Abshire v. Redland Energy Services, LLC

Filing 30

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
V.

PLAINTIFFS

CASE NO. 10-2170

REDLAND ENERGY SERVICES, LLC

DEFENDANT

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.
I.

Background
This

matter

was

instituted

on

behalf

of

Plaintiffs

Roy

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.

Their shift

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
of time-and-a-half.
In

June

of

2009,

Redland

distributed

a

memorandum

to

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
overtime compensation.

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

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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
onsite

FLSA

investigation

into

applicable overtime laws.

whether

Redland

violated

the

The DOL investigator concluded that

Redland had not violated the FLSA in aligning its rig employees’
pay

period

with

investigator’s

that

Narrative

of

the

Report

rest
(Doc.

of

the

16-3)

company.
noted

that

The
no

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.
her report:

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

3

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.
II.

Legal Standard
Summary

judgment

should

be

granted

"if

the

pleadings,

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).

In

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.

v.

See Fed. R.
Zenith Radio

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.
4

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).
III. Discussion
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.”
little

legal

authority

29 C.F.R. § 778.105.

generally,

and

none

in

There is
Arkansas

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.
In

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
overtime compensation.”

The court found a violation of the FLSA

because the employer “ha[d] not presented any evidence that it
ha[d]

created

an

alternating

or

variable

work

schedule

to

accomplish some bona fide business objective or to accommodate
employee preferences.”

Id. at 371.

California is not the only jurisdiction to interpret the
5

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,
business reason.

This is true even when a change in the payroll

schedule results in decreased payments of overtime compensation to
employees.

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
6

the FLSA).

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
overtime).
In the instant case, Redland provided a legitimate business
reason for changing its work week for payroll purposes.

Company

officers and staff testified in depositions that the change in the
work week was made to align all employees on the same company
payroll.

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
its inception.
Redland intended

The evidence presented in this case shows that
to

accomplish

administrative

efficiencies

in

calculating and paying wages and overtime to company employees
using a uniform payroll work week of Sunday through Saturday.

The

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
Court.

To be clear, the FLSA’s requirements are satisfied once a

defendant shows that its policy change was made for a legitimate
business purpose.

That business purpose need not be the exclusive

7

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
when

interviewing

Redland’s

records and practices.

employees

and

inspecting

payroll

Generally, an agency’s interpretation of

law and its conclusions after investigation are not controlling;
nevertheless,

such

determinations

should

“proportional to their power to persuade.”

be

given

deference

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
favor of

summary

judgment, in

addition

to the

other reasons

outlined above.
IV.

Conclusion
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.

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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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