Bacon v. Eaton Aeroquip, LLC

JEFFREY BACON, et al., Plaintiffs, v. EATON AEROQUIP, LLC, Defendant.

Case No. 11-cv-14103

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

October 9, 2014

Honorable Gershwin A. Drain

OPINION AND ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT [#99], AND DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT [#101]

I. INTRODUCTION

On September 20, 2011, Plaintiff Jeffrey Bacon, filed the instant action for overtime compensation under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA") against Defendant, Eaton Aeroquip, LLC. On November 2, 2011, a group of Plaintiffs led by Mr. Bacon filed Plaintiffs' Fourth Amended Complaint [#49], alleging that Defendant improperly classified them as exempt under the FLSA's bona-fide executive exemption because Plaintiffs asserted they had no authority to hire, discipline, or fire employees or otherwise influence personnel decisions. In this action, Plaintiffs seek to recover their lost overtime compensation, as well as liquidated damages for Defendant's alleged willful violation of the FLSA.

Presently before the court is Plaintiffs' Renewed Motion for Partial Summary Judgment Regarding the Fluctuating Workweek Method of Calculating Damages and Statutory Limitations Period [#99], and Defendant's Motion for Partial Summary Judgment [#101]. This matter is fully briefed and a hearing was held on September 30, 2014. For the reasons that follow, theCourt will GRANT Plaintiffs' Motion for Partial Summary Judgment with respect to the fluctuating work week method of calculating damages, and DENY Defendant's Partial Motion for Summary Judgment with respected to liquidated damages. The Court will DENY both parties' Motions with respect to the statute of limitations period, and DENY Defendant's Motion with respect to the dismissal of the claims of Plaintiff Dixon.

II. FACTUAL BACKGROUND

Plaintiffs are former front-line supervisors at Defendant's aerospace manufacturing plant located in Jackson, Michigan. Defendant's plant manufactures critical components for military and commercial aircraft. Plaintiffs Bacon, Hebb, Saadeldin, and Baynes were Production Supervisors at the plant; Plaintiffs Wilson, Kyro, Haygood, and Dixon were Logistics Supervisors. The plant is unionized and subject to a collective bargaining agreement (" CBA").

At the time this action was filed in September of 2011, the plant employed more than five hundred people and fifteen supervisors, who annually earned approximately $55,000.00 to $75,000.00. Production supervisors directed the work of between twenty to thirty employees and were responsible for managing particular departments such as the Bend, Joining, Standard, Complex Hose, and Specialty Coupling departments. Logistics supervisors directed the work of twenty to forty employees and were responsible for managing specific departments to ensure the supply of materials necessary to manufacture and ship the aircraft parts.

On May 30, 2013, this Court dismissed this action and issued an Opinion and Order [#89] granting Defendant's Motion for Summary Judgment [#73], and denying Plaintiffs' Motion for Partial Summary Judgment [#72] as moot. In reaching that Decision this Court found that Plaintiffs could not show a genuine issue of material fact existed as to their FLSA claims because the Court found that the Plaintiffs were employed in a bona-fide executive capacity, andtherefore exempt from FLSA's overtime provisions. As a result of this Court's decision, this Court did not address all of the parties' arguments, and reached neither the issue of the applicability of the fluctuating workweek method of calculating damages nor the applicability of the three-year statute of limitations.

The Sixth Circuit disagreed with this Court and held that, based upon the record; a reasonable jury could find that Plaintiffs did not have sufficient influence over personnel decisions to be classified as exempt executives. The Sixth Circuit remanded the action to this Court on May 1, 2014, and pursuant to the Sixth Circuit's mandate this Court reopened the case on June 16, 2014 [#96]. Plaintiffs filed their Renewed Motion for Partial Summary Judgment Regarding the Fluctuating Workweek Method of Calculating Damages and Statutory Limitations Period [#99] on July 1, 2014. Defendant filed a Motion for Partial Summary Judgment [#101] on July 2, 2014.

III. LAW & ANALYSIS

A. Standard of Review

Federal Rule of Civil Procedure 56(a) empowers the court to render summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." See Redding v. St. Eward, 241 F.3d 530, 532 (6th Cir. 2001). The Supreme Court has affirmed the court's use of summary judgment as an integral part of the fair and efficient administration of justice. The procedure is not a disfavored procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v. Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir. 1995).

The standard for determining whether summary judgment is appropriate is "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is soone-sided that one party must prevail as a matter of law.'" Amway Distributors Benefits Ass'n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The evidence and all reasonable inferences must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he 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 genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original); see also National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).

If the movant establishes by use of the material specified in Rule 56(c) that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing party must come forward with "specific facts showing that there is a genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the non-movant's pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on which a jury could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477 U.S. at 252).

B. Legal Analysis

1. Plaintiffs' Partial Motion for Summary Judgment

a. The Fluctuating Workweek is Inapplicable Due to Hours Based Bonuses

Pursuant to the FLSA, the maximum regular workweek for nonexempt employees is forty hours. See 29 U.S.C. § 207(a)(1). For workweeks that exceed forty hours, the FLSA specifies that nonexempt employees are entitled to overtime pay for hours worked beyond that number "at a rate not less than one and one-half times the regular rate" of pay. Id. Employers who violate the FLSA's overtime provisions by failing to appropriately compensate employees may be liable for payment of both unpaid overtime wages and an equivalent amount of liquidated damages. See 29 U.S.C. § 213(b).

Four years after the passage of the FLSA, the Supreme Court authorized an alternate method for the calculation of overtime compensation that may be used when an "employment contract is for a weekly wage with variable or fluctuating hours." Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 580, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942), superseded on other grounds by statute, 29 U.S.C. § 260, as recognized in Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 128 n.22, 105 S.Ct. 613, 625 n. 22, 83 L.Ed.2d 523 (1985). This method has become known as the "fluctuating workweek method" ("FWW") of overtime payment; and, has also "been incorporated into an interpretive rule promulgated by the Department of Labor [("DOL")]." Urnikis-Negro v. Am. Family Prop. Servs., 616 F.3d 665, 675 (7th Cir. 2010) (citing 29 C.F.R. § 778.114); see also Highlander v. K.F.C. Nat. Mgmt. Co., 805 F.2d 644, 647 (6th Cir. 1986) ( "[T]he fluctuating work week method of overtime payment [is] authorized under 29 C.F.R. § 778.114.").

The DOL issued 29 C.F.R. § 778.114 ("Section 778.114"), as an interpretive rule in 1968 to clarify how and when employers could use the "half-time" method from Missel. This court has relied on Section 778.114, to find that the FWW "weekly salary is divided by the number of hours worked in a particular workweek—including hours worked over forty, if any—to calculate the 'regular rate.' " Dorsey v. TruGreen Ltd. P'ship, No. 13-10412, 2013 WL 6048999, at * 8 (E.D. Mich. Nov. 15, 2013) (citing 29 C.F.R. § 778.114(a)). Further this Court has recognized that "[a]n additional payment for any hours worked over 40 is then made at one-half this regular rate 'because such hours have already been compensated at the straight time regular rate, under the salary arrangement.' " Id. (citing 29 C.F.R. § 778.114(a)).

This Court has also noted that "[u]se of the FWW method does not result in paying half-time for overtime hours; rather, it permits an employer to apply the weekly salary to the overtime hours as part of the time-and-a-half overtime rate." Id. "Thus, employees with fluctuating-hour contracts are entitled only to additional half-time pay." Stultz v. J.B. Hunt Transp., Inc., No. 13-CV-13705, 2014 WL 3708807, at *3 (E.D. Mich. July 28, 2014) (citing 29 C.F.R. §...