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Mendez v. Dental

March 26, 2008

NEREIDA MENDEZ, PLAINTIFF,
v.
PERLA DENTAL, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge

MEMORANDUM OPINION

This matter is before the court on the parties' post-trial motions. For the reasons stated below, we grant Plaintiff's motions and we deny Defendants' motions.

BACKGROUND

Plaintiff Nereida Mendez ("Mendez") alleged in her complaint that she worked for Defendant Perla Dental ("Perla"). According to Mendez, during her employment she was subjected to verbal and physical sexual advances and other sexual harassment. Mendez contended that she complained to the management of Perla, but, management did not address her complaints. Mendez also asserted that Defendant Doctor Assam Ahmed ("Ahmed") and Defendant Doctor Waleed Dajani directly participated in the harassment. Mendez brought the instant action and included in her second amended complaint a claim alleging gender discrimination in violation of Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. § 2000e et seq.,and a Title VII hostile work environment claim (Count I), a Title VII retaliation claim (Count II), assault and battery claims (Count III), intentional infliction of emotional distress ("IIED") claims (Count IV), a retaliatory discharge claim (Count V), a Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., claim (Count VI), and an Illinois Minimum Wage Law, 820 ILCS 105/1 et seq. claim (Count VII).

A jury trial began in this case on April 23, 2007, and on April 26, 2007, the jury delivered a verdict in favor of Mendez on all claims. The jury awarded Mendez compensatory damages (excluding back pay and overtime) in the amount of $20,431.25, overtime damages in the amount of $6,750, and lost wages (for the Illinois Retaliatory Discharge claim only) in the amount of $4,000, for a total non-punitive damages award of $31,181.25. The jury also awarded punitive damages of $500,000 for the Title VII harassment claim and $250,000 for the Title VII retaliation and Illinois retaliation claims. The parties subsequently filed post-trial motions and briefs concerning the statutory damages cap. On March 6, 2008, this case was reassigned to the undersigned judge.

DISCUSSION

Mendez has filed a motion for liquidated damages pursuant to the provisions of the FLSA. The parties have also filed briefs regarding Title VII statutory damages caps. Defendants have filed a motion to reduce the $250,000 punitive damage award based on retaliatory discharge, and Defendants have filed a motion for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50 ("Rule 50") on the intentional infliction of emotional distress claims.

I. Liquidated Damages Under the Fair Labor Standards Act

Mendez filed a post-trial motion for liquidated damages in the amount of $13,500 under the FLSA. Defendants argue that the liquidated damages award, if granted, should equal $6,750. The FLSA provides that employers who violate overtime regulations "shall be liable to the employee or 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). Liquidated damages are awarded unless the court determines that "the employer show[ed] . . . that [the violation] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act." 29 U.S.C § 260.

In the instant action, the jury found that Mendez worked 500 overtime hours between April 27, 2002, and April 2, 2003, for which Defendants failed to compensate her appropriately. Additionally, the jury found that Defendants either "knew or showed reckless disregard [regarding] whether their failure to pay overtime to Plaintiff Nereida Mendez was a violation of the law." (DE 164, Ex. 1 at 7). Since the jury found that Defendants failed to properly compensate Mendez for her overtime work, and since the jury explicitly rejected the notion that Defendants exercised good faith and had reasonable belief regarding their compensation of Mendez for overtime, Mendez should receive $6,750 in liquidated damages, an amount equal to the overtime the jury found she should have been paid.

We note that Mendez requests that the court grant $13,500 in liquidated damages, which is double the amount the jury decided Mendez was entitled to based on non-payment of overtime. Defendants point out that the liquidated damages award should be equal to the unpaid overtime compensation, as outlined in 29 U.S.C. § 216(b), not double that amount, as Mendez requests in her motion. However, it appears that the terminology used by Mendez in the initial request was confusing and Mendez has clarified in her Reply that she requests "double damages in the amount of $13,500, an[] additional $6,750.00 in addition to the $6,750.00 awarded by the jury. . . ." (DE 175 Par. 3). Therefore, we grant Mendez's motion for liquidated damages under the FLSA and award Mendez $6,750 in liquidated damages.

II. Title VII Statutory Damages Caps

The parties have filed briefs regarding the statutory damages caps for Title VII claims. Title VII limits the sum of compensatory and punitive damages that a plaintiff may be awarded under the statute. 42 U.S.C. § 1981a(b)(3); EEOC v. Custom Companies, Inc., 2007 WL 734395, at *8 (N.D. Ill. 2007). In the instant action, the jury awarded Mendez $20,431.25 in compensatory damages (excluding back pay and overtime) and $500,000 in punitive damages on her Title VII sexual harassment claim. The jury verdict form indicates that the jury awarded $20,431.25 in compensatory damages, excluding back pay and overtime. The verdict form did not give the jury the option to indicate what parts of the compensatory award were for which claims. For example, the jury could not indicate how much of the $20,431.25 was for harassment, specifically. The parties agree that Title VII's statutory damages caps will limit this award, but disagree on the limitation amount.

Pursuant to 42 U.S.C. § 1981a(b)(3) ("Section 1981a(b)(3)"): The sum of the amount of compensatory damages awarded . . . for future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other non-pecuniary losses, and the amount of punitive damages awarded under this section, shall not exceed, for each complaining party -- A) in the case of a respondent who has more than 14 and fewer than 101 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $50,000; (B) in the case of a respondent who has more than 100 and fewer than 201 employees in each of 20 or more calendar weeks in the current or preceding calendar year, $100,000; . . . .

Id. Thus, if Perla had 100 or fewer employees in the relevant time period, Mendez's Title VII compensatory and punitive damages will be capped at $50,000. If Perla had 101 to 200 employees, Mendez's Title VII compensatory and punitive damages will be capped at $100,000.

A. Relevant Time Period

Section 1981a(b)(3) directs a court to consider the number of persons employed by a defendant "in the current or preceding year." Id. It is undisputed that Mendez worked for Perla from April 2002 to April 2003. (DE 157 at 2; DE 164 at 2). However, the parties disagree about what the resulting relevant time period is under Section 1981a(b)(3). Mendez claims that the determinative time period is April 2002 to April 2003, the period during which Defendants discriminated against Mendez. Defendants claim that the relevant time period extends from the beginning of 2002 to the end of 2003. (DE 157 at 2).

In Komorowski v. Townline Mini-Mart & Restaurant, 162 F.3d 962 (7th Cir. 1998), the Seventh Circuit, in considering the phrase "current calendar year" in 42 U.S.C. § 2000e(b), determined that the phrase refers to the year in which the alleged discrimination occurred and the year preceding it. Id. at 966. Since 42 U.S.C. § 2000e(b) and Section 1981a(b)(3) have similar wording regarding the relevant time period, we conclude that the Seventh Circuit would give the same construction to Section 1981a(b)(3) as it gave to 42 U.S.C. § 2000e(b). See Menchaca v. American Medical Response of Illinois, Inc., 2002 WL 48073, at *7 (N.D. Ill. 2002) (concluding that the Seventh Circuit would give the same construction as in Komorowski). Thus, the relevant time period for punitive damages under Section 1981a(b)(3) is the year of the alleged violation and the previous calendar year.

In the instant action, Mendez alleged that she was unlawfully harassed beginning in June 2002 and continuing through April 2003. (DE 28 Par. 16). Thus, the time period relevant to determining punitive damage caps is the years in which the violations occurred, 2002 and 2003, and the preceding year, 2001.

B. Burden of Proof

Mendez and Defendants dispute who has the burden of proving how many employees Perla had during the statutory period under Section 1981a(b)(3). Defendants argue that Mendez has the burden of proving the number of people Perla employed during the relevant time period. To support their contention, Defendants cite Ost v. West Suburban Travelers Limousine, Inc., 88 F.3d 435, 439 (7th Cir. 1996) and Wilson v. Comtrust LLC, 249 F. Supp. 2d 993, 997 (N.D. Ill. 2003). (DE 157 at 3-4). However, both Ost and Wilson turned on the issue of whether defendants were "employers" within the definition of Title VII, an essential threshold element of a Title VII claim on which the plaintiff carries the burden of proof. 88 F.3d at 439-40;249 F. Supp. 2d at 994-95. However, the issue now before the court relates to the number of people employed by Defendants for the purpose of damages caps, which is not an element of Mendez's Title VII claim. At the post-trial stage, by way of contrast, there is no similarly delineated burden. A much more persuasive analogy is made by reviewing cases regarding a defendant's burden to produce evidence of net worth in order to minimize punitive damages. In Kemezy v. Peters , 79 F.3d 33 (7th Cir. 1996), the Seventh Circuit held that in a Section 1983 action, the defendant bears the burden of establishing his net worth when defending against a claim involving punitive damages. Id. at 36. While this case differs from Kemezy because Section 1981a(b)(3) caps are determined by the judge after a verdict is rendered rather than by the jury, the holding of Kemezy is nonetheless instructive. As Mendez correctly observes, "[i]f the defendant bears the burden of showing its net worth in hopes of avoiding a large punitive damages award, then logically it is also incumbent upon the defendant to show how many employees it has when attempting to obtain a lower damages cap." (DE 169 at 6). Net worth and the number of employees serve the same purpose in the uncapped punitive damage case and the Title VII capped case. They both relate to a defendant's ability or obligation to pay the award based upon a defendant's net worth or number of employees. The principles articulated by the Seventh Circuit in Kemezy with regard to a defendant's burden to show net worth thus weigh in favor of placing the burden of proof regarding the number of employees on Defendants.

In addition, it is reasonable to place the burden of establishing the number of employees on Defendants since normally a defendant employer is in a better position to provide information regarding its employees. See, e.g. , Kemezy , 79 F.3d at 36 (stating that "[s]ince . . . information about net worth is in the possession of the person whose net wealth is in issue, the normal principles of pleading would put the burden of production on the defendant"). Thus, we conclude that Defendants bear the burden of proof in establishing the number of employees of Perla during the relevant time period.

C. Evidence Concerning Number of Employees

There is conflicting evidence with regard to how many persons Perla employed during the relevant time period. There is a dispute between the parties whether this ...


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