Hanna v. Marriott Hotel Servs.
| Decision Date | 09 January 2023 |
| Docket Number | 3:18-cv-00325 |
| Parties | SAMEH HANNA, Plaintiff, v. MARRIOTT HOTEL SERVICES INC., MARRIOTT INTERNATIONAL INC. Defendants. |
| Court | U.S. District Court — Middle District of Tennessee |
This case involves the applicability, to a group of banquet staff members employed by Marriott Hotel Services Inc. (“MHS”), of the current version of the “retail or service establishment” exemption to the overtime provisions of the Fair Labor Standards Act. Pending before the Court are the two side's cross-motions for summary judgment. (Doc. Nos. 206, 209). For the reasons stated below, Defendants' motion for summary judgment (Doc. No. 209) will be GRANTED and Plaintiff's motion for summary judgment (Doc. No. 206) will be DENIED.
The Court concludes that all facts necessary for the Court to resolve this case as a matter of law are not in genuine dispute, and that each of the cross-motions can be resolved as a matter of law based on those undisputed facts. More specifically, each cross-motion turns on a question of statutory interpretation, i.e., the applicability or inapplicability of the (statutory) “retail or service establishment” exemption in light of the undisputed facts that are set forth in this section beginning with the following paragraph.
Defendant Marriott Hotel Services Inc. (“MHS”) is a wholly owned subsidiary of Defendant Marriott International Inc. (“MII”). (Doc. No. 221 at 5). The Gaylord Opryland Resort & Convention Center (“the Gaylord”)[1] is a large hotel located in Nashville Tennessee and is owned by Ryman Hospitality Properties Inc. (“Ryman”), a company legally unrelated to MHS. (Doc. No. 217 at 2).
MHS manages the Gaylord for Ryman. (Doc. No. 221 at 2). In exchange, MHS receives from Ryman a guaranteed base management fee and, under certain circumstances, an incentive management fee. (Id. at 3). The base management fee is calculated as a percentage of the gross revenue generated at the Gaylord. MHS receives the incentive management fee only if MHS reaches a particular profit threshold through its operations at the Gaylord. (Id.).
MHS manages all operations at the Gaylord, including selling (or renting) goods and services, such as guest rooms, food and beverages, and banquet events. (Id. at 2, 6-9). Each banquet customer enters into a contract with MHS for banquet services, and employees of MHS serve as the staff. (Doc. No 222 at 4). Each contract includes a mandatory banquet service charge, which is either 24% or 25% of the total food and beverage costs charged to the banquet customer. (Doc. No. 221 at 11). The service charge is divided up by MHS, with MHS retaining 45% and allocating the remaining 55% to the banquet staff members. (Id. at 13-14). The 55% portion of the service charge is distributed proportionally among banquet staff members based on the respective number of hours they worked that week.[2] (Id.).
MHS receives payment from each banquet customer, which is then placed into a Marriott Business Services bank account. (Id. at 3). The revenue received from the banquets at the Gaylord is earmarked in the account for “the Hotel” (meaning, presumably, the Gaylord, although the parties are unclear about this). (Id.). MHS remits to Ryman the profits from the banquet revenue, less the base management fee and, if applicable, the incentive management fee. (Doc. No. 222 at 5).
The Gaylord is a popular attraction in Nashville, Tennessee and is open to the general public. (Doc. No. 221 at 6, 7). It is commonly used as a venue for large-scale events, including banquets. (Id. at 6). During the relevant time period, direct sales of goods and services to end customers at the Gaylord constituted over 98% of total annual sales.[3] (Id. at 10).
The sole original (and named) Plaintiff, Sameh Hanna, is a former employee and banquetstaff member of MHS. (Id. at 2). From March 2015 to October 23, 2020, Plaintiff served as a Banquet Captain and Senior Banquet Captain. (Id.). During Plaintiff's employment with MHS as part of the banquet staff, Plaintiff's compensation structure consisted of two inputs: 1) an hourly wage; and 2) his share of the distribution of the 24% or 25% service charge collected from banquet customers, i.e., his portion of the 55% of the service charge that is distributed among banquet staff members. (Id. at 13-14).
Other than on one occasion, which is not material here, Plaintiff did not receive overtime payment while employed by MHS as a banquet staff member. (Id. at 20).
Plaintiff brought this action against MII and MHS as a collective action under the Fair Labor Standards Act (“FLSA”),[4] seeking overtime pay for the relevant time period on behalf of himself and others similarly situated to him. (Doc. No. 1). After filing an amended complaint (Doc No. 15), Plaintiff thereafter moved for conditional certification of a class (also known as a “collective” in the context of FLSA collective actions) comprising himself and those similarly situated, and for court-authorized notice to those similarly situated pursuant to 29 U.S.C. § 216(b). (Doc. No. 79). The Court granted that motion in part, certifying a particular defined class and authorizing notice to members of the class. (Doc. No. 127).
Thereafter, the Court amended and clarified the scope of the class as originally defined, such that the class is now defined as “all banquet staff employees of Defendants at the Gaylord Opryland Resort and Convention Center in Nashville, Tennessee, who: (1) worked more than 40 hours per week for Defendants in the three-year period preceding the Court's entry of this Order; (2) were classified as “exempt” by Defendants pursuant to 29 U.S.C. § 207(i); and (3) were compensated through the fixed hourly rate plus service charge distribution (characterized by Plaintiff as the ‘variable hourly rate') compensation plan under which Plaintiff was paid.” (Doc. No. 150 at 1-2). Subsequently, more than 100 class members consented to joining this action with the original Plaintiff as so-called “opt-in” Plaintiffs, although six thereafter were dismissed upon motion of Defendants for failing to participate in discovery as required. (Doc. No. 241). (Herein, the Court refers primary, though not exclusively, to “Plaintiff” rather than “Plaintiffs” even when the reference applies equally to the opt-in Plaintiffs).
Summary judgment is appropriate where there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). “By its very terms this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). In other words, even if genuine, a factual dispute that is irrelevant or unnecessary under applicable law is of no value in defeating a motion for summary judgment. See id. at 248. On the other hand, “summary judgment will not lie if the dispute about a material fact is ‘genuine[.]'” Id.
A fact is “material” within the meaning of Rule 56(c) “if its proof or disproof might affect the outcome of the suit under the governing substantive law.” Reeves v. Swift Transp. Co., 446 F.3d 637, 640 (6th Cir. 2006) (citing Anderson, 477 U.S. at 248), abrogated on other grounds by Young v. Utd. Parcel Serv., 575 U.S. 206 (2015). A genuine dispute of material fact exists if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Harris v. Klare, 902 F.3d 630, 634-35 (6th Cir. 2018). The party bringing the summary judgment motion has the initial burden of identifying portions of the record that demonstrate the absence of a genuine dispute over material facts. Pittman v. Experian Info. Sols., Inc., 901 F.3d 619, 627-28 (6th Cir. 2018) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). Alternatively, the moving party may meet its initial burden by otherwise “show[ing]”-even without citing materials of record-that the nonmovant “cannot produce admissible evidence to support a material fact (for example, the existence of an element of a nonmovant plaintiff's claim).” Fed.R.Civ.P. 56(c)(1)(B). If the summary judgment movant meets its initial burden, then in response the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. Pittman, 901 F.3d at 628.[5] Importantly, “[s]ummary judgment for a defendant [that has met its initial burden as the movant] is appropriate when the plaintiff ‘fails to make a showing sufficient to establish the existence of an element essential to [her] case, and on which [she] will bear the burden of proof at trial.'” Clevelandv. Pol'y Mgmt. Sys. Corp., 526 U.S. 795, 805-06 (1999) (quoting Celotex, 477 U.S. at 322).
“The standard of review for cross-motions for summary judgment does not differ from the standard applied when a motion is filed by only one party to the litigation.” New Century Found. v. Robertson, 400 F.Supp.3d 684, 689 (M.D. Tenn. 2019) (citing Ferro Corp. v. Cookson Grp PLC, 585 F.3d 946, 949 (6th Cir. 2009). Id. (quoting Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)). In addition, “if the moving party will bear the burden of persuasion at trial, then that party must support its motion...
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