THOMAS E. PEREZ, Secretary of Labor, United States Department of Labor, Plaintiff - Appellee,
EL TEQUILA, LLC; CARLOS AGUIRRE, individually, Defendants-Appellants.
FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF OKLAHOMA(D.C. No. 4:12-CV-00588-JED-PJC)
V. Wilkinson, Tulsa, Oklahoma, for Defendants - Appellants.
Z. Grauman (M. Patricia Smith, Solicitor of Labor, Jennifer
S. Brand, Associate Solicitor, and Paul L. Frieden, Counsel
for Appellate Litigation, of U.S. Department of Labor, Office
of the Solicitor, on the brief), Washington, D.C., for
Plaintiff - Appellee.
KELLY, MATHESON, and McHUGH, Circuit Judges.
El Tequila, LLC, and Carlos Aguirre (collectively, "El
Tequila") appeal from a $2, 137, 627.44 judgment in
favor of Plaintiff-Appellee, Secretary of the Department of
Labor (Secretary). 3 Aplt. App. 352; see also Perez v. El
Tequila, LLC, No. 12-CV-588-JED-PJC, 2015 WL 4173541
(N.D. Okla. July 10, 2015) (partial summary judgment opinion
and order). Our jurisdiction arises under 28 U.S.C. §
1291, and we affirm.
Tequila is a restaurant with four locations (Harvard, Broken
Arrow, Owasso, and Memorial) in Tulsa, Oklahoma. In December
2010, an employee from the Harvard location complained to the
Department of Labor's Wage and Hour Division (WHD). 23
Aplee. Supp. App. 1814. This complaint prompted the WHD to
investigate the Harvard location (First Harvard
Investigation). The First Harvard Investigation consisted of
interviews with employees and El Tequila's owner, Mr.
Aguirre; examining payroll documents; and touring the
restaurant. Id. at 1822. The payroll records showed
employees were paid $7.25 per hour (the minimum wage), worked
about forty hours a week, and received overtime when
required. See 10 Aplee. Supp. App. 780-801.
Interviews with Mr. Aguirre and his employees confirmed this
information. 23 Aplee. Supp. App. 1822-23. The WHD
investigator only found recordkeeping violations, and closed
the First Harvard Investigation. 16 Aplee. Supp. App. 1243.
employee complaints prompted the WHD to investigate the
Harvard location again (Second Harvard Investigation). 23
Aplee. Supp. App. 1825-27. This time, the WHD investigator
arrived at the Harvard location unannounced, id. at
1827, and discovered several violations. First, the records
Mr. Aguirre provided during the First Harvard Investigation,
known as middle sheets, were based on his false summaries of
how many hours employees worked, rather than actual clock-in
and clock-out times. 16 Aplee. Supp. App. 1300; 23 Aplee.
Supp. App. 1834. During the Second Harvard Investigation, Mr.
Aguirre provided the WHD investigator with time sheets that
contained actual clock-in and clock-out times. 23 Aplee.
Supp. App. 1829-31. Mr. Aguirre withheld these time sheets
during the First Harvard Investigation, and many time entries
had been "whited-out" and edited to conform with
the Federal Labor Standards Act (FLSA). Id. at 1831.
employees revealed that Mr. Aguirre instructed them to lie in
their interviews during the First Harvard Investigation.
Id. at 1831-32. This time, employees told the WHD
investigator that they had been working from 60 to 70 hours
per week and were paid a salary. Id. at 1831. They
said the time sheets were not accurate, and "that they
were forced to sign" them. Id.
Aguirre admitted that the time sheets and middle sheets were
not correct, and that he told his employees what to say in
their interviews. Id. at 1835, 1876. The WHD
investigator told Mr. Aguirre he had violated the FLSA
because his employees' salaries were below minimum wage,
he did not pay them overtime, and because he committed
recordkeeping violations. Id. at 1836. El Tequila
agreed to pay $261, 760.77 to its fifty-eight employees at
the Harvard location for unpaid wages from December 2009 to
August 2011. 10 Aplee. Supp. App. 802-07.
September 2011, the WHD investigated El Tequila's
Memorial, Owasso, and Broken Arrow locations because Mr.
Aguirre admitted the same impermissible payment practices
were occurring there. 23 Aplee. Supp. App. 1844. The WHD
investigator discovered FLSA violations for these other three
locations. Id. at 1851. Relying on El Tequila's
expert report, the Secretary asserts that El Tequila owes
$386, 887.82 to its employees at these locations for wages
from October 2009 to August 2011. Aplee. Br. at 12-13.
the investigations, El Tequila changed the way it paid its
employees, but continued to withhold wages from them. El
Tequila started paying hourly by check, and employees clocked
in and out on the restaurants' touch panel cash registers
(Casio QT 6600). 16 Aplee. Supp. App. 1228, 1233-34, 1257.
The registers generated weekly reports of employees'
regular time and overtime. See id. at 1258; see,
e.g., 9 Aplee. Supp. App. 698-709. Managers had the
ability to edit the time recorded by the registers. 16 Aplee.
Supp. App. 1357-58. Employee hours that had been recorded on
the registers were manually removed or reduced many times,
apparently by managers.
Tequila improperly reduced its employees' hours in yet
another way. Rather than provide the register reports
themselves, Mr. Aguirre gave El Tequila's accountant
summary sheets containing an alphabetical listing of
employees and indications of hours worked each day and total
weekly hours and tips. 16 Aplee. Supp. App. 1261; see,
e.g., 9 Aplee. Supp. App. 745-60. These middle sheets,
compiled by Mr. Aguirre and other managers, indicated
employees worked even fewer hours than did the altered
records from the registers. The Secretary estimates that El
Tequila owes its employees at all four locations $636, 483.28
for wages from August 7, 2011, to June 30, 2014. Aplee. Br.
October 2012, the Secretary filed suit because El Tequila
refused to pay its employees at the Broken Arrow, Owasso, and
Memorial locations for wages from October 2009 to August
2011. In a Third Amended Complaint (TAC) filed on February 5,
2015, the Secretary alleged that El Tequila managers and Mr.
Aguirre "manually altered the electronic time record
weekly reports in order to reduce the actual hours shown as
worked by employees." 1 Aplt. Am. App. 31. El Tequila
was required to respond to the TAC by February 23, eighteen
days later, but did not. The Secretary filed a motion for
summary judgment on March 19, id. at 77-78, and El
Tequila filed its motion to file an out-of-time answer to the
TAC the next day. Id. at 119-20. The motion
explained that El Tequila did not timely respond to the TAC
because the answer's due date "was not properly
docketed." Id. at 119. The district court
denied El Tequila's motion to file its answer out of ...