This 'n That in FLSA appeal

This appeal challenges various rulings from the district court on overtime claims brought under the Fair Labor Standards Act and the New York Labor Law. The jury ruled for the plaintiffs, and the district court took some of thee successful claims away. Everyone appeals. The case was argued n January, and the Court of Appeals issued this summary order on April 26, a long time for a summary order, which usually comes down a few weeks after argument.

The case is Leevson v. Aqualife USA, issued on April 26. This case has been kicking around since 2014. At trial, the jury awarded around $300,000 in damages for overtime and other damages. The parties raise a cornucopia of issues.

While the trial court threw out the jury verdict in plaintiffs' favor on their individual commissions and granted Aqualife judgment as a matter of law on that claim, the Court of Appeals (Sullivan, Carney and Hall) brings that claim back. Why? Because Aqualife did not seek judgment as a matter of law on this claim during trial, and they did not seek that relief following trial. These Rule 50 motions have to be asserted during and after trial if you want to preserve these claims on appeal. Having waived those issues at trial, the Court of Appeals reinstates that portion of the verdict. I can't say I've seen that happen too often, where the Second Circuit reinstates a favorable verdict on waiver grounds even though the trial court set aside that verdict post-trial. But it happened here. The lesson here is that you have to move for judgment as a matter of law during and after trial if you want to challenge any adverse verdict on appeal. The only way around this is by proving on appeal that the verdict is a manifest injustice, which means the jury totally blew it and there was no evidence whatsoever to support the verdict in any way.

Defendants also challenge the trial court's order awarding plaintiffs double damages for their overtime claims. The Court of Appeals notes that double damages are the natural order of things in FLSA claims. This is sort of a punishment for employers who don't pay their people the first time around. The employer can get around double damages if they acted in good faith. But, the Court of Appeals says, the employer "has not come close to demonstrating good faith," and its evidence intended to prove good faith was actually a "concoction" to avoid the labor laws in the first place.

Another issue raised on appeal was management's claim that plaintiffs were estopped from claiming they were employees (and therefore entitled to overtime pay) and not independent contractors (who have few rights) because made contrary statements to the IRS. Normally, if you say one thing in a judicial or administrative proceeding but the opposite in a different proceeding, you are estopped from that switch-a-roo. But statements to the IRS are not part of any "proceeding," so that argument fails. Sounds more like a credibility argument for trial, which the jury must have ignored, as they ruled for the plaintiffs anyway.