Alvarez Perez v. Sanford-Orlando Kennel Club, Inc.

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JANUARY 29, 2008
THOMAS K. KAHN
No. 06-15931
CLERK
________________________

D. C. Docket No. 05-00269-CV-ORL-28-JGG

ISRAEL ALVAREZ PEREZ,

Plaintiff-Appellee
Cross-Appellant,

versus

SANFORD-ORLANDO KENNEL CLUB, INC.,
COLLINS & COLLINS,
d.b.a. CCC Racing,

Defendants-Appellants
Cross-Appellees,

JACK COLLINS,
Defendant
Cross-Appellee.

________________________

Appeals from the United States District Court
for the Middle District of Florida
_________________________

(January 29, 2008)
Before CARNES, BARKETT and HILL, Circuit Judges.

CARNES, Circuit Judge:

This appeal and cross-appeal arise from an overtime wages lawsuit brought

under the Fair Labor Standards Act, 29 U.S.C. §§ 201–19, by Israel Alvarez Perez

against Sanford-Orlando Kennel Club, Inc., Collins & Collins Partnership d/b/a

CCC Racing, and Jack Collins, Sr. The judgment winding up the litigation in the

district court found Kennel Club and CCC Racing, but not Collins, Sr., liable for a

violation of the FLSA overtime wages provision and awarded damages, but not

liquidated damages, to Perez. All of the parties except Collins, Sr. were unhappy

with one or more parts of the judgment.

Kennel Club and CCC Racing have appealed from the judgment insofar as it

found them liable on the overtime claim. They contend that the district court

should have granted them judgment as a matter of law on the theory that they are

separate establishments, which would mean that each of them was a seasonal

operation qualifying for the recreational and amusement exemption in 29 U.S.C. §

213(a)(3).

Perez has cross-appealed from two aspects of the judgment. He contends

that the district court erred in granting Collins, Sr. judgment as a matter of law on

the theory that he was not Perez’s employer. He also contends that in light of the

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jury’s finding for statute of limitations purposes that the violations were willful, it

was error for the court to then find that the defendants had acted in good faith,

thereby precluding liquidated damages.

I.

From 1955 through 2001, Kennel Club operated a winter greyhound racing

season from November through May of each year at its Longwood facility near

Orlando, Florida. At that time, there was another facility—the Seminole

Raceway—located just two or three miles away from Kennel Club that operated a

summer season of greyhound racing. In November 2000 Jack Collins, Jr., on

behalf of Kennel Club, initiated discussions with Seminole Raceway’s

management, inquiring whether Seminole would sell its summer racing permit to

Kennel Club. Seminole wanted to get out of the greyhound racing business, but

some Kennel Club shareholders refused to help Collins, Sr. put up the necessary

capital to finance the purchase agreement.

As a result, Collins & Collins Partnership purchased Seminole’s summer

racing permit with the personal funds of Jack Collins, Sr., who was an officer and

majority shareholder of both Kennel Club and Collins & Collins Partnership. The

purchase added a summer race season at Kennel Club’s facility to the winter one

already being conducted there. Around the same time, Kennel Club registered with

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the Department of State the name Collins & Collins Partnership d/b/a CCC Racing.

In May 2001 CCC Racing entered into an agreement with Kennel Club to

use its facility during the summer months. In that agreement Kennel Club

authorized CCC Racing to operate a summer season of greyhound racing at the

Longwood facility from May through October of each year. During that summer

season, CCC Racing would be responsible for the operations of the Longwood

facility: the “general operational activities,” “marketing activities,” and all

“administrative activities, including accounting, legal, and compliance activities.”

As consideration, the agreement entitled Kennel Club “to receive One and One-

Half (1.5%) of the aggregate ‘pari-mutuel wagering handle’” earned by CCC

Racing during each summer season. That percentage amounted to $398,821 in

2002 and $388,044 in 2003.

Kennel Club continued conducting winter race meets at the Longwood

facility, while CCC Racing began conducting summer race meets there. Although

Kennel Club and CCC Racing maintained separate bank accounts, payrolls, tax

identification numbers, and permits, the companies did share the same facility,

telephone number, credit card, and general liability insurance policy. Money

coming from Kennel Club’s operating accounts was also recorded as a payable on

CCC Racing’s books, and CCC Racing controlled Kennel Club’s operating cash.

4
 As for the management of the Longwood facility, an agreement between

Kennel Club and CCC Racing named Jack Collins, Sr. as the managing agent of

the facility. Despite his official position and being known as “the head boss,”

Collins, Sr.’s sons had actually run the business for him since he suffered a heart

attack in 1998. Jack Collins, Jr., rather than his father, had ultimate authority over

hiring and firing decisions. In fact, Collins, Sr. had visited the facility only once a

year since his heart attack. He had not taken part in the day-to-day operations of

the facility since 1998, nor had he been involved in the hiring and firing of

employees, employee assignments, determining employee compensation, or

supervising employees.

Once the Longwood facility began operating year-round, many employees

who worked for Kennel Club during the winter race seasons continued to work for

CCC Racing during the new summer seasons. In fact, a majority of the employees

at Kennel Club and CCC Racing worked for both companies. These employees

performed the same work year-round, with the only notable difference being that

they received separate paychecks from the two entities for each half of the year.

Perez, who worked maintenance at the racetrack facility for nearly two years, was

one of these employees. He generally received separate tax forms and paychecks

from Kennel Club and CCC Racing. On one occasion, however, Perez was paid by

5
Kennel Club during a period in which CCC Racing was operating the Longwood

facility.

In February 2005 Perez filed a complaint in the Middle District of Florida

against both Kennel Club and Jack Collins, Sr., which Perez later amended to

include CCC Racing as an additional defendant. The complaint contended that all

of the defendants were Perez’s former employers and had “repeatedly and

willfully” violated 29 U.S.C. § 207 “by failing to compensate [him] at a rate not

less than one and one-half times his regular rate at which he was employed for

workweeks longer than (40) hours.” He asked that the defendants be held jointly

and severally liable for unpaid overtime wages and for an additional amount as

liquidated damages.

The defendants answered Perez’s complaint by asserting that they were not

his employers under the FLSA, and that his claims were barred by the recreational

and amusement exemption in 29 U.S.C. § 213(a)(3) under what they characterized

as the “six-month receipts test and/or the seasonal operation test.” They also

asserted that the claims were “barred, in whole or in part, by the applicable statute

of limitations,” and that “[a]ll actions taken by the Defendants with respect to its

[sic] relationship with [Perez] were in good faith and based on legitimate business

interests.”

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 The district court conducted a two-day jury trial in September 2006. After

the conclusion of Perez’s case, the defendants moved for judgment as a matter of

law.1 The district court reserved judgment on that motion and ultimately sent the

case to the jury, which returned a verdict in favor of Perez against all three

defendants. Specifically, the jury found that each of the defendants was not

“exempt from the [FLSA] through the seasonal operation exemption or the six-

month receipts test,” that Collins, Sr. was Perez’s employer, and that each of the

defendants had failed to pay Perez the overtime compensation to which he was

entitled by law. On the statute of limitations issue, the jury found that the

defendants “either knew or showed reckless disregard for whether its conduct was

prohibited by the FLSA,” meaning that they acted willfully.

Following the jury’s verdict, the defendants renewed their motions for

judgment as a matter of law and also moved for a new trial. The district court

granted judgment as a matter of law to Collins, Sr. concluding that he was not

Perez’s employer under the FLSA because, although he “may have owned the

company and he may have had control as the owner,” he did not have the dealings

1
Actually, what happened at the end of the Perez’s case is that the district court did not
permit the defendants to orally make or discuss any motion: “Counsel, you can reserve.
Reserve your motions. All right. Call your first witness.” After the defense rested, the
defendants again moved for judgment as a matter of law, filing a written motion in open court.
The district court reserved ruling on the motion to give Perez an opportunity to brief the issue.
The following morning, the district court denied the motion. The defendants did what they could
to preserve the issues raised in their motion, and Perez does not contend to the contrary.

7
with employees that the FLSA requires. As to Kennel Club and CCC Racing, the

district court denied their motions.

Although the district court allowed the jury’s verdict against Kennel Club

and CCC Racing to stand, it denied Perez’s motion for liquidated damages. As a

basis for that denial, the court relied on its own finding that Kennel Club and CCC

Racing had sought advice regarding the exemption issue from both an attorney and

their payroll company. The court was satisfied that this was enough to show that

they had acted in good faith for purposes of 29 U.S.C. § 260, even though the jury,

in connection with the statute of limitations issue, had found that their violations of

the FLSA had been willful (“either knew or showed reckless disregard for whether

its conduct was prohibited by the FLSA”). The court explained that the

inconsistency between its finding and the jury’s was permitted because it was

“within the Court’s domain, not the jury’s, to determine whether Defendants

established a good faith defense,” thereby precluding liquidated damages.

Kennel Club and CCC Racing filed this appeal. They contend that the

district court erred in denying their motions for judgment as a matter of law

because they are exempt from the overtime requirement of the FLSA pursuant to

the recreational and amusement exemption in 29 U.S.C. § 213(a)(3). They also

contend that there is insufficient evidence in the record to support the jury’s verdict

8
against them in light of their evidence on the exemption issue. Perez has filed a

cross-appeal, contending that the district court erred both in granting Collins, Sr.’s

renewed motion for judgment as a matter of law and in denying Perez an award of

liquidated damages.

II.

Congress enacted the FLSA “in order to eliminate ‘labor conditions

detrimental to the maintenance of the minimum standard of living necessary for

health, efficiency, and general well-being of workers.’” Antenor v. D & S Farms,

88 F.3d 925, 929 (11th Cir. 1996) (quoting 29 U.S.C. §§ 202(a) & (b)). To those

ends, 29 U.S.C. § 207 requires that employers pay time and a half for those hours

that an employee works in excess of the standard forty hour work week. 29 U.S.C.

§ 207(a)(1). Section 213, however, lists a host of exemptions to the FLSA’s

minimum wage and maximum hour requirements. See id. § 213. The exemptions

“are to be construed narrowly,” and the employer shoulders the burden of

establishing that it is entitled to an exemption. Evans v. McClain of Ga., Inc., 131

F.3d 957, 965 (11th Cir. 1997).

The recreational and amusement exemption at issue in this case provides:

The provisions of . . . section 207 of this title shall not apply with
respect to . . . any employee employed by an establishment which is an
amusement or recreational establishment . . . if (A) it does not operate
for more than seven months in any calendar year, or (B) during the

9
 preceding calendar year, its average receipts for any six months of such
year were not more than 33 1/3 per centum of its average receipts for
the other six months of such year . . . .

29 U.S.C. §§ 213(a), (a)(3). Under that controlling provision, therefore, an

employer qualifies for exemption if it is a recreational and amusement

establishment and it also satisfies either the seasonal operation test or the six-

month receipts test. See id.

No one questions that Kennel Club and CCC Racing are in the recreation or

amusement business. And no one disputes that if they are considered as separate

establishments, each of them qualifies for the § 213(a)(3) exemption because each

one operates for less than seven months a year and also satisfies the six-month

receipts test. Likewise, no one disputes that if Kennel Club and CCC Racing are

grouped together and considered as one establishment, the combined entity is not

entitled to the benefit of the § 213(a)(3) exemption, because cumulatively it

operates year-round and fails to satisfy the six-month receipts test. The

disagreement is about whether Kennel Club and CCC Racing should be considered

as one establishment or two for § 213(a)(3) purposes. The answer depends on

what constitutes the “establishment” under that provision, which “is a problem of

10
law to be decided from all the facts in [the] case,” Acme Car & Truck Rentals, Inc.

v. Hooper, 331 F.2d 442, 444 (5th Cir. 1964).2

Kennel Club and CCC Racing contend that Jeffery v. Sarasota White Sox,

Inc., 64 F.3d 590 (11th Cir. 1995) (per curiam), supports their position that they are

exempt under § 213(a)(3). It does not. In that case we concluded that a minor

league baseball team, which leased a facility to use during the months of spring

training, was exempt as a recreational and amusement establishment under §

213(a)(3). Id. at 594–95. That case involved an issue about the seasonal operation

test and how to apply it in a situation where the defendant was one separate

business. Id. at 594 (stating the issue as “whether or not Defendant’s business is

truly seasonal”). The Jeffery case did not present the pivotal issue before us,

which arises from the fact that Kennel Club and CCC Racing share a single facility

and are commonly owned and controlled. Because there was no similar two versus

one establishment question in Jeffery, that decision is not helpful. The text of the

FLSA itself is not helpful either. Although the term “establishment” is used in

several different provisions, nowhere in the Act is it defined.

The Supreme Court’s decision in A.H. Phillips, Inc. v. Walling, 324 U.S.

490, 65 S. Ct. 807 (1945), interpreted an earlier version of the retail and service

2
See Bonner v. Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc) (adopting as
binding precedent in the Eleventh Circuit all decisions of the former Fifth Circuit announced
prior to October 1, 1981).

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establishment exemption, which was then contained in 29 U.S.C. § 213(a)(2). In

doing so, the Court defined an “establishment” as “a distinct physical place of

business,” because that is the way the term is ordinarily used in business and

government. Id. at 496, 65 S. Ct. at 810 (concluding that a chain of grocery stores

and its central warehouse were not a single retail establishment under the retail and

service establishment exemption and, therefore, were bound by the provisions of

the FLSA). The Phillips definition is reflected in the Code of Federal Regulations,

which states that generally in the Act “the term establishment . . . refers to a

‘distinct physical place of business’ rather than to ‘an entire business or enterprise’

which may include several separate places of business.” 29 C.F.R. § 779.23; see

also id. § 779.203.

In Marshall v. Sundial Associates, Ltd., 588 F.2d 120, 122 (5th Cir. 1979),

we applied the Supreme Court’s teachings in Phillips when we interpreted the term

“establishment” as used in the hotel establishment exemption of 29 U.S.C. §

213(b)(8). Our conclusion was that “when a part of a business complex seeks

exemption as a separate establishment it must at least show that it has a physically

separate place of business.” Id.

As additional support for our interpretation of the term “establishment,” we

cited in Sundial to 29 C.F.R. § 779.305, which provides in pertinent part:

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 Although . . . two or more departments of a business may constitute a
single establishment, two or more physically separated portions of a
business though located on the same premises, and even under the
same roof in some circumstances may constitute more than one
establishment for purposes of exemptions. In order to effect such a
result physical separation is a prerequisite. In addition, the physically
separated portions of the business also must be engaged in operations
which are functionally separated from each other. . . . In other words,
[a] portion of an establishment would be considered a separate
establishment from the unrelated portion for the purpose of the
exemption if: (a) It is physically separated from the other activities;
and (b) it is functionally operated as a separate unit having separate
records, and separate bookkeeping; and (c) there is no interchange of
employees between the units. The requirement that there be no
interchange of employees between the units does not mean that an
employee of one unit may not occasionally, when circumstances
require it, render some help in the other units or that one employee of
one unit may not be transferred to work in the other unit. The
requirement has reference to the indiscriminate use of the employee in
both units without regard to the segregated functions of such units.

29 C.F.R. § 779.305; see Sundial, 588 F.2d at 123. We stated that § 779.305

applies not only to the retail and service establishment exemption, but also to a

number of exemptions listed in 29 C.F.R. § 779.302, including the hotel

establishment exemption. Sundial, 588 F.2d at 123 n.2 (explaining that § 779.305

is “to be applied to a number of exemptions including § 213(b)(8)”).

Because the companies in the Sundial case were “completely physically

intertwined,” we determined that they were to be treated as a single establishment

despite the fact that they maintained separate business identities, books, and

payrolls. Id. at 123. We acknowledged that those factors may be relevant in

13
deciding the scope of an establishment in certain circumstances, but explained that

“they only become significant once the employer has shown that a distinct physical

establishment exists.” Id.; see also Montalvo v. Tower Life Bldg., 426 F.2d 1135,

1144–45 (5th Cir. 1970) (stating that “functional unity” is “normally invoked to

show that two or more places of business which are physically separated should be

considered a single establishment,” but is inappropriate where “business activities

of a single enterprise take place within a single distinct physical place of

business”).

The Phillips, Sundial, and Montalvo decisions govern situations where there

are two business operations being conducted at the same time, which is what each

of those cases involved. It makes sense that two businesses being conducted at the

same time are more likely to be considered one establishment if they are at the

same place. Physical separation is important when there is no separation in time.

When, however, business operations are conducted in different seasons, physical

separation is of much less importance. As the First Circuit has explained:

While “physical location” may be relevant in applying an exemption
depending on the nature of a particular business (such as whether the
employer is a retail sales company), it has little to do with an
exemption based on the periods in which a business operates. A
common place of business alone is particularly inapposite to
application of an exemption based on seasonality, as two seasonal
businesses may, by operating at different times, utilize the same
location while retaining their independence. Such a test in effect begs

14
 the question, because the possibility remains that the two businesses,
being independently seasonal, are able to retain their separate
identities notwithstanding common use of the single facility.

Marshall v. New Hampshire Jockey Club, Inc., 562 F.2d 1323, 1331 n.3 (1st Cir.

1977).

What we take away from our Sundial decision is that while 29 C.F.R. §

779.305 (“Exemptions for Certain Retail or Service Establishments”) explicitly

applies to the retail and service exemptions, its three-requirement definition of an

establishment may be borrowed to define establishment for purposes of other

exemptions. See Sundial, 588 F.2d at 123 n.2 (concluding that it is “to be applied

to a number of exemptions including § 213(b)(8)”). The First Circuit borrowed it

for that purpose in the Marshall case, 562 F.2d at 1329, which involved racetrack

facts, as our present case does.

Because 29 C.F.R. § 779.305 lists the three requirements in the conjunctive,

Kennel Club and CCC Racing must satisfy each of them in order to qualify as

separate establishments entitled to benefit from the § 213(a)(3) recreational and

amusement exemption. See also Gilreath v. Daniel Funeral Home, Inc., 421 F.2d

504, 510 (8th Cir. 1970) (“Since the three prerequisites of 29 C.F.R. § 779.305 are

joined in the conjunctive, the defendant cannot prevail on its exemption claim

without proof of conformity to each requirement.”).

15
 Whatever we might decide about the first and third § 779.305 requirements,

Kennel Club and CCC Racing do not meet the second one, which is that each

business be “functionally operated as a separate unit having separate records, and

separate bookkeeping.” 29 C.F.R. § 779.305. Although their separate bank

accounts, payrolls, tax identification numbers, and permits show that Kennel Club

and CCC Racing were organized as distinct entities, those facts are not enough to

establish that they were operated as separate units. The language of the regulation

requires businesses to be “functionally operated as . . . separate unit[s] having

separate records, and separate bookkeeping” in order to qualify as distinct

establishments. 29 C.F.R. § 779.305. Entities that are set up separately can be

operated jointly. Put a little differently, separate books and records may show the

existence of more than one corporate entity, but they do not necessarily show more

than one establishment for FLSA exemption purposes. See Acme Car & Truck

Rentals, 331 F.2d at 445 (determining that two corporations were functionally one

entity and thus a single establishment where the only distinction between them was

“their separate corporate existences” and “all the implications thereof, i.e., separate

records and taxes,” but they were commonly owned and controlled, shared the

same officers, used the same premises, and hired the same employees).

16
 In its FLSA racetrack case the First Circuit concluded that the two seasonal

businesses, under the facts of that case, functionally operated as separate units. See

Marshall, 562 F.2d at 1331. The companies in that case maintained separate

records, received different tax treatment, and exercised independent decision

making with respect to hiring employees. Id. The First Circuit looked beyond

those facts, however, to inquire “more broadly” into “the integrity of the economic

. . . and functional separation between the business units.” Id. (internal quotation

marks and citation omitted) (ellipsis in original). One company conducted

thoroughbred racing during one part of the year, and the other conducted harness

racing during a different part of the year. Id. at 1327. After pointing out that there

were important differences between those two types of racing, which resulted in

variations in business risks and in the patterns of state regulation for the

companies, the court reasoned that the two defendants were economically

independent of each other. Id. at 1332. It concluded that they were not a single

establishment for purposes of the § 213(a)(3) recreational and amusement

exemption. Id.

Although Kennel Club and CCC Racing also maintained separate records

and tax identification numbers, unlike the defendants in Marshall, they operated

the same sport—greyhound racing—and were similarly regulated by the state.

17
They also failed to keep their corporate identities distinct and their operations

separate to the extent that the Marshall defendants did.

Kennel Club paid the Department of State filing fee to register CCC

Racing’s fictitious name. The two shared a single credit card. They shared one

general liability insurance policy. On at least one occasion when Perez was

supposedly working for CCC Racing, he was actually paid by Kennel Club. CCC

Racing controlled Kennel Club’s operating cash, and money from Kennel Club’s

operating accounts was recorded as a payable on CCC Racing’s books. CCC

Racing’s summer racing permit was purchased with the personal funds of Jack

Collins, Sr., who was the majority shareholder of both Kennel Club and CCC

Racing. He was also the designated managing agent at the Longwood facility year-

round pursuant to the agreement between the companies. Similarly, Tom

Bowersox served as the director of racing and operations at the facility for both

companies. Because Kennel Club and CCC Racing intermingled funds and in

many aspects of management functioned as a single unit, they were not separate

establishments.

For these reasons, the jury reasonably could have found, as it did, that

Kennel Club and CCC Racing failed to carry their burden of establishing that they

were entitled to the recreational and amusement exemption of 29 U.S.C. §

18
213(a)(3). The district court correctly denied their motions for judgment as a

matter of law, which were dependent upon the proposition that they were separate

establishments.

III.

Turning now to Perez’s cross-appeal, his first contention is that the district

court erred when it granted Collins, Sr.’s renewed motion for judgment as a matter

of law on the ground that he was not an employer within the meaning of the FLSA.

When deciding whether to uphold a ruling on such a motion, “the standard of

review to be applied by this Court is the same as that applied by the district court .

. . . If the facts and inferences point overwhelmingly in favor of one party, such

that reasonable people could not arrive at a contrary verdict, then the motion was

properly granted.” Carter v. City of Miami, 870 F.2d 578, 581 (11th Cir. 1989).

Collins, Sr. cannot be held individually liable for violating the overtime

provision of the FLSA unless he is an “employer” within the meaning of the Act.

29 U.S.C. § 207(a)(1); Donovan v. Grim Hotel Co., 747 F.2d 966, 971 (5th Cir.

1984). Section 203 broadly defines an employer as “any person acting directly or

indirectly in the interest of an employer in relation to an employee.” 29 U.S.C. §

203(d). Whether an individual falls within this definition “does not depend on

technical or ‘isolated factors but rather on the circumstances of the whole

19
activity.’” Hodgson v. Griffin & Brand of McAllen, Inc., 471 F.2d 235, 237 (5th

Cir. 1973) (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.

Ct. 1473, 1477 (1947)).

Perez argues that Collins, Sr. exercised enough control over Kennel Club

and CCC Racing for him to be treated as an employer under the FLSA. We have

recognized that “[t]he overwhelming weight of authority is that a corporate officer

with operational control of a corporation’s covered enterprise is an employer along

with the corporation, jointly and severally liable under the FLSA for unpaid

wages.” Patel v. Wargo, 803 F.2d 632, 637–38 (11th Cir. 1986) (internal quotation

marks and citation omitted). However, we have also made clear that in order to

qualify as an employer for this purpose, an officer “must either be involved in the

day-to-day operation or have some direct responsibility for the supervision of the

employee.” Id. at 638.

Our decision in Patel is instructive. There we held that the defendant, who

was both the president and vice-president of a corporation, as well as a director and

a principal stockholder, was not an employer for FLSA purposes. We reached that

conclusion because he did not “have operational control of significant aspects of

[the company’s] day-to-day functions, including compensation of employees or

other matters in relation to an employee.” Id. (internal quotation marks omitted);

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see also Wirtz v. Pure Ice Co., 322 F.2d 259, 263 (8th Cir. 1963) (finding that a

majority stockholder who visited the company only two or three times a year and

“had nothing to do with the hiring of the employees or fixing their wages or hours”

was not an employer under the FLSA). While acknowledging that the defendant in

Patel could have, if he had chosen, played a greater role in the operations of the

company, we focused on the role that he did play in concluding that he “lacked the

operational control necessary for the imposition of liability as an ‘employer’ under

the FLSA.” Patel, 803 F.2d at 638; see also Wirtz, 322 F.2d at 262 (“There is little

question from the record but what Thompson as the majority stockholder and

dominant personality in Pure Ice Company, Inc., could have taken over and

supervised the relationship between the corporation and its employees had he

decided to do so. A careful reading of the record, however, indicates that he did

not do so.”).

Like the president in Patel, Collins, Sr. did not take such an active role in the

day-to-day operations of Kennel Club and CCC Racing. The undisputed evidence

established that his sons—not Collins, Sr. himself—had exercised considerable

control at the Longwood facility since 1998, the year he had a heart attack. Jack

Collins, Jr. testified that he was the one who had the ultimate say concerning hiring

and firing decisions at Kennel Club, and that his father had not even visited the

21
facility more than once a year. Collins, Sr. testified that since 1988 he had not

taken part in the day-to-day operations of the facility, had not been involved in the

supervision or hiring and firing of employees, and had not determined their

compensation. Tom Bowersox—the director of racing and operations—admitted

that he would have complied with any directive Collins, Sr. gave him, but testified

that Collins, Sr. had never given him any instructions about an employment matter.

Although Collins, Sr. remained the designated managing agent under the

agreement between Kennel Club and CCC Racing even after his heart attack in

1998, and he could have played a greater role in the day-to-day operations of the

Longwood facility if he had desired, Patel instructs that unexercised authority is

insufficient to establish liability as an employer. See Patel, 803 F.2d at 638; see

also Wirtz, 322 F.2d at 262.

Perez’s attorney suggested at oral argument that we should find the Sixth

Circuit’s decision in Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962 (6th Cir.

1991), helpful on this issue, but we don’t find it helpful to his side. In Dole, the

Sixth Circuit affirmed the district court’s order granting summary judgment against

the president and co-owner of a corporation on the FLSA employer issue. Id. at

966. The president in the Dole case, however, not only had a “significant

ownership interest in the corporation,” but also had and exercised “control over

22
significant aspects of the corporation’s day-to-day functions, including determining

employee salaries.” Id.; see also Grim Hotel Co., 747 F.2d at 972 (concluding that

the defendant was an employer where he began and controlled the hotel

corporations, held their purse strings, guided their policies, could authorize

compliance with the FLSA, solved major problems, and had “ultimate control over

wages”); Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983) (affirming the

district court’s order concluding that two defendants—who together were the

president, treasurer, secretary, and only members of the board of directors—were

employers where they maintained offices at the company and “were actively

engaged in the management, supervision and oversight” of the company’s affairs,

“including employee compensation and benefits”).

The Sixth Circuit noted in Dole that, “To be classified as an employer, it is

not required that a party have exclusive control of a corporation’s day-to-day

functions. The party need only have operational control of significant aspects of

the corporation’s day to day functions.” Dole, 942 F.2d at 966 (internal quotation

marks omitted). For that reason the fact that a payroll bookkeeper handled the

details of calculating hours, overtime, and commissions did not prevent the

president, who actually decided how much the employee compensation would be,

from being an employer. Id.; see also Schultz v. Mack Farland & Sons Roofing

23
Co., 413 F.2d 1296, 1299–1300 (5th Cir. 1969) (finding that the founder,

president, and sole investor in two corporations was an employer where he set the

management policy for both corporations and exercised authority over the hiring,

firing, hours, work assignments, and compensation of supervisory personnel). Nor

did it matter in the Dole case that a general manager handled many of the day-to-

day problems relating to the operation of the corporation or that branch managers

exercised some control over the hours that their employees worked. Dole, 942

F.2d at 966. Because he “was involved in the business operations of the

corporation, and he controlled the purse strings of the corporation,” the Sixth

Circuit held the president in Dole jointly and severally liable as an employer under

the FLSA. Id.

Our case, however, is different. There was insufficient evidence for a jury

reasonably to conclude that Collins, Sr. was either involved in the day-to-day

operation of the Longwood racetrack facility or was directly responsible for the

supervision of employees during the relevant years. Perez introduced no evidence

to contradict the uniform testimony of Collins, Sr., of Tom Bowersox, and of Jack

Collins, Jr. that since Collins, Sr. suffered a heart attack in 1998, his sons had run

the business and made all the decisions about hiring and firing and compensation.

Perez was left to rely on Collins, Sr.’s official position as managing agent under

24
the agreement between Kennel Club and CCC Racing, but as our Patel decision

establishes, that is not enough.

The district court correctly granted Collins, Sr.’s motion for judgment as a

matter of law on the issue involving his individual liability.

IV.

Perez also contends that the district court erred in finding that the defendants

acted in good faith, which was the basis for the court’s decision not to award

liquidated damages against them. This contention focuses on the inconsistency

between that finding by the judge and the jury’s earlier finding that the defendants’

violations were willful, which it implicitly made in the course of deciding on the

length of the statute of limitations period. Perez argues that the court’s finding of

good faith cannot be reconciled with the jury’s finding of willfulness and must

yield to it. If so, it was error for the district court not to assess liquidated damages.

The seed bed that gave rise to this conflict between findings lies in having

the judge and jury answer what is essentially the same question for two different

purposes. The willfulness or good faith question is answered first by the jury to

determine the period of limitations and then, if there is a verdict for the employee,

again by the judge to determine whether to award liquidated damages.

25
 The statute of limitations for claims seeking unpaid overtime wages

generally is two years, but if the claim is one “arising out of a willful violation,”

another year is added to it. 29 U.S.C. § 255(a). To establish that the violation of

the Act was willful in order to extend the limitations period, the employee must

prove by a preponderance of the evidence that his employer either knew that its

conduct was prohibited by the statute or showed reckless disregard about whether

it was. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 108 S. Ct. 1677,

1681 (1988). The Code of Federal Regulations defines reckless disregard as the

“failure to make adequate inquiry into whether conduct is in compliance with the

Act.” 5 C.F.R. § 551.104. Where the jury decides willfulness for statute of

limitations purposes, see Fowler v. Land Mgmt. Groupe, Inc., 978 F.2d 158, 163

(4th Cir. 1992), it will be called upon to do so in cases, like this one, where the

failure to pay overtime occurred more than two years before the action was filed.3

That is one side of the potential conflict.

The other side of the potential conflict is that the Act assigns to the judge the

role of finding whether the employer acted in subjective and objective good faith

for liquidated damages purposes. See 29 U.S.C. § 260. When the jury finds an

3
We have been unable to find an FLSA decision of this Court squarely holding that the
decision about whether the employer acted willfully for purposes of determining the statute of
limitations period is to be decided by the jury. In the district court, the court and the parties
assumed that the jury was to decide willfulness, and the parties have assumed that in their briefs
and arguments to us. So, we assume it too.

26
employer has violated the overtime provision of the FLSA and assesses

compensatory damages, the district court generally must add an award of

liquidated damages in the same amount, which doubles the total damages awarded.

29 U.S.C. § 216(b) (“Any employer who violates the provisions of [the FLSA] . . .

shall be liable to the employee or employees affected in the amount of . . . their

unpaid overtime compensation . . . and in an additional equal amount as liquidated

damages.”); see also Dybach v. State of Fla. Dep’t of Corr., 942 F.2d 1562,

1566–77 (11th Cir. 1991). There is, however, a good faith defense, which gives

the court discretion to reduce or deny an award of liquidated damages “if the

employer shows to the satisfaction of the court that the act or omission giving rise

to such action was in good faith and that he had reasonable grounds for believing

that his act or omission was not a violation of the Fair Labor Standards Act.” 29

U.S.C. § 260. The employer bears the burden of establishing both the subjective

and objective components of that good faith defense against liquidated damages.

Dybach, 942 F.2d at 1566; Spires v. Ben Hill County, 980 F.2d 683, 689 (11th Cir.

1993).

We discussed this conflict of findings issue in our recent decision in another

FLSA overtime wages case. See Rodriguez v. Farm Stores Grocery, Inc., ___ F.3d

___ (11th Cir. 2008). There we had the flip side of the present circumstances. The

27
employer in Rodriguez contended that because the jury had found that the violation

of the overtime provision had not been willful for statute of limitations purposes,

the judge was required to find that the employer had acted in good faith for

liquidated damages purposes. Id. at ___.

We found it unnecessary to decide in Rodriguez whether the judge could

make a finding on good faith inconsistent with the jury’s finding on willfulness,

because the different burdens of proof meant that the findings in that case were not

inconsistent. Id. at ___. Viewed in light of which party had the burden, the jury’s

finding was that the employee had not proven by a preponderance of the evidence

that there was willfulness, while the judge’s finding was that the employer had not

proven by a preponderance of the evidence that there was a lack of good faith. Id.

at ___. As we explained, the two findings were not inconsistent because a

reasonable factfinder could have found the evidence to be in equipoise on the

willfulness/good faith question, with the result that the employee had not proven

willfulness at the same time the employer had not proven good faith. Id. at ___. In

other words, it is logically possible for the losing side to have varied with, because

it depended on, the burden of proof.

That theory of reconciliation will not work in the present case. The jury’s

verdict on the statute of limitations issue amounts to a finding that the employee

28
carried his burden of proving willfulness, while the judge’s decision on the

liquidated damages issue amounts to a finding that the employer carried its burden

of proving good faith. Both findings rule out any equipoise in the evidence.

Because the burden of proof is different, two negative findings, which is what we

had in Rodriguez, may be explained by positing an evenness of the evidence; two

positive findings, which is what we have here, cannot be. So, the issue that was

not presented in Rodriguez is squarely presented here: Does the jury’s finding that

willfulness has been proven by the employee preclude the judge from finding that

good faith has been proven by the employer?

We have not decided this issue in the FLSA context, but we have resolved

closely analogous issues in the Equal Pay Act and Age Discrimination in

Employment Act contexts. See Glenn v. Gen. Motors Corp., 841 F.2d 1567 (11th

Cir. 1988); Castle v. Sangamo Weston, Inc., 837 F.2d 1550 (11th Cir. 1988). The

Equal Pay Act amended § 206 of the FLSA to prevent pay discrimination based on

sex, and the FLSA’s statute of limitations and liquidated damages provisions apply

to EPA claims. See 29 U.S.C. §§ 206(d)(3), 216(b), 260. In the Glenn case, which

was litigated before there was a right to a jury trial in EPA actions, the district

court found in deciding the length of the limitations period that the employer had

acted willfully in violating the statute, and it found in awarding liquidated damages

29
that the employer had not proven that it acted in good faith. Glenn, 841 F.2d at

1573. The employer contended on appeal that the district court should not have

awarded liquidated damages, but we rejected that contention for two alternative

reasons. Id. One was that there was sufficient evidence to support the district

court’s finding that the company had not acted in good faith. Id.

The second reason we gave for affirming the award of liquidated damages in

Glenn was that a finding the defendant had acted willfully for statute of limitations

purposes precludes a finding that it acted in good faith for liquidated damages

purposes. Id. at 1573 n.14 (explaining “that our conclusion in the context of the

discussion on the statute of limitations issue that GM’s actions met [the] . . .

definition of ‘willful’ precludes a finding of good faith on the part of GM”); see

also EEOC v. City of Detroit Health Dep’t, Herman Kiefer Complex, 920 F.2d

355, 358 (6th Cir. 1990) (“Since the jury determined that the City’s violation of the

Equal Pay Act was willful, and since the district court was, in determining whether

the violation was in good faith and with reasonable grounds, presented with the

same issue, the district court was bound by the jury finding.”). The preclusion

holding in Glenn was an alternative one, but alternative holdings are binding

precedent. Massachusetts v. United States, 333 U.S. 611, 623, 68 S. Ct. 747, 754

(1948); Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 340, 48 S. Ct.

30
194, 196 (1928); Johnson v. DeSoto County Bd. of Comm’rs, 72 F.3d 1556, 1562

(11th Cir. 1996); McLellan v. Miss. Power & Light Co., 545 F.2d 919, 925 n.21

(5th Cir. 1977).

Of course, we did not have the jury versus judge aspect of the question in the

Glenn case. But we did have it in the Castle ADEA case. That statute provides for

liquidated damages only where the defendant’s violation was “willful.” 29 U.S.C.

§ 626(b). For purposes of that provision, the Supreme Court had defined

willfulness as meaning that the defendant “either knew or showed reckless

disregard for the matter of whether its conduct was prohibited by the ADEA.”

Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 128–29, 105 S. Ct. 613,

625–26 (1985). That is the same definition of willfulness that applies to the

FLSA’s statute of limitations provision. McLaughlin, 486 U.S. at 135, 108 S. Ct.

at 1682.

That willfulness has the same meaning under both the FLSA and the ADEA

is important for our purposes, because we pointed out in Castle that when a jury

finds that a defendant’s violation is willful for statute of limitations purposes, “it

has already factored the possibility of good faith into its examination.” Castle, 837

F.2d at 1561. We held that a jury’s finding of willfulness deprives the district

court of any discretion to reduce liquidated damages based on its own finding of

31
good faith.4 Id. We explained that holding this way: “Not only would a district

court impermissively be making a finding contrary to the jury’s findings, but under

the Thurston definition to find ‘good faith’ after a finding of ‘willful’ violation is

illogical; the two terms are now mutually exclusive.” Id. (internal citation

omitted); see also Spanier v. Morrison’s Mgmt. Servs., 822 F.2d 975, 979 (11th

Cir. 1987) (“We hold that the existence of a jury issue of willfulness under the

Thurston standard divests the district court of discretion to reduce an ADEA

liquidated damages award.”); Lindsey v. Am. Cast Iron Pipe Co., 810 F.2d 1094,

1098 (11th Cir. 1987) (“[I]t is well-settled that the court may not make findings’

contrary to or inconsistent with the jury’s resolution . . . of that same issue as

implicitly reflected in its general verdict . . . .” (internal quotation marks and

4
Before the Supreme Court’s decision in Thurston, this Court used in ADEA cases the
“in the picture” standard of willfulness, which asked whether the employer knew or suspected
that the conduct might violate the Act. See Coleman v. Jiffy June Farms, Inc., 458 F.2d 1139,
1142 (5th Cir. 1972). With that very broad definition of willfulness in place, our circuit law
permitted the district court to reduce or deny liquidated damages based on a finding of good faith
even where it had been determined that the employer willfully violated the ADEA. In Hays v.
Republic Steel Corp, 531 F.2d 1307 (5th Cir. 1976), considering the applicability of the good
faith defense in 29 U.S.C. § 260 to the ADEA, we held that the discretion of the district court
under § 260 to reduce or deny liquidated damages based on a showing of good faith applied to
ADEA cases. Id. at 1312. Under the Jiffy June standard, a finding of willfulness and a later
finding of good faith were not contradictory. An employer could know that there was a
possibility it was violating the Act but still have a good faith belief that it was not.

However, after the Supreme Court narrowed the definition of willfulness in Thurston, we
determined that the Supreme Court had “disapproved this court’s definition of willfulness and,
by implication, disapproved the discretion that this court had vested in district courts to reduce
the liquidated damages award on a finding of good faith.” Spanier v. Morrison’s Mgmt. Servs.,
822 F.2d 975, 979 (11th Cir. 1987). In other words, Thurston’s narrowing of the definition of
willfulness made it and good faith mutually exclusive.

32
citation omitted) (ellipsis in original)); Powell v. Rockwell Int’l Corp., 788 F.2d

279, 287 (5th Cir. 1986) (affirming the district court’s award of liquidated damages

in an ADEA case because under “the Thurston rule . . . ‘good faith’ can no longer

coexist with ‘willfulness’” and concluding that “a further examination of good

faith becomes irrelevant because it has already been factored into the Thurston

‘willfulness’ definition” by the jury).

We conclude, based on the reasoning and holdings of our Glenn and Castle

decisions, that in an FLSA case a jury’s finding in deciding the limitations period

question that the employer acted willfully precludes the court from finding that the

employer acted in good faith when it decides the liquidated damages question. Our

conclusion puts us on what appears to be the majority side of the circuit split on

this issue. Compare Singer v. City of Waco, Tex., 324 F.3d 813, 823 (5th Cir.

2003) (affirming an award of liquidated damages where the jury had found that the

defendant’s violation of the FLSA was willful, because the defendant could not

show it had acted in good faith), and Chao v. A-One Med. Servs., Inc., 346 F.3d

908, 920 (9th Cir. 2003) (affirming an award of liquidated damages under the

FLSA where there had been a finding of willfulness, and noting that “a finding of

good faith is plainly inconsistent with a finding of willfulness”), and Herman v.

Palo Group Foster Home, Inc., 183 F.3d 468, 474 (6th Cir. 1999) (affirming a

33
district court’s award of liquidated damages for violations of the FLSA and

concluding that “a finding of willfulness is dispositive of the liquidated-damages

issue”), and Pollis v. New Sch. for Soc. Research, 132 F.3d 115, 120 (2d Cir.

1997) (finding in an EPA case that an employer had acted willfully for purposes of

the statute of limitations, “and the resulting compensatory award should be

doubled pursuant to the Fair Labor Standards Act’s liquidated damages provision”

under 29 U.S.C. § 260), and Brinkman v. Dep’t of Corr., 21 F.3d 370, 372 (10th

Cir. 1994) (determining that the district court “properly awarded liquidated

damages based upon the jury’s finding of willfulness” because “when fact issues

central to a claim are decided by a jury upon evidence that would justify its

conclusion, the Seventh Amendment right to a jury trial prohibits the district court

from reaching a contrary conclusion”), with Broadus v. O.K. Indus., Inc., 226 F.3d

937, 944 (8th Cir. 2000) (noting in an EPA case that the “jury’s decision on

willfulness is distinct from the district judge’s decision to award liquidated

damages” (citation omitted)), and Fowler, 978 F.2d at 163 (determining in an EPA

case that in light of “the explicit language of section 260, expressly vesting

discretion to award liquidated damages in the hands of the trial judge . . .

Congressional intent would [not] be effectuated by a scheme in which, in every

case, the trial court’s discretion to award liquidated damages would be completely

34
constrained by the jury’s determination on ‘willfulness’ for purposes of the statute

of limitations”).5

We reject the defendants’ argument that the district court was empowered to

decide the good faith question and decline to award liquidated damages because of

the evidence that they had consulted an attorney and their payroll company about

whether they qualified for the recreational and amusements exemption and had

been advised that they did. Given our holding that a jury’s finding of willfulness

forecloses a judge from finding good faith, evidence that an employer acted

without willfulness and in good faith makes a difference at this stage only if that

evidence compels judgment as a matter of law for the employer. In deciding that

question we apply the usual standard of whether “no jury reasonably could have

reached a verdict for the plaintiff” on the claim or defense. Collado v. United

Parcel Serv., Co., 419 F.3d 1143, 1149 (11th Cir. 2005). We apply that standard

5
The Fourth Circuit misspoke when it said in Fowler that the majority position on this
issue results in “a scheme in which, in every case, the trial court’s discretion to award liquidated
damages would be completely constrained by the jury’s determination on ‘willfulness’ for
purposes of the statute of limitations.” Fowler, 978 F.2d at 163. There will not be a statute of
limitations issue for the jury to decide “in every case.” Even in the subset of cases where there is
a statute of limitations issue, a decision by the jury that the employee has failed to carry his
burden of proving willfulness will not constrain the judge’s decision on whether the employer
has carried its burden of proving good faith for liquidated damages purposes. Only in those
cases where there is a statute of limitations issue and where the jury decides that issue by finding
that the employee has proven the employer acted willfully will the judge’s decision on the
liquidated damages issue be constrained.

35
de novo and must draw all inferences in favor of the prevailing party, id., here the

plaintiff.

The defendants presented testimony on this issue from three witnesses. Gray

Laney, a CPA who worked for both Kennel Club and CCC Racing, testified that he

had always thought that the companies were exempt from paying overtime. He

said that he had discussed the matter with a sales representative of Paychecks

Business Solutions, their payroll company, who reviewed it with an unidentified

person in his company. They were of the opinion that Kennel Club and CCC

Racing were exempt, but that was based on the assumption that the two were

separate entities, which in turn was apparently based on the further assumption that

the two companies did not intermingle any of their money. As we have already

noted, however, the evidence at trial, viewed in the light most favorable to Perez,

showed that the two companies shared a single credit card, that CCC Racing

controlled Kennel Club’s operating cash, and that money from Kennel Club’s

operating accounts was recorded as a payable on CCC Racing’s books. See supra

at ___.

Charles Neilson, another CPA and business consultant for Kennel Club and

CCC Racing, testified that he had gotten a verbal opinion from Bill Kalish, an

attorney who did work for the Collins family, about whether the companies

36
qualified for the recreational and amusement exemption. Based on what Neilson

had told him, Kalish advised that the exemption applied and he passed that advice

along to principals in the companies. Although he testified that Kalish was aware

of how the companies had been set up, Neilson did not testify that Kalish knew that

one controlled the other’s operating cash or about how the money of one was

treated as a payable on the other’s books.

The final witness to testify for Kennel Club and CCC Racing on this issue

was Jack Collins, Jr. He testified that after he set up CCC Racing he personally

called Bill Kalish for advice about whether the two companies were exempt, and

Kalish advised him that they were exempt. He also said that he had received the

same advice from his payroll company. His testimony, however, does not indicate

what, if anything, he disclosed to attorney Kalish or the payroll company about the

financial inter-relationships and dealings between the companies.

All three of these witnesses were cross-examined, and the jury had an

opportunity to observe their demeanor and come to a conclusion about their

credibility. The jury could have been persuaded not to believe the testimony of

these witnesses for several reasons. One is that the attorney Bill Kalish, on whose

opinion Kennel Club and CCC Racing supposedly relied, did not testify. At the

time of this trial, which was held in Orlando, Kalish’s office was eighty or ninety

37
miles away in Tampa. He did legal work for the companies and their principals,

and they could have called him as a witness. They failed to do so, and no

explanation for that failure appears in the record.

The same is true of the failure to call the person at the payroll company who

supposedly advised Kennel Club and CCC Racing that they were exempt. That

person was not called and, again, no explanation for the failure to do so appears in

the record. The jury could have found it telling that neither of the two people who

allegedly arrived at the opinion on which Kennel Club and CCC Racing relied was

called to testify that he actually did render that opinion or the basis for it.

The jury also justifiably could have been skeptical about the opinion because

it was not reduced to writing by either attorney Kalish or the unidentified person at

the payroll company, or otherwise reflected in any document. But even if the jury

credited all of the testimony of the three witnesses who testified about the

opinions, it still reasonably could have concluded that Kennel Club and CCC

Racing acted willfully, because they and those acting on their behalf failed to

supply Kalish and the payroll company with all of the information needed to arrive

at an informed opinion on the subject.

For these reasons, we conclude that the jury reasonably could have

concluded that Kennel Club and CCC Racing’s violations of the FLSA were

38
willful. The evidence did not compel the jury to reach the contrary conclusion.

And, as we have already explained at some length, the jury’s finding on that

willfulness issue ruled out a later finding by the judge of good faith. It follows that

the district court erred by denying Perez’s motion for liquidated damages.

V.

In conclusion, we AFFIRM the judgment of the district court insofar as it

denies Kennel Club and CCC Racing’s motions for judgment as a matter of law

and grants Collins, Sr.’s renewed motion for judgment as a matter of law. We

REVERSE the judgment of the district court denying liquidated damages and

REMAND for entry of a judgment that includes liquidated damages.

39