Josendis v. Wall to Wall Residence Repairs, Inc.

Decision Date17 November 2011
Docket NumberNo. 09–12266.,09–12266.
Citation18 Wage & Hour Cas.2d (BNA) 577,662 F.3d 1292,23 Fla. L. Weekly Fed. C 567
PartiesLuis Carlos JOSENDIS, and similarly situated individuals, Plaintiff–Appellant, v. WALL TO WALL RESIDENCE REPAIRS, INC., a Florida corporation, and, Defendant–Appellee.
CourtU.S. Court of Appeals — Eleventh Circuit

OPINION TEXT STARTS HERE

Gary A. Costales, Gary A. Costales, P.A., Miami, FL, for PlaintiffAppellant.

Chris Kleppin, Glasser, Boreth & Kleppin, P.A., Plantation, FL, for DefendantAppellee.

Appeal from the United States District Court for the Southern District of Florida.Before TJOFLAT and COX, Circuit Judges, and KORMAN,* District Judge.TJOFLAT, Circuit Judge:

This is a Fair Labor Standards Act case. Luis Carlos Josendis sued his former employer, Wall to Wall Residence Repairs, Inc.,1 for unpaid overtime and back wages pursuant to the Fair Labor Standards Act of 1938 (the “FLSA”),2 its implementing regulations, and Florida law. Wall to Wall moved to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for relief. Because Wall to Wall attached an affidavit and a statement of undisputed facts to its motion, the district court converted the motion to a motion for summary judgment pursuant to Rule 12(d) and gave the parties “a reasonable opportunity to present all the material that [was] pertinent to the motion.” 3 Josendis did not avail himself of that opportunity until after the date the district court set for the completion of discovery, when he served Wall to Wall with a battery of discovery requests. Wall to Wall objected to this discovery and moved the court for a protective order under Rule 26(c). 4 The court granted Josendis leave to engage in discovery limited to the issues presented in Wall to Wall's motion, and sanctioned Josendis's attorney pursuant to Rule 37(a)(5)(B) for abusing the discovery process. 5

At the close of this limited discovery, the court granted Wall to Wall summary judgment on Josendis's FLSA claim and dismissed his state law claim without prejudice. Josendis now appeals that ruling. He contends that material issues of fact precluded summary judgment and, alternatively, that, had the district court not limited his discovery as it did, he would have uncovered evidence that would have created material issues of fact. Josendis also appeals the district court's sanctions order against his attorney.

This opinion is organized as follows. Part I describes the FLSA, the facts germane to Josendis's FLSA claim, and the proceedings in the district court. Part II addresses the limited discovery the district court afforded Josendis after the time for discovery had closed, reviews the court's sanctions order, and concludes that neither decision constituted an abuse of discretion. Part III deals with and rejects Josendis's challenges to the summary judgment. Part IV concludes.

I.

A.

The FLSA mandates that an “employee[ ] who is “engaged in interstate commerce” must be paid an overtime wage of one and one-half times his regular rate for all hours he works in excess of forty hours per week. 29 U.S.C. § 207(a).6 If a covered employee is not paid the statutory wage, the FLSA creates for that employee a private cause of action against his employer for the recovery of unpaid overtime wages and back pay. Id. § 216(b).7

As defined by the statute, and subject to certain exceptions not at issue here, an employee is “any individual employed by an employer.” Id. § 203(e)(1). The statutory definition of “employer” is similarly broad; it encompasses both the employer for whom the employee directly works as well as “any person acting directly or indirectly in the interests of an employer in relation to an employee.” Id. § 203(d). We have accordingly held that the FLSA contemplates that a covered employee may file suit directly against an employer that fails to pay him the statutory wage, or may make a derivative claim against any person who (1) acts on behalf of that employer and (2) asserts control over conditions of the employee's employment. See Patel v. Wargo, 803 F.2d 632, 637–38 (11th Cir.1986) (citing Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir.1983) (explaining that a person is derivatively liable if he is intimately involved in the day-to-day operations of an employer that would be directly liable under the FLSA)).

In order to be eligible for FLSA overtime, however, an employee must first demonstrate that he is “covered” by the FLSA. There are two possible types of FLSA coverage. See, e.g., Ares v. Manuel Diaz Farms, Inc., 318 F.3d 1054, 1056 (11th Cir.2003) (citing 29 U.S.C. § 207(a)(1)). First, an employee may claim “individual coverage” if he regularly and “directly participat[es] in the actual movement of persons or things in interstate commerce.” Thorne v. All Restoration Servs., Inc., 448 F.3d 1264, 1266 (11th Cir.2006) (citing 29 C.F.R. § 776.23(d)(2) (2005); 29 C.F.R. § 776.24 (2005)); see also 29 U.S.C. § 207(a)(1) (mandating time-and-a-half for “employees ... engaged in [interstate] commerce or in the production of goods for [interstate] commerce”). Second, an employee is subject to enterprise coverage if he is “employed in an enterprise engaged in commerce or in the production of goods for commerce,” 29 U.S.C. § 207(a)(1), where commerce means “trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof,” id. § 203(b), and an “enterprise” is the activities performed by a person or persons who are (1) engaged in “related activities,” (2) under “unified operation or common control,” and (3) have a “common business purpose,” id. § 203(r)(1).

In relevant part, an enterprise is engaged in commerce or in the production of goods for commerce if it

(i) has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person; and

(ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500,000.

Id. § 203(s)(1)(A)(i)(ii) (emphasis added). Alternatively, enterprise coverage is available to any employee of an enterprise “engaged in the operation of a hospital [or] an institution primarily engaged in the care of ... the aged ... who [also] reside on the premises of such institution.” Id. § 203(s)(1)(B). An employee may be subject to either type, or both types, of FLSA coverage. See Ares, 318 F.3d at 1056 (citing 29 U.S.C. § 207(a)(1)).

In aid of that statutory language, the U.S. Department of Labor (the “DOL”) has issued interpretive regulations pertaining to both individual and enterprise coverage.8 We defer to those regulations when the statutory language is ambiguous or the statutory terms are undefined. Chevron U.S.A. Inc. v. Natural Res. Def. Council, 467 U.S. 837, 843–45, 104 S.Ct. 2778, 2781–83, 81 L.Ed.2d 694 (1984) (requiring deference where the statutory language is ambiguous and the rule-making agency's regulation is a reasonable interpretation of Congress's intent); see also Falken v. Glynn Cnty., Ga., 197 F.3d 1341, 1345–46 (11th Cir.1999) (deferring to the DOL's implementing regulation defining “fire protection activities,” a term left undefined by the FLSA). But we apply the statutory language as written when it is unambiguous. Chevron, 467 U.S. at 842–43, 104 S.Ct. at 2781; see also Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6, 120 S.Ct. 1942, 1947, 147 L.Ed.2d 1 (2000) ([W]hen the statute's language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms.”) (quoting United States v. Ron Pair Enters., 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989) (internal quotations marks omitted)). Regulations entitled to Chevron deference bind us in regard to the ambiguous text only. Chevron, 467 U.S. at 843–45, 104 S.Ct. at 2781–83; cf. Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944) (applying limited deference to agency interpretations that, “while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance”); Pugliese v. Pukka Dev., Inc., 550 F.3d 1299, 1305 (11th Cir.2008) (applying Skidmore deference).

One DOL regulation is at issue here: 29 C.F.R. § 776.23, which seeks to extend enterprise coverage to all employees engaged in construction work that is “closely or intimately related to the functioning of existing instrumentalities and channels of interstate commerce or facilities for the production of goods for such commerce.” Id. § 776.23(c). The relevant regulatory text reads:

All employees who are employed in connection with construction work which is closely or intimately related to the functioning of existing instrumentalities and channels of interstate commerce or facilities for the production of goods for such commerce are within the scope of the [FLSA]. Closely or intimately related construction work includes the maintenance, repair, reconstruction, redesigning, improvement, replacement, enlargement, or extension of a covered facility. If the construction project is subject to the [FLSA], all employees who participate in the integrated effort are covered, including not only those who are engaged in work at the site of construction such as mechanics, laborers, handymen, truckdrivers, watchmen, guards, timekeepers, inspectors, checkers, surveyors, payroll workers, and repair men, but also office, clerical, bookkeeping, auditing, promotional, drafting, engineering, custodial and stock room employees.

Id. (footnote omitted).9 Under § 776.23(c), then, any employee who takes part in qualifying construction work, or is employed by an employer engaged in such work, would...

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