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Hall v. Plastipak Holdings, Inc.

United States District Court, E.D. Michigan, Southern Division

May 25, 2017

ROBERT HALL, et al., Plaintiffs,
v.
PLASTIPAK HOLDINGS, INC., et al., Defendants.

          OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

          ROBERT H. CLELAND UNITED STATES DISTRICT JUDGE.

         Pending before the court is Defendants' Motion for Summary Judgment. (Dkt. #53.) The motion is fully briefed. The court conducted a hearing on the motion on May 17, 2017. For the following reasons, the court will grant Defendants' motion.

         I. BACKGROUND

         Plaintiffs are five current and former employees of Plastipak Packaging, Inc.'s facility in Westland, Michigan. They allege that Defendant Plastipak Packaging, Inc. (“Plastipak”) has violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., by failing to pay them sufficiently for those hours worked above the 40-hour weekly threshold identified within the law.

         Defendants argue that, as Plaintiffs agree that they were “salary non-exempt” employees, it is true that they are entitled to overtime pay, but regulations-in particular 29 CFR 778.114-permit a “fluctuating workweek method” of overtime pay calculation like that Plastipak used. They claim that Plaintiffs have already admitted during their deposition testimony that the four requirements to allow the use of this method of calculation are satisfied. Defendants also argue that Plaintiffs' allegations that their employer would reduce their vacation pay whenever they worked less than 40 hours per week was belied by Plaintiffs' deposition testimony that Plastipak only reduced their bank of vacation pay for time that they had requested to take off. They further point to a determination by the United States Department of Labor, whose audits in 2013 and 2016 found that Plastipak's challenged practices were consistent with the FLSA. In sum, Defendants assert that Plastipak's pay practices are actually in excess of what the FLSA requires. Finally, Defendants contend that Defendants Plastipak Holdings, Inc., Plastipak Technologies, LLC, and William C. Young are not “employers” under the FLSA because they did not exercise control of the terms and conditions of Plaintiffs' work, and thus are due a grant of summary judgment in their favor as well.

         Plaintiffs respond, firstly, that Defendants' motion is premature as discovery is not set to close for a number of months. They continue that genuine issues of fact exist as to whether Plastipak's pay practices as implemented actually conform to the fluctuating workweek overtime calculation method, because Plaintiffs were not paid time-and-a-half for overtime hours, and Plaintiffs had to consume vacation or paid time off during weeks when they worked less than 40 hours. They also argue that it is unclear whether the Plaintiffs understood and agreed to the fluctuating workweek arrangement.

         They point out that Defendants' claims regarding Department of Labor audits are not supported by any admissible evidence beyond an affidavit of a Plastipak employee. Further, Plaintiffs contend that Defendants' reliance upon Department of Labor regulations is misguided, as they include language stating that “compliance . . . cannot be rested on any application of the fluctuating workweek overtime formula.” Plaintiffs also assert that dismissal of Defendants other than Plastipak would be immature as they have not had the opportunity to conduct full depositions of Mr. Young or company representative for the other Defendants.

         In reply, Defendants claim that the years-long period during which named Plaintiffs received paystubs describing their pay in detail, coupled with other indicia that they were informed of the policy, undermines their insistence that they did not understand the fluctuating workweek method of overtime calculation. They also answer Plaintiff's contentions regarding the undeveloped state of discovery by pointing out that the instant case has been pending for two years, and Plaintiffs unilaterally cancelled the deposition of the complained-of affiant. Defendants argue that the use of banked vacation time occurred when Plaintiffs requested time off, that they were paid the same weekly pay when they refused to work overtime, and that employers are of course expected to deduct from accumulated time off when employees take time away from work. They also advance the position that the regulatory language identified by Plaintiffs does not apply in the instant case, where employees are paid overtime and were not misclassified as salary exempt.

         This court has already had occasion to address and reject Defendants' arguments in the context of a motion to dismiss. (Dkt. #35, Pg. ID 645-49.) Defendants also advanced similar arguments in a motion for reconsideration in support of their contention that conditional class certification would be unduly burdensome in light of the alleged weakness of Plaintiffs' claims-a view the court rejected along with reference to its earlier decision. (Dkt. #51, Pg. ID 978.) The court will once again address these arguments, this time with an eye to the standard on summary judgment.

         II. STANDARD

         Summary judgment is proper “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.” Fed.R.Civ.P. 56(a). “In deciding a motion for summary judgment, the court must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party's favor.” Sagan v. United States, 342 F.3d 493, 497 (6th Cir. 2003). The movant has the initial burden of showing the absence of a genuine dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “[T]hat burden may be discharged by showing . . . that there is an absence of evidence to support the nonmoving party's case.” Bennett v. City of Eastpointe, 410 F.3d 810, 817 (6th Cir. 2005) (internal quotation marks omitted).

         The burden then shifts to the nonmovant, who must put forth enough evidence to show that there exists “a genuine issue for trial.” Horton v. Potter, 369 F.3d 906, 909 (6th Cir. 2004) (citation omitted). Summary judgment is not appropriate when “the evidence presents a sufficient disagreement to require submission to a jury.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986). In evaluating a summary judgment motion, “the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial . . . credibility judgments and weighing of the evidence are prohibited.” Moran v. Al Basit LLC, 788 F.3d 201, 204 (6th Cir. 2015) (internal quotation marks and citations omitted).

         III. DISCUSSION

         Defendants do not dispute that they paid the same hourly rate for overtime hours that they nominally paid Plaintiffs for their standard hours. The plain text of the regulation upon which Defendants rely states in part that:

. . Since the salary in such a situation is intended to compensate the employee at straight time rates for whatever hours are worked in the workweek, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the workweek into the amount of the salary to obtain the applicable hourly rate for the week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirement because such hours have already been compensated at the straight time regular rate, under the salary arrangement.
. . Where all the legal prerequisites for use of the “fluctuating workweek” method of overtime payment are present, the Act, in requiring that “not less than” the prescribed premium of 50 percent for overtime hours worked be paid, does not prohibit paying more. On the other hand, where all the facts indicate that an employee is being paid for his overtime hours at a rate no greater than that which he receives for nonovertime ...

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