Abshire v. Redland Energy Services, LLC
MEMORANDUM OPINION AND ORDER granting defendant Redland Energy Services, LLC's 16 Motion for Summary Judgment and case is dismissed with prejudice; further plaintiffs' 21 motion to certify class or for collective action is denied as moot and parties are responsible for their own fees and costs. Signed by Honorable Robert T. Dawson on October 6, 2011. (rw)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
ROY ABSHIRE, DAVID L. COLE,
WILLIAM McMURRAY, J.C. GREENBUSH
STEVE TRENT, and similarly situated employees
CASE NO. 10-2170
REDLAND ENERGY SERVICES, LLC
MEMORANDUM OPINION & ORDER
Before the Court is Defendant Redland Energy Services, LLC’s
(“Redland”) Motion for Summary Judgment (Doc. 16), Memorandum Brief
in Support (Doc. 17), and Statement of Facts (Doc. 18); Plaintiffs’
Response in Opposition (Doc. 26) and Memorandum Brief (Doc. 27);
and Defendant’s Supplement to Motion and Reply to Plaintiffs’
Response (Doc. 28).
For the reasons discussed herein, Defendant’s
Motion (Doc. 16) is GRANTED.
Abshire, David L. Cole, William McMurray, J.C. Greenbush, and Steve
Trent, individually, and as representatives of all those similarly
situated, for alleged violations of the wage and hour requirements
of the Fair Labor Standards Act (“FLSA”).
Plaintiffs are hourly
employees of Redland who worked on oil drilling rigs.
schedule consisted of 12-hour shifts each day, seven days per week
from Tuesday through Monday, every other week. Prior to June 2009,
Plaintiffs worked according to this schedule approximately 84 hours
per workweek, of which 44 hours were overtime hours paid at a rate
Plaintiffs and all other oil rig workers informing them that the
payroll period would be changed to run from Sunday to Saturday
rather than Tuesday to Monday.
Even though the payroll period
changed, Redland kept the rig workers’ Tuesday to Monday shift
schedule the same.
Plaintiffs filed a Complaint (Doc. 1), followed by an Amended
Complaint (Doc. 3) in November 2010, alleging that Redland’s
decision to change the payroll period without altering the shift
schedule violated the FLSA.
Plaintiffs contend that Redland’s
payroll period change was made in order to avoid paying rig workers
To support this contention, Plaintiffs
assert that when Redland’s pay period aligned with the rig workers’
shift schedule, all seven consecutive 12-hour work days for rig
workers fell in a single given pay period; however, after Redland
changed its pay period so that it no longer aligned with the rig
workers’ shift schedule, only five consecutive 12-hour work days
fell within a single given pay period and the other two 12-hour
days in the shift fell in the next pay period.
It is undisputed that both before and after the payroll period
change rig employees each worked at least 84 hours over a seven-day
period, every other week; but after implementation of the new
payroll policy, rig employees received less overtime compensation
than before the policy went into effect.
It is Redland’s position
that it changed the payroll policy for rig workers in order to
create uniform payroll administration so that all Redland employees
would be on the same payroll schedule.
In January 2011, a few months after Plaintiffs filed the
instant lawsuit, the Department of Labor (“DOL”) conducted an
applicable overtime laws.
The DOL investigator concluded that
Redland had not violated the FLSA in aligning its rig employees’
violations of the FLSA had occurred based on her review of the
employer’s records and employee interview statements. Further, the
investigator specifically addressed Plaintiffs’ complaint about the
company pay period differing from the oil rig crews’ work schedule
of Tuesday through Monday each week.
The investigator observed in
“Overtime is based on the employer’s established work
week Sunday through Saturday and not the employee’s work schedule.”
She also observed that even though the drilling crews worked
Tuesday through Monday, the other Redland employees, including the
“work over crew” and the office staff, worked Sunday through
Saturday, which matched the company-wide payroll schedule.
The DOL investigator did not include the named Plaintiffs in
her investigation because their lawsuit against Redland was then
pending; however, the investigator interviewed other rig workers by
telephone who worked the same job and had the same work schedule as
the named Plaintiffs. Ultimately, DOL found that Defendant Redland
had not committed any violation of the FLSA, including the overtime
compensation violation that is the subject of the instant lawsuit.
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law." Fed. R. Civ. P. 56(c).
reviewing a summary judgment motion, the court must view the facts
and inferences from the facts in the light most favorable to the
non-moving party, and the burden is placed on the moving party, to
establish both the absence of a genuine issue of material fact and
that it is entitled to judgment as a matter of law.
Civ. P. 56(c);
Matsushita Elec. Indus. Co.
See Fed. R.
Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356 (1986); Nat'l.
Bank of Commerce of El Dorado, Arkansas v. Dow Chem. Co., 165 F.3d
602 (8th Cir. 1999).
Once the moving party has met this burden,
the non-moving party may no longer rest on the allegations in its
pleadings, but must set forth specific facts by affidavit and other
evidence, showing that a genuine issue of material fact exists.
See Fed. R. Civ. P. 56(e).
In order to withstand Defendant’s motion for summary judgment,
Plaintiffs must substantiate their allegations with "sufficient
probative evidence that would permit a finding in his favor on more
than mere speculation, conjecture, or fantasy." Gregory v. Rogers,
974 F.2d 1006, 1010 (8th Cir. 1992).
Federal regulations state that an employer’s designation of a
work week may not be “designed to evade the overtime requirements
of the [Fair Labor Standards] Act.”
29 C.F.R. § 778.105.
specifically, regarding whether an employer’s decision to change
its employees’ pay period violates the FLSA when that decision
results in a decrease in employee overtime compensation.
Seymour v. Metson Marine, Inc., 194 Cal. App. 4th 361, 370
(Cal. Ct. App. 2011), a California court interpreted the FLSA’s
overtime requirements and held that “an employer may not designate
its workweek in a manner that is designed primarily to evade
The court found a violation of the FLSA
because the employer “ha[d] not presented any evidence that it
accomplish some bona fide business objective or to accommodate
Id. at 371.
California is not the only jurisdiction to interpret the
FLSA’s overtime requirements in this way. The general rule appears
to be that an employer may establish a pay week that differs from
its employees’ work week if it is for a legitimate, or bona fide,
This is true even when a change in the payroll
schedule results in decreased payments of overtime compensation to
See Pappas v. The Kerite Co., 16 Conn.Supp. 190 (Conn.
C.P. 1949) (no right to overtime where payroll period for all
factory employees did not coincide with plaintiff’s work schedule,
since there was “no subterfuge employed to defeat plaintiff’s right
to overtime pay”); McCain et al v. Boatel, Inc. et al., 1974 WL
1336 (E.D. La. August 13, 1974 ) (summary judgment granted where
employer presented legitimate business purpose to justify the
difference between the actual work week and the actual pay week);
Allen v. Gonzales Consulting Service, Inc., 2011 WL 202088 (W.D.
Mich. 2011) (employer granted summary judgment when legitimate
business purpose given for denial of overtime to employee whose
workweek for payroll purposes began in the middle of his shift);
Blasdell v. State of New York, 1992 WL 469733 (N.D.N.Y. 1992)
(employees’ rotating shift schedule did not violate the FLSA
because the nature of the job required a work schedule that began
on a different day than that of the pay period); Oliver v.
Centerpoint Energy, Inc., 2010 WL 2163915 (S.D. Tex. May 27, 2010)
(work week differed from pay period used to calculate overtime, but
no violation of law absent evidence of employer’s intent to evade
Cf. In re Wal-Mart Stores, Inc., Wage, 505 F.Supp.2d
609 (N.D.Cal. 2007) (employer’s pay policy violated the FLSA
because no reason given for policy other than avoiding paying
In the instant case, Redland provided a legitimate business
reason for changing its work week for payroll purposes.
officers and staff testified in depositions that the change in the
work week was made to align all employees on the same company
This change was not done as a subterfuge but rather was
communicated to the relevant employees via a memorandum. Moreover,
this change was intended to be permanent and has remained so since
The evidence presented in this case shows that
calculating and paying wages and overtime to company employees
using a uniform payroll work week of Sunday through Saturday.
Court finds that no genuine issue of material fact exists as to the
legitimate business reason given for the change in work week.
Although Plaintiffs argue that the true motivating factor
behind the pay period change is Redland’s desire to avoid paying
overtime to rig workers, this inference is not borne out by the
deposition testimony and other documentary proof submitted to the
To be clear, the FLSA’s requirements are satisfied once a
defendant shows that its policy change was made for a legitimate
That business purpose need not be the exclusive
reason for the policy change.
The Court is also persuaded by the findings of the DOL
investigator who examined the particular work week change objected
to by Plaintiffs. The investigator found no violations of the FLSA
records and practices.
Generally, an agency’s interpretation of
law and its conclusions after investigation are not controlling;
“proportional to their power to persuade.”
Madden v. Lumber One
Home Center of Stuttgart, 2010 WL 4974971 (E.D. Ark. Dec. 2, 2010).
It is plain that the DOL investigator interviewed employees at the
company who were similarly situated to Plaintiffs and inspected
time sheets of those engaged in the same work as Plaintiffs.
Therefore, the findings of the agency investigator also weigh in
Accordingly Defendant Redland Energy Services, LLC’s Motion
for Summary Judgment (Doc. 16) is GRANTED, and this case is
dismissed with prejudice.
Plaintiffs’ Motion to Certify Class or
for Collective Action (Doc. 21) is DENIED AS MOOT.
to be responsible for their own fees and costs.
The parties are
IT IS SO ORDERED this 6th day of October 2011.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge
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