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Brown v. L & P Industries

December 21, 2005

ELAINE J. BROWN PLAINTIFF
v.
L & P INDUSTRIES, LLC, AND MICHAEL THOMAS HENDRICKSON DEFENDANT



The opinion of the court was delivered by: J. Leon Holmes United States District Judge

OPINION AND ORDER

Plaintiff Elaine Brown brought an action against Defendants L & P Industries, Inc. ("L & P"), and Michael Thomas Hendrickson, claiming violations of both the Fair Labor Standards Act of 1938, 29 U.S.C. § 201, et seq. ("FLSA") and Arkansas state law. The case is now before this Court on cross-motions for partial summary judgment relevant to the FLSA claims. For the following reasons, both motions are granted.

A court should grant summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The party moving for summary judgment bears the initial responsibility of informing the district court of the basis of its motion and identifying the portions of the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Group Health Plan, Inc. v. Philip Morris USA, Inc., 344 F.3d 753, 763 (8th Cir. 2003). When the moving party has carried its burden under Rule 56(c), the non-moving party must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1985) (quoting FED. R. CIV. P. 56(e)). The non-moving party sustains this burden by showing that there are "genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson, 477 U.S. at 250. When a non-moving party cannot make an adequate showing on a necessary element of the case on which that party bears the burden of proof, the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323. In deciding a motion for summary judgment, the Court must view the facts and inferences in the light most favorable to the party opposing summary judgment. Boerner v. Brown & Williamson Tobacco Corp., 260 F.3d 837, 841 (8th Cir. 2001) (citing Rabuska v. Crane Co., 122 F.3d 559, 562 (8th Cir. 1997)). If the evidence would allow a reasonable jury to return a verdict for the non-moving party, summary judgment should be denied. Derickson v. Fidelity Life Assoc., 77 F.3d 263, 264 (8th Cir. 1996) (citing Anderson, 477 U.S. at 248).

I.

Brown worked for L & P, a company that manufactures furniture. Brown initially worked in a position in which she was paid hourly and received overtime pay at a rate of one and one-half times her basic rate of pay for all hours in excess of 40 per week. She was promoted to the position of Finish Line Supervisor in 1999. After her promotion, L & P still paid Brown as an hourly employee, but stopped paying her the higher rate, "time and a half," for overtime (hours worked in excess of 40 per week). L & P thus paid Brown at the same hourly rate regardless of the number of hours she worked each week.

During the years that Brown worked there, L & P used an electronic time clock connected to a computer to record the hours its employees worked. Employees were to "clock in" at work and "clock out" when they took a morning break, ate lunch, or left work. At the end of each two-week pay period, L & P's Office Manager, Donna Kling, would download the time data from the time clock to the computer and print a time-clock record of the employees' work time. Before submitting these records for payment, however, Kling would "adjust" the employees' time-clock records by manually marking through the work hours shown and deducting various amounts of time. The employees were thus paid for fewer work hours than reflected on the time-clock records.

In their depositions, Kling and Hendrickson, L & P's owner, testified that time was deducted from the employees' working hours or their time-clock records were otherwise altered for a variety of reasons. For example, if an employee forgot to "clock in" or "clock out," the times that the employee began or stopped working on that date could be written in. Most often, however, time was deducted from the time-clock records to ensure that employees were paid only for the "approved" hours for which L & P wished to compensate them, regardless of the number of hours the employees actually worked. Specifically, L & P's policy was that a working day was eight hours, which ran from 6:00 a.m. to 2:45 p.m., allowing time off for a morning break and lunch. If an employee began working early or continued working late, his or her time-clock record was "adjusted" to reflect the approved 6:00 a.m. to 2:45 p.m. workday. The employee was paid for any additional time actually worked only if Ms. Kling determined, in her discretion, that some or all of the additional time had been approved by a supervisor or was otherwise warranted.

Employees were also required to "clock out" for a mandatory 15-minute morning break and a lunch break. If an employee did not do so, Ms. Kling would deduct time from the employee's time-clock record, regardless of whether the employee took a break or had an uninterrupted break, free of work duties. Ms. Kling did not track these adjustments on a daily basis, but made them all at the end of each two-week pay period. Ms. Kling testified, however, that she tried to be fair and that if an employee disagreed with the number of hours for which he or she was paid during a pay period, the employee could discuss the situation with Ms. Kling and she might give the employee credit for the disputed time.

Because L & P pays its hourly employees by 15-minute increments, L & P also employed a practice of "rounding" each employee's total daily working time to correspond to a 15-minute increment. L & P did not add up its employees' time for each pay period and then round the final number. Ms. Kling rounded the employees' work time for each day. Ms. Kling also testified that she did not follow a mathematical formula in doing so. For example, 5 hours and 39 minutes was not automatically rounded up to 5 hours and 45 minutes. Instead, Ms. Kling decided how to round off each employee's time "based on [her] knowledge of that employee."

After Brown's 1999 promotion to Finish Line Supervisor, she complained to numerous L & P administrative and supervisory personnel about L & P's failure to pay her time and a half for her overtime. Specifically, Brown testified that she addressed the issue with Kling as well as David Hyatt, the Plant Manager; Hendrickson's father, who operated L & P before Hendrickson took over; and Hendrickson himself. Hendrickson testified that L & P did not pay Brown time and a half for overtime because he and his father had believed that L & P was not legally required to do so.

In September, 2004, L & P changed its position and began paying Brown for overtime at a rate of time and a half. Within a few weeks, however, Brown was terminated. Defendants assert that Brown was fired for threatening to physically harm a fellow employee. Brown admits that she made the threatening statements, but contends that other employees who engaged in similar conduct were not fired and that the real reason for her termination was that she had complained about not receiving overtime pay and threatened to contact the Department of Labor.

Brown filed this lawsuit on October 22, 2004, claiming damages for both past-due overtime pay and retaliatory discharge in violation of the FLSA. Brown now moves for partial summary judgment as to her FLSA claim for damages relating to the unpaid overtime, and Defendants move for partial summary judgment as to the retaliation claim. Each motion is addressed separately below.

II.

A. Brown's Claim for Overtime Compensation

Brown's motion for partial summary judgment involves four separate issues: (1) whether a genuine issue of disputed fact exists as to Brown's actual damages, i.e., the amount of compensation due for Brown's overtime hours; (2) whether the applicable statute of limitations is two or three years; (3) whether Brown is entitled to liquidated damages in an amount equal to her actual damages; and (4) whether Hendrickson is personally liable for Brown's damages.

1. Actual Damages

Defendants concede that, under the FLSA, Brown was entitled to overtime pay at a rate of one and one-half times her basic rate of pay and that their denial of such compensation was in violation of the law. See 29 U.S.C. § 207(a)(1) ("no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed"). Brown's regular rate of pay and the number of hours for which she was actually paid at this rate are not in dispute. The parties disagree, however, on the method by which the total number of working hours for which Brown is due overtime compensation should be calculated and whether Defendants are entitled to an offset against the actual damages due for a set of furniture given to Brown.

a. Number of Work Hours for Which Brown is Due Compensation

As explained below, Brown has produced evidence of the number of hours she worked and the amount of compensation due her. Defendants deny the accuracy of this amount and insist that a genuine issue of disputed fact exists as to the amount of Brown's damages. Defendants, however, have offered only bald denials and assertions, not evidence, to support their position, and "mere allegations or denials" are insufficient to withstand a motion for summary judgment. Krenik v. County of Le Seur, 47 F.3d 953, 957 (8th Cir. 1995). A careful examination of the evidence and relevant law reveals that no genuine issue of fact exists as to Brown's actual damages and Brown is entitled to judgment as a matter of law.

i. Brown's Time-Clock Records

Brown seeks overtime compensation for all hours in excess of 40 per week shown on her time-clock records at a rate of time and a half, minus the payment she has received for some of those hours at her regular rate of pay.*fn1 Defendants argue, however, that the number of hours in excess of 40 per week for which Brown should receive overtime compensation are the "adjusted," i.e., reduced, hours for which L & P has already paid her at her regular rate. Defendants thus contend that Brown is owed only the "premium," or the additional one-half of her regular pay rate, for those reduced hours, and that Brown should receive no compensation for any additional hours shown on her time-clock records.

The issue is further complicated by the fact that L & P did not regularly maintain the records of its employees' work hours. L & P produced time-clock records for less than half of the workweeks relevant to this lawsuit, spanning a three-year period. To calculate her total damages, Brown has determined the average number of hours in excess of 40 per week reflected on her ...


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