FIL ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T OCTOB ER 21, 2010 J OHN L EY CL ERK [DO NOT PUBLISH]
IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 0 9- 16 13 4

__ __ __ __ __ __ __ __ __ __ __ __ D. C. Dock etNo. 0 8- 01 59 9- CV-2 -KOB TRACI L. JONES,
Pl ai nt iff -Ap pe ll an t,
ve rs us FREEDOM RAIN, TLC, d/b/ a The Lov el ady

Cen te r, an d BRENDA SPAHN,
Defen da nt s- App el le es .

__ __ __ __ __ __ __ __ __ __ __ __ App eal fro m

th e Uni te d S ta te s Di st ric t Co urt fo r th e North ernDis tri ctof Al ab am a

__ __ __ __ __ __ __ __ __ __ __ __ _ (Oct ob er 2 1, 2 01 0) Befo re HULL, MARTIN an d F AY, Circ ui t Jud ge s. PER CURI AM:Pl ai nt iff -Ap pe ll an t Trac i L. Jo ne s (“ Jo ne s” ) fi le d thi s l aws ui t ag ai ns t Defen da nt s- App el le es Free do m Rai n, TLC d/b /aThe Lo ve la dy Cent er (“ TLC”)
an d B ren daSp ah n (“ Sp ah n” ), he r fo rm er em pl oyer, all eg in g t ha t Def

en da nt s vi ol at edth e Fai r Lab orSta nd ard s Act(“ FLSA”) b y fai li ng to pa y

he r ov ert im e
co m pe ns at io n. Th e d is tri ctco urt g ran te d s umm ary jud gm en t i n fa vo r of Defen da nt s, fi nd in g t ha t, as a m at te r of law, the FLSA’s in di vi du al an d e nt erp ris e
co ve rag e p ro vi si on s d idno t ap pl y to TLC, andth atSp ah n’s l iabi li ty w as on ly de riv at iv e o f TLC’s li ab il ity . As th ere a re d is pu te d i ss ue s o f m at eri al factas t o whe th er TLC is subjec t t o t he FLSA’s ent erp ris e co ve rag e p ro vi si on du e to th e
am ou ntof i ts an nu al gro ss vo lu m e o f sa le s o r bu si ne ss , we rev ers e th e jud gm en t o f th e d is tri ctco urt g ran ti ng su m m ary jud gm en t t o Def

en da nt s an d re m an d fo r fu rth er p ro ceed in gs co ns is te ntwith t hi s o pi ni on . I. BACKGROUND Defen da ntTLC is a no n- pr of itco rp or at io n t ha t, dur in g t he rel ev an t t im e pe rio d, o wne d Th e Lov el ady Cen te r, a res id en ti al tre atm en t an d re co ve ry pro gr am fo r ho m el es s wo m enwho were ei th er rec en tl y rel eas edfro m

pri so n, v ic ti m s o f do m es ti c v io le nc e, orsubs ta nc e ab us ers . In ad di ti on to op erat in g t he reh ab il it at io n c en te r, TLC als o o pe rat edsev eral othe r bu si ne ss es , in cl ud in g a n
em pl oym en t ag en cy , di ne r, day care , beaut y sh op , andst or e. TLC em pl oyed 3 0 t o
250 work ers , in cl ud in g P la in ti ff J on es , who was aCli en t Re pr es en ta ti ve forTLC

fro m Ju ne 20 06 to Aug us t 2 00 7. J on es rep orte d t o Def en da ntSp ah n, wh o was th e fo un de r an d Ex ecu ti ve Dire ct orof TLC. Durin g J on es ’ em pl oym en t wi th TLC, sh e m ai nt ai ns th atsh e typi cal ly w orke d o ve r 45 ho ur s- pe r-wee k, b utwas n otpa id ti m e-an d- a-h al f ov ert im e p ay forho ur s wo rk edinex ces s o f 40 ho ur s- pe r-wee k. On Se pt em

be r 2, 2 00 8, J on es fil eda la wsu itto reco ve r he r unpa idov ert im e
co m pe ns at io n. In a on e-co un t Co m pl ai nt , Jo ne s al le ge d t ha t Def en dant s wi ll fu ll y vi ol at edth e o ve rti m e p ro vi si on s o f th e FLSA, 29 U.S.C. § 2 07 , by fai li ng to
co m pe ns at e h er fo r al l h ou rs work edinex ces s o f 40 ho ur s- pe r-wee k dur in g h er
em pl oym en t wi th TLC. In the ir An swe r, Defen da nt s, am on g o th er thi ng s, d en ie d th atth ey were s ub ject t o t he FLSA. Afterdi sc ov ery was co nduc te d, Def en da nt s fil eda Mo ti on forSu m

m ary Ju dg m en t al le gi ng th atth ere wer e n o g enui ne is su es
as to an y m at eri al fact s re ga rd in g wh ethe r Defen da nt s wer e subjec t t o t he ov ert im e pr ov is io ns of t he FLSA. On Oct ob er 2 6, 2 00 9, the di st ric t co urt g ran te d Defen da nt s’ Mo ti on forSu m m ary Ju dg m en t, fi nd in g t ha t, as a m atte r of law: (1) th e FLSA’s in di vi du al co ve rag e p ro vi si on di d n otap pl y to Defen dant s b ecau se Jo ne s d idno t s ho w th atsh e was en ga ge d i n i nt ers ta te co m m erce or i n t he pr oduc ti on of g oo ds forin te rs ta te co m m erce ; (2 ) th e FLSA’s en te rp ris e co ve rag e pr ov is io n d idno t ap pl y

to Defen da nt s b ecau se , eve n i f Jo ne s co ul d s ho w th atTLC

3em

pl oyees e ng ag edinin te rs ta te co m m erce , sh e d idno t s ho w th atTLC’ s g ro ss bu si ne ss in co m e ex ceed ed$5 00 ,00 0; an d (3 ) Sp ah n’s l iabi li ty w as on ly deri va ti ve of TLC’ s l iabi li ty, of

whi chth ere was no ne . On Nov em be r 25 , 20 09 , Jo ne s fi le d a Not ic e o f App eal
. II. STANDARD OF REVIEW W e rev ie w th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t de no vo , co ns id eri ng all th e ev id en ce an d fa ctua l i nf eren ces inth e li gh t m os t fa vo rab le to th e n on -m ov in g p arty . Se e W il ch omb e v. Tee Vee To on s, In c., 55 5 F .3d94 9, 9 56 (1 1t h C ir. 2 00 9) . Und er Fe d.R .Civ .P. 56 (c), a m ot io n fo r su m m ary jud gm en t i s pr op erl y gra nt edwhen “ th e p le ad in gs , dep os it io ns , ans wers to in te rro ga to rie s, an d adm is si on s o n fi le , to ge th er wi th th e affi da vi ts , if an y , sh ow tha t the re i s n o ge nu in e is su e as to an y

m at eri al factan d t ha t the m ov in g p arty is en ti tl edto a jud gm en t as a m at te r of

law.” Cel ot ex Co rp . v. Catre tt , 47 7 U.S. 3 17 , 32 2 (1 98 6)
. III. DISC USSION On ap pe al , Jo ne s ar gu es th e d is tri ctco urt erredinfin di ng th atth e FLSA’s
en te rp ris e co ve rag e p ro vi si on di d n otap pl y to Defen dant s. Un de r th e FLSA,
en te rp ris e co ve rag e o nl y

ap pl ie s t o “ anen te rp ris e en ga ge d i n c omm erce or i n t he pr oduc ti on of g oo ds forco m m erce ,” whi chm ean s an en te rp ris e th at : (i) ha s em pl oyees en ga ge d in co m

m erce or in th e p r o duc ti on of go od s
4fo r co m m erce , or th at ha s em

pl oyees ha nd li ng , se ll in g, or ot he rwis e worki ng on go od s or m at eri al s th at ha ve be en m ov ed in or pr oduc ed fo r co m m erce by any

pe rs on ; an d (ii ) is a n e n te rp ris e who se annu al gr os s vo lu m e of sa le s m ad e or bu si ne ss do ne is no t le ss th an $5 00 ,00 0 (ex cl us iv e of ex ci se ta xe s at th e ret ai l l ev el th atare s ep arat el y st at ed ); 29 U.S.C. § 2 07 (a)( 1) ; 2 9 U.S.C. § 20 3( s) (1 )(A)

. Thu s, fo r en te rp ris e co ve rag e to ap pl y , a bu si ne ss m

us t h av e: (1) em

pl oyees e ng ag edinco m

m erce or h an dl in g go od s m ov edinco m

m erce , and(2) an nu al gro ss vo lu m e o f sa le s o r bu si ne ss do ne of at l eas t $ 50 0,0 00 . In the in st an t ca se , Jo ne s p res en te d e vi de nc e reg ard in g t he fir strequi rem en t b y

sh owi ng th atTLC’ s emplo y ees en ga ge d i n i nt ers ta te
co m m erce by ope rat in g an e m pl oym en t ag en cy , di ne r, da y care , beauty sh op , and st or e. Howev er, the di st ric t co urt fo un d t ha t J on es di d n otsat is fy th e se co nd requi rem en t as sh e fai le d t o p res en t ev id en ce s ho win g t ha t TLC h adan nu al gro ss
vo lu m e o f sa le s o r bu si ne ss do ne of a t l eas t $ 50 0,0 00 forth e p ert in en t years. As
su ch , th e d is tri ctco urt fo un d t ha t the FLSA’s ent erp ris e co ve rag e p ro vi si on di d
no t ap pl y to Defen da nt s. W e rev ie wedth e ev id en ce b efo re the di stric t co urt de no vo to de te rm in e if ge nu in e is su es of m at eri al factex is te d a s t o wh ethe r TLC ha d a nn ua l g ro ss vo lu m e of sal es or b us in es s d on e o f atlea st$5 00 ,00 0 i n 2 00 6 a nd20 07 . Accor di ng to 29 C.F.R. § 77 9.2 59 ,
5[ t ]h e a n n ua l gr os s vo lu m e of sa le s m ad e or bus in es s do ne of an

en te rp ris e co ns is ts of it s gro ss rece ip ts fro m al l ty pe s of sa le s m ad e an d bu si ne ss do ne du rin g a 12 -m on th pe rio d. The gr os s vo lu m e of sa le s m ad e or bu si ne ss do ne m ean s th e gr os s do ll ar vo lu m e (n ot li m it ed to in co m e) de riv ed fro m al l sa le s an d bu si ne ss trans act io ns in cl ud in g, fo r ex am pl e, gr os s rece ip ts fro m se rv ic e, cred it , or ot he r si m il ar ch arg es . . . . The gr os s vo lu m e of sa le s or bu si ne ss in cl ud es th e rece ip ts fro m s al es m ad e or bu si ne ss do ne by th e ret ai l or se rv ic e es tabl is hm en ts of th e en te rp ris e as well as th e sa le s m ad e or bu si ne ss do ne by an y ot h e r e s t abl is hm en ts of th e en te rp ris e, ex cl us iv e o f th e in te rn al trans act io ns be twee n t he m . (em ph as is ad de d) . Thu s, fo r pu rp os es of t he FLSA, “ an nu al gro ss vo lu m e o f sa le s
orbu si ne ss do ne ” co ns is ts of g ro ss rece ip ts fro m all types of s al es , in cl ud in g s al es
m ad e b y an y est ab li sh m en ts of the en te rp ris e. By de fin it io n, the gro ss vo lu m e o f
sa le s i s n otli m it edto in co m e. As t o 2 00 6 a nn ua l g ro ss vo lu m e o f sa le s o r bu si ne ss do ne , Jo ne s s ub m it te d TLC’ s 2 00 7 IR S Fo rm

99 0 t o s ho w th atTLC’ s an nu al gro ss vo lu m e o f sa le s o r bu si ne ss do ne in20 06 ex ceed ed$5 00 ,00 0. Lin e 1 7 o f Fo rm 99 0’s Supp ort Sch edul e st at es th atTLC had“ gr os s re cei pt s fr om adm is si on s, m erch an di se so ld
orservi ces pe rfo rm ed , or fu rn is hi ng of f aci li ti es inan y

act iv it y th atis rel at edto th e o rg an iz at io n’s ch ari tabl e, et c., pu rp os e” o f $8 68 ,19 7 i n 2 00 6, wel l b ey on d t he $5 00 ,00 0 t hr es ho ld . Defen dant s ar gu e th atth is do cu m en t was un au th en ti cat ed
an d t hu s s ho ul d n otbe co ns id ered . TLC, howe ve r, pr oduc edth is do cu m en t, Ba te s Num be red00 60 -0 07 2, t o J on es init s re sp on se to Jo ne s’ in te rro ga to rie s, s ta ti ng

6th atitele ct ed“pu rs ua ntto FRCP 33 (d ) to pro du ce b us in es s re co rd s” inli euof

an swe rin g s om e o f th e in te rro ga to rie s d ire ct ly. Def’s Res p. t o P l.’s In te rro g. Do c. 42 , Ex. L. Sub se qu en tl y , init s re sp on se s t o J on es ’ reque st s fo r admis si on s, b ot h Defen da nt s ad m it te d tha t “ Bat es Num be redDocu m en ts 1-1 ,26 0 a re p ho to co pi es of Free do m Rai n’s [TLC’s] do cu m en ts .” Def’s Res p. t o P l.’s Req . forAdm is . Doc. 42 , Ex. Q, No. 2 1 a ndEx. F, No. 3 0. Th us , Defen da nt s’ arg um en t i s wi th ou t m eri t
as th is do cu m en t was au th en ti cat ed
. Se e 29 A Am .Ju r.2d Eviden ce § 1 05 3 (2 01 0)
. Thi s d oc um en t ra is es di sp ut edis su es of f actas t o wh ethe r TLC’s ann ua l g ro ss
vo lu m e o f sa le s o r bu si ne ss do ne in20 06 ex ceed edth e $ 50 0,0 00 th res ho ld
. As t o 2 00 7 a nn ua l g ro ss vo lu m e o f sa le s o r bu si ne ss do ne , Jo ne s s ub m it te d TLC’ s 2 00 7 P ro fitan d Lo ss Sta te m en t t o s ho w th atTLC’ s an nu al gro ss vo lu m e o f
sa le s o r bu si ne ss do ne in20 07 ex ceed ed$5 00 ,00 0. Th e Pro fitan d Lo ss Sta te m en t sh ows th e fo ll owi ng “ in co m e”: $6 6,3 37 .03 fro m TLC’ s emplo ym en t ag en cy bu si ne ss (“ TLC Pers on ne l” ); $ 18 0.0 0 fr om TLC’ s d ay care bu si ne ss (“ Kidzo ne In co m e”); $1 63 ,10 1.7 4 fr om TLC’ s wo rkrel eas e p ro gr am (“ PDL”); $2 03 ,19 5.7 5 fro m ren t (“ Pro gr am

Fees ”); $9 ,67 0.0 0 fr om

th e St at e o f Alaba m a; $3 7,4 15 fro m th e TASC p ro gr am

(“ Tasc - Ano th er Ch an ce” a nd“ Tasc - CCP” ); $ 25 .00 fro m tra ns po rta ti on fees ; an d $ 9,4 67 .90 fro m ve nd in g. Th e to ta l o f th es e in co m e fig ur es is $4 89 ,39 2.4 2, wh ic h i s b el ow the $5 00 ,00 0 t hr es ho ld . Jo ne s, h owe ve r,
7arg ue s tha t the st at edam ou ntof i nc om e fro m TLC’ s emplo ym en t ag en cy bu si ne ss , $6 6,3 37 .03 , is gro ss ly und eres ti m at ed . Jo ne s es ti m at edth atif 6 5% o f TLC’s ap pr ox im at el y

20 0 c li en ts work ed2,0 00 ho ur s g ro ss in g $ 8.0 0 p er h ou r, th enth e
am ou ntof i nc om e fro m

TLC’ s emplo ym en t ag en cy bu si ne ss wou ldbe $2 ,08 0,0 00 , whi chwou ldm ak e th e 2 00 7 a nn ua l g ro ss vo lu m e o f sa le s o r bu si ne ss do ne far
ex ceedth e $ 50 0,0 00 en te rp ris e co ve rag e th res ho ld . Defen da nt s ag ai n arg ue th at th is do cu m en t was un au th en ti cat edan d t hu s s ho ul d n otbe co ns id ered , andth at Jo ne s’ est im at e o f in co m e fro m TLC’ s emplo ym en t ag en cy bu si ne ss is pu re sp ecu la ti on . As s ta te d abo ve , Defen da nt s’ arg um en t tha t the do cu m en t i s u naut he nt ic at ed is witho utm eri t. TLC pr oduc edth is do cu m en t, Ba te s Num be red02 05 -0 20 7, t o Jo ne s i n i ts res po ns e to Jo ne s’ in te rro ga to rie s, s ta ti ng th atitele ct ed“pu rs ua ntto FRCP 33 (d ) to pro du ce b us in es s re co rd s” inli euof a ns weri ng so m e o f th e in te rro ga to rie s d ire ct ly. Def’s Res p. t o P l.’s In te rro g. Do c. 42 , Ex. L. Subs eque nt ly, in it s re sp on se s t o J on es ’ reque st s fo r adm is si on s, b ot h Def en da nt s adm it te d t ha t “ Bat es Num be redDocu m en ts 1-1 ,26 0 a re p ho to co pi es of F reed om Rai n’s [TLC’s] do cu m en ts .” Def’s Res p. t o P l.’s Req . forAdm is . Doc. 4 2, Ex . Q, No. 2 1 a ndEx. F, No. 3 0. Th us , th is do cu m en t was auth en ti cat ed
. Se e 29 A Am .Ju r.2d Eviden ce § 1 05 3 (2 01 0) . Furt he r, al th ou ghDefen da nt s s ta te Jo ne s’
8es ti m at e o f in co m e fro m TLC’ s emplo ym en t ag en cy bu si ne ss is sp ecu la ti on , th ey pr es en te d n o e vi de nc e to refu te th e es ti m at e. Jo ne s’ est im at e m ay no t b e p reci se
an d m ay no t p ers ua de a jury, bu t tha t d oe s n otm ak e itpu re s pe cu la ti on . Her
es ti m at e was ba se d upo n Def en da nt s’ res po ns es to di sc ov ery as well as h er pe rs on al kn owl ed ge ga in edas acli en t re pr es en ta ti ve forTLC. From Jo ne s’ cal cu la ti on , a jury co ul d i nf er tha t the st at edam ou ntof i nc om e fro m TLC’ s
em pl oym en t ag en cy

bu si ne ss is un de res ti m at ed . Evenif t he st at edam ou ntof in co m e is un de res ti m at edby onl y $1 0,6 07 .58 , andno t $ 2,0 13 ,66 2.9 7 a s J on es
es ti m at ed , th enDefen da nt s’ ann ua l g ro ss vo lu m e o f sa le s o r bu si ne ss do ne wou ld
m eetth e $ 50 0,0 00 en te rp ris e co ve rag e th res ho ld . At th e v ery le as t, J on es rai se d di sp ut edis su es of f

actas t o wh ethe r TLC’s ann ua l g ro ss vo lu m e o f sa le s o r bu si ne ss do ne in20 07 ex ceed edth e $ 50 0,0 00 th res ho ld
. Su m m ary jud gm en t i s p ro pe r on ly whe n t he re ar e n o g enui ne is su es of
m at eri al fact . Viewi ng th e ev id en ce an d any j us ti fiabl e in fere nc es inJo ne s’ fav or , a rea so nabl e p ers onco ul d c on cl ud e th atth ere a re d is pu te d i ss ue s o f m at eri al fact
as to whet he r TLC’s ann ua l g ro ss vo lu m e o f sa le s o r bu si ne ss ex ceed ed$5 00 ,00 0 in 20 06 an d 2 00 7, wh ic h wo ul d s ub ject TLC t o t he FLSA’s ent erp ris e co ve rag e pr ov is io n. Co ns eque nt ly, th e d is tri ctco urt’s re as on in g i n t hi s re ga rdis in su ffi ci en t t o s us ta in su m m ary jud gm en t. Fi nd in g the se ge nu in e is su es of

9m at eri al factth atm us t b e res ol ve d b y

a jury, we rev ers e th e d is tri ctco urt’s g ran t of su m m ary jud gm en t t o Def

en da nt s. IV. CONCLUSION Fo r th e fo reg oi ng reas on s, we re ve rs e th e d is tri ctco urt’s g ran t o f su m m ary jud gm en t t o Def

en da nt s an d re m an d fo r fu rth er p ro ceed in gs co ns is te ntwith t hi s op in io n. REVERSED an d R EMANDED.

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