Coker v. Goldberg & Associates P.C.

Background

Sade Coker worked for Goldberg & Associates P.C. for approximately five weeks in the fall of 2020. She sued the Firm and Julie Goldberg under the Fair Labor Standards Act and the New York Labor Law, alleging that she was not paid overtime or spread-of-hours pay and that she was fired after asking for overtime. Defendants asserted that Coker was covered by the administrative exemption and therefore was not entitled to overtime or spread-of-hours pay. They also asserted a good-faith defense to liquidated damages.

During discovery, Coker repeatedly complained that defendants had not fully or promptly responded to her requests. The District Judge ordered defendants to complete outstanding discovery by April 17, 2023, but those orders did not identify particular documents or categories of information. Coker then moved for sanctions, seeking severe relief up to and including a judgment establishing defendants’ liability. She specifically identified withheld WhatsApp audio files exchanged with Goldberg and possible internal WhatsApp messages concerning whether employees were exempt from overtime requirements.

Rule 11 request

The court held that no relief could be granted under Rule 11. Rule 11 generally addresses improper filings and requires a party seeking sanctions to describe the challenged conduct and give the opposing party 21 days to withdraw or correct it. Coker did not comply with that safe-harbor requirement. In addition, Rule 11 does not apply to discovery responses and related discovery matters governed by Rules 26 through 37.

Discovery-order sanctions

Although Coker did not identify another legal basis for sanctions, the court construed her motion under Rule 37(b)(2), which permits sanctions when a party does not obey a discovery order. Available sanctions can include establishing facts, barring evidence, striking pleadings, dismissing claims, entering judgment, or requiring payment of expenses. The court explained that sanctions must be just and connected to the discovery issue involved. Severe sanctions such as default judgment are generally reserved for extreme situations, including willful or bad-faith conduct.

WhatsApp audio files

Defendants acknowledged that they withheld some WhatsApp audio files exchanged between Coker and Goldberg based on attorney-client privilege. They did not provide the privilege log required by Federal Rule of Civil Procedure 26(b)(5) and Local Civil Rule 26.2. The court concluded that defendants violated the April 13, 2023 discovery order by failing to complete discovery as to those files and that sanctions were appropriate.

The court found Coker’s requested default judgment, striking of an affirmative defense, and negative inference about the audio files disproportionate. It also found no indication that the files had been destroyed or that their absence had prejudiced Coker. Instead, the court ruled that defendants waived their privilege claim as to the remaining WhatsApp audio files and ordered them produced no later than February 7, 2024. Because the files might contain sensitive information about the Firm’s clients and their immigration cases, production was limited to an attorneys’-eyes-only basis. Coker’s counsel could disclose or use the files further, including at trial, only with defendants’ written agreement or a further court order.

Other WhatsApp messages

Coker argued that defendants withheld internal messages involving human resources, the executive team, and an attorney concerning employee-exemption decisions. The court was not persuaded that Coker had shown defendants actually withheld those documents or violated the discovery order as to them. However, testimony suggested that Goldberg might possess responsive internal communications, and those communications could be relevant to defendants’ good-faith defense.

Because good faith was an affirmative defense and defendants had the burden of proving it, the court ruled that defendants would be precluded from using previously undisclosed WhatsApp communications to support that defense. The court did not impose the broader sanctions Coker requested.

Disposition

The court granted Coker’s motion only in part: defendants had to produce the withheld WhatsApp audio files on an attorneys’-eyes-only basis, and defendants were precluded from using or relying on previously undisclosed WhatsApp communications to support their good-faith defense. The court declined to award expenses because it rejected Rule 11 as the basis for sanctions and did not grant most of the requested relief. Each party therefore had to bear its own expenses, including attorney fees, connected with the motion.