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Branum v. Richardson

United States District Court, S.D. Mississippi, Northern Division

February 27, 2014

JOVITA BRANUM, STEPHANIE MILLS, LINDSEY POOLE, SHEILA RAINES, AND BRENDA SONES, Plaintiffs,
v.
DANA RICHARDSON, IKE ROOKMAKER, WAYNE ELLIS, GUY HOGAN, SONYA TEASLEY, GEORGE PHILLIPS, JAMES WASHINGTON, AND NATIONAL CREDIT UNION ADMINISTRATION BOARD, Defendants.

ORDER

DANIEL P. JORDAN, III, District Judge.

This suit for overtime wages under the Fair Labor Standards Act is before the Court on two motions for summary judgment. First, Defendant Ike Rookmaker filed a motion for summary judgment [109] pursuant to Federal Rule of Civil Procedure 56. Plaintiffs responded in opposition [117], and Rookmaker filed a rebuttal [123]. Then, Plaintiffs filed an amended response [125] and an opposition to the rebuttal [127], which prompted Rookmaker to file a motion to strike [129]. Plaintiffs oppose [130] the motion to strike. Second, Defendants Dana Richardson, Wayne Ellis, Guy Hogan, Sonya Teasley, George Phillips, and James Washington also filed a motion for summary judgment [110]. Plaintiffs responded [119], and Defendants filed a rebuttal [122]. Plaintiffs then repeated their practice of filing an amended response [124] and an opposition to the rebuttal [126].

Having fully considered the premises, the Court finds that Defendants' summaryjudgment motions should be granted. The Court further finds that while the rules do not provide for Plaintiffs to file a surreply without first seeking leave of Court, the surreply does not alter the Court's conclusion. Therefore, the motion to strike is denied.

I. Facts and Procedural History

Plaintiffs Jovita Branum, Stephanie Mills, Lindsey Poole, Sheila Raines, and Brenda Sones are former employees of Valued Member Credit Union (VMCU). Defendants Ike Rookmaker, Wayne Ellis, Guy Hogan, Sonya Teasley, George Phillips, and James Washington served on the Board of Directors of the credit union. And Defendant Dana Richardson served as the CEO. On December 14, 2010, Plaintiffs filed their Complaint against VMCU and the individual Defendants asserting federal claims for overtime compensation under the Fair Labor Standards Act (FLSA) and state-law claims for slander and intentional infliction of emotional distress.

Shortly thereafter, VMCU apparently became insolvent and on May 31, 2011, the National Credit Union Administration Board (NCUA) initiated involuntary liquidation proceedings against VMCU and appointed itself as liquidating agent under 12 U.S.C. § 1787(a). The case has significantly narrowed since inception because Plaintiffs have abandoned all claims except for their claims for overtime wages [136]. This claim is now before the Court on the individual Defendants' motion for summary judgment. There are currently no pending motions filed by Defendant NCUA.

The Court, having considered the submissions of the parties, along with the pertinent authorities, finds that the individual Defendants are not employers under the FLSA and are entitled to summary judgment in their favor.

II. Summary Judgment Standard

Summary judgment is warranted under Rule 56(a) of the Federal Rules of Civil Procedure when evidence reveals no genuine dispute regarding any material fact and that the moving party is entitled to judgment as a matter of law. The rule "mandates the entry of summary judgment, after adequate time for discovery and upon motion, 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." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

The party moving for summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact." Id. at 323. The nonmoving party must then "go beyond the pleadings" and "designate specific facts showing that there is a genuine issue for trial.'" Id. at 324 (citation omitted). In reviewing the evidence, factual controversies are to be resolved in favor of the nonmovant, "but only when... both parties have submitted evidence of contradictory facts." Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the court may "not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments have never constituted an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); Little, 37 F.3d at 1075; SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993).

III. Analysis

The individual Defendants argue that Plaintiffs are not entitled to overtime pay from them because: 1) the individual Defendants are not employers under the FLSA and, 2) Plaintiffs are exempt from the FLSA based on their job duties. Because Defendants are correct as to the first argument, the Court declines comment on the second.

Generally, for a corporate officer to be considered an employer, he or she must have operating control over employees. But the facts of this case are complicated by Plaintiffs' claim that the roles of the Defendant board members and the responsibilities of the management team of the credit union changed between 2007 and 2010, when the credit union was audited. Specifically, Plaintiffs maintain that rather than hire additional employees, the board required existing employees to work overtime. With this background in mind, the Court turns to the first issue-whether the individual defendants are employers under the FLSA, thereby exposing them to personal liability for unpaid overtime.

A. Employer Status

The FLSA requires an employer to pay its employees overtime for hours worked over forty hours per week, and an "[e]mployer' includes any person acting directly or indirectly in the interest of an employer in relation to an employee...." 29 U.S.C. §203(d); see also Gray v. Powers, 673 F.3d 352, 354-55 (5th Cir. 2012). Generally, an individual with managerial responsibilities is considered an "employer" and is liable under the FLSA. See Lee v. Coahoma Cnty., Miss., 937 F.2d 220, 226 (5th Cir. 1991) (noting that the term "employer" includes individuals with managerial responsibilities and substantial control over the terms and conditions of the employee's work).

A shareholder, member, or officer of an entity is not individually liable as an employer simply because of his or her position. Instead, the Fifth Circuit Court of Appeals applies an "economic reality" test to determine whether an individual is sufficiently involved in the day-to-day operation of the company and its employees to be considered an employer for FLSA purposes. See Gray, 673 F.3d at 354-55. "To determine whether an individual or entity is an employer, the court considers whether the alleged employer: (1) possessed the power to hire and fire employees; (2) supervised or controlled employee work schedules or conditions of employment; (3) determined the ...


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