Hobbs v. Evo Inc.
| Decision Date | 15 February 2019 |
| Docket Number | CIVIL ACTION NO. H-16-770 |
| Parties | JEROD HOBBS, RONALD LEE, JORDAN ARROYO and ARLEN JONES, Individually and behalf of others similarly situated, Plaintiffs, v. EVO INCORPORATED, JONATHAN JAMES RENTON THORSBY, MAURICE McBRIDE, SAM COPEMAN, and FRANCIS NEILL, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Before the Magistrate Judge, upon referral from the District Judge, is Defendant EVO Incorporated ("EVO" or the "Company"), Jonathan James Renton Thursby ("Thursby"), Maurice McBride ("McBride"), Sam Copeman ("Copeman"), and Francis Neill ("Neill"), (collectively "Defendants") Motion for Summary Judgment (Document No. 74), and Defendants' Motion for Partial Summary Judgment on Statute of Limitations (In the Alternative, if Necessary, to their Motions for Summary Judgment)(Document No. 75). Having considered the Motions, the responses, the replies, the summary-judgment evidence, and the applicable law, the Magistrate Judge RECOMMENDS, for the reasons set forth below, that Defendants' Motion for Summary Judgment be DENIED and that Defendants' Partial Motion for Summary Judgment be GRANTED.
Plaintiffs Jerod Hobbs ("Hobbs"), Ronald Lee ("Lee"), Jordan Arroyo ("Arroyo"), and Arlen Jones ("Jones"), individually and on behalf of all other similarly situated Field Engineers, filed the instant collective action,1 against Defendants, alleging they were misclassified as exempt employees and were not paid overtime wages for the time they worked more than forty hours a week, in violation of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et. seq. First Amended Original Complaint (Document No. 48, p. 1-15). Plaintiffs further allege that Defendants acted willfully in failing to pay overtime wages in violation of the FLSA. (Document No. 48, p. 15-16). Defendants generally deny that they violated any provision of the FLSA and further deny that they acted willfully in failing to pay Plaintiffs in accordance with the FLSA. (Document Nos. 50 and 55).
EVO provides diagnostic information to its customers through observation of wellbores, pipelines, and other oil and gas exploration and production facilities, primarily through the use of video cameras. Plaintiffs are current or former employees of EVO, working as Field Engineers. Defendants contend that Plaintiffs have failed to offer any evidence to support their claims that Defendants violated the FLSA by failing to pay them overtime. They further argue that Plaintiffs are/were properly classified as exempt from the FLSA overtime provisions under the administrative, highly-compensated, and outside-sales employee exemptions and, therefore, no overtime is due. Plaintiffs responded that Defendants have not established Plaintiffs' exempt status and therefore the motion should be denied. Defendants have also moved for partial summary judgment on the statute of limitation, contending that Plaintiffs have not and cannot present evidence that Defendantswillfully violated the FLSA. Plaintiffs argue that the three-year statute of limitations should apply and that the motion should be denied.
Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The substantive law governing the claim at issue determines which facts are material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute over a material fact is genuine if the evidence presents an issue "that properly can be resolved only by a finder of fact because [it] may reasonably be resolved in favor of either party." Id. at 250. "Unsubstantiated assertions, improbable inferences, and unsupported speculation are not sufficient to defeat a motion for summary judgment." Brown v. City of Houston, 337 F.3d 539, 541 (5th Cir. 2003). The moving party bears the burden of identifying evidence that no genuine issue of material fact exists, Celotex Corp v. Catrett, 477 U.S. 317, 323 (1986), and the court must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. See Matsushita Elec. Indus.Co. v. Zenith Radio Corp. 475 U.S. 574, 587 (1986). Where the nonmovant bears the burden of proof at trial, the movant need only point to the absence of evidence supporting an essential element of the nonmovant's case; the movant does not have to support its motion with evidence negating the case. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). If the movant succeeds, the nonmovant can defeat the motion for summary judgment only by identifying specific evidence of a genuine issue of material fact, see Anderson, 477 U.S. at 248-49, but that evidence need not be in a form that would be admissible at trial. See Celotex, 477 U.S. at 324. In ruling on summary judgment, a court may notresolve credibility issues or weigh evidence. See Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398-99 (5th Cir. 2008).
The FLSA requires employers to pay time and a half for each hour that an employee works in excess of 40 hours, 29 U.S.C. § 207(a), and creates a cause of action against employers that violate these requirements. 29 U.S.C. § 216(b). "An employee bringing an action for unpaid overtime compensation must first demonstrate by a preponderance of the evidence: (1) that there existed an employer-employee relationship during the unpaid overtime periods claimed; (2) that the employee engaged in activities within the coverage of the FLSA; (3) that the employer violated the FLSA's overtime wage requirements; and (4) the amount of overtime compensation due." Johnson v. Heckmann Water Res. (CVR), Inc., 758 F.3d 627, 630 (5th Cir. 2014). If the plaintiff establishes a prima facie claim, the burden shifts to the defendant to either establish that he is exempt from the FLSA's requirements, or otherwise come forward with evidence disproving the plaintiff's alleged damages. Id.
Congress exempted certain classes of employees from FLSA coverage. See Zannikos v. Oil Inspections (U.S.A.), Inc., 605 F. App'x 349, 352 (5th Cir. 2015)("Certain employees, however, are exempt from the overtime requirements [of the FLSA]."). Exemptions are defined by the Secretary of Labor at 29 C.F.R. § 541.0 et. seq. Examples of exempt employees include workers who are employed in an administrative capacity. See 29 U.S.C. § 213(a)(1)(exempting from § 207 "any employee employed in a bona fide executive, administrative, or professional capacity. . ."). Likewise, highly compensated employees who perform at least one of the duties of an executive,administrative, or professional employee are exempt from the FLSA's overtime requirements, see 29 C.F.R. § 541.601, as are workers employed in outside sales, see 29 C.F.R. § 541.500(a)(1)-(2).
The employer bears the burden to establish the applicability of an exemption under the FLSA. Chatham v. Allstate Ins. Co., 465 F.3d 578, 584 (5th Cir. 2006). The question of how an employee spends his time working is a question of fact; but whether an employee's salary and duties ultimately satisfy an exemption is a question of law. Zannikos, 605 F.Appx at 352. (citing Icile Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986)). FLSA's exemptions must be given a "fair reading" rather than being construed narrowly against the employer. Encino Motorcars v. Navarro, ___U.S.___, 138 S.Ct. 1134, 1142 (2018); Carley v. Crest Pumping Technologies, L.L.C , 890 F.3d 575, 579 (5th Cir. 2018).
To qualify as a bona-fide exempt administrative employee, the employee must (1) earn at least $455 per week; (2) primarily perform work directly related to the management or general business operations of the employer or the employer's customers; and (3) exercise discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200(a). An employee's primary duty is not determined solely by his/her job title or by the amount of time spent performing exempt work. See 29 C.F.R. § 541.2; 29 C.F.R. § 541.700(b). An employee's primary duty is "what [the employee] does that is of principal value to the employer." Dalheim v. KDFW-TV, 918 F.2d 1220, 1227 (5th Cir. 1990). That determination "must be based on all the facts of a particular case, with the major emphasis on the character of the employee's job as a whole." 29 C.F.R. § 541.700(a).
With respect to the second element, "the pharse 'directly related to the management or general business operations' refers to the type of work performed by the employee. To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business, as distinguished, for example, from "work involving repetitive operations with . . . hands, physical skill and energy," such as that done by "non-management production-line workers and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, [and] mechanics." 29 C.F.R. § 541.601(d). The regulations further provide that Id. § 541.201(b). In Dewan v. M-I, L.L.C., 858 F.3d 331, 336 (5th Cir. 2017), the Fifth Circuit explained the...
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