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Hajiani v. Esha USA, Inc.

United States District Court, E.D. Tennessee

November 7, 2017

ESHA USA, INC., et al., Defendants.



         This civil action is before the Court on defendants' Motion for Partial Summary Judgment [Doc. 36] and Motion to Dismiss [Doc. 38], the latter of which the Court converted to a motion for summary judgment under Federal Rule of Civil Procedure 12(d) because defendants attached and relied upon an exhibit [Doc. 46]. Plaintiff, proceeding pro se, responded in opposition to these motions [Docs. 42-43]. Defendants then filed replies [Docs. 44-45], to which plaintiff responded yet again [Doc. 47]. Defendant's motions are thus fully briefed and ready for disposition. For the reasons stated below, the Court will grant defendants' motions for summary judgment.

         I.. Background

         A. Factual Background

         This case concerns allegations of unpaid overtime wages under the federal Fair Labor Standards Act (the “FLSA”), 29 U.S.C. §§ 201-19, along with various other civil wrongs. Plaintiff Salim Hajiani alleges that defendants employed him in their gas-station convenience store from approximately October 10, 2011, to January 10, 2012 [Doc. 1 ¶¶ 12-13]. The store is owned by defendant ESHA USA, Inc. (“ESHA”), a Tennessee corporation, and plaintiff alleges that defendants Sameer Ramjee and Jamaludin Sayani own ESHA and control its operations [Id. ¶¶ 2, 25-28]. Plaintiff asserts that he routinely worked over forty hours per week as a cashier, but did not receive overtime pay for this work [Id. ¶¶ 15-16]. Plaintiff further alleges that he regularly sold goods moving in interstate commerce as part of his work [Id. ¶¶ 17-21]. Plaintiff submits that Ramjee and Sayani supervised and controlled his work schedule and activities [Id. ¶¶ 30-33].

         In addition, plaintiff alleges that, after some time passed, he began to demand payment of unpaid regular and overtime wages from defendants [Id. ¶¶ 38-39]. Plaintiff claims that defendants terminated his employment on January 10, 2012, in retaliation for making these demands [Id. ¶ 40]. Further, plaintiff asserts that Ramjee and Sayani made derogatory remarks to other potential employers who called for a reference-specifically, that plaintiff was a “bad worker” who would sue them-and that these remarks have made it difficult for plaintiff to find other work [Id. ¶¶ 41-42]. Plaintiff also asserts that defendants denied him the rest and meal breaks mandated by Tennessee law and required him to live nearby and stay on-call from 6:00 a.m. to midnight, every day [Id. ¶¶ 32-54]. Plaintiff alleges that he generally worked five to six days per week [Id. ¶ 55].

         All parties concede that they entered into a Confidential Settlement Agreement and Release (the “Settlement Agreement”) relating to some or all of plaintiffs' allegations in February 2012 [See Doc. 38 p. 2; Doc. 43 p. 1]. Plaintiff was then represented by counsel, though he has represented himself in this litigation [Doc. 44 p. 2]. One provision of the Settlement Agreement provides as follows:

Hajiani hereby releases and forever discharges ESHA USA, Inc. and RAMJEE, their agents, employees, insurers, predecessors, successors, assigns, and all other persons or entities in any way related to or affiliated with ESHA USA, Inc. and RAMJEE of and from any and all complaints, claims, demands, causes of action, obligations, damages or any other fault or liability, in contract, by statute, or in tort, however, described, whether or not now known, suspected, or claimed, direct or indirect, which Hajiani has had, currently has or may have against ESHA USA, Inc. and RAMJEE arising from the payment of wages, including overtime wages, and all claims asserted or which could have been asserted under the FLSA.

[Doc. 37-1 ¶ 3]. Defendants argue that this Settlement Agreement should be dispositive of this action [Doc. 37 p. 2; Doc. 38 p. 2]. Plaintiff concedes that he signed the Settlement Agreement, but contends that this agreement did not fully compensate him for the violations of federal and state law defendants committed, and thus did not constitute a total release of his claims against them [Doc. 43 p. 1].

         B. Procedural History

         On December 22, 2014, plaintiff filed a complaint against defendants in this Court, seeking monetary relief for failure to pay overtime wages in violation of the FLSA, retaliatory discharge, defamation, unjust enrichment, breach of contract, and other theories [Doc. 1]. After various case-administration and discovery disputes, defendants filed a motion for partial summary judgment and accompanying memorandum of law on May 4, 2017 [Docs. 36-37]. That same day, defendants filed a motion to dismiss, to which they attached an exhibit-a copy of the Settlement Agreement discussed above [Docs. 38, 38-1]. Plaintiff filed responses to these motions on July 19, 2017 [Docs. 42-43], to which defendants then replied [Docs. 44-45].

         Then, on July 26, 2017, the Court entered an order providing notice to the parties that, because defendants had attached an exhibit to their motion to dismiss and relied upon it therein [Docs. 38, 38-1], the Court would treat this motion as one for summary judgment pursuant to Federal Rule of Civil Procedure 12(d) [Doc. 46]. In compliance with Sixth Circuit case law, see, e.g., Bruce v. Corr. Med. Servs., Inc., 389 F. App'x 462, 465 (6th Cir. 2010), the Court permitted the parties fourteen days from entry of that order to file any additional materials pertinent to the resolution of defendants' motion [Doc. 46 p. 2]. Plaintiff filed a short additional response on August 11, 2017 [Doc. 47], but the parties have not otherwise filed any supplemental materials pertaining to defendants' dispositive motions. Thus, the Court will resolve defendants' motions-treating both as motions for summary judgment-on the record as it currently stands.

         II. Standard of Review

          Summary judgment under Federal Rule of Civil Procedure 56 is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party bears the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n.2 (1986); Moore v. Philip Morris Cos., 8 F.3d 335, 339 (6th Cir. 1993). All facts and inferences to be drawn from the record before the Court must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 301 F.3d 937, 942 (6th Cir. 2002).

         Yet, “[o]nce the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations.” Curtis Through Curtis v. Universal Match Corp., 778 F.Supp. 1421, 1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of a particular element, the nonmoving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.

         The Court's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the factfinder. Id. at 250. The Court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the record “to establish that it is bereft of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479- 80 (6th Cir. 1989). Thus, “the inquiry performed is the threshold inquiry of determining whether there is a need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

         III. Analysis

         Defendants have raised various arguments as to why they are entitled to judgment as a matter of law under Federal Rule of Civil Procedure 56 on plaintiff's claims against them [Docs. 36-38, 44-45]. The Court will address each of these arguments, along with plaintiff's responses [Docs. 42-43, 47], in turn. As explained below, the Court finds that defendants are entitled to summary judgment on all seven of plaintiff's claims.

         A. The Settlement Agreement

         First, defendants argue that Counts I, II, IV, and V of the complaint-those arising under the FLSA-are barred because plaintiff released these claims in the Settlement Agreement [Doc. 37 p. 2; Doc. 38 p. 2]. Defendants assert it is undisputed that plaintiff expressly agreed to release all of his claims “in contract, by statute, or in tort, . . . arising from the payment of wages, including overtime wages, and all claims asserted or which could have been asserted under the FLSA” [Doc. 37 p. 2; Doc. 37-1 ¶ 3]. Thus, defendants submit that there is no “genuine dispute as to any material fact” regarding their “entitle[ment] to judgment as a matter of law” on these claims. Fed.R.Civ.P. 56(a).

         Plaintiff responds that, although he did enter into the Settlement Agreement, he “was not fully compensated for his claims. Plaintiff was paid just $5350.00 (which included attorney fees)” [Doc. 42-1 p. 2]. Plaintiff asserts that, because this figure does not cover all of his FLSA claims, the release “should be deemed null and void at this stage” [Id.]. In a later brief, plaintiff further explains that the Settlement Agreement compensated him only for his regular-time work and corresponding overtime wages-not his on-call time, corresponding overtime wages, or his other claims [Doc. 47 p. 1]. Plaintiff alleges that defense counsel originally drafted an agreement broadly releasing all of plaintiff's claims, but that plaintiff refused to sign that version and the current language was adopted instead [Id. at 1-2]. Defendants respond that plaintiff's claim that the Settlement Agreement should be deemed null and void is untenable because plaintiff did not raise this argument in his complaint [Doc. 44 pp. 1-2].

         Were the Court to consider only the arguments described above, the Court would be inclined to agree with defendants that plaintiff released Counts I, II, IV, and V in the Settlement Agreement. “A settlement agreement is a type of contract and is governed ‘by reference to state substantive law governing contracts generally.'” Cogent Solutions Grp., LLC v. Hyalogic, LLC, 712 F.3d 305, 309 (6th Cir. 2013) (quoting Bamerilease Capital Corp. v. Nearburg, 958 F.2d 150, 152 (6th Cir. 1992)). Under Tennessee law, [1] ordinary principles of contract law “govern[] disputes concerning the formation, construction, and enforceability” of settlement agreements. Waddle v. Elrod, 367 S.W.3d 217, 222 (Tenn. 2012). Accordingly, “[t]he literal meaning of the contract language controls if the language is clear and unambiguous.” Dick Broad. Co. v. Oak Ridge FM, Inc., 395 S.W.3d 653, 659 (Tenn. 2013); accord 84 Lumber Co. v. Smith, 356 S.W.3d 380, 383 (Tenn. 2011) (“The intention of the parties is based on the ordinary meaning of the language contained within the four corners of the contract.”).

         Here, contrary to plaintiff's reading, the Settlement Agreement released all of plaintiff's “complaints, claims, demands, causes of action, obligations, damages or any other fault or liability” against defendants “arising from the payment of wages, including overtime wages, and all claims asserted or which could have been asserted under the FLSA” [Doc. 37-1 ¶ 3 (emphasis added)]. Thus, the agreement purports to release all claims arising from the payment of wages-whether or not rooted in the FLSA-and is not limited to wages for “regular time, ” as opposed to “on call time” [Doc. 47 p. 1]. Moreover, permitting plaintiff to now claim that the compensation he received under the bargained-for terms of the Settlement Agreement was insufficient would undermine the purpose of the agreement and defendants' reasonable expectations in executing it. See Lopez v. Taylor, 195 S.W.3d 627, 632 (Tenn. Ct. App. 2005) (noting that a central purpose of contract law is to “protect[] the parties' reasonable expectations and their right to receive the benefits of the agreement they entered into”).

         But that is not the end of the analysis. In reviewing pertinent FLSA case law, the Court has determined that a critical question concerning the Settlement Agreement's enforceability remains unresolved. The parties have not briefed or even mentioned this issue-i.e., whether the Settlement Agreement is void under the FLSA, as discussed further below. The Court is, however, mindful of its duty to “liberally construe the briefs of pro se litigants and apply less stringent standards to parties proceeding pro se than to parties represented by counsel.” Bouyer v. Simon, 22 F. App'x 611, 612 (6th Cir. 2001). Given plaintiff's pro se argument that the Settlement Agreement is “null and void” [Doc. 42-1 p. 2], as well as the significant concerns of federal public policy implicated here, the Court finds it appropriate to consider this issue at this time.

         The FLSA requires employers engaged in interstate commerce to provide overtime compensation, at a rate of at least one-and-a-half times the normal pay rate, to covered employees who work more than forty hours in a week. 29 U.S.C. § 207(a)(1). Employers who violate this duty are liable for both the unpaid overtime wages and statutory liquidated damages. Id. § 216(b). Congress adopted the FLSA out of “recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency.” Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706 (1945). Thus, as a general rule, “FLSA rights cannot be abridged by contract or otherwise waived because this would nullify the purposes of the statute and thwart the legislative policies it was designed to effectuate.” Craig v. Bridges Bros. Trucking LLC, 823 F.3d 382, 388 (6th Cir. 2016) (quoting Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981)). Specifically, permitting waiver of FLSA rights through private bargaining would undermine ...

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