Osterman v. Gen. R.V. Ctr., Inc., Case No. 19-10698
| Decision Date | 16 November 2020 |
| Docket Number | Case No. 19-10698 |
| Parties | MICHAEL OSTERMAN Plaintiff, v. GENERAL R.V. CENTER, INC., Defendant. |
| Court | U.S. District Court — Eastern District of Michigan |
OPINION AND ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT (ECF NO. 19), DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (ECF NO. 20), AND PLAINTIFF'S MOTION TO STRIKE (ECF NO. 28)
This matter concerns alleged violations of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 207(a), and the Michigan Workforce Opportunity Wage Act of 2014 ("MWOWA"), Mich. Comp. Laws § 408.414a. Plaintiff Michael Osterman alleges that his employer, Defendant General R.V. Center, Inc., failed to pay him for all hours worked and at a rate of 1 ½ times his regular rate of pay for all hours worked in excess of 40 hours per week. (ECF No. 1, ¶¶ 26-27). In response, General R.V. contends that Osterman was properly compensated under a "flat rate system" that exempted his compensation from the overtime requirements of these statutes. (ECF No. 3, PageID.14).
Before the court are Osterman's partial motion for summary judgment, (ECF No. 19), and General R.V.'s motion for summary judgment, (ECF No. 20). Also pending is Osterman's motion to strike, filed in reaction to General R.V.'s untimely response to his partial summary judgment motion. (ECF No. 28). The court has determined that a hearing on the subject motions is not necessary. For the reasons set forth below, the court GRANTS Osterman's motion for partial summary judgment, (ECF No. 19), and DENIES General R.V.'s motion for summary judgment, (ECF No. 20). The court also DENIES Osterman's motion to strike. (ECF No. 28).
General R.V. Center sells and services recreational vehicles in Michigan and across the country. (ECF No. 19-4, PageID.155-56). Plaintiff, Michael Osterman, worked as a pre-delivery inspection technician for General R.V. from May 2015 until January 2019. (ECF No.1, PageID.2; ECF No.3, PageID.9). As an inspection technician, Osterman serviced units awaiting sale as well as those that had just been sold. (ECF No. 19-4, PageID.157-58; ECF No. 1, PageID.2; ECF No. 3, PageID.9). Christopher Dietrich, General R.V.'s Senior Business Consultant of Operations, testified that technicians like Osterman performed the same work ("pre-prep" work) regardless of whether they performed it before or after a sale. (ECF No. 19-4, PageID.158).
General R.V. compensated Osterman at all relevant times under a flat rate system. (Id. at PageID.159). General R.V. implemented the flat rate system company-wide1 in 1997. (Id. at PageID.155, 161). Under this system, General R.V. calculated Osterman's pay by multiplying his hourly rate by the number of flat rate hours for a particular assignment. (Id. at PageID.159). Industry standards predetermined these flat rate hours, essentially basing them on the number of hours that a technician generally should take to complete a given task. (Id. at PageID.159). General R.V. paid Osterman these flat rate hours, regardless of whether he worked longer or shorter than that amount. (ECF No. 19-2, PageID.139). General R.V. determined Osterman's hourly rate based on his skill level. (ECF No. 19-4, PageID.159). General R.V. did not pay Osterman overtime hours for hours worked in excess of 40 hours per week during any of the time he worked there. (ECF No. 19-3, PageID.149). Osterman argues that this failure to pay him overtime hours violated the FLSA and the MWOWA.
When a party files a motion for summary judgment, it must be granted "if the movant shows that there is no genuine dispute as to any material fact and themovant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record . . . ; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1). The standard for determining whether summary judgment is appropriate is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." State Farm Fire & Cas. Co. v. McGowan, 421 F.3d 433, 436 (6th Cir. 2005) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). Additionally, the evidence and all reasonable inferences must be construed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Where the movant establishes the lack of a genuine issue of material fact, the burden of demonstrating the existence of such an issue shifts to the non-moving party to come forward with "specific facts showing that there is a genuine issue for trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). That is, the party opposing a motion for summary judgment must make an affirmative showing with proper evidence and must "designate specific facts in affidavits, depositions, or other factual material showing 'evidence on which the jury could reasonably findfor the plaintiff.'" Brown v. Scott, 329 F. Supp. 2d 905, 910 (E.D. Mich. 2004) (quoting Anderson, 477 U.S. at 252). However, mere allegations or denials in the non-movant's pleadings will not satisfy this burden, nor will a mere scintilla of evidence supporting the non-moving party. Anderson, 477 U.S. at 248, 251.
In assessing whether there is a genuine dispute about a material fact, the court must determine if the evidence in the case "is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. Such a determination requires that the court "view the evidence presented through the prism of the substantive evidentiary burden" applicable to the case. Id. at 254. Thus, if the plaintiff must ultimately prove its case at trial by a preponderance of the evidence, on a motion for summary judgment the Court must determine whether a jury could reasonably find that the plaintiff's factual contentions are true by a preponderance of the evidence. See id. at 252-53. Finally, if the nonmoving party fails to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof, the movant is entitled to summary judgment. Celotex, 477 U.S. at 323. The court must construe Rule 56 with due regard not only for the rights of those "asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury," but also for the rights of those "opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis." Id. at 327.
Osterman brings this case under the overtime provisions of the FLSA and the MWOWA. This district has recognized that the overtime provisions of these acts "largely parallel each other" so they are analyzed in the same manner. Arrington v. Mich. Bell Telephone Co., 746 F. Supp. 2d 854, 857 (E.D. Mich. 2010); Allen v. Lincare, Inc., No. 16-CV-11996, 2018 WL 352362, at *8 n.2 (E.D. Mich. Jan. 10, 2018) (citing Dikker v. 5-Star Team Leasing, 243 F. Supp. 3d 844, 854 n.3 (W.D. Mich. 2017)). Because neither party has indicated that the court should treat this analysis any differently, Osterman's claims are addressed here through a singular analysis.
Section 207(a) of the FLSA entitles employees to receive at least 1 ½ times their regular rate of pay for hours they work in excess of 40 hours per week unless they are exempt from the overtime provisions of the Act. 29 U.S.C. § 207(a). It is undisputed that Osterman worked more than 40 hours per week and was not compensated at 1 ½ times his regular rate of pay. (ECF No. 19-3, PageID.149). Therefore, unless Osterman was exempt from the overtime provisions of the FLSA, General R.V. violated the plain language of the Act.
FLSA overtime exemptions are "affirmative defense[s] on which the employer has the burden of proof." Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974); see also Douglas v. Argo-Tech Corp., 113 F.3d 67, 70 (6thCir. 1997). Those exemptions "are to be narrowly construed against the employers seeking to assert them." Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960). The employer bears the burden of proving that the employee meets each of the exemption's requirements by "clear and affirmative evidence." Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 501 (6th Cir. 2007). Rather than being a heightened evidentiary standard, however, the Sixth Circuit has clarified that the defendant must establish the elements of the exemption by a preponderance of the evidence. Renfro v. Indiana Mich. Power Co., 497 F.3d 573, 576 (6th Cir. 2007). The ultimate question of whether an employee is exempt from overtime wage requirements is a question of law. Ale v. TVA, 269 F.3d 686, 691 (6th Cir. 2001).
General R.V.'s argument is that Osterman is exempt from the overtime provisions of the FLSA because it paid him on a commission basis. (ECF No. 20, PageID.202-207); see 29 U.S.C. § 207(i). This exemption provides as follows:
No employer shall be deemed to have violated subsection (a) by employing any employee of a retail or service establishment for a workweek in excess of the applicable workweek specified therein, if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under section 206 of this title, and (2) more than half his compensation for a representative period (not less than one month) represents commissions on goods or services. In determining the...
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