Walsh v. Timberline S.

• Decision Date: 24 February 2023
• Docket Number: 1:16-cv-11552
• Parties: MARTIN J. WALSH, Secretary of Labor, Plaintiff, v. TIMBERLINE SOUTH, LLC and JIM PAYNE, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

MARTIN J. WALSH, Secretary of Labor, Plaintiff, v. TIMBERLINE SOUTH, LLC and JIM PAYNE, Defendants.

No. 1:16-cv-11552

United States District Court, E.D. Michigan, Northern Division

February 24, 2023

OPINION AND ORDER AFFIRMING SECRETARY'S DAMAGES RECALCULATION

Honorable Thomas L. Ludington United States District Judge

After nearly seven years of litigation in this Fair Labor Standards Act case, the only remaining issues are how much time four equipment operators spent eating lunch and commuting to and from work while completely relieved of their work-related duties. That time must be excluded from calculation of monetary damages that Defendants must pay for past-due overtime.

The Secretary of Labor previously calculated that Defendants owe the four operators a total of $104,431.86 for unpaid overtime. Then Defendants provided affidavits from the four operators that placed that number in doubt, triggering the Sixth Circuit to remand for recalculation. After considering the new affidavits and the rest of the record, the Secretary has reduced Defendants' liability to $59,602.74-a 43% discount. In response, Defendants argue they owe $18,440.57.

The questions presented are whether the Secretary's new calculations are reasonable and if so whether Defendants have sufficiently rebutted them.

I.

Formed as a Michigan LLC in 2010, Timberline South harvests timber from two to four jobsites at a time, exclusively in Michigan. Walsh v. Timberline S., LLC, No. 1:16-CV-11552, 2022 WL 17367185, at *1 (E.D. Mich. Nov. 28, 2022). Every workday Timberline's equipment operators must fill their trucks' hundred-gallon tanks on the way to work, from work, or both. Id. They commute from home or hotel, depending on the location of the jobsite, which changes every few weeks. Id. At the jobsites, the employees cut timber, load it onto trucks, and then transport it to mills in Michigan. Id. They get paid daily, hourly, by harvest amount, or some combination of those methods. Id. Jim Payne is Timberline's director and established its compensation and recordkeeping practices. Id.

In April 2016, the Secretary of Labor sued Timberline and Payne under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 207, 2015(a)(2), alleging violations of overtime and recordkeeping requirements. ECF No. 1.

Two years ago, the Sixth Circuit affirmed this Court's grant of summary judgment favoring the Secretary but vacated the damages awards. Sec'y of Lab. v. Timberline S., LLC (Timberline I), 925 F.3d 838 (6th Cir. 2019). The Sixth Circuit reasoned that neither ordinary-commute time nor bona-fide mealtime^[1] is “work” subject to the FLSA's overtime-compensation requirements, even for employers that have a custom or policy of paying for such time. Id. at 855. On remand, this Court was directed to determine the commute and meal time during which Defendants' employees were completely relieved of their duties and to exclude it from damages. Id. at 855 & n.12.

On remand, this Court held that more discovery was unlikely to uncover new evidence, given the Parties' investment in discovery, cross-motions for summary judgment, and two rounds of supplemental briefing on damages. Perez v. Timberline S., LLC, 453 F.Supp.3d 1068, 107273 (E.D. Mich. 2020), aff'd in part, rev'd in part, and remanded sub nom. Walsh v. Timberline S., LLC (Timberline II), No. 20-1529, 2022 WL 705835 (6th Cir. Mar. 9, 2022). This Court also held that Defendants failed to offer any evidence establishing the time that their employees were paid for ordinary-commute time and meal time. Id. at 1073-74. So summary judgment was granted against Defendants in the “amount of $439,437.62 for overtime wages, plus an equal amount in liquidated damages, for a total of $878,874.84”: the same amounts as before. Id. at 1074.

Defendants appealed again, arguing (1) this Court “was required to reopen discovery or hold an evidentiary hearing on damages,” (2) this Court “erred by including commute and meal time in the damages award,” and (3) “each of the Secretary's calculations of overtime contained errors and inconsistencies.” Timberline II, 2022 WL 705835, at *1.

The Sixth Circuit remanded the case based on two narrow “disputes of material fact”:

(1) “damages as pertains to the seven weeks where Defendants noted that [seven] employee[s'] timecards reflected fewer overtime hours worked as compared to the payroll journals relied on by the Secretary” and

(2) “the number of hours of ordinary commute time and bona fide meal periods [that] were included in the payroll records” of five other employees.^[2]

Id. at *8-9.

On remand, the Parties resolved the first issue through a stipulated order. ECF No. 90. With respect to the second issue, the Secretary no longer seeks backpay for Gary Payne, the brother of Defendant Jim Payne. ECF No. 87 at PageID.4662 n.1.^[3]

Thus, the only remaining issues are how much time four equipment operators spent eating their lunch and commuting to and from work while “completely relieved of their duties,” which “must be excluded from the amount of damages that Defendants must pay.” Walsh v. Timberline S., LLC, No. 1:16-CV-11552, 2022 WL 17367185, at *3 (E.D. Mich. Nov. 28, 2022) (citing Timberline II, 2022 WL 705835, at *7). The only material evidence on the issues is the equipment operators' identical affidavits, which read that “[o]n most days[, they] drove about one hour to the jobsite, and one hour home, and took a half-hour lunch when [they] could fit it in. When [they] reported time, [they] included [their] drive time and lunch time in total hours.” Axford Aff., ECF No. 41-12 at PageID.4167; Keyser Aff., ECF No. 41-12 at PageID.4169; Kitchen Aff., ECF No. 41-12 at PageID.4170; Ogden Aff., ECF No. 41-12 at PageID.4171.

To that end, the Parties submitted supplemental briefing. At this Court's direction, the Secretary considered the four employees' affidavits to recalculate damages, resulting in a reduction of Defendants' liability from $104,431.86 to $59,602.74. See ECF No. 87 at PageID.4666. By contrast, Defendants assert they should be liable for only $18,440.57. ECF No. 91 at PageID.4693.

Having reviewed the Parties' briefing, this Court finds that a hearing is unnecessary and will resolve the issues on the papers. See E.D. Mich. LR 7.1(f)(2).

II.

A.

A motion for summary judgment should be granted if the movant “shows that 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 movant has the initial burden of “identifying those portions of [the record] it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the opposing party who must set out specific facts showing “a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (citation omitted). A genuine issue of fact requires more than “a mere scintilla of evidence,” Id. at 251, more than “some metaphysical doubt,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).

The court must draw all reasonable inferences in favor of the nonmovant to determine “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Id. at 251-52; see Lossia v. Flagstar Bancorp, Inc., 895 F.3d 423, 428 (6th Cir. 2018); see also Matthew N. Preston II, The Tweet Test: Attributing Presidential Intent to Agency Action, 10 BELMONT L. REV. 1, 35-36 (2022) (urging courts not to draw inferences that are “neither reasonable nor logical”).

Summary judgment will be granted if the nonmovant fails to establish a genuine issue of material fact, see Celotex Corp., 477 U.S. at 322, and denied if the challenged elements have “genuine factual issues that . . . may reasonably be resolved in favor of either party,” Hancock v. Dodson, 958 F.2d 1367, 1374 (6th Cir. 1992) (citation omitted). “The standard is the same [if] ‘the parties present cross-motions.'” MRP Props. v. United States, 583 F.Supp.3d 981, 990 (E.D. Mich. 2021) (quoting Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir. 1991)).

B.

In FLSA cases, if the employer kept inaccurate or inadequate records, then the plaintiff may satisfy a relaxed burden of proof by estimating damages with a just and reasonable inference. See Timberline II, No. 20-1529, 2022 WL 705835, at *5 (6th Cir. Mar. 9, 2022) (quoting O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 602 (6th Cir. 2009)); Monroe v. FTS USA, LLC, 860 F.3d 389, 398-99 (6th Cir. 2017) (quoting Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687 (1946)).

If the FLSA plaintiff provides a reasonable estimate of damages, then the burden “shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the [plaintiff]'s evidence.” Acosta v. Off Duty Police Servs., 915 F.3d 1050, 1064 (6th Cir. 2019) (quoting U.S. Dep't of Lab. v. Cole Enters., 62 F.3d 775, 779 (6th Cir. 1995)).

“If the employer cannot negate the estimate,” then “the court may award the reasonably inferred, though perhaps approximate, damages.” Timberline II, 2022 WL 705835, at *5-6 (first quoting O'Brien, 575 F.3d at 602-03); and then quoting Monroe, 860 F.3d at 407)).

III.

The only issues remaining are the calculations of four equipment operators' ordinary-commute time and bona-fide mealtime which “must not be included in determining how many hours of overtime each employee worked.” Timberline I, 925 F.3d 838, 855 (6th Cir. 2019) (“Defendants may not use the amounts paid for those otherwise non-compensable work...