The opinion
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
HARRISON DIVISION
BENJAMIN FOLTA PLAINTIFF
V. CASE NO. 3:21-CV-3038
NORFORK BREWING COMPANY
and JASON AAMODT DEFENDANTS
MEMORANDUM OPINION AND ORDER
Now before the Court are a Motion for Summary Judgment (Doc. 40) filed by
Defendants Norfork Brewing Company (“NBC”) and Jason Aamodt and a Motion for
Partial Summary Judgment (Doc. 38) filed by Plaintiff Benjamin Folta. Both Motions are
fully briefed and ready for decision.1
Defendants’ Motion for Summary Judgment argues the Court should find as a
matter of law that Mr. Folta did not regularly engage in interstate commerce while working
for NBC, so he is not entitled to individual coverage under the Fair Labor Standards Act
(“FLSA”).2 Defendants contend that although Mr. Folta, in his capacity as Brewer for
NBC, engaged in interstate commerce to some limited degree—by placing a few online
1 In considering Defendants’ Motion (Doc. 40), the Court also reviewed Defendants’ Brief
in Support (Doc. 42) and Statement of Facts (Doc. 43); Mr. Folta’s Response (Doc. 48)
and Statement of Facts (Doc. 49); and Defendants’ Reply (Doc. 51). In considering Mr.
Folta’s Motion (Doc. 38), the Court reviewed Mr. Folta’s Brief in Support (Doc. 39) and
Statement of Facts (Doc. 41); Defendants’ Response (Doc. 45), Brief (Doc. 46), and
Statement of Facts (Doc. 47); and Mr. Folta’s Reply (Doc. 50).
2 An employee is covered under the FLSA if he works for a business engaged in interstate
commerce with an annual gross volume of sales of at least $500,000.00 (“enterprise
coverage”), 29 U.S.C. §§ 207(a), 203(s)(1), or if the employee’s work—regardless of the
size of his employer—requires him to regularly engage “in commerce or in the production
of goods for commerce” (“individual coverage”), 29 U.S.C. § 206 (a). Here, Mr. Folta has
conceded that NBC’s annual gross volume of sales is insufficient to qualify him for
enterprise coverage. He believes he is entitled to individual coverage.
orders, traveling out of state on occasion, and communicating with Mr. Aamodt about
business matters via text message and telephone—these tasks are not enough to
establish Mr. Folta’s regular use of interstate commerce and make his employment
subject to the requirements of the FLSA.
Mr. Folta’s Motion for Partial Summary Judgment asks the Court to find that during
his tenure as Brewer, he was not paid on a “salary basis” as that term is defined at 29
C.F.R. § 541.602(a) from at least December 2018 until June 2019. Mr. Folta argues that
in order to claim an exemption from the FLSA’s minimum wage and overtime
requirements, Defendants bear the burden of proving that he qualified as an executive,
administrative, or professional employee. Exempt employees are paid a salary and are
not entitled to overtime compensation. 29 U.S.C. § 213(a). The regulations define “salary
basis” as the payment of a regular, predetermined amount each pay period. See 29
C.F.R. § 541.602(a). Mr. Folta contends there is no genuine, material dispute that
Defendants failed to pay him a regular, predetermined amount each pay period through
June 2019, so his job could not qualify as exempt during that time.
As for the period from June 26, 2019, until the date of his last paycheck, February
25, 2021, Mr. Folta concedes it is arguable that he was paid on a consistent, salary basis
of $1,300.00 biweekly, which equates to $650.00 per week. However, Mr. Folta points
out that effective January 1, 2020, exempt employees performing executive,
administrative, or professional work were required to be paid a minimum weekly salary of
$684.00, and Defendants’ salary payments fell short.3 Mr. Folta asks the Court to find
3 Defendants claim Mr. Folta’s job qualified for an executive, administrative, or
professional exemption. See, e.g., Doc. 46, p. 6.
that even if Defendants paid him on a salary basis from January 2020 until February 2021,
the amounts they paid him during that time were insufficient as a matter of law to qualify
for the FLSA’s executive, administrative, or professional exemptions.
Below, the Court will begin its analysis of the two Motions by setting forth the
appropriate summary judgment standard. Next, the Court will turn to the merits of
Defendants’ Motion for Summary Judgment, followed by Mr. Folta’s Motion for Partial
Summary Judgment. For the reasons explained below, Defendants’ Motion is DENIED,
and Plaintiff’s Motion is GRANTED.
I. LEGAL STANDARD
The Court “shall grant summary judgment if the movant 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). “[A] genuine issue of material fact exists if: (1) there is a
dispute of fact; (2) the disputed fact is material to the outcome of the case; and (3) the
dispute is genuine, that is, a reasonable jury could return a verdict for either party.” RSBI
Aerospace, Inc. v. Affiliated FM Ins. Co., 49 F.3d 399, 401 (8th Cir. 1995). The moving
party bears the burden of proving the absence of any material factual disputes and that
they are entitled to judgment as a matter of law, but the nonmoving party may not rest
upon mere denials or allegations in the pleadings and must set forth specific facts to raise
a genuine issue for trial. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986);
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
The Court must view all evidence and inferences in a light most favorable to the
nonmoving party. See McCleary v. ReliaStar Life Ins. Co., 682 F.3d 1116, 1119 (8th Cir.
2012). However, “[w]hen opposing parties tell two different stories, one of which is
blatantly contradicted by the record, so that no reasonable jury could believe it, a court
should not adopt that version of the facts for purposes of ruling on a motion for summary
judgment.” Scott v. Harris, 550 U.S. 372, 380 (2007).
II. DISCUSSION
A. Defendants’ Motion
Defendants’ Motion for Summary Judgment argues the Court should find as a
matter of law that Mr. Folta did not regularly engage in interstate commerce while working
for NBC, so he is not entitled to individual coverage under the FLSA. Defendants agree
that while working as Brewer, Mr. Folta did a few tasks that related to interstate
commerce. They contend, however, that those tasks were not regular enough or
substantial enough to cause Mr. Folta’s job to fall within the ambit of the FLSA.
Whether an employee falls within the FLSA’s protection is a question of law, but
“the amount of time an employee works and the duties he or she performs present factual
questions.” Reich v. Stewart, 121 F.3d 400, 404 (8th Cir. 1997). Individual coverage
under the FLSA exists for employees who “regularly use the instrumentalities of interstate
commerce in [their] work.” Miller v. Centerfold Ent. Club, Inc., 2017 WL 3425887, at *9
(W.D. Ark. Aug. 9, 2017) (quoting Thorne v. All Restoration Servs., 448 F.3d 1264–66
(11th Cir. 2006)). For an employee to be “engaged in commerce” under the FLSA, the
employee must directly participate “in the actual movement of persons or things in
interstate commerce” by “(i) working for an instrumentality of interstate commerce, e.g.,
transportation or communication industry employees, or (ii) by regularly using the
instrumentalities of interstate commerce in his work, e.g., regular and recurrent use of
interstate telephone, telegraph, mails, or travel.” Thorne, 448 F.3d at 1266 (citing 29
C.F.R. § 776.23(d)(2); 29 C.F.R. § 776.24); see also 29 C.F.R. § 776.10(b) (“[S]ince
‘commerce’ as used in the Act includes not only ‘transmission’ of communications but
‘communication’ itself, employees whose work involves the continued use of the interstate
mails, telegraph, telephone or similar instrumentalities for communication across State
lines are covered by the Act.”).
Mr. Folta testified in his deposition that he would order hops for the brewery
through three different websites. (Doc. 42-1, pp. 47, 52). He claims he paid for the
supplies using “the brewery credit card that was on file on the computer.” Id. at p. 47.
Defendants dispute that Mr. Folta was ever authorized to use a brewery credit card or
that he ever ordered hops. There appears to be a genuine, material dispute of fact as to
whether Mr. Folta ordered beer ingredients and in doing so availed himself of the use of
interstate commerce. Further, though it is undisputed that Mr. Folta’s job was to make
beer that would eventually be sold in interstate commerce, there is a dispute of fact as to
when Defendants first sold beer across state lines.
Next, Mr. Folta produced 135 pages of email correspondence he believes relates
to his employment with NBC. (Doc. 42-5). Defendants respond that “a review of the email
files Folta produced in this case show that he never actually sent an email from a company
email address,” that “he used his personal email, and that from 2018–2021 he sent a total
of 6 emails that were work related.” (Doc. 43, ¶ 13). Mr. Folta testified that he was, in
fact, issued a work email account and sent work-related emails from that account.
However, Mr. Folta believes Defendants deleted the work email account once Mr. Folta
quit, and he can no longer access it. (Doc. 42-1, p. 39). In any event, the parties agree
that Mr. Folta sent some work-related emails while he was employed at NBC. They
disagree as to how many work-related emails were sent.
Mr. Folta also produced 187 pages of text messages he contends relate in some
way to his work for NBC. (Doc. 42-6). Defendants respond that “the text messages reveal
they are mundane communications that were not even sent regularly, nor were they a
part of Plaintiff’s regular job duties.” (Doc. 43, ¶ 14). Mr. Folta disagrees and believes that
a “review of the text messages cited reveals they largely concern the day-to-day
operations of the brewery and were often sent on a weekly or even daily basis.” (Doc. 49,
p. 2). Clearly, the parties agree that Mr. Folta sent and received at least some work-
related text messages. They disagree about whether Mr. Folta sent enough text
messages to constitute regular engagement in interstate commerce.
Finally, Mr. Folta testified in his deposition that he traveled outside Arkansas for
work multiple times. (Doc. 42-1, p. 37). Defendants agree that Mr. Folta made at least
three trips out of state on brewery business—to Kansas, Michigan, and Minnesota. (Doc.
42-3, pp. 2–3). They disagree that his out-of-state trips were numerous enough to qualify
as regular engagement in interstate commerce.
For the reasons explained, the Court finds that genuine, material disputes of fact
exist as to the quantity, quality, and nature of Mr. Folta’s interstate contacts during his
employment at NBC. These are fact questions reserved for the jury. As a result,
Defendants’ Motion for Summary Judgment (Doc. 40) on the issue of individual coverage
under the FLSA is DENIED.
B. Mr. Folta’s Motion
Assuming Mr. Folta proves at trial that he qualifies for individual FLSA coverage,
his Motion for Partial Summary Judgment asks the Court to find that Defendants wrongly
categorized him as exempt from the FLSA’s minimum wage and overtime requirements—
based solely on the manner and amounts that he was paid—from at least December
20184 through June 22, 2019, and from January 1, 2020, through February 25, 2021.
According to Defendants, Mr. Folta was always paid an agreed-upon salary and qualified
as an exempt executive, administrative, or professional worker.
The Court has reviewed Mr. Folta’s paystubs from NBC, which Defendants agree
are authentic. Defendants also agree that Mr. Folta was paid the amounts reflected in the
paystubs.5
Challenges to an employee’s classification status ordinarily center around the
nature of the employee’s job duties. Workers who are “employed in a bona fide executive,
administrative, or professional capacity” are exempt from the FLSA’s minimum wage and
overtime compensation requirements. 29 U.S.C. § 213(a)(1). The employer bears the
burden of proof to establish “that the employee's ‘primary duty’ is the performance of
exempt work, 29 C.F.R. § 541.700; that he is paid not less than the minimum salary level,
§ 541.600; and that he is paid on a ‘salary basis,’ § 541.602.” Coates v. Dassault Falcon
4 Even though Mr. Folta has provided paystubs for work beginning in November 2018, his
Motion for Partial Summary Judgment asks the Court to make findings as to payments
“beginning . . . December of 2018.” (Doc. 39, p. 6).
5 Defendants contend they made additional “salary” payments to Mr. Folta from October
2019 to May 2020 in the form of health insurance benefits, which are not included in the
paystubs. However, Defendants provide no proof to substantiate: (1) the amount of each
benefit payment and (2) whether the payments were directed to Mr. Folta or to a third
party, such as an insurance company.
Jet Corp., 961 F.3d 1039, 1042 (8th Cir. 2020) (citing Grage v. N. States Power Co.--
Minn., 813 F.3d 1051, 1054 (8th Cir. 2015)).
Mr. Folta’s Motion for Partial Summary Judgment focuses primarily on the last
prong of the test for exempt work: whether he was paid on a “salary basis.” To be clear,
Mr. Folta does not ask the Court to delve into the question of whether his job duties at
NBC were “executive, administrative, or professional,” but instead to focus on the more
basic question of how he was paid. Being paid on a “salary basis” simply means that the
worker:
regularly receive[d] each pay period on a weekly, or less frequent basis, a
predetermined amount constituting all or part of the employee’s
compensation, which amount is not subject to reduction because of
variations in the quality or quantity of the work performed.
29 C.F.R. § 541.602.
From November 5, 2018, to February 24, 2019, Mr. Folta received $960.00 in
biweekly gross earnings. For the pay period from February 25, 2019, to March 10, 2019,
his biweekly pay dropped to $880.00. The next pay period, March 11, 2019, to March 24,
2019, his pay rose to $1,320.00. Defendants explain Mr. Folta got a “raise” in March
2019, but his biweekly pay dropped to $1,100.00 in April. It remained at that rate until
May 19, 2019. Then, Mr. Folta’s pay changed again. His next three paystubs from May
20 to June 1, June 2 to June 15, and June 16 to June 22, show gross earnings of $1,800,
$1,191.67, and $596.00, respectively. Thereafter, from June 26, 2019, until the date of
his last pay period, February 25, 2021, he received regular paychecks totaling $1,300.00
every two weeks. See Doc. 38-1.
Mr. Folta’s earliest paystubs from November 5, 2018, to May 19, 2019, indicate
the total number of hours he worked on a biweekly basis, multiplied by an hourly rate of
pay. Certain paystubs show a rate of pay of $11.00 per hour, see id. at pp. 19–24, while
others show a rate of $12.00 per hour, see id. at pp. 1–3, 25–29. As a result, the gross
hourly earnings on each paystub vary considerably. From May 20, 2019, to June 1, 2019,
Mr. Folta’s paystub reflects he worked a total of 50 hours over the course of two weeks
at a rate of $12.00 per hour, for a total of $600.00. See id. at p. 18. The same paystub
also reflects an additional $1,200.00 salary payment. Id. Defendants respond that
despite the labels on the paystubs, Mr. Folta was never paid on an hourly basis, and
these paystubs all reflect salary payments. For the pay period from June 2, 2019, to June
15, 2019, and the pay period from June 16, 2019, to June 22, 2019, Mr. Folta was paid
lump-sum amounts labeled “salary”—one payment of $1,191.67, and the next $596.00.
Id. at pp. 16–17. Defendants concede that Mr. Folta’s pay in June 2019 was “irregular,”
but they explain that they docked his pay to discipline him for bringing a pistol into the
brewery. See Doc. 46, p. 3.
As previously stated, it is Defendants’ burden to prove they paid Mr. Folta on a
salary basis. They have failed to meet this burden for the pay periods between at least
December 2018 and June 22, 2019. His rate of pay during this time was not a regular,
predetermined amount.
Mr. Folta’s rate of pay does appear to become regular and predetermined after
June 22, 2019. His paystub starting the week of June 26, 2019, reflects a biweekly
payment of $1,300.00. That same amount was paid biweekly until Mr. Folta stopped
working for NBC in February 2021. Mr. Folta notes, however, that as of January 1, 2020,
workers who qualified as exempt due to the nature of their executive, administrative, or
professional work were required to be compensated a minimum salary of $684.00 per
week. See 29 C.F.R. §§ 541.100(a)(1) (executive); 541.200(a)(1) (administrative);
541.300(a) (professional). As Defendants paid Mr. Folta a salary of only $650.00 per
week (or $1,300.00 biweekly), this amount did not meet the minimum threshold.
Defendants agree that if the jury finds Mr. Folta is entitled to individual coverage under
the FLSA, they did not pay him enough per week after January 1, 2020, to qualify for an
exemption. See Doc. 46, p. 5 (admitting that “Plaintiff was, inadvertently, paid . . . less
than the FLSA minimum for 30 weeks in 2020 and for 6 weeks in 2021”).
For all these reasons, Mr. Folta’s Motion for Partial Summary Judgment (Doc. 38)
is GRANTED. The Court finds that Mr. Folta was not paid on a salary basis from at least
December 2018 until June 22, 2019, so his work was not exempt during those times. It
appears Mr. Folta was paid on a salary basis from June 26, 2019, until February 25, 2021;
however, the salary payments made to him between January 1, 2020, and February 25,
2021, were insufficient as a matter of law to qualify for executive, administrative, or
professional exemptions to the FLSA.
C. Defendants’ Damages Table and Offer of Settlement
Defendants created a table showing the damages they estimate they owe Mr. Folta
for deficient salary payments, assuming, of course, that the jury finds he is entitled to
individual coverage under the FLSA. See Doc. 46, pp. 2–3. Because they concede Mr.
Folta’s salary payments were too low to qualify for executive, administrative, or
professional exemptions for at least some period of time, they mailed Mr. Folta “a check
for two times th[e] amount” they calculated they owe him. Id. at p. 5. As a result,
Defendants now consider Mr. Folta’s claims to be moot, since they believe any salary
deficiency “has now been rectified” through the payment of a settlement check. /d. at pp.
5-6.
The Court observes that Defendants’ decision to mail Mr. Folta a settlement check
does not “moot” his claims. Once litigation has commenced, employers may only settle
FLSA cases “if the parties agree on a settlement amount and the district court enters a
stipulated judgment.” Beauford v. ActionLink, LLC, 781 F.3d 396, 405-06 (8th Cir. 2015).
As far as the Court is aware, the parties have not agreed on a settlement amount.
lll. © CONCLUSION
For the reasons stated, IT IS ORDERED that Defendants’ Motion for Summary
Judgment (Doc. 40) is DENIED, and Plaintiffs Motion for Partial Summary Judgment
(Doc. 38) is GRANTED. This matter remains set for jury trial
IT IS SO ORDERED on this 1st day of September, 2022.
"29
UNITED STATES DISTRICT JUDGE
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