Updite v. Delta Beverage Group, Inc.
Following discovery, the defendant, Delta Beverage Group, Inc., moved for summary judgment on the day rate versus hourly rate claim; the plaintiffs opposed the defendant’s Motion for Partial Summary Judgment and also moved for summary judgment on the following issues: the defendant pays merchandisers hourly.
Title 29, Code of Federal Regulations, Section 778.112 provides:
If the employee is paid a flat sum for a day’s work or for doing a particular job, without regard to the number of hours worked in the day or at the job, and if he receives no other form of compensation for services, his regular rate is determined by totaling all the sums received at such day rates or job rates in the workweek and dividing by the total hours actually worked. His is then entitled to extra half-time pay at this rate for all hours worked in excess of 40 in the workweek.
29 C.F.R. § 778.112. Section 778.112 does not require an employee’s consent to its application; rather, “the triggering requirement is solely that employees are paid a day or job rate.” Dufrene v. Browning-Ferris, Inc., 207 F.3d 264, 268 (5th Cir.2000); see also Hartsell v. Dr. Pepper Bottling Co. of Tex., 207 F.3d 269, 273 (5th Cir.2000) (“Again, the plain language of this interpretative bulletin does not require that employee and employer have a mutual understanding concerning the ‘regular rate’ of pay. All that is required is that employee be, in fact, paid a day-rate.”).
Pepsi contends that it pays its merchandisers on a day rate basis; thus, in accordance with Section 778.112, the merchandisers are “entitled to extra half-time pay … for all hours worked in excess of 40 in the workweek.” Id. Conversely, the merchandisers contend that Pepsi is not paying a day rate in accordance with Section 778.112, but rather is paying them an hourly rate. If paid at an hourly rate, the merchandisers are entitled to a time-and-a-half rate, not a half-time rate, for overtime hours worked. Both Pepsi and the merchandisers have moved for summary judgment based on their respective positions.
The Court finds that there are genuine issues of material fact preventing entry of summary judgment on the day rate versus hourly rate claim. Pepsi maintains, and it is true, that the triggering requirement of Section 778.112Hartsell, 207 F.3d at 273;
Dufrene, 207 F.3d at 268. Yet, the Court’s review of the summary judgment record reveals factual questions in relation to whether the merchandisers were, in fact, paid a day-rate. The pay stub submitted by Pepsi references “rate” and “hours,” not “day rate” or “job rate.” Further, the deposition testimony and sworn declaration of Adele McCarty (“McCarty”), Pepsi’s national payroll manager, along with certain discovery responses that were verified by McCarty, present factual issues that can only be resolved through credibility determinations. Finally, the merchandisers have presented Updite’s “2006 Compensation Statement” listing a “Current Hourly Rate” of $9.38 and a “New Hourly Rate” of $9.66. These factual issues preclude entry of summary judgment. After hearing the evidence and making the necessary credibility determinations, it will be for the jury, not the Court, to decide if the merchandisers in this case are, in fact, paid a day-rate.
is that an employee be, in fact, paid a day-rate. See
The Court also denied Defendant summary judgment under 29 U.S.C. § 259(a) based on Pepsi’s argument that the day-rate method of payment was used in good-faith conformity with, and in reliance on, 29 C.F.R. § 778.112. Alternatively, Pepsi further argued that if summary judgment is denied, the Court should make limited rulings that (1) the two-year statute of limitations under 29 U.S.C. § 255(a) applies because any violation by Pepsi was not willful and (2) that liquidated damages under 29 U.S.C. § 260 are not appropriate. “Based on the showing made, the Court declines to grant summary judgment under 29 U.S.C. § 259(a). Likewise, the Court will not hold that the two-year statute of limitations under 29 U.S.C. § 255(a) applies and/or that liquidated damages under 29 U.S.C. § 260 are not appropriate. The record simply has not been fleshed out enough at this stage of the litigation for the Court to make such rulings.”
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