Casanova v. Gold's Tex. Holdings Grp., Inc.
| Decision Date | 23 March 2016 |
| Docket Number | No. 5:13-CV-1161-DAE,5:13-CV-1161-DAE |
| Parties | DANIEL CASANOVA and TIFFANY SAUL, individually and on behalf of all others similarly situated, Plaintiffs, v. GOLD'S TEXAS HOLDINGS GROUP, INC., Defendant. |
| Court | U.S. District Court — Western District of Texas |
Before the Court are two motions: (1) a Motion for Partial Summary Judgment filed by Daniel Casanova and Tiffany Saul, individually and on behalf of all others similarly situated (collectively, "Plaintiffs") (Dkt. # 64); and (2) a Motion for Summary Judgment filed by Gold's Texas Holdings Group, Inc. ("Defendant" or " Gold's Gym") (Dkt. # 65). On March 21, 2016, the Court heard oral argument on the cross motions: Lawrence Morales II, Esq., appeared on behalf of Plaintiffs and Carrie Hoffman, Esq., appeared on behalf of Defendant. After careful consideration of the supporting and opposing memoranda and the arguments presented at the hearing, the Court, for the reasons that follow, GRANTS Plaintiffs' Motion for Partial Summary Judgment (Dkt. # 64) and DENIES Defendant's Motion for Summary Judgment (Dkt. # 65).
This case concerns the applicability of an exemption contained in the Fair Labor Standards Act ("FLSA"), codified as 29 U.S.C. § 207(i). Section 207(i) exempts certain employers from having to pay employees overtime for hours worked in excess of 40 per week where, inter alia, more than half of an employee's compensation represents commissions on goods or services. See 29 U.S.C. § 207(i)(2). The question before the Court is whether the compensation plan for trainers at Gold's Gym qualifies as a commission under the exemption.
On December 22, 2013, Plaintiffs filed suit on behalf of themselves and all others similarly situated. (Dkt. # 1.) Plaintiffs are past and present personal trainers employed by Gold's Gym. (Id.) Plaintiffs' complaint alleges that Gold's Gym violated the FLSA, 29 U.S.C. § 201 et seq., by improperly classifying them and other personal trainers as exempt from the FLSA and not paying them time and one half for hours worked in excess of 40 hours per week. (Id. ¶ 1.) On November 19, 2014, this Court issued an order granting conditional class certification. (Dkt. # 24.) Subsequently, over eighty individuals have opted into the conditional class.
Defendant operates forty-one full-service gyms throughout Texas and employs personal trainers to assist gym members improve their physical fitness. ("Copeland Decl.," Dkt # 65-1 ¶ 6-10.) A trainer's primary responsibility includes "providing customized fitness programs to the customer that include education and guidance on proper nutrition, cardiovascular exercise, resistance training and other programs to help the member achieve their fitness goals." ("Job Description," Dkt. # 65, Ex. 1-B.)
Trainers are compensated in two different ways. First, trainers are assigned a certain number of hours per week to work on the floor of the gym. ("Code of Conduct," Dkt. # 64, Ex. 1.) These hours are commonly referred to as "floor hours" or "blue hours." ("Copeland Dep.," Dkt. # 64, Ex. 3 at 11:6-25.) For each hour worked on the floor, the trainer receives a fixed hourly rate. (Code of Conduct.) During floor hours, a trainer performs a variety of tasks that include assisting gym members while they work out, re-racking weights, completing administrative work, assisting in selling personal training sessions to gym members, and conducting gym orientations for new members. (Copeland Dep. at 78:2-13.) Each gym, however, has a limited number of "floor hours" based on budget constraints. (See Copeland Dep. at 61-62.) Generally, "floor hours" comprise a relatively small amount of a trainer's overall compensation package.
The primary basis of a trainer's compensation comes from conducting personal training sessions with members. (Code of Conduct.) Under this portion of the compensation package, trainers receive a percentage of the price charged to a gym member for each personal training session that the trainer actually conducts. (Code of Conduct.) The only exception to this compensation scheme, whereby a trainer receives a percentage of the training session price without conducting a session, occurs where the member cancels the session within a 24-hour window or the member does not attend the session. (Copeland Dep. at 24:19-25.) Otherwise, a trainer must conduct the personal session to earn the percentage of the price. In general, the length of each session is one hour. (Id. at 77:3-7.) Accordingly, the more sessions a trainer conducts, the more that trainer would earn. (Id. at 26:1-11.)
The price range of a personal training session is set by Gold's Gym, but trainers negotiate within that range with gym members for the actual price charged, based on a variety of factors, including the type of session sold (i.e. a bootcamp, one-on-one, or small group session), the number of sessions a gym member purchases, the trainer's certification level, and whether the gym member is new. (Copeland Dep. at 22:17-25.) The percentage that a trainer would receive as compensation for each session is based on two elements: (1) the amount of national certifications and specialty certificates the trainer possessed; and (2) the amount ofsessions a trainer conducts in a bi-weekly pay period. ("2013 Incentive Pay Understanding1," Dkt. # 65, Ex. 1 at 16.) In 2013, trainers at Gold's Gym received the following percentages for sessions they conducted:
Bi-Weekly Count Title Count Payout Count Payout Fitness Coach Any 35% Fitness Specialist 1 Any 35% Fitness Specialist 2 0-29 40% 30+ 45% Fitness Specialist 3 0-39 45% 40+ 50% Fitness Expert 0-49 55% 50+ 60%
(Id.) Trainers earn different titles, and thus a higher percentage of the training session price, by becoming more skillful. Gold's Gym set out the following standards for a trainer to increase his or her earning capacity:
| Title/Classification |
| Certifications Required |
| Fitness Coach |
| 1 National Certification |
| Fitness Specialist 1 |
| 1 National Certification and 2 Specialties |
| Fitness Specialist 2 |
| 1 National Certification and 2 Specialties |
| Fitness Specialist 3 |
| 1 National Certification and 2 Specialties |
| Fitness Expert |
| 2 National Certification and 3 Specialties |
(Id.) According to this payment structure, for example, a Fitness Expert would receive 55% of the price paid by a gym member for the first 49 sessions that Fitness Expert conducted in a bi-weekly pay period. (Id.) For each session over50 in a given pay period, that Fitness Trainer would receive 60% of the price paid by the gym member upon conducting that session with the member. (Id.; Copeland Dep. at 16:6-10.) Apparent from the charts, trainers can increase the percentage they receive per session that they service by earning more certifications and specialties.
Finally, in addition to being paid in the manner just described, up until 2012, trainers were also eligible to receive a flat percentage of their volume of sales of membership packages and personal training sessions. (Dkt. 64-2 at 1.) Under this model, trainers did indeed receive a percentage of the sale for a personal training session upon executing the sale. (Copeland Dep. at 33:18-22.) However, starting in 2012, Gold's Gym rolled out a new compensation system that stated "[t]rainers are not eligible for sales commissions." (Id. at 3; see also Copeland Dep. 33:1-25; 34:1-3.) Under this compensation method, "[a]ll [t]rainers [were] paid for sessions serviced." (Dkt. # 64-2 at 3.) Therefore, the only method of compensation for personal trainers was by working "floor hours" at a set rate and servicing personal training sessions at each trainer's relevant percentage rate.
A court must grant summary judgment when "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 Meadaa v. K.A.P.Enterprises, L.L.C., 756 F.3d 875, 880 (5th Cir. 2014). "Substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is only genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id.
In seeking summary judgment, the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets this burden, the nonmoving party must come forward with specific facts that establish the existence of a genuine issue for trial. Distribuidora Mari Jose, S.A. de C.V. v. Transmaritime, Inc., 738 F.3d 703, 706 (5th Cir. 2013) (quoting Allen v. Rapides Parish Sch. Bd., 204 F.3d 619, 621 (5th Cir. 2000)). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Hillman v. Loga, 697 F.3d 299, 302 (5th Cir. 2012).
In deciding whether a fact issue has been created, "the court must draw all reasonable inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Kevin M. Ehringer Enters. v. McData Servs. Corp., 646 F.3d 321, 326 (5th Cir. 2011) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)). However, "[u]nsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment." United States v.Renda Marine, Inc., 667 F.3d 651, 655 (5th Cir. 2012) (quoting Brown v. City of Hous., 337 F.3d 539, 541 (5th Cir. 2003)).
Gold's Gym argues that its compensation plan is a commission because it is based on a percentage of the amount charged to the customer, not a flat rate per hour. (Dkt. # 67 at 10.) Gold's Gym further argues that its compensation plan represents a...
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