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

September 24, 2012

IN RE: ENTERPRISE RENT-A-CAR WAGE & HOUR EMPLOYMENT PRACTICES LITIGATION NICKOLAS HICKTON, ET. AL., PLAINTIFFS,
v.
ENTERPRISE RENT-A-CAR COMPANY, ET. AL., DEFENDANTS.



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

THIS DOCUMENT RELATES TO: Hickton v. Enterprise Rent-A-Car Company, Civil No. 07-1687

MEMORANDUM OPINION

I. Introduction

This opinion concerns sample plaintiff Nicholas Hickton ("Hickton"). Pending before the court are eight motions for summary judgment filed by the relevant operating subsidiaries (collectively "defendants") of former 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 Rent-A-Car Company of Pittsburgh, LLC ("ERAC-Pittsburgh"), a subsidiary of ERAC, against Hickton. (ECF No. 346.)*fn2 Hickton originally also claimed that he was improperly classified as exempt when he was a branch manager at ERAC-Pittsburgh (in addition to the time he was an assistant manager), but he later withdrew the claim with respect to his employment as a branch manager. This opinion, therefore, will only consider his employment as an assistant manager and the time period during which he was an assistant manager.

ERAC-Pittsburgh argues that when Hickton was an assistant manager he qualified for the executive, administrative and combination exemptions from the compensation requirements of the FLSA. Hickton 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-Pittsburgh 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, Hickton 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-Pittsburgh failed to satisfy its burden of proving as a matter of law that Hickton was properly classified as exempt as an assistant manager. The motion for summary judgment filed by ERAC-Pittsburgh against sample plaintiff Hickton will be DENIED.

II. Factual Background

Hickton was hired by ERAC-Pittsburgh on August 11, 2003. (Hickton JCS (ECF No. 432) ¶ 3.) He was hired as a nonexempt management trainee at a branch in Pleasant Hills, Pennsylvania (the "Pleasant Hills branch") and a satellite office in a car dealership. (Id. ¶¶ 4, 6.) On April 19, 2004, while still a management trainee, Hickton transferred to ERAC-Pittsburgh's branch at the Pittsburgh International Airport (the "airport branch"). (Id. ¶ 5.) On August 1, 2004, Hickton became a management assistant at the airport branch. (Id. ¶ 8.) On November 1, 2004, ERAC-Pittsburgh promoted Hickton to an assistant manager at the airport branch. (Id. ¶ 12.) On March 7, 2006, he was promoted to branch manager of ERAC-Pittsburgh's branch in Steubenville, Ohio. (Id. ¶ 49.) This opinion concerns the employment of Hickton as an assistant manager during the period of time between November 2004 and March 2006.

Hickton declared that his primary responsibility while an assistant manager was writing tickets and renting vehicles. (Hickton Decl. (ECF No. 305, Ex. B) ¶ 12.) He wrote at least twenty-five rental tickets each day. (Id.) He also cleaned and moved cars and picked up customers. (Id. ¶¶ 21-23.)

ERAC-Pittsburgh encouraged its employees to take initiative and exhibit independence in their responsibilities. (Hickton Dep. (ECF No. 352-2) at 6.) As an exempt management trainee, Hickton's job duties required him to "[a]nswer the phone, take reservations, pick customers up, drop customers off, work on accounts receivable with some of the local dealerships[, which meant] making sure that we were collecting money on rental contracts that they owed us, [and to conduct] normal day-to-day operational functions, [such as] cleaning cars." (Id.) Hickton recalled that these job responsibilities required little if any oversight because he had received training prior to arriving at the Pleasant Hills branch and because these responsibilities were "self-explanatory." (Id. at 6-7.)

More important and potentially discretionary issues which ERAC-Pittsburgh employees were required to make-such as the proper qualifications for renting cars-were dictated by policy, and nonexempt employees were empowered to make decisions on those issues, as long as pre-established criteria were met. (Id. at 37.) For example, policy dictated whether a customer met the qualifications to pay with cash or a debit card. (Id.) The branch manager had the authority to deviate from company-wide policies. (Id. at 40.) For example, at the airport branch, the branch manager established the policy that only assistant managers or the branch manager should conduct "call-backs," but management trainees and management assistants were empowered to perform call-backs according to ERAC-Pittsburgh policy. (Id.) The term "call-backs" refers to the branch's method of keeping track of outstanding vehicles and ensuring timely payment had been made; the term could imply calling the customer to check in on the status of the rental or simply marking in the computer system that a return was expected on a specific day. (Id. at 40-41.) Hickton declared that "[t]he general operation of each branch . . . was set forth in highly detailed manuals supplied to all branch employees . . . [which] approved responses to situations encountered during the normal course of branch operations" and that he did not develop these policies or procedures, but was required to follow them. (Hickton Decl. (ECF No. 305, Ex. B) ¶¶ 16-18.)

In August 2005, Hickton's branch manager reviewed his performance as an assistant manager. (Hickton Review (ECF No. 352-10).) Hickton completed a portion of his employee performance evaluation where he indicated the percentage of time each week spent on various "management duties":

(A) MANAGEMENT OF CUSTOMER SERVICE . . . 100%[;]

(B) HUMAN RESOURCE MANAGEMENT . . . 100%[;]

(C) SALES AND MARKETING . . . 90%[;]

(D) BRANCH ACCOUNTING . . . 50%[;]

(E) FLEET MANAGEMENT . . . 100%[;]

(F) MANAGEMENT OF BRANCH SAFETY, SECURITY, MAINTENANCE, AND APPEARANCE . . . 100%[; and]

(G) OTHER . . . [uncompleted] %[.] (Id.) Below that section of the self-evaluation, Hickton wrote, "[m]y reasoning for not equating this section with a grand total of 100% is because I am constantly doing multiple things. Multitasking is a very important asset to my successes." (Id.) Hickton affirmed that he multitasked as an assistant manager during his deposition. (Hickton Dep. (ECF No. 352) at 16.)

Hickton did not remember filling out the 2005 self-evaluation and at his deposition he specifically denied performing many of the tasks which fell within the categories listed on the sheet. (Id. at 14.) For example, he testified that he did not select or recommend job candidates, delegate and share responsibilities, follow up on delegated assignments, or investigate and resolve employee issues and complaints. (Id.) He did not have the authority to hire or fire employees, and did not make recommendations about potential candidates. (Id. at 50, 53-54.) He did not remember giving guidance or instruction to ERAC-Pittsburgh employees during the workday. (Id. at 38.) He did, however, admit that he "supervis[ed]" employees at the airport branch and that he approved employee time entries at the end of the day when he worked the evening shift. (Id. at 42, 47.) He testified that maintaining the proper mix of vehicles (i.e., SUVs as opposed to sedans) in the branch's inventory was exclusively the responsibility of the branch manager at the airport branch. (Id. at 41.) Hickton denied having the authority as an assistant manager to discipline employees, but he did provide informal warnings to employees who, for example, had a history of tardiness. (Id. at 15, 43.) Hickton admitted that he trained and motivated employees. (Id. at 16, 21.) For example, he testified to the accuracy of his self-evaluation assessment that "training never ends" and "[o]n a daily basis I teach customer service techniques, as well as prepare my employees for their skills test and MQIs." (Id. at 17.) Hickton's review indicates that he was the "Branch Corporate Account Manager" at the airport branch, which required him to try to increase business at the branch through marketing efforts and developing new accounts. (Id. at 17.)

Hickton did not participate in prospective employee interviews while he was an assistant manager. (Id. at 22.) Even as a branch manager, he only sat in on two interviews, and he had no input into the hiring decision. (Id.) He described himself, even as a branch manager, as a "spectator" to the hiring process, who may or may not be present during an interview. (Id.) According to the declaration of George Penrod ("Penrod"), who was the branch manager at the airport branch when Hickton was an assistant manager, the airport branch was staffed through the "Best Employee Program," which meant that management assistants and management trainees were not hired directly to work at the airport branch. (Decl. of George Penrod ("Penrod Decl.") (ECF No. 352-4) ¶¶ 7-8.) Instead, they were selected from the best performers at other ERAC-Pittsburgh branches. (Id.) Under that program, ERAC-Pittsburgh's human resources personnel would compile and email to Penrod a list of eligible employees' sales data. (Id. ¶ 8.) Penrod, in turn, would call the prospective employees whom he selected, invite them to visit the airport branch, and interview them. (Id.) Penrod declared that Hickton made recommendations about transferring employees as part of the "Best Employee Program" based upon his having worked in other branches with some of the eligible employees. (Id. ¶ 17.) Penrod claimed he gave those recommendations weight. (Id.) Penrod also declared that Hickton recommended a particular employee be transferred out of the airport branch for poor performance, and that Penrod acted on that recommendation. (Id. ¶ 18.) Hickton did not recall whether that happened when questioned about the specific employee during his deposition. (Hickton Dep. (ECF No. 352-2) at 35.) He declared that he occasionally had informal conversations in which he gave his opinion about an individual, but that Penrod asked all employees for input, and Hickton did not believe his suggestions were given particular weight. (Hickton Decl. (ECF No. 305, Ex. B) ¶¶ 29-31.)

According to Penrod, Hickton was one of four assistant managers at the airport branch, and he was assigned his own team of three to four management trainees or management assistants, which he supervised. (Penrod Decl. (ECF No. 352-4) ¶ 4.) Hickton, on the other hand, denied delegating tasks. (Hickton Dep. (ECF No. 352-2) at 14.) He testified that the nonexempt employees did not need any meaningful direction: "The process is so simple that [giving direction is] really not necessary. . . . It's just you do the same thing a hundred times a day. Everybody knows what to do, and it gets done." (Id. at 26.) He declared that he did not set schedules or apportion tasks among employees, but that management trainees and management assistants carried out their functions without his direction. (Hickton Decl. (ECF No. 305, Ex. B) ¶¶ 46-47.)

Hickton occasionally worked during evening hours, when neither Penrod nor other assistant managers were present at the airport branch. (Hickton Dep. (ECF No. 352-2) at 34.) He worked weekends occasionally, but Penrod or another assistant manager were often there on weekends as well. (Id.) When Hickton worked the evening shift, the branch was staffed by only four employees, including him, who were split between two locations (a drop-off location and a pick-up location). (Hickton Decl. (ECF No. 305, Ex. B) ¶ 25.) If an important decision needed to be made when Penrod was away from the branch, Hickton was required to call Penrod and obtain his approval and guidance about the appropriate course of action. (Id. ¶ 26.) Hickton's authority to make unimportant decisions was the same as any other employee when the branch manager was not present, and as was explained above, was largely controlled by branch or corporate policy. (Id. ¶ 27.)

When Hickton became an assistant manager, he was given keys to the airport branch and the combination to the branch's safe. (Id. at 32-33.) He had new authorization to run specific reports on the branch's computer system, but his actual access to the reports did not increase because they had always been accessible and available in the branch in hard copy format. (Id. at 33.)

As an assistant manager, Hickton was paid a salary plus a percentage of the branch profits. (Hickton JCS (ECF No. 432) ¶ 12.) Hickton's total compensation in 2005 amounted to $37,255. (Id.) During the same time period, management trainees annually earned between approximately $25,000 and $28,000. (Lansberry Decl. (ECF No. 352-3) ¶ 14.) Management assistants earned between approximately $27,000 and $30,000 annually during the same time period. (Id.)

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-Pittsburgh claims that Hickton 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-Pittsburgh argues that Hickton submitted a sham affidavit after his deposition, which this court should disregard in assessing the existence of genuinely disputed material facts. Second, Hickton argues that ERAC-Pittsburgh failed to disclose the identity of witnesses whose ...


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