JAMES S. GWIN, District Judge.
Plaintiffs Joseph Walls, Dawn Stiger, David Hill, and Melinda Sexton seek to recover unpaid overtime wages from Defendants Host International, Inc. and HMS Host Tollroads, Inc.
Defendants operate food and beverage concession stores at airports, highway rest stops, and other travel facilities throughout the country.
Plaintiff Walls works for Defendants at the Cleveland Hopkins International Airport. Before filing this lawsuit Walls worked 50 to 60 hours per week. Walls typically spent about 90 per cent of his working time on manual tasks.
Until 2012, Plaintiff Stiger worked at the Erie Islands Travel Plaza in Clyde, Ohio. She worked 50 to 60 hours per week during her employment. Stiger spent about 95 per cent of her working time on manual tasks.
Until 2012, Plaintiff Sexton worked at a Travel Plaza in Beckley, West Virginia. She currently resides in Ohio.
Until 2011, Plaintiff Hill worked for Defendants at Port Columbus International Airport. Plaintiff Hill typically worked 50 hours per week, but would sometimes work more. Hill spent about 80 per cent of his work on manual tasks.
Plaintiffs claim that their primary work responsibilities were manual tasks similar to non-exempt hourly employees.
Plaintiffs admit performing some amount of managerial work, though all the Plaintiffs say that this work was sparing and infrequent compared to the manual tasks Plaintiffs performed.
Defendants argue that Plaintiffs were exempt from the overtime requirements of the FLSA because Plaintiffs' employment fell under either the executive exemption,
Other district courts have addressed Plaintiffs' claims. On August 2, 2010, Easton Stevens filed an FLSA collective action in the Eastern District of New York. Stevens sought unpaid overtime wages on behalf of assistant managers at Host.
Plaintiffs do not seek to proceed as a collective action in this case. Instead, these four Plaintiffs join their individual FLSA overtime claims in one lawsuit. In addition, Plaintiff Walls brings a claim for unpaid overtime wages under Ohio law,
Defendants move for summary judgment as to each Plaintiff and each claim. With their motion, Defendants argue that Plaintiffs were all exempt employees under the FLSA's executive and administrative exemptions.
Defendants also argue that Plaintiff Hill's claims are barred by the default two-year statute of limitations for FLSA claims.
Under Federal Rule of Civil Procedure 56, "[s]ummary judgment is proper when `there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'"
Defendants claim that Plaintiff Hill's FLSA claims are untimely because Plaintiffs are not able to show that Defendants willfully mis-classified Plaintiffs.
Plaintiffs point to the deposition testimony of Defendants' senior human resources executive, Coleman Lauterbach, taken as part of the Stevens
After reviewing the Lauterbach deposition, the Court agrees with the conclusions of the Boden and Liles courts and finds evidence in the deposition creates a genuine dispute of material fact as to whether Defendants showed reckless disregard for the requirements of the FLSA. Taken in the light most favorable to Plaintiff Hill, the deposition could suggest to a reasonable jury that Defendants' investigation into the actual duties and exempt status of Host assistant managers was insufficiently rigorous to satisfy the Department of Labor Regulation requirements under 29 C.F.R. § 578.3(c)(3).
Defendants are large and complex corporate entities that employ thousands of exempt and non-exempt employees across many retail plazas and concepts.
Assistant managers have job descriptions that Defendants claim "track the [Department of Labor] regulations."
Therefore, the Court finds a genuine dispute of material fact on the issue of willfulness.
The Court
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.'"
"Not all employees, however, are protected by [the time-and-a-half] requirement."
Under 29 C.F.R. § 541.100, exempt executive employees are those:
Defendants bear the burden of proving that Plaintiffs are exempt from FLSA overtime requirements.
Ohio construes its state law exemptions to its overtime requirements in the same way as the FLSA. Therefore, the Court's FLSA findings apply equally to Plaintiff Walls' claims under the Ohio Wage Act.
Plaintiffs admit that their salary compensation satisfied the salary basis test. The parties otherwise dispute whether Plaintiffs' positions were exempt from overtime pay.
Defendants argue that Plaintiffs are exempt from overtime pay because Defendants employed Plaintiffs as bona fide executives. To support their position, Defendants cite to Plaintiffs' job descriptions,
Plaintiffs admit to performing some managerial tasks. However, Plaintiffs claim that they spent the vast majority of their working time performing manual tasks done by non-exempt hourly employees. These included cooking, working the cash register, and cleaning. Furthermore, Plaintiffs claim that they lacked the authority to hire, fire, discipline, and otherwise manage the hourly employees that a bona fide executive would have.
Department of Labor Regulations codified in 29 C.F.R. § 541.102 provide insight into what work duties are managerial in nature. Under § 541.012,
Taking the evidence in the light most favorable to Plaintiff Walls, Defendants do not show that Plaintiff Walls was a manager under the factors listed in 29 C.F.R. § 541.102.
Walls testified that he spent 90 per cent of his working time performing the same manual work that the non-exempt hourly employees would do.
Although Walls interviewed candidates for employment,
Walls did not direct the work of other employees, train the employees, apportion the work among employees, set their schedules, or plan for their safety and security.
Furthermore, there was always a store manager directly above Walls, except for a period of several months when the travel plaza where Walls worked did not have a manager.
Given the relative unimportance of Walls' managerial duties, the time he spent performing manual tasks, and consistent supervision by management, the Court finds that Defendants do not show that Walls performed managerial functions that qualify him as an exempt executive employee.
Because the exemption does not apply to Plaintiff Walls at the second prong of the test, the Court does not address the remaining prongs of the test. The Court
After considering the evidence in the light most favorable to Plaintiff Stiger, the Court finds that Defendants have not shown that Stiger is an exempt executive. Defendants do not show that Plaintiff Stiger was a manager under the factors listed in 29 C.F.R. § 541.102.
Stiger interviewed candidates, but the manager would often ignore Stiger's recommendations.
Through most of Plaintiff Stiger's employment, any attempt to discipline other employees fell on "deaf ears."
When Defendants promoted Stiger from non-exempt hourly employee to assistant manager, she testified that the only major responsibility difference was that she had to work at six different restaurants.
Stiger did not train employees.
There is some evidence that Stiger directed the work of some other employees. Stiger said that part of her job was to make sure that the other employees were working at the right stores.
While Stiger's general manager directed Stiger to fill out numerical employee evaluation forms, Stiger did not recommend promotions and was not authorized to do so.
Defendants do not argue that Stiger was involved with any of the following:
The record shows that Stiger performed some managerial functions during her employment with Defendants. However, her lack of authority in important managerial areas, such as hiring, firing, disciplining employees, scheduling, and planning, outweigh the relatively unimportant managerial responsibilities that Stiger had. As a result Defendants do not show that Stiger was a bona fide executive.
Because the executive exemption does not apply to Stiger at the second prong of the test, the Court does not address the remaining prongs. The Court
Taking the evidence in the light most favorable to Plaintiff Sexton, the Court finds that Defendants have not shown that Sexton is an exempt executive. Defendants do not show that Plaintiff Sexton was a manager under the factors listed in 29 C.F.R. § 541.102.
Sexton interviewed candidates for employment at the travel plaza.
New employees received basic training at a computer terminal when they started their jobs. However, Sexton would also give on-the-job training and coaching to employees.
Sexton drafted schedules for other employees, but the general manager would often revise and always finalize the schedule.
However, these assignments were made by whichever employee opened a store that day, including to non-exempt hourly employees.
Sexton did not have authority to discipline other employees. She had to go to one of the general managers with the issue.
Sexton sometimes placed orders for supplies at the concepts. For example, she put in an order for milk for the Starbucks concept.
Sexton could not decide what prices to charge for items, pick which items to sell or promote, set a budget, determine the dress code, or set the pay rate for employees.
Defendants do not argue that Stiger was involved with any of the following:
Like Plaintiff Stiger, the record contains some evidence that Sexton performed managerial duties while working for Defendants. However, her lack of authority in important managerial areas, such as hiring, firing, discipline, budgeting, and scheduling, combined with the amount of time Sexton spent performing manual tasks and supervision by a manager, outweigh the relatively unimportant managerial responsibilities that Sexton had.
As a result Defendants do not show that Sexton was a bona fide executive. Because the executive exemption does not apply to Sexton at the second prong of the test, the Court does not address the remaining prongs. The Court
As with Plaintiffs Walls, Stiger, and Sexton, Defendants do not show that Plaintiff Hill was a manager under the factors listed in 29 C.F.R. § 541.102.
While Hill believed that he had the authority to hire, he never interviewed any candidates for employment, hired anybody, or recommended anybody for hiring.
Hill could not set or adjust pay rates of employees.
Like the other Plaintiffs, the record contains some evidence that Hill performed managerial duties while working for Defendants. However, Hill lacked authority in important managerial areas, such as interviewing, evaluating, firing, disciplining employees, budgeting, and scheduling. This lack of authority, the amount of time Hill spent performing manual tasks, and the manager's supervision over any discretion outweigh the relatively unimportant managerial responsibilities that Hill had.
As a result Defendants do not show that Hill was a bona fide executive. Because the executive exemption does not apply to Hill at the second prong of the test, the Court does not address the remaining prongs. The Court
Under 29 C.F.R. § 541.200, exempt administrative employees are those:
Defendants bear the burden of proving that Plaintiffs are exempt from FLSA overtime requirements.
Ohio construes its state law exemptions to its overtime requirements in the same way that the FLSA does. Therefore, the Court's FLSA findings apply equally to Plaintiff Walls' claims under the Ohio Wage Act.
29 C.F.R. § 541.201 defines what types of work directly relate to management or general business operations for the purposes of the administrative exemption. These include "work in functional areas such as tax; finance; accounting; budgeting; auditing; insurance; quality control; purchasing; procurement; advertising; marketing; research; safety and health; personnel management; human resources; employee benefits; labor relations; public relations, government relations; computer network, internet and database administration; legal and regulatory compliance; and similar activities."
As explained above, Plaintiff Walls spent the majority of his time performing manual tasks for Defendants. Walls spent much of the remainder of his time performing non-manual office work. However, this work, including printing forms and posting schedules, was not the kind of work contemplated by 29 C.F.R. § 541.201.
Defendants did not authorize Walls to work in any of the areas listed in § 541.201 or similar areas. Walls' work does not fit under§ 541.201. Therefore the office work that Walls performed was not "directly related to management or general business operations" for the purposes of the administrative exemption to the overtime requirements of the FLSA. As a result the Court will not address whether that kind of work was Walls' primary duty.
29 C.F.R. § 541.202 provides a partial list of factors to consider in determining whether an employee acted with discretion on matters of significance, including:
Walls could exercise discretion in some areas, such as by providing ratings for employees and taking notes during interviews. However, these are not matters of significance. Rather, Plaintiff Walls did not exercise discretion on significant matters as a normal part of his job. His ability to exercise discretion and independent judgment was limited, as explained above, by being consistently supervised by the store manager and needing store manager permission for managerial matters, including discipline.
Defendants assert that "Walls composed and submitted employee schedules, including his own . . . openly maintained that he had goals for the plaza . . . reviewed employee competencies and conducted evaluations . . . determined when and in which concepts he was best suited to work . . . [and] acted as the Store Manager for several months during 2013."
First, Walls testified that the manager finalized the schedule and that he simply posted it.
In sum, Defendants do not show that Walls exercised the discretion needed to be an administrative employee. As under the executive exemption analysis, Walls spent most of his time performing manual labor. Walls did not spend the remaining time in the "performance of office or non-manual work directly related to the management or general business operations of the employer [involving] the exercise of discretion and independent judgment with respect to matters of significance." The Court
Defendants argue that Stiger is exempt from FLSA overtime requirements because she was an administrative employee. As explained above with respect to Plaintiff Walls, Defendants must show that Stiger's "primary duty [was] the performance of office or non-manual work directly related to the management or general business operations of" Defendants.
Defendants claim that Stiger was involved in "checking and maintaining inventory and stock; conducting interviews of new hire candidates; composing and issuing discipline for employees; and reviewing sales plans."
The tasks that Defendants cite to support their argument are either misleading or not relevant to the administrative exemption. For example, when Defendants say that Stiger reviewed sales plans, they refer to parts of Stiger's deposition where she testified that her general manager asked her to do a sales plan. She testified that she had never been asked to do one before, did not know what a sales plan was, had no training on the matter, and probably did not complete the assignment."
Likewise, the other tasks that Defendants reference do not fit within the scope of § 541.201. Stiger's general manager delegated these tasks to Stiger. The tasks were designed to facilitate the job of the general manager, not to give any authority to Stiger. Checking stock, conducting screening interviews, and drafting discipline write-ups, without the authority to act on them, is more maintenance than managerial. Defendants do not show show that Stiger's work was directly related to management or the business operations of Defendants. As a result, the Court does not address whether that kind of work was Stiger's primary duty.
Defendants make essentially the same arguments regarding Stiger's exercise of discretion as they did regarding Plaintiff Walls' exercise of discretion. Defendants claim that "Stiger composed and submitted employee schedules, reviewed employee competencies and conducted evaluations, documented and determined employee discipline, and enforced Host policies," and argue that "Stiger regularly exercised discretion and independent judgment on significant matters."
As explained above, a general manager supervised Plaintiff Stiger and Stiger had little to no authority or discretion in any of her decision-making. Furthermore, the tasks that Defendants cite are not matters of significance to Defendants' business operations.
Defendants also argue that Sexton is exempt from FLSA overtime requirements because she is an administrative employee. As explained above with respect to Plaintiff Walls, Defendants must show that Sexton's "primary duty [was] the performance of office or non-manual work directly related to the management or general business operations of" Defendants.
Defendants claim that because Sexton was involved in "checking and maintaining inventory and stock and following up directly with the vendors . . . conducting interviews of new hire candidates; reviewing sales plans; and drafting schedules" that Sexton's work was directly related to management or the business operations of Defendants.
However, as explained with regard to Plaintiff Stiger, these types of responsibilities do not fit within the § 541.201 factors. In other words, the tasks that Defendants cite are not directly related to relevant determining business operations. As a result, the Court does not address whether that kind of work was Sexton's primary duty.
As with Plaintiffs Walls and Stiger, Defendants argue that because "Sexton composed and submitted employee schedules, reviewed employee competencies and conducted evaluations, documented and determined employee discipline, and maintained and ordered more product and inventory," that "Sexton regularly exercised discretion and independent judgment on significant matters."
For the same reasons as those regarding Plaintiffs Walls and Stiger, Defendants have not shown that the tasks Sexton performed are matters of significance within the meaning of § 541.202(b). Therefore, Defendants do not show that Sexton is exempt as an administrative employee. The Court
Defendants argue that Hill is exempt from FLSA overtime requirements because he was an administrative employee. As explained above with respect to the other Plaintiffs, Defendants must show that Hill's "primary duty [was] the performance of office or non-manual work directly related to the management or general business operations of [Defendants]."
Defendants claim that because Hill "was charged with functions such as directing the employees, determining where to spend his own time . . . predicting and controlling product and labor costs . . . made a variety of decisions regarding his own management style, leadership decisions involving employees, prioritizing work, and making minute-by-minute decisions regarding the operation of the business," that Hill's work was directly related to management or the business operations of Defendants.
Taking the evidence in the light most favorable to Plaintiff Hill, Hill was not in charge of "controlling product and labor costs." That characterization of Hill's work does not find support in the portions of Hill's deposition that Defendants cite.
The remaining types of responsibilities that Defendants cite do not fit within the § 541.201 factors. In other words, the tasks that Defendants cite are not directly related to business operations relevant to the administrative exemption. As a result, the Court does not address whether that kind of work was Hill's primary duty.
Defendants do not make a separate argument as to how Hill's primary duty involved the exercise of discretion in matters of significance.
For the foregoing reasons, the Court
IT IS SO ORDERED.
