United States District Court, N.D. Illinois, Eastern Division
OPINION AND ORDER
H. Lefkow Judge.
Schweninger filed suit against his former employer, Advanced
Vision Technology, Inc. (AVT), alleging violations of the
Fair Labor Standards Act, 29 U.S.C. § 201 et
seq. (FLSA). Cross motions for summary judgment are
pending, and the parties agree that the case can be resolved
on the issue of whether there is a valid Belo contract under
29 U.S.C. § 207(f). If a Belo contract exists, there can
be no violation of the FLSA. For the reasons stated below,
AVT's motion is granted and Schweninger's motion is
a business that deals in printing technology. Schweninger
worked for AVT as a Field Service Engineer (FSE) from
2007-the time AVT acquired his previous employer, GMI-until
he resigned in September 2014. As an FSE, Schweninger worked
on a variety of AVT's product lines, and his job duties
covered a wide range of activities. These duties included:
installing, maintaining, and repairing AVT systems, which
sometimes entailed extensive travel by car or plane to reach
customer locations; consulting with customers, training
customers' employees to use the machines, troubleshooting
problems and providing remote support; and completing routine
paperwork, ordering parts, promoting sales, and attending
trainings. When Schweninger had to travel to customer
locations for installation or repair work, his trips would be
scheduled in advance. The duration of these trips could vary
for any number of reasons, including variations in travel
time, delays in receiving parts, the type of product being
installed or repaired, the customer's employee-training
needs, or a repair or maintenance issue that was not known to
him before he arrived onsite. Schweninger was also regularly
scheduled to be “on call, ” during which times he
would be responsible for addressing customer emergencies
either by phone or through in-person visits. Issues that
would come up when he was on call were “usually just
kind of one off little issues, ” (dkt. 37-5, Ex. 4 at
50:21-22), and “each troubleshooting call was its own
entity . . . . [that] could take a few minutes or an
hour.” (Id. at 53:16-18.)
approximately 2005, GMI switched all the FSEs from salary to
hourly pay. As part of that switch, GMI guaranteed FSEs would
be paid for a minimum of 40 hours per week, even when they
worked fewer than 40 hours. AVT maintained this pay structure
when it acquired GMI in 2007. In January 2009, however, AVT
ran into financial difficulties due to the financial downturn
and began considering modifying the way it paid FSEs. First,
it tried to maintain the same pay structure but with reduced
hourly wages. When that did not alleviate the financial
strain, AVT tried to limit FSEs' overtime, but that
caused customer service to suffer. After further
consideration, AVT came up with three possible solutions: (1)
keeping the same pay structure but further lowering hourly
wages; (2) abolishing the guaranteed minimum weekly pay and
only paying employees for hours worked; or (3) adopting what
is known as a Belo contract, under which the company would
lower hourly wages but also guarantee a minimum weekly pay
equivalent to 40 hours at a regular hourly wage and an
additional 10 hours at an overtime wage equal to one and a
half times the regular wage. AVT, wanting to stabilize its
labor costs while still providing FSEs with a steady,
predictable income, opted to adopt the Belo contract.
informed the FSEs of this change in a letter dated December
10, 2009. The letter explained AVT's reasoning for the
change and laid out the terms of the new pay structure,
including the employee's new hourly wage, overtime wage,
and minimum weekly pay. It further stated that acceptance of
those terms was a condition of continued employment. AVT
asked each employee to sign their letter and return it prior
to the new pay structure taking effect on January 1, 2010.
Schweninger signed his letter and returned it. Schweninger
continued to work for AVT and to be compensated in accordance
with the terms laid out in the December 2009 letter, until he
voluntarily resigned in September 2014.
August 11, 2015, Schweninger filed suit against AVT, alleging
that AVT violated the FLSA's overtime provision, 29
U.S.C. § 201(a), because the new pay structure was not a
valid Belo contract under 29 U.S.C. § 207(f) because it
did not meet two of the four requirements under that
exception (count I). Schweninger additionally alleged that
AVT's violation was willful, thus extending the
applicable statute of limitations for recovery of unpaid
overtime to three years, pursuant to 29 U.S.C. § 255(a)
(count II), and that he, on behalf of himself and a similarly
situated class of plaintiffs, was entitled to liquidated
damages under 29 U.S.C. § 260 (count III). After the
completion of discovery, AVT filed for summary judgment that
the new pay structure was a valid Belo contract. Schweninger
filed a cross-motion for summary judgment on the same issue.
judgment obviates the need for a trial where there is no
genuine issue as to any material fact and the moving party is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
A genuine issue of material fact exists if “the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505,
91 L.Ed.2d 202 (1986). To determine whether any genuine fact
issue exists, the court must pierce the pleadings and assess
the proof as presented in depositions, answers to
interrogatories, admissions, and affidavits that are part of
the record. Fed.R.Civ.P. 56(c). Because the parties agree
that a single issue resolves the case, the court views the
facts in a light favorable to Schweninger. See Scott v.
Harris, 550 U.S. 372, 378127 S.Ct. 1769, 167 L.Ed.2d 686
(2007). It is unnecessary to treat the motions separately.
bears the initial burden of proving there is no genuine issue
of material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In response,
Schweninger cannot rest on bare pleadings alone but must
designate specific material facts showing that there is a
genuine issue for trial. Id. at 324; Insolia v.
Philip Morris Inc., 216 F.3d 596, 598 (7th Cir. 2000).
If a claim or defense is factually unsupported, it should be
disposed of on summary judgment. Celotex, 477 U.S.
Requirements of a “Belo” Contract
207 of the FLSA addresses the maximum time an employer can
require an employee to work during any given week without
being entitled to compensation in excess of the normal hourly
rate, i.e., overtime pay. See generally, 29 U.S.C.
§ 207(a). Subsection (f) of this section, however, makes
an exception for “[e]mployment necessitating irregular
hours of work.” See 29 U.S.C. § 207(f).
In order to qualify for this exception, four requirements
have to be met: (1) the employee is employed pursuant to a
bona fide individual contract; (2) the employee's duties
necessitate irregular work hours; (3) the contract specifies
a regular rate of pay and compensation of not less than
one-and-a-half times that rate for hours in excess of a
maximum workweek (40 hours); and (4) the contract contains a
weekly pay guarantee, based on the specified rates, for not
more than 60 hours of work. Id. “[A]n
employer who invokes the Belo exception has the burden of
showing affirmatively that each of the essential conditions
to the exception are met.” Donovan v. Brown Equip.
& Service Tools, Inc., 666 F.2d 148, 153 (5th Cir.
1982); see also Acton v. City of Columbia, 436 F.3d
969, 976 (8th Cir. 2006); Johnson v. City of Columbia,
S.C., 949 F.2d 127, 129-30 (4th Cir. 1991).
parties do not dispute that their employment contract
specified a regular rate of pay and an overtime rate of
one-and-a-half times the regular rate and that it included a
weekly pay guarantee. (Dkt. 50 ¶ 8.) Thus, the only
questions are whether the contract constituted a bona fide
individual agreement and whether Schweninger's employment
duties necessitated irregular work hours. In interpreting the
terms “bona fide individual contract” and
“necessitate irregular hours of work, ...