Kohli v. Mahesh Investments of Little Rock LLC et al
ORDER granting in part and denying in part 6 Motion for Partial Summary Judgment. Signed by Judge Susan Webber Wright on 4/13/2015. (ks)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
MAHESH INVESTMENTS OF
LITTLE ROCK LLC and MAHESH
NO: 4:14CV00283 SWW
Deepak Kohli brings this Fair Labor Standards Act (“FLSA”) action against
Mahesh Investments of Little Rock LLC (“Mahesh Investments”) and Mahesh Patel
(“Patel”), alleging that Defendants served as his employers and failed to pay him
minimum wage and overtime. Before the Court is Kohli’s motion for partial summary
judgment (ECF Nos. 6,7,8), Defendants’ response in opposition (ECF No. 9), Kohli’s
reply (ECF No. 20), and Defendants’ surreply (ECF No. 11). After careful consideration,
and for reasons that follow, Plaintiff’s motion is granted in part and denied in part.
By sworn declaration,1 Kohli testifies that on or about December 25, 2012, Patel
ECF No. 6-1 (Kohli Dec.).
personally hired him to work at the La Quinta Inn in Pine Bluff (“La Quinta”)2 and that
Patel gave him the title “assistant general manager.” Kohli reports that he quit his job at
La Quinta in September 2013, but in November 2013, Patel hired him to work at the
Rodeway Inn and Suites in Little Rock (“Rodeway”). Kohli testifies that during his
employment at La Quinta and Rodeway, he worked 14 to 16 hours everyday, seven days
a week, and he was expected to live on site and remain on call at all times. Kohli charges
that Patel personally determined the amount of his wages and that Patel failed to pay him
a minimum wage and overtime. Kohli also claims that Patel paid him in cash because he
was concerned about Kohli’s immigration status.
Kohli brings this action to recover unpaid wages, including overtime pay, from
Patel and Mahesh Investments. The FLSA requires employers to pay nonexempt
employees a minimum hourly wage, which is currently set at $7.25. See 29 U.S.C.
§ 206(a)(1). The FLSA also requires employers to compensate nonexempt employees at
the rate of one and one-half times their normal hourly rate for all hours worked in excess
of a 40-hour week. See U.S.C. § 207(a)(1). The statute exempts certain employees from
minimum wage and overtime protections, including “any employee employed in a bona
fide executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1).
Kohli seeks partial summary judgment and asks the Court to make the following
According to the parties’ submissions, La Quinta is now operating under the name Pine
findings as a matter of law: (1) that Patel served as Kohli’s employer during his
employment at La Quinta and Rodeway, (2) that Kohli was a non-exempt employee
during his employment at La Quinta and Rodeway, and (3) that Defendants are liable to
Kohli for unpaid minimum wages and overtime.
Summary judgment is appropriate when “the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). The summary judgment inquiry depends on the
substantive evidentiary standard of proof that would apply at the trial on the merits. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505 (1986). Accordingly,
when the moving party bears the ultimate burden of persuasion at trial as to the claim or
defense in question, the movant must support his summary judgment motion with
evidence that would entitle him to a directed verdict if not controverted at trial. See id.;
see also Firemen's Fund Ins. Co. v. Thien, 8 F.3d 1307, 1310 (8th Cir. 1993)(citing
Celotex Corp. v. Catrett, 477 U .S. 317, 331, 106 S. Ct. at 2556 (1986)(Brennan, J.,
dissenting)). If the moving party meets his burden, the nonmoving party must show the
existence of a genuine dispute as to a material fact. But if the moving party fails to meet
this initial burden, the Court must deny summary judgment, regardless of the non-moving
An “employer” subject to liability under the FLSA is defined as “any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C.
§ 203(d). Under this broad definition, an employee may have multiple employers subject
to FLSA liability, see Donovan v. Agnew, 712 F.2d 1509, 1510 (1st Cir.1983), and the
economic realities of a working relationship control whether an entity or individual
functions as a FLSA employer. See Blair v. Wills, 420 F.3d 823, 829 (8th Cir.
2005)(citing Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 33, 81 S.Ct. 933
It is undisputed that Patel has an ownership interest in entities that own La Quinta
and Rodeway and that he is a member of co-defendant Mahesh Investments, which holds
a franchise interest in Rodeway. However, Patel testifies by affidavit that he has never
been responsible for the day-to-day operations of La Quinta or Rodeway.3 Patel testifies
that he and nonparty Rakesh Kothari (“Kothari”), the managing member of non-party
U.S. Hotel Management LLC (“U.S.”), entered an agreement under which U.S. provided
general management services for La Quinta and Rodeway. According to Patel, Kothari
managed the hotels and billed Mahesh Investments for his services. Patel claims that
Kothari and U.S. were solely responsible for hiring and terminating Kohli, yet Patel states
that he terminated Kohli’s employment in February 2014.
Kohli testifies that Patel personally supervised his work at La Quinta and Rodeway
and that Patel communicated with him several times each week for the purpose of
See ECF No. 9-2 (Patel Aff.).
directing his work. In addition to his declaration, Kohli provides a copy of an email
message that Patel sent him on January 17, 2014, when Kohli worked at Rodeway,
regarding refrigerators available for purchase online. Kohli also provides copies of police
reports, dated February 25, 2014 and March 1, 2014, which identify Patel as the owner of
La Quinta and Rodeway and state that he contacted police to report missing documents.
Patel’s own testimony demonstrates that he qualifies as Kohli’s employer under
the FLSA. In addition to having an ownership interest in the entities that owned La
Quinta and Rodeway and hiring a company that provided management services for the
hotels, Patel possessed and exercised the power to terminate Kohli’s employment. See
Reich v. Circle C. Investments, Inc., 998 F.2d 324, 329 (5th Cir.1993)(quoting Donovan v.
Sabine Irrigation Co., 695 F.2d 190, 194–95 (5th Cir.1983)(noting that the FLSA’s
definition of employer is “sufficiently broad to encompass an individual who, though
lacking a possessory interest in the ‘employer’ corporation, effectively dominates its
administration or otherwise acts, or has the power to act, on behalf of the corporation visa-vis its employees.”). Considering the totality of the circumstances, the Court finds that
Patel qualifies as an “employer” subject to FLSA liability in this case.
The FLSA exempts certain employees from minimum wage and overtime
protections, including “any employee employed in a bona fide executive, administrative,
or professional capacity.” 29 U.S.C. § 213(a)(1). An employer bears the burden to
demonstrate that employees were exempt from the FLSA’s minimum wage and overtime
requirements, see Fife v. Harmon, 171 F.3d 1173, 1174 (8th Cir. 1999), and “[w]e protect
workers by narrowly construing exemptions to the FLSA's overtime requirements.”
Beauford v. ActionLink, No. 13-3265, 2015 WL 1260453, 3 (8th Cir. March 20,
2015)(citing Spinden v. GS Roofing Prods. Co., 94 F.3d 421, 426 (8th Cir. 1996)).
In the answer, Defendants generally assert that Kohli “was exempt from the
minimum wage and overtime provisions of the [FLSA,]”4 and in opposition to Kohli’s
motion for partial summary judgment, Defendants argue that genuine issues for trial exist
as to whether Kohli qualifies for an administrative or an executive employee exemption.
“To determine whether an employee fits within a certain FLSA exemption, we
apply the appropriate [Department of Labor (DOL)] regulation.” Id. Under the
applicable regulations, both administrative and professional employees must be
compensated on a “salary basis”5 at a rate of not less than $455 per week.6 Additionally,
ECF No. 2 (Answer, ¶ 64).
An employee may also qualify as an administrative or executive employee if he is
compensated on a “fee basis” at a rate of not less than $455 per month. FLSA regulations define
“fee basis” as “an agreed sum for a single job regardless of the time required for its completion.”
29 C.F.R. § 541.605(a). None of the parties in this case contend that Kohli was paid on a “fee
In addition to salary requirements, to qualify for an exemption, an employee’s “primary
duty” must be the performance of exempt work. For administrative employees, exempt work
consists of office or non-manual work directly related to management or general business
operations, and exempt work for executive employees consists of management of an enterprise.
See 29 C.F.R. § 541.200(2)(administrative exemption), § 541.100(2)(executive exemption).
Here, Defendants fail to provide any evidence regarding Kohli’s job dues. Instead, they
point to Kohli’s testimony that Patel “gave” him the title of assistant general manager. Contrary
to Defendants’ representation to the Court, Kohli does not testify that his primary duty at the
hotels was acting as an assistant general manager. Compare ECF No. 9-1 at 10 (Defendants’
the $455 a week requirement is met if the employee is compensated monthly on a “salary
basis of $1,971.66.” 29 C.F.R. § 541.600(b). An employee is paid on a “salary basis” if
he regularly received a predetermined amount of pay, which constituted all or part of his
compensation, and was not subject to a reduction based on the quality or quantity of the
work he performed. See 29 C.F.R. § 541.602(a).
Defendants acknowledge that Kohli claims that he was paid approximately $425
per week during the relevant time period,7 but they point out that he is unable to produce
any records that document the amount of his pay. According to Kohli, Patel paid him in
cash, thus he has no pay records. Defendants, however, imply that payroll records once
existed and that Kohli either confiscated or destroyed them. Patel claims that in 2014, he
discovered that “certain records” had been stolen or removed from La Quinta and
Rodeway, and Defendants charge that “the alleged perpetrators of this crime are the
former general manager and the Plaintiff.” ECF No. 9-1. However, the record is void of
any evidence that Kohli confiscated or destroyed Defendants’ business records.
Defendants shoulder the burden to show that Kohli was compensated on a “salary
Brief) with ECF No. 6-1 (Kohli Dec.). Furthermore, Department of Labor regulations provide:
“A job title alone is insufficient to establish the exempt status of an employee.” 29 C.F.R.
Kohli testifies that he was paid a monthly salary at La Quinta and Rodeway and that the
pay he received had no correlation to the number of hours he worked. See ECF No. 6-1 (Kohli
Dec.). He reports that Patel paid him $2,400 the first month he worked at La Quinta, and after
that, between $1,500 and $1,700 per month. Kohli testifies that he worked at Rodeway from
November 27, 2013 through March 7, 2014 and that Patel paid him $1,300 in December, $2,000
in January 2014, and $2,500 in February 2014.
basis” at the rate of not less than $455 per week or $1,971.66 per month. The Court finds
that Defendants’ unsubstantiated charge regarding criminal conduct is wholly inadequate
to withstand Kohli’s motion for partial summary judgment. According to Kohli’s sworn
testimony, his pay varied month to month, and with the exception of one month, Patel
paid him less than $455 per week or $1,961.66 per month. In sum, Defendants have
failed to come forward with evidence creating a genuine issue of material fact as to
whether Kohli was exempt from the FLSA’s overtime and minimum wage protections,
and the Court finds that Kohli is entitled to summary judgment on this issue.
The Court has determined, as a matter of law, that Patel was Kohli’s employer for
FLSA purposes and that Kohli does not qualify as an exempt administrative or executive
employee. Additionally, Defendants have failed to controvert Kohli’s testimony that he
worked 14 to 16 hours every day during his employment at La Quinta and Rodeway and
that he did not receive minimum wages or overtime required under the FLSA.
Accordingly, the Court finds that Kohli is entitled to summary judgment as to Patel’s
liability for FLSA violations. However, the Court is without sufficient information to
conclude that Separate Defendant Mahesh Investments qualifies as Kohli’s employer and
therefore declines to grant summary judgment in Kohli’s favor as to this separate
For the reasons stated, Plaintiff’s motion for partial summary judgment is
GRANTED IN PART AND DENIED IN PART as provided in this order.
IT IS SO ORDERED THIS 13th DAY OF APRIL, 2015.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE
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