Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Alston v. DirecTV, Inc.

United States District Court, D. South Carolina, Columbia Division

May 26, 2017

James Alston, Carnell Bullock, Mark Hilton, Zachary Jenkins, James Kile, Rhett Linley, John McPherson, Jeffrey Naves, Joseph Robinson, Carl Simon, Khehadi Watkins, Corey Gleaton, Nolan Pegues, and Alan Ryman, Plaintiffs,
v.
DIRECTV, Inc., DIRECTV, LLC, and MasTec North America, Inc., Defendants.

          ORDER AND OPINION

         Defendants DIRECTV, Inc., DIRECTV, LLC (together, “DirecTV”) and MasTec North America, Inc. (“MasTec”) (collectively, “Defendants”)[1] have filed 14 motions seeking summary judgment on claims arising under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., asserted by Plaintiffs James Alston, Carnell Bullock, Mark Hilton, Zachary Jenkins, James Kile, Rhett Linley, John McPherson, Jeffrey Naves, Joseph Robinson, Carl Simon, Khehadi Watkins, Corey Gleaton, Nolan Pegues, and Alan Ryman (together, “Plaintiffs”). (See ECF Nos. 87 to 100.) A hearing on the motions has been scheduled. (See ECF No. 139.) In order to streamline the upcoming hearing and to ensure an expeditious disposition of the summary judgment motions, this order addresses a number of arguments raised by the parties for which the court believes argument at a hearing would not be beneficial. Accordingly, in this order, the court DENIES IN PART Defendants' motions for summary judgment and reserves decision on the remaining aspects of the motions until after the hearing.

         I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

         On October 20, 2014, Plaintiffs filed their complaint in this matter, alleging that they are all technicians who worked installing and repairing satellite television service systems offered to consumers by DirecTV. (See ECF No. 1 at 2, 5.) Plaintiffs allege that DirecTV oversees a “provider network” of corporate entities called Home Service Providers (“HSPs”) that provide DirecTV with its workforce of technicians. (See Id. at 5.) Ostensibly, HSPs, such as MasTech, either employ technicians directly or engage technicians as independent contractors, and an HSP might also subcontract with another HSP to provide DirecTV with technicians who are designated as employees or independent contractors of the subcontracted HSP. (See Id. at 5-6.) Plaintiffs allege that the HSP provider network was designed to allow DirecTV to exercise the right of control over technicians while avoiding its obligation to comply with the requirements that the FLSA imposes on employers. (See Id. at 6-8.) Plaintiffs claim that, despite Defendants' designation of their employment status, Plaintiffs were jointly employed by DirecTV and by the HSPs that engaged them for purposes of the FLSA. (See Id. at 8-10.)

         Plaintiffs also claim that the net effect of Defendants' policies and practices was to willfully fail to pay minimum wage and overtime compensation due to Plaintiffs, and to avoid keeping accurate time records in order to save on payroll costs. (See Id. at 10.) They allege that DirecTV used a computer program called SIEBEL to coordinate and assign to technicians particular work orders for installing or repairing DirecTV systems and that DirecTV used a per-task (piece-rate) payment scheme to compensate technicians for completing work orders. (See Id. at 7.) Although the system accounted for some of the time during which technicians completed work orders, Plaintiffs allege that it failed to account for all of that time and that technicians were not compensated for the time needed to perform other necessary work, such as

assembling satellite dishes, driving to and between job assignments, reviewing and receiving schedules, calling customers to confirm installations, obtaining required supplies, assisting other technicians with installations, performing required customer educations, contacting [DirecTV] to report in or activate service, working on installations that were not completed, and working on “rollback” installations where Plaintiffs had to return and perform additional work on installations previously completed.

(Id. at 11.) Plaintiffs also allege that the provider network resulted in many technicians being misclassified as independent contractors and that, due to this misclassification, technicians were required to purchase at their own expense the supplies necessary to perform the work and that “chargebacks” were deducted from their pay. (See Id. at 12.) As a result of Defendants' failure to compensate technicians for working all the time necessary to perform their work and Defendants' failure to reimburse technicians for chargebacks and expenses necessarily incurred to perform their work, Plaintiffs allege that they were paid below the minimum wage and overtime wage rates, in violation of the FLSA. (See Id. at 10-12.) Plaintiffs seek damages for unpaid minimum wages, unpaid overtime wages, and liquidated damages, pursuant to 29 U.S.C. § 216(b), and damages from unpaid wages and compensation resulting from their misclassification as independent contractors. (See Id. at 24-27.)

         After discovery was completed (see ECF No. 66 at 1), Defendants filed the instant motions for summary judgment (see ECF Nos. 87 to 100). Although Defendants raise several grounds for summary judgment, each motion is specifically tailored to each of the 14 remaining Plaintiffs, such that not all of the grounds raised are applicable to each Plaintiff. (See ECF No. 131 at 52 (appendix).) Defendants assert that they are entitled to summary judgment on all or some of the claims asserted by all or some of the remaining Plaintiffs because there is no genuine dispute that (1) certain Plaintiffs were properly classified as independent contractors and were not jointly employed by Defendants; (2) Defendants lacked the requisite knowledge of the hours Plaintiffs worked; (3) certain Plaintiffs are subject to the retail or service establishment exemption for overtime wages under 29 U.S.C. § 207(i); (4) certain Plaintiffs were paid at least the minimum wage; (5) certain Plaintiffs are unable to make the requisite showing of damages; (6) certain Plaintiffs' claims are barred by two year statute of limitations in 29 U.S.C. § 255(a); and (7) certain Plaintiffs were properly paid overtime wages during their employment with MasTec. (See ECF Nos. 87-1, 88-1, 89-1, 90-1, 91-1, 92-1, 93-1, 94-1, 95-1, 96-1, 97-1, 98-1, 99-1, 100-1; see also ECF No. 131 at 52.)

         II. LEGAL STANDARD

         Summary judgment is appropriate when the materials in the record show 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). “[I]n ruling on a motion for summary judgment, ‘the evidence of the nonmovant[s] is to be believed, and all justifiable inferences are to be drawn in [their] favor.'” Tolan v. Cotton, __ U.S. __, 134 S.Ct. 1861, 1863 (2014) (per curiam) (brackets omitted) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving part[ies], ” and a fact is material if it “might affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248.

         The parties seeking summary judgment shoulder the initial burden of demonstrating to the court that there is no genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the movants have made this threshold demonstration, the non-moving parties, to survive the motion for summary judgment, may not rest on the allegations averred in their pleadings. Rather, the non-moving parties must demonstrate that specific, material facts exist which give rise to a genuine issue. See Id. at 324.

         III. ANALYSIS

         The court addresses Defendants' grounds for summary judgment below. As indicated by the truncated recitation of the facts above, the court discusses the relevant evidence to which the parties point in each of the below subparts as needed.

         A. Joint employment and designation of Plaintiffs' employment status

         As Defendants correctly point out, for a defendant to be liable under the FLSA provisions at issue here, a plaintiff must prove that he was the defendant's employee, as that term is used for purposes of the FLSA. See Salinas v. Commercial Interiors, Inc., 848 F.3d 125, 133 (4th Cir. 2017) (citing 29 U.S.C §§ 203(e)(1), 206(a), 207(a)(1)). Under the FLSA, an individual may be jointly employed by more than one entity at the same time, with all joint employers being jointly responsible for compliance with the FLSA. See Id. at 133-35. Under their theory of liability, Plaintiffs appear to argue that each Plaintiff was jointly employed by DirecTV and MasTec (see ECF No. 125 at 71-88), even though Plaintiffs Bullock and Ryman assert claims against DirecTV only, and not against MasTec (see ECF No. 1 ¶¶ 84, 147).

         In their first ground for summary judgment, Defendants have asserted in their motions that Plaintiffs fail to adduce evidence sufficient to raise a genuine dispute that DirecTV and MasTec did not jointly employ Plaintiffs Alston, Hilton, Jenkins, Kile, Linley, McPherson, Naves, Robinson, Simon, and Watkins (see ECF No. 87-1 at 10-21; ECF No. 90-1 at 8-20; ECF No. 91-1 at 9-20; ECF No. 92-1 at 9-21; ECF No. 93-1 at 9-21; ECF No. 94-1 at 10-22; ECF No. 96-1 at 9-20; ECF No. 98-1 at 11-23; ECF No. 99-1 at 10-22; ECF No. 100-1 at 12-25) or that DirecTV was not a joint employer of Plaintiffs Bullock, Gleaton, Pegues, and Ryman (see ECF No. 88-1 at 8- 20; ECF No. 89-1 at 10-19; ECF No. 95-1 at 9-18; ECF No. 97-1 at 9-20). Defendants argue that the larger group of Plaintiffs have failed to adduce sufficient evidence that DirecTV and MasTec were their joint employers under the four-factor test set forth in Bonnette v. California Health & Welfare Agency, 704 F.2d 1465 (9th Cir. 1983), or the six-factor test set forth in Ling Nan Zheng v. Liberty Apparel Co., Inc., 355 F.3d 61 (2d Cir. 2003), (see, e.g., id. at 14-21) and that the smaller group failed to adduce sufficient evidence that DirecTV was their joint employer under either the Bonnette or Zheng tests (see, e.g., ECF No. 88-1 at 13-20).With respect to all Plaintiffs except Gleaton, Pegues, and Robinson, Defendants also argue that each of them were independent contractors of an HSP subcontracted by MasTec to provide technicians for DirecTV and that, because they were independent contractors of a third party, they, as a matter of law, could not be employees of MasTec and DirecTV. (See, e.g., ECF No. 87-1 at 10 (citing Roslov v. DirecTV, Inc., __ F.Supp.3d __, No. 4:14-cv-00616 BSM, 2016 WL 6892110 (E.D. Ark. Nov. 4, 2016)).)

         After Defendants filed their motions for summary judgment, the Fourth Circuit issued, on the same day, its opinions in Salinas and in Hall v. DIRECTV, LLC, 846 F.3d 757 (4th Cir. 2017). In Salinas, the Fourth Circuit reaffirmed its decision in Schultz v. Capital International Securities, Inc., 466 F.3d 298 (4th Cir. 2006), which

established a two-step framework for analyzing FLSA joint employment claims, under which courts must first determine whether two entities should be treated as joint employers and then analyze whether the worker constitutes an employee or independent contractor of the combined entity, if they are joint employers, or each entity, if they are separate employers

Salinas, 848 F.3d at 139-40 (citing Schultz, 466 F.3d at 305-07). Regarding the first step of this two-step framework, the court noted that district courts in this circuit had applied the Bonnette and Zheng tests to determine whether two entities should be treated as joint employers. See Id. at 136. However, after a thorough review of the issue, the Salinas court expressly admonished the district courts to “no longer employ Bonnette or tests derived from Bonnette in the FLSA joint employment context, ” id. at 140; see also Id. at 137 (“[C]ourts should not rely on the Bonnette factors in determining whether a worker constitutes an employee or independent contractor for purposes of the FLSA and analogous labor statutes.”), an admonition that appears to prohibit employing Zheng for the same purpose, see Id. at 136 (viewing the Zheng test as a “liberalized” version of the Bonnette test). After expressly prohibiting the use of Bonnette and similar tests, the Salinas court set forth its own list of six non-exhaustive factors a court should consider in determining whether two entities should be treated as joint employers for FLSA purposes. See Id. at 141-42. Regarding the second step of the two-step framework, the Salinas court reaffirmed Schultz's six-factor test, derived from Unites States v. Silk, 331 U.S. 704 (1947), abrogated in part on other grounds by Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992), in determining whether a worker constitutes an employee or independent contractor of the joint or separate employers. See Salinas, 848 F.3d at 137 n.7, 150.

         In Hall, the Fourth Circuit addressed, among other things, a district court's decision to first determine whether a plaintiff was an employee before determining whether the defendants were joint employers under the FLSA. See 846 F.3d at 766-67. Despite the express language in Schultz “recognize[ing] that in certain cases it may be necessary to first determine whether a party is an ‘employer' for FLSA purposes before determining whether a joint employment arrangement exists, ” 466 F.3d at 306 n.1, the Hall court nonetheless castigated the district court for “invert[ing] the two-step inquiry [the Fourth Circuit] ha[d] adopted in FLSA joint employment cases, ” 846 F.3d at 767; see also Id. at 769 (explaining that “the district court's inversion of the two-step Schultz framework alone would warrant reversal” and again castigating the district court for “compound[ing] its error by relying on Bonnette”). The Fourth Circuit concluded that courts “first must determine whether the defendant and one or more additional entities” were joint employers before proceeding to “the second step of the analysis-which asks whether a worker was an employee or independent contractor for purposes of the FLSA.” Hall, 846 F.3d at 767. It reasoned that the outcome of the second step “depends in large part upon the answer to the first step, ” because the key inquiry is “whether the two entities' combined influence over the terms and conditions of the worker's employment render the worker an employee as opposed to an independent contractor.” Id. Thus, “[f]ocusing first on the relationship between putative joint employers is essential to accomplishing the FLSA's . . . purpose.” Id.

         Here, as Plaintiffs assert (see ECF No. 125 at 71-88) and as Defendants acknowledge (see ECF No. 131 at 5-27) to some extent, the assessment of Plaintiffs' joint employer theory of liability under the FLSA must proceed under the two-step analysis reaffirmed in Salinas, and, in addressing the first step, the court must apply the non-exhaustive six-factor test set forth in Salinas and may not apply the tests set forth in Bonnette or Zheng. Accordingly, to the extent that Defendants argue that they are entitled to summary judgment on the ground that they were not joint employers of any Plaintiff under the application of the Bonnette and Zheng tests, the court DENIES their motion in this respect.

         Moreover, as the Fourth Circuit explained in Hall, the court may not first determine whether a worker is an employee of a putative joint employer before determining whether a joint employer arrangement exists. To do so would violate the principle emphasized by the Fourth Circuit that whether an employment relationship exists in the context of an alleged joint employer arrangement depends on the putative joint employers' combined influence over the terms and conditions of the work to be performed, rather than their separate influence. Accordingly, the court cannot agree with Defendants that, should the court conclude that certain Plaintiffs have failed to create a genuine dispute that they are not independent contractors of a third-party HSP, then, as a matter of law, Defendants cannot be joint employers of those Plaintiffs. Such an analysis inverses the two-step framework set forth in Salinas and Hall. Accordingly, to the extent that Defendants argue that they are entitled to summary judgment on the ground that they were not joint employers of certain Plaintiffs because those Plaintiffs were independent contractors of third-party HSPs, the court DENIES their motion in this respect.[2]

         The court declines, until after the hearing on Defendants' summary judgment motions, to decide whether Plaintiffs have adduced sufficient evidence to create a genuine dispute that Defendants jointly employ any of the Plaintiffs under the two-step framework articulated in Salinas and Hall.

         B. Knowledge of uncompensated work

         To succeed on a 29 U.S.C. § 207(a)(1) claim for uncompensated overtime wages, a plaintiff bears the burden of proving, as an element of the claim, that the employer had actual or constructive knowledge of the plaintiff's uncompensated overtime work. See Bailey v. Cnty. of Georgetown, 94 F.3d 152, 157 (4th Cir. 1996); Pforr v. Food Lion, Inc., 851 F.2d 106, 109 (4th Cir. 1988); Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir. 1986). This court has consistently applied this requirement to FLSA claims for uncompensated overtime wages, see MacGregor v. Farmers Ins. Exch., No. 2:10-cv-03088-DCN, 2014 WL 4199140, at *3 (D.S.C. Aug. 20, 2014); Martin v. Champion Window Co. of Columbia, LLC, No. 3:09-757-JFA, 2010 WL 412583, at *2 (D.S.C. Jan. 28, 2010), as have other district courts within the Fourth Circuit, see Brockdorff v. Wells Mgmt. Grp., LLC, No. 3:15cv137-HEH, 2015 WL 376241, at *4 (E.D. Va. June 15, 2015); Butler v. DirectSAT USA, LLC, 55 F.Supp.3d 793, 803 (D. Md. 2014); Porter v. Petroleum Transp., Inc., No. 2:10-cv-01384, 2012 WL 3835075, at *2 (S.D. W.Va. Sept. 4, 2012). Moreover, the knowledge element in the § 207(a)(1) uncompensated overtime wages context is premised on the FLSA's prerequisite that the plaintiff show that he was “employed” (meaning suffered or permitted to work, 29 U.S.C. § 203(g)) by the defendant, see Davis, 792 F.2d at 1276, a prerequisite also imposed in a 29 U.S.C. § 206(a)(1) claim for violation of the minimum wage requirement, see Sanchez v. Truse Trucking, Inc., 74 F.Supp.3d 716, 721 (M.D. N.C. 2014). Accordingly, to succeed on a § 206(a)(1) claim for violation of the minimum wage requirement, a plaintiff must prove that the defendant had actual or constructive knowledge of the plaintiff's work that forms the basis of his claim. See Porter, 2012 WL 2835075, at *2.

         Defendants assert that Plaintiffs have failed to adduce sufficient evidence to raise a genuine dispute that Defendants lacked actual or constructive knowledge of any uncompensated work performed by Plaintiffs and, therefore, that Defendants are entitled to summary judgment on all of Plaintiffs' wage-related claims. (See, e.g., ECF No. 87-1 at 22-23 (citing Hertz v. Woodbury Cnty., 566 F.3d 775, 782 (8th Cir. 2009); Whitaker v. Pac. Enters. Oil Co., 956 F.2d 1170, at *1 (10th Cir. 1992) (unpublished table disposition)).)[3] Defendants first assert Plaintiffs have not demonstrated actual knowledge of Plaintiffs' work hours because it is undisputed that Defendants did not monitor or record Plaintiffs' schedules and that they did not pay Plaintiffs and thus had no knowledge of the methods or rates of payment. (See, e.g., id. at 22.) Defendants also assert that Plaintiffs have not demonstrated constructive knowledge of Plaintiffs' work hours. (See, e.g., id.) Defendants argue that SIEBEL, the program used to issue and track the performance and completion of DirecTV work orders, is not a timekeeping or payroll system and that it would have been futile for Defendants to attempt to track the number of hours Plaintiffs worked using SIEBEL because the amount of hours each work order takes to complete varies. (See, e.g., id. at 22-23.)

         In response, Plaintiffs advance two arguments. First, Plaintiffs argue essentially that, when an alleged employer disavows the employment relationship and has made no attempt to monitor or record a putative employee's work hours, the requirement that the alleged employer have actual or constructive knowledge of the putative employee's uncompensated work hours should not apply. (See ECF No. 125 at 88 (citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686-87 (1946), superseded by statute on other grounds, Portal-to-Portal Act, Pub. L. No. 49-52, § 5, 61 Stat. 84, 87 (1947) (codified at 29 U.S.C. § 216(b))).) Second, Plaintiffs argue that they have adduced sufficient evidence regarding SIEBEL to raise a genuine dispute as to whether Defendants had knowledge of Plaintiffs' uncompensated work hours because SIEBEL tracked and reported the time at which technicians arrived at each job site and the expected total time it would take a technician to complete all work orders assigned in a day and because MasTec admitted that technicians rarely worked less than 40 hours per week. (See Id. at 21-22, 89 (citing ECF No. 125-4 at 90).)

         The court rejects Plaintiffs' first argument. The court emphasizes here that the knowledge requirement is derived from the FLSA's prerequisite for liability that the defendant employ the plaintiff and from the FLSA's definition of the term “employ.” See Davis, 792 F.2d at 1276-77. A plaintiff must prove that the defendant knew or should have known of the work performed precisely because doing so is integral to proving that the defendant employed plaintiff to do that work for purposes of FLSA liability. Id.; see also Porter, 2012 WL 2835075, at *2; Darrikhuma v. Southland Corp., 975 F.Supp. 778, 783 (D. Md. 1997). A conclusion that a plaintiff is not required to prove a defendant's actual or constructive knowledge that plaintiff performed the work amounts to a conclusion that the plaintiff need not prove that the defendant suffered or permitted the work to be done, even when (or specifically because) the defendant disputes that it employed the plaintiff. Such a conclusion is untenable because it presumes from the outset that the defendant employed plaintiff and places on defendant the burden to disprove that presumption, a result not contemplated by FLSA jurisprudence and one that, in fact, upends FLSA analysis. See Pforr, 851 F.2d at 109 (“[T]his burden is squarely upon the plaintiff; a defendant . . . is not required to show lack of knowledge as an affirmative defense.”); Davis, 792 F.2d at 1277 (“Nothing . . . in the [FLSA] itself treats the lack of employer knowledge as an affirmative defense to be raised and proved by the employer.”). Accordingly, the court cannot accept an argument that is premised on this legal conclusion.

         Plaintiffs' reliance on Mt. Clemens in this regard is misplaced. As the Fourth Circuit explained when faced with a similar argument regarding the knowledge requirement, Mt. Clemens

was squarely directed at the issue of what evidence an employee must introduce to establish the extent of his overtime work when his employer has kept inadequate records. Employer knowledge was not an issue in that case. Nothing in Mt. Clemens . . . treats the lack of employer knowledge as an affirmative defense to be raised and proved by the employer. The [FLSA] requires the plaintiff to prove that he was “employed” by the defendant, and that means proof that the defendant knew or should have known that the plaintiff was working overtime for the employer.

Davis, 792 F.2d at 1277 (internal citation omitted); see also Craig v. Bridges Bros. Trucking, LLC, 823 F.3d 382, 391-92 (6th Cir. 2016) (warning against “conflat[ing] the issues” by equating Mt. Clemens' standard for proving that a plaintiff performed the work with the standard of proving that a defendant had actual or constructive knowledge of the work). Aside from Mt. Clemens, which is inapposite, Plaintiffs point to no other authority supporting the proposition that an FLSA plaintiff need not prove the defendant's actual or constructive knowledge of the work when the defendant disputes that it employed the plaintiff and has not attempted to monitor or record the plaintiff's work. Because this proposition otherwise has no support in law, the court rejects it and will not further entertain Plaintiffs' arguments in this vein.

         The court declines to address the parties' other argument-concerning whether Plaintiffs have adduced sufficient evidence of Defendants' knowledge-until after the hearing.

         C. Retail or service establishment overtime wages exemption

         The FLSA provides an exemption from § 207(a)'s overtime wage requirement for qualifying employers that employ the employee in “a retail or service establishment.” 29 U.S.C. § 207(i).[4] Aside from the threshold requirement that the employer employ the employee in a retail or service establishment, exemption from the overtime wages requirement under § 207(i) is applicable only

if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under section 206 . . ., and (2) more than half his compensation for a representative period (not less than one month) represents commissions on goods or services.

Id.

         Because the FLSA “is ‘remedial and humanitarian in purpose' reflecting an intent by Congress to protect broadly the ‘rights of those who toil, '” Morrison v. Cnty. of Fairfax, 826 F.3d 758, 761 (4th Cir. 2016) (quoting Tenn. Coal, Iron & R.R. v. Muscoda Local No. 123, 321 U.S. 590, 597 (1944)), “courts are to construe the FLSA liberally, ‘recognizing that broad coverage is essential' to accomplishing the statute's goals, ” id. (quoting Tony & Susan Alamo Found. v. Sec'y of Labor, 471 U.S. 290, 296 (1985)); see also Purdham v. Fairfax Cnty. Sch. Bd., 637 F.3d 421, 427 (4th Cir. 2011) (“[T]he Supreme Court has cautioned that the FLSA ‘must not be interpreted or applied in a narrow, grudging manner[.]'” (quoting Tenn. Coal, 321 U.S. at 597)). For these reasons, “FLSA exemptions . . . ‘are to be narrowly construed against the employers seeking to assert them' and applied only in instances ‘plainly and unmistakably with the exemptions' terms and spirit.'” Morrison, 826 F.3d at 761 (internal quotation marks omitted) (quoting Desmond v. PNGI Charles Town Gaming, L.L.C., 564 F.3d 688, 692 (4th Cir. 2009) (“Desmond I”)); see Arnold v. Ben Kanowsky, Inc., 361 U.S. 388 (1960). Thus, although the Fourth Circuit does not appear to have confronted the exemption set forth in § 207(i), in general, employers asserting an exemption bear the burden to “prove the application of the exemption by clear and convincing evidence.” Calderon v. GEICO Gen. Ins. Co., 809 F.3d 111, 121 (4th Cir. 2015) (citing Desmond I, 564 F.3d at 691 n.3); see also Schmidt v. Charleston Collision Holdings Corp., No. 2:14-cv-01094-PMD, 2015 WL 3767436, at *5 (D.S.C. June 17, 2015) (applying clear and convincing evidence standard to employer's assertion of § 207(i) exemption); Herrera v. TBC Corp., 18 F.Supp.3d 739, 741-42 (E.D. Va. 2014) (same after noting circuit split).

         In the court's estimation, Defendants' argument that there is no genuine dispute that the § 207(i) exemption applies to them fails at the threshold issue of whether they employed Plaintiffs in a retail or service establishment, so the court limits its discussion in this order to this threshold issue.[5] Defendants, asserting the § 207(i) exemption against all Plaintiffs except Gleaton, Naves, and Pegues (see ECF No. 87-1 at 24-25; ECF No. 88-1 at 22-24; ECF No. 90-1 at 22-23; ECF No. 91-1 at 23-24; ECF No. 92-1 at 23-24; ECF No. 93-1 at 23-24; ECF No. 94-1 at 24-26; ECF No. 96-1 at 25-26; ECF No. 97-1 at 24-26; ECF No. 98-1 at 26-27; ECF No. 99-1 at 28-30), [6] rely heavily on Matrai v. DirecTV, LLC, 168 F.Supp.3d 1347 (D. Kan. 2016), (see, e.g., ECF No. 87-1 at 24-25). Noting first that § 207(i) does not define the term “retail or service establishment, ” the Matrai court outlined two tests that courts have used in determining whether an employer employs an employee in a retail or service establishment for purposes of § 207(i). See Matrai, 168 F.Supp.3d at 1359-62. The first test relies on the definition of “retail or service establishment” provided in the since-repealed 29 U.S.C. § 213(a)(2) and the case law and Department of Labor regulations emanating therefrom. See Matrai, 168 F.Supp.3d at 1359-60. Under this test, a “retail or service establishment” means an establishment with at least 75% of its annual dollar volume of goods or services being (1) not available for resale and (2) recognized as retail sales or service in the particular industry. See Id. at 1359 (citing 29 C.F.R. § 779.411); see also Schultz v. W.R. Hartin & Son, Inc., 428 F.2d 186, 187 n.3 (4th Cir. 1970). The second test, developed by the Seventh Circuit in Alvarado v. Corp. Cleaning ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.