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Beard v. District of Columbia Housing Authority

November 4, 2008

DALERIE V. BEARD PLAINTIFF,
v.
DISTRICT OF COLUMBIA HOUSING AUTHORITY, DEFENDANT.



The opinion of the court was delivered by: Richard W. Roberts United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff Dalerie Beard brings this action against her previous employer, defendant District of Columbia Housing Authority ("DCHA"), for unpaid wages, overtime wages and benefits payments purportedly due to her under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. ("FLSA" or "the Act"). DCHA moves to dismiss or for summary judgment, arguing that Beard's claims are barred by a prior accord and satisfaction. Beard opposes, asserting that the doctrine of accord and satisfaction does not apply to claims for unpaid wages, overtime, or other liquidated damages under the FLSA. Because an accord and satisfaction cannot extinguish claims for unpaid wages, overtime, or liquidated damages under the FLSA, and because a genuine issue of material fact exists as to whether Beard was exempt from the requirements of the FLSA by virtue of being employed in a bona fide administrative capacity, DCHA's motion for summary judgment will be denied.*fn1

BACKGROUND

Beard, a Maryland resident, was employed by the DCHA approximately from December 27, 2005, until November 11, 2007, as a Supervisory Housing Program Specialist, earning roughly $86,972 per year. (Compl. ¶¶ 6-7.) She alleges that from December 2005 through November 2007, DCHA willfully violated the overtime provisions of the FLSA by failing to pay her one and one-half her regular hourly rate for hours worked in excess of forty hours per work week. (Compl. ¶¶ 21-35.)

At the end of her term of employment, Beard signed a document titled "General Release and Severance Agreement" ("Release") in return for $7,247.67, which contained a waiver and release clause stating:

In consideration of the promises and covenants by DCHA set forth herein, Beard agrees that she will and does forever and irrevocably release and discharge DCHA . . . from any and all grievances, claims, demands, debts, defenses actions or causes of action, obligations, damages, and liabilities whatsoever, whether they be at law, in equity, or mixed, in any way arising out of or relating to Beard's employment with, and separation from, DCHA and covenants not to make or file any lawsuits, complaints, or other proceedings of any kind in any court, on behalf of himself [sic] or any other person, against Releasees. Beard expressly acknowledges that DCHA has discharged all obligations due her.

The parties further recognize, acknowledge, and agree that this Agreement may be revoked by Beard within seven (7) days of her signing this Agreement. Any such revocation must be in writing and delivered by hand to Hans Froelicher, in his capacity as acting General Counsel for DCHA. (Def.'s Mot. to Dismiss ("Def.'s Mot."), Ex. 1 at 2-3.) On December 5, 2007, Beard received and cashed a check from DCHA for $4,351.51, which constituted the agreed-upon settlement payment less the required deductions for state and federal income tax withholding. (Def.'s Mot. Ex. 2.) While the parties dispute whether Beard revoked the release, the parties agree that Beard kept the proceeds from the check. (Pl.'s Reply at 4-5.)

DCHA moves to dismiss or alternatively for summary judgment under Federal Rules of Civil Procedure 12(b)(6) and 56, solely on the theory that Beard's claims were barred by a prior accord and satisfaction. Beard opposes DCHA's motion, and cross-moves for partial summary judgment. DCHA opposes that motion, arguing that Beard was an administrative employee, and therefore was not entitled to the protections of the FLSA.

DISCUSSION

A party may move under Federal Rule of Civil Procedure 12(b)(6) to dismiss a complaint for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). "If, on a motion under Rule 12(b)(6) . . . matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56." Fed. R. Civ. P. 12(d). Because DCHA attached the release that forms the basis for its claim of accord and satisfaction to its motion to dismiss, matters beyond the pleadings will be considered, and DCHA's motion will be treated as one for summary judgment. See Wiley v. Glassman, 511 F.3d 151, 160 (D.C. Cir. 2008); Mulhall v. Dist. of Columbia, 747 F. Supp. 15, 19 (D.D.C. 1990).

Summary judgment may be granted only where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); Galvin v. Eli Lilly & Co., 488 F.3d 1026, 1037 (D.C. Cir. 2007). A fact is material if it is capable of affecting the outcome of the litigation. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue is one where the "evidence is such that a reasonable jury could return a verdict for the nonmoving party," as opposed to evidence that "is so one-sided that one party must prevail as a matter of law." Id. at 251-52. The party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Arrington v. U.S., 473 F.3d 329, 337 (D.C. Cir. 2006). In considering whether there is a genuine issue of material fact, a court must draw all reasonable inferences in favor of the non-moving party. Anderson, 477 U.S. at 255; see also Wilson v. CARCO Group, Inc., 518 F.3d 40, 41 (D.C. Cir. 2008).

I. ACCORD AND SATISFACTION

The maximum-hours provision of the FLSA requires employers to pay any employee who is covered by the Act "not less than one and one-half times the regular rate at which [she] is employed" for all hours worked in excess of forty in a week. 29 U.S.C. § 207(a)(1). All hours of employment count for purposes of overtime calculation, so long as the "employer knows or has reason to believe that [the employee] is continuing to work." 29 C.F.R. § 785.11. An employer who violates the Act "shall be liable to the employee or employees affected in the amount of [the employee's] unpaid overtime compensation, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b).

DCHA argues that Beard's claims for unpaid benefits, unpaid wages, unpaid overtime wages and liquidated damages under the FLSA are barred by an accord and satisfaction, because Beard accepted $4,351.51 under the terms of the release Beard signed.*fn2 Accord and satisfaction is a "method of discharging and terminating an existing right and constitutes a perfect defense in an action for enforcement of the previous claim." Johnson v. Mercedes Benz, USA LLC, 182 F. Supp. 2d 58, 65 (D.D.C. 2002) (quoting Pierola v. Moschonas, 687 A.2d 942, 947 (D.C. 1997)). "An accord is a contract between two parties for the settlement of an existing claim," and satisfaction refers to "the execution or performance of the settlement agreement." Valcon II, Inc. v. United States, 26 Cl. Ct. 393, 396 (1992); see also Consolidated Indus. v. United States, 195 F.3d 1341, 1344 (Fed. Cir. 1999). An accord and satisfaction occurs when "'some performance different from that which was claimed as due is rendered and such substituted performance is accepted by the claimant as full satisfaction of his claim.'" O'Connor v. United States, 308 F.3d 1233, ...


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