Linda Sondesky v. Cherry Scaffolding Inc.

• Court: Court of Appeals for the Third Circuit
• Decided: September 13, 2021
• Docket: 19-2899
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________

Nos. 19-2899 & 19-2900 _____________

LINDA SONDESKY

v.

CHERRY SCAFFOLDING INC.; STEPHEN ELLIS, Appellants in No. 19-2899

STEPHEN EDWARD ELLIS, Appellant in No. 19-2900 _____________

On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civ. Nos. 2-16-05667, 2-17-04280) District Judge: Honorable Anita B. Brody ______________

Submitted Under Third Circuit L.A.R. 34.1(a) December 14, 2020 ______________

Before: GREENAWAY, JR., SHWARTZ, and FUENTES, Circuit Judges.

(Opinion Filed: September 13, 2021)

______________

OPINION* ______________

* This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. GREENAWAY, JR., Circuit Judge.

Appellee Linda Sondesky brought claims against her former employer, Cherry

Scaffolding, Inc., and Cherry Scaffolding’s president, Stephen Ellis (together, the

“Appellants”), for, among other things, retaliation under the Fair Labor Standards Act of

1938 (“FLSA”), 28 U.S.C. § 201 et seq., and defamation.1 Appellants counterclaimed for

conversion of the overtime monies paid to Sondesky. A jury found in Sondesky’s favor

on all claims, and Appellants moved for judgment notwithstanding the verdict, or, in the

alternative, a new trial. The District Court denied the motions. Appellants appealed,

arguing that (1) Sondesky was an exempt employee under the FLSA, and therefore her

retaliation claims failed, and (2) punitive damages were improperly granted. We will

affirm the District Court’s order.

I. BACKGROUND

Sondesky worked as a bookkeeper for Cherry Scaffolding from October 2015 to

March 2016. Sondesky testified that early in her employment, she had a telephone

conversation with Ellis, in which they agreed that the office was “a mess,” and that it

would take Sondesky overtime hours to get “all of this straightened out.” App. 56.

Sondesky testified that Ellis agreed to her additional hours during this conversation and

that she proceeded to submit weekly timesheets to Ellis reflecting her overtime hours.

In 2016, Cherry Scaffolding terminated Sondesky for insubordination. Following

Sondesky’s termination, Cherry Scaffolding filed a lawsuit against Sondesky in a

1 Sondesky filed two separate lawsuits—one against Cherry Scaffolding and one against Ellis. The cases were consolidated for trial. Pennsylvania small claims court, accusing her of stealing money for overtime and

seeking to recover overtime compensation from Sondesky. Although Sondesky prevailed

in the suit in small claims court, the matter did not end there. Ellis contacted several of

Sondesky’s former employers, emailing at least one, and accused Sondesky of stealing

money from Cherry Scaffolding.

As a result of Ellis’s actions, Sondesky brought suit against Appellants in the

Eastern District of Pennsylvania, claiming, inter alia, that: (1) Cherry Scaffolding and/or

Ellis unlawfully retaliated against her, in violation of the FLSA, by suing her in small

claims court; (2) Ellis unlawfully retaliated against her, in violation of the FLSA, by

sending an email to her former employer which stated, among other things, that Sondesky

stole money from Cherry Scaffolding; and (3) Ellis unlawfully defamed Sondesky when

he sent that email to her former employer.2 Appellants brought counterclaims for breach

of fiduciary duty and conversion.

The District Court held a jury trial. At the close of Sondesky’s case, Appellants

made a Federal Rule of Civil Procedure 50 motion seeking judgment as a matter of law.

The District Court denied the motion, and all the claims proceeded to the jury, which

found in favor of Sondesky and against Appellants with respect to all claims. The jury

awarded Sondesky $1,000 in compensatory damages for her first retaliation claim, $1 in

nominal damages for her second retaliation claim, and $100,000 in punitive damages for

2 Sondesky’s other claims were either dismissed or withdrawn before trial. her defamation claim. The jury did not award compensatory damages for Sondesky’s

defamation claim.

Thereafter, Appellants moved for judgment notwithstanding the verdict pursuant

to Federal Rule of Civil Procedure 50(b), or, in the alternative, a new trial. The District

Court denied the motion. This timely appeal followed.

II. DISCUSSION3

Appellants argue that the District Court erred in denying its motion for judgment

notwithstanding the verdict. We exercise plenary review over the District Court’s denial

of judgment notwithstanding the verdict. In re Lemington Home for the Aged Official

Comm. of Unsecured Creditors, 777 F.3d 620, 626 (3d Cir. 2015).

A motion for judgment notwithstanding the verdict pursuant to Rule 50(b) should

only be granted “if, as a matter of law, the record is critically deficient of that minimum

quantity of evidence from which a jury might reasonably afford relief.” Id. (quoting

Trabal v. Wells Fargo Armored Serv. Corp., 269 F.3d 243, 249 (3d Cir. 2001)). In

making that determination, “we must examine the record in a light most favorable to

[Sondesky as the non-moving party], giving her the benefit of all reasonable inferences,

even though contrary inferences might reasonably be drawn.” Id. (quoting Dudley v. S.

Jersey Metal, Inc., 555 F.2d 96, 101 (3d Cir. 1977)).

3 The District Court had jurisdiction pursuant to 28 U.S.C. § 1331, because Sondesky’s Amended Complaint asserted a claim arising under the FLSA, and supplemental jurisdiction over Sondesky’s Pennsylvania state law claims and Cherry Scaffolding’s counterclaims pursuant to 28 U.S.C. § 1367. We have jurisdiction under 28 U.S.C. § 1291. A. Appellants Forfeited the Argument Regarding Sondesky’s Employment Status

As a preliminary matter, Appellants argue that the District Court erred by finding

that Sondesky was a non-exempt employee under the FLSA.4 This general issue was

presented to the District Court, including in a pretrial order and in proposed jury

instructions. The District Court declined to give those instructions to the jury.5

However, we need not decide whether that action by the District Court was proper

because that question is not before us today—Appellants do not appeal the District

Court’s decision to not instruct the jury on that point. See Barna v. Bd. of Sch. Dirs. of

the Panther Valley Sch. Dist., 877 F.3d 136, 145 (3d Cir. 2017) (noting that this Court

does not reach arguments not raised in an appellant’s opening brief).

Appellants only appeal the denial of their motion for judgment notwithstanding the

verdict. Therefore, whether the evidence supported that Sondesky was a non-exempt

employee, for the purposes of a motion for judgment notwithstanding the verdict, is now

raised for the first time on appeal.6

4 The FLSA creates two classifications of employees—exempt and non-exempt. See 29 U.S.C. § 213. Pursuant to the FLSA, employers are not required to pay exempt employees overtime wages. 29 U.S.C §§ 207(a)(1), 213. Thus, Appellants now argue that Sondesky was not entitled to overtime pay thereby undermining her retaliation claims. 5 While the parties do not explain the District Court’s decision on appeal, the record supports that the District Court found Sondesky’s employment status was irrelevant for determining Sondesky’s retaliation claims. 6 To the extent Appellants are insinuating that the District Court was required to address this issue sua sponte in its order denying the motion for judgment notwithstanding the verdict, they provide no case law or argument to support this proposition. It is clearly established that this Court does not generally consider arguments that

are not preserved in the district court. See, e.g., id. at 145–47; Garza v. Citigroup Inc.,

881 F.3d 277, 284 (3d Cir. 2018); DIRECTV Inc. v. Seijas, 508 F.3d 123, 125 n.1 (3d Cir.

2007). Arguments that are not preserved are either waived or forfeited. Barna, 877 F.3d

at 146. Appellants have forfeited, rather than waived, this claim as they failed to timely

assert it before the District Court.7 See id. at 147.

In civil cases, while this Court does not review waived claims, we will review

forfeited ones when “exceptional circumstances” exist, such as “when the public interest

requires that the issue[s] be heard or when a manifest injustice would result from the

failure to consider the new issue[s].” Id. (quotations and citations omitted) (alterations in

original). No such circumstances exist here. Accordingly, because Appellants’ argument

that Sondesky was an exempt employee under the FLSA is forfeited, and because no

exceptional circumstances exist, we will not reach the merits of this claim.

B. Sufficient Evidence Supports the Jury’s Verdict

Appellants contend that the evidence presented at trial was insufficient to support

the jury’s verdict on both of the retaliation claims. To establish a retaliation claim, a

plaintiff must show that (1) she engaged in protected activity; (2) she suffered an adverse

employment decision; and (3) the adverse decision was causally related to the protected

activity. Daniels v. Sch. Dist. of Phila., 776 F.3d 181, 193 (3d Cir. 2015).

7 Waiver is the “intentional relinquishment or abandonment of a known right,” whereas, in contrast, forfeiture “is the failure to make the timely assertion of a right.” Barna, 877 F.3d at 147 (quoting United States v. Olano, 507 U.S. 725, 733 (1993)). i. 1st Retaliation Claim

In addition to its forfeited argument that Sondesky was an exempt employee,

Appellants contend that trial evidence was insufficient for a jury to conclude that they

retaliated against Sondesky in violation of the FLSA when they sued her in small claims

court as a result of her making a complaint asking to be paid overtime. Appellants assert

that the trial evidence was insufficient because (1) Sondesky engaged in no protected

activity and (2) there was no causal connection between such complaint and the small

claims court action. This argument fails because, taking the evidence in the light most

favorable to Sondesky, there was sufficient evidence presented at trial from which the

jury reasonably could find that Sondesky engaged in a protected activity and that

Appellants’ lawsuit was causally related to her filing a complaint seeking overtime.

“To fall within the scope of the [FLSA] antiretaliation provision, a complaint must

be sufficiently clear and detailed for a reasonable employer to understand it, in light of

both content and context, as an assertion of rights protected by the statute and a call for

their protection.” Kasten v. Saint-Gobain Performance Plastics Corp., 563 U.S. 1, 14

(2011). Oral complaints meet this standard. Id.

At trial, Sondesky testified that, shortly after she began working for Cherry

Scaffolding, she had a telephone conversation with Ellis asking for overtime wages, and

that she sent Ellis a weekly breakdown of payroll timesheets that clearly indicated her

overtime hours. Contrary to Appellants’ argument that these actions do not “even

remotely suggest an assertion of rights or objection[s],” Appellants’ Br. 23, this is

sufficient evidence to support the jury’s finding: Sondesky told Ellis she would need to work more hours given the state of the business and submitted payroll sheets reflecting

that request, thus asserting her rights to overtime pay and engaging in a protected activity

under the FLSA.

Additionally, there is sufficient evidence presented at trial from which the jury

could find a causal connection between Sondesky’s protected activity and the small

claims court action as Ellis testified that once he learned Sondesky had paid herself

overtime, he pursued action in small claims court. This is sufficient for a jury to find a

causal connection between Sondesky’s protected activity—a complaint for overtime

pay—and the small claims action against her.

Therefore, Appellants’ argument fails.

ii. 2nd Retaliation Claim

Appellants also argue that the trial evidence was insufficient for a jury to conclude

that Ellis retaliated against Sondesky in violation of the FLSA when he sent an email to

her former employer. In that email, Ellis wrote that Sondesky stole money from Cherry

Scaffolding, as a result of Sondesky’s protected activity under the FLSA.

Appellants make this argument only in the heading of a section of the brief. We

are not clear on the substance of this argument as they make no other reference to it, and

it is therefore forfeited. See Ethypharm S.A. France v. Abbott Labs., 707 F.3d 223, 231

n.13 (3d Cir. 2013) (noting this Court has “consistently held that ‘[a]n issue is waived

unless a party raises it in its opening brief, and for those purposes a passing reference to

an issue . . . will not suffice to bring that issue before this court’”) (alterations in original) (quoting Laborers’ Int’l Union of N. Am. v. Foster Wheeler Energy Corp., 26 F.3d 375,

398 (3d Cir. 1994)). Therefore, we need not address this scarcely mentioned argument.

C. Punitive Damages were Permissible

Appellants contend that the recovery of punitive damages for defamation is not

permitted under Pennsylvania law when the jury does not award compensatory damages

if the jury does not also find actual malice.8 Sondesky argues that the jury did find actual

malice, but even if they did not, punitive damages are permissible when there is a finding

that the party acted intentionally, recklessly, or with reckless indifference.

As the District Court noted, under Pennsylvania law, punitive damages may be

awarded absent compensatory damages as long as there is a cause of action that supports

the imposition of punitive damages. In fact, Pennsylvania law permits punitive damages

when there is “conduct that is outrageous, because of the defendant’s evil motive or his

reckless indifference to the rights of others.” Hutchison ex. rel. Hutchinson v. Luddy, 870

A.2d 766, 770 (Pa. 2005) (quoting Feld v. Merriam, 485 A.2d 742, 747 (Pa. 1984)).

Here, the verdict sheet shows the jury answered in the affirmative as to whether

“Steven Ellis both act[ed] intentionally or recklessly in sending the email, and act[ed]

with malice or reckless indifference to the rights of Linda Sondesky[.]” App. 15

(emphasis added). Thus, the jury actually determined that Ellis acted with actual malice

or reckless indifference to Sondesky’s rights. Therefore, Appellants’ argument fails.

8 To the extent Appellants make a constitutional argument as to the punitive damages, this argument has been forfeited as it was not raised in post-trial motions before the District Court. Barna, 877 F.3d at 147 (stating that forfeiture is the failure to timely raise an argument before the lower court). III. CONCLUSION

For the reasons set forth above, we will affirm the District Court’s order denying

Appellants’ motion for judgment notwithstanding the verdict, or, in the alternative, a new

trial.