Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Acosta v. KDE Equine, LLC

United States District Court, W.D. Kentucky, Louisville

March 30, 2018

R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor PLAINTIFF



         This matter is before the court on cross-motions of the parties for summary judgment. The Plaintiff, R. Alexander Acosta, the Secretary of Labor, U.S. Department of Labor (“DOL”), moves for partial summary judgment (DN 61). The Defendants, KDE Equine, LLC, d/b/a Steve Asmussen Stables (“KDE”) and Steve Asmussen (“Asmussen”), move for summary judgment (DN 62). Fully briefed, these matters are ripe for review. For the following reasons, the court will GRANT IN PART and DENY IN PART the Plaintiff's partial motion for summary judgment. The court will GRANT IN PART and DENY IN PART the Defendants' motion for summary judgment.

         I. BACKGROUND

         Steve Asmussen is a licensed, professional Thoroughbred racehorse trainer. (DN 62, 5, ¶ 3.) Asmussen and his wife own and co-manage KDE, a Thoroughbred horseracing operation. (Id. at ¶ 2.) KDE is a limited liability company with locations in: Lone Star Park, Grand Prairie, Texas; Belmont Park, Elmont, New York; Keeneland Race Course, Lexington, Kentucky; and Churchill Downs, Louisville, Kentucky. (Id. at ¶ 4.) According to Asmussen, KDE is one of the largest Thoroughbred racehorse training and care operations in the United States. (DN 62-1, 11:22-25.) At one point in 2017, Asmussen and KDE were training approximately 180 Thoroughbred racehorses. (DN 61-1, 2, ¶ 6.)

         During the time relevant to this action, KDE employed between 120 and 150 employees in various positions. (Id. at 3, ¶ 12.) Among these employees are “hot walkers” and “grooms.” (Id. at ¶ 13.) Hot walkers walk, and sometimes bathe, the horses after a training session in order to cool them down. (Id. at ¶¶ 14 -15.) Grooms get the horses ready for their training session, which includes tasks such as saddling the horses, administering liniments and poultices, brushing the horses, clipping their nails, and cleaning the stalls. (Id. at ¶ 17.) Additionally, on race days grooms will lead the horses to the track and hot walkers will cool them down after the race. (Id. at 6, ¶ 42.)

         Grooms generally start the work day at 5:00 a.m. and work to around 11:00 a.m. seven days per week. (DN 62-4, 12-13.) Then, grooms come back to work every afternoon from 3:00 p.m. until around 4:30 p.m. (DN 61-4, 13:9-12.) On race days, grooms may work additional hours if they have a horse running. (DN 61-22, 33:6-24.) The parties have agreed that grooms generally work 48.5 - 52.5 hours per week. (DN 61-13, 52; DN 61-1, ¶ 39; DN 67, ¶ 39.)

         Hot walkers also work seven days a week, from 5:00 a.m. until around 10:00 a.m. or 10:30 a.m. (DN 61-4, 9:20-22; DN 61-7, 9:14-16.) In a seven day work week, some hot walkers may also work additional afternoons every other day. Testimony indicates that these afternoon hours are from around 3:00 p.m. or 3:30 p.m. until around 4:30 p.m. (DN 61-4, 10:8-10; DN 61-6, 18:5-10; DN 61-7, 9:22-25.) KDE's hot walkers work approximately 38 - 42.5 hours a week. (DN 61-13, 51 - 52.)

         The parties have agreed that the hot walkers and grooms are both paid a salary. (“Like Plaintiff, Defendants do not dispute that the workers were paid a salary.”) (DN 70, 4.) It is undisputed that the grooms are paid $1, 000.00[1] every two weeks. (DN 61-4, 14:1-3; DN 61-1, ¶ 21; DN 67, ¶ 21.) Hot walkers are also paid on a two week basis. (DN 61-4, 14:6-10.) Payroll records indicate that hot walkers are paid $652.00 per pay period. (Id.; DN 62-20.)

         Additionally, the parties agree that both the grooms and hot walkers are paid extra compensation if they perform additional tasks beyond their normal working duties. (DN 61-1, 4, ¶ 22.) For example, an employee who walks a horse to a race is paid a flat fee of $25.00. (Id. at ¶ 23.) Unloading hay also earns the employee $25.00. (Id.) If the employee does the laundry she earns $100.00. (Id.) These additional forms of compensation are “fixed sums” and not considered part of the employees' salaries. (DN 61-7, 13.) The Defendants, through the testimony of KDE accountant Pete Belanto, testified that these fixed sums would always compensate the employees at a rate of at least time and a half. (DN 61-8, 54:12-23.) However, there is no dispute that employees did not record the actual hours they worked for each task on their time sheets. (DN 62-6, 29-30.)

         The DOL filed an Amended Complaint in this court in January of 2017 for violations of the Fair Labor Standards Act (“FLSA” or “Act”), 29 U.S.C. § 201 et seq. Specifically, the DOL brings claims against KDE and Asmussen under 29 U.S.C. § 206 (“Section 6”) for failing to pay employees the federal minimum wage, 29 U.S.C. § 207 (“Section 7”) for failing to pay employees overtime wages, and 29 U.S.C. § 211 (“Section 11”) for failing to keep adequate and accurate employment records. The DOL moves for partial summary judgment on its Section 7 and Section 11 claims. Additionally, the DOL has moved for liquidated damages and the application of a three-year limitations period. The Defendants have moved for summary judgment on each count in the Amended Complaint.

         II. STANDARD

         A party moving for summary judgment must show 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 moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Additionally, the Court must draw all factual inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A genuine issue for trial exists when “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986). On cross-motions for summary judgment, “the court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration.” B.F. Goodrich Co. v. U.S. Filter Corp., 245 F.3d 587, 592 (6th Cir. 2001) (citing Taft Broadcasting Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991)).


         This action is brought under provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. The Plaintiff alleges that the Defendants violated the FLSA's minimum wage provision (Section 6), maximum hours provision (Section 7), and the provision requiring the maintenance of adequate employee records (Section 11). Under the Act, non-exempt employees are guaranteed a minimum hourly wage of $7.25. 29 U.S.C. § 206. For any work performed in excess of forty hours they are entitled to hourly pay at a rate of one and one-half their regular hourly rate. 29 U.S.C. § 207(a)(1).

         There is no dispute that KDE is an employer subject to the provisions of the FLSA. (DN 59, 2.) Further, the parties have stipulated that that the hot walkers and grooms are non-exempt employees that are required to be paid overtime compensation in addition to a minimum wage. (DN 64, ¶ 2.) Rather, the dispute resides in whether the salaries of the hot walkers and grooms, along with the additional flat-rate compensation paid to employees for specified tasks, complies with the minimum requirements for minimum wage and overtime pay for non-exempt employees under the FLSA. Additionally, the parties dispute the adequacy of KDE's record keeping, the applicable statute of limitations to this action, and the availability of liquidated damages. The court will address each claim in turn.

         A. Section 11

         The Court first will address Section 11 of the FLSA, as the state of the Defendants' employment records is instrumental in determining the outcome of the remaining claims.[2]

         Section 11 of the FLSA states as follows:

Every employer subject to any provision of this chapter or of any order issued under this chapter shall make, keep, and preserve such records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him, and shall preserve such records for such periods of time, and shall make such reports therefrom to the Administrator as he shall prescribe by regulation or order as necessary or appropriate for the enforcement of the provisions of this chapter or the regulations or orders thereunder.

29 U.S.C. § 211(c).[3] Under this provision, an employer is required “to make and keep records of employees' wages and hours, plus other employment conditions and practices.” U.S. Dept.' of Labor v. Cole Enterprises, Inc., 62 F.3d 775, 779 (6th Cir. 1995). The regulations additionally require an employer to “maintain and preserve” employment records indicating, among other information, “[h]ours worked each workday and total hours worked each workweek.” 29 C.F.R. § 516.2(a)(7). Employers are expected to keep payroll records for a period of three years and time sheets for a period of two years. Cole Enterprises, 62 F.3d at 779; see also 29 C.F.R. §§ 516.5(a), 516.6(a)(1).

         The DOL argues that KDE's employment records are neither adequate nor accurate. The burden to keep accurate wage and time records lies with the employer: “[d]ue regard must be given to the fact that it is the employer who has the duty under [Section 11] of the Act to keep proper records of wages, hours and other conditions and practices of employment and who is in position to know and to produce the most probative facts concerning the nature and amount of work performed.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946).

         A review of the employment records produced by the Defendants shows that KDE has produced payroll records for the calendar years of 2012, 2013, and 2014. (DN 61-14, 9 - 71.) They have also produced copies of check stubs for the year of 2015. (DN 61-15 - DN 61-20.) Lastly, KDE has produced time sheets for pay periods in 2014 and 2015 and a handful of undated, handwritten “time notes, ” kept by barn foremen, allegedly recording the grooms' and hot walkers' work and overtime hours. (DN 61-21; DN 61-9; DN 61-10; DN 61-9, 5-7.)

         First, the DOL argues that none of the records produced by KDE indicate the amount of hours that employees worked in 2012 and 2013. As indicated above, the only records produced for the years of 2012 and 2013 were payroll records, as time sheets and paystubs were not produced for these years. (DN 61-14, 9-36.) A closer review of these pay records confirms that the 2012 and 2013 payroll records do not indicate the number of hours worked by each employee. (Id.) The payroll records for these years list a gross amount earned, but do not indicate how the gross amounts were calculated in terms of hours or overtime hours. (Id.) The payroll records produced for the pay periods in 2014, by contrast, list each employee's total hours. (DN 61-14, 36-71.)

         Next, the Plaintiff contends that the available records from 2014 reveal inaccuracies in the employees' hours. By way of example, the DOL directs the court's attention to the time sheet and corresponding payroll record of a particular employee for the pay period ending on April 25, 2014. The payroll record of this employee, Carlos Hernandez (“Hernandez”), indicates that he worked 81 hours for the two-week period ending on April 25 and earned a gross salary of $652.00, the typical salary for a hot walker who works the minimum guaranteed hours. (DN 61-14, 38.) However, Hernandez's time sheet for this pay period reflects different hours. His time sheet shows that between April 12 and April 25, he worked every day from 5:00 a.m. until 11:00 a.m., and then again every afternoon from 3:30 p.m. until 5:00 p.m. for a total of 105 hours. (DN 61-21, 6.) A comparison of other employees' payroll records and time sheets from this same pay period reveals additional inconsistencies.[4]

         Lastly, the DOL argues that the record-keeping practices of KDE are inadequate because KDE does not accurately record the hours that employees spend on the additional tasks, such as laundry, that earn the employees flat-rate fees in addition to their salaries. Despite disagreeing as the whether or not the hours spent working on these additional tasks “would always be less” than the hours for which they were paid, there is no dispute that the actual hours spent on each task were not recorded on the employees' time sheets. (DN 61-8, 54:12-23.)

         The Defendants do not argue that their record-keeping practices are compliant with Section 11 under 29 C.F.R. § 516.2(a)(7), which requires employers to keep records of “[h]ours worked each workday and total hours worked each workweek.” Rather, they respond to the DOL's motion, and simultaneously move for summary judgment, by contending that their record-keeping practices are compliant with Section 11 under an alternative regulation, 29 C.F.R. § 516.2(c). This regulation applies to employees working “fixed schedules” and states that:

With respect to employees working on fixed schedules, an employer may maintain records showing instead of the hours worked each day and each workweek as required by paragraph (a)(7) of this section, the schedule of daily and weekly hours the employee normally works. Also,
(1) In weeks in which an employee adheres to this schedule, indicates by check mark, statement or other method that such hours were in fact actually worked by him, and
(2) In weeks in which more or less than the scheduled hours are worked, shows that exact number of hours worked each day and each week.

29 C.F.R. § 516.2(c). This regulation is an exception to the normal record-keeping obligations under Section 11 and requires less stringent documentation. However, even assuming that the grooms and hot walkers work “fixed schedules” such that the Defendants are entitled to the less onerous standard of record-keeping, the undisputed facts indicate that KDE violated Section 11 of the FLSA under 29 C.F.R. § 516.2(c) for the years of 2012 and 2013. Whether KDE satisfied the requirements of 29 C.F.R. § 516.2(c) in 2014 is a genuine issue of material fact.

         For the calendar years of 2012 and 2013, the only available records of employee hours and wages are the payroll records indicating each employee's gross and net salary for the pay period. A Court has found a similar form of record-keeping to be insufficient. Berrios v. Nicholas Zito Racing Stable, Inc., 849 F.Supp.2d 371, 381 - 82 (E.D.N.Y. 2012) (finding a Section 11 violation when “[t]he Defendants' payroll records merely indicate[d] the employee's name and the amount paid to that individual each week.”)

         Further, the Defendants have not provided any additional 2012 or 2013 employment records which indicate by checkmark, statement, or other method, that each employee adhered to his or her fixed schedule, if the employee did indeed work a fixed schedule. Courts have found that 29 C.F.R. § 516.2(c)(1) requires an affirmative act: “the text requires verification through some affirmative act that the scheduled hours were in fact worked, or if there is actual deviation on the schedule, requires a listing of all hours actually worked.” Nobles v. State Farm Mut. Auto Ins. Co., 2011 WL 3924920 at *4 (W.D. Mo. Sep. 7, 2011.) For the years of 2012 and 2013, KDE has not provided any documentation reflecting an affirmative act.

         KDE has submitted the statements of eight individuals, with names redacted, employed as hot walkers or grooms to support its contention that its employment records are accurate. One such statement reads: “Yes, the hours are accurate with what we work and what they pay.” (DN 67-6, 1.) Another states, “This is all exact and paid with what I work.” (DN 67-6, 3.) While all eight of the statements indicate the employees' beliefs that their salaries accurately reflect the number of hours they work, the statements are otherwise generally vague and the dates of employment for each employee has been redacted. These after-the-fact, generalized statements from eight employees ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.