Overtime wages under the Fair Labor Standards Act

Federal District Court Opinions

PIERRE v. LORI-AL CLEANERS, INC., (S.D.Fla. 11-22-2006)
AGNES PIERRE, and all others similarly situated, Plaintiff,
v. LORI-AL CLEANERS, INC., a Florida corporation, and JAY
GOLDSTEIN, individually, Defendants. Case No.
05-61774-CIV-MARRA/SELTZER. United States District Court,
S.D. Florida. November 22, 2006

OPINION AND ORDER

KENNETH MARRA, District Judge

This cause is before the Court upon Defendants Lori-al
Cleaners, Inc. and Jay Goldstein’s Motion for Summary
Judgment [DE 18], filed September 6, 2006. Plaintiff Agnes
Pierre filed her response on October 6, 2006. Defendants
Lori-al Cleaners, Inc. and Jay Goldstein did not file a
reply. The matter is now ripe for review.

I. Background

The facts, as culled from affidavits, depositions,
answers, answers to interrogatories and reasonably inferred
therefrom in a light most favorable to Plaintiff, for the
purpose of this motion, are as follows:

Defendant Jay Goldstein (“Goldstein”) is the president and
owner of Defendant Lori-Al Cleaners, Inc. (“Lori-Al”)
(“Defendants”). (Goldstein Dep. 6, Mar. 21, 2006.) Lori-Al
is a dry cleaning business whose annual gross sales volume
exceed $500,000.00. (Goldstein Dep. 9; Def. Page 2 Resp.
to Req. for Admis. Nos. 10-13, Ex. A, attached to Pl. Resp.
to Def. Mot.)[fn1] Lori-Al customers are permitted to pay
with credit cards, personal checks, cash and, with proper
identification, out-of-state checks. (Goldstein Dep. 21-22.)

Goldstein hired Plaintiff, Agnes Pierre (“Pierre”
“Plaintiff”), and set her compensation. (Goldstein Dep. 52;
Pierre Dep. 31, Mar. 21, 2006; Def. Answers to Pl.
Interrog. No. 2.) Pierre was responsible for pressing
pants. (Goldstein Dep. 42; Pierre Dep. 29; Pl. Answer to
Def. Interrog. No. 2.) She would be given the pants once
another employee had cleaned the pants and put the pants on
a “horse.” (Goldstein Dep. 52.)

Goldstein paid employees by both paycheck and cash, and he
decided how much cash each employee would be given.
(Goldstein Dep. 66-68.) Goldstein employed at least 12
non-management employees and four management employees at
Lori-Al. (Goldstein Dep. 37, 68.) There are several
departments at Lori-Al, each responsible for either
laundering shirts, dry cleaning clothing, pressing
clothing, staffing the front counter or bagging and sorting
clothing. (Goldstein Dep. 34-35.)

One of dry cleaning chemicals used at Lori-Al is
perchloroethylene, a product purchased by Lori-Al from
various Florida suppliers. (Goldstein Dep. 15.) Those same
Florida suppliers provide Lori-Al with hangers and plastic
bags, and deliver these items in a truck. (Goldstein Dep.
16-17.) Additionally, Lori-Al purchases a special dry
cleaning soap that is shipped to Lori-Al via truck from a
Missouri company. (Goldstein Dep. 17-18, 81-82.) The
different dry cleaning equipment at Lori-Al includes
pressing machines, hot head machines, dry cleaning
machines, shirt unit machinery, washing machines, boilers,
air compressors, chillers and conveyors. Page 3 (Goldstein
Dep. 10.) At first, Goldstein used equipment that was
already in the store when he opened Lori-Al, but he later
purchased additional machinery from companies in Florida.
(Goldstein Dep. 11.) Goldstein acknowledges that some of
the purchased equipment may not have been manufactured in
Florida. (Goldstein Dep. 82.)

Lori-Al does provide delivery service to its steady
customers (Goldstein Dep. 22.) In fact, Lori-Al has two
cargo vans, flanked with Lori-Al signs, that perform this
service. (Goldstein Dep. 23.) Goldstein gives the delivery
drivers Sunoco credit cards to purchase gasoline.
(Goldstein Dep. 24.)

Lori-Al does not perform leather and suede cleaning,
tailoring or shoe repair on site; instead, these tasks are
sent to other businesses. (Goldstein Dep. 25.) Goldstein
mails these businesses checks for their services.
(Goldstein Dep. 26.)

Defendants move for summary judgment, claiming they are
not liable to Plaintiff for overtime wages under the Fair
Labor Standards Act (the “FLSA”), 29 U.S.C. §
207(a)(1). Specifically, Defendants argue Lori-Al is not an
enterprise engaged in commerce or in the production of
goods for commerce, and that Plaintiff did not engage in
interstate commerce at Lori-Al. (Def. Mot. at 1-2.)

II. Summary Judgment Standard

The Court may grant summary judgment “if 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). The stringent burden of establishing
the absence of a genuine issue of material fact lies with
the moving party. Celotex Corp. v. Catrett, 477 U.S. 317,
Page 4 323 (1986). The Court should not grant summary
judgment unless it is clear that a trial is unnecessary,
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986),
and any doubts in this regard should be resolved against
the moving party. Adickes v. S.H. Kress & Co., 398 U.S.
144, 157 (1970).

The movant “bears the initial responsibility of informing
the district court of the basis for its motion, and
identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp., 477 U.S. at 323. To
discharge this burden, the movant must point out to the
Court that there is an absence of evidence to support the
nonmoving party’s case. Id. at 325.

After the movant has met its burden under Rule 56(c), the
burden of production shifts and the nonmoving party “must do
more than simply show that there is some metaphysical doubt
as to the material facts.” Matsushita Electronic Industrial
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
According to the plain language of Fed.R.Civ.P. 56(e), the
non-moving party “may not rest upon the mere allegations or
denials of the adverse party’s pleadings,” but instead must
come forward with “specific facts showing that there is a
genuine issue for trial.” Fed.R.Civ.P. 56(e); Matsushita,
475 U.S. at 587.

Essentially, so long as the non-moving party has had an
ample opportunity to conduct discovery, it must come
forward with affirmative evidence to support its claim.
Anderson, 477 U.S. at 257. “A mere `scintilla’ of evidence
supporting the opposing party’s position will not suffice;
there must be a sufficient showing that the jury could
reasonably find for that party.” Walker v. Darby, 911 F.2d
1573, 1577 (11th Cir. 1990). If the evidence advanced by
the non-moving party “is merely colorable, or is not
significantly probative, then summary judgment may Page 5
be granted.” Anderson, 477 U.S. 242, 249-50.

III. Discussion

The FLSA requires an employer to pay overtime compensation
if the employee can establish individual coverage or
enterprise coverage. Thorne v. All Restoration Svcs, Inc.,
448 F.3d 1264, 1265 (11th Cir. 2006); Alonso v. Garcia, 147
Fed. Appx. 815 (11th Cir. 2005) citing Dunlop v. Indus.
America Corp., 516 F.2d 498 (5th Cir. 1975).[fn2] While the
determination of coverage under the FLSA must be resolved
on the facts of each case, it is nonetheless a question of
law. See Donovan v. Weber, 723 F.2d 1388, 1391-92 (8th Cir.
1984) (enterprise coverage is a matter of law but must be
resolved on the facts of each case); see also Birdwell v.
City of Gadsden, 970 F.2d 802, 807-08 (11th Cir. 1992)
(under the FLSA, “[i]t is for the court to determine if a
set of facts gives rise to liability; it is for the jury to
determine if those facts exist”); Patel v. Wargo, 803 F.2d
632, 634 (11th Cir. 1986) (the determination of whether an
entity is an employer under the FLSA requires individual
findings of fact that lead to a legal determination).

To qualify for enterprise coverage, Defendants must
“ha[ve] employees engaged in commerce or in the production
of goods for commerce, or [] ha[ve] employees handling,
selling, or otherwise working on goods or materials that
have been moved in or produced for commerce by any person;
and is an enterprise whose annual gross volume of sales
made or business done is not less than $500,000.” 29 U.S.C.
§ 203(s)(1)(A)(i) and (ii). Individual coverage
requires the Page 6 Plaintiff, at trial, to provide
evidence that she was engaged in commerce or engaged in the
production of goods for commerce. Thorne, 448 F.3d at
1265-66 citing 29 U.S.C. § 207 (a)(1). The phase
“engaged in commerce” is interpreted broadly and liberally.
Alonso, 147 Fed. Appx. 815 citing Brennan v. Wilson Bldg.,
Inc., 478 F.2d 1090 (5th Cir. 1973).

Turning first to enterprise coverage, the Court begins its
analysis by noting Defendants’ concession that Lori-Al
annually grosses over $500,000.00. (Def. Mot. 4.) Hence,
the Court will focus its attention on the first prong of
the enterprise test. In examining the evidence, the Court
concludes that there is sufficient record evidence to
support a finding that Defendants are an enterprise under
the FLSA. The record indicates that Defendants employ 16
employees, who perform a myriad of duties, including
laundering shirts, dry cleaning, pressing clothing, bagging
and sorting clothing, and staffing the front counter.
(Goldstein Dep. 34-37.) Thus, the record supports a finding
that out of the 16 employees employed at Lori-Al, at least
two or more of these employees, in performing their job
functions, “engage[] in commerce or in the production of
goods for commerce, or [] handle, sell, or otherwise work
on goods or materials that have been moved in or produced
for commerce by any person.” 29 U.S.C. §
203(s)(1)(A)(i); see Velez v. Vassallo, 203 F. Supp. 2d
312, 328 (S.D.N.Y. 2002) (noting enterprise coverage under
the FLSA for a local laundry if the soap it used moved in
interstate commerce); see also Dole v. Odd Fellows Home
Endowment Bd., 912 F.2d 689, 695 (4th Cir. 1990) (employees
who did laundry, cleaned and performed maintenance tasks
used goods and materials that had traveled in interstate
commerce); Archie v. Grand Cent. P’ship., Inc., 997 F.
Supp. 504, 530-31 (S.D.N.Y. 1998) (bags, brooms, shovels,
pails and scrapers used by sanitation crews are items that
moved in interstate commerce); Marshall v. Sunshine and
Leisure, Inc., 496 F. Supp. 354, 358-59 (M.D. Page 7 Fla.
1980) (use of cleaning products by employees of a rest home
satisfies FLSA enterprise coverage).

Moreover, there is evidence that, in performing their dry
cleaning and laundering functions, Defendants’ employees
used supplies and equipment that moved through interstate
commerce. For example, Goldstein testified that he
purchased numerous pieces of equipment for his dry cleaning
business, and acknowledged that some of the equipment may
not have been manufactured in Florida. (Goldstein Dep.
10-11, 82.) Additionally, Defendants purchased other dry
cleaning chemicals, as well as hangers and plastic bags,
that were delivered by truck. (Goldstein Dep. 14-17.) Most
significantly, Goldstein testified that he purchased a
special dry cleaning soap from Missouri. (Goldstein Dep.
17-18.) Thus, this evidence, if borne out at trial,
supports a finding that Defendants’ employees used
supplies, products and equipment that moved in commerce.

Likewise, Defendants’ outsourcing of tailoring and shoe
repair, its acceptance of out-of-state checks and credit
cards, and its use of credit cards by its delivery drivers,
also mitigates against a finding that Defendants are not an
enterprise as defined under the FLSA. Indeed, it is
possible to conclude that Defendants’ acceptance and use of
out-of-state checks and credit cards require Defendants to
access financial and banking networks that stretch
throughout the United States. In a similar vein, Defendants
interact with various businesses in providing certain
services to their customers, including tailoring and shoe
repair. By mailing checks to these vendors, Defendants
engage in interstate commerce. Lastly, in providing
delivery service to its customers, Defendants use two
commercial vehicles. The use of commercial vehicles also
supports a finding of enterprise coverage, given these
vehicles may have moved through Page 8 interstate
commerce.

Nonetheless, Defendants argue that the Court should find,
as a matter of law, that enterprise coverage does not apply
to them. In making that argument, Defendants point to
Goldstein’s testimony that he purchased equipment and
supplies from companies in South Florida, and not from
out-of-state vendors. (Def. Mot. at 4.) This testimony,
however, merely raises the question as to whether equipment
and supplies, as a whole or in part, moved in interstate
commerce, prior to being sold to Goldstein by a Florida
company. Notably, in Donovan v. Pointon, the Tenth Circuit
examined a land development company whose employees used
various types of construction machinery to perform their
work and, like in this case, the defendant asserted that he
had obtained the machinery from other instate companies,
and thus was not subject to enterprise coverage. Donovan v.
Pointon, 717 F.2d 1320 (10th Cir. 1983). The Donovan court
rejected that argument and stated that the acquiring of
goods and materials from an instate company is “irrelevant”
to a determination of enterprise coverage and that the
“critical issue is whether the goods or materials handled
by [the defendant] and his employees had moved in
interstate commerce.” Id. at 1322-23. The Court adopts the
reasoning of the Donovan case, and finds that, at this
juncture, the use of this equipment by Defendants support a
conclusion that the equipment moved through interstate
commerce.[fn3]

Finally, the Court rejects Defendants’ reliance on Thorne
for support of the position that Page 9 the use of credit
cards by their delivery drivers did not constitute an
engagement in interstate commerce. (Def. Mot. 4.) In
Thorne, the Eleventh Circuit addressed individual coverage
under the FLSA, not enterprise coverage. 448 F.3d at 1265-66
n. 1. Clearly, then, Thorne does not apply to the analysis
of enterprise coverage.[fn4] Equally unpersuasive is
Defendants’ citation to Dunlop. (Def. Mot. 4-5.) In that
case, the former Fifth Circuit examined and analyzed the
meaning of the FLSA amendments, enacted prior to 1974, and
held that prior to 1974, the FLSA did not reach enterprises
that simply provided services to customers. Dunlop, 516
F.2d at 502. In doing so, the Dunlop Court stated that 1974
amendments would be applied prospectively, and noted that
the 1974 amendments to the FLSA created a “broader
definition” of enterprise coverage, which included
enterprises whose employees handle, sell, or otherwise work
on goods or materials that have been moved in commerce. Id.
at 502 n. 8. Thus, these cases are unpersuasive and provide
no basis for the Court to find that Defendants are, as a
matter of law, not an enterprise under the FLSA. Therefore,
Defendants’ motion for summary judgment on this basis must
be denied.

With respect to the FLSA’s application to Defendants under
“individual coverage,” the Court notes that, although
Plaintiff pled in her complaint both enterprise and
individual coverage, Plaintiff no longer seeks individual
coverage under the FLSA. (Pl. Resp. 13.) Thus, the Court
need not address Defendants’ argument on this point.
Lastly, the Court rejects Plaintiff’s request for rulings
on the issue of enterprise coverage, Goldstein’s status as
an employer under the Page 10 FLSA, and Plaintiff’s status
as a non-exempt employee who worked in excess of 40 hours
in one or more work weeks. (Pl. Resp. 9-12 and n. 1.)
Plaintiff has not moved for summary judgment on these
points, as required under the Federal Rules of Civil
Procedure. See Easterwood v. CSX Transportation, Inc., 933
F.2d 1548, 1566 (11th Cir. 1991), aff’d on other grounds,
507 U.S. 658 (1993) (district court may grant summary
judgment on an issue only if party moves for summary
judgment pursuant to Rule 56(b) and (c)).

Accordingly, there is sufficient record evidence to deny
Defendants’ request for summary judgment on the basis of
enterprise coverage.

IV. Conclusion

It is ORDERED AND ADJUDGED that Defendants Lori-al
Cleaners, Inc. and Jay Goldstein’s Motion for Summary
Judgment [DE 18] is DENIED.

DONE AND ORDERED.

[fn1] Defendants concede that Lori-Al annually grosses over
$500,000.00. (Def. Mot. 4.)

[fn2] The decisions of the United States Court of Appeals
for the Fifth Circuit, as that court existed on September
30, 1981, handed down by that court prior to the close of
business on that date, shall be binding as precedent in the
Eleventh Circuit, for this court, the district courts, and
the bankruptcy courts in the circuit. Bonner v. Pritchard,
661 F.2d 1206, 1207 (11th Cir. 1981) (en banc).

[fn3] Notably, Defendants state that “only” one soap was
purchased from Missouri. (Def. Mot. 4.) Given that the
record supports a finding that Defendants are an
enterprise, it is unnecessary for the Court to decide
whether the purchase of one soap can, as a matter of law,
give rise to enterprise coverage. That stated, the Court
will simply note that engagement in commerce by an employer
is subject to a broad and liberal interpretation. Alonso,
147 Fed. Appx. 815 citing Brennan v. Wilson Bldg., Inc.,
478 F.2d 1090 (5th Cir. 1973).

[fn4] Likewise, Defendants’ reliance on Kitchings v.
Florida United Methodist Children’s Home, Inc., 393 F.
Supp. 2d 1282 (M.D. Fla. 2005) for the proposition that
credit card usage cannot sustain enterprise coverage is
rejected. The Kitchings’ discussion of credit card usage
concerned individual coverage, not enterprise coverage. Id.
at 1292-93. Page 1