Ely v. Dolgencorp, LLC

• Citation: 827 F.Supp.2d 872
• Decision Date: 25 October 2011
• Docket Number: No. 5:10–cv–00115–JEG–JWC.,5:10–cv–00115–JEG–JWC.
• Parties: Melvin ELY, Plaintiff, v. DOLGENCORP, LLC, Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

827 F.Supp.2d 872

Melvin ELY, Plaintiff,

v.DOLGENCORP, LLC, Defendant.

No. 5:10–cv–00115–JEG–JWC.

United States District Court, E.D. Arkansas, Northern Division.

Oct. 25, 2011.

Joel S. Allen, Jason R. Elliott, Melissa M. Hensley, Ronald Eugene Manthey, Morgan, Lewis & Bockius LLP, Dallas, TX, Frederick J. Lewis Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Memphis, TN, for Defendants.

C. Lance Gould, Roman Ashley Shaul, Beasley, Allen, Crow, Methvin, Portis & Miles, P.C., Montgomery, AL, for Plaintiffs.

ORDER

JAMES E. GRITZNER, District Judge.

Now before the Court is a Motion for Summary Judgment and Motion to Strike and Objections to Evidence Offered in Opposition to Defendant's Motion for Summary Judgment, filed by Defendant Dolgencorp, LLC (Defendant or Dolgencorp or Dollar General). Plaintiff Melvin Ely (Plaintiff or Ely), previously employed by Dolgencorp as a store manager, alleges entitlement to overtime wages under the Fair Labor Standards Act (FLSA). Defendant counters that Plaintiff is exempt from said overtime compensation due to his classification as an executive employee under the FLSA regulations. No hearing was requested, and the Court finds no hearing necessary in resolving the matter. The motions are fully submitted and ready for ruling.

I. BACKGROUND

A. Procedural History

The present litigation originated in the United States District Court for the Northern District of Alabama as a class action. The various plaintiffs brought this action to remedy alleged violations of the wage provisions of the FLSA, seeking unpaid overtime compensation for work weeks requiring 60 to 90 hours from store managers paid on a salary basis when only a fraction of those hours were spent on managerial duties. They allege that the store managers are also entitled to liquidated damages, prejudgment interest, and attorneys fees. At the close of the collective plaintiffs' case-in-chief, the Alabama court decertified the class. This case, along with thirty-one others, was transferred to the United States District Court for the Eastern District of Arkansas on March 30, 2010. The undersigned was designated to serve in the Eastern District of Arkansas on August 25, 2010; and on August 26, 2010, these cases were reassigned to this judge for further proceedings. The parties sought an extension of case deadlines in all cases pending consideration of a motion for summary judgment to be filed in the above-entitled action, as a representative case that could provide direction to the parties in all remaining cases. Defendant then filed this Motion for Summary Judgment on June 30, 2011, asserting that it is entitled to judgment as a matter of law on the grounds of its affirmative defense that Ely was exempt from overtime compensation under the executive exemption of the FLSA. This Motion, along with Defendant's Motion to Strike evidence presented by Plaintiff in opposition to Defendant's Motion for Summary Judgment, are now at issue before this Court.

B. Summary of Material Facts¹

Dolgencorp is a retail concern that sells basic consumable goods in its approximate 8,500 stand-alone stores across thirty states. Each store is run pursuant to a manual containing Dollar General's Standard Operating Procedures (SOPs). These stores are staffed with one store manager, the only salaried employee, and, ordinarily, an assistant store manager (ASM), a lead clerk, and multiple store clerks. For their services, store managers are compensated weekly on a salary basis, with the prospect of earning performance-based, or team-share, bonuses.² The performance of each store manager and ASM is annually evaluated, and these evaluations affect raises and/or bonuses. The bonuses available to store managers exceed those available to ASMs and clerks by up to 200%. Plaintiff, however, never earned a team-share bonus and contends that in-store bonuses were contingent upon unobtainable goals. While the parties dispute the actual authority of the store manager, they agree that each store manager is subject to the supervision of a district manager. The district manager supervises between fifteen to twenty-five stores but does not normally have keys to those stores.

On December 6, 2003, Ely was hired by Defendant and, following two weeks of training, began work as the store manager of Dolgencorp's Store No. 8167 in Conroe, Arkansas. Approximately one month later, Ely was transferred to Store No. 3737 because, as he characterized it, the store was a problem store and needed a strong manager. On March 16, 2005, while still the store manager of Store No. 3737, Ely's employment was terminated. Ely's starting salary was $673.08 weekly, which increased once in April of 2004 to $679.80. The ASM, the second highest paid employee, made only $8.25 per hour and, therefore, would receive $330 for a 40–hour work week. Ely admits knowing that he was a salaried employee, that he would not receive overtime pay, and that he received more compensation because he had more responsibility as the store manager. Plaintiff notes, however, that he worked 65–hour weeks, making his salary the effective equivalent of $2.21 more per hour than that which was earned by an ASM.

Dolgencorp operates on a "lean store-staffing model," Pl. Ex. 1, App. 7, ECF No. 51–2, under which store managers are provided labor budgets by district managers, which specify the number of hours that a store manager can schedule subordinate employees. This model reduces Defendant's primary expense—labor. As raised by Plaintiff, a common concern amongst store managers is how this staffing model leaves stores short staffed. The store managers voiced these concerns; however, instead of increasing labor hours, Defendant increased store hours of operation. Accordingly, despite being told that he would need to work only 48 hours a week, Ely was forced under this staffing model to work approximately 65 hours a week, frequently manning the store from open to close. During those hours, he often times ran the store with the aid of only one other employee, whose primary job was to run the cash register or stock shelves.

The labor shortage was most acutely felt by store managers on delivery truck days, when Ely, like many managers, was required to schedule all of his employees and exhaust 75% of his weekly labor hours. Ely notes that, in addition to the time lost to unloading the delivery truck, the most time-consuming tasks assigned to him, along with his fellow employees, was checking out customers and stocking shelves. Of his 65–hour work weeks, approximately 80% of Ely's time was dedicated to nonmanagerial, manual labor duties such as unloading trucks, stocking shelves, cleaning the store, and running the cash register. These extra hours were required of Ely, since he was not allowed to schedule overtime hours for the subordinate employees, and exceeding his allotted labor hours resulted in disciplinary action against him by the district manager.

The parties dispute whether part of Ely's job was to serve as the on-site human resource (HR) representative. Arguing in the affirmative, Defendant points to Ely's responsibility to collect new hire paperwork and communicate Dollar General's employment policies as evidence of Ely's role as HR representative. Defendant also points to Ely's deposition testimony that he served as the HR representative. Ely disputes this by arguing that, while he could make recommendations, he lacked the authority to give a pay raise or promotion, or to even fill out the paperwork when the district manager granted them. Defendant notes that Ely saw his managerial responsibilities of hiring, scheduling, and training as necessary for the success of his store. Dollar General points to Ely's duty to assess the work performance of the ASMs and clerks, discipline them for poor performance, and coach them on means to improve as evidence of his managerial position. He was also responsible to receive and implement store reports, recalls, and product promotions as well as monitor store trends in sales and shrink. Furthermore, Defendant distinguishes Ely's position by acknowledging that he was the only employee in the store who could conduct interviews, create employee schedules, handle customer complaints, and void or refund transactions.

While not disputing this, Ely distinguishes himself from the district manager, whom he contends was the actual head of the store, demonstrated by the fact that the district manager had to approve all price mark downs, had to be notified of all write ups, and determined the labor hours available for scheduling. Ely concedes that he performed some of the duties listed by Defendant as "Duties and Essential Job Functions" for store managers on its store manager job description sheet, Def.'s Ex. 12, ECF No. 43–17, such as recruiting and staffing the store, training the employees, evaluating employee performance, holding safety meetings, completing paperwork, and ensuring the financial integrity of the store. Ely counters, however, that he did not perform all the tasks on the list since he never fired an employee, and he could not fire³ or hire⁴ any employee without first obtaining the consent of the district manager. Ely was unable to independently set pay rates, determine if someone could be rehired, grant raises or promotions, or mark down items for sale. Plaintiff had no control over the store's thermostat, hours of operation, or contracts with outside vendors. While admitting that he had minimal discretion in merchandise purchase and product placement, Ely notes that over 90% of product placement was predetermined by corporate planograms, and his discretionary placement was subject to the district manager's approval. Ely lacked the authority to fix maintenance problems in the store or transfer merchandise in or out of the store. Furthermore, Plaintiff notes that he performed duties not contained on the list, including cleaning, stocking, and taking out the trash, and shared some of his...