Wellman v. Grand Isle Shipyard, Inc.

Filing 70

ORDER AND REASONS granting in part, denying in part 48 MOTION for Summary Judgment; All claims against GIS by Aaron Matte in this matter are DISMISSED WITH PREJUDICE. Signed by Judge Lance M Africk on 5/6/2015.(blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

DEAN WELLMAN

CIVIL ACTION

VERSUS

NO. 14-831

GRAND ISLE SHIPYARD, INC.

SECTION I

ORDER AND REASONS
Before the Court 1 is a motion for summary judgment filed by defendant, Grand Isle
Shipyard, Inc. (“GIS”). Plaintiffs oppose the motion. 2 For the following reasons, the motion is
GRANTED IN PART and DENIED IN PART.
BACKGROUND
Plaintiffs are former employees of GIS who allege that they are owed wages for
uncompensated overtime hours. 3 Plaintiffs allege that they were compensated pursuant to a
“straight time for overtime” policy instead of the time-and-a-half minimum rate for overtime
hours required by the Fair Labor Standards Act (“FLSA”). 4 See 29 U.S.C. § 207(a)(1). 5 Plaintiffs
contend that GIS willfully violated the FLSA and that it must compensate them for unpaid
overtime wages, as well as reasonable attorneys’ fees and costs. 6

1

R. Doc. No. 48.
R. Doc. No. 55.
3
R. Doc. No. 1, ¶¶ 1, 23.
4
R. Doc. No. 1, ¶¶ 1, 9, 18.
5
29 U.S.C. § 207(a)(1) provides that “[n]o employer shall employ any of his employees . . . for a
workweek longer than forty hours . . . unless such employee receives compensation for his
employment in excess of the hours above specified at a rate not less than one and one-half times
the regular rate at which he is employed.”
6
R. Doc. No. 1, ¶¶ 22-25.
2

The Court conditionally certified the above-captioned matter as a collective action on
November 7, 2014. 7 The conditionally certified class consists of “[a]ll persons employed by
Grand Isle as Project Managers and paid on an hourly basis at any time during the three years
prior to the date of this notice.” 8 Fourteen individuals opted in to the lawsuit, and GIS has not
moved to decertify the class.
GIS contends that summary judgment is appropriate as to all plaintiffs because they are
exempt from the FLSA’s overtime requirements pursuant to the “highly compensated employee”
exemption, which is set forth in 29 C.F.R. § 541.601. 9 GIS also contends that the appropriate
statute of limitations period is two years, not three, and that several of the plaintiffs’ claims are
time-barred. 10 GIS further asserts that an award of statutory liquidated damages would not be
appropriate in this case. 11 Finally, GIS contends that four plaintiffs should be dismissed for
failing to timely opt in to the collective action. 12
STANDARD OF LAW
Summary judgment is proper when, after reviewing the pleadings, the discovery and
disclosure materials on file, and any affidavits, the court determines that there is no genuine issue
of material fact. See Fed. R. Civ. P. 56. “[A] party seeking summary judgment always bears the
initial responsibility of informing the district court of the basis for its motion and identifying
those portions of [the record] which it believes demonstrate the absence of a genuine issue of
material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking summary
judgment need not produce evidence negating the existence of material fact, but need only point
7

See R. Doc. No. 25.
R. Doc. No. 25, at 10.
9
See R. Doc. No. 48-1, at 2-4.
10
See R. Doc. No. 48-1, at 6-9.
11
See R. Doc. No. 48-1, at 9-10.
12
See R. Doc. No. 48-1, at 11.
8

2

out the absence of evidence supporting the other party’s case. Id.; Fontenot v. Upjohn Co., 780
F.2d 1190, 1195 (5th Cir. 1986).
Once the party seeking summary judgment carries its burden pursuant to Rule 56, the
nonmoving party must come forward with specific facts showing that there is a genuine issue of
material fact for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587
(1986). The showing of a genuine issue is not satisfied by creating “‘some metaphysical doubt as
to the material facts,’ by ‘conclusory allegations,’ by ‘unsubstantiated assertions,’ or by only a
‘scintilla’ of evidence.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (citations
omitted). Instead, a genuine issue of material fact exists when the “evidence is such that a
reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). The party responding to the motion for summary judgment may not
rest upon the pleadings, but must identify specific facts that establish a genuine issue. Id. The
nonmoving party’s evidence, however, “is to be believed, and all justifiable inferences are to be
drawn in [the nonmoving party’s] favor.” Id. at 255; see also Hunt v. Cromartie, 526 U.S. 541,
552 (1999).
DISCUSSION
I.

Highly Compensated Employee Exemption

As stated, the FLSA provides that “[n]o employer shall employ any of his employees . . .
for a workweek longer than forty hours . . . unless such employee receives compensation for his
employment in excess of the hours above specified at a rate not less than one and one-half times
the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). The FLSA does, however,
provide certain exemptions to this requirement. E.g., id. § 213(a)(1) (exempting from § 207 “any
employee employed in a bona fide executive, administrative, or professional capacity”). The

3

Department of Labor (“DOL”), which is tasked with administering the FLSA, see id. § 204, has
published regulations that define this exemption pursuant to its statutory authority. 13
GIS contends that plaintiffs are not entitled to overtime wages on the basis of the
exemption for “highly compensated employees,” which states in pertinent part:
(a) An employee with total annual compensation of at least $100,000 is deemed
exempt . . . if the employee customarily and regularly performs any one or more
of the exempt duties or responsibilities of an executive, administrative or
professional employee identified in subparts B, C or D of this part.
(b)(1) “Total annual compensation” must include at least $455 per week paid on a
salary or fee basis.
29 C.F.R. § 541.601. The relevant regulations further define what it means to be paid on a salary
basis, id. § 541.602(a), 14 but employees’ compensation need not be calculated weekly:
An exempt employee’s earnings may be computed on an hourly, a daily or a shift
basis, without losing the exemption or violating the salary basis requirement, if
the employment arrangement also includes a guarantee of at least the minimum
weekly required amount paid on a salary basis regardless of the number of hours,
days or shifts worked, and a reasonable relationship exists between the guaranteed
amount and the amount actually earned. 15
Id. § 541.604(b); see also Zannikos v. Oil Inspections (U.S.A.), Inc., No. 14-20253, 2015 WL
1379882, at *9-10 (5th Cir. Mar. 27, 2015) (discussing the highly compensated employee
exemption). “The decision whether an employee is exempt under the [FLSA] is primarily a
13

See also Defining and Delimiting the Exemptions for Executive, Administrative, Professional,
Outside Sales and Computer Employees, 69 Fed. Reg. 22122, 22122 (Apr. 23, 2004) (codified at
29 C.F.R. pt. 541) (“These exemptions are often referred to as the ‘white collar’ exemptions. To
be considered exempt, employees must meet certain minimum tests related to their primary job
duties and, in most cases, must be paid on a salary basis at not less than minimum amounts.”)
14
29 C.F.R. § 541.602(a) (“An employee will be considered to be paid on a ‘salary basis’ within
the meaning of these regulations if the employee regularly receives each pay period on a weekly,
or less frequent basis, a predetermined amount constituting all or part of the employee’s
compensation, which amount is not subject to reduction because of variations in the quality or
quantity of the work performed.”).
15
“The reasonable relationship test will be met if the weekly guarantee is roughly equivalent to
the employee’s usual earnings at the assigned hourly, daily or shift rate for the employee’s
normal scheduled workweek.” 29 C.F.R. § 541.604(b).
4

question of fact,” but the “ultimate decision” as to the applicability of an FLSA exemption is a
question of law. Cheatham v. Allstate Ins. Co., 465 F.3d 578, 584 (5th Cir. 2006). “[T]he burden
of proof lies with the employer.” Id.
Plaintiffs’ main point of contention relates to whether they were paid at least $455 per
week on a salary basis. Plaintiffs contend that no part of their compensation was guaranteed and
that their “pay moved in ‘lock step’ with the number of hours they worked.” 16 Plaintiffs provided
ample evidence in connection with their opposition, including affidavits from individual
plaintiffs and an abundance of payroll evidence. 17 For example, several plaintiffs provided
“Employee Confirmation” sheets that make no mention of any salary, but rather list a flat hourly
pay rate. 18
In support of its motion, GIS submitted a declaration by Bryan Pregeant (“Pregeant”),
GIS’s Vice President, wherein he attested that “[e]ach opt-in received at least $455 in
compensation during each week he worked as a Project Manager.” 19 However, this assertion
does not address the regulations’ requirement that the employment arrangement must “include[]
a guarantee of at least the minimum weekly required amount paid.” 29 C.F.R. § 541.604(b)
(emphasis added); see also id. § 541.602(a). GIS also submitted a declaration by Thomas Craig,
a project manager who states that he “was verbally told by GIS at the time of my hire that I
would receive at least 40 hours of compensation per week,” 20 and an audit by the DOL

16

R. Doc. No. 55, at 5.
See, e.g., R. Doc. No. 55-1, at 1, ¶ 7; R. Doc. No. 55-2, at 2, ¶ 11; R. Doc. No. 55-4, at 35; R.
Doc. No. 65-1, at 1; R. Doc. No. 65-3, at 1-3; R. Doc. No. 65-4, at 1, 3, 5, 7, 9, 11, 13, 15, 17; R.
Doc. No. 65-6.
18
R. Doc. No. 55-1, at 4; R. Doc. No. 65-2, at 1-5; but cf. R. Doc. No. 65-5, at 1. The Court
notes that two such employee confirmations have an additional notation “CA - $500.00,” which
meaning is unexplained. See R. Doc. No. 65-2, at 2-3.
19
R. Doc. No. 48-4, ¶ 11.
20
R. Doc. No. 64-1, at 34, ¶ 5.
17

5

concluding that GIS’s project managers “are guaranteed pay for a minimum of 40 hours per
week, whether they work it or not (Exhibit B-5).” 21 The referenced exhibit is not provided,
however, and the Court cannot ascertain the precise basis for the DOL’s conclusion. 22
Based on the present record, the Court finds that there is conflicting evidence raising a
genuine issue of material fact as to whether plaintiffs were compensated at least $455 per week
paid on a salary basis. Without having established such a guarantee, GIS cannot obtain summary
judgment on the basis of the highly compensated employee exemption. Accordingly, the Court
denies GIS’s motion with respect to this issue.
II.

Statute of Limitations

The FLSA provides for a statute of limitations of two years, “except that a cause of action
arising out of a willful violation may be commenced within three years.” 29 U.S.C. § 255. “Mere
knowledge of the FLSA and its potential applicability does not suffice [to show willfulness], nor
does conduct that is merely negligent or unreasonable.” Zannikos, 2015 WL 1379882, at *10
(citing McLaughlin v. Richland Shoe Co., 486 U.S. 128, 132-33 (1988); Trans World Airlines,
Inc. v. Thurston, 469 U.S. 111, 127-28 (1985); Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1416
(5th Cir. 1990)). “Rather, an employer’s violation is willful only if it ‘knew or showed reckless
disregard for the matter of whether its conduct was prohibited by the statute . . . .’” Id. (quoting
McLaughlin, 486 U.S. at 133) (alteration in original). “An employer who ‘act[s] without a
reasonable basis for believing that it was complying with the [FLSA]’ is merely negligent.” Id.
21

R. Doc. No. 64-1, at 37.
The Court notes that in support of its assertion that project managers were subject to a
minimum salary guarantee, GIS provides evidence that project managers “could be placed on
‘shop time’ and could continue to receive compensation even though they did not perform
billable work for a GIS client.” R. Doc. No. 64, at 4 n.5. This “shop time,” however, is still
compensation for hours worked, and not a minimum salary guarantee. The Court also notes that
the written statement to the DOL by Cory Dantin makes no mention of any guaranteed wage. See
R. Doc. No. 48-3, at 5-6.
22

6

(quoting McLaughlin, 486 U.S. at 134-35). “The plaintiff bears the burden of demonstrating
willfulness.” Id. (citing Cox v. Brookshire Grocery Co., 919 F.2d 354, 356 (5th Cir. 1990)).
GIS contends that it did not willfully violate the FLSA and that the DOL’s audit
concluding that project managers were exempt “demonstrate[s] that any purported FLSA
violation committed by Defendant with regard to the collective action was not willful.”23
Plaintiffs argue that GIS acted with reckless disregard because GIS “is no unsophisticated small
operation” 24 and “certainly knew the black letter rule that hourly employees are entitled to
overtime. Thus, [GIS] was clearly on notice of a potential FLSA violation, and its decision to not
pay its hourly Project Managers overtime without doing anything else is at the very least reckless
disregard.” 25 Plaintiffs also contest the relevance of the DOL audit and argue that “[e]ven a
cursory review of the DOL documents demonstrates that the DOL either made a monumental
mistake or was duped.” 26 Plaintiffs note that the DOL’s conclusion was based on the finding that
GIS’s project managers “are guaranteed pay for a minimum of 40 hours per week, whether they
work it or not.”27 However, plaintiffs also note that there was no such guarantee, as discussed
above. 28
The Court concludes that it would be inappropriate to grant summary judgment with
respect to the issue of GIS’s willfulness. Clearly, plaintiffs cannot rely solely on the fact that GIS
“is no unsophisticated small operation” 29 in order to establish willfulness at trial. See Zannikos,
2015 WL 1379882, at *10 (“Mere knowledge of the FLSA and its potential applicability does
23

R. Doc. No. 48-1, at 7.
R. Doc. No. 55, at 15.
25
R. Doc. No. 55, at 16. In support of this proposition, plaintiffs submitted a deposition of
Pregeant taken in a separate matter. See R. Doc. No. 55-4, at 26.
26
R. Doc. No. 55, at 17.
27
R. Doc. No. 64-1, at 37.
28
R. Doc. No. 55, at 17.
29
R. Doc. No. 55, at 15.
24

7

not suffice . . . .”). However, as discussed above, the Court cannot ascertain the basis for the
DOL’s conclusion that project managers were provided with a weekly guaranteed salary
equivalent to 40 hours per week. The discrepancy between the DOL’s audit and the present
record raises a suggestion that there may be an element of willfulness to GIS’s behavior.
Considering the anemic evidence provided by GIS in support of any minimum guaranteed wage
and the voluminous evidence presented by plaintiffs suggesting that they were paid only for the
hours they worked, the Court can only wonder why the DOL would conclude that all project
managers were guaranteed 40 hours per week as a salary.
The Court emphasizes that plaintiffs bear the burden of producing evidence and eliciting
testimony in support of GIS’s willfulness. However, the Court finds that genuine issues of
material fact preclude the Court from granting summary judgment and foreclosing all inquiry
into GIS’s willfulness at trial.
Having concluded that a genuine issue of material fact precludes summary judgment as to
GIS’s willfulness, the Court cannot determine at this time whether it must apply a two-year or
three-year statute of limitations. GIS has moved for summary judgment against three opt-in
plaintiffs (Russell Milam, Daniel Gauthreaux, and Gene Robicheaux) on the basis that their
claims are barred by a two-year statute of limitations, but such plaintiffs may be entitled to some
recovery in the event the Court finds that a three-year statute of limitations should be applied.30
Accordingly, the Court denies GIS’s motion with respect to these plaintiffs.
Finally, the Court notes that GIS has moved for summary judgment as to Aaron Matte
(“Matte”) under either the two-year or three-year statute of limitations. Plaintiffs have not

30

R. Doc. No. 48-1, at 8.
8

offered any opposition as to the dismissal of Matte’s claims. 31 Accordingly, the Court grants
GIS’s unopposed motion for summary judgment as to Matte.
III.

Liquidated Damages

Employers who violate the FLSA are generally liable for the amount of unpaid
compensation, plus “an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b).
However, the FLSA also provides courts with the discretion to award a reduced amount of, or
zero, liquidated damages “if the employer shows to the satisfaction of the court that the act or
omission giving rise to such action was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation” of the FLSA. 29 U.S.C. § 260. The Fifth
Circuit has stated that employers who are found liable bear a “substantial burden” in attempting
to avoid liquidated damages. Owens v. Marstek, L.L.C., 548 F. App’x 966, 972 (5th Cir. 2013)
(quoting Mireles, 899 F.2d at 1415). “The district court’s discretion to reduce the liquidated
damages ‘must be exercised consistently with the strong presumption under the statute in favor
of doubling.’” Nero v. Indus. Molding Corp., 167 F.3d 921, 929 (5th Cir. 1999) (quoting Shea v.
Galaxie Lumber & Constr. Co., 152 F.3d 729, 733 (7th Cir. 1998)).
GIS contends that it “has established its good faith by receiving a favorable decision from
the DOL with regard to its wage and hour practices.” 32 However, the Court finds that at this
stage of the proceedings, GIS has not presented evidence that overcomes the strong presumption
in favor of double damages. GIS’s exclusive reliance on the DOL audit is problematic for the
reasons discussed above. Accordingly, the Court denies GIS’s motion with respect to the issue of
liquidated damages.

31
32

See R. Doc. No. 48-1, at 4-5; R. Doc. No. 48-5, at 1.
R. Doc. No. 48-1, at 10.
9

IV.

Failure To Timely Opt In

“Courts have broad discretion in determining whether to permit late opt-in filers to join a
collective action.” Coronado v. D N.W. Hous., Inc., No. 13-2179, 2014 WL 6674292, at *2 (S.D.
Tex. Nov. 24, 2014) (Rosenthal, J.); see also Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208,
1219 (11th Cir. 2001) (“The decision to create an opt-in class under § 216(b), like the decision
on class certification under Rule 23, remains soundly within the discretion of the district court.”).
“Although the caselaw on this issue is wide-ranging, courts have generally decided the question
by balancing various combinations of the following factors: (1) whether ‘good cause’ exists for
the late submissions; (2) prejudice to the defendant; (3) how long after the deadline passed the
consent forms were filed; (4) judicial economy; and (5) the remedial purposes of the FLSA.”
Coronado, 2014 WL 6674292, at *2 (quoting Ruggles v. Wellpoint, Inc., 687 F. Supp. 2d 30, 37
(N.D.N.Y. 2009), and citing numerous cases applying the Ruggles factors).
GIS asserts that the claims of four opt-in plaintiffs (Brent Gaspard, Larry Cadwell, Jerry
Gros, and Gene Robicheaux) “should be dismissed because they failed to timely opt in to the
collective action in this matter.” 33 The notice form approved by the Court advised potential
claimants that they were required to postmark or fax their consent form to plaintiffs’ counsel
within 60 days of the notice’s mailing, 34 resulting in a deadline of January 30, 2015. 35 With
respect to Brent Gaspard and Larry Cadwell, both individuals postmarked their consent forms by
this deadline. 36 Accordingly, GIS’s motion is denied with respect to these two plaintiffs.

33

R. Doc. No. 48-1, at 11.
See R. Doc. No. 29-1, at 1.
35
See R. Doc. No. 48-1, at 11; R. Doc. No. 55, at 18.
36
See R. Doc. No. 55-4, at 32-33.
34

10

With respect to Jerry Gros, he stated in an affidavit that he “do[es] not recall exactly
when [he] received the notice in this case” but that he “responded promptly after receiving it.”37
His consent form was filed into the record on February 9, 2015. 38 Plaintiffs also submitted an
email sent to plaintiffs’ counsel, dated February 12, 2015 and purportedly sent by Gene
Robicheaux, stating that the notice “was sent to my ex-wife’s house” and that “[m]y ex-wife
gave it to my son last month and he just found it in his duffle bag today and gave it to me.” 39 His
consent form was filed into the record on February 12, 2015, the same day that the email was
sent. 40
GIS asserts that the Court should not consider Gene Robicheaux’s unsworn email as
summary judgment evidence. 41 However, GIS does not address the Ruggles factors, or even
argue that it was prejudiced in any way by the untimely opt-ins, both of which were less than
two weeks late. Judicial economy would clearly best be served by deciding the untimely opt-in
claims which present identical issues as the claims by the timely opt-ins. Furthermore, allowing
the untimely opt-ins furthers the FLSA’s remedial purpose of ensuring workers are properly
compensated. Accordingly, because the Ruggles factors counsel in favor of allowing the
untimely opt-ins, even without a strong showing of good cause, the Court exercises its discretion
to deny GIS’s motion with respect to Jerry Gros and Gene Robicheaux.

37

R. Doc. No. 55-3, at 3, ¶ 29.
R. Doc. No. 43.
39
R. Doc. No. 55-4, at 34.
40
R. Doc. No. 44.
41
R. Doc. No. 64, at 9.
38

11

CONCLUSION
The Court notes that plaintiffs urged the Court to grant summary judgment sua sponte in
their favor on certain issues. 42 Because genuine issues of material fact preclude summary
judgment, the Court declines to do so. Accordingly, and for the foregoing reasons,
IT IS ORDERED that the motion is GRANTED IN PART. All claims against GIS by
Aaron Matte in the above-captioned matter are DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that the motion is DENIED in all other respects.

New Orleans, Louisiana, May 6, 2015.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

42

E.g., R. Doc. No. 55, at 3.
12