On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2009-28312
Panel consists of Justices Boyce, Christopher, and Donovan.
Tracy Christopher Justice
For seven years, Ashmita "Stella" Unni Prakash worked as a live-in nanny in the home of Drs. Ashish and Aparna Kamat and was paid less than the federal minimum wage. Prakash sued the Kamats under the Fair Labor Standards Act ("the FLSA"). The jury found that the Kamats were equitably estopped from relying on the statute of limitations and assessed damages for the entire seven years of Prakash's employment. The Kamats challenge the award of all damages for conduct that occurred more than two years before Prakash filed suit. In addition, they contend that the judgment violates the one-satisfaction rule and constitutes a double recovery. In a cross-appeal, Prakash challenges the trial court's failure to award her attorney's fees.
We conclude that the jury's findings in response to the charge's equitable-estoppel and damage questions support the challenged portion of the judgment. We further hold that although Prakash did not waive the right to recover damages for violations that occurred more than two years before she filed suit, she did waive the right to recover attorney's fees. We accordingly affirm the trial court's judgment.
I. FACTUAL AND PROCEDURAL HISTORY
The parties agree that Prakash worked in the Kamat household from January 21, 2001 through January 31, 2008 and that the Kamats' family members in India paid Prakash's husband varying amounts for her services. Prakash and the Kamats offered conflicting evidence about the terms of their agreement, her hours and working conditions, the amount Prakash's husband received, the extent to which any wages due to Prakash should be offset by credit for meals and lodging, and the extent of each side's actual or constructive knowledge about Prakash's wage rights.
A. The Beginning of Prakash's Employment
In 2000, Prakash was supporting herself, her husband, and her seven-year-old son by working as a nurse's aide in Dr. Vendana Walvekar's clinic in India. Prakash had never attended school and could neither read nor write. According to the testimony at trial, she earned monthly wages of between 1, 200 and 3, 000 rupees—an amount that, using the average conversion rate agreed upon the parties' experts at trial, was the equivalent of $26–$65.
Through Walvekar, Prakash learned of an opportunity to earn more money. Walvekar's daughter, Dr. Aparna Kamat, lived in Morgantown, West Virginia with her husband, Dr. Ashish Kamat. The Kamats were expecting a baby, and Walvekar wanted them to have live-in help. She volunteered to pay the employee's wages.
Prakash had worked as a nanny before and was interested in the job. To enable her to obtain a visa to travel to the United States, Walvekar and the Kamats provided a number of documents. In her affidavit to the U.S. Consulate, Walvekar swore that she would pay Prakash a salary equivalent to $100 per week, and she represented that this amount was "the normal weekly daycare charges in the State of West Virginia, Morgantown." Ashish completed a form in which he informed the consulate that if Prakash were allowed to come to the United States, he would be responsible for her room, board, and medical expenses.
In contrast to the statements in her affidavit, Walvekar never paid Prakash her wages directly and never paid her the equivalent of $100 per week. Instead, Walvekar paid Prakash's husband a lesser amount in rupees in India. After six months, Prakash's wages continued to be paid to her husband, but were paid by Ashish's parents.
B. The Length of Prakash's Employment Contract and Stay in the U.S.
The parties dispute the reason for Prakash's long stay in the United States. Prakash attested that the original agreement called for her to work just six months, and that Ashish said he would pay her an additional $1, 500 at the end of that time. Although the Kamats failed to make this lump-sum payment, Prakash stated that she initially agreed to stay until the Kamats replaced her. According to Prakash, she continued to work for them, even moving with the Kamats to Houston, because they said they would bring her husband and son to the United States. Moreover, she testified that when she asked to return to India, the Kamats refused to allow her to do so. She stated that she could not return on her own because she had no money and Ashish kept her passport.
Prakash's employment ended after she happened to meet a relative of her former employer Jotika Ramchandani. Prakash met with Ramchandani on December 30, 2007 and related her version of events, and Ramchandani called Daya, an organization that assists Indian victims of domestic violence. Daya put Ramchandani in touch with Constance Rossiter, the program director of the human trafficking program at YMCA International Services. Prakash's situation was investigated by law enforcement, and on February 1, 2008, agents from the Federal Bureau of Investigation and U.S. Immigration and Customs Enforcement removed Prakash from the Kamats' home.
The Kamats contend that Prakash stayed in the United States so long because she did not want to return to India, and they maintain that Prakash fabricated most of her complaints in an attempt to remain in this country. They deny that they ever said they would bring Prakash's family here or that she lacked access to her passport.
C. Prakash's Wages and Offsets
Prakash's wages were increased several times, but the timing and amount of the increases are disputed. According to the Kamats, Prakash's husband was paid 10, 000 rupees per month (about $217) during the first half of 2001; 15, 000 rupees per month (about $326) in the second half of that year; 18, 000 rupees per month (about $391) from 2002 through 2004; 20, 000 rupees per month (about $435) in 2005 and 2006; and 25, 000 rupees per month (about $543) beginning in 2007. In addition, witnesses for the Kamats testified that Prakash's husband was paid a lump-sum payment of 100, 000 rupees (about $2, 174) in 2002 and 400, 000 rupees (about $8, 696) in 2007. Witnesses for the Kamats also testified that all of these arrangements were made at Prakash's suggestion or with her consent.
In contrast, Prakash testified that her husband was paid 10, 000 rupees per month (about $217) in 2001; 13, 000 rupees per month (about $283) in 2002; 15, 000 rupees per month (about $326) in 2003; and 18, 000 rupees per month (about $391) thereafter. She denied that any lump-sum payments were made. She also testified that she did not agree that her husband should be paid instead of her; that her wages would be paid in rupees instead of dollars; or that she should be paid so little.
D. Prakash's Working and Living Conditions
Perhaps the greatest disparity in the evidence is found in the witnesses' descriptions of Prakash's working and living conditions. According to Prakash, she worked eighteen hours a day, seven days a week, for seven years, and was never given a vacation. She described her duties to include cooking, cleaning, vacuuming, working in the yard, doing the family's laundry and ironing, washing windows, and caring for the children. She stated that she never had a room or even a bed, but slept in a sleeping bag on the floor in the Kamats' son's room. She testified that she was afraid of Ashish because she had seen him strike and choke his wife before. She also described an incident in which he yelled at her and broke her glasses because she laundered one of his shirts improperly.
In contrast to Prakash's testimony, both of the Kamats testified that Prakash worked only five days a week. Ashish testified that she worked an average of five or six hours a day, while Aparna testified that Prakash worked six to eight hours a day. They testified that her duties were to look after the children when the Kamats were at work; to do the children's laundry twice a week; to tidy up after the children; and to cook on Tuesdays, Wednesdays, and Thursdays. They both testified that Ashish never struck Aparna; that Prakash did not do heavy cleaning, yard work, or any laundry or ironing except for the children's clothes; that no one yelled at her; that Ashish did not break her glasses; and that although her passport was usually kept in Ashish's desk drawer or in a portable safe, Prakash had access to it at all times. They testified that Prakash always had a bed and slept in a sleeping bag in one of the children's rooms only when she chose to do so because of back pain.
E. Prakash's Wage Rights
It is undisputed that the Kamats never informed Prakash about her wage rights under federal law. All of the Kamats' other household employees—a housekeeper, a driver, a yard worker, and the two child-care workers they successively employed after Prakash—were paid amounts that exceeded the minimum wage. Aparna testified that until this lawsuit was filed, she never calculated the number of hours that Prakash worked or thought about the minimum wage. She stated that if she had known that the minimum-wage law applied, she would not have had Prakash come to live with them. Even after the Kamats' expert conceded at trial that the federal minimum-wage law applies in this case and identified the minimum wage applicable at different times during Prakash's employment, Ashish continued to deny that it applied to Prakash because, according to the Kamats, Prakash was Aparna's mother's employee.
F. The Jury Charge and Judgment
Ultimately, the Kamats did not object to jury instructions explaining that "this case arises under the Fair Labor Standards Act, a federal law that provides for the payment of minimum wages." They also did not object to instructions that "U.S. minimum wage laws (not Indian laws) apply." The charge instructions identified the minimum-wage rate for each period of Prakash's employment and included an explanation of credits for meals and lodging.
To determine whether Prakash was entitled to recover any damages from the Kamats for their alleged violations of the FLSA, the jury had to resolve disputed fact questions about the hours she worked, the amount that her husband was paid for her services, and the extent to which the Kamats were entitled to any credits for meals and lodging they provided. In addition, the parties disagreed about the applicable limitations period, and this determination also involved questions of fact for the jury.
In the usual case, a cause of action for unpaid minimum wages is subject to a two-year statute of limitations. See Fair Labor Standards Act of 1938, 29 U.S.C. § 255(a) (2012). If the cause of action arises out of a willful violation of the minimum-wage law, the limitations period is three years. Id. The Kamats maintained that the two-year limitations period applied. Prakash alleged both that the Kamats' violations of the FLSA were willful so that the three-year limitations period applied, and that the doctrine of equitable estoppel prevented them from relying on any statutory limitations period. To address each of these scenarios, Prakash's FLSA claims were submitted to the jury in three sets of questions.
The Kamats do not challenge the portion of the judgment that is based on the jury's answer to the first set of questions, which addressed liability and damages for FLSA violations within the two-year limitations period. In answer to Question 1A, the jury found that the Kamats violated the FLSA by failing to pay Prakash the minimum wage during the time period of May 5, 2007 (the date that was two years before she filed suit) through January 31, 2008 (the last day of her employment). In answer to Question 1B, jurors found that the sum of $11, 051 would fairly and reasonably compensate Prakash for those violations.
In the second set of questions, the jury found that the Kamats' actions in violating the FLSA were willful. Jurors were instructed to measure the damages for such willful violations as the difference between what Prakash should have been paid under the FLSA and what she was actually paid, less any applicable credits for meals and lodging, during the period of May 5, 2006 through May 5, 2007—a period of time that is actually one year and one day. The jury found these damages to be $14, 488.
In the third set of questions, the jury found that the doctrine of equitable estoppel prevented the application of the statute of limitations to Prakash's FLSA claims. Jurors were instructed to measure damages as the difference between what Prakash should have been paid under the FLSA and what she was actually paid, less any applicable credits for meals and lodging, during the period of January 21, 2001 (the first day of her employment) and May 5, 2007 (the date that was two years before she filed suit). The jury found these damages to be $95, 220.
The trial court awarded Prakash $106, 271 in FLSA damages. This is the sum of the jury's damages findings in response to Question 1B (measured from May 5, 2007 through January 31, 2008) and Question 3B (measured from January 21, 2001 through May 5, 2007). The result is that Prakash was awarded damages for the entire length of her employment, and the single day of May 5, 2007 was included twice. Pursuant to a federal statute, the trial court also awarded Prakash a further $106, 271 in liquidated damages. See 29 U.S.C. § 216 (2012). Finally, the trial court awarded post-judgment interest and taxed costs against the Kamats. Both sides appealed.
II. ISSUES PRESENTED
The Kamats present five issues for review. In their first issue, they contend that Prakash waived her right to recover damages for any allegedly wrongful conduct that occurred before May 5, 2007, by failing to submit controlling questions to the jury and by failing to obtain material findings that the Kamats violated the FLSA before that date. In their second issue, they argue that the doctrine of equitable estoppel does not apply to Prakash's claims, and that in any event, the evidence is legally and factually insufficient to support the jury's finding that the doctrine prevents the application of the statute of limitations to her claims. They assert in their third issue that the evidence is legally and factually insufficient to support the jury's finding that they acted willfully. In their fourth issue, they argue that reversal and remand is proper because the charge question pertaining to equitable estoppel was defectively submitted and its submission was harmful. Finally, they contend in their fifth issue that the judgment violates the one-satisfaction rule and constitutes a double recovery.
In her cross-appeal, Prakash asserts that she is entitled to recover attorney's fees for trial and appellate proceedings, and she asks that we either enter an appropriate award or remand the case for the trial court to hold a hearing to determine and award an appropriate amount. Prakash also presents two "conditional" issues to be reached only if we reduce or vacate the trial court's judgment. In those issues, she asserts that the trial court erred in refusing to (a) disqualify the law firm of Rusty Hardin & Associates, ...