LINDA V. PARKER, District Judge.
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
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 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 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.
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 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.
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 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):
Mulbah, 261 F.3d at 589.
Additionally, concerning, discovery disputes, this Court has indicated the following in its practice guidelines:
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
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 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:
(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 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.
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.)
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 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:
329 C.F.R. § 785.17;
Recently, in Adair v. Charter County of Wayne, 452 F.3d 482 (6
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 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:
(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:
(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:
(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 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:
(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 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:
(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 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.)
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 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:
29 CFR § 778.114
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 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.
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:
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. 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.
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 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.
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
