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Rotax v. Leponto's Hair Styling and Beauty

March 31, 2006

BILL ROTAX PLAINTIFF,
v.
LEPONTO'S HAIR STYLING AND BEAUTY, CULTURE SCHOOL, INC. D/B/A PHILLIPS HAIRSTYLING INSTITUTE, GAIL LIBERATORE, STEVEN C. PHILLIPS, INC., STEVEN C. PHILLIPS, INDIVIDUALLY AND AS OWNER AND OPERATOR OF BOTH CORPORATIONS, DEFENDANTS.



The opinion of the court was delivered by: Howard G. Munson Senior United States District Judge

MEMORANDUM - DECISION AND ORDER

Plaintiff, Bill Rotax, filed a complaint against defendants Leponto's Hair Styling and Beauty Culture School, Inc., doing business as Phillips Hairstyling Institute ("PHI"), Gail Liberatore, the financial aid administrator of PHI ("Liberatore"), Steven C. Phillips, Inc., and Steven C. Phillips ("Phillips") (collectively "defendants"), alleging causes of action for unpaid wages under the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 216 et. seq.,and New York Labor Law, for violations of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), 29 U.S.C. § 1161 et. seq.,and the Employment Retirement Income Security Act ("ERISA"), §§ 404(a)(1) and 502(a)(3)(B), for failing to offer him health insurance after his termination, for fraudulent misrepresentation under New York Labor Law §§ 190, 198 et. seq.,for unlawful employment practices under New York Executive Law § 296(1)(a), and for breach of employment contract and defamation under New York Common Law. See Dkt. No. 1, Compl. Currently before the court are plaintiff's two letter requests and defendants' motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. See Dkt No. 18, Notice of Mot. For the reasons set forth below plaintiff's letter requests are DENIED, and defendants' motion for summary judgment is GRANTED in part and DENIED in part.

BACKGROUND

I. Facts*fn1

In the spring of 1991, plaintiff submitted his resume and a letter of interest to PHI. Dkt. No. 19, Def.'s Statement of Material Facts at ¶ 1. Thereafter, Phillips, PHI's owner and operator, interviewed plaintiff. Id. at ¶ 2. On May 1, 1991, Phillips sent plaintiff a letter bearing an offer of employment, which outlined the relevant terms and conditions of the School Coordinator position offered to plaintiff, including: a $20,800 annual salary; provisions for vacation, sick time, health insurance and one-half reimbursement of tuition for pre-approved continuing education in which plaintiff maintained a "B" or better average; and, a particular start date for the position. Id. at ¶ 3; Phillips Aff. at ¶ 5, Ex. C. The offer also stated: "there will be an [sic] $50 incentive based on students who complete the course."*fn2 Dkt. No. 19, Phillip's Aff. at Ex. C. The offer letter was not binding on plaintiff. Dkt. No. 19, Def.'s Mem. of Law at 2; Brown Aff. at Ex. C, Rotax Dep. at 49.*fn3 Plaintiff accepted the offer and commenced his employment in June 1991. Dkt. No. 19, Def.'s Statement of Material Facts at ¶ 4. Plaintiff served as PHI's School Coordinator until September 10, 1999, when he was discharged due to an alleged "termination of his position" at PHI. Dkt. No. 1, Compl. at ¶ 3.

Plaintiff maintains that he was an hourly, rather than salaried, employee. Pacheco Aff. at ¶ 5. Although at his deposition, plaintiff testified that his job offer had "a salary, slash, per weekly figure" and did not include an "hourly" rate, Dkt. No. 19, Def.'s Mem. of Law at 2; Brown Aff. at Ex. C, Rotax Dep. at 58, plaintiff disputes that this testimony indicates that he was a salaried employee and directs the court's attention to his pay stubs as evidence of the nature of his compensation. Id.; Pl.'s Mem. of Law at Ex. D.

The School Coordinator's job description states, in pertinent part, "The School Coordinator will assist the Director and Financial Aid Director in any way possible to insure [sic] the best educational environment and successful operation of the school." Dkt. No. 19, Def.'s Statement of Material Facts at ¶ 5. As part of his duties, the School Coordinator was expected to answer telephone calls, conduct initial interviews of prospective students, process new students' information, and maintain students' attendance and progress reports. Id. Plaintiff worked as the School Coordinator for nine years. During this period, defendants maintain that plaintiff never assumed any of the Financial Aid Director's duties. Id. at ¶ 6; Brown Aff. at Ex. C, Rotax Dep. at 123. While Plaintiff concedes that he never assumed the formal title of Financial Aid Director, he contends that he performed many of the Financial Aid Director's duties. Pl.'s Statement of Material Facts at ¶ 6. Also during this period, plaintiff received two pay raises, and PHI assumed payment for plaintiff's health insurance in its entirety. Dkt. No. 19, Def.'s Statement of Material Facts at ¶ 7.

During plaintiff's employment, PHI employed, at most, eleven employees. Dkt. No. 19, Def.'s Statement of Material Facts at ¶ 8; Brown Aff. at Ex C., p. 54. Plaintiff concedes that PHI did not employ more than eleven employees at any one time; however, he baldly asserts that between all of Phillip's businesses, he employed at least twenty employees. Pacheco Aff. at ¶ 8, Pl.'s Mem. of Law at 5. PHI maintains that it neither paid its employees overtime nor offered any retirement benefits to them, Dkt. No. 19, Def.'s Statement of Material Facts at ¶¶ 9-10, a contention disputed by plaintiff. Pl.'s Statement of Material Facts at ¶ 9.

On June 4, 1997, a PHI student, filed an unsolicited written complaint with Phillips in which he alleged that plaintiff had harassed him. Specifically, the student alleged that plaintiff called him at home and invited him to attend a barbeque after work/school hours. The student was wary of plaintiff's invitation because he believed that if he were to decline it, plaintiff could use his position at PHI to negatively influence his grades and standing at PHI. Moreover, the student conveyed that plaintiff's behavior toward him made him feel awkward and uncomfortable. Def.'s Statement of Material Facts at ¶¶ 11-13. Phillips investigated the student's complaint and spoke with both the student and plaintiff. Following the investigation, Phillips issued a letter to plaintiff in which he stated that plaintiff's behavior was unacceptable. Id. at ¶ 14. Plaintiff disputes defendant's account of the alleged incident in its entirety and argues that defendants forged the written complaint. Pl.'s Statement of Material Facts at ¶ 11-13.

Defendants move for summary judgment arguing that neither the FLSA nor New York Labor Law required PHI to compensate plaintiff, as an administrative employee earning more than $250 per week, for overtime. Defendants argue that plaintiff cannot recover for breach of employment contract because he was an at-will employee. Furthermore, defendants argue that because PHI employed less than twenty people, it is exempt from COBRA's and ERISA's requirements. Finally, defendants argue that they are entitled to qualified immunity as to plaintiff's defamation claim.

II. Plaintiff's Belated Discovery Requests

Before proceeding further, the court addresses plaintiff's belated letter requests. By letter request dated June 10, 2004, plaintiff's former counsel*fn4 sought the court's permission to subpoena records from the James Howard Wayne Association ("JHWA") in an effort to ascertain the number of people Phillips employed during those years in which Phillips employed plaintiff. Plaintiff's counsel speculated that she "might be able to prove" that Phillips employed at least twenty people. By letter dated July 14, 2004, plaintiff's counsel supplemented her request arguing that it was impossible for her to determine the name of the company she sought to subpoena during discovery.

By letter dated June 17, 2004, defendants opposed plaintiff's request arguing: (1) that all discovery in this matter was closed as of October 31, 2003, see Dkt. No. 7, Uniform Pretrial Order; (2) that there is no reason why plaintiff's counsel could not have made such a request in the normal course of discovery prior to the discovery deadline; and (3) that to permit plaintiff to subpoena records more than seven months after the close of discovery would cause them severe prejudice.

The court finds that there is nothing in the record to suggest that plaintiff could not have utilized the conventional channels of the discovery process to ascertain the name of Phillips' accountants. Plaintiff's explanation hardly merits the court reopening, in effect, discovery. Plaintiff's request for the court's permission to subpoena records from JHWA is DENIED.

By letter request dated June 22, 2004, plaintiff's counsel requested that the court accept a verification of the PHI student who filed the written complaint against plaintiff. Plaintiff's counsel argued that she submitted the verification to the student months ago, before the close of discovery, but that her office did not receive the verification until April 12, 2004. Plaintiff's counsel concedes that the discovery deadline had elapsed by the time of her request. By letter dated June 28, 2004, defendants opposed plaintiff's request arguing: (1) that the verification is irrelevant to the court's consideration of whether Phillips defamed or sexually harassed plaintiff, and (2) that plaintiff's attempt to submit the verification is tardy, with both the deadline for discovery, October 31, 2003, and the deadline for filing any papers in opposition to defendants' motion ...


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