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Tonak v. Kenwal Steele Corp.

United States District Court, Eastern District of Michigan, Southern Division

April 7, 2015

JUDITH TONAK, Plaintiff,
v.
KENWAL STEELE CORP., et al., Defendants.

ORDER DENYING (1) DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT (ECF #25) AND (2) PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT (ECF #26)

MATTHEW F. LEITMAN, UNITED STATES DISTRICT JUDGE.

INTRODUCTION

In 2007, Defendant Kenwal Steele Corporation (“Kenwal”) hired Plaintiff Judith Tonak (“Tonak”) as a full-time employee. Tonak served as the administrative assistant to one of Kenwal’s executives, Defendant Stephen Eisenberg (“Eisenberg”). It appears that Tonak’s duties included, among other things, making travel arrangements for Eisenberg and his family, managing Eisenberg’s checking accounts, paying some of his personal bills, assisting with the hiring of Eisenberg’s household staff, answering Eisenberg’s phone, and running personal errands for Eisenberg. For these services, Kenwal paid Tonak an annual salary of over $60, 000, plus yearly bonuses and other employment benefits.

On January 27, 2014, Tonak filed this action against Kenwal and Eisenberg. (See the “Complaint, ” ECF #1.) Tonak claims that Kenwal and Eisenberg (collectively, “Defendants”) failed to pay her overtime wages in violation of the Fair Labor Standards Act (the “FLSA”). (See id.) Following discovery, Defendants moved for summary judgment, arguing that Eisenberg is not entitled to any additional pay because she is exempt from the overtime provisions of the FLSA. (See “Defendants’ Motion, ” ECF #25.) Tonak has also moved for partial summary judgment on the same issue, arguing that she is not exempt as a matter of law. (See “Tonak’s Motion, ” ECF #26.) The Court heard argument on both motions on March 18, 2014. (See Dkt.) For all of the reasons stated below, the Court DENIES both motions.

GOVERNING LEGAL STANDARD

A movant is entitled to summary judgment when it “shows that there is no genuine dispute as to any material fact....” U.S. SEC v. Sierra Brokerage Services, Inc., 712 F.3d 321, 326-27 (6th Cir. 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)) (quotations omitted). “The mere existence of a scintilla of evidence in support of the [non-moving party’s] position will be insufficient; there must be evidence on which [a fact-finder] could reasonably find for [that party].” Anderson, 477 U.S. at 252. However, summary judgment is not appropriate when “the evidence presents a sufficient disagreement to require submission to [the trier of fact].” Id. at 251-252. When reviewing the record, “the court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in its favor.” Id.

ANALYSIS

A. The FLSA and the Relevant Administrative Exemption

Congress enacted the FLSA “to correct labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers.” Keller v. Miri Micosystems LLC, ___ F.3d ___, 2015 WL 1344617, at *3 (6th Cir. Mar. 26, 2015) (internal quotation marks omitted). Among other things, the FLSA requires “employers to pay employees overtime compensation, which must be no less than one-and-one-half times the regular rate of pay, if the employee works more than forty hours in a week.” Id. The FLSA defines an “employee” as “any individual employed by an employer.” See 29 U.S.C. § 203(e)(1).

Some employees, however, are exempt from the FLSA’s overtime compensation provisions, and “[a]n employer may raise a plaintiff’s status as an exempt employee as an affirmative defense to claims brought under the FLSA.” Orton v. Johnny’s Lunch Franchise, LLC, 668 F.3d 843, 846 (6th Cir. 2012). Such “[e]xemptions, however, are to be narrowly construed against the employers seeking to assert them.” Id. (internal quotation marks omitted). “The employer bears the burden of establishing the affirmative defense by a preponderance of the evidence, and the employer satisfies this burden only by providing clear and affirmative evidence that the employee meets every requirement of an exemption.” Id. (internal quotation marks omitted).

The exemption at issue here relieves employers of the obligation to pay overtime to those employed in an “administrative” capacity. See 29 U.S.C. § 213(a)(1) (the “Administrative Exemption”). The Administrative Exemption provides that “[m]inimum wage and maximum hour requirements … shall not apply with respect to … any employee employed in a bona fide … administrative … capacity.” Id.

“Congress did not define [this exemption], but delegated authority to the Department of Labor [] to issue regulations to define and delimit [the exemption’s] terms.” Foster v. Nationwide Mutual Insurance Company, 710 F.3d 640, 642 (6th Cir. 2013). The current regulations provide that the Administrative Exemption covers employees:

(1) Compensated ... at a rate of not less than $455 per week ...;
(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the ...

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