Source: http://sc.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20170526_0001295.DSC.htm/qx
Timestamp: 2017-06-23 03:17:07
Document Index: 776854660

Matched Legal Cases: ['§ 201', '§ 216', '§ 207', '§ 255', '§ 203', '§ 207', '§\n207', '§ 203', '§ 206', '§ 206', '§\n5', '§\n216', '§ 207', '§ 207', '§ 207', '§ 207', '§ 207']

| Alston v. DirecTV, Inc.
Alston v. DirecTV, Inc.
James Alston, Carnell Bullock, Mark Hilton, Zachary Jenkins, James Kile, Rhett Linley, John McPherson, Jeffrey Naves, Joseph Robinson, Carl Simon, Khehadi Watkins, Corey Gleaton, Nolan Pegues, and Alan Ryman, Plaintiffs,v.DIRECTV, Inc., DIRECTV, LLC, and MasTec North America, Inc., Defendants.
DIRECTV, Inc., DIRECTV, LLC (together, “DirecTV”)
and MasTec North America, Inc. (“MasTec”)
(collectively, “Defendants”)[1] have filed 14
motions seeking summary judgment on claims arising under the
Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 201 et seq., asserted by Plaintiffs James
Alston, Carnell Bullock, Mark Hilton, Zachary Jenkins, James
Kile, Rhett Linley, John McPherson, Jeffrey Naves, Joseph
Robinson, Carl Simon, Khehadi Watkins, Corey Gleaton, Nolan
Pegues, and Alan Ryman (together, “Plaintiffs”).
(See ECF Nos. 87 to 100.) A hearing on the motions
has been scheduled. (See ECF No. 139.) In order to
streamline the upcoming hearing and to ensure an expeditious
disposition of the summary judgment motions, this order
addresses a number of arguments raised by the parties for
which the court believes argument at a hearing would not be
beneficial. Accordingly, in this order, the court DENIES IN
PART Defendants' motions for summary judgment and
reserves decision on the remaining aspects of the motions
until after the hearing.
October 20, 2014, Plaintiffs filed their complaint in this
matter, alleging that they are all technicians who worked
installing and repairing satellite television service systems
offered to consumers by DirecTV. (See ECF No. 1 at
2, 5.) Plaintiffs allege that DirecTV oversees a
“provider network” of corporate entities called
Home Service Providers (“HSPs”) that provide
DirecTV with its workforce of technicians. (See Id.
at 5.) Ostensibly, HSPs, such as MasTech, either employ
technicians directly or engage technicians as independent
contractors, and an HSP might also subcontract with another
HSP to provide DirecTV with technicians who are designated as
employees or independent contractors of the subcontracted
HSP. (See Id. at 5-6.) Plaintiffs allege that the
HSP provider network was designed to allow DirecTV to
exercise the right of control over technicians while avoiding
its obligation to comply with the requirements that the FLSA
imposes on employers. (See Id. at 6-8.) Plaintiffs
claim that, despite Defendants' designation of their
employment status, Plaintiffs were jointly employed by
DirecTV and by the HSPs that engaged them for purposes of the
FLSA. (See Id. at 8-10.)
also claim that the net effect of Defendants' policies
and practices was to willfully fail to pay minimum wage and
overtime compensation due to Plaintiffs, and to avoid keeping
accurate time records in order to save on payroll costs.
(See Id. at 10.) They allege that DirecTV used a
computer program called SIEBEL to coordinate and assign to
technicians particular work orders for installing or
repairing DirecTV systems and that DirecTV used a per-task
(piece-rate) payment scheme to compensate technicians for
completing work orders. (See Id. at 7.) Although the
system accounted for some of the time during which
technicians completed work orders, Plaintiffs allege that it
failed to account for all of that time and that technicians
were not compensated for the time needed to perform other
necessary work, such as
assembling satellite dishes, driving to and between job
assignments, reviewing and receiving schedules, calling
customers to confirm installations, obtaining required
supplies, assisting other technicians with installations,
performing required customer educations, contacting [DirecTV]
to report in or activate service, working on installations
that were not completed, and working on
“rollback” installations where Plaintiffs had to
return and perform additional work on installations
(Id. at 11.) Plaintiffs also allege that the
provider network resulted in many technicians being
misclassified as independent contractors and that, due to
this misclassification, technicians were required to purchase
at their own expense the supplies necessary to perform the
work and that “chargebacks” were deducted from
their pay. (See Id. at 12.) As a result of
Defendants' failure to compensate technicians for working
all the time necessary to perform their work and
Defendants' failure to reimburse technicians for
chargebacks and expenses necessarily incurred to perform
their work, Plaintiffs allege that they were paid below the
minimum wage and overtime wage rates, in violation of the
FLSA. (See Id. at 10-12.) Plaintiffs seek damages
for unpaid minimum wages, unpaid overtime wages, and
liquidated damages, pursuant to 29 U.S.C. § 216(b), and
damages from unpaid wages and compensation resulting from
their misclassification as independent contractors. (See
Id. at 24-27.)
discovery was completed (see ECF No. 66 at 1),
Defendants filed the instant motions for summary judgment
(see ECF Nos. 87 to 100). Although Defendants raise
several grounds for summary judgment, each motion is
specifically tailored to each of the 14 remaining Plaintiffs,
such that not all of the grounds raised are applicable to
each Plaintiff. (See ECF No. 131 at 52 (appendix).)
Defendants assert that they are entitled to summary judgment
on all or some of the claims asserted by all or some of the
remaining Plaintiffs because there is no genuine dispute that
(1) certain Plaintiffs were properly classified as
independent contractors and were not jointly employed by
Defendants; (2) Defendants lacked the requisite knowledge of
the hours Plaintiffs worked; (3) certain Plaintiffs are
subject to the retail or service establishment exemption for
overtime wages under 29 U.S.C. § 207(i); (4) certain
Plaintiffs were paid at least the minimum wage; (5) certain
Plaintiffs are unable to make the requisite showing of
damages; (6) certain Plaintiffs' claims are barred by two
year statute of limitations in 29 U.S.C. § 255(a); and
(7) certain Plaintiffs were properly paid overtime wages
during their employment with MasTec. (See ECF Nos.
87-1, 88-1, 89-1, 90-1, 91-1, 92-1, 93-1, 94-1, 95-1, 96-1,
97-1, 98-1, 99-1, 100-1; see also ECF No. 131 at
judgment is appropriate when the materials in the record 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). “[I]n ruling on a
motion for summary judgment, ‘the evidence of the
nonmovant[s] is to be believed, and all justifiable
inferences are to be drawn in [their] favor.'”
Tolan v. Cotton, __ U.S. __, 134 S.Ct. 1861, 1863
(2014) (per curiam) (brackets omitted) (quoting Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). A
dispute is genuine “if the evidence is such that a
part[ies], ” and a fact is material if it “might
affect the outcome of the suit under the governing
law.” Anderson, 477 U.S. at 248.
parties seeking summary judgment shoulder the initial burden
of demonstrating to the court that there is no genuine issue
of material fact. See Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). Once the movants have made this
threshold demonstration, the non-moving parties, to survive
the motion for summary judgment, may not rest on the
allegations averred in their pleadings. Rather, the
non-moving parties must demonstrate that specific, material
facts exist which give rise to a genuine issue. See
court addresses Defendants' grounds for summary judgment
below. As indicated by the truncated recitation of the facts
above, the court discusses the relevant evidence to which the
parties point in each of the below subparts as needed.
Joint employment and designation of Plaintiffs'
Defendants correctly point out, for a defendant to be liable
under the FLSA provisions at issue here, a plaintiff must
prove that he was the defendant's employee, as that term
is used for purposes of the FLSA. See Salinas v.
Commercial Interiors, Inc., 848 F.3d 125, 133 (4th Cir.
2017) (citing 29 U.S.C §§ 203(e)(1), 206(a),
207(a)(1)). Under the FLSA, an individual may be jointly
employed by more than one entity at the same time, with all
joint employers being jointly responsible for compliance with
the FLSA. See Id. at 133-35. Under their theory of
liability, Plaintiffs appear to argue that each Plaintiff was
jointly employed by DirecTV and MasTec (see ECF No.
125 at 71-88), even though Plaintiffs Bullock and Ryman
assert claims against DirecTV only, and not against MasTec
(see ECF No. 1 ¶¶ 84, 147).
their first ground for summary judgment, Defendants have
asserted in their motions that Plaintiffs fail to adduce
evidence sufficient to raise a genuine dispute that DirecTV
and MasTec did not jointly employ Plaintiffs Alston, Hilton,
Jenkins, Kile, Linley, McPherson, Naves, Robinson, Simon, and
Watkins (see ECF No. 87-1 at 10-21; ECF No. 90-1 at
8-20; ECF No. 91-1 at 9-20; ECF No. 92-1 at 9-21; ECF No.
93-1 at 9-21; ECF No. 94-1 at 10-22; ECF No. 96-1 at 9-20;
ECF No. 98-1 at 11-23; ECF No. 99-1 at 10-22; ECF No. 100-1
at 12-25) or that DirecTV was not a joint employer of
Plaintiffs Bullock, Gleaton, Pegues, and Ryman (see
ECF No. 88-1 at 8- 20; ECF No. 89-1 at 10-19; ECF No. 95-1 at
9-18; ECF No. 97-1 at 9-20). Defendants argue that the larger
group of Plaintiffs have failed to adduce sufficient evidence
that DirecTV and MasTec were their joint employers under the
four-factor test set forth in Bonnette v. California
Health & Welfare Agency, 704 F.2d 1465 (9th
Cir. 1983), or the six-factor test set forth in Ling Nan
Zheng v. Liberty Apparel Co., Inc., 355 F.3d 61
(2d Cir. 2003), (see, e.g., id. at 14-21)
and that the smaller group failed to adduce sufficient
evidence that DirecTV was their joint employer under either
the Bonnette or Zheng tests (see,
e.g., ECF No. 88-1 at 13-20).With respect to all
Plaintiffs except Gleaton, Pegues, and Robinson, Defendants
also argue that each of them were independent contractors of
an HSP subcontracted by MasTec to provide technicians for
DirecTV and that, because they were independent contractors
of a third party, they, as a matter of law, could not be
employees of MasTec and DirecTV. (See, e.g., ECF No.
87-1 at 10 (citing Roslov v. DirecTV, Inc., __
F.Supp.3d __, No. 4:14-cv-00616 BSM, 2016 WL 6892110 (E.D.
Ark. Nov. 4, 2016)).)
Defendants filed their motions for summary judgment, the
Fourth Circuit issued, on the same day, its opinions in
Salinas and in Hall v. DIRECTV, LLC, 846
F.3d 757 (4th Cir. 2017). In Salinas, the Fourth
Circuit reaffirmed its decision in Schultz v. Capital
International Securities, Inc., 466 F.3d 298
(4th Cir. 2006), which
established a two-step framework for analyzing FLSA joint
employment claims, under which courts must first determine
whether two entities should be treated as joint employers and
then analyze whether the worker constitutes an employee or
independent contractor of the combined entity, if they are
joint employers, or each entity, if they are separate
Salinas, 848 F.3d at 139-40 (citing
Schultz, 466 F.3d at 305-07). Regarding the first
step of this two-step framework, the court noted that
district courts in this circuit had applied the
Bonnette and Zheng tests to determine
whether two entities should be treated as joint employers.
See Id. at 136. However, after a thorough review of
the issue, the Salinas court expressly admonished
the district courts to “no longer employ
Bonnette or tests derived from Bonnette in
the FLSA joint employment context, ” id. at
140; see also Id. at 137 (“[C]ourts should not
rely on the Bonnette factors in determining whether
a worker constitutes an employee or independent
contractor for purposes of the FLSA and analogous labor
statutes.”), an admonition that appears to prohibit
employing Zheng for the same purpose, see
Id. at 136 (viewing the Zheng test as a
“liberalized” version of the Bonnette
test). After expressly prohibiting the use of
Bonnette and similar tests, the Salinas
court set forth its own list of six non-exhaustive factors a
court should consider in determining whether two entities
should be treated as joint employers for FLSA purposes.
See Id. at 141-42. Regarding the second step of the
two-step framework, the Salinas court reaffirmed
Schultz's six-factor test, derived from
Unites States v. Silk, 331 U.S. 704 (1947),
abrogated in part on other grounds by Nationwide Mut.
Ins. Co. v. Darden, 503 U.S. 318 (1992), in determining
whether a worker constitutes an employee or independent
contractor of the joint or separate employers. See
Salinas, 848 F.3d at 137 n.7, 150.
Hall, the Fourth Circuit addressed, among other
things, a district court's decision to first determine
whether a plaintiff was an employee before determining
whether the defendants were joint employers under the FLSA.
See 846 F.3d at 766-67. Despite the express language
in Schultz “recognize[ing] that in certain
cases it may be necessary to first determine whether a party
is an ‘employer' for FLSA purposes before
determining whether a joint employment arrangement exists,
” 466 F.3d at 306 n.1, the Hall court
nonetheless castigated the district court for
“invert[ing] the two-step inquiry [the Fourth Circuit]
ha[d] adopted in FLSA joint employment cases, ” 846
F.3d at 767; see also Id. at 769 (explaining that
“the district court's inversion of the two-step
Schultz framework alone would warrant
reversal” and again castigating the district court for
“compound[ing] its error by relying on
Bonnette”). The Fourth Circuit concluded that
courts “first must determine whether the defendant and
one or more additional entities” were joint employers
before proceeding to “the second step of the
analysis-which asks whether a worker was an employee or
independent contractor for purposes of the FLSA.”
Hall, 846 F.3d at 767. It reasoned that the outcome
of the second step “depends in large part upon the
answer to the first step, ” because the key inquiry is
“whether the two entities' combined
influence over the terms and conditions of the worker's
employment render the worker an employee as opposed to an
independent contractor.” Id. Thus,
“[f]ocusing first on the relationship between putative
joint employers is essential to accomplishing the FLSA's
. . . purpose.” Id.
as Plaintiffs assert (see ECF No. 125 at 71-88) and
as Defendants acknowledge (see ECF No. 131 at 5-27)
to some extent, the assessment of Plaintiffs' joint
employer theory of liability under the FLSA must proceed
under the two-step analysis reaffirmed in Salinas,
and, in addressing the first step, the court must apply the
non-exhaustive six-factor test set forth in Salinas
and may not apply the tests set forth in Bonnette or
Zheng. Accordingly, to the extent that Defendants
argue that they are entitled to summary judgment on the
ground that they were not joint employers of any Plaintiff
under the application of the Bonnette and
Zheng tests, the court DENIES their
motion in this respect.
as the Fourth Circuit explained in Hall, the court
may not first determine whether a worker is an employee of a
putative joint employer before determining whether a joint
employer arrangement exists. To do so would violate the
principle emphasized by the Fourth Circuit that whether an
employment relationship exists in the context of an alleged
joint employer arrangement depends on the putative joint
employers' combined influence over the terms and
conditions of the work to be performed, rather than their
separate influence. Accordingly, the court cannot agree with
Defendants that, should the court conclude that certain
Plaintiffs have failed to create a genuine dispute that they
are not independent contractors of a third-party HSP, then,
as a matter of law, Defendants cannot be joint employers of
those Plaintiffs. Such an analysis inverses the two-step
framework set forth in Salinas and Hall.
Accordingly, to the extent that Defendants argue that they
are entitled to summary judgment on the ground that they were
not joint employers of certain Plaintiffs because those
Plaintiffs were independent contractors of third-party HSPs,
the court DENIES their motion in this
respect.[2]
court declines, until after the hearing on Defendants'
summary judgment motions, to decide whether Plaintiffs have
adduced sufficient evidence to create a genuine dispute that
Defendants jointly employ any of the Plaintiffs under the
two-step framework articulated in Salinas and
Knowledge of uncompensated work
succeed on a 29 U.S.C. § 207(a)(1) claim for
uncompensated overtime wages, a plaintiff bears the burden of
proving, as an element of the claim, that the employer had
actual or constructive knowledge of the plaintiff's
uncompensated overtime work. See Bailey v. Cnty. of
Georgetown, 94 F.3d 152, 157 (4th Cir. 1996); Pforr
v. Food Lion, Inc., 851 F.2d 106, 109 (4th Cir. 1988);
Davis v. Food Lion, 792 F.2d 1274, 1276 (4th Cir.
1986). This court has consistently applied this requirement
to FLSA claims for uncompensated overtime wages, see
MacGregor v. Farmers Ins. Exch., No. 2:10-cv-03088-DCN,
2014 WL 4199140, at *3 (D.S.C. Aug. 20, 2014); Martin v.
Champion Window Co. of Columbia, LLC, No. 3:09-757-JFA,
2010 WL 412583, at *2 (D.S.C. Jan. 28, 2010), as have other
district courts within the Fourth Circuit, see Brockdorff
v. Wells Mgmt. Grp., LLC, No. 3:15cv137-HEH, 2015 WL
376241, at *4 (E.D. Va. June 15, 2015); Butler v.
DirectSAT USA, LLC, 55 F.Supp.3d 793, 803 (D. Md. 2014);
Porter v. Petroleum Transp., Inc., No.
2:10-cv-01384, 2012 WL 3835075, at *2 (S.D. W.Va. Sept. 4,
2012). Moreover, the knowledge element in the §
207(a)(1) uncompensated overtime wages context is premised on
the FLSA's prerequisite that the plaintiff show that he
was “employed” (meaning suffered or permitted to
work, 29 U.S.C. § 203(g)) by the defendant, see
Davis, 792 F.2d at 1276, a prerequisite also imposed in
a 29 U.S.C. § 206(a)(1) claim for violation of the
minimum wage requirement, see Sanchez v. Truse Trucking,
Inc., 74 F.Supp.3d 716, 721 (M.D. N.C. 2014).
Accordingly, to succeed on a § 206(a)(1) claim for
violation of the minimum wage requirement, a plaintiff must
prove that the defendant had actual or constructive knowledge
of the plaintiff's work that forms the basis of his
claim. See Porter, 2012 WL 2835075, at *2.
assert that Plaintiffs have failed to adduce sufficient
evidence to raise a genuine dispute that Defendants lacked
actual or constructive knowledge of any uncompensated work
performed by Plaintiffs and, therefore, that Defendants are
entitled to summary judgment on all of Plaintiffs'
wage-related claims. (See, e.g., ECF No. 87-1 at
22-23 (citing Hertz v. Woodbury Cnty., 566 F.3d 775,
782 (8th Cir. 2009); Whitaker v. Pac. Enters. Oil
Co., 956 F.2d 1170, at *1 (10th Cir. 1992) (unpublished
table disposition)).)[3] Defendants first assert Plaintiffs have
not demonstrated actual knowledge of Plaintiffs' work
hours because it is undisputed that Defendants did not
monitor or record Plaintiffs' schedules and that they did
not pay Plaintiffs and thus had no knowledge of the methods
or rates of payment. (See, e.g., id. at
22.) Defendants also assert that Plaintiffs have not
demonstrated constructive knowledge of Plaintiffs' work
hours. (See, e.g., id.) Defendants argue
that SIEBEL, the program used to issue and track the
performance and completion of DirecTV work orders, is not a
timekeeping or payroll system and that it would have been
futile for Defendants to attempt to track the number of hours
Plaintiffs worked using SIEBEL because the amount of hours
each work order takes to complete varies. (See,
e.g., id. at 22-23.)
response, Plaintiffs advance two arguments. First, Plaintiffs
argue essentially that, when an alleged employer disavows the
employment relationship and has made no attempt to monitor or
record a putative employee's work hours, the requirement
that the alleged employer have actual or constructive
knowledge of the putative employee's uncompensated work
hours should not apply. (See ECF No. 125 at 88
(citing Anderson v. Mt. Clemens Pottery Co., 328
U.S. 680, 686-87 (1946), superseded by statute on other
grounds, Portal-to-Portal Act, Pub. L. No. 49-52, §
5, 61 Stat. 84, 87 (1947) (codified at 29 U.S.C. §
216(b))).) Second, Plaintiffs argue that they have adduced
sufficient evidence regarding SIEBEL to raise a genuine
dispute as to whether Defendants had knowledge of
Plaintiffs' uncompensated work hours because SIEBEL
tracked and reported the time at which technicians arrived at
each job site and the expected total time it would take a
technician to complete all work orders assigned in a day and
because MasTec admitted that technicians rarely worked less
than 40 hours per week. (See Id. at 21-22, 89
(citing ECF No. 125-4 at 90).)
court rejects Plaintiffs' first argument. The court
emphasizes here that the knowledge requirement is derived
from the FLSA's prerequisite for liability that the
defendant employ the plaintiff and from the FLSA's
definition of the term “employ.” See
Davis, 792 F.2d at 1276-77. A plaintiff must prove that
the defendant knew or should have known of the work performed
precisely because doing so is integral to proving that the
defendant employed plaintiff to do that work for purposes of
FLSA liability. Id.; see also Porter, 2012
WL 2835075, at *2; Darrikhuma v. Southland
Corp., 975 F.Supp. 778, 783 (D. Md. 1997). A conclusion
that a plaintiff is not required to prove a defendant's
actual or constructive knowledge that plaintiff performed the
work amounts to a conclusion that the plaintiff need not
prove that the defendant suffered or permitted the work to be
done, even when (or specifically because) the defendant
disputes that it employed the plaintiff. Such a conclusion is
untenable because it presumes from the outset that the
defendant employed plaintiff and places on defendant the
burden to disprove that presumption, a result not
contemplated by FLSA jurisprudence and one that, in fact,
upends FLSA analysis. See Pforr, 851 F.2d at 109
(“[T]his burden is squarely upon the plaintiff; a
defendant . . . is not required to show lack of knowledge as
an affirmative defense.”); Davis, 792 F.2d at
1277 (“Nothing . . . in the [FLSA] itself treats the
lack of employer knowledge as an affirmative defense to be
raised and proved by the employer.”). Accordingly, the
court cannot accept an argument that is premised on this
reliance on Mt. Clemens in this regard is misplaced.
As the Fourth Circuit explained when faced with a similar
argument regarding the knowledge requirement, Mt.
was squarely directed at the issue of what evidence an
employee must introduce to establish the extent of his
overtime work when his employer has kept inadequate records.
Employer knowledge was not an issue in that case. Nothing in
Mt. Clemens . . . treats the lack of employer
knowledge as an affirmative defense to be raised and proved
by the employer. The [FLSA] requires the plaintiff to prove
that he was “employed” by the defendant, and that
means proof that the defendant knew or should have known that
the plaintiff was working overtime for the employer.
Davis, 792 F.2d at 1277 (internal citation omitted);
see also Craig v. Bridges Bros. Trucking, LLC, 823
F.3d 382, 391-92 (6th Cir. 2016) (warning against
“conflat[ing] the issues” by equating Mt.
Clemens' standard for proving that a plaintiff
performed the work with the standard of proving that a
defendant had actual or constructive knowledge of the work).
Aside from Mt. Clemens, which is inapposite,
Plaintiffs point to no other authority supporting the
proposition that an FLSA plaintiff need not prove the
defendant's actual or constructive knowledge of the work
when the defendant disputes that it employed the plaintiff
and has not attempted to monitor or record the
plaintiff's work. Because this proposition otherwise has
no support in law, the court rejects it and will not further
entertain Plaintiffs' arguments in this vein.
court declines to address the parties' other
argument-concerning whether Plaintiffs have adduced
sufficient evidence of Defendants' knowledge-until after
Retail or service establishment overtime wages
FLSA provides an exemption from § 207(a)'s overtime
wage requirement for qualifying employers that employ the
employee in “a retail or service establishment.”
29 U.S.C. § 207(i).[4] Aside from the threshold requirement
that the employer employ the employee in a retail or service
establishment, exemption from the overtime wages requirement
under § 207(i) is applicable only
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 . . ., and (2) more than half his
compensation for a representative period (not less than one
month) represents commissions on goods or services.
the FLSA “is ‘remedial and humanitarian in
purpose' reflecting an intent by Congress to protect
broadly the ‘rights of those who toil, '”
Morrison v. Cnty. of Fairfax, 826 F.3d 758, 761 (4th
Cir. 2016) (quoting Tenn. Coal, Iron & R.R. v.
Muscoda Local No. 123, 321 U.S. 590, 597 (1944)),
“courts are to construe the FLSA liberally,
‘recognizing that broad coverage is essential' to
accomplishing the statute's goals, ” id.
(quoting Tony & Susan Alamo Found. v. Sec'y of
Labor, 471 U.S. 290, 296 (1985)); see also Purdham
v. Fairfax Cnty. Sch. Bd., 637 F.3d 421, 427 (4th Cir.
2011) (“[T]he Supreme Court has cautioned that the FLSA
‘must not be interpreted or applied in a narrow,
grudging manner[.]'” (quoting Tenn. Coal,
321 U.S. at 597)). For these reasons, “FLSA exemptions
. . . ‘are to be narrowly construed against the
employers seeking to assert them' and applied only in
instances ‘plainly and unmistakably with the
exemptions' terms and spirit.'”
Morrison, 826 F.3d at 761 (internal quotation marks
omitted) (quoting Desmond v. PNGI Charles Town Gaming,
L.L.C., 564 F.3d 688, 692 (4th Cir. 2009)
(“Desmond I”)); see Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388 (1960). Thus, although the
Fourth Circuit does not appear to have confronted the
exemption set forth in § 207(i), in general, employers
asserting an exemption bear the burden to “prove the
application of the exemption by clear and convincing
evidence.” Calderon v. GEICO Gen. Ins. Co.,
809 F.3d 111, 121 (4th Cir. 2015) (citing Desmond I,
564 F.3d at 691 n.3); see also Schmidt v. Charleston
Collision Holdings Corp., No. 2:14-cv-01094-PMD, 2015 WL
3767436, at *5 (D.S.C. June 17, 2015) (applying clear and
convincing evidence standard to employer's assertion of
§ 207(i) exemption); Herrera v. TBC Corp., 18
F.Supp.3d 739, 741-42 (E.D. Va. 2014) (same after noting
circuit split).
court&#39;s estimation, Defendants&#39; argument that there
is no genuine dispute that the &sect; 207(i) exemption
applies to them fails at the threshold issue of whether they
employed Plaintiffs in a retail or service establishment, so
the court limits its discussion in this order to this
threshold issue.[5] Defendants, asserting the &sect; 207(i)
exemption against all Plaintiffs except Gleaton, Naves, and
Pegues (see ECF No. 87-1 at 24-25; ECF No. 88-1 at
22-24; ECF No. 90-1 at 22-23; ECF No. 91-1 at 23-24; ECF No.
92-1 at 23-24; ECF No. 93-1 at 23-24; ECF No. 94-1 at 24-26;
ECF No. 96-1 at 25-26; ECF No. 97-1 at 24-26; ECF No. 98-1 at
26-27; ECF No. 99-1 at 28-30), [6] rely heavily on Matrai v.
DirecTV, LLC, 168 F.Supp.3d 1347 (D. Kan. 2016),
(see, e.g., ECF No. 87-1 at 24-25). Noting first
that &sect; 207(i) does not define the term &ldquo;retail or
service establishment, &rdquo; the Matrai court
outlined two tests that courts have used in determining
whether an employer employs an employee in a retail or
service establishment for purposes of &sect; 207(i). See
Matrai, 168 F.Supp.3d at 1359-62. The first test relies
on the definition of &ldquo;retail or service
establishment&rdquo; provided in the since-repealed 29 U.S.C.
&sect; 213(a)(2) and the case law and Department of Labor
regulations emanating therefrom. See Matrai, 168
F.Supp.3d at 1359-60. Under this test, a &ldquo;retail or
service establishment&rdquo; means an establishment with at
least 75% of its annual dollar volume of goods or services
being (1) not available for resale and (2) recognized as
retail sales or service in the particular industry. See
Id. at 1359 (citing 29 C.F.R. &sect; 779.411); see
also Schultz v. W.R. Hartin & Son, Inc., 428 F.2d
186, 187 n.3 (4th Cir. 1970). The second test, developed by
the Seventh Circuit in Alvarado v. Corp. Cleaning