Mitchell v. Abercrombie & Fitch, Co., No. C2-04-306.

• Decision Date: 31 March 2006
• Docket Number: No. C2-04-306.,No. C2-05-596.
• Citation: 428 F.Supp.2d 725
• Parties: Melissa MITCHELL, Plaintiff, v. ABERCROMBIE & FITCH, CO. et al., Defendants, Casey FULLER,<SMALL><SUP>1</SUP></SMALL> Plaintiff, v. ABERCROMBIE & FITCH, CO. et al., Defendants.
• Court: U.S. District Court — Southern District of Ohio

428 F.Supp.2d 725

Melissa MITCHELL, Plaintiff, v. ABERCROMBIE & FITCH, CO. et al., Defendants, Casey FULLER,¹ Plaintiff, v. ABERCROMBIE & FITCH, CO. et al., Defendants.

No. C2-04-306.

No. C2-05-596.

United States District Court, S.D. Ohio, Eastern Division.

March 31, 2006.

COPYRIGHT MATERIAL OMITTED

Anthony F. Fata, Miller Faucher & Cafferty LLP, Chicago, IL, Bryan L. Clobes, Miller Faucher & Cafferty LLP, Philadelphia, PA, Elmer Morton Goldman, Mason, OH, James F. Keller, Gottesman & Associates, Zachary Gottesman, Cincinnati, OH, for Plaintiff.

Jonathan T. Tyack, Tyack Blackmore & Liston Co. LPA, John William Ferron, Ferron & Associates, Columbus, OH.

Allen Shawn Kinzer, Mark A. Knueve, Thomas Brennan Ridgley, Vorys Sater Seymour & Pease, Columbus, OH, for Defendants.

OPINION AND ORDER

SARGUS, J.

In this consolidated, putative class action, Plaintiffs, Melissa Mitchell, Jennifer Frietsch and Scott Oros, on behalf of themselves and similarly situated class members, allege that Defendants, Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc. ("Abercrombie" or "Defendants"), violated the Fair Labor Standards Act, 29 U.S.C. § 207(a) ("FLSA"), and the Ohio Minimum Fair Wage Standards Act, O.R.C. § 4111.03(A), by failing to pay non-exempt Assistant Managers and Managers-in-Training proper compensation for overtime. Plaintiffs also claim that Abercrombie improperly classifies its Store Managers as exempt executives for purposes of evading the requirement to pay them overtime.

On December 28, 2004, this Court denied Defendants' Motion to Dismiss the Plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6), declining to exercise the option of converting the Motion to Dismiss to one for summary judgment. The parties have now completed the necessary discovery on the issues relating to overtime compensation. The matter is now ready for disposition under Federal Rule of Civil Procedure 56. Thus, before the Court are Defendants' separate Motions for Summary Judgment against each of the three named Plaintiff's on all of their claims. For the reasons that follow, Defendants' Motion for Summary Judgment on the Claims of Jennifer Frietsch is granted; Defendants' Motion for Summary Judgment on the Claims of Melissa Mitchell is granted; and Defendants' Motion for Summary Judgment as to Plaintiff Scott Oros' Claim Under Count One of the Amended Complaint is granted.

I.

Defendants, Abercrombie & Fitch Co. and Abercrombie & Fitch Stores, Inc., operate over 800 retail clothing stores throughout the United States selling specialty clothing for men, women and children. Although the stores vary in location, size, volume, and staffing patterns, most Abercrombie stores employ a Store Manager, at least one Assistant Manager, and, depending on the store, at least one Manager-in-Training ("MIT"), who trains to become an Assistant Manager. In addition, most Abercrombie stores employ a large number of part-time hourly employees as sales associates.

Abercrombie classifies its Store Managers as "exempt" from the overtime requirements of the FLSA and pays no compensation to them for ours they work in excess of 40 per week. (Routh Aff. at ¶ 3.) Abercrombie classifies Assistant Managers and MITs as "non-exempt" for the purposes of the overtime requirements of the Fair Labor Standards Act. (Routh Aff. at ¶ 4.) Plaintiffs maintain that the FLSA, 29 U.S.C. § 207(a), and Ohio Minimum Fair Wages Standards Act, O.R.C. § 4111.03, require Abercrombie to compensate these employees for each overtime hour worked at a rate not less than one and one-half (1.5) times their regular hourly rate. Plaintiffs allege that instead of paying 1.5 times the employees' hourly rate, Abercrombie paid Assistant Managers and MITs hourly "Supplemental Pay," or more particularly, only half (.5) their hourly rate, for overtime hours worked above 40 hours per week. Abercrombie calculated the hourly Supplemental Pay by dividing the employee's weekly salary by 40 and then by 2, to arrive at an hourly rate to be paid for each hour worked in excess of 40 each week. (Routh Aff. at ¶ 5.)

Plaintiff, Scott Oros, resides in Westlawn, Pennsylvania. Oros worked for Abercrombie at its Streamtown Mall store in Scranton, Pennsylvania beginning on January 1, 2003 initially as a MIT, then as an Assistant Manager and finally, beginning in June, 2003, as a Store Manager where he remained until his resignation in October, 2003.² When Oros applied for the position as an MIT, District Manager Sarah Nicholson interviewed him. During his pre-hire interview, Nicholson informed Oros that is he was employed as an MIT, he would earn a salary and would be paid Supplemental Pay, that is, half of his salary's hourly rate-equivalent for any time he worked in excess of 40 hours. (Oros Dep. at 45-50.) Oros' starting annual salary was $23,000, or $442.31 per week. (Routh Aff., ¶ 7.) Oros believed that the Supplemental Pay was "like a bonus" for time worked in excess of 40 hours. (Id. at 49.)

After he completed the MIT program, Oros was promoted to Assistant Manager at the Scranton store. He continued to be paid on a salary basis plus Supplemental Pay. In June 2003, Oros transferred to the Oxford Valley store near Philadelphia and was promoted to the position of Store Manager. After two months, he transferred to Abercrombie's Allentown store, where he was the Store Manager for approximately three to four months until the end of his employment in early October 2003.³

Plaintiffs Melissa Mitchell and Jennifer Frietsch, also former employees of Abercrombie each began as MITs and subsequently advanced to Assistant Managers. Unlike Oros, neither Mitchell nor Frietsch ever worked as a Store Manager.

Jennifer Frietsch first applied for employment with Abercrombie in the Summer of 1998 and began working as a parttime Brand Representative.⁴ After the Summer of 1998, Frietsch continued to work part-time as a Brand Representative for Abercrombie, primarily at its Kenwood mall near Cincinnati, Ohio, during summers and holiday seasons in 1998, 1999 and 2000. (Frietsch Dep. at 28-34.) In October 2001, after Frietsch graduated from college, she was recruited by Bill Leifheit to apply for a job as a MIT. Leifheit offered Frietsch a position as a MIT at an annual salary of $24,000. Frietsch was told on her first day of employment as a MIT that she was going to be paid a salary, and an additional half-time rate when she worked over 40 hours in a week. (Frietsch Dep. at 70.) Frietsch thought that Supplemental Pay was a bonus she would receive for working so much. (Frietsch Dep. at 194.) After she completed the MIT training program, Frietsch was promoted to Assistant Manager in December 2001. Although she received an increase in pay, the manner in which she was paid did not change. (Routh Aff. at ¶ 6, Exh. 3.) Frietsch resigned her employment in or about December, 2002.

Melissa Mitchell applied for employment with Abercrombie after she was recruited by her friend and co-Plaintiff, Jennifer Frietsch, who was then an Assistant Manager with Abercrombie. District Manager Bill Leifheit interviewed Mitchell for a position as a MIT. During this initial pre-hire interview, as he had done with Frietsch, Leifheit discussed compensation with Mitchell and informed Mitchell that if she was employed with Abercrombie as a MIT and an Assistant Manager, she would earn a salary, and, in addition, that she would earn half of the salary's hourly rate equivalent for any time worked in excess of 40 hours in a workweek. (Mitchell Dep. at 52, 118.) Mitchell also considered Supplemental Pay as a bonus and a means for Abercrombie to demonstrate that it valued its employees. (Mitchell Dep. at 232.) Mitchell was eventually hired as a MIT into Abercrombie's store in the Kenwood mall near Cincinnati, Ohio. After she completed the MIT training, Mitchell was promoted to Assistant Manager. She received an increase in pay, but the manner in which she was paid did not change. (Routh Aff. at ¶ 6, Exh. 2.) Mitchell resigned her employment in December, 2002.

At their new job orientation, Oros and Mitchell received and signed an Orientation Checklist which contained a section that states "Assistant Manager Pay (in non-California states)—Assistant Managers receive a weekly base salary for all hours worked each week. Hours over 40 per week are paid at the Supplemental Pay rate." (Oros Dep. Exh. 2; Mitchell Dep. Exh 2.)⁵ The Orientation Checklist then made a reference to the page in the Associate Handbook where more information could be found regarding Supplemental Pay. Oros, Mitchell and Frietsch also received a copy of the Associate Handbook at the time they were hired:⁶

ASSISTANT MANAGER PAY AND SUPPLEMENTAL HOURS (NON-CALIFORNIA)

Assistant Managers receive a weekly base salary for all hours worked each week. This is computed and reflected on paychecks at an hourly rate. Managers—in—Training, Trainees and Assistant Managers working in states other than California are eligible for hourly Supplemental Pay for hours "worked" in excess of 40 each week. "Hours Worked" include the following: regular, meeting in store/meeting out of store, inventory, management training, injury, new store opening, sick. An hourly Supplemental Pay rate is calculated by dividing the Assistant Manager weekly base salary by 40 and then by 2, to arrive at an hourly rate to be paid for each hour worked in excess of 40 each week. Example: $480 weekly base salary

                                  divided by 40 = $12.00 equivalent hourly rate
                                  divided by 2 = $ 6.00 Supplemental Pay rate
                

All benefit hours must be paid on 8 straight time hours. Benefit hours, excluding sick pay, will not count as hours worked or accumulate towards the calculation of supplemental pay. Hours worked on a holiday must be paid based on 8 straight hours (this is in addition to the 8 hours of holiday pay). Only hours worked and sick pay hours are to be accumulated towards the...