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Blahnik v. Box Office Ticket Sales, LLC

United States District Court, N.D. Illinois, Eastern Division

March 28, 2017

PAUL BLAHNIK and ADDISON POPPAS, individually and for all others similarly situated, Plaintiffs,


          John Z. Lee, Judge

         Plaintiffs Paul Blahnik (“Blahnik”) and Addison Poppas (“Poppas”) (together, “Plaintiffs”) brought a class action suit against Defendants Box Office Ticket Sales, LLC, Tickets in Time, LLC, John Urich, and Howard Schwartz (“Defendants”). They claim that Defendants failed to pay them overtime as required by the Fair Labor Standards Act (FLSA), 29 U.S.C. § 207 et seq. One individual-Julius Mosansky (“Mosansky”)-opted in to Plaintiffs' class. Defendants have now moved for partial summary judgment, arguing they should be exempt from the FLSA's overtime pay requirements except in relation to Poppas's employment from 2014 through 2015. For the reasons that follow, Defendants' motion [40] is granted.

         Background [1]

         Box Office Ticket Sales (“BOTS”) is the trade name for an online ticket broker that at all relevant times sold event tickets to consumers. Defs.' LR 56.1(a)(3) Stmt. ¶ 4, ECF No. 41. Among BOTS's offerings were tickets to concerts, sporting events, and the theater. Id.; Pls.' LR 56.1(b)(3)(C) Stmt. ¶ 2, ECF No. 48.[2] When customers called seeking tickets, BOTS's sales representatives searched sites like Ticketmaster and StubHub for tickets to the requested events, purchased them using a company card, and then charged and sent them to the customers. Pls.' LR 56.1(b)(3)(C) Stmt. ¶¶ 22-24. Blahnik, Poppas, and Mosansky each worked for BOTS as sales representatives. Id. ¶¶ 1-2. Blahnik worked for BOTS from July 2013 through July 2015, Poppas from February 2013 through June 2014 and again from November 2014 through April 2015, and Mosansky from October 2012 through July 2013 and again from March 2014 through December 2014. Defs.' LR 56.1(a)(3) Stmt. ¶¶ 6-8.

         During their employment at BOTS, Plaintiffs regularly worked 45 hours per week, Pls.' LR 56.1(b)(3)(C) Stmt. ¶¶ 16-17, although they in some instances worked more, Defs.' LR 56.1(a)(3) Stmt. ¶¶ 10-12. They were compensated by a base salary of $35, 000, bonuses, and commissions based on ticket sales they made. Id. ¶ 9; Pls.' LR 56.1(b)(3)(C) Stmt. ¶ 13. They were not paid overtime. Pls.' LR 56.1(b)(3)(C) Stmt. ¶ 14.

         Their hourly rate of compensation and percentage of compensation based on commissions are relevant to their claims in this case. During Blahnik's period of employment, his base salary provided him a rate of compensation of at least $16.28 per hour. Defs.' LR 56.1(a)(3) Stmt. ¶ 14. Additionally, commissions comprised at least 55.05% of his total compensation during the years he worked for BOTS. Id. ¶ 16. Poppas's base salary provided him a rate of compensation of at least $12.57 per hour during his employment in 2013. Id. ¶ 15. During that year, commissions comprised 50.89% of his total compensation. Id. ¶ 17. Mosansky's base salary provided him a rate of compensation of more than $14.00 per hour. Id. ¶ 13. Commissions comprised at least 56.72% of his total compensation during his years at BOTS. Id. ¶ 18.

         Plaintiffs state that, while working at BOTS, Defendant John Uhrich- BOTS's CEO-“created a companywide policy of refusing to sell tickets to African American callers.” Pls.' LR 56.1(b)(3)(C) Stmt. ¶¶ 16, 26.[3] Uhrich initially instructed Plaintiffs to “hang up the phone whenever a person sounded African American or had an African-American name, especially if that person requested tickets to an event with a predominantly African-American audience (e.g., rap concerts and NBA games).” Pls.' LR 56.1(b)(3)(C) Stmt. ¶ 27. Later, “due to African-Americans calling back after being hung up on, ” Uhrich instructed Plaintiffs to “quote African-American callers ticket prices so highly-inflated that no reasonable person would purchase a ticket.” Id. ¶ 28.

         Legal Standard

         “The court shall 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.” Fed.R.Civ.P. 56(a). To survive summary judgment, the nonmoving party must “do more than simply show that there is some metaphysical doubt as to the material facts, ” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), and instead must “establish some genuine issue for trial such that a reasonable jury could return a verdict in her favor.” Gordon v. FedEx Freight, Inc., 674 F.3d 769, 772-73 (7th Cir. 2012). In reviewing a motion for summary judgment, the Court gives the nonmoving party “the benefit of conflicts in the evidence and reasonable inferences that could be drawn from it.” Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785, 794 (7th Cir. 2013). The Court must not make credibility determinations or weigh conflicting evidence. McCann v. Iroquois Mem'l Hosp., 622 F.3d 745, 752 (7th Cir. 2010).


         Defendants have moved for partial summary judgment as to Plaintiffs' FLSA overtime claims based on the “Commission Salespersons” exemption found in 29 U.S.C. § 207(i). Defs.' Mem. Supp. Summ. J. 2, ECF No. 42. Under this provision, employers are exempt from the FLSA's overtime pay requirements as to certain employees where three conditions are met: (1) the employer must operate (and the employee must work at) a “retail or service establishment”; (2) the regular rate of pay for such an employee must exceed one and one-half times the applicable minimum hourly rate; and (3) more than half of the employee's compensation for a representative period of at least one month must come from commissions on good or services. 29 U.S.C § 207(i); see Alvarado v. Corp. Cleaning Servs., Inc., 782 F.3d 365, 366 (7th Cir. 2015).

         In moving for summary judgment, it is Defendants' burden to establish that the § 207(i) exemption applies. Laouini v. CLM Freight Lines, Inc., 586 F.3d 473, 475 (7th Cir. 2009) (explaining that a defendant moving for summary judgment on the basis of an affirmative defense carries the burden of establishing the defense). Here, there are no genuine disputes of material fact, and in any case, whether the exemption applies is a question of law for the Court to decide. See Roe-Midgett v. CC Servs., Inc., 512 F.3d 865, 869 (7th Cir. 2008) (citing Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986)) (“Determining the duties encompassed by an employee's position is a question of fact; determining the appropriate FLSA classification is a question of law.”); see also Bitner v. Wyndham Vacation Resorts, Inc., No. 13-CV-451-WMC, 2016 WL 7480428, at *17 (W.D. Wis. Dec. 29, 2016) (stating that whether a defendant is a retail or service establishment under § 207(i) is a question of law). Moreover, the Seventh Circuit has stated that the § 207(i) exemption is to be construed against an employer trying to assert it, but only as a tie-breaker in a close case. Mechmet v. Four Seasons Hotels, Ltd., 825 F.2d 1173, 1177-78 (7th Cir. 1987).

         Defendants start by arguing that the second and third conditions for the § 207(i) exemption are satisfied. According to their calculations, Plaintiffs each received a regular rate of pay that exceeded one and one-half times the applicable minimum wage (which is $12.38 per hour) during the relevant time periods, and Plaintiffs each received total earnings in the relevant years more than half of which were made up of commissions. Defs.' Mem. at 5-8; Defs.' LR 56.1 Stmt. ¶¶ 13-18. Plaintiffs do not contest these calculations, Pls.' Resp. Defs.' LR 56.1(a)(3) Stmt. ¶¶ 13-18, ECF No. 47, nor do they dispute that Defendants have satisfied the second and third requirements of § 207(i).

         Instead, Plaintiffs focus their arguments on the first requirement: whether BOTS constitutes a “retail or service establishment.” They argue it does not for three reasons. First, Plaintiffs contend that they worked regular hours, which precludes BOTS from being categorized as a “retail or service establishment.” Pls.' Mem. Opp. Summ. J. 7-10, ECF No. 49. Second, Plaintiffs direct the Court to guidance from the Department of Labor (“Department”) stating that a travel agency lacks a “retail concept.” Id. at 10 (citing 29 C.F.R. § 779.317). Reasoning that BOTS's business is “functionally no different from that of a travel agent, ” Plaintiffs argue that BOTS- like a travel agency-is not a retail establishment. Id. at 11. Finally, Plaintiffs argue that BOTS's purported policy of not selling tickets to African-Americans demonstrates that ...

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