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McKinney v. United Stor-All Centers LLC

September 21, 2009

PATRICIA H. MCKINNEY ET AL., PLAINTIFFS,
v.
UNITED STOR-ALL CENTERS LLC ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos.: 39, 46

MEMORANDUM OPINION

DENYING THE DEFENDANTS'MOTION FOR SUMMARY JUDGMENT;GRANTING PLAINTIFF MCKINNEY'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT

I. INTRODUCTION

This matter is before the court on the defendants' motion for summary judgment and plaintiff Patricia McKinney's cross-motion for partial summary judgment. The plaintiffs, Patricia McKinney and Darryl Robinson, were employed as the Primary Managers of self-storage facilities owned and operated by the defendants. They allege that the defendants failed to pay them overtime wages to which they were entitled, in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 et seq. The defendants move for summary judgment, arguing that as "administrative" and "executive" employees, the plaintiffs were statutorily exempted from the FLSA's overtime requirements. Defendant United Stor-All Centers LLC ("USAC") also moves for summary judgment on the grounds that the plaintiffs were employed solely by United Stor-All Management LLC ("USAM") and not by USAC, and that USAC is therefore not a proper party to this action. Plaintiff McKinney has filed a cross-motion for partial summary judgment, contending that no reasonable jury could conclude that she was an "executive" employee for purposes of the FLSA.

The court concludes that there exist genuine issues of material fact regarding the defendants' assertion that the plaintiffs fall within the "administrative" exemption to the FLSA's overtime requirements. Accordingly, the court denies summary judgment to the defendants on this issue. The court further concludes that the defendants have failed to demonstrate the absence of a genuine issue of material fact concerning whether the plaintiffs were "executive" employees. In fact, the evidence adduced plainly demonstrates that plaintiff McKinney did not fall within the "executive" exemption. Thus, the court denies summary judgment to the defendants on this issue and grants plaintiff McKinney's cross-motion for partial summary judgment. Lastly, the court concludes that a genuine issue of fact remains as to whether USAC had an employment relationship with the plaintiffs. Accordingly, the court declines to dismiss USAC from the litigation at this juncture.

II. FACTUAL & PROCEDURAL BACKGROUND

A. The Plaintiffs' Job Responsibilities

In March 2003, plaintiff McKinney was hired as the Primary Manager of Uptown Self-Storage, a self-storage facility operated by USAM. Defs.' Statement of Material Facts Not in Dispute ("Defs.' Statement") ¶ 12. Uptown Self-Storage's principal business involved the leasing of storage units and rental trucks to customers. Pls.' Opp'n to Defs.' Mot. for Summ. J. and Cross-Mot. for Partial Summ. J. ("Pls.' Opp'n") at 11. From late February 2005 to January 2008, McKinney allegedly worked an average of sixty hours per week. Id. at 4. During this period, McKinney's annual salary ranged from approximately $34,500 to $42,600. Defs.' Statement ¶¶ 9-12. In addition, McKinney was provided with a rent-free apartment on the premises of Uptown Self-Storage with an estimated rental value of $900 per month. Defs.' Mot., Ex. 3 (Decl. of Cathy Avery-Pugh) ("Avery-Pugh Decl.") ¶ 13.

In 2005, plaintiff Robinson became the Primary Manager of Fullerton Self-Storage, another self-storage facility operated by USAM. Defs.' Statement ¶¶ 54-55. Robinson alleges that from September 2005 to September 2008, he worked approximately forty-five hours per week. Pls.' Opp'n at 4. During this period, Robinson earned between approximately $34,000 and $36,000 per year. Defs.' Statement ¶ 70.

As set forth in the "Position Description" created by the plaintiffs' employer, a Primary Manager's duties fell into roughly four categories: (1) Sales, Marketing and Customer Service; (2) Administration; (3) Custodial and Maintenance; and (4) Leadership/Supervision. Defs.' Mot., Ex. 5 ("Position Description") at 1-2. The first category of responsibilities required Primary Managers to "[a]chieve[] lease-up objectives by utilizing effective advertising, telephone techniques, and direct interactions with potential customers," "[p]romote[] and maintain[] excellent customer relations by providing information and resolving problems effectively and in a timely fashion," "[c]reate[] and implement[] [an] annual marking plan, spending at least 1/2 day per week on approved marketing activities" and "[r]ecommend[] marketing strategies based on competitive information, maintaining market studies, and analysis of local business opportunities." Id. at 1.

The Primary Manager's "Administrative" responsibilities included "[m]anaging cash and balancing receipts," "[m]aking collections, posting payments, and... daily bank deposits" and "[f]ollow[ing] up on delinquent accounts." Id. Primary Managers were also required to prepare "such management, marketing, operational or other reports as required in [the Operations Manual] or as required from time to time by the District Manager" and to accurately utilize computer systems and accounting records. Id.

The Primary Manager's "Custodial and Maintenance" duties included "[v]isually inspect[ing] the store daily" and "respond[ing] to potential breach of security problems," "[m]onitor[ing] security systems," "[e]nsur[ing] the cleanliness and orderliness standards are met in the office, restrooms and grounds and that vacant units are cleaned on a timely basis... [which] means doing the work him/herself whenever necessary" [and] "[p]erform[ing] minor repairs needed at the facility." Id. Primary Managers were required to "[k]eep the premises in a neat and clean condition, the grounds free of debris, and the landscaped areas free of weeds." Id. at 1-2.

As for "Leadership/Supervision," the Primary Managers were responsible for the "effective training and supervision of Assistant Manager(s) [to ensure] that the facility [was] properly managed in his/her absence." Id. at 2. In addition, the Primary Manager was responsible for the "recruiting, hiring, training and motivation of subordinates." Id.

The Primary Manager was the highest level employee at each facility and reported to an off-site District Manager. Defs.' Mot. at 4-5. The Primary Manager was required to have "[f]requent and regular contacts with [his or her] supervisor [and] Home Office Personnel." Position Description at 2. In addition, each Primary Manager was provided with an extensive Operations Manual. See Pls.' Opp'n at 2 & Ex. 7 ("Operations Manual"). As discussed in more detail below, the Operations Manual provided detailed instructions on how each Primary Manager was to fulfill his or her responsibilities. See generally id.

McKinney states that she spent approximately forty percent of her time on customer sales and service, forty-five percent of her time on maintenance, five percent of her time on marketing activities and ten percent of her time on staff management. Pls.' Opp'n at 1 & Ex. 5 (Affidavit of Patricia McKinney) ("McKinney Aff.") ¶ 3. Robinson testified that he spent approximately fifty percent of his time on customer sales and service, thirty percent of his time on maintenance, five percent of his time on marketing and fifteen percent of his time on "administrative management/facility management." Id. at 1-2, Ex. 2 (Dep. of Darryl Robinson) ("Robinson Dep.") at 142-43.

McKinney asserts that for the bulk of her tenure, she supervised one full-time Assistant Manager, though she supervised a second full-time employee on occasion. Id. at 4; see also Defs.' Mot., Ex. 1 (Aff. of Carol Shipley) ("Shipley Aff.") ¶ 31. Robinson supervised two Assistant Managers for all but a five month period, during which time he supervised three to four Assistant Managers. See also Shipley Aff. ¶ 32. The day-to-day responsibilities of the Assistant Managers largely mirrored those of the Primary Managers. Id.

In 2006, Robinson was appointed as the Senior Primary Manager for his district, which encompassed the State of Maryland. Defs.' Statement ¶¶ 57-60. As Senior Primary Manager, Robinson had additional responsibilities, such as training other Primary Managers in his district. Id. ¶¶ 61. He received an additional $100 per month as Senior Primary Manager. Id. ¶ 59.

B. Relationship Between USAC and USAM

USAM is owned sixty-five percent by USAC and thirty-five percent by Carol Shipley, who also serves as USAM's president. Pls.' Opp'n at 26; Shipley Aff. ¶ 3. USAM provides property management services to storage facilities owned by USAC. Shipley Aff. ¶ 6. The two entities share payroll systems, human resources systems, accounting employees and a common website. Id. at 26-27. Yet the two entities have separate main offices. Id. at 26. Furthermore, the defendants assert -- and the plaintiffs do not dispute -- that USAC did not own the Uptown and Fullerton facilities, did not perform any services at the USAM facilities, did not supervise the plaintiffs' work and did not have the authority to hire or fire the plaintiffs. Shipley Aff. ¶¶ 12-13; see Pls.' Opp'n at 25-27.

C. Procedural History

Plaintiff McKinney commenced this action individually and on behalf of others similarly situated on February 25, 2008, see generally Compl., and filed an amended complaint on June 13, 2008, alleging that the defendants failed to pay her overtime wages as required by the FLSA and failed to pay her for her accrued but unused vacation time as required by D.C. Code § 32-1001,*fn1 see generally Am. Compl. On September 26, 2008, plaintiff Robinson filed a Consent to Participate in this collective action. See Consent to Participate. On November 10, 2008, the court granted the plaintiff McKinney's motion to facilitate the identification and notification of additional potential plaintiffs and ordered the defendants to produce a list of all Primary Managers at facilities identified by the plaintiffs. Order (Nov. 10, 2008). The defendants filed the instant motion for summary judgment on January 2, 2009. The plaintiffs opposed the defendants' motion on February 20, 2009, and plaintiff McKinney cross-moved for partial summary judgment on the defendants' claim that she falls within the "executive" exemption to FLSA's overtime requirements.

III. ANALYSIS

A. Legal Standard for a Motion for Summary Judgment

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C. Cir. 1995). To determine which facts are "material," a court must look to the substantive law on which each claim rests. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A "genuine issue" is one whose resolution could establish an element of a claim or defense and, therefore, affect the outcome of the action. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 248.

In ruling on a motion for summary judgment, the court must draw all justifiable inferences in the nonmoving party's favor and accept the nonmoving party's evidence as true. Anderson, 477 U.S. at 255. A nonmoving party, however, must establish more than "the mere existence of a scintilla of evidence" in support of its position. Id. at 252. To prevail on a motion for summary judgment, the moving party must show that the nonmoving party "fail[ed] 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." Celotex, 477 U.S. at 322. By pointing to the absence of evidence proffered by the nonmoving party, a moving party may succeed on summary judgment. Id.

The nonmoving party may defeat summary judgment through factual representations made in a sworn affidavit if he "support[s] his allegations... with facts in the record," Greene v. Dalton, 164 F.3d 671, 675 (D.C. Cir. 1999) (quoting Harding v. Gray, 9 F.3d 150, 154 (D.C. Cir. 1993)), or provides "direct testimonial evidence," Arrington v. United States, 473 F.3d 329, 338 (D.C. Cir. 2006). Indeed, for the court to accept anything less "would defeat the central purpose of the summary judgment device, which is to weed out those cases insufficiently meritorious to warrant the expense of a jury trial." Greene, 164 F.3d at 675.

B. Legal Standard for FLSA Overtime Exemptions

The FLSA requires that employers pay their employees one and a half times their "regular rate" for work in excess of forty hours per week, unless they are subject to certain enumerated exemptions. 29 U.S.C. § 207(a). As relevant here, the FLSA exempts from coverage those individuals "employed in a bona fide executive, administrative, or professional capacity." Id. § 213(a). These overtime exemptions are "affirmative defense[s] on which the employer has the burden of proof." Corning Glass Works v. Brennan, 417 U.S. 188, 196-97 (1974); accord Am. Fed'n of Gov't Employees, AFL-CIO v. Office of Pers. Mgmt., 821 F.2d 761, 771 (D.C. Cir. 1987) (noting that "the burden is on the employer to demonstrate the employee is in fact exempt"). The employer's claim that an exemption applies "must be proved by clear and affirmative evidence or the employee must be given coverage under the Act." Roney v. United States, 790 F. Supp. 23, 26 (D.D.C. 1992); see also Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 501 (6th Cir. 2007) (citing Roney, 790 F. Supp. at 26) (noting that "clear and affirmative evidence" requirement does not impose on the employer any heightened evidentiary burden).

It is well-settled that "exemptions from the Act are narrowly construed against the employer in order to further Congress's goal of affording broad federal government protection." Hunter v. Sprint Corp., 453 F. Supp. 2d 44, 50-51 (D.D.C. 2006) (citing Mitchell v. Ky. Fin. Co., 359 U.S. 290, 295 (1959)); Thomas, 506 F.3d at 501 (noting that the FLSA exemptions "are to be narrowly construed against the employers seeking to assert them") (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960)); Nicholson v. World Bus. Network, Inc., 105 F.3d 1361, 1364 (11th Cir. 1997). The exemptions are to be applied "only to those clearly and unmistakably within the terms and spirit of the exemption." Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1239 (11th Cir. 2008); Clements v. Serco, Inc., 550 F.3d 1224, 1227 (10th Cir. 2008) (noting that the employer "bears the burden of proving that the [e]mployees fit plainly and unmistakably within the exemption's terms") (internal quotations omitted).

The Department of Labor ("DOL") has promulgated detailed regulations outlining the criteria for the application of the FLSA exemptions. See 29 C.F.R. §§ 541.100 et seq. "The Department of Labor regulations are entitled to judicial deference and are the primary source of guidance for determining the scope of exemptions to the FLSA." Clements, 530 F.3d at 1227 (quoting Ackerman v. Coca-Cola Enters., 179 F.3d 1260, 1264 (10th Cir. 1999)).

At issue here are the "administrative" and "executive" exemptions to the overtime requirement. See 29 U.S.C. § 213(a)(1). The DOL regulations define an "administrative" employee as an individual:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week...;

(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general ...


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