United States District Court, D. Hawaii
JAMES J. NAVAJA, Plaintiff,
HONOLULU ACADEMY OF ARTS, STEPHAN JOST DIRECTOR, CHRIS ATHERALL, LINDA FERRARA, JAME HUSBAND, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS VERIFIABLE QUI TAM COMPLAINT FOR EMPLOYMENT FRAUD, HARASSMENT, DISCRIMINATION, RETROACTIVE BACK PAY, FRAUD
LESLIE E. KOBAYASHI UNITED STATES DISTRICT JUDGE.
Before the Court is Defendants Honolulu Academy of Arts (“HAA”), Stephan Jost, Chris Atherall, Linda Ferrara, and Jame Husband’s (“Defendants”) Motion to Dismiss Verifiable Qui Tam Complaint for Employment Fraud, Harassment, Discrimination, Retroactive Back Pay, Fraud (“Motion”), filed on January 12, 2016. [Dkt. no. 18.] Pro se Plaintiff James J. Navaja (“Plaintiff”) has not filed any response to the Motion. On February 11, 2016, this Court issued an entering order finding this matter suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). [Dkt. no. 20.] After careful consideration of the Motion and the relevant legal authority, Defendants’ Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the reasons set forth below.
On August 26, 2015, Plaintiff filed his “Verifiable Qui Tam Complaint for Employment Discrimination, Harassment Retroactive Back Pay, Fraud” (“Complaint”). Plaintiff and all of the individual Defendants are HAA employees: Plaintiff is a Supervisor H-5; Jost is the Director; Atherall is a Supervisor H-2, Chief of Security; Ferrara is the Human Resource Director; and Husband is a security officer. [Complaint at ¶¶ 3, 5-8.]
Plaintiff asserts that he is a full-time HAA employee and is entitled to full benefits. [Id. at ¶ 13.] According to the Complaint, on or about May 2014, Plaintiff discovered that, in June and August 2006, he “worked 9 hours and was only paid for 8.” [Id. at ¶¶ 10-11.] In addition, when he went into the company’s payroll management system, he discovered that the records for that period were missing. Plaintiff alleges that Defendants deprived him of overtime pay for that period through fraud. Although the employee handbook states that a pay period starts on Sunday and ends on a Saturday, Plaintiff argues that the company’s earnings statement shows that the actual pay periods are inconsistent the handbook. [Id. at ¶¶ 11-12.] He alleges that the pay periods “mov[e] around, skirting the 40 hour work week, depriving the plaintiff of overtime, by shifting the pay period over to the next pay period, thereby losing those hours of overtime pay.” [Id. at ¶ 12.]
Plaintiff also states that he “was allegedly shorted of most of his holiday pay by “one hour and a half (1.5), ” i.e. he was only “paid for 6.5 hours.” [Id. at ¶ 13.] He apparently questioned Ferrara about it, but she did not give him an answer. [Id. at ¶ 14.]
Plaintiff states that there was a June 18, 2011 memorandum directive from Jost regarding a mandated forty-hour work week for all HAA departments (“Forty-Hour Directive”). According to Plaintiff, Atherall received the directive, but did not make the required adjustments for the security department. Plaintiff and two other supervisors raised questions about the Forty-Hour Directive, but they were told that it did not apply to their department. Plaintiff, however, argues that there was no documentation to support the alleged exception. In April 2013, Plaintiff raised the issue again with Mike Chock, an Assistant Chief of Security, and Chock was surprised that Plaintiff and others in Atherall’s department never received the mandated adjustment. Chock told Plaintiff that he would talk to Atherall about it. [Id. at ¶¶ 15-20.]
Plaintiff states that, on April 10, 2013, he received a notice from Atherall stating that Plaintiff’s forty-hour adjustment would be effective May 1, 2013. Atherall verbally informed him that HAA could not “pay back all the lost hours for the past years.” [Id. at ¶ 21.] Plaintiff states that HAA job descriptions mandate a forty-hour work week, and there was a July 15, 2005 memorandum that “claim[ed] a 40 hour work week” and was posted on the bulletin board. [Id. at ¶ 22.] Atherall’s statement troubled Plaintiff, and, on February 10, 2014, Plaintiff submitted an internal complaint to Atherall regarding the hours owed to him from July 15, 2005 to May 1, 2013. The internal complaint also addressed eight other security staff whose pay was allegedly affected in the same way. Plaintiff argues that the failure to pay for these uncompensated hours constitutes fraud. [Id.] He also argues that Defendants violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., because, in addition to failing to compensate him for a forty-hour work week, they also avoided paying him overtime and holiday rates. [Id. at pg. 1.]
HAA Deputy Director Wong replied later that day and informed Plaintiff that she would hold a meeting with Atherall and Ferrara the next day. On February 13, 2014, Plaintiff met with Ferrara, who informed him that the forty-hour work week was for salaried employees. Plaintiff asked why they were not given the forty-hour adjustment until May 1, 2013, while the Forty-Hour Directive gave a deadline of July 1, 2011. Ferrara told him that Wong decided to make the adjustment effective on May 1, 2013 for security staff working less than forty hours per week. Ferrara said that Plaintiff’s internal complaint was unfounded, and HAA could not give back pay for hours that employees did not work. Plaintiff argues that, during the meeting, Ferrara would not address the fact that the Forty-Hour Directive mandated the adjustment for all staff and was not limited to particular positions. [Id. at ¶¶ 23-26.]
At some point after the meeting, Plaintiff was informed that he was protected by the whistle blower protection policy. Ferrara told him that the next step in the internal complaint process was before Jost, but Jost never met with Plaintiff to address his internal complaint. Plaintiffs filed the instant action because he is not satisfied with the outcome of his internal complaint. [Id. at ¶¶ 27-28.] Plaintiff alleges that Jost and Atherall violated the Forty-Hour Directive by: failing to make adjustments for the missing hours; and failing to pay overtime compensation that he could have earned if he had been working a forty-hour week. [Id. at ¶ 29.] He alleges that he is “still suffering the financial loss in retroactive accrual of back pay, with interest, work hours, overtime, sick leave, vacation pay, prospectively, with interest, ” and he argues that he would not have suffered these losses if HAA had honored the Forty-Hour Directive. [Id. at ¶ 28.]
Plaintiff also alleges that he was “subjected to discrimination/fraud” in that he was assigned to work at special events without adequate compensation. [Id. at ¶ 30.] According to Plaintiff, Defendants conspired to avoid paying night differential compensation except to favored HAA employees. [Id. at ¶ 31.] Plaintiff also alleges that, on March 10, 2014, Husband accosted him in the security office, yelling at him and bullying him for twenty minutes. Plaintiff cited Husband for harassment and bullying. At the time of that incident, Husband was allegedly living at Atherall’s apartment. Plaintiff provided the disciplinary report to Atherall. Plaintiff emphasizes that the report form includes a provision stating that: 1) an employee or volunteer filing a internal complaint would be provided with a summary of the findings of the investigation; and 2) if the employee or volunteer reported the allegedly unlawful activity, policy, or practice within a reasonable time to allow HAA the reasonable opportunity to investigate and correct the situation, HAA would not retaliate against him. Plaintiff alleges that Atherall did not comply with HAA policy in dealing with his internal complaint. [Id. at ¶¶ 33-37.]
Plaintiff states that this action “is a Qui tam, fraud suit, under 31 U.S.C. §§ 3729-3733, and [a] civil rights case.” [Id. at pg. 1.] The Complaint alleges the following claims: Defendants violated federal and state labor laws by denying Plaintiff pay for hours he worked and by denying him benefits (“Count I”); [id. at ¶¶ 41-43;] Defendants’ denial of his pay and benefits was fraudulent and discriminatory (“Count II”); [id. at ¶¶ 44-45;] a claim that may be a breach of contract claim based on the alleged failure to comply with HAA policies (“Count III”); [id. at ¶¶ 46-47;] and a claim for punitive damages based on Defendants’ allegedly wanton and malicious conduct (“Count IV”) [id. at ¶ 48]. Plaintiff prays for the following relief: a declaratory judgment regarding Defendants’ liability; an order requiring the individual Defendants to resign, without pension or severance benefits; an injunction prohibiting retaliation against Plaintiff and requiring Defendants to produce the policy at issue in this case; an award of back pay and benefits, with interest; compensatory damages of $1, 500, 000.00 against each of the individual Defendants, plus treble damages; $10, 000, 000.00 in damages against HAA, plus treble damages; punitive damages of $1, 500, 000.00 against each of the individual Defendants, and $10, 000, 000.00 against HAA; and costs of suit. [Id. at ¶¶ 49-71.]
In the instant Motion, Defendants argue that: 1) the action fails as a qui tam action because such actions enforce liability for certain acts and claims perpetrated against the federal government; 2) even if Plaintiff could bring a qui tam action for false claims, he failed to comply with the statutory requirements for qui tam actions by a private person; 3) to the extent that Plaintiff alleges discrimination, harassment, and retaliation claims under Title VII of the Civil Rights Act of 1964 (“Title VII”) or Haw. Rev. Stat. Chapter 378, he failed to exhaust his administrative remedies; and Plaintiff’s FLSA claims are barred by the statute of limitations. Defendants ask this Court to dismiss Plaintiff’s Complaint with prejudice.
I. Qui Tam ...