his numbers eighteen eleven nineteen eighteen thirteen thirty eight are out sander cost versus men and kim incorporated at all oral argument not to exceed fifteen minutes per side respect or for the this is not the typical fair labor standards act that appears you know i mean i reserve five minutes for a bottle this is not the typical fair labor standards act that appears before you this is not a case in which employees have come forward and said we were being underpaid or that there was some artificial scheme to pay us last or to do anything that would give the employees not the money that they thought they were entitled this is a case where if an employee was sent home early and didn't work the full fifty two hours forty hours at regular at one eight and twelve hours at over time they were still compensated that amount because the employer had promised them that they would have that amount of hours and if business was slow this is a restaurant so if we had a day like yesterday when a lot of people don't go out and they were sent home early they still paid them the same the prime purpose of the federal that the fair labor standards act was to aid the unprotected and organized and lowest paid of the nation's working population that is those employees who lack sufficient bargaining power to secure for themselves a minimum whether they paid them on a basis of whether or not they worked and actually under the regulations doing it the way they did with the day or not did not day does actually comply with the records but what they did is when the department of labor came in and we addressed that it detail in our reply brief that that does actually fit the way they kept records fit the regulation but when the department of labor came in they said we'll do what you want so they did put in a time clock and then that one fell apart so they did a different one they did everything they could here to be in compliance because their goal is not to underpay as mr hurd testified the goal is to overpay is to because this is a competitive market and it's hard to get a sushi shop and the reason we put all the information in our brief about and in the brief to the court of appeal is the direct district court about prevailing wage and so forth there's people were paid h using the department of labor's own prevailing wage standards they were paid substantially higher than any market in the country but for california so and having a daughter in california you can hardly afford that money i can understand the wages there but the here is not that instance and why we would be asking you to remain in this case because summary judgment is not appropriate here can be found in the district court's own opinion  the district court shot and i quote from the district court's opinion beginning on the docket number eighty one page id number three zero zero seven in this case defendants made a good faith effort to comply with the f l s a and it regulations skipping a few of their pitches many although not all of their employees were compensated generously a little defendants failed to keep adequate in contemporaneous employed time records he disagreed with that or comply with the they the paying overtime they paid their employees handsomely and records after the fact showed that for many employees the weekly wage they received meant it was possible that they were paid an hourly rate at or above minimum wage and then time and a half for hours in excess of forty per week in fact no employees complained about the wages they paid they were paid so if it's possible that the employees were paid records from us and discovery for two years that is not true i carry these up to the bench with me because these are the times the big stamp time records that were produced in discovery unfortunately they weren't part of the record in front of the district court because we had no way to reply to a reply brief and so we actually listed in our our brief that we would like provision to submit these these are the two years of time records that were produced  discovery there bates stamp they're marked out the dental and you can look at the protective order that was entered in this case and it were first to these actual records show that statement that we didn't produce these records is bring a motion to compel her to get the murder and if they didn't get them this part of labor would have sat back and done anything the second question that you have is when they did dock to pay from the employees know what they would do if you worked if you i promised you twelve hours a day i didn't promise you a weekly rage i promised you i would give you judge done at twelve hours a day so if you didn't work at all yesterday you wouldn't get paid i wouldn't deduct it you just wouldn't get paid you would have a zero for your time records on the in punch in and punch out when they put the time clock in back in two thousand and fifteen but you would if you did work and you came in yesterday and i told you at the beginning because you saw all the employment contracts they signed and i'll get to that in a second but if you came in and it was really awful and i said judge i'll go home it's why you would be working in a restaurant to go with me judge double go home where don't have much going on here i would still pay you the twelve hours so whether or not i sent you home at five or you work till the end of the day i would pay you that amount and the government actually admitted that if you look at our reply brief we quote from the the transcript where the judge says no you admit if they had package this differently saying to the government if it packs differently that is if the record keeping was different that they wouldn't be in violation they paid exactly the same amount of wages and the government said yes and they admit it is well in their briefs so here we don't have a case where people weren't paid properly here we have a case where they didn't receive the right amount of wages but the department of labor didn't like the way they kept their records the government his cross appealed on the liquidated damages what's your what's your take on that point the judge was right there the argument that i read to you at the beginning of my argument was from his liquidated damages where he cite and you look at the actual statute it said that they may determine that there is no basis for liquidated damages and that's what the judge did here he actually spent time on that he went through and said that  is paying their employees improperly when they're using a bonus not here to pay you when you don't work but to hide an artificially low better wages it's for someone who is paying their employees stealing their chips is paying their employees a dollar an hour is making them do off the record work is doing any number of those things that's where liquidated damages might apply here you have people who are actually paying their employees more you have the government saying if we repackage that then it wouldn't be a violation if it was indifferent record keeping now that you didn't pay the right dollar amount but that if you had different record keeping you have the  saying the same thing and what this happens is you have an impermissible than if lucky keeping is wrong the remedy is injunctive relief there are no monetary damages so everybody here says the record keeping is wrong they probably paid the right amount but we're going to assess one hundred twelve thousand dollars against them that turns it into an impermissible monetary damages for bad record keeping which the statute does not allow he or no employee claimed that they had a problem the only statement in the just to court says well mrs mangan her affidavit says employees complained they were paid whether it was forty or more no one supported that we produced we asked them for give us the back up to that documents from the employees where they signed recognizing that they were paid properly and we produced every one of those those contracts to rebut that so there isn't a single point yet the judge even points out no employee complained about the wages they pay were paid this is one way or by what they're doing now is to you know here's your hours in calculating if you go home early you don't get paid the employees are actually being paid less then they were before that is not the intent of the fair labor standards act and it isn't the fact that there is a penalty of one hundred twelve thousand should be applied and in this case we've asked to remand not only for those reasons but also there was no hearing or no determination or calculation of the damages in any way to set forth there has to be at least some evidence of a representative testimony here you have an investigator only who who ad gregg where you did object to how the german just how the representative sampling happened you didn't believe in that case that there was any finding of overtime violation five oh yes i'm so sorry thank you so much for your time good morning your honor may it please the court i'm sorry markets for the secretary of labor your honour's in this case sold garden was paying the same amount to its employees each week regardless of the number of hours worked whether they work fewer hours or more hours if they worked more overtime hours than twelve which was so garden's default schedule they didn't receive greater pay that violates that full essays overtime provision in which congress requires that employers pay an additional fifty percent premium for each additional hour working to did think they were complying with it you know the words even if you're right it seems like they did think they were complying with it no one was complaining and i think they thought they were pretty generous while you're on or whether the complaints is not indicative of their employer's intent or whether there was a violation employees might not know their rights they might be afraid of retaliation if they complain and i don't think that that is a important fact in this case i think it's important to the liquidated damages argument that they thought they were complying and well your honor i would argue that there's the evidence is not consistent with the finding that they subjectively believe that they were in compliance given that they weren't keeping the most basic records that would show whether they were paying overtime including the number of hours their employees were working and that they changed their explanation of how they were paying over the course of the case and created reconstructed records that show different methods of payment those behaviors are inconsistent with a genuine belief that that they were in compliance or it's inconsistent to me with the perspective of a small business that you know doesn't can't hire full time accountants probably can't doesn't have a big budget for all of this and i think you're going to you would agree that these requirements can be complicated your argument that are running a small business they can be complicated i'm not sure that they were particularly complicated in this case what they thought they were requires is to pay at least the minimum wage for each hour worked and then fifty percent more than whatever the employees are receiving at their regular rate of base pay for each additional hour of overtime to be decided to pay a fixed amount that they had jested according to their own methods and then in order to explain how that included overtime the created somewhat convoluted reconstructions of their record so they created the confusion where there's a fundamentally simple requirement because in that part of the problem too she should leave i don't know what happened which she did pass away but after the deposition before her deposition could be taken but during the course of the case so that certainly wasn't the issue when they were devising their peace scheme and working with wage and hour during the investigation itself when they didn't change their pay practices and did not come into compliance i would also remind your honor that the liquidated damages standard is that that  incorrect in finding subjective good faith and quite importantly that it erred by not considering object of reasonableness which just can't be shown in this case the fair labor standards act regulations explicitly prohibit the type of payment scheme that so burton was engaged in and if you look at twenty nine c f r seven seventy eight point five hundred b it reads it is not possible for an employer lawfully to agree with his employees that they will receive the same total sum compris retirement overtime compensation in all weeks without regard to the number of overtime hours if any worked in any work week that's plain as day it's not objective we reasonable to think that you can create a scheme where you are not paying your employees different amounts when they work different numbers of to what these people actually did in terms of what was required by the fairly my understanding of this case is that they continued the practices after they took over this was they continued the practices as they had been under the prior ownership so what does this record show of what they actually did your honor they considered in their interest the tories that they knew that there was an overtime requirement that they had to pay an additional premium on hours worked over forty when they took over the business but i think the issue of liquidated damages is not what they affirm and of lee whether they affirmatively knew they were committing a violation but whether they'd taken affirmative steps to determine what their obligations were and to attempt to comply with them ignorance of the law is not does not excuse of course the violation or liquidated damages congress created a policy where employees are entitled to back wages and liquidated damages by default as compensation not as punishment for for deliberately bad behavior but because employees suffer from not receiving their wages how to do is to keep a payment system in place when you take over a business and to allow to assume they're complying with the law your honor i don't see why you would be and you are as an employer obligated to comply with the  mint i get it that it's a basic requirement of funded super basic with what they were doing here but around it was fifty two hour week it was complicated to what they were doing and i don't think it's self evident to everybody that oh of course that's a violation your honor what the record show after they installed the time clock is that employees were frequently working more than fifty two hours a week some of them are working sixty hours so it wasn't consistent but they were paying the same amount to employees who worked more than fifty two hours and i think that asking employees to agree to a fixed amount even if they are going to work more hours in a work week is a fairly simple example of violating the overtime provision of the act and then employer it's very reasonable to assume that employer would know that or should at least be on notice to find out if that is a violation of the overtime provision just what is your view of what the liquidated damages here should have been they should be an amount equal to the back wages that were owed to the employee just out of curiosity because i freely confess it has no really very real bearing here but what happens this business if we say that's what should have happened  the financial circumstances of this restaurant when we join our initiates investigations and fines back wages and never settle and with employers and it arranges payment plans the government is not out to close down business  it's simply the secretary is charged with enforcing the fair labor standards act and explaining to employers and requiring them to comply properly with the act that it did in deciding i mean there is some discretion liquidated damages right i mean your answer is it has to be doubled does it really judge he's not allowed to say ok fine i'll do some but i just don't want to do in other hundred thousand your honor the provision that congress wrote is sexton to sixty says that liquidated damages must be applied unless the employer can meet its burden of showing that it activists objective good faith and object of reason i'm picking up on judge by childers question let's assume you're right and judge the abused its discretion didn't satisfy subjective and objective reasonableness then according to the statute three hundred percent if it has to be one hundred percent if the employer can't make the showing if the employer can then then it can be reduced to any percent zero percent half it's and that's at the discretion of the district court judge that's when  in this case and the event that liquidated damages weren't awarded for an award of pre judgement interest similarly for compensation purposes and the just report failed to address that request and if this court doesn't not reverse on liquidated damages we would ask that it reverse for an  he's was filed i have fifty with a couple years five years ten years of the case was filed in december of twenty fifteen so to be done to know i believe that's correct it's certainly a smaller percentage and then the doubling that the employees are entitled to again because there is no way for small garden to show object of reasonable neath where it's violation is inconsistent with f s a regulations and supreme court case law so there's never an ability to not award nearly no your honor i know other cases it's possible to objectively reasonably believe that an employer is behaving i thought you just said the object of prong is were you in violation of ignorance is no defense at all so were you in violation answer yes does the subjective element even come into it your honor the question for liquidated damages is whether the employer can show that it believed that it was acting in compliance and that belief was objectively reasonable so there are many cases where employers are trying to comply but there is some confusion about the law or the facts of their case in this instance and with the set of facts with this employer and its pay scheme even if as we dispute jet they subjectively believed that they were complying with the overtime provision of the act it was not objectively reasonable to think so because they simply were not paying more for more overtime hours that is violation of the overtime provision and there's no there's no way here in within these specific circumstances there are other cases there are certainly times when employers relieved of the burden to pay liquidated damages properly but here there there can be a real question they were not paying more to employees who worked additional overtime hours even though they were paying more to employees who didn't work the whole shift in other words they're looking at it as if you look at the whole week month whatever and you balance it all out yeah we were in compliance with all that because we actually did but that's not the way they recorded it that's not what their record keeping showed and they weren't in fact paying for actual overtime hours the time and a half even though they were paying for hours not worked at all your honor and usually they were keeping records showing which shifts employees showed up for and paying them based on the number of shifts that correct if you assume that they were paid as assuming that they were working fifty two hours but the haven't presented any evidence that it's factually correct to assume that it worked out to an average because they weren't tracking the hours and they haven't provided any calculations to dispute the region our divisions calculations but in any case deciding that you are going to on average pay people or just yes that's part of what they're complaining about is that they really didn't have the opportunity to provide some of the information you're not talking about they are there across motions for summary judgment and they provided exhibits just as the secretary did and had an opportunity to make their arguments before the district court there is nothing that they were prevented from asserting the as to the records that that opposing counsel addressed the secretary attached to his exhibits to his motion to for summary judgment all of the records say he had received from sol garden provided to the extent they contained the relevant information in order to arrive at the calculations as well as some reasonable inferences and under the mt comment i want to get a question in before your time of course you talked about there being a requirement of as the object divines and i think that the simpler one right they have they are required to show both in order to be relieved of their obligation to pay liquidated damages and judge the erred by not mentioning objective reasonableness at all and we think in this case where the employer was not adjusting pay based on the number of overtime hours worked that it was an objectively reasonable to believe they were in compliance with the act and we are also arguing that the facts here don't show subjective good faith this is an employer the did not keep the most basic records that changed its explanation of how it was paying that changed its explanation of who it had consulted and look whether any conversations about what the required had occurred at all and then the evidence presented about those conversations is so limited that it's impossible to know if it's consistent with this record that the accountant told them what you're doing is in complete violation of the act they haven't presented evidence that they were received advice about their pay scheme and were following it thank you thank you died before this lawsuit ever happened that's how i got involved miss lee died in august of two thousand and fifteen of cancer young woman very sad but died suddenly so this lawsuit wasn't going on and then she died and records  created for this lawsuit that's simply not true the second thing and that's much more important is that counsel has said that this is a situation where if someone worked over twelve hours they were paid overtime that is not true and there is no evidence in the record as to that if you judge these thirty four page opinion not once does she say that he says that the hours were paid but the methodology was used wrong and his opinion basically focuses on an issue of bonus which doesn't fit with the actual cea far for bonuses because this is not one being used to hide an artificially low pa show we brought up in our brief reply brief our third brief on page fifteen page eighty twenty two plaintiffs does not that being the pelleas does an appellate does not cite to any example where an employee working less than fifty two hours a week was underpaid plaintiffs does not say to any example where an employee worked over fifty two hours a week and was either underpaid or not paid for the additional overtime hours that was in our brief it was it right they were sure and the records show they were paid time and a half for any hours over twelve the reason is that the judge donald to answer your question this year for our standard about fixed schedule that allows you to do a fixed schedule is twenty nine c a far five one six point two c so their original documents comply with that c f r and that's why there is an objective belief that you can do it it says employers  quote two years in weeks in which an employee it hears to a schedule indicated by a chalk mark a stillman or other hours other method that hours were in fact worked by him then used an actual no that complies with the chap mark that the actual c a far requires in this case if their schedule of the rushed the times they were open is never more than twelve hours misses her testify to that mr kim testif that if there was some strange rate way that they were they were paid more time while sister counsel says that the pay records actually then show sixty hours that's not true there's none in front of you and ask for the actual records that we had the opportunities to make them not true plaintiffs submitted a brief that said we didn't pay properly and here's the damages and the based on this speculation we came back and said this is based on speculation and here a representative samples of documents that show that that's not the case they came back and said oh no we were talking about what you know you rebutted what we said we're talking about you didn't produce records for a two year period we could not respond to them there's no way to do is sure reprieve that says not true that's why we say to you you look at the protective order in this case and it refers to the records that we produced to show that they did the rest with never open more than twelve hours correct correct afternoon so no and that testimony was also one rebutted there is an employee who came in and said oh no we were supposed to do anything more mrs bangham never says we were supposed to do anything more they stipulated to that where the those are the hours of the restaurant mrs kim testified that she came in and opened the door and she locked up and these are the hours she did it and she was the first in and last to go sure the manager so it's there is nothing in this record that supports the statement you heard that they didn't pay for overtime hours over fifty two hours they said i will pay you your you know pains i will pay you cindy victor you want to make a thousand dollars a day i will pay you would be fancy i would pay you the you know x amount as regular as this is your over to this is what you make you make twenty dollars an hour and if you in the actual twelve hours you'll make thirty dollars an hour and i will guarantee you twenty times a day one hundred sixty and you know whatever the other is times that i will guarantee you that you will make that amount and if i send you home early i won't but if i don't if i have you have to work over look at those employment contracts i w pay you and there is not one thing in this record that shows otherwise so this is not a case where they paid the same regardless of hours they paid overtime time and a half there is no evidence as for liquidated damages their questions pointed out exactly the issue they believed they were doing right they don't speak english their depositions had to be taken in korean with a translator they don't speak english they relied on amy lee who was korean who is the didn't change their records because they're playing games they didn't recalculate they didn't serve recalculated if the department of labor said to them today we want you to jump on your left foot they jumped on her left foot the fact that they changed whenever a part of labor wanted them to shouldn't