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Clark v. Shop24 Global, LLC
Citations: 77 F. Supp. 3d 660; 2015 U.S. Dist. LEXIS 5496; 2015 WL 235201Docket: No. 2:12-cv-802
Court: District Court, S.D. Ohio; January 15, 2015; Federal District Court
The Court addressed the parties' cross-motions for partial summary judgment, granting in part and denying in part the Defendants' motion while denying the Plaintiffs' motion. Joseph Clark, a former employee of Shop24 USA (predecessor to Shop24 Global), was hired in May 2009 to serve as a repair technician for vending machines. He underwent training in Belgium and reported to supervisor Matthew Reckner in the Columbus, Ohio office. Clark's job included a range of responsibilities such as repairing and installing vending machines, training colleagues, responding to customer inquiries, creating user manuals, and managing inventory. His work hours were extensive, averaging 70 hours per week and sometimes reaching 100 hours, despite the employee manual indicating a standard 40-hour work week without guaranteed overtime for exempt employees. In July 2009, Clark questioned his overtime eligibility and classification as an exempt employee, receiving inconsistent responses from Reckner. In June 2010, following the sale of assets to Shop24 Global, Clark retained the same job responsibilities. The Plaintiff worked long hours and, in summer 2011, Shop24 Global hired Anthony Weygandt, whom Clark trained in vending machine maintenance. In early 2012, the Plaintiff began investigating overtime laws under the FLSA and reached out to administrators Setness and Reckner regarding his exempt classification. Reckner, initially unaware of the classification system, later opined that the Plaintiff was exempt due to his job title. Subsequently, Shop24 Global offered the Plaintiff a switch from a salaried position to hourly, which would lower his pay and eliminate his managerial status and bonuses; the Plaintiff opted to remain salaried. In September 2012, while still employed, the Plaintiff filed a Complaint alleging violations of the FLSA and Ohio Minimum Fair Wage Standards Act. Around this time, Shop24 Global hired Leland Palmer to accommodate business growth. During a trip to Oklahoma City, the Plaintiff expressed to his coworkers a desire to "oust or overthrow" management and threatened to destroy his laptop if retaliated against. Weygandt reported these comments to Reckner, who informed CEO Horner. As a result of the Plaintiff's remarks, Horner terminated his employment. The Plaintiff's Third Amended Complaint alleges multiple violations, including misclassification as an exempt employee, retaliation for protected activity under the FLSA, failure to pay overtime wages under Ohio law, and inadequate maintenance of wage records as mandated by the Ohio Constitution. The parties' motions for partial summary judgment are fully briefed and awaiting resolution. Under Federal Rule of Civil Procedure 56, summary judgment is appropriate if the evidence shows no genuine dispute regarding any material fact, entitling the moving party to judgment as a matter of law. The burden lies with the moving party to prove the absence of genuine issues of material fact, often by demonstrating that the nonmoving party lacks sufficient evidence for an essential element of its case. The presence of some factual dispute does not defeat a properly supported motion; only disputes over material facts that could affect the outcome of the case will preclude summary judgment. The nonmoving party must provide significant probative evidence to show more than mere metaphysical doubt regarding material facts. Courts reviewing summary judgment motions do not weigh evidence or assess credibility but must decide if the evidence demonstrates sufficient disagreement to necessitate a jury trial or if it overwhelmingly favors one party. The evidence and inferences must be viewed favorably to the nonmoving party, but a mere scintilla of evidence is insufficient; there must be enough for a reasonable jury to find in favor of the nonmoving party. In this case, the Plaintiff seeks summary judgment on Counts 1, 3, and 4 of his Third Amended Complaint, asserting that undisputed facts reveal the Defendants wrongfully classified him as an exempt employee, denying him overtime compensation owed under the Fair Labor Standards Act (FLSA) and the Ohio Revised Code. Additionally, the Plaintiff contends that the Defendants violated the Ohio Constitution by failing to maintain proper wage and hours records. Defendants seek summary judgment on Count II of Plaintiff's Third Amended Complaint, asserting that Plaintiff fails to demonstrate causation between his protected conduct and his termination. They present three legal arguments: (1) Plaintiff's overtime compensation should be calculated using the fluctuating workweek method; (2) RDO Equipment Co. does not qualify as Plaintiff's "employer" under the FLSA or Ohio law; and (3) Shop24 Global, LLC is not liable for any overtime compensation owed to Plaintiff prior to June 30, 2010, when it acquired assets from Shop24 USA, Inc. In addressing Count One regarding unpaid overtime, Plaintiff claims he was misclassified as an exempt employee under the FLSA, while Defendants contend there is a genuine factual dispute over this classification. Plaintiff argues he is a "blue-collar worker" who serviced large vending machines, and that Defendants cannot prove any applicable exemptions. Defendants counter that significant evidence supports the classification of Plaintiff's job duties as administrative under the FLSA. The determination of exempt status is a fact-intensive inquiry, as outlined in various case laws. Under the FLSA, employees must receive overtime pay for hours worked over 40 per week unless they qualify for specific exemptions, with the classification primarily being a factual question. Exemptions must be interpreted narrowly against employers, who carry the burden of proof to demonstrate that an employee qualifies for such exemptions by providing clear evidence that all criteria are met. Specifically, for the administrative exemption under the Fair Labor Standards Act (FLSA), three criteria must be satisfied: (1) the employee is compensated at least $455 per week; (2) the employee's primary duty involves office or non-manual work related to the employer's management or business operations; and (3) the employee exercises discretion and independent judgment on significant matters. The plaintiff concedes to meeting the first criterion but disputes the second and third. In evaluating the second criterion, courts assess the employee's actual daily tasks rather than relying solely on general job descriptions. Relevant factors include the importance of exempt duties, time spent on exempt work, the employee's level of supervision, and salary comparisons with non-exempt employees. The determination of primary duty must consider all facts, emphasizing the overall nature of the employee's job. To qualify under the second criterion, an employee must perform work that supports the business's operations rather than roles like manufacturing or retail sales. Examples of qualifying work include activities in finance, human resources, legal compliance, and similar functions. The evidence in this case is mixed, indicating that the plaintiff was hired as a technician to service vending machines, which involved extensive training and significant time spent on installation and maintenance, particularly before more technicians were added. The Plaintiff engaged in manual labor on-site and performed repairs and rebuilds of vending machine components in the Defendants’ shop. This supports the Plaintiff’s assertion that his primary role involved manual labor rather than management duties. His work required physical skill and knowledge gained through apprenticeships and training. Conversely, the Defendants argue that the Plaintiff primarily served as their parts and service manager, responsible for overseeing parts inventory, service manuals, customer complaints, employee management, and budget determinations. The Plaintiff also trained and supervised technicians, provided basic customer training, and resolved issues over the phone, occasionally instructing subcontractors on servicing machines. The Defendants classify much of the Plaintiff's work as quality control, which they argue relates directly to management operations. The Plaintiff disputes this characterization, and the central question remains whether his work was directly related to the operation of the Defendants’ business under federal regulations. Federal regulations outline a nonexhaustive list of work related to management or general business operations, including quality control (see 29 C.F.R. 541.201(b)). In this case, the Defendants argue that the Plaintiff's role in customer service, providing training, problem-solving for vending machines, and implementing solutions was vital for their business operations. The Defendants assert that the Plaintiff's work as a service manager was essential to the business's functioning, indicating that summary judgment for the Plaintiff on Count One is unwarranted. Although the Plaintiff spent considerable time on installing and repairing vending machines, evidence shows he also engaged in significant office-related tasks tied to management and business operations. This creates a genuine factual dispute regarding the second element of the administrative employee exemption, which must be decided by a jury rather than the Court. The Plaintiff references Bothell v. Phase Metrics, Inc., where a former hourly employee transitioned to a salaried field service engineer role, but the nature of his work did not change. In Bothell, both parties presented differing views on the plaintiff's primary duties, with the defendant claiming he managed client accounts while the plaintiff argued his main responsibilities were hands-on equipment installation and maintenance. Despite conflicting narratives, the district court ruled in favor of the defendant, determining that the plaintiff's customer service tasks were ancillary to the defendant's primary operations, thus qualifying for the administrative employee exemption. The Ninth Circuit reversed a lower court's ruling, clarifying that customer service work related to products sold is not inherently "administrative" in nature. The defendant’s primary business involves designing, manufacturing, and selling technologically advanced test equipment that requires customer installation, training, and service assistance, which are essential for sales. The court identified two competing narratives regarding the plaintiff's role: one suggesting he functioned as an account manager with minimal manual labor, and the other portraying him as a skilled repairman whose administrative tasks were minor compared to his manual duties. This discrepancy necessitated a fact-specific inquiry to determine the plaintiff's administrative exemption status. The plaintiff argued that his duties were similar to those in Bothell, focusing on installation and maintenance rather than administrative work. However, the court found that the defendant's evidence indicated the plaintiff engaged in accounting, budgeting, purchasing, and personnel management—activities classified as non-manual work tied to business operations. Consequently, both parties faced a factual dispute regarding the plaintiff's primary duties, making a judgment at this stage premature. Furthermore, the court highlighted that evaluating the exercise of discretion and independent judgment is crucial for determining administrative exemption, as it involves assessing various options and making independent decisions, even if subject to higher-level review. The exercise of discretion and independent judgment must extend beyond merely applying established techniques or procedures. The Plaintiff contends that as a repairman, he did not exercise significant discretion, relying instead on training and procedures learned previously. His work was primarily under direct supervision, requiring prior authorization for tasks such as on-site repairs and ordering parts. Conversely, the Defendants argue that the Plaintiff had significant responsibilities, including developing service contracts, selecting suppliers, managing a parts inventory valued at $50,000 to $60,000, determining maintenance responses, negotiating with subcontractors, approving invoices, and contributing to operational guides and hiring assessments. Federal regulations provide criteria for assessing the exercise of discretion, suggesting that the Plaintiff's role as parts and service manager impacted business operations substantially. Evidence indicates that he provided management advice, managed significant financial commitments, and had some independent authority in his duties. The Court finds that the Defendants have established a genuine dispute regarding whether the Plaintiff's primary duties involved significant discretion and independent judgment, leading to the denial of the Plaintiff's motion for summary judgment on Count One of the Third Amended Complaint. The Defendants argue that the Plaintiff qualified for the executive exemption under the Fair Labor Standards Act (FLSA) during his final month of employment in September 2012, asserting that he directed the work of two employees, Weygandt and Parker. The Plaintiff contends he did not meet the criteria for the executive exemption, particularly disputing his authority to direct the work of these employees. Testimonies are contradictory; the Plaintiff claims he had little authority over them, while other evidence suggests they reported to him regularly. This conflicting testimony creates a genuine issue of material fact regarding the Plaintiff's classification, necessitating a jury's determination at trial, leading to the denial of the Plaintiff's Motion for Partial Summary Judgment on this issue. Regarding overtime compensation, the Defendants propose that if the jury finds the Plaintiff does not qualify for the administrative or executive exemption, any owed overtime should be calculated using the fluctuating workweek (FWW) method, citing precedent from Overnight Motor Transp. Co. v. Missel. They argue this allows for half-time compensation for hours worked over 40 per week. The Plaintiff disagrees, asserting entitlement to overtime at one and a half times his regular pay rate as mandated by 29 U.S.C. 207 and arguing that the conditions for the FWW method have not been met. The Defendants counter that the Plaintiff's arguments overlook the legal basis for their position. Defendants argue that Overnight Motor Transp. Co. v. Missel, rather than 29 C.F.R. 778.114, supports their use of the fluctuating workweek (FWW) method for calculating overtime compensation. They assert that Missel allows for this calculation independent of the federal regulation. Under the Fair Labor Standards Act (FLSA), employers must pay employees at least one and one-half times their regular rate for hours worked over forty in a week (29 U.S.C. 207(a)(1)). While the FLSA does not define "regular rate," it is established that this rate is calculated by dividing total remuneration by the total hours worked in a week (29 C.F.R. 778.109). In Missel, the Supreme Court recognized the FWW as a valid method when employees are paid a fixed weekly wage for variable hours. This method allows employers to treat the fixed wage as compensation for all hours worked, including overtime, requiring them to pay only half the regular rate for overtime hours instead of time and a half. The regulation (29 C.F.R. 778.114) also permits salary arrangements for fluctuating hours, provided there is a mutual understanding that the salary covers all hours worked, and the employee receives additional compensation for overtime at a rate not less than half the regular rate. Salary intended to compensate employees at straight time rates for hours worked results in a variable regular rate, calculated by dividing the salary by the total hours worked each week. Overtime pay at one-half of this rate, in addition to the salary, meets legal requirements since the salary already covers straight time for those hours. Courts face challenges applying the fluctuating workweek (FWW) method in Fair Labor Standards Act (FLSA) misclassification cases, with some district courts rejecting its application, while others support it based on regulatory guidance. A third group of appellate courts contends that the regulation does not permit remedial damages, referencing the Missel case as authoritative for applying the FWW method in misclassification contexts. Notably, the Sixth Circuit lacks precedents on this issue. The defendants in this case claim that the FWW method is applicable, asserting that the plaintiff agreed to a fixed weekly wage for fluctuating hours. This claim is supported by the plaintiff's admission of working an average of 70 hours, peaking at 100 hours in some weeks, and the company handbook's acknowledgment of expectations regarding work hours. Employees are required to work more than 40 hours per week as needed to fulfill job responsibilities, with the understanding that substantial extra work may occasionally be necessary. If workload becomes unmanageable with reasonable additional effort, employees should consult their supervisors. Exempt employees do not receive overtime pay for hours worked over 40 per week, as a moderate amount of overtime is factored into their salaried compensation. Evidence from the Plaintiff’s deposition indicates he understood his fixed salary was compensation for fluctuating hours worked without additional overtime pay. However, the Plaintiff challenges this understanding, stating he was uncertain about his pay structure and had been promised bonuses, which raises questions about whether there was a mutual agreement on salary compensation for fluctuating hours. The Court must assess whether the parties had a clear understanding regarding the fixed weekly wage for the fluctuating hours worked, considering both the initial employment agreement and their subsequent conduct. There is no explicit employment agreement presented, but the record shows fluctuating hours were worked, leaving a genuine issue of material fact regarding the agreed compensation structure. The Plaintiff's testimony and the Defendants' Employee Handbook suggest the potential existence of an agreement regarding compensation. However, the Plaintiff's evidence, which includes inquiries about the lack of overtime pay and promises of bonuses, contradicts the notion of a fixed weekly wage for fluctuating hours. This situation is compared to two precedential cases: Umikis-Negro, where the employee accepted fixed pay without protest, allowing for the use of the fluctuating workweek (FWW) method for overtime, and Black, where the employee objected to the lack of overtime pay, leading the court to reject the FWW method for calculating overtime. Given the Plaintiff's repeated questioning of overtime pay and the promise of bonuses, the case aligns more closely with Black, thus denying the Defendants' request for summary judgment on overtime compensation calculation. In Count Two of the Plaintiff's Third Amended Complaint, he alleges retaliation for questioning overtime pay and filing the lawsuit. The Defendants argue for summary judgment, claiming lack of causal connection between the Plaintiff's conduct and his termination, and asserting a legitimate business reason for the firing. The Plaintiff contends he can establish a prima facie case of retaliation and prove that the Defendants' reasons are pretextual. The FLSA prohibits retaliation against employees for exercising their rights, with the McDonnell Douglas burden-shifting analysis applicable to such claims. To establish a prima facie case, an employee must show engagement in protected activity and that the employer was aware of this activity. To establish a prima facie case of retaliation, a plaintiff must demonstrate four elements: (1) engagement in protected activity, (2) an adverse employment action taken by the employer, (3) the timing of the adverse action, and (4) a causal connection between the protected activity and the adverse employment action. If the plaintiff meets this burden, the defendant must then provide a legitimate, non-discriminatory reason for the adverse action. If the defendant does so, the plaintiff must then prove that these reasons are a pretext for illegal discrimination. In this case, the parties dispute the causal connection element. The defendants argue that the plaintiff's protected activity, which occurred in July 2009 when he complained about overtime, is too temporally distant from his termination in September 2012 to establish a causal link. In contrast, the plaintiff points to a more recent protected activity: the filing of a complaint for unpaid overtime on September 4, 2012, followed by his termination three weeks later. He contends that this close temporal proximity is sufficient to establish the necessary causal connection. The court notes that a causal link can be demonstrated through direct or circumstantial evidence, and in some instances, temporal proximity alone can suffice to show causation in retaliation cases. Given that the plaintiff was terminated just three weeks after filing his complaint, this proximity may allow a reasonable juror to conclude that the termination was a direct result of the protected activity. Previous cases have upheld that a causal connection can be satisfied when the adverse action occurs within months or even weeks of the protected activity. The timeline of less than three weeks between the employer's receipt of discrimination charges and the employee's termination suggests a potential inference of discrimination, as established in DiCarlo v. Potter, where a similar timeframe indicated a causal connection for a prima facie case of retaliation. In contrast, Philbrick v. Holder found a five-week gap insufficient to establish such a connection. The Plaintiff argues that his termination was retaliatory, claiming it was linked to his complaints about unpaid overtime and the filing of his lawsuit, rather than the stated reason of insubordination during a dinner in September 2012. The Defendants assert that the Plaintiff's behavior at the dinner, where he made threatening comments about management and indicated destructive intentions towards company property, justified his termination as a legitimate, non-discriminatory reason. The Plaintiff contends that this stated reason is pretextual, aiming to obscure the true motivation behind his dismissal. The evidence presented by the Defendants indicates that after reporting the Plaintiff's conduct, management, having consulted legal counsel, decided to suspend and subsequently terminate him. The court finds that the Plaintiff's insubordinate actions serve as a legitimate basis for his termination, consistent with precedents that recognize insubordination as a valid reason for adverse employment actions. The plaintiff must demonstrate by a preponderance of the evidence that the defendant's reasons for termination were not genuine but rather a pretext for illegal discrimination. This can be shown by establishing that: 1) the proffered reason lacked factual basis, 2) it did not motivate the defendant's actions, or 3) it was insufficient to justify the action. The plaintiff argues that the defendant's rationale for his firing was not genuine, citing Reckner’s deposition, where he stated the plaintiff's behavior at a dinner did not warrant termination and that he only felt personally hurt. However, the court notes that the decision to terminate was made by Honer, the CEO, and there is no evidence to suggest he did not sincerely believe the plaintiff's actions were unprofessional. Reckner’s testimony does not imply that the stated reason for the plaintiff’s firing was a pretext. The plaintiff's only other evidence of pretext is the temporal proximity between his lawsuit filing and his termination, which occurred three weeks later. While temporal proximity can help establish a prima facie case of retaliation, it is insufficient to create a genuine issue of material fact regarding pretext. Several cases cited confirm that temporal proximity alone does not demonstrate that the employer's stated non-discriminatory reason for termination is pretextual. Consequently, the defendant is entitled to summary judgment on the retaliation claim. Additionally, the plaintiff's third count relates to unpaid overtime under the Ohio Minimum Fair Wage Standards Act, which mandates that employers pay employees overtime at a rate of one and one-half times their wage for hours worked over forty in a week, adhering to specific regulations outlined in the Fair Labor Standards Act. Ohio’s wage and hour law aligns with the Fair Labor Standards Act (FLSA) as established in O.R.C. 4111.03(A). The court denies the Plaintiff's Motion for Partial Summary Judgment regarding Count Three, following similar reasoning applied to Count One. In Count Four, the Plaintiff alleges that the Defendants breached the Ohio Constitution by failing to maintain and provide wage and hour records. The Defendants admit they did not track the Plaintiff's hours but argue that their obligation under Article II, Section 34a of the Ohio Constitution depends on whether the Plaintiff was correctly classified as an exempt executive or administrative employee. The Ohio Constitution mandates employers to keep detailed records of wages and hours worked for employees for at least three years and to provide these records upon request. However, an exception exists for employees exempt from overtime pay requirements, as stated in O.R.C. 4111.14(F). A significant factual dispute remains regarding the Plaintiff's classification, which must be resolved before determining if there was a violation of the recordkeeping requirement. Consequently, the Plaintiff's Motion for Partial Summary Judgment on Count Four is also denied. Additionally, Defendants claim that RDO Equipment Co. is not considered an "employer" under the FLSA and the Ohio Minimum Fair Wage Standards Act, seeking summary judgment on all counts based on this assertion. Defendants argue that Defendant RDO Equipment's connection to Defendant Shop24 Global is minimal, asserting that their only link is through shared ownership in a limited partnership that controls Shop24 Global. They claim Marvin Setness, acting as RDO Equipment's agent, lacked substantial control over the plaintiff's employment terms. In contrast, the plaintiff asserts that Setness effectively acted as a second boss, controlling key aspects of his work, including invoice approvals, inventory orders, travel reimbursements, and payroll management. The plaintiff contends that these factors create a genuine issue of material fact regarding RDO Equipment's control over his employment conditions, despite acknowledging he was not integral to RDO Equipment's operations or economically dependent on it. The plaintiff argues that the Defendants’ Motion for Partial Summary Judgment should be denied. The FLSA and Ohio Minimum Fair Wage Standards Act define "employer" broadly, emphasizing the economic realities of the relationship between the parties. Courts assess this relationship based on several factors, including the plaintiff’s role in the employer's operations, economic dependence, control over employment terms, hiring authority, and maintenance of employment records. Ultimately, the classification of an entity as an employer under the FLSA is a legal question, not a factual one. The Plaintiff acknowledges a lack of evidence indicating that Defendant RDO Equipment had the authority to hire or fire him, yet contends that it exercised significant control over his work conditions. The evidence shows that Setness, an alleged agent of RDO Equipment, supervised the Plaintiff's procurement of parts and travel expenses. For purchases exceeding a few thousand dollars, the Plaintiff needed Setness's approval to process payments, which Setness executed for approved invoices. Setness frequently communicated with the Plaintiff to track the work hours of other employees for payroll purposes. Despite this, evidence does not support a finding that RDO Equipment had substantial control over the Plaintiff's work terms. Setness lacked hiring or firing authority and could not modify the Plaintiff's pay, schedule, or responsibilities. The administrative tasks performed by Setness do not equate to control over the Plaintiff's work conditions. The factors considered—including the Plaintiff's lack of integration into RDO Equipment's operations, economic independence, and RDO Equipment's limited control—indicate that RDO Equipment was not the Plaintiff's employer. Consequently, the Court grants summary judgment in favor of Defendant RDO Equipment on all claims in the Plaintiff's Third Amended Complaint. Regarding successor liability, the Defendants assert that Defendant Shop24 Global is entitled to summary judgment concerning the Plaintiff's overtime claims prior to June 30, 2010, based on an asset purchase agreement with Defendant Shop24 USA, which explicitly stated that Shop24 Global would not assume any liabilities not listed in the agreement, except for $8,822 in backpay owed to the Plaintiff. Under Ohio law, the Defendants claim the transfer agreement is enforceable, asserting that Defendant Shop24 Global is not liable for overtime compensation prior to June 30, 2010. The Plaintiff argues for the applicability of successor liability despite the asset purchase agreement between Defendant Shop24 USA and Defendant Shop24 Global, asserting that the continuity between the two entities supports this liability. The Defendants counter that the Plaintiff failed to raise the successor liability argument earlier, thus procedurally defaulting on it, and contend that the Plaintiff should have amended the complaint under Rule 15(a). The Court must determine if the Defendants were aware of the Plaintiff's successor liability theory before the response to the summary judgment motion. While the Third Amended Complaint does not explicitly mention successor liability, the Plaintiff's ongoing claims for overtime from September 2009 to September 2012, despite the asset transfer, suggest the Defendants had notice of this theory. The Defendants' motion for summary judgment implies recognition of the Plaintiff's potential claims under successor liability, indicating they were not unfairly surprised by the argument. Consequently, the Plaintiff's reliance on successor liability is deemed appropriate as the allegations provided sufficient notice to the Defendants. The Sixth Circuit has not definitively ruled on the applicability of successor liability under the Fair Labor Standards Act (FLSA), but it has adopted the federal common law of successor liability in employment law, as established in Thompson v. Bruister. Other circuit courts have uniformly supported applying successor liability within the FLSA context. Specifically, the Seventh and Ninth Circuits have endorsed this application, viewing it as a logical extension of existing case law. The court agrees that successor liability is appropriate in FLSA cases, particularly due to the FLSA's remedial purposes, which necessitate a broader definition of "employer" than traditional common law allows. In cases where successor liability is at issue, the Sixth Circuit assesses the equity of imposing such liability based on a balance of interests among the defendant-employer, plaintiff-employee, and federal policy objectives. Relevant factors for this evaluation include whether the successor company had notice of the charges, the predecessor's ability to provide relief, continuity of business operations, and similarities in workforce and supervisory personnel. In this specific instance, the limitations in the asset transfer agreement do not govern when federal standards of successor liability apply, meaning that conditions set forth in the agreement, which exempt Thomas & Betts from assuming certain liabilities, are not controlling under federal law. Key factors for determining successor liability include: the existence of the same jobs under similar working conditions, the use of the same machinery and production methods, and the production of the same products. Each factor may not be relevant in all cases, with the overarching question being whether imposing legal obligations is equitable and aligns with federal policy. In this case, the Plaintiff acknowledges that Defendant Shop24 Global was unaware of the lawsuit when it acquired assets from Defendant Shop24 USA on June 30, 2010. However, the insolvency of Defendant Shop24 USA and its inability to pay the Plaintiff’s salary support the argument for successor liability, as it suggests the predecessor cannot fulfill any potential compensation owed to the Plaintiff. The asset transfer agreement further indicates that Defendant Shop24 USA lacks assets to cover any damages. Evidence shows that the Plaintiff's job responsibilities, working conditions, and supervision remained unchanged post-transfer, and Defendant Shop24 Global continued the same operational practices and product offerings as Defendant Shop24 USA. Although some facts are disputed, there is enough evidence to suggest a genuine issue regarding the successor liability of Defendant Shop24 Global, leading to a denial of their summary judgment request concerning the Plaintiff's Fair Labor Standards Act (FLSA) claim prior to June 30, 2010. Regarding the Plaintiff's claim for unpaid overtime under the Ohio Minimum Fair Wage Standards Act, the federal standard for successor liability does not apply. Ohio law generally exempts asset purchasers from the seller's debts unless specific exceptions are met, including the buyer’s agreement to assume liabilities, transactions resembling a merger, continuation of the seller's business, or fraudulent intent to evade obligations. The Defendants argue that Defendant Shop24 Global should not be liable for Defendant Shop24 USA's obligations as no such assumption was made in their asset transfer agreement. The court has denied the plaintiffs' motion for partial summary judgment and granted, in part, the defendants' motion for partial summary judgment. The defendants in the case are Shop24 Global, LLC; Shop24 USA, LLC; and RDO Equipment Co., with a key dispute regarding whether RDO Equipment Co. employed the plaintiff. The plaintiff identifies Setness as the "controller" for RDO Equipment Co. and Shop24 Global, while the defendants refer to him as Shop24 Global's “payroll administrator.” Setness's affidavit indicates he is employed by R.D. Offutt Company, with his salary allocated to PROffutt Limited Partnership, which owns Shop24 Global, LLC. The court discusses the classification of the plaintiff as an exempt employee under the Fair Labor Standards Act (FLSA), referencing the administrative-production dichotomy established by the Sixth Circuit. This distinction differentiates between production employees, who generate the product or service, and administrative employees, whose work supports the employer's principal production activities. The parties have not adequately addressed the defendants’ principal production activity in their arguments, making the dichotomy of limited relevance. Defendant Shop24 Global describes its primary activity on its website as providing automated convenience stores, which may suggest the plaintiff's work could be classified as production. However, the record indicates the plaintiff may have performed both types of work, leading to a factual dispute regarding his primary duties. The plaintiff contends he is entitled to recover damages under a three-year statute of limitations due to the defendants' alleged knowing and willful violation of the FLSA and seeks liquidated damages, arguing the defendants cannot prove their violation was in good faith. A genuine issue of material fact exists regarding whether the Defendants correctly classified the Plaintiff as an exempt employee, preventing the Court from addressing certain related issues. The Plaintiff contends he did not meet the second element of the executive employee definition, but there is no dispute regarding his primary job duties, which did not involve managing the enterprise or a recognized department. The Plaintiff's initial motion for summary judgment focused solely on the third element of the executive exemption and failed to address the second element, which the Court will not consider since new arguments raised in a reply brief can deprive the opposing party of the opportunity to respond. The Defendants cite Fegley v. Higgins to support their argument for using the fluctuating workweek (FWW) method for calculating overtime if the Plaintiff is found misclassified; however, the Court disagrees, noting that Fegley did not involve a misclassified employee and did not address relevant regulations. The Sixth Circuit has approved the FWW method for overtime compensation but has not addressed its application in retroactive calculations for misclassified employees. The Plaintiff references criteria from Rainey v. American Forest and Paper Association for applying the FWW method, emphasizing the need for a clear mutual understanding between the parties. The employee must meet five criteria for a fluctuating workweek arrangement: 1) hours must vary weekly; 2) the employee receives a fixed salary regardless of hours worked; 3) the salary must provide an average hourly wage exceeding minimum wage; 4) the employee must receive additional compensation for overtime. The Plaintiff concedes that the first four criteria are met but argues that the fifth is not satisfied. Consequently, the fluctuating workweek does not apply. In retaliation claims, Sixth Circuit precedent indicates that temporal proximity alone is insufficient to establish causation, as established in Nguyen v. City of Cleveland. However, in Mickey, the court found that close timing between an adverse action and an employer's knowledge of protected activity can establish a causal connection. Later Sixth Circuit cases have aligned with this interpretation, despite some panels maintaining the temporal proximity limitation. The Defendants did not reference these cases to argue against causation in the Plaintiff's termination. The Plaintiff's assertion that Reckner felt merely "hurt" by his comments is countered by Reckner's testimony of feeling threatened. Regarding employment records, while Setness allegedly maintained some records and had a role in payment methods for Shop24 Global employees, he lacked authority to alter the Plaintiff's pay rate. Additionally, the Plaintiff's claim that Setness acted as Clark's employer is unsupported due to a lack of response to an inquiry about exempt classification under the FLSA, leaving no admissible evidence for that assertion. The fifth factor's mixed nature does not favor the Plaintiff when considered alongside four other relevant factors. The first factor, concerning whether Defendant Shop24 Global was aware of the charge at the time it acquired Defendant Shop24 USA’s assets, is deemed irrelevant since the lawsuit was filed two years post-acquisition. A more pertinent consideration is whether Defendant Shop24 Global was aware of the Plaintiff's potential claims for unpaid overtime at the time of the asset acquisition. Evidence suggests that Defendant Shop24 Global may have had such notice, as the Plaintiff raised concerns about unpaid overtime and his exempt classification under the FLSA during his employment with Defendant Shop24 USA, prior to the transfer. Given the continuity in operations between the two entities, it is reasonable to conclude that Defendant Shop24 Global was likely aware of the Plaintiff's potential claims at the time of the acquisition.