The Garofolos were hired to work as resident managers of defendant's Blue & Gray Self Storage facility in Virginia. They lived in an apartment above the business office. In acceptance of their employment, the Garofolos entered into a Resident Manager Employment Agreement, which included, among other things, specific terms regarding hours of employment, job duties, and compensation.
The agreement was intended to satisfy 29 C.F.R. § 785.23 (2004), a Department of Labor regulation interpreting the Fair Labor Standards Act (FLSA), which states:
An employee who resides on his employer’s premises on a permanent basis or for extended periods of time is not considered as working all the time he is on the premises. Ordinarily,he may engage in normal private pursuits and thus have enough time for eating, sleeping, entertaining, and other periods of complete freedom from all duties when he may leave the premises for purposes of his own. It is, of course, difficult to determine the exact number of hours worked under these circumstances and any reasonable agreement of the parties which takes into consideration all of the pertinent facts will be accepted. . . .
29 C.F.R. § 785.23 (2004) (emphasis added).
The agreement with the Garofolos was clearly well-drafted, and it was found to be reasonable because it
- acknowledged that 40 hours a week was a reasonable estimate of the hours actually worked;
- provided guidance as to how the required duties could be accomplished within 40 hours (including a sample schedule illustrating how the employees could accomplish their duties within a 40 hour workweek by dividing the workload);
- required the Garofolos to certify on a monthly basis that 40 hours continued to be a reasonable estimate of the time needed to complete the duties as resident managers; and
- provided for overtime pay if either employee exceeded 40 hours in a given week.
For the period in question, the Garofolos never submitted a request for overtime compensation in accordance with the terms of their employment agreement.
The Court acknowledged that "in light of the difficulty in separating 'work' time from personal time for employees who live on site, section 785.23 establishes a presumption that such employees are not working the entire time they are on the premises." Even if the employees actually worked more than 40 hours per week by deviating from the suggested schedule, they were not entitled to overtime because the employment agreement remained reasonable. "Standing alone, proof that the Garofolos worked more than 40 hours per week would not preclude summary judgment in this case," the Court held. "[I]t is not enough for the plaintiffs to show that they worked more than agreed. They must show that the agreement provided an unreasonably short amount of time to perform the assigned tasks."