Wiliams et al v. Hooah Security Services, LLC et al
Filing
62
ORDER granting 49 Plaintiffs' Motion for Summary Judgment; denying 54 Defendants' Motion for Summary Judgment. Signed by Judge S. Thomas Anderson on 11/18/11. (Anderson, S.)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION
______________________________________________________________________________
JEROME WILLIAMS and CHERYL ANN
)
DOCKERY, on behalf of themselves and others )
similarly situated,
)
)
Plaintiffs,
)
)
v.
)
No. 09-02376-STA-tmp
)
HOOAH SECURITY SERVICES LLC, a
)
domestic limited liability company, and RIC
)
BAILEY, individually,
)
)
Defendants.
)
______________________________________________________________________________
ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND
DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
______________________________________________________________________________
Before the Court is Plaintiffs’ Motion for Summary Judgment (D.E. # 49), filed on March
23, 2011, and Defendants’ Motion for Summary Judgment (D.E. # 54), filed on March 31, 2011.
For the following reasons, Plaintiffs’ Motion for Summary Judgment is GRANTED and
Defendants’ Motion for Summary Judgment is DENIED.
BACKGROUND
On June 16, 2009, Jerome Williams and Cheryl Ann Dockery, along with the other
members of this collective action (“Plaintiffs”), filed a Complaint alleging that Ric Bailey and
Hooah Security Services LLC (“Defendants”) failed to properly pay Plaintiffs for those hours
worked in excess of forty per workweek under the Fair Labor Standards Act (“FLSA”). The
following facts are undisputed for purposes of this Motion unless otherwise noted.
1
Defendant Hooah Security Services LLC (“Hooah”) is a company which provides
security guard services and patrols for businesses in and around the Memphis, Tennessee, area.
(Defs.’ Reply to Pls.’ Statement of Undisputed Facts ¶ 1.) Defendant Ric Bailey (“Defendant
Bailey”) has owned and operated Hooah by himself since 2008. (Id. ¶ 2.) Defendant Bailey
interviewed and hired Plaintiffs and other security guard employees of Hooah and made hiring
and firing decisions. (Id. ¶ 3.) He also determined Plaintiffs’ amount of payment, whether they
received raises, and their work schedules. (Id. ¶ 4, 6.) Defendant Bailey set Hooah’s
employment policies and negotiated its contracts with its customers. (Id. ¶ 5, 8.) Defendants
advertised their services online via Hooah’s website, and Defendants have both recruited and
hired employees from Mississippi and Arkansas by using Monster.com. (Id. ¶ 12-14.)
Defendants had gross sales of $700,000 and over $500,000 in gross sales in 2008-2009. (Id. ¶
11.)
Defendants’ Business Activities
It is undisputed that Defendants have provided security services for residential apartment
complexes in Memphis, Tennessee. (Id. ¶ 9.) Defendants dispute that they provided security
services for a private school (Id.), and Plaintiffs assert that Defendants provided security services
for a Longhorn Steakhouse Restaurant. (Pls.’ Resp. to Defs.’ Statement of Undisputed Facts ¶
3.) The parties do not dispute that Hooah provided security services for only business entities or
enterprises inside Tennessee (Defs.’ Reply to Pls.’ Statement of Undisputed Facts ¶ 4), and
Hooah’s employee security officers were not authorized to perform any services outside
Tennessee. (Id. ¶ 7.) Additionally, Defendants did not engage in the production of “goods for
commerce.” (Defs.’ Statement of Undisputed Material Facts ¶ 5.)
2
Plaintiffs state that Defendants sold security supplies “such as shirts, handcuffs,
flashlights, and batons” out of Defendants’ offices (Pls.’ Statement of Undisputed Facts ¶ 15.)
Defendants dispute this fact. They argue that at all times material to the allegations in the
complaint, Defendants did not sell security supplies. (Defs.’ Reply to Pls.’ Statement of
Undisputed Facts ¶ 15.) According to Defendant, Fred McWilliams (“McWilliams”), one of
Hooah’s former district managers, sold security supplies out of Hooah’s office. (Id.) However,
Defendants allege that McWilliams’ sales of the shirts, handcuffs, flashlights, batons, and other
such items began in the spring of 2010—after the allegations in Plaintiffs’ complaint. (Id.) For
the same reasons, Defendants dispute that Defendants and one of the district managers sold
security supplies out of Hooah’s office, that the items were sold to Defendants’ security guard
employees, and that the items were obtained by Defendants from a uniform company in
California. (Id. ¶ 16-18.)
Plaintiffs dispute that Defendants did not sell security supplies to Defendants’ security
guard employees during the time of Plaintiffs’ employment with Defendants. (Pls.’ Resp. to
Defs.’ Statement of Undisputed Facts ¶ 8.) Plaintiffs state that Defendant Bailey shared in the
revenues of security supplies sold to Defendants’ security guard employees by another of
Defendants’ employees. (Id.) Additionally, Plaintiffs state that Defendants provided and sold
security supplies to security guard employees during Plaintiffs’ employment with Defendants.
(Id.)
The Use of Materials by Defendants’ Employees
Defendants state that their security officers were required to have only a flashlight and a
cell phone and that each employee normally provided their own flashlights and cellular
3
telephones. (Defs.’ Statement of Undisputed Facts ¶ 9.) However, Hooah purchased a
flashlight, cell phone, and clothing for Plaintiff Cheryl Dockery (“Plaintiff Dockery”) “because
she did not have them.” (Defs.’ Reply to Pls.’ Statement of Undisputed Facts ¶ 19.) Plaintiffs
deny that Defendants’ employees were required to carry only a flashlight and cell phone, stating
that “some of the posts and patrols that Plaintiffs worked were armed posts requiring the guard
be armed with a gun while on duty.” (Pls.’ Resp. to Defs.’ Statement of Undisputed Facts ¶ 9.)
Plaintiffs filed a Statement of Additional Undisputed Facts in Support of Their
Opposition to Defendants’ Motion for Summary Judgment. (Pls.’ Resp. to Defs.’ Statement of
Undisputed Facts at 4-5.) In these Additional Undisputed Facts, Plaintiffs state that on “certain
occasions,” Defendants supplied Plaintiffs and other security guard employees with materials for
use on the job obtained from Wal-Mart or another local supply store. (Id. ¶ 5.) Plaintiffs also
state that Defendants employed armed guards who were required to carry a weapon. (Id. ¶ 3.)
At least Plaintiffs Jerome Williams (“Plaintiff Williams”) and Darrell Hoskins, as well as
“some of the other Plaintiffs,” were armed guards required to carry a weapon. (Id. ¶ 4.)
Plaintiffs point out that Plaintiff Williams was an armed guard who carried a Glock automatic
handgun and handcuffs while he was patrolling for Defendants. (Id. ¶ 6-7.) Plaintiff Williams
purchased the gun in Olive Branch, Mississippi, and its magazine was manufactured in Australia.
(Id. ¶ 6) Plaintiff Williams purchased the Massachusetts-made handcuffs at a Memphis,
Tennessee, security supply store. (Id. ¶ 7.) Additionally, Plaintiff Darrell Hoskins worked for
Defendants as an armed guard, and he carried a Taurus 9 mm pistol while on patrol. (Id. ¶ 8.)
Plaintiff Darrell Hoskins’ pistol was manufactured in Miami, Florida. (Id.) His Bianchi duty
belt was made in Mexico, and his pepper spray was made in Ft. Lauderdale, Florida. (Id.) Both
4
the duty belt and the pepper spray were purchased at a security supply store in Memphis,
Tennessee. (Id.)
Occasionally, Defendants’ security guards worked over forty hours per week. (Defs.’
Reply to Pls.’ Statement of Undisputed Facts ¶ 20.) Defendants do not dispute that their security
guards were not paid time and a half of their regular pay for the hours they worked in excess of
forty hours a week because Defendants did not have the money to do so. (Id. ¶ 21, 24.)
Defendants admit that they should have paid their security guards time and a half for their
overtime hours. (Id. ¶ 23.) Moreover, Defendants did not know that they were required by law
to pay their security guards for their overtime hours worked, nor did Defendants determine
whether they were required by law to pay their security guards time and a half for their overtime
hours. (Id. ¶ 22.) Neither party disputes that Defendant’s schedule should show the number of
hours worked by each employee in any given week. (Id. ¶ 25.)
Hourly-Paid Plaintiffs
Plaintiff Cheryl Dockery
Defendants employed Plaintiff Dockery from October 17, 2008, until January 28, 2009.
(Defs.’ Reply to Pls.’ Statement of Undisputed Facts ¶ 41.) She was paid $9 per hour, and she
was not paid overtime compensation for the hours she worked in excess of forty per workweek.
(Id. ¶ 42-43.) Neither party disputes that she worked 104.75 hours of overtime while employed
by Defendants and that she is owed $471.38 in overtime compensation if Defendants are covered
by the FLSA. (Id. ¶ 44.) Defendants dispute that the FLSA applied to them while Plaintiff
Dockery was their employee.
Plaintiff Zachery Smith
5
Defendants employed Plaintiff Zachery Smith (“Plaintiff Smith”) from December 9,
2008, through March 14, 2009. (Id. ¶ 55.) He was paid $10 per hour, but he was not paid
overtime compensation for the hours he worked in excess of forty per workweek. (Id. ¶ 56-57.)
Neither party disputes that he worked 32 hours of overtime while employed by Defendants and
that he is owed $160.00 in overtime compensation if Defendants are covered by the FLSA. (Id.
¶ 58.) Defendants dispute that the FLSA applied to them while Plaintiff Smith was their
employee.
Plaintiff Billy Hoskins
Defendants employed Billy Hoskins from January 1, 2009, to March 10, 2009. (Id. ¶ 59.)
He was paid $8 per hour from January 1, 2009, until February 1, 2009, and after February 1,
2009, he was paid $9 per hour. (Id. ¶ 60.) He was not paid overtime compensation for the hours
he worked in excess of forty per workweek. (Id. ¶ 61.) Neither party disputes that he worked
100.5 hours of overtime while employed by Defendants and that he is owed $428.25 in overtime
compensation. (Id. ¶ 62.) Defendants dispute that the FLSA applied to them while Plaintiff
Billy Hoskins was their employee.
Plaintiff John Boullion
Defendants employed John Boullion (“Plaintiff Boullion”) from December 7, 2008,
through March 14, 2009. (Id. ¶ 71.) He was paid $10 per hour, but he was not paid overtime
compensation for the hours he worked in excess of forty per workweek. (Id. ¶ 72-73.) Neither
party disputes that Plaintiff Boullion worked 45.05 hours of overtime while employed by
Defendants and that he is owed $225.25 in overtime compensation. (Id. ¶ 74.) Defendants
dispute that the FLSA applied to them while Plaintiff Boullion was their employee.
6
Salaried Plaintiffs
Plaintiff Jerome Williams
Defendants employed Plaintiff Williams from December 6, 2007, until February 20,
2009. (Defs.’ Reply to Pls.’ Statement of Undisputed Facts ¶ 26.) Plaintiff Williams’ salary was
$400 per week, plus a gas stipend of $200 per week, from January 11, 2008 through June 27,
2008, for a period of 24 weeks. (Id. ¶ 27.) His salary increased to $440.00 per week, with a gas
stipend of $200 per week, from July 4, 2008, until December 25, 2008, for a period of 25 weeks.
(Id. ¶ 28.) He did not turn in time sheets showing the number of hours he worked per week, and
Defendants do not have records showing the number of hours worked by Williams. (Id. ¶ 34.)
Although Defendants do not have pay records for Plaintiff Williams for the periods of
December 6, 2007, to January 11, 2008, or December 26, 2008, through February 20, 2009,
Plaintiff Williams believes that he was paid his $400 per week salary from December 6, 2007, to
January 11, 2008, and his $440 per week salary from December 26, 2008, through February 20,
2009. (Id. ¶ 29-30.) During both of these periods, he received his $200 per week gas stipend.
(Id. ¶ 30.)
Plaintiff Williams spent approximately 20% of his time performing managerial functions
for Defendants; he spent the remainder of his time performing normal patrol and security guard
functions. (Id. ¶ 31.) He did not have the authority to hire and fire employees himself. (Id. ¶
32.) On average, Plaintiff Williams worked fifty hours per week, (Id. ¶ 38), and Defendants
admit that he worked over forty hours during one or more workweeks while he was employed by
Defendants. (Id. ¶ 33.) Defendants do not dispute that he was not paid additional compensation
for the overtime hours he worked. (Id. ¶ 35.) Defendants dispute that Plaintiff Williams was
7
entitled to overtime pay; Defendants maintain that as a salaried employee, he was not entitled to
overtime compensation, and it is for that reason that Defendants did not pay Plaintiff Williams
overtime pay. (Id. ¶ 35-36.) Defendants dispute Plaintiff Williams’ amount of overtime
compensation due because he was “not entitled to overtime compensation as a salaried
employee.” (Id. ¶ 39-40.) The parties do not dispute that Plaintiff Williams is owed $3,912.00
in overtime compensation if Hooah is covered by the FLSA and if he is not exempt from FLSA
coverage as a salaried employee. (Id.)
Plaintiff Niehaus McKinney
Defendants employed Plaintiff Niehaus McKinney (“Plaintiff McKinney”) from March
14, 2008, until March 16, 2009. (Id. ¶ 45.) Plaintiff McKinney was paid $9 per hour from
March 14, 2008 to May 25, 2008, and he worked approximately twelve hours of overtime per
week during this time. (Id. ¶ 50-51.) From October 1, 2008, to March 16, 2009, Plaintiff
McKinney was paid $400.00 per week with a $50.00 gas stipend per week. (Id. ¶ 53.) During
the course of his employment with Defendants, Plaintiff McKinney did not have the authority to
hire or fire employees. (Id. ¶ 46.) Defendants do not have time records for Plaintiff McKinney
from March 14, 2008 to May 25, 2008, a ten-week period, or October 1, 2008, to March 16,
2009, a 23-week period. (Id. ¶ 49.) Plaintiff McKinney did not have the authority to hire or fire
employees. (Id. ¶ 47.) Neither party disputes that Plaintiff McKinney worked more than forty
hours a week for one or more workweeks but was not paid overtime compensation for those
hours. (Id. ¶ 48.)
Defendants do not dispute that Plaintiff McKinney would be owed $540.00 for his
overtime from March 14, 2008, to May 25, 2008, if Defendants are covered under the FLSA.
8
(Id. ¶ 52.) However, Defendants dispute that Plaintiff McKinney is owed $490.50 for 109 hours
of overtime from May 25, 2008, to October 1, 2008, as he became a salaried employee “on or
about June 15, 2008.” (Id. ¶ 48.) Additionally, Defendants dispute that Plaintiff McKinney is
owed $1150 in overtime pay from October 1, 2008, to March 16, 2009 because he became a
salaried employee on or about June 15, 2008. (Id. ¶ 53-54.) But they do not dispute that
Plaintiff McKinney worked approximately ten hours of overtime per week from October 1, 2008,
through March 16, 2009. (Id. ¶ 53.)
Plaintiff Darrell Hoskins
Defendants employed Plaintiff Darrell Hoskins from October 2008 through March 17,
2009. (Id. ¶ 63.) Plaintiff Darrell Hoskins was paid $10 per hour. (Id.) Neither party disputes
that Plaintiff Darrell Hoskins worked more than forty hours a week for one or more workweeks
but was not paid overtime compensation for those hours. (Id. ¶ 64.) He would be owed $605 of
overtime compensation for his work from October 5, 2008, to January 31, 2009, excluding the
work he performed from October 11, 2008 to October 25, 2008. (Id. ¶ 65.) Additionally, neither
party disputes that Plaintiff Darrell Hoskins is owed $260.00 for the 54 hours of overtime he
performed from October 11, 2008, through October 25, 2008. (Id. ¶ 66-67.) He also would be
entitled to $200.00 in overtime compensation for the work he performed from February 1, 2009,
to March 17, 2009. In total, the parties do not dispute that Plaintiff Darrell Hoskins would be
owed $1065.00 in overtime compensation.
While Defendants do not dispute the monetary amounts stated by Plaintiff Darrell
Hoskins which would be owed to him for his hourly work if Hooah is a covered enterprise (Id. ¶
65, 69-70), Defendants deny that they owe him overtime compensation for the overtime that he
9
worked while he was a salaried employee. (Id. ¶ 65, 69-70.) Defendants maintain that Plaintiff
Darrell Hoskins became a lieutenant—and thereby a salaried employee—on or about November
16, 2008, and he maintained that position throughout the remainder of his employment. (Id. 65,
69-70.) Thus, despite Defendants’ lack of time records for Plaintiff Darrell Hoskins from
February 1, 2009, through March 17, 2009 (Id. ¶ 68), Defendants state that he is not entitled to
overtime compensation because he was a salaried employee at the time. (Id. ¶ 69-70.)
Plaintiff Wesley Pruett
Defendants employed Plaintiff Wesley Pruett (“Plaintiff Pruett”) from February of 2008
through October of 2008. (Id. ¶ 75.) Plaintiff Pruett earned a salary of $420.00 per week from
February 2008 through March of 2008, and he earned $440.00 per week from March of 2008 to
October of 2008. (Id. ¶ 76.) He worked approximately fifty-five hours a week, and he did not
have the authority to hire or fire employees or manage or direct employees. (Id. ¶ 77-78.)
Defendants do not have records showing the amount of hours worked by Plaintiff Pruett or the
amount of money he was paid. (Id. ¶ 79.)
Plaintiffs assert that Plaintiff Pruett worked overtime hours while employed by
Defendants but was not paid overtime compensation. (Id. ¶ 80-81.) They claim that he is owed
$2,149.10 in overtime wages. (Id. ¶ 81.) Defendants dispute these facts because Plaintiff Pruett
was “always a salaried employee of Hooah.” (Id. ¶ 80-81.)
The Parties’ Arguments
In their Motion for Summary Judgment, Plaintiffs contend that Defendants were covered
by the FLSA on the basis of enterprise coverage. (Pls.’ Mem. in Supp. of Mot. for Summ. J.,
D.E. # 49-1, at 5.) For purposes of this Motion, Plaintiffs do not argue that they were
10
individually covered by the FLSA. (Id.) Because Defendants admit that they had annual gross
revenue in excess of $500,000 per year, Plaintiffs assert that “the only remaining inquiry is
whether . . . Defendants’ business meets the ‘interstate commerce’ requirements of the FLSA.”
(Id.) Plaintiffs also allege that Defendant Bailey was Plaintiffs’ joint employer and that he is
jointly and severally liable to Plaintiffs for their damages. (Id. at 3.) Plaintiffs then assert that
because Defendants were covered by the FLSA, Defendants violated its provisions by failing to
pay Plaintiffs time-and-a-half for the time they worked in excess of forty hours per workweek.
Plaintiffs also extensively outline the hours worked and wages allegedly owed to them. (Id. at 613.)
In response, Defendants refer to their separate Motion for Summary Judgment on the
enterprise coverage issue and briefly argue that they are not covered by the FLSA because they
are not engaged in interstate commerce. (Resp. of Defs. to Pls.’ Mot., D.E. # 55, at 1.)
Moreover, Defendants assert that even if they are covered by the FLSA, their four salaried
employees—Plaintiffs Williams, McKinney, Pruett, and Darrell Hoskins—were not entitled to
overtime payment once they became salaried employees. (Id. at 1-2.) Defendants also argue
that these salaried employees “accepted their salaries without protest” and thus consented to the
payment of the fixed sum without regard for the number of hours worked each week. (Id. at 2.)
In reply, Plaintiffs point out that Defendants did not dispute the overtime compensation
claims of Plaintiffs Dockery, Boullion, Smith, and Billy Hoskins if Defendants are covered by
the FLSA. (Pls.’ Reply in Supp. of their Mot. for Summ. J., D.E. # 57, at 2.) Plaintiffs also refer
to their Response to Defendants’ Motion for Summary Judgment to address Defendants’
argument that Hooah is not an enterprise covered by the FLSA. (Id.) Plaintiffs assert that, under
11
the FLSA, the salaried employees are due compensation and that employees cannot expressly or
implicitly waive their rights to overtime compensation. (Id. at 4.) Additionally, Plaintiffs argue
that no FLSA exemptions apply and that Defendants have not raised any affirmative defenses
exemptions to FLSA coverage. (Id. at 5.)
Defendants also filed a Motion for Summary Judgment. In their Motion, Defendants
argue that there is no FLSA coverage for individual employees based upon their employment
actions. (Defs.’ Mot. for Summ. J., D.E. # 54-1, at 2-4.) Defendants aver that because no
employee engaged in commerce, produced goods for commerce, or affected interstate commerce,
there can be no individual coverage under the FLSA. (Id. at 2-3.) Defendants also argue that
Hooah was not a covered enterprise under the FLSA. (Id. at 4-6.) They assert that the only
applicable enterprise coverage clause is the portion asserting that Defendants’ employees
“handle, sell, or otherwise work on goods or materials that have been moved in or produced for
commerce by any person.” (Id. at 5.) Even if the Court finds that Defendants’ employees
handled items that have been moved in interstate commerce, Defendants argue that such
handling is de minimis and will not require compensation. (Id. at 7.) Defendants assert that their
employees did none of these actions and that their “operations in providing security services to
residential apartment complexes in Tennessee is fundamentally an intrastate activity.” (Id. at 6.)
In response, Plaintiffs argue that Defendants “employed two or more employees who
handled materials that had been moved in commerce or produced for commerce.” (Pls.’ Resp. to
Defs.’ Mot. for Summ. J., D.E. # 56, at 1-2.) Plaintiffs reiterate that they do not contend that
they were individually covered by the FLSA, but they do assert that Defendants were a covered
enterprise under the FLSA. (Id. at 3.) Plaintiffs aver that enterprise coverage is met under the
12
FLSA’s “handling” clause “if employees merely handle tools, supplies, or equipment that
originated out of state.” (Id. at 4.) Plaintiffs also acknowledge that a dispute remains as to
whether Defendants’ sale of security supplies is sufficient to trigger enterprise liability under the
FLSA during the time of the events asserted in the Complaint. (Id. at 5.)
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a) provides that 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.1
In reviewing a motion for summary judgment, the evidence must be viewed in the light most
favorable to the nonmoving party.2 When the motion is supported by documentary proof such as
depositions and affidavits, the nonmoving party may not rest on his pleadings but instead must
present some “specific facts showing that there is a genuine issue for trial.”3 It is not sufficient
“simply [to] show that there is some metaphysical doubt as to the material facts.”4 These facts
must be more than a scintilla of evidence and must meet the standard of whether a reasonable
juror could find by a preponderance of the evidence that the nonmoving party is entitled to a
verdict.5 When determining if summary judgment is appropriate, the Court should ask “whether
the evidence presents a sufficient disagreement to require submission to a jury or whether it is so
1
Fed. R. Civ. P. 56(a).
2
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
3
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
4
Matsushita, 475 U.S. at 586.
5
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
13
one-side that one party must prevail as a matter of law.”6
Summary judgment must be entered “against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial.”7 In this Circuit, “this requires the nonmoving party
to ‘put up or shut up’ [on] the critical issues of [his] asserted causes of action.”8
ANALYSIS
Enterprise Coverage
“Congress enacted the [FLSA] ‘to compensate those who labored in excess of the
statutory maximum number of hours for the wear and tear of extra work.’”9 Section 207 of the
FLSA provides that:
[e]xcept as otherwise provided in this section, no employer shall employ any of
his employees who in any workweek is engaged in commerce or in the production
of goods for commerce, or is employed in an enterprise engaged in commerce or
in the production of goods for commerce, for a workweek longer than forty hours
unless such employee receives compensation for his employment in excess of the
hours above specified at a rate not less than one and one-half times the regular
rate at which he is employed.10
Here, Plaintiffs do not contend that they were individually covered by the FLSA. Instead, they
argue that the FLSA covers Hooah under its enterprise coverage provision.
6
Id. at 251-52 (1989).
7
Celotex, 477 U.S. at 322.
8
Lord v. Saratoga Capital, Inc., 920 F. Supp. 840, 847 (W.D. Tenn. 1995) (citing Street v.
J.C. Bradford & Co., 886 F.2d 1472, 1478 (6th Cir. 1989)).
9
Wood v. Mid-Am. Mgmt. Corp., 192 F. App’x 378, 379 (6th Cir. 2006) (quotation
omitted).
10
29 U.S.C. § 207.
14
Enterprise coverage attaches to a business where it is an “[e]nterprise engaged in
commerce or in the production of goods for commerce.”11 The FLSA defines this phrase to
include an enterprise that (1) “has employees engaged in commerce or in the production of goods
for commerce, or that has employees handling, selling, or otherwise working on goods or
materials that have been moved in or produced for commerce by any person;” and (2) “is an
enterprise whose annual gross volume of sales made or business done is not less than $500,000
(exclusive of excise taxes at the retail level that are separately stated.”12 It is undisputed that
Defendants satisfy the second requirement of enterprise coverage, as they had annual gross
revenue in excess of $500,000 per year. Therefore, whether Hooah qualifies under the FLSA’s
enterprise coverage provision depends upon whether Hooah’s employees “engaged in commerce
or in the production of goods for commerce” or “handl[ed], [sold], or otherwise work[ed] on
goods or materials that have been moved in or produced for commerce by any person.”13
Because the parties do not dispute that Hooah’s employees did not produce goods for commerce,
whether Hooah is a covered enterprise depends upon whether its employees engaged in
commerce or handled, sold, or otherwise worked on goods or materials that have been moved in
or produced for commerce by any person.14
11
Id.
12
29 U.S.C. § 203(s)(1)(A)(i)-(ii). The FLSA defines “commerce” as “trade, commerce,
transportation, transmission, or communication among the several States or between any State
and any place outside thereof.” Id. § 203(b).
13
Id. § 203(s)(1)(A)(i).
14
See 29 U.S.C. § 203(s)(1)(A)(i). The latter requirement is rarely difficult to establish
because it is met by showing that two or more employees have handled materials that have been
moved in commerce. Jacobs v. New York Foundling Hosp., 577 F.3d 93, 99 n.7 (2d Cir. 2009)
(quotation and internal punctuation omitted).
15
Although Congress did not specifically define “materials” in the FLSA, and the Sixth
Circuit has not yet weighed in on the definition of “materials,” the Eleventh Circuit has
exhaustively evaluated the several possible meanings for “materials” in light of the FLSA’s
definition of “goods.”15 After reviewing several definitions, the Eleventh Circuit ultimately
defined “materials” as “tools or other articles necessary for doing or making something” which
“have a significant connection with the employer’s commercial activity.”16 In summary, the
Eleventh Circuit stated that
[f]or purposes of the FLSA’s handling clause, an item will count as “materials” if
it accords with the definition of “materials”—tools or other articles necessary for
doing or making something—in the context of its use and if the employer has
employees “handling, selling, or otherwise working on” the item for the
employer’s commercial (not just any) purpose.17
Additionally, “[c]ourts have consistently construed the FLSA liberally to apply to the farthest
reaches consistent with congressional directs.”18
The Court has applied these principles in another similar case. In Dixon v. Maximum
Sec. Serv., LLC, all plaintiffs were armed security guards.19 This Court noted that three
employees were required to carry handguns while on patrol as security officers, and these
handguns were manufactured out of the state of Tennessee.20 Plaintiffs used these handguns “for
15
See Polycarpe v. E&S Landscaping Serv., Inc., 616 F.3d 1217, 1221-27 (11th Cir. 2010).
16
Id. at 1226.
17
Id. at 1227.
18
Kowalski v. Kowalski Heat Treating Co., 920 F. Supp. 799, 803 (N.D. Ohio 2006) (citing
Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 296 (1985)).
19
No. 08-2746, 2011 WL 2182349, at *5 (W.D. Tenn. June 3, 2011).
20
Id.
16
Defendant’s commercial purpose of providing armed security services to its clients.”21 Because
they were “articles necessary for doing something”—providing security for clients—the Court
held that the Plaintiffs’ handguns were “materials” within § 203(s)(1)(A)(i) of the FLSA.22 The
Court further held that “the employees were handling the handguns for the employer’s
commercial purposes—providing security for clients”—and that the defendant was a covered
enterprise under the FLSA.23
Here, Plaintiffs assert that at least two security guards were required to carry handguns
and magazines, and that these objects’ travel in interstate commerce, combined with Plaintiffs’
use of these items while working as security guards, subject Defendants to enterprise coverage
under the FLSA. Defendants assert that Hooah is not an enterprise covered by the FLSA
because its employees do not handle materials or goods that have been moved in or produced for
commerce. Moreover, Defendants aver that because they did not supply their employees with
materials or goods moving in or produced for commerce, enterprise coverage does not exist.
Defendants also argue that they provide security services to residential apartment complexes and
that this activity is fundamentally intrastate.
Defendants’ arguments are not well-taken in light of the analysis in Dixon and Polycarpe.
Here, just as in Dixon, Plaintiffs are security guards, at least two of whom were armed security
guards required to carry a weapon while on duty. Plaintiff has presented undisputed facts that
Plaintiff Williams’ gun was purchased in Olive Branch, Mississippi, and its magazine was
21
Id.
22
Id. at *6.
23
Id.
17
manufactured in Australia. Plaintiff Darrell Hoskins’ pistol was manufactured in Miami,
Florida. That Defendants did not provide these materials to its employees has no bearing on
enterprise coverage. Rather, the Court examines whether the handguns are “materials” and if so,
whether they were “handled” for Defendants’ commercial purposes.
The Court finds that Plaintiffs’ handguns are “materials” within the definition of the
FLSA because they are “articles necessary for doing something”—providing security for clients.
The Court also finds that Plaintiffs used these firearms for Defendants’ commercial purpose of
providing armed security services to its clients. The parties do not contest that Defendants had
annual gross revenue in excess of $500,000 per year. Therefore, the FLSA applies to Defendants
by virtue of its enterprise coverage provision.
Because the Court finds that Hooah is a covered enterprise under the FLSA’s handling
clause, the Court need not address Plaintiffs’ assertions that Hooah is a covered enterprise due to
its sale of security supplies that have been moved in commerce. While the sale and timing of
security supplies remains in dispute, Hooah is a covered enterprise as a matter of law by virtue of
the handling clause. Because the material facts surrounding the Court’s holding as to the
handling clause are not in dispute, summary judgment on this issue remains appropriate.
Rule of De Minimis
Defendants present an alternative argument. They argue that “if the Court were to find
that some of the foregoing items24 may have in some minor way affected interstate commerce, it
24
Defendants refer to flashlights and cellular telephones discussed earlier in their motion.
The Court will construe this phrase to include the pepper spray, duty belt, firearms, and gun
magazines also used by Plaintiffs in the performance of their duties.
18
should not trigger the application of the Act to these [D]efendants.”25 Defendants then cite to a
case establishing the “rule of de minimis.”
The Sixth Circuit recognized the rule of de minimis in a 1949 decision: it said that
“[w]here some inconsequential incident of interstate commerce happens to result from the
general conduct of a fundamentally intrastate business, the rule of deminimis [sic] is applicable
and the [FLSA] does not apply.”26 In Hunter, enterprise coverage was primarily alleged on the
basis of production of goods for commerce, rather than on the basis of handling materials that
have moved in interstate commerce.27 Indeed, the court took pains to detail the distance between
the plaintiffs’ work and interstate commerce by noting that the defendant
was [not] engaged in the production of goods for commerce by reason of the fact
that it caused the waste paper, gathered from the offices of the building in
cleaning operations, to be sold to a waste paper dealer, that some of it was
thereafter processed into roofing felt, and, of this, a certain amount eventually
found its way into interstate commerce.28
The court also held that “such part of the roofing material as may have gone into commerce was
too many steps removed from the process of handling by the building employees to come within
the confines of the [FLSA].”29 Thus, the court refused to extend the same attenuated reasoning
to find coverage under the FLSA’s handling provision. While the Fifth Circuit has interpreted
Hunter’s holding to apply the de minimis rule “[i]n determining whether transactions are in
25
(Defs.’ Mem. in Supp. of Mot. for Summ. J., D.E. # 54-1, at 7.)
26
Hunter v. Madison Avenue Corp., 174 F.2d 164, 167 (6th Cir. 1949).
27
See id.
28
Id.
29
Id.
19
interstate commerce under the [FLSA],”30 the Sixth Circuit appears to extend the rule of de
minimis to enterprises under the handling clause as well.
The court in Houchin v. Thompson did not extend enterprise coverage on the basis of
engaging in commerce or producing goods for commerce.31 In that case, the alleged interstate
activity involved the placement of waste paper in boxes, which would then be sold to a “local
concern,” which would then break open the bales of waste paper and mix it with other paper
before shipping approximately 21.75% of the larger bales of paper out of state.32 The Houchin
court merely quoted the following language from Hunter when it declined to find enterprise
coverage: “[w]here some inconsequential incident of interstate commerce happens to result from
the general conduct of a fundamentally intrastate business, the rule of de minimis is applicable
and the [FLSA] does not apply.”33
Here, the Court finds that the rule of de minimis articulated in Hunter and its progeny is
inapplicable to the case at bar. The Court has determined that Defendants are a covered
enterprise by virtue of the FLSA’s handling clause. Although Hunter implied that the rule of de
minimis applies to enterprises covered under the FLSA’s handling clause, in this case, the
handling of materials produced in interstate commerce is not de minimis. Plaintiffs are security
guards, and at least two of them are required to carry weapons while they perform their job
duties. Plaintiffs have submitted the declarations of two armed guards whose weapons were
30
Skinner v. U.S. Steel Corp., 233 F.2d 762, 764 (5th Cir. 1956).
31
No. C-67-216, 1969 WL 313, at *2 (W.D. Tenn. Nov. 18, 1969).
32
Id. at *1.
33
Id. at *2.
20
manufactured outside Tennessee. Their use of the weapons as part of their employment was not
de minimis; they were hired to provide armed security, and they did so at all times while they
were working. Such use of materials which have moved in interstate commerce is not de
minimis, and the rule of de minimis does not apply.
Thus, for the foregoing reasons, Defendants’ Motion for Summary Judgment as to
enterprise coverage is DENIED, and Plaintiffs’ Motion for Summary Judgment as to enterprise
coverage is GRANTED.
Coverage of Salaried Employees
FLSA Exemption
While Defendants do not challenge the FLSA’s applicability to their hourly employees if
Hooah is a covered enterprise, Defendants argue that their salaried employees are exempt from
FLSA coverage. The FLSA “contains certain exemptions from the overtime compensation
requirement,” but these “exemptions . . . are narrowly construed against the employer.”34 The
applicability of an FLSA exemption is an affirmative defense that an employer must establish by
a preponderance of the evidence.35 Defendants bear the burden of proving affirmative defenses
under the FLSA.36 To satisfy their burden of proof, defendants generally must identify the
specific exemption they wish the court to apply to their case.37 The Sixth Circuit has further
34
Baden-Winterwood v. Life Time Fitness, Inc., 566 F.3d 618, 626 (6th Cir. 2009).
35
Renfro v. Ind. Mich. Power Co., 497 F.3d 573, 576 (6th Cir. 2007) (citation omitted).
36
Brock v. City of Cincinnati, 236 F.3d 793, 809 (6th Cir. 2001).
37
See, e.g., Burson v. Viking Forge Corp., 661 F. Supp. 2d 794, 799 (N.D. Ohio 2009)
(defendant asserted that plaintiff, as a shift supervisor, was an “executive employee” exempt
under the FLSA); Leonard v. Dolgencorp Inc., No. 4:10-CV-57-H, 2011 WL 2009937, at *1,
*10 (W.D. Ky. May 23, 2011) (defendant moved for summary judgment “on the grounds that
21
observed that an employer “must establish through ‘clear and affirmative evidence’ that the
employee meets every requirement of an exemption.”38 In their Answer, Defendants pled as a
fourth defense that Plaintiff “Williams was a salaried employee and was exempt from coverage
under the FLSA.”39 Defendants later extended this argument to all salaried plaintiffs in this case.
29 U.S.C. § 213(a)(1) provides that “the provisions of section 206 . . . and section 207 of
this title shall not apply with respect to any employee employed in a bona fide executive,
administrative, or professional capacity.” While Defendants have not cited to any legal authority
or informed the Court under which exemption their salaried employees qualify, the Court
interprets their filings to be referring to bona fide executive employees or bona fide
administrative employees. The Secretary of Labor has adopted regulations defining a bona fide
executive employee. To be exempt from FLSA coverage by virtue of their status as a bona fide
executive, employees must (1) be “[c]ompensated on a salary basis at a rate of not less than $455
per week,” (2) have the primary duty of “management of the enterprise in which [they are]
employed,” (3) “customarily and regularly direct the work of two or more other employees,” and
(4) have “the authority to hire or fire other employees.”40
Here, Defendants do not dispute that Plaintiff Williams earned a salary of $400 per week
before he was promoted; after his promotion, he earned $440 per week. Nor do they dispute that
[plaintiff] was exempt from the FLSA’s overtime pay requirements under its ‘execution
exemption’”).
38
Ale v. TVA, 269 F.3d 680, 691 n.4 (6th Cir. 2001) (quotation omitted) (holding that the
defendant has the burden to establish the elements of the affirmative defense by a preponderance
of the evidence).
39
(Answer at 5.)
40
29 C.F.R. § 541.100(a) (2007).
22
Plaintiff McKinney was paid a salary of $400 per week. Additionally, they do not dispute that
Plaintiff Pruett was paid a salary ranging from $420 per week to $440 per week. Therefore, the
salaries of Plaintiffs Williams, McKinney, and Pruett fail to meet the requirement of 29 C.F.R. §
541.100(a)(1) that they earn a salary of “not less than $455 per week,” and they cannot qualify
under the FLSA’s bona fide executive employee exemption.41
Even if Defendants had successfully proven by a preponderance of the evidence that
Plaintiff Williams earned not less than $455 per week, Plaintiff Williams would still fail to
qualify under the bona fide executive employee exemption. Defendants do not dispute that
Plaintiff Williams spent only 20% of his time performing managerial functions, and managerial
responsibilities totaling only one-fifth of an employee’s time does not make their managerial
duties the “primary duty” of their employment as required by § 541.100(a)(2). Moreover,
Plaintiff Williams did not have the authority to hire or fire employees, which is a requirement
under § 541.100(a)(3). Therefore, the Court finds that Defendants have failed to meet their
burden of proof as to the affirmative defense of the FLSA exemption for bona fide executive
employees.42
41
The Court notes that Plaintiff Williams earned a gas stipend of $200 per week during his
employment with Defendants. However, Defendants have cited no authority stating that the
Court should include this $200 a week stipend as part of Plaintiff Williams’ salary.
Additionally, Plaintiff McKinney’s gas stipend of $50 per week, when added to his weekly
salary of $400 per week, would not bring him above the threshold required to qualify under the
bona fide executive employee exemption. Defendants do not indicate whether Plaintiff Pruett
received a gas stipend. Therefore, the Court finds that Defendants have failed to satisfy their
burden to prove the applicability of this FLSA exemption by a preponderance of the evidence.
42
Defendants also failed to submit evidence which would prove the applicability of the
bona fide executive employee exemption by a preponderance of the evidence as to the two
remaining salaried plaintiffs.
23
Defendants could also be asserting that the salaried plaintiffs are bona fide administrative
employees qualifying for an FLSA exemption under § 213(a)(1).43 To prove that the salaried
plaintiffs are bona fide administrative employees, Defendants must demonstrate three elements
for each employee: (1) the employee is “compensated on a salary or free basis at a rate of not
less than $250 per week,” (2) the employees’s “primary duty consists of . . . [t]he performance of
nonmanual work directly related to management policies or general business operations” of
Defendants, and (3) the employee’s work “includes work requiring the exercise of discretion and
independent judgment.”44
As under the bona fide executive employee exemption, Defendants have failed to put
forth evidence which proves the applicability of the bona fide administrative employee
exemption by a preponderance of the evidence. While the first prong of the short test is
satisfied, Defendants fail to provide evidence regarding the primary duties of Plaintiffs
McKinney, Darrell Hoskins, and Pruett, and they do not dispute that Plaintiff Williams spent
about 20% of his time performing managerial functions for Defendants. As such, his “primary
duty” was not directly related to management policies, and he cannot satisfy the second prong of
the bona fide administrative employee exemption. Thus, the Court finds that Defendants have
not met their burden of proof as to the bona fide administrative employee exemption under the
FLSA.
43
The Department of Labor’s regulations regarding the definition of a bona fide
administrative employee include both a “long test” for employees paid on a salary basis of “not
less than $155 per week” and a “short test” for employees paid on a salary basis of “not less than
$250 per week.” 29 C.F.R. §§ 541.2(e)(1)-(2). Here, the Court will apply the short test, as it is
not disputed that all four salaried plaintiffs earned salaries of more than $250 per week.
44
29 C.F.R. § 541.2(e)(2).
24
Thus, the Court finds that Defendants have not satisfied their burden of proof as to the
affirmative defense of an FLSA exemption for coverage of salaried employees, and no
exemption will remove the salaried employees from FLSA coverage.
Consent to Salaried Status
Defendants also argue that their salaried employees “were aware of and consented to
their salaried status and the payment of a fixed sum per week regardless of the number of hours
worked each week.”45 Therefore, Defendants assert that Plaintiffs should be denied recovery for
alleged overtime.46 Plaintiffs assert that they could not expressly or impliedly agree to waive
their rights to overtime compensation under the FLSA.47
The United States Supreme Court has “frequently emphasized the nonwaivable nature of
an individual employee’s right to a minimum wage and to overtime pay under the [FLSA].”48 In
Barrentine, the court noted that “FLSA rights cannot be abridged by contract or otherwise
waived because this would ‘nullify the purposes’ of the statute and thwart the legislative policies
it was designed to effectuate.”49
Therefore, contrary to Defendants’ assertions, the Court finds that Plaintiffs did not
waive their rights to overtime compensation under the FLSA, nor did the acceptance of their
salaries without protest cause them to waive their right to recover those wages under the FLSA.
45
(Resp. of Defs. to Pls.’ Mot. for Summ. J., D.E. # 55, at 2.)
46
(Id.)
47
(Pls.’ Reply in Supp. of their Mot. for Summ. J., D.E. # 57, at 4.)
48
Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981).
49
Id.
25
Thus, for the foregoing reasons, Defendants’ Motion for Summary Judgment as to lack of FLSA
coverage of their salaried employees is DENIED.
Liability of Defendant Bailey
The FLSA defines “employer” as “any person acting directly or indirectly in the interest
of an employer in relation to an employee . . . .”50 The FLSA’s remedial purposes “require the
courts to define ‘employer’ more broadly than the term would be interpreted in traditional
common law applications.”51 Whether a party is an employer within the meaning of the FLSA is
a legal determination appropriate for summary judgment.52 The Sixth Circuit applies the
“economic realities” test to determine whether a party is an employer under the FLSA,53 as more
than one employer can be responsible for FLSA violations.54
The economic realities test “examines whether the alleged employer ‘has a significant
ownership interest in [the corporation that employs the plaintiffs], controls significant functions
of the business, and determines salaries and hiring decisions.’”55 The test “focuses on whether
the individual was the person who made the decisions that allegedly violated the FLSA.”56
Additionally, the Cole Enterprises court identified two situations in which defendants were
50
29 U.S.C. § 203(d).
51
Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 965 (6th Cir. 1991).
52
See id.
53
Fegley v. Higgins, 19 F.3d 1126, 1131 (6th Cir. 1994).
54
U.S. Dep’t of Labor v. Cole Enters., Inc., 62 F.3d 775, 778 (6th Cir. 1995).
55
Gonzalez v. HCA, Inc., No. 3:10-00577, 2011 WL 3793651, at *13 (M.D. Tenn. Aug. 25,
2011) (quoting Cole Enters., 62 F.3d at 778).
56
Id.
26
“employers” under the FLSA.57 First, the court noted that “a corporate officer who has
operational control of the corporation’s covered enterprise is an ‘employer’ under the FLSA,
along with the corporation itself.”58 Second, the court also noted that “one who is the chief
executive officer of a corporation, has a significant ownership interest in it, controls significant
functions of the business, and determines salaries and makes hiring decisions has operational
control and qualifies as an ‘employer’ for purposes of the FLSA.”59 In these situations, the
employers are jointly and severally liable under the FLSA for the unpaid wages.60
The parties do not dispute that Hooah is Plaintiffs’ employer for FLSA purposes.
However, Defendants dispute that Defendant Bailey also qualifies as Plaintiffs’ employer.
Whether a party is an employer under the FLSA is a question of law.61
Plaintiffs argue that Defendant Bailey has solely owned and operated Hooah since 2008,
and that he performed a myriad of managerial activities, including
negotiat[ing] Hooah’s contracts with customers; interview[ing] Plaintiffs and
other prospective employees; [making] the decisions on [the] hiring and firing of
Plaintiffs and Hooah’s other employees; determin[ing] pay rates and salaries of
Plaintiffs and other employees; determin[ing] if and when Plaintiffs got raises,
promotions, or demotions; over[eeing] the finances; determin[ing] the work
schedules of Plaintiffs, and develop[ing] the employment policies for Hooah.62
Defendants do not address this argument in their Response to Plaintiff’s Motion for Summary
57
Id.
58
Id.
59
Id.
60
Fegley, 19 F.3d at1131.
61
See Dole, 942 F.2d at 965.
62
(Pls.’ Mem. in Supp. of Mot. for Summ. J., D.E. # 49-1, at 4.)
27
Judgment, nor do they discuss it in their own Motion for Summary Judgment. Furthermore,
Defendants do not dispute these facts.
Here, the Court finds that Defendant Bailey is an “employer” as defined by the FLSA.
Defendant Bailey controlled significant functions of Hooah, including the hiring and firing of
employees, creating employment policies, and negotiating contracts with customers. Defendant
Bailey also determined Plaintiffs’ amount of payment, whether they received raises, and their
work schedules. Therefore, he would have been in control of the decisions violating the FLSA.
Accordingly, Defendant Bailey is an “employer” along with Hooah, and he is jointly and
severally liable for the damages owed to Plaintiffs.
Thus, Plaintffs’ Motion for Summary Judgment as to Defendant Bailey’s status as a joint
employer with Hooah is GRANTED.
Violation of the FLSA
The Court has found that Hooah and Defendant Bailey are employers covered by the
FLSA, and all Plaintiffs fall within the protections of the FLSA as well. It is undisputed that
Defendants did not pay Plaintiffs time and a half their regular rate of pay for the hours they
worked over forty in a workweek. Defendants failed to pay Plaintiffs overtime because they did
not have the money to do so. Morever, Defendants do not dispute that they should have paid
their security guards time and a half for overtime hours worked. Therefore, Defendants have
failed to comply with the FLSA, and they have violated the FLSA by not paying Plaintiffs for
the overtime hours they worked. Thus, the Plaintiffs’ Motion for Summary Judgment as to
Defendants’ violation of the FLSA is GRANTED.
Damages
28
Liquidated Damages
Section 216(b) of the FLSA provides that “[a]ny employer who violates the provisions of
[§] 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.”63 The Sixth Circuit has characterized these
damages as “compensation, not a penalty or punishment.”64 They are “the norm” and have even
been referred to by the Sixth Circuit as “mandatory.”65 The FLSA grants district courts
discretion not to award liquidated damages if the employer “shows that ‘the act or omission
giving rise to [its violation] was in good faith and that he had reasonable grounds for believing
that [its] act or omission was not a violation of the [FLSA].”66 Additionally, “the burden of
establishing good faith for an employer is ‘substantial,’ . . . and a failure to comply with the
provisions of the Act must be based on objectively reasonable grounds.”67
It is undisputed that Defendants did not know that the law required them to pay their
security guards time and a half for overtime hours worked. Defendants do not dispute that they
did nothing to determine whether they were required by law to pay their security guards time and
a half for overtime hours worked.
Therefore, the Court finds that Plaintiffs are entitled to both the unpaid overtime
63
29 U.S.C. § 216(b).
64
Elwell v. Univ. Hosps. Home Care Servs., 276 F.3d 832, 849 (6th Cir. 2002).
65
Martin, 381 F.3d at 585.
66
Solis v. Min Fang Yang, 345 F. App’x 35, 38-39 (6th Cir. 2009) (quoting 29 U.S.C. §
260).
67
Id. at 39 (quotation omitted).
29
compensation amount and an additional equal amount as liquidated damages. The parties do not
dispute the amount of overtime pay requested by Plaintiffs. Therefore, the Court finds that each
Plaintiff is entitled to his or her asserted unpaid overtime compensation amount. Furthermore,
Defendants have provided no evidence they can avoid an award of liquidated damages in this
action. Consequently, the Court finds that each Plaintiff is entitled to an additional equal amount
of unpaid overtime compensation as liquidated damages.
Amount of Damages
Under the FLSA, employees have the burden of proving “by a preponderance of the
evidence of that they performed work for which [they] were not properly compensated.”68
Typically, an employee can prove damages “through discovery and analysis of the employer’s
code-mandated records.”69 But if the employer “kept inaccurate or inadequate records, the
plaintiff’s burden of proof is relaxed, and, upon satisfaction of that relaxed burden, the onus
shifts to the employer to negate the employee’s inferential damage estimate.”70 The employee
meets this relaxed 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.”71 If the employee produces enough
evidence to raise this “just and reasonable inference,” the burden “then shifts to the employer to
68
Myers v. Copper Cellar Corp., 192 F.3d 546, 551 (6th Cir. 1999) (internal punctuation
omitted).
69
Id.
70
Id.
71
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946) (overruled in part by
the Portal to Portal Act).
30
come forward with evidence of the precise amount of work performed or with evidence to
[negate] the reasonableness of the inference to be drawn from the employee’s evidence.”72
Finally, “[i]f the employer fails to produce such evidence, the court may then award damages to
the employees, even though the result be only approximate.”73
For the hourly employees, neither party disputes the amount of overtime hours worked by
Plaintiffs Dockery, Boullion, Billy Hoskins, and Smith or the overtime compensation owed to
them. Accordingly, the Court finds that Plaintiffs have raised a just and reasonable inference as
to the damages they are owed for Defendants’ FLSA violation, and Defendants have not negated
the reasonableness of that inference. The Court accepts Plaintiffs’ undisputed calculation of the
damages owed to them.
Therefore, Plaintiff Dockery is entitled to $942.76—$471.38 in unpaid overtime wages
and $471.38 in liquidated damages. Plaintiff Boullion is entitled to $450.50—$225.25 in unpaid
overtime wages and $225.25 in liquidated damages. Plaintiff Billy Hoskins is entitled to
$856.50—$428.25 in unpaid overtime wages and $428.25 in liquidated damages.
Plaintiff
Smith is entitled to $320.00—$160.00 in unpaid overtime wages and $160.00 in liquidated
damages.
However, all four salaried plaintiffs lack either time records or pay records. Defendant
has no pay records for Plaintiff Williams for the periods of December 6, 2007, to January 11,
2008, and December 26, 2008 to February 20, 2009.74 Moreover, Plaintiff Williams did not turn
72
Id.
73
Id.
74
(Defs.’ Reply to Plaintiffs’ Statement of Undisputed Facts, D.E. # 55-1, at 7.)
31
in time sheets showing the amount of hours he worked per week, and Defendants do not have
records showing the number of hours he worked.75 Plaintiff Williams has presented estimates of
the amount of overtime he worked per week, and Defendants do not dispute those estimates.
Therefore, the Court finds that Plaintiff Williams has raised a just and reasonable inference as to
the amount of overtime he worked. Defendants do not dispute these estimates or the estimated
amount of salary Plaintiff Williams earned during his employment with Defendants. Therefore,
Defendants neither challenged nor negated this inference, and the Court finds there is no dispute
of any material facts related to Plaintiff Williams’ asserted amount of damages.
But Plaintiffs have included Plaintiff Williams’$200 gas stipend as part of his salary in
their calculation of his damages.76 The Court can find no authority stating that gas stipends are
to be included in salary calculations under the FLSA. Plaintiffs, who bear the burden of
establishing the reasonableness of their asserted damages, have not presented the Court with any
authority indicating that Plaintiffs’ overtime wage compensation should include their gas
stipends. According to their declarations, all four salaried plaintiffs’ job duties included
patrolling customer locations via vehicle and standing post at certain locations.77 Yet only two
of these plaintiffs, Plaintiff Williams and Plaintiff McKinney, stated that they were paid a gas
stipend. To consider a gas stipend part of the salary paid to Plaintiffs Williams and McKinney
when the other two salaried plaintiffs received no gas stipend for performing the same duties
seems illogical to the Court. Additionally, the Court is calculating damages for the overtime
75
(Id. at 8.)
76
(Id. at 9.)
77
(Pls.’ Mot. for Summ. J., D.E. # 49-3, 49-4, 49-5, 49-6.)
32
work Plaintiffs performed. To be paid time-and-a-half for their uncompensated overtime work
under the FLSA is both just and reasonable; however, to receive 150% of their gas stipend as
damages—which is not a reflection of the amount of work they performed—would be
inappropriate.
Therefore, in the absence of contrary authority, the Court finds that Plaintiff Williams’
gas stipend should not be included in his overtime compensation calculation under the FLSA.
Using Plaintiffs’ formula, the Court finds that Plaintiff Williams is entitled to $1,200.00 in
overtime compensation for the period of December 6, 2007, to June 27, 2008.78 Plaintiff
Williams is also entitled to $1.452.00 in overtime compensation for the period of July 4, 2008,
through February 20, 2009.79 Therefore, Plaintiff Williams’ total amount of overtime
compensation due is $2,652.00. As such, the Court determines that Plaintiff Williams is owed a
total of $5,304.00—$2,652.00 in unpaid overtime wages and $2,652.00 in liquidated damages.
As to Plaintiff McKinney, Defendants lacks his time records for the ten weeks between
March 14, 2008, and May 25, 2008, and the twenty-three weeks between October 1, 2008, and
March 16, 2009.80 However, Plaintiff McKinney has presented estimates of the amount of time
he worked during those periods, and Defendants have not disputed either the amount of time or
the overtime compensation he is owed. Defendants only dispute Plaintiff McKinney’s coverage
78
$400.00 per week / 50 hours = $8.00 / 2 = $4.00 x 10 hours of overtime per week =
$40.00 x 30 weeks = $1,200.00. (Defs.’ Reply to Plaintiffs’ Statement of Undisputed Facts, D.E.
# 55-1, at 9.) Defendants disputed this calculation to the extend that “Williams was not entitled
to overtime compensation as a salaried employee.” (Id.)
79
$440.00 per week / 50 = $8.80 / 2 = $4.40 x 10 hours of overtime per week = $44.00 x 33
weeks = $1,452.00. (Id.)
80
(Defs.’ Reply to Plaintiffs’ Statement of Undisputed Facts, D.E. # 55-1, at 10.)
33
under the FLSA while he was a salaried employee. Accordingly, the Court finds that Plaintiff
McKinney has satisfied his burden of raising a just and reasonable inference as to the amount of
damages he is owed for Defendants’ FLSA violation, and Defendants neither challenge nor
dispute the amount he would be owed or the amount of hours he worked.
However, Plaintiffs included Defendant McKinney’s gas stipend of $50 per week, which
he earned from October 1, 2008, through March 16, 2009, in their calculation of his
compensation. As discussed above, the Court finds the inclusion of the gas stipend in the timeand-a-half calculation to be inappropriate. Accordingly, using Plaintiffs’ formula, the Court
finds that Plaintiff McKinney is entitled to $920.00 in overtime compensation for the period of
October 1, 2008, to March 16, 2009.81 Defendants do not dispute that he is owed $540.00 in
overtime for the period between March 14, 2008, and May 25, 2008. Defendants dispute that
Plaintiff McKinney would be owed $490.50 for 109 hours of overtime between May 25, 2008,
and October 1, 2008, only because he became a salaried employee during that time. The Court
has held that Plaintiff McKinney was covered by the FLSA while he was a salaried employee.
Therefore, the Court finds that Plaintiff McKinney’s total amount of overtime compensation due
is $1,950.50. As such, the Court determines that Plaintiff Williams is owed a total of
$3,901.00—$1,950.50 in unpaid overtime wages and $1.950.50 in liquidated damages.
As to Plaintiff Darrell Hoskins, Defendants do not have records for the five-week period
between February 1, 2009, and March 17, 2009.82 However, they dispute Plaintiff Darrell
81
$400 per week / 50 hours = $8.00 per hour / 2 = $4.00 per hour x 10 hours of overtime
per week = $40 x 23 weeks = $920.00. (Id. at 11.)
82
(Defs.’ Reply to Plaintiffs’ Statement of Undisputed Facts, D.E. # 55-1, at 14.)
34
Hoskins’ assertion that he worked approximately ten hours of overtime during this time because
he was a salaried employee not entitled to overtime compensation.83 Defendants extend this
objection to all overtime compensation Plaintiff Darrell Hoskins is owed while he was a salaried
employee, but they do not dispute the amount of the alleged damages or hours of overtime he
worked. The Court has held that Defendants’ salaried employees are covered by the FLSA. As
such, the Court finds that Plaintiff Darrell Hoskins has met his burden to prove his damages, and
Defendants have not presented evidence that his reported hours are inaccurate. Accordingly, the
Court finds that Plaintiff Darrell Hoskins’ total amount of overtime compensation due is
$1,065.00. Thus, the Court determines that Plaintiff Darrell Hoskins is owed a total of
$2,130.00—$1,065.00 in unpaid overtime wages and $1,065.00 in liquidated damges.
Finally, Defendants do not dispute that they do not have any records showing the amount
of hours worked by Plaintiff Pruett or the amounts he was paid during his employment.84
Defendants dispute that Plaintiff Pruett is entitled to overtime compensation due to his status as a
salaried employee, but they do not dispute that he worked approximately fifty-five hours per
week or the amount of his salary. The Court has held that Defendants’ salaried employees are
covered by the FLSA. Accordingly, the Court finds that Plaintiff Pruett has met his burden as to
the amount of hours he has worked and the amount of damages to which he is entitled, and
Defendants have not presented evidence that these damages are inaccurate, incorrect, or
improper. Therefore, the Court finds that Plaintiff Pruett’s total amount of overtime
compensation due is $2,149.10. Thus, the Court determines that Plaintiff Pruett is owed a total
83
(Id.)
84
(Defs.’ Reply to Plaintiffs’ Statement of Undisputed Facts, D.E. # 55-1, at 16.)
35
of $4,298.20—$2,149.10 in unpaid overtime wages and $2,149.00 in liquidated damages.
As previously addressed, Hooah and Defendant Bailey are jointly and severally liable for
these compensation amounts. Accordingly, Plaintiffs’ Motion for Summary Judgment as to
damages and liquidated damages is GRANTED.
Attorney’s Fees
Plaintiffs also seek reasonable attorneys’ fees, pre-judgment and post-judgment interest,
and costs incurred as a result of this litigation.85 According to 29 U.S.C. § 216(b), “[t]he Court
in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a
reasonable attorney’s fee to be paid by the defendant, and costs of the action.” Thus, because a
judgment for unpaid wages and liquidated damages has been entered, Plaintiffs’ request for
attorney’s fees and costs is GRANTED.
Therefore, Plaintiffs shall submit within thirty (30) days of this Order a Motion for
Reasonable Attorney’s Fees, Pre-Judgment and Post-Judgment Interest, and Costs. Defendants
shall then have thirty (30) days following the filing of Plaintiffs’ Motion to respond. The Court
will then determine the amount of attorney’s fees, costs, and pre-judgment and post-judgment
interest to be awarded by separate order.
CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion for Summary Judgment is
GRANTED, and Defendants’ Motion for Summary Judgment is DENIED. Judgment is to be
entered for Plaintiff Dockery in the amount of $942.76, Plaintiff Bouillon in the amount of
$450.50, Plaintiff Billy Hoskins in the amount of $856.50, Plaintiff Smith in the amount of
85
(Compl. at 6.)
36
$320.00, Plaintiff Williams in the amount of $5,304.00, Plaintiff McKinney in the amount of
$3,901.00, Plaintiff Darrell Hoskins in the amount of $2,130.00, and Plaintiff Pruett in the
amount of $4,298.20.
IT IS SO ORDERED.
s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: November 18, 2011.
37
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?