221 F. Supp. 3d 115
D.D.C.2016Background
- Thirteen drywall/ceiling workers sued CRC (C.R. Calderon Construction, Inc.), its owners (Carlos and Ana Calderon), JCI (Jacinto Construction, Inc.), JCI’s owner (Jacinto Cespedes), and Travelers (surety) for unpaid wages, overtime, and related damages under the FLSA, DCMWRA, and DCWPCA, plus breach of a payment bond claim against Travelers.
- CRC was the prime subcontractor with a fixed-price Prime Subcontract from Whiting-Turner; CRC hired JCI under two fixed-price subcontracts to perform most of CRC’s work. Many JCI workers (the plaintiffs) worked on-site supervised by CRC’s foreman (Enrique Sanz) and JCI’s owner (Cespedes).
- Plaintiffs performed work but were underpaid and ultimately not paid for final weeks; certified payrolls and other records show reclassification of some workers from "carpenter" to lower-paid categories and other irregularities. CRC settled with DOL for $150,000 and agreed DOL would distribute amounts to listed workers (including these plaintiffs), but the settlement did not release plaintiffs’ claims here and operates as an offset.
- At bench trial the court found pervasive control by CRC (foreman, tools, scheduling, direction, classification influence), active operational control by the Calderons, and that Cespedes/JCI hired, supervised, and failed to pay workers.
- The court concluded CRC, the Calderons, JCI, and Cespedes were joint employers under the FLSA/DC law; Travelers’ payment bond is co-extensive with CRC’s obligations; and the CRC–JCI subcontracts are unenforceable and cross-claims among them are denied as moot because the contracts were tainted by illegal/unconscionable conduct (reclassification, underpayment, hiring undocumented workers, misreporting).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1) Were CRC and the individual defendants joint employers of the plaintiffs under FLSA/DC law? | Plaintiffs: CRC (and the Calderons) exercised substantial control (foreman, tools, scheduling, classification influence) and thus are joint employers along with JCI and Cespedes. | CRC/JCI/Cespedes: JCI was the employer; CRC only coordinated and could not hire/fire JCI employees; individual defendants deny employer status. | Held: CRC, Carlos and Ana Calderon, JCI, and Jacinto Cespedes were joint employers and are jointly/severally liable. |
| 2) Does Travelers’ payment bond cover liquidated damages and attorneys’ fees in addition to unpaid wages? | Plaintiffs: Bond language is broad; under Miller Act/Miller-Act-related precedent and FLSA remedial purpose, bond covers unpaid wages, liquidated damages, and attorneys’ fees. | Travelers: Bond covers only “labor” (wages) and does not extend to liquidated damages or attorneys’ fees. | Held: Travelers is liable to the extent of the bond for unpaid wages and also for statutory liquidated damages and attorneys’ fees (bond construed broadly; Carter and remedial policies support coverage). |
| 3) What wage rates apply and how much are damages? (classification/amounts) | Plaintiffs: Were hired and expected to be paid at the Davis–Bacon carpenter prevailing wage listed in the subcontract; damages are unpaid wages plus liquidated damages. | CRC: Disputes carpenter classification for some plaintiffs and contends record inconsistencies; DOL classification issues are administrative. | Held: Eleven plaintiffs were entitled to carpenter wages as promised; two (the Moyas) were finishers. Court adopted the parties’ Consolidated Summary Chart and calculated total unpaid wages of $153,806.94 plus equal liquidated damages, offset by DOL payments, yielding $207,599.34 aggregate owed. |
| 4) Are CRC–JCI subcontracts enforceable; are cross-claims for indemnity/contribution valid? | CRC: Subcontracts valid; CRC seeks indemnity/contribution for amounts owed. JCI: Asserts breaches by CRC and seeks payment; also challenges enforceability. | JCI: Subcontracts unconscionable, illegal, procured by fraud/misleading practices; parties engaged in illegal practices. | Held: Subcontracts unenforceable as against public policy (formation/implementation involved illegal acts and manipulation); parties are in pari delicto; cross-claims denied as moot and equitable relief denied. |
Key Cases Cited
- Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697 (Sup. Ct. 1945) (recognizes Congress' authorization of liquidated damages to remedy delayed payment of wages)
- Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (Sup. Ct. 2003) (FLSA employer/employee inquiry looks to traditional agency/master-servant concepts)
- Morrison v. Int'l Programs Consortium, Inc., 253 F.3d 5 (D.C. Cir. 2001) (enumerates economic-reality factors for employer status under the FLSA)
- United States ex rel. Sherman v. Carter, 353 U.S. 210 (Sup. Ct. 1957) (payment-bond surety liable for items that are part of worker compensation, including liquidated damages and related costs)
- Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (Sup. Ct. 1942) (FLSA liquidated damages are compensatory, not a penalty)
- Ventura v. Bebo Foods, Inc., 738 F. Supp. 2d 1 (D.D.C. 2010) (applies FLSA economic-reality test and notes DC statutes are construed consistently with FLSA)