DAVID C. NORTON, District Judge.
This matter is before the court on defendant's motion for summary judgment. For the reasons stated below, the court denies the motion.
On December 3, 2010, named plaintiffs David MacGregor, James Cantrell, and Debra Carnahan filed a purported class action complaint against Farmers Insurance Exchange ("Farmers") for alleged violations of the Fair Labor Standards Act ("FLSA" or "the Act"). The complaint also alleged an alternative quantum meruit claim based on South Carolina common law. The named plaintiffs amended their complaint on February 14, 2011. On March 4, 2011, they moved for conditional certification of a class of all Farmers property claims representatives who have unlawfully been denied overtime pay. Though the named plaintiffs each worked in the Atlanta regional zone the last three years and under the same supervisor for some time, they initially requested certification of a nationwide class. The court denied that motion on July 22, 2011 because the named plaintiffs failed to allege a common policy or plan materially uniting the proposed nationwide class.
On January 31, 2012, the plaintiffs moved for reconsideration of the court's ruling on conditional certification or, in the alternative, for conditional certification of a narrower class. On April 30, 2012, the court denied the motion for reconsideration, but granted leave to resubmit the motion to renew if the named plaintiffs could outline the parameters of a narrower class. On May 15, 2012, the named plaintiffs moved for conditional certification of a more limited class "including all property claims representatives who worked under the Plaintiffs' supervisory chain headed by Michael Flynn, Defendant's Branch Claims Manager of its Atlanta Zone, during the three years predating the filing of this motion." Pls.' Renewed Mot. for Conditional Certification 1. On July 20, 2012, the court conditionally certified this narrower class.
On March 28, 2013, the court approved the parties' Joint Motion to Approve Notice to Potential Members of Conditionally-Certified Collective Action. On April 24, 2013, plaintiff John Hodges filed notice of his consent to opt in as a plaintiff in this suit.
On December 16, 2013, Farmers moved for summary judgment on all plaintiffs' FLSA claims. Plaintiffs opposed the motion on January 24, 2014. Farmers filed a reply on February 7, 2014. This matter has been fully briefed and the court had the benefit of the parties' oral argument at a hearing held on March 20, 2014. The matter is ripe for the court's review.
Because the court must construe all facts in the light most favorable to the nonmoving party, these facts are drawn from plaintiffs' brief. MacGregor, Cantrell, Carnahan, and Hodges all used to work as property claims representatives ("PCRs") for Foremost Insurance Company ("Foremost"), a Farmers subsidiary. Because plaintiffs all worked in Foremost's Atlanta zone, they all reported to supervisors who in turn reported to Michael Flynn, the Branch Claims Manager for the Atlanta zone.
As PCRs, plaintiffs handled insurance claims made by Foremost customers, inspected newly-insured properties, and handled appraisals for desk adjusters. The work of a PCR is somewhat unpredictable, as no one can forecast how many claims will be made on any particular day or week. In addition, PCRs are required to do a great deal of driving, as they must physically inspect their customers' newly-insured properties as well as properties for which claims are made.
Farmers required its PCRs to have any overtime hours approved before those hours were worked. Plaintiffs were required to submit their estimated weekly time cards by 9:00 a.m. on Monday morning — before any work had been done. If, during the week, plaintiffs realized that their actual work hours were going to vary from their estimated work hours, they were required to request approval for additional overtime. Farmers did not maintain an official policy regarding how additional overtime requests were evaluated. Farmers' employment materials explain that:
Pls.' Opp'n to Mot. for Summ. J. Ex. 10, at 2-3.
Plaintiffs allege that Farmers fostered an atmosphere in which "employees were intimidated into not reporting their actual time worked out of fear of losing their jobs." Pls.' Opp'n 11. Specifically, plaintiffs contend that "although Farmers claims it prohibited employees from working `off the clock,' Plaintiffs, in order to complete all their assigned work, had to work overtime hours `off the clock' because supervisors frequently refused to approve Plaintiffs' overtime requests."
Summary judgment shall be granted "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). "By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no
"[A]t the summary judgment stage the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial."
Farmers moves for summary judgment, arguing that plaintiffs' FLSA claim fails for two distinct reasons. First, Farmers contends that plaintiffs cannot prove that Farmers "suffered or permitted" their off-the-clock work. Second, Farmers asserts that plaintiffs' FLSA claim would still fail — even if plaintiffs could make out a prima facie claim for relief under the Act — because plaintiffs were all exempt from the Act's overtime requirements pursuant to its administrative exemption.
The Act states that employers must compensate their employees for a workweek longer than forty hours on the basis of at least one and a half times the employee's regular hourly rate. 29 U.S.C. § 207(a)(1). Where, as here, an employer's records do not reflect the overtime hours that plaintiffs claim to have worked, the employee bears the "burden of proving that he performed work for which he was not properly compensated."
Before turning to Farmers' arguments in favor of summary judgment, the court must first determine whether plaintiffs have met their burden of demonstrating the amount and extent of their alleged off-the-clock overtime work as a matter of just and reasonable inference. Plaintiffs in FLSA overtime cases need not "prove each hour of overtime work with unerring accuracy or certainty."
What quantum of evidence satisfies the just and reasonable inference standard is a matter of some debate. In
In this case, Cantrell, Carnahan and MacGregor have each averred that they worked "at least ten overtime hours each week" for which they were not compensated. Cantrell Decl. ¶ 12, Feb. 20, 2011; Carnahan Decl. ¶ 13, Feb. 14, 2011; MacGregor Decl. ¶ 13, Feb. 15, 2011. They stood by these estimates in their depositions.
While plaintiffs' estimates are by no means detailed, the court — when drawing all inferences in their favor — finds that they have proven the amount and extent of their alleged overtime work as a matter of just and reasonable inference.
Farmers contends that summary judgment is appropriate because plaintiffs have failed to meet the second prong of the
In this case, plaintiffs declare that their supervisors frequently refused to approve the overtime requests that they submitted at the beginning of each calendar week, effectively forcing them to work off-the-clock in order to finish all of their assignments.
Plaintiffs' evidence that Farmers knew of their off-the-clock overtime work may be somewhat thin. Nevertheless, it is enough to survive summary judgment. The court finds that plaintiffs have, for the moment, sufficiently demonstrated that Farmers suffered or permitted their off-the-clock overtime work.
Finally, Farmers contends that plaintiffs' FLSA claim fails because they are administrative employees who are exempt from the Act's overtime provisions. Plaintiffs respond that cannot be considered exempt employees because Farmers itself classified them as non-exempt employees.
Among the employees exempt from the Act's overtime pay requirement are persons "employed in a bona fide executive, administrative, or professional capacity" ("the administrative exemption").
(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
29 C.F.R. § 541.200(a);
As an initial matter, the parties agree that plaintiffs were paid salaries that exceeded $455 per week. What remains to be determined is whether plaintiffs meet the second and third prongs of the administrative exemption test. In Farmers' favor, federal labor regulations explain that
29 C.F.R. § 541.203(a). Farmers is in the business of writing insurance policies and handling insurance claims. Plaintiffs are white collar workers who examined and settled those claims. This work appears to be directly related to general business operations, which the regulations further define as "work directly related to assisting with the running or servicing of the business." 29 C.F.R. § 541.201(a). Additionally, plaintiffs exercised discretion by conducting many of the activities described in 29 C.F.R. § 541.203.
Plaintiffs, on the other hand, provide evidence that Farmers classified its PCRs as non-exempt employees. Plaintiffs have submitted a Farmers-issued job profile for senior PCR lists the job as "non-exempt" under FLSA, Pls.' Opp'n Ex. 18, as well as a memorandum from Farmers' vice president of human resources that was sent to "All Non-Exempt Claims Representatives" on April 10, 2008.
Pls.' Opp'n Ex. 10 at 1.
Even if, as Farmers contended at the hearing, the determination of whether plaintiffs are exempt or non-exempt is a legal conclusion for the court, it is a conclusion that the court is unable to draw at this time. As a result of the evidence that Farmers itself classified its PCRs as non-exempt under the FLSA, the court cannot now find that Farmers has shown, by clear and convincing evidence, that plaintiffs qualify for the Act's administrative exemption.
For all these reasons, the court
Cantrell Dep. 115:11-22, Apr. 4, 2012. Carnahan testified that she usually worked two hours of unrecorded overtime each day, which amounts to ten hours of overtime each week. Carnahan Dep. 87:13-17, June 26, 2012. MacGregor stated in his deposition that he worked ten to twelve unrecorded overtime hours each week.
MacGregor Dep. 116:17-24, June 25, 2012.