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Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 

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FILED 

UNITED STATES COURT OF APPEALS United State .. Cc :r, oi Appeals ,,...,,...+l, n,;,.(',1it 

TENTH CIRCUIT 

AUSTILENE BORUM 

Plaintiff-Appellee, 

vs . 

DILLARD DEPARTMENT STORES, INC., 

Defendant-Appellant. 

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FEBO 7 1991 

~OBERT L. HOECKER 

Clerk 

No. 90-6245 

(D.C. No. CIV-89 1574 P) 

(W. D. Okla. ) 

ORDER AND JUDGMENT* 

Before LOGAN, MOORE and BALDOCK, Circuit Judges.** 

Defendant-appellant Dillard Department Stores, Inc. 

(employer) appeals based upon a jury verdict awarding the 

plaintiff-appellee (employee) $2,456.90 in compensatory damages, 

and a like amount awarded as liquidated damages, for the failure 

to pay overtime wages. See 29 U.S.C. §§ 207(a)(l), 216(b), 260. 

In awarding compensatory damages over three years, the jury found 

t hat employer's violation was wilful, 29 u.s.c. § 255(a); 

McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988); thus, 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of law of the 

case, res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

** After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist in the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause therefore is ordered 

submitted without oral argument. 

Appellate Case: 90-6245 Document: 010110098469 Date Filed: 02/07/1991 Page: 1 
the limitations period for damages was extended from two to three 

years. The court, based upon advisory answers to interrogatories 

submitted to the jury, awarded liquidated damages in a like 

amount, finding that employer had not met its burden to show both 

that it had acted in good faith and with reasonable grounds for 

believing it did not violate the Fair Labor Standards Act (FLSA), 

22 u.s.c. §§ 201-219. See 29 u.s.c. § 260; Sinclair v. Automobile 

Club of Oklahoma, 733 F.2d 726, 730 (10th Cir. 1984). 

On appeal, employer contends that the district court erred in 

admitting the testimony of several of employee's witnesses because 

the probative value of their testimony was substantially 

outweighed by the danger of unfair prejudice, confusion of the 

issues and misleading the jury. Fed. R. Evid. 403. In an 

appellate challenge under Rule 403, we will review the district 

court's decision to admit evidence for a clear abuse of 

discretion. C.A. Assoc. v. Dow Chemical Co., 918 F.2d 1485, 1489 

(10th Cir. 1990). The first step is to review whether the 

evidence is relevant. Id. Then the probative value and the need 

for the evidence is balanced against any unfair prejudice which 

may result from its admission. Id. Outright exclusion of 

evidence under Rule 403 is appropriate only where the probative 

value of the evidence is substantially outweighed by the danger of 

unfair prejudice. We have repeatedly recognized that exclusion of 

relevant evidence on Rule 403 grounds is a drastic remedy to be 

used sparingly. Id. at 1490; Dow Chemical Corp. v. Weevil-Cide 

Co., 897 F.2d 481, 488 (10th Cir. 1990); Wheeler v. John Deere 

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Co., 862 F.2d 1404, 1410 (10th Cir. 1988). See also Fed. R. Evid. 

105 (availability of a limiting instruction). 

Employer objected to the admission of the testimony of the 

following witnesses: Norma Sheperd, Joy Botchlet, Glenna Shrum, 

Terry Everhart and Marlene Armstrong. The district court insisted 

on detailed proffers and, after performing the requisite Rule 403 

balancing, limited the testimony. We have reviewed the testimony 

of these witnesses in the context of the entire trial and do not 

find abuse of discretion in light to the factual issues presented. 

See generally rec. vol. I, doc. 41 at 2-3 (final pretrial order). 

Employee worked at employer's Sooner Fashion Mall store in 

Norman, Oklahoma from June 1984, until October 1988. At trial, 

she attempted to show that the employer frequently assigned tasks 

well in excess of what could be done in a normal workday, thereby 

necessitating "off-the-clock overtime" because of budget 

restrictions communicated by management. Another material issue 

was whether employer acted wilfully, entitling employee to a 

three-year limitation period. Employee sought to prove that 

managerial employees of employer either knew or showed reckless 

disregard for the matter of whether "off-the-clock" or 

uncompensated overtime was prohibited by statute. See McLaughlin, 

486 U.S. at 130. 

Norma Sheperd was employee's predecessor at the Sooner store. 

Employee testified that Shepherd had warned her to "'be careful of 

the hours that you work because you will be giving them a lot more 

hours than you get paid for.'" Rec. vol. II at 5. Sheperd was a 

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salaried employee, not subject to the time-and-a-half provision of 

the FLSA. Notwithstanding, the trial court admitted her testimony 

for the limited purpose of showing that the job, which took on 

added responsibilities under employee's tenure, could not be 

completed in forty hours per week. Id. vol. III at 96. Employer 

brought out on cross-examination that Sheperd had no personal 

knowledge of the hours employee worked, having left one week after 

employee began. Id. at 98-99. 

Joy Botchlet, a former hourly employee at other stores of the 

employer, testified concerning uncompensated overtime and her 

unsuccessful attempts to meet with one of employer's store 

managers. Employer brought out on cross-examination that Botchlet 

worked in only two of the employer's stores and lacked personal 

knowledge about events in other stores. Botchlet also reported a 

confrontation between an assistant store manager and an employee 

who had worked overtime and then sought additional compensation. 

The district court admitted this evidence to show a corporate 

policy of employer, which directly relates to wilfulness, id. at 

167-69; however, Botchlet's proffered testimony concerning 

non-managerial employees who allegedly had worked uncompensated 

overtime did not survive a Rule 403 balancing and was excluded. 

Id. at 169-70. The district court required employee to link the 

testimony with a policy: 

I will not let the case degenerate into five or six 

trials involving a bunch of low level employees or 

managerial people unless its going to provide the jury a 

window to the issue we are supposed to be litigating in 

this phase. That is whether or not there was a 

corporate policy. 

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Id. at 170. Plainly, Botchlet's testimony pertained to employer 

notice, knowledge and wilfulness concerning uncompensated overtime 

and the district court exercised reasonable discretion in both 

admitting and limiting that testimony based upon Rule 403. 

Glenna Shrum, an operations manager at another store, 

testified concerning three complaints she received concerning 

overtime. One of those complaints was reported to a 

vice-president of personnel who said he would take care of the 

problem. Another complaint was reported to a store manager, who 

reportedly responded that unreported overtime "'was the Dillard's 

way' or something [similar)." Id. vol. IV at 237. This evidence 

plainly addresses notice, knowledge and wilfulness. 

So did the testimony of Terry Everhart, an hourly employee at 

another store, who testified that the store's operations manager 

told her she had to finish her work, regardless. She testified 

that she had overheard a conversation between the acting store 

manager, the merchandising manager and an employee who was upset 

and crying because that employee was not being paid for hours 

worked. On cross-examination, Everhart admitted she did not know 

whether the employee had been paid, and that on two occasions 

Everhart went to the personnel representative and successfully 

sought payment for hours already worked in excess of forty. 

Everhart's testimony goes to notice, knowledge and wilfulness. 

Employer's objections to the testimony of Marlene Armstrong, 

a salaried area sales manager at the Sooner store where employee 

worked, border on the frivolous. Armstrong testified that she 

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supervised hourly employees and that she was aware of many 

employees who worked in excess of forty hours per week during the 

Sooner store's grand opening. She testified about the importance 

employer placed upon meeting budgets and that two of her employees 

worked without clocking in or out, taking uncompleted work home. 

Armstrong did not offer to pay these employees or have them clock 

in. She also testified that plaintiff employee confided that she 

was not reporting overtime and verified that plaintiff employee 

left the store after hours on occasion. Armstrong's testimony was 

highly relevant concerning the practice at the Sooner store, as 

well as notice, knowledge and wilfulness of the employer. 

Employer directs our attention to Schrand v. Federal Pacific 

Elec. Co., 851 F.2d 152 (6th Cir. 1988), an age discrimination 

case in which the district court's decision to admit testimony of 

two former employees concerning the reasons for their termination 

was reversed. The two former employees, who worked in different 

geographical areas from the plaintiff, testified that they were 

told that they were being terminated because they were "too old." 

Id. at 156. Their testimony was the only direct evidence of age 

discrimination in the case and the plaintiff expressly was not 

attempting to establish a pattern or practice case. Id. at 156. 

Schrand is simply factually inapposite. Norma Sheperd and 

Marlene Armstrong worked at the Sooner Mall store, and Joy 

Botchlet, Glenna Shrum, and Terry Everhart worked in other 

employer stores in Oklahoma. Unlike the Schrand plaintiff, 

employee adduced direct and circumstantial evidence of employer 

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disregard of the FLSA concerning overtime. Likewise, employee 

sought to show a corporate policy to prevail on the wilfullness 

issue, which the Schrand court recognized as relevant and 

admissible. Id. at 152. We think that factual differences 

between this case and Schrand require different results. 

While we recognize that some of the evidence admitted did not 

pertain directly to the Sooner Mall store, we think that the 

district court properly limited the plaintiff's proof for 

permissible purposes, including foundation, as outlined above. A 

limiting instruction was given indicating that certain evidence 

would be admitted for a limited purpose: "The plaintiff is trying 

or wants to show in this case that there was a corporate wide 

policy of violating the Fair Labor Standards Act by not paying for 

overtime that was worked." Rec. vol. IV at 189. Employer's 

appeal is short on showing unfair prejudice, let alone showing 

that such prejudice substantially outweighed the probative value 

of the evidence admitted. The district court exercised 

commendable discretion which we may not lightly overturn. 

AFFIRMED. 

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Entered for the Court 

Bobby R. Baldock 

Circuit Judge 

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