Enterprise Rent-A-Car failed to establish that a former assistant manager’s job duties were executive or administrative and therefore exempt from the Fair Labor Standards Act requirement of overtime pay, a federal judge has ruled, denying the company’s summary judgment motion.
U.S. District Judge Joy Flowers Conti of the Western District of Pennsylvania held that there were genuine issues of fact regarding Kevin Hagler’s primary duties at the nationwide rental car company. He was a sample plaintiff in the multidistrict litigation concentrated in the Western District of Pennsylvania in which assistant managers allege that they were deprived of overtime pay in violation of the FLSA. The opinion answers one of eight motions for summary judgment from Enterprise subsidiaries, according to the opinion.
In addition to finding that there are facts in dispute that should be heard by a jury, Conti found Enterprise’s argument that Hagler had filed a sham affidavit unavailing.
“The court finds the challenged declaration statements are not flatly contradictory of Hagler’s deposition testimony. The declarations are, therefore, not shams,” Conti said in her 36-page opinion in In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation. “Even if the declarations were stricken from the record, there would still be sufficient genuine disputes of material fact to preclude the court from entering summary judgment in ERAC-South Central’s favor,” she added, referring to Enterprise Leasing Co. South Central, which brought this motion for summary judgment.
In deciding that Hagler’s affidavit in opposition to summary judgment didn’t sufficiently contradict his earlier submissions enough to rise to the level of a “sham,” Conti noted that the U.S. Court of Appeals for the Third Circuit has “adopted a more flexible approach” to considering the “sham affidavit doctrine” than other circuits, which have held that any affidavit that contradicts earlier testimony should be disregarded.
In its 2007 opinion in Jiminez v. All American Rathskeller, the Third Circuit held “that ‘not all contradictory affidavits are necessarily shams,’” Conti said, quoting that opinion.
The only issues that Enterprise raised regarding Hagler’s statements involved the degree to which he was involved in the hiring and discipline of other branch employees and whether he directed or trained other employees.
“With respect to the declaration statements, the court reviewed the declarations, and could not discern any sham statement,” Conti said.
Moving to the substantive issues of exemption under the FLSA, Conti found that Enterprise wouldn’t prevail in any of the three categories that it presented: executive, administrative and combination.
“The FLSA exempts from its overtime provisions ‘any “employee in a bona fide executive, administrative, or professional capacity,”‘” Conti explained, quoting from the Third Circuit’s 2010 opinion in Soehnle v. Hess. “Additionally, the FLSA exempts from its overtime provisions ‘employees who perform a combination of exempt duties,’” she said, quoting from the act.
The burden of proof is on Enterprise, Conti said, explaining that “in light of the broad remedial purpose of the FLSA, exemptions are narrowly construed against the employer.”
As for the executive exemption, Conti found that three of the four qualifiers tipped toward management not being Hagler’s primary duty.
In weighing the “relative importance of the exempt duties as compared with other types of duties,” Conti found that Hagler’s most important role was “to complete the menial and sales tasks necessary to rent cars to customers.”
Similarly, weighing the second factor, she noted that Hagler testified that he spent 80 percent of his time on tasks that aren’t exempt from overtime under the FLSA. They include writing rental tickets, washing cars and attending to their maintenance, and helping customers, according to the opinion.
On the third factor, Conti found that Hagler didn’t have sufficient freedom from the oversight of a manager to qualify.
The fourth factor, though, Conti found weighed in favor of Hagler’s classification as a manger because his wage was significantly higher than hourly employees.
Also, Conti said, Hagler did not regularly supervise at least two employees nor did he have the authority to hire and fire people.
Conti denied Enterprise’s motion for summary judgment based on the executive exemption.
Likewise, regarding the administrative exemption, Conti found that Enterprise hadn’t sufficiently shown that the nature of Hagler’s work was primarily administrative nor that he had discretion to deal with matters of importance.
“For the most part, Hagler was bound by company policy, and did not deviate from it. He was usually subject to the oversight of the branch manager. The record reflects that Hagler deferred to superiors in resolving disputes,” Conti said. “To the extent that he made discretionary decisions, those decisions were not significant enough, in the context of a car rental business, to meet the requirements of the regulations.”
Conti denied summary judgment to Enterprise regarding the administrative exemption.
And, because Enterprise failed to meet its burden regarding the executive and administrative exemptions, the combination exemption is inapplicable, Conti said.
Neither Gregg Shavitz of Shavitz Law Group in Boca Raton, Fla., nor James Wyrsch of Bryan Cave in St. Louis, Mo., could immediately be reached for comment.
(Copies of the 36-page opinion in In re Enterprise Rent-A-Car Wage & Hour Employment Practices Litigation, PICS No. 12-1736, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •