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Edwards v. Clinical Research Consultants, Inc.

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

May 24, 2017

JANET EDWARDS, et al, Plaintiffs,



         This matter is before the court on the motions for partial summary judgment filed by defendant Clinical Research Consultants, Inc., ("CRC") (doc. 45), defendant Laura Farley (doc. 46), defendant Richard Kilgore (doc. 51), and the plaintiffs (doc. 48). The motions are supported by evidence and the parties have been given the opportunity to fully brief the motions.[1]The parties have consented to the jurisdiction of the undersigned magistrate judge; accordingly, the court enters this Memorandum Opinion.

         I. BACKGROUND

         The plaintiffs, Janet Edwards, Betsy Brigham-Hoke, and Tina Buchanan, filed a complaint against Clinical Research Consultants, Inc., ("CRC"), James Richard Kilgore, Laura Farley, and Roxanne Reeves, alleging that they were employed by CRC, and that they performed work for CRC but were not paid for all of the hours they worked, in violation of the Fair Labor Standards Act of 1938, 20 U.S.C. § 201 et seq. ("FLSA"), and in violation of state-law principles governing contractual and quasi-contractual relations. They assert that CRC was their employer. The complaint further asserts that Kilgore, CRC's president; Farley, its vice president; and Reeves, its controller also exerted control as employers.

         Plaintiffs allege that the defendants violated the FLSA by failing to pay the plaintiffs the minimum and overtime wages mandated by federal law (Count I), and that the violations of the FLSA were willful. (Count II). Plaintiffs assert, in the alternative, that CRC breached contracts to pay wages that it had agreed to pay the plaintiffs (Count III), and that CRC was unjustly enriched by the unpaid work provided by the plaintiffs (Count IV).[2]


         Under Federal Rule of Civil Procedure 56(a), summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The party asking for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, ' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett 477 U.S. 317, 323 (1986) (quoting former Fed.R.Civ.P. 56(c)). The movant can meet this burden by presenting evidence showing there is no dispute of material fact, or by showing that the nonmoving party has failed to present evidence in support of some element of its case on which it bears the ultimate burden of proof. Celotex, 477 U.S. at 322-23. There is no requirement, however, "that the moving party support its motion with affidavits or other similar materials negating the opponent's claim." Id. at 323.

         Once the moving party has met his burden, Rule 56 "requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions of file, ' designate 'specific facts showing that there is a genuine issue for trial.'" Id. at 324 (quoting former Fed.R.Civ.P. 56(e)). The nonmoving party need not present evidence in a form necessary for admission at trial; however, he may not merely rest on his pleadings. Celotex, 477 U.S. at 324. "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.

         After the plaintiff has properly responded to a proper motion for summary judgment, the court must grant the motion if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The substantive law will identify which facts are material and which are irrelevant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. " [T]he judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. His guide is the same standard necessary to direct a verdict: "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52; see also Bill Johnson's Restaurants, Inc. v. N.L.R.B., 461 U.S. 731, 745 nil (1983). However, the nonmoving party "must do more than show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Anderson, 477 U.S. at 249 (citations omitted); accord Spence v. Zimmerman, 873 F.2d 256 (11th Cir. 1989). Furthermore, the court must "view the evidence presented through the prism of the substantive evidentiary burden, " so there must be sufficient evidence on which the jury could reasonably find for the plaintiff. Anderson, 477 U.S. at 254; Cottle v. Storer Communication, Inc., 849 F.2d 570, 575 (11th Cir. 1988). Nevertheless, credibility determinations, the weighing of evidence, and the drawing of inferences from the facts are the function of the jury, and therefore the evidence of the non-movant is to be believed and all justifiable inferences are to be drawn in his favor. Anderson, 477 U.S. at 255. The non-movant need not be given the benefit of every inference but only of every reasonable inference. Brown v. City of Clewiston, 848 F.2d 1534, 1540 n. 12 (11th Cir. 1988).

         III. FACTS

         Because there are cross motions for summary judgment, the court must view the facts in the light most favorable to the nonmovants, and each party is, with respect to at least one motion, a nonmovant. The court begins with a discussion of the defendants' motions, viewing the facts in the light most favorable to the plaintiffs.

         CRC was a corporation doing business in Alabama. The company conducted clinical trials for pharmaceutical companies seeking approval by the Federal Drug Administration ("FDA") for drugs, medical devices, and medical procedures to be sold nationwide. The owners of CRC included Kilgore, Reeves, and Farley. Beginning in 2012, and continuing until the corporation's dissolution, CRC did not generate sufficient revenues to cover its financial obligations, including payroll. Due to the financial downturn of CRC, none of the employees, including the individual defendants, received their full salaries during 2012 and 2013. Plaintiffs continued to work for CRC, however, and at times may have worked more than 40 hours per week. Kilgore, as the CEO of the corporation, repeatedly urged the plaintiffs to continue working, even without pay, saying that the financial fortunes of the company were about to turn around. CRC ceased operations and was dissolved on February 11, 2014. On May 29, 2015, the plaintiffs filed this action, seeking unpaid wages, liquidated damages, equitable relief, attorneys' fees, costs, and expenses.

         Plaintiff Tina Buchanan was employed by CRC as Director of Regulatory Affairs in the Regulatory Department. She worked at CRC full-time from April 2005 until February 2013, and worked part-time on an hourly basis from February 2013 until June 2013. She was the only employee of the Regulatory Department. She reported to defendant Reeves until Reeves left the company, and then she reported directly to defendant Kilgore. Kilgore set Buchanan's work hours and established her salary. Buchanan described her job as "pushing paper" needed to begin the clinical studies by filling in preprinted forms. She denied that she exercised any discretionary decisionmaking authority. A job description of her position labeled the job as "FLSA Status: Exempt - Administrative, " although Ms. Buchanan testified that she did not really understand what that meant. (Doc. 45-5, pp. 8-9, Exh. 2 to Buchanan Depo. and doc. 45-6, p. 5, Buchanan Depo.). Her salary as of 2012 was $866.82 per week.

         Plaintiff Betsy Brigham-Hoke was employed by CRC in the accounting/finance department. She was hired in April 2005 as an assistant to comptroller Reeves, and in 2006 was given the title of Accounting Assistant. She was terminated in October 2012. She passed information along to the accounting company for processing of the payroll. She did not supervise any employees, and she was supervised by Kilgore. She spent much of her time answering phones, greeting people, and filing. She reported to Reeves, and she took over some of Reeves' duties when Reeves left. Brigham-Hoke reported directly to Kilgore after Reeves left. Kilgore hired her, evaluated her, and determined her rate of pay. Her salary, beginning in 2012, was $961.54 per week.

         Plaintiff Janet Edwards was employed by CRC as a clinical research consultant from February 2001 through September 2013. Her duties including general patient work-ups, including blood work and taking vital signs. She was a licensed practical nurse, although a nursing certificate was not required for the tasks that she was assigned. She did not supervise any other employees, and she was supervised by Farley. In 2009, Edwards filed a petition in the United States Bankruptcy Court for relief under Chapter 13 of the Bankruptcy Code. She was discharged in 2014, having made 100 percent repayment to her creditors. She did not list any claim against CRC as an asset at any time during the bankruptcy proceeding. Her salary, beginning in 2012, was $895.25 per week.

         Each of the three plaintiffs stated that they named Farley as a defendant because she was an owner of the company. Farley once paid $5, 100.00 of her own funds to pay a monthly Blue Cross/Blue Shield insurance premium on behalf of CRC, which she described as a loan to the company. Farley also paid about $2000.00 of her own funds for "sundry supplies" for CRC. (Doc. 62-5, Farley Responses to Interrogatories).

         Kilgore set the pay rate for each employee and was responsible for hiring and firing employees. His job duties at CRC included "oversight of marketing, clinical operations, regulatory compliance and financial operations." (Doc. 62-6, Kilgore Responses to Interrogatories). Both Farley and Kilgore knew that the plaintiffs had worked during some weeks in 2012 and 2013 for which they did not receive any pay. (Docs. 62-2 through 62-4, plaintiffs' declarations).


         A. CRC's Motion for Partial Summary Judgment

         Defendant CRC seeks summary adjudication on plaintiffs' FLSA claims on two grounds: that CRC is not covered by the FLSA because it does not meet the statutory definition of an "enterprise, " and that the plaintiffs are exempt employees because they were employed in salaried, administrative positions. The plaintiffs do not assert that CRC was an enterprise, but they argue that, regardless of whether CRC is an "enterprise" under the statute, they are entitled to individual coverage under the FLSA. They further assert that their duties did not meet the prerequisites for being deemed "administrative" under the FLSA, and therefore were nonexempt.

         1. "Enterprise" coverage

         Defendant CRC has moved for summary judgment on the basis that CRC is not an "enterprise" pursuant to 29 U.S.C. § 207(a)(1), 29 U.S.C. §203(s)(1)(A)(ii).[3] The FLSA provides that an "enterprise" engaged in commerce:

(i) has employees engaged in [interstate] commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person; and
(ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500, 000 (exclusive of excise taxes at the retail level that are separately stated).

29 U.S.C. § 2O3(s)(1)(A)(i) (ii). "To establish an FLSA claim, a plaintiff must show, among other things, either 'individual coverage' or 'enterprise coverage.'" Mendoza v. Discount C.V. Joint Rack & Pinion Rebuilding, Inc., 101 F.Supp.3d 1282 (S.D. Fla. 2Ol5)(emphasis added). See also Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1298-99 (11th Cir. 2011). Where an enterprise is covered, "all its employees are entitled to FLSA protection[, b]ut where an enterprise is not covered, individual employees may still be ...

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