Court Opinion

ID: 3061735
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:52:00.660474+00
Date Added: 2024-06-11T10:45:33.204145
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT           FILED
                        ________________________ U.S. COURT OF APPEALS
                                                           ELEVENTH CIRCUIT
                               No. 09-16134                 OCTOBER 21, 2010
                         ________________________              JOHN LEY
                                                                CLERK
                    D. C. Docket No. 08-01599-CV-2-KOB

TRACI L. JONES,

                                                            Plaintiff-Appellant,

                                      versus

FREEDOM RAIN, TLC,
d/b/a The Lovelady Center, and
BRENDA SPAHN,

                                                         Defendants-Appellees.

                         ________________________

                  Appeal from the United States District Court
                     for the Northern District of Alabama
                        _________________________

                                 (October 21, 2010)

Before HULL, MARTIN and FAY, Circuit Judges.

PER CURIAM:
      Plaintiff-Appellant Traci L. Jones (“Jones”) filed this lawsuit against

Defendants-Appellees Freedom Rain, TLC d/b/a The Lovelady Center (“TLC”)

and Brenda Spahn (“Spahn”), her former employer, alleging that Defendants

violated the Fair Labor Standards Act (“FLSA”) by failing to pay her overtime

compensation. The district court granted summary judgment in favor of

Defendants, finding that, as a matter of law, the FLSA’s individual and enterprise

coverage provisions did not apply to TLC, and that Spahn’s liability was only

derivative of TLC’s liability. As there are disputed issues of material fact as to

whether TLC is subject to the FLSA’s enterprise coverage provision due to the

amount of its annual gross volume of sales or business, we reverse the judgment of

the district court granting summary judgment to Defendants and remand for

further proceedings consistent with this opinion.

                                I. BACKGROUND

      Defendant TLC is a non-profit corporation that, during the relevant time

period, owned The Lovelady Center, a residential treatment and recovery program

for homeless women who were either recently released from prison, victims of

domestic violence, or substance abusers. In addition to operating the

rehabilitation center, TLC also operated several other businesses, including an

employment agency, diner, daycare, beauty shop, and store. TLC employed 30 to

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50 workers, including Plaintiff Jones, who was a Client Representative for TLC

from June 2006 to August 2007. Jones reported to Defendant Spahn, who was the

founder and Executive Director of TLC. During Jones’ employment with TLC,

she maintains that she typically worked over 45 hours-per-week, but was not paid

time-and-a-half overtime pay for hours worked in excess of 40 hours-per-week.

      On September 2, 2008, Jones filed a lawsuit to recover her unpaid overtime

compensation. In a one-count Complaint, Jones alleged that Defendants willfully

violated the overtime provisions of the FLSA, 29 U.S.C. § 207, by failing to

compensate her for all hours worked in excess of 40 hours-per-week during her

employment with TLC. In their Answer, Defendants, among other things, denied

that they were subject to the FLSA. After discovery was conducted, Defendants

filed a Motion for Summary Judgment alleging that there were no genuine issues

as to any material facts regarding whether Defendants were subject to the overtime

provisions of the FLSA. On October 26, 2009, the district court granted

Defendants’ Motion for Summary Judgment, finding that, as a matter of law: (1)

the FLSA’s individual coverage provision did not apply to Defendants because

Jones did not show that she was engaged in interstate commerce or in the

production of goods for interstate commerce; (2) the FLSA’s enterprise coverage

provision did not apply to Defendants because, even if Jones could show that TLC

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employees engaged in interstate commerce, she did not show that TLC’s gross

business income exceeded $500,000; and (3) Spahn’s liability was only derivative

of TLC’s liability, of which there was none. On November 25, 2009, Jones filed a

Notice of Appeal.

                           II. STANDARD OF REVIEW

      We review the district court’s grant of summary judgment de novo,

considering all the evidence and factual inferences in the light most favorable to

the non-moving party. See Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 956

(11th Cir. 2009). Under Fed.R.Civ.P. 56(c), a motion for summary judgment is

properly granted when “the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

                                 III. DISCUSSION

       On appeal, Jones argues the district court erred in finding that the FLSA’s

enterprise coverage provision did not apply to Defendants. Under the FLSA,

enterprise coverage only applies to “an enterprise engaged in commerce or in the

production of goods for commerce,” which means an enterprise that:

      (i) has employees engaged in commerce or in the production of goods

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      for commerce, or that has employees handling, selling, or otherwise
      working on goods or materials that have been moved in or produced for
      commerce by any person; and
      (ii) is an enterprise whose annual gross volume of sales made or
      business done is not less than $500,000 (exclusive of excise taxes at the
      retail level that are separately stated);

29 U.S.C. § 207(a)(1); 29 U.S.C. § 203(s)(1)(A). Thus, for enterprise coverage to

apply, a business must have: (1) employees engaged in commerce or handling

goods moved in commerce, and (2) annual gross volume of sales or business done

of at least $500,000. In the instant case, Jones presented evidence regarding the

first requirement by showing that TLC’s employees engaged in interstate

commerce by operating an employment agency, diner, daycare, beauty shop, and

store. However, the district court found that Jones did not satisfy the second

requirement as she failed to present evidence showing that TLC had annual gross

volume of sales or business done of at least $500,000 for the pertinent years. As

such, the district court found that the FLSA’s enterprise coverage provision did

not apply to Defendants.

      We reviewed the evidence before the district court de novo to determine if

genuine issues of material fact existed as to whether TLC had annual gross volume

of sales or business done of at least $500,000 in 2006 and 2007. According to 29

C.F.R. § 779.259,

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      [t]he annual gross volume of sales made or business done of an
      enterprise consists of its gross receipts from all types of sales made and
      business done during a 12-month period. The gross volume of sales made
      or business done means the gross dollar volume (not limited to income)
      derived from all sales and business transactions including, for example,
      gross receipts from service, credit, or other similar charges. . . . The gross
      volume of sales or business includes the receipts from sales made or
      business done by the retail or service establishments of the enterprise as
      well as the sales made or business done by any other establishments of
      the enterprise, exclusive of the internal transactions between them.

(emphasis added). Thus, for purposes of the FLSA, “annual gross volume of sales

or business done” consists of gross receipts from all types of sales, including sales

made by any establishments of the enterprise. By definition, the gross volume of

sales is not limited to income.

      As to 2006 annual gross volume of sales or business done, Jones submitted

TLC’s 2007 IRS Form 990 to show that TLC’s annual gross volume of sales or

business done in 2006 exceeded $500,000. Line 17 of Form 990’s Support

Schedule states that TLC had “gross receipts from admissions, merchandise sold

or services performed, or furnishing of facilities in any activity that is related to

the organization’s charitable, etc., purpose” of $868,197 in 2006, well beyond the

$500,000 threshold. Defendants argue that this document was unauthenticated

and thus should not be considered. TLC, however, produced this document, Bates

Numbered 0060-0072, to Jones in its response to Jones’ interrogatories, stating

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that it elected “pursuant to FRCP 33(d) to produce business records” in lieu of

answering some of the interrogatories directly. Def’s Resp. to Pl.’s Interrog. Doc.

42, Ex. L. Subsequently, in its responses to Jones’ requests for admissions, both

Defendants admitted that “Bates Numbered Documents 1-1,260 are photocopies of

Freedom Rain’s [TLC’s] documents.” Def’s Resp. to Pl.’s Req. for Admis. Doc.

42, Ex. Q, No. 21 and Ex. F, No. 30. Thus, Defendants’ argument is without merit

as this document was authenticated. See 29A Am.Jur.2d Evidence § 1053 (2010).

This document raises disputed issues of fact as to whether TLC’s annual gross

volume of sales or business done in 2006 exceeded the $500,000 threshold.

      As to 2007 annual gross volume of sales or business done, Jones submitted

TLC’s 2007 Profit and Loss Statement to show that TLC’s annual gross volume of

sales or business done in 2007 exceeded $500,000. The Profit and Loss Statement

shows the following “income”: $66,337.03 from TLC’s employment agency

business (“TLC Personnel”); $180.00 from TLC’s daycare business (“Kid zone

Income”); $163,101.74 from TLC’s work release program (“PDL”); $203,195.75

from rent (“Program Fees”); $9,670.00 from the State of Alabama; $37,415 from

the TASC program (“Tasc - Another Chance” and “Tasc - CCP”); $25.00 from

transportation fees; and $9,467.90 from vending. The total of these income

figures is $489,392.42, which is below the $500,000 threshold. Jones, however,

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argues that the stated amount of income from TLC’s employment agency business,

$66,337.03, is grossly underestimated. Jones estimated that if 65% of TLC’s

approximately 200 clients worked 2,000 hours grossing $8.00 per hour, then the

amount of income from TLC’s employment agency business would be $2,080,000,

which would make the 2007 annual gross volume of sales or business done far

exceed the $500,000 enterprise coverage threshold. Defendants again argue that

this document was unauthenticated and thus should not be considered, and that

Jones’ estimate of income from TLC’s employment agency business is pure

speculation.

      As stated above, Defendants’ argument that the document is unauthenticated

is without merit. TLC produced this document, Bates Numbered 0205-0207, to

Jones in its response to Jones’ interrogatories, stating that it elected “pursuant to

FRCP 33(d) to produce business records” in lieu of answering some of the

interrogatories directly. Def’s Resp. to Pl.’s Interrog. Doc. 42, Ex. L.

Subsequently, in its responses to Jones’ requests for admissions, both Defendants

admitted that “Bates Numbered Documents 1-1,260 are photocopies of Freedom

Rain’s [TLC’s] documents.” Def’s Resp. to Pl.’s Req. for Admis. Doc. 42, Ex. Q,

No. 21 and Ex. F, No. 30. Thus, this document was authenticated. See 29A

Am.Jur.2d Evidence § 1053 (2010). Further, although Defendants state Jones’

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estimate of income from TLC’s employment agency business is speculation, they

presented no evidence to refute the estimate. Jones’ estimate may not be precise

and may not persuade a jury, but that does not make it pure speculation. Her

estimate was based upon Defendants’ responses to discovery as well as her

personal knowledge gained as a client representative for TLC. From Jones’

calculation, a jury could infer that the stated amount of income from TLC’s

employment agency business is underestimated. Even if the stated amount of

income is underestimated by only $10,607.58, and not $2,013,662.97 as Jones

estimated, then Defendants’ annual gross volume of sales or business done would

meet the $500,000 enterprise coverage threshold. At the very least, Jones raised

disputed issues of fact as to whether TLC’s annual gross volume of sales or

business done in 2007 exceeded the $500,000 threshold.

      Summary judgment is proper only when there are no genuine issues of

material fact. Viewing the evidence and any justifiable inferences in Jones’ favor,

a reasonable person could conclude that there are disputed issues of material fact

as to whether TLC’s annual gross volume of sales or business exceeded $500,000

in 2006 and 2007, which would subject TLC to the FLSA’s enterprise coverage

provision. Consequently, the district court’s reasoning in this regard is

insufficient to sustain summary judgment. Finding these genuine issues of

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material fact that must be resolved by a jury, we reverse the district court’s grant

of summary judgment to Defendants.

                                IV. CONCLUSION

      For the foregoing reasons, we reverse the district court’s grant of summary

judgment to Defendants and remand for further proceedings consistent with this

opinion.

      REVERSED and REMANDED.

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