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Allen v. Enabling Technologies Corp.

United States District Court, D. Maryland

August 11, 2016

WAYNE ALLEN et al. Plaintiffs
v.
ENABLING TECHNOLOGIES CORP. Defendant

          MEMORANDUM

          William M. Nickerson Senior United States District Judge

         On December 30, 2014, Plaintiffs Wayne Allen and Howard Cable filed a Complaint against their former employer, Defendant Enabling Technologies Corp. ECF No. 1. Plaintiffs’ three-Count Complaint alleges violations of 1) the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq.; 2) the Maryland Wage and Hour Law (MWHL), Md. Code Ann., Lab & Empl. § 3-401 et seq., and 3) the Maryland Wage Payment and Collection Law (MWPCL), Md. Code Ann., Lab & Empl. § 3-501 et seq. Id. Now pending before the Court is Plaintiffs’ Motion for Summary Judgment, [1] ECF No. 27; Defendant’s Cross-Motion for Summary Judgment, ECF No. 33; Defendant’s Motion for Leave to File Amended Answer, ECF No. 31; Plaintiffs’ Motion to Strike, ECF No. 41; and Defendant’s Motion for Leave to File Reply Memorandum in Excess of Twenty-Five Pages, ECF No. 42. Upon a review of the pleadings and the applicable case law, the Court determines that no hearing is necessary. Local Rule 105.6. For the reasons set forth below, the Court will deny Plaintiffs’ Motion for Summary Judgment, deny Defendant’s Cross-Motion for Summary Judgment, grant Defendant’s Motion for Leave to File Amended Answer, deny Plaintiffs’ Motion to Strike, and grant Defendant’s Motion for Leave to File Reply Memorandum in Excess of Twenty-Five Pages.

         I. Background

         Defendant Enabling Technology Corp. (ETC) is a Maryland corporation with its principle place of business in Glen Arm, Maryland. Defendant specializes in information technology (IT) services. According to ETC’s founder and President, Bill Vollerthum, the corporation provides unified communications and unified messaging solutions, [2] including information technology infrastructure, objective strategic assessment, design, planning, and implementation to a variety of clients throughout the United States. Vollerthum Affidavit ¶ 3, ECF No. 33-4. Defendant employs Support Engineers, also referred to as Messaging Engineers, Unified Messaging Engineers, and Unified Communications Engineers, to provide customer support and update client IT systems. ECF No. 33-2 at 5. Support Engineers generally have a technical background in the IT, software, and/or computer science fields. Vollerthum Affidavit ¶ 6, ECF No. 33-4.

         Plaintiffs worked for Defendant as Messaging Engineers. ECF No. 27-3 at 1.[3] Plaintiff Wayne Allen worked for Defendant from September 4, 2012, until approximately December 1, 2014. ECF No. 1 ¶ 8. Allen worked remotely from his home in Florida. Allen’s base salary was $52, 500 and that salary increased to approximately $55, 125 in October of 2013. ECF No. 33-8 ¶ 11. On or about November 28, 2014, Allen was terminated. ECF No. 33-4 ¶ 20. Plaintiff Howard Cable worked for Defendant from December 14, 2009, until August of 2014. ECF No. 1 ¶ 8; ECF No. 33-2 at 10. Cable worked in Defendant’s Maryland office two days a week, and worked the rest of the week remotely from his home office. ECF No. 33-8 ¶ 9. Cable’s base salary was $63, 000 and increased to $66, 780 in April of 2011, $70, 787 in April of 2012, and $74, 326.35 in October of 2013. ECF No. 33-8 ¶ 5. On August 13, 2014, Cable was terminated. ECF No. 33-4 ¶ 16.

         The regular work schedule for ETC employees such as Plaintiffs was Monday through Friday from 8:30 a.m. until 5:00 p.m. ECF No. 33-2 at 7. Once every four to six weeks, ETC employees took turns working on call in addition to their regular schedule. During an on call week, employees were obligated to respond to work requests from 5:00 p.m. to 8:30 a.m. Monday through Thursday and from 5:00 p.m. Friday through 8:30 a.m. Monday. In order to perform on call duties, ETC employees needed ready access to their cell phone and email. ECF No. 33-4 ¶ 8. As extra compensation for on call weeks, employees received a lump sum payment of $350-$400. ECF No. 1 ¶ 9.

         The crux of Plaintiffs’ Complaint is that, pursuant to the FLSA and MWHL, Defendant was obligated to compensate Plaintiffs at the overtime rate of one-and-one-half times their regular rate for all hours worked in excess of forty hours per week, and that Defendant’s failure to do so was willful and intentional, and was not in good faith. Plaintiffs request unpaid overtime wages under the FLSA and MWHL, liquidated damages in an amount equal to their unpaid overtime wages under the FLSA and MWHL, treble damages under the MWPCL, interest, costs, and attorney’s fees.

         The following two issues are pertinent to the parties’ motions for summary judgment: 1) whether Plaintiffs were properly classified as exempt from the FLSA’s overtime pay requirements pursuant to exemptions found at 29 U.S.C. § 213(a)(1) and/or 29 U.S.C. § 213(a)(17); and 2) if Plaintiffs were misclassified, how many hours of overtime Plaintiffs worked during their tenures at ETC.[4] As to classification, Plaintiffs argue that they did not perform the type of high level work that is exempt from the overtime pay requirements of the FLSA and MWHL. In response, Defendant argues that due to Plaintiffs’ salaries, skill levels, and primary duties, they were properly classified as exempt employees, ineligible for overtime pay. As to the number of overtime hours worked, Plaintiffs claim that they worked an average of 60 hours per week, 50.5 hours during regular work weeks and 92 hours during on call weeks. ECF No. 27-3 ¶ 9. In response, Defendant argues that Plaintiffs worked 40 hours during regular work weeks and 50 to 60 hours during on call weeks. ECF No. 33-2 at 9.

         II. Discussion

         A. Defendant’s Motion for Leave to File Amended Answer

         On February 29, 2016, Plaintiffs filed a Motion for Summary Judgment, in which they asserted that by “failing to plead the ‘computer professional’ defense as part of its Answer or Amended Answer, Defendant has waived its right to raise the affirmative defense that Plaintiffs were exempt computer professionals.” ECF No. 27-3 at 6. In response to that motion, on March 11, 2016, Defendant filed a Motion for Leave to File Amended Answer pursuant to Federal Rule of Civil Procedure[5] 15(a)(2).[6] ECF No. 31. Defendant asserts that Plaintiffs were properly notified that it planned to raise an FLSA exemption defense and that, assuming arguendo that the exemption defense was not properly raised, Plaintiffs cannot show prejudice or unfair surprise which would support a finding of waiver. ECF No. 31-1 at 7.

         According to Rule 8(b)(1)(A), “[i]n responding to a pleading, a party must: state in short and plain terms its defenses to each claim asserted against it.” Additionally, under Rule 8(c)(1), “[i]n responding to a pleading, a party must affirmatively state any avoidance or affirmative defense.” A defendant’s failure to sufficiently plead an affirmative defense may result in the waiver of such defense. RCSH Operations, LLC v. Third Crystal Park Associates LP, 115 Fed. App’x 621, 629 (4th Cir. 2004). “[T]he application of an exemption under the Fair Labor Standards Act is an affirmative defense.” Corning Glass Works v. Brennan, 417 U.S. 188, 196-197 (1974). Under Affirmative Defenses, Defendant’s Amended Answer[7] asserts:

20. The Complaint in its entirety fails to state a claim upon which relief may be granted.
21. Plaintiffs’ claims are barred by the statute of limitations.
22. All actions taken by the Defendant with respect to the Plaintiffs were taken completely in good faith with high regard for the rights of the Plaintiffs.
23. Plaintiffs were paid in accordance with the law.

ECF No. 12 at 3.

         In regards to paragraph 23, Plaintiffs assert that this “vague, general denial gave [them] no insight as to whether Defendant would assert a claim for exemption in its defense.” ECF No. 32 at 2. With regards to the same paragraph, Defendant asserts that Plaintiffs were properly notified of its contention that they were exempt from the overtime pay provisions of the FLSA. ECF No. 31-1 at 6-7. In support of this contention, Defendant cites Hanzlik v. Birach, a case where the court, in considering the affirmative defense that the plaintiff “was exempt from the FLSA’s overtime requirements, ” found that the plaintiff was adequately put on notice that the defendant intended to prove that the plaintiff was not covered by the FLSA. Civil No. JCC-09-221, 2009 WL 2147845, at *2-4 (E.D. Va. July 14, 2009). The court opined that “[f]orcing a defendant to cite each and every applicable statute and regulation that may support an FLSA exemption at the answer stage would be contrary to the spirit of Rule 8” and that “[t]he matter can be fleshed out through discovery.” Id. at 4. Defendant’s assertion that “Plaintiffs were paid in accordance with the law” is another way of saying “Plaintiffs were exempt from the FLSA.” This Court agrees with the court’s above-cited sentiment in Hanzlik.

         The Court need not decide whether Defendant sufficiently pled an FLSA exemption, however, because Plaintiffs have not demonstrated prejudice due to Defendant’s alleged pleading failure.[8] “Failure to raise an affirmative defense until the summary judgment phase of a case does not waive the defendant’s ability to assert the defense absent a showing of prejudice to the plaintiff.” Cornell v. Council of Unit Owners Hawaiian Vill. Condominiums, Inc., 983 F.Supp. 640, 642-643 (D. Md. 1997). Plaintiffs cannot show prejudice because the primary issue focused on throughout discovery was whether they were properly classified as exempt employees under 29 U.S.C. § 213(a)(1) and 29 U.S.C. § 213(a)(17). See ECF No. 31-1 at 7-16. Further, Plaintiffs’ Motion for Summary Judgment sufficiently contemplates and responds to those exemptions.

         The applicability of an exemption is the principle issue in this matter; whether or not an exemption applies governs all other issues raised in the parties’ motions for summary judgment. Plaintiffs’ attempt to avoid the threshold issue and suggestion that form should prevail over substance is contrary to the federal policy of resolving cases on the merits. Conley v. Gibson, 355 U.S. 41, 48 (1957). The Court will grant Defendant’s motion, and allow Defendant to amend its Amended Answer in order to expressly state its affirmative defense that Plaintiffs were properly classified as exempt employees pursuant to 29 U.S.C. § 213(a)(1) and/or 29 U.S.C. § 213(a)(17).

         B. Plaintiffs’ Motion to Strike and Defendant’s Motion for Leave to File Reply ...


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