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
Civil No. 09-0833 ) Civil No. 09-1188
ENTERPRISE RENT-A-CAR ) Civil No. 09-1321 COMPANY, et. al., ) Civil
Civil No. 10-1189 Defendants. ) Civil No. 10-1456
Civil No. 11-0071 ) Civil No. 11-0333 ) Civil No. 11-1024 ) Civil
THIS DOCUMENT RELATES TO:
Graham v. Enterprise Leasing ) Company, Civil No. 09-0833
This opinion concerns sample plaintiff Melinda McQuaig ("McQuaig"). 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 Florida, LLC ("ERAC-Florida"), against McQuaig. (ECF No. 245.)*fn2 ERAC-Florida argues that McQuaig qualified for the executive, administrative and combination exemptions from the compensation requirements of the FLSA. McQuaig 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-Florida 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, McQuaig 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-Florida failed to satisfy its burden of proving as a matter of law that McQuaig was properly classified as exempt. The motion for summary judgment filed by ERAC-Florida against sample plaintiff McQuaig will be DENIED.
ERAC-Florida hired McQuaig on June 20, 2005. (McQuaig Dep. (ECF No. 277- 1) at 5). McQuaig worked at ERAC-Florida's branch 4365 in Waycross, Georgia (the "Waycross branch"). (Id.) McQuaig's claims against ERAC-Florida concern the period from May 14, 2006 until November 27, 2006, during which time McQuaig was an assistant manager at the Waycross branch. (Id.)
The Waycross branch is a small, rural rental facility located fifty miles from the nearest ERAC-Florida branch in Kingsland, Georgia. (McQuaig Joint Concise Statement of Material Facts ("McQuaig JCS") (ECF No. 404) ¶¶ 3-4.) ERAC-Florida's corporate headquarters is in Jacksonville, Florida, which is more than seventy-five miles from the Waycross branch. (Decl James M. Brown ("Brown Decl.") (ECF No. 277- 3) ¶ 5.) The majority of the Waycross branch's business involved rentals to insured motorists under their insurance policies. (McQuaig JCS (ECF No. 404) ¶ 6.) These rentals were often made while vehicles were being repaired. (Id.)
When McQuaig accepted employment at ERAC-Florida on June 20, 2005, her initial job title was "management trainee." (McQuaig Dep. (ECF No. 277-1) at 5.) As a management trainee, McQuaig's "main role was to rent vehicles." (Id. at 9.) To that end, McQuaig "wrote tickets, washed cars, made reservations, picked up customers, [and] delivered cars" during her time as a management trainee. (Id.) She would occasionally transport cars to and from Jacksonville, Florida. (Id.) As a management trainee, she participated in "call-backs," which involved contacting rental customers to ensure the branch's vehicles were properly paid for and returned. (McQuaig JCS (ECF No. 404) ¶ 8.) McQuaig testified that "[e]ven as a management trainee, [she] assisted with the accounts receivables [sic] . . . [and] we all helped in the duties of the office." (McQuaig Dep. (ECF No. 277-1) at 9.) She received training as a management trainee in customer service and in ERAC-Florida's sales procedures and techniques. (Id.)
McQuaig was promoted to "management assistant" on April 23, 2006. (Id. ¶ 12.) Prior to being promoted, McQuaig was required to pass the management qualification interview (the "MQI"). (McQuaig Dep. (ECF No. 277-1) at 13.) The MQI was a four-hour interview intended to assess the interviewee's knowledge of the car rental business. (Id.) To be eligible for the management assistant promotion, McQuaig was also required to participate in sales training, and her performance ratings as a management trainee had to meet minimum benchmarks. (Id.)
McQuaig was promoted to "assistant manager" on May 14, 2006. (Id. at 5.) According to McQuaig, her promotion to assistant manager produced only two changes in her actual responsibilities at the Waycross branch. (Id. at 15, 60.) The first change is that McQuaig was required to review the Waycross branch's employees' time worked each week in order to verify they had actually worked the hours submitted to the payroll system. (Id.) According to McQuaig, it was "just a matter of clicking a button." (Id.) She testified that after her promotion, "that's the only [new task] that I did on my own without having to call and ask somebody." (Id. at 60.) The second change was that she was required to attend "assistant branch manager meetings," which provided continuing training in sales and management. (Id. at 15-17.) One of the training courses McQuaig attended was about "leadership and performance reviews." (McQuaig Dep. (ECF No. 277-1) at 17.)
During McQuaig's tenure as assistant manager, the Waycross branch was also staffed by some combination of an area manager, a branch manager, one management trainee or management assistant, and at least two part-time "car preps." The area manager was not based at the Waycross branch and did not have an office there, but was involved in overseeing operations there. (Id. at 21, 41, 63.) Car preps were limited to working thirty hours per week. (Id. at 15.) Management trainees, who were classified as nonexempt (and paid overtime) often worked more than forty hours per week. (Id.) ERAC-Florida endeavored, however, to send them home before paying overtime, whenever possible. (Id.) McQuaig testified that the hours she worked as an assistant manager were similar to the hours she worked as a management trainee or management assistant (which is also classified as a nonexempt position). (Id. at 58.) In all three positions, she regularly worked more than fifty hours per week: "it was 55, 60, 70, sometimes 80 hours a week." (Id.; McQuaig Decl. (ECF No. 325, Ex. C) ¶ 3.) Upon her promotion to assistant manager she stopped earning overtime. (McQuaig Dep. (ECF No. 277-1) at 14-15.) Instead, she was paid a salary plus a commission based upon the Waycross branch's profits. (Id.)
McQuaig testified that she made more money as a management assistant and management trainee than she did as an assistant manager. (Id. at 55.) Her compensation as an assistant manager included a salary of $1,077 per bi-weekly pay period and commissions of 5.25% of the profits of her branch. (McQuaig JCS (ECF No. 404) ¶ 46.) These payments were equivalent to a base annual salary of $28,000. (Brown Decl. (ECF No. 277-3) at ¶ 14.) According to James Brown ("Brown"), who is ERAC-Florida's Group Human Resources Manager for Northeast Florida, ERAC-Florida estimated that McQuaig's total annual compensation would be $37,000, but that the Waycross branch performed poorly during McQuaig's tenure, so her total compensation missed that target. (Id.) Brown did not quantify the deficit. The base salary for management trainees in the Waycross branch during McQuaig's time as an assistant manager was $850 per bi-weekly pay period, plus overtime. (Id. ¶ 15.) The base salary for management assistants during the relevant time period at the Waycross branch was $925 per bi-weekly pay period, plus overtime. (Id.) Assuming a management trainee and management assistant worked fifty hours per week during the relevant time period, a management trainee earned $30,387 annually and a management assistant earned $33,068 annually, according to Brown.*fn3 (Id.)
As an assistant manager, McQuaig did delegate work at times to subordinate employees,*fn4
but she testified that most employees knew their responsibilities without her input-for example, when a car returned from a rental, the car preps knew to clean it without her directing them to do so. (McQuaig Dep. (ECF No. 277-1) at 19.) McQuaig testified that it was a "team effort" and that all employees were encouraged to take accountability for the Waycross branch's success. (Id.) All employees, including nonexempt management trainees and management assistants, corrected each other's mistakes and made recommendations to each other. (Id. at 20.) Based upon her testimony, it appears McQuaig did have some greater degree of authority actually to direct the actions of other employees at her branch, as opposed to making suggestions or recommendations. (Id.) She consistently testified, however, that very little direction was needed because the branch's employees were trained in their responsibilities outside the branch, and knew their roles. (Id. at 19-20.) When direction was necessary, the branch manager was responsible for making most decisions. (Id. at 36.) McQuaig testified that "as far as who does what, the branch manager decides that." (Id.) If the branch manager was out of the office, McQuaig had greater responsibility to supervise and to delegate minor tasks to the branch's employees. (Id. at 42, 63.) McQuaig testified that she generally worked the same hours as her branch manager. (Id. at 64.)
With respect to directing the work of the Waycross branch's employees, McQuaig had limited responsibilities. The branch manager set the work schedule for all employees. (Id. at 29-30, 38.) McQuaig did not make recommendations regarding the schedule, but might remind the branch manager if a particular employee had a meeting at a certain time. (Id.) If the branch manager was out of the office, it was McQuaig's responsibility to make sure the employees took their lunch breaks and left on time. (Id. at 38.)
Most employee training at ERAC-Florida was conducted outside the Waycross branch, according to McQuaig. (Id. at 20.) She attempted to motivate employees by praising their good work. (Id. at 36.) All employees were encouraged to assist each other in improving their performance and sales techniques, and they would occasionally role-play sales situations and talk about how to handle them. (Id. at 36, 39.) McQuaig's participation in the role-playing did not change when she was promoted to assistant manager. (Id. at 39.) McQuaig would suggest other employees ask particular questions on the phone that might help them become better at gaining corporate rental accounts. (Id. at 21.)
According to McQuaig's testimony, she was not involved in disciplining employees. She never handed out any "write-ups." (Id. at 41.) She received a write-up for repeated tardiness and her area manager came to the branch to present the write-up. (Id.) McQuaig wanted to discipline an employee on one occasion because he would regularly argue with her in front of customers. (Id. at 61.) She asked her branch manager "to write him up," and the branch manager responded that he would talk to the employee. (Id.) The employee did not receive a write-up. (Id. at 61-62.)
Brown testified assistant managers at ERAC-Florida are expected to play a role in hiring, disciplining, training, and evaluating branch employees. (Brown Decl. (ECF No. 277-3) ¶ 16.) Brown explained that the ERAC-Florida human resources department places substantial weight on the opinions of assistant managers, who they believe are often more actively involved in and aware of the performance of subordinate employees than branch managers. (Id. ¶¶ 17-18.) McQuaig testified that she played no role in the hiring or firing of employees at the Waycross branch, and gave no input on hiring or firing of personnel. (McQuaig Dep. (ECF No. 277-1) at 33, 60-61.) She testified that she did not recommend candidates for jobs. (Id. at 35.) She testified that she had no role in decisions regarding promotions or transfers, and at least one person was eligible for promotion during McQuaig's tenure. (Id. at 37.) If the Waycross branch was understaffed, either the branch manager or the area manager was responsible for coordinating with another branch to obtain additional staffing. (Id. at 29.)
Although McQuaig never wrote any performance reviews during her six months as an assistant manager, she did attend a training session for assistant managers on performance reviews, as mentioned above. (Id. at 17-18.) She testified that "[her] branch manager wrote the employee reviews." (Id. at 18.) She believed one performance review was conducted while she was assistant manager, and she was not involved in conducting the review or asked for input with respect to the review. (Id. at 37-38.) She remembered her branch manager and area manager asking her informally about the performance of other employees in the Waycross branch. (Id. at 30.) Brown's declaration explains that McQuaig's lack of participation in employee reviews was odd, and was explained by the shortness of her tenure at ERAC-Florida. (Brown Decl. (ECF No. 277-3) ¶ 19.) In his declaration, Brown claims that no employees were reviewed at the Waycross branch during the time when McQuaig was an assistant manager. (Id.)
According to McQuaig's testimony, her responsibilities in managing other employees increased when the branch manager was not present. For example, when a customer asked to speak to a manager, that customer would be referred to the branch manager, unless he was out of the branch; in which case, she would speak to the customer. (McQuaig Dep. (ECF No. 277-1) at 23.) If the branch manager was not in the office, McQuaig might ask a car prep to pick up a car at a dealership, which is an instruction she would not give if the branch manager were present. (Id. at 28.) When the branch manager was not present, it was McQuaig's responsibility to ensure that employees took their lunch breaks and clocked out at their scheduled times. (Id. at 38.)
According to McQuaig, her day-to-day activities did not change significantly when she was promoted to assistant manager. If the branch was going to have a busy day, the branch manager might coordinate a meeting of employees in the morning, but McQuaig testified she never led those meetings. (Id. at 29.) She estimated that sixty percent of her time as assistant manager was spent "renting vehicles and . . . washing cars and making reservations." (Id. at 48.) She testified that she washed three to five cars daily as an assistant manager. (Id. at 30.) To wash a single car required between twenty and thirty minutes. (Id. at 31.) McQuaig estimated that she "ran the counter" at the Waycross branch sixty percent to seventy percent of the time. (Id. at 26.) "To run the counter" means to "sit up there and answer the phone and write tickets. . . . [T]hey're sitting at our computers, you know, answering, making reservations, you know, and writing tickets." (Id.) When she was not running the counter, that task was performed by either the branch manager or the management trainee. (Id.) McQuaig, her branch manager, and the Waycross branch's management trainee or assistant (if there was one), took turns working Saturday mornings. (Id. at 22.) She worked three hours every second or third Saturday, and no other employees were present at the branch on Saturdays. (Id.) McQuaig acknowledged that her work sometimes involved multitasking, such that she might write a rental ticket at the same time she trained or instructed an employee. (Id. at 47.)
McQuaig had limited discretion at the Waycross branch. For example, fleet management-"making sure you have the right number of cars for the amount of rentals you might have"-was the responsibility of the branch manager and area manager. (Id. at 28.) McQuaig did not coordinate with other offices when there was a need to shuffle cars among or between them, which was a common occurrence. (Id.) She did not have authority to release one the Waycross branch's vehicles to a different branch. (Id.) McQuaig's participation in fleet management was, according to her testimony, limited to driving employees to other branches to pick up additional cars when needed, or informing the branch manager if the branch needed to acquire a specialized or luxury vehicle to meet a particular customer's requirements. (Id. at 28, 45.) If the branch manager was not in the branch, McQuaig called the area manager with respect to all fleet management issues to obtain approval. (Id. at 45-46.) To her recollection, the branch manager was not required to obtain approval from the area manager in similar situations. (Id.)
McQuaig's discretion in dealing with customers was limited by company policy. She was permitted to give preapproved discounts and upgrades to assuage dissatisfied customers, but for certain types of upgrades she was required to obtain approval from the branch manager; her discretion in this area was the same as the discretion of a management trainee or a management assistant. (Id. at 24-25, 35.) When asked whether she had any role in "develop[ing] strategies and strategic alternatives to solve problems," McQuaig responded that she had no recollection of developing strategies or solving problems beyond giving discounts or upgrades to customers. (Id. at 40.) She testified that any decision that affected branch profits was made by the branch manager. (Id. at 50.) In determining whether to rent to customers who were not using a debit card, credit card or money order, McQuaig was not permitted to deviate from pre-established company policies. (Id. at 25.) To make a cash rental, the customer was required to have two out of three forms of identity verification, such as current pay stubs or utilities bills. (Id.) All employees were taught to apply that policy. (Id.)
McQuaig did some branch marketing. (Id.) She visited companies near the Waycross branch to try to develop new business. (Id.) Occasionally, she would give out Enterprise marketing materials such as pens or writing pads. (Id.) She did not have to ask permission to give out the marketing materials, but she was required to obtain approval for other marketing purchases, such as buying biscuits or doughnuts for customers. (Id. at 26.) Everyone at the Waycross branch took an active role in marketing. (Id. at 39.) McQuaig made one or two sales calls per month as an assistant manager. (Id. at 49.) A sales call typically took her away from the branch for a half day. (Id.)
The number of employees at Waycross branch was somewhat fluid. (See id. at 21-22, 27-28, 62-63.) Normally a branch manager, an assistant manager (McQuaig), a management trainee (who was promoted to management assistant before McQuaig left the Waycross branch), and two part-time car preps were present in the branch. (Id. at 21-22, 27-28, 37, 62-63; Brown Decl. (ECF No. 277-3) ¶¶ 20-22.) According to McQuaig, there was never a time during her tenure when the branch was staffed by more than one full-time employee (excluding herself and the branch manager). (McQuaig Dep. (ECF No. 277-1) at 63.) One of the two part-time employees was out occasionally because of health problems. (Id.) The two part-time car preps respectively worked, on average, twenty-nine hours per week and thirty-four hours per week. (Brown Decl. (ECF No. 277-3) ¶22.)
On October 23, 2006, McQuaig's branch manager transferred to another ERAC-Florida branch. (McQuaig JCS (ECF No. 404) ¶ 37.) From then until November 13, 2006, when McQuaig took a leave of absence, she was the most senior employee working at the Waycross branch. (Id. ¶ 38.) McQuaig testified that during this time she referred to her area manager for most decisions. (McQuaig Dep. (ECF No. 277-1) at 6 ("I always had to refer to the area manager, you know. I was not the branch manager.").) She never returned to work after taking her leave of absence on November 13, 2006, and she was removed from ERAC-Florida's payroll on November 27, 2006. (McQuaig JCS (ECF No. 404) ¶ 39.) She explained that her reason for leaving ERAC-Florida was that she believed her pay was not commensurate with the amount of time required by her job as an assistant manager. (Id. at 52.)
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. .
(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).
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-Florida claims that McQuaig 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-Florida argues that McQuaig submitted a sham affidavit after her deposition, which this court should disregard in assessing the existence of genuinely disputed material facts. Second, McQuaig argues that ERAC-Florida failed to disclose the identity of witnesses whose ...