Williams et al v. Alimar Security, Inc.

Filing 52

OPINION and ORDER Denying Defendant's 44 Amended Motion for Summary Judgment and Partial Motion to Dismiss for Failure to Prosecute. Signed by District Judge Linda V. Parker. (RLou)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
MARCUS WILLIAMS et al.,
Plaintiffs,

Civil Case No. 13-12732
Honorable Linda V. Parker

v.
ALIMAR SECURITY, INC.,
Defendant.
_______________________________/
OPINION AND ORDER DENYING DEFENDANT’S AMENDED MOTION
FOR SUMMARY JUDGMENT AND PARTIAL MOTION TO DISMISS
FOR FAILURE TO PROSECUTE [ECF NO. 44]
Plaintiffs Marcus Williams, Michael Taylor, Dennis Stone (voluntarily
dismissed), and Aaron Bradford (collectively “Plaintiffs”), filed this collective
action lawsuit under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.
(“FLSA”). Plaintiffs assert that they are hourly employees and that Defendant
Alimar Security, Inc. (“Defendant” or “Alimar”) violated the provisions of the
FLSA by failing to pay Plaintiffs time and a half for the time they worked in
excess of forty hours per workweek. Currently before the Court is Defendant’s
motion for summary judgment. For reasons that follow, the Court DENIES
Defendant’s motion.

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I.

Factual Background

Plaintiffs were employed by Defendants as “alarm response security
officers,” (AROs) for the duration of the three years preceding the filing of this
lawsuit. (Compl., ECF No. 1 at Pg. ID 3.) Defendant provides security services to
its customers, including “armed response to alarms at the residential and business
premises of its customers.” (Id.) As alarm response security officers, Plaintiffs
monitored and responded to the alarms on the premises of Defendant’s customers.
(Id.) This required Plaintiffs to travel and inspect said premises when the alarms
sounded, and determine the cause of an alarm’s sounding. (Id.) Further, Plaintiffs
would “secur[e] the premises as needed and repor[t] the status of the premises to
Alimar or law enforcement agencies.” (Id.)
Plaintiffs assert that they were employed by Defendant as hourly employees
and were “not exempt to the overtime pay requirements of the FLSA.” (Id. at Pg.
ID 4.) Plaintiffs further contend that they regularly worked in excess of forty-eight
hours, yet were paid “at the rate of $11.37 per hour for forty hours per week, with
no compensation for hours worked in excess of forty per week.” (Id.) In support of
this assertion Plaintiffs claim: (1) they regularly worked 48 hour weeks –
specifically four, twelve-hour shifts per week – and were not paid for the eight
hours worked in excess of forty; (2) Plaintiffs were regularly required to remain at
work for one hour at the end of their shifts; and (3) Plaintiffs were regularly

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required to attend training sessions and meetings for which they were not
compensated. (Id.) As a result of Defendant’s wrongdoing, Plaintiffs filed this
lawsuit. (ECF No. 1.)
Plaintiffs make known to the Court, in their complaint, that their lawsuit is a
collective class action. (Compl., ECF No. 1 at Pg. ID 4.) Plaintiffs assert that said
class consists of employees similarly situated to Plaintiffs, who have either worked
or are currently working for Defendant and were not paid overtime for hours
worked in excess of forty hours. (Id.) Further, Plaintiffs assert that class members:
(1) perform or have performed the same or similar work as Plaintiffs; (2) the
specific job titles or responsibilities of each class member do not prevent collective
treatment; and (3) “[a]ll [c]lass [m]embers, irrespective of their particular job
requirements, are entitled to overtime compensation for hours worked in excess of
forty during a workweek.” (Id. at Pg. ID 5.) On November 20, 2013, Plaintiffs
motion for temporary class certification (ECF No. 11) was granted. (ECF No. 19.)
Plaintiffs bring a single cause of action against Defendant. Specifically,
Plaintiffs assert that Defendant’s practice of not paying Plaintiffs and class
members the time and a half rate that they are owed, pursuant to the FLSA, for
hours worked in excess of 40 hours, constitutes a violation of 20 U.S.C. § 207.
(Compl., ECF No. 1 at Pg. ID 6.) Plaintiffs further assert that as a result of this
violation, Plaintiffs and class members are entitled to: (1) recover their overtime

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compensation; (2) “an amount equal to all of their unpaid overtime wages as
liquidated damages,” pursuant to 29 U.S.C. § 216(b); and (3) “attorney fees and
costs, as required by the FLSA.” (Id.) Shortly after the filing of Plaintiffs
complaint, Defendant filed its summary judgment motion. (ECF No. 44.) A motion
hearing was held on February 9, 2016.
II.

Standard of Review

Summary judgment pursuant to Federal Rule of Civil Procedure 56 is
appropriate “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 central inquiry is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986). After adequate time for discovery and upon motion, Rule 56
mandates summary judgment against a party who fails to establish the existence of
an element essential to that party’s case and on which that party bears the burden
of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The movant has the initial burden of showing “the absence of a genuine
issue of material fact.” Id. at 323. Once the movant meets this burden, the
“nonmoving party must come forward with specific facts showing that there is a
genuine issue for trial.” Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475

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U.S. 574, 587 (1986) (internal quotation marks and citation omitted). To
demonstrate a genuine issue, the nonmoving party must present sufficient evidence
upon which a jury could reasonably find for that party; a “scintilla of evidence” is
insufficient. See Liberty Lobby, 477 U.S. at 252.
“A party asserting that a fact cannot be or is genuinely disputed” must
designate specifically the materials in the record supporting the assertion,
“including depositions, documents, electronically stored information, affidavits or
declarations, stipulations, admissions, interrogatory answers, or other materials.”
Fed. R. Civ. P. 56(c)(1). The court must accept as true the non-movant’s evidence
and draw “all justifiable inferences” in the non-movant’s favor. See Liberty Lobby,
477 U.S. at 255.
III.

Applicable Law and Analysis

1. Failure to Prosecute
Defendant first seeks dismissal on the premise that named Plaintiff Marcus
Williams – as well as collective action opt-ins Keith Deramus, Darren Malone, and
Jeremy Ray – have failed to respond and appear for depositions to which they had
notice. (Def.’s Mot., ECF No. 44 at Pg. ID 745–46.) Defendant asserts that
without these depositions, Defendants are “unable to determine the key issues in
this case” as they relate to these absent individuals. (Id. at Pg. ID 745.) Further,
Defendant contends that the failure to show should result in dismissal for failure to

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prosecute, pursuant to Federal Rules of Civil Procedure 30(g), 37(d), 41(b), and
EDMI L.R. 41.2. (Id.)
The Sixth Circuit discourages involuntary dismissals without prior notice.
Rogers v. City of Warren, 302 F. App'x 371, 376 (6th Cir. 2008). “[I]n the absence
of notice that dismissal is contemplated, a district court should impose a penalty
short of dismissal unless the derelict party has engaged in bad faith or
contumacious conduct.” Id. (citing Harris v. Callwood, 844 F.2d 1254, 1256 (6th
Cir. 1988)). To assess the appropriateness of a district court’s decision to
involuntarily dismiss a complaint, the Sixth Circuit often applies the following
four-factor test laid out in Mulbah v. Detroit Bd. Of Educ., 261 F.3d 586 (6th Cir.
2001):
(1) whether the party's failure is due to willfulness, bad faith, or fault;
(2) whether the adversary was prejudiced by the dismissed party's
conduct; (3) whether the dismissed party was warned that failure to
cooperate could lead to dismissal; and (4) whether less drastic
sanctions were imposed or considered before dismissal of the action.
Mulbah, 261 F.3d at 589.
Additionally, concerning, discovery disputes, this Court has indicated the
following in its practice guidelines:
Local Rule 37.1 requires the parties to attempt to narrow their
disagreements in regard to discovery. The Court expects counsel to
make every effort to comply with this Local Rule, to confer with one
another and resolve discovery matters themselves. However, if
counsel have conferred and made every effort to reach an agreement
but have been unsuccessful, the Court will be available to conduct a
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telephone conference on short notice in order to resolve discovery
disputes expeditiously and without the need for motions. No
discovery motion may be filed before the Court is contacted.
Practice Guidelines for Judge Linda V. Parker, Discovery Disputes – Section D:
https://www.mied.uscourts.gov/index.cfm?pageFunction=chambers&judgeid=46
(emphasis in the original).
Given that Defendant has failed to notify the Court of its discovery dispute
prior to seeking dismissal, and the fact that Plaintiff Williams as well as the
collective action opt-ins have yet to receive any warning from this Court that
failure to cooperate would lead to dismissal, the dismissal of these individuals at
this time is inappropriate. Accordingly, Defendant’s dismissal request is DENIED.
2. Certain named opt-ins did not work any overtime hours
Defendant next asserts that the record reflects that collective action opt-ins
Derek Banks and Jeremy Ray have not worked more than 40 hours in a work week,
and that Mark Allen apparently worked over 40 hours per week on four occasions
but was paid for this time.
Concerning collective action opt-ins Banks and Ray, Defendant simply
states the following: “Derek Banks and Jeremy Ray do not appear to have worked
any hours over 40 in a work week and therefore should be dismissed from this
overtime lawsuit. (Ex. R).” (Def.’s Mot., ECF No. 44 at Pg. ID 746.) Exhibit R
contains a host of different documents and spans over 100 pages. Defendant fails
to direct the Court’s attention to any particular section of Exhibit R, and fails to
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explain how Exhibit R demonstrates that these Plaintiffs have not worked any
overtime hours. “Issues adverted to in a perfunctory manner, unaccompanied by
some effort at developed argumentation, are [ ] deemed waived. It is not sufficient
for a party to mention a possible argument in the most skeletal way, leaving the
court to ... put flesh on its bones.” McPherson v. Kelsey, 125 F.3d 989, 995–96 (6th
Cir. 1997) (quoting Citizens Awareness Network, Inc. v. United States Nuclear
Regulatory Comm'n, 59 F.3d 284, 293–94 (1st Cir. 1995)) (further citations
omitted).
Regarding collective action opt-in Mark Allen, Defendant states the
following:
Mark Allen apparently did work over 40 hours per week on four
occasions but appears to have been paid for this time. See Ex. R and
Ex. S. Allen admits he was paid overtime for certain occasions and
cannot recall other times he may have worked overtime. (Ex. E at 31).
As such, Allen appears to have been paid overtime (at time and a half)
for any hours worked over 40.
(Def.’s Mot., ECF No. 44 at Pg. ID 746.) Again, Exhibits R and S contain a wide
array of documents. Defendant fails to direct the Court’s attention to any specific
document in support of his assertion that Mr. Allen was compensated. Further,
regarding Exhibit E, the deposition of Allen, Defendant directs Allen’s attention to
the fact that he was paid in one instance when he worked 9.25 hours more than
forty in a week. (Allen Dep. ECF No. 44-6 at Pg. ID 799.) The Court finds that
without more, Defendant has failed to demonstrate that Allen did not work any
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additional overtime hours, especially since Defendant concedes that response
officers were schedule for 12 hour shifts, four days a week. (Def.’s Mot., ECF No.
44 at Pg. ID 740.) Given that Defendant fails to demonstrate that Allen was
compensated for all other hours worked in excess of forty hours in a workweek,
Defendant’s argument is futile. Accordingly, Defendant’s request for dismissal of
collective action opt-ins Banks, Ray, and Allen is unsubstantiated.
3. On-call and/or waiting to be engaged
In the complaint, Plaintiffs indicate that they were employed as alarm
response security officers from June 2010 through June 2013, i.e., “during the
three years preceding the date of filing of th[e] [c]omplaint.” (Compl., ECF No. 1
at Pg. ID 3.) Defendant asserts that it has employed AROs since approximately
September 1, 2010, and that the vast majority of AROs were hired and trained in
June 2012. (Def.’s Mot., ECF No. 44 at Pg. ID 737.) Further, Defendant states in
its summary judgment motion that after consulting with its payroll company,
Acrisure, it determined that the AROS were exempt from the overtime
requirements of the FLSA, made the AROs salaried employees, and compensated
them “at a salary of $909.60 bi-weekly, or $454.30 per week for all hours worked
during the workweek.” (Id. at Pg. ID 739.) Defendant contends that “the salary
structure was explained to all AROs in a meeting in July 2012.” (Id.)

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Defendant explains that thereafter, and prior to the filing of this lawsuit,
unknown AROs filed a charge with the Department of Labor alleging that
Defendant owed them overtime. (Id. at Pg. ID 741.) Consequently, beginning in
April 2013, Defendant changed its payroll practices, deeming AROs non-exempt
under the FLSA and compensating them at an hourly rate of $8.75 per hour, plus
overtime. (Id.) Defendant continued to schedule AROs for twelve hour shifts, four
days a week. (Id.)
Thus, from September 2010 until April 2013, Defendants classified
Plaintiffs and class members as salaried employees, exempt from overtime pay
under the FLSA. After April 7, 2013 they were reclassified as hourly employees
entitled to overtime pay. (Id.) In its summary judgment motion, Defendant does not
assert that the reason Plaintiffs and class members are not entitled to time and a
half overtime pay for hours worked in excess of 40 hours per week for the
September 2010 –April 2013 period is because they were properly classified as
employees exempt from overtime pay under the FLSA during this period. In fact,
Alimar states that “Defendant is not challenging the AROs’ non-exempt status in
this case.” (Def.’s Mot., ECF No. 44 at Pg. ID 741, n.1.) Rather, Defendant asserts
that the reason Plaintiffs and class members are not entitled to overtime pay is that
Plaintiffs and class members “were not working their entire 12 hour shifts and

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instead, when not on alarm runs, were legally ‘on call’ or ‘waiting to be engaged’
and therefore not entitled to compensation during those hours.” (Id. at Pg. ID 746.)
Defendant asserts in support of its position that in addition to the Code of
Federal Regulations (CFR), an nonbinding 1988 Tenth Circuit case – Norton v.
Worthen Van Services, Inc., 839 F.2d. 653 (10th Cir. 1988) – “is instructive as to
when employees are on-call.” (Def.’s Mot., ECF No. 44 at Pg. ID 747.) This Court
disagrees and holds that in addition to the CFR, there is binding Sixth Circuit and
United States Supreme Court case law that guides the Court’s requisite analysis.
Under certain circumstances, time spent waiting to work while on call may
constitute working time under the FLSA. See Armour & Co. v. Wantock, 323 U.S.
126, 133 (1944). The Department of Labor, the executive department charged with
administering the FLSA, explains:
[a]n employee who is required to remain on call on the employer's
premises or so close thereto that he cannot use the time effectively for
his own purposes is working while ‘on call.’ An employee who is not
required to remain on the employer's premises but is merely required
to leave word at his home or with company officials where he may be
reached is not working while on call.
329 C.F.R. § 785.17;
Recently, in Adair v. Charter County of Wayne, 452 F.3d 482 (6th Cir. 2006),
the Sixth Circuit laid out the requisite analysis for an on-call situation, holding in
relevant part:

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The FLSA “provides that employees must be compensated at one and
one-half times their regular rate for overtime work.” Martin v. Ohio
Turnpike Comm'n, 968 F.2d 606, 609 (6th Cir.1992) (citing 29 U.S.C.
§ 207(a)). Although the FLSA does not state whether time spent on
call is working time, the Supreme Court has held that, under some
circumstances, waiting time is compensable. See Armour & Co. v.
Wantock, 323 U.S. 126, 133, 65 S.Ct. 165, 89 L.Ed. 118 (1944);
Skidmore v. Swift & Co., 323 U.S. 134, 136, 65 S.Ct. 161, 89 L.Ed.
124 (1944).
[T]his circuit has acknowledged that “an employee may be entitled to
compensation even though he or she is on call at home or elsewhere.”
Martin, 968 F.2d at 609. In Martin, we held that “on-call time spent at
home may be compensable if the restrictions imposed are so onerous
as to prevent employees from effectively using the time for personal
pursuits.” Id. at 611.
The Martin court evaluated the claims in light of the precedent of
other circuits and the Department of Labor's promulgated regulations
concerning the compensability of on-call time. Id. at 610-11. The
relevant regulations provide that “[t]ime spent at home on call may or
may not be compensable depending on whether the restrictions placed
on the employee preclude using the time for personal pursuits” and
that “where the conditions placed on the employee's activities are so
restrictive that the employee cannot use the time effectively for
personal pursuits, such time spent on call is compensable.” 29 C.F.R.
§ 553.221(d). This court found summary judgment against the
plaintiffs' claims appropriate because they failed to demonstrate that
the employer's on-call policy resulted in severe restrictions on their
personal time, imposing “burdens that seriously interfere with their
ability to use the time for personal pursuits,” such as being summoned
to work so frequently that effective use of personal time was made
impracticable. Id. at 611-12.
Adair v. Charter Cty. of Wayne, 452 F.3d 482, 487 (6th Cir. 2006). “[O]n-time call
time spent at home may be compensable if the restrictions imposed are so onerous

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as to prevent employees from effectively using the time for personal pursuits.”
Martin, 968 F.2d at 611.”
Defendant states in his motion that AROs had few calls per shift (sometimes
none) and that the majority of responses were of short duration. (Def.’s Mot., ECF
No. 44 at. Pg. ID 738.) Defendant further argues that officers were able to engage
in personal activities such as sleeping, spending time with friends and family, and
going out to eat. (Id.) Essentially, Defendant asserts that when Plaintiff and class
members were not responding to alarms, they were able to do as they wished. (Id.)
Defendant’s CEO, Paul Martinelli, stated at his deposition that “[t]he alarm
response officers had a lot of freedom to do whatever they wanted to do.”
(Martinelli Dep., ECF No. 44-2 at Pg. ID 765.) When asked to provide examples,
Martinelli stated, “I’m only going to give you examples that I have personal
knowledge of…[s]hopping, visiting relatives, sleeping, taking off their uniform to
go to sleep, picking up their dog at the vet, taking their kids to and from school. I
think the list would probably continue on, I just can’t remember all of them, but
those are actual instances.” (Id.)
In a July 27, 2012 email to AROs, Martinelli states the following:
All Alarm Officers are on salary! This was made perfectly clear! Just
like the rest of us, you do NOT get holiday pay, overtime pay or any
other pay. And for the most part, many of you are not even working
hard or much during your 12 hour shifts, so it works out well for all of
us.

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We are finding some of you “AWOL” during your shift and
wondering why you are parked where you are parked. From now on,
please let the dispatcher know where you are at all times as they have
been instructed to follow you on the Teletrac. Also, some of you are
in violation of our post orders and have gone to your residence
without permission. A few of you have even had other family
members or friends in our vehicles. LET ME BE VERY CLEAR.
YOU DON’T GO HOME WITHOUT PERMISSION AND YOU
ARE NEVER TO HAVE ANOTHER NON-EMPLOYEE OF
ALIMAR IN OUR VEHICLE WITHOUT MY PERMISSION. I
HAVE A ZERO TOLERANCE FOR VIOLATION OF THE ABOVE
AND WILL MAKE ANY MOVE NECESSARY TO MAINTAIN
ORDER AND COMPLIANCE WITH OUR RULES AND
POLICIES. THEREFORE, IF I FIND OUT THAT ANY OF YOU
HAVE VIOLATED OUR POST ORDERS OR POLICES THERE
WILL BE NO SECOND CHANCE.
(Martinelli Email, ECF No. 44-8 at Pg. ID 812-13.)
What Plaintiffs’ attempted to get away with while working their scheduled
shift, does not constitute what Plaintiffs were permitted to due under Defendant’s
Polices and Post Orders. Contrary to Defendant’s assertions, Martinelli’s
statements in the email indicate that the limitations placed on AROs were much
more restrictive and onerous than what Defendant lets on. Based on the referenced
email, AROs were clearly unable to do as they wished.
Moreover, Plaintiffs assert the following facts in their responsive brief –
contrary to Defendant’s contentions:
Plaintiffs’ job involved reporting to Alimar’s offices at the beginning
of the shift, picking up the equipment they would use, and traveling in
Alimar’s vehicle to their assigned patrol areas. They were uniformed
throughout their shifts and required to be in or near the vehicle at all
times. If an alarm call came in they went to the scene, investigated to
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determine whether there had been a security breach, dealt with the
situation according to established procedures, reported their action,
and returned to the center of the patrol area. They were also called
upon to perform other tasks, such as transporting other guards or
checking on business with stationary Alimar guards, during the day.
At the end of the shift they returned to Alimar, turned in their vehicles
and equipment, completed their reports if necessary and turned in the
reports.
(Pls. Resp. Br., ECF No. 46 at Pg. ID No. 1209.)
The “Shift Procedures” section of Defendant’s revised “June 2012 Alarm
Response Officer Post Orders” support Plaintiffs assertions. In this section, the
following is stated:
Head to the center or nearest point of the center of your city sector.
Stay in or near your vehicle with the phone near your vehicle with the
phone and messaging screen turned on and tablet ready… You are not
to return to the office until your shift has ended unless called to the
office by management or dispatch!
(Post Order, ECF No. 46-5 at Pg. ID 1276.)
This section of the Post Orders suggest that AROs were required to stay in
the center of their post areas for the duration of their twelve-hour shifts and could
not leave said post area until their work shift ended. Further, the Post Orders also
state that when seeking to leave their sector or proceed to their residences, AROs
were prohibited from doing so without permission from dispatch. (Id. at Pg. ID
278.) Generally, AROs were expected to be in the center of their post area until
their shift was over; and towards the end of the shift AROs were expected to fill
the gas tank, prepare the vehicle for the next officer and complete reports. (Id. at
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Pg. ID 277-78.) Having reviewed the record, it is clear that Plaintiffs’ factual
assertions – as well as the Post Orders and Martinelli’s email – suggest that the
work conditions imposed burdens on the AROs that were quite possibly so onerous
that they prevented employees from effectively using their time for personal
pursuits – given that AROs were to be stationed in the center of their duty area in
their vehicle for the duration of their twelve hour work shift unless they were on a
run, responding to a sounding alarm. Plaintiffs’ assertions are contrary to
Defendant’s and therefore, a question of material fact remains – thus, precluding
summary judgment to Defendant.
Alternatively, Defendant asserts that if Plaintiffs and class members were
not on-call, they were waiting to be engaged. Defendant asserts the following:
If this Court finds the AROs were not on-call, they were, in the
alternative “waiting to be engaged.” Under the regulations, waiting
time is not compensable if employees are “waiting to be engaged”
rather than “engaged to wait.” 29 CFR 785.14. This uses a similar
analysis as determining on–call time described above but contains a
few additional factors. In 29 CFR 785.14
(Def.’s Mot., ECF No. 44 at Pg. ID 748.)
“In determining whether an employee is engaged to wait or waiting to be
engaged, the critical inquiry is whether the time spent waiting is primarily for the
benefit of the employer or employee.” Bernal v. Trueblue, Inc., 730 F. Supp. 2d
736, 741 (W.D. Mich. 2012). In Bernard, the district court held that federal courts
consider several non-controlling and non-exhaustive factors in determining
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whether waiting is predominantly for the benefit of the employer or employee.
These factors include: (1) whether the agreements and understandings between the
employer and employee indicate that waiting time will be compensated; (2)
whether the employer requested or required that the employee wait; (3) the extent
to which an employee’s free will is constrained during waiting time; and (4) the
extent to which the employer actually benefits from the waiting time. Id.
Defendant asserts that “the facts supporting waiting to be engaged and on-call in
this case are the same.” In support of this assertions Defendant provides nothing
more than the following five bullet points:
 The officers were provided a company cell phone and did not have to
be near a landline phone
 The officers have a significant response time of 45 minutes for ADT
and 30 minutes for other companies
 The majority of responses were of short duration
 Few calls per shift, sometimes none
 The officers were able to engage in personal activities including but
not limited to sleeping, spending time with friends and family, going
out to eat, engaging in activities
(Def.’s Mot., ECF No. 44 at Pg. ID 749.)
Again, the Sixth Circuit holds that “it is not sufficient for a party to mention
a possible argument in the most skeletal way, leaving the court to ... put flesh on its
bones.” McPherson v. Kelsey, 125 F.3d 989, 995–96 (6th Cir. 1997) (quoting
Citizens Awareness Network, Inc. v. United States Nuclear Regulatory Comm'n, 59
F.3d 284, 293–94 (1st Cir. 1995)) (further citations omitted). Defendant leaves this

17

Court to speculate and develop Defendant’s arguments as to how the waiting time
in this case was predominantly for the benefit of its employee. Defendant’s waiting
to be engaged argument is asserted in a perfunctory manner unaccompanied by
some effort at developed argumentation, and is therefore deemed waived. (Id.)
4. Consent to Salary
Next, Defendant seeks a ruling indicating that overtime recovery for Plaintiff
and class members is limited to half the overtime hours they worked under the
“fluctuating workweek” rationale.
Essentially, Defendant argues that the salary compensated Plaintiffs and
class members for the straight-time component of all hours worked, and that
therefore they are only entitled to an overtime premium of half of their regular rate
of pay. (Def.’s Mot., ECF No. 44 at Pg. ID 750.) Defendant argues that therefore,
the proper calculation of damages involves dividing the plaintiffs' salary for a
particular week by the number of hours of work and applying a 50% premium to
all hours worked beyond forty. (Id.)
While Defendant argues that the fluctuating work week approach is the
appropriate measure of damages, Plaintiffs argue that the method proposed by
Defendant for calculating damages is not proper since there was no clear and
mutual understanding that the salaries were intended to compensate them for all
hours worked in a week. (Pls.’ Resp. Br., ECF No. 46 at Pg. ID 1220.) Plaintiffs

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further argue that the Defendant never paid them under the fluctuating work week
model and that therefore that any overtime amounts owed would be time and a half
for each hour of overtime. (Id. at 1221)
29 CFR § 778.114 is the regulation governing the fluctuating work week
model. That regulation explains the premise behind the fluctuating work week
model:
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 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 he
receives extra compensation, in addition to such salary, for all
overtime hours worked at a rate not less that 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 arrangement.
29 CFR § 778.114

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Broken down, § 778.114 requires four conditions before an employer may
apply a fluctuating work week model: (1) the employee's hours fluctuate from
week to week; (2) the employee receives a “fixed weekly salary” that does not vary
based on the number of hours worked during the week; (3) the fixed salary
provides compensation at a regular rate that is not lower than minimum wage; and
(4) there is a “clear mutual understanding” among the parties that the fixed salary
is compensation (apart from overtime premiums) for all hours worked each
workweek, whatever their number. Dorsey v. TruGreen Ltd. P'ship, 13–10412,
2013 WL 6048999, at *8 (E.D. Mich. Nov.15, 2013) (adopting report and
recommendation) (citing 29 CFR § 778.114(a) and (c)).
“Whether to apply the fluctuating work week model of calculating damages
is a question of law for the [c]ourt to decide. But, the [c]ourt can only apply that
method if there is a clear indication that the employer and the employee have
agreed that the employee will be paid a fixed weekly wage to work fluctuating
hours.” Thomas v. Doan Const. Co., No. 13-11853, 2014 WL 1405222, at *13
(E.D. Mich. Apr. 11, 2014) (citations and internal quotations omitted). That
question – whether an employer and employee agreed to a fixed weekly wage for
fluctuating hours – “is a question of fact.” Id. (citations omitted).
Here, then, there is an issue of fact as to whether the parties expressly agreed
to a fixed weekly wage for fluctuating hours. Defendant points to an email and

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memorandum sent to Plaintiffs, both of which indicated that AROs were salaried.
(Def.’s Mot. ECF No. 44 at Pg. ID 752.) The Court finds that these documents do
not support the assertion that there was a fluctuating work week schedule in place,
since there is no agreement in either statement that the parties agreed to one. See
Thomas, No. 13-11853, 2014 WL 1405222, at *13. There appears no negotiation.
The Court finds that there is an issue of fact as to the parties' understanding
regarding Plaintiff's pay. If this case goes to trial, the jury will have to answer
whether the parties agreed to a fluctuating work week schedule. If they did, the
Court will apply the fluctuating work week method of damages; if they did not, the
Court finds that Plaintiffs would be entitled to one-and-one-half times the regular
rate for the overtime hours worked. See id.
5. Liquidated Damages
Defendant asserts that Plaintiffs are not entitled to liquidated damages
because the failure to pay overtime damages was made in good faith and a
reasonable belief that the FLSA was not violated. With respect to liquidated
damages under the FLSA, the Sixth Circuit holds the following:
Section 216(b) of the FLSA provides that “[a]ny employer who
violates the provisions of section 206 or section 207 of this title shall
be liable to the employee or employees affected in the amount of their
unpaid minimum wages, or their unpaid overtime compensation, as
the case may be, and in an additional equal amount as liquidated
damages.” 29 U.S.C. § 216(b) (1998). Liquidated damages under the
FLSA “ ‘are compensation, not a penalty or punishment.’ ”
McClanahan v. Mathews, 440 F.2d 320, 322 (6th Cir.1971) (quoting
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Overnight Motor Co. v. Missel, 316 U.S. 572, 583, 62 S.Ct. 1216, 86
L.Ed. 1682 (1942)); see also Brooklyn Sav. Bank v. O'Neil, 324 U.S.
697, 707, 65 S.Ct. 895, 89 L.Ed. 1296 (1945) (“It constitutes a
Congressional recognition that failure to pay the statutory minimum
on time may be so detrimental to maintenance of the minimum
standard of living necessary for health, efficiency, and general wellbeing of workers and to the free flow of commerce, that double
payment must be made in the event of delay in order to insure
restoration of the worker to that minimum standard of well-being.”
(internal quotations omitted)).
A district court, however, has the discretion not to award liquidated
damages to a prevailing plaintiff if “the employer shows to the
satisfaction of the court that the act or omission giving rise to such
action was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation of the Fair Labor
Standards Act of 1938.” 29 U.S.C. § 260 (1998); see also Herman v.
Palo Group Foster Home, 183 F.3d 468, 474 (6th Cir.1999). This
burden on the employer is substantial and requires “proof that [the
employer's] failure to obey the statute was both in good faith and
predicated upon such reasonable grounds that it would be unfair to
impose upon [it] more than a compensatory verdict.” McClanahan,
440 F.2d at 322 (internal quotations omitted) (emphasis added). “In
the absence of such proof [, however,] a district court has no power or
discretion to reduce an employer's liability for the equivalent of
double unpaid wages.” Id.; see also Uphoff v. Elegant Bath, Ltd., 176
F.3d 399, 405 (7th Cir.1999) ( “ ‘Although in the final analysis, we
review a district court's decision on liquidated damages for abuse of
discretion, that discretion must be exercised consistently with the
strong presumption under the statute in favor of doubling.’ ” (quoting
Shea v. Galaxie Lumber & Constr. Co., 152 F.3d 729, 733 (7th
Cir.1998))).
Elwell v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 840 (6th Cir. 2002)
The Court concludes that Defendant has not met its burden of demonstrating
good faith when it instituted its payment plan. Defendant merely states that the
decision to make the AROs salary was after consultation with its payroll company.
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The only evidence submitted in support of this assertion is a declaration from
Martinelli in which he states that “[t]he decision to pay AROs salary was based on
my consultations with my payroll company, Acrisure, and I believed in good faith
that the AROs were exempt from overtime requirements and could be paid a salary
for all hours worked.” (Martinelli Declaration, ECF No. 44-3 at Pg. ID 767.) This
declaration alone does not persuade the Court that Defendant made the
compensation determination on a good faith basis, given that Mr. Martinelli also
said in his email to AROs, regarding salaried pay, the following: “All Alarm
Officers are on salary! And for the most part, many of you are not even working
hard or much during your 12 hour shifts, so it works out well for all of us.”
Without more, the proof provided by Defendant fails to meet Defendant’s
substantial burden to demonstrate that its failure to obey the statute was both in
good faith and predicated upon such reasonable grounds.
6. Conditional Certification
In two short sentences, Defendant seeks to dismiss the class members
because the final collective action class was never certified, as required by a
discovery order. (Def.’s Mot., ECF No. 44 at Pg. ID 753-54.) Defendant provides
no developed argumentation, provides no case law supporting this assertion.
Defendant simply refers this Court’s attention to the discovery order entered prior
to reassignment of the case to this Court. (ECF No. 9.) Given that a new

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scheduling order was subsequently entered in this case (ECF No. 38), and the order
makes no mention of a date for filing a motion for final certification, dismissal on
this basis is unwarranted.

7. Offers of Judgment
Defendant initially sought entry of Judgment based of the offers of judgment
he made against Plaintiffs and class members. However, at the motion hearing,
Defendant withdrew this argument in light of the recent United States Supreme
Court decision, Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016), as revised
(Feb. 9, 2016) which held that a complaint was not rendered moot by unaccepted
offers of judgment.
Accordingly, for the abovementioned reasons, Defendant’s motion for
summary judgment (ECF No. 44) is DENIED.
IT IS SO ORDERED.
s/ Linda V. Parker
LINDA V. PARKER
U.S. DISTRICT JUDGE
Dated: March 16, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of
record and/or pro se parties on this date, March 16, 2016, by electronic and/or U.S.
First Class mail.
s/ Richard Loury
Case Manager
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