Kowalski v. Kowalski Heat Treating, Co.

• Decision Date: 27 March 1996
• Docket Number: No. 1:93CV2578.,1:93CV2578.
• Citation: 920 F. Supp. 799
• Parties: Ted KOWALSKI, Plaintiff, v. KOWALSKI HEAT TREATING, COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Ohio

920 F. Supp. 799

Ted KOWALSKI, Plaintiff, v. KOWALSKI HEAT TREATING, COMPANY, Defendant.

No. 1:93CV2578.

United States District Court, N.D. Ohio.

March 27, 1996.

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Mark P. Herron, Cleveland, OH, for plaintiff.

Alan S. Belkin, Law Offices of Alan S. Belkin, Cleveland, OH, for defendant.

MEMORANDUM OPINION

ECONOMUS, District Judge.

This case is brought by the Plaintiff, Ted Kowalski, under the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq., to recover unpaid overtime compensation. Pending currently before the Court are three motions; (1) Defendant's Motion to Dismiss; (2) Defendant's Motion for Summary Judgment; and (3) Plaintiff's Motion for Partial Summary Judgment. Each of the motions will be addressed within this memorandum opinion.

Plaintiff, Ted Kowalski (Kowalski) was hired by The Kowalski Heat Treating Company (Company) on May 13, 1991 as a plant manager trainee and was trained in many aspects of the defendant's business. He successfully completed his training period on September 5, 1991 and was named plant manager. He then became responsible for the supervision of four full-time employees.

On or about September 21, 1991 many employees were laid off due to declining business. The only full-time employees retained were Robert Kowalski (president), his son Stephen Kowalski (vice-president), and the plaintiff (no relation). Kowalski was told that he would be required to work additional hours beyond the normal forty-hour work week. He agreed to the conditions. Thereafter, his hours increased substantially to the point where he worked in excess of sixty hours per week. He was not paid overtime for these additional hours. However, his salary increased almost 25% during the next two years.

On June 15, 1993, Kowalski was suspended for one day, without pay, for leaving the plant prior to completing his duties. On that same day, he submitted a three-page response to the suspension in which he stated that he had been working sixty-hour weeks for more than twenty months and was being paid for only a forty-hour week. He further advised his superiors that he would protect his interests as an employee and that he was forwarding a copy of his letter to the U.S. Department of Labor. Kowalski never forwarded a copy of the letter to any government agency prior to his discharge. On September 24, 1993, he was discharged, allegedly on the basis of tardiness.

I. Defendant's Motion to Dismiss

The Fair Labor Standards Act (FLSA) passed by Congress in 1938, is a comprehensive remedial scheme requiring a minimum wage and limiting the maximum number of hours worked. The FLSA prohibits employers from employing any worker for a work week longer than forty hours unless the employee receives compensation for employment in excess of forty hours. 29 U.S.C. § 207(a)(1). Such compensation must be at a rate not less than one and one half times the regular rate at which the employee is employed. Id.

The Company moves for dismissal of all claims alleged by Kowalski to have arisen during the period from March 1, 1991 through May 31, 1993 on the grounds of lack of subject matter jurisdiction. The Company argues that it does not come within the coverage of the FLSA because it had gross revenue from sales of less than $500,000 annually during that period. Kowalski does not dispute that the Company's gross sales revenue was less than $500,000 annually during the relevant time period. Instead, he argues that he is still protected by the FLSA because he was personally engaged in the production of goods for commerce on a regular and recurring basis.

There are essentially two ways in which employees gain protection under the FLSA. First, employees may be employed in an enterprise engaged in commerce or the production of goods for commerce and thus enjoy "enterprise coverage."¹ Second, employees may themselves be engaged in commerce or in the production of goods for commerce, enjoying "individual" coverage.² Kowalski seeks protection under the second of these two coverage options provided by the FLSA.

While it is true that Section 203(s) was inserted into the Act to exempt small businesses from the scope of the provisions of the FLSA, the fundamental purpose of the Act is to encourage employers to distribute work among a larger number of employees rather than to work employees overtime. Heaton v. Moore, 43 F.3d 1176, 1181 (8th Cir.1994) cert. denied, ___ U.S. ___, 115 S.Ct. 2249, 132 L.Ed.2d 257 (1995). Courts have consistently construed the FLSA liberally to apply to the farthest reaches consistent with congressional direction. Tony & Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290, 296, 105 S.Ct. 1953, 1959, 85 L.Ed.2d 278 (1985). This liberal construction is based on the recognition that broad coverage is essential to accomplish the goal of outlawing from interstate commerce goods produced under conditions that fall below minimum standards of decency. Id.

The Company contends that the Congressional intent of exempting small businesses from FLSA coverage is defeated if Kowalski is permitted to proceed with his claim under the "individual" coverage of the FLSA. The Court does not agree. Through its passage of the FLSA, Congress established two types of coverage for employees, enterprise and individual. Each of these coverages hinge on the company engaging in interstate commerce. The fact that an employee cannot assert "enterprise" coverage because the company has annual sales revenue of less than $500,000 does not also require a finding, as the defendant suggests, that the company does not engage in interstate commerce. The Court has found no authority to support the proposition that the individual coverage provided under Section 207 defeats the purposes of the FLSA.

Further, the evidence presented shows that Kowalski was an employee engaged in the production of goods for interstate commerce. His work involved, in part, preheating, austenitizing, and tempering steel and then preparing it for shipment to customers, some of whom were located outside of Ohio. The evidence shows that he was an employee sufficiently engaged in the production of goods for interstate commerce, thus qualifying for individual coverage under the FLSA. Therefore, the Court finds that it has subject matter jurisdiction and the motion to dismiss must be denied.

II. Defendant's Motion for Summary Judgment

The Defendant brings a motion for summary judgment on the plaintiff's claims that he was discharged in retaliation for plaintiff's protected FLSA activities and that the Company's opposition to the unemployment compensation claim was also a retaliatory act.

Fed.R.Civ.P. 56(c) governs summary judgment and provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ...

The party moving for summary judgment bears the burden of showing the absence of a genuine issue as to any material fact, and for these purposes, the evidence submitted must be viewed in the light most favorable to the nonmoving party to determine whether a genuine issue of material fact exists. Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1245 (6th Cir.1995).

The burden on the nonmoving party may be discharged if the moving party demonstrates that the nonmoving party has failed to establish an essential element of his case for which he bears the ultimate burden of proof at trial. Morales v. American Honda Motor Co., Inc., 71 F.3d 531, 535 (6th Cir.1995). If the moving party meets this burden, only then must the nonmoving party present more than a scintilla of evidence in support of his position. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). Summary judgment must be granted unless there is sufficient evidence favoring the nonmoving party for a judge or jury to return a verdict for that party. Id. at 249, 106 S.Ct. at 2510-11.

The principles enunciated by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) are applicable to this case. Under this standard the plaintiff must first establish a prima facie case of retaliation. To establish a prima facie case, the plaintiff must show (1) that he engaged in a statutorily protected activity; (2) an adverse employment action occurred; and (3) a causal link between the two. Canitia v. Yellow Freight System, Inc., 903 F.2d 1064, 1066 (6th Cir.1990), cert. denied, 498 U.S. 984, 111 S.Ct. 516, 112 L.Ed.2d 528 (1990). If a prima facie case is established, the defendant must then produce evidence that demonstrates a legitimate reason for terminating the plaintiff. Id. at 1066. If this next step is satisfied, the plaintiff must then demonstrate that the proffered reason was not the true reason for the discharge but was instead a pretext. Id.

The Company argues that the only evidence of protected activity is a letter from Kowalski to the defendant which contained merely "oblique allusions" to FLSA violations. According to the Company, this letter does not provide a sufficient basis on which to support a retaliation claim under 29 U.S.C. § 215(a)(3). However, this circuit has held that complaints made to a supervisor are sufficient to trigger protected status because "the Act also applies to the unofficial assertion of rights through complaints at work." E.E.O.C. v. Romeo Community Schools 976 F.2d 985, 989 (6th Cir.1992) (quoting Love v. RE/MAX of America, Inc., 738 F.2d 383 (10th Cir.1984)).

The Company next argues that even if this letter is found to constitute statutorily protected activity, plaintiff cannot establish a causal link between the protected activity and Kowalski's termination. It emphasizes that the most...