Biggio et al v. H2O Hair Inc. et al

Filing 118

ORDER AND REASONS DENYING 90 Motion for Summary Judgment Dismissing the FLSA Claims of Ashley Brown and Kayla Alvarez; DENYING 91 Motion for Summary Judgment Dismissing the FLSA Claims and Gap Claims of Alison Kennedy. Signed by Judge Ivan L.R. Lemelle on 12/16/2016. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CARRIE BIGGIO, ET AL.

CIVIL ACTION

VERSUS

NO. 15-6034

H2O HAIR INC., ET AL.

SECTION “B”(2)
ORDER AND REASONS

Before the Court are Defendants’ “Motion for Summary Judgment
Dismissing the FLSA Claims of Ashley Brown and Kayla Alvarez” (Rec.
Doc. 90) and “Motion for Summary Judgment Dismissing the FLSA
Claims and Gap Claims of Alison Kennedy” (Rec. Doc. 91). Plaintiffs
timely filed opposition memoranda. Rec. Docs. 93-94. For the
reasons discussed below,
IT IS ORDERED that the motion to dismiss the FLSA claims of
Ashley Brown and Kayla Alvarez (Rec. Doc. 90) is DENIED.
IT IS FURTHER ORDERED that the motion to dismiss the FLSA and
gap claims of Alison Kennedy (Rec. Doc. 91) is DENIED.
I.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY
As this Court has previously discussed, on November 18, 2015,

Plaintiffs

Carrie

Biggio

and

Chelsea

Luminais

(collectively

“Plaintiffs”), filed the present action under the Fair Labor
Standards Act (“FLSA”) against their former employer, asserting
claims individually and on behalf of all those similarly situated.
Rec. Doc. 1 at 1-2. Plaintiffs worked full-time at Defendant H2O
Hair, Inc. (“H2O”) under numerous job titles, including, but not

limited to: apprentice, stylist, masseuse, blow-dry bar attendant,
receptionist, assistant, and housekeeper. Id. at 2. Named as
Defendants in the action are H2O, Michael John Gaspard,1 Holli M.
Gaspard,2 and XYZ Insurance Company.3 Id.; see also Rec. Doc. 45
at

¶¶

5-7.

Plaintiffs

asserted

a

number

of

claims

against

Defendants, including: (1) failure to pay minimum wage and overtime
as mandated by the FLSA; (2) retaliation against Plaintiffs and
those similarly situated who requested proper wages under the FLSA;
(3) conversion and misappropriation; (4) unjust enrichment; and
(5) failure to pay overdue wages following termination, as required
by LA. REV. STAT. § 23:621 et seq. Id. at 3-6. Plaintiffs sought
unpaid back wages, liquidated damages, punitive damages, costs,
and attorney’s fees, among other forms of relief applicable under
Louisiana and federal law. Id. at 6-7.
Soon after filing the complaint, Plaintiffs filed a motion to
conditionally certify the class. Rec. Doc. 27. On March 14, 2016,
the motion was granted in part to allow conditional certification.
Rec. Doc. 44 at 15. Consent forms from all potential opt-in
plaintiffs had to be postmarked and deposited in the U.S. Mail on
or before ninety days following the first mailing of the notice.

Michael John Gaspard served, at all relevant times, as H2O’s manager,
secretary, and treasurer. Rec. Doc. 1 at 2.
2 Holli Gaspard served, at all relevant times, as the president of H2O. Rec.
Doc. 1 at 2.
3 XYZ Insurance Company is, upon Plaintiffs’ information and belief, the unnamed
insurer providing coverage to Defendants for acts or omissions of officers and
directors. Rec. Doc. 1 at 2.
1

2

Id. at 16. Based on these deadlines, and according to Plaintiffs,
the opt-in period consequently ended on June 30, 2016. Rec. Doc.
74-1 at 1. Plaintiffs Ashley Brown and Kayla Alvarez opted-in to
the class on April 27, 2016. Rec. Doc. 51. On November 2, 2016,
this Court permitted Plaintiff Alison Kennedy to opt-in, even
though her consent form was filed after the deadline had passed.
Rec. Doc. 86.
II.

THE PARTIES’ CONTENTIONS
Defendants now seek to dismiss the FLSA and wage gap claims

of Ashley Brown, Kayla Alvarez, and Alison Kennedy. Rec. Docs. 902 at 1; 91-2 at 1.
A. MS. BROWN AND MS. ALVAREZ
Ms. Brown purportedly worked for H2O from August 15, 2015 to
September 29, 2015, while Ms. Alvarez worked for H2O from March
18, 2015 to July 11, 2015. Rec. Doc. 90-4 at 3. Defendants claim
that Ms. Brown and Ms. Alvarez were shampoo girls who were paid on
an hourly basis at the federal minimum wage rate of $7.25 per hour.
Rec. Doc. 90-2 at 1. Whenever they worked over forty hours during
a week, Defendants assert that both women were paid overtime wages
at the rate of $10.875 per hour. Id. Relying on the affidavit of
Cherie

Callaghan,

H2O’s

office

manager,

and

time

card

and

compensation reports for both Ms. Brown and Ms. Alvarez (Rec. Docs.
90-4, 90-6 – 90-9), Defendants argue that both employees were paid
everything that they were owed. Rec. Doc. 90-2 at 2.
3

With regard to Ms. Brown, Plaintiffs argue that the evidence
relied on by Defendants in their motion for summary judgment
effectively demonstrates violations of the FLSA. Rec. Doc. 94 at
3. Specifically, a time card report for Ms. Brown during the week
of September 25, 2015 shows that she worked “33:17” (meaning 33
hours

and

17

minutes,

equal

to

33.28

hours),

but

that

her

compensation report for the corresponding period shows that she
was only paid for 32.28 hours. Id. (citing Rec. Docs. 90-6 at 8;
90-7). Plaintiffs also argue that Ms. Brown attended a meeting on
September 3, 2015, but that her time card does not reflect the
fact

that

she

attended

the

meeting

and

subsequently

“worked

straight through until her shift ended that evening.” Id. (citing
Rec. Doc. 94-2 at ¶ 3; Rec. Doc. 90-6 at 4).4 This resulted in a
discrepancy of 2 hours and 26 minutes. Id. Finally, Ms. Brown
insists that she worked on Monday, September 7, 2015, but that the
records do not reflect, and that she was never paid for, this work.
Id. at 4 (citing Rec. Doc. 94-2 at ¶ 4).
Further, Plaintiffs argue that Ms. Alvarez attended meetings
during April, May, and July 2015, but she “did not clock in for
most of these meetings for fear of getting into trouble.” Rec.
Doc. 94 at 4 (citing Rec. Doc. 94-4 at ¶ 4).5 She also claims that
she was asked to “run errands and deliver coffee” before her shift

4
5

Rec. Doc. 94-2 is the affidavit of Ms. Brown.
Rec. Doc. 94-4 is the declaration of Ms. Alvarez.

4

started (Rec. Doc. 94-4 at ¶ 5) and that she did not receive a
paycheck “from the period April to May . . .” (id. at ¶ 6).
B. MS. KENNEDY
Ms. Kennedy purportedly worked for H2O from November 11, 2012
to January 20, 2015. Rec. Doc. 91-4 at 1. Defendants claim that
she was a stylist compensated solely on a commission basis and
that her compensation exceeded one and one-half times the federal
minimum wage for each pay period. Rec. Doc. 91-2 at 1. Relying on
a second affidavit from Ms. Callaghan, daily schedules for the
period

between

December

21,

2012

and

July

24,

2014,

and

a

compensation report for Ms. Kennedy (Rec. Docs. 91-4 - 91-6),
Defendants argue that Ms. Kennedy was paid everything that she was
owed. Rec. Doc. 91-2 at 2.
Plaintiffs argue that Defendants have not proven that Ms.
Kennedy is exempt from the requirements of the FLSA. Rec. Doc. 93
at 3. Specifically, Plaintiffs contend that Defendants admitted
that they failed to maintain a copy of the agreement under which
the exemption would apply, as required by the Code of Federal
Regulations. Id. at 5 (citing Rec. Doc. 93-6).6 Also, they failed
to record the number of hours worked by Ms. Kennedy. Rec. Doc. 93
at 6-8. Because Defendants failed to maintain these records,
Plaintiffs maintain that they cannot claim the exemption. Id. at

6

Rec. Doc. 93-6 is an excerpt from the deposition testimony of Ms. Callaghan.

5

8. Finally, Plaintiffs note that Ms. Kennedy was compensated in
the same way as Plaintiff Carrie Biggio and Defendants have already
admitted that Ms. Biggio’s payment scheme does “not fall within
any exemption” to the FLSA. Id. (citing Rec. Doc. 14 at ¶ 16).
III. LAW AND ANALYSIS
Under Federal Rule of Civil Procedure 56, summary judgment is
appropriate

only

interrogatories,

if
and

“the

pleadings,

admissions

on

depositions,
file,

together

answers
with

to
the

affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as
a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986) (quoting FED. R. CIV. P. 56(c)). See also TIG Ins. Co. v.
Sedgwick James of Washington, 276 F.3d 754, 759 (5th Cir. 2002).
A genuine issue exists if the evidence would allow a reasonable
jury to return a verdict for the nonmoving party. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The movant must
point to “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.” Celotex, 477 U.S. at 323. If
and when the movant carries this burden, the non-movant must then
go beyond the pleadings and present other evidence to establish a
genuine issue. Matsushita Elec. Indus. Co., Ltd. V. Zenith Radio
Corp., 475 U.S. 574, 586 (1986).
6

However, “where the non-movant bears the burden of proof at
trial, the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial.” Lindsey v. Sears Roebuck & Co., 16 F.3d 616,
618 (5th Cir. 1994). Conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment. Travelers Ins. Co. v.
Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993).
A. MS. BROWN AND MS. ALVAREZ
Pursuant to federal law, employees are to be paid at least
$7.25 per hour; for each hour worked in excess of forty hours per
week, each employee is to be paid at a rate not less than one and
one-half times the regular rate at which he or she is employed. 29
U.S.C. §§ 206(a)(1)(C); 207(a)(1).
Here, Defendants claim that Ms. Brown and Ms. Alvarez were
paid $7.25 for each hour worked less than or equal to forty hours
per week and $10.875 per hour for each hour worked in excess of
forty hours per week. Rec. Doc. 90-2 at 2.7

Based on these

assertions and accompanying exhibits (including Ms. Callaghan’s
affidavit and the time card and compensation reports for both Ms.
Brown and Ms. Alvarez), alone, Defendants argue that they are
entitled to summary judgment.

One and one-half times the federal minimum wage rate of $7.25 per hour is
$10.875 per hour.
7

7

However, Plaintiffs have presented evidence to contradict
Defendants’ assertions. First, Plaintiffs argue that Defendants
failed to pay Ms. Brown for approximately two and one-half hours
of work on September 3, 2015, a full day of work on September 7,
2015, and an hour of work during the week of September 25, 2015.
Rec. Doc. 94 at 3-4. Second, Plaintiffs have presented evidence
that Ms. Alvarez was discouraged from clocking in to work, forced
to work without clocking in, and was not paid for an entire pay
period. Id. at 4; Rec. Doc. 94-4 at ¶¶ 4-6. When considering a
motion for summary judgment “[a]ll facts and reasonable inferences
must be construed in favor of the nonmovant, and the court must
not weigh evidence or determine credibility.” Blank v. Bell, 634
Fed. App’x 445, 446 (5th Cir. 2016) (citing Deville v. Marcantel,
567 F.3d 156, 163-64 (5th Cir. 2009)). Because the parties have
presented conflicting evidence, this Court cannot grant summary
judgment dismissing the claims of Ms. Brown and Ms. Alvarez.
B. MS. KENNEDY
Despite the provisions recited above, no employer shall be
deemed to have violated § 207(a), the FLSA’s overtime provision,
by employing any employee of a retail or service
establishment for a workweek in excess of the applicable
workweek specified therein, if (1) the regular rate of
pay of such employee is in excess of one and one-half
times the minimum hourly rate applicable to him under [§
206], and (2) more than half his compensation for a
representative period (not less than one month)
represents commissions on goods or services. In
determining the proportion of compensation representing
8

commissions,
of a bona
commissions
whether the
guarantee.

all earnings resulting from the application
fide commission rate shall be deemed
on goods or services without regard to
computed commissions exceed the draw or

29 U.S.C. § 207(i). Employees who satisfy these requirements are
considered

“exempt”

from

the

FLSA.

See,

e.g.

In

re

Direct

Southwest, Inc., Fair Labor Standards Act (FLSA) Litigation, 081984, 2009 WL 2461716, at *2 (E.D. La. Aug. 7, 2009) (acknowledging
that § 207(i) is referred to as the “retail service exemption”).
To claim the exemption, the employer must therefore establish (1)
the employees work in a retail or service establishment; (2) the
employees are paid a regular rate of one and one-half times the
federal minimum wage for each hour worked; and (3) the employees
receive more than half of their compensation in the form of
commissions. See, e.g. Thomas v. Bob Mills Furniture Co., LLC, 14219, 2016 WL 1464636, at *2 (W.D. Tex. April 13, 2016) (citing
McAninch v. Monro Muffler Brake, Inc., 799 F. Supp. 2d 807, 81011 (S.D. Ohio 2011); Chariot v. Ecolab, Inc., 136 F. Supp. 3d 433,
449 (E.D.N.Y. 2015); 29 C.F.R. § 779.412). As to the second
element,

the

“regular

rate”

is

“determined

by

dividing

the

employer’s total compensation during the workweek by the number of
hours worked.” Klinedinst v. Swift Invs., Inc., 260 F.3d 1251,
1256 (11th Cir. 2001) (citing 29 C.F.R. § 779.419(b) (citing
Overnight Motor Co. v. Missel, 316 U.S. 572 (1942))). Thus, for
each employee exempted under this section, the employer “shall
9

maintain and preserve payroll and other records . . . ,” including
the hours worked each workday and total hours worked each workweek
and
[a] copy of the agreement or understanding under which
[§ 207(i)] is utilized or, if such agreement or
understanding
is
not
in
writing,
a
memorandum
summarizing
its
terms
including
the
basis
of
compensation, the applicable representative period and
the date the agreement was entered into and how long it
remains in effect. Such agreements or understandings, or
summaries may be individually or collectively drawn up.
29 C.F.R. §§ 516.2(a)(7); 516.16(b). If an employer fails to keep
these records, “and there is conflicting evidence regarding the
number of hours worked per week, the number of hours ‘is a genuine
issue

of

material

fact

for

the

factfinder.’”

Forster

v.

Smartstream, Inc., 2016 WL 70605, at *5 (M.D. Fla. Jan. 6, 2016)
(citing Klinedinst, 260 F.3d at 1257).
“The decision whether an employee is exempt under the [FLSA]
is primarily a question of fact . . . .” Cheatham v. Allstate Ins.
Co., 465 F.3d 578, 584 (5th Cir. 2006) (citing Smith v. City of
Jackson, Miss., 954 F.2d 296, 298 (5th Cir. 1992) (quoting Blackmon
v. Brookshire Grocery Co., 835 F.2d 1135, 1137 (5th Cir. 1988))).
“However, ‘[t]he ultimate decision whether an employee is exempt
from the FLSA’s overtime compensation provisions is a question of
law.’” Id. (quoting Lott v. Howard Wilson Chrysler-Plymouth, 203
F.3d 326, 331 (5th Cir. 2000) (citing Dalheim v. KDFW-TV, 918 F.2d
1220 (5th Cir. 1990))). Essentially, though, FLSA exemptions are

10

construed

narrowly

“and

the

burden

of

proof

lies

with

the

employer.” Id. (citing Vela v. City of Houston, 276 F.3d 659, 666
(5th Cir. 2001)).
Defendants claim that Ms. Kennedy “was compensated on a
commission basis only and that at all times her commissions
exceeded 1 ½ times the minimum wage.” Rec. Doc. 91-2 at 2.
Plaintiffs respond by arguing that Defendants have not satisfied
their burden of proving that Ms. Kennedy was exempt from the FLSA,
because Defendants did not maintain the records required by 29
C.F.R. § 516.16(b), including a copy of the agreement as to how
employees were to be paid and a record of hours worked. Rec. Doc.
93 at 3-6. Thus, Plaintiffs conclude that Defendants did not pay
commissions under a “bona fide commission plan.”
Neither the FLSA nor the Department of Labor’s regulations
define a “bona fide commission,” but the regulations do provide
that
A commission rate is not bona fide if the formula for
computing the commissions is such that the employee, in
fact, always or almost always earns the same fixed amount
of compensation for each workweek . . . [or if] the
employee receives a regular payment constituting nearly
his entire earnings which is expressed in terms of a
percentage of the sales which the establishment . . .
can always be expected to make with only a slight
addition to his wages based upon a greatly reduced
percentage applied to the sales above the expected
quota.
29 C.F.R. § 779.416(c) (emphasis added). Here, the records provided
by Defendants show that Ms. Kennedy was paid varying amounts each
11

pay period. Rec. Doc. 91-5 (e.g. on March 21, 2012 Ms. Kennedy was
paid $1,143.27, but on April 18, 2012 she was paid $974.83).
Nonetheless, the exact formula used to calculate Ms. Kennedy’s
compensation

was

not

provided

to

the

Court.

Without

this

information, we cannot conclusively determine whether or not the
compensation methodology used by Defendants constitutes a bona
fide commission plan.
Furthermore, Plaintiffs note that Defendants failed to track
the number of hours that Ms. Kennedy worked. Rec. Doc. 93 at 6-8.
Even though Defendants provided the Court with Ms. Kennedy’s client
appointment schedule (Rec. Doc. 91-6), this schedule presumably
does not account for canceled appointments, walk-ins, meetings,
and other activities generally associated with Ms. Kennedy’s work
responsibilities. Without an accurate record of Ms. Kennedy’s work
hours,

it

is

impossible

to

calculate

whether

or

not

her

compensation amounted to more than one and one-half times the
federal minimum wage for each hour worked, as required by § 207(i).
See, e.g. Klinedinst, 260 F.3d at 1256 (exempt employees are paid
a regular rate of one and one-half times the federal minimum wage
for each hour worked and the regular rate is “determined by
dividing the employer’s total compensation during the workweek by
the number of hours worked”) (emphasis added). Ms. Callaghan’s
uncorroborated

and

conclusory

allegation

that

Ms.

Kennedy’s

compensation exceeded the requisite amount is not sufficient to
12

warrant summary judgment in favor of Defendants. See Rec. Doc. 914 at 1; Galindo v. Precision Am. Corp., 754 F.2d 1212 (5th Cir.
1985) (“We have long recognized that mere statements of conclusions
of law or ultimate fact cannot shift the summary judgment burden
to the nonmovant”); Bridges v. Internal Revenue Serv., 433 F.2d
299, 300 (5th Cir. 1970) (“Defendant officers may not rely, of
course, on bare conclusory allegations on this issue, for this
will not sustain a summary judgment in their favor”); Tapps Brewing
Inc. v. City of Sumner, 482 F. Supp. 2d 1218, 1225 (W.D. Wash.
2007) (“Conclusory, non-specific statements in affidavits are not
sufficient, and missing facts will not be presumed”); Monroe v.
Bd. of Educ. Of Town of Wolcott, Conn., 65 F.R.D. 641, 650 (D.
Conn. 1975) (“Perhaps because the testimony of affiants, who are
not subject to cross-examination, is inherently less reliable than
that of witnesses in open court, courts have been stricter, holding
that conclusory statements of opinion in affidavits are entitled
to no weight in the court’s deliberative process”).
Defendants’ two-page memoranda, devoid of any supporting case
law, failed to convince this Court that Defendants were entitled
to judgment as a matter of law. See, e.g. Forster, 2016 WL 70605,
at *7 (where the

court denied summary judgment, because the

defendant made “no arguments in his motion but instead . . . cites
declarations and materials produced in discovery as containing the
material undisputed facts, attached as exhibits to his motion,”
13

thereby leaving “the Court to discern potential bases for summary
judgment”). FLSA exemptions are construed narrowly “and the burden
of proof lies with the employer.” Cheatham, 465 F.3d at 584 (citing
Vela, 276 F.3d at 666). At this stage, Defendants have failed to
satisfy that burden.
New Orleans, Louisiana, this 16th day of December, 2016.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

14