Olibas v. Barclay

• Decision Date: 20 September 2016
• Docket Number: No. 15–10919,15–10919
• Parties: Nicole Olibas, On behalf of themselves and all others similarly situated; Reginald E. Williams; Donny J. Hodkinson; Tina McDonald ; Carol Johnson, Plaintiffs–Appellees v. John Barclay ; Native Oilfield Services, L.L.C., Defendants–Appellants Reginald E. Williams, On behalf of themselves and all others similarly situated; Donny J. Hodkinson, On behalf of themselves and all others similarly situated; Tina McDonald, On behalf of themselves and all others similarly situated; Carol Johnson, On behalf of themselves and all others similarly situated; Plaintiffs–Appellees v. Native Oilfield Services, L.L.C., John Barclay ; Defendants–Appellants
• Court: U.S. Court of Appeals — Fifth Circuit

838 F.3d 442

Nicole Olibas, On behalf of themselves and all others similarly situated; Reginald E. Williams; Donny J. Hodkinson; Tina McDonald ; Carol Johnson, Plaintiffs–Appellees

v.John Barclay ; Native Oilfield Services, L.L.C., Defendants–Appellants

Reginald E. Williams, On behalf of themselves and all others similarly situated; Donny J. Hodkinson, On behalf of themselves and all others similarly situated; Tina McDonald, On behalf of themselves and all others similarly situated; Carol Johnson, On behalf of themselves and all others similarly situated; Plaintiffs–Appellees

v.Native Oilfield Services, L.L.C., John Barclay ; Defendants–Appellants

No. 15–10919

United States Court of Appeals, Fifth Circuit.

Filed September 20, 2016

Allen Ryan Vaught, Melinda Arbuckle, Denyse Finn Clancy, Farsheed Fozouni, Sherri Ann Saucer, Esq., Baron & Budd, P.C., Dallas, TX, for Plaintiffs–Appellees.

Christopher Earl Moore, Esq., Attorney, Matthew Miles McCluer, Christine Marie White, Esq., Ogletree, Deakins, Nash, Smoak & Stewart, P.C., New Orleans, LA, David Michael O'Dens, Esq., SettlePou, Dallas, TX, for Defendants–Appellants.

Before JOLLY, BARKSDALE, and SOUTHWICK, Circuit Judges.

E. GRADY JOLLY

, Circuit Judge:

The overarching question presented in this appeal is whether an employer, Native Oilfield Services, L.L.C., and its president, John Barclay, (together, “Native”) owed its employee truck drivers overtime under the Fair Labor Standards Act (“FLSA”) or whether the drivers were exempt from the FLSA's overtime pay requirement under the Motor Carrier Act (“MCA”). Because we conclude that the district court did not err in denying Native's Renewed Motion for Judgment as a Matter of Law (“JMOL”) and Motion for a New Trial, we AFFIRM.

I.

Native provides commercial transportation services to the oil and gas industry, primarily transporting sand for hydraulic fracking. Native's truck drivers filed a collective action against Native, alleging that Native violated the FLSA by failing to pay them overtime for their off-the-clock hours waiting to be assigned a truck or for their trucks to be loaded/unloaded between August 22, 2009, and August 5, 2014. Native countered that the drivers were exempt from the FLSA's overtime pay provisions under the MCA.

At trial, there was no dispute that Native was a motor carrier engaged in interstate commerce or that the drivers operated trucks over 10,000 pounds. There was, however, conflicting testimony over whether the drivers engaged in the actual transportation of goods across state lines or the intrastate transportation of goods in the flow of interstate commerce—situations that would bring the drivers within the ambit of the MCA exemption.¹

Notably, at trial, Native could not produce drivers' logs, bills of lading, time sheets, or other documents conclusively showing interstate travel by the drivers.² It also could not produce documentary evidence of any customer orders to support its intrastate theory.³ Native only produced Interstate Fuel Tax Agreements (“IFTAs”). Although they reflected the out-of-state miles recorded each year, the IFTAs only covered two years, showed no out-of-state travel for long periods, did not identify drivers, and did not record the weights of vehicles.⁴ Moreover, the jury saw a discovery request for documents that “ever informed any driver that he/she could be indiscriminately assigned to drive an interstate trip” that Native responded to with “none.”

At the close of trial, the district court refused to give Native's 491–page damages jury instruction, which would have required the jury to determine the total weekly pay and hours worked for each of the 108 plaintiff-drivers for five years. Also, although it otherwise adopted wholesale Native's jury instruction on the second prong of the MCA, the court added, at the drivers' request, a one-sentence example of when a “reasonable expectation” of interstate transport is satisfied. The example identified a single factor of a multi-factor test.⁵

On August 5, 2014, the jury returned a verdict in favor of the drivers. The jury found that: (1) Native failed to establish each essential element of the MCA exemption; (2) Native failed to pay the drivers overtime in violation of the FLSA; (3) Native willfully violated the FLSA; and (4) the drivers, as a collective unit, averaged eighteen hours of weekly unpaid overtime.⁶

The court ordered the parties to mediate their unresolved dispute over the amount of damages owed. When the parties could not reach a settlement, the drivers moved for entry of judgment, providing the court with supplemental, post-verdict declarations from drivers whose testimony was not presented at trial.⁷ The court then determined the drivers' regular hourly rate of pay and the overtime premium without any further jury findings. In order to do these calculations, the court accepted the drivers' post-verdict declarations, which stated whether a driver was paid hourly or by the load. This was necessary, the court explained, because Native failed to maintain adequate payroll records, an obligation mandated by federal law.

On May 8, 2015, the court awarded the drivers $1,673,145 in unpaid overtime compensation, $1,673,145 in liquidated damages, $371,759.59 in attorneys' fees, and $10,564.32 in costs. The court also denied Native's renewed JMOL motion.⁸ It entered final judgment on May 11, 2015.

Native then renewed its JMOL motion and moved for a new trial. The court denied both motions on August 27, 2015.⁹

Native has timely appealed. Native contends that the district court erred: (1) in denying its JMOL and new-trial motions because the weight of the evidence showed that the MCA exemption applied to the drivers; and (2) in denying its new trial motion because: (a) the “reasonable expectation” and damages jury instructions were improper and prejudicial; and (b) the damages calculation was improper because the jury's findings on the average overtime hours worked were not supported by the evidence and the court considered the drivers' post-verdict declarations.

II.

A.

We begin by considering the district court's denial of Native's JMOL and new trial motions because it determined that there was sufficient evidence for the jury to reasonably conclude the MCA exemption did not apply. We review the denial of a JMOL motion de novo , but “ ‘our standard of review with respect to a jury verdict is especially deferential.’ ” Evans v. Ford Motor Co. , 484 F.3d 329, 334 (5th Cir. 2007)

(citation omitted). We review the denial of a new trial motion using the more deferential abuse of discretion standard. Jackson v. Host Int'l, Inc. , 426 Fed.Appx. 215, 218 (5th Cir. 2011) (citations omitted).

Native argued below, as it does on appeal, that the court should have granted its JMOL or new trial motions because no rational jury could have found that its drivers did not operate vehicles in interstate commerce or transport intrastate goods that were in interstate commerce. The drivers contended below, as they do on appeal, that: (1) the verdict is supported by the evidence; and (2) Native failed to meet its burden of establishing each element of the MCA exemption.

The FLSA “requires an employer to pay overtime compensation to any employee working more than forty hours in a workweek.” Allen v. Coil Tubing Servs., L.L.C. , 755 F.3d 279, 282 (5th Cir. 2014)

(citing 29 U.S.C. § 207(a)(1) ). Although there are exemptions to the FLSA, these exemptions “ ‘are construed narrowly against the employer, and the employer bears the burden to establish a claimed exemption.’ ” Id. at 283 (citation omitted).

The MCA exemption “states that the FLSA's overtime requirement shall not apply ... to ... any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49 of the MCA.” Id.

(citations and internal quotation marks omitted). Section 31502 and Department of Transportation regulations permit the Secretary to “establish these requirements for employees who” drive vehicles over 10,000 pounds and meet two requirements. Id. at 283, 291 n.6 (citations omitted).

Only the second requirement is contested here.¹⁰ It requires employees to “ ‘engage in activities of a character directly affecting the safety of operation of motor vehicles ... in interstate ... commerce.’ ” Id. at 283

(citations omitted). “Interstate commerce” is “ ‘the actual transport of goods across state lines or the intrastate transport of goods in the flow of interstate commerce.’ ” Id. (citation omitted). And “the ‘character of the activities involved in the performance of [the employee's] job ... is controlling.’ ” Id. (citations omitted).

The MCA exemption will not apply if “ ‘the continuing duties of the employee's job have no substantial direct effect on such safety of operation or where such safety-affecting activities are so trivial, casual, and insignificant as to be de minimis.’ ” Id. at 284

(citation omitted). But, generally, the exemption applies if employees are, or are “ ‘likely to be, called upon in the ordinary course of [their] work to perform, either regularly or from time to time, safety-affecting activities ... that are interstate in nature.’ ” Id. (citations omitted). Employees are likely to be called upon to perform such activities if they “ ‘could reasonably have been expected to [engage] in interstate commerce consistent with their job duties.’ ” Id. (citations omitted). This, in turn, is determined by a multi-factor test.¹¹

Native has not shown that the district court erred in denying its JMOL motion. It was a pure jury question whether to believe the employees or the employer. See Dalton v. Toyota Motor Sales, Inc. , 703 F.2d 137, 140 (5th Cir. 1983)

. The jury heard conflicting testimony. Even though it could have decided in favor of Native, the jury decided in favor of the drivers. Moreover, the evidence was clearly sufficient to support the...