MOZINGO et al v. OIL STATES ENERGY SERVICES, L.L.C. et al

Filing 398

MEMORANDUM re 387 MOTION for an Award of Liquidated Damages for Group One Plaintiffs filed by ROBERT PICKEL, MICHAEL BURCHIK, WAYNE EDDY, JASON LETT. Signed by Judge Mark A. Kearney on 11/30/2017. (kly)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

SAMMY MOZINGO, et al.

v.
OIL STATES ENERGY SERVICES,
L.L.C.,

: CIVIL ACTION
:
:
: NO. 15-529
:
:
:

MEMORANDUM
KEARNEY, J.

November 30, 2017

Following our jury’s unanimous finding an employer violated federal law by not paying
overtime compensation to crane operators at its fracking sites, the winning employees now move
to double the jury’s award of overtime compensation. As a matter of public policy, Congress
mandates these liquidated damages unless the employer shows it subjectively acted in good faith
in trying to comply with the law and its attempts to comply with the law are objectively
reasonable.

When, as here, the employer disputes its legal obligation but does not show good

faith efforts to comply with the law or demonstrate reasonable efforts to comply with the law, we
must follow the Congressional mandate. In the accompanying Order, we grant the employees’
post-trial motion for liquidated damages and double the amount of the jury’s unanimous award
of overtime compensation to the four crane operators.
I.

Background
Employees sued their former employer, Oil States, for failing to pay overtime under the

Fair Labor Standards Act for working on fracking drill sites. We tried claims from four of the
employees who worked as crane operators last month. The crane operators adduced evidence
they worked overtime hours but Oil States classified them as exempt from the Act and did not

pay them overtime. Oil States argued the crane operators were exempt from the Act as highly
compensated employees or exempt under the Motor Carrier Act.
The crane operators adduced evidence Oil States acted willfully or recklessly through
testimony from Terry Woodall, Oil States’ former vice president of human resources, who
believed crane operators were classified as non-exempt from the Act. Jill Curry, another former
employee of Oil States’ human resources department, testified she believed crane operators were
non-exempt based on their job description and Oil States’ paperwork describing the position as
non-exempt under the Act more than once.
The jury unanimously found the crane operators entitled to overtime under the Fair Labor
Standards Act and awarded money damages.1 The jury also found Oil States willfully or
recklessly failed to pay overtime compensation to the four crane operators and awarded money
damages for an extra year.2
II.

Analysis
The crane operators, under § 216(b) of the Act, move to double the jury’s award of

unpaid overtime compensation as liquidated damages.3 Congress mandates liquidated damages
as part of compensatory damages “to compensate employees for losses they might suffer by
reason of not receiving their lawful wage at the time it was due.” 4 Congress later amended the
Act providing us with discretion to award less than full 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 the his act or omission was not a
violation of [the Act].”5
Our court of appeals has “stressed” the employer “must show good faith and reasonable
grounds before [we] may exercise ‘sound discretion’ to deny or limit liquidated damages.”6 Oil

2

States has the “plain and substantial” burden of proving it is “entitled to discretionary relief from
the [Act’s] mandatory liquidated damages provision.”7 To avoid liquidated damages, we must
find Oil States subjectively acted in good faith in trying to comply with the Act, and then find
Oil States’ attempts to comply with the Act are objectively reasonable.8
To satisfy its burden, Oil States “must show that [it] took affirmative steps to ascertain
the Act’s requirements, but nonetheless, violated its provisions.”9 If Oil States does not satisfy
this burden with evidence, we are “without discretion to deny liquidated damages.” 10 Oil States’
burden is difficult to meet as illustrated in Souryavong, where the district court awarded
liquidated damages because the employer presented no evidence of its affirmative steps to
comply with the Act.11 At the close of the employees’ case, however, the district court found the
employees did not adduce evidence of the employer’s willfulness.12 The employees appealed the
court’s finding on willfulness arguing, among other things, the award of liquidated damages
required the finding as a matter of law, employees adduced evidence of willfulness.13 Our court
of appeals disagreed, distinguishing between the evidence of intentional acts to prove willfulness
and the lesser evidentiary showing the employer lacked good faith attempts to comply with the
Act.14 “A lack of evidence going to good faith is not the same as evidence in support of
intentionality.”15
Our jury, after three full days of evidence and several hours of deliberation, found Oil
States willfully violated the Act by classifying the crane operators as exempt and failing to pay
them overtime. The jury heard two Oil States’ human resource employees testify they believed
crane operators were non-exempt based on their job description and Oil States’ paperwork
described the position as non-exempt under the Act more than once. We instructed the jury
willfulness could only be found if Oil States either knew it violated the Act or recklessly

3

disregarded the possibility of violation.16 Under our court of appeals’ instruction in Souryavong,
we instructed the jury it must find Oil States’ conduct is more than unreasonable because Oil
States had to have “some degree of actual awareness” of its violation.17 Where, as here, the jury
found Oil States had some degree of actual awareness it violated the Act, we cannot find Oil
States subjectively acted in good faith.18
Oil States argues it meets its burden because its pay plan for the crane operators
conformed to industry standards. Oil States also argues we should not award liquidated damages
because it had a good faith, reasonable belief the crane operators were exempt from the Act both
under the highly compensated exemption and exempt under the Motor Carrier Act.
A.

Oil States’ pay plan conforming to industry standards is not good faith.

Oil States argues paying crane operators a salary and a job bonus, instead of hourly with
overtime, conformed to industry standard practice and thus shows good faith.

Ms. Curry

testified, “[i]t was an industry standard rate of pay. So it wasn’t a question of we want to do one
or the other [hourly plus overtime].”19 Our court of appeals rejected this argument in Martin
holding where an employer did not take affirmative steps to determine whether the pay plan
complies with the Act, an “employer’s adherence to customary and widespread industry
practices that violate the Act’s overtime pay provisions is not evidence of an objectively
reasonable good faith violation.”20 Oil States offered no evidence it independently researched
whether the industry standard salary and job pay plan for crane operators complied with the Act.
B.

Oil States did not show a good faith belief the crane operators were exempt
under highly compensated exemption.

Oil States argues its belief the crane operators were exempt under the highly
compensated exemption is objectively reasonable because there is a lack of clarity in how the
exemption is applied. For the highly compensated exception, Oil States argues it reasonably
4

believed the crane operators were “deemed exempt” because it paid the crane operators over
$100,000 a year meaning it was not required to evaluate the nature of the crane operators’
specific duties under the Act. Oil States argued even if the jury found it made the wrong call,
because it is a “close call”, we should find its belief objectively reasonable.
Our court of appeals, in Martin, addressed whether uncertainty in the law is relevant for
determining if Oil States’ attempt to comply with the Act is objectively in good faith. 21 “While
we have considered the closeness of factual or legal questions in a case arising under the Act to
be relevant to a liquidated damages decision, we hold here that in order to assist an employer's
case against liquidated damages, ‘legal uncertainty ... must pervade and markedly influence the
employer's belief; merely that the law is uncertain does not suffice.’”22 Our court of appeals
requires the employer produce “record evidence” of implementing a pay plan because it
reasonably believed it complied with the Act relying on “some pervasive legal uncertainty
concerning the exemption status of its employees.”23
In explaining why crane operators were exempt under from overtime laws, Ms. Curry
testified, “[t]hey were the face of the company; they were responsible for dealing with the
company man; they were responsible for the service quality of the job; they were responsible for
the safety of the job and the fact that we were paying them a lot of money to do that job, far more
than what they would have gotten in overtime.”24 Additionally, Mr. Woodall, Oil States’ Vice
President of Human Resources, testified crane operators are non-exempt and Oil States had to
pay overtime under the Act.25

Mr. Woodall also testified he never reviewed the exempt

classification of job positions when he joined Oil States in 2013.26
Oil States offered no testimony its human resource employees even knew of the legal
uncertainty around the highly compensated exemption let alone researched conflicting legal

5

authority and made a good faith effort to rely on a reasonable interpretation. While Oil States’
counsel ably argues there is uncertainty in caselaw, there is no evidence an Oil States’ employee
knew of these uncertainties before litigation began.
C.

Oil States did not show a good faith belief the crane operators were exempt
and covered under the Motor Carrier Act.

Oil States also argues its belief the crane operators were exempt from overtime payments
because they were covered by the Motor Carrier Act is objectively reasonable because of a
perceived lack of clarity in how we apply the exemption. For the Motor Carrier Act exemption,
Oil States reasonably believed the crane operators were exempted from the Act entirely because
the Motor Carrier Act, and not the Act, applies to employees who drive trucks weighing over
10,000 pounds. Oil States argues it had a good faith, reasonable belief when Congress used the
phrase weighing over 10,000 pounds it meant the actual physical weight of the truck when driven
by the employee and not the truck’s gross vehicle weight rating. Oil States reasonably believed
the Motor Carrier Act covered crane operators and exempted them from the Fair Labor Standards
Act, because they drove trucks weighing over 10,000 pounds and did not pay them overtime. We
disagreed before trial holding the gross vehicle weight rating is the appropriate metric to
determine if the Motor Carrier Act exemption applies.27
Oil States offered no testimony its human resource employees even knew of the alleged
legal uncertainty around whether the employee is covered by the Motor Carrier Act, let alone
researched conflicting legal authority and made a good faith effort to rely on a reasonable
interpretation. Ms. Curry testified she was not familiar with and did not recall whether the Motor
Carrier Act exemptions applied to smaller trucks or of any other changes in the law. 28 Once
again, while Oil States’ counsel ably argues there is some uncertainty in caselaw for both

6

exemptions, there is no evidence an Oil States’ employee knew of these uncertainties when Oil
States did not pay overtime.
Oil States adduced no evidence showing the legal uncertainty in the Motor Carrier Act
exemption or the highly compensated exemption had “pervade[d] and markedly influence[d]”
Oil States’ belief the crane operators are exempt from overtime pay under the Act. Oil States
failed to meet its “plain and substantial burden” of good faith affirmative steps to comply with
the Act.
III.

Conclusion
We grant the crane operators’ motion for liquidated damages and double their damages

because Oil States fails to meet its burden to show it had a good faith belief its pay plan
complied with the Act and took objectively reasonable affirmative steps to comply with Act’s
overtime requirements.

1

ECF Doc. No. 381.

2

Id.

3

29 U.S.C. § 216(b).

4

Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 907 (3d Cir. 1991) (quoting Marshall v.
Brunner, 668 F.2d 748, 753 (3d Cir. 1982)).

5

29 U.S.C. § 260.

6

Martin, 940 F.2d at 907 (citing Marshall, 668 F.2d at 753) (“[The Portal-to-Portal Act]
provides that the district court has discretion to award no liquidated damages, or to award an
amount of liquidated damages less than the amount provided by section 216(b) of the FLSA, if,
and only if, the employer shows that he acted in good faith and that he had reasonable grounds
for believing that he was not violating the Act”).

7

7

Id. (quoting Williams v. Tri-County Growers, Inc., 747 F.2d 121, 129 (3d Cir. 1984)).

8

See Brooks v. Village of Ridgefield Park, 185 F.3d 130, 137 (3d Cir. 1999) (citing Martin, 940
F.2d at 907-08).
9

Martin, 940 F.2d at 908; see also Souryavong v. Lackwanna County, 872 F.2d 122, 125 (3d
Cir. 2017) (“In supporting of this determination, the District Court correctly followed [Martin],
in which we held that an employer’s failure to take “affirmative steps to ascertain the legality of
its pay practices” mandates an award of liquidated damages.”).
10

Id. (quoting Tri-County Growers, 747 F.2d at 129).

11

Souryavong, 872 F.2d at 125.

12

Id.

13

Id. at 127.

14

Id.

15

Id.

16

N.T. October 19, 2017, p. 95:8-18.

17

Id.

18

See Brooks, 185 F.3d at 137 (citing Martin, 940 F.2d at 907-08).

19

N.T. October 16, 2017, p. 226:7-8 (deposition of Jill Curry played to the jury), Deposition of
Jill Curry, June 16, 2016, pp. 85:25-86:1.
20

Martin, 940 F.2d at 910.

21

Id. at 910.

22

Id. (citing Brock v. Claridge Hotel and Casino, 846 F.2d 180, 187 (3d Cir. 1991) and Laffey v.
Northwest Airlines, 567 F.2d 429, 466 (D.C. Cir. 1976)).
23

Id.

24

N.T. October 16, 2017, p. 226:7-8 (deposition of Jill Curry played to the jury), Deposition of
Jill Curry, June 16, 2016, pp. 70:23-71:3.
25

N.T. October 17, 2017, p. 255:15-16 (deposition of Terry Woodall played to jury), Deposition
Terry Woodall, June 17, 2016, p 12.10-19; p. 84:8-17.
8

26

Id. at pp. 74:14-75:11.

27

See ECF Doc. No. 286.

28

N.T. October 16, 2017, p. 226:7-8 (deposition of Jill Curry played to the jury), Deposition of
Jill Curry, June 16, 2016, pp. 57:19-58:20.

9