Souza v. Sunbelt Auto Group, Inc. et al, No. 2:2009cv01103 - Document 27 (D. Ariz. 2010)
Court Description: ORDER granting in part and denying in part 16 Motion for Summary Judgment; denying 18 Motion for Summary Judgment; finding as moot 22 Motion to Strike. The Court will set a final pretrial conference by separate order. Signed by Judge David G Campbell on 4/6/2010.(NVO)
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Souza v. Sunbelt Auto Group, Inc. et al 1 Doc. 27 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 10 11 12 13 ) ) ) Plaintiff, ) ) vs. ) Sunbelt Auto Group, Inc., doing business ) ) as Aamco Transmissions, et al., ) ) Defendants. ) ) Keith Souza, No. CV09-1103 PHX DGC ORDER 14 15 Plaintiff and Defendants have filed motions for summary judgment. Dkt. ##16, 18. 16 The motions are fully briefed. Dkt. ##19, 25, 21, 23. Souza has also filed a motion to strike 17 the affidavit of Wendell Johnson, which Defendants cite in support of their motion. 18 Dkt. #22. For reasons that follow, the Court will deny both of Souza’s motions and will 19 grant in part and deny in part Defendants’ motion. 20 I. Background. 21 Souza was an employee at Sunbelt Auto Group, Inc., a repair shop that did business 22 as AAMCO Transmissions. According to Souza, he was entitled to overtime pay under the 23 Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and Defendants failed to pay 24 him overtime as required during the three years that he worked for Sunbelt. Defendants 25 dispute that Souza was entitled to overtime pay, and have filed a counterclaim against Souza 26 on the ground that he “wrongfully . . . converted to his own use certain Transmission Parts 27 owned by Sunbelt.” Dkt. #5 at 5. Both parties have moved for summary judgment on the 28 question of whether Souza was entitled to overtime pay under the FLSA. Dkt. ##16, 18. Dockets.Justia.com 1 II. Legal standard. 2 A. Summary judgment standard. 3 A court must grant summary judgment if the pleadings and supporting documents, 4 viewed in the light most favorable to the nonmoving party, “show that there is no genuine 5 issue as to any material fact and that the moving party is entitled to judgment as a matter of 6 law.” Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); 7 Jesinger v. Nev. Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law 8 determines which facts are material, and “[o]nly disputes over facts that might affect the 9 outcome of the suit under the governing law will properly preclude the entry of summary 10 judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Jesinger, 24 F.3d 11 at 1130. In addition, the dispute must be genuine, that is, the evidence must be “such that a 12 reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248. 13 B. FLSA. 14 The FLSA regulates wages and hours of work in private and public employment. 15 Generally, it “requires employers to pay employees one and one-half times their regular rates 16 of pay for all hours worked in excess of forty in a workweek.” Trinh v. JP Morgan Chase 17 & Co., No. 07-CV-1666 W(WMC), 2008 WL 1860161, *1 (S.D. Cal. Apr. 22, 2008). The 18 FLSA has an exception, however, for individuals who are “employed in a bona fide 19 executive, administrative, or professional capacity.” 29 U.S.C. § 213(a)(1). A “bona fide 20 executive” is an employee (1) who is paid a salary of not less than $455 per week, (2) whose 21 “primary duty is management of the enterprise in which the employee is employed or of a 22 customarily recognized department or subdivision therof,” (3) who “customarily and 23 regularly directs the work of two or more other employees,” and (4) who “has the authority 24 to hire or fire other employees or whose suggestions and recommendations as to the hiring, 25 firing, advancement, promotion or any other change of status of other employees are given 26 particular weight.” 29 C.F.R. § 541.100(a). The employer bears the burden of proving that 27 an employee is a bona fide executive. Walling v. General Indus. Co., 330 U.S. 545, 547-48 28 (1947). -2- 1 III. Analysis. 2 Both parties have moved for summary judgment on the question of whether Souza 3 was a bona fide executive employee. Souza contends that Defendants have failed to put 4 forward sufficient evidence showing that he was a bona fide executive employee and that, 5 as a result, he is entitled to judgment as a matter of law. Dkt. #18. Defendants contend that 6 the facts, even when viewed in the light most favorable to Souza, show that Souza was an 7 executive employee. Fed. R. Civ. P. 56(c). The Court finds that there is a genuine issue of 8 material fact as to whether Souza was an executive employee. 9 A. Salaried Employee. 10 Under 29 C.F.R. § 541.118, “[a]n employee will be considered to be paid ‘on a salary 11 basis’ within the meaning of the regulations if under his employment agreement he regularly 12 receives each pay period on a weekly, or less frequent basis, a predetermined amount . . . 13 which amount is not subject to reduction because of variations in the quality or quantity of 14 the work performed.” Both Souza and Defendants seek summary judgment on this issue. 15 Souza argues that he is entitled to summary judgment because Defendants’ payroll 16 records listed him as an hourly employee. See Dkt. #18-3 at 6-10. The payroll classification 17 of Souza is not dispositive. An employee may be labeled as hourly in the employer’s books 18 and yet actually qualify as salaried. 19 Management Corp., 68 F. Supp. 2d 1186, 1192 (W.D. Wash. 1999), the court noted that “a 20 payroll accounting system which calculates an exempt employees [sic] pay on an hourly 21 basis does not indicate that the employee was not salaried and, thus, is subject to the FLSA’s 22 minimum wage or overtime wage requirements.” Similarly, in McGuire v. City of Portland, 23 159 F.3d 460, 464 (9th Cir. 1998), the Ninth Circuit found that an employee was salaried 24 because he received the same pay every week, even though the employer accounted for the 25 employee’s time on an hourly basis. Thus, the fact Defendants’ payroll records list Souza 26 as an hourly employee does not necessarily mean that Souza was an hourly employee. For instance, in Palazzolo-Robinson v. Sharis 27 Souza also argues that on “one occasion he was docked for less than a full day of 28 pay.” See Dkt. #18-1 at ¶ 7. In response, Defendants cite the deposition testimony of John -3- 1 Lindsay, the owner of Sunbelt, who stated that the only reason Souza was docked for less 2 than a full day’s pay was that “he came to me and he said his drug counselor or the people 3 he worked with – Drugs Anonymous I think it’s called – told him that he had to be 4 accountable and responsible for his actions, and he suggested we deduct moneys from him.” 5 Dkt. #20-1 at 4. Taking these facts in the light most favorable to Defendants as the non- 6 moving party, the Court cannot find as a matter of undisputed fact that Souza was an hourly 7 employee. 8 Defendants argue that they are entitled to summary judgment because the “payroll 9 classification of ‘hourly’ does not defeat an employee’s exempt status.” Dkt. #23 at 3. 10 While the mere classification of an employee as hourly is not dispositive, Defendants have 11 failed to meet their burden of showing that Souza was salaried. Their motion for summary 12 judgment (Dkt. #16) and reply (Dkt. #23) fail to identify any evidence in the record showing 13 that there is no dispute of fact as to whether Souza was a salaried employee. See Celotex, 14 477 U.S. at 323 (A party seeking summary judgment “bears the initial responsibility of 15 informing the district court of the basis for its motion, and identifying those portions of 16 [the record] which it believes demonstrate the absence of a genuine issue of material fact.”). 17 B. Management Duties. 18 Under 29 C.F.R. § 541.100(a), Souza’s “primary duty” must have been “management 19 of the enterprise” in which he was employed or management “of a customarily recognized 20 department or subdivision therof.” Both parties argue that they are entitled to summary 21 judgment on this issue. 22 Souza argues that his primary duty was not management, but rather was to diagnose 23 and in some cases repair customer automobiles. Souza relies on the deposition testimony of 24 Kristian Fossler, an employee at Sunbelt, who stated that Souza’s “job duties was [sic] to 25 diagnose each and every vehicle that came into the shop, what the problem was, and then to 26 figure out what was the course of action to correct that problem.” See Dkt. #18-3 at 3. In 27 response, Defendants argue that Souza’s primary duties were managerial as shown by the 28 affidavit of John Lindsay, who stated that Souza “participated in interviewing potential -4- 1 employees,” “trained new employees,” “directed most if not all of the work of employees,” 2 “planned the work that would be done,” “determined what techniques should be used for 3 much of the work that was done,” “determined the type of parts to order,” and “determined 4 the flow and distribution of work at Sunbelt’s shop.” Dkt. #17-1 at 4. Defendants also cite 5 the statement of Wendell Johnson1 that Souza was “a salaried employee in a position as Lead 6 Man and then Assistant Manager of the shop.” Dkt. #17-1 at 6. They also cite the statements 7 of Ben Carlson and Thomas Schuldner that Souza’s “duties entailed the supervision of 2 full 8 time technicians.” Dkt. #17-1 at 8, Dkt. #17-1 at 10. 9 Each side offers competing evidence, precluding summary judgment. Defendants 10 argue that Fossler’s testimony is unreliable, but questions of credibility are for the finder of 11 fact at trial, not for the Court at summary judgment. Anderson, 477 U.S. at 255. 12 C. Supervisory Duties. 13 Under 29 C.F.R. § 541.100(a), Souza must have “customarily and regularly direct[ed] 14 the work of two or more other employees.” Both parties argue that they are entitled to 15 summary judgment on this issue. 16 Souza argues that he was not a supervisor because Fossler stated in his deposition that 17 Souza was not a supervisor. Dkt. #18-1 at 3 (citing Dkt. #18-3 at 4). Defendants rely on the 18 affidavit of John Lindsay, who stated that Souza “directed most if not all of the work of 19 employees,” and on the statements of Ben Carlson and Thomas Schuldner, who stated that 20 Souza’s “duties entailed the supervision of 2 full time technicians.” Dkt. #17-1 at 4, 8, 10. 21 This factual dispute precludes summary judgment. 22 D. Hiring and Firing. 23 Under 29 C.F.R. § 541.100(a), Souza must have been an employee who “ha[d] the 24 25 1 26 27 28 Plaintiff has filed a motion to strike the affidavit of Wendell Johnson. Even without Johnson’s affidavit, Defendants have presented sufficient evidence to preclude summary judgment on the question of whether Souza’s primary duties were managerial or whether Souza was a supervisor. As a result, the Court finds the motion to strike moot and will deny it (Dkt. #22). -5- 1 authority to hire or fire other employees or whose suggestions and recommendations as to 2 the hiring, firing, advancement, promotion or any other change of status of other employees 3 [were] given particular weight.” Both parties argue that they are entitled to summary 4 judgment on this issue. 5 Souza argues that he could not hire and fire. Dkt. #18-1 at ¶ 10. In support, he cites 6 John Lindsay’s deposition. The deposition, however, does not show that Souza could not 7 hire and fire and certainly does not show that Souza carried no weight in the hiring and firing 8 process. See Dkt. #18-2 at 4-5 (John Lindsay stating that Souza had the authority to impose 9 formal discipline on employees and that he also reviewed applications). As a result, Souza 10 has failed to show that he is entitled to summary judgment. 11 Defendants contend that Souza’s “recommendations as to the hiring, firing, 12 advancement, promotion or any other change of status of other employees [were] given 13 particular weight.” 29 C.F.R. § 541.100(a). In support, they cite the statement of John 14 Lindsay that “Plaintiff was the individual I relied upon to determine how a particular 15 technician was performing,” and that he “took Plaintiff’s recommendations about hiring and 16 firing very seriously.” Dkt. #17-1 at 3. In response, Souza contends that his duties did not 17 include hiring and firing and that he did not complete performance reviews or evaluate 18 employees, but he fails to provide any evidence showing that his recommendations as to 19 hiring and firing were not given weight. A party opposing summary judgment “must set 20 forth specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). 21 Souza has failed to do so and, as a result, the Court finds that “there is no genuine issue as 22 to any material fact and that [Defendants] [are] entitled to judgment as a matter of law” on 23 this question. Fed. R. Civ. P. 56(c). 24 IT IS ORDERED: 25 1. Souza’s motion for summary judgment (Dkt. #18) is denied. 26 2. Defendants’ motion for summary judgment (Dkt. #16) is granted with respect 27 28 to Souza’s hiring and firing authority, but otherwise denied. 3. Souza’s motion to strike (Dkt. #22) is denied as moot. -6- 1 4. The Court will set a final pretrial conference by separate order. 2 DATED this 6th day of April, 2010. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7-
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