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HARDRICK v. AIRWAY FREIGHT SYSTEMS

August 25, 1999

FRANK HARDRICK, FRANCOIS D. SEETS, ANDRES M. SMITH AND WILLIAM SHANNON, PLAINTIFFS,
v.
AIRWAY FREIGHT SYSTEMS, INC., DEFENDANT.



The opinion of the court was delivered by: Levin, United States Magistrate Judge.

  MEMORANDUM OPINION AND ORDER

At issue before the court are Plaintiffs', Frank Hardrick ("Hardrick"), Francois D. Seets ("Seets"), Andres M. Smith ("Smith") and William Shannon ("Shannon") (hereinafter known collectively as "Plaintiffs"), Motion for Summary Judgment and Defendant's, Airway Freight Systems, Inc. ("Airway"), Cross-Motion for Summary Judgment. For the reasons set forth below, Plaintiffs' motion is granted and Defendant's motion is denied.

FACTUAL BACKGROUND

This is an action pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. Defendant is an employer within the meaning of the FLSA § 3(d), 29 U.S.C. § 203(d) and an enterprise engaged in commerce within the meaning of FLSA § 3(s)(1)(A), 29 U.S.C. § 203(s)(1)(A). At all times material, Airway's operations have been covered by the minimum wage and overtime provisions of the FLSA. (Pl.12(M), ¶ 2; Def. 12(M), ¶ 2.)*fn1

Plaintiffs are former employees of Airway, all of whom were paid on an hourly rate. During the course of their employment, there were numerous workweeks during which Plaintiffs worked for Defendant in excess of forty hours. (Pl.12(M), ¶ 12.) Plaintiffs were compensated at their regular hourly rate of pay for all hours they worked over forty in such workweeks. (Pl.12(M), ¶ 15; Def. 12(M), ¶¶ 15, 22, 28, 31.)

Airway, through its president Ken Campbell ("Campbell"), informed Plaintiff Hardrick, who in turn informed the other Plaintiffs, that overtime (more than forty hours in one workweek) was not required in order to complete their duties and that no "overtime" would be paid. (Pl.12(M), ¶ 13.) In other words, in Airway's view, Plaintiffs' duties were such that they could have been completed during a regular forty-hour workweek. Campbell further informed Plaintiffs that if they wished to work overtime, they could do so with the understanding that they would only be paid at a rate equal to their regular hourly rate. (Pl.12(M), ¶ 14.) The basis for Defendant's policy of paying Plaintiffs their regular hourly rate of pay for hours worked over forty is that it did not require overtime and allowed overtime only if employees agreed to receive their regular hourly rate for such hours worked. (Pl.12(M), ¶ 17.)

Airway did not do any investigation as to whether its policy relating to payment for overtime hours was legal under the provisions of the FLSA. (Pl.12(M), ¶ 19.) Campbell did not consult with an attorney to determine if such an agreement between the employees and himself, whereby the employees would earn their regular rate of pay for hours worked in excess of forty, was legal. (Pl.12(M), ¶ 21.)

Hardrick worked a total of 1535.75 overtime hours during the course of his employment. Seets worked a total of 25.5 overtime hours during his employment. Smith worked 23.5 overtime hours during his employment. Shannon worked a total of 375.75 overtime hours during the course of his employment.

ANALYSIS

I. STANDARD OF REVIEW

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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). See also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has produced evidence to show that it is entitled to summary judgment, the party seeking to avoid such judgment must affirmatively demonstrate that a genuine issue of material fact remains for trial. LINC Fin. Corp. v. Onwuteaka, 129 F.3d 917, 920 (7th Cir. 1997).

In deciding a motion for summary judgment, a court must "review the record in the light most favorable to the nonmoving party and to draw all reasonable inferences in that party's favor." Vanasco v. National-Louis Univ., 137 F.3d 962, 964 (7th Cir. 1998). See also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Nevertheless, the nonmovant may not rest upon mere allegations but "must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). See also LINC, 129 F.3d at 920. A genuine issue of material fact is not shown by the mere existence of "some alleged factual dispute between the parties," Anderson, 477 U.S. at 247, 106 S.Ct. 2505, or by "some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rather, a genuine issue of material fact exists only if "a fair-minded jury could return a verdict for the [nonmoving party] on the evidence presented." Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

  II. THE FAIR LABOR STANDARDS ACT DOES NOT PERMIT THE AGREEMENT
      BETWEEN PLAINTIFFS AND DEFENDANT.

Plaintiffs contend that the United States Supreme Court has consistently held that FLSA rights cannot be waived and that "[t]he duty to pay overtime in conformity with the FLSA is a reflection of Congressional policy by which employees are protected in spite of agreements and/or other actions that would normally be a defense ...


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