Reyes v. Snowcap Creamery, Inc. et al
AMENDED ORDER re: 70 Order on Motion for Summary Judgment, This case remains set for a three-day bench trial beginning December 16, 2013, by Judge William J. Martinez on 8/14/2013. (ervsl, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 11-cv-02755-WJM-KMT
SNOWCAP CREAMERY, INC.,
EMILY ARNOLD, and
AMENDED ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT
In this civil action, Plaintiff Jonathan Reyes (“Plaintiff”) brings claims under the
Fair Labor Standards Act (“FLSA”) against his former employer Defendant Snowcap
Creamery, Inc. and its owners Robert and Emily Arnold (collectively “Defendants”).
(ECF No. 1.) The primary issue in this case is whether Plaintiff, who was employed as
a “kitchen manager”, was properly classified as an exempt employee for purposes of
the overtime provisions in the FLSA. (Id. at 1.)
Before the Court are the parties’ cross-motions for summary judgment
(“Motions”). (ECF Nos. 50 & 59.) For the reasons set forth below, the Motions are
I. LEGAL STANDARD
Summary judgment is appropriate only if there is no genuine issue of material
fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem
Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute
as to a material fact depends upon whether the evidence presents a sufficient
disagreement to require submission to a jury or conversely, is so one-sided that one
party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49
(1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal
Service, 812 F.2d 621, 623 (10th Cir. 1987).
A fact is “material” if it pertains to an element of a claim or defense; a factual
dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a
reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The
Court must resolve factual ambiguities against the moving party, thus favoring the right
to a trial. Houston v. Nat’l General Ins. Co., 817 F.2d 83, 85 (10th Cir. 1987).
II. FACTUAL BACKGROUND
A brief recitation of the facts necessary to resolve the instant Motions is set forth
Defendant Snowcap Creamery, Inc. (“Snowcap”) is a small restaurant in Erie,
Colorado owned and operated by Defendants Robert and Emily Arnold. (Emily Arnold
Dep. (ECF No. 53-15) p. 68.) Plaintiff Jonathan Reyes was employed by Snowcap from
August 2009 until September 17, 2011. (ECF No. 6 ¶ 37.) He was originally hired as a
line cook and was paid $10.00 per hour. (Reyes Decl. (ECF No. 52) ¶ 4.)
In late 2009, Plaintiff accepted Defendants’ offer to become Snowcap’s Kitchen
Manager, with a salary of $1,100.00 every two weeks. (Bob Arnold Decl. (ECF No. 501) ¶ 1.) Plaintiff frequently worked more than forty hours a week and more than twelve
hours per day. (Answer ¶¶ 47 & 51.) Defendants did not pay him any additional wages
for the overtime he worked. (Id. ¶ 56.)
To the extent more detailed facts about Plaintiff’s work environment are
necessary for the Court’s analysis, they will be set forth in greater detail below. Briefly,
Plaintiff was generally regarded as Emily Arnold’s “right hand man” in the kitchen. (ECF
No. 50-12.) He had some responsibility for recruiting and training new kitchen
employees, scheduling employees in the kitchen, ordering food and supplies, and
creating new menu items. (Reyes Dep. (ECF No. 50-4) pp. 54-61, 70-71, 84-85.)
On June 3, 2011, Plaintiff and Snowcap entered into an “Employment
Agreement” which stated that Snowcap would pay for Plaintiff’s service fees, attorneys’
fees, and other expenses incurred “in pursuit of his U.S. immigration documentation,
including and up to U.S. naturalization.” (ECF No. 6-1.) Under the terms of this
agreement, Plaintiff was to repay 50% of these costs through monetary reimbursement
or non-paid work hours. (Id.) In the event Plaintiff’s employment ceased, Plaintiff was
required to pay back 100% of the money expended by Snowcap. (Id.)
Plaintiff’s last day of employment with Defendants was September 17, 2011.
(Reyes Decl. (ECF No. 52) ¶ 9.) Plaintiff has not been paid for the final five days that
he worked. (Id.) On September 28, 2011, Plaintiff sent a text message to Robert
Arnold asking for payment of his final wages and providing the address to which
payment could be sent. (ECF No. 52-1.)
On the facts set forth above, Plaintiff brings the following claims: (1) violation of
the Fair Labor Standards Act, 29 U.S.C. § 216(b); (2) violation of the Colorado Minimum
Wage Order, 7 Colo. Code Regs. 1103-1:4; and (3) violation of the Colorado Wage Act,
Colo. Rev. Stat. § 8-4-101 et seq. (ECF No. 1.) Additionally, Defendants bring a
counter-claim for unpaid money under the Employment Agreement. (ECF No. 6.)
Each party moves for judgment in its favor on all claims. (ECF Nos. 50 & 51.)
The Court will address each claim in turn below.
Fair Labor Standards Act Claim
Under the FLSA, the general rule is that any employee who works more than
forty hours in a workweek must receive overtime compensation. See 29 U.S.C. §
207(a)(1). Employers need not pay overtime, however, if the employee is “employed in
a bona fide executive, administrative, or professional capacity” as defined by the
regulations promulgated by the Secretary of Labor. See 29 U.S.C. § 213(a)(1).
Employees who fall within the “executive, administrative or professional” regulations are
commonly referred to as “exempt” employees.
The employee bears the burden of proving that the employer is violating the
FLSA. Archuleta v. Wal-Mart Stores, Inc., 543 F.3d 1226, 1233 (10th Cir. 2008).
However, an employer who asserts that the employee is exempt because he falls within
the executive, administrative, or professional exceptions bears the burden of
establishing that such category applies. Id. The exceptions to FLSA’s overtime
requirement are construed strictly against the employer. Id.
In this case, Defendants allege that Plaintiff was exempt from the overtime
requirements because he was an “executive” at Snowcap.1 (ECF No. 50 at 22-23.)
Under the Department of Labor regulations, an employee qualifies for the executive
exemption if the employee: (1) is paid a salary not less than $455.00 per week; (2) has
a primary duty of management of the enterprise or a customarily recognized department
or subdivision thereof; (3) customarily and regularly directs the work of two or more
other employees; and (4) has “authority to hire or fire other employees or whose
suggestions and recommendations as to the hiring, firing, advancement, promotion, or
any other change of status of other employees are given particular weight.” 29 C.F.R. §
541.100(a). As the employer, Defendants bear the burden of showing that each of
these prongs has been satisfied. Because, as set forth below, the Court finds that there
are significant factual disputes as to at least three of these prongs, summary judgment
is not appropriate.
Primary Duty is Management
The parties dispute whether Plaintiff’s primary duty was management of the
enterprise or a subdivision thereof. Defendants argue that Plaintiff was the kitchen
manager and, as such, his primary duty was managing the kitchen and its employees.
Plaintiff moves for summary judgment on Defendants’ assertion that the
executive exemption applies and argues that Defendants failed to properly plead this
affirmative defense. (ECF No. 51 at 20-21.) While the Court agrees that the assertion
of this affirmative defense in the Defendants’ Answer is weak, Plaintiff should have
raised this argument earlier in the litigation through a Motion to Strike or some other
vehicle. Were the Court to grant Plaintiff’s Motion at this point, the remedy would be to
simply allow Defendants the opportunity to file an amended Answer. At this stage of the
litigation, such action is unnecessary as the Final Pretrial Order contains Defendants’
detailed assertion of the executive exemption, and supplants the pleadings for the
remainder of this case. (See ECF No. 64 at 10.) Accordingly, Plaintiff’s Motion for
Summary Judgment is denied to the extent it seeks judgment on the executive
exemption affirmative defense based on waiver.
(ECF No. 50 at 27-32.) Plaintiff contends that he was a cook and his primary duty was
simply those activities associated with a cook in a small restaurant. (ECF No. 51 at 2325.)
The FLSA regulations include the following illustrative list of management
interviewing, selecting, and training of employees; setting
and adjusting their rates of pay and hours of work; directing
the work of employees; maintaining production or sales
records for use in supervision or control; appraising
employees’ productivity and efficiency for the purposes of
recommending promotions or other changes in status;
handling employee complaints and grievances; disciplining
employees; planning the work; determining the techniques to
be used; apportioning the work among the employees;
determining the type of materials, supplies, machinery,
equipment or tools to be used or merchandise to be bought,
stocked and sold; controlling the flow and distribution of
materials for merchandise and supplies; providing for the
safety and security of the employees or the property;
planning and controlling the budget; and monitoring or
implementing legal compliance measures.
29 C.F.R. § 541.102. An employee’s “primary duty” is management if it is the “principal,
main, major or most important duty that the employee performs.” See 29 C.F.R.
541.700(a). To determine whether an employee’s primary duty is management, the
Court may look at the following non-exclusive factors: (1) the amount of time spent
performing non-managerial tasks, (2) the relative importance of non-managerial duties
as compared to other duties, (3) the employee’s relative freedom from direct
supervision, and (4) the relationship between the employee’s salary and the wages paid
to other employees performing nonexempt work. Id.
Having reviewed the evidence, the Court finds that there is a genuine dispute of
fact as to whether Plaintiff’s primary duty was management. For example, on the one
hand, there is evidence showing that Plaintiff was the primary contact for hiring and
training new employees in the kitchen. (Reyes Dep. at 78-79, 126.) He played a role in
planning labor costs and determining when more employees were needed in the
kitchen. (Id. at 95-96.) Plaintiff was involved with selecting and ordering supplies for
the kitchen. (Id. at 70-71.) All of these are activities that would fall within
“management” according to the regulations cited above.
On the other hand, Plaintiff has presented evidence showing that whatever
managerial activities he assisted with took only a small fraction of his days. (Emily
Arnold Dep. at 69-70.) Plaintiff has shown that he spent the majority of his time
performing the duties of a line cook with no managerial responsibilities. (Holloway Dep.
at 12-13.) Though satisfying this prong of the analysis is their burden, Defendants have
failed to provide any analysis showing the amount of time that Plaintiff spent on
managerial activities. While the time spent on management activities is not dispositive,
it is an important factor which must be considered on a case-by-case basis. See 29
C.F.R. § 541.106(a), 541.700(b).
Given the disparate facts in the record, the Court finds that there is a genuine
dispute of fact as to whether Plaintiff’s primary duty was management.
Customarily and Regularly Directs the Work of Two or More Employees
The regulations require that an exempt executive employee regularly direct the
work of two full-time employees or their equivalent. See 29 C.F.R. § 541.104(a) (“To
qualify as an exempt executive under § 541.100, the employee must customarily and
regularly direct the work of two or more other employees. The phrase ‘two or more
other employees’ means two full-time employees or their equivalent. One full-time and
two half-time employees, for example, are equivalent to two full-time employees. Four
half-time employees are also equivalent.”).
The Court finds that there is a genuine dispute of fact as to whether Plaintiff
regularly and customarily supervised the work of the equivalent of two full-time
employees. At various points in the case, Defendants have taken the position that
Plaintiff supervised anywhere from thirteen to thirty-two employees during his tenure as
kitchen manager. (ECF No. 59 at 15.) Depending on which evidence the Court finds
credible, it could easily conclude in favor of either party. Given the disparate evidence
on this point in the record, the Court has little difficulty finding that this issue merits a
Additionally, there are significant factual disputes regarding the nature of
Plaintiff’s supervision of these employees. This is inter-related with the discussion
above about whether and to what extent Plaintiff’s duties were “managerial”. Plaintiff
has presented evidence that he was simply a senior cook and did not “supervise” many
of his co-workers. Defendants have presented evidence showing that Plaintiff directed
the work of other employees, which would suggest that he was supervising them.
Having reviewed the evidence in the record, the Court finds that reasonable minds
could disagree as to whether Plaintiff regularly and customarily supervised certain of his
co-workers. As such, summary disposition in favor of either party is inappropriate.
Influence over Personnel Decisions
With respect to the fourth criterium, whether an employer gives “particular
weight” to an employee’s recommendations as to the hiring, firing, advancement,
promotion or any other change of status of other employees depends on “whether it is
part of the employee’s job duties to make such suggestions and recommendations; the
frequency with which such suggestions and recommendations are made or requested;
and the frequency with which the employee’s suggestions and recommendations are
relied upon.” 29 C.F.R. § 541.105. In general, “an executive’s suggestions and
recommendations must pertain to employees whom the executive customarily and
regularly directs.” Id. An employee’s recommendations “may still be deemed to have
‘particular weight’ even if a higher level manager’s recommendation has more
importance and even if the employee does not have authority to make the ultimate
decisions as to the employee’s change in status.” Id.
The Court finds a genuine dispute of fact as to whether Plaintiff’s opinions were
given “particular weight” with regard to personnel decisions. Defendants have
presented evidence showing that Plaintiff was an integral part of the hiring and
disciplinary process for kitchen employees. (Reyes Dep. at 84-87.) However, Plaintiff
has presented evidence showing that he provided only minimal input on personnel
decisions, was not consulted at all on some personnel decisions, and that such
decisions were made exclusively by the Arnolds. (ECF No. 54-15 at 79-80.) Thus,
reasonable minds could disagree as to whether Defendants gave particular weight to
Plaintiff’s opinion in personnel matters and, as such, summary adjudication is
In sum, given the significant factual disputes with respect to whether Defendants
have met their burden of showing that Plaintiff was an “executive” employee, the Court
denies both Parties’ Motions for Summary Judgment on the FLSA claim.
Under the FLSA, an employee is generally entitled to recover unpaid past wages
going back two years. See 29 U.S.C. § 255. However, if an employer’s violation of the
FLSA was “willful”, an employee can recover for three years of wages. Id. “The
standard for willful violations is whether the employer ‘knew or showed reckless
disregard for the matter of whether its conduct was prohibited by the [FLSA].’” See
Reich v. Monfort, Inc., 144 F.3d 1329, 1334 (10th Cir. 1998).
Plaintiff moves for summary judgment on his claim that he is entitled to three
years of unpaid wages because Defendants’ FLSA violation was willful. (ECF No. 51 at
25.) However, the Court has already held that the significant factual disputes with
regard to Plaintiff’s job duties, his supervision of other employees, and his role in
personnel decisions means that a trial is necessary to decide if Plaintiff was an exempt
employee. If, after hearing all of the evidence at trial, the Court finds that Plaintiff was
exempt, then Defendants’ failure to pay overtime was not a violation of the FLSA, and
Plaintiff’s claim for a willful violation would necessarily fail. Therefore, the issue of
whether any violation of the FLSA was willful cannot be decided at this stage of the
litigation. See Linn v. Developmental Servs. of Tulsa, Inc., 891 F. Supp. 574, 580 (N.D.
Okla. 1995) (the jury must decide willfulness where there is a dispute of fact as to
whether an employee is exempt).
Accordingly, Plaintiff’s Motion for Summary Judgment is denied as to whether
Defendants’ FLSA violation was willful.
Plaintiff also asks the Court to determine, as a matter of law, that he is entitled to
liquidated damages. (ECF No. 51 at 31.)
Under the FLSA, an employer that violates 29 U.S.C. § 207 is typically liable for
liquidated damages in an amount equal to the amount of unpaid overtime
compensation. See 29 U.S.C. § 216(b); Dep’t of Labor v. City of Sapulpa, 30 F.3d
1285, 1289 (10th Cir. 1994). However, if the employer can prove that (1) the violation
occurred in good faith and (2) it had “reasonable grounds for believing that its act or
omission was not a violation of the [FLSA], the court may, in its sound discretion, award
no liquidated damages or award any amount thereof not to exceed the amount specified
in section 216 of this title.” 29 U.S.C. § 260; Doty v. Elias, 733 F.2d 720, 725-26 (10th
Cir. 1984). The employer must establish both prongs of § 260 to avoid or reduce an
award of liquidated damages. See Sapulpa, 30 F.3d at 1289 (“Thus, the district court
may eliminate or reduce the award of liquidated damages only if the employer
demonstrates both that he acted in good faith and that he had reasonable grounds for
believing that his actions did not violate the [FLSA].”) (quotations omitted). Even if an
employer can satisfy the two prongs of § 260, a court still has discretion to award some
or all of the liquidated damages. See id.
Whether an employee is entitled to liquidated damages is a question for the
Court to decide after the issues of whether there has been an FLSA violation and
whether such violation was willful have been decided. See Brinkman v. Dep’t of Corr.,
21 F.3d 370, 372-73 (10th Cir. 1994). Because the Court has held that trial is
necessary to determine both of these issues, the Court cannot resolve the liquidated
damages issue at this point. Accordingly, Plaintiff’s Motion for Summary Judgment is
denied to the extent it seeks pre-trial resolution of liquidated damages.
Colorado Minimum Wage Order
Plaintiff also brings a claim under the Colorado Minimum Wage Order (“CMWO”),
which “regulates wages, hours, working conditions and procedures for certain
employers and employees for work performed within the boundaries of the state of
Colorado.” 7 Colo. Code Regs. 1103-1:1. The CMWO requires that an employee be
paid time and one-half for all hours worked over forty in a week or twelve in a day. Id. at
1103-1:4. Like the FLSA, the CMWO exempts employees that are employed in an
“executive or supervisor” capacity. Id. at 1103-1:5. To qualify as an “executive or
supervisor”, an employee must: (1) earn in excess of the equivalent of the minimum
wage for all hours worked in a workweek; (2) supervise the work of at least two full-time
employees; (3) have the authority to hire and fire, or to “effectively recommend” such
action; and (4) spend a minimum of 50% of the workweek in duties directly related to
Given the similarity between the FLSA’s “executive” exemption and the
“executive or supervisor” exemption under the CMWO, the Court need not rehash its
prior analysis to conclude that there are significant disputes of material fact with respect
to whether Plaintiff qualifies as an “executive or supervisor”. Accordingly, the Court
finds that this question must be resolved by a trial and the parties’ cross Motions for
Summary Judgment on this claim are denied.
Colorado Wage Act
Plaintiff brings a claim for unpaid wages under the Colorado Wage Act (“CWA”),
which requires that an employer pay all wages or compensation for work already
performed immediately upon discharge. Colo. Rev. Stat. § 8-4-109(1)(a). Plaintiff
alleges that Defendants failed to pay him any wages for his last five days of work. (ECF
No. 51 at 32.)
Defendants first argue that Plaintiff waived or abandoned this claim by failing to
include it in the Scheduling Order. (ECF No. 50 at 35.) Defendants cite no authority
supporting this argument, and the Court is not compelled to find that the failure to
explicitly reference a particular statute in the Scheduling Order constitutes waiver of
such claim. Plaintiff’s claim under the CWA was plainly set forth in the Complaint and is
also included in the Final Pretrial Order, which supplants the pleadings. (ECF Nos. 1 &
64.) As such, the Court finds that Plaintiff has not abandoned his CWA claim.
Defendants next argue that summary judgment is appropriate because Plaintiff
failed to make a written demand for payment after he quit his employment. (ECF No. 50
at 35.) The CWA requires that, when an employer refuses to pay wages, an employee
must “make a written demand for payment within sixty days after the date of separation
and shall state in the demand where such payment can be received.” Colo. Rev. Stat. §
The evidence shows that Plaintiff sent a text message to Defendants in which he
asked for his payment and provided an address where Defendants could send his final
check. (ECF No. 1 at 9.) Defendants contend that a text message does not suffice as
“written demand for payment”. (ECF No. 50 at 35-36.) Defendants also contend that an
employee must demand a particular amount of payment. (Id.) However, the only
authority cited by Defendants for these arguments is an article from the Colorado
Lawyer magazine. This is plainly insufficient to meet their burden of showing that they
are entitled to judgment as a matter of law.
The Court finds that neither Party has met its burden of showing that it is entitled
to summary judgment on Plaintiff’s CWA claim. As such, the cross-Motions for
Summary Judgment are denied as to this claim.
Defendants bring a counter-claim against Plaintiff based on an Employment
Agreement executed between the parties. (ECF No. 6 at 6-7.) The Parties have both
moved for summary judgment on this claim. (ECF Nos. 50 at 36; 51 at 34-36.)
Plaintiff’s Motion for Summary Judgment argues that summary judgment in his
favor is appropriate on the counter-claim because the Colorado law governing
covenants not to compete prohibits contracts such as the Employment Agreement.
(ECF No. 51 at 34 (citing Colo. Rev. Stat. § 8-2-113(2)(c)).) Defendants contend that
the Employment Agreement does not restrict Plaintiff’s right to compete or to leave his
job for another employer and, therefore, the law cited by Plaintiff does not apply. (ECF
No. 54 at 56-57.) The Court agrees with Defendants. Nothing in the Employment
Agreement restricts Plaintiff’s ability to gain employment with a competitor or to
compete with Defendants’ business. As such, the law governing covenants not to
compete is inapplicable.
Plaintiff also argues that the Employment Agreement was not breached because
the repayment provisions were triggered only if Plaintiff quit his employment, and
Plaintiff was terminated rather than voluntarily resigning his position. (ECF No. 51 at
35-36.) The Court finds that the plain language of the Employment Agreement does not
support this argument. (ECF No. 6-1.) Rather, the Employment Agreement provides
that Plaintiff will repay the costs incurred by Defendants for immigration service fees,
attorneys’ fees, and direct expenses regardless of whether he was terminated or
whether there was an “‘at will’ severance of employment.” (Id.) Thus, the Court finds
that whether Plaintiff quit or was terminated is irrelevant to whether he was obligated to
repay the money.
As these are the only two arguments raised by Plaintiff in support of his request
for summary judgment on Defendants’ Counter-Claim, the Court finds that Plaintiff has
failed to meet his burden of showing that he is entitled to judgment as a matter of law on
Defendants’ Motion for Summary Judgment devotes four sentences to its
Counter-Claim. (ECF No. 50 at 36.) The only factual citation is to the Complaint and
there are no legal citations. (Id.) Defendants utterly fail to address any of the elements
of a breach of contract claim or provide any analysis as to why they are entitled to
summary judgment on this claim. (Id.) Given Defendants’ cursory treatment of this
issue, the Court declines to devote any additional time to this aspect of the Motion and,
therefore, it is denied. See United States v. Almaraz, 306 F.3d 1031, 1041 (10th Cir.
2002) (holding that a party’s “perfunctory and cursory reference” to an issue “without
citation to authority in support of a legal argument is inadequate to warrant
Accordingly, the Parties’ cross-Motions for Summary Judgment are denied with
respect to Defendants’ counter-claim.
For the reasons set forth above, the Court ORDERS as follows:
Defendants’ Motion for Summary Judgment (ECF No. 50) is DENIED;
Plaintiff’s Motion for Summary Judgment (ECF No. 51) is DENIED; and
This case remains set for a three-day bench trial beginning December 16, 2013.
Dated this 14th day of August, 2013.
BY THE COURT:
William J. Martínez
United States District Judge
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