Papesh v. Move It Management LLC et al

Filing 31

SUMMARY JUDGMENT OPINION AND ORDER denying 21 MOTION for Summary Judgment (Signed by Magistrate Judge Stephen Wm Smith) Parties notified.(jmarchand, 4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
TRICIA PAPESH, INDIVIDUALLY AND ON §
BEHALF OF OTHERS SIMILARLY SITUATED
§,
Plaintiff,
§
§
vs.
§
§
MOVE IT MANAGEMENT, L.L.C., et al., §
Defendants.
§

June 05, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. H-15-3195

SUMMARY JUDGMENT OPINION AND ORDER
This Fair Labor Standards Act (FLSA) case is before the court on defendants'
motion for summary judgment (Dkt. 21). Having considered the parties’ submissions,
the law, and arguments at a hearing on the record in open court on May 23, 2017, it
is ordered that defendants’ motion is denied.1
Background
The following facts are undisputed unless otherwise noted. Tricia Papesh was
hired on May 23, 2012 by Watson & Taylor Management, Inc. to manage a selfstorage facility in Webster, Texas. At that time she was paid $12.00 per hour. Watson
& Taylor transferred its employees to Move It Management, LLC (MIM) in April,
2013. Papesh remained employed as the manager of the same self-storage facility, and
her pay was increased to $14.00 per hour. Throughout her employment Papesh was
1

The parties have consented to the jurisdiction of this magistrate judge over all aspects of this
case, including final judgment (Dkt. 15).

required to enter her time through a computer timekeeping program managed by a
professional employment organization.2 On several occasions, Papesh requested
corrections to her time sheets after submission. From January 2013 through April
2015, she was paid for approximately 720 overtime hours. She was terminated on
May 22, 2015.
Watson & Taylor's and MIM's timekeeping and overtime policies were set forth
in employee handbooks. MIM's 2015 employee handbook contains the following
provision:
Prohibited ‘Off the Clock’ Work
At not time should employees perform work while ‘off the clock.’ All
time spent working should be properly recorded. If given a directive to
perform work ‘off the clock,’ please promptly notify your corporate
supervisor, or if your corporate supervisor has given a directive to work
‘off the clock’ and/or has told you not to properly record all hours
worked, notify your Insperity human resource specialist. No employee
will be penalized in any way for making such a complaint.3

2

In May 2012, the time-keeping function was handled by Human Resources Technologies,
Inc. d/b/a Odyssey HR. Watson & Taylor switched to Orchestrate H/R, Inc. shortly after
Papesh was hired. When Watson & Taylor transfered employees to MIM, the timekeeping
function was managed by Insperity, Inc.

3

D.Ex.B14 (Dkt. 21-4 at 152).
2

Defendants move for summary judgment on the grounds that Papesh cannot
prove MIM was aware that she worked any unpaid overtime hours,4 and that MS Sub
Clear Lake, L.L.C. was not her employer.
Summary Judgment Standards
Summary judgment is appropriate if no genuine issues of material fact exist,
and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
The party moving for summary judgment has the initial burden to prove there are no
genuine issues of material fact for trial. Provident Life & Accident Ins. Co. v. Goel,
274 F.3d 984, 991 (5th Cir. 2001). Dispute about a material fact is “genuine” if the
evidence could lead a reasonable jury to find for the nonmoving party. In re
Segerstrom, 247 F.3d 218, 223 (5th Cir. 2001). “An issue is material if its resolution
could affect the outcome of the action.” Terrebonne Parish Sch. Bd. v. Columbia Gulf
Transmission Co., 290 F.3d 303, 310 (5th Cir. 2002).
If the movant meets this burden, “the nonmovant must go beyond the pleadings
and designate specific facts showing that there is a genuine issue for trial.” Littlefield
v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001) (quoting Tubacex, Inc.

4

Defendants also argue that Papesh was paid the required minimum wage for all hours she
worked. Papesh did not address this issue in her response or at the hearing. To the extent the
complaint alleges a minimum wage claim, Papesh has abandoned it and it is dismissed with
prejudice.
3

v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995)); Caboni v. Gen. Motors Corp., 278
F.3d 448, 451 (5th Cir. 2002). If the evidence presented to rebut the summary
judgment is not significantly probative, summary judgment should be granted.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). In determining
whether a genuine issue of material fact exists, the court views the evidence and
draws inferences in the light most favorable to the nonmoving party. Id. at 255;
Hotard v. State Farm Fire & Cas. Co., 286 F.3d 814, 817 (5th Cir. 2002).
Analysis
The FLSA is a remedial statute that requires employers to pay non-exempt
employees overtime at an hourly rate “not less than one and one-half time the regular
rate at which he is employed.” 29 U.S.C. § 207(a). Papesh bears the burden of
proving that defendants did not pay her all the overtime pay she was entitled to
receive. See Samson v. Apollo Resources, Inc., 242 F.3d 629, 636 (5th Cir. 2001).
Papesh also bears the burden of proving that defendant MS Sub Clear Lake, L.L.C.
was her employer. Id.; Martinez-Mendoza v. Champion Intern. Corp., 340 F.3d 1200,
1209 (11th Cir. 2003).
A.

Papesh's overtime claim

Papesh claims that she was forced to work overtime “off the clock.” MIM has
produced pay records for every day of Papesh’s employment. Papesh does not dispute
4

that those records reflect the hours she actually reported. When an employer keeps
accurate pay records, it is plaintiff's burden to prove “the employer knew or had
reason to believe that the reported information was inaccurate.” Brumbelow v. Quality
Mills, Inc., 462 F.2d 1324, 1327 (5th Cir. 1972). Where an employee fails to notify
her employer or prevents her employer from discovering that she is working overtime,
the employer's failure to pay for overtime hours is not a violation of the FLSA.
Newton v. City of Henderson, 47 F.3d 746, 747 (5th Cir. 1995).
As reflected in her timesheets,5 Papesh’s regular hours were roughly 8:00 a.m.
until 6:00 p.m. Monday through Friday and 9:00 a.m. until 2:00 p.m. Saturday.
However, it is undisputed that the storage-facility, which included a business center
and commercial lease space, operated 24 hours a day. Papesh represents without
contradiction that her responsibilities included servicing the business at any hour
needed.6 It would not be not surprising if she received after-hour phone calls from her
supervisors, and Papesh’s voluminous phone records indicate she did.7 Papesh has

5

D.Ex.B8.

6

P.Ex. 3.

7

P.Ex. 1. Defendants object to the voluminous phone records and the chart matching phone
calls with time records because the response brief does not cite the record with sufficient
particularity to help the court, and the chart is illegible and not in a helpful format.
Defendants also argue that Papesh’s affidavit contradicts her deposition testimony. See Dkt.
27 at 4. These objections are overruled.
5

reviewed the phone records to identify specific instances when she received a call
from a manager, but the time is not entered on her timesheets.8 Papesh contends that
this evidence “unequivocally show[s] that Defendants’ upper level managers knew
Plaintiff was performing work ‘off the clock’ and was not being compensated
overtime for those hours.”9
There is no dispute that Papesh was paid for some overtime hours she worked
during the relevant time period. It is Papesh’s contention that while she was paid
overtime for some hours over forty that she worked in the course of a regular business
day, she was told by her managers that she was not allowed to clock in and be paid
overtime when she was required to work “on call” at night and early morning. For the
time period April 22, 2013 through May 16, 2015, Papesh’s timesheets show only two
instances when Papesh clocked back in after having clocked out for the day. On
October 16, 2014, Papesh clocked out at 5:23 p.m., and then clocked back in at 9:00
p.m. and out again at 11:00 p.m.10 On March 23, 2015, Papesh clocked out at 6:04
p.m., then clocked back in from 8:02 p.m. until 9:02 p.m.11

8

P.Ex. 2; P.Ex. 3. Defendants have not pointed out any discrepancy in this representation.

9

Dkt. 24 at 5.

10

D.Ex.B8 at 20 (Dkt. 21-4 at 94).

11

Id. at 26 (Dkt. 21-4 at 100).
6

Papesh has presented sufficient evidence to create a genuine issue of fact as to
whether she worked overtime hours for which she was not paid.12 The next question
becomes whether her employer was aware of it.
Defendants point out that Papesh had a history of inaccurate timekeeping.13 She
often requested corrections in her time records, including requests to add missing
time, and was never denied the requested hours. In fact, one such instance occurred
on October 16, 2014.14 Papesh concedes that she never complained to Diane Taylor
(the owner of MIM) or Insperity Human Resource Specialist Theresa Guy-Tippie that
she was forced to work “off the clock.”15 And it is true that the employee handbook
does state that working off the clock is against company policy.16
On the other hand, Papesh’s affidavit says that Eddie Johnson and Tom
Maxfield, two of her supervisors, told her within 30 days of being hired that she was

12

The court also concludes that there is a fact issue as to whether the number of unpaid
overtime hours worked is de minimis. In her deposition, Papesh estimated she worked 4
unpaid “on call” hours per week. D.Ex.A at 70, 92.

13

D.Exs.B17, 27, 28, 29.

14

See Dkt. 21 at 12; D.Ex.B23.

15

D.Ex. A at 38, 52-53, 68-69, 70, 93, 102. Papesh was aware that Theresa Guy-Tippie was
her Insperity human resource specialist. Id. at 42.

16

See D.Ex. A at 22-23; D.Ex.B2, 10, 14, 15.
7

not allowed to report her overtime.17 Johnson and Maxfield, along with another
supervisor, Josh Springer, were responsible for several late night phone calls to
Papesh. The evidence indicates that Johnson monitored Papesh’s timekeeping and
thus had reason to know that she was not accurately reporting her time.18 Papesh also
says that she discussed working off the clock with Maxfield when he came to town
for business lunches.19 While she did not report working off the clock to the HR
Specialist or the owner of the company, she allegedly did tell Anne Sullivan, who was
responsible for verifying payroll, that she did not like working “off the clock,” but
Sullivan was not concerned.20 Because of these communications from her superiors,
Papesh worried that if she reported more overtime or complained to the owner of the
company, she would lose her job.21
If Papesh’s testimony is credible, a reasonable jury could infer that her
employer encouraged her to work overtime hours without reporting it. Cf. Newton,
47 F.3d at 747 (“Newton's payroll forms would not be reliable indicators of the
17

P.Ex. 3. This is not directly contradictory of her deposition testimony. Although at deposition
she could not recall precise instances, she was consistent in her position that Johnson and
Masfield both gave this instruction. See, e.g., D.Ex.A at 43-44, 85, 92-93.

18

D.Ex.B17, 18

19

D.Ex. A at 41.

20

P.Ex. 3.

21

Id.
8

number of hours worked, if there was evidence to support the conclusion that the City
encouraged or forced Newton to submit incorrect time sheets.”).
Given these disputed fact issues, the court denies defendants’ motion for
summary judgment on Papesh’s overtime claim.
B.

Papesh’s joint employer claim 22

In cases where a plaintiff allegedly has more than one employer, this court
“must apply the economic realities test to each individual or entity alleged to be an
employer and each must satisfy the four part test.” Gray v Powers, 673 F.3d 352, 354
(5th Cir. 2012). The four parts of the economic reality test 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. Id. at 355
(citing Williams v. Henagan, 595 F.3d 610, 620 (5th Cir.2010)). The ultimate

22

29 C.F.R. § 791.2 (1991) provides:
(a) A single individual may stand in the relation of an employee to
two or more employers at the same time under the Fair Labor
Standards Act of 1938, since there is nothing in the act which
prevents an individual employed by one employer from also entering
into an employment relationship with a different employer. A
determination of whether the employment by the employers is to be
considered joint employment or separate and distinct employment for
purposes of the act depends upon all the facts in the particular case.
9

determination that a person or entity is an employer under the FLSA is a finding of
law. Beliz v. W.H. McLeod & Sons Packing Co., 765 F.2d 1317, 1327 (5th Cir.1985).
Papesh’s joint employer claim is based solely on the undisputed fact that “MS
Sub was the owner of the storage and business rental facility at which she worked.”
Dkt. 24 at 5. However, the Property Management Agreement between MIM and MS
Sub provides that MIM is responsible for hiring employees and “[a]ll matters
pertaining to the employment, supervision, compensation, promotion, and discharge
of such employees are the responsibility of [MIM], who is and shall remain, in all
respects, the employer of such employees.” Dkt. 21-4 at 215. Papesh has presented
no evidence that MS Sub and MIM ignored this contract provision or that MS Sub
otherwise meets the economic reality test. Defendants’ motion for summary judgment
as to MS Sub is granted.
Conclusion and Order
For the reasons set forth above, defendants' motion for summary judgment
(Dkt. 21) is denied. This case is set for a jury trial beginning on July 24, 2017.
Signed at Houston, Texas on June 5, 2017.

10