Contreras v. Lara's Trucks, Inc. et al
Filing
39
ORDER granting in part and denying in part 26 Motion for Summary Judgment; Plaintiff Luis Molina's claims are DISMISSED WITHOUT PREJUDICE. Signed by Judge Thomas W. Thrash, Jr on 1/11/13. (dr)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
LENNIN CONTRERAS
on behalf of himself and all others
similarly situated,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:12-CV-85-TWT
LARA'S TRUCKS, INC.
a Georgia corporation, et al.,
Defendants.
ORDER
This is an action for overtime wages under the Fair Labor Standards Act. It is
before the Court on the Defendants’ Motion for Summary Judgment [Doc. 26]. For
the reasons set forth below, the Court GRANTS IN PART and DENIES IN PART the
Defendants’ Motion for Summary Judgment, and Plaintiff Luis Molina’s claims are
DISMISSED WITHOUT PREJUDICE.
I. Background
The Plaintiff, Lennin Contreras, worked for the Defendants, Lara’s Trucks, Inc.
and Fernando Lara, from June 2010 to September 2011. (Contreras Decl. ¶ 2.)
Contreras worked in the Defendants’ internet department. (Id.) Contreras consistently
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worked sixty hours or more per week. (Contreras Decl. ¶ 4.) Nonetheless, he was
paid the same hourly wage for all hours worked; he did not receive a higher wage for
hours exceeding 40 hours per week. (Contreras Decl. ¶¶ 2, 5.)
Contreras states that his primary job duties were to take pictures of the
Defendants’
inventory and post vehicle listings on the Defendants’ website.
(Contreras Decl. ¶ 7.) Contreras spent 60-70 percent of his work hours taking pictures
of the Defendants’ inventory and posting and updating the pictures and vehicle
descriptions on the Defendants’ website. (Contreras Decl. ¶ 8.) Fernando Lara told
Contreras on multiple occasions that Contreras’ job was to keep the photos and
inventory listings up to date and that he did not want Contreras to spend time with the
customers. (Contreras Decl. ¶ 7.) Fernando Lara told Contreras that he was not
permitted to negotiate prices of vehicles with customers when they called about
internet listings and that Contreras should forward the customers to the Defendants’
car salesmen. (Contreras Decl. ¶ 11.) On one or two instances, after January 1, 2011,
when Lara’s Trucks was very busy, Fernando Lara instructed Contreras to help the
salespersons; apart from these instances, Contreras did not make sales or obtain
contracts or orders of any kind from customers for the sale of automobiles. (Contreras
Decl. ¶ 6.) Contreras followed strict guidelines when taking and uploading pictures
of the vehicles, and when describing the vehicles, and exercised minimal, if any,
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discretion. (Contreras Decl. ¶¶ 9-10.)
From June 2010 to early January 2011, Contreras was paid solely with an
hourly wage. The hourly rate started at $8 and was increased to $9 in October 2010
and $10 in December 2010. (Contreras Decl. ¶ 2.) From approximately January 13,
2011 to September 2011, Contreras was paid an hourly wage of $10 and a commission
on 42 vehicles that were sold by the Defendants. (Contreras Decl. ¶ 5.) During this
period, Contreras’ total compensation consisted of approximately $16,330 in hourly
wages and $2,100 in commissions paid on vehicles sold by the Defendants. (Id.)
Eighty-nine percent of Contreras’ pay during this period came from his hourly wage.
Contreras filed the Complaint in this Court on January 10, 2012 [Doc. 1].
Contreras claims that the Defendants violated the Fair Labor Standards Act, 29 U.S.C.
§ 201 et seq. (“FLSA”) by failing to pay him overtime wages, and seeks to recover
unpaid overtime wages, liquidated damages, attorney’s fees, and costs. (Compl.) Luis
Molina filed his consent to be a Party Plaintiff on February 29, 2012 [Doc. 9]. The
Defendants filed this Motion for Summary Judgment on August 2, 2012 [Doc. 26].
II. Motion for Summary Judgment Standard
Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show that no genuine issue of material fact exists
and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
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The court should view the evidence and any inferences that may be drawn in the light
most favorable to the nonmovant. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59
(1970). The party seeking summary judgment must first identify grounds that show
the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323-24 (1986). The burden then shifts to the nonmovant, who must go beyond
the pleadings and present affirmative evidence to show that a genuine issue of material
fact does exist. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
III. Discussion
A.
Overtime Wages
The FLSA generally requires employers to compensate employees one and onehalf times the regular rate of pay for all work performed in excess of 40 hours per
week. 29 U.S.C. § 207(a); Birdwell v. City of Gadsden, Ala., 970 F.2d 802 (11th Cir.
1992). An exception to this rule is found in 29 U.S.C. § 213(b)(10)(A) which
provides that the overtime requirements of the FLSA do not apply to “any
salesman...primarily engaged in selling...automobiles, trucks, or farm implements, if
he is employed by a nonmanufacturing establishment primarily engaged in the
business of selling such vehicles or implements to ultimate purchasers.” Id. “An
automobile salesman is ‘an employee who is employed for the purpose of and is
primarily engaged in making sales or obtaining orders or contracts for sale of the
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vehicles.’” Williams v. Gold Car Lending, Inc., No. 4:09-CV-84, 2010 U.S. Dist.
LEXIS 131571, at *15-*16 (M.D. Ga. 2010), quoting 29 C.F.R. § 779.372(c)(1). A
“‘sale’...includes any sale, exchange, contract to sell, consignment for sale, shipment
for sale, or other disposition.” 29 U.S.C. § 203(k). The Defendants base their Motion
for Summary Judgment on this so-called “automobile salesman exception” to the
FLSA overtime requirement. The exception is “to be construed narrowly, and the
employer shoulders the burden of establishing that it is entitled to an exemption.”
Alvarez Perez v. Sanford-Orlando Kennel Club, Inc., 515 F.3d 1150, 1156 (11th Cir.
2008).
To determine whether an employee is an exempt employee under the salesman
exception requires a “necessarily fact-intensive...primary duty inquiry,” which
examines the “actual day-to-day job activities” of the employee, and “not the labels
the Plaintiffs or the Defendant[s] place on those duties.” Morgan v. Family Dollar
Stores, 551 F.3d 1233, 1269 (11th Cir. 2008); Mutch v. PGA Tour, Inc., No. 3:04-CV97, 2006 U.S. Dist. LEXIS 98630, at *10-*11 (M.D. Fla. 2006). For an automobile
salesman to be primarily engaged in sales work, “over 50 percent of the
salesman’s...time must be spent in selling...vehicles.” 29 C.F.R. § 779.372(d).
“[P]romotion work that is ‘performed incidental to and in conjunction with an
employee’s own outside sales or solicitations is exempt work,’ whereas promotion
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work that is ‘incidental to sales made, or to be made, by someone else is not.’”
Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2158 (2012), quoting 29
C.F.R. § 541.503(a).
The Defendants have not met their burden of demonstrating that as a matter of
law Contreras primarily engaged in selling automobiles. Viewed in the light most
favorable to the Plaintiff, the facts are that Contreras spent the majority of his time
taking pictures of vehicles and posting the pictures to the website, and updating the
vehicle descriptions on the website. These actions could be construed as promotion
work incidental to sales made by someone else, i.e., salesmen at Lara’s Trucks that
interact with customers. On only one or two occasions, Contreras interacted with
customers or negotiated prices, so he was rarely present when the sale was made. The
Plaintiff’s statement that “a lot of cars got sold because of my job” is inconsequential.
As stated above, the label that the parties place on the employee’s duties does not alter
the analysis of what those duties were; the primary duty inquiry is still required.
Mutch, 2006 U.S. Dist. LEXIS 98630, at *10-*11. There is a genuine issue of
material fact regarding Contreras’ primary duty for Lara’s Trucks, and thus the
Defendants cannot prove an affirmative defense to the FLSA’s overtime requirement,
and their Motion for Summary Judgment on this issue is denied.
B.
The FLSA’s Record Keeping Requirement
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Count II of the Plaintiff’s Complaint pleads a violation of the FLSA’s record
keeping requirement. 29 U.S.C. § 211(c). The statute imposes the duty upon
employers to keep records of “persons employed” and the “wages, hours, and other
conditions and practices of employment.” Id. Where the employer fails to keep such
records, the court applies a burden shifting analysis to determine hours worked. In the
first instance, an employee proves that work has been performed by producing
evidence of the amount and extent of hours worked, by “just and reasonable
inference.” Chao v. Vidtape, Inc., 196 F. Supp. 2d 281, 293 (E.D.N.Y. 2002), aff'd
mem., Chao v. Vidtape, Inc., 2003 WL 21243085 (2d Cir. 2003), quoting Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946). The burden then shifts to
the employer “to come forward with evidence of the precise amount of work
performed or with evidence to negative the reasonableness of the inference to be
drawn from the employee's evidence.” Id. In the event that the employer fails to
sustain this burden, the court may award damages to the employee, even if those
damages are “only approximate.” Id.
If the Plaintiff intends to assert a violation of the FLSA’s record keeping
requirement as a separate cause of action, this claim fails because there is no private
right of action to enforce this provision. Rossi v. Associated Limousine Serv., Inc.,
438 F. Supp. 2d 1354, 1366 (S.D. Fla. 2006); Elwell v. University Hospitals Home
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Care Services, 276 F.3d 832, 843 (6th Cir. 2002).
C.
Similarly Situated Plaintiffs
A collective action under the FLSA “may be maintained against any employer
... by any one or more employees for and in behalf of himself or themselves and other
employees similarly situated. No employee shall be a party plaintiff to any such action
unless he gives his consent in writing[.]” 29 U.S.C. § 216(b). Unlike class actions
under Rule 23, a collective action under the FLSA requires individuals to opt-in to the
action instead of opting out. Shabazz v. Asurion Ins. Serv., No. 3:07-0653, 2008 WL
1730318, at *2 (M.D. Tenn. 2008), citing Douglas v. GE Energy Reuter Stokes, No.
1:07-CV-77, 2007 WL 1341779, at *2 (N.D. Ohio 2007).
Courts typically employ a two-step process to determine whether employees are
similarly situated so that collective action is proper. The process is:
The first step is conducted early in the litigation process, when the court
has minimal evidence and consists of a preliminary inquiry into whether
the plaintiff's proposed class consists of similarly situated employees
who were collectively ‘the victims of a single decision, policy, or plan[.]’
If the plaintiff meets this lenient standard, the court grants only
conditional certification for the purpose of notice and discovery.
The second step of this process is usually conducted after merits
discovery has occurred, and consists of a specific factual analysis of each
employee's claim to ensure that each proposed plaintiff is an appropriate
member of the collective action. At this second stage, the court will
again make a certification decision based on the “similarly situated”
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standard, but will require a higher level of proof than was necessary at
the first stage for conditional certification. If the conditional group of
plaintiffs does not meet this standard at the second stage, the group is
then decertified, the opt-in plaintiffs are dismissed without prejudice and
any remaining plaintiffs are permitted to move onto the trial stage of
litigation.
Shabazz, 2008 WL 1730318, at *2, quoting Lugo v. Farmer’s Pride Inc., No. 07-CV749, 2008 WL 638237, at *3 (E.D. Pa. 2008); see generally Morgan, 551 F.3d at
1260-1262.
Discovery has closed, and the Court now evaluates whether Luis Molina, the
lone Plaintiff who filed a “Consent to be a Party Plaintiff,” is “similarly situated” to
Lennin Contreras. After filing his Consent to be a Party Plaintiff, the Court has not
seen any evidence from Luis Molina. Molina has not filed an affidavit. Molina’s
Consent to be a Party Plaintiff contains statements that tend to show that he is not
similarly situated to Lennin Contreras, including his statement that “During the last
three years, I also worked for Defendants as a ‘Car Salesman,’ in which capacity
Defendants failed to pay me minimum wage for all hours that I worked in given pay
periods.” (Molina’s Consent to be a Party Plaintiff, at ¶ 6.) Contreras denies that he
worked as a salesman, and Contreras does not complain that the Defendants failed to
pay him the minimum wage. As previously mentioned, the parties’ own labels are
inconsequential, but Molina has not provided the Court with sufficient information to
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begin a primary duty inquiry. “[T]he burden is on the plaintiffs to make an
evidentiary showing that they and the proposed class are similarly situated, not on the
defendants to disprove such similarity.” Reed v. Mobile Cnty. Sch. Sys., 246 F. Supp.
2d 1227, 1232 (S.D. Ala. 2003). The Plaintiff does not oppose the Motion for
Summary Judgment as to Luis Molina. The Plaintiff does not produce sufficient
evidence to establish a collective action under § 216(b), and Molina is therefore
dismissed without prejudice.
D.
Damages
Subject to a factual finding in his favor, Contreras is eligible for damages.
These include compensatory damages, which would be calculated at a rate of one half
of Contreras’ hourly rate (as he has already received his typical hourly rate for work
exceeding 40 hours per week) times the number of hours Contreras worked overtime,
and an additional equal amount as liquidated damages. 29 U.S.C. § 216(b). However,
the Court has the power to exercise its discretion in the matter of liquidated damages
by virtue of 29 U.S.C. § 260, which makes allowances for an employer who shows to
the Court that his actions were in good faith and that he had reasonable grounds to
believe that those actions did not violate the FLSA. Id.; Morgan, 551 F.3d at 1282.
The Court will not make any determination on liquidated damages at this time. Upon
a finding that the Defendants violated the FLSA in failing to pay Contreras overtime
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pay, the Defendants would also be required to pay, in addition to the overtime
compensation due, a reasonable attorney's fee and the costs of the action. 29 U.S.C.
§ 216(b).
IV. Conclusion
For the reasons set forth above, the Court GRANTS IN PART and DENIES IN
PART the Defendants’ Motion for Summary Judgment [Doc. 26]. Plaintiff Luis
Molina’s claims are DISMISSED WITHOUT PREJUDICE.
SO ORDERED, this 11 day of January, 2013.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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