Tamas v. Family Video Movie Club, Inc.

Decision Date28 March 2013
Docket NumberNo. 11 C 1024,11 C 1024
PartiesALINA TAMAS, Individually, and on Behalf of All Others Similarly Situated, Plaintiffs, v. FAMILY VIDEO MOVIE CLUB, INC., Defendant.
CourtU.S. District Court — Northern District of Illinois

Judge John Z. Lee

MEMORANDUM OPINION AND ORDER

Defendant Family Video Movie Club, Inc. ("Family Video") moves for summary judgment as to the claims brought by Plaintiff Alina Tamas ("Tamas") alleging that Family Video has violated the Fair Labor Standards Act ("FLSA") by wrongfully classifying Tamas (and those employees of Family Video who are similarly situated) as exempt employees. Tamas responds that genuine issues of material fact exist as to the nature of her position and preclude the Court from granting summary judgment in favor of Family Video. For the reasons set forth below, Family Video's motion is denied.

Facts
I. Undisputed Material Facts

The following facts are undisputed. Family Video is a privately owned movie and video game retailer with hundreds of individual retail stores in more than 18 states. (Def.'s Local Rule 56.1(a)(3) Statement of Undisputed Facts ("Def.'s LR 56.1(a)(3)") ¶ 1.) Tamas was formerly employed as a "MIT," or "Manager-in-Training" at FamilyVideo in 2010.1 (Id. ¶¶ 2, 5.) Tamas began training with various store managers, her district manager, and her regional director to become a store manager in April 2010. (Id. ¶ 6.) When Tamas received her first paycheck, she realized that she was considered an hourly employee rather than a salaried employee. (Id. ¶ 7.) When Tamas asked her district manager and regional director whether she could be paid a salary, she was told that she would be paid a salary once she successfully completed a Salary Approval Evaluation. (Id.)

As of June 7, 2010, Tamas had been trained on all of the tasks identified in the MIT Salary Approval Evaluation, which she verified in writing. (Id. ¶¶ 11, 13.) The district manager recommended to the regional director that Tamas be promoted from an hourly MIT to a salaried MIT. (Id. ¶ 14.) The regional manager certified that she was ready and eligible to be promoted to a salaried MIT. (Id. ¶ 15.) Tamas became a salaried MIT at the Family Video locations in Mundelein, IL and Round Lake, IL. (Id. ¶¶ 17, 18.) As a salaried MIT, Tamas was the highest-ranked person at her stores when there was no district manager or store manager ("SM") present on site. (Id. ¶¶ 19, 20.)

As a MIT, it is undisputed that Tamas was involved in interviewing job applicants and could make suggestions as to hiring, firing, promotion, demotion and change in employment status of the employees at her stores. (Id. ¶¶ 28, 29.) Tamas made two recommendations for hire, both of whom were hired by Family Video. (Id. ¶ 30.) Tamas made one recommendation for promotion, and that person was promoted to assistant manager. (Id. ¶31.) She also conducted personnel reviews of her employees. (Id. ¶ 40.) Tamas coached and trained employees as directed. (Id. ¶ 42.) Tamas handled customercomplaints. (Id. ¶ 46.) As a salaried MIT, Tamas received at least $455 per week in salary. (Id. ¶ 76.)

On October 25, 2010, Tamas was recommended for a "medium volume store manager position" or a "low volume store manager position." (Id. ¶ 77.) However, Tamas resigned as a salaried MIT on November 1, 2010. (Id. ¶ 78.) She continued working at Family Video as a part-time customer service representative until April 2011. (Id. ¶ 79.)

II. Material Facts In Dispute

There is a fundamental dispute, at the heart of this case, as to the nature of the duties Tamas performed as a salaried MIT and the amount of time she spent doing them.

For its part, Family Video offers the Declaration of Jim Burda, a Regional Director, who avers, in relevant part, that "[o]nce an employee becomes a salaried MIT, the employee is expected to be in charge of the store, run the store as though the employee was the owner, and perform all of the duties that are expected of a Store Manager . . . ." (Def.'s LR 56.1(a)(3), Ex. 2, ¶ 5.) Family Video further relies upon the job description for a SM contained in the Family Video Employee Handbook, which describes the tasks that SMs and MITs were expected to perform. (Id. ¶ 27; Ex. 5 thereto at 9-10.) For example, Family Video's Employee Handbook states that MITs are "trained to become proficient in all functions of the Store Manager." (Id., Ex. 5 at 10.)

Tamas, in contrast, steadfastly denies that she served in a managerial capacity and provides exhaustive lists of non-managerial tasks that she actually performed. (See, e.g., Pl.'s Resp. to Def.'s LR 56.1(a)(3) ¶ 4.) Tamas asserts that while she may have been trained to perform certain managerial tasks in theory, she did not necessarily performthem in practice. (Id. ¶ 3.) Tamas also points out that Family Video's training manual (the "Star Binder") also assigned numerous non-managerial tasks to MITs. (Id. ¶ 9.) Furthermore, according to Tamas, "SMs and MITs perform uniform janitorial functions" including sweeping, trash removal and snow removal. (Pl.'s LR 56.1(b)(3)(C) ¶ 28.) Finally, Tamas alleges that she either lacked authority to perform managerial tasks unless directed by Family Video management or only did so pursuant to Family Video policies that did not allow her to exercise discretion. (See, e.g., id. ¶¶ 2, 22, 23, 25, 26.)

As a result, there are numerous material facts in dispute, including but not limited to: (1) whether Tamas made certain decisions at her stores without approval from her managers, including but not limited to setting sales goals and making schedules (Pl.'s Resp. to Def.'s LR 56.1(a)(3) ¶¶ 33, 34); (2) whether Tamas was "in charge of" her store (id. ¶ 21); (3) how many employees Tamas supervised at any given time and how many hours those employees worked (id. ¶¶ 23, 24); (4) how much Tamas was paid as a salaried MIT at each store compared with the hourly employees at those stores (id. ¶¶ 25, 26); and (5) whether Tamas was permitted to fire employees at her stores. (Id. ¶ 32.)

Discussion
I. Summary Judgment Standard

Summary judgment is proper where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the initial burden of establishing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Once the moving party has sufficiently demonstrated the absence of a genuine issue of material fact, the nonmoving party must then set forth specific facts demonstrating that there aredisputed material facts that must be decided at trial. Id. at 321-22. The Court must take the evidence in the light most favorable to the non-movant and draw all justifiable inferences in the non-movant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).

II. Fair Labor Standards Act

The FLSA provides that employees must receive overtime pay if they work more than 40 hours in a given work week. 29 U.S.C. § 207(a)(1). However, "any employee employed in a bona fide executive, administrative, or professional capacity" is exempt from this requirement. 29 U.S.C. § 213(a)(1). The burden falls to the employer to establish that an exemption applies. Schaefer-LaRose v. Eli Lilly & Co., 679 F.3d 560, 571 (7th Cir. 2012). The Court is obligated to construe exemptions narrowly against the employer. Mitchell v. Lublin, McGaughy & Assoc., 358 U.S. 207 (1959). Here, Family Video contends that the executive and/or administrative exemptions apply to Tamas in her role as a MIT, and that she was properly classified as an exempt employee. Not surprisingly, Tamas disagrees.

The DOL has promulgated regulations that set forth numerous factors for the Court to consider in determining whether an exemption applies to a particular employee. See 29 C.F.R. § 541.100 (2004) (General rule for executive employees); 29 C.F.R. § 541.200 (2004) (General rule for administrative employees); 29 C.F.R. § 541.708 (2004) (Combination exemptions). These regulations, and the cases interpreting them, provide a roadmap for the Court to evaluate Defendant's motion.

For an employee to be classified as exempt under the executive exemption, the following requirements must be met:

(1) the employee is paid a salary of $455 or more per week;
(2) the employee's "primary duty" is management;
(3) the employee's job includes customary and regular direction of at least two other employees; and
(4) the employee may either hire or fire other employees or her suggestions regarding hiring and firing of other employees are accorded "particular weight."

29 C.F.R. § 541.100 (2004).

For the administrative exemption to apply, employees must:

(1) be paid a salary of $455 or more per week2 ;
(2) have as their "primary duty the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers"; and
(3) their primary duty must include "the exercise of discretion and independent judgment with respect to matters of significance."

29 C.F.R. § 541.200(a) (2004).

Finally, pursuant to the regulation commonly referred to as the "combination exemption":

[e]mployees who perform a combination of exempt duties as set forth in the regulations in this part for executive, administrative, professional, outside sales and computer employees may qualify for exemption. Thus, for example, an employee whose primary duty involves a combination of exempt administrative and exempt executive work may qualify for exemption. In other words, work that is exempt under one section of this part will not defeat the exemption under any other section.

29 C.F.R. § 541.708 (2004).

As reflected in these regulations, in determining whether these exemptions apply, the Court must first decide what tasks, duties and responsibilities fall within theemployee's "primary duty." The DOL provides the following definition of "primary duty" and a non-inclusive four-factor...

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