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In Re: Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation

July 19, 2012

IN RE: ENTERPRISE RENT-A-CAR WAGE & HOUR EMPLOYMENT PRACTICES LITIGATION


The opinion of the court was delivered by: Conti, District Judge.

Civil No. 07-1687 NICKOLAS HICKTON, et. al., ) Civil No. 09-0815 ) Civil No. 09-0816 Plaintiffs, ) Civil No. 09-0824 ) Civil No. 09-0832 v. ) Civil No. 09-0833 ) Civil No. 09-1188 ENTERPRISE RENT-A-CAR ) Civil No. 09-1321 COMPANY, et. al., ) Civil No. 10-1003 ) Civil No. 10-1189 Defendants. ) Civil No. 10-1456 ) Civil No. 11-0071 ) Civil No. 11-0333 ) Civil No. 11-1024 ) Civil No. 12-0659

THIS DOCUMENT RELATES TO:

Galia v. Enterprise Rent-A-Car Company, Civil No. 09-0816

MEMORANDUM OPINION

I. Introduction

This opinion concerns sample plaintiff Robert Bajkowski ("Bajkowski"). Pending before the court are eight motions for summary judgment filed by the relevant operating subsidiaries (collectively "defendants") of defendant Enterprise Rent-a-Car Company ("ERAC") against sample plaintiffs*fn1 selected from the cases consolidated in this multidistrict litigation ("MDL").

The consolidated cases involve allegations that defendants violated the compensation requirements of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq. ("FLSA"), by failing to pay plaintiffs overtime compensation. Plaintiffs are or were assistant managers employed by one of the defendants.

This memorandum opinion addresses the motion for summary judgment filed by defendant Enterprise Leasing Company of Chicago, LLC ("ERAC-Chicago"), against Bajkowski. (ECF No. 253.)*fn2 ERAC-Chicago argues that Bajkowski qualified for the executive, administrative and combination exemptions from the compensation requirements of the FLSA. Bajkowski responds that summary judgment would be improper at this stage because there are genuine disputes of material facts concerning whether the "narrowly construed" FLSA exemptions are applicable. ERAC-Chicago argues that no dispute is genuine because plaintiffs submitted declarations that violated the "sham affidavit" doctrine in an attempt to fabricate disputes of fact. In response, Bajkowski argues that the sham affidavit doctrine is not applicable and that certain of the declarations filed in support of the motion for summary judgment were submitted in violation of Federal Rule of Civil Procedure 26. Each of those arguments will be addressed.

After an extensive review of the parties' submissions, the hearing transcript of the oral argument and the applicable legal principles, the court concludes that in light of the summary judgment standard of review and the narrowness of the FLSA exemptions, ERAC-Chicago failed to satisfy its burden of proving as a matter of law that Bajkowski was properly classified as exempt. The motion for summary judgment filed by ERAC-Chicago against sample plaintiff Bajkowski will be DENIED.

II. Factual Background

Bajkowski was first employed by ERAC-Chicago as a management trainee in July 2003. (Bajkowski Joint Concise Statement of Material Facts I ("Bajkowski JCS I") (ECF No. 405) ¶¶ 1-2.) He was promoted to assistant manager at Branch 15C1 in Chicago, Illinois in June 2006. (Id. ¶ 4.) On February 1, 2007, Bajkowski was transferred to Branch 15NH, located in Des Plaines, Illinois. (Id. ¶ 5.) On June 12, 2007, he transferred to Branch 1553 in Skokie, Illinois. (Id. ¶ 6.)

Bajkowski testified that, most of the time, his work as an assistant manager consisted of writing tickets and renting cars, picking up customers, driving them back and cleaning cars. (Bajkowski JCS I ¶ 7; Bajkowski Dep. (ECF No. 288-1) at 29.) Bajkowski wrote on a performance review that he spent sixty percent of his time on customer service management, but explained during his deposition that he equated those responsibilities with writing tickets, renting cars and washing cars. (Bajkowski Dep. (ECF No. 288-1) at 29.) He testified that those were the same responsibilities he had as a management trainee and management assistant. (Id. at 29.) According to Bajkowski, there was little to no difference between the daily tasks assigned to assistant managers and management trainees*fn3 while employed by ERAC-Chicago. (Id. at 24.) For example, Bajkowski explained that many of his duties as an assistant manager overlapped with the work of nonexempt branch employees, including performing call backs, fleet management, responsibility for the branch cash box, and opening and closing the branch. (Id. at 6, 29-30.) Bajkowski's branch manager at the 15NH branch, Andrew Mikkila ("Mikkila"), averred in a declaration that Bajkowski "was in charge of fleet management." (Mikkila Decl. (ECF No. 288-3) ¶ 9.) Mikkila also averred that Bajkowski was responsible for performing many tasks that other employees were not permitted to perform. (Id. ¶ 8.) Mikkila described two examples: (1) Bajkowski had access to the credit card system to facilitate customer refunds (id.); and (2) Bajkowski was the only employee, other than the branch manager, with a set of keys to the store, and thus shared the responsibility with the branch manager to open and close the store each day. (Id. ¶ 5.)

The parties dispute who had authority over the branch when the branch manager was not present. Mikkila averred that "[Bajkowski] was in complete control of the office when I was out marketing, when I had the day off, or when I was on vacation." (Id. ¶ 11.) Bajkowski testified at his deposition that he was "the last point of authority at his branches" when the branch manager was not present. (Bajkowski Dep. (ECF No. 288-1) at 9.) He also stated that in the absence of the branch manager, he was required to call the area manager regarding employee discipline because the area manager "was basically in charge." (Id. at 7.) Bajkowski later averred in his supplemental declaration that "[w]hen the Branch Manager was away from the branch and unavailable, the Area Manager was responsible for the operation of the branch." (Bajkowski Suppl. Decl. (ECF No. 329, Ex. A) ¶ 9.)

The parties likewise dispute who had authority over the branch when both the branch manager and assistant manager were present. Bajkowski testified that his schedule largely overlapped with that of his branch manager and the branch manager was present the majority of the time that Bajkowski was scheduled to work. (Bajkowski Suppl. Decl. (ECF No. 329, Ex. A)

¶ 8.) Bajkowski testified that when Mikkila was present, Mikkila always made decisions regarding fleet management because "he was in charge." (Bajkowski Dep. (ECF No. 288-1) at 10.) Bajkowski further testified that he never independently made fleet management decisions when Mikkila was present, but "would ask him first." (Id.) Jeff Ragona ("Ragona") , who was Bajkowski's area manager at ERAC-Chicago from April 2008 until October 2008, provided a declaration in which he stated that "[a]n Assistant Manager is empowered to supervise, direct, and delegate work to [subordinate] employees . . . [and] is also empowered to run a branch without a Branch Manager's supervision." (Ragona Decl. (ECF No. 288-4) ¶ 5.) Ragona also averred that Bajkowski had been responsible for running the morning meeting at his branch every other day (alternating with the branch manager). (Id. ¶ 13.)

Bajkowski testified that he did not conduct performance reviews of branch employees. (Bajkowski Dep. (ECF No. 288-1) at 15.) Instead, Bajkowski added comments to a review after the form was completed by the branch manager. (Id.) While Bajkowski did not discipline employees, he recalled one instance when he complained about an incident involving an employee to his manager. (Id. at 16.) The employee was terminated for that incident "and a few other things," but Bajkowski did not recommend she be terminated and did not believe he had the authority to write her up. (Id.) He believed he was required to call the area manager if a disciplinary decision arose and the branch manager was unavailable. (Id. at 7.) Ragona, on the other hand, averred that "an Assistant Manager . . . may discipline or reprimand an employee if necessary." (Ragona Decl. (ECF No. 288-4) ¶ 5.)

With respect to training employees and scheduling their work, the parties dispute whether the assistant manager was responsible for those tasks. Bajkowski testified that he did not have any role in scheduling employees and did not have the responsibility to teach, train, motivate or manage employees. (Bajkowski Dep. (ECF No. 288-1) at 10, 24.) Ragona averred that "[Bajkowski] was in charge of scheduling." (Ragona Decl. (ECF No. 288-4) at 5.) Bajkowski testified he was not responsible for planning employees' "flex plans," by which employees could make marketing calls and return home without returning to the branch. (Bajkowski Dep. (ECF No. 288-1) at 28-29.) Bajkowski recalled one instance where he counseled a branch employee about a test based on his experience with the exam. (Id. at 28.) Mikkila averred that Bajkowski "had the same responsibilities" as the branch manager regarding the managing of employees and was "responsible for training the employees whenever we had down time." (Mikkila Decl. (ECF No. 288-3) ¶ 4.)

Bajkowski acknowledged that on three occasions he conducted observational interviews of management trainee candidates. (Bajkowski JCS ¶¶ 57, 58.) Bajkowski gave the candidates a tour of the branch, asked the candidates predetermined questions, recorded the candidates' responses, and transmitted the responses with his comments to ERAC-Chicago's human resources personnel. (Id. ¶ 57.) Bajkowski believed his comments were considered by human resources when making hiring decision with respect to the interviewees. (Bajkowski Dep. (ECF No. 288-1) at 7.)

Bajkowski admitted to inflating his managerial percentages on his performance evaluation because it would "look better under review." (Id. at 29.) While he indicated in his performance evaluation that he spent ten percent of his time on human resources management, he testified at his deposition that he probably only spent one percent of his time on those duties. (Id.) Likewise, he listed sales and marketing at ten percent on his evaluation, but testified at his deposition that he thought the number was closer to six or seven percent. (Id.) He also put "management of customer service" at 100%, but testified that at the time he had only been employed as an assistant manager for one month and did not understand the form. (Id. at 27.) Bajkowski also overemphasized his assistant manager duties on his resume because "if I put I washed cars and I rent[ed] cars . . . I wouldn't get a job so I . . . had to put something in [the resume] to get a job. . . ." (Id. at 38-39.)

Bajkowski's 2007 Form W-2 indicates that his total compensation as an assistant manager in 2007 was $38,375.29. (Bajkowski App. (ECF No. 329, Ex. F).) Bajkowski testified that he worked approximately sixty hours per week during his tenure as an assistant branch manager. (Bajkowski Dep. (ECF No. 288-1) at 17.) Assuming fifty working weeks per year at sixty hours per week, Bajkowski earned approximately $12.79 for each hour that he worked, without being paid any overtime rates.*fn4 The $12.79 hourly rate may be somewhat misleading. If Bajkowski had been classified as nonexempt (and had worked 60 hours in each of 50 weeks in 2007) his annual earnings of $38,375.29 would have reflected a starting hourly rate of approximately $10.96 per hour.*fn5 In 2007, management assistants earned between $11.19 and $11.89 per hour; management trainees earned between $10.49 and $11.19 per hour; and car prep/porters earned between $7.00 and $8.75 per hour. (Hartline Decl. (ECF No. 288, Ex. 1) ¶ 14.)

III. Summary Judgment Standard

Federal Rule of Civil Procedure 56 provides in relevant part:

(a) Motion for Summary Judgment or Partial Summary Judgment. A party may move for summary judgment, identifying each claim or defense -- or the part of each claim or defense -- on which summary judgment is sought. The court shall grant summary judgment 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. The court should state on the record the reasons for granting or denying the motion. .

(c) Procedures.

(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:

(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or

(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

FED. R. CIV. P. 56(a), (c)(1)(A), (B).

Rule 56 of the Federal Rules of Civil Procedure "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."

Marten v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)).

An issue of material fact is in genuine dispute if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Doe v. Abington Friends Sch., 480 F.3d 252, 256 (3d Cir. 2007) ("A genuine issue is present when a reasonable trier of fact, viewing all of the record evidence, could rationally find in favor of the non-moving party in light of his burden of proof." (citing Celotex Corp., 477 U.S. at 322-23; Anderson, 477 U.S. at 248)).

"[W]hen the movingparty has carried its burden under Rule 56(c), its opponent must do more than simply show thatthere is some metaphysical doubt as to the material facts . . . . Where the record taken as a wholecould not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue fortrial."

Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). The court must rely on the substantive law to identify which facts are material. Abington Friends Sch., 480 F.3d at 256 (citing Anderson, 477 U.S. at 248).

In deciding a summary judgment motion, a court must view the facts in the light most favorable to the nonmoving party and must draw all reasonable inferences, and resolve all doubts in favor of the nonmoving party. Woodside v. Sch. Dist. of Phila. Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001); Doe v. Cnty. of Centre, Pa., 242 F.3d 437, 446 (3d Cir. 2001); Heller v. Shaw Indus., Inc., 167 F.3d 146, 151 (3d Cir. 1999). A court must not engage in credibility determinations at the summary judgment stage. Simpson v. Kay Jewelers, Div. of Sterling, Inc., 142 F.3d 639, 643 n.3 (3d Cir. 1998).

IV. Discussion

The FLSA is a federal statute, originally enacted in 1938, and designed to combat substandard labor conditions relating to unfair wages, overlong working hours and a variety of other perceived evils. At issue in this motion for summary judgment are some of the myriad exemptions to the FLSA's overtime requirements. Specifically, ERAC-Chicago claims that Bajkowski was exempt from the FLSA's compensation requirements under one of the following exemptions: 1) executive, 2) administrative or 3) combination.

As a preliminary matter, before addressing the substantive arguments relating to FLSA exemptions, the court will address the two secondary arguments presented by the parties. First, ERAC-Chicago argues that Bajkowski submitted a sham affidavit after his deposition, which this court should disregard in assessing the existence of genuinely disputed material facts. Second, Bajkowski argues that ERAC-Chicago failed to disclose the identity of witnesses whose statements were attached to its motion for summary judgment, in violation of Rule 26 of the Federal Rules of Civil Procedure.

A. Sham Affidavit Doctrine

ERAC-Chicago asserts that Bajkowski submitted a "sham affidavit." Under the "sham affidavit" doctrine, district courts "'disregard[] an offsetting affidavit that is submitted in opposition to a motion for summary judgment when the affidavit contradicts the affiant's prior deposition testimony.'" Seitz v. Detweiler, Hershey and Assocs., P.C. (In re CitX Corp.), 448 F.3d 672, 679 (3d Cir. 2006) (quoting Baer v. Chase, 392 F.3d 609, 624 (3d Cir. 2004)); see, e.g., Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 252 (3d Cir. 2007) (holding that to permit the plaintiffs to engineer factual disputes by means of self-serving affidavits "'would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact'" (quoting Perma Research & Dev. Co. v. Singer Co., 410 F.2d 572, 577-78 (2d Cir. 1969))); Zalewski v. PNC Fin. Servs. Group, Inc., No. 06-1231, 2008 U.S. Dist. LEXIS 70026, at *4 (W.D. Pa. Feb. 4, 2008) (second report and recommendation) (granting summary judgment based on employee's "performance evaluations . . . , her contemporaneous reporting of her job responsibilities, [her] resume, and her deposition testimony"), adopted by Memorandum Opinion, Zalewski v. PNC Fin. Servs. Group, Inc., No. 06-1231 (W.D. Pa. Apr. 7, 2008).

"A sham affidavit is a contradictory affidavit that indicates only that the affiant cannot maintain a consistent story or is willing to offer a statement solely for the purpose of defeating summary judgment." Jiminez, 503 F.3d at 253. Because the trial court is vested with the inherent power to grant summary judgment on disputed records, Anderson v. Liberty Lobby, 477 U.S. 242, 251 (1986), the court may conclude that no reasonable jury could accord evidentiary weight to an affidavit that is clearly offered solely for the purpose of defeating summary judgment. Jiminez, 503 F.3d at 253. The practical underpinning of the sham affidavit doctrine "is that prior depositions are more reliable than affidavits." Id.

In Jiminez the Court of Appeals for the Third Circuit recognized that other courts of appeals have "adopted a particularly robust version of the sham affidavit doctrine, holding that, whenever a subsequent affidavit contradicts prior deposition testimony, it should be disregarded." Id. at 254. The Court of Appeals for the Third Circuit has "adopted a more flexible approach." Id. The court recognized in Jiminez that "not all contradictory affidavits are necessarily shams." Id. Notably, "'[w]hen there is independent evidence in the record to bolster an otherwise questionable affidavit, courts generally have refused to disregard the affidavit." Id. (quoting Baer v. Chase, 392 F.3d 609, 625 (3d Cir. 2004)). "Such corroborating evidence may establish that the affiant was 'understandably' mistaken, confused, or not in possession of all the facts during the previous deposition," and the affiant should have the opportunity to provide a "satisfactory explanation" for the conflict between the prior deposition and the affidavit. Id.; see Martin v. Merrell Dow Pharmaceuticals, Inc., 851 F.2d 703, 706 (3d Cir. 1988) ("When, as in the present case, the affiant was carefully questioned on the issue, had access to the relevant information at the time, and provided no satisfactory explanation for the later contradiction, the courts of appeals are in agreement that the subsequent affidavit does not create a genuine issue of material fact.").

When deposition testimony is ambiguous or incomplete, subsequent affidavits may be provided to clarify the testimony and will not be discarded as sham documents. See Lytle v. Capital Area Intermediate Unit, No.1:05-CV-0133, 2009 WL 82483, at *2 (M.D. Pa. Jan. 9, 2009) ("Situations may arise where an affidavit does not 'raise a new or distinct matter,' but rather explains certain aspects of a deposition testimony that caused confusion." (quoting Baer, 392 F.3d at 625)). To that end, "[d]isregarding statements in an affidavit is appropriate on 'clear and extreme facts' . . . when the affidavit is 'flatly contradictory' to the prior testimony . . . ." Coleman v. Cerski, No. 3:04-cv-1423, 2007 WL 2908266, at *5 (M.D. Pa. Oct. 4, 2007) (quoting Videon Chevrolet, Inc. v. Gen. Motors Corp., 992 F.2d 482, 488 (3d Cir. 1993)). When allegations in a subsequent affidavit could support statements made in prior deposition testimony, the dueling statements "are more appropriately dealt with on cross-examination than on summary judgment." Ragan v. Fuentes, No. 05-2825, 2007 WL 2892948, at *11 (D.N.J. Sept. 28, 2007).

Bajkowski's original declaration is dated October 20, 2009. He was deposed on January 20, 2010, and submitted a supplemental declaration dated January 31, 2010. Bajkowski argues the two declarations are consistent with each other and with his deposition testimony. Specifically, ...


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