United States District Court, N.D. Texas, Abilene Division
REPORT AND RECOMMENDATION
RAY, JR. UNITED STATES MAGISTRATE JUDGE
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. Both motions are fully ripe and
ready for ruling.
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
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).
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.
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).
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. 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
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
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).
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.
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). 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.
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; 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).
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).
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).
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.
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).
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.
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.
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.
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).
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.
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).
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.
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." "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)).
"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).
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.
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). More particularly, § 207(a)(1)
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.
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.
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