Hicks v. AVERY DREI, LLC
654 F.3d 739
7th Cir.2011Background
- Hicks worked as a security guard (cash-paid) then as a desk clerk (check-paid) at a hotel operated by Avery Drei, LLC and owned by Chance Felling.
- Hicks alleged overtime pay, unpaid wages, and accrued vacation pay; defendants argued cash payments for overtime and a lack of vacation vesting.
- Trial court granted partial judgment as a matter of law against Hicks on vacation pay and part of the overtime claim; the jury returned verdict for defendants on remaining overtime claim.
- Disclosures late in discovery revealed six additional cash payments; Hicks moved to exclude this evidence in limine; district court allowed the evidence.
- Trial occurred June 21–22, 2010; Hicks challenged the pretrial rulings and the district court’s interpretations of the FLSA and Indiana wage statutes.
- Hicks appealed challenging (i) exclusion of belated cash-payment evidence, (ii) directed verdict on FLSA overtime, and (iii) vacation pay claim; the Seventh Circuit affirmed all challenged rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Vacation pay entitlement, pro rata or contracted vesting | Hicks contends pro rata accrual absent a published contrary policy | Defendants argue there was an agreement Hicks did not earn vacation until after a year and she did not vest | Affirmed; no error in directing verdict for Hicks did not vest vacation pay absent pro rata entitlement due to agreement |
| Admission of late-disclosed cash-payment evidence | Late disclosure prejudiced Hicks; should have been excluded | District court properly admitted but imposed sanctions for delay | Affirmed denial of the motion in limine; no plain-error mandate to exclude; sanctions adequate |
| Enterprise coverage under FLSA for overtime | Felling and related entities constitute an enterprise with common business purpose and >$500,000 revenue | Profit motive alone does not establish common business purpose; enterprise coverage not shown; jury should not decide based on testimony | Affirmed; no basis to conclude enterprise coverage existed based on the record; district court properly directed verdict |
Key Cases Cited
- Die & Mold, Inc. v. Western, 448 N.E.2d 44 (Ind. Ct. App. 1983) (vacation pay pro rata if no contrary agreement; but not controlling here due to express agreement)
- Williams v. Riverside Cmty. Corr. Corp., 846 N.E.2d 738 (Ind. Ct. App. 2006) (supports concept of vesting under Indiana law when agreement implied non-vesting)
- Marcus & Millichap Inv. Servs. of Chicago, Inc. v. Sekulovski, 639 F.3d 301 (7th Cir. 2011) (de novo review standard for directed verdict; standard of review applied to LOM)
- Reich v. Gateway Press, Inc., 13 F.3d 685 (3d Cir. 1994) (enterprise coverage framework for FLSA; related activities and common control)
- Brennan v. Veterans Cleaning Serv., Inc., 482 F.2d 1362 (5th Cir. 1973) (requires more than profit motive for common business purpose under FLSA)
- Sapperstein v. Hager, 188 F.3d 852 (7th Cir. 1999) (role of court in determining enterprise coverage)
- Zimmerman v. Chicago Bd. of Trade, 360 F.3d 612 (7th Cir. 2004) (evidence standards for appellate review on directed verdicts)
- Cobige v. City of Chicago, Ill., 651 F.3d 780 (7th Cir. 2011) (prejudice and evidentiary issues in civil trials; standard for admitting evidence)
- Jackson v. Parker, 627 F.3d 634 (7th Cir. 2010) (plain-error review in civil cases; forfeiture considerations)