Speert et al v. Proficio Mortgage Ventures, LLC et al
MEMORANDUM. Signed by Judge James K. Bredar on 6/10/11. (hmls, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SCOTT SPEERT et al.,
VENTURES, LLC, et al.,
CIVIL NO. JKB-10-718
Plaintiffs Scott Speert, Linda Nieves, Harvey Sanford, and David Rascoe sued Proficio
Mortgage Ventures, LLC, and Glenn Hyatt, former manager of Proficio’s branch office in
Owings Mills, Maryland, claiming violations of the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 201 et seq., and the Maryland Wage Payment and Collection Law (“MWPCL”), Md.
Code Ann., Lab. & Empl. § 3-501 et seq. (LexisNexis 2008). (Compl., ECF No. 20.) Proficio
was a licensed mortgage lender during the time that is the subject of the complaint. Plaintiffs
claim they were employed by Proficio from July 2009 through October 2009 in a satellite branch
office, also located in Owings Mills, Maryland, and were responsible for generating mortgage
loans for Proficio. (2nd Am. Compl. ¶ 6, ECF No. 20.) They further claim they were not paid
minimum wages during portions of this time period, they were not paid overtime during portions
of this time period, and they were not paid commissions they had earned. (Id. ¶ 18, 21, 25.)
Plaintiffs have filed a motion for partial summary judgment that seeks to narrow the
issues in the case. (ECF No. 39.) They have filed this motion only with respect to Speert,
Nieves, and Rascoe because Proficio disputes whether Sanford was employed at all with the
company. (Pls.’ Mot. Partial Summ. J. 3.) Plaintiffs have requested the Court to resolve the
following points, rephrased by the Court:
1. Whether Proficio is a covered employer under the FLSA;
2. Whether Hyatt is a covered employer under the FLSA;
3. What is the undisputed period of employment for Speert, Nieves, and Rascoe;
4. Whether Defendants can satisfy their burden of proving by clear and convincing evidence
that Plaintiffs fit within the “outside salesperson” exemption;
5. Whether Defendants violated the FLSA by not paying the required statutory minimum
wages during the undisputed period of Plaintiffs’ employment;
6. Whether Defendants violated the FLSA by not paying the required statutory overtime
compensation during the undisputed period of Plaintiffs’ employment; and
7. Whether Defendants violated the FLSA by not maintaining required records during the
undisputed period of Plaintiffs’ employment.
I. Standard for Summary Judgment
“The court shall grant summary judgment 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); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to
current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any
genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). If
sufficient evidence exists for a reasonable jury to render a verdict in favor of the party opposing
the motion, then a genuine dispute of material fact is presented and summary judgment should be
denied. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, the “mere
existence of a scintilla of evidence in support of the plaintiff’s position” is insufficient to defeat a
defendant’s motion for summary judgment. Id. at 252. The facts themselves, and the inferences
to be drawn from the underlying facts, must be viewed in the light most favorable to the
opposing party, Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th
Cir. 2008), who may not rest upon the mere allegations or denials of his pleading but instead
must, by affidavit or other evidentiary showing, set out specific facts showing a genuine dispute
for trial, Fed. R. Civ. P. 56(c)(1). Supporting and opposing affidavits are to be made on personal
knowledge, contain such facts as would be admissible in evidence, and show affirmatively the
competence of the affiant to testify to the matters stated in the affidavit. Rule 56(c)(4).
A. Whether Proficio is a covered employer
The parties have made resolution of the first question easy by entering into a stipulation
to the effect that during the time in question, Proficio “was an enterprise engaged in commerce
within the meaning of section 3(s)(1)(A) of the Fair Labor Standards Act, 29 U.S.C. section
203(s)(1)(A).” (Pls.’ Mot., Ex. 6.) Thus, Proficio is an employer covered by the FLSA’s
proscriptions on failure to pay minimum wage, 29 U.S.C. § 206(a), and failure to compensate for
overtime, 29 U.S.C. § 207.
B. Whether Hyatt is a covered employer
Plaintiffs also seek to hold Hyatt responsible as a covered employer under the FLSA,
which treats as an employer “any person acting directly or indirectly in the interest of an
employer in relation to an employee.” 29 U.S.C. § 203(d). The FLSA’s provisions “should be
broadly interpreted and applied to effectuate its goals,” Purdham v. Fairfax Co. Sch. Bd., 637
F.3d 421, 427 (4th Cir. 2011), which included the intent “to lessen, so far as seemed then
practicable, the distribution in commerce of goods produced under subnormal labor conditions”
by eliminating low wages and long hours, Rutherford Food Corp. v. McComb, 331 U.S. 722, 727
Determining who may be considered an employer under the FLSA has been the subject
of only a few Supreme Court cases, none of which is similar to the facts of the instant case. See,
e.g., Rutherford (determining whether meat boners were employees or independent contractors),
cited supra; Goldberg v. Whitaker House Coop., Inc., 366 U.S. 28, 32-33 (1961) (ruling that
members of craftmaking cooperative were employees); Falk v. Brennan, 414 U.S. 190, 195
(1973) (concluding that maintenance workers were employed not only by their immediate
employer but also by rental property management firm in light of latter’s extensive managerial
responsibilities, which gave it substantial control of terms and conditions of employees’ work).
In these cases, the Supreme Court focused on the economic reality of the employment
relationship rather than on technical concepts of common law, which are more properly
considered in determining a superior’s liability to third parties for subordinates’ torts. See
Brennan v. Gilles & Cotting, Inc., 504 F.2d 1255, 1261 (4th Cir. 1974) (construing meaning of
“employer” in Occupational Safety and Health Act; noting OSHA’s similarity to FLSA). In a
case under the National Labor Relations Act, the Supreme Court addressed the status of guards
in plants producing war materiel and found the guards remained employees of the corporation
that owned the plants even though the guards had been “militarized” by the U.S. Army. N.L.R.B.
v. E.C. Atkins & Co., 331 U.S. 398, 412-13 (1947). The Court observed,
The most important incidents of the employer-employees relationship—wages,
hours and promotion—remained matters to be determined by respondent rather
than by the Army.
In this setting, it matters not that respondent was deprived of some of the
usual powers of an employer, such as the absolute power to hire and fire the
guards and the absolute power to control their physical activities in the
performance of their service. Those are relevant but not exclusive indicia of an
employer-employee relationship under this statute. As we have seen, judgment as
to the existence of such a relationship for purposes of this Act must be made with
more than the common law concepts in mind. That relationship may spring as
readily from the power to determine the wages and hours of another, coupled with
the obligation to bear the financial burden of those wages and the receipt of the
benefits of the hours worked, as from the absolute power to hire and fire or the
power to control all the activities of the worker.
Id. at 413-14. The Court further noted that the National Labor Relations Board’s conclusion was
reinforced by other findings that militarized guards were treated as private employees for
purposes of the FLSA. Id. at 413 n.19.
Construing FLSA’s definition of “employer” has also only been touched upon in Fourth
Circuit cases. See, e.g., Schultz v. Capital Intern. Sec., Inc., 466 F.3d 298, 307 (4th Cir. 2006)
(resolving questions whether two employers were joint employers and whether individuals were
employees or independent contractors); Brock v. Hamad, 867 F.2d 804, 809 n.6 (4th Cir. 1989)
(finding Hamad was employer within meaning of FLSA because he hired and directed
employees in his rental property business); Howard v. Malcolm, 852 F.2d 101, 104-05 (4th Cir.
1988) (noting similarity of “employer” definition in Agricultural Worker Protection Act and
FLSA). In Howard, the Court noted an individual may be considered to be an employer “where
the work follows the usual path of the employee; and where, as a matter of economic reality, the
employee is dependent upon that person for their livelihood.” 852 F.2d at 104 (citations and
internal quotation marks omitted).
A consistent factor in cases from other circuits has been operational control over the
individuals claiming to have been employees. The Second Circuit has noted the relevant factors
to consider include “‘whether the alleged employer (1) had the power to hire and fire the
employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained employment
records.’” Herman v. RSR Sec. Servs. Ltd., 172 F.3d 132, 139 (2d Cir. 1999). That court also
observed that none of the four factors is dispositive and that a court should consider the totality
of circumstances. Id. However, the Herman opinion further noted that it is not necessary to
employer status to monitor employees continuously. Instead, “[c]ontrol may be restricted, or
exercised only occasionally.” Id.
The Fifth Circuit has concluded the designation of “employer” under the FLSA
encompasses “‘an individual who, though lacking a possessory interest in the “employer”
corporation, effectively dominates its administration or otherwise acts, or has the power to act,
on behalf of the corporation vis-à-vis its employees.’” Reich v. Circle C Invs., Inc., 998 F.2d
324, 329 (5th Cir. 1993). The Sixth Circuit concluded that a party only need have “‘operational
control of significant aspects of the corporation’s day to day functions.’” Dole v. Elliott Travel
& Tours, Inc., 942 F.2d 962, 966 (6th Cir. 1991). The Eleventh Circuit in Patel v. Wargo, 803
F.2d 632 (11th Cir. 1986), relied upon the absence of operational control by the president, who
was also a director and principal stockholder of a corporation, to determine that he was not an
employer within the meaning of the FLSA. Id. at 637-38. The First Circuit found that corporate
officers with significant ownership interests “who had operational control of significant aspects
of the corporation’s day to day functions, including compensation of employees, and who
personally made decisions to continue operations despite financial adversity during the period of
nonpayment” of wages, were employers within the scope of the FLSA and, therefore, personally
liable. Donovan v. Agnew, 712 F.2d 1509, 1514 (1st Cir. 1983).
Plaintiffs do not dispute that Hyatt had no ownership interest in Proficio, and they do not
dispute that he was not an officer of Proficio. They note that Hyatt was the branch manager of
the Owings Mills branch of Proficio. (Pls.’ Mot. Partial Summ. J., Ex. 7, Hyatt Dep.37:6,
Mar. 24, 2011, ECF No. 39.) Proficio responded to interrogatories about branch managers as
Branch managers are authorized to hire and terminate the employment of
branch employees. Branch managers manage employees while in the office.
Proficio’s branch managers have discretion to set local office hours, but must
follow overall company policy in regards to the total number of hours worked.
Branch managers approve payroll and commission payments. . . . See Branch
Manager position description . . . .
(Id. Ex. 8, Ans. Interrog. #10.) It should be noted that Proficio’s answers to interrogatories were
signed by Stephen L. Bennett, under penalty of perjury, on behalf of Proficio on December 17,
2010. Proficio’s Branch Manager Job Description included the following responsibilities:
(a) Hiring, management of performance, and termination of positions for all
branch personnel; in accordance with Employer’s employment
management policies and procedures;
(g) Overseeing all day-to-day branch activities and branch personnel, ensuring
that the branch culture is consistent with Employer’s corporate goals, and
ensuring that all branch personnel abide by Employer’s policies and
(h) Ensuring that all branch personnel . . . participate in all Employersponsored training, and attend all requisite company meetings.
(Id. Ex. 10.)
In contrast to these clear statements of authority, Hyatt submitted an affidavit in support
of Defendants’ opposition to Plaintiffs’ motion in which he stated he “could recommend new
hires, but did not have ultimate authority to hire new employees on behalf of Proficio.” (Defs.’
Opp. Ex. 1, Hyatt Aff. ¶ 4, ECF No. 41.) Testimony of Proficio’s Rule 30(b)(6)1 designee,
Stephen L. Bennett, was to a similar effect, i.e., that a branch manager could only recommend
hiring and termination of employees since the ultimate decision was made at Proficio’s
Jacksonville, Florida, headquarters. (Id. Ex. 2, Bennett Dep. 78:20—79:4, Mar. 18, 2011.)
Federal Rules of Civil Procedure.
Bennett further testified that Hyatt, as branch manager, had authority to set the terms of the
branch employees’ compensation. (Id. 79:5-7.)
Under Rule 33(c), Federal Rules of Civil Procedure, “[a]n answer to an interrogatory may
be used to the extent allowed by the Federal Rules of Evidence.” Proficio’s interrogatory answer
may be considered an admission by a party-opponent (and therefore not hearsay) under
Rule 801(d)(2), Federal Rules of Evidence. See Buckley v. Airshield Corp., 116 F. Supp. 2d 658,
669 (D. Md. 2000) (“[A] party opponent’s answers to interrogatories are admissible as
admissions. . . . Such admissions qualify as substantive evidence of the fact stated therein.”).
Clearly, it is competent and persuasive evidence of a branch manager’s authority as against
Proficio,2 but the question arises as to whether it is rightly considered the same as against Hyatt.3
It is analogous, in reverse, to a statement by a servant concerning matters within the scope of his
employment. Fed. R. Evid. 801(d)(2)(D). It is logical to treat Proficio’s interrogatory answer
about the authority of a branch manager as binding on Hyatt, who was a branch manager for
Proficio. It may even be illogical not to do so since it was surely Proficio’s domain to create a
job description for its employee, rather than the employee’s domain to create one for himself.
In cases where parties have said conflicting things in depositions and affidavits, the
Fourth Circuit has ruled that sworn testimony, once given, may not be considered to be
genuinely disputed by the same party’s later affidavit. See, e.g., In re: Family Dollar FLSA
Litigation, 637 F.3d 508, 512-13 (4th Cir. 2011). See also Miller v. Federal Deposit Ins. Corp.,
906 F.2d 972, 975 (4th Cir. 1990) (uncertainties as to resolution of issue stemmed only from
differences among party’s deposition testimony, testimony during administrative hearing,
correspondence, and other documentary statements; no genuine dispute of material fact created
by conflicting versions of party’s testimony). The answer to interrogatory and the branch
manager position description incorporated by reference in the answer to interrogatory preceded
in time Bennett’s later deposition and Hyatt’s later affidavit. Proficio is fairly held to its earlier
admissions as to Hyatt’s ability to hire and fire employees. Its later attempts to discredit these
prior admissions do not create a genuine dispute of material fact with regard to Proficio’s
liability for the authorized actions of Hyatt in hiring and terminating branch office employees.
The Court observes that Proficio and Hyatt are represented by the same attorney and
that all filings by defense counsel are on behalf of both Proficio and Hyatt.
Additionally, it is in the interest of both Proficio and Hyatt to deny he had authority to hire and
fire, even though they may have different reasons for doing so. Their alignment of interests
favors their similar treatment on this evidentiary point. Still, the more cautious approach is to
treat the question of whether Hyatt could hire and fire branch employees as a material fact that
must be resolved at trial. If that fact is resolved against Hyatt, then it would be appropriate to
rule that he is a covered employer within the meaning of the FLSA.
C. What was the undisputed period of employment for Speert, Nieves, and Rascoe
In the company’s amended answers to interrogatories, Proficio responded to the first
interrogatory, which asked, inter alia, the dates of employment for each Plaintiff, by stating the
Scott Speert: Hired: September 2, 2009; Terminated: October 20, 2009;
Linda Nieves: Hired: 9/8/2009; Terminated: 10/20/2009.
Harvey Sanford: Not applicable; Mr. Sanford was never hired by Proficio.
David Rascoe: (a) Hired: 9/9/2009; Terminated: 10/20/2009.
(Pls.’ Mot. Partial Summ. J. Ex. 9, Proficio’s Am. Ans. to Speert’s 1st Interrog. #1.) Proficio’s
Rule 30(b)(6) designee conceded in his deposition that the date of September 9, 2009, was not
correct for Rascoe’s hiring and testified that Rascoe was hired on August 24, 2009. (Defs.’ Opp.
Ex. 2, Bennett Dep. 41:1-21.) No genuine dispute of material fact exists as to the following
dates of employment for three of the Plaintiffs:
Speert: September 2 through October 20, 2009
Nieves: September 8 through October 20, 2009
Rascoe: August 24 through October 20, 2009.
Disputes still exist between the two sides as to whether these three Plaintiffs were employed by
Proficio at times other than the above-stated time periods, and no ruling is made with respect to
other time periods.
D. Whether Defendants can satisfy their burden of proving by clear and convincing
evidence that Plaintiffs fit within the “outside salesperson” exemption
Since an exemption would obviate the duties imposed by the FLSA on Proficio, it is best
to address that issue first before considering whether Proficio’s conduct, in the absence of an
exemption, violated the FLSA’s requirements for minimum-wage payments, overtime
compensation, and recordkeeping.
In 29 U.S.C. § 213(a)(1), Congress specified that the
statutory mandates for payment of minimum wages and overtime do not apply to any employee
employed in the capacity of outside salesman and further specified that such term was subject to
definition and delimitation by regulations of the Secretary of Labor. Federal regulations provide
the following definitions:
The term “employee employed in the capacity of outside salesman” . . . shall
mean any employee whose primary duty is making sales . . . or obtaining orders
or contracts for services . . . and who is customarily and regularly engaged away
from the employer’s place or places of business in performing such primary duty.
29 C.F.R. § 541.500(a)(1), (2).
An outside sales employee must be customarily and regularly engaged “away
from the employer’s place or places of business.” The outside sales employee is
an employee who makes sales at the customer’s place of business or, if selling
door-to-door, at the customer’s home. Outside sales does not include sales made
by mail, telephone or the Internet unless such contact is used merely as an adjunct
to personal calls. Thus, any fixed site, whether home or office, used by a
salesperson as a headquarters or for telephonic solicitation of sales is considered
one of the employer’s places of business, even though the employer is not in any
formal sense the owner or tenant of the property.
29 C.F.R. § 541.502.
(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.
(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
29 C.F.R. § 541.700.
The phrase “customarily and regularly” means a frequency that must be greater
than occasional but which, of course, may be less than constant. Tasks or work
performed “customarily and regularly” includes work normally and recurrently
performed every workweek; it does not include isolated or one-time tasks.
29 C.F.R. § 541.701.
Exemptions from FLSA coverage “are to be narrowly construed against the employers
seeking to assert them,” Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960), quoted in
Purdham, 637 F.3d at 427, and the employer must prove the applicability of an exemption to an
employee by clear and convincing evidence, Shockley v. City of Newport News, 997 F.2d 18, 21
(4th Cir. 1993). Defendants take the “position that Plaintiffs did not perform any compensable
work for Proficio during September 2009.” (Defs.’ Opp. 10, ECF No. 41.) However, for the
purpose of deciding this motion, the Court has already determined that no genuine issue of
material fact exists as to specific dates of employment for Speert, Nieves, and Rascoe, so
Defendants’ “position” is not helpful in deciding the issue of exemption.
The only point otherwise argued by Defendants is that Plaintiffs concede they never
performed any work at Proficio’s licensed Owings Mills, Maryland, office and, therefore,
Plaintiffs have conceded they were “customarily and regularly engaged away from their
employer’s place of business,” within the meaning of the “outside sales” exemption of 29 C.F.R.
§ 541.500. (Defs.’ Opp. 10.) Defendants’ interpretation of the exemption is contrary to the
explanatory language of 29 C.F.R. § 541.502, which states, “[A]ny fixed site, whether home or
office, used by a salesperson as a headquarters or for telephonic solicitation of sales is considered
one of the employer’s places of business, even though the employer is not in any formal sense
the owner or tenant of the property.” Given that language, it matters not whether Plaintiffs
worked in Proficio’s “licensed” location or in another location. Defendants have not sustained
their burden of proving by clear and convincing evidence the applicability of the “outside sales”
exemption to Plaintiffs. In fact, no genuine dispute of material fact exists on the applicability of
this exemption. It does not apply to the Plaintiffs.
E. Whether Defendants violated the FLSA by not paying the required statutory minimum
wages during the undisputed period of Plaintiffs’ employment
F. Whether Defendants violated the FLSA by not paying the required statutory overtime
compensation during the undisputed period of Plaintiffs’ employment
The standard to be met by a plaintiff in a FLSA case was stated in Anderson v. Mt.
Clemens Pottery Co., 328 U.S. 680 (1946):
[A]n employee has carried out his burden if he proves that he has in fact
performed work for which he was improperly compensated and if he produces
sufficient evidence to show the amount and extent of that work as a matter of just
and reasonable inference. The burden then shifts to the employer to come
forward with evidence of the precise amount of work performed or with evidence
to negative the reasonableness of the inference to be drawn from the employee’s
evidence. If the employer fails to produce such evidence, the court may then
award damages to the employee, even though the result be only approximate.
Id. at 687. See also Pforr v. Food Lion, Inc., 851 F.2d 106, 108-09 (4th Cir. 1988).
As previously noted, the undisputed period of employment for Speert was September 2
through October 20, 2009. Speert received two paychecks from Proficio—one for $1,160 on
October 15, 2009, and another for $1,627.84 on October 30, 2009. (Pls.’ Mot. Partial Summ. J.
Ex. 9, Am. Ans. to Speert’s 1st Interrog. #1(f).) The pay period for the first check was October 1
through October 15, 2009. (Bennett Dep. 98:9—99:6.) Thus, the basic facts establish that
Speert was not paid for the period of September 2 through September 30, 2009. Further, in
Speert’s answers to interrogatories, he stated that he worked at least 45 hours per week during
the time of his employment with Proficio. (Pls.’ Mot. Partial Summ. J. Ex. 1, Speert Ans.
Interrog. #22.) This evidence is sufficient to establish a prima facie case that Speert performed
work for Proficio and he was not properly compensated for it.
The burden now shifts to Proficio to come forward with evidence of the precise amount
of work performed by Speert or evidence that negates the reasonableness of the inference drawn
from Speert’s evidence. Defendants first argue that Speert, as well as Nieves and Rascoe, did
not work in Proficio’s licensed office in Owings Mills, Maryland, during September 2009
because he was in the satellite office that Rascoe sought to establish for Proficio. (Defs.’
Opp. 7.) As noted earlier, however, as far as the FLSA is concerned, that distinction in location
of work makes no difference. Defendants next argue that Plaintiffs did not perform compensable
work during this time period because Hyatt did not direct them to perform any. (Id. 8.) But
Defendants have cited no authority for the proposition that one must be “directed” to perform
work before one is considered to have worked, within the scope of the FLSA. Indeed, the FLSA
defines “employ” as suffering or permitting to work. 29 U.S.C. § 203(g). No direction is
necessary to this definition.
Defendants next contend the evidence shows that Plaintiffs might have been working on
behalf of another entity, CMI, a marketing enterprise run by Hyatt’s brother, Mitchell Hyatt,
during September 2009. (Defs.’ Opp. 8-9.) Even if that were true, though, it would not negate
the inference that Proficio is liable for failure to compensate Plaintiffs properly since the FLSA
is not premised on exclusivity of employment. The cases dealing with jointly liable employers
are instructive on this point. See, e.g., Falk, 414 U.S. at 195; Schultz, 466 F.3d at 307. Thus,
Defendants have failed to carry their burden of showing Speert was properly compensated in
The evidence as to Nieves is similar.
Her undisputed dates of employment were
September 8 through October 20, 2009. Although she received two more paychecks following
the October 30, 2009, paycheck, she received no paycheck for September 2009. (Proficio’s Am.
Ans. to Speert’s 1st Interrog. #1(f).) She also stated she worked at least 45 hours per week for
Proficio during this time period. (Pls.’ Mot. Partial Summ. J. Ex. 2, Nieves’s Ans. to Interrog.
#20.) Thus, she, too, has established a prima facie case for improper compensation by Proficio
during September 2009. In addition to the unsuccessful arguments advanced above, Defendants
contend that Nieves could not have been performing any work for Proficio since she did not have
“login” credentials for part of this time and could not log into Proficio’s computer system to
process mortgage loans or check mortgage rates. (Defs.’ Opp. 8.) Even if that were true,
Defendants fail to explain how that would make it impossible for Nieves to generate new loan
business from which Defendants would benefit. It must be concluded that Defendants have
failed to carry their burden in relation to Nieves.
Rascoe’s undisputed dates of employment with Proficio were August 24 through
October 20, 2009. He also received four paychecks in October and November 2009, but none
for August or September 2009. (Proficio’s Am. Ans. to Speert’s 1st Interrog. #1(f).) Rascoe
stated he worked at least 50 hours per week for Proficio during this time.
He, too, has
established a prima facie case that Proficio did not compensate him properly during August and
September of 2009.
Besides the ill-fated arguments Defendants advanced with respect to all Plaintiffs,
Defendants contend that Rascoe continued to negotiate terms for himself and the loan officers he
intended to employ in his satellite office. Consequently, neither Rascoe nor the Plaintiffs were
yet employed by Proficio. (Defs.’ Opp. 7.) Assuming arguendo that Rascoe did this, it does not
negate the inference that Defendants suffered or permitted Rascoe or the other Plaintiffs to work
for Proficio. That inference is bolstered by Rascoe’s statements that his establishment and
management of the satellite office and his recruitment of loan officers were done with the
knowledge and authorization of Hyatt as well as Proficio’s regional manager, Mike Joyner.
(Pls.’ Mot. Partial Summ. J., Ex. 3, Rascoe’s Ans. to Interrog. #19.) Thus, Defendants have
failed to shoulder their burden with respect to Rascoe.
This conclusion applies to both the minimum-wage claim and the overtime-compensation
claim. Thus, no genuine dispute of material fact exists as to whether Proficio violated the FLSA
by failing to pay minimum wages and overtime compensation during the undisputed periods of
employment for Speert, Nieves, and Rascoe. It is clear that Proficio did violate the FLSA.
F. Whether Defendants violated the FLSA by not maintaining required records during the
undisputed period of Plaintiffs’ employment
The FLSA imposes a recordkeeping requirement on employers that includes keeping a
record of the “wages, hours, and other conditions and practices of employment” for employees.
29 U.S.C. § 211(c). Plaintiffs do not assert any failure by Defendants in this regard as a separate
cause of action, nor would such be consistent with the statutory scheme permitting employees to
recover unpaid wages while vesting in the Secretary of Labor the prerogative to seek relief for
other types of FLSA violations. See Rossi v. Assoc. Limousine Servs., Inc., 438 F. Supp. 2d
1354, 1366 (S.D. Fla. 2006) (concluding employees do not have private right of action for
violation of FLSA’s recordkeeping requirements). Plaintiffs apparently only seek a ruling on
this point to support their case for unpaid wages, which is necessarily based on estimates and
approximations given Proficio’s ready concession that it did not keep time cards for Speert,
Nieves, and Rascoe. (Pls.’ Mot. Partial Summ. J. Ex. 9, Proficio’s Ans. to Speert’s 1st Interrog.
#9.) Since this only affects the weight of the evidence and does not change the outcome of the
case, no ruling is needed on this point.
The Court holds that Proficio is a covered employer within the meaning of the FLSA, that
a genuine dispute of material fact exists as to whether Hyatt is a covered employer within the
meaning of the FLSA, that Defendants have not carried their burden for establishing the “outside
salesman” exemption, that Speert, Nieves, and Rascoe have undisputed periods of employment
as specified supra, and that Speert, Nieves, and Rascoe have established violations of the
FLSA’s requirements pertaining to minimum wages and overtime compensation for the
undisputed periods of employment. A separate order will be entered reflecting these holdings.
DATED this 10th day of June, 2011.
BY THE COURT:
James K. Bredar
United States District Judge
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