Robert Niland v. Delta Recycling Corp.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
________________________
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 03-14553 July 21, 2004
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 03-80259-CV-DMM

ROBERT NILAND, on behalf of himself
and all others similarly situated,

Plaintiff-Appellant,

versus

DELTA RECYCLING CORP.,
a Florida corporation,

Defendant-Appellee.

________________________

Appeal from the United States District Court
for the Southern District of Florida
_________________________

(July 21, 2004)

Before BLACK and MARCUS, Circuit Judges, and SMITH*, District Judge.

PER CURIAM:

*
Honorable Fern M. Smith, United States District Judge for the Northern District of
California, sitting by designation.
Robert Niland appeals the district court’s grant of summary judgment to

Delta Recycling Corp. (Delta) in his case seeking compensation for back overtime

wages under the Fair Labor Standards Act (FLSA), as codified at 29 U.S.C. § 216.

Niland argues the district court erred in holding that Delta’s self-audit and

payment of back wages were adequately supervised by the Department of Labor

(DOL). Niland also argues the district court erred in holding he waived his right

to sue when he accepted payment from Delta. We disagree and affirm.

I. BACKGROUND

Niland was a truck driver for Delta. During Niland’s employment, Delta

was acquired by Allied Waste North America, Inc. (Allied). After the acquisition,

Allied discovered that Delta might not have paid some of its current and former

employees overtime in compliance with the FLSA. Delta contacted the DOL

regarding this potential violation. The result was a Compliance Partnership

Agreement (Agreement) entered into between the DOL and Delta.

The Agreement contained the following significant provisions: (1) Delta

would conduct a voluntary self-audit to determine overtime wage liabilities;

(2) the DOL would supervise the payment of any back wages; and (3) although

Delta would not be permitted to use DOL Form WH-58 (entitled “Receipt for

2
Payment of Back Wages”), it would be allowed to use the waiver language

contained in the form.

During the self-audit, Delta determined it owed back wages to Niland. On

May 23, 2002, Delta sent a check along with a letter and receipt to Niland for

these wages.1 The letter was signed by Catharine Ellingsen, who was acting as

Delta’s corporate counsel. This letter, the receipt, and the check each indicated

that acceptance constituted waiver of any legal claims. Indeed, the receipt

specifically included the waiver language from DOL Form WH-58.

Niland called Ellingsen because he believed he was owed more than the

check indicated. Ellingsen stated the check was for the correct amount. She then

suggested Niland contact Lori Brown, an attorney in the Miami office of the firm

that was serving as Delta’s outside counsel. Brown told Niland an investigation

had been conducted and that it had confirmed his check was for the correct

amount. Neither Ellingsen nor Brown ever instructed Niland to contact the DOL,

and Niland did not do so on his own.

1
Niland was not contacted by the DOL, Delta, or Delta’s outside counsel during the
self-audit.

3
Niland eventually decided to cash the check, but a new check had to be

issued because the original had expired. The same waiver language was printed

on the new check, and Niland endorsed and cashed it on October 25, 2002.

An official DOL record obtained through the Freedom of Information Act

indicated the DOL spent a total of one hour supervising the payment of back

wages to Delta’s employees. In reliance on this record, the district court denied

Delta’s motion for summary judgment.2 In response, Delta filed a motion for

reconsideration. This motion was accompanied by both an affidavit and a letter.

The affidavit was by Alfred Perry, Regional Director for the Southeast

Region for the DOL at the time the Agreement was signed and implemented. In it,

Perry stated the following: (1) he entered into an agreement with Delta in which

he agreed to supervise the payment of back wages to various Delta employees;

(2) he spent many hours over several months working on the negotiation and

completion of the Delta agreement; (3) he negotiated with Delta that an

independent accounting firm would calculate employees’ back wages based on

formulas, assumptions, and factors he approved; (4) he reviewed and approved the

report of the accounting firm; (5) he negotiated the waiver language included in

2
Delta’s motion was originally styled as a motion to dismiss, but it was converted to a
motion for summary judgment.

4
payments to the employees; and (6) almost all the time he spent on the case was

not recorded because it was not his practice to do so.

Also accompanying the motion for reconsideration was a letter from the

accounting firm hired by Delta. The letter indicated that some of the time records

provided by Delta were illegible and others were unavailable. The letter also

noted that it was not always possible to determine the actual amount of time an

employee worked during a given pay period. Finally, the letter observed that there

were sometimes discrepancies among the various sources of payroll information.

Upon reconsideration, the district court entered an order granting summary

judgment in favor of Delta, from which Niland appeals.

II. DISCUSSION

We review the district court’s grant of summary judgment de novo. Iraola

& CIA, S.A. v. Kimberly-Clark Corp., 325 F.3d 1274, 1283 (11th Cir. 2003).

Pursuant to 29 U.S.C. § 216(c), the DOL is authorized to supervise payment

of back wages owed to employees. Lynn’s Food Stores, Inc. v. United States, 679

5
F.2d 1350, 1353 (11th Cir. 1982).3 If an employee accepts the payment of back

wages supervised by the DOL, the employee waives the right to bring suit for

unpaid wages and liquidated damages. Id.

The district court concluded (1) the DOL adequately supervised the

payment of back wages here, and (2) Niland waived his right to bring suit. Niland

argues these rulings constitute error. We disagree.

A. Whether the DOL Adequately Supervised

Niland contends the DOL failed to adequately supervise the payment of

back wages.

We are guided here by our decisions in two previous cases. See Lynn’s

Food Stores, 679 F.2d at 1352–53; Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d

537, 538–39 (5th Cir. 1977).4 In Lynn’s Food Stores, we held there was

inadequate supervision where the DOL was completely uninvolved in the

3
Section 216(c) provides:
The Secretary is authorized to supervise the payment of the unpaid minimum
wages or the unpaid overtime compensation owing to any employee or employees
under section [206 or 207 of this title], and the agreement of any employee to
accept such payment shall upon payment in full constitute a waiver by such
employee of any right he may have under subsection (b) of this section to such
unpaid minimum wages or unpaid overtime compensation and an additional equal
amount as liquidated damages.
29 U.S.C. § 216(c).
4
In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
Court adopted as binding precedent all decisions of the former Fifth Circuit handed down prior to
close of business on September 30, 1981.

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employer’s attempt to settle a claim for back wages. See 679 F.2d at 1352–53. In

contrast, in Sneed, we held there was adequate supervision where a DOL official

investigated the claim for back wages, determined the amount owed the employee,

presented the check to the employee on the employer’s behalf, and required the

employee to sign a receipt waiving his right to sue. See 545 F.2d at 538–39.

In this case, the Perry affidavit demonstrates that, as in Sneed, the DOL

played a significant role in both Delta’s self-audit and Delta’s payment of back

wages. The affidavit5 shows the DOL entered into the Agreement with Delta

under which Perry agreed to supervise the payment of back wages to various Delta

employees, including Niland. Indeed, Perry specifically stated he spent many

hours over several months working on the negotiation and completion of the

Agreement, devoting his time to:

(a) the review of correspondence to and from Delta
representatives; (b) the negotiation and finalization of
the Delta agreement; (c) the negotiation, review, and
approval of formulas and assumptions to be used by an

5
Niland argues that the district court erred when it granted Delta’s motion for
reconsideration because Perry’s affidavit was not newly discovered evidence. We review for
abuse of discretion. Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800,
806 (11th Cir. 1993). Pursuant to 29 C.F.R. §§ 2.21 and 2.22, Perry was not permitted to testify
without permission from the DOL. Perry’s testimony was not available until July 18, 2003, when
the Secretary permitted Perry to submit testimony on Delta’s behalf. Given that this date was
after the district court’s July 7, 2003, order denying Delta summary judgment, we conclude the
district court did not abuse its discretion by considering the affidavit. See Alcock, 993 F.2d at
806.

7
independent accounting firm to calculate back wages
under my supervision; (d) the negotiation of what data
would be considered in those calculations; (e) the
negotiation, review, and approval of language that would
inform employees that their acceptance of back wages
would waive their rights to sue under section 16(b) of the
FLSA; (f) the negotiation, review, and approval of the
documents that would contain this language, which
included a letter to employees, a receipt for retroactive
wage payment, and the back of a back wage check;
(g) the coordination of DOL activities intended to track
and manage the back wage payments, including any
questions from Delta employees about the effect of
accepting the back wages or how they were calculated;
(h) the creation of an escrow-type account to accept back
wages on behalf of Delta employees who could not be
located; and (i) discussion with the director and assistant
director of the DOL’s Miami office about the Delta
agreement and any related matters.

Perry also negotiated with Delta that an independent accounting firm would

calculate employees’ back wages based on formulas, assumptions, and factors that

he approved. Furthermore, Perry reviewed and approved the report of the

accounting firm. The facts here are thus far removed from those in Lynn’s Food

Stores where there was no DOL supervision whatsoever. See 679 F.2d at

1352–53.

8
Accordingly, we conclude the DOL—acting through Perry—adequately

supervised the payment of back wages to Niland.6

B. Whether Niland Waived His Right to Bring Suit

Niland contends that, because Delta did not use form WH-58, it is

precluded from claiming that he waived his right to bring suit. We are not

persuaded. A WH-58 is a standard form used by the DOL to inform an employee

that, although he has the right to file suit under 29 U.S.C. § 216(b), acceptance of

the back wages offered will result in waiver of those rights. The DOL can either

authorize an employer to use the WH-58 or authorize other waiver language. See

29 C.F.R. § 516.2(b)(2). Here, Perry’s affidavit shows the DOL authorized the use

of Delta’s waiver language. Therefore, this language was sufficient to create an

enforceable waiver of Niland’s right to sue.

6
We do not suggest that the only way to establish the adequacy of DOL supervision is by
the presentation of an affidavit by a DOL representative.

9
III. CONCLUSION

For the reasons stated, the district court did not err when it concluded

(1) the DOL exercised adequate supervision, and (2) Niland waived his right to

bring suit.

AFFIRMED.