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Ethelbah v. Kona Grill International Inc.

United States District Court, D. Arizona

November 26, 2018

Lisa Ethelbah, Plaintiff,
Kona Grill International Incorporated, et al., Defendants.



         Plaintiff Lisa Ethelbah accuses Defendants Kona Grill International, Inc. and Kona Sushi, Inc. of failing to pay her overtime in violation of the Fair Labor Standards Act (“FLSA”). Before the Court is Defendants' motion for summary judgment. (Doc. 45.) The motion is fully briefed, and the Court held oral argument on October 17, 2018. For reasons that follow, Defendants' motion is denied.

         I. Background

         Defendants hired Plaintiff as their Human Resources Manager in July 2015. (Doc. 46 ¶ 1.) In that capacity, Plaintiff “provided advice and counseling to Kona Grill management”; “conducted extensive audits of Kona Grill's HR documents, policies, and practices”; “conduct[ed] internal investigations regarding employment matters”; “recommended, developed, and conducted training sessions for Kona Grill managers and employees”; “recommend[ed], draft[ed] and implement[ed] HR policies and procedures”; recommended and implemented “a new online employee onboarding and benefits election system”; “manag[ed] and overs[aw] workers' compensation, general liability and unemployment claims against Kona Grill”; “administered Kona Grill's FMLA and medical leave policies”; “administer[ed] Kona Grill's benefits programs”; “provided expert guidance to management regarding compliance with various employment laws”; and made hiring recommendations.[1] (Id. ¶¶ 8, 18, 23, 28, 35, 41, 43, 51, 57, 65, 83-88.) Plaintiff's duties also included data entry. (See Doc. 48 ¶ 98.)

         Plaintiff voluntarily resigned in November 2018. (Doc. 46 ¶ 1.) On November 28, 2016, she presented Defendants with a letter demanding allegedly unpaid overtime wages. (Doc. 46-4 at 63-66.) When Defendants refused to pay the amounts demanded, Plaintiff filed this action.

         II. Legal Standard

         Summary judgment is appropriate if the evidence, viewed in the light most favorable to the nonmoving party, 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). Summary judgment may also be entered “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material if it might affect the outcome of the case, and a dispute is genuine if a reasonable jury could find for the nonmoving party based on the competing evidence. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

         The party seeking summary judgment “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323. The burden then shifts to the non-movant to establish the existence of material factual issues that “can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson, 477 U.S. at 250. If the non-movant fails “to make a sufficient showing on an essential element of her case” the moving party is entitled to summary judgment in its favor on that element. Celotex, 477 U.S. at 323.

         III. Discussion

         Defendants argue that Plaintiff cannot prevail on her claim for unpaid overtime wages because she qualifies for the FLSA's administrative exemption as a matter of law. Under the FLSA, employers must pay their employees one and one-half times their regular rate for work exceeding forty hours per workweek. 29 U.S.C. § 207(a)(1). This overtime requirement does not apply, however, to persons “employed in a bona fide . . . administrative . . . capacity.” 29 U.S.C. § 213(a)(1). Under Department of Labor (“DOL”) regulations, the administrative exemption covers any employee:

(1) Compensated on a salary or fee basis at a rate of not less than $455 per week . . .;
(2) Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and
(3) Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

29 C.F.R. § 541.200(a). These DOL regulations “are explicit prerequisites to exemption, not merely suggested guidelines.” McKeen-Chaplin v. Provident Sav. Bank, FSB, 862 F.3d 847, 851 (9th Cir. 2017) (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, (1960)). Thus, Plaintiff can survive ...

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