                                                                                                       07/05/2018
                  IN THE COURT OF APPEALS OF TENNESSEE
                               AT JACKSON
                                      June 20, 2018 Session

            MIKE SNODGRASS v. AHA MECHANICAL CONT. LLC

                     Appeal from the Circuit Court for Shelby County
                     No. CT-005346-14 Robert Samual Weiss, Judge
                        ___________________________________

                              No. W2017-01401-COA-R3-CV
                          ___________________________________


The trial court denied Appellant, employee, relief under the Fair Labor Standards Act,
and employee appeals. Because the trial court’s judgment does not clearly show that it
applied the correct legal standard in deciding the case, we vacate and remand.

          Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
                                Vacated and Remanded

KENNY ARMSTRONG, J., delivered the opinion of the court, in which J. STEVEN
STAFFORD, P.J., W.S., and ARNOLD B. GOLDIN, J., joined.

Steven Wilson and Matt Gulotta, Memphis, Tennessee, for the appellant, Mike
Snodgrass.

John A. Irvine, Jr., Memphis, Tennessee, for the appellee, AHA Mechanical Contractors
LLC.1


                                              OPINION

       Donna and Mike Burlon are the owners of AHA Mechanical Contractors, LLC
(“AHA,” or “Appellee”). AHA is in the business of constructing and servicing HVAC
systems. On February 20, 2012, AHA hired Mike Snodgrass (“Appellant”), with whom
the Burlons had been friends for approximately ten years. Mr. Snodgrass was initially
hired as a salesman for AHA under a verbal agreement with the Burlons. Specifically,
the parties agreed that Mr. Snodgrass would be paid for forty hours of work per week
plus two percent commission on any new sales Mr. Snodgrass made. Mr. Snodgrass was

      1
          By order of May 9, 2018, this Court denied Appellee’s motion to accept a late-filed brief.
initially paid an hourly rate of $7.50. By the time his employment was terminated, Mr.
Snodgrass’ hourly rate had increased to $17.00 per hour.

       In addition to Mr. Snodgrass, AHA employed three technicians and two office
staff. These employees were required to clock in and out each day. Mr. Snodgrass did
not punch his time on the clock. There is dispute between the parties as to whether AHA
did not require Mr. Snodgrass to log his time or whether he simply refused to do so.
Regardless, AHA had no record of his working time from approximately February of
2012 until June of 2012.

        In June of 2012, AHA provided Mr. Snodgrass with a company vehicle, which
was equipped with a GPS tracking system. Mr. Snodgrass was aware of the GPS, but
testified that he did not realize AHA was using the device to track his working hours.
Mr. Snodgrass was fired from AHA after the GPS monitor on his company vehicle
indicated that he would frequently travel to dead end streets and vacant lots where AHA
had no business dealings. Despite growing concern over his idle time, AHA continued to
pay Mr. Snodgrass for forty hours of work per week. On or about May 6, 2013, AHA
terminated Mr. Snodgrass’ employment.

       On September 16, 2013, Mr. Snodgrass filed a complaint for breach of contract
and promissory estoppel against AHA in the General Sessions Court for Shelby County.
In his complaint, Mr. Snodgrass claimed that AHA failed to pay him certain
commissions. Mr. Snodgrass amended his complaint on January 16, 2014, to add a claim
that AHA violated his right to overtime pay under the Fair Labor Standards Act, 29
U.S.C. § 201, et seq. (“FLSA”). In response, AHA filed a counter-complaint against Mr.
Snodgrass, alleging overpayment of wages. On November 13, 2014, AHA agreed for
Mr. Snodgrass to obtain a judgment in the general sessions court for the full jurisdictional
amount, and AHA’s counter-complaint was dismissed with prejudice. AHA appealed to
the Circuit Court for Shelby County (the “trial court”).

        The trial court heard the case on March 9, 2017. On June 12, 2017, the trial court
entered its judgment, finding that Mr. Snodgrass was not entitled to relief. Specifically,
the trial court’s judgment provides, in pertinent part, that:

       1. [Mr. Snodgrass] failed to meet his burden of proof to establish he was
       entitled to overtime for his work in excess of 40 hours per week, in that he
       failed to ever request overtime pay during the time he worked for the
       company and the fact that the company paid him 40 hours per week
       regardless, including days that he did not work.
       2. [Mr. Snodgrass] failed to meet his burden on the wage and hour claim,
       as there was proof from the GPS records indicating that he was not
       working. . . .

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       Mr. Snodgrass appeals. He raises three issues for review as stated in his brief:

       1. The trial court erred in denying judgment for [Appellant] based on its
       finding that [Appellant] could not prove he actually worked during “idling
       time” as shown by AHA’s recordkeeping of his working hours.
       2. The trial court erred in holding that [Appellant] waived his right to claim
       overtime pay under the FLSA against AHA because he did not complain
       about not being paid overtime at the time of his employment.
       3. Whether the trial court erred in holding any earned overtime was
       cancelled out by alleged overpayments made to [Appellant] by AHA.

       Because this case was tried by the court sitting without a jury, we review the trial
court’s findings of fact de novo with a presumption of correctness, unless the evidence
preponderates against those findings. McGarity v. Jerrolds, 429 S.W.3d 562, 566 (Tenn.
Ct. App. 2013); Wood v. Starko, 197 S.W.3d 255, 257 (Tenn. Ct. App. 2006). This
Court conducts a de novo review of the trial court’s resolutions of question of law, with
no presumption of correctness. Kelly v. Kelly, 445 S.W.3d 685, 691-92 (Tenn. 2014);
Armbrister v. Armbrister, 414 S.W.3d 685, 692 (Tenn. 2013).

       The issues raised in this appeal trigger application of the Fair Labor Standards Act
(“FLSA”). The FLSA sets the minimum wage and overtime standards for most
employers in the United States. Generally, an employee must be compensated at or
above the statutory rate for the first forty hours per week of work, and at one and one-half
times the employee’s regular wage for overtime. There are exemptions to these
requirements, and an employer seeking an exemption bears the burden of proving that it
is applicable. Douglas v. Argo-Tech Corp., 113 F.3d 67, 70 (6th Cir. 1997). Exemptions
are construed narrowly against an employer seeking to assert an exemption. Auer v.
Robbins, 519 U.S. 452, 462, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) (citing Arnold v. Ben
Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)).

      A plaintiff generally has the burden of proving that his or her employer violated
the FLSA. However,

       where the employer’s records are inaccurate or inadequate . . . an employee
       has carried out his burden if he proves that he has in fact performed work
       for which he was improperly compensated and if he produces sufficient
       evidence to show the amount and extent of that work as a matter of just and
       reasonable inference. The burden then shifts to the employer to come
       forward with evidence of the precise amount of work performed or with
       evidence to negative the reasonableness of the inference to be drawn from
       the employee’s evidence. If the employer fails to produce such evidence,
       the court may then award damages to the employee, even though the result
       be only approximate.
                                           -3-
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88, 66 S.Ct. 1187, 90 L.Ed.
1515 (1946) (quoted and reaffirmed in United States Dep't of Labor v. Cole Enters.,
Inc., 62 F.3d 775, 779 (6th Cir.1995)), superseded by statute on other grounds as stated
in Carter v. Panama Canal Co., 463 F.2d 1289, 1293 (D.C.Cir.1972). In Mt. Clemens,
the district court awarded employees overtime compensation under the FLSA. 328 U.S.
at 685-86. On appeal, the Sixth Circuit reversed the district court, finding that it was the
employees’ burden “to prove by a preponderance of the evidence that they did not receive
the wages to which they were entitled ... and to show by evidence rather than conjecture
the extent of overtime worked, it being insufficient for them merely to offer an estimated
average of overtime worked.” Id. at 686.

       On grant of certiorari, the Supreme Court held that the Sixth Circuit imposed an
improper standard of proof that had “the practical effect of impairing many of the
benefits” of the FLSA. Id. The Supreme Court stated the correct liability and damages
standard, to-wit: an employee bringing suit has the “burden of proving that he performed
work for which he was not properly compensated. The remedial nature of this statute and
the great public policy which it embodies . . . militate against making that burden an
impossible hurdle for the employee.” Id. at 686-87. The Supreme Court further
explained that “where the employer’s records are inaccurate or inadequate and the
employee cannot offer convincing substitutes . . . an employee has carried out his burden
if he proves that he has in fact performed work for which he was improperly
compensated and if he produces sufficient evidence to show the amount and extent of that
work as a matter of just and reasonable inference.” Id. at 687. The employee’s burden of
proof on damages can be relaxed, the Supreme Court explained, because employees
rarely keep work records, which is the employer’s duty under the Act. Id. Once the
employee satisfies his or her relaxed burden to establish the extent of uncompensated
work, “[t]he burden then shifts to the employer to come forward with evidence of the
precise amount of work performed or with evidence to negative the reasonableness of the
inference to be drawn from the employee’s evidence.” Id. at 687-88.

        The Sixth Circuit quoted and applied the Mt. Clemens standard in Herman v. Palo
Group Foster Home, Inc., concluding that the employees had met their burden on
liability because “credible evidence” had been presented that they had performed work
for which they were improperly compensated. 183 F.3d 468, 473 (6th Cir.1999).
Recognizing the Mt. Clemens burden shifting paradigm, the Sixth Circuit further held
that “Defendants did not keep the records required by the FLSA, so the district court
properly shifted the burden to Defendants to show that they did not violate the Act.” Id.
The end result of this standard is that if an “employer fails to produce such evidence, the
court may then award damages to the employee, even though the result be only
approximate.” Id. at 472 (quoting Mt. Clemens, 328 U.S. at 688).

      From our review of the trial court’s judgment, supra, we cannot determine
whether the trial court applied the correct standard or burden of proof in this case. The
                                           -4-
trial court states that Mr. Snodgrass “failed to meet his burden of proof to establish he
was entitled to overtime . . .” insofar as Mr. Snodgrass “failed to . . . request overtime pay
during” the term of his employment with AHA. The fact that Mr. Snodgrass did not
request overtime pay does not, ipso facto, mean that he is not entitled to it. The trial
court cites no authority for its position that an employee’s failure to request overtime pay
is fatal to his or her claim for it. Other than Mr. Snodgrass’ failure to request overtime
pay, the trial court cites no evidence to support its conclusion that Mr. Snodgrass failed to
meet his initial burden. Furthermore, it is undisputed that AHA did not keep adequate
records of Mr. Snodgrass’ time. Even if we concede that Mr. Snodgrass was recalcitrant
in his refusal to clock in and out, the FLSA places the burden of proper time keeping
squarely on the employer. While acknowledging that, “for the first three months of [Mr.
Snodgrass’] employment, no records were kept [by AHA],” the trial court’s order fails to
negate, or even reference, the burden shifting paradigm set out in Mt. Clemens.

        A trial court speaks through its orders. Palmer v. Palmer, 562 S.W.2d 833, 837
(Tenn.Ct.App.1977). Here, and for the foregoing reasons, the trial court’s judgment does
not clearly indicate that it applied the correct legal standard in this case. In this regard,
the judgment fails to comply with Tennessee Rule of Civil Procedure 52.01 (“In all
actions tried upon the facts without a jury, the court shall find the facts specially and shall
state separately its conclusions of law and direct the entry of the appropriate judgment.”).
Because we cannot determine whether the trial court applied the proper standard and
burden of proof in this case, we vacate the judgment and remand for such further
proceedings as may be necessary. We take no position as to the ultimate outcome of the
case. Our holding, does not preclude the trial court from allowing the parties to present
additional proof on remand. However, the trial court must evaluate the evidence under
the applicable standard, applying the correct burden(s) of proof, and the trial court’s order
must reflect that it has done so.

       For the foregoing reasons, we vacate the judgment of the trial court and remand
the case for such further proceedings as may be necessary and are consistent with this
opinion. Costs of the appeal are assessed one-half to the Appellant, Mike Snodgrass and
his surety, and one-half to the Appellee, AHA Mechanical Contractors, LLC, for all of
which execution for costs may issue if necessary.




                                                   _________________________________
                                                   KENNY ARMSTRONG, JUDGE



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