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Hilda L. Solis, Secretary of Labor, United States Department of v. General Interior Systems

June 1, 2012

HILDA L. SOLIS, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, PLAINTIFF,
v.
GENERAL INTERIOR SYSTEMS, INC.; JEFFERY T. MENTO, INDIVIDUALLY, AND AS PRESIDENT; AND RICHARD MABBETT, INDIVIDUALLY, AND AS VICE PRESIDENT, DEFENDANTS.



The opinion of the court was delivered by: Neal P. McCurn, Senior District Judge

MEMORANDUM-DECISION and ORDER

I. Introduction

Currently before the court in this Fair Labor Standards Act case are motions for partial summary judgment by plaintiff, Hilda L. Solis, Secretary of Labor for the United States Department of Labor ("the Secretary," or "Plaintiff") and defendants, General Interior Systems, Inc. ("GIS"); Jeffery T. Mento, President ("Mento"); and Richard Mabbett, Vice President ("Mabbett"). Both motions are fully briefed and are decided on the submitted papers only, without oral argument.

In her complaint, the Secretary seeks injunctive and monetary relief against Defendants regarding alleged unpaid overtime violations of the Fair Labor Standards Act ("FLSA" or "the Act"). See 29 U.S.C. §§ 201, et seq. By her motion for partial summary judgment pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, the Secretary seeks an order that (1) defendant GIS is an "enterprise" that is "engaged in commerce" for the purposes of the FLSA; (2) defendant Mento is an "employer" within the meaning of the Act; and (3) certain individuals who performed work for GIS who were mis-classified by Defendants as subcontractors are actually "employees" of GIS within the meaning of the Act. Also, by her motion, the Secretary withdraws Mabbett as a defendant to this action. Defendants oppose the Secretary's motion only insofar as they argue that there are questions of fact regarding the status of the workers as employees or independent contractors, precluding summary judgment as to that issue.

By their motion for partial summary judgment pursuant to Rule 56(a), Defendants seek an order (1) dismissing the action against defendant Mabbett; (2) dismissing certain claims that accrued more than two years before this action was commenced; and (3) dismissing certain claims for liquidated damages. Plaintiff opposes so much of the motion that seeks dismissal of claims that accrued more than two years prior to the filing of the complaint and dismissing claims for liquidated damages.

Because both parties seek the dismissal of Mabbett from this action, the pending motions will be granted in that regard. Further, there having been no opposition to Plaintiff's request for an order that defendant GIS is an "enterprise" that is "engaged in commerce" and that defendant Mento is an "employer" for the purposes of the FLSA, and for the reasons set forth by Plaintiff in her memorandum of law, Plaintiff's motion will be granted in that regard as well.

Accordingly, there are three issues that need to be addressed by the court in deciding the pending motions: (1) whether certain of Defendants' workers may be classified as "employees" covered by the FLSA, as Plaintiff argues, or whether they are independent contractors, as Defendants argue; (2) whether Defendants willfully violated the FLSA, such that the claims in this action are subject to a three-year, as opposed to a two-year, statute of limitations; and (3) whether Defendants acted in good faith and with reasonable grounds to believe their actions or omissions did not violate the FLSA, which is relevant to whether and how much liquidated damages are available to the Secretary on her claims in this action.

II. Legal Standard

A motion for summary judgment shall be granted "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). The movant has the initial burden to show the court why it is entitled to summary judgment. See Salahuddin v. Goord, 467 F.3d 263, 272 (2d Cir. 2006) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986)). If the movant meets its burden, the burden shifts to the non-movant to identify evidence in the record that creates a genuine issue of material fact. See id., at 273 (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348 (1986)).

When the court is deciding a motion for summary judgment, it must resolve all ambiguities and draw all reasonable inferences in the non-movant's favor. See Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004) (citing Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598 (1970)). Where, as here, a court is considering multiple motions for summary judgment, each party's motion must be evaluated "on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration." Byrne v. Rutledge, 623 F.3d 46, 53 (2d Cir. 2010) (quotation and citation omitted).

III. Factual Background

GIS is a New York corporation that operates as a construction company located in Liverpool, New York. GIS installs metal stud framing, drywall, acoustical ceilings, and performs carpentry work, including installing doors, hardware, closures, and hinges. Mento is the founder and sole owner and president of GIS. Mabbett, who no longer works for GIS, was an office manager for GIS and held the title of vice president.

The Secretary commenced the present action against Defendants alleging FLSA violations as to approximately 340 individuals whose names are attached to the complaint. See Dkt. No. 1. The parties disagree as to whether some or all of these individuals, who allegedly performed work on GIS projects, were employees covered by the FLSA or instead were independent contractors. Further, many of these individuals were purportedly referred to Defendants from certain labor supply companies, and the parties disagree as to the nature of the agreements and/or relationships between Defendants and these companies.

In addition to unpaid overtime compensation for violations beginning three years prior to the commencement of this action, the Secretary seeks ...


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