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Pappas v. Solution Start, Corp.

United States District Court, W.D. North Carolina, Charlotte Division

July 26, 2018

PETE J. PAPPAS Plaintiff,
v.
SOLUTION START, CORP., Defendant.

          ORDER

          GRAHAM C. MULLEN UNITED STATES DISTRICT JUDGE

         This matter is before the Court upon Defendant's Motion for Partial Summary Judgement pursuant to Rule 56(a) of the Federal Rules of Civil Procedure (Doc. No. 6). This motion has been fully briefed and is ripe for disposition.

         I. FACTUAL BACKGROUND

         Plaintiff Pete J. Pappas initiated this claim against his former employer Defendant SolutionStart, Corp. for unpaid overtime in violation of the Fair Labor Standards Act (“FLSA”) and the North Carolina Wage and Hour Act (“NCWHA”).

         Defendant was founded in 2000 by its CEO, Demetrios Andritsogiannis, who at all times relevant to this case went by the name Jimmy Georgiou (“Georgiou”). Defendant is a business providing technology solutions, managed services, and customer support to its customers, most of whom are dental practices.

         Plaintiff was employed by Defendant as a technician. His duties included installing hardware systems and cables at client locations and occasionally supporting hardware and software products. Beginning in the early days of its existence, Defendant paid all employees as salaried employees, and they received the same flat amount each pay period regardless of how many hours the employee worked. Georgiou and Andy Vrantsis (“Vrantsis”), the company's Vice President of Operations and Finance, allegedly believed this was appropriate for skilled professionals in a computer related field.

         Defendant uses Paychex, a third-party service provider, to process payroll and consult on HR matters. Paychex assisted in the creation of the company's employee handbook and benefit plans. Georgiou assumed Paychex would notify SolutionStart if its pay practices were incorrect.

         In the summer of 2016, Plaintiff expressed his belief that he was misclassified by Defendant as an exempt employee under FLSA and that he should be earning overtime.[1] Around the same time, Defendant was contacted by Paychex in connection with some upcoming changes in the law that might require Defendant to reclassify certain employees as non-exempt.

         Defendant consulted with Paychex and sought legal advice on both the new wage laws and Plaintiff's question about his own classification. After this consultation Defendant reclassified Pappas and one other employee as non-exempt. Out of 25 employees, these were the only two employees who needed to be reclassified. The re-classification was implemented the week of July 9-16, 2016. Plaintiff was paid in accordance with the law from this date forward.

         Plaintiff asked to be paid for the overtime he had worked prior to his reclassification. In November 2016, Defendant attempted to pay Plaintiff and the other reclassified employee an amount equal to the overtime they should have received for the previous two years. There was no condition to their acceptance of this payment.

         Even though Plaintiff was paid a salary, Defendant maintained accurate records of his working hours using a software program called ConnectWise. Plaintiff entered his own hours into ConnectWise and certified that they were correct. Plaintiff acknowledges that these records accurately reflected his time. Using the ConnectWise records, Vrantsis created a spreadsheet showing how much money Plaintiff would have earned during the past two years if he had been paid overtime. During the November meeting, Georgiou and Vrantsis showed Plaintiff the spreadsheet and explained the methodology behind it. Plaintiff acknowledges the spreadsheet is accurate and its methodology was correct. In that meeting, Georgiou and Vrantsis also presented Plaintiff with a payroll check in the gross amount of $10, 350.17 and a Memorandum of Understanding explaining the payment and how it had been calculated. Although there was no condition on Plaintiff's acceptance of the payment, Defendant hoped the Memorandum would effectively communicate that there was no reason for a dispute. Plaintiff took the check with him, but never deposited it. Plaintiff allegedly believed that the payment was “unfair” because it did not cover the entire length of his employment.

         Plaintiff continued working for Defendant as a non-exempt employee until he voluntarily resigned effective June 16, 2017. He filed this lawsuit on August 4, 2017.

         II. DISCUSSION

         A. ...


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