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MCLAUGHLIN v. LUNDE TRUCK SALES

May 19, 1989

ANN McLAUGHLIN, Secretary of Labor, United States Department of Labor, Plaintiff,
v.
LUNDE TRUCK SALES, INC., LUNDE LEASING, INC., Corporations, and RICHARD LUNDE, an Individual, Defendants


Stanley J. Roszkowski, United States District Judge.


The opinion of the court was delivered by: ROSZKOWSKI

STANLEY J. ROSZKOWSKI, UNITED STATES DISTRICT JUDGE

 This action comes before the court on the plaintiff's motion for summary judgment. For the reasons set forth below, the court finds the following:

 (1) Lunde Truck Sales ("Sales") and Lunde Leasing ("Leasing"), together, are enterprises "engaged in commerce or in the production of goods for commerce" within the meaning of the FLSA. (2) Richard Lunde ("Lunde") is an employer within the meaning of the FLSA of employees employed at the Leasing location. (3) Sales and Leasing are joint employers within the meaning of the FLSA of employees employed at the Leasing location. (4) The facilities of the corporate defendants Sales and Leasing constitute separate establishments within the meaning of 29 C.F.R. § 779.310. (5) The question of whether the defendants have violated Sections 6, 7, and 11 of the Act is expressly reserved. The court requires the parties and the plaintiff, in particular, to more fully address the question of the existence of violations in a supplemental brief.

 BACKGROUND

 In September of 1986, pursuant to § 17 of the Fair Labor Standards Act [ 29 U.S.C. § 201 et seq.], hereinafter referred to as "FLSA" or "Act", the Secretary of Labor brought suit to enjoin and restrain the defendants from violating §§ 6, 7, 11, 15(a)(2) and 15(a)(5) of the Act. Specifically, the plaintiff charges that the defendants have repeatedly violated the provisions of § 6 of the Act by paying employee wages at rates less than $ 3.35 per hour. The plaintiff additionally charges the defendants with violating § 7 and § 15(a)(2) of the Act for failing to pay overtime wages to employees. The plaintiff also asserts that the defendants have failed to keep and preserve adequate and accurate records of employees and their wages and hours and other conditions and practices of employment. Finally, the plaintiff charges that the defendants, during the period since January 1, 1984, have repeatedly violated and are willfully violating the provisions of the Act; therefore, the defendants have become liable for an equal additional amount of liquidated damages pursuant to § 16(c) of the Act.

 Presently, the plaintiff moves the court for summary judgment on these claims except those involving "willful" violations. The plaintiff has divided its motion into several distinct requests for judgment rulings. The court shall address these requests individually and in the order presented.

 DISCUSSION

 The Court will not grant any summary judgment motion unless all of the pleadings and supporting documents, if any, indicate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2513, 91 L. Ed. 2d 202 (1986): Fitzsimmons v. Best, 528 F.2d 692, 694 (7th Cir. 1976).

 The initial burden is on the moving party to demonstrate that there is no genuine issue or question of material fact in dispute. Rose v. Bridgeport Brass Company, 487 F.2d 804, 808 (7th Cir. 1973). Once the moving party has stated that a fact is not in question, the burden shifts to the non-moving party to demonstrate that there is some question of fact or to contradict the fact and bring it into question. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).

 I. Do Lunde Truck Sales and Lunde Leasing constitute an enterprise within Section 3(r) [§ 203(r)] and 3(s) [§ 203(s)] of the Fair Labor Standards Act?

 The defendants concede that Lunde Truck Sales and Lunde Leasing, together, are an "enterprise engaged in commerce or in the production of goods for commerce" within the meaning of the FLSA. (Memorandum in Opposition to Plaintiff's Amended Motion for Partial Summary Judgment).

 II. Is Richard Lunde an employer within the meaning of section 3(d) [§ 203(d)] of the FLSA of employees employed at the Leasing location?

 The FLSA defines "employer", in pertinent part, as follows:

 . . . any person acting directly or indirectly in the interest of an employer in relation to an employee . . .

 29 U.S.C. § 203(d). The plaintiff argues that Lunde meets the preceding definition based on his role as a corporate officer managing the day-to-day operations of the corporation. The defendants do not quibble with Lunde's role with the corporations; rather, they advocate the use of a narrow definition of "employer." Essentially, the defendants proffer a definition of "employer" that would include corporate officers only where in ordinary civil litigation similar circumstances would merit the piercing of the corporate veil. The defendants conclude such circumstances are not present in the instant case.

 The court looks to past precedent for guidance in interpreting the FLSA's definition of "employer." In Falk v. Brennan, 414 U.S. 190, 195, 94 S. Ct. 427, 431, 38 L. Ed. 2d 406 (1973), the Court acknowledged the expansive nature of "employer" in the scheme of the FLSA by finding the defendant rental management company an "employer" of maintenance workers employed at the property managed by the defendant. In Karr v. Strong Detective Agency, 787 F.2d ...


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