From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
Aug. 8 — Resident caretakers for a motel in Tennessee aren't entitled to the federal minimum wage or overtime pay because they didn't work for a large-enough enterprise or engage in the sort of workplace duties that would make them eligible, a federal judge ruled ( Davis v. Patel , 2016 BL 254579, M.D. Tenn., No. 3:14-cv-764, 8/5/16 ).
Fair Labor Standards Act coverage applies broadly to all workers at a particular business if it meets a revenue threshold, or narrowly to individual workers whose duties include certain characteristics, Judge Aleta A. Trauger wrote Aug. 5 for the U.S. District Court for the Middle District of Tennessee. Plaintiffs Michael and Janice Davis aren't eligible under either condition, she said.
The FLSA applies to all employees of businesses that exceed $500,000 in annual revenue. This is called “enterprise coverage,” said John Ho, a management-side attorney at Cozen O'Connor who wasn't involved in the case. “If your annual volume of business is $500,000 or over, everyone is in, period,” he said. “It doesn’t matter what specific individuals do. Every employee that works for that enterprise” is covered, unless an exemption applies, he told Bloomberg BNA Aug. 8.
“If, for whatever reason, a business doesn’t meet that annual dollar threshold,” the FLSA may apply “if the particular person bringing the lawsuit is engaged in interstate commerce,” Ho said. This is called “individual coverage,” he said.
Individual coverage applies when workers “regularly and recurrently use instrumentalities of interstate commerce in the course of their work,” Trauger wrote.
“It’s the unusual case where the coverage issue becomes the issue,” Andrew Naylor, an attorney for defendant Rest Haven Motel, told Bloomberg BNA Aug. 8. “You usually aren’t fighting over that,” he said.
Michael and Janice Davis conceded the Goodlettsville, Tenn., motel didn't satisfy the revenue threshold for enterprise coverage, Trauger said. They contended they engaged in commerce by processing credit card payments from guests that operated on interstate financial systems.
The Davises also said they engaged in interstate commerce when they registered guests to stay in the motel. Out-of-state visitors were particularly fond of renting its rooms by the hour, they said.
The Davises' contention that processing payments qualified as interstate commerce wasn't persuasive because they could recall doing this only one time, the judge wrote. Rooms were paid for mostly in cash, Janice Davis said in a deposition.
The hotel didn't maintain records with names or home addresses for its hourly customers, Trauger said. Without a log, it was “mere speculation” that the Rest Haven rented rooms to out-of-state guests by the hour, she said.
Attorneys for the Davises didn't immediately respond to Aug. 8 requests for comments.
Castelli & Knox LLP and Grace Law represented the Davises. Waller Lansden Dortch & Davis LLP represented the hotel.
To contact the reporter on this story: Jon Steingart in Washington at email@example.com
To contact the editor responsible for this story: Susan J. McGolrick at firstname.lastname@example.org
Text of the opinion is available at http://www.bloomberglaw.com/public/document/Davis_et_al_v_Patel_et_al_Docket_No_314cv00764_MD_Tenn_Mar_17_201/2.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)