The opinion of the court was delivered by: Honorable Paul L. Maloney
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
Plaintiffs Katy and Richard Bray, brother and sister, filed suit against their former employer, Defendant Dog Star Ranch, and against Defendants Patrick and Carol Yarnold. Dog Star Ranch is owned and operated by the Yarnolds. The complaint alleges two claims under the Fair Labor Standards Act ("FLSA"). First, Plaintiffs allege Defendants failed to appropriately compensate them for overtime. Second, Plaintiffs allege they were discharged in retaliation for complaining about violations of the FLSA.
Defendants filed a motion for summary judgment (Dkt. No. 27) and supporting brief (Dkt. No. 28). Plaintiffs filed a response. (Dkt. No. 35.) Defendants filed a reply. (Dkt. No. 41.) Defendants move for summary judgment on several grounds. First, Defendants allege Richard Bray was a supervisor and therefore is not entitled to overtime as of January 1, 2007. Second, Defendants allege both Richard and Katy Bray were terminated, not because of their complaints, but due to the manner in which they raised their complaints. Third, Defendants allege Plaintiffs failed to mitigate their damages. Finally, Defendants argue they are entitled to offset any overpayments paid to Plaintiffs for weeks where Plaintiffs worked less than 40 hours. Oral argument on the motion was held on March 1, 2010.
Summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories and admissions, together with the affidavits, show there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. FED. R. CIV. P. 56(c); Tucker v. Tennessee, 539 F.3d 526, 531 (6th Cir. 2008). The burden is on the moving party to show that no genuine issue of material fact exists, but that burden may be discharged by pointing out the absence of evidence to support the nonmoving party's case. Bennett v City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The facts, and the inferences drawn from them, must be viewed in a light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (quoting Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)). Once the moving party has carried its burden, the nonmoving party must set forth specific facts showing there is a genuine issue for trial. FED. R. CIV. P. 56(e); Matsushita, 475 U.S. at 574. The question is "whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-252.
Dog Star Ranch provides day care, boarding, grooming, and training services for dogs on a 48 acre wooded facility in Whitehall, Michigan. (Pl. Ex. C - C. Yarnold Dep. 29.) The Ranch employs around 12 or 13 people. (Pl. Ex. A - R. Bray Dep. 33.) Employees worked as Star Buddies, Cabin Buddies, trainers, and office administrative staff. (C. Yarnold Dep. 47.) A Cabin Buddy cleans the facilities and does not handle the dogs. (C. Yarnold Dep. 47; R. Bray Dep. 35.) A Star Buddy handles the dogs, including feeding and medication. (C. Yarnold Dep. 47; R. Bray Dep. 34-35.)
Both Plaintiffs began working for Dog Star Ranch in 2004. Richard Bray began working at the facility in June 2004, when it opened. (C. Yarnold Dep. 25-26, 46-47.) He began as a Star Buddy and later worked as a trainer, after he received classes on training dogs. (C. Yarnold Dep. 47-48; R. Bray Dep. 32.) His employment with Dog Star Ranch ended June 23, 2008. (Pl. Ex. Q -Answers to Unemployment Benefits Questionnaire.) Katy Bray began working for Dog Star Ranch in the summer of 2004. (Pl. Ex. B - K. Bray Dep. 10.) Katy worked as a Star Buddy. (Id. 18.) At the end of the summer, Katy returned to school and only worked for Dog Star Ranch sporadically, approximately one weekend a month and holidays. (Id. 28.) In 2005 and 2006, Katy continued to work full time during the summer and sporadically during the school year. (Id. 39-41.) She did not work at Dog Star Ranch between January and June, 2007. (Id. 42.) Her employment with Dog Star Ranch ended on June 23, 2008. (Id. 43.)
The employees at the Dog Star Ranch were not paid for work done in excess of forty hours each week. When Richard started working at the Dog Star Ranch, he claims he and Carol reached an agreement regarding overtime hours. (R. Bray Dep. 24-25.) Under the agreement, if he worked more than 40 hours in a week, he would receive a paycheck for working 40 hours, and he would bank the extra hours and they would be applied to weeks where he worked less than 40 hours. (Id.at 24) If he worked less than 40 hours and did not have banked time, he would not receive a full paycheck for 40 hours' work. (Id. at 26.) About one year after he started working at Dog Star Ranch, Richard and Carol had another conversation in which they agreed that Richard would be paid for 80 hours every two weeks "no matter what because of the amount of hours that I would work, that there really wasn't any yes [sic], if I missed an hour here or there or for a week that I wouldn't have made it up." (Id. 28.) Richard still kept track of his hours and any hours over 40 a week were banked for the purpose of paid vacations. (Id. 28-29.) Richard concedes, after this agreement, if he worked 75 hours instead of 80 hours, he would still get paid for 80 hours, whether he had banked hours or not. (Id. 31.)
Similar to Richard, Katy Bray was never paid for overtime work. (K. Bray Dep. 24.) If she worked more than 40 hours in a week, she was paid for 40 hours, and the overtime was banked for future use. (Id.) According to Katy, Carol asked if she would agree to this system of banking hours and told Katy that Dog Star would simply issue Katy paychecks when Katy returned to school until the banked hours were paid off. (Id. 25-26.) Katy acknowledges she received paychecks from Dog Star Ranch in the fall of 2004, after she had returned to school. (Id. 26.)
In her deposition, Carol Yarnold explained how this system evolved. Carol claims she never asked Katy to work overtime. (C. Yarnold Dep. 57.) According to Carol, if Katy worked in excess of 40 hours, it was because Katy and another employee swapped shifts. (Id.) This usually happened because one of the employees wanted a day off and needed someone to cover their schedule. (Id.) Carol explained, as long as the shifts were covered, everyone would get their full time pay and Dog Star could provide the employees with health insurance. (Id. 59.)
"The FLSA mandates the payment of minimum wage and overtime compensation to covered employees." Citicorp Indus. Credit, Inc. v. Brock, 483 U.S. 27, 32 (1987). Under section 207(a)(1), employers are not to employ covered individuals "for a work week longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate for which he is employed." 29 U.S.C. § 207(a)(1); see Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 501 (6th Cir. 2007). Under section 207(o), public employers are allowed to compensate employees with "compensatory time," rather than money. 29 U.S.C. § 207(o) (emphasis added).
The FLSA includes a number of exemptions to the minimum wage and maximum hour requirements. See 29 U.S.C. § 213(a). Section 213(a)(1) exempts from those requirements "employees employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1); see ACS v. Detroit Edison Co., 444 F.3d 763, 767 (6th Cir. 2006). "The Secretary of Labor, as directed by statute, has adopted regulations defining a bona fide executive employee." Speedway SuperAmerica, 506 F.3d at 502. Under the regulations, an employee is exempt as an executive from the wage and hour requirements if he or she (1) is compensated on a salary basis of not less than $455 per week, (2) has a primary duty of management in the business in which he or she is employed, (3) customarily and regularly directs the work of two or more other employees, and (4) "has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight."*fn1 29 C.F.R. 541.100(a).
The FLSA exemptions are affirmative defenses, for which the employer bears the burden of proof. Speedway SuperAmerica, 506 F.3d at 501 (citing Corning Class Works v. Brennan, 417 U.S. 188, 196-97 (1974)). Exemptions to the FLSA must be narrowly construed against the employer seeking to assert them. Id. (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960)). The employer bears the burden of proving that the exemption asserted applies to the employee at issue. ACS, 444 F.3d at 767 (quoting Douglas v. Argo-Tech Corp., 113 F.3d 67, 70 (6th Cir. 1997)). All elements of the exemption must be established by a preponderance of the evidence. Speedway SuperAmerica, 506 F.3d at 501-502 (clarifying that the employer need not meet a heightened evidentiary standard and quoting Renfro v. Indiana Michigan Power Co., 497 F.3d 575, 576 (6th Cir. 2007)).
The regulations enacted pursuant to the FLSA provide courts with some guidance for applying the executive exemption. The regulations outline the activities typically performed by an employee who is a manager, including interviewing, selecting and training employees, setting and adjusting pay and work hours, maintaining records, handling employee complaints, disciplining employees, and apportioning work among employees, to list a few. 29 C.F.R. § 541.102. An employee who concurrently performs exempt and nonexempt duties is not disqualified from the executive exemption and such situations must be considered on a case-by-case basis. Id. § 541.106(a). The ...