UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

 

ROBERT HALL, et al.,

Plaintiffs,

v.

PLASTIPAK HOLDINGS, INC., et al.,

Defendants.

 /

Case No. 15-11428

OPINION AND ORDER GRANTING

DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

Pending before the court is Defendants’ Motion for Summary Judgment. (Dkt.

#53.) The motion is fully briefed. The court conducted a hearing on the motion on May

17, 2017. For the following reasons, the court will grant Defendants’ motion.

I. BACKGROUND

Plaintiffs are five current and former employees of Plastipak Packaging, Inc.’s

facility in Westland, Michigan. They allege that Defendant Plastipak Packaging, Inc.

(“Plastipak”) has violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et

seq., by failing to pay them sufficiently for those hours worked above the 40-hour

weekly threshold identified within the law. 

Defendants argue that, as Plaintiffs agree that they were “salary non-exempt”

employees, it is true that they are entitled to overtime pay, but regulations–in particular

29 CFR 778.114–permit a “fluctuating workweek method” of overtime pay calculation

like that Plastipak used. They claim that Plaintiffs have already admitted during their

deposition testimony that the four requirements to allow the use of this method of
calculation are satisfied. Defendants also argue that Plaintiffs’ allegations that their

employer would reduce their vacation pay whenever they worked less than 40 hours per

week was belied by Plaintiffs’ deposition testimony that Plastipak only reduced their

bank of vacation pay for time that they had requested to take off. They further point to a

determination by the United States Department of Labor, whose audits in 2013 and

2016 found that Plastipak’s challenged practices were consistent with the FLSA. In sum,

Defendants assert that Plastipak’s pay practices are actually in excess of what the

FLSA requires. Finally, Defendants contend that Defendants Plastipak Holdings, Inc.,

Plastipak Technologies, LLC, and William C. Young are not “employers” under the

FLSA because they did not exercise control of the terms and conditions of Plaintiffs’

work, and thus are due a grant of summary judgment in their favor as well. 

Plaintiffs respond, firstly, that Defendants’ motion is premature as discovery is

not set to close for a number of months. They continue that genuine issues of fact exist

as to whether Plastipak’s pay practices as implemented actually conform to the

fluctuating workweek overtime calculation method, because Plaintiffs were not paid

time-and-a-half for overtime hours, and Plaintiffs had to consume vacation or paid time

off during weeks when they worked less than 40 hours. They also argue that it is

unclear whether the Plaintiffs understood and agreed to the fluctuating workweek

arrangement. 

They point out that Defendants’ claims regarding Department of Labor audits are

not supported by any admissible evidence beyond an affidavit of a Plastipak employee.

Further, Plaintiffs contend that Defendants’ reliance upon Department of Labor

regulations is misguided, as they include language stating that “compliance . . . cannot

2
be rested on any application of the fluctuating workweek overtime formula.” Plaintiffs

also assert that dismissal of Defendants other than Plastipak would be immature as

they have not had the opportunity to conduct full depositions of Mr. Young or company

representative for the other Defendants. 

In reply, Defendants claim that the years-long period during which named

Plaintiffs received paystubs describing their pay in detail, coupled with other indicia that

they were informed of the policy, undermines their insistence that they did not

understand the fluctuating workweek method of overtime calculation. They also answer

Plaintiff’s contentions regarding the undeveloped state of discovery by pointing out that

the instant case has been pending for two years, and Plaintiffs unilaterally cancelled the

deposition of the complained-of affiant. Defendants argue that the use of banked

vacation time occurred when Plaintiffs requested time off, that they were paid the same

weekly pay when they refused to work overtime, and that employers are of course

expected to deduct from accumulated time off when employees take time away from

work. They also advance the position that the regulatory language identified by Plaintiffs

does not apply in the instant case, where employees are paid overtime and were not

misclassified as salary exempt.

This court has already had occasion to address and reject Defendants’

arguments in the context of a motion to dismiss. (Dkt. #35, Pg. ID 645-49.) Defendants

also advanced similar arguments in a motion for reconsideration in support of their

contention that conditional class certification would be unduly burdensome in light of the

alleged weakness of Plaintiffs’ claims–a view the court rejected along with reference to

3
its earlier decision. (Dkt. #51, Pg. ID 978.) The court will once again address these

arguments, this time with an eye to the standard on summary judgment.

II. STANDARD

Summary judgment is proper “if the movant shows that 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). “In deciding a motion for summary judgment, the court must

view the evidence in the light most favorable to the non-moving party, drawing all

reasonable inferences in that party’s favor.” Sagan v. United States, 342 F.3d 493, 497

(6th Cir. 2003). The movant has the initial burden of showing the absence of a genuine

dispute as to a material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “[T]hat

burden may be discharged by showing . . . that there is an absence of evidence to

support the nonmoving party’s case.” Bennett v. City of Eastpointe, 410 F.3d 810, 817

(6th Cir. 2005) (internal quotation marks omitted). 

The burden then shifts to the nonmovant, who must put forth enough evidence to

show that there exists “a genuine issue for trial.” Horton v. Potter, 369 F.3d 906, 909

(6th Cir. 2004) (citation omitted). Summary judgment is not appropriate when “the

evidence presents a sufficient disagreement to require submission to a jury.” Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 243 (1986). In evaluating a summary judgment

motion, “the judge’s function is not himself to weigh the evidence and determine the

truth of the matter but to determine whether there is a genuine issue for trial . . . 

credibility judgments and weighing of the evidence are prohibited.” Moran v. Al Basit

LLC, 788 F.3d 201, 204 (6th Cir. 2015) (internal quotation marks and citations omitted). 

III. DISCUSSION

4
Defendants do not dispute that they paid the same hourly rate for overtime hours

that they nominally paid Plaintiffs for their standard hours. The plain text of the

regulation upon which Defendants rely states in part that:

. . . Since the salary in such a situation is intended to compensate the

employee at straight time rates for whatever hours are worked in the

workweek, the regular rate of the employee will vary from week to week

and is determined by dividing the number of hours worked in the

workweek into the amount of the salary to obtain the applicable hourly rate

for the week. Payment for overtime hours at one-half such rate in addition

to the salary satisfies the overtime pay requirement because such hours

have already been compensated at the straight time regular rate, under

the salary arrangement.

. . . Where all the legal prerequisites for use of the “fluctuating workweek”

method of overtime payment are present, the Act, in requiring that “not

less than” the prescribed premium of 50 percent for overtime hours

worked be paid, does not prohibit paying more. On the other hand, where

all the facts indicate that an employee is being paid for his overtime hours

at a rate no greater than that which he receives for nonovertime hours,

compliance with the Act cannot be rested on any application of the

fluctuating workweek overtime formula.

29 C.F.R. § 778.14(a) & (c). 

Under Plaintiffs’ reading, these provisions inexplicably contradict. They say that

“payment for overtime hours at one-half [the rate received for nonovertime hours] in

addition to the salary satisfies the overtime pay requirement,” but that an employer does

not comply with the FLSA if an employee is “paid for his overtime hours at a rate no

greater than that which he receives for nonovertime hours.” 

Resolving the apparent contradiction requires a nuanced understanding of the

nonovertime hourly rate. Plaintiff’s reading is erroneous because it ignores the essential

character of the fluctuating work week, which recalculates the base pay rate according

to the total hours worked. Because an employee’s base hourly rate reduces

5
proportionately according to each hour worked, an employer who merely compensates

an employee for overtime hours “at a rate no greater than that which he receives for

nonovertime hours” would essentially pay the employee nothing at all for overtime hours

beyond the normal salary. That is to say, an employee who worked 40 hours in one

week and received a salary of $400 can be said to have worked for an hourly rate of

$10. If the employee received the same compensation for 60 hours without an overtime

premium, she would have earned an hourly rate of $6.66. What the law requires is that

for the 20 overtime hours, the employer pay her an additional $3.33 an hour over and

above her normal salary. An illustration of this principle is contained in 29 C.F.R.

§ 778.14(b). Plaintiffs supply no law to the contrary.

Absolutely no suggestion exists that Defendants paid less than a 0.5 hourly

premium for overtime hours. In fact, the undisputed facts are that Plastipak greatly

exceeded this premium, because it established the “base rate” for calculating overtime

pay base rate by simply dividing the normal weekly salary by 40 hours rather than the

larger, total number of hours worked. Defendants then paid 1.0 times the calculated

hourly base rate. To put it another way, Defendants’ practice was to pay the employee

in the latter of the two scenarios described above an hourly rate of $10 for overtime

hours when they would have only been required to pay $3.33. As no issue of material

fact exists as to whether, assuming the below requirements are met, Defendants’ hourly

overtime pay practices satisfy the requirement of the FLSA, the court will grant

summary judgment on this question.

Defendants concede that “[t]he Sixth Circuit places the burden on employers to

show application of the fluctuation workweek method.” (Dkt. #53, Pg. ID 1019.) The

6
parties agree that the four requirements for Defendants to operate under the fluctuating

workweek method under 29 C.F.R. § 778.114 are: 

(1) the employee’s hours must fluctuate from week to week;

(2) the employee must receive a fixed salary that does not vary with

the number of hours worked during the week (excluding overtime

premiums);

(3) the fixed amount must be sufficient to provide compensation every

week at a regular rate that is at least equal to the minimum wage;

and

(4) the employer and employee must share a “clear mutual

understanding” that the employer will pay that fixed salary

regardless of the number of hours worked.

Mitchell v. Abercrombie & Fitch, Co., 428 F. Supp. 2d 725, 734 (S.D. Ohio 2006), aff’d,

225 F. App’x 362 (6th Cir. 2007) (citations omitted). Plaintiffs do not challenge the

satisfaction of the first or third requirements. Therefore, the court will grant summary

judgment for Defendants on those questions. 

A. Variation of Fixed Salary

Plaintiffs argue that a genuine issue of fact exists over whether Defendants

impermissibly required Plaintiffs to spend banked vacation time for two-week periods

when they worked less than 80 hours. As Defendants rightly point out, the fact that an

employer sometimes requires employees to use vacation time is hardly, by itself, proof

of an impermissible practice. This court’s previous opinion rejected a similar argument

operating under a different standard, stating that the cited cases make “relatively clear

that only deductions of a disciplinary nature are allowed under the fluctuating work week

. . . [d]eductions to ‘make up the difference’ for an employee who was scheduled, for

example, to work only thirty-two hours are of an entirely different sort[.]” (Dkt. #35, Pg.

7
ID 647.) Defendants now contend that Plastipak only made deductions when Plaintiffs

specifically requested time off and cite to deposition testimony by four of the named

Plaintiffs. 

The court may grant summary judgment even prior to the close of discovery

where further discovery “would not provide relevant evidence on the single dispositive

issue in this case.” Grimmett v. Dace, 34 F. Supp. 3d 712, 727 n.19 (E.D. Mich. 2014)

(citing Maki v. Laakko, 88 F.3d 361, 367 (6th Cir. 1996)). During his deposition, Steven

Trent testified that hours were deducted when he took time off, but he could not

remember a time when he was forced to use vacation time. (Dkt. #53-2, Pg. ID 1087.)

Roderick Smartt testified that any time he used vacation time represented instances that

he had requested off. (Dkt. #53-3, Pg. ID 1135.) Ebony Martin testified that she did not

recall a time when she was forced to use vacation time at the employer’s behest. (Dkt.

#53-4, Pg. ID 1186-87.) Jason Trent testified that he did not view paystubs indicated a

reduction in vacation time were the result of him “being docked for time when [he] was

working less than [full time.]” (Dkt. #53-5, Pg. ID 1227.) Defendants do not cite to the

deposition of Robert Hall in their motion nor do Plaintiffs cite it within their response

because it occurred on March 27, 2017 (Dkt. #58-3, Pg. ID 1617), and the transcript

became available after these materials were filed. He testified that if an employee were

sick, he or she would be forced to use vacation hours but would then also be expected

to make up the lost hours as overtime or risk discipline. (Dkt. #58-3, Pg. ID 1622.) 

When faced with a similar argument, the court in Mitchell v. Abercrombie & Fitch,

Co., concluded that summary judgment was appropriate because Plaintiffs had “failed to

create an issue of fact by testifying, without more, that they believed they would be

8
docked in any given week they worked less than 40 hours.” 428 F. Supp. 2d 725, 736

(S.D. Ohio 2006), aff’d, 225 F. App’x 362 (6th Cir. 2007). The court explained in further:

Abercrombie’s policy requiring that MITs and Assistant Managers code 40

“hours” of combined benefit and work time per week subject to disciplinary

action does not show a “significant likelihood” that Plaintiffs’ fixed salaries

were subject to docking. Plaintiffs have shown neither “actual deductions,”

nor a “clear and particularized policy” which “ ‘effectively communicates’

that deductions will be made in specified circumstances.” None of the

documents adduced by Plaintiffs indicate that MITs or Assistant Managers

will be docked in salary under circumstances outside the scope of 29

C.F.R. § 778.114.

Instead, each Plaintiff received a fixed salary regardless of how many

hours he or she worked. Plaintiffs concede that they never earned less

than their salary and that their pay was never docked. Abercrombie’s pay

and time records for Plaintiffs also establish that they always received

their full salary. In weeks that Plaintiffs worked fewer than 40 hours in a

workweek, they received their full salary, and their accrued paid benefit

time was reduced by the number of hours below 40. In sum, Plaintiffs

receive a fixed salary that did not vary with the number of hours worked

during the week. 

Id. at 737 (citing Auer v. Robbins, 519 U.S. 452, 452, 117 S. Ct. 905, 137 L.Ed.2d 79

(1997)). 

Plaintiffs in turn point to their pay stubs, which indicate that during two-week

period when they worked less than 80 hours, their vacation days were deducted to

make up the difference. Nevertheless, Plaintiff’s paystubs, standing on their own, are

not sufficient to establish a genuine issue of material fact. It is undisputed that these

deductions from vacation time occurred. What is in question is whether they were

performed for a permissible reason.

Plaintiffs do not present any evidence for their contention that Defendants

impermissibly deducted their vacation time and otherwise do not dispute that, setting

aside overtime, they were paid the same amount every week regardless of the hours

9
worked. Aside from bald speculation, they do not provide an example of an instance

where they were paid less than their weekly salary for working less than 40 hours in a

week. Thus, summary judgment in Defendants’ favor is appropriate on this question as

well.

B. Presence of a Clear Mutual Understanding

It is likewise Defendants’ burden to establish a clear mutual understanding

between the parties that the employees were working on a salaried basis. The Sixth

Circuit has indicated that such a burden is met in the following circumstances:

the district court observed that [plaintiff] had signed and acknowledged the

explanatory calculation form indicating that she understood the Fair Labor

Standard Act’s fluctuating work week method of overtime compensation,

that [plaintiff’s] claim was based on her post hoc self-serving assertion at

trial, that [plaintiff] had presented no corroborating evidence whatsoever to

support her asserted misunderstanding of the manner in which her rate of

pay was calculated, and that her demeanor at trial discounted her

credibility as a witness.

Highlander v. K.F.C. Nat. Mgmt. Co., 805 F.2d 644, 648 (6th Cir. 1986). 

The district court in that case had heard testimony at a bench trial. Here the court

makes no determination as to witness credibility, but Plaintiffs Steven Trent, Roderick

Smart, and Ebony Martin all signed acknowledgment forms explaining the method of

calculation method. (Dkts. ##53-6, 53-7, 53-8.) Though it was attached to a previous

filing without being included in Defendants’ instant motion, it appears that Robert Hall

also signed a copy of this acknowledgment form in 2006. (Dkt. #41-3, Pg. ID 714.)

Jason Trent testified that he signed a verification form for an employee handbook

containing the same language along with a statement indicating that he understood that

the handbook outlined his “privileges and benefits, as well as [his] responsibilities and

10
obligations” as an employee. (Dkt. #53-5, Pg. ID 1200.) Each of the named Plaintiffs

except for Robert Hall also signed a copy of that statement (Dkt. #53-10, 53-11, 53-12,

53-13.) Similar to the circumstances in Highlander is the fact that Plaintiffs supply no

corroborating evidence to support their claims of confusion beyond their own post hoc

testimony. Indeed Plaintiffs, including Hall, do not dispute that they received the sheet

with the handbook explanation of how their wages were calculated or the

acknowledgment document. 

They contend, through their own deposition testimony, only that no one verbally

explained this document to them and that they understood they were being paid

“straight time” at their normal hourly rate for overtime. The Sixth Circuit has held that in

FLSA cases, uncorroborated testimony by Plaintiffs operating on first-hand knowledge

is sufficient to create a genuine issue of material fact where that testimony is

inconsistent with Defendants’ factual account. Moran v. Al Basit LLC, 788 F.3d 201, 205

(6th Cir. 2015). However, as explained supra, Plastipak’s practice was consonant with

Plaintiffs’ averred understanding. Employees were paid an overtime premium of 1.0

times their normal non-overtime rate, resulting in payments of at least double what the

FLSA mandates for overtime. 

The law does not require Plaintiffs to be experts at calculating the fluctuating

workweek formula for employers to compensate them according to the method. Nor

does the law require employers to supplement written agreements with verbal

explanations. Instead, it only demands that the parties have a clear mutual

understanding “that the fixed salary is compensation (apart from overtime premiums) for

the hours worked each workweek, whatever their number, rather than for working 40

11
hours or some other fixed weekly work period[.]” 29 C.F.R. § 778.114(a). One must read

this with an understanding that, of course, the FLSA contemplates some manner of

overtime for additional hours. Put differently, the parties must understand that the

employee will not be docked pay for working less than 40 hours in a week. The

Department of Labor Letter Ruling Defendants attached to their brief explains: 

the Department’s regulations do not require that the “clear and mutual

understanding” extend to the method used to calculate overtime pay. . . .

Rather, 29 C.F.R. § 778.114 only requires that the employees have a

“clear and mutual understanding that they would be paid on a salary basis

for all hours worked.”

(Dkt. #53-17, Pg. ID 1311 (citations omitted).)

Plaintiffs point to nothing, either within their own testimony or without, suggesting

that they carried the mistaken belief–setting aside their vacation time argument

addressed above–that they would receive less than their normal salary for working less

than 40 hours in a week. Even drawing all inferences in favor of Plaintiffs, Defendants

have carried their burden of showing that a clear mutual understanding existed between

the parties. To hold otherwise would be to convert the “clear, mutual understanding”

requirement into an almost insurmountable hurdle on summary judgment. Summary

judgment on this question is also warranted.

C. Department of Labor Audit

In an earlier opinion, this court stated that even assuming arguendo that the

Department of Labor had approved the company’s pay program: 

Defendants have given this court no reason to believe Plaintiffs are

unreasonable in asserting that the regulations have not been followed with

respect to the plaintiffs in this case, nor have they shown that the court

would necessarily be bound by the Department of Labor determination to

which Defendants allude. . . . The court has not been presented with the

12
agency document or determination to which Defendants refer and cannot

gauge its persuasive or precedential value at this point in the case.

(Dkt. #33, Pg. ID 586.) The same remains true today, though the court does not

foreclose the possibility of Department of Labor determinations being dispositively

persuasive, see Heavenridge v. Ace-Tex Corp., No. 92-75610, 1993 WL 603201, at *4

(E.D. Mich. Sept. 3, 1993) (“Even though there appears to have been no mutual

understanding, [defendant] is insulated from liability due to its reliance on the

Department of Labor investigation and determination that it should pay [plaintiff] on a

fluctuating workweek basis.”). However, the question is moot at this time because the

court will grant summary judgment for the reasons stated above.

D. Non-Plastipak Defendants

The court has also previously had occasion to address the arguments advanced

by Defendants as to the inclusion of Defendants other than Plastipak:

It may be that there are several simultaneous employers who may be

responsible for compliance with the FLSA. The remedial purposes of the

FLSA require the courts to define ‘employer’ more broadly than the term

would be interpreted in traditional common law applications. In deciding

whether a party is an employer, ‘economic reality’ controls rather than

common law concepts of agency. . . . all of the Plastipak entities (Packing,

Holdings, and Technologies) allegedly have the same or similar

incorporators and resident agents . . . the overwhelming weight of

authority is that a corporate officer with operational control of a

corporation’s covered enterprise is an employer along with the

corporation, jointly and severally liable under the FLSA for unpaid wages.

(Dkt. #33, Pg. ID 585 (quotations and citations omitted).)

Defendants now offer that Plaintiffs have completely failed to supply any

evidence that Plastipak Holdings, Inc., has ever served as their employer, that Plastipak

Technologies, LLC is essentially an empty shell company without assets, and that Mr.

13
Young exerts no control over employees at Plastipak. Plaintiffs respond in their brief

without citation to any evidence in the record that they believe Plastipak Holdings, Inc.,

is the sole shareholder of Plastipak Packaging, Inc., and that they believe further

discovery will allow them to establish the role of Plastipak Technologies, LLC and Mr.

Young in the employment of Plaintiffs. Whether, in light of the paucity of evidence prior

to the close of discovery, it is simply too early to slam the door shut on Plaintiffs’ efforts

to make this inquiry, is also a moot question. Whatever conduct of Plastipak that

Plaintiffs wish to attribute to the other Defendants, it cannot sustain a claim against

them for the same reasons explained above. Therefore, the court will grant summary

judgment as to these Defendants as well.

IV. CONCLUSION

IT IS ORDERED that Defendants’ Motion for Summary Judgment (Dkt. #53) is

GRANTED. A separate judgment shall issue.

 s/Robert H. Cleland 

ROBERT H. CLELAND

UNITED STATES DISTRICT JUDGE

Dated: May 25, 2017

I hereby certify that a copy of the foregoing document was mailed to counsel of record

on this date, May 25, 2017, by electronic and/or ordinary mail.

 s/Lisa Wagner 

Case Manager and Deputy Clerk

(810) 292-6522

S:\Cleland\JUDGE'S DESK\C2 ORDERS\15-11428.HALL.MSJ.PostHearing.bss.wpd

14