The opinion of the court was delivered by: Denise Cote, District Judge:
The plaintiffs and defendants have made cross motions for summary judgment in this action brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. The plaintiffs are Garage Managers employed by Garage Management Corp. ("GMC") or related corporate entities. The plaintiffs seek principally to establish the correct method for calculating their overtime pay and the payment of overtime wages for the period before mid-April 2010.*fn1 For the following reasons, the plaintiffs' motion is granted in part and the defendants' motion is denied.
The following facts are undisputed unless otherwise indicated. GMC operates approximately 68 parking garages in New York City and two garages in Hoboken, New Jersey. Each parking garage is run by a Garage Manager, who is responsible for managing all aspects of the garage's operations, including its profitability. They supervise Parking Attendants, who park and retrieve cars and collect money. Garage Managers are themselves supervised by an Area Supervisor, who is responsible for approximately thirty garages.
Garage Managers are regularly scheduled to work five days a week for more than 40 hours per week. Most Garage Managers are regularly scheduled to work about 50 hours per week. Garage Managers use a time clock, which records their hours for each day they work.
Garage Managers are required to make daily drop offs of the cash receipts and related paperwork to a central depot. The drop-off must be witnessed by an employee at a central depot. For at least some Garage Managers the trip to the depot requires travel lasting from 15 to 30 minutes after the Garage Manager has "punched-off" the time clock. In such cases, the time to drop off the cash receipts is not recorded by the time clock.
Prior to mid-April 2010, the payroll records and paystubs for Garage
Managers reflected an hourly rate for straight time wages for all
hours shown on the records created by the time clocks.*fn2
The hourly compensation equaled the number of hours worked
times the hourly wage rate, minus appropriate deductions. As the GMC
Policies and Procedures Manual explained:
Each employee is required to punch in and out on the manual time clock at the beginning and end of their shift. . . .
At the end of each pay period, the manager must add the total hours worked for each employee and record this total on each time card. The manager will then verify the hours worked on the time card v. the scheduled hours on the weekly schedule.
In addition to the compensation for every hour worked, each Garage Manager was also paid a monthly lump sum Extra Compensation bonus called an "EC bonus." The EC bonus was a pre-determined amount for an employee that did not vary from month to month. The amount of an individual's EC bonus was determined from a number of factors including garage assignment, merit increases, garage transfers, promotions and seniority. The amount of the EC bonus did not vary because of the hours worked, but GMC contends that it was more than sufficient to cover payment of any overtime wages due during the pay period.
This action was filed on May 12, 2010. On August 11, the Court authorized notice of a collective FLSA action. Approximately 47 of the currently employed 60 Garage Managers filed consents to join the action. On March 29, 2011, the defendants' motion to dismiss and to compel arbitration was denied. Mclean v. Garage Manage. Corp., 10 Civ. 3950 (DLC), 2011 WL 1143003 (S.D.N.Y. Mar. 29, 2011).
Fact discovery closed on March 23, 2011. In addition to the motions addressed in this Opinion, the plaintiffs have moved to "certify" a class action on plaintiffs' New York Labor Law claims, and the defendants have moved to deny FLSA collective action "certification."*fn3
Summary judgment may not be granted unless all of the submissions taken together "show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination, the court must view all facts "in the light most favorable" to the nonmoving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d Cir. 2008).
When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set out specific facts showing a genuine issue for trial," and cannot "rely merely on allegations or denials" contained in the pleadings. Fed. R. Civ. P. 56(e); see also Wright v. Goord, 554 F.3d 225, 266 (2d Cir. 2009). "A party may not rely on mere speculation or conjecture as to the true nature of the facts to overcome a motion for summary judgment," as "[m]ere conclusory allegations or denials cannot by themselves create a genuine issue of material fact where none would otherwise exist." Hicks v. Baines, 593 F.3d 159, 166 (2d Cir. 2010) (citation omitted). Only disputes over material facts -- "facts that might affect the outcome of the suit under the governing law" -- will properly preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (stating that the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts").
The plaintiffs have moved for partial summary judgment on six issues: (1) Garage Managers are not exempt from the overtime laws since they are "salary basis" employees; (2) GMC did not pay overtime wages to Garage Managers prior to mid-April 2010; (3) the EC bonuses are not overtime wages; (4) to calculate overtime pay, the hourly rate must be increased by apportioning the EC bonus to the hourly rate; (5) Garage Managers must be paid for the time taken to make the daily drop offs of cash receipts; and, (6) that Richard Chapman is an employer.
The defendants have moved for summary judgment on five issues: (1) Section 10 of the Portal-to-Portal Act, 29 U.S.C. § 259(a), provides a good faith defense to the defendants which operates as a complete bar to FLSA liability; (2) Garage Managers are bona fide executives and therefore exempt from the FLSA requirements regarding overtime pay; (3) the EC bonus constituted proper payment of all overtime pay if GMC was required to pay overtime; (4) Garage Managers made the daily drop offs of cash receipts before they "punched-out" on the time clocks and therefore were compensated for this work; and (5) six plaintiffs were not employed after May 12, 2007, and therefore their claims must be dismissed. Since many of the eleven issues raised by the parties overlap, they will be addressed in the seven sections that follow.
GMC contends that it cannot be held liable for any FLSA violation because it relied on a "practice" of the United States Department of Labor ("DOL") that classified Garage Managers as exempt employees. GMC has not shown that it is entitled to summary judgment on this defense.
Beginning in 1988, the DOL conducted multiple investigations of GMC's overtime pay practices for its Garage Attendants. These investigations found violations of the overtime pay regulations and in response to a 1993 DOL investigation GMC agreed to pay back wages to ninety-five Garage Attendants.
During the course of the 1988 investigation, DOL investigator Louis B. Vanegas told GMC's Director of Personnel that Garage Managers were exempt executives.*fn4 At the time of that statement, Vanegas was 22 years old and an apprentice investigator responding to a wage complaint by a GMC Parking Attendant. The status of GMC's Garage Managers was not the central focus of his investigation. In his internal report of the 1988 investigation, Vanegas wrote
Blanket overtime exemption given to managers of all parking garages on the basis that they were paid a guaranteed salary regardless of hours worked and their primary duty was management of the garage in which they worked. Review of mgr's payroll rec'ds indicated that they were paid for at least 40 hrs even when they worked less than 40 hrs, the mgrs supervised at least 2 FT [full time] employees. Vanegas is no longer with the DOL and ...