Costello v. Home Depot USA, Inc., Civil Action No. 3:11–CV–953 (JCH).

• Decision Date: 13 May 2013
• Docket Number: Civil Action No. 3:11–CV–953 (JCH).
• Citation: 944 F.Supp.2d 199
• Parties: James COSTELLO and Aron Moore, Plaintiffs, v. HOME DEPOT USA, INC., Defendant.
• Court: U.S. District Court — District of Connecticut

944 F.Supp.2d 199

James COSTELLO and Aron Moore, Plaintiffs,

v.HOME DEPOT USA, INC., Defendant.

Civil Action No. 3:11–CV–953 (JCH).

United States District Court,

D. Connecticut.

May 13, 2013.

Caitlin Duffy, Olimpio Lee Squitieri, Squitieri & Fearon, New York, NY, Mark P. Kindall, Robert A. Izard, Jr., Izard Nobel, LLP, West Hartford, CT, for Plaintiffs.

David Seth Poppick, Kathryn Elizabeth White, Epstein, Becker & Green, P.C., Stamford, CT, Joel M. Cohn, Ray E. Donahue, Akin, Gump, Strauss, Hauer & Feld, Washington, DC, Patrick G. Brady, Epstein, Becker & Green, PC, Newark, NJ, for Defendant.

RULING RE: PLAINTIFFS' RENEWED MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. No. 90)

JANET C. HALL, District Judge.

I. INTRODUCTION

Plaintiffs James Costello and Aron Moore bring this action against defendant Home Depot U.S.A., Inc. (“Home Depot”), alleging that they were not paid for overtime work in violation of the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. § 207, because they were misclassified as “exempt” employees. Plaintiffs filed this Renewed Motion for Partial Summary Judgment as to the proper method of determining overtime (“Pls.' Mot. Renewed Partial Summ. J.”) (Doc. No. 90).

This Motion was filed the same day as Home Depot's Motions for Summary Judgment as to the claims against it (Doc. Nos. 93, 98). Soon thereafter, the parties filed a Joint Motion to Adjourn the Briefing Deadlines as to this Renewed Motion for Partial Summary Judgment (Doc. No. 103) pending resolution of Home Depot's Motions for Summary Judgment. That Motion was granted. See Doc. No. 104. On March 5, 2013, 928 F.Supp.2d 473, 2013 WL 837586 (D.Conn.2013), the court denied Home Depot's Motions for Summary Judgment (Doc. No. 120) and ordered the resumption of the briefing schedule regarding the instant Renewed Motion for Partial Summary Judgment.

For the following reasons, the court grants in part the Renewed Motion for Partial Summary Judgment.

II. STANDARD OF REVIEW

A motion for summary judgment “may properly be granted ... only where there is no genuine issue of material fact to be tried, and the facts as to which there is no such issue warrant judgment for the movingparty as a matter of law.” In re Dana Corp., 574 F.3d 129, 151 (2d Cir.2009). Thus, the role of a district court in considering such a motion “is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists.” Id. In making this determination, the trial court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268, 274 (2d Cir.2009).

“[T]he moving party bears the burden of showing that he or she is entitled to summary judgment.” United Transp. Union v. Nat'l R.R. Passenger Corp., 588 F.3d 805, 809 (2d Cir.2009). Once the moving party has satisfied that burden, in order to defeat the motion, “the party opposing summary judgment may not merely rest on the allegations or denials of his pleading; rather his response, by affidavits or otherwise as provided in the Rule, must set forth ‘specific facts' demonstrating that there is ‘a genuine issue for trial.’ ” Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009) (quoting Fed.R.Civ.P. 56(e)). “A dispute about a ‘genuine issue’ exists for summary judgment purposes where the evidence is such that a reasonable jury could decide in the non-movant's favor.” Beyer v. County of Nassau, 524 F.3d 160, 163 (2d Cir.2008) (quoting Guilbert v. Gardner, 480 F.3d 140, 145 (2d Cir.2007)); see also Havey v. Homebound Mortg., Inc., 547 F.3d 158, 163 (2d Cir.2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)) (stating that a non-moving party must point to more than a mere “scintilla” of evidence in order to defeat a motion for summary judgment).

III. FACTUAL BACKGROUND

James Costello and Aron Moore were each employed by Home Depot as an Assistant Store Manager (“ASM”). See Plaintiffs' Local Rule 56(a)(1) Statement (“Pls.' 56(a)(1)”) (Doc. No. 92) at ¶ 1; Defendant's Local Rule 56(a)(2) Statement (“Def.'s 56(a)(2)”) (Doc. No. 123) at ¶ 1. Home Depot did not pay plaintiffs overtime while they were employed as ASMs. Pls.' 56(a)(1) at ¶ 2; Def.'s 56(a)(2) at ¶ 2. While plaintiffs were employed as ASMs, Home Depot paid plaintiffs on a salary basis for all hours worked in a work week regardless of the number of hours they worked. Id.

When Costello was promoted to ASM, he did not negotiate his salary. Pls.' 56(a)(1) at ¶ 3; Def.'s 56(a)(2) at ¶ 3. The parties do not appear to dispute that Costello never discussed whether his salary included an overtime premium for the hours he was expected to work over 40, but do appear to dispute whether this implies that Costello did not understand whether he would be paid overtime. Id. When Moore was hired as an ASM, his salary was not negotiated, and there was no discussion of whether his salary included an overtime premium, although the parties appear to dispute whether this implies that Moore did not understand whether or not he would be paid overtime. Pls.' 56(a)(1) at ¶ 4; Def.'s 56(a)(2) at ¶ 4.

While plaintiffs were employed as ASMs, Home Depot classified plaintiffs as exempt from overtime pay under the executive exemption provided by the FLSA and parallel state and commonwealth laws. Pls.' 56(a)(1) at ¶ 5; Def.'s 56(a)(2) at ¶ 5.¹In determining the exempt status of the ASM position, Home Depot relied, at least in part, on the job description. Pls.' 56(a)(1) at ¶ 6; Def.'s 56(a)(2) at ¶ 6. The parties dispute whether they had a contractual agreement that limited the number of hours plaintiffs worked as ASMs. Pls.' 56(a)(1) at ¶ 7; Def.'s 56(a)(2) at ¶ 7.² The parties also dispute whether the plaintiffs were required to work 55 hours per week, or whether the plaintiffs were merely generally scheduled to work 55 hours per week and could realistically expect an average work week to last 55 hours. Pls.' 56(a)(1) at ¶ 7; Def.'s 56(a)(2) at ¶ 7.

The parties dispute whether Moore ever worked less than 40 hours per week, and whether he averaged between 60 and 70 hours of work a week. Pls.' 56(a)(1) at ¶ 8; Def.'s 56(a)(2) at ¶ 8.³ The parties dispute whether Costello ever worked less than 40 hours per week, and whether he averaged between 60 and 80 hours of work per week. Pls.' 56(a)(1) at ¶ 9; Def.'s 56(a)(2) at ¶ 9. ⁴

Home Depot did not pay the plaintiffs any overtime for any hours worked over 40 hours in a week. Pls.' 56(a)(1) at ¶ 10; Def.'s 56(a)(2) at ¶ 10. The parties dispute whether Home Depot calculated a regular rate of pay for the plaintiffs and, if it did, whether it used a 40 hour work week as a measure for doing so. Pls.' 56(a)(1) at ¶ 11; Def.'s 56(a)(2) at ¶ 11.

Home Depot asserts that its business is seasonal and that the hours ASMs work fluctuates. Def.'s 56(a)(2), Disputed Issues of Material Fact at ¶ 6–7.

IV. DISCUSSION

The sole issue before the court is the proper method for calculating the amount of overtime owed to the plaintiffs if, indeed, a jury determines that the plaintiffs were misclassified as exempt from the FLSA. The plaintiffs argue that the FLSA requires that all hours worked beyond the standard forty-hour workweek must be compensated at one-and-a-half times their regular rate of pay for hours worked beyond forty per week (the “time-and-a-half method”), with the regular rate of pay calculated at their weekly salary divided by forty hours. See Plaintiffs' Memorandum in Support of Renewed Motion for Partial Summary Judgment (“Pls.' Memo. Renewed Partial Summ. J.”) (Doc. No. 91) at 1, 15. They further argue that misclassification cases are categorically different from other types of FLSA cases, and that they, by definition, cannot be subject to an alternative method of calculating damages. Id. at 6–17. It is undisputed here that Home Depot classified the plaintiffs as exemptfrom the FLSA, and that no overtime has been paid to them.

A. Method of Calculation

Home Depot argues that the time-and-a-half method is not the exclusive means of calculating damages in misclassification cases. See Defendant's Memorandum in Opposition to Renewed Motion for Partial Summary Judgment (“Def.'s Memo. Renewed Mot. Partial Summ. J.”) (Doc. No. 122) at 1. Instead, Home Depot asserts that in cases where, as here, the employee and the employer have entered into an agreement whereby the parties have a “clear mutual understanding” that the employee will receive a fixed salary intended to cover all hours worked, the employee has actually already been compensated for the “time” portion of “time-and-a-half” for all of the hours that employee worked. As such, only the remaining “half” needs to be paid back as missed overtime. See id. This is commonly referred to as the “half-time” method.

In order to understand why these assertions are at odds in the misclassification context, it is important to provide some background. In general, the FLSA provides that an employee who works more than forty hours in a given week is entitled to compensation at “one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a). Notably, this FLSA provision was not intended to encourage workers to seek the financial benefits of overtime work. See Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 577–78, 62 S.Ct. 1216, 86 L.Ed. 1682 (1942). Rather, it was intended to make use of overtime more expensive from employers, in the hopes that the additional cost of using overtime workers would spur companies to hire additional employees to do the extra work, because a new worker would get paid at the cheaper regular rate. See id. (“[A]lthough overtime was not flatly prohibited, financial pressure was applied to spread employment to avoid the extra wage and workers were assured additional pay to compensate them for the burden of a workweek beyond the hours fixed in the act. In a...