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Pierce v. Wyndham Vacation Resorts, Inc.

United States District Court, E.D. Tennessee, Knoxville

October 6, 2017

JESSEE PIERCE and MICHAEL PIERCE, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
WYNDHAM VACATION RESORTS, INC., et al., Defendants.

          MEMORANDUM AND ORDER

          C. CLIFFORD SHIRLEY, JR. UNITED STATES MAGISTRATE JUDGE

         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 193].

         Now before the Court is the Defendants' Motion for Summary Judgment as to Certain Highly Compensated Employees [Doc. 236]. Specifically, the Defendants request that the Court dismiss the claims of Jesse Pierce; Michael Pierce, Sr.; R. Craig Thrift; and Thomas Garrett (hereinafter, “Plaintiffs”). The Plaintiffs have responded in opposition to the Motion [Doc. 265], and the Defendants have filed a Reply [Doc. 269]. During a status conference with the parties on August 7, 2017, the parties stated that a hearing was not necessary. The Motion is now ripe for adjudication. Accordingly, for the reasons explained below, the Court finds that the Defendants' Motion [Doc. 236] is not well-taken, and it is DENIED.

         I. BACKGROUND

         This case involves allegations that certain Sales Representatives who worked at the Defendants' offices worked off-the-clock and were not paid for working in excess of 40 hours in a work week. [Doc. 1 at ¶ 2]. The Complaint alleges that the Defendants willfully violated the Fair Labor Standards Act (“FLSA”). [Id. at ¶ 3].

         The parties agree on the following facts, unless otherwise noted. Dduring the relevant recovery period, October 21, 2010, through October 31, 2013, the Plaintiffs earned greater than $100, 000.00 and were employed as commissioned sales representatives. [Doc. 266 at ¶¶ 2-6]. The total earnings for each year are as follows:

2010

2011

2012

2013

Jessee Pierce

$906, 457.34

$739, 805.80

$753, 436.67

$671, 945.03

Michael Pierce, Sr.

$299.208.43

$241, 373.97

$281, 731.77

$255, 035.53

Craig Thrift

NA

$299, 658.55

$852, 234.99

$447, 727.10

Thomas Garrett

$243, 856.11

$194, 259.36

$280, 575.92

$474, 288.62

         The Defendants assert, and the Plaintiffs disagree, that each Plaintiff customarily and regularly performed one or more executive duties during the recovery period. For instance, the Defendants assert that the Plaintiffs managed a team of sales representatives, conducted sales training, and directed the actions of two or more employees. [Doc. 239 at ¶¶ 9, 20, 31, and 35]. The Plaintiffs disagree with the Defendants' characterizations. [Doc. 266 at ¶¶ 9, 20, 31, and 35].

         II. POSITIONS OF THE PARTIES

         The Defendants argue that the Plaintiffs' claims are exempt from the overtime provisions of the FLSA during the relevant recovery period pursuant to the highly compensated employee exception, 29 C.F.R. § 541.601, which was in effect during the relevant time period. The Defendants assert that the Plaintiffs fall within the highly compensated employee exemption because they earned more than $100, 000.00 annually and they customarily and regularly performed one or more executive or administrative duties.[1]

         The Plaintiffs respond [Doc. 265] that the Defendants cannot establish their burden of proving that the Plaintiffs are exempt from the FLSA's overtime compensation requirements. The Plaintiffs state that the Defendants cannot claim the exemption pursuant to 29 C.F.R. § 541.601 because no portion of the compensation that the Plaintiffs received from the Defendants was paid on a salary basis as is required in order for the employer to claim that an employee is an exempt executive. The Plaintiffs argue that even if the Defendants were permitted to pay executive employees on a fee basis, the Defendants cannot establish that they paid the Plaintiffs on a fee basis because commissions do not constitute payment on a fee basis. Further, the Plaintiffs contend that even if the Defendants could establish the compensation requirements, the Defendants cannot satisfy the streamlined duties test by which highly compensated employees' exempt status may be determined.

         The Defendants reply [Doc. 269] that the regulation expressly refutes the Plaintiffs' argument that highly compensated employees, whose exempt duty is executive in nature, must be paid on a salary basis versus a fee basis. In addition, the Defendants state that the only court that has addressed whether commissions can constitute payment on a fee basis has rejected the Plaintiffs' view. Finally, the Defendants reply that proving exempt status under the highly compensated variant of the executive exemption does not require or involve an inquiry into an employee's primary duty.

         III. STANDARD OF REVIEW

         Summary judgment under Rule 56 of the Federal Rules of Civil Procedure 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). The moving party bears the burden of establishing that no genuine issues of material fact exist. Celotex Corp. v. Catrett, 477 U.S. 317, 330 n. 2 (1986); Moore v. Philip Morris Cos., Inc., 8 F.3d 335, 339 (6th Cir. 1993). All facts and all inferences to be drawn therefrom must be viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Burchett v. Kiefer, 301 F.3d 937, 942 (6th Cir. 2002).

         “Once the moving party presents evidence sufficient to support a motion under Rule 56, the nonmoving party is not entitled to a trial merely on the basis of allegations.” Curtis v. Universal Match Corp., 778 F.Supp. 1421, 1423 (E.D. Tenn. 1991) (citing Celotex, 477 U.S. at 317). To establish a genuine issue as to the existence of a particular element, the non-moving party must point to evidence in the record upon which a reasonable finder of fact could find in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The genuine issue must also be material; that is, it must involve facts that might affect the outcome of the suit under the governing law. Id.

         The Court's function at the point of summary judgment is limited to determining whether sufficient evidence has been presented to make the issue of fact a proper question for the finder of fact. Anderson, 477 U.S. at 250. The Court does not weigh the evidence or determine the truth of the matter. Id. at 249. Nor does the Court search the record “to establish that it is bereft of a genuine issue of material fact.” Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir. 1989). Thus, “the inquiry performed is the threshold inquiry of determining whether there is a need for a trial-whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250.

         IV. ANALYSIS

         The Court has considered the parties' positions and finds that the Defendants' position is not well-taken. The Court observes, however, that there are two matters that need to be addressed before analyzing the merits of Defendants' Motion.

         First, the Defendants state, in a footnote, that many other opt-in plaintiffs had the threshold income to qualify for the highly compensated employee exemption but that they (Defendants) have not been allowed to take the depositions of all of the opt-ins to develop proof necessary to support a motion for summary judgment. The Defendants continue that they should be allowed to develop proof necessary to support a motion for summary judgment as to those opt-in plaintiffs and that they reserve the right to move for summary judgment following the opportunity to take the remaining depositions and develop the necessary proof to establish the highly compensated employee exemption. It is unclear to the Court what other proof is needed since the Defendants presumably possess records showing Plaintiffs' (Defendants' employees) earnings[2] and are presumably aware of the Plaintiffs' job functions, as their employer. In any event, even if the Defendants “needed” such depositions, they could have requested such from the Court. They chose, however, not to request such depositions and instead chose to raise this matter in a footnote in their Motion for Summary Judgment. Given that this is an already seasoned cased (i.e., approximately four years old), the Court will not consider additional dispositive motions.

         Second, the Plaintiffs assert that the Defendants have not revealed to the Court or to the Plaintiffs that they (Defendants) were asserting this affirmative defense, except to the extent that the fifteenth affirmative defense of the Answer can be considered such a revelation. [Doc. 265 at 2]. The Plaintiffs do not argue that the Defendants waived such defense, and they proceed to argue the ...


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