Pursuant to the Fair Labor Standards Act (FLSA), in order to bring a lawsuit for failure to pay overtime, an employee must meet the burden of proving a nexus to interstate commerce. There are two ways which an employee can prove this nexus: 1) by showing that the employee engaged in commerce for the employer within the meaning of the FLSA or 2) by showing that the employer has other employees who engaged in commerce within the meaning of the FLSA and that the employer also generated annual gross sales of not less than $500,000.
In Martinez v. Petrenko, the employee alleged that his employer engaged in interstate commerce within the meaning of the FLSA and met the annual gross sales of not less than $500,000 but did not allege that he, as the employee, engaged in interstate commerce for the employer. However, during discovery, the employee was unable to produce any evidence that his employer’s sales were high enough to trigger coverage under the FLSA.
When the employer moved for summary judgment, the employee presented the alternative argument to the Court: that he himself engaged in interstate commerce while working for the employer. The Court awarded summary judgment to the employer because the new theory came too late. Although the employee submitted an affidavit saying that he traveled interstate and made interstate phone calls, which is sufficient to establish individual coverage under the FLSA, the Court rejected his argument because it was “a new and unadvertised theory of individual coverage” that had not previously been raised.
The employee argued that it was not a change in “theory of liability” because he consistently argued that the employer was liable for unpaid overtime under the FLSA. However, the Court disagreed and opined that he sought to entirely change the theory establishing a nexus. The summary judgment for the employer was upheld and it the judge did not err in denying the employee’s request to present a new theory.
This is an excellent reminder about the importance of pleading alternative theories of liability in any type of Complaint.
Martinez v. Petrenko
Lawyers Weekly No. 01-174-15
Volume 43, Issue No. 47