Hasan v. GPM Investments LLC
3:07-cv-01779
| D. Conn. | Aug 27, 2012Background
- Plaintiffs allege GPM misclassified them as exempt, depriving them of overtime under FLSA and CMWA.
- GPM paid store managers a fixed salary with no additional overtime pay, regardless of hours worked.
- Plaintiffs seek damages calculated from an appropriate hourly rate absent the alleged violation.
- Issue is whether a fluctuating work week method can be used to compute damages in a misclassification case.
- Court discusses Missel and DOL guidance on fluctuating work week, and applies them to determine calculation method.
- Court grants plaintiffs’ motion to preclude use of fluctuating work week and to determine damages through other means.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can fluctuating work week be used in a misclassification case | Hasan argues for Missel-based rate | GPM argues standard fluctuating rate applies | No; not appropriate in misclassification case |
| Whether DOL guidance governs the damage calculation | Guidance supports fluctuating rate | Guidance is less authoritative | Guidance supports, but not controlling; not used here |
| What is the proper approach to calculating damages absent a violation | Reconstruct hourly rate for affected weeks | Use fixed salary with potential embedded overtime | Court will not use fluctuating work week formula; damages to be determined at hearing |
Key Cases Cited
- Overnight Motor Transport Co. v. Missel, 316 U.S. 572 (U.S. 1942) (holding weekly wage with variable hours requires week-by-week calculation of rate and overtime)
- 149 Madison Ave. Corp. v. Asselta, 331 U.S. 199 (U.S. 1947) (permits compensation flexibility to accommodate various pay schemes)
- Missel, Missel v. Overnight Motor Transp. Co. (—) (basis for fluctuating rate concept (quoted in Missel))
- Russell v. Wells Fargo & Co., 672 F. Supp. 2d 1008 (N.D. Cal. 2009) (guidance on fluctuating pay and contemporaneous payment requirement)
- Urnikis-Negro v. Am. Family Prop. Serv., 616 F.3d 665 (7th Cir. 2010) (cites treatment of DOL rule as reasonable, not controlling for past remedies)
- Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728 (U.S. 1981) (FLSA rights cannot be abridged by contract)
- Skidmore v. Swift & Co., 323 U.S. 134 (U.S. 1944) (agency guidelines persuasive based on expertise)
- Christensen v. Harris Co., 529 U.S. 576 (U.S. 2000) (agency rules outside formal rulemaking deserve lesser deference)