Holland v. Bynum & Sons Plumbing, Inc. et al
Filing
74
MEMORANDUM OPINION INCLUDING FINDINGS OF FACT AND CONCLUSIONS OF LAW, FINAL JUDGMENT entered in favor of Defendant Scott Bynum and against Plaintiff James Holland. The Clerk of Court is DIRECTED to enter this document on the civil docket as a final judgment pursuant to Rule 58 of the Civil Rules of Federal Procedure. IT IS FURTHER ORDERED that the proceeding as to Defendant Bynum & Sons Plumbing is ADMINISTRATIVELY CLOSED due to the STAY [Doc. 24 ] resulting from the federal bankruptcy proceeding. Signed by Magistrate Judge Janet F. King on 9/11/2014. --Please refer to http://www.ca11.uscourts.gov to obtain an appeals jurisdiction checklist--(tcc)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
JAMES HOLLAND,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:11-CV-00908-JFK
BYNUM & SONS PLUMBING,
INC., et al.,
Defendants.
MEMORANDUM OPINION INCLUDING FINDINGS OF FACT
AND CONCLUSIONS OF LAW
This case is before the court following a bench trial conducted on June 23 and
25, 2014. [Docs. 68 and 69].1 On March 11, 2011, Plaintiff James Holland filed a
complaint against Defendants Bynum & Sons Plumbing and Scott Bynum alleging that
Defendants improperly classified him as an independent contractor rather than as an
employee and failed to pay him the wages he was entitled to under the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 201, et seq. [Doc. 1]. After Defendant Bynum
& Sons Plumbing filed for Chapter 11 bankruptcy, triggering the automatic stay of
proceedings, pursuant to 11 U.S.C. § 362(a), as to that Defendant, the case proceeded
1
Citations to the transcript of the bench trial are: (Tr. 6/23/14 at ) and (Tr.
6/25/14 at ).
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against Defendant Scott Bynum (“Bynum”), who is proceeding pro se. [Docs. 18 and
24].
Plaintiff filed a motion for summary judgment on December 3, 2012. [Doc. 35].
After consideration of the briefs of the parties, which District Judge Forrester, then the
presiding judge on the case noted did not comply with the court’s local rules [Doc. 46
at 2], the Judge held that Defendant Bynum was an employer as defined by 29 U.S.C.
§ 203(d) of the FLSA and, therefore, that he is personally liable for any damages
resulting from violations of the FLSA [Id. at 5-6]. The Judge further held that Plaintiff
had been improperly classified as an independent contractor under the provisions of
the FLSA and, instead, was an employee of Defendant Bynum and entitled to
minimum and overtime wages. [Id. at 7-10].
As to the issue of damages flowing from any failure of Defendant Bynum to pay
Plaintiff minimum wage and overtime compensation due him under the FLSA, the
Judge found, based on the incomplete record before him, that he did “not presently
have enough information before [him] to even guess the overtime hours Holland
worked” and noted that the evidence was disputed, especially in light of the lack of
official records from the employer. [Doc. 46 at 11-12]. Although the Judge noted
having Plaintiff’s 1099s demonstrating the total amount he was paid for the years
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employed at Bynum & Sons Plumbing, he stated that this information does not provide
Plaintiff’s hourly rate. [Id. at 12]. Accordingly, the Judge could not determine the
amount, if any, of damages. [Id.].
The Judge further found that, once the amount of damages was determined,
pursuant to 29 U.S.C. § 216(b), Plaintiff was entitled to liquidated damages, “which
should be equal to actual damages[.]” [Id. at 12-13]. And, finally, the Judge found
that Defendant Bynum acted willfully in mis-identifying Plaintiff as an independent
contractor and that, therefore, the three-year statute of limitations applied in this case.2
[Id. at 13-14].
On March 10, 2014, Plaintiff and Defendant Bynum consented to proceed before
the undersigned on a bench trial to determine the issue of damages for any violation
of the FLSA. [Doc. 60]. The bench trial was held on June 23 and 25, 2014. [Docs.
68 and 69]. Plaintiff filed a post-trial brief in support of his claims for FLSA damages.
[Doc. 72]. And Plaintiff filed a motion [Doc. 73] for approval of attorney’s fees and
2
The period for which Plaintiff could seek damages was March 23, 2008,
through February 2011, when his employment ended. (Tr. 6/23/14 at 2-3). However,
due to Plaintiff’s failure to provide supporting documentation, in this case, his 2011
federal tax form, to Defendant Bynum by the deadline set by the court, Plaintiff
withdrew his request for damages for any FLSA violations occurring after December
31, 2010. (Id. at 16-17).
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costs. Defendant Bynum did not file a post-hearing brief or a response to the motion
for fees and costs.
I.
Bench Trial Evidence
With respect to the evidence introduced during the bench trial, Plaintiff Holland
objected to the introduction by Defendant Bynum of any Bynum & Sons Plumbing
records pertaining the hours that he worked and his compensation. (Tr. 6/23/14 at 711). This dispute over the introduction of such records arose due to Defendant
Bynum’s failure to produce the records, in response to discovery requests, during the
discovery period. (Id.). After the case was stayed against Defendant Bynum & Sons
Plumbing, Plaintiff sought from Defendant Bynum business records relating to
Plaintiff’s compensation and hours of employment. In response to those discovery
requests, Defendant Bynum stated that he did not have possession of the records and
that Plaintiff should seek to obtain the records from the business. [Doc. 26, Exhibit 1].
In ruling on Plaintiff’s objection to Defendant Bynum introducing business records at
the bench trial, the court determined that Defendant Bynum, due to his relationship to
the business and because he was able to obtain some of the records in preparation for
the bench trial, had authority to access and produce the business records in response
to discovery requests and, therefore, could not introduce the records during the bench
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trial. (Tr. 6/23/14 at 11-12). Plaintiff did not, during discovery or in preparation for
the bench trial, apparently make any attempt to obtain directly from Bynum & Sons
Plumbing the business records regarding his compensation or hours of employment.
Kimberly Saunders, who is Plaintiff Holland’s fiancé and has been in a
relationship with him for seventeen years (with three children a result of that
relationship), was employed by Bynum & Sons Plumbing as an Office Dispatcher from
the end of 2006/early 2007 through sometime in May 2010. She was terminated from
her employment. (Tr. 6/23/14 at 27-28). Her duties included scheduling customer
appointments and dispatching the eight to ten plumbers working for the business to the
appointments. (Id. at 28-29). The normal operating hours for the business was 8:00
a.m. to 4:00 p.m., Monday through Friday, and on Saturdays until noon. (Id. at 29).
Any emergency appointments needing attention after those hours or on Sunday were
handled by the dispatcher on call and routed out to one of the plumbers. (Id.).
Although Saunders was not aware of the status of each plumber each day, she would
have an idea of how long into the evenings each plumber, including Plaintiff Holland,3
might be working and which appointments remained on the schedule. (Id. at 30-31).
3
Saunders testified that Plaintiff started working at Bynum & Sons Plumbing a
few months after she began her employment, that is, in approximately November or
December of 2007. (Id. at 34).
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The plumbers, including Plaintiff Holland, covered appointments to the north
in Gainesville, Georgia, and to the south in Valdosta and Bainbridge, Georgia, as well
as in Alabama. (Id. at 31, 33, 49). Plaintiff Holland regularly worked six days a week
and was on call on Sundays approximately once every month and a half.4 He reported
to work between 8:00 and 8:30 a.m. and did not arrive at home in the evenings until
between 9:00 and 10:00 p.m. (Id. at 32-35, 49-51). During the relevant time period,
Saunders stated that she and Plaintiff Holland took two weeks of vacation time each
year. (Id. at 36, 40). Although not providing any specific year, Plaintiff Holland
testified that he worked on a New Year’s Day and one Easter and that he has worked
on the Fourth of July and Christmas Eve. (Tr. 6/25/14 at 15-16). Plaintiff Holland did
not work Memorial Day, Labor Day, Thanksgiving, and Christmas Day. (Id. at 16-17).
Plaintiff Holland did not work one week in September 2009, when the business was
closed due to flooding.5 (Id. at 17). He also did not work four days in January 2010
4
When on call on Sundays, until noon, Plaintiff Holland was not required to be
at the business. (Id. at 55-56).
5
Information regarding the timing of the flood is found at:
http://www.nrcs.usda.gov/wps/portal/nrcs/detail/ga/newsroom/?cid=nrcs144p2_021
919 (last visited September 4, 2014).
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when the business was closed due to snow6 and one week in January 2010 due to an
eye injury. (Id. at 17, 22). Plaintiff testified that he did not work on the following days
in 2010 due to attendance at plumbing school: October 16, 23 and 30; November 6,
13, 16, 20; and December 6. (Id. at 17).
Plaintiff Holland utilized a vehicle provided by Bynum & Sons Plumbing when
working and drove that vehicle home in the evenings.
(Id. at 49).
He was
compensated for his work on commission, approximately 25% of the amount billed to
each customer. (Id. at 51). Before that commission was paid, the business deducted
certain expenses, such as, the supplies or parts needed for the plumbing appointment,
whether those supplies or parts were obtained from the business or had to be purchased
off-site such as from Lowe’s. (Id. at 51-52). Plaintiff Holland was not “paid back” for
the cost of the supplies or parts used for a plumbing job. He received the percentage
of the total bill charged the customer, which included the cost for those supplies and
parts, as his commission. (Id. at 52). When asked “[w]hat other things . . . Bynum &
Sons charge[d him] for before they paid you the money that showed up on a 1099[,]”
Plaintiff Holland listed these items: uniforms, gas, worker’s compensation, liability
6
Information regarding the timing of this snow event is found at:
http://www.ajc.com/news/news/local/a-brief-history-of-atlantas-snow-horrors/nQbZC
(last visited September 4, 2014).
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insurance, automobile insurance, $145.00 per week for use of the vehicle, and tires.7
(Id. at 53-54). Plaintiff also stated that, in addition to these “things” (that is, the items
that were deducted by Bynum & Sons Plumbing before he received his compensation),
he had other expenses which were identified as business expenses on his federal
income tax returns, such as, gas for the vehicle8 and repairs on the vehicle. (Id. at 53).
Plaintiff Holland identified for the record his Exhibit 1 which is a copy of
selected pages from his 2008 federal tax return. (Tr. 6/23/14 at 41-43). The return was
prepared by an accountant. (Id. at 43). On cross-examination, Plaintiff Holland was
questioned about specific entries on the Profit and Loss From Business page (Exhibit
1, 08-1) and what expenses supported the entries. (Id. at 57-59). Plaintiff was not able
to explain the entries, stating that he kept all of his receipts - “every receipt that I have
ever - that I use when I am out in the field that I keep[,]” and that he gives everything
to his accountant to prepare the tax returns. (Id. at 58). Although Plaintiff Holland
7
Plaintiff specifically testified that, when his vehicle needed tires, the cost would
come out of his pay check, that is, before he was paid his commission. He confirmed
that testimony even when his attorney pointed out that tires were listed on his tax
returns as a business expense incurred by Plaintiff after receiving his compensation.
(Id. at 53-54).
8
Plaintiff Holland previously testified that gas for the vehicle was an expense
deducted from his commission before he was paid. (Id. at 53).
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stated that he did not keep a daily calendar recording the dates that he worked for
Bynum & Sons Plumbing, he reiterated that he “did keep all the paperwork.” (Tr.
6/25/14 at 31).
Plaintiff identified his Exhibit 2 which is a copy of the 1099 for the year 2009
received from Bynum & Sons Plumbing and selected pages from his 2009 federal tax
return which was prepared by an accountant. (Tr. 6/23/14 at 44-45). Plaintiff
supplemented Exhibit 2 due to the fact that an amended return was filed, after an audit
by the Internal Revenue Service, identified as Exhibit 2A.9 (Tr. 6/25/14 at 5-10, 2324).
Plaintiff also identified his Exhibit 3 which is a copy of the 1099 for the year
2010 received from the business and selected pages from his 2010 federal tax return
which was prepared by an accountant. (Tr. 6/23/14 at 47-48). With respect to this tax
return, Plaintiff Holland was also questioned on cross-examination about the amounts
identified on the Profit and Loss From Business page (Exhibit 3, 10-4), and he was not
able to explain the entries (Id. at 62-63; Tr. 6/25/14 at 25-26).
9
Plaintiff Holland again stated that he could not explain about the audit “because
[he] really do[es] not know taxes . . . .” (Tr. 6/25/14 at 23).
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Additional facts will be set forth as necessary during discussion of Plaintiff’s
claims for damages.
II.
Plaintiff’s Claims for Damages
Based on the information provided by the testimony of Ms. Saunders and
Plaintiff Holland, Plaintiff claims that he “typically worked from 8:30 a.m. until 9:00
p.m. or 12½ hours per day.” [Doc. 72 at 11 n.10, 12 n.12 & n.14]. His workweek is
Monday through Saturday [Id. at 10]; and he acknowledged being off approximately
two weeks per year for vacation and being “also off from work on other occasions
during the relevant time period” [Id. at 10]. Based on this information, and “to align
with Plaintiff’s annual Federal Income tax returns[,]” Plaintiff Holland divided his
request for damages into three time periods: (1) March 23, 2008, through December
31, 2008, and provided a chart (Exhibit A) submitted to support a calculation that, for
the 221.29 days Plaintiff worked during this period, at 12½ hours a day, there were
1,617.14 “regular hours” and 1,148.96 “overtime hours”; (2) January 1, 2009, through
December 31, 2009, and provided a chart (Exhibit B) submitted to support a
calculation that, for the 295.17 days Plaintiff worked this period, at 12½ hours a day,
there were 2,085.71 “regular hours” and 1,603.87 “overtime hours”; and (3) January
1, 2010, through December 31, 2010, and provided a chart (Exhibit C) submitted to
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support a calculation that, for the 281.17 days Plaintiff worked during this period, at
12½ hours a day, there were 2,085.71 “regular hours” and 1,428.87 “overtime hours.”
[Id. at 11-12]. Plaintiff made no attempt to calculate his “regular hours” or “overtime
hours” based on a “workweek.”
Plaintiff also did not attempt to determine his “regular rate of pay” but, instead,
based his calculation of damages on the amount of minium wage10 that he should have
been paid using the total “regular hours” he calculated for each of the three time
periods. To calculate the overtime wages he should have been paid, Plaintiff used the
“overtime hours” he calculated for each time period multiplied by one and one-half
times the minimum wage for the period. [Id. at 13-14]. Using this method, Plaintiff
Holland claims that he should have earned the following minium wage and overtime
wages for each period as follows: (1) March 23, 2008, through December 31, 2008,
minimum wages of $10,072.29 and overtime wages of $10,360.02, for a total of
$20,432.31; (2) January 1, 2009, through December 31, 2009, minimum wages of
$14,305.43 and overtime wages of $16,485.67, for a total of $30,791.09; and (3)
10
The applicable minimum wages are: July 24, 2007, through July 24, 2008,
$5.85; July 24, 2008, through July 24, 2009, $6.55; and July 24, 2009, through
December 31, 2010, $7.25. [Doc. 72 at 13 n.16].
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January 1, 2010, through December 31, 2010, minimum wages of $15,121.43 and
overtime wages of $15,538.95, for a total of $30,660.38. [Id. at 14-15].
Plaintiff then determined the amount that he claims he was not paid for each
time period as required by the FLSA. Plaintiff used the amount of his commission
compensation for each year paid by Bynum & Sons Plumbing (for 2008, $58,978.00;
for 2009, $65,343.12; and for 2010, $68,994.35) and subtracted the business expenses
identified on each of the federal tax returns (for 2008, $46,385.00; for 2009,
$54,532.00; and for 2010, $43,127.00), to arrive at his yearly compensation of:
$12,593.00 for 2008; $10,811.00 for 2009; and $19,702.00 for 2010.11 [Id. at 15].
Therefore, Plaintiff contends that his unpaid minimum and overtime wages for each
year are: 2008 - $7,839.31; 2009 - $19,980.09; and 2010 - $10,940.38 for a total of
$38,759.79. Plaintiff also seeks liquidated damages in an equal amount, for a total
damage award of $77,519.57. [Id. at 15-16]. Finally, Plaintiff seeks $9,275.00 in
attorney’s fees based on a fee rate of $270.00 per hour for 34.35 hours and $350.00 in
costs which reflects the federal court filing fee. [Doc. 73].
11
Plaintiff added back into the amount of net income reflected on his 2010
federal tax form, $4,753.00, the amounts of $12,000 in wages that he paid to himself
and $2,967 for meals and entertainment. [Doc. 72 at 15 n.18; Plaintiff’s Exhibit 3 at
10-4].
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III.
Findings of Fact and Conclusions of Law
Congress enacted the FLSA in 1938 in order to provide minimum wage and
maximum hour protections for workers. Allen v. Board of Public Ed. for Bibb County,
495 F.3d 1306, 1311 (11th Cir. 2007). “Under the FLSA, an employer may not employ
his employee for a workweek longer than forty hours unless his employee receives
overtime compensation at a rate not less than one and a half times his regular rate.”
Id. at 1314 (citing 29 U.S.C. § 207(a)(1)). “A person is employed if he or she is
suffered or permitted to work. 29 U.S.C. § 203(g). It is not relevant that the employer
did not ask the employee to do the work. The reason that the employee performed the
work is also not relevant. ‘[I]f the employer knows or has reason to believe that the
employee continues to work, the additional hours must be counted.’” Id. (citation
omitted). Accordingly, “a FLSA plaintiff must demonstrate that (1) he or she worked
overtime without compensation and (2) the [employer] knew or should have known
of the overtime work.” Id. at 1314-15; and see Anderson v. Mt. Clemens Pottery Co.,
66 S. Ct. 1187, 1192 (1946) (the plaintiff “has the burden of proving that he performed
work for which he was not properly compensated”), superseded by statute on other
grounds.
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In a case where the employer has failed to keep accurate records of the number
of hours the plaintiff has worked, the employee merely has to show that he “in fact
performed work for which he was improperly compensated[,]” and he must produce
“sufficient evidence to show the amount and extent of that work as a matter of just and
reasonable inference.” Anderson, 66 S. Ct. at 1192; see also Allen, 495 F.3d at 1315
(“‘[t]he remedial nature of this statute and the great public policy which it embodies
. . . militate against making that burden an impossible hurdle for the employee’”)
(citation omitted). If the employee makes this prima facie showing, “[t]he burden then
becomes the employer’s, and it must bring forth either evidence of the precise amount
of work performed or evidence to negate the reasonableness of the inference to be
drawn from the employee’s evidence.” Allen, 495 F.3d at 1316. If the employer fails
in carrying this burden, damages may then be awarded to the employee, “‘even though
the result be only approximate.’” Id. (citation omitted).
The determination of whether a plaintiff has been paid at least minimum wage
and has been compensated for any overtime hours worked is based on a “workweek.”
See Walters v. American Coach Lines of Miami, Inc., 569 F. Supp. 2d 1270, 12991300 (S.D. Fla. 2008) (“the regular rate cannot be less than the minimum wage” and
that regular rate, that is, “‘regular hourly rate of pay[,] . . . is determined by dividing
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his total remuneration for employment . . . in any workweek by the total number of
hours actually worked by him in that workweek for which such compensation was
paid’”) (quoting 29 C.F.R. § 778.109); and see Klinedinst v. Swift Investments, Inc.,
260 F.3d 1251, 1256 (11th Cir. 2001) (same). “The FLSA focuses on the workweek
as its basic unit.” Solano v. A Navas Party Production, Inc., 2011 WL 98819, at *7
(S.D. Fla. January 12, 2011). The regulations, in fact, specify: “In calculating
overtime pay, . . . ‘[t]he Act takes a single workweek as its standard, and does not
permit averaging of hours over 2 or more weeks.’” Takacs v. A.G. Edwards and Sons,
Inc., 444 F. Supp. 2d 1100, 1114 (S.D. Cal. 2006) (quoting 29 C.F.R. § 778.104,
entitled “Each workweek stands alone.”); Johnson v. Wave Comm GR LLC, --- F.
Supp. 2d ----, 2014 WL 988510, at *16 (N.D. N.Y. March 14, 2014) (“the averaging
of hours over two or more weeks is not permitted”); Solano, 2011 WL 98819, at *7
(“Indeed, ‘the FLSA as a whole and the DOL’s implementing regulations of the Act
highlight the primacy of the workweek concept.’”) (citation omitted). “The regulations
go on to state ‘[t]he rule is applicable to . . . employees paid on a commission basis.’”
Takacs, 444 F. Supp. 2d at 1100 (quoting 29 C.F.R. § 778.104).
The obvious problem with Plaintiff’s attempt to prove damages for alleged
minimum wage and overtime compensation violations is his reliance on averaging his
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yearly compensation with the hours he contends he worked for up to one year time
periods. Plaintiff totally ignored the FLSA’s focus on the “workweek” to determine
whether there are violations of the Act. If a party cannot average hours and
compensation over a two week period to either prove or disprove violations of the Act,
then Plaintiff’s attempt to use his total compensation for a year, reduced by what the
court finds are rather dubious business expenses, along with calculations of the number
of “regular” and “overtime” hours worked for a year, also calculations that the court
finds dubious, necessarily fails to meet his burden to establish a prima facie case.
Plaintiff made no effort to present a prima facie case focusing on each workweek as
required by the FLSA.
The court further notes that, although Plaintiff wants to argue that his burden of
proof is lightened by Defendant Bynum’s failure to produce proper and accurate
records of the hours Plaintiff worked and his compensation, Plaintiff’s efforts to obtain
such records to establish his prima facie case were all but non-existent. Plaintiff
served discovery requests on Defendant Bynum, proceeding pro se, for the records of
Bynum & Sons Plumbing - after that entity was no longer actively involved in this
litigation due to the bankruptcy filing. Although advised by Defendant that the records
were in the possession of Bynum & Sons Plumbing, Plaintiff made no attempt to
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obtain any business records from that source. [Doc. 26, Exhibit 1]. The fact that
Defendant’s response was deemed insufficient to allow him to produce the records at
the bench trial in defense should Plaintiff establish a prima facie case, does not require
the court to find that such records do not exist and were not available to Plaintiff had
he simply subpoenaed the records for trial for use in establishing a prima facie case.
And, given the fact that Defendant attempted to introduce records and, based on this
court’s observation of Defendant’s cross-examination of Plaintiff, used records to
identify dates when Plaintiff was not working, the court concludes that at least some
records were available for Plaintiff to subpoena and rely on in establishing a prima
facie case.
Even assuming that proper and accurate records were not maintained by Bynum
& Sons Plumbing, Plaintiff still fails to establish a prima facie case. The court accepts
Plaintiff’s evidence, based on his testimony and the testimony of Ms. Saunders, as to
the hours that he worked. Plaintiff Holland regularly worked six days a week, Monday
through Saturday, and he reported to work between 8:00 and 8:30 a.m. and did not
arrive at home in the evenings until between 9:00 and 10:00 p.m. (Id. at 32-35, 49-51).
As Plaintiff calculates, this constitutes a 12½ hour day and, assuming that Plaintiff was
present at work each day for the week, a 75 hour workweek. The problem is that the
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testimony makes it clear that Plaintiff missed some days during the workweeks at issue
- maybe even full workweeks.
During the relevant time period, Ms. Saunders stated that she and Plaintiff
Holland took two weeks of vacation time each year. (Id. at 36, 40). If Plaintiff’s
calculation of hours worked accounts for this vacation time, the court cannot discern
on the charts attached to his post-trial brief such is the case. Furthermore, no evidence
was offered to explain how and when the vacation time was taken. Although not
providing any specific year, Plaintiff Holland also testified that he worked on a New
Year’s Day and one Easter and that he has worked on the Fourth of July and Christmas
Eve. (Tr. 6/25/14 at 15-16). This testimony indicates that Plaintiff did not work these
holidays every year, and the court cannot determine if the charts relied on by Plaintiff
[Doc. 72, Exhibits A, B, and C] account for these days off. Plaintiff Holland did not
work Memorial Day, Labor Day, Thanksgiving, and Christmas Day. (Id. at 16-17).
Plaintiff Holland did not work one week in September 2009, when the business was
closed due to flooding. (Id. at 17). He also did not work four days in 2010 when the
business was closed due to snow in January and one week in January 2010 due to an
eye injury. (Id. at 17, 22). Again, the court cannot determine from review of the charts
supporting Plaintiff’s calculation of hours worked that he properly accounted for all
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of this time off. Finally, Plaintiff testified that he did not work on the following days
due to attendance at plumbing school: October 16, 23 and 30; November 6, 13, 16, 20;
and December 6. (Id. at 17). As best the court can ascertain, the information on these
charts is not based on testimony introduced during the bench trial but, instead, reflect
an arbitrary determination of days worked for each month during the time at issue.
These charts demonstrate why minimum wage and overtime compensation violations
are based on a workweek not by manipulating hours and yearly wages over a span of
months.
And, assuming that the court could determine the number of hours that Plaintiff
worked for each week during the almost three years at issue, Plaintiff did not produce
any evidence reflecting his compensation for each of those workweeks. Plaintiff
apparently made no effort to do so because he never intended to rely on evidence of
that nature - despite the fact the Act requires such proof and despite the fact that
District Judge Forrester identified this failure as one of the reasons for denying
Plaintiff’s summary judgment motion on damages. [Doc. 46 at 12]. Plaintiff was not
paid in a lump sum at the end of each year; the record before the court is devoid of any
indication of when or in what amounts Plaintiff was compensated. The court finds that
Plaintiff, at a minimum, should have produced some record of his compensation, for
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example, direct deposit statements or payment stubs - Plaintiff, after all, testified that
he kept every record concerning the days he worked. (Tr. 6/25/14 at 31).
Even more problematic is Plaintiff’s attempt to reduce his compensation by
deducting the amount of business expenses reflected on his 2008, 2009 and 2010
federal tax returns from his yearly compensation of $58,978.00 in 2008, $65,343.12
in 2009, and $68,994.35 in 2010 as reflected on his tax returns and 1099s. After
making these questionable deductions, Plaintiff contends that he only earned (although
working approximately 75 hours a week) $12,593.00 in 2008, $10,811.00 in 2009, and
$19,702.00 in 2010. [Doc. 72 at 15-16]. There are a number of problems with this
attempt to use his business expenses as reflected on this federal income tax returns.
First, Plaintiff was unable to explain the information that was used to arrive at
the expenses reflected on his tax returns except to repeatedly state that he kept every
single receipt for these expenses and turned over everything to his accountant. (Tr.
6/23/14 at 57-59, 62-63; Tr. 6/25/14 at 23, 25-26, 31). If Plaintiff had all of these
records, he could have - should have - produced the records in order to support his
testimony, not only about the nature of the expenses but to allow for allocation of the
expenses for a workweek time frame.
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Second, based on Plaintiff’s testimony, most of the business expense deductions
reflected on the federal tax returns apparently were already deducted from Plaintiff’s
compensation before he was paid his commission. Plaintiff testified that he utilized
a vehicle provided by Bynum & Sons Plumbing when working and drove that vehicle
home in the evenings. (Tr. 6/23/14 at 49). He was compensated for his work on
commission, approximately 25% of the amount billed to each customer. (Id. at 51).
Before that commission was paid, Plaintiff testified that the business deducted certain
expenses, such as, the supplies or parts needed for the plumbing appointment, whether
those supplies or parts were obtained from the business or had to be purchased off-site
such as from Lowe’s. (Id. at 51-52). Although Plaintiff Holland was not “paid back”
for the cost of the supplies or parts used for a plumbing job, he received the percentage
of the total bill charged the customer, which included the cost for those supplies and
parts, as his commission. (Id. at 52). When asked “[w]hat other things . . . Bynum &
Sons charge[d him] for before they paid you the money that showed up on a 1099” (Id.
at 53; emphasis added), Plaintiff Holland listed these items: uniforms, gas, worker’s
compensation, liability insurance, automobile insurance, $145.00 per week for use of
the vehicle, and tires. His counsel even noted the discrepancy with Plaintiff’s
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testimony about the deduction from his compensation for tires and the fact that a
business expense deduction for tires was reflected on his tax returns. (Id. at 53-54).
There are more discrepancies with Plaintiff’s alleged business expense
deductions. The tax returns reflect deductions for supplies and parts or cost of goods
sold, for uniforms and for insurance, as three examples of items which Plaintiff
testified were deducted from his commission before he was paid.12 (Plaintiff’s Exhibit
1 at 08-1 and 08-2; Plaintiff’s Exhibit 2 at 09-2 and 09-3; and Plaintiff’s Exhibit 3 at
10-4 and 10-5). And, if, as Plaintiff testified, gas13 and the $145.00 per week charge
for usage of the vehicle was deducted before Plaintiff was compensated, the court is
at a loss to understand what business expense could possibly account for the large
deduction for each year reflected on the tax returns, that is, the “Car and truck
12
The material and supplies, or parts - goods sold, represent a significant
business expense deduction reflected on each of Plaintiff’s tax returns: $12,511.00 in
2008 (Plaintiff’s Exhibit 1 at 08-1); $19,067.00 in 2009 (Plaintiff’s Exhibit 2 at 09-2);
and $21,114.00 in 2010 (Plaintiff’s Exhibit 3 at 10-4). The court also notes that the
entries for these “expenses” are not consistent for all three years. In 2010, the
deduction for “supplies,” which had been accounted for under Expenses in 2008 and
2009, moved to Income, Cost of goods sold, in 2010. (Plaintiff’s Exhibit 3 at 10-4).
13
Plaintiff’s testimony was conflicting on whether gas was deducted from his
compensation before he was paid. (Tr. 6/23/14 at 53).
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expenses” of $29,281.00 in 2008 (Plaintiff’s Exhibit 1 at 08-1), of $30,649.00 in 2009
(Plaintiff’s Exhibit 2 at 09-2), and of $20,783.00 in 2010 (Plaintiff’s Exhibit 3 at 10-4).
Third, the court declines to accept Plaintiff’s use of the business expense
deductions on his federal tax returns to reduce his compensation for each year based
on entries that the court simply cannot discern, given the testimony at the bench trial,
as having any relationship to work for Bynum & Son’s Plumbing. For example, in
2008, Plaintiff included $70.00 for advertising and $90.00 for office expenses.
(Plaintiff Exhibit 1 at 08-1). And in 2010, Plaintiff included $741.00 for offense
expenses and $478.00 for computer equipment. (Plaintiff’s Exhibit 3 at 10-4 and 105).
While Plaintiff may have had some legitimate deductions for expenses incurred after he was paid his commission, the federal tax returns Plaintiff offered,
without supporting documentation or his ability to explain any of the entries and which
reflect deductions for expenses that Plaintiff testified had already been deducted from
his compensation, do not provide reliable evidence of the amounts of those legitimate
deductions. Accordingly, even if the court accepted Plaintiff’s ill-founded attempt to
base the alleged FLSA violations on the three periods of time identified by Plaintiff
and accepted his calculation of “regular” and “overtime” hours for each of those time
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frames, resulting in the total compensation he claims he was due of: (1) March 23,
2008, through December 31, 2008, minimum wages of $10,072.29 and overtime wages
of $10,360.02, for a total of $20,432.31; (2) January 1, 2009, through December 31,
2009, minimum wages of $14,305.43 and overtime wages of $16,485.67, for a total of
$30,791.09; and (3) January 1, 2010, through December 31, 2010, minimum wages of
$15,121.43 and overtime wages of $15,538.95, for a total of $30,660.38 [Doc. 72 at
14-15], Plaintiff’s compensation for the time frames in question well exceed those
amounts.
Plaintiff contends that: (1) he should have earned $20,432.31 in 2008 and his
income that year was $58,978.00 (Plaintiff’s Exhibit 1 at 08-1); (2) he should have
earned $30,791.09 in 2009 and his income was $65,343.12 (Plaintiff’s Exhibit 2 at 091); and (3) he should have earned $30,660.38 in 2009 and his income was $68,994,35
(Plaintiff’s Exhibit 3 at 10-1). If the court reduced Plaintiff’s yearly income by half
to account for after compensation expenses, which the court believes based on the
evidence introduced at trial is an excessive reduction, Plaintiff still earned more than
he contends was due him under the FLSA. The court finds that he has not established
a prima facie case of a violation of the FLSA.
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IV.
Conclusion
In the present case, because Plaintiff has failed in his burden to prove that he has
performed work for which he has not been paid, it is unnecessary for the court to
engage in the burden shifting analysis contemplated in Anderson. See Allen, 495 F.3d
at 1315-16 (citing Anderson, 66 S. Ct. at 1192). The court concludes that Plaintiff has
not established any violation of the FLSA. Consequently, based upon the foregoing
findings of fact and conclusions of law, and pursuant to Fed. R. Civ. P. 58, it is hereby
ORDERED AND ADJUDGED that Final Judgment shall be entered in favor
of Defendant Scott Bynum and against Plaintiff James Holland and that the Clerk of
Court is DIRECTED to enter this document on the civil docket as a final judgment
pursuant to Rule 58 of the Civil Rules of Federal Procedure;
IT IS FURTHER ORDERED that Plaintiff’s motion [Doc. 73] for attorney’s
fees and costs be DENIED; and
IT IS FURTHER ORDERED that the proceeding as to Defendant Bynum &
Son’s Plumbing is ADMINISTRATIVELY CLOSED due to the STAY [Doc. 24]
resulting from the federal bankruptcy proceeding.
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SO ORDERED THIS 11th day of September, 2014.
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