Martin v. Southern Premier Contractors, Inc.
Filing
43
ORDER DENYING Defendant Southern Premier Contractor's, Inc.'s 32 Motion for Summary Judgment. Signed by Judge Richard W. Story on 03/06/13. (sk) Modified on 3/6/2013 (sk).
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
RUPHARD HUGH MARTIN, JR.,
Plaintiff,
v.
SOUTHERN PREMIER
CONTRACTORS, INC.,
Defendant.
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CIVIL ACTION NO.
2:11-CV-00197-RWS
ORDER
This case comes before the Court on Defendant Southern Premier
Contractors, Inc.’s Motion for Summary Judgment [32]. After reviewing the
record, the Court enters the following Order.
Background
Plaintiff Ruphard Hugh Martin, Jr. (“Plaintiff”) brought this action for
unpaid overtime compensation under the Fair Labor Standards Act of 1938
(“FLSA”), which requires that employers pay their employees overtime
compensation at a rate not less than time and a half for hours worked in excess
of a forty-hour workweek. 29 U.S.C. § 207(a)(1). This requirement, however,
does not apply with respect to any employee “employed in a bona fide
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executive . . . capacity.” 29 U.S.C. § 213(a)(1). Defendant Southern Premier
Contractors, Inc. (“Defendant” or “SPC”) now moves for summary judgment on
Plaintiff’s overtime claim on the basis of this executive exemption. (See
generally Def.’s Mem. of Law in Supp. of Mot. for Summ. J. (“Def.’s Mem.”),
Dkt. [32-1].) The nature of Plaintiff’s employment with SPC is, therefore, the
key issue in this case.1
I.
General Background on SPC and Plaintiff’s Employment
SPC is a utility contractor in the primary business of repairing and
replacing pipes for Gwinnett County. (Def.’s Statement of Material Facts
About Which There Is No Genuine Issue To Be Tried (“Def.’s SMF”), Dkt.
[32-2] ¶ 1.) It commenced operations in May 2009 and has two departments, a
civil department and a CCTV department, the latter of which was created in
September or October 2010. (Id. ¶¶ 1, 6; Pl.’s Resp. to Def.’s SMF, Dkt. [37-6]
¶ 6.) Plaintiff was hired by SPC as a full-time employee in July 2009 and from
July 2009 until September or October 2010 worked on SPC’s civil crew, which
1
SPC also argues that it was not covered by the FLSA, and therefore not
subject to its overtime compensation requirement, “until the end of the first quarter of
2010 because its annualized revenue was less than $500,000 until that point.” (Def.’s
Mem., Dkt. [32-1] at 2, 5-7 (citing 29 U.S.C. § 203(s)(1)(A).) This argument is
addressed in Part II.A. of the Discussion section, infra.
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repaired underground stormwater pipes. (Decl. of Ruphard Hugh Martin, Jr.
(“Pl.’s Decl.”), Dkt. [37-1] ¶¶ 2-3.) From September or October 2010, when
the CCTV department was established, until the end of Plaintiff’s employment,
Plaintiff worked primarily in SPC’s CCTV department, which department
primarily cleaned underground stormwater pipes and inspected them by video.
(Id. ¶¶ 6-7.) SPC paid Plaintiff $240 per day at the outset of his employment
but started paying him on a salary basis around the first of 2010. (Def.’s SMF,
Dkt. [32-2] ¶ 8.) In June 2010, Plaintiff’s salary was increased from $1,200 per
week to $1,500 per week. (Id. ¶ 9.) SPC contends that Plaintiff was the highest
paid employee other than the company’s two owners, Michael Massey
(“Massey”) and Lisa Massey.2
2
Plaintiff disputes this assertion on grounds that “SPC has failed to provide the
Court with evidence of the extent to which [Plaintiff]’s compensation allegedly
outpaced his coworkers’ wages when, for example, the other workers’ paid overtime
hours are considered.” (Pl.’s Resp. to Def.’s SMF, Dkt. [37-6] ¶ 10.) In support of
this factual assertion, Defendant points to Massey’s deposition, in which he testified
that other than himself and SPC’s other owner, Lisa Massey, Plaintiff was the highest
compensated SPC employee. (June 7, 2012 Dep. of Michael Massey (“Massey
Dep.”), Dkt. [33-3] at 48:24-49:9.)
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II.
The Nature of Plaintiff’s Employment
The Parties hotly dispute the nature of Plaintiff’s employment. As stated
above, SPC contends that Plaintiff is subject to the executive exemption of the
FLSA and, thus, argues that Plaintiff was employed in an executive capacity,
with his primary duties being the management of SPC’s departments and
supervision of its employees. (See generally Def.’s Mem., Dkt. [32-1].)
Plaintiff contends, on the other hand, that he does not fall within the executive
exemption of the FLSA because he was, essentially, an “ordinary laborer,” with
the overwhelming majority of his work consisting of hard manual labor and
non-managerial tasks. (See generally Pl.’s Resp. to Def.’s Mot. for Summ. J.
(“Pl.’s Resp.”), Dkt. [37].)
A.
Defendant’s Account of Plaintiff’s Responsibilities
The following is a summary of the evidence presented by SPC in support
of its argument that Plaintiff was employed in an executive capacity. SPC
contends that Plaintiff was a foreman for SPC, first in the civil and later in the
CCTV department. (Aff. of Michael Massey (“Massey Aff.”), Dkt. [32-6] ¶ 3.)
With respect to his work in the civil department, SPC contends that Plaintiff
“watched over the job” when Massey was not present, “did supervising work,”
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and “told [employees] what to do once [they] got to the job.” (Def.’s SMF,
Dkt. [32-2] ¶¶ 11-12.) SPC contends that Plaintiff subsequently “took over” or
“r[an]” the CCTV department and, in that capacity, participated in the process
of hiring other employees, made hiring recommendations, trained employees,
scheduled the work the CCTV department would perform, made staffing
decisions, and decided what materials would be required to complete a job. (Id.
¶¶ 13-22.) It is undisputed that Plaintiff “was responsible for the work
performed by all employees in the CCTV department.” (Id. ¶ 17.) It is also
undisputed that Plaintiff prepared daily reports for SPC and that Plaintiff was
the only employee who prepared these reports from January 2010 to July 2011,
when another employee, Kelton Peels (“Peels”), also gained this authority.
(Id. ¶ 33.)
SPC also contends that as a “manager” for SPC, Plaintiff was responsible
for supervising employees and ensuring that work was completed properly and
on time. (Id. ¶¶ 23-32.) For example, SPC contends that between four and
eight employees reported to Plaintiff at all times, and that Plaintiff would
instruct employees on how to perform work tasks. (Id. ¶¶ 24, 26-30.) It is
undisputed that Plaintiff “had primary responsibility to make sure that work was
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performed in a safe manner.” (Id. ¶ 42.) To this end, SPC contends that
Plaintiff had the authority to correct employees who were working in an unsafe
manner and that Plaintiff did, in fact, reprimand employees for incorrect work
performance, either directly or indirectly to Massey. (Id. ¶ 43.) Indeed,
Plaintiff admits that he reprimanded employees for “equipment-related issues.”
(Pl.’s Resp. to Def.’s SMF, Dkt. [37-6] ¶ 43.)
Massey summarized Plaintiff’s employment position as follows:
As a foreman, [Plaintiff]’s principal value to SPC was that
he was able to manage work projects from start to finish. It was
easier to find employees to perform manual labor than it was to
find employees like [Plaintiff] who could supervise work projects
and make sure that work was done in a prompt, correct, and safe
manner. SPC paid [Plaintiff] more than any other employee (other
than me and my wife Lisa, who is a co-owner of SPC) because of
his value as a supervisor.
Because of his role supervising the civil and then the CCTV
departments, I gave particular weight to [Plaintiff]’s
recommendations for hiring and firing employees. If an
interviewee or an employee could not co-exist with [Plaintiff], then
it did not make sense for that person to be working with [Plaintiff].
Accordingly, I placed great importance on [Plaintiff]’s input
regarding hiring and firing. In fact, I cannot recall an instance
where I did not act in accordance with his recommendations
regarding hiring and firing.
(Massey Aff., Dkt. [32-6] ¶¶ 4-5.)
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B.
Plaintiff’s Account of His Employment Responsibilities
As stated above, Plaintiff vigorously disputes SPC’s contention that
Plaintiff was employed in an executive or managerial capacity and contends, on
the contrary, that he was an ordinary laborer whose work consisted primarily of
hard manual labor and non-managerial tasks. (See generally Pl.’s Resp. to
Def.’s Mot. for Summ. J., Dkt. [37].) Plaintiff’s argument in this regard
essentially boils down to his contention that “virtually all management-level
decisions regarding SPC’s business were made by [Massey], not [Plaintiff].”
(Id. at 7.) In support of this argument, Plaintiff offers the following evidence.3
From July 2009 through September or October 2010, while Plaintiff
worked in the civil department, “Plaintiff spent approximately ninety-five
percent of his work time landscaping, performing construction work, operating
tractors and backhoes, driving trucks, and repairing stormwater pipes.” (Pl.’s
Statement of Additional Material Facts Presenting a Genuine Issue for Trial
(“Pl.’s SAF”), Dkt. [37-7] ¶ 1.) Plaintiff explains that this work included
“hauling gravel and other materials by dumptruck, operating backhoes and
3
Again, the Court provides a summary of the evidence provided by Plaintiff
and does not attempt to catalog each piece of Plaintiff’s evidence.
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trackhoes, running tractors, shoveling dirt, spreading straw, and laying sod.”
(Decl. of Ruphard Hugh Martin, Jr. (“Pl.’s Decl.”), Dkt. [37-1] ¶ 4.) Plaintiff
also was tasked with completing daily reports, which task took Plaintiff
approximately five to ten minutes at the end of each work day. (Id.)
It is undisputed that while Plaintiff was working with the civil crew,
Massey was on the same job site as Plaintiff approximately ninety to ninety-five
percent of the time. (Pl.’s SAF, Dkt. [37-7] ¶ 9.) While Plaintiff admittedly
“watched over the job,” he did so only in Massey’s absence and while, at the
same time, doing the same work as other employees. (Pl.’s Resp. to Def.’s
SMF, Dkt. [37-6] ¶ 11.) Plaintiff contends that he only supervised employees
in Massey’s absence and that any directions he provided to employees or other
workers on job sites came directly from Massey. (Id. ¶ 12; Pl.’s SAF, Dkt. [377] ¶¶ 19-20.) Plaintiff contends that Massey, not Plaintiff, directed work on
SPC’s civil job sites and that Massey, not Plaintiff, decided whether to purchase
materials for a job site; decided or approved changes in work orders; and was
responsible for project billing. (Pl.’s SAF, Dkt. [37-7] ¶¶ 11-14.) If a problem
arose on a civil job site and Massey was not there, Plaintiff would call Massey
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to see what Massey wanted to be done. (Id. ¶ 18.) If Massey left a job site, he
would tell Plaintiff and other employees what to do before he left. (Id. ¶ 17.)
After Plaintiff moved primarily to the CCTV department, he spent “at
least eighty percent of his work time performing non-managerial labor: cleaning
pipes, placing the camera (which weighs approximately one hundred pounds
and must be carefully lowered into the pipe), and remotely controlling the
camera.” (Pl.’s Decl., Dkt. [37-1] ¶ 8.) Plaintiff disputes SPC’s contentions
that Plaintiff generally supervised the CCTV department and actively
participated in the hiring of employees. (Pl.’s Resp. to Def.’s SMF, Dkt. [37-6]
¶¶ 13-16, 18.) First, Plaintiff contends that many managerial decisions were
made by Massey rather than Plaintiff. (Id. ¶ 13.) In particular, although
Massey tasked Plaintiff with preparing a preliminary schedule for the video
work, Massey ultimately decided the order in which video jobs would be
completed. (Id.; see also Pl.’s SAF, Dkt. [37-7] ¶ 28 (“Once drafted, [Plaintiff]
would email the schedule to Massey, who would either approve it or revise
it.”).) Plaintiff also contends that after the CCTV crew completed its scheduled
jobs, Massey, not Plaintiff, decided whether the CCTV crew would quit for the
day or go assist the civil crew. (Pl.’s Resp. to Def.’s SMF, Dkt. [37-6] ¶ 13;
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Pl.’s SAF, Dkt. [37-7] ¶ 29.) Plaintiff also contends that if the CCTV crew
came across a “particularly gnarly pipe,” Plaintiff called Massey for instruction
on whether to clean the pipe with the jet truck or clean the pipe by hand. (Pl.’s
Resp. to Def.’s SMF, Dkt. [37-6] ¶ 13; Pl.’s SAF; Dkt. [37-7] ¶ 29.)
Second, Plaintiff points out that he never hired or fired anyone while
working for SPC and that neither Massey nor Lisa Massey ever told Plaintiff he
had authority to do so. (Pl.’s SAF, Dkt. [37-7] ¶ 7.) Indeed, Plaintiff denies
SPC’s assertion that he participated in the process of interviewing employees.
(Pl.’s Resp. to Def.’s SMF, Dkt. [37-6] ¶ 14.) Nor does Plaintiff recall ever
recommending that anyone be hired. (Id.) Plaintiff contends that he merely
responded to Massey’s questions about how probationary employees were
performing. (Id. ¶ 16.) Plaintiff never adjusted or set any employee’s rate of
pay or hours while employed by SPC. (Pl.’s SAF, Dkt. [37-7] ¶ 8.) Plaintiff
gave no input regarding SPC’s budget and had no responsibility to monitor its
legal compliance. (Id.)
The Court sets out the legal standard governing a motion for summary
judgment before considering SPC’s motion on the merits. The Court first
considers Defendant’s argument that it was not covered by the FLSA until the
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end of the first quarter of 2010. The Court then considers Defendant’s
argument that it was not obligated to pay Plaintiff overtime compensation, in
any event, because Plaintiff fell within the executive exemption of the FLSA.
Discussion
I.
Summary Judgment Legal Standard
Federal Rule of Civil Procedure 56 requires that summary judgment be
granted “if 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 moving party bears ‘the initial responsibility of informing the . . .
court of the basis for its motion, and identifying those portions of the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue
of material fact.’” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259
(11th Cir. 2004) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)
(internal quotations omitted)). Where the moving party makes such a showing,
the burden shifts to the non-movant, 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).
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The applicable substantive law identifies which facts are material. Id. at
248. A fact is not material if a dispute over that fact will not affect the outcome
of the suit under the governing law. Id. An issue is genuine when the evidence
is such that a reasonable jury could return a verdict for the non-moving party.
Id. at 249-50.
Finally, in resolving a motion for summary judgment, the court must
view all evidence and draw all reasonable inferences in the light most favorable
to the non-moving party. Patton v. Triad Guar. Ins. Corp., 277 F.3d 1294, 1296
(11th Cir. 2002). But, the Court is bound only to draw those inferences which
are reasonable. “Where the record taken as a whole could not lead a rational
trier of fact to find for the non-moving party, there is no genuine issue for trial.”
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
“If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.” Anderson, 477 U.S. at 249-50 (internal citations
omitted); see also Matsushita, 475 U.S. at 586 (once the moving party has met
its burden under Rule 56(a), the nonmoving party “must do more than simply
show there is some metaphysical doubt as to the material facts”).
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II.
Analysis
A.
Enterprise Coverage under the FLSA
SPC first argues that it was not covered by the FLSA until the beginning
of the second quarter of 2010 because it’s annualized revenue was less than
$500,000 prior to this point. (Def.’s Mem., Dkt. [32-1] at 5-7.) On this basis,
SPC seeks summary judgment on Plaintiff’s claim for overtime compensation
for hours worked prior to April 1, 2010. (Id.)
Enterprise coverage under the FLSA does not exist unless the business’s
“annual gross volume of sales made or business done is not less than
$500,000.” 29 U.S.C. § 203(s)(1)(A)(ii). The governing regulations recognize
that in the case of a new business, the employer will be unable to compute its
annual dollar volume on the basis of a twelve-month period. 29 C.F.R. §
779.269. The regulations also recognize, however, that in many cases, it will be
“readily apparent that the enterprise or establishment will or will not have the
requisite annual dollar volume specified in the Act.” 29 C.F.R. § 779.269. The
regulations give as an example a large department store or supermarket, where
“it may be clear from the outset that the business will meet the annual dollar
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volume tests so as to be subject to the requirements of the Act.” 29 C.F.R. §
779.269.
In cases where it is not clear, the regulations provide that “the gross
receipts of the new business during the first quarter year in which it has been in
operation will be taken as representative of its annual dollar volume . . . for
purposes of determining its obligations under the Act in workweeks falling in
the following quarter year period.” 29 C.F.R. § 779.269. “Similarly, for
purposes of determining its obligations under the Act in workweeks falling
within ensuing quarter year periods, the gross receipts of the new business for
the completed quarter year periods will be taken as representative of its annual
dollar volume in applying the annual volume tests of the Act.” 29 C.F.R. §
779.269 (emphasis added).
SPC has submitted evidence, which Plaintiff does not dispute, that its
gross sales in its first three quarters of operation were as follows:
•
2009 quarter 2 (its first quarter of operation): $47,092
•
2009 quarter 3: $109,043
•
2009 quarter 4: $216,837
(Def.’s SMF, Dkt. [32-2] ¶¶ 1-4; Pl.’s Resp. to Def.’s SMF, Dkt. [37-6] ¶¶ 1-4.)
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SPC thus contends that, using the “look-back method” set out in 29 C.F.R. §
779.269 for new businesses, its annualized gross sales volume did not reach
$500,00 until the second quarter of 2010. (Def.’s Mem., Dkt. [32-1] at 6-7.) In
its response brief, Plaintiff does not dispute SPC’s calculations in this regard.
(Pl.’s Resp., Dkt. [37] at 20-21.)
Plaintiff nonetheless contends that SPC has failed to prove, as a matter of
law, that SPC was not subject to enterprise coverage under the FLSA until the
second quarter of 2010. (Pl.’s Resp., Dkt. [37] at 20-21.) To this end, Plaintiff
contends that it was “clear from the outset that [SPC] [would] satisfy the annual
dollar volume test by the end of its first year of business.” (Id. at 20 (citing 29
C.F.R. § 779.269).) In support of this argument, Plaintiff points to Massey’s
deposition testimony, in which he stated that SPC had paid each of its nonmanagerial employees overtime since SPC had been in business:
Q.
. . . When do you contend that Southern Premier Contractors
became subject to the [FLSA]?
A.
[SPC], we abide by the [FLSA], always have.
Q.
Okay.
A.
But management people are exempt. [Plaintiff] was in a
management position.
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Q.
. . . Does that mean you paid all non-management employees
overtime since [SPC]’s been in business?
A.
To my knowledge, yes.
(Id. at 20-21 (quoting Massey Dep., Dkt. [34] at 129:5-19).)4
The Court agrees with Plaintiff that issues of fact preclude the Court from
ruling as a matter of law that SPC was not subject to the FLSA until the second
quarter of 2010. As stated above, the regulations recognize that “[i]n many
cases it is readily apparent that the enterprise or establishment will or will not
have the requisite annual dollar volume specified in the Act” and list as
examples “a large department store” or “a supermarket.” 29 C.F.R. § 779.269.
Although SPC argues that it does not fall within this language because it is not
“a large department store, or a supermarket,” these are merely examples of
enterprises that clearly are covered by the Act, and there is no evidence in the
record from which the Court may decide, as a matter of law, that SPC is not
4
Plaintiff also points to the fact that SPC grossed nearly four times the amount
needed to establish coverage under the FLSA in its first year. (Pl.’s Resp., Dkt. [37]
at 21 (citing Massey Dep., Dkt. [34] at 120-21).) Indeed, Massey testified that in its
first year of business, SPC grossed between 1.9 and 2 million dollars in income.
(Massey Dep., Dkt. [34] at 120:22-121:6.)
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such an enterprise. Accordingly, SPC is not entitled to summary judgment on
this issue.
B.
Executive Exemption of the FLSA
As stated in the Background section, supra, SPC moves for summary
judgment on Plaintiff’s overtime claim on the basis of the FLSA’s executive
exemption. This exemption provides that the FLSA’s overtime compensation
requirement does not apply to “any employee employed in a bona fide
executive . . . capacity . . . .” 29 U.S.C. § 213(a)(1). Department of Labor
Regulations define the term “employee employed in a bona fide executive
capacity” as any employee:
(1)
Compensated on a salary basis at a rate of not less than $455
per week . . .;
(2)
Whose primary duty is management of the enterprise in
which the employee is employed or of a customarily
recognized department or subdivision thereof;
(3)
Who customarily and regularly directs the work of two or
more other employees; and
(4)
Who has the authority to hire and 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.
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29 C.F.R. § 541.100(a). The question of whether Plaintiff falls within the
executive employee exemption is a question of law for the Court; the question
of how Plaintiff spent his working time, however, is a question of fact. Icicle
Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986).
SPC argues that Plaintiff satisfied each element of the four-part test for
the executive exemption and therefore that SPC is entitled to judgment as a
matter of law on Plaintiff’s overtime claim. (Def.’s Mem., Dkt. [32-1] at 8-22.)
Plaintiff contends, on the other hand, that based on the evidence in the summary
judgment record, a reasonable jury could find that Plaintiff was not employed in
a “bona fide executive capacity.” (Pl.’s Resp. to Def.’s Mot. for Summ. J.
(“Pl.’s Resp.”), Dkt. [37] at 3, 10-21.) Plaintiff concedes the first part of the
four-part test, that Plaintiff was a salaried employee, compensated at a rate not
less than $455 per week. (Id. at 3.) Plaintiff argues, however, that the evidence
in the record “does not require a finding that [Plaintiff’s] primary duty was
management, that he ‘customarily and regularly’ directed the work of two or
more employees, and that his recommendations regarding hiring and firing were
‘given particular weight.’” (Id. (emphasis in original).) The Court considers
these three elements against the evidence in the summary judgment record.
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1.
Primary Duty is Management
The Department of Labor Regulations define “management” as
including, but not limited to, activities such as:
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 purpose 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, or sold; controlling the flow and distribution of materials
or 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. The term “primary duty” is defined to mean “the
principal, main, major or most important duty that the employee performs.” 29
C.F.R. § 541.700(a).
The Regulations provide that “[d]etermination of an employee’s primary
duty must be based on all the facts in a particular case, with the major emphasis
on the character of the employee’s job as a whole.” 29 C.F.R. § 541.700(a).
“Factors to consider when determining the primary duty of an employee
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include, but are not limited to, the relative importance of the exempt duties as
compared with other types of duties; the amount of time spent performing
exempt work; the employee’s relative freedom from direct supervision; and the
relationship between the employee’s salary and the wages paid to other
employees for the kind of nonexempt work performed by the employee.” 29
C.F.R. § 541.700(a). The Regulations further provide that the amount of time
an employee spends doing exempt work “can be a useful guide in determining
whether exempt work is the primary duty of an employee”:
Thus, employees who spend more than 50 percent of their time
performing exempt work will generally satisfy the primary duty
requirement. Time alone, however, is not the sole test, and nothing
in this section requires that exempt employees spend more than 50
percent of their time performing exempt work. Employees who do
not spend more than 50 percent of their time performing exempt
duties may nonetheless meet the primary duty requirement if the
other factors support such a conclusion.
29 C.F.R. § 541.700(b).
SPC bears the burden of establishing its executive exemption affirmative
defense. Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1269 (11th Cir.
2008). Courts are to “closely circumscribe the FLSA’s exemptions,” applying
them only “to those clearly and unmistakably within the terms and spirit of the
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exemption.” Id. Exemptions to the FLSA’s overtime requirement therefore are
narrowly construed. Id. Moreover, the Eleventh Circuit Court of Appeals has
rejected a “categorical approach” to deciding whether an employee falls within
the executive exemption. Id. The Court has recognized “the necessarily factintensive nature of the primary duty inquiry, that the answer is in the details,
and that where an issue turns on the particular facts and circumstances of a case,
it is not unusual for their to be evidence on both sides of the question, with the
result hanging in the balance.” Id. (internal quotes and citations omitted).
The Court finds that, in this case, factual issues regarding the nature of
Plaintiff’s position with SPC preclude it from ruling as a matter of law that
Plaintiff’s primary duty was management. As stated above, factors bearing on
the primary duty inquiry include, but are not limited to:
•
the relative importance of the exempt duties as compared with
other types of duties;
•
the amount of time spent performing exempt work;
•
the employee’s relative freedom from direct supervision; and
•
the relationship between the employee’s salary and the wages paid
to other employees for the kind of nonexempt work performed by
the employee.
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29 C.F.R. § 541.700(a). Accepting the facts according to Plaintiff as true, the
Court finds that a reasonable jury could conclude that Plaintiff’s primary duty
was not management.
Plaintiff has presented evidence that he spent between eighty to ninetyfive percent of his work time performing manual labor and non-managerial
tasks. Such work included hauling gravel and other materials by dumptruck,
operating backhoes and tractors, shoveling dirt, spreading straw, laying sod, and
operating the one-hundred-pound CCTV camera. Moreover, Plaintiff has
presented evidence that Massey, not Plaintiff, made all major managerial
decisions and that Plaintiff was subject to Massey’s direct supervision.
For example, it is undisputed that while Plaintiff worked in the civil
department of SPC, Massey was on the same job site as Plaintiff ninety-five
percent of the time. Plaintiff contends that Plaintiff “watched over the job” and
supervised employees only in Massey’s absence. Plaintiff also contends that
any directions he gave to other employees came directly from Massey and that
Massey directed SPC’s work on civil job sites; e.g., deciding whether to
purchase materials, deciding or approving changes in work orders, and
overseeing project billing. If a problem arose on a civil job site, Plaintiff did
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not exercise discretion in determining how to resolve it but, rather, called
Massey for direction. Before Massey ever left a job site, he gave Plaintiff and
the other employees directions regarding the work they were to perform.
Additionally, it is undisputed that Plaintiff never hired or fired any
employee, and Plaintiff contends that he did not even participate in this process.
On the contrary, Plaintiff contends that his only role in this regard was
answering questions from Massey regarding the performance of particular
employees, about whom Massey inquired. Although SPC contends that
Plaintiff was the highest paid employee after Massey and his wife and SPC-coowner, Lisa Massey, there is no evidence in the record regarding how Plaintiff’s
salary compared to the compensation paid other non-managerial employees.
In light of this evidence, a reasonable jury could conclude, based on the
factors set out above, that Plaintiff’s primary duty was not management. See,
e.g., Rodriquez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1265 (11th Cir.
2008) (finding sufficient evidence from which jury reasonably could conclude
that store managers’ primary duty was not management, where evidence was
presented that, e.g., (1) managerial tasks did not constitute majority of
managers’ work; (2) managers lacked authority and discretion over their
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respective stores and employees; (3) some store managers could not make
management decisions without permission of district manager; and (4) some
store managers’ hourly rate of pay was comparable to or even less than those of
sales associates or assistant managers); Morgan v. Family Dollar Stores, Inc.,
551 F.3d 1233, 1269 (11th Cir. 2008) (finding sufficient evidence from which
jury reasonably could find that store managers’ primary duty was not
management, where ample evidence showed (1) store managers spent 80 to
90% of their time performing manual labor; (2) their non-managerial tasks were
of equal or greater importance to the store’s functioning and success; (3) store
managers rarely exercised discretion and (4) had little freedom from direct
supervision; and (5) a relatively small difference existed between store
managers’ and assistant managers’ hourly rates). Accordingly, the Court cannot
rule as a matter of law that Plaintiff was subject to the executive exemption of
the FLSA.5 SPC, therefore, is not entitled to summary judgment on its
executive exemption affirmative defense.
5
The Court declines to address the remaining two parts of the executive
exemption test (29 C.F.R. § 541.100(a)) in light of SPC’s failure to show as a matter
of law that Plaintiff’s primary duty was management.
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C.
Measure of Damages
Finally, SPC argues that “if this Court does not dismiss Plaintiff’s FLSA
claim in its entirety because Plaintiff is exempt, it should order that Plaintiff’s
measure of damages should be half-time his hourly rate of pay, not time-and-ahalf.”6 (SPC’s Mot. for Summ. J., Dkt. [32-1] at 24.) As stated at the beginning
6
In support of this argument, SPC points to 29 C.F.R. § 778.114(a) and
multiple circuit and district court cases applying this provision to award overtime
compensation on a half-time, rather than time-and-a-half, basis. Under this provision:
An employee employed on a salary basis may have hours of work which
fluctuate from week to week and the salary may be paid him pursuant to
an understanding with his employer that he will receive such fixed
amount as straight time pay for whatever hours he is called upon to
work in a workweek, whether few or many. Where there is a clear
mutual understanding of the parties that the fixed salary is compensation
(apart from overtime premiums) for the hours worked each workweek,
whatever their number, rather than for working 40 hours or some other
fixed weekly work period, such a salary arrangement is permitted by the
Act if the amount of the salary is sufficient to provide compensation to
the employee at a rate not less than the applicable minimum wage rate
for every hour worked in those workweeks in which the number of
hours he works is greatest, and if he receives extra compensation, in
addition to such salary, for all overtime hours worked at a rate not less
than one-half his regular rate of pay. Since the salary in such a situation
is intended to compensate the employee at straight time rates for
whatever hours are worked in the workweek, the regular rate of the
employee will vary from week to week and is determined by dividing
the number of hours worked in the workweek into the amount of the
salary to obtain the applicable hourly rate for the week. Payment for
overtime hours at one-half such rate in addition to the salary satisfies the
overtime pay requirement because such hours have already been
compensated at the straight time regular rate, under the salary
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of this Order, Section 7(a)(1) of the FLSA provides that “no employer shall
employ any of his employees . . . for a workweek longer than forty hours unless
such employee receives compensation for his employment in excess of the
hours above specified at a rate not less than one and one-half times the regular
rate at which he is employed.” 29 U.S.C. § 207(a)(1) (emphasis added). “The
employee’s ‘regular rate’ of pay is thus the ‘keystone’ of section 7(a).”
Urnikis-Negro v. Am. Family Property Servs., 616 F.3d 665, 673 (7th Cir.
2010) (quoting Walling v. Youngerman-Reynolds Hardwood Co., 325 U.S.
419, 424 (1945)). “‘On that depends the amount of overtime payments which
are necessary to effectuate the statutory purposes. The proper determination of
that rate is therefore of prime importance.’” Id. (quoting Walling, 325 U.S. at
424).
The “regular rate” of pay under the Act is the amount of compensation an
employee receives per hour. 29 C.F.R. § 778.109. Computation of this rate
begins with a determination of the employee’s weekly salary. 29 C.F.R. §
arrangement.
29 C.F.R. § 778.114(a). (See footnote 10, infra, for a discussion of the applicability of
this regulation to the issue before the Court.)
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778.113. See also Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 579
(1942), superseded on other grounds by statute as stated in Trans World
Airlines, Inc. v. Thurston, 469 U.S. 111, 128 n.22 (1985) (“It is . . . abundantly
clear from the words of section 7 that the unit of time under that section within
which to distinguish regular from overtime is the week.”). “To produce the
regular hourly rate of pay for purposes of the overtime calculation, the weekly
salary must in turn be divided ‘by the number of hours which the salary is
intended to compensate.’” Urnikis-Negro, 616 F.3d at 673 (emphasis added)
(quoting 29 C.F.R. § 778.113(a)7). An employee’s regular rate of pay is a
question of fact. Id. at 680 (citing Walling, 325 U.S. at 424-25).
In this case, SPC has failed to present any evidence regarding the number
of hours Plaintiff’s salary was intended to compensate, although there is
evidence in the record that Plaintiff regularly worked more than 40 hours per
week. (Pl.’s SAF, Dkt. [37-7] ¶ 24.) Was Plaintiff’s salary intended to
compensate him for a forty-hour workweek? A fifty-hour workweek? Or for all
7
This regulation states, “If the employee is employed solely on a weekly salary
basis, the regular hourly rate of pay, on which time and a half must be paid, is
computed by dividing the salary by the number of hours which the salary is intended
to compensate.” 29 C.F.R. § 778.113 (emphasis added).
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hours worked in a given workweek, regardless of the number? This issue, in
turn, bears on the proper method of calculating the overtime to which Plaintiff
would be entitled, if found not exempt.
Following the United States Supreme Court’s decision in Missel, 316
U.S. at 580-81 & n.16, courts have held that where an employee’s salary is
intended to compensate the employee for any and all hours worked in a given
workweek, rather than some fixed number of hours, overtime compensation
owed to the employee is calculated on a half-time rather than time-and-a-half
basis. The rationale behind this rule has been stated as follows:
Notably, the approach taken by the Court in Missel treats the fixed
weekly wage paid to the employee as compensation at the regular
rate for all hours that the employee works in a week, including
overtime hours. The employer will separately owe the employee a
premium for the overtime hours, but because he has already been
compensated at the regular rate for the overtime hours by means of
the fixed wage, the employer will owe him only one-half of the
regular rate for those hours rather than time plus one-half.
Urnikis-Negro, 616 F.3d at 675 (emphasis in original). See also Seymour v.
PPG Indus., Inc., No. 09-1707, 2012 WL 3746194, at *14 (W.D. Pa. Aug. 29,
2012) (“Ultimately, the employee’s regular rate of pay is a factual issue . . .
which requires a threshold determination whether the salary was intended to
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compensate for a fixed number of hours, or alternatively for all hours worked.
If the salary was for a fixed number of hours, the employees are entitled to
time-and-a-half for overtime work.8 If the salary was for all time worked, the
employees are only entitled to the half-time premium, because they have
already received payment for straight time on their overtime hours.”); Torres v.
Bacardi Global Brands Promotions, Inc., 482 F. Supp. 2d 1379, 1381 (S.D. Fla.
2007) (“[A] non-exempt employee who receives a weekly salary for all hours
worked has, by definition, already been paid his “regular rate” for all hours
worked in the workweek. Thus, [such] employee is only owed half-time for
any hours worked in excess of forty per workweek.”).
In accordance with the foregoing, if Plaintiff is found not exempt, and if
his salary was intended to compensate him for fluctuating work hours, the
overtime premium to which he would be entitled properly would be calculated
on a half-time basis. If, on the other hand, Plaintiff’s salary was intended to
compensate him for fixed work hours, Plaintiff would be entitled to overtime
8
The Seymour court recognized as follows: “This conclusion assumes the fixed
number of hours was forty per week. If, on the other hand, the salary was actually
intended to compensate for fifty hours, the employees would be entitled to half-time
for the first ten hours or less of overtime and time-and-a-half for any overtime worked
beyond the first ten hours.” 2012 WL 3746194, at *14 n.8.
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compensation on a time-and-a-half basis.9 Given the lack of evidence in the
record regarding the number of hours Plaintiff’s salary was intended to
compensate, the Court cannot rule as a matter of law that the overtime
compensation, if any, owed Plaintiff should be calculated on a half-time basis.
SPC therefore is not entitled to summary judgment on this issue.10
9
As the court in Seymour recognized, this presumes a forty-hour workweek.
See footnote 8, supra.
10
Some courts have limited damages to the half-time premium discussed above
on the basis of the Department of Labor’s “fluctuating workweek” regulation, 29
C.F.R. § 778.114, set out in footnote 6, supra. See, e.g., Clements v. Serco, Inc., 530
F.3d 1224, 1230-31 (10th Cir. 2008); Valerio v. Putnam Assocs., Inc., 173 F.3d 35,
39-40 (1st Cir. 1999); Blackmon v. Brookshire Grocery Co., 835 F.2d 1135, 1138-39
(5th Cir. 1988) (relying on section 778.114 and affirming award of half-time
damages). This regulation provides that employers may, consistent with their
obligations under the FLSA, calculate overtime compensation at half the regular rate
“[w]here there is a clear mutual understanding of the parties that the fixed salary is
compensation (apart from overtime premiums) for the hours worked each workweek,
whatever their number, rather than for working 40 hours or some other fixed weekly
work period . . . .” 29 C.F.R. § 778.114(a).
Other courts, however, have rejected this analytical approach, while awarding
damages on a half-time basis, reasoning that section 778.114(a) is not a remedial
provision but, rather, a regulation setting forth one way in which an employer may
compensate a non-exempt employee consistent with the FLSA. See, e.g., UrnikisNegro, 616 F.3d at 666 (“[Section 778.114(a)] sets forth one way in which an
employer may lawfully compensate a non-exempt employee for fluctuating work
hours; it is not a remedial measure that specifies how damages are to be calculated
when a court finds that an employer has breached its statutory obligations.”); Torres,
482 F. Supp. 2d at 1381-82 (calculating overtime compensation on half-time basis but
not under analytical framework of section 778.114(a)); Seymour, 2012 WL 3746194,
at *13 (“This court concludes that the best approach is not to conflate the fluctuating
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Conclusion
Based on the foregoing, Defendant Southern Premier Contractors, Inc.’s
Motion for Summary Judgment [32] is DENIED.
SO ORDERED, this 6th day of March, 2013.
_______________________________
RICHARD W. STORY
UNITED STATES DISTRICT JUDGE
workweek regulation with the damages calculation.”). The Court agrees with the
foregoing authorities that section 778.114(a) does not provide the proper analytical
framework for calculating damages on a half-time basis in the case of a non-exempt
employee compensated at a fixed weekly wage for fluctuating work hours.
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