfulness’ for purposes of
the statute of limitations.”).
Interesting as the issue is, we don’t have to pick a side in the circuit split in
order to decide this appeal. The underlying concern of the Tenth Circuit in
Brinkman, which affirmed a district court’s finding that good faith was absent
because the jury had found willfulness, was fostering consistency between the
factfindings of judges and juries. Brinkman, 21 F.3d at 372–73. That concern is
the same whether it is articulated as a Seventh Amendment problem, see id. (“We
have held that when fact issues central to a claim are decided by a jury upon
evidence that would justify its conclusion, the Seventh Amendment right to a jury
trial prohibits the district court from reaching a contrary conclusion.”), or as a
collateral estoppel problem. However it is articulated, that concern is not
implicated here.
We assume for present purposes that the absence of willfulness is equivalent
to the presence of good faith. Even with that assumption, in the present case the
jury’s finding and the court’s finding are not necessarily inconsistent. The jury’s
actual finding was that the store managers had failed to carry their burden of
proving that Farm Stores had willfully violated the FLSA. The interrogatory it
returned, accurately phrased in light of the law, stated that the store managers did
33
not prove “by a preponderance of the evidence that [Farm Stores] knew it was
violating the [FLSA] or showed reckless disregard as to whether it was violating
the [FLSA] by treating its store managers as exempt for purposes of overtime.”
The court’s actual finding, in light of the statute, is that Farm Stores did not carry
its burden of proving that it had acted in good faith.
The reconciliation point is the burden of proof, and more specifically, the
differences in its placement. For the willfulness issue on which the statute of
limitations turns, the burden is on the employee; for the good faith issue on which
liquidated damages turns, the burden is on the employer. Because the burden of
proof is placed differently, a finding that willfulness was not present may co-exist
peacefully with a finding that good faith was not present. The result varies with
the burden of proof, provided that a factfinder could conclude that the evidence on
the issue is evenly balanced. See 18 Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and Procedure § 4422 (2d ed. 2002)
(explaining that where the burden of proof varies, collateral estoppel does not
necessarily apply because “it is possible that the initial determination rested on a
conclusion that the evidence was in exact equipoise”); see also Steelmet, Inc. v.
Caribe Towing Corp., 747 F.2d 689, 694 (11th Cir. 1984) (surveying decisions of
other courts, academic commentary, and the Restatement (Second) of Judgments
34
and concluding that “the change in allocation of the burden of proof makes a
difference” as to the applicability of the doctrine of collateral estoppel).
In deciding whether a rational factfinder could view the evidence on the
willfulness/good faith issues as evenly balanced, we bear in mind that it is the
factfinder’s function to resolve credibility questions, and we must view the
evidence through the curative lens of resolving all conflicts in favor of the
judgment. In this instance, that means resolving all conflicts toward equipoise.
With that in mind, we conclude that acting rationally, a factfinder could have
found the evidence evenly balanced.
Our analysis and the result we reach does not conflict with the Tenth
Circuit’s Brinkman decision. The conclusion in that case was that a finding by the
judge that the employer had proven it acted in good faith would have been
inconsistent with the jury’s finding that the employees had proven the employer
acted willfully. Brinkman, 21 F.3d at 372–73. In other words, a finding that a
positive condition (good faith) had been proven would have been inconsistent with
finding that the negative of the same condition (willfulness) had also been proven.
We already have assumed, after all, that good faith and willfulness cannot coexist.
By contrast, what we have here is the failure of Farm Stores to prove a positive
condition (good faith). That is not inconsistent with the store managers’ failure to
35
prove the negative of that same condition (willfulness). It is not inconsistent,
because if the evidentiary needle is pointing straight up, neither side has carried its
burden of proof, nothing has been proven.
For these reasons, we reject Farm Stores’ contrary argument that the judge’s
finding that it lacked good faith cannot stand.
V.
The district court’s order denying Farm Stores’ motion for judgment as a
matter of law is AFFIRMED in all respects, except that the part of the judgments
awarding damages in favor of the twenty-six store manager plaintiffs are
REVERSED, and the case is REMANDED for a new trial on damages consistent
with this opinion.7
EDMONDSON, Chief Judge, CONCURS in the result.
7
Because we are reversing the part of the judgment that awarded damages in its entirety,
and because the amount of liquidated damages depends on the other damages awarded, our
reversal includes the liquidated damages determination. The district court is free to revisit that
issue after the new trial on damages. Our decision on the liquidated damages issue is confined to
concluding that on the evidence in the record at this time, the district court could award
liquidated damages. We have not addressed whether it must do so.
36