Buber v. GrowersHouse LLC
| Decision Date | 24 February 2023 |
| Docket Number | CV-20-00219-TUC-RM |
| Parties | Satchidananda Buber, et al., Plaintiffs, v. GrowersHouse LLC, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Plaintiffs Satchidananda Buber (“Buber”) and Joseph Trejo (“Trejo”) brought this action pursuant to the Fair Labor Standards Act (FLSA), arguing that Defendants misclassified them as exempt and failed to pay them overtime wages as required under the FLSA and Arizona state law. Pending before the Court is Defendants' Motion for Summary Judgment. (Doc. 70.) Plaintiff's responded in opposition (Doc. 74), Defendants replied (Doc. 78), and the Motion is fully briefed. For the following reasons, the Motion will be denied.
A court must grant summary judgment “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); see also Celotex Corp. v Catrett, 477 U.S. 317, 322-23 (1986). The movant bears the initial responsibility of presenting the basis for its motion and identifying those portions of the record, together with affidavits, if any, that it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323.
If the movant fails to carry its initial burden of production, the nonmovant need not produce anything. Nissan Fire & Marine Ins. Co. v. Fritz Co., 210 F.3d 1099, 110203 (9th Cir. 2000). But if the movant meets its initial responsibility, the burden shifts to the nonmovant to demonstrate the existence of a factual dispute and to show (1) that the fact in contention is material, i.e., a fact that might affect the outcome of the suit under the governing law, and (2) that the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 250 (1986); see Triton Energy Corp. v. Square D. Co., 68 F.3d 1216, 1221 (9th Cir. 1995). The nonmovant need not establish a material issue of fact conclusively in its favor, First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 28889 (1968); however, it must “come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal citation omitted); see Fed.R.Civ.P. 56(c)(1).
At summary judgment, the Court's function is not to weigh the evidence and determine the truth but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. Pure questions of law, where there is no disputed issue of fact, are appropriate for summary judgment. Schrader v. Idaho Dep't of Health & Welfare, 768 F.2d 1107, 1110 (9th Cir. 1985). “The inquiry performed is the threshold inquiry of determining whether there is the 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. “[T]his standard mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a), which is that the trial judge must direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict.” Id. (internal citation omitted). In its analysis, the Court must accept the nonmovant's evidence and draw all inferences in the nonmovant's favor. Id. at 255. The Court need consider only the cited materials, but it may consider any other materials in the record. Fed.R.Civ.P. 56(c)(3).
Plaintiffs brought this action against Defendants GrowersHouse LLC, GG Growth LLC, Nathan Lipton (“Lipton”), Paul Lipton, and their spouses, collectively Defendants,[1]under the FLSA. (Doc. 1.) Plaintiffs allege that Defendants unlawfully misclassified them as exempt under the FLSA and thus failed to pay them overtime wages pursuant to federal and Arizona state law. (Id.)[2] Plaintiffs allege that they should have been classified as non-exempt employees under the FLSA and therefore should have received overtime pay at a rate not less than one and one-half times (1.5x) their regular rate of pay for hours worked in excess of 40 hours per workweek. (Id. at 7.) Plaintiffs allege that their weekly hours exceeded 40 hours and that they did not receive overtime pay for the additional hours. (Id.) Plaintiffs allege that Defendants' violation of the FLSA was willful and that Defendants either knew or recklessly disregarded whether their conduct violated the FLSA. (Id. at 8.) They also allege violations of the applicable Arizona wage statutes requiring overtime pay for hours worked in excess of 40 hours per workweek. (Id. at 8-9.) Essentially, this is a straightforward overtime wage dispute, wherein Plaintiffs contend that they should have been compensated at the standard rate for their overtime hours under the FLSA, while Defendants contend that Plaintiffs were properly classified as exempt employees and therefore were not owed overtime wages for any work they performed in excess of 40 hours per workweek.
Plaintiffs were employed as commercial account managers at GrowersHouse, a hydroponics supplies and indoor gardening center with an online and retail store based in Tucson, Arizona.[3] (Doc. 71 at 1-2, DSOF ¶ 1.) GrowersHouse classified its retail and customer service division employees as non-exempt under the FLSA, while commercial division employees were classified as exempt, purportedly based on the higher levels of discretion, responsibility, and independent judgment involved in commercial sales and account management. (DSOF ¶ 3; PSOF ¶ 3.)[4] Both Plaintiffs were originally hired as customer service or sales representatives earning an hourly wage. (DSOF ¶¶ 4, 5, 10, 11.) Buber was hired in 2016; in 2017 he began managing commercial accounts and receiving a fixed annual salary. (DSOF ¶ 5.) Trejo was hired in 2014; in 2015 he began managing commercial accounts and receiving a fixed annual salary. (DSOF ¶ 11.) From August 4, 2017, until June 25, 2020, Buber's base salary was between $40,000 and $60,000 per year, and he received additional annual bonuses that increased his salary to as high as $82,862.92 in 2019. (DSOF ¶¶ 6, 9.)[5] From December 9, 2015 until June 25, 2020, Trejo's base salary was between $48,000 and $66,950 per year, and he received additional annual bonuses that increased his salary to as high as $68,109.20 in 2017. (DSOF ¶¶ 12, 15.)
The parties present significant disputes concerning the precise nature of Plaintiffs' job duties and responsibilities. According to Defendants, Buber and Trejo's duties included “overseeing the performance and success of assigned outside partners,” “maximizing gross profit performance,” and establishing and building relationships with customers by “streamlining communication, providing solutions based on product and industry knowledge, and building trust.” (DSOF ¶¶ 17-18.) Defendants further state that Plaintiffs were responsible for developing, tracking, and managing “positive direct relationships with commercial scale producers, outside partners, and design-build professionals” and served as “the face of the company” by representing GrowersHouse in “direct dealings with customers, vendors, and collaborators.” (DSOF ¶¶ 28-29.) Defendants state that Plaintiffs “managed all orders to cash activity for assigned accounts,” including “product creation, product selection, price quoting, order entry, submitting purchase orders, scheduling freight and logistics, customer invoicing, payment notifications, and account followups.” (DSOF ¶ 32.) Defendants state that Plaintiff's “had discretion with respect to how to accept payment” because payment fraud is an issue in the cannabis industry, and that Plaintiffs managed logistics for shipping orders, including coordinating with vendors and freight carriers to quote and book shipping for large orders being shipped significant distances. (DSOF ¶¶ 35-36.) Defendants state that Plaintiffs were responsible for “resolving conflicts and providing solutions to customers;” as an example, Defendant cites an instance where a customer received damaged lights and Trejo exercised discretion to ship replacement lights before receiving the return, even though GrowersHouse policy was to receive the returned product before shipping a replacement. (DSOF ¶ 37.) Defendants state that Plaintiffs “assessed, determined, and implemented all account specific pricing by reviewing costs and anticipating volumes” and that they analyzed customer supply needs and identified new opportunities for products and vendor partners, including adding products to the GrowersHouse catalogue. (DSOF ¶¶ 38-39, 41-42.) According to Defendants, these responsibilities included adding products to the enterprise resource planning, or ERP, software, called Brightpearl, which involved “determining pricing and margins for the company.” (DSOF ¶¶ 41, 42.) Defendants state that Plaintiffs were involved in “directly negotiating better volume pricing and terms,” “had discretion to deviate from general guidelines reading pricing margins,” and “were authorized to represent GrowersHouse” in negotiations involving pricing with new vendors and committing to doing a certain volume of sales per year. (DSOF ¶¶ 40, 42, 43.) Defendants state that Plaintiffs worked with sales leadership to “develop and implement region specific campaigns and sales strategies,” “converted inbound leads to purchasing accounts,” and make suggestions for improving sales performance and growth. (DSOF ¶¶ 44-46.) Defendants aver that both Buber and Trejo were responsible for supervising other sales employees until a Sales Director was...
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