Hobbs v. EVO Inc.
| Decision Date | 28 August 2019 |
| Docket Number | CIVIL ACTION NO. 4:16-CV-00770 |
| Citation | 394 F.Supp.3d 717 |
| Parties | Jerod HOBBS, et al., Plaintiffs, v. EVO INCORPORATED, et al., Defendants. |
| Court | U.S. District Court — Southern District of Texas |
John David Hart, The Law Offices of John David Hart, Fort Worth, TX, for Plaintiffs
Marlene C. Williams, Michael J. Woodson, Eversheds Sutherland (US) LLP, Houston, TX, for Defendants.
The Parties and their counsel appeared before this Court for a bench trial for the determination of their claims in the above-styled and numbered case. Each side presented evidence during trial, produced briefing, and made their respective arguments as to the effects of the evidence, and the Court hereby issues its findings of fact and conclusions of law. The Court will first give a brief background and set out the facts to which the Parties have agreed. Next the Court will recount in detail the relevant testimony and other evidence adduced at trial. Finally, the Court sets out its findings of fact and conclusions of law.
I. Background Facts
Plaintiffs Jerod Hobbs ("Hobbs"), Ronald Lee ("Lee"), Arlen Jones ("Jones"), and Jordan Arroyo ("Arroyo") were field engineers that worked for E.V. Incorporated (hereinafter "EVO").1 Plaintiffs filed suit against EVO, Maurice McBride ("McBride"),2 Francis Neill ("Neill"), and Sam Copeman ("Copeman"). The Plaintiffs brought this action seeking unpaid overtime and liquidated damages under the Fair Labor Standards Act ("FLSA"), claiming they worked more than 8-hour days/40-hour weeks during the course of their employment with EVO and were not paid overtime wages as required by the FLSA.
Defendants concede that Plaintiffs were not paid overtime, but they differ with Plaintiffs on whether Plaintiffs are owed overtime and differ significantly on the frequency that overtime pay might be due, if indeed any is due. They also concede that there were occasions when the Plaintiffs worked in excess of 40-hour weeks, but they claim that Plaintiffs were not entitled to overtime wages because they are exempt from the requirements of the FLSA under the administrative, highly compensated, and outside sales exemptions.
EVO is a company that provides downhole video camera services for the oil and gas industry. (Doc. No. 98 "Joint Pretrial Order" ¶ 6.1). EVO has specialized and proprietary camera technology which allows it to assist its customers in reviewing well conditions, such as to identify, diagnose, or photograph conditions that interrupt operations at a wellsite. EVO is an enterprise in commerce within the meaning of 29 U.S.C. § 203(s)(1) and § 203(r). (Id. ¶ 6.2–6.3). EVO has and had an annual gross volume of sales made or business done of not less than $500,000. (Id. ¶ 2). EVO is a domestic for-profit corporation incorporated under the laws of the State of Texas with its principal place of business in Harris County, Texas. (Id. ¶ 6.4). The other individual defendants—Copeman and Neill—are citizens of the United Kingdom. (Id. ¶ 6.6–6.8). The Parties agreed that EVO and Neill are employers under the FLSA. (Id. ¶ 6.9–6.10).
The two individual Defendants were executives at EVO or one of its affiliates. (McBride acted as interim CEO of EVO from June or July 2015 until April 2016).3 (Id. ¶ 6.11). Copeman served as Director of EVO, Corporate Officer of EVO, and acted as President of EVO. (Id. ¶ 6.12). The time frame in which Copeman held these positions is discussed in more detail below. Since the Parties conceded Neill was an employer as that term is defined in the FLSA and since the Court directed a verdict on that issue in favor of McBride at trial, it will concentrate any discussions of individual liability on Copeman.
EVO employed the four Plaintiffs as field engineers. (Id. ¶ 6.18). Hobbs, Lee, Jones, and Arroyo were EVO's employees within the meaning of the FLSA. (Id. ¶ 6.13). The Plaintiffs worked for EVO for the following periods of time:
(Id. ¶ 6.14–6.17). As field engineers, the Plaintiffs would travel to customers' wellsite locations where they would obtain downhole video and provide EVO's customers with a thumb drive containing the downhole video, the job log, and individual pictures as requested by the customer that the field engineer collected throughout the job. (Id. ¶ 6.20–6.22). The job logs and summaries were prepared on location by the field engineers, as well as real-time annotations of the downhole video for the customers. (Id. ¶ 6. 33). At the job site, field engineers interfaced with wireline operators, engineers, and company representatives—often called the "company man." (Id. ¶ 6.32).
During the course of their employment with EVO, the Parties agree that Plaintiffs were typically the sole EVO representative at a customer's site. (Id. ¶ 6.31). As field engineers, the Plaintiffs did not handle employee grievances or complaints (id. ¶ 6.24), did not discipline other employees (id. ¶ 6.25), and did not and could not set or adjust the rate of pay of other employees (id. ¶ 6.23).
During their employment, the Plaintiffs were located in different states. Hobbs, whose original title was "West Virginia Base Manager," was initially located in West Virginia and then was transferred to Oklahoma as a field engineer. (Id. ¶ 6.26–6.27). Lee was based in Colorado. (Id. ¶ 6.30). Jones was based in Oklahoma. (Id. ¶ 6.28). Arroyo was based in California. (Id. ¶ 6.29).
As field engineers, Plaintiffs earned a salary of at least $455.00 per week. (Id. ¶ 6.19).
The agreed recovery period for Hobbs is March 24, 2014 to August 6, 2018. (Id. ¶ 6.36). Hobbs' compensation during those time periods was as follows:
(Id. ¶ 6.37). The agreed recovery period for Lee is September 2, 2014 to May 4, 2018. (Id. ¶ 6.38). Lee's compensation during the time period was as follows:
(Id. ¶ 6.39). The agreed recovery period for Jones is March 24, 2014 to October 5, 2014. (Id. ¶ 6.42). Jones' compensation during the time period was as follows:
• $122,932.07
(Id. ¶ 6.43). The agreed recovery period for Arroyo is March 24, 2014 to January 26, 2016. (Id. ¶ 6.40). Arroyo's compensation during the time period was as follows:
(Id. ¶ 6.41). During their employment with EVO, Defendants treated Plaintiffs as exempt employees for overtime purposes. (Id. ¶ 6.44).
EVO is a wholly owned subsidiary of E.V. Holdings. (EVO Ex. 93 at 14:17–15:7) ("E.V. Holdings owns ... E.V. Offshore Limited in the U.K. and E.V. Offshore owns E.V., Inc. [EVO].") The related companies in this corporate family include E.V. Holdings, E.V. Finco, and E.V. Offshore, but these entities are not at issue in this case. Although some of the chief executives at issue in this case were on the board of E.V. Holdings, such as Copeman and McBride, in those positions they nonetheless maintained executive responsibilities over EVO.
This case involves a large number of non-party individuals who are repeatedly mentioned in the testimony and exhibits. Accordingly, the Court will briefly address the names and titles of the most frequently mentioned persons:
Additionally, EVO produced an organizational of its company in Plaintiffs' Exhibit 5, which the Court now describes in relevant part. The executive management sector was made up of a first tier—the CEO (Neill, McBride, and later Louden)—then a tier consisting of the CFO (Copeman), Chief Technical Officer (Thursby), VP Marketing, Engineering and Manufacturing Manager, President Americas, Europe/Asia Region Manager, and "MENA" Asia Region Manager. Under President Americas was a third tier, consisting of the "GOM" Manager, VP US Land (Sutherlin), and VP Canada. (Plaintiffs' Ex. 5 at 1).4 Copeman directly supervised three Financial Controllers (Trudi O'Brien, Alan Hardingham, and Monica Flores) and an IT Support Engineer. (Id. at 2).
Within the North American region, the three regions (GOM, US Land, and Canada) each had similar divisions with slight differences in nomenclature. In particular, the regions had supervisors over the field engineers and a separate sales engineer or sales manager. (Id. at 7–9). The US Land chain of command at one point in time appeared as follows:
(Id. at 9). As the chart shows, Sutherlin oversaw the entire US region. There were three specifically designated salespersons, one in Houston, one in Dallas, and one in the Rockies District. Several field engineers reported directly to Sutherlin, including Hobbs. Others in the Rockies District, such as Ron Lee, reported to White, who in turn reported to Sutherlin. The California...
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Hobbs v. EVO Inc.
...discretion.III.The district court's post-trial rulings on liability, damages, and attorney's fees are AFFIRMED .1 Hobbs v. EVO Inc. , 394 F. Supp. 3d 717, 720 (S.D. Tex. 2019).2 Hobbs from September 1, 2011 until August 6, 2018; Lee from September 2, 2014 until May 4, 2018; Arroyo from Janu......
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Chapter § 2-13 29 CFR § 541.200. General Rule for Administrative Employees
...must make policy decisions on how a business should be run and about the nature and quality of the advice). • Hobbs v. Evo Inc., 394 F. Supp. 3d 717 ( S.D. Tex. 2019) (trial court conducts bench trial; plaintiffs were field engineers; court engaged in exhaustive discussion of limits of admi......