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

July 20, 2012

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


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

NICKOLAS HICKTON, et. al., Plaintiffs, v. ENTERPRISE RENT-A-CAR COMPANY, et. al., Defendants.

Civil No. 07-1687 Civil No. 09-0815 Civil No. 09-0816 Civil No. 09-0824 Civil No. 09-0832 Civil No. 09-0833 Civil No. 09-1188 Civil No. 09-1321 Civil No. 10-1003 Civil No. 10-1189 Civil No. 10-1456 Civil No. 11-0071 Civil No. 11-0333 Civil No. 11-1024 Civil No. 12-0659

THIS DOCUMENT RELATES TO: Graham v. Enterprise Rent-A-Car Company, Civil No. 09-0833

MEMORANDUM OPINION

I. Introduction

This opinion concerns sample plaintiff Wayman F. Graham II ("Graham"). 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 Graham. (ECF No. 247.)*fn2 ERAC-Florida argues that Graham qualified for the executive and combination exemptions from the compensation requirements of the FLSA. Graham 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, Graham 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 Graham was properly classified as exempt. The motion for summary judgment filed by ERAC-Florida against sample plaintiff Graham will be DENIED.

II. Factual Background

ERAC-Florida hired Graham on November 25, 2003. (Graham Joint Concise Statement of Material Facts ("Graham JCS") (ECF No. 434) ¶ 1.) Graham was employed in a variety of functions at several ERAC-Florida branches in the Miami area. The claims at issue in this opinion concern the period from May 16, 2005 until February 27, 2006, during which time he was an assistant manager, first at an ERAC-Florida branch in South Beach (a neighborhood of Miami Beach, Florida) (the "South Beach branch") and later at defendant's branch at the Miami International Airport (the "airport branch"). (Id. ¶¶ 3-5, 10; Declaration of Lucila M. Pelay ("Pelay Decl.") (ECF No. 280-2) ¶ 4.)

Graham began working at ERAC-Florida in November 2003 as a "management trainee." (Pelay Decl. (ECF No. 280-2) ¶ 4.) He was promoted to a "management assistant," then to an "assistant manager" and ultimately to a "branch manager" before being terminated by ERAC-Florida.*fn3 (Id.) As stated above, this opinion involves Graham's tenure as an assistant manager. His first assignment as an assistant manager at ERAC-Florida was at the South Beach branch beginning on May 16, 2005. (Graham JCS (ECF No. 434) ¶ 5.) The South Beach branch's business primarily consisted of insurance replacement rentals for customers whose cars were being serviced. (Id. ¶ 6.) The branch also rented to individuals vacationing in the area. (Id.) During Graham's tenure as an assistant manager at the South Beach branch, the branch was also staffed by between five and six full-time hourly employees and four part-time hourly employees. (Pelay Decl. (ECF No. 280-2) ¶ 10.)

When Graham began working at the South Beach branch, he was supervised by a branch manager. From June 20, 2005 until August 1, 2005, no branch manager was assigned to that location. (Id.) Lucila Pelay ("Pelay"), a human resources manager for ERAC-Florida, stated in her declaration that Graham "ran the South Beach branch [when it was] without a Branch Manager between June 20, 2005 and August 1, 2005." (Id.) Contradicting Pelay's statement, Graham testified in his deposition that the South Beach branch remained "under the authority of the area manager" during that time period. (Graham Dep. (ECF No. 280-1) at 50.) Graham recalled that other local branch managers assisted with the branch's operations during that time period as well:

Q: And, did you have occasion to perform tasks that might usually belong to the branch manager, because there was no branch manager?

A: Under the authority of the area manager, he'd have to actually come in and do those types of tasks

. . . [T]here were other . . . local branch managers that could assist. (Id.) Although the area manager delegated some branch manager tasks to Graham during that time period, Graham was required to coordinate by telephone with his area manager in the performance of those tasks. (Id.) In essence, Graham testified that he had no authority to make the kinds of discretionary decisions a branch manager would make. (Id.) Instead, the area manager made those decisions; Graham performed the operative or clerical tasks associated with those responsibilities, after consulting with the area manager by telephone. (Id.)

While he worked at the South Beach branch, Graham filled out a self-assessment in which he estimated that he spent:

 forty percent of his time on "management of customer service";  ten percent of his time on "human resource management";  ten percent of his time on "sales and marketing";  ten percent of his time on "branch accounting";  ten percent of his time on "fleet management";  ten percent of his time on "management of branch safety, security, maintenance, and appearance"; and  ten percent of his time on "other tasks," such as training the branch's management trainees and management assistants. (Graham Assistant Manager Review (ECF No. 280-5) at E-010528.) ERAC-Florida preselected the above-listed categories of tasks when it created the self-assessment form; when he filled out the form, Graham estimated what percentage of his time he spent on each category of task. (Id.) When Graham estimated the portion of his time spent on "management of customer service," his estimate included the time spent coaching, training and managing employees, as well as delegating tasks to and sharing tasks with employees. (Graham Dep. (ECF No. 280-1) at 42.) It also included customer service functions which Graham carried out. (Id. ("'Delegates and shares functions' . . . generally, that was the case. . . . [S]ome of the times a lot of the functions I actually did, you know, myself.").) As explained more fully below, Graham equated "customer service" with the non-sales tasks carried out by branch employees.

Graham transferred to the airport branch on August 22, 2005, where he continued his employment as an assistant manager until February 28, 2006.*fn4 (Graham JCS (ECF No. 434) ¶ 10.) At the height of the rental season the airport branch maintained a fleet of over 1,000 vehicles. (Id. ¶ 11.) At the time of Graham's transfer, ERAC-Florida employed more than eighty workers at its airport branch. (Pelay Decl. (ECF No. 280-2) ¶ 11.) The airport branch was typically staffed by two assistant managers, one of whom supervised the inside rental counter, and one of whom oversaw the outside "drive" location where rental vehicles were received, cleaned, stored and presented to customers.*fn5 (Declaration of Roxanne Lalla-Maharajh ("Lalla-Maharajh Decl.") (ECF No. 280-3) ¶ 11; Graham Dep. (ECF No. 280-1) at 35, 57.) Both the inside and the outside location were typically staffed by four or five hourly employees. (Lalla-Maharajh Decl. (ECF No. 280-3) ¶ 11.) The inside rental counter was also staffed by at least two receptionists. (Id.)

The airport branch had an area manager who was at the branch Monday through Friday, as well as two branch managers. (Graham Dep. (ECF No. 280-1) at 103, 105.) Graham testified that the area manager and two branch managers "ran the operation" and that assistant managers, management trainees and management assistants performed the "legwork" associated with managing the branch. (Id. at 105.) Graham consistently testified during his deposition that there were very few distinctions between the role he played within ERAC-Florida as a management trainee or management assistant and the role he played as an assistant manager- although he did admit assistant managers were more likely to be placed in supervisory roles such as running the "drive"-and that the main institutional difference between those three categories of employees is that assistant managers were relied on to perform the "legwork" when management assistants and management trainees could not be required to work longer without incurring overtime costs to the branch. (Id. at 4, 9, 51, 105.) "[O]ne of the biggest expenses [to ERAC-Florida] was the overtime for the MTs." (Id. at 9.) "What the MTs and MAs couldn't do for time reasons . . . the assistant manager had to kick in and take care of . . . ." (Id. at 105.) Graham indicated that he worked between sixty and seventy-five hours per week (id. at 9), averaging around sixty-five or seventy hours (id. at 94), and that he often worked "12 -- 14 -- 16 hours" per day at the airport branch "because the MTs had to leave [on account of] their overtime" (id. at 51). Graham usually worked six days per week. (Id. at 94.)

As an assistant manager, Graham testified that his main jobs involved making sales, providing customer service and performing other office functions. (Id. at 4.) Graham testified that he performed these same tasks while employed as a management trainee. (Id. ("Essentially everything I did as an MT was the same as I did as assistant manager.").)

Graham was often responsible for opening the airport branch while he worked there, which involved arriving early to ensure that the branch was prepared for the day. (Id. at 36, 58-59.) This preparation work often took Graham two-to-three hours, and it was common for him to arrive at work as early as 4:30 a.m., hours earlier than most other branch employees. (Id. at 58-59.) Graham testified that the duties involved with opening the store included unlocking the store, setting out the reservation slips for the day, checking that the appropriate cars had been dropped off overnight, making sure the airport shuttles had begun cycling, and deciding whether to add cars that had been dropped off overnight to the airport branch's fleet or to send them back to the branch from which they came. (Graham Dep. (ECF No. 280-1) at 58-60.) Although a few shuttle drivers came in early in the morning, other employees generally did not start arriving until around 7:00 a.m., along with a branch manager. (Id. at 58.) Graham's counterpart assistant manager was usually tasked with closing the branch. (Id.)

At the airport branch Graham was given the title of "team captain," and was assigned a team of employees, whose sales metrics were assessed collectively and compared to other subgroups of ERAC-Florida employees. (Id. at 39.) While employed at the airport branch, Graham estimated that he spent:

 seventy percent of his time on "management of customer service";  five percent of his time on "human resource management";  five percent of his time on "sales and marketing";  five percent of his time on "branch accounting";  five percent of his time on "fleet management";  five percent of his time on "management of branch safety, security, maintenance, and appearance"; and  five percent of his time on "other tasks."*fn6

(Id. at 68.) Graham indicated that "customer service" meant the outside, "drive" functions of the branch, as opposed to the sales functions which were performed at the inside counter. (Id. at 47 ("[We tried to] hav[e] the -- the better people that sold, you know, at the counter and the people probably outside with me that were, you know, better with customer service.").)

There are disputes about the extent to which Graham was responsible for training and developing other ERAC-Florida employees in his role as an assistant manager. Although Graham testified that he was not responsible for training and development of employees on his team, he wrote in his assistant manager performance review and affirmed during his deposition that he felt "a strong sense of accomplishment" when he was able to "train others and help them develop." (Graham Dep. (ECF No. 280-1) at 66.) Likewise, Carlos Jiminez, an employee of ERAC-Florida who worked under Graham at the airport branch, also averred that part of Graham's duties as assistant manager included training branch employees in the performance of their job duties. (Jiminez Decl. (ECF No. 280-4) ¶ 4.) Graham, attempting to clarify the role he played in training and developing employees, testified that "everyone in the office was . . . influential in helping to train and assist others." (Graham Dep. (ECF No. 280-1) at 39.) Graham, however, affirmed in his deposition that he performed "'[c]ustomer service training, sales and marketing [training], local office training (branch management), MQI training, [and] airport branch training.'" (Id. at 45.)

With respect to Graham's supervisory responsibilities at ERAC-Florida, Roxanne LallaMaharajh ("Lalla-Maharajh"), a current area manager for ERAC-Florida and Graham's former branch manager at the airport branch, averred that assistant managers are part of the "branch management team." (Lalla-Maharajh Decl. (ECF No. 280-3) ¶¶ 2, 3, 10.) According to LallaMaharajh, "[a]lthough Assistant Branch Managers would write rental contracts if needed, Management Trainees and Management Assistants would write far more contracts because the Assistant Branch Managers were busy overseeing branch operations." (Id. ¶ 8.) Graham, on the other hand, disputed that he oversaw operations, testifying that he "couldn't give any employee instruction without [first] having the approval of the branch manager." (Graham Dep. (ECF No. 280-1) at 21.) He testified that his responsibilities as an assistant manager did not differ much from the responsibilities of management trainees and management assistants, especially since all three positions had the same basic duties and employees in these positions received instructions from the branch manager. (Id. at 51.) According to Graham, the final "say-so" belonged to the area manager, and that authority "trickled down to the branch managers." (Id. at 104.) As an assistant manager, he did what his branch manager told him to do, just like he had done while he was a management trainee and a management assistant. (Id.) Graham did, however, testify during his deposition that he could give "major instruction[s]" to management trainees and that he delegated tasks to subordinates as part of his job. (Graham Dep. (ECF No. 280-1) at 21.) For example, although he lacked the authority either to tell an employee to take time off from work or to take a couple of days' rentals off a customer's bill, he could instruct employees to go out to the parking lot to assist arriving customers. (Id.) Graham testified that management trainees and management assistants were not free to disregard his instructions. (Id. at 104.)

Graham's delegation of tasks to subordinate employees related to the operational aspects of the car rental business. Specifically, Graham testified that he instructed employees to wash and prepare cars for each incoming reservation, which included ensuring that each car received the appropriate maintenance, and he instructed branch employees to assist customers, when the need arose.*fn7 (Graham Dep. (ECF No. 280-1) at 28, 39, 53.) Although he believed the branch manager and the area manager were in charge of running the branch's operations, he was aware that management trainees and management assistants were required to follow his instructions. (Id. at 104.) He testified that he participated in developing, planning, and implementing the branch's overall sales strategy, which included assisting employees with promoting and selling "protection products" (i.e., insurance-related upsells) and upgrades. (Id. at 47-48.) Those functions were secondary, however, according to Graham, because "[w]e were running the drive [and] [t]here really wasn't much time for" training or coaching employees to sell protection products and upgrades. (Id. at 48.) Graham's input into the branch's sales strategy was to make sure better salespeople worked the inside counter while employees who had better customer service skills worked outside with him. (Id. at 47.) He did not "[m]ak[e] difficult decisions in matters of importance" because "that's put . . . on the branch manager." (Graham Dep. (ECF No. 280-1) at 54.)

With the exception of the delegation of tasks and training mentioned above, Graham's responsibilities were limited in other human resources management tasks including disciplining employees and scheduling. Graham testified that he was not responsible for disciplining employees or scheduling employee shifts. (Id. at 42, 56.) Instead, the lead reservationist "made the schedules for everyone." (Id. at 28, 43.) Though Graham did not schedule employees, if additional employees were needed on the "drive," he would pull extra workers from inside; likewise, if he had too many employees, he might send some inside. (Id. at 56.) Lalla-Maharajh testified that Graham could send employees home if business was slow or call more employees to work if the airport branch was busy. (Lalla-Maharajh Decl. (ECF No. 280-3) ¶ 13.)

Similarly, although major disciplinary decisions were the responsibility of the branch manager, Graham could make recommendations to the branch manager relating to disciplinary issues. (Graham Dep. (ECF No. 280-1) at 42.) Lalla-Maharajh testified that assistant branch managers were expected to play a role in discipline during Graham's tenure, but did not testify that Graham participated in disciplinary matters. (Lalla-Maharajh Decl. (ECF No. 280-3) ¶ 15.) Pelay testified that "Assistant Branch Managers [were] expected to play a role in hiring, disciplining, training, and evaluating branch employees . . . for the period that Mr. Graham was an Assistant Branch Manager," but did not indicate that Graham himself had participated in any disciplining of employees. (Pelay Decl. (ECF No. 280-2) ¶ 12.)

The record indicates no material participation by Graham in the decision-making process relating to the promotion or the hiring and firing of employees. Pelay testified that assistant branch managers "typically participate" during employee interviews, on which they"regularly provide comments on . . . candidates" which are given "considerable weight in the hiring process." (Id. at ¶ 13 (emphasis added).) No testimony was introduced that Graham participated in the hiring process. Graham did not recall participating in the hiring process as an assistant manager, and stated he had no input in hiring decisions. (Graham Dep. (ECF No. 280-1) at 41, 98.) He remembered the branch manager having responsibility for the hiring and interviewing process at the South Beach branch. (Id.) He testified that the airport branch had only employed individuals who had already worked at ERAC-Florida's other branches, so there was no hiring or interview process. (Id.) Graham testified he did not have any input regarding who was to be fired. (Id. at 41.) Pelay and Lalla-Maharajh both testified that assistant managers generally are expected to participate in termination decisions, but neither testified that Graham participated in any meaningful way in any decisions to fire employees. (Pelay Decl. (ECF No. 280-2) ¶¶ 15-16; Lalla-Maharajh Decl. (ECF No. 280-3) ¶¶ 15-18.) With respect to promotions, Graham testified that he volunteered his opinions about the value of branch employees, but did not know whether his opinions were considered as part of the decision-making process with respect to advancement and promotion of employees. (Graham Dep. (ECF No. 280-1) at 46-47 ("[W]hen I gave it, I would hope that it was, but to the best of my knowledge no weight was given to my recommendations.").) Although he did not know whether any weight was given to his recommendations, he suspected that his opinion was not relevant because he noticed no correlation between people he had suggested were deserving and people who were receiving promotions. (Id.) Neither Pelay nor Lalla-Maharajh testified that they gave Graham's recommendations weight in decisions relating to the advancement of employees. (Pelay Decl. (ECF No. 280-2) ¶¶ 15-16; Lalla-Maharajh Decl. (ECF No. 280-3) ¶¶ 15-18.) Again, their testimony was purely generic.*fn8 (Id.)

Beyond offering his opinions about the value of particular employees, as described above, Graham inserted perfunctory comments on employee evaluations after the branch manager had filled out the review and made his own comments. (Graham Dep. (ECF No. 280-1) at 42.) For example, on an eight-page employee review of Faith Wells, Graham's hand-written comments were limited to the following:

ASST. MANAGER'S COMMENTS:

Faith is an excellent MT. She is very dedicated and always shines at the office.

ASST. MANAGER'S SUGGESTIONS FOR IMPROVEMENTS: Assume more a leadership role [sic]. This will prepare for the next level.

(Faith Wells Performance Review (ECF No. 280-7) at 6.) On a similar review, Graham's "comments" were: "[y]ou are a very important part of the team. Please continue to help customers." (Pio Delgado Performance Review (ECF No. 280-8) at 2.) Graham's "suggestion[]" was: "[f]ocus on the customers." (Id.)

As an assistant manager, Graham earned a base salary of $25,000 per year, which amounted to bi-weekly payments of $981. (Graham JCS (ECF No. 434) ¶ 24.) In addition to his salary, Graham also earned commissions based on the profitability of the branch. (Id. ¶ 23.) As a management trainee and management assistant, Graham earned between $9.28 and $10.75 per hour. (Id. ¶ 25.) Graham earned $31,980 as an hourly management trainee in 2004. (Id. ¶ 26.) In 2005, after being promoted to assistant manager, Graham earned $41,149, which included commission from branch profits. (Id.) The record does not contain information relating to the salaries earned by management trainees and management assistants in 2005. Assuming a sixty-eight-hour work week*fn9 and fifty work weeks per year, Graham earned $12.10 per hour as an assistant manager, or a twelve percent increase over the high end of his hourly wage as a management trainee. Had Graham, however, been classified as nonexempt (and given the previously stated assumptions about the amount of time he spent working each week*fn10 ), his annual income would have correlated with a straight-time hourly rate of $10.03 per hour.*fn11

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), ...


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