Julie Su, Acting Secretary of Labor, U.S. Department of Labor, sued Los Cocos Mexican Restaurant, Inc. and several individual defendants in the United States District Court for the District of Kansas, raising claims under the Fair Labor Standards Act (FLSA). Before the court is Plaintiff’s motion for partial summary judgment.
Statement of Undisputed Facts
The case involves six tolling agreements signed between May 2020 and June 2021. These agreements tolled the statute of limitations for FLSA claims from May 16, 2019 (or June 15, 2017 in the last agreement) until the filing of the lawsuit. Defendants Delgado (individually and on behalf of Los Cocos) and Alfaro signed all agreements, while Defendant Alvaro de Leon did not sign any. The Department of Labor (DOL) signed all agreements except the fourth one.
Defendants Delgado and Alfaro claim they did not receive signed copies of the first five agreements from the DOL. The sixth agreement was fully executed and returned to Defendants’ counsel. All agreements included language waiving the statute of limitations defense for the tolling period.
Evidentiary Disputes: Defendants initially objected to the authenticity of the agreements submitted by Plaintiff. However, this issue was resolved as Defendants attached the same agreements to their response, and Plaintiff authenticated them through an investigator’s declaration.
Legal Analysis
Enforceability of Tolling Agreements: The court found all tolling agreements enforceable against Defendants Delgado, Alfaro, and Los Cocos. Under Kansas law, a written contract signed by one party but acted upon by both parties is enforceable. The court held that Defendants accepted the benefit of not being sued during the tolling period and cannot now claim the agreements are unenforceable due to lack of Plaintiff’s signature on some agreements.
Waiver of Statute of Limitations Defense: The court determined that Defendants Los Cocos, Delgado, and Alfaro waived their statute of limitations defense for the period from May 16, 2019, to the filing date of the action. The court emphasized that even if a tolling agreement is not enforceable, a party’s waiver of a statute of limitations defense is still enforceable, citing Tenth Circuit precedent.
Alvaro de Leon’s Liability: The court found that Defendant Alvaro de Leon, who did not sign any agreements, did not waive his statute of limitations defense. His liability is limited to violations occurring from January 6, 2020, or January 6, 2019, if willful violations are proven.
Exclusion of Financial Evidence: The court granted Plaintiff’s motion to exclude evidence of Defendants’ financial condition, including tax returns and profit/loss statements. The court reasoned that such evidence is not relevant to liquidated damages, which are considered compensatory in nature.
Employee Statements and Informer’s Privilege: The court addressed the government’s invocation of the informer’s privilege to protect employee identities in statements provided during the investigation. The court ordered disclosure of unredacted statements on the morning prior to each employee’s testimony, balancing the need to protect informants with Defendants’ right to prepare for cross-examination.
The court granted in part and denied in part Plaintiff’s motion for partial summary judgment, enforcing the tolling agreements against Los Cocos, Delgado, and Alfaro, but not against Alvaro de Leon.
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