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Smith v. Haynes & Haynes, P.C.

United States District Court, N.D. Alabama, Southern Division

August 22, 2017




         This case is before the court on Defendants' Motion for Summary Judgment (Doc. #94) filed on December 17, 2016 and Plaintiff's Motion for Partial Summary Judgment (Doc. #112) filed on February 21, 2017. The Motions are fully briefed and supported by the parties' evidentiary submissions. (Docs. #95-98, 113-25).

         I. Procedural History

         Plaintiff, Jenny Connell Smith, filed a complaint in this court on July 11, 2014 alleging that Defendants misclassified her as an independent contractor while she worked for them as a paralegal/legal assistant and failed to pay her an appropriate overtime rate in violation of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. (Doc. #1, Count I). On August 27, 2014, Plaintiff filed an amended complaint adding three more claims: Count II for retaliation in violation of the FLSA; Count III for breach of contract; and Count IV for slander. (See generally Doc. #14).

         Earlier in this case, Defendants filed a Motion for Judgment on the Pleadings (Docs. #12, 20). The court determined that judicial estoppel barred Plaintiff's FLSA and breach of contract claims and that Plaintiff's slander claim was barred by the absolute litigation privilege. (Doc. #39 at 5-12). The claim for retaliation under the FLSA (Count II) survived that early dispositive motion. (Id. at 12-14). Defendants' current motion seeks dismissal of Plaintiff's retaliation claim. (Doc. #94). Plaintiff's motion seeks partial summary judgment on the question of liability. (Doc. #112).

         II. Relevant Undisputed Facts

         The facts set out in this opinion are gleaned from the parties' submissions of facts claimed to be undisputed, their respective responses to those submissions, and the court's own examination of the evidentiary record. All reasonable doubts about the facts have been resolved in favor of the nonmoving party. See Info. Sys. & Networks Corp. v. City of Atlanta, 281 F.3d 1220, 1224 (11th Cir. 2002). These are the “facts” for summary judgment purposes only. They may not be the actual facts that could be established through live testimony at trial. See Cox v. Admr. U.S. Steel & Carnegie Pension Fund, 17 F.3d 1386, 1400 (11th Cir. 1994). Asserted “facts” that are not facts at all will be disregarded. Carter v. Three Springs Residential Treatment, 132 F.3d 635, 642 (11th Cir. 1998) (conclusory allegations without specific supporting facts have no probative value).

         A. Plaintiff's Employment and the Filing of the Lawsuit

         Plaintiff Jenny Connell Smith (“Plaintiff” or ”Smith”), a legal assistant/paralegal, worked for Defendants from approximately December 2000 through April 2009 and again from July 2011 through December 2012. (Doc. #39, Amend. Compl., ¶¶ 22, 27, 28). On April 14, 2011, prior to her second round of employment, Plaintiff filed a Voluntary Chapter 13 Bankruptcy Petition with the United States Bankruptcy Court, Northern District of Alabama, Southern Division. (Doc. #13-3, Documents from Bankruptcy Petition; Doc. #39 at 2). Plaintiff did not include any contingent or unliquidated claims in Item 21 on Schedule B to her Bankruptcy Petition or on the schedules supporting that petition. (Doc. #13-3, ¶ 5).

         On July 11, 2014, Plaintiff filed the action now pending before the court. (Doc. #1). In that original Complaint, Plaintiff alleged that she notified Defendants that she was misclassified as a contract employee and was not being paid overtime to which she was entitled. (Doc. #1, ¶ 21). After learning of the lawsuit, Defendants retained John Saxon to represent them. (Doc. #98-5, A. Haynes Dep. at 54-56; Doc. #98-6, K. Haynes Dep. at 38-39). Based on Plaintiff's allegations, Defendants took steps to preserve all evidence which might be relevant to Smith's claims and/or any possible responses or defenses to those allegations. (Doc. #98-5, A. Haynes Dep. at 26-27; Doc. #98-9, A. Haynes Decl., ¶ 4; Doc. #98-10, K. Haynes Decl., ¶ 5).

         While retrieving and reviewing all information that might possibly be relevant to the lawsuit, Defendants reviewed emails wherein Plaintiff discussed her requests to be rehired; her desire to be classified as an independent contractor; her wages; her performance as a paralegal/legal assistant; her disclosure of controlled substance abuses during her employment; her various medical conditions; her reasons for wanting to be classified as an independent contractor; and numerous personal projects and matters unrelated to the law firm's work. (Doc. #98-9, A. Haynes Decl., ¶ 6; Doc. #98-10, K. Haynes Decl., ¶ 7). Defendants also recalled loans and payroll advances made to Plaintiff, Plaintiff's bankruptcies, and Plaintiff's communications with other attorneys in the Birmingham area. (Doc. #98-5, A. Haynes Dep. at 182-85, 186-87, 189, 192, 194; Doc. #98-6, K. Haynes Dep. at 24-25; Doc. #98-9, A. Haynes Decl., ¶ 7; Doc. #98-10, K. Haynes Decl., ¶ 8).

         B. Defendants Report the Fact of the Lawsuit to NELA-AL

         The National Employment Lawyers Association (“NELA”) is a national organization of lawyers who represent individual employees. The Alabama Affiliate of NELA is NELA-Alabama (“NELA-AL”). In 2014, NELA-AL had 33 dues paying members. (Doc. #98-12, Guerrier Decl., ¶ 6). One of those members was Russ Parker, an Alabama attorney who previously represented Plaintiff and filed the Original Complaint on her behalf. (Id.). Another was Alicia Haynes. (Doc. #98-5, A. Haynes Dep. at 130). Hank Sherrod, III, another Alabama attorney, was then the President of NELA-AL. (Doc. #98-8, Guerrier Dep. at 25; Doc. #98-7, Sherrod Dep. at 15, 29-30).

         NELA-AL maintains a confidential Listserv where members of NELA-AL can post questions and share ideas pertaining to employment law and litigation. (Doc. #98-8, Guerrier Dep. at 17-24). A confidentiality provision is contained in the bylaws, requiring a firm to self-report if it is engaged in litigation with another member firm. (Doc. #98-12, Guerrier Decl., ¶ 7) (“The Board shall further require applicants to agree not to participate in NELA-Alabama's confidential listserv during the pendency of any employment matter in which he or she opposes a NELA-Alabama member who is representing the employee and to notify NELA-Alabama's President of the conflict.”).

         Alicia Haynes was aware of the bylaws and concluded that she needed to bring the Smith matter to Sherrod's attention. (Doc. #98-5, A. Haynes Dep. at 132-33). Ms. Haynes called Sherrod and expressed concern about “her firm's work product being available to Russ [Parker] during the litigation.” (Doc. #98-7, Sherrod Dep. at 21). Sherrod told Ms. Haynes that he “would consult the other Board members and … make a decision without [Alicia Haynes] about the appropriate steps to take.” (Id.). Sherrod concluded that the appropriate response to Ms. Haynes's concern was to suspend Parker's NELA-AL membership (including access to the Listserv) during the pendency of this litigation, despite the fact that the bylaws did not call for suspension from the organization. (Id. at 13-14, 21-22; Doc. #98-8, Guerrier Decl., ¶ 7). Specifically, Sherrod testified that “Russ was a marginal member of our group. He wasn't to my recollection even active on the Listserv. He was the one that chose to initiate an action against some of our members, members who were prominent contributors to the Listserv. The Listserv would have suffered terribly in my view if the Haynes & Haynes firm had been excluded from it rather than him. And I guess that you could have left everybody on, but that didn't seem right either.” (Doc. #98-7, Sherrod Dep. at 16).

         On July 18, 2014, Sherrod wrote Parker a letter notifying him that, “[b]ecause you are in litigation with two of our members and their firm, the board has decided to suspend your membership until completion of the lawsuit.” (Doc. #97-2, Exh. 2 to Parker Dep., Suspension Letter). Sherrod had discussed the matter with other members of the NELA-AL Board, either directly or through email, in making the decision. (Doc. #98-7, Sherrod Dep. at 13-15, 62-63).

         After receiving the letter from Sherrod, Parker sent Sherrod an email asking him to explain the basis for the decision to suspend his membership. (Doc. #97-2, Parker Dep. at 73). According to Sherrod, “My thinking in general is that regardless of the merits of your lawsuit, it undermines group collegiality for a member to have a lawsuit against other members.” (Id.). Parker never sought to be reinstated as a member of NELA-AL. (Id. at 70, 76).

         C. John Saxon's Involvement in the Early Stages of this Litigation

         Defendants discussed with their colleague John Saxon how to best raise the judicial estoppel issue, which they believed would dispose of the Smith case. (Doc. #98-5, A. Haynes Dep. at 34; Doc. #98-9, A. Haynes Decl., ¶¶ 11-12; Doc. #98-10, K. Haynes Decl., ¶¶ 12-13).

         The options Defendants presented to Saxon were: (1) file an answer, followed by a motion to dismiss on the ground of issue preclusion or (2) send a Rule 11 letter to Parker, setting forth the facts and law establishing judicial estoppel, and asking Smith (through Parker) to dismiss her case voluntarily or face possible sanctions under Rule 11. (Doc. #98-9, A. Haynes Decl., ¶ 13; Doc. #98-10, K. Haynes Decl., ¶ 14; Doc. #98-11, Saxon Decl., ¶ 7). Saxon suggested a third option: that he personally reach out to Parker, explain the facts and law related to judicial estoppel, and see if Smith might be willing to dismiss her claim voluntarily. (Doc. #98-5, A. Haynes Dep. at 82; Doc. #98-6, K. Haynes Dep. at 49-52; Doc. #98-9, A. Haynes Decl., ¶ 14; Doc. #98-10, K. Haynes Decl., ¶ 15; Doc. #98-11, Saxon Decl., ¶ 8). Since Parker had been his associate, [1] Saxon thought that a face to face meeting would be more efficient and productive than the work required for the other options. (Doc. #98-9, A. Haynes Decl., ¶ 14; Doc. #98-11, Saxon Decl., ¶ 8). Defendants agreed to have Saxon reach out to Parker in an attempt to quickly resolve the lawsuit. (Doc. #98-9, A. Haynes Decl., ¶ 14; Doc. #98-10, K. Haynes Decl., ¶ 15).

         On August 4, 2014, the two lawyers met at Saxon's office. (Doc. #98-11, Saxon Decl., ¶ 10; Doc. #113-1, Parker Decl., ¶ 4). Saxon is an experienced attorney who has practiced law for 40 years, mostly in this judicial district. (Doc. #98-11, Saxon Decl., ¶ 2). At the time of the meeting, Parker had practiced for around 8 years and formerly worked at Saxon's firm as an associate. (Doc. #97-2, Parker Dep. at 14-15). Unbeknownst to Saxon, Parker surreptitiously recorded their meeting by placing a recording device in his jacket pocket.[2] (Doc. #97-2, Parker Dep. at 9, 15, 19).

         Ironically, while he was being secretly taped, Saxon began the meeting with a discussion about professionalism. (Doc. #98-4, Saxon Dep. at 26-28; Doc. #116-2, Transcription of Meeting between Saxon and Parker at 2). That is, he offered Parker feedback “in the advice category.” (Id.). He also expressed his opinion that an attorney who takes an adverse position against another lawyer may lose settlement leverage once a judicial complaint is filed. Saxon opined that, as a professional courtesy, when suing other attorneys, it is better to attempt to resolve the matter without the necessity of filing suit. (Doc. #116-2, Transcription at 2-4). Saxon also raised his “main point” for the meeting: that Parker and Plaintiff “have a serious and fatal judicial estoppel problem” which he believed would bar Plaintiff's claim given the fact that her bankruptcy petition failed to mention an overtime claim. (Id. at 4-11).

         Saxon ended the meeting by addressing additional information “that may be helpful in convincing [Plaintiff] … [not] to go forward.” (Id. at 12). According to Saxon, “if for some reason this doesn't get dismissed … if … if it goes forward, there will be counterclaims.”[3] (Id. at 18, 30). Saxon “made it clear” to Parker that there was evidence to support certain counterclaims. (Doc. #98-4, Saxon Dep. at 19). “And a couple of them would be compulsory and would be the kind of thing that I think Russ would know whether we could bring or not.” (Id. at 18-19). Specifically, Saxon outlined three counterclaims - one for unpaid loans, one for tortious interference, and one for “stealing time.” (Doc. #116-2, Transcription at 18, 21).

         Saxon shared emails with Parker in which Plaintiff asked to be paid hourly so that she would not lose her free medical care, admitted that she used cocaine while working for Haynes & Haynes and was a terrible employee, and asked to remain a contract employee, forego health insurance, and be responsible for her own taxes. (Id. at 16-31). This documentation was shared with Parker after having “discuss[ed] the facts and documents which would provide a basis for defenses to Smith's claims and consider[ing] how best to share [the] information with Mr. Parker.” (Doc. #98-11, Saxon Decl., ¶ 9).

         As there had been no discussion of counterclaims in the meeting between Saxon and Defendants, the record also indicates that Saxon had not asked whether there were any extenuating circumstances which might make the assertion of potential counterclaims questionable. (Doc. #98-4, Saxon Dep. at 19-23) (i.e. “My understanding was it was not paid, maybe it was, I don't know …”). For example, as to any claim for money owed on unpaid loans, Haynes & Haynes had agreed to forgive the money owed in lieu of a raise. (Doc. #118, Exh. A, Email dated 3/1/09; Doc. #98-4, Saxon Dep. at 20; Doc. #98-10, K. Haynes Dep. at 61, 84-85; Doc. #98-5, A. Haynes Dep. at 91; Doc. #113-2, Smith Decl., ¶ 14). As to tortious interference, Alicia Haynes did not consider the incident in question to be “a big deal” and could not think of a time when Smith interfered with her business. (Doc. #98-5, A. Haynes Dep. at 95-96, 115; Doc. #113-2, Smith Decl., ¶ 5). Finally, as to the question of “stealing time, ” Alicia Haynes agreed that handling personal matters and matters for other attorneys during lunch time does not constitute stealing time. (Doc. #98-5, A. Haynes Dep. at 191; Doc. #96-1, Smith Dep. at 254, 275).

         On August 6, 2014, Barry and Brandi Frederick filed a Notice of Appearance (Doc. #6) on behalf of Plaintiff. Later that same day, Parker withdrew as counsel for Plaintiff.[4] (Doc. #8). Plaintiff did not oppose the change of counsel. (Doc. #97-2, Parker Dep. at 93-95).

         III. Summary Judgment Standard

         Under Federal Rule of Civil Procedure 56(c), summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party asking for summary judgment always bears the initial responsibility of informing the court of the basis for its motion and identifying those portions of the pleadings or filings which it believes demonstrate the absence of a genuine issue of material fact. Id. at 323. Once the moving party has met its burden, Rule 56(c) requires the non-moving party to go beyond the pleadings and -- by pointing to affidavits, or depositions, answers to interrogatories, and/or admissions on file -- designate specific facts showing that there is a genuine issue for trial. See Id. at 324.

         The substantive law will identify which facts are material and which are irrelevant. See Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). All reasonable doubts about the facts and all justifiable inferences are resolved in favor of the non-movant. See Allen v. Bd. of Pub. Educ. for Bibb Cty., 495 F.3d 1306, 1314 (11th Cir. 2007); Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993). A dispute is genuine, “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. See Id. at 249.

         When faced with a “properly supported motion for summary judgment, [the non-moving party] must come forward with specific factual evidence, presenting more than mere allegations.” Gargiulo v. G.M. Sales, Inc., 131 F.3d 995, 999 (11th Cir. 1997). As Anderson v. Liberty Lobby, Inc., teaches, under Rule 56(c) a plaintiff may not simply rest on her allegations made in the complaint; instead, as the party bearing the burden of proof at trial, she must come forward with at least some evidence to support each element essential to her case at trial. See Anderson, 477 U.S. at 252. “[A] party opposing a properly supported motion for summary judgment ‘may not rest upon the mere allegations or denials of [her] pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.'” Id. at 248 (citations omitted).

         Summary judgment is mandated “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp., 477 U.S. at 322. “Summary judgment may be granted if the non-moving party's evidence is merely colorable or is not significantly probative.” ...

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