Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_13-cv-00550/USCOURTS-azd-2_13-cv-00550-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 29:203 Equal Pay Act

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Adran Morga Mariche, 

Plaintiff, 

v. 

Phoenix Oil, LLC; William J. Donovan, III; 

Kristen B. Donovan; James J. Gaffney, 

Defendants.

No. CV-13-00550-PHX-NVW

ORDER 

 Before the Court is Plaintiff Adran Mariche’s Motion for Partial Summary 

Judgment (Doc. 29), and Defendants’ Cross-Motion for Summary Judgment (Doc. 33). 

Also before the Court is Defendants’ Motion for Summary Judgment re State Law Claim 

(Doc. 38). For the following reasons, summary judgment will be denied on all counts, 

except that Defendants’ motion to dismiss Kristen Donovan will be granted. 

I. BACKGROUND 

 Plaintiff Adran Mariche was employed by Defendant Phoenix Oil at a Phoenixarea convenience store and gas station. For the first two-and-a-half years, Mariche was 

an hourly cashier making $8.50 and then $8.75 per hour. [PSOF ¶ 2]. He was promoted 

to a salaried position on August 20, 2010 and began receiving a weekly salary of 

$453.85, $480.77, and then $500.00 over the next three years. [PSOF ¶¶ 2-3]. 

 Phoenix Oil and Mariche disagree on the material facts surrounding the terms and 

conditions of his employment. Once salaried, Phoenix Oil alleges Mariche took on a 

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managerial role while Mariche asserts he continued to perform the same duties as other 

hourly workers. As part of his salaried position, Mariche claims he was generally 

scheduled to work from 10:00p.m. to 8:00a.m. on weekdays but often had to work an 

additional two hours after his official shift ended. [PSOF ¶ 5]. Phoenix Oil denies that 

Mariche was ever required to stay later than his assigned shift. [DSOF ¶ 31]. 

 During his shifts, Mariche performed some managerial tasks. These included 

receiving shipments, directing the other night shift employee(s), completing end of shift 

paper work, and closing out the cash registers. [PSOF ¶¶ 10, 17, 23]. Mariche also 

performed tasks consistent with a general, hourly employee such as running the cash 

register, restocking shelves, cleaning the store, and overseeing the hot food items. 

[PSOF ¶¶ 10 – 20]. He wore the same shirt as all the other employees and his name 

badge bore no managerial title. [PSOF ¶¶ 31-35]. Mariche claims the store’s day 

manager wore a different color shirt that identified him as a manager, but Phoenix Oil 

states that, per company policy, all employees wore the same uniform and no special 

designation was given to managers. [DSOF ¶ 73]. 

 Mariche also asserts that he was rarely responsible for supervising more than one 

employee, except in the early mornings when a second employee would arrive around 

6:00 or 7:00a.m. [PSOF ¶¶ 8-10]. Phoenix Oil contends that two or three employees 

were on the clock during Mariche’s night shift and that Mariche supervised at least 96 

employee work hours each week. [DSOF ¶¶ 19-21]. When Mariche was present at the 

store, there was only one other employee with him for the majority of his shift. Half of 

the supervisory hours attributed to Mariche by Phoenix Oil are from nights when Mariche 

was not scheduled to work in the store but was still considered in charge of the night shift 

by Phoenix Oil. Mariche disputes that he was managing employees on days when he was 

not scheduled to work. 

 Mariche now brings this Partial Motion for Summary Judgment, contending 

Phoenix Oil misclassified him as an exempt employee under the Fair Labor Standards 

Act (“FLSA”). (Doc. 29). Defendant Phoenix Oil cross-moves for summary judgment, 

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arguing Mariche was properly characterized as an exempt employee under the FLSA. 

(Doc. 33). Phoenix Oil also moves for summary judgment on Mariche’s state law claim 

(Doc. 38), which asserts liability under Arizona law for failure to pay overtime wages. 

See A.R.S. § 23-355. 

II. LEGAL STANDARD FOR SUMMARY JUDGMENT 

Summary judgment is appropriate when the moving party carries its burden of 

demonstrating that there is no genuine dispute as to any material fact and that it is entitled 

to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 

317, 322 (1986). A material fact is one that might affect the outcome of the suit under 

the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual 

issue is genuine if “the evidence is such that a reasonable jury could return a verdict for 

the nonmoving party.” Id. 

 Once the moving party has carried its burden under Rule 56, the party opposing 

summary judgment must “set forth specific facts showing that there is a genuine issue for 

trial.” Anderson, 477 U.S. at 256. The facts are “viewed in the light most favorable to 

the nonmoving party only if there is a genuine dispute as to those facts.” Scott v. Harris, 

550 U.S. 372, 380 (2007). “Where the record taken as a whole could not lead a rational 

trier of fact to find for the nonmoving party, there is no genuine issue for trial.” 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). 

III. MARICHE’S IMMIGRATION STATUS 

 When applying for a job with Phoenix Oil, Mariche presented a social security 

number and driver’s license bearing the name Nicholas Vlisides. [DSOF 7]. The 

Nicholas Vlisides associated with that social security number, however, is an insurance 

agent residing in Texas. [DSOF 10]. Phoenix Oil states that it uses E-Verify 

[DSOF ¶ 9], an online program run by the federal government and used by employers to 

verify that a potential employee is eligible to work in the United States, but Phoenix Oil 

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does not claim that it ran Mariche’s information through the E-Verify system or that the 

system confirmed Mariche’s eligibility to work in the United States. When asked 

whether he used a false identity to obtain employment, Mariche asserted his Fifth 

Amendment right against self-incrimination. [DSOF 51]. 

 When a plaintiff invokes his Fifth Amendment right in response to probative 

evidence offered against him in a civil case, an adverse inference is permitted. See 

Baxter v. Palmigiano, 425 U.S. 308, 318 (1976) (noting that “the Fifth Amendment does 

not forbid adverse inferences against parties to civil actions when they refuse to testify in 

response to probative evidence offered against them”). Mariche’s refusal to discuss the 

use of Mr. Vlisides’s social security number permits an inference that Mariche is an 

unlawful resident of the United States who fraudulently obtained employment through 

the use of another person’s identity. Phoenix Oil contends that Mariche is barred from 

recovering any unpaid wages under the FLSA because he was not authorized to work in 

the United States while employed by Phoenix Oil. 

 Phoenix Oil relies on Hoffman Plastic Compounds v. NLRB, 535 U.S. 137 (2002), 

which holds that a person not authorized to work in the United States is barred from 

recovering back pay under the National Labor Relations Act (“NLRA”). In Hoffman 

Plastic, the plaintiff was fired for engaging in pro-union activities. Id. at 141. The 

National Labor Relations Board determined his firing violated the NLRA, awarded the 

plaintiff back pay, and ordered his employer to reinstate him. Id. The back pay was 

awarded for the time between the plaintiff’s termination and reinstatement, a period 

during which the plaintiff performed no actual work for the employer. Id. At a later 

hearing, the plaintiff admitted he was not legally present in the United States, had no 

authorization to work, and had used another individual’s birth certificate to obtain 

employment. Id. The employer then challenged the award, arguing the plaintiff’s 

immigration status barred an award of back pay under the NLRA. Id. at 142. 

 The Supreme Court agreed, holding that the Board was required to consider how 

Congressional objectives would be impacted by any remedy provided and noting that 

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earlier case law had already established that the Board’s authority was “limited by federal 

immigration policy.” Id. at 145 (citing Sure-Tan, Inc. v. N.L.R.B., 467 U.S. 883, 903 

(1984)). The Court concluded that because the Immigration Reform and Control Act 

(“IRCA”) criminalized the use of fraudulent identifying documents to obtain 

employment, “allowing the Board to award backpay to illegal aliens would unduly trench 

upon explicit statutory prohibitions critical to federal immigration policy.” Id. at 138. In 

overturning the Board’s award, it held that a plaintiff without a legal right to work in the 

United States could not be awarded back pay for a time when the plaintiff did no actual 

work. Id. at 152-53. The Court held that awarding back pay was not essential to 

punishing the employer because other sanctions, such as orders that the employer cease 

its violations of the NLRA, would serve to enforce national labor policy. Id. at 153. 

Hoffman Plastic limited the remedies available to undocumented employees under 

the NLRA but did not disturb their status as employees covered by the statute. Sure-Tan, 

Inc. v. NLRB, 467 U.S. 883, 892 (1984). Like the NLRA, the FLSA broadly defines an 

employee as “any individual employed by an employer.” 29 U.S.C. § 203(e)(1). The 

statute excludes volunteers and other select groups from the definition of employee but 

says nothing about excluding undocumented workers. Id. at § (e). Undocumented 

workers are considered employees under the FLSA. See Lucas v. Jerusalem Café, LLC, 

721 F.3d 927, 934 (8th Cir. 2013) (citing City of Milwaukee v. Ill. & Mich., 451 U.S. 304, 

329 n.22 (1981) (noting that Congress knows how to limit the definition in a statute when 

it means to)). 

A narrow reading of Hoffman Plastic is that it limits the NLRB's remedial 

discretion to afford remedies that conflict with IRCA but does nothing to limit a federal 

court’s discretion to balance the mandates of IRCA against another statute. Rivera v. 

NIBCO, Inc., 364 F.3d 1057, 1068 (9th Cir. 2004). The Ninth Circuit suggested that 

reading, in part, when it held that a district court can bar discovery of a plaintiff 

employee’s immigration status in the liability phase of a Title VII action. Id. 

 But even under a broad reading, Hoffman Plastic does not address whether an 

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undocumented worker can recover for unpaid wages under the FLSA. Two circuits have 

directly addressed the issue and have held that Hoffman Plastic does not bar recovery 

under the FLSA for work already performed by employees who were unlawfully present 

in the United States and could not legally obtain employment. See Lucas v. Jerusalem 

Café, LLC, 721 F.3d 927 (8th Cir. 2013); Lamonica v. Safe Hurricane Shutters, Inc., 711 

F.3d 1299 (11th Cir. 2013); see also Maderia v. Affordable Housing Foundation, Inc., 

469 F.3d 219, 243 (2d Cir. 2006) (noting that employees in violation of IRCA are still 

entitled to back pay under the FLSA). 

As the cases supporting recovery under the FLSA note, a key difference between 

the NLRA plaintiffs in Hoffman Plastic and an FLSA plaintiff is that “an FLSA plaintiff 

is not attempting to recover back pay for being unlawfully deprived of a job that he could 

never have lawfully performed. Rather, he simply seeks to recover unpaid minimum 

wages and overtime for work already performed.” Lamonica, 711 F.3d at 1308 (internal 

citations and quotations omitted, emphasis in original). A remedy for back pay under the 

FLSA “merely ensures that the employer does not take advantage of the violation by 

availing himself of the benefit of undocumented workers' past labor without paying for it 

in accordance with minimum FLSA standards.” Madeira, 469 F.3d at 243. “Holding 

employers who violate federal immigration law and federal employment law liable for 

both violations advances the purpose of federal immigration policy by offsetting what is 

perhaps the most attractive feature of unauthorized workers—their willingness to work 

for less than the minimum wage.” Lucas, 721 F.3d at 936 (internal citations and 

quotations omitted). 

 Under this unanimous lower court authority, Mariche may bring suit 

under 29 U.S.C. §§ 206(a), 207(a), 216(b) to recover statutory damages for work 

actually performed. Although the FLSA permits equitable remedies in certain 

circumstances, because Mariche seeks only money damages, we do not address whether 

equitable remedies would be available to an undocumented worker suing under the 

FLSA. Because Mariche’s immigration status does not undercut his FLSA claim, 

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evidence regarding his immigration status or its connection with his employment will be 

inadmissible at trial, unless it is relevant for some other purpose and not unduly 

prejudicial. Defendant Phoenix Oil’s Motion for Summary Judgment on this issue will 

be denied. Furthermore, Plaintiff will be entitled at trial to judgment as a matter of law 

against this defense. 

IV. UNCLEAN HANDS

 Phoenix Oil next asserts Mariche’s recovery should be barred by the doctrine of 

unclean hands because Marchie fraudulently used another person’s social security card 

and birth certificate to obtain employment. Phoenix Oil also asserts Mariche possesses 

unclean hands because he was fired for doctoring court documents to make it appear that 

a store manager was involved in criminal activity. As discussed above, Mariche’s 

immigration status has no bearing on his ability to recover unpaid wages. In analyzing 

Phoenix Oil’s unclean hands defense, it is only Mariche’s doctoring of documents to 

make it appear that a store manager was involved in criminal activity that may be 

considered. 

The doctrine of unclean hands is “a self-imposed ordinance that closes the doors 

of a court of equity to one tainted with inequitableness or bad faith relative to the matter 

in which he seeks relief, however improper may have been the behavior of the 

defendant.” Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814 

(1945). Here, Mariche seeks money damages, not equitable relief. Phoenix Oil cites to 

no persuasive authority suggesting the doctrine of unclean hands should be extended to 

bar an award of money damages in this case. Even if Mariche was seeking equitable 

relief, the defense ordinarily does not apply “where Congress authorizes broad equitable 

relief to serve important national policies.” McKennon v. Nashville Banner Pub. Co., 513 

U.S. 352, 360 (1995) (denying an employer’s request to apply the unclean hands defense 

to bar all equitable recovery in a case involving violations of the Age Discrimination in 

Employment Act). 

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 The Supreme Court has, however, carved out one exception to the general rule that 

an employer cannot use unclean hands to defend against an employment action. In 

McKennon, the court held that if an employee would have been fired for his bad acts if 

the bad acts had been discovered at the time of their commission, then the employer may 

offer evidence of those bad acts to mitigate money damages owed for work performed 

after the bad acts occurred. Id. at 362-63. But the exception does not save Phoenix Oil’s 

claim because Mariche performed little to no work after submitting the fraudulent court 

documents. [DSOF ¶¶ 12-16]. Phoenix Oil quickly discovered the documents were 

faked and proceeded to fire Mariche for submitting them. [Id.]. Thus, there was no 

period of time during which Mariche remained employed only because Phoenix Oil was 

ignorant of his bad acts. Phoenix Oil’s Motion for Summary Judgment on the theory that 

Mariche’s recovery is barred by the doctrine of unclean hands is denied. 

V. MARICHE’S STATUS AS AN EXEMPT EMPLOYEE UNDER THE FLSA

If an employee is required to work more than forty hours in a week, the FLSA 

requires an employer to pay the employee an overtime rate of one and one half their usual 

hourly rate for each additional hour worked beyond the forty hour threshold. 29 U.S.C. 

§ 207(a)(2)(C). An employer is exempted from paying overtime if an employee “is 

employed in a bona fide executive, administrative, or professional capacity.” Id. at 

§ 213(a)(1). “An employer who claims an exemption from the FLSA[’s overtime 

requirements] has the burden of showing that the exemption applies. The FLSA is to be 

liberally construed to apply to the furthest reaches consistent with Congressional 

direction. To that end, FLSA exemptions are to be narrowly construed against employers 

and are to be withheld except as to persons plainly and unmistakenly within their terms 

 and spirit.” Webster v. Pub. Sch. Emps. of Wash., Inc., 247 F.3d 910, 914 (9th Cir. 2001) 

(internal citations and quotations omitted). 

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 Phoenix Oil contends Mariche was employed in a bona fide executive capacity, 

meaning he held an exempt status under the FLSA and was not entitled to overtime pay. 

To establish this, Phoenix Oil must show that: (1) Mariche was “compensated on a salary 

or fee basis at a rate not less than $455 per week,” (2) his primary duty was “management 

of the enterprise” in which he was employed, (3) he customarily and regularly directed 

the work of “two or more other employees,” and (4) he had “the authority to hire or fire 

other employees” or that his “suggestions and recommendations as to the hiring, firing, 

advancement, promotion or any other change of status of other employees [were] given 

particular weight.” 29 C.F.R. § 541.100(a). Phoenix Oil must also show that Mariche 

earned at least $455 per week. 29 C.F.R. § 541.100(a)(1). Because both parties move for 

summary judgment on whether Mariche was had status under the FLSA, each bears the 

respective burden of proving that there is no issue of material fact with respect to their 

view of Mariche’s job duties and salary. 

 The parties dispute nearly every material fact pertaining to the question of whether 

Mariche qualified as an exempt employee under the FLSA. They dispute his job duties, 

the number of employees he supervised, and whether he hired or fired employees. They 

also dispute whether deductions taken for cash register shortages ever brought his salary 

under the minimum threshold for an exempt employee. See Mayhue’s Liquor Stores, Inc. 

v. Hodgson, 464 F.2d 1196 (5th Cir. 1972) (holding that a general deduction for cash 

register shortages tends to “shift part of the employer's business expense to the 

employees” and is impermissible if the deduction drops an employee’s salary below the 

statutory minimum). The evidence submitted by both parties is conflicting and 

contradictory on all dispositive issues. “At the summary judgment stage, the trial 

judge’s function is not himself to weigh the evidence and determine the truth of the 

matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 

242-43. Whether Mariche was an exempt employee is a question that must be reserved 

for trial. Summary judgment will be denied to both parties. As liability has not yet been 

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determined, the type and amount of damages Mariche may be entitled to will also be 

reserved for trial. 

VI. STATUTE OF LIMITATIONS 

 Claims for unpaid wages under the FLSA are generally subject to a two year 

statute of limitations. 29 U.S.C. § 255(a). If an employee can prove that an employer’s 

violation of the statute was willful, the statute of limitations is extended to three 

years. Id. To succeed on a claim that an employer’s conduct was willful, an employee 

must show that the employer was not merely negligent and that, instead, “the employer 

either knew or showed reckless disregard for the matter of whether its conduct was 

prohibited by the statute.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 134 (1988). 

This action was filed on March 16, 2013. If Phoenix Oil’s conduct was willful, Mariche 

would be entitled to back pay for all violations occurring after March 16, 2010. If 

Phoenix Oil’s conduct was not willful, Mariche would only be entitled to back pay for 

violations occurring after March 16, 2011. 

 At this stage, Mariche has established a genuine question of fact as to whether 

Phoenix Oil’s violations of the FLSA, if any, were willful. Whether Mariche is entitled 

to a two or three year statute of limitations is a question for the jury. Phoenix Oil’s 

motion for summary judgment on the applicable statute of limitations will be denied. 

VI. DISMISSAL OF KRISTEN DONOVAN 

Phoenix Oil moves for summary judgment on the issue of whether defendant 

Kristen Donovan should be dismissed from the suit. Mariche alleges Kristen Donovan, 

owner William Donovan’s wife, supervised him on occasion and should remain a 

defendant. [PSSOF ¶ 51]. Under the FLSA an employer is “any person acting directly or 

indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. § 203(d). 

The Ninth Circuit has “held that the definition of ‘employer’ under the FLSA is not 

limited by the common law concept of ‘employer’ but is to be given an expansive 

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interpretation in order to effectuate the FLSA's broad remedial purposes.” Boucher v. 

Shaw, 572 F.3d 1087, 1090-91 (9th Cir. 2009) (internal citations and quotation omitted). 

 In support of its assertion that Kristen Donovan should be dismissed, Phoenix Oil 

offers an excerpt from Mariche’s deposition where he asserts that a specific female did 

not supervise him or determine his compensation. (Doc 32, Exb. 2). Phoenix Oil’s 

excerpt redacts the preceding lines which presumably identify who Mariche is speaking 

of, but Mariche does not dispute that he was speaking about Kristen Donovan. Phoenix 

Oil also asserts Ms. Donovan was rarely present at the store and was only paid a small 

annual sum for part-time auditing work and other minimal tasks. [DSOF ¶ 66]. The only 

evidence offered by Mariche is his affidavit, in which he states Kristen Donovan 

sometimes came to do inventory and directed him. [PSOF ¶ 51]. This statement alone is 

not enough to create an issue of fact regarding whether Kristen Donovan was his 

supervisor. See Kennedy v. Allied Mut. Ins. Co., 952 F.2d 262, 266 (9th Cir. 1991) 

(noting that “[t]he general rule in the Ninth Circuit is that a party cannot create an issue 

of fact by an affidavit contradicting his prior deposition testimony.”). Phoenix Oil has 

successfully carried its burden of showing there is no genuine issue of fact regarding 

Kristen Donovan’s status as Mariche’s supervisor. Summary judgment will be granted 

for Phoenix Oil on this issue, and Kristen Donovan will be dismissed as a defendant in 

this action.

VII. MARICHE’S STATE LAW CLAIM 

 Also before the Court is Phoenix Oil’s second Motion for Summary Judgment on 

Mariche’s state law claims (Doc. 38) and Mariche’s Response (Doc. 39). Mariche’s 

claim for relief under A.R.S. § 23-350, et seq., is almost identical to his claim for relief 

under the FLSA. (Doc. 47). Accordingly, the same questions of fact that necessitate 

denial of Phoenix Oil’s Cross-Motion for Summary Judgment on Mariche’s FLSA claims 

(Doc. 33) require denial of Phoenix Oil’s Motion for Summary Judgment re: State Law 

Claim (Doc. 38). 

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 IT IS THEREFORE ORDERED that Plaintiff Adran Mariche’s Motion for Partial 

Summary Judgment (Doc. 29) is denied. 

 IT IS FURTHER ORDERED that Defendant Phoenix Oil’s Cross-Motion for 

Summary Judgment (Doc. 33) is denied, except that it is granted as to all claims against 

Defendant Kristen Donovan. 

 IT IS FURTHER ORDERED that Defendant Phoenix Oil Inc.’s Motion for 

Summary Judgment re: State Law Claim (Doc. 38) is denied. 

 Dated this 3rd day of June, 2014. 

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