Untalan v. Nissan Motor Corporation in Guam

Filing 47

Report And Recommendations re 19 Motion for Partial Summary Judgment. Objections to R&R due by 10/25/2019. IT THEREFORE IS RECOMMENDED that the motion for partial summary judgment be denied except as to the claim that Plaintiff is not entitled to any further reimbursement for medical and dental premiums for the period of June 1, 2017 to July 31, 2017. Signed by Magistrate Judge Joaquin V.E. Manibusan, Jr on 10/11/2019. (fad, )

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1 2 3 4 5 DISTRICT COURT OF GUAM 6 TERRITORY OF GUAM 7 8 9 10 11 12 13 14 15 ) CIVIL CASE NO. 18-00015 ) Plaintiff, ) ) vs. ) REPORT AND RECOMMENDATION ) re Motion for Partial Summary Judgment NISSAN MOTOR CORPORATION IN ) ) GUAM, ) Defendant. ) ______________________________________ ) NATHANIEL UNTALAN, On August 20, 2019, the court heard the Motion for Partial Summary Judgment filed by Nissan Motor Corporation in Guam (Defendant) against Nathaniel Untalan (Plaintiff). 16 At the conclusion of the hearing, the court took the motion under advisement. 17 After having reviewed the memoranda in support and in opposition to the motion and the 18 reply thereto, the arguments by the parties, the court submits its decision in this Report and 19 Recommendation. 20 21 BACKGROUND Plaintiff was hired by Nissan in July, 1997 as a Warehouse Person. He continued in that 22 capacity until 2007 when he was promoted to Assistant Parts Manager. As Assistant Parts 23 Manager, he had the duty “of assisting the Parts Manager, readings emails, checking up on 24 invoices, and following up on part orders and service repairs.” Plaintiff alleges that in 2013, his 25 hourly rate of employment with Nissan was $3.12 and remained at that rate throughout 26 the period of his employment with Nissan. 27 28 In September, 2013, Plaintiff enlisted in the United States Air Force Reserve. Since his enlistment, Plaintiff alleges that he received negative comments from his employer and his 1 loyalty to the company was questioned as well as his character as a manager. Eventually, he 2 was forced to resign “due to issues regarding his 401k, health care, promotions, and an 3 intolerable work environment that Nissan intentionally created” as a result of his enlistment. 4 5 6 On April 30, 2018, Plaintiff filed a two-count complaint against Defendant. In his complaint, Plaintiff alleges that: Count I. Nissan violated his rights under Guam’s Fair Labor Standards Act because it 7 never paid him a base rate of no less than $8.25 when the said rate became effective on 8 January 1, 2015. He continued to receive a base rate of $3.12 per hour until his termination. 9 Thus, Plaintiff alleges that he was never lawfully paid as an hourly employee or as a salaried 10 11 employee and was exempt from the provisions of 22 G.C.A. § 3108. Count II. Nissan violated his rights under the Uniformed Services Employment and 12 Reemployment Rights Act (USERRA) by: (A) Plaintiff’s denial of promotion; (B) Plaintiff’s 13 Constructive Discharge; (C) Nissan’s willful and reckless violation of the rules and regulations 14 of employees pension benefit plans under USERRA; and (D) Nissan’s failure to pay him health 15 insurance premiums which were withheld from his regular wages and benefits. 16 17 18 19 DISCUSSION Defendant has moved for partial summary judgment on three grounds. In its motion, it argues that: 1. Nissan is entitled to summary judgment because there was no violation of Guam’s 20 Fair Labor Standards Act because Plaintiff was employed as a bona fide executive employee and 21 paid on a salary of not less than $455 per week. 22 23 2. Nissan is entitled to partial summary judgment because it did not wilfully or recklessly withhold employer contributions into Plaintiff’s 401K plan. 24 3. Nissan is entitled to summary judgment on the claim that Plaintiff is entitled to 25 reimbursement for medical and dental premiums for the period of June 1, 2017 to July 31, 2017. 26 Summary Judgment: Violation of Guam’s Fair Labor Standards Act. 27 Defendant argues that the provisions of the Fair Labor Standards Act are inapplicable to 28 Plaintiff since he was an executive employee of Defendant. As a bona fide executive employee Page -2- 1 of Defendant, Plaintiff was exempt from the requirements of Guam’s Fair Labor Standard Act. 2 In support thereof, Defendant cites 22 G.C.A. § 3108(b)(1), which provides: 3 7 Any employee who is employed in a bona fide executive capacity, which is any employee who is compensated on a salary or fee basis at a rate of not less than Four Hundred Fifty-five Dollars ($455.00) per week and whose primary duty is management of the enterprise where the employee is employed or of a recognized department thereof; who customarily and regularly directs the work of two (2) or more other employees; and who has the authority to hire or fire other employees or whose suggestions and recommendations as to hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight. 8 Under the statute, an employee is exempt under the Guam Fair labor Standard Act if 4 5 6 9 (1) he is employed in a bona fide executive capacity earning a salary of not less that $455 per 10 week and (2) is employed in a recognized department thereof; customarily and regularly directs 11 the work of two or more other employees; has the authority to hire or fire other employees or 12 whose suggestions and recommendations as to hiring, firing, advancement, promotion, or any 13 other change of status of other employees are given particular weight. 14 Thus, Defendant argues that Plaintiff was employed as a bona fide executive employee. 15 In support thereof, Defendant advises the court that Plaintiff was an Assistant Parts Manager 16 from 2007 until he resigned on September 7, 2017 earning the requisite salary under the statute. 17 In addition, Defendant provides the court with Plaintiff’s deposition testimony which illustrates 18 his managerial duties.1 The relevant deposition parts provide: 19 Q: In your own words, can you tell me exactly what your essential job duties were throughout the years that you held that job position. A: Process special orders, handle customers, of course, work on stock orders, oversaw most of my Parts Advisors, monitor sales, keep an eye on telephones. ... Q: How many people or how many employees were in the Parts Department? A: We had approximately eight, ten. Q: And so you said there were parts advisors? A: Parts advisors. Q: And what other titles were there? A: Warehouse person. Q: Okay. Anything else? A: We had an inventory clerk off-island, an off-island inventory clerk. Q: Okay. And you said that you oversaw parts advisors -- 20 21 22 23 24 25 26 27 28 1 Excerpt pages from the May 30, 2019 Deposition Transcript of Plaintiff are appended to Defendant’s Concise Statement beginning at page 75 of ECF No. 23. Page -3- 1 A: Yes, ma’am. Q: -- correct? Did you also oversee the warehouse person? A: Yes. Q: And did you also oversee the inventory off-island clerk? A: Yes. ... Q: Okay. Did you direct them with regard to their job duties, meaning did you tell them what to do or did you show them how to do things, things of that nature that an assistant manager would do? A: Yes. Q: “Yes,” okay. Now, with regard to these individuals, did you have the authority to make any suggestions with regard to either promoting them or maybe demoting them or maybe recommending them for certain raises or anything of that nature? A: Officially or -Q: In your capacity as an Assistant Parts Manager. A: As a Manager, I can always take care of my people and talk to the Parts Manager or give him my opinion. Q: And make those recommendations? A: If he asks for it. Q: Okay. As an Assistant Parts Manager, do you feel that your opinion regarding how an individual was doing was given a certain amount of weight? A: I would hope so. 2 3 4 5 6 7 8 9 10 11 12 13 Q: Have you had discussions [with the Parts Manager] before regarding promotions, demotions? A: When he asks my opinion. Q: So he will defer to you? A: He would ask, yes. 14 15 16 Q: One of the things that I wanted to also follow up on is when we were talking about your job duties and your job description, did that also include doing performance reviews for your Parts Advisors or anyone that you oversaw in the Parts Department? A: Yes, Ma’am. Q: So that was also part of your essential duties - A: Yes. Q: - - to do the performance reviews? A; We split it in half. It was me and the Manager. Q: Oh, ok. A: He asked for help, so he would make me do four and then he would take the rest at his discretion. 17 18 19 20 21 22 Depo. Tr. Nathaniel B. Untalan, ECF No. 23 at 78-84.2 23 Based upon the foregoing, Defendant argues that Plaintiff was a bona fide executive 24 employee of Defendant when he was so employed because he regularly supervised eight to ten 25 individuals in the Parts Department; that his job description and managerial duties illustrated he 26 27 28 2 For ease of reference, citations to excerpts of deposition transcripts shall refer to the page numbers printed on the ECF footer. Page -4- 1 had a leadership position within Defendant’s employment; and that he made recommendations as 2 to hiring, firing, and promotions for the company. 3 4 5 Defendant next argues that Plaintiff was paid on a salary basis of not less than $455 per week. Since Guam has no rules interpreting the statute, Defendant cites 29 CFR Part 541.600, 6 the federal regulation interpreting the Federal Fair Labor and Standard Act, for guidance. The 7 regulation provides: 8 9 10 11 (a) To qualify as an exempt executive, administrative or professional employee under section 13(a)(1) of the Act, an employee must be compensated on a salary basis at a rate of not less than $455 per week (or $380 per week, if employed in American Samoa by employers other than the Federal Government), exclusive of board, lodging or other facilities. 13 (b) The $455 a week may be translated into equivalent amounts for periods longer than one week. The requirement will be met if the employee is compensated biweekly on a salary basis of $910, semimonthly on a salary basis of $985.83, or monthly on a salary basis of $1,971.66. However, the shortest period of payment that will meet this compensation requirement is one week. 14 Mr. Arnel Bonto, Nissan’s Controller, testified that pursuant to the Fair Labor Standards 12 15 Act, Plaintiff was considered an executive employee and was exempt from the minimum wage 16 requirements. See Depo. Tr. Arnel Bonto, ECF No. 23 at 91. When asked about Plaintiff’s pay 17 structure, he indicated that Plaintiff’s salary was comprised of his base pay plus commission and 18 bonuses. Id. at 100-01. He added that Plaintiff received a minimum of $455 per week, id. at 91, 19 and to ensure that Nissan complied with this weekly salary requirement, Mr. Bonto personally 20 calculated Plaintiff’s commissions, and then forwarded the commission calculation worksheet to 21 Linda Nieva, Nissan’s Chief Accountant, for review and processing into the payroll system. Id. at 22 89 and 92-93. 23 At $455 per week, Plaintiff should have earned a minimum of $23,660 per year. Id. at 93. 24 During his deposition, Mr. Bonto reviewed Plaintiff’s pay registers from 2007 to 2017 (id. at 94- 25 99 and Exhibit K) and confirmed that during those years, he earned more than $23,660 per year, 26 as evidenced below: 27 2007 $27,924.28 2013 $49,567.28 28 2008 $39,722.93 2014 $36,364.06 2009 $42,591.36 2015 $36,608.79 Page -5- 1 2010 $46,628.21 2016 $48,848.50 2 2011 $44,242.11 2017 $29,846.99 3 2012 $49,093.84 4 Based upon the above, Defendant has moved for summary judgment based upon the 5 premise that Plaintiff is not covered under Guam’s Fair Labor Standards Act. 6 Plaintiff has opposed the above motion. 7 In his opposition, see ECF No. 29, Plaintiff points out that his pay structure is calculated 8 based upon a percentage of the adjusted gross profit plus a base pay. In June, 2008, he received 9 notice that his revised pay plan would be based upon a 2% sales commission plus a $5,000 10 annual base pay. Furthermore, Plaintiff states that in 2011, he was notified that his base pay was 11 increased to a new rate of $500 per month ($6,00 per year). See Opp’n at 2, ECF No. 29. 12 Plaintiff also states that on July 18, 2017, he was notified by Defendant that his pay plan was 13 calculated based upon 2% of adjusted gross profit plus a base pay of $6,500 per year or $270.84 14 per pay period. Id. at 6. 15 Citing 29 C.F.R. § 541.602(a), Plaintiff argues that the $455 per week salary threshold 16 must be a fixed and predetermined amount rather than the “as long as he actually gets at least 17 $455 each week ...and if he does not we will reimburse him shortly thereafter” policy which 18 Nissan has adopted. It is Plaintiff’s position that under federal and Guam law, fluctuating and 19 uncertain commissions are not counted towards the $455 per week threshold. To meet said 20 threshold amount, the $455 salary must be guaranteed. It must be a fixed and predetermined 21 amount, and free and clear. Plaintiff contends that commissions do not qualify as fixed 22 predetermined amounts that are paid free and clear because they are subject to variations based 23 upon the quality or quantity of the work performed. 24 29 C.F.R. § 541.602(a) provides: 25 (a) General rule. An employee will be considered to be paid on a “salary basis” within the meaning of these regulations if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to the exceptions provided in paragraph (b) of this section, an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for 26 27 28 Page -6- 1 any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee's predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available. 2 3 4 Has Nissan satisfied summary judgment standards? In determining whether Nissan is 5 entitled to summary judgment, the court notes Nissan must show that Plaintiff’s employment was 6 truly as an executive performing functions as an executive employee under the company’s 7 umbrella and that he was paid the requisite salary provided under the statute. 8 Nissan argues that Plaintiff was an executive employee because he regularly supervised 9 eight to ten individuals in the Parts Department; his job description and managerial duties 10 illustrated he had a leadership position within Defendant’s employment; and he made 11 recommendations as to hiring, firing, and promotions for the company. 12 The court notes that federal regulations which interpret whether an employee functions as 13 an executive employee have other guidelines which appear to require a fact finding by the trier of 14 fact. 15 For example, in order to determine whether an employee suggestions and 16 recommendations are given “particular weight”, 29 C.F.R. § 541.105 provides: 17 18 19 20 21 22 23 To determine whether an employee's suggestions and recommendations are given “particular weight,” factors to be considered include, but are not limited to, whether it is part of the employee's job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendations are made or requested; and the frequency with which the employee's suggestions and recommendations are relied upon. Generally, an executive's suggestions and recommendations must pertain to employees whom the executive customarily and regularly directs. It does not include an occasional suggestion with regard to the change in status of a co-worker. An employee's suggestions and recommendations may still be deemed to have “particular weight” even if a higher level manager's recommendation has more importance and even if the employee does not have authority to make the ultimate decision as to the employee's change in status. 24 As further examples, federal regulations provide guidelines as to the general rules for 25 administrative employees (29 C.F.R. § 541.200), whether an employee’s work is directly related 26 to management or general business operations (29 C.F.R. § 541.201), primary duty 27 considerations (29 C.F.R. § 541.700), and concurrent duties (29 C.F.R. § 541.106). 28 Whether or not Plaintiff qualifies for work that is directly related the management or Page -7- 1 2 3 4 5 6 general business of Defendant, 29 C.F.R. § 201 provides: (a) To qualify for the administrative exemption, an employee's primary duty must be the performance of work directly related to the management or general business operations of the employer or the employer's customers. The phrase “directly related to the management or general business operations” refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from working on a manufacturing production line or selling a product in a retail or service establishment. 7 8 9 10 11 12 (b) Work directly related to management or general business operations includes, but is not limited to, work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities. Some of these activities may be performed by employees who also would qualify for another exemption. 14 (c) An employee may qualify for the administrative exemption if the employee's primary duty is the performance of work directly related to the management or general business operations of the employer's customers. Thus, for example, employees acting as advisers or consultants to their employer's clients or customers (as tax experts or financial consultants, for example) may be exempt. 15 An important factor in determining whether Plaintiff is an executive employee centers on 13 16 17 18 19 20 21 the question of his primary job duty. 29 C.F.R. § 541.700 provides: (a) To qualify for exemption under this part, an employee's “primary duty” must be the performance of exempt work. The term “primary duty” means the principal, main, major or most important duty that the employee performs. Determination 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. Factors to consider when determining the primary duty of an employee 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. 22 23 24 25 26 (b) The amount of time spent performing 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. 27 28 (c) Thus, for example, assistant managers in a retail establishment who perform exempt executive work such as supervising and directing the work of other employees, ordering merchandise, managing the budget and authorizing payment of bills may have management as their primary duty even if the assistant managers Page -8- 1 2 spend more than 50 percent of the time performing nonexempt work such as running the cash register. However, if such assistant managers are closely supervised and earn little more than the nonexempt employees, the assistant managers generally would not satisfy the primary duty requirement. 3 4 As seen in the regulations above, whether or nor Plaintiff is a bona fide executive 5 employee is a fact intensive process. His primary duty is based upon all of the facts in the case. 6 See 29 C.F.R. § 541.700. Whether or not his suggestions or recommendations are given weight 7 also requires more facts to be developed. See 29 C.F.R. § 541.105. 8 9 Thus, based upon all of the above, the court finds that summary judgment on the basis that Plaintiff is exempt from the application of the Fair Labor Standards Act because he is a bona 10 fide executive employee of Nissan is inappropriate at this time. Summary judgment is 11 appropriate when the facts are not in dispute. In this instance, Plaintiff disputes his salary 12 computation as Nissan asserts that it is. Likewise, whether Plaintiff is indeed a bona fide 13 executive employee is a factual determination that must be determined at trial based upon the 14 aforesaid regulations and not at this stage of the proceedings. 15 16 17 Summary Judgment that Nissan did not wilfully or recklessly withhold employer contributions into Plaintiff’s 401K plan. Nissan argues that Plaintiff has not met his burden of showing that Nissan’s failure to 18 initially provide him with the correct employer contributions into his 401K plan was willful or in 19 reckless disregard of its obligations. Nissan states that Plaintiff in the Complaint simply alleges 20 that “Untalan’s 401K benefits were withheld from the amount that he received in his pension 21 plan” and that “Nissan willfully or recklessly violated the rules and regulations of employee 22 pension benefit plans under USERRA.” ECF No. 1. He then alleges in his deposition that in 23 2017, he raised this issue with E.J. Quintanilla, and when he was informed that he was not 24 entitled to these benefits, he filed a Complaint with ESGR. Depo. Tr. Nathaniel B. Untalan, ECF 25 No. 29 at 40. Nissan unequivocally states that when Plaintiff initially brought this issue to Mr. 26 Quintanilla’s attention, Mr. Quintanilla was under the good faith belief that Nissan had paid him 27 the correct benefits and that Nissan was not violating any laws. It was only after speaking with 28 the ESGR representative that Mr. Quintanilla was on notice that something could be awry. So, Page -9- 1 he immediately sought clarification from Ms. Bamba at ASC Trust. She first provided him with 2 information that confirmed his stance, but then after additional research, she contacted him 3 approximately one week later and provided him with the correct information as it relates to 4 military service members. Upon receipt of this information, Nissan’s Controller immediately 5 calculated the amount of employer contribution due and forwarded it to ASC Trust. Nissan 6 concludes that based upon the court’s holding in Reed v. Honeywell Int’l. Inc., Nissan’s initial 7 error as to its compliance requirements and its consultation with ASC in an attempt to comply 8 with USERRA is not evidence of willfulness. 9 In Opposition, Plaintiff argues that triable issues of fact remain as to whether Nissan’s 10 acts were wilful. Questions remain as to Nissan’s intentions and motivations for allegedly 11 violating Plaintiff’s USERRA rights by withholding 401K contributions, failing to reinstate his 12 health insurance immediately, and making “illegal” deductions from his salary. 13 Plaintiff points out that he met with Mr. Quintanilla in July, 2017 regarding his 401K 14 account and filed his ESGR complaint at least by mid-July. Mr. Quintanilla did not do anything 15 about the complaint until he contacted Gaby Bamba on August 30, 2017. Mr. Quintanilla states 16 in his affidavit of June 12, 2019 (ECF No. 20-4) that on September 6, 2017, Ms. Bamba 17 contacted him by email and advised him that she had failed to provide him with rules specific to 18 military service members and USERRA. Ms. Bamba later provided him with the information 19 and eventually Mr. Quintanilla provided the information to the company controller, who 20 immediately calculated the amount due to Plaintiff for the past years when he was on military 21 leave. A check in the amount of $1,467.39 was issued to ASC Trust. Mr. Quintanilla fails to 22 state when the money was paid and what past year amounts they were for. 23 22 GCA § 3219 provides penalties for employers who fail to pay wages when due or who 24 underpay employees, unless the employer can establish an affirmative defense. Damages are 25 assessed as punitive damages which is equal to three times the wages due. Section 3219(a)(8) 26 provides: “(8) In the case of an underpayment, the underpayment was a good faith effort error 27 with no intent to defraud.” 28 In this case, there has been an acknowledgment of an underpayment by Nissan in relation Page -10- 1 to Plaintiff’s 401K, where Nissan has admitted that it has now correctly calculated the amounts 2 due him for past years he was on military leave. Nissan asserts that the underpayment for past 3 years Plaintiff was on military leave was a good faith error with no intent to defraud. Plaintiff 4 disputes Nissan’s good faith assertions. 5 After having weighed the above contentions and the facts as represented therein, the court 6 agrees with Plaintiff that there remain triable issues of facts to be determined whether Nissan’s 7 acts were made in good faith error and with no intent to defraud. 8 9 Summary Judgment on the claim that Plaintiff is entitled to reimbursement for medical and dental premiums for the period of June 1, 2017 to July 31, 2017. 10 With respect to this claim, Nissan asserts that it has now paid all medical and dental 11 premiums to Plaintiff for the periods from June 1, 2017 to July 31, 2017 and can be granted 12 summary judgment inasmuch as there are no amounts left to be paid. 13 It appears to the court that Plaintiff’s position with respect to this issue is that assuming 14 the reimbursements have indeed been all paid, there still remains the issue regarding penalties for 15 a failure to pay which are subject to the affirmative defenses under 22 GCA § 3219. 16 With regard to this issue, the court agrees in part with Nissan that it should be entitled to 17 summary judgment solely to the issue that there are no further reimbursements due to Plaintiff 18 for medical and dental premiums for the period from June 1, 2017 to July 31, 2017. However, 19 the court also agrees with Plaintiff that there still remains the issue whether Nissan is subject to 20 the penalties provided for under 22 GCA § 3219 for the failure to pay when due the amounts 21 therein. Such an inquiry is appropriate for trial and is thus inappropriate for summary judgment. 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// Page -11- 1 RECOMMENDATION 2 IT THEREFORE IS RECOMMENDED that the District Court issue an order as follows: 3 That the motion for partial summary judgment be denied except as to the claim that 4 Plaintiff is not entitled to any further reimbursement for medical and dental premiums for 5 the period of June 1, 2017 to July 31, 2017. 6 IT IS SO RECOMMENDED. /s/ Joaquin V.E. Manibusan, Jr. U.S. Magistrate Judge Dated: Oct 11, 2019 7 8 9 10 NOTICE 11 Failure to file written objections to this Report and Recommendation within fourteen (14) days from the date of its service shall bar an aggrieved party from attacking such Report and Recommendation before the assigned United States District Judge. 28 U.S.C. § 636(b)(1)(B). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Page -12-

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