Goulas v. Lagreca Services, Inc. et al
Filing
60
ORDER & REASONS that the Defendants' 47 Motion for Summary Judgment is GRANTED IN PART and DENIED IN PART. In particular, Defendants' motion is GRANTED with respect to Plaintiff's claims pre-dating October 12, 2008 and Plaintiff's claims under the Louisiana Whistleblower Statute, and DENIED with respect to all other claims. Signed by Judge Eldon E. Fallon on 5/10/13. (dno, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NEAL P. GOULAS
CIVIL ACTION
VERSUS
NO. 12-898
CHARLES P. LAGRECA, JR., ET AL.
SECTION “L” (2)
ORDER AND REASONS
The Court has pending before it Defendants’ Motion for Summary Judgment. (Rec. Doc.
47). The Court has reviewed the briefs and the applicable law and now issues this Order and
Reasons.
I.
BACKGROUND
A.
Facts
Plaintiff Neal Goulas brings this action for unpaid overtime and wrongful termination
against his former employer, Defendant LaGreca Services, Inc. (“Services”), doing business as
LaGreca Transportation, and its owner, Defendant Charles P. LaGreca, Jr. (“LaGreca”). The
uncontested facts in the case are as follows. LaGreca is Plaintiff’s uncle and the founder of
Services, a horizontal directional drilling company. Services employs crews of four to six
employees, who perform drilling work. Plaintiff began working on one of these crews in
February 2007.
In either late 2007 or early 2008, Plaintiff was promoted to the position of superintendent
and received a corresponding pay increase. Plaintiff also worked as a superintendent from mid2009 until May 2010. There is some dispute over the extent of Plaintiff’s job responsibilities as
superintendent, but it is undisputed that he was responsible for drafting daily reports and
documenting the progress of his crew, as well as tracking and ensuring that the crew had
sufficient supplies and materials for their work. While working for Services, Plaintiff was paid
on a weekly basis. The number of hours that Plaintiff and other Services employees worked
would vary from week to week. Defendants claim that Plaintiff was guaranteed an annual
income of $65,000 regardless of the number of hours he worked, but Plaintiff disputes this
assertion.
Plaintiff’s employment was terminated in May 2010, following the hiring of another
employee, John Lyons. Plaintiff had objected to the hiring of Mr. Lyons, and had voiced this
opinion to LaGreca. The facts surrounding that conversation remain in dispute, but it is
undisputed that soon after Mr. Lyons was hired, Plaintiff accidentally called LaGreca, and
LaGreca overheard him making critical comments about Mr. Lyons. The next day, LaGreca met
with Plaintiff. During the meeting, Plaintiff complained to LaGreca about alleged drug use by his
co-worker, although Plaintiff never threatened to disclose the violation of any law by Services to
a third party. By the end of that meeting, Plaintiff’s employment with Services had ended
B.
Procedural History
Plaintiff brought suit on October 18, 2010 in the 32nd Judicial District Court for the
Parish of Terrebonne. His Petition for Damages alleges that he was never compensated for 20 or
more hours of overtime that he was working each week. (Rec. Doc. 1-1 at p. 2, ¶ 2).
Furthermore, Plaintiff alleges that he was fired in retaliation after he reported a safety violation
and/or the use of drugs on the premises. Id. at ¶ 3. He requests “past due wages, vacation pay,
bonus, penalty wages, and attorney fees pursuant to Louisiana law.” Id. at p. 3, ¶ 9.
On November 4, 2010, Defendants filed Dilatory and Peremptory Exceptions, alleging,
2
essentially, that Plaintiff had incorrectly named the Defendants in his Petition. Id. at pp. 5-6.
Plaintiff amended his Petition to remedy this deficiency, id. at pp. 8-9, and Defendants filed an
Answer and Reconventional Demand, alleging that Plaintiff was a salaried exempt employee and
that no safety violation had occurred, id. at pp. 13-14, ¶¶ 2-3. Defendants brought their
Reconventional Demand against Plaintiff and his wife, Jennifer Goulas, based on a balance
allegedly due on a promissory note and for various other allegedly unpaid personal loans. Id. at
pp. 15-16, ¶¶ 9-13.
On March 8, 2012, the Plaintiff and Mrs. Goulas filed Peremptory Exceptions in response
to LaGreca’s reconventional demand. Id. at pp. 20-27. In that filing, the Goulases indicated for
the first time that Plaintiff was bringing suit for “Failure to Pay Overtime in accordance with the
Fair Labor Standards Act.” Id. at p. 22. On April 5, 2012, Defendants removed the case to this
Court, asserting federal question jurisdiction. (Rec. Doc. 1 at ¶ 14). This Court previously
granted Defendants leave to amend their counterclaims (Rec. Doc. 18), but on April 1, 2013,
after Defendants conceded that the Court lacked subject matter jurisdiction, all counterclaims
except the claim for unpaid salary advances were remanded to state court. (Rec. Doc. 46).
II.
PRESENT MOTION
Defendants now file this Motion for Summary Judgment on Plaintiff’s claims. (Rec. Doc.
47). Defendants’ main argument is that Plaintiff was exempt from FLSA under both the
executive exemption and the administrative exemption. Furthermore, Defendants argue that
some of Plaintiff’s claims are barred by the statute of limitations. Defendants also argue that
summary judgment is warranted on Plaintiff’s whistleblower claims and Plaintiff’s claims
against LaGreca individually, due to legal defects in those claims. Plaintiff opposes the motion
3
and argues that he was not actually exempt under either exemption cited by Defendants, that
Defendants’ willful conduct means that a longer limitations period applies, and that Plaintiff’s
whistleblower claims and claims against LaGreca individually are legally adequate.
III.
LAW AND ANALYSIS
A.
Standard on Motions for Summary Judgment
A district court can grant a motion for summary judgment only when 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.’” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)
(quoting Fed. R. Civ. P. 56 (c)). When considering a motion for summary judgment, the district
court “will review the facts drawing all inferences most favorable to the party opposing the
motion.” Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court
must find “[a] factual dispute . . . [to be] ‘genuine’ if the evidence is such that a reasonable jury
could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] ‘material’ if it might
affect the outcome of the suit under the governing substantive law.” Beck v. Somerset Techs.,
Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986)).
“If the moving party meets the initial burden of showing that there is no genuine issue of
material fact, the burden shifts to the non-moving party to produce evidence or designate specific
facts showing the existence of a genuine issue for trial.” Engstrom v. First Nat’l Bank of Eagle
Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24; Fed. R. Civ. P.
56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly
4
supported motion. See Anderson, 477 U.S. at 248. “If the evidence is merely colorable, or is not
significantly probative,” summary judgment is appropriate. Id. at 249-50 (citations omitted).
Partial summary judgment dismissing only certain claims is appropriate under the same
standards. See Fed. R. Civ. P. 56(d).
B.
Analysis
1.
Executive Exemption
Defendants’ first argument in support of a grant of summary judgment is that Plaintiff
qualified for both the executive and the administrative exemptions to FLSA. Pursuant to 29
U.S.C. § 213(a)(1), “any employee employed in a bona fide executive, administrative, or
professional capacity” is exempt from the general overtime requirements located in 29 U.S.C.
§ 207. For the purpose of FLSA, an executive is defined as any employee:
(1) Compensated on a salary basis at a rate of not less than $455
per week . . . exclusive of board, lodging or other facilities;
(2) Whose primary duty is management of the enterprise in which
the employee is employed or of a customarily recognized
department or subdivision thereof;
(3) Who customarily and regularly directs the work of two or more
other employees; and
(4) Who has the authority to hire or fire other employees or whose
suggestions and recommendations as to the hiring, firing,
advancement, promotion or any other change of status of other
employees are given particular weight.
29 C.F.R. § 541.100.
a.
Salary Basis
FLSA’s accompanying regulations clarify that an employee is paid on a “salary basis” as
long as the employee regularly receives “a predetermined amount constituting all or part of the
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employee’s compensation, which amount is not subject to reduction because of variations in the
quality or quantity of the work performed.” 29 C.F.R. § 541.602(a). However, “[e]xempt
employees need not be paid for any workweek in which they perform no work.” Id. Furthermore,
an employer may deduct an employee’s pay for full-day absences without affecting the
employee’s salaried status. Id. § 541.602(b)(1). Deductions for half-day absences are not
permitted. Id.
Defendants argue that Plaintiff meets this requirement, as the relevant payroll records
reflect that Plaintiff’s net pay was above $455 per week. (Rec. Doc. 47-4 at 4-6). However,
Plaintiff disputes this point. First, Plaintiff argues that he was required to work a certain number
of hours per week in order to receive his pay, meaning that his work was “subject to reduction
because of variations in the . . . quantity of the work performed.” 29 C.F.R. § 541.602(a). In
support of this point, Plaintiff cites the testimony of Carole Prevost, Services’ office manager,
that employees have to work either 68 or 68.5 hours per week in order to receive their
“guaranteed paycheck.” (Prevost Dep. at 11, Rec. Doc. 49-2 at 4). Second, Plaintiff argues that
he was subject to partial pay docks, which is sufficient to prevent him from qualifying as a
salaried employee. In support of this argument, Plaintiff cites Services’ employee handbook,
which states that any employee’s pay will be docked by one half-day if the employee either (1) is
caught sleeping on the job or (2) arrives more than 10 minutes late, but less than one hour late.
(Rec. Doc. 49-7 at 9-10). Plaintiff further argues that he was actually subject to one of these
partial pay docks for tardiness during the week of August 10, 2009. (Rec. Doc. 47-4 at 6).
Defendants respond by arguing, first, that Plaintiff admits in his Statement of Contested
Material Facts that he was “guaranteed . . . a salary of exactly $65,000.” (Rec. Doc. 49-1 at
6
¶ 19). Second, Defendants argue that although Plaintiff’s pay was docked by $100 during the
week of August 10, 2009, Plaintiff has not provided the Court with sufficient evidence
demonstrating that this docking occurred due to tardiness, rather than a proper justification for
exempt employees. Defendants also argue that the employee handbook is inadmissible because
Plaintiff has not provided supporting affidavits establishing its admissibility or authenticity.
Defendants are correct that the employee handbook, as currently submitted, is not
admissible, and therefore the Court will disregard it for the purpose of adjudicating this motion.
Furthermore, the Court acknowledges that most of the evidence in the record points toward a
conclusion that Plaintiff was paid on a salary basis. Nonetheless, the Court believes that a
genuine issue of material fact remains on this issue. The testimony of Carole Prevost casts some
doubt on whether Plaintiff’s pay was subject to reduction for variations in the quantity of work
he performed. Additionally, certain testimony by LaGreca suggests that Plaintiff’s compensation
did have a more significant relationship to the number of hours he actually worked.1
Furthermore, the Court assumes that the sentence that Defendants cite from Plaintiff’s Statement
of Contested Material Facts is a typographical error, since Plaintiff’s brief clearly contests the
1
Specifically, LaGreca testified:
Well, remember, Neal is paid to work 68 and a half and 68 hours
every week. And if you look right here, Neal was paid, in 2010, to
work 1160 hours. He only logged 905. So we got 260 hours he
actually owes me; he got paid for and he didn’t work. In 2009, the
one year before, he was paid to work 3549 hours, he worked 2973.
. . . So he owes me about 600 hours for 2009.
(LaGreca Dep. at 54, Rec. Doc. 47-5 at 10) (emphasis added).
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assertion that his pay was guaranteed.2
In a FLSA case, the employer bears the burden of proving an employee’s exempt status,
and moreover, exemptions must be construed narrowly in favor of the employee. E.g., Cleveland
v. City of Elmendorf, Tex., 388 F.3d 522, 526 (5th Cir. 2004) (citations omitted). In light of this
fact, as well as the other remaining factual disputes described below, the Court finds it is
appropriate to deny summary judgment to Defendants.
b.
Primary Duty
The second requirement for FLSA’s executive exemption is that the employee’s “primary
duty” must be “management of the enterprise in which the employee is employed or of a
customarily recognized department or subdivision thereof.” 29 C.F.R. § 541.100(a)(2). Examples
of “management” duties include “directing the work of employees; maintaining production or
sales records for use in supervision or control; . . . planning the work; determining the techniques
to be used; apportioning the work among the employees; determining the type of materials,
supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and
sold; . . . [and] providing for the safety and security of the employees or the property.” Id.
§ 541.102. When determining an employee’s “primary duty,” a Court should consider
the relative importance of the exempt duties as compared with
other types of duties; the amount of time spent performing exempt
work; the employee’s relative freedom from direct supervision;
and the relationship between the employee’s salary and the wages
paid to other employees for the kind of nonexempt work performed
2
Defendants assert in their Statement of Undisputed Facts that “Services guaranteed
[Goulas] an annual income of approximately $65,000.” (Rec. Doc. 47-2 at ¶ 19). In response,
Plaintiff writes: “Denied. Plaintiff moves to strike as record does not support such facts. LaGreca
guaranteed Goulas a salary of exactly $65,000. (Goulas Tr. 119:11-13).” (Rec. Doc. 49-1 at
¶ 19).
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by the employee.
Id. § 541.700(a). Furthermore, “[a] customarily recognized department or subdivision must have
a permanent status and a continuing function,” id. § 541.103(a), but it “need not be physically
within the employer’s establishment and may move from place to place,” id. § 541.103(c).
As an exception to these general rules, “manual laborers” and “other ‘blue collar’
workers who perform work involving repetitive operations with their hands, physical skill, and
energy” are not eligible for the executive exemption as a matter of law. 29 C.F.R. § 541.3(a).
“Such nonexempt ‘blue collar’ employees gain the skills and knowledge required for
performance of their routine manual and physical work through apprenticeships and on-the-job
training, not through the prolonged course of specialized intellectual instruction required for
exempt learned professional employees such as medical doctors, architects and archeologists.”
Id. Thus, “non-management production-line employees and non-management employees in
maintenance, construction and similar occupations” are not included in the executive exemption.
Id.
Defendants argue that Plaintiff meets the “primary duty” requirement because he
supervised a drilling crew, which can qualify as a “subdivision of an enterprise” under FLSA.
See Allen v. Coil Tubing Servs., L.L.C., 846 F. Supp. 2d 678, 708 (S.D. Tex. 2012). Defendants
cite various testimony in support of this claim. First, they cite the testimony of LaGreca, who
refers to Plaintiff as a “working superintendent” and further describes Plaintiff’s duties as
follows:
As superintendent, you need to manage the crew. you need to keep
track of their hours. You need to, you know, fill out the reports for
the day. You need to, you know, make sure the job goes well, run
the job. Something’s broke, to make sure it gets fixed. If
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something is forgotten or, not forgotten, but something is needed
to make the job go well, you need to get it. I mean, you need to run
the job, whatever needs to be done.
(LaGreca Dep. at 17-18, Rec. Doc. 47-5 at 4). Next, Defendants cite the testimony of Plaintiff,
who confirms that as a superintendent, he was “responsible for making sure that everything gets
done correctly,” including making sure that all equipment is set up correctly and that certain
safety requirements are met. (Goulas Dep. at 81, Rec. Doc. 47-6 at 12). Furthermore, Plaintiff
testifies that LaGreca was usually not present in the field and would visit an average of once per
week for approximately 30-60 minutes. (Goulas Dep. at 82-83, Rec. Doc. 47-6 at 13).
Defendants also note that Plaintiff was responsible for writing and sending daily reports on his
team’s activities. (Goulas Dep. at 85-86, Rec. Doc. 47-6 at 13-14). Finally, Defendants note that
Plaintiff was paid significantly more than the other non-superintendent employees, who were
paid on an hourly basis. (Goulas Dep. at 58-59, 118-119, Rec. Doc. 47-6 at 9, 17).
In response, Plaintiff argues that his primary duties were actually those of a blue collar
manual laborer, and therefore, he is not included in the executive exemption pursuant to 29
C.F.R. § 541.3(a). In support of this contention, Plaintiff cites LaGreca’s testimony that Plaintiff
“wasn’t just a finger pointer” but “also had to do the work.” (LaGreca Dep. at 18, Rec. Doc. 47-5
at 4). Plaintiff argues that his duties included running the locator, which required him to “walk
with [the box] and . . . electronically pick up where [the] drill stem is” and indicate with paint
where it was located; running drilling rigs; driving trucks; and washing equipment. (LaGreca
Dep. at 14-16, Rec. Doc. 49-3 at 5). Plaintiff also notes that according to LaGreca, the daily
reports took only a few minutes for Plaintiff to complete. (LaGreca Dep. at 19, Rec. Doc. 47-5 at
4). Plaintiff cites an old case in which a “working foreman” was held not to be exempt under
10
FLSA because more than 20 percent of his work involved non-exempt duties. Walling v.
Jacksonville Paper Co., 69 F. Supp. 599, 606 (S.D. Fla. 1947) aff’d sub nom. Jacksonville Paper
Co. v. McComb, 167 F.2d 448 (5th Cir. 1948), rev’d, 336 U.S. 187 (1949).
Defendants respond to these points by noting that the majority of the testimony
describing Plaintiff’s manual labor duties refers to the very beginning of Plaintiff’s employment
with Services, before he had been promoted to the position of superintendent. (LaGreca Dep. at
13-14, Rec. Doc. 49-3 at 5). Defendants also emphasize that Plaintiff does not dispute that his
duties included at least some management responsibilities. Next, Defendants argue that the case
Plaintiff cites was decided under an outdated standard. See 29 C.F.R. § 541.700(b) (noting that
“employees who spend more than 50 percent of their time performing exempt work will
generally satisfy the primary duty requirement,” but “[t]ime alone . . . is not the sole test,” and
there is no requirement that an employee spend 50 percent of his or her time performing exempt
work).
Again, the Court acknowledges that certain portions of the Plaintiff’s argument are
problematic, but it nonetheless concludes that this is a factual issue that must be reserved for the
factfinder at trial. Certain factors listed under § 541.700(a)—namely, freedom from direct
supervision and discrepancy in pay—seem to weigh in favor of finding that the primary duty
requirement is met in Plaintiff’s case. However, with respect to the other two factors listed in
that section—“the relative importance of the exempt duties as compared with other types of
duties” and “the amount of time spent performing exempt work”—the record is not sufficiently
clear. Too many of the relevant facts remain in dispute for the Court to grant summary judgment
at this time.
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c.
Direction of Other Employees
There appears to be no dispute that this requirement is met. Defendants argues that
Plaintiff meets this requirement because he regularly supervised at least three crew members.
(Goulas Dep. at 42-43, 137, Rec. Doc. 47-6 at 7, 18). Although Plaintiff denies in his Statement
of Contested Material Facts that he regularly directed the work of at least two employees (Rec.
Doc. 49-1 at ¶ 9), he makes no argument to the contrary in his brief and appears to concede that
he had at least some supervisory responsibilities. However, a grant of summary judgment
regarding the executive exemption is not appropriate due to the contested factual issues relating
the other three factors.
d.
Hiring and Firing
As noted above, an employee is not required to have direct hiring and firing power in
order for this requirement to be met; it is sufficient that the employee’s “suggestions and
recommendations as to the hiring, firing, advancement, promotion or any other change of status
of other employees are given particular weight.” 29 C.F.R. § 541.100(a)(4). Defendants argue
that this requirement is met because LaGreca initially refused to hire John Lyons due to
Plaintiff’s recommendation, and ultimately required that Lyons prove himself by “doing some
odd jobs around [LaGreca’s] house” before hiring him on a more permanent and full-time basis.
(LaGreca Dep. at 20-22, Rec. Doc. 47-5 at 4-5). Defendants also cite Plaintiff’s testimony
suggesting that LaGreca wanted Plaintiff “to run the company one day.” (Goulas Dep. at 68,
Rec. Doc. 47-6 at 11). Plaintiff opposes this point and characterizes the hiring of Lyons
differently, noting that when Plaintiff opposed the hiring of Lyons, he actually threatened to quit
12
if Lyons was hired, at which point LaGreca testified that he said: “Neal, don’t put me in that
position. Don’t tell me what to do with my company.” (LaGreca Dep. at 21, Rec. Doc. 47-5 at 5).
Defendants reply to this argument by emphasizing that it is undisputed that “Services did
not initially hire Lyons based in part on Goulas’ opinion.” (Rec. Doc. 53 at 3-4). However, the
Court doubts that a single instance of an employer giving weight to an employee’s opinion on
hiring and firing is sufficient to meet this requirement, and neither party provides uncontested
evidence that LaGreca gave particular weight to Plaintiff’s recommendations at any other time.
Accordingly, the Court will deny summary judgment on this issue.
2.
Administrative Exemption
The administrative exemption includes any employee:
(1) Compensated on a salary or fee basis at a rate of not less than
$455 per week . . . exclusive of board, lodging or other facilities;
(2) Whose primary duty is the performance of office or
non-manual work directly related to the management or general
business operations of the employer or the employer's customers;
and
(3) Whose primary duty includes the exercise of discretion and
independent judgment with respect to matters of significance.
Id. § 541.200. As noted above, genuine issues of material fact remain with respect to (1) whether
Plaintiff was compensated on a salary basis and (2) the nature of Plaintiff’s “primary duty” as a
superintendent for Services. Accordingly, the Court will deny summary judgment on the
administrative exemption as well.
3.
FLSA Statute of Limitations
“A [FLSA] cause of action accrues at each regular payday immediately following the
work period during which the services were rendered for which the wage or overtime
13
compensation is claimed.” Haferty v. Pulse Drug Co., Inc., 821 F.2d 261, 271, modified on
reh’g, 826 F.2d 2 (5th Cir. 1987). Claims for FLSA violations must be brought “within two years
after the cause of action accrued, except that a cause of action arising out of a willful violation
may be commence within three years after the cause of action accrued.” 29 U.S.C. § 255.
Plaintiff filed his original Petition for Damages on October 18, 2010. (Rec. Doc. 1-1 at
4). Accordingly, Defendants argue that any claims arising out of Plaintiff’s employment before
October 18, 2008 are barred by the statute of limitations. Plaintiff brings claims for allegedly
unpaid overtime that he worked “since 2007.” (Rec. Doc. 1-1 at p. 8, ¶ 2). Defendants argue that
all claims arising from Plaintiff’s employment before October 12, 2008 are barred because
October 23, 2008 is the last pay date within the two-year statute of limitations, and on that date,
Plaintiff was paid for work done from October 12-18, 2008.
Plaintiff responds that his claims should not be barred, because Defendants’ violation
was willful, in that Services “knew or showed reckless disregard for the matter of whether its
conduct was prohibited.” Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 128 (1985); see
also McLaughlin v. Richland Shoe Co., 486 U.S. 128, 134 (1988) (adopting Thurston standard
for FLSA claims). In support of this argument, Plaintiff cites the testimony of Carole Prevost
relating to the calculation of worker’s compensation premiums. (Prevost Dep. at 16-21, Rec.
Doc. 49-2 at 6-7). Specifically, Ms. Prevost describes the Services compensation scheme as
involving a base rate of pay for the first 40 hours an employee works, and overtime pay (double
or triple time) for hours worked over that amount. With respect to Plaintiff specifically, Ms.
Prevost testified that Plaintiff’s pay was based on a 68-hour week, and that Plaintiff received
“$10 an hour for 40 hours” and “$30 an hour for 28 hours.” (Prevost Dep. at 21, Rec. Doc. 49-2
14
at 7).
Based on this testimony, Plaintiff alleges that Services used a “split-day plan”
compensation scheme in violation of FLSA:
(a) . . . Under this plan the normal or regular workday is artificially
divided into two portions one of which is arbitrarily labeled the
“straight time” portion of the day and the other the “overtime”
portion. Under such a plan, an employee who would ordinarily
command an hourly rate of pay well in excess of the minimum for
his work is assigned a low hourly rate (often the minimum) for the
first hour (or the first 2 or 4 hours) of each day. This rate is
designated as the regular rate: “time and one-half” based on such
rate is paid for each additional hour worked during the
workday. . . .
(b) Such a division of the normal 8-hour workday into 4 straight
time hours and 4 overtime hours is purely fictitious. . . .
29 C.F.R. § 778.501; see also Walling v. Helmerich & Payne, 323 U.S. 37 (1944).
Ms. Prevost’s testimony does not support this conclusion. The Services compensation
scheme as described by Ms. Prevost did not involve an arbitrary split of the workday into two 4hour periods; rather, it involved a split into an 8-hour period and an overtime period. As noted
above, Ms. Prevost testified that Plaintiff received “$10 an hour for 40 hours” and “$30 an hour
for 28 hours.” (Prevost Dep. at 21, Rec. Doc. 49-2 at 7). To qualify as a split-day plan, Plaintiff
would have had to receive $10 an hour for 34 hours and $30 an hour for 34 hours, which is not
the case here.
Because this testimony is the only evidence cited by Plaintiff in support of the claim that
Defendants willfully violated FLSA, the Court agrees that the two-year statute of limitations
applies, and all of Plaintiff’s claims arising out of work performed before October 12, 2008 are
barred. The Court grants summary judgment to Defendants on this issue.
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4.
Louisiana Whistleblower Statute
The Louisiana Whistleblower Statute provides certain protections to employees who
threaten to disclose an employer’s illegal activity:
An employer shall not take reprisal against an employee who in
good faith, and after advising the employer of the violation of law:
(1) Discloses or threatens to disclose a workplace act or
practice that is in violation of state law.
(2) Provides information to or testifies before any public
body conducting an investigation, hearing, or inquiry into
any violation of law.
(3) Objects to or refuses to participate in an employment
act or practice that is in violation of law.
La. Rev. Stat. § 23:967(A). The definition of “reprisal” includes “firing, layoff, loss of benefits,
or any other discriminatory action” taken as a result of protected actions. Id. § 23:967(C)(1).
“The Louisiana Whistleblower Statute targets serious employer conduct that violates the law.”
Fondren v. Greater New Orleans Expressway Com’n, 03-1383 (La. App. 5 Cir. 4/27/04), 871 So.
2d 688, 691 (citing Puig v. Greater New Orleans Expressway Com’n, 00-924 (La. App. 5 Cir.
10/31/00), 772 So.2d 842, 845, writ denied, 00-3531 (La. 3/9/01), 786 So.2d 731. “For an
employee to establish a claim under La. R.S. 23:967, she must prove that her employer
committed an actual violation of state law.” Stevenson v. Williamson, 547 F. Supp. 2d 544 (M.D.
La. 2008), aff’d, 324 F. App’x 422 (5th Cir. 2009).
Defendants argue that Plaintiff’s claims under this act must be dismissed, because
Plaintiff alleges that Services fired him for telling LaGreca that Mr. Lyons—a mere coworker—had violated the law by using illegal drugs on the premises. In other words, Defendants
argue that Plaintiff never encountered a violation of the law by his employer. Additionally,
16
Defendants argue that Plaintiff never threatened to disclose the alleged violation to a third party,
nor did he provide information to a public body or refuse to participate in an illegal act or
practice. Accordingly, Defendants argue that none of the requirements of § 23:967 are met in this
case.
Plaintiff responds by arguing that he was terminated after LaGreca overheard “a
telephone call in which Goulas accidentally dialed LaGreca while having a conversation with his
wife Jennifer.” (Rec. Doc. 49 at 12). In other words, Plaintiff argues that he was terminated after
disclosing the alleged drug use to his wife. Plaintiff argues that this disclosure is sufficient to
trigger protection under § 23:967(A)(1). Furthermore, Plaintiff argues that he disclosed the
alleged violation to LaGreca during Plaintiff’s termination meeting.
In response, Defendants argue first that disclosure to Plaintiff’s wife is not the type of
disclosure contemplated by the Whistleblower Act. See Hale v. Touro Infirmary, 2004-0003 (La.
App. 4 Cir. 11/3/04), 886 So.2d 1210, 1215 (noting that the Act applies to employees who
threaten to “publicize” or “report” serious violations of the law). Second, Defendants emphasize
that under the statute, the disclosure must occur “after advising the employer of the violation of
the law.” La. Rev. Stat. § 23:967(A). In this case, Plaintiff claims that he made the disclosure
before advising his employer of the alleged violation. Finally, Defendants reemphasize that the
Whistleblower Act covers only serious violations committed by the employer, not illegal acts of
a mere co-worker.
The Court agrees that Plaintiff’s claims under the Whistleblower Act are legally flawed
for the reasons indicated by Defendants. In particular, the timing of the disclosure and the
identity of the alleged wrongdoer cause Plaintiff’s circumstances to fall outside the protection of
17
the Act. The Court will grant summary judgment to Defendants on Plaintiff’s claims under
§ 23:967.
5.
Claims against LaGreca
Finally, Defendants argue that all claims against LaGreca should be dismissed because
Plaintiff’s employer was Services, not LaGreca. Defendants argue that this fact is undisputed
because Plaintiff admits it in his Amended Petition (Rec. Doc. 1-1 at p. 8, ¶ 2), and it is also
reflected in Plaintiff’s pay records (Rec. Doc. 47-4 at 4-6). Plaintiff responds that its claims
against LaGreca are proper because under FLSA, “‘[e]mployer’ includes any person acting
directly or indirectly in the interest of an employer in relation to an employee.” 29 U.S.C.
§ 203(d). Furthermore, Plaintiff cites Supreme Court precedent holding that “economic reality”
should govern the determination of employer status under FLSA. Goldberg v. Whitaker House
Coop., 366 U.S. 28, 33 (1961). Plaintiff cites various testimony indicating that LaGreca meets all
four standard factors under this economic reality test.3 Defendants reply that basic corporate law
principles should shield LaGreca from liability for action he took as an officer of Services.
Defendants also dispute the relevance of certain testimony cited by Plaintiff.
As the Fifth Circuit has previously noted: “The overwhelming weight of authority is that
a corporate officer with operational control of a corporation’s covered enterprise is an employer
along with the corporation, jointly and severally liable under FLSA for unpaid wages.” Donovan
v. Grim Hotel Co., 747 F.2d 966, 972 (5th Cir. 1984) (quoting Donovan v. Agnew, 712 F.2d
3
Specifically those factors are whether the alleged employer “(1) possessed the power to
hire and fire the employees, (2) supervised and controlled employee work schedules or
conditions of employment, (3) determined the rate and method of payment, and (4) maintained
employment records.” Williams v. Henagan, 595 F.3d 610, 620 (5th Cir. 2010).
18
1509, 1511 (1st Cir. 1983) (internal quotation marks omitted); see also Solis v. Universal Project
Management, Inc., No. 08-1517, 2009 WL 4043362 (S.D. Tex. Nov. 19, 2009) (collecting
cases). Accordingly, it is not clear that the claims against LaGreca in his individual capacity are
inappropriate simply due to his status as an officer of the corporation. The Court will deny
summary judgment on this highly fact dependent issue.
IV.
CONCLUSION
For the foregoing reasons, IT IS ORDERED that Defendants’ Motion for Summary
Judgment (Rec. Doc. 47) is GRANTED IN PART and DENIED IN PART. In particular,
Defendants’ motion is GRANTED with respect to Plaintiff’s claims pre-dating October 12, 2008
and Plaintiff’s claims under the Louisiana Whistleblower Statute, and DENIED with respect to
all other claims.
New Orleans, Louisiana, this 10th day of May, 2013.
______________________________________
UNITED STATES DISTRICT JUDGE
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