Cowan v. Treetop Enterprises, Inc.

• Decision Date: 27 August 1999
• Docket Number: No. 3:98-0623.,3:98-0623.
• Citation: 120 F.Supp.2d 672
• Parties: James COWAN, et. al. v. TREETOP ENTERPRISES, INC. et al.,
• Court: U.S. District Court — Middle District of Tennessee

120 F.Supp.2d 672

James COWAN, et. al. v. TREETOP ENTERPRISES, INC. et al.,

No. 3:98-0623.

United States District Court, M.D. Tennessee. Nashville Division.

August 27, 1999.

COPYRIGHT MATERIAL OMITTED

Trevor Wayne Howell, R. Scott Jackson, Jr., Howell & Jackson, PLLC, Nashville, TN, for plaintiffs.

Hugh C. Howser, Jr., Charles Eric Stevens, Kara E. Shea, Miller & Martin, LLP, Nashville, TN, for defendants.

MEMORANDUM

HIGGINS, District Judge.

The plaintiffs, James Cowan, Andrew McMahan, Timothy Harper and Patricia Morton, filed this action under the Fair Labor Standards Act, 29 U.S.C. § 216(b), on behalf of themselves and all others similarly situated,¹ against the defendants: Treetop Enterprises, Inc., their current or former employer; and James L. Shaub, II, and William (Billy) E. Ezell, III, officers and stockholders of Treetop.² In essence, the plaintiffs allege that as current or former unit managers at Treetop's restaurants, the defendants have deemed them bona fide executive employees who are exempt from FLSA's overtime pay requirements. The plaintiffs assert that in actuality, the primary duty of the unit manager is being a grill operator or cook on the first shift and that in fact, unit managers are regular employees and entitled to overtime for the substantial number of hours worked each week beyond FLSA's 40-hour limit without overtime compensation.

Pending before the Court are the following motions filed January 11, 1999:(1) the plaintiffs' motion for partial summary judgment (Docket Entry No. 168); (2) the defendants' motion for summary judgment (Docket Entry No. 174); and (3) the defendant Treetop's motion for oral argument (Docket Entry No. 178); as well as the plaintiffs' motion (filed February 1, 1999; Docket Entry No. 180) to strike the defendants' expert report and the defendants' motion (filed March 12, 1999; Docket Entry No. 201) to supplement the record.

For the reasons stated below, the plaintiffs' motion to strike shall be granted. The defendants' motion to supplement the record shall granted. The defendant Treetop's motion for oral argument shall be denied as moot. The plaintiffs' motion for partial summary judgment and the defendants' motion for summary judgment shall be granted in part and denied in part.

I.

Under a franchise agreement with Waffle House, Inc., Treetop owns and operates 103 Waffle House restaurants, some of which are in Tennessee, Alabama, Mississippi and Kentucky. Each restaurant unit is a separate facility of 1,750 square feet and seats approximately 33 to 46 customers. Plaintiffs' response (filed February 1, 1999; Docket Entry No. 184) to defendants' statement of undisputed facts, ¶¶ 6-8. The restaurants have three shifts: 7:00 a.m. to 2:00 p.m., 2:00 p.m. to 9:00 p.m. and 9:00 p.m. to 7:00 a.m.; but the first shift is the busiest and most profitable and yields 50 percent of all sales in the restaurants. Affidavit of William E. Ezell, III (filed January 11, 1999; Docket Entry No. 175) ¶ 12.³

Under its organizational structure, Treetop assigns a unit manager to each restaurant. Each unit manager is supported by a district relief manager who substitutes for the unit manager on the unit manager's days off. Id., ¶ 10. The parties agree that the duties and responsibilities of unit managers and district relief managers are identical. Plaintiffs' response (Docket Entry No. 184) ¶ 9. The unit managers report directly to a district manager who usually has responsibility for three restaurant units in a defined geographical area. Treetop currently has 30 district managers who supervise unit managers and workers in the restaurants. Ezell affidavit (Docket Entry No. 175) ¶ 10.

A district manager reports to a division manager who has responsibility for nine restaurants generally in three districts. Treetop currently has twelve division managers. Plaintiffs' response (Docket Entry No. 184) ¶ 13, 14. A division manager, in turn, reports to a regional manager, who generally has responsibility for 25 to 30 restaurants in a defined geographical area. Plaintiffs' response (Docket Entry No. 184) ¶ 15. However, currently Treetop has only one regional manager who is responsible for 15 restaurants, and the remaining restaurants do not have regional managers. Plaintiffs' notice (Docket Entry No. 173), James Shaub deposition at 82-83; plaintiffs' notice (Docket Entry No. 172), Deposition Exhibit 54. The regional managers report to area managers who report directly to the president and chief operating officer of Treetop. Plaintiffs' response (Docket Entry No. 184) ¶ 16.

At some point in their employment with Treetop, the plaintiffs have worked or are currently working as unit managers and/or district relief managers. Id., ¶ 3. Treetop has classified its unit managers and district relief managers as exempt "executives" under the FLSA. Plaintiffs' response (Docket Entry No. 184) ¶ 2. Each restaurant is staffed by 15 to 20 hourly employees who generally serve in two distinct categories, grill operators ("cooks") and sales persons ("waitresses"). Id., ¶ 18.

In theory, Treetop considers its unit managers to be responsible for "organizing all resources necessary in servicing the customer and seeing that service actually happens as contemplated. The key ingredient to service is personnel." Ezell affidavit (Docket Entry No. 175) ¶ 24. The unit manager's job description in Waffle House Way, an operational manual prepared and distributed to franchises by Waffle House, reflects that the unit manager's job includes staffing as does the district manager's job. Plaintiffs' notice (Docket Entry No. 172), Deposition Exhibit 99. Yet in practice, staffing is the district manager's job. The three main components of the position of district manager is sales, profit and people. Providing proper staffing plays a major role in sales and profit. Plaintiffs' notice (Docket Entry No. 173), Donnie Bean deposition at 144-150.

As to their individual restaurant activities, because the first shift is the busiest, the unit manager is usually the grill operator or cook for that shift. Plaintiffs' notice (Docket Entry No. 173), Jeanie Dixon deposition at 19. In fact, Treetop's "Production Training Unit" manual for unit manager trainees states

The primary objective at the Production Training Unit is to become a proficient grill operator. A second objective is to gain exposure to the daily management duties and responsibilities....

Plaintiffs' notice (Docket Entry No. 172), Deposition Exhibit 117 at 2 (emphasis added).

Unit managers also wait on tables for absent waitresses.⁴ Plaintiffs' notice (Docket Entry No. 173), Dixon deposition at 37. For other shifts, if an employee is absent, until a replacement employee arrives, the unit manager performs the functions of the absent employee's position. Plaintiffs' response (Docket Entry No. 184) ¶ 27.

A "very common" practice at Treetop restaurants is for hourly employees, who are cooks or grill operators on other shifts, to fill in for and perform the jobs of the unit manager when a unit manager is sick and the designated district relief manager is unavailable to cook. Plaintiffs' notice (Docket Entry No. 173), Bean deposition at 211-12, Timothy Harper deposition at 144-45.

The defendants do not maintain time records for unit managers as to scheduling time or the total hours these managers are at work. There is not any periodic survey or analysis of the amounts or percentages of time spent by unit managers on particular tasks. Defendants' motion (Docket Entry No. 174) for summary judgment, Exhibit I, defendants' answers to plaintiffs' first set of interrogatories, ¶¶ 1, 2 & 9. The only time analysis of the unit managers' actual activities on a weekly basis was provided by the plaintiffs who have worked in 31 different restaurants in 13 different cities/towns, and three different states. Plaintiffs' notice (Docket Entry No. 174), Exhibits D-G.

It is undisputed that all of these affiants have performed the multiple employee tasks at the Treetop restaurants at issue, including waiting on tables. Defendants' response (Docket Entry No. 188) ¶ 128. Based on the time analyses performed by the unit managers who submitted affidavits, the average number of hours they worked per week while employed by Treetop ranged from 87.32 to 90.76 hours. Some unit managers sometimes worked "triple shifts," or 24 hours straight in the restaurants and sometimes slept in the restaurants. Affidavit of Domingo Meza (filed August 17, 1999; Docket Entry No. 41) ¶¶ 38-39; see also, affidavit of Marc Cooper (Docket Entry No. 42) ¶¶ 37, 43 and affidavit of Robert Parsons (Docket Entry No. 43) ¶ 36.

Aside from total hours worked, several plaintiffs have filed affidavits estimating the percentages of time performing their different functions as unit managers. The range is from 83 percent to 93 percent of their time being involved in cooking, food preparation, washing dishes, waiting on tables, unloading trucks, pulling out stock and delivering money to the bank. Defendants' motion (Docket Entry No. 174) for summary judgment, Exhibit G, Riddle affidavit, ¶¶ 21, 21, 32-36; Exhibit E, McMahan affidavit, ¶¶ 33-37 and affidavit of Ronnie T.J. Richards (Docket Entry No. 45), ¶¶ 33-37.

Almost 100 percent of the unit manager's time is spent as a cook on the first shift. Of the total amount of functions, considering work on other shifts, cooking time for a workweek varies, ranging from approximately 36.02 percent to 71.34 percent.

Mr. Jay Ezell, Treetop's vice president of operations, found from his review of nine district relief managers, that on the average they spend 49 percent of their time as grill operators. He also found that one manager spent 75 percent of his time as a grill operator. See plaintiffs' notice (Docket Entry No. 172), Deposition Exhibits 64 and 69. One of the unit managers who is not a plaintiff in this lawsuit testified that the unit manager is cooking orders almost...