United States District Court, S.D. Mississippi, Northern Division
OPINION AND ORDER
T. WINGATE UNITED STATES DISTRICT JUDGE.
THIS COURT is Plaintiffs' Motion for Partial Summary
Judgment [doc. no. 53]. Defendants oppose
this motion. Having considered the pleadings, the attachments
thereto, the relevant authorities, as well as oral arguments
presented by the parties, the Court finds the motion is well
taken and should be granted.
FACTS AND PROCEDURAL HISTORY
a wage-and-hour case brought under the Fair Labor Standards
Act.The Plaintiffs herein are Melvin Tillis,
Nicholas Boykin, Teona Rockingham, Aaron Williams, Marcellus
Grant, Jason Weaver and Chase McKnight. Carpet and flooring
installers, these plaintiffs bring this civil lawsuit seeking
alleged unpaid overtime compensation against their former
employers, namely Southern Floor Covering, Inc., Steven Keith
and Jeff Matthews, who are in the carpet and flooring
Southern Floor Covering, Inc., is partially owned by
Defendant Jeff Mathews, who is also the President. The other
owners are Carolyn Presley and Angel Mathews. [doc. No. 54].
Jeff Matthews is responsible for the company's
operations, including billing, business decisions, employee
compensation decisions, and assigning work tasks to
employees. Mathews Dep. [doc. no. 53-2 at
11:23-12:12; 19:1-20:22; 73:22-74:4]. As admitted in its
Amended Answer [doc. No. 36 ¶ 13] Southern Floor
Covering earns over $500, 000 per year in gross receipts, the
threshold amount for defining an enterprise engaged in
commerce under the FLSA.
filed their Amended Complaint [doc. no. 35] on February 19,
2017. Plaintiffs claim that in violation of the Fair Labor
Standards Act, 29 U.S.C. § 201 et. Seq,
Defendants failed to compensate them at the required rate for
overtime under 29 U.S.C. § 207(a)(1) when they worked
more than forty hours in a week. Plaintiffs also contend that
the Defendants failed to maintain adequate work records as
required by 29 C.F.R. Part 516,  and that the Defendants did
not act in good faith in committing these violations, a
circumstance which exposes them to the penalties of 29 U.S.C.
§ 216 (b). That section provides that for violation of
the overtime provisions of §207 of the FLSA, the
employer shall be liable to the employees affected in the
amount of their unpaid overtime compensation and in an
additional equal amount as liquidated damages. Section 216(b)
also allows for a reasonable attorney's fee and costs of
the action to be awarded to successful plaintiffs.
Teona Rockingham also alleges that Defendants retaliated
against him in contravention of the provisions of 29 U.S.C.
§215(a)(3) and Hagan v. Echostar Satellite,
LLC, 529 F.3d 617, 625-27 (5th Cir. 2008). Rockingham
contends that the Defendants terminated him, or otherwise
refused to assign work to him, because of his complaints
about these alleged violations. This retaliation claim,
however, is not a part of this motion for partial summary
judgment, but is reserved for the decision of the trier of
TYPICAL WORK DAY
workday begins when they arrive at the warehouse in Pearl,
Mississippi. “When installers arrive for work in the
morning they are given a service order that tells them where
to go that day to perform their job.” [53-6, Mot. for
Partial S. J., Exh. 6, Interrogatory Answer #3.] They then
load the work vans, and drive to the first worksite. After
completing the assigned work, they call back to the office to
ask whether more jobs need to be done that day. If so, they
would travel to that job site. If no additional jobs are
scheduled, they would drive back to the warehouse and unload
all the scrap and other waste material out of the vans, Once
the work day ends, they would go home. [53-2, Mot. for
Partial S. J., Exh. 2, Def. Dep. at 48]. Sometimes the work
was local, and sometimes the jobs were out of state. [53-2,
Mot. for Partial S. J., Exh. 2, Def. Dep. at 74-75].
hired their first employee around 1994. [53-2, Mot. for
Partial S. J., Exh. 2, Def. Dep. 9:20 - 10:3]. From that date
until around 2004, Defendants treated these employees as
“independent contractors.” [53-2, Mot. for
Partial S. J., Exh. 2, Def. Dep. 12-14]. The year 2004
brought an unsettling development. The Mississippi
Unemployment Commission held that Defendants had
misclassified these employees as independent contractors.
[53-2, Mot. for Partial S. J., Exh. 2, Def. Dep. 13:5-24].
Since 2004, Defendants have had to recognize the carpet
installers and helpers as “employees.”
Commensurate with this new designation, Defendants had to pay
them a “salary.” [53-2, Mot. for Partial S. J.,
Exh. 2, Def. Dep. 19:1-3].
dilemma later plagued the Defendants, erupting relative to
Defendants' handling of company records concerning hours
worked and overtime paid. Defendant Mathews testified that he
believed he did not have to track hours and pay overtime for
his flooring installation employees. The alleged source of
his mistaken belief, he says, was based on a conversation
with his accountant, Aaron Johnson. The accountant allegedly had
had told him that “a supervising crew leader making a
salary of $455 a week did not have to be paid an additional
amount for overtime.” [59-2, Opp. to Mot. for Partial
S. J., Exh 2.] Defendant Mathews, however, testified that he
thought this advice was more expansive; he testified in his
deposition that he understood the accountant to be saying
that any employee could be exempt so long as
“the company paid a salary of at least $455 a week,
” [59-1, Op. to Mot. for Partial S. J., Exh 1], and
that “you don't have to keep up with their
time.” [53-2, Mot. for Partial S. J., Exh. 2, Def. Dep.
FLSA generally requires employers to pay nonexempt employees
overtime pay at one and one-half times their regular rate for
all hours worked in excess of 40 per week. 29 U.S.C.
§207(a)(1). Congress however, has permitted some
exceptions, such as the exemption for certain commissioned
retail employees, as found in 29 U.S.C. § 207(i).
when faced with the accusations herein, defendants relied
upon an exception provided for employers for exempt salaried
employees. Defendants have abandoned that “exempt
salaried employee” defense. At present, they look to
the “commission” exemption to overtime under
§207(i). That section provides that an employee who is
an employee of “a retail or service establishment,
” may be exempt from overtime pay if: (1) the regular
rate of pay of such employee is in excess of one and one-half
times the minimum hourly wage, and more than half of
his compensation in a month is from commissions on goods or
services. 29 U.S.C. § 207(i). The Section 207(i)
exemption “was enacted to relieve an employer from the
obligation of paying overtime compensation to certain
employees of a retail or service establishment paid wholly or
in greater part on the basis of commissions.” 29 C.F.R.
the Defendants herein contend that these plaintiffs were paid
based on a commission rate, they made no notation on the
payroll records that the company was treating the employees
as exempt commission employees. [53-9, 53-2, Mot. for Partial
S. J., Exh. 9 at 1-4; Exh. 2, Def. Dep. 60:6-22; see also
Id. at 21, 22, 23.] Nor did Defendants guarantee
employees that they would receive at least the statutory rate
under the commission exemption of $10.88 per hour (one and
one-half times the minimum wage of $7.25. [53-2, Mot. for
Partial S. J., Exh. 2, Def. Dep. 38:7-18].
the exception of the forklift operators - who received
overtime pay -Defendants did not “ever track hours . .
. for any employee, ” and Defendant Mathews testified
that “I was not keeping up with time.” [53-2,
Mot. for Partial S. J., Exh. 2, Def. Dep. 15:5-12; 59:7-20].
affidavit by Defendant Mathews, he states that the
“salary” he paid Plaintiffs was actually “a
guarantee of $480 a week or a commission, whichever [i]s
greater.” [doc. 59-1]. He attests that the
“commission” is a fixed percentage of the labor
charge paid by the customer. He further states that the
guarantee “is for a 5-day work week. The guarantee is
reduced by $96 for each day that an employee does not work
during the week.” Attached to Mathew's affidavit is
a spreadsheet entitled “Summary of Plaintiff's
Payroll Records, ” which purports to list the
commission and guaranteed base for each employee in each
week. The Summary does not provide an explanation of how the
commission figures were derived, however. This is especially
confusing since the figures listed on the Summary do not
comport with the figures listed on the payroll records
provided by the Defendants.
such example occurred for the week of October 2, 2015.
Defendants' “Summary” shows that Plaintiff
Boykin worked five days the week ending October 2, 2015 [doc.
no. 59-1 at p. 3], and would therefore have had a guaranteed
base of $480. Since Boykin's commission only totaled
$151.34 for that week [doc. 53-9 at p. 6], he should have
been paid the base amount of $480, according to the policy
stated by Mathews in his affidavit; yet Boykin was paid $500
for that week.
week of October 22, 2015, Defendants' Summary shows
Plaintiff Boykin with a “base” of $384 for
working four days and a commission of $448.13 [doc. no. 53-9
at p. 8]. There are two problems here. First, those same
payroll records provided by the Defendants show that Boykin
actually worked five days that week, not four; so he should
have had a guaranteed base of $480. Secondly, Boykin's
pay for that week was neither the $384 base for four days,
nor the $480 base for five days, nor the $448.13 in
ostensible commission; instead, Boykin was paid $460 for that
week, for which no explanation is readily discernible. The
company's records reveal that the employees' pay
fluctuated, seemingly at random, from week to week.
April 19, 2016, Plaintiffs filed the present lawsuit,
alleging violations of the overtime provisions of the Fair
Labor Standards Act. They alleged that they had worked more
than 40 hours per week in a number of weeks, and that they
had not been paid overtime. Defendants have
admitted that Plaintiffs worked more than 40 hours
in some weeks - though the exact time worked and the number
of such weeks is contested - and that they have not paid
overtime rates for such time.
addition, in response to this lawsuit, Defendants have now
abandoned their theory that these employees were exempt under
the “salary” exemptions to the FLSA, and in this
litigation have argued instead that the employees are
“commission” employees exempt from overtime under
Section 7(i) of the Act. [59, Opp. to Mot. for Partial S. J.]
Section 7 (i), remember, provides that
“commissioned” retail employees are exempt from
overtime pay if the following conditions are met: (1) the
regular pay of such employee is in excess of one and one-half
times the minimum wage; and (2) more than half of the
employee's compensation represents commissions on goods
discovery, on August 31, 2017, Plaintiffs filed a Motion for
Partial Summary Judgment accompanied by nine exhibits
reflecting work records, pay records and deposition testimony
[doc. no. 53]. On October 3, 2017, Defendants filed a
six-page Memorandum Brief in opposition to Plaintiffs'
motion, and did not address the attached work and pay
records. In support of their Response in Opposition,
Defendants provided only two affidavits, one of which
included the previously-mentioned, “Summary of
Plaintiffs' Payroll records” [doc. no. 59-1].
SUMMARY JUDGMENT STANDARD
56(a) of the Federal Rules of Civil Procedure provides that
“A party may move for summary judgment, identifying
each claim or defense - or the part of each claim or defense
- on which summary judgment is sought. 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. The court should state on the
record the reasons for granting or denying the motion.”
FED. R. CIV. P. 56(a). The United States Supreme Court has
held that this rule "mandates the entry of summary
judgment, after adequate time for discovery and upon motion,
against a party who fails to make a sufficient showing 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).
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
in the case which it believes demonstrate the absence of a
genuine issue of material fact. Celotex, 477 U.S. at
323. Once this showing is met, the burden falls on the
non-movant to “set forth specific facts showing that
there is a genuine issue for trial.” U.S. v.
Lawrence, 276 F.3d 193, 197 (5th Cir. 2001). While the
Court views the evidence in a light most favorable to the
non-movant, see Coleman v. Houston Indep. Sch.
Dist., 113 F.3d 528, 533 (5th Cir.1997), in order to
avoid summary judgment, the non-movant must go beyond the
pleadings and come forward with specific facts indicating a
genuine issue for trial, see Celotex Corp. v.
Catrett, 477 U.S. 317, 324 (1986). If the defendant
makes no response to an issue in a summary judgment motion,
the district court must look at the summary judgment evidence
to determine whether judgment is appropriate. See John v.
State of La. (Bd. of Trs. for State Colls., &
Univs.), 757 F.2d 698, 709 (5th Cir. 1985) (summary
judgment cannot be supported solely on the ground that the
non-movant failed to respond to the motion).
Plaintiffs' motion seeks partial summary judgment as to
seven specific matters. As was evident from the opposition -
and as further clarified at oral argument - five of the
claims and/or defenses on which Plaintiffs sought summary
judgment were unopposed, specifically:
(1) Plaintiffs are employees under the FLSA, and both
Defendant Southern Floor Covering and Defendant Jeff Mathews
are employers under the FLSA, and therefore jointly and
(2) Defendants violated the FLSA's regulations requiring
them to keep records and track time worked.
(3) Under the FLSA, travel time and wait time is part of
working time, which is compensable.
(4) Plaintiffs worked more than 40 hours in some weeks.
(5) Defendants lack any defense under 29 U.S.C. § 259,
regarding reliance on ...