Secretary of Labor v. Maranto et al

Filing 115

ORDER denying 42 Defendant Meers Store and Restaurant, Inc.'s Motion for Summary Judgment. Signed by Honorable Timothy D. DeGiusti on 9/19/2017. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
R. ALEXANDER ACOSTA, Secretary
of Labor, United States Department of
Labor,
Plaintiff,
Case No. CIV-15-1378-D
v.
MARGARET MARANTO, et al.,
Defendants.

ORDER
Presently before the Court is Defendant Meers Store and Restaurant, Inc.’s Motion
for Summary Judgment [Doc. No. 42] filed pursuant to Fed. R. Civ. P. 56. 1 The Motion is
supported by Defendant’s opening and reply briefs [Doc. Nos. 43 & 58]; and opposed by
Plaintiff’s response brief [Doc. No. 55].
This case involves claims by the United States Department of Labor under the Fair
Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-19, that Defendants Meers Store &
Restaurant, Inc. (the “Store”) and Margaret Maranto violated the FLSA by failing to pay
minimum wages to employees, failing to pay overtime compensation, failing to comply
with child labor provisions, and failing to maintain required records since January 30, 2012.
Plaintiff seeks injunctive relief, an assessment of unpaid wages and compensation owed to
the Store’s employees, and liquidated damages for willful FLSA violations.

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Plaintiff’s Motion for Summary Judgment will be addressed by a separate order.

In answer to the Complaint, Defendants admitted that Joe and Margaret Maranto
(husband and wife) have managed the Store during the relevant time period and that the
Store “supervises or controls employees.” See Am. Answer [Doc. No. 22], ¶¶ 2-3.

In

answering interrogatories, Defendants stated that both Mr. and Mrs. Maranto have full
management authority. See Defs.’ Answer Pl.’s First Set Interrogs. [Doc. No. 55-3] at 3.
Now, however, the Store presents facts based on an affidavit of Mr. Maranto stating that
during a period of his incapacity, Mrs. Maranto “assumed all management duties including
adopting and enforcing personnel policies,” without his knowledge or authority (or that of
“any other person having any interest in Meers Store”). See Maranto Aff. [Doc. No. 432], ¶¶ 3-6. Based on these asserted facts, the Store seeks a summary determination that it
is not liable for any statutory violations that occurred because its manager, Mrs. Maranto,
was not authorized to adopt the alleged unlawful personnel policies or to commit the
alleged unlawful acts.
Plaintiff objects to the Store’s Motion on grounds that this ultra vires defense was
not raised in Defendants’ pleading or in answers to interrogatories requesting such
information, that Mr. Maranto’s affidavit is insufficient to support such a defense, that the
Store’s statement of material facts is disputed, and that the asserted defense has no basis in
FLSA law. Plaintiff is correct that the Store provides no legal authority for its asserted
defense; the cases cited in its brief address only the personal liability of corporate officers
as an “employer” under the FLSA or state law. See Fraternal Order of Police Barkley
Lodge #60, Inc. v. Fletcher, 618 F. Supp. 2d 712, 722 (W.D. Ky. 2008) (FLSA) (cited in

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Def.’s Reply Br. [Doc. No. 58] at 1); Ayon v. Kent Denver Sch., Civ. Action No. 12-cv2546-WJM-CBS, 2013 WL 1786978 (D. Colo. April 26, 2013) (unpublished) (state-law
claims) (cited in Def.’s Opening Br. [Doc. No. 43] at 5). However, Plaintiff also fails to
provide legal authority to support its argument, which is, the fact “[t]hat a manager may
take an action in violation of the FLSA that was not specifically authorized by the corporate
employer is immaterial to the corporate employer’s liability under the statute.” See Pl.’s
Resp. Br. [Doc. No. 55] at 7.
Standard of Decision
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and that the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). A material fact is one that “might affect the outcome of the
suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute is genuine if the evidence is such that a reasonable jury could return a verdict for
either party. Id. at 255. The movant bears the initial burden of demonstrating the absence
of a dispute of material fact warranting summary judgment. See Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). If the movant carries this burden, the nonmovant must then
“set forth specific facts” that would be admissible in evidence and that show a genuine
issue for trial. See Anderson, 477 U.S. at 248; Celotex, 477 U.S. at 324; Adler v. Wal-Mart
Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998); Fed. R. Civ. P. 56(c)(1)(A).

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Discussion
The FLSA imposes duties on covered employers with respect to compensation and
working conditions of non-exempt employees. In relevant part, an “employer” as defined
by FLSA “includes any person acting directly or indirectly in the interest of an employer
in relation to an employee.” See 29 U.S.C. § 203(d). “‘Person’ means an individual,
partnership, association, corporation, business trust, legal representative, or any organized
group of persons.” Id. § 203(a). With certain exceptions not relevant here, “the term
‘employee’ means any individual employed by an employer.” Id. § 203(e)(1). And the
term “‘[e]mploy’ includes to suffer or permit to work.’” Id. § 203(g). Federal courts have
recognized that “the breadth of these definitions is both intentional and obvious.”
Thompson v. Real Estate Mortg. Network, 748 F.3d 142, 148 (3d Cir. 2014). “‘The
Supreme Court has even gone so far as to acknowledge that the FLSA’s definition of an
employer is the broadest definition that has ever been included in any one act.’” Id.
(quoting In re Enterprise Rent-A-Car Wage & Hour Emp’t Prac. Litig., 683 F.3d 462, 46768 (3d Cir. 2012)) (internal quotation and citation omitted).
One federal appellate court has also observed:

“Unfortunately, however, the

statute’s definition of “employer” relies on the very word it seeks to define . . . . The statute
nowhere defines ‘employer’ in the first instance.’” Irizarry v. Catsimatidis, 722 F.3d 99,
103 (2d Cir. 2013). To effectuate FLSA’s remedial purposes, the Supreme Court “‘has
instructed that the determination of whether an employer-employee relationship exists for
purposes of the FLSA should be grounded in economic reality rather than technical

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concepts.’” Id. at 104 (quoting Barfield v. NYC Health & Hosps. Corp., 537 F.3d 132,
141 (2d Cir. 2008)) (internal quotation omitted); see Baker v. Flint Eng’g & Const. Co.,
137 F.3d 1436, 1440 (10th Cir. 1998). Most appellate courts have “treated employment
for FLSA purposes as a flexible concept to be determined on a case-by-case basis by review
of the totality of the circumstances” and “have identified different sets of relevant factors
based on the factual challenges posed by particular cases.” Barfield, 537 F.3d at 141-42.
Further, “[u]nder the FLSA, multiple persons or entities can be responsible for a single
employee’s wages as ‘joint employers’ in certain situations.” See Thompson, 748 F.3d at
148. In these situations, “each joint employer may be held jointly and severally liable for
the FLSA violations of the other, in addition to direct liability for its own violations.” Id.
In this case, the Store’s motion for summary judgment does not present sufficient
facts or legal authority to support its position that it was not the FLSA “employer” of the
employees whose wages and employment are the subject of the Complaint. Therefore, on
the summary judgment record presented, the Court finds that the Store has not carried its
initial burden to demonstrate the absence of a dispute of material fact and its entitlement to
a judgment as a matter of law. 2

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If the Store did present legal authority for its position that Mrs. Maranto’s alleged lack
of authority to act on behalf of the corporation could absolve the Store of liability, the Court would
find the conclusory statements in Mr. Maranto’s affidavit are insufficient to support this defense
to liability. See Perez v. El Tequila, LLC, 847 F.3d 1247, 1252 (10th Cir. 2017) (holding that an
affidavit containing only “a conclusory statement, devoid of facts, is insufficient to create a
genuine issue of material fact”).
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Conclusion
For these reasons, the Court finds that the Store has not shown there is no genuine
dispute of material facts and it is entitled to a judgment as a matter of law on Plaintiff’s
FLSA claims against it.
IT IS THEREFORE ORDERED that Defendant Meers Store and Restaurant, Inc.’s
Motion for Summary Judgment [Doc. No. 42] is DENIED.
IT IS SO ORDERED this 19th day of September, 2017.

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