Source: http://ky.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180330_0000282.WKY.htm/qx
Timestamp: 2019-04-22 14:04:51+00:00

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This matter is before the court on cross-motions of the parties for summary judgment. The Plaintiff, R. Alexander Acosta, the Secretary of Labor, U.S. Department of Labor (“DOL”), moves for partial summary judgment (DN 61). The Defendants, KDE Equine, LLC, d/b/a Steve Asmussen Stables (“KDE”) and Steve Asmussen (“Asmussen”), move for summary judgment (DN 62). Fully briefed, these matters are ripe for review. For the following reasons, the court will GRANT IN PART and DENY IN PART the Plaintiff's partial motion for summary judgment. The court will GRANT IN PART and DENY IN PART the Defendants' motion for summary judgment.
The DOL filed an Amended Complaint in this court in January of 2017 for violations of the Fair Labor Standards Act (“FLSA” or “Act”), 29 U.S.C. § 201 et seq. Specifically, the DOL brings claims against KDE and Asmussen under 29 U.S.C. § 206 (“Section 6”) for failing to pay employees the federal minimum wage, 29 U.S.C. § 207 (“Section 7”) for failing to pay employees overtime wages, and 29 U.S.C. § 211 (“Section 11”) for failing to keep adequate and accurate employment records. The DOL moves for partial summary judgment on its Section 7 and Section 11 claims. Additionally, the DOL has moved for liquidated damages and the application of a three-year limitations period. The Defendants have moved for summary judgment on each count in the Amended Complaint.
A party moving for summary judgment must show 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). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Additionally, the Court must draw all factual inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine issue for trial exists when “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986). On cross-motions for summary judgment, “the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 592 (6th Cir. 2001) (citing Taft Broadcasting Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991)).
This action is brought under provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The Plaintiff alleges that the Defendants violated the FLSA's minimum wage provision (Section 6), maximum hours provision (Section 7), and the provision requiring the maintenance of adequate employee records (Section 11). Under the Act, non-exempt employees are guaranteed a minimum hourly wage of $7.25. 29 U.S.C. § 206. For any work performed in excess of forty hours they are entitled to hourly pay at a rate of one and one-half their regular hourly rate. 29 U.S.C. § 207(a)(1).
There is no dispute that KDE is an employer subject to the provisions of the FLSA. (DN 59, 2.) Further, the parties have stipulated that that the hot walkers and grooms are non-exempt employees that are required to be paid overtime compensation in addition to a minimum wage. (DN 64, ¶ 2.) Rather, the dispute resides in whether the salaries of the hot walkers and grooms, along with the additional flat-rate compensation paid to employees for specified tasks, complies with the minimum requirements for minimum wage and overtime pay for non-exempt employees under the FLSA. Additionally, the parties dispute the adequacy of KDE's record keeping, the applicable statute of limitations to this action, and the availability of liquidated damages. The court will address each claim in turn.
The Court first will address Section 11 of the FLSA, as the state of the Defendants' employment records is instrumental in determining the outcome of the remaining claims.
29 U.S.C. § 211(c). Under this provision, an employer is required “to make and keep records of employees' wages and hours, plus other employment conditions and practices.” U.S. Dept.' of Labor v. Cole Enterprises, Inc., 62 F.3d 775, 779 (6th Cir. 1995). The regulations additionally require an employer to “maintain and preserve” employment records indicating, among other information, “[h]ours worked each workday and total hours worked each workweek.” 29 C.F.R. § 516.2(a)(7). Employers are expected to keep payroll records for a period of three years and time sheets for a period of two years. Cole Enterprises, 62 F.3d at 779; see also 29 C.F.R. §§ 516.5(a), 516.6(a)(1).
The DOL argues that KDE's employment records are neither adequate nor accurate. The burden to keep accurate wage and time records lies with the employer: “[d]ue regard must be given to the fact that it is the employer who has the duty under [Section 11] of the Act to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and to produce the most probative facts concerning the nature and amount of work performed.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946).
Next, the Plaintiff contends that the available records from 2014 reveal inaccuracies in the employees' hours. By way of example, the DOL directs the court's attention to the time sheet and corresponding payroll record of a particular employee for the pay period ending on April 25, 2014. The payroll record of this employee, Carlos Hernandez (“Hernandez”), indicates that he worked 81 hours for the two-week period ending on April 25 and earned a gross salary of $652.00, the typical salary for a hot walker who works the minimum guaranteed hours. (DN 61-14, 38.) However, Hernandez's time sheet for this pay period reflects different hours. His time sheet shows that between April 12 and April 25, he worked every day from 5:00 a.m. until 11:00 a.m., and then again every afternoon from 3:30 p.m. until 5:00 p.m. for a total of 105 hours. (DN 61-21, 6.) A comparison of other employees' payroll records and time sheets from this same pay period reveals additional inconsistencies.
(2) In weeks in which more or less than the scheduled hours are worked, shows that exact number of hours worked each day and each week.
29 C.F.R. § 516.2(c). This regulation is an exception to the normal record-keeping obligations under Section 11 and requires less stringent documentation. However, even assuming that the grooms and hot walkers work “fixed schedules” such that the Defendants are entitled to the less onerous standard of record-keeping, the undisputed facts indicate that KDE violated Section 11 of the FLSA under 29 C.F.R. § 516.2(c) for the years of 2012 and 2013. Whether KDE satisfied the requirements of 29 C.F.R. § 516.2(c) in 2014 is a genuine issue of material fact.
Further, the Defendants have not provided any additional 2012 or 2013 employment records which indicate by checkmark, statement, or other method, that each employee adhered to his or her fixed schedule, if the employee did indeed work a fixed schedule. Courts have found that 29 C.F.R. § 516.2(c)(1) requires an affirmative act: “the text requires verification through some affirmative act that the scheduled hours were in fact worked, or if there is actual deviation on the schedule, requires a listing of all hours actually worked.” Nobles v. State Farm Mut. Auto Ins. Co., 2011 WL 3924920 at *4 (W.D. Mo. Sep. 7, 2011.) For the years of 2012 and 2013, KDE has not provided any documentation reflecting an affirmative act.

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