PLAINTIFF’S RESPONSE TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW
Plaintiff Justin McClain responds to Defendants,’ Ultimate Towing of Gainesville, Inc. and Stephen J. O’Grady (collectively “Defendants”), Motion for Summary Judgment [Doc. 23] as follows:
I. SUMMARY OF THE CASE
The Motor Carrier Act exemption does not apply. That exemption, which must be narrowly construed against employers, applies only if Plaintiff was driving a vehicle that weighed over 10,000 pounds. The tow trucks Plaintiff drove for Defendants weigh less than 10,000 pounds. Moreover, Plaintiff never worked outside Florida for Defendants and had no reasonable expectation that he would. Defendants’ themselves admit they have no knowledge of him working outside Florida and have no records of any work any of their employees have done outside Florida. The remaining arguments Defendants make are also without merit.
II. STATEMENT OF FACTS
1. Defendant O’Grady is the sole owner and President of Defendant Ultimate Towing. See Notice of Exhibits, Exhibit 5, Answer to Interrogatory Number 14. He is also responsible for many duties directly relating to the operation of the business, such as budgeting, negotiating and entering into contracts, maintaining financial statements, paying taxes, driving tow trucks, dispatching, building maintenance, client development, and complying with necessary certifications. Id.
2. Defendants operate a “trespass towing” and “roam towing” business in Alachua County. See Notice of Exhibits, Exhibit 3, ¶1 (prohibiting Mr. and Mrs. Forron from competing against Defendants’ “trespass towing or roam towing business within Alachua County”).
3. Defendants are contractually prohibited from “Consent Towing,” which is defined as “calls initiated or referred though AAA or other auto clubs and any direct calls from vehicle drivers or owners” within Gainesville, FL. Notice of Exhibits, Exhibit 4, Page 1, ¶1. Defendants are also contractually prohibited from “advertis[ing] or assist[ing] in the advertisement of any business engaged in Consent Towing” within Gainesville. Notice of Exhibits, Exhibit 4, Page 2, ¶1.
4. Plaintiff drove several single cab light duty trucks for Defendants. Notice of Exhibits, Exhibit 1, ¶3. See also Notice of Exhibits, Exhibit 10. When adding in the weight of the towing mechanism attached to the light duty truck, their weight is less than 10,000 pounds. Notice of Exhibits, Exhibit 3, ¶3-6.
5. Plaintiff never left the state of Florida for Defendants. Exhibit 3, ¶7. Defendants never told Plaintiff he was at risk of leaving the state of Florida. Notice of Exhibits, Exhibit 3, ¶7. He was never asked to leave the state of Florida by Defendants or their employees. Notice of Exhibits, Exhibit 3, ¶7. He never saw anyone working as an employee for Defendants tow a car either to outside Florida or from outside Florida. Notice of Exhibits, Exhibit 3, ¶9. There are no records of any out of state tows and Defendants admit that they are “not aware that Plaintiff performed any work outside the state of Florida.” Notice of Exhibits, Exhibit 5, Defendant’s Answer Plaintiff’s Interrogatory Number 9. Defendants readily admit there are no records of any out of state tows. See Paragraphs 13 and 26 of O’Grady’s Affidavit [Doc. 22-1] and Paragraph 6 of Flake’s Affidavit [Doc. 22-2].
6. The local nature of Defendants’ business is also evident from Mr. O’Grady’s public Facebook posts. Notice of Exhibits, Exhibit 11. For example, this one from Mary 27th is a clear example of Defendants’ “roam towing” activities and how he “prey[s]” on people in Gainesville:
Stephen O’Grady We prey upon the ignorant and selfish, and do this city a great service lest it be preyed upon by immoral deviants like you–Stephen O’Grady, Ultimate Towing
7. The tow truck drivers for Defendants, such as Plaintiff, were responsible for finding cars to tow. Notice of Exhibits, Exhibit 3, ¶12. When Defendants claim that it “assigned schedules,” it is likely referring to the times Plaintiff worked (such as the day or night shift), not the jobs performed. Notice of Exhibits, Exhibit 3, ¶12.
8. Mr. Flake’s duties while Plaintiff worked for Defendants was primarily driving a tow truck. Notice of Exhibits, Exhibit 3, ¶11. He typically worked day shifts, while Plaintiff worked typically nights. Id. To the best of Plaintiff’s knowledge, Mr. Flake did not become a manager until after Plaintiff left Defendants’ employment. Notice of Exhibits, Exhibit 3, ¶10. On its initial disclosures, Defendants identify him as a “Senior Driver.” Notice of Exhibits, Exhibit 7, Page 2. Moreover, Mr. Flake’s term of employment was interrupted and not continual. Id.
III. MEMORANDUM OF LAW
As discussed below, Plaintiff is not exempt from overtime under the FLSA pursuant to the Motor Carrier Act Exemption because: 1) the tow trucks Defendants operate weigh less than 10,000 pounds and 2) Defendants did not have an interstate business. Also, Defendants’ claim that estoppel precludes Plaintiff’s claims is completely without merit. Finally, Defendants’ arguments regarding willfulness and a good faith defense are unavailing.
A. Plaintiff is Not Exempt from Overtime Under the FLSA Per the Motor Carrier Act Exemption.
Any FLSA exemptions, such as the Motor Carrier Act and 49 U.S.C. § 31502, must “be narrowly construed against the employers seeking to assert them and their application limited to those establishments plainly and unmistakably within their terms and spirit.” Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392 (1960). The burden of proving an exception rests upon the employer. Id. at 394. The party asserting an exemption, usually the employer, bears the burden of showing the applicability of the exemption, and that the employer is “clearly and unmistakably within the spirit and the letter of [the exemption’s] terms.” Pugh v. Lindsay, 206 F.2d 43, 46 (4th Cir. 1953).
1. Defendants’ Vehicles do not Weigh over 10,000 Pounds
The motor carrier exemption is waived for employees who, in whole or in part, drive vehicles weighing less than 10,000 pounds. Defendants’ recognize this legal requirement in their Motion for Summary Judgment at Page 12:
Specifically, Section 31132 of Title 49 defines a commercial motor vehicle as a “self-propelled or towed vehicle used on the highways in interstate commerce to transport passengers or property, if the vehicle – (A) has a gross vehicle weight rating or gross vehicle weight of at least 10,001 pounds, whichever is greater.” 49 U.S.C. § 31132(1)(A).
[Doc. 23], (e.s.).
As fully explained in Plaintiff’s Declaration and the 3 exhibits thereto, the tow trucks he drove weighed less than 10,000 pounds – including the tow attachment modification to the light truck. See Notice of Exhibits, Exhibit 1, ¶3-6. Even though Defendants have the burden to prove the exemption, the only “evidence” submitted that its trucks weigh more than 10,000 pounds is Mr. O’Grady’s self-serving and generalized statement in his Affidavit at Paragraph 24 which states Plaintiff and other drivers “drove tow trucks weighing 10,001 pounds or more.”
In stark contrast to Defendant O’Grady’s unsupported and generalized assertion about the weight of the tow trucks, Plaintiff’s Declaration includes 3 exhibits: Exhibit A, a picture of Defendant’s tow truck, Exhibit B a copy of part of Ford’s website showing the weight of the truck without the towing mechanism, and Exhibit C: a website shot of the towing mechanism attached to the truck and its weight. As described in his Declaration, when the weight of the light duty truck is added to the weight of the attached after-market towing mechanism, the weight is well under 10,000.00 pounds.
Defendants make no such analysis or showing, even though they have the duty to prove the Motor Carrier affirmative defense. They do not describe the basis for their assertion that the trucks weigh more than 10,000 pounds, cite any manuals or vehicle handbooks, offer an expert mechanical opinion or anything. To the contrary, all the available evidence shows that the tow trucks weighed well below the required 10,000 pounds.
The recent decision in Crookston v. Doctor’s Inc., No. 16-2071-JTM (D. Kan. June 6, 2017) highlights the employer’s high burden of proof regarding the 10,000-pound rule. There, the plaintiff normally drove a 2007 Ford F-150 truck weighing 8,900 pounds during his employment. However, he also sometimes drove the F-150 hooked to a trailer with a combined weight that likely exceeded 10,000 pounds. Moreover, plaintiff sometimes drove the F-150 without the trailer within the course of his duties. The defendant argued that this trailer added to the 10,000-pound requirement; however, the court held that because the plaintiff drove without the trailer more at least half of the time the Motor Carrier Act did not apply. The court concluded that:
[t]he burden lies with the employer to establish that the [Motor Carrier Act] exemption applies and that the [Technical Corrections Act] does not. The court finds that defendants have not met their burden as they acknowledge that plaintiff drove a noncommercial vehicle (the F-150 without a trailer) more than half the time he was employed with Doctor’s.
citing Moore v. Performance Pressure Pumping Servs., LLC, No. 5:15-CV-346-RCL, 2017 WL 1501436, at *10 (W.D. Tex. Apr. 26, 2017) (e.s.). (“[A]t the summary judgment stage, an employer must provide evidence that its employees exclusively drove vehicles greater than 10,000 pounds during a relevant workweek, or that any work with small vehicles was merely de minimis work.”)
Similar to Crooston, Defendants have not met their burden to prove that Plaintiff drove a noncommercial vehicle more than half the time he was employed with them. Even assuming Defendants where to argue that the weight of a car in tow should be added to reach the 10,000-pound limit, the fact that the truck would be without a car in tow for at least half of the time defeats that argument per Crooston. See also McMaster v. Eastern Armored Services, Inc., 780 F.3d 167 (3d Cir. 2015) (holding that a driver/guard who drove half of her trips on vehicles weighing less than 10,000 pounds worked “in part” on smaller vehicles and therefore was a “covered employee” under the TCA).
Additionally, unlike a trailer which has a constant weight, a car in tow is not similarly attached and the car’s weight would vary based on the type of car. Thus, the weight of a car in tow would never be included in a 10,000-pound calculation, just like the weight of items in a pulled trailer. By way of example, if a trailer was hauling rocks the vehicle weight for purposes of the Motor Carrier Act is only the weight of the truck and trailer – not the rocks it sometimes carries. See DOL Field Assistance Bulletin No. 2010-2 (“’Weighing 10,000 pounds’ – WHD will continue to use the gross vehicle weight rating (GVWR) or gross combined vehicle weight rating if the vehicle is pulling a trailer. The GVWR is found on the vehicle, usually on a plate on the door jamb.”) Similarly, any cars towed by the trucks in the instant case cannot be added to exceed the 10,000-pound limit, only the truck and tow mechanism attached thereto.
Defendants have the burden to prove the truck’s weight is greater than 10,000 pounds sans any potential car in tow, but failed to do so – especially when all facts are viewed in a light most favorable to Plaintiff. Thus, summary judgment should be denied.
2. Defendants were Not Engaged in Interstate Commerce
“Where the employee’s continuing job duties have no substantial direct effect on the safety of operation of motor vehicles in interstate commerce, or where such activities are so trivial, casual, and insignificant as to be de minimis, the exemption does not apply.” Major v. Chons Bros., Inc., 53 P.3d 781, 784 (Colo.App. 2002). In Major, the plaintiff’s interstate commerce activity as a tow truck driver involved nine out-of-state tows during three years of work. The court found that the plaintiff’s job activities were “overwhelmingly” conducted intrastate, and that the nine out-of-state tows, which constituted interstate commerce activity, merely rose to the level of being de minimis interstate commerce activity, therefore precluding the application of the exemption. Id. at 784.
In this case, Plaintiff performed no out of state work for Defendants and had no expectation that he would; not even a de minimis amount. He never heard of any employee of Defendants having performed out of state work for Defendants. There are no records of any out of state work performed by Defendants for any employees, let alone Plaintiff.
Moreover, the non-compete agreements Defendants produced in discovery also only relate to Alachua County, and specifically prohibit Defendants from taking AAA or direct call jobs. See Notice of Exhibits, Exhibit 3. Those non-competes state that Defendants’ are in the roam towing and trespass business. The definitions of “roam towing” and “trespass towing,” to which Defendants’ business is limited, make the intrastate nature of its business crystal clear. The non-compete attached as Exhibit 3 references Gainesville Code 14.5 for the definitions of those terms. The nature of that work is indisputably intrastate:
Roam towing means towing or removal of a vehicle that is parked on private real property, without the consent of the vehicle’s registered owner or other legally authorized person in control of the vehicle, when the tow was not specifically requested by the private property owner or designee, but was done pursuant to an agreement on the form approved by the towing administrator with a tow company for the tow company to monitor non-permitted parking on said private real property.
Trespass towing means towing or removal of a vehicle that is parked on private real property, without the consent of the vehicle’s registered owner or other legally authorized person in control of the vehicle. “Trespass towing” includes roam towing and call in towing.
See Gainesville City Code, Section 14.5-25. Those non-competes also specifically prohibit Defendants from engaging in “Consent Towing” – aka towing for auto clubs such as AAA or “any direct calls from vehicles drivers or owners.” See Notice of Exhibits, Exhibit 4. Thus, the only cars Defendants are towing are those improperly parked on private property – a purely local type of towing business. This is also evidenced by Defendant O’Grady’s Facebook posts, which show him publically bragging about “preying” on the citizens of Gainesville – at least some of whom Defendants perceive as ignorant, selfish and immorally deviant. See Notice of Exhibits, Exhibit 11
Defendants are being untruthful in the Affidavits submitted when they claim they had an interstate business. The non-competes attached as Exhibits 3 and 4 to the Notice of Exhibits make it clear they are engaged in the roam towing and trespass towing – obviously a local endeavor per the definitions of those terms in Code 14.5. Defendants are contractually prohibited from both direct calls and motor clubs (such as the AAA). This is the reason Defendants fought so hard to prevent Plaintiff from receiving copies of the non-competes and had to be Ordered to produce them – they disprove their affirmative defense that they ran an interstate towing operation. See Doc. 20, Order on Motion to Compel. Instead of withdrawing that defense, Defendants have doubled down and moved for summary judgment based on the false notion that their activities are interstate. There is not a single document that even tends to prove that claim, and Exhibits 3 and 4 clearly prove it to be false.
Defendants have not proved they engaged in interstate activities and this is a burden it must carry to prove its affirmative defense. Thus, there is at least a genuine issue of material fact regarding the Motor Carrier Act’s exemptions.
B. Plaintiff is Not Estopped
Defendants never pled estoppel as an affirmative defense. See Doc. 5. Thus, their estoppel argument should be denied.
Even if estoppel was pled, Federal Courts have repeatedly rejected estoppel as an affirmative defense to an FSLA action. See e.g. Caserta v. Home Lines Agency, Inc., 273 F.2d 943, 946 (2d Cir. 1959), Burry v. Nat’l Trailer Convoy, Inc., 338 F.2d 422, 426-27 (6th Cir. 1964), Handler v. Thrasher, 191 F.2d 120, 123 (10th Cir. 1951). Specifically, in Caserta, Judge Friendly addressed the availability of an estoppel defense in FLSA actions and concluded that allowing such a defense would be “inconsistent with both the language and the policy of the Fair Labor Standards Act.” Caserta, 273 F.2d at 427. To hold otherwise, Judge Friendly continued, would be to “ignore that this case lies in an area where agreements and other acts that would normally have controlling legal significance are overcome by Congressional policy.” Id.
Even if estoppel was a legitimate defense and even if Defendants pled it, their argument that Plaintiff lied on his criminal indigency form is pure nonsense. Noticeably absent from Defendants’ Motion is the actual indigency form it claims Plaintiff lied on, so Plaintiff has filed both it and the application made for his appeal as Exhibits to this Response. See Notice of Exhibits, Exhibits 2 and 6. Notably, the indigency form attached as Exhibit 2 was signed while Plaintiffs still worked for Defendants, before he made a claim for overtime, before he filed this lawsuit, and before Plaintiff even hired counsel to advise him of his FLSA rights (on November 18, 2016, as per Paragraph 13 of his Declaration filed as Exhibit 1). Exhibit 2 asks for “take home income” and “other income”; thus, Plaintiff properly disclosed his $450 per week paid by Defendants as “Driver Commission”. There is no place on the form to fill out perceived future litigation, nor should there be for the purposes of that form: to determine if Plaintiff can currently afford either a criminal attorney or pay the appellate filing fees. The appeal motion filed by his criminal attorney attached as Exhibit 6 is also not misleading as it relates back to the form originally signed (i.e. Exhibit 2). Exhibit 6 states that Plaintiff was previously adjudged as indigent and remains insolvent; that is accurate. Id.
Defendants have not even come close to carrying their burden to prove that Plaintiff “calculated to make a mockery of the judicial system” as required by the 11th Circuit in Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1285 (11th Cir. 2002). The notion that Plaintiff would perceive Defendant’s nonpayment to him of overtime as an “asset” on a indigency form used to waive the filing fees for a criminal appeal defies any common sense. Exhibit 2 does not even ask about future litigation (as might as bankruptcy form, which Defendants’ admit is the law applied to judicial estoppel). See Defendants’ Motion at page 23 (“Although the application of judicial estoppel is most commonly used where an individual has failed to disclose a claim in litigation as an asset in the individual’s separate bankruptcy proceeding. . ..”).
Further proving the utter frivolousness of Defendants’ claims is the Defendant Steven O’Grady’s own bankruptcy petition dated January 3, 2017. See Notice of Exhibits, Exhibits 5. That petition does not list Plaintiff’s claims as a liability although it lists other potential lawsuits (such as the one on Page 18 regarding Monica Cook and another on Page 15 regarding Catherine Fleming). Moreover, the Court Docket to Defendant O’Grady’s bankruptcy does not show that Plaintiff was added as a creditor (for example on April 11, 2017, well after this lawsuit was filed, American InfoSoure LP was added as a creditor). See Notice of Exhibits, Exhibit 8. Incredibly, Defendants claim Plaintiff should have put on his indigency form (filed before this lawsuit began) a notice about this lawsuit but Defendant O’Grady himself did not list this lawsuit as a potential liability on his own bankruptcy petition.
C. There is a Genuine Issue of Fact Regarding Willfulness
Defendants claim that Plaintiff should only be entitled to 2 years of compensation because: “the classification of the tow truck drivers was based on a prior Department of Labor determination finding that such drivers were exempt under the MCA.” See Defendants’ Motion at Page 25. However, Defendants never filed this Department of Labor determination as record evidence in support of their Motion – nor was it produced in discovery to Plaintiff. It was also not listed on Defendants’ initial disclosures. Notice of Exhibits, Exhibit 7.
To the contrary, Defendants’ lack of records and failure to even disclose the Department of Labor determination it now seeks to rely on are evidence of willfulness. An employer that fails to adhere to the Act’s record keeping requirements cannot later complain that its employees’ evidence of damages is inexact or imprecise. For example, in Elwell v. University Hospitals Home Care Serv., 276 F.3d 832, 844 (6th Cir. 2002), the Sixth Circuit held that a district court should properly have instructed a jury that evidence of recordkeeping violations can be an element of recklessness or willfulness. A finding of willfulness would have operated to extend the normal two-year statute of limitations to three years. Id. at 842. The evidence at trial revealed the University failed to keep records of time worked. Recordkeeping violations can corroborate an employee’s claims that the employer acted willfully in failing to compensate for overtime. Id. at 844; see also, Harold Levinson Assoc., Inc. v. Chao, 2002 U.S. App. LEXIS 9796 (2d Cir. May 22, 2002) (stating that the “defendants’ utter failure to implement proper recordkeeping even after the investigation giving rise to a FLSA settlement, supports the finding that the defendants’ violations were willful). In this case, not only did Defendants not keep proper records such as Plaintiff’s hours worked they failed to disclose and produce the Department of Labor determination it now seeks to rely on. Its belies common sense that Defendants relied so heavily on this supposed DOL determination but failed to preserve it or obtain it themselves from the DOL during the course of this litigation.
Moreover, Defendants’ admitted knowledge of the Department of Labor’s previous inquiry imposed the obligation to further inquire as to Plaintiff’s exempt status. An employer willfully violates the FLSA if he should inquire as to whether his actions violate it, but fails to do so. The Supreme Court held in McLaughlin v. Richland Shoe Co., 486 U.S. 128, 108 S. Ct. 1677 (1988), that a willful violation of the Act occurs when an employer either knows that his conduct is prohibited by or “show[s] reckless disregard for” the FLSA, id. at 133, 108 S. Ct. at 1681. Here, Defendants did nothing to determine the exempt status of Plaintiff even though their predecessor had been cited by the Department of Labor. That also creates a genuine issue of material fact as to the willfulness issue and whether the Defendants showed a “reckless disregard” for the FLSA.
Finally, whether a party acted willfully under the FSLA is a factual inquiry more properly reserved for the factfinder as recognized by the Pattern Jury Instructions and the following Middle District decision:
Defendant responds that summary judgment on this issue is not appropriate, because the notes to the Eleventh Circuit Pattern Jury Instructions state that whether a defendant committed a willful violation is a jury question. See Notes to Pattern Jury Instruction 1.7.1, Eleventh Circuit Pattern Jury Instructions (Civil), 2005 edition. The Court agrees with Defendant and denies Plaintiffs’ motion on this issue.
McGuire v. Hillsborough County, Fla., 511 F.Supp.2d 1211, 1216-17 (M.D. Fla. 2007). The notes to the 11th Circuit’s Pattern Jury Instructions state that “The willfulness or good faith question is answered first by the jury to determine the period of limitations. . ..” Thus, the issue of willfulness should be reserved for a determination by the factfinder than at summary judgment.
D. Defendants did not Prove a Good Faith Defense
The good faith affirmative defense to liquidated damages requires “an employer [to] show that it acted with both objective and subjective good faith. ” Rodriguez v. Farm Stores Grocery, Inc., 518 F.3d 1259, 1272 (11th Cir. 2008). The determination of whether an employer acted in good faith and had reasonable grounds for believing its act or omission was not a violation of the FLSA has both a subjective and objective component. Dybach v. Florida Dep’t of Corrections, 942 F.2d 1562, 1566 (11th Cir. 1991). Subjective good faith means the employer has an honest intention to ascertain what the FLSA requires and to act in accordance with it. Id. Objective good faith means the employer had reasonable grounds for believing its conduct comported with the FLSA. Id.
In addition, “[g]ood faith requires some duty to investigate potential liability under FLSA.” Barcellona v. Tiffany English Pub, Inc., 597 F.2d 464, 469 (5th Cir. 1979). An employer who knew or had reason to know that the FLSA applied cannot establish good faith as a defense. Reeves v. International Tel. & Tel. Corp., 616 F.2d 1342, 1352-53 (5th Cir.1980). See also Friedman v. S. Fla. Psychiatric Assocs., 2005 WL 1540129 (11th Cir. 2005) (no good faith where employer read FLSA 20 years prior and thought employee was exempt under prior legislation) (unpublished decision); Spires v. Ben Hill County, 980 F.2d 683, 689 (11th Cir. 1993) (“[L]iquidated damages are mandatory absent a showing of good faith.”); Joiner v. Macon, 814 F.2d 1537, 1539 (11th Cir.1987) (same).
Defendants simply did not prove this defense, and never even produced and/or obtained the Department of Labor determination it claims it relied on as mentioned in the previous section. Defendants have not carried their burden to prove they acted with both an objective and subjective good faith belief as to whether Plaintiff was being properly paid under the FLSA. Even if it had relied on a supposed DOL determination, Defendants presented no evidence about what the exact DOL findings were, how they applied to Plaintiff’s, that Defendants’ researched the FSLA themselves, or that Defendants’ made any other attempt to actually comply with the FLSA as to Plaintiff. See Friedman v. S. Fla. Psychiatric Assocs., Inc., 139 F. App’x 183, 185-86 (11th Cir. 2005) (employer’s testimony that it researched the FLSA in the past was insufficient because it did not update its research); Spires, 980 F.2d at 690 (employer failed to demonstrate good faith because “it took no action whatsoever to investigate its compliance with the [FLSA] until it was contacted by the plaintiff’s counsel”); McGuire, 511 F.Supp.2d 1216-17 (M.D. Fla. 2007) (employer failed to show good faith because it relied on non-binding case law from the outside the Eleventh Circuit and failed to adequately consider Department of Labor regulations). For these reasons, and for those stated in the previous sub-section C as to willfulness, Defendants’ have not carried their burden to prove their good faith defense when all the facts are construed in a light most favorable to Plaintiff.
For all the reasons stated herein, Plaintiff Justin McClain, respectfully requests that Defendants’ Motion for Summary Judgment be denied.