Perez v. El Tequila, LLC, No. 16-5002 (10th Cir. 2017)Annotate this Case
Defendants-Appellants El Tequila, LLC, and Carlos Aguirre (collectively, “El Tequila”) appealed a $2,137,627.44 judgment in favor of Plaintiff- Appellee, Secretary of the Department of Labor (Secretary). El Tequila was a restaurant with four locations (Harvard, Broken Arrow, Owasso, and Memorial) in Tulsa, Oklahoma. In December 2010, an employee from the Harvard location complained to the Department of Labor’s Wage and Hour Division (WHD). The complaint prompted the WHD to investigate the Harvard location (First Harvard Investigation). The First Harvard Investigation consisted of interviews with employees and El Tequila’s owner, Aguirre; examining payroll documents; and touring the restaurant. The payroll records showed employees were paid $7.25 per hour (the minimum wage), worked about forty hours a week, and received overtime when required. Interviews with Aguirre and his employees confirmed this information.The WHD investigator only found recordkeeping violations, and closed the First Harvard Investigation. Additional employee complaints prompted the WHD to investigate the Harvard location a second time. This time, the WHD investigator arrived at the Harvard location unannounced, and discovered several violations. The records Mr. Aguirre provided during the First Harvard Investigation, known as middle sheets, were based on his false summaries of how many hours employees worked, rather than actual clock-in and clock-out times. During the Second Investigation, Aguirre provided the WHD investigator with time sheets that contained actual clock-in and clock-out times. Aguirre withheld these time sheets during the First Harvard Investigation, and many time entries had been “whited-out” and edited to conform with the Federal Labor Standards Act (FLSA). The Second Investigation would reveal that Aguirre instructed employees to lie during their interviews. Time sheets and middle sheets were found to have been falsified. In September 2011, the WHD investigated El Tequila’s Memorial, Owasso, and Broken Arrow locations because Aguirre admitted the same impermissible payment practices were occurring there. In October 2012, the Secretary filed suit because El Tequila refused to pay its employees at the Broken Arrow, Owasso, and Memorial locations for wages from October 2009 to August 2011. On appeal, El Tequila challenged aspects of the investigations and subsequent trial, including the amount of damages ordered against it. Finding no reversible error, the Tenth Circuit affirmed the judgment.