Jones v. Univesco, Inc.
| Decision Date | 29 March 2021 |
| Docket Number | CIVIL NO. 4:19-CV-509-SDJ |
| Parties | Demarret JONES, individually and on behalf of all others similarly situated v. UNIVESCO, INC. |
| Court | U.S. District Court — Eastern District of Texas |
Joshua Jon Sanford, Sanford Law Firm, PLLC, Little Rock, AR, for Demarret Jones.
Antonio Undrea Allen, Caroline C. Harrison, Lu Pham, Dowell Pham Harrison, LLP, Fort Worth, TX, Spencer M. Mainka, Phelps Dunbar, New Orleans, LA, for Univesco, Inc.
Before the Court is Defendant Univesco's Motion for Summary Judgment, (Dkt. #25). Having reviewed the parties’ briefing and the applicable legal authorities, the Court concludes that Univesco's motion should be GRANTED .
Univesco, Inc. is a property management company headquartered in Plano, Texas, that manages twenty-one apartment complexes in Texas and Florida. (Dkt. #25 at 2). Univesco employed Plaintiff Demarret Jones from November 21, 2018, to June 14, 2019. (Dkt. #25 at 3). Univesco first hired Jones as an assistant property manager, an hourly-paid position, at its Prestonwood Hills property in Plano, Texas. (Dkt. #25 at 3). Jones held this position until March 20, 2019, when he was promoted to property manager, a salaried position, at Univesco's Vista Springs property in Lewisville, Texas. (Dkt. #23 at 3). Jones continued in this role until June 14, 2019, when Univesco terminated Jones. (Dkt. #25 at 4).
Univesco offers a discount on rent to its employees if they choose to reside at one of Univesco's properties. (Dkt. #25 at 2). Under this arrangement, Univesco offers a 20% discount on market rent to employees who reside at one of Univesco's properties and a 40% discount if the employees reside at the property where they work. (Dkt. #25 at 2). All of Univesco's 226 employees are eligible for this rent discount, and, as of June 2020, 122 of them take advantage of it. (Dkt. #25 at 2). Univesco deducts the cost of rent from the paychecks of employees who receive the discount. (Dkt. #25 at 2). Univesco's employees are not automatically entitled to an apartment by virtue of their employment. (Dkt. #25 at 9). Rather, they must complete a rental application, pass a criminal background check, meet various income and credit requirements, and execute a lease agreement. (Dkt. #25 at 9). Employees who elect not to take advantage of the rent discount receive no additional compensation. (Dkt. #25 at 9).
Jones became eligible for the 40% discount starting on December 7, 2018, when he executed a lease on an apartment at the Prestonwood Hills property at which he worked. (Dkt. #25 at 3). The market rent for the apartment was $1,429 per month. (Dkt. #25 at 3). With the 40% discount applied, the monthly rent became $857.40. (Dkt. #25 at 3).
Between November 21, 2018, and March 20, 2019, the period during which Jones worked as an assistant property manager, Jones worked overtime for at least 16.75 hours.1 (Dkt. #25 at 3–4; Dkt. #28 at 7). Jones's overtime wage was one and one-half times Jones's hourly wage, plus bonuses and commissions. (Dkt. #1 ¶ 26). Univesco did not include the rent discount in its calculation of employees’ overtime pay. (Dkt. #1 ¶ 27).
After he was terminated Jones filed suit against Univesco individually and on behalf of others similarly situated alleging underpayment of overtime wages in violation of the Fair Labor Standards Act (FLSA).2 (Dkt. #1). Jones asserts that Univesco violated the FLSA by not including his and other employees’ rent discounts in their regular rate of pay when calculating overtime pay. (Dkt. #1). Univesco filed a motion to dismiss, asserting that Jones's complaint failed to state a claim upon which relief could be granted. (Dkt. #3). Univesco argued that the rent discount is not part of employees’ regular rate of pay but rather a gift that employers may exclude from the calculation of employees’ overtime pay. (Dkt. #3 at 3). Univesco further asserted that, even if the rent discount must be included in calculating overtime pay, Jones's complaint failed to allege facts sufficient to state a claim under the FLSA. (Dkt. #3 at 4–7). The Court denied Univesco's motion, concluding that it was not apparent from the face of the complaint that the rent discount was a "gift or in the nature of a gift" within the meaning of 29 C.F.R. § 778.212. (Dkt. #17 at 9). The Court also concluded that the reasonable cost of Jones's rent discount constituted "board" and "lodging" under the FLSA and therefore should be included in Jones's regular rate of pay. (Dkt. #17 at 5). Finally, the Court deemed that the complaint alleged sufficient facts to plausibly state a claim. (Dkt. #17 at 10–17).
Univesco now moves for summary judgment pursuant to Federal Rule of Civil Procedure 56. (Dkt. #25).
"Summary judgment is appropriate only 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.’ " Shepherd v. City of Shreveport , 920 F.3d 278, 282–83 (5th Cir. 2019) (quoting FED. R. CIV. P. 56(a) ). If the moving party presents a motion for summary judgment that is properly supported by evidence, "the burden shifts to the nonmoving party to show with ‘significant probative evidence’ that there exists a genuine issue of material fact." Hamilton v. Segue Software Inc. , 232 F.3d 473, 477 (5th Cir. 2000) (quoting Conkling v. Turner , 18 F.3d 1285, 1295 (5th Cir. 1994) ).
Because Federal Rule of Civil Procedure 56 requires that there be no "genuine issue of material fact" to succeed on a motion for summary judgment, "the mere existence of some alleged factual dispute" is insufficient to defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" when, under the relevant substantive law, its resolution might govern the outcome of the suit. Id. at 248, 106 S.Ct. 2505. "An issue is ‘genuine’ if the evidence is sufficient for a reasonable jury to return a verdict for the nonmoving party." Hamilton , 232 F.3d at 476.
"Courts consider the evidence in the light most favorable to the nonmovant, yet the nonmovant may not rely on mere allegations in the pleading; rather, the nonmovant must respond to the motion for summary judgment by setting forth particular facts indicating that there is a genuine issue for trial." Int'l Ass'n of Machinists & Aerospace Workers v. Compania Mexicana de Aviacion, S.A. de C.V. , 199 F.3d 796, 798 (5th Cir. 2000). If, when considering the entire record, the court concludes that no rational jury could find for the nonmoving party, the movant is entitled to summary judgment. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing First Nat'l Bank of Ariz. v. Cities Serv. Co. , 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968) ).
The FLSA requires employers to pay employees one and one-half times their regular rate for hours worked in excess of forty hours in a workweek. 29 U.S.C. § 207(a)(1). The statute defines "regular rate" as "all renumeration for employment paid to, or on behalf of, the employee," subject to a number of exemptions. 29 U.S.C. § 207(e). Exemptions to the FLSA "are construed narrowly against the employer, and the employer bears the burden to establish a claimed exemption." Olibas v. Barclay , 838 F.3d 442, 448 (5th Cir. 2016) (quoting Allen v. Coil Tubing Servs., L.L.C. , 755 F.3d 279, 283 (5th Cir. 2014) ).
A. No Genuine Dispute Exists as to a Material Fact.
While the parties dispute whether the FLSA permits the rent discount to be excluded from an employee's regular rate of pay, which is a question of law, they do not disagree about the factual circumstances surrounding Jones's employment and Univesco's rent discount. See (Dkt. #28 at 3–8). The parties’ factual disputes relate only to the precise number of overtime hours that Jones worked and whether Univesco properly calculated the expenses associated with Jones's Prestonwood Hills apartment. See (Dkt. #28 at 3–8). Neither of these facts is material because neither affects the Court's legal conclusion that the FLSA requires exclusion of the rent discount from employees’ regular rate of pay. Consequently, the parties’ few factual disputes are ultimately irrelevant to the outcome of this case, and no genuine dispute exists as to a material fact.
B. Univesco is Entitled to Judgment as a Matter of Law Because Univesco's Rent Discount is Excludable from Employees’ Regular Rate of Pay as an "Other Similar Payment" Exempt Under 29 C.F.R. § 778.224 .
The preliminary question before the Court is whether Jones is protected by the FLSA. A plaintiff bringing a cause of action under the FLSA bears the burden of demonstrating that he or she is covered by the FLSA and is therefore eligible for the Act's protections. Sobrinio v. Med. Ctr. Visitor's Lodge, Inc. , 474 F.3d 828, 829 (5th Cir. 2007) (citing Warren-Bradshaw Drilling Co. v. Hall , 317 U.S. 88, 90, 63 S.Ct. 125, 87 L.Ed. 83 (1942) ). The overtime provisions protect employees who are "engaged in commerce or in the production of goods for commerce" or who are "employed in an enterprise" that does the same. 29 U.S.C. § 207(a)(1). The statute defines commerce as "trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof." 29 U.S.C. § 203(b). Further, under the FLSA, an "[e]nterprise engaged in commerce or in the production of goods for commerce" is an entity that:
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