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Acosta v. Timberline South LLC

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

February 14, 2018

R. ALEXANDER ACOSTA Secretary of Labor, United States Department of Labor Plaintiff,
TIMBERLINE SOUTH LLC, a Michigan limited liability company, and JIM PAYNE, an individual, Defendants.

          Hon. Patricia T. Morris



         On April 29, 2016, Plaintiff Secretary of Labor filed a complaint against Defendants Timberline South LLC, a timber felling concern, and its manager Jim Payne, alleging violations of the overtime and recordkeeping provisions of the Fair Labor Standards Act of 1938. The parties filed cross motions for summary judgment. On October 6, 2017, the Court entered an order denying Defendant's motion for summary judgment, granting Plaintiff's motion for summary judgment in part as to the issues of liability and liquidated damages, and ordering supplemental briefing on damage calculation. On October 20, 2017, Defendants filed a motion for reconsideration of the Court's conclusion that Defendants are liable for liquidated damages under the FLSA.



         Pursuant to Eastern District of Michigan Local Rule 7.1(h), a party can file a motion for reconsideration of a previous order, but must do so within fourteen days. A motion for reconsideration will be granted if the moving party shows: “(1) a palpable defect, (2) the defect misled the court and the parties, and (3) that correcting the defect will result in a different disposition of the case.” Michigan Dept. of Treasury v. Michalec, 181 F.Supp.2d 731, 733-34 (E.D. Mich. 2002) (quoting E.D. Mich. LR 7.1(g)(3)). A “palpable defect” is “obvious, clear, unmistakable, manifest, or plain.” Id. at 734 (citing Marketing Displays, Inc. v. Traffix Devices, Inc., 971 F.Supp.2d 262, 278 (E.D. Mich. 1997). “[T]he Court will not grant motions for rehearing or reconsideration that merely present the same issues ruled upon by the Court, either expressly or by reasonable implication.” E.D. Mich. L.R. 7.1(h)(3). See also Bowens v. Terris, 2015 WL 3441531, at *1 (E.D. Mich. May 28, 2015).


         29 U.S.C. §216(b) of the FLSA provides that an employer who violates section 206 or 207 shall be liable for liquidated damages in an amount equal to the unpaid overtime compensation. 29 U.S.C. §216(b). However,

If the employer shows to the satisfaction of the court that the act or omission giving rise to such action was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the Fair Labor Standards Act of 1938, as amended, the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.

29 U.S.C. § 260.

         The employer bears the substantial burden of establishing this affirmative defense. Dole 942 F.2d at 968 (6th Cir. 1991). The employer must show both a subjective belief that it was compliant with the FLSA as well as an objectively reasonable basis for that belief. See Samson v. Apollo Res., Inc., 242 F.3d 629, 640-41 (5th Cir. 2001); Elwell v. Univ. Hosps. Homecare Servs., 276 F.3d 832, 841 (6th Cir. 2002). To show subjective good faith, an employer must show “an honest intention to ascertain and follow the dictates of the act.” Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 908 (3d Cir. 1991) (citing Williams v. Tri-County Growers, Inc., 747 F.2d 121, 129 (3d Cir. 1984) (abrogated on other grounds).

         An employer who acted negligently, but not wilfully, in misclassifying an employee will not be able to satisfy the good faith or reasonableness requirements. See id.; Elwell, 276 F.3d at 842. An employer must take affirmative steps to ascertain the Act's requirements. Martin v. Indiana & Michigan Power Co., 381 F.3d 574, 584 (6th Cir. 2004). An employer may, but is not required to, rely on the advice of legal counsel provided that counsel is fully informed about the roles of all potentially exempt employees, counsel provides advice that is reasonable, and the employer adheres strictly to that advice. Townley v. Floyd & Beasley Transfer Co., 1989 WL 205342, at *4 (N.D. Ala. Dec. 8, 1989); Cook v. Carestar, Inc., 13 WL 5477148, at *12 (S.D. Ohio Sept. 16, 2013).


         In the order dated October 6, 2017, the Court found Defendants liable for liquidated damages and noted as follows:

Defendants' single inquiry to Timberline's accountant falls well short of meeting this burden. Mr. Rooyakker's advice was at most an opinion with respect to the general applicability of the Agricultural Exemption to Timberline's operations. Rooyakker Tr. at 61-62. Mr. Payne could not reasonably rely on that opinion with respect to all employees performing varying duties including administration and transportation. Mr. Payne made no follow up inquiry to ...

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