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Biziko v. Van Horne

United States District Court, N.D. Texas, Abilene Division

August 20, 2019

AMBER BIZIKO, Plaintiff,
STEVEN VAN HORNE, et al., Defendants.



         Before the Court are Plaintiffs Motion for Partial Summary Judgment (ECF No. 74) and Defendants' Motion for Partial Summary Judgment (ECF No. 75). Each party has filed a response in opposition, see Defs.' Resp. (ECF No. 78) and Pl.'s Resp. (ECF No. 79), and a reply brief, see Pl.'s Reply (ECF No. 80) and Defs.' Reply (ECF No. 81). The parties have provided evidentiary support and other documents with their filings.[1] Both motions are fully ripe and ready for ruling.

         Pursuant to Special Order No. 3-326 issued on June 15, 2019, the undersigned will preside over all civil cases assigned or referred to Magistrate Judge E. Scott Frost until a replacement magistrate judge has been appointed for the Abilene Division. This action has been referred pursuant to 28 U.S.C. § 636(b). Because the parties have not consented to have all further proceedings in this case conducted by a magistrate judge, the undersigned issues this report and recommendation, directs the Clerk of Court to reassign the case to Senior District Judge Sam R. Cummings for all further proceedings, and recommends that the Court (1) GRANT in part and DENY in part Plaintiffs motion and (2) DENY Defendants' motion.


         On June 22, 2016, Plaintiff commenced this action by filing a civil complaint against defendants Steven Van Home ("SVH") and Michelle N. Van Home ("MVH"), "d/b/a A Habitat for Learning," ("AHFL" or "Habitat") under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-16, for failure to pay overtime. (See ECF No. 1, Compl.). Nearly two years later, on June 18, 2018, SVH testified as corporate representative for Habitat that Plaintiff had entered into an agreement with another entity, Loving Individuals Generating Healing Today ("LIGHT"), to perform volunteer work for Habitat in exchange for a cash stipend from LIGHT for the hours volunteered. (See ECF No. 58-2 at 18-35).

         On July 9, 2018, Plaintiff moved to file a second amended complaint based on this alleged newly discovered evidence. (See ECF No. 56, Second Mot. for Leave to Am. Compl.). As the motion remained pending, Defendants deposed Plaintiff on August 3, 2018. (See ECF No. 78-3 at 1). She testified that SVH did not want her to report any hours over forty because "he didn't want to do the time and a half." Id. at 24. When asked, "The over 40 hours, who was that work for?", she responded "A Habitat for Learning." Id. She further testified that she had never heard of a "LIGHT Charitable Participation Record" and had no knowledge of LIGHT. Id. at 26. When pressed about her attorneys moving to add LIGHT as a defendant, she indicated that she did not understand the questioning. Id. at 26-27. She later reiterated that she knows nothing about LIGHT. Id. at 42.

         With her reply brief filed August 13, 2018, Plaintiff submitted the full SVH deposition transcript from June 18, 2018, to support her position that newly discovered information justified amending her complaint to add a new defendant. (See ECF No. 58-2). When the Court granted Plaintiff permission to file a second amended complaint on September 24, 2018, it noted "an unusual procedural background" in addition to the unusual twist "that according to Defendants, Plaintiff both volunteered and worked for pay at AHFL," whereas Plaintiff claims to have "never worked as a volunteer at AHFL." (ECF No. 61, Mem. Op. & Order, at 1-2).

         At this point, there is no reason to reiterate the atypical background, but information submitted with the motion to amend is relevant to a major issue in this case - Plaintiffs employment relationship with defendants. In addressing that motion and without making any determination as to its factual accuracy or credibility, the Court considered the deposition testimony of SVH regarding the alleged volunteer work arrangement between Plaintiff and LIGHT.[2] See Id. at 3, 6-9. It summarized that testimony as follows:

While experiencing financial difficulties while working for AHFL, Plaintiff approached Mr. Van Home asking to work overtime because she needed additional funds. AHFL did not need any employee to work overtime. It did not approach Plaintiff and ask her to work overtime. When she informed Mr. Van Home about her financial problems, he mentioned LIGHT as a potential aid to her problems. He told her that he was involved in an outreach organization that could help if she were volunteering for a non-profit organization, such as AHFL. Even though AHFL had no reason to give anyone overtime on a regular basis, he suggested LIGHT as a way "for her to receive more money." Although she initially declined to explore the volunteering option, a few weeks later, she asked if she could get the help from the outreach organization.
Because Plaintiff both worked and volunteered at AHFL, she would note on the far right end of her time sheet the hours that she had volunteered. So, for example, "if she worked four hours for the day and volunteered three hours, she would write down the times that she worked, from what time to what time, and then she would just simply put three hours or four hours that she volunteered." Whether she was volunteering or working for pay at AHFL, she performed the same duties. AHFL did not combine the volunteer hours with the work-for-pay hours to calculate overtime pay. Instead, as Plaintiff requested, her stipend from LIGHT was paid at her normal hourly rate multiplied by the number of hours that she volunteered.

Id. at 3 (citations omitted). After considering applicable "legal principles, the briefing, prior court orders, pertinent background information, and the proposed amended complaint, the Court grant[ed] Plaintiff leave to amend to name LIGHT as a new defendant." Id. at 11.

         In that amended complaint, Plaintiff adds LIGHT as a new defendant and sues the four defendants for alleged failures to pay overtime as required by 29 U.S.C. § 207(a) of the FLSA. (See ECF No. 62, Second Am. Compl., ¶¶ 1-2). In her present motion, Plaintiff seeks summary judgment on one issue - that the two entity defendants "constitute a single employer under the FLSA" but if the Court finds otherwise, she urges it to find that they "constitute a single joint employer." (ECF No. 74 at 1). In their motion, Defendants seek summary judgment for all claims against LIGHT and for claims asserted against MVH to the extent her liability is based on alleged actions taken on behalf of LIGHT. (ECF No. 75 at 2-7).

         The following facts are drawn from the parties' pleadings, briefs, and evidence filed in this case. When "both sides move for summary judgment," courts may "recount the evidence that is undisputed, and, when it is necessary to set out evidence that is contested, will do so favorably to the side who is the summary judgment nonmovant in the context of that evidence." Leal v. Magic Auto Touch Up, Inc., No. 3:16-CV-0662-D, 2018 WL 297339, at * 1 (N.D. Tex. Jan. 4, 2018). To the extent any fact is disputed, it will be so stated.

         I. Defendants

         Habitat is a private, non-profit school with children ranging in age from newborns to sixteen. (ECF No. 78-2, Habitat Corp. Dep., at 8, 18).[3] It is comprised of eleven buildings at three locations: Beltway (eight buildings at 3242 Beltway South in Abilene), Tuscola (two buildings at 410 Graham Street in Tuscola), and Sayles (one building at 1957 Sayles Boulevard in Abilene). Id. at 8-9, 15. Four individuals sit on its board: Carlton Lyons, Mark Almeida, Andraes Royal, and MVH. Id. at 10-11.

         LIGHT is a charitable organization that provides services for low income people who are having difficulties "making ends meet." (ECF No. 79-2, Corp. Dep. LIGHT, at 10). SVH has also described it as "an outreach program" designed to provide help to persons in need. (ECF No. 78-2 at 16). It obtains funding through "different volunteering systems," private donors, and a childcare facility it operates under the name "Children of Light," which has about fifty children enrolled. Id. at 54-55. Its director is Kathy Larry. (ECF No. 79-2 at 12). According to SVH, it has shared a mailing address with Habitat at the Sayles location; has a physical address at 588 East Ambler in Abilene;[4] and has four board members: himself, David Mrotek, David Als, and Mark Almeida. (ECF No. 78-2 at 15-17, 52-53; ECF 79-2 at 12). Nevertheless, tax documents filed by the two entities show the same address (3242 Beltway South); business purpose (primary purpose is to provide development and educational services for children and families); and officers or trustees (Carlton Lyons, Mark Almeida, Andreas Royal, and MVH). (See ECF Nos. 74-3, 74-5, 74-7 (2014-16 taxes for LIGHT) at 1 -2, 7; ECF Nos. 74-4, 74-6, 74-8 (2014-16 taxes for Habitat) at 1-2, 7).

         SVH founded Habitat and is an administrator for it but does not sit on its board. (ECF No. 78-2 at 11). He worked with Plaintiff on a day-to-day basis for the first part of her employment. Id. at 12. He did not supervise her as an immediate supervisor, but he "would know what was going on." (ECF No. 75-1 at 12). He and MVH provided supervision above her immediate supervisor. (ECF No. 74-1). Although he had authority to hire and fire Plaintiff, such decisions were for the board. (ECF No. 75-1 at 12).

         SVH also testified that he was a founder and board member of LIGHT. (ECF No. 79-2 at 9; ECF No. 78-2 at 17). As a board member, SVH would "help make the decisions" when certain corporate matters would arise, such as "whether we were going to spend in a certain area or not." (ECF No. 79-2 at 11). In his role at LIGHT he worked with Plaintiff in that he "enrolled her as a client." Id. at 9. He explained that he also worked with Plaintiff at Habitat and because she was experiencing financial difficulties, he told her about his involvement with LIGHT, a company that "pretty much assists people who are in a state like her." Id. at 9-10. He "enrolled her as one who would receive benefits from LIGHT, if she was volunteering at another company, which at the time [Habitat] was a non-profit organization" that qualified her for the benefits. Id. at 10. When Plaintiff provided services to Habitat through this arrangement with LIGHT, she answered to him as a board member for LIGHT and as Habitat's administrator. (ECF No. 74-1 at 56). It was up to the board to ultimately end the stipend, but if needed, SVH had authority to discipline Plaintiff. (ECF No. 75-1 at 12-13).

         MVH is a board member for Habitat, (ECF No. 78-2 at 10-11), and its executive director, (ECF No. 79-9, MVH Dep., at 5). As director, she does whatever is needed, including cleaning dishes and changing diapers. Id. When Plaintiff was at the Beltway location, MVH had daily interactions with her. Id. at 6. Although the nature of Plaintiffs position did not require a set schedule of hours, MVH expected her to be there on time and on the days scheduled. See Id. at 7-8. MVH supervised Plaintiffs work performed as a caregiver and as an assistant director; had authority to hire, fire, and discipline her; and would recommend pay raises when warranted. Id. Although she knows about LIGHT, she was not involved with it. Id. at 6.

         II. Employment Relationship

         Plaintiff undoubtedly had an employee-employer relationship where she would provide services as a childcare giver (sometimes referred to as a teacher) or assistant director for an hourly wage. (ECF No. 78-3, Pl.'s Dep., at 9, 13). MVH hired her to work at Habitat. Id. at 14. During her employment with Habitat, SVH and MVH were immediate supervisors. (ECF No. 74-1 at 56-57; ECF No. 78-3 at 13-14).

         While working as assistant director, Plaintiff received an hourly rate of $9.00. (ECF No. 78-3 at 13). She was responsible for making "sure everything was running smoothly" and would keep track of employee hours, including her own. Id. at 13-14, 21. With the promotion, she had less focus on the children and more administrative responsibilities. (ECF No. 78-2 at 14). In the new role, she would answer calls, collect funds, do time sheets, and "pretty much" supervise the teachers to make sure things "were within balance." Id. As part of her work, she would show the children movies, such as "An American Tail: Fievel Goes West," or a television show such as "Dora the Explorer." (ECF No. 79-1, Pl.'s Decl., ¶ 6). She would use the internet to submit her time cards to supervisors through electronic mail every two weeks. Id. ¶ 7.

         The parties disagree about other aspects of Plaintiffs work. She asserts that throughout her employment she would routinely (generally once a week) order or purchase and handle learning supplies for the school. Id. at ¶ 4. She further asserts that her work routine included using her own vehicle or a company van to transport school children to facilities of Defendants. Id. ¶ 5. But Defendants assert that she never purchased or called vendors to order supplies. (ECF No. 81-1, SVH Deck, ¶ 4). And, while Plaintiff would use a Dodge Caravan to pick up children enrolled in Habitat's after school program, she would only drive two blocks and strictly for Habitat's purposes even though LIGHT owned the van and had loaned it to Habitat as a donation for Habitat uses. Id. ¶¶ 5-6. Defendants also assert that Plaintiff was never asked to use her own vehicle. Id. ¶ 6.

         Plaintiff testified that she would record some hours "more to the right side of the paper and that's what would be cash." ECF 78-3 at 24. Although she identified Habitat as who she was working for when she was not paid overtime, see id., she has added LIGHT as a defendant given Defendants' position that she volunteered some time to Habitat through an arrangement with LIGHT. She testified that she has never heard of LIGHT, and if she had filled out the paperwork recording her participation, she "would have spelled [her] kids' names right and . . . would not have put Steve Van Home as [her] contact person." Id. at 26, 42.

         According to SVH, however, Plaintiff "asked for help from LIGHT." (ECF No. 78-2 at 18). He testified that, when someone who works for a non-profit needs financial assistance, LIGHT "is ready to help." Id. When he learned that Plaintiff was having financial troubles while she was working for Habitat as an assistant director, he referred her to LIGHT for help so long as she volunteered for a non-profit organization like Habitat. Id. at 18-19. LIGHT's board would decide who would be assisted. Id. at 55. Plaintiff could volunteer for any non-profit and receive the same assistance. Id. at 20. She would decide how much time she would volunteer and could "stop at any time." Id. at 58. Although she could have selected any non-profit, she volunteered at Habitat. (ECF No. 74-1 at 37).

         According to SVH, in return for the volunteering, LIGHT would pay a stipend so Plaintiff could pay her bills. (ECF No. 78-2 at 18). The arrangement was up to her. (ECF No. 79-2 at 18.) Because she asked to be paid for her volunteer time at her normal hourly rate, "her stipend was paid at her hourly rate multiplied by the number of hours she volunteered every week." (ECF No. 74-1 at 35). Based on that agreement, her stipend would vary weekly. Id. This stipend calculation was atypical for LIGHT, which would normally pay a set stipend weekly. Id.

         Plaintiff controlled her own time sheets and according to SVH she would make a notation on the time sheet that she was volunteering certain hours. (ECF 78-2 at 24). So that everyone would "figure out the hours that she was volunteering, she would put that at the far right end of that particular day on the time sheet." Id. at 25. She was not paid overtime if her hours for Habitat combined with her volunteer time for LIGHT exceeded forty. Id. at 28. Habitat paid her for the non-volunteer time and LIGHT paid her a stipend for the volunteer hours. Id. The stipend was given as cash gift. (ECF No. 79-2 at 19-21). Plaintiffs duties did not change when she performed work for Habitat and when she volunteered time there for LIGHT. (ECF No. 74- 1 at27;ECF No. 79-2 at 17-18).

         One or more of the named defendants employed Plaintiff from approximately March 26, 2014, through March 18, 2016. The parties dispute who constitutes her employer. As Plaintiff has stressed in her motion, she claims to have never heard of LIGHT until she received written discovery responses from Defendants. (ECF No. 74 at 2 n.l). In support of their motion, Defendants have, provided Plaintiffs own deposition testimony to support her position that she has no knowledge of or connection with LIGHT. (See ECF No. 78-3 at 26, 42). She asserts that Habitat and the individual defendants were paying her a portion of her work hours in cash to avoid paying her overtime and limit their employer tax liability exposure. (See ECF No. 74 at 2 n.l). Although she believes that Defendants fabricated the volunteer arrangement as a defense to this action, she added LIGHT as a defendant and argues that the two entities constitute a single employer for purposes of the FLSA. See Id. She claims that she routinely worked overtime hours that Defendants failed to pay at an overtime rate in violation of the FLSA.


         Under Fed.R.Civ.P. 56(a), courts "grant summary judgment 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."[5] "As to materiality, the substantive law will identify which facts are material" and a fact is "material" only if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When "the evidence is such that a reasonable jury could return a verdict for the nonmoving party," a dispute over a material fact qualifies as "genuine" within the meaning of Rule 56. Id. Because there must be a genuine dispute of material fact, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Id. at 247-48. There is no genuine dispute for trial when "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party." Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)).

         The "party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). In determining whether to grant summary judgment, the courts view all facts and reasonable inferences drawn from the record "in the light most favorable to the party opposing the motion." Heinsohn v. Carabin & Shaw, P.C., 832 F.3d 224, 234 (5th Cir. 2016) (citation omitted). Once the movant carries that initial burden, the burden shifts to the party opposing the motion to present competent summary judgment evidence showing the existence of a genuine fact dispute. Matsushita, 475 U.S. at 586-87; see also, Fed. R. Civ. P. 56(c). Once the burden shifts to the nonmoving party, that party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. In other words, "[unsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment." Heinsohn, 832 F.3d at 234 (citation omitted). Furthermore, the courts have "no duty to search the record for material fact issues." RSR Corp. v. Intllns. Co., 612 F.3d 851, 857 (5th Cir. 2010); accord Hernandez v. Yellow Transp., Inc., 670 F.3d 644, 651 (5th Cir. 2012).


         Both sides seek partial summary judgment in this case. Given the nature of the legal issues and the briefing, an overview of the law is warranted.

         I. Applicable Law

         With exceptions not relevant here, the FLSA requires employers to pay one and a half times an employee's regular rate for any time worked over forty hours per week. See 29 U.S.C. § 207(a)(1).[6] More particularly, § 207(a)(1) provides:

Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.

         This provision requires (1) an employee-employer relationship; (2) coverage, i.e., an employee or enterprise-employer that engages in commerce or in the production of goods for commerce; and (3) a workweek that exceeds forty hours.

         A. Employee-Employer Relationship

         When determining who are "employees" under the FLSA, "common law employee categories or employer-employee classifications under other statutes are not of controlling significance" because the FLSA "contains its own definitions, comprehensive enough to require its application to many persons and working relationships, which prior to this Act, were not deemed to fall within an employer-employee category." Walling v. Portland Terminal Co.,330 U.S. 148, 150-51 (1947) (citations omitted). Further, the Supreme Court "has consistently construed the Act 'liberally to apply to the furthest reaches consistent with congressional direction."' Tony & Susan Alamo ...

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