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Ziegler v. Tower Communities, LLC

United States District Court, N.D. Alabama, Southern Division

March 17, 2015

KEITH ZIEGLER AND SHANDA ZIEGLER, Plaintiffs,
v.
TOWER COMMUNITIES, LLC, Defendant.

MEMORANDUM OPINION

KARON OWEN BOWDRE, Chief District Judge.

This FLSA matter is before the court on cross-motions for summary judgment: "Plaintiffs' Motion for Summary Judgment" (doc. 37) and Defendant Tower Communities, LLC's "Motion for Summary Judgment" (doc. 39). Despite the titles of these motions, each is for partial summary judgment; the Plaintiffs' motion addresses the FLSA claim for overtime wages in Count I but not the claim for FLSA retaliation in Count II, and the Defendant's motion is also limited in scope. The Plaintiffs responded to the Defendant's motion (doc. 43), and the Defendant responded to the Plaintiff's motion (doc. 45). All parties filed replies (docs. 49 & 50). These motions have received thorough briefing, with voluminous evidentiary submissions.

For the reasons stated in this Memorandum Opinion, the court FINDS that both motions are due to be GRANTED IN PART and DENIED IN PART. More specifically, the court WILL GRANT the Plaintiffs' motion as to Defendant's misclassification of the Plaintiffs, and also as to the Defendant's violation of the FLSA's requirements of recordkeeping and of paying overtime wages for time actively worked on behalf of Tower. Further, the court WILL GRANT the Defendant's motion and WILL DENY the Plaintiffs' motion as to Defendant's liability for overtime wages for on-call time other than time spent actively working on behalf of Tower. Finally, the court WILL DENY the Defendant's motion on the issues of its liability for paying overtime wages for active overtime work; of the applicability of the fluctuating workweek method; and of its liability on the claim for FLSA retaliation.

PROCEDURAL BACKGROUND

On May 9, 2013, the Plaintiffs, Keith and Shanda Ziegler, filed a Collective Action Complaint (doc. 1) on behalf of themselves and all others similarly situated, against Defendant, Tower Communities, LLC, asserting violations of the Fair Labor Standards Act. The Zieglers have twice amended the initial pleading; the current pleading, "Plaintiffs' Second Amended Complaint" (doc. 28), dropped the collective class claims, listing only the two named Plaintiffs[1]. The Second Amended Complaint contained two causes of action: Count I, alleging that Tower and Steele violated the FLSA in failing to pay minimum wage compensation and overtime compensation and in misclassification of Managers despite their actual job duties; and Count II, alleging that Tower and Steele retaliated against them in violation of the FLSA when the Defendants took retaliatory adverse employment actions against them, including terminating them in retaliation for filing a complaint asserting FLSA violations.

FACTS

Tower does not dispute that the Zieglers are entitled to summary judgment on the claims that Tower misclassified the Zieglers and that it failed to keep time records, but Tower disputes that the Zieglers worked over forty hours per week.

Tower manages trailer and RV parks throughout the United States, including Carson Village and Hidden Valley mobile home communities in Birmingham, Alabama. The company's home office is in California, where its part-owner, former Defendant Bill Steele, is based, and it employees roughly 200 people. Tower is run by three Managers, and Steele is the only one of the three who manages the Alabama parks. Steele decides how much Tower pays its Alabama park employees. Tower generally hires husband and wife teams to manage its trailer parks, with the men generally in charge of outside maintenance work and the women generally in charge of the office and bookkeeping.

Although Steele is the Manager and Supervisor of the Alabama parks, Tower employs Janet and Dan Zuckerman as Auditor-Trainers, and their job is to travel the country in their RV, performing audits of Defendants' parks, training new managers, and helping with management changes.

The Zieglers' Employment and Contract

In January of 2013, Tower hired Keith and Shanda Ziegler to work at the Hidden Valley park. They initially held the position of Assistant Managers, working under Managers Amy and Randy Pruitt, with a total salary of $2, 400 per month as a couple, plus living accommodations on the park premises. The contract valued the living accommodations provided to the Zieglers, which was the 3-bedroom/2-bath Managers' Trailer, at $243.10 per month, which is the lot rental at Hidden Valley. The contract also provided that the Zieglers had a $75.00 monthly utility allowance, a $50.00 monthly cell phone reimbursement allowance, and a fuel allowance that equaled at least $92.00 every month. (Doc. 38-7, at 2).

In a separate paragraph marked "KICK-BACKS, " the contract provides, "I will not accept any payments, gifts, or other considerations (kickbacks') from dealer, or others. I also acknowledge that this is illegal and detrimental to the best interests of owner." (Doc. 41-9, at 2).

Employment Duties

As was customary with Tower husband and wife management teams, Keith Ziegler did the "outside" work and maintenance, and Shanda Zieger performed the "inside" work of running the office. She was also responsible for gardening and making bank deposits. According to the Zieglers' employment contract with Tower, their job duties consisted of the following:

1. Advertise, rent, and show [RV/trailer lot] spaces as they become vacant.
2. Collect all rents when due and promptly deposit the same to owner's account or as otherwise instructed.
3. Clean or supervise the cleaning and preparation, of each space for re-rental.
4. Maintain the general premises in a clean, orderly and safe condition.
5. Perform minor maintenance as may be necessary, including, but not limited to, such items as leaking faucets, stopped up sewer and water drains, minor repairs, and painting. It is understood that employee will not be required to perform, unless otherwise indicated in this contract, major repairs or maintenance, but that employee will do such work as will keep outside plumbing and maintenance bills to a minimum.
6. Care, protection, and regular inventory of maintenance equipment, supplies, tools, and other personal property of owner. Maintain a maintenance log for equipment.
7. Prepare such records and reports as may be required by employer.
8. Be familiar with the Manager Instruction Manual and keep its bulletins updated at all times.
9. Adjust any complaints of tenants and enforce the rules in accordance with the policies of employer.
10. Report any unusual tenant problems to employer.

(Doc. 38-7).

Although the employment contract did not refer to the park pool, Keith Ziegler was also responsible for maintaining the pool when it was open. Keith Ziegler acknowledged that the pool was never open under his management, but he nevertheless cleaned it and added chemicals daily.

The Zieglers' employment contract did not list driving around the park regularly or providing security as one of their job duties, and neither the Zuckermans nor any other Tower supervisor instructed the Zieglers that they must provide security. However, Tower terminated its contract with a private security firm after the Zieglers arrived, and with that termination, Keith Ziegler decided that he would provide security, spending an hour or two regularly driving around the park to keep an eye on things. Ziegler acknowledged that he never told the Zuckermans that he was providing security as part of his work duties, but Dan Zuckerman testified that, with the security firm termination, he knew that Keith Ziegler took over some of the security duties by answering phone calls with complaints about parties and other security matters and by driving around the park once in a while. Dan Zuckerman testified that driving around the park at night took about 15 minutes and that he personally cruised the park once per night while on-call, but he did not specifically instruct the Zieglers to do so and he does not know how often Keith did so.

In an email dated January 29, 2013 from the Pruitts, Managers of both Birmingham Tower parks in January of 2013, referred to "daily rides around the community" and complained about Keith Ziegler failing to clean up a mess left after the removal of a mobile home on a Saturday and not discovered until the next Tuesday. The inference was that the Pruitts understood such daily rides were part of the job of Manager and Assistant Manager. (Doc. 53-3, at 104).

Employment Hours

The Zieglers' employment contract with Tower stated that "[a]lthough employee must reside on the community's premises, compensation is based on a maximum of 40 hours per week." (Doc. 38-7, at 2). During their employment with Tower, the Zieglers never received any pay for hours worked over 40 per week. Steele testified that he understood that the Manager salary would "not be an issue with minimum wage, by paying them the 1, 200 and giving them, you know, space rent and a house and so on and so forth." (Doc. 38-2, at 35-36). When asked whether Tower had any method of tracking the time and dates Managers worked, he responded that they were on salary and that Tower did not track the hours actually worked, other than the office hours. The Managers at Hidden Valley park are each scheduled to work office hours from 8:00 a.m. to 4:00 p.m. for five days per week with a one-hour unpaid lunch break, equaling 35 hours per week. The Zieglers similarly understood that the salary amount was all they would receive, regardless of the hours worked.

In addition to the regular office hours, Tower also required that the Managers rotate being on-call, requiring one of the Zieglers to be on-call one week during all hours the office is closed with one of the Carson Managers on-call the next week. Shanda Ziegler testified, however, that when a Ziegler on-call period occurred, both Zieglers stayed at the park except to run short errands.

According to part-owner Steele and the Zuckermans, Tower does not require the Manager on-call to remain on the property, as long as he or she is available to be reached by telephone. However, Janet Zuckerman acknowledged instructing the Zieglers that being no more than 30 minutes away while on-call was a good practice and guideline, although that guideline is not a Tower requirement. Keith Ziegler understood the instruction that they be no more than 10 to 20 minutes away while on-call if they were available by cell phone, but the Zieglers testified that they did not have cell phones until April of 2013. They did, however, receive the $50 per month cell phone allowance for the months of January, February and April of 2013, submitting cell phone charges for reimbursement.

Tower expected, in addition to the scheduled office work hours of 35 hours per week, that each of its Managers would work no more than five additional hours after hours and during on-call periods, for a total of 40 hours per week. Steele testified that Tower did not anticipate or require that its Managers would work more than 40 hours per week, and Tower apparently did not consider the on-call hours to be working hours except when the Manager actually responded to problems and telephone calls during the on-call hours. At the beginning of their training month, some supervisor explained to the Zieglers that the park had so much general maintenance and upkeep and that these tasks could not all be accomplished during work hours but that the Managers must nevertheless complete them. The implication was that the Zieglers could expect to be working after normal work hours to complete the tasks and to make the park look great.

Training

The Zieglers received training from the Zuckermans that lasted for the first month of their employment. During that training month, Shanda Ziegler requested that the $2, 400 salary be divided with Keith receiving $2, 000 per month and Shanda receiving $400 per month so that the pay would not conflict with her eligibility for Social Security benefits. A dispute exists whether Shanda made the request because Janet Zuckerman told her to do so because Tower had had "a lot of older managers that are in the situation, " and had addressed the situation with an uneven salary split in the past. (Doc. 38-5, at 39-40). Zuckerman acknowledged that she initially told Shanda Ziegler the company could honor her request to do the uneven salary split. However, part-owner Steele stopped to that arrangement and, after the first month, he required the salary division for the Zieglers to be changed to each spouse receiving pay of $1200 per month. Steele explained that this requirement was necessary because the wife could complain that she only received $400 per month for all of the work she did. During the training month, Dan Zuckerman suspected that Keith Ziegler was "close to working more than 40 hours in a week, " so Zuckerman immediately instructed Ziegler that he was not to work overtime, and reminded him of that instruction on numerous occasions.

At the completion of the training, the Zuckermans left Alabama from February 1-11, 2013.

Pruitts' Termination; Zieglers become Co-Managers

After the training period, the Zieglers began reporting to the Hidden Valley Managers, Amy and Randy Pruitt, who also managed Carson Village. But in February of 2013, shortly after the Zieglers started working with the Pruitts, Tower terminated the Pruitts. For the next ten or eleven days, no one held the official position of Manager at either of the two parks, but the Zieglers performed all of the managerial responsibilities at both parks until the Zuckermans returned. During this interim period, the Zieglers were working constantly, seven days per week, from 7 or 8 in the morning until night. Tower hired someone to sit temporarily in the Hidden Valley office during the day to answer the phone and take payments, but Shanda Ziegler continued to handle Hidden Valley paperwork and otherwise functioned as its Co-Manager. The Zuckermans spoke to the Zieglers daily during this interim time, and the Zieglers gave them reports that all was well, and did not advise the Zuckermans about having to spend more than 40 hours a week each to manage both parks.

When the Zuckermans arrived back in town after the Pruitts' termination, they took over management of Carson Village. In March of 2013, Tower changed the Zieglers' position from Assistant Managers to Managers of Hidden Valley, and raised each spouse's pay to $1, 275 total per month, or $2, 550 per couple per month. On his paycheck, Ziegler received a credit for $170 per month as "rent" excluded from federal taxable wages, but no deduction is listed on the paycheck for the $243.10 value for accommodations. Also at the beginning of March of 2013, Tower hired Jason and Stacy Shellnut to take over management of Carson Village.

Hours Worked as Co-Managers

As Co-Manager of Hidden Valley park, Keith Ziegler estimated that he worked an extra two to four hours outside of scheduled work hours each weekday[2], and sixteen to twenty hours on the average weekend, for a total of seventy to eighty hours per week. Keith Ziegler worked every weekend, beginning after he got up in the morning until evening, with the exception that he attended church on most Sunday mornings. Shanda Ziegler claims to have worked slightly fewer hours, estimating that she worked between sixty to seventy hours per week, working five to eight extra hours total during the Monday through Friday workweek, and fifteen to twenty hours every weekend. Although the office closed at four, Shanda Ziegler regularly worked after four, closing out the books and handling issues that arose; she regularly worked at the office until six or seven p.m., and at least a dozen times during the term of her employment, she stayed at the office until nine p.m. Many of the times that she was staying until six or seven, she would be talking on the phone to Tower personnel.

Daily activity logs reflect that the Zieglers regularly worked more than 8 AM to 4:00 PM on weekdays. Although those logs do not always support the total number of hours that the Zieglers are claiming for Monday through Friday work, the logs show that one or both Zieglers worked more than an hour late on two or more weekdays during most workweeks, and thus, support the Zieglers' testimony that they routinely worked hours significantly beyond scheduled office hours. See, e.g., Doc. 53-1, at 65, 75, 89, 103, 105, 107, 114-119, 124, 126, 130).

These daily logs are separate from the Zieglers' on-call logs, although some overlap exists; on-call logs reflect on-call work performed after the office was closed on weekdays and on weekends. On-call logs do not completely verify the number of hours that the Zieglers claim to have worked, but they do support the Zieglers' claims that they regularly engaged in a significant amount of active work while on-call. See, e.g., Doc. 53-1, at 14, 18, 24, 31-32, 38-40, 53, 54-57, 66, 67, 72, 74, 76-78, 80, 91, 93, 94, 138, 139, & 174). The record is unclear whether Tower required the Zieglers to send daily and on-call logs to Tower supervisors on a regular basis or whether Tower simply required the Zieglers to prepare the logs and have them available if their supervisors at Tower needed verification of their work.

Although the scheduled work hours reflected a one-hour unpaid lunch, and the office was closed for an hour during lunchtime, the Zeiglers received uninterrupted lunch breaks only occasionally because of daily phone calls during lunchtime, forwarded from the office to their home phone, from California management or park residents or potential residents. More than half the calls required one or both of them to return to the office or to leave their home to do something during the lunch hour.

Some examples of jobs that Keith Ziegler regularly found he had no time to do during the regular work hours so he performed them on weekends were mowing the lawn at the manager's spot and pressure washing.

The Zieglers were "on-call" every other week, involving being available on the nights and the weekends. The Zieglers claim that they received calls every single week night and every single weekend day they were "on-call." Shanda testified that the calls were "constant, " and Keith explained: "We were the first ones they seemed to call for everything. We were like the Shell answer man." They would receive calls on everything from broken pipes, electrical issues, to fires, and even domestic disputes and break-ins. Keith Ziegler testified: "we normally got called before the police got called." (Doc. 38-4, at 98).

Although Tower claims that, technically, only one Ziegler was "on-call, " Shanda Ziegler testified that "on-call" tied both of them to the park, for all practical purposes, because each Ziegler had different duties. She did not have the skills to respond to maintenance calls nor did she feel comfortable responding to calls that needed action during the nighttime or those involving security such as an altercation. (Doc. 38-5, at 41-42). During Ziegler "on-call" periods, one of the Zieglers would leave to make bank deposits, pick up something from the other park, or pick up food, but aside from those quick errands, the practice was to stay together, physically in the park. Only after April, when they both purchased cell phones, were they able to leave the park together, and even then they had to remain within twenty minutes from the park.

Because the Zieglers claim that they did not have cell phones until April of 2013[3], Keith Ziegler testified that one of them was required to stay within range of a landline phone during the on-call hours, which would be within twenty yards of their house or office. According to Keith, the Zieglers asked the Zuckermans if Tower would buy them cell phones, and the response was no. However, evidence reflects that although Tower may not have bought the Zieglers cell phones, it did pay them a monthly cell phone reimbursement of $50 for the months of January, February and April[4] of 2013 based upon documentation from the Zieglers of cell phone expenses, even though the Zieglers now claim that they did not have cell phones in January and February.

Tower's Awareness of Overtime

The evidence reflects that, as early as January of 2013, the Zuckerman and Steele had notice that Keith Ziegler was working more than 40 hours per week. In his deposition testimony, Dan Zuckerman acknowledged: "I knew but I mentioned it to him that he... wasn't supposed to, but that was up to him, if he wanted to get up." (Doc. 38-6, at 33). Dan Zuckerman also acknowledged mentioning to his wife, Janet, that Keith Ziegler was working overtime, but he did not acknowledge talking to Steele about Keith's long hours. Dan Zuckerman claims to have reiterated to Keith the admonition on numerous occasions that he was not to work more than 40 hours per week, and no evidence reflects that Keith Ziegler specifically explained on those occasions that he was regularly working over 40 hours and could not get the work done during a 40-hour week.

An email from Janet Zuckerman to Bill Steele dated January 29, 2013 also reflects that she was aware of Keith Ziegler's long hours and that she communicated that awareness to Steele: "[The Pruitts] make it sound like Keith is lazy and it is just the opposite, he is out working many mornings at 6:30 am and doesn't stop many evenings till dark." (Doc. 53-3, at 104). Even given the early sunset in January, Janet Zuckerman was describing to Steele a 10-hour work day for Keith on "many" days.

Further the Zuckermans knew from their own experience the time requirements of Property Managers for Tower parks. Their testimony varied about whether the position of Property Managers required the Zuckermans to work over 40 hours per week. At one point, Dan Zuckerman testified that the Zuckermans have performed the Manager jobs of Hidden Valley and of Carson Village, and during these periods, they each did not work more than 40 hours per week. (Doc. 46-3, at 3, ΒΆ 3). However, Janet Zuckerman testified that when the Zuckermans worked as Managers, at times they worked more than forty hours per work week, especially when they were on-call. (Doc. 38-3, at 163-64).

In addition, evidence reflects that Tower employees other than the Zuckermans and Steele were aware that the Zieglers routinely worked more than the scheduled work hours. Shanda Ziegler testified that when in the office working late, she was often talking on the phone to Tower personnel, such as Stacy Shellnut, the Zuckermans, or the Tower IT person, trying to figure out why mistakes had occurred in the daily reports or simply responding to requests and directives. According to Shanda Ziegler's testimony, Lupe Gonzales, the office manager at Tower in Pasadena, California, was aware that the Zieglers worked seven days a week, although the discussion is not clear whether she was aware that they routinely worked every weekend or just call weekends. Shanda Ziegler and Lupe were discussing the fact that Keith Ziegler was injured when he was working on a Sunday, and Shanda advised her that the Zieglers worked seven days a week. Lupe laughed and said: "yeah, but that's expected. Just don't do anything that you could get hurt on." (Doc. 38-5, at 120).

In February of 2013, the Zieglers began to complain about work hours and wages that were "not legal." On February 23, 2013, the Zieglers sent an email to Steele, advising him that they wanted to discuss some important issues directly with him. The email did not specify the nature of the issues. The Zuckermans, not Steele, responded to the email to Steele, and set up a lunch meeting between the Zuckermans and Zieglers. Shanda Ziegler testified that she and her husband spoke to the Zuckermans about needing more money to pay their bills, which were higher than anticipated, and to compensate them for the long hours they were working. According to the testimonies of both Shanda and Keith, the Zieglers specifically complained that they were not even receiving minimum wage for the total number of work hours; the Zieglers complained that their wages were "not legal." When the Zuckermans responded that the Zieglers had agreed to the position with the specified salary, the Zieglers said: "You can't agree to something that's not legal." (Doc. 38-5, at 93; see Doc. 38.4, at 202 (to the same effect)). The Zuckermans promised to relay their complaints to Steele, and later advised the Zieglers that they had spoken with Steele but that he had refused their requests. The Zieglers commented: "that's not legal, you can't do that." (Doc. 38-5, at 94-95).

However, the evidence does not reflect that the Zuckermans communicated to Steele that the Zieglers had complained to them about FLSA violations or illegal wages. The Zuckermans' March 6, 2013 email to Steele referred to a "come to Jesus" meeting with the Zieglers and referred to the Zieglers' financial difficulties with high utility bills and deposits, stating that they were "struggling financially." The email did not ...


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