Spangler v. Mourik, L.P.
Filing
29
MEMORANDUM OPINION AND ORDER denying 24 Cross MOTION for Summary Judgment , denying 19 Amended MOTION for Summary Judgment . (Joint Pretrial Order due by 9/1/2017. Docket Call set for 9/8/2017 at 03:00 PM in Courtroom 9B before Judge Sim Lake.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 1 of 46
United States District Court
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
JAMES SPANGLER,
§
§
§
§
§
§
§
§
§
Plaintiff,
v.
MOURIK, L.P.,
Defendant.
Southern District of Texas
ENTERED
August 08, 2017
David J. Bradley, Clerk
CIVIL ACTION NO. H-16-0349
MEMORANDUM OPINION AND ORDER
Plaintiff,
against
James
defendant,
Spangler
Mourik,
("Spangler"),
L.P.
("Mourik"),
filed
to
this
action
recover
unpaid
overtime wages and statutory damages under the Fair Labor Standards
Act ("FLSA"), 29 U.S.C.
§
as exempt from overtime.
216(b) for willfully misclassifying him
Pending before the court is Defendant's
First Amended Motion for Complete Summary Judgment
FAMSJ," Docket Entry No.
("Defendant's
19), and Plaintiff's Response to Motion
for Summary Judgment and Cross-Motion for Partial Summary Judgment
("Plaintiff's Response and CMPSJ," Docket Entry Nos.
23 and 24).
After considering Plaintiff's Supplemental Response to Motion for
Summary Judgment ("Plaintiff's Supplemental Response," Docket Entry
No. 25), Defendants's Reply in Support of Its Motion for Complete
Summary
Judgment
("Defendant's
Reply,"
Docket
Entry
No.
2 6) ,
Defendant's Response in Opposition to Plaintiff's Cross-Motion for
Partial
Summary
Judgment
("Defendant's
Response,"
Docket
Entry
No. 27), Plaintiff's Reply in Support of Cross-Motion for Partial
Summary Judgment
("Plaintiff's Reply," Docket Entry No.
the applicable law,
28), and
the court concludes that the pending motions
for summary judgment should both be denied.
1
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 2 of 46
I. Standard of Review
Summary judgment is authorized if the movant establishes that
there is no genuine dispute about any material fact and the law
entitles it to judgment.
material
facts
are
Fed. R. Civ. P. 56(a)
"genuine"
if
the
Disputes about
evidence
is
such
that
a
reasonable jury could return a verdict for the nonmoving party.
Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2511 (1986).
The
Supreme Court has interpreted the plain language of Rule 56(a) to
mandate the entry of summary judgment "after adequate time for
discovery and upon motion,
showing
sufficient
to
against a party who fails to make a
establish
the
existence
of
an
element
essential to that party's case, and on which that party will bear
the burden of proof at trial."
S.
Ct.
"must
2548,
2552
(1986).
Celotex Corp.
v.
Catrett,
106
A party moving for summary judgment
'demonstrate the absence of a
genuine
issue
of material
fact,' but need not negate the elements of the nonmovant's case."
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994)
(en
bane) (per curiam) .
the
If the moving party meets this burden,
nonmovant must go beyond the pleadings and show by affidavits,
depositions,
answers to interrogatories,
other admissible evidence that
admissions on file,
specific facts
there is a genuine issue for trial.
Id.
or
exist over which
Factual controversies are
to be resolved in favor of the nonmovant, "but only when . . . both
parties have submitted evidence of contradictory facts."
2
Id.
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 3 of 46
II.
Undisputed Facts
Mourik is an industrial cleaning, environmental remediation,
and
industrial
maintenance
company
that
provides
an
array
services to the chemical and petrochemical industries,
of
including
factory turnarounds, high pressure and industrial vacuum cleaning,
remediation of chemical storage tanks, waste container maintenance
and cleaning, plant shutdowns, asbestos clean-up, and cleaning and
maintenance in inert and toxic atmospheres. 1
On
Project
January
21,
Supervisor
2013,
for
Mourik
an
annual
hired
Spangler
salary
of
to
work
$57,500.00
as
a
plus
incentive bonuses ranging from $10,000.00 to $15,000.000 per year;
Spangler's
employment
as
a
Mourik
Project
Supervisor
ended
in
November of 2015 when he was earning $65,000.000 per year plus
incentive bonuses. 2
As a Project Supervisor Spangler managed a
team of three to thirty employees providing refinery turnaround and
industrial
services. 3
cleaning/vacuuming
Commercial Drivers License
( "CDL"),
Spangler
held
a
and could drive vehicles in
1
Defendant's FAMSJ,
Docket Entry No.
19, p.
7
(citing
Declaration of Melissa Barner ("Barner Declaration"), Docket Entry
No. 19-1, p. 2 ~3.
2
Id. (citing Barner Declaration, Docket Entry No. 19-1, p. 2
and Oral Deposition of James Spangler ("Spangler Deposition"),
pp. 41:1-3, 48:17-22, 51:20-52:3, 67:19-68:8, 140:17-24, Docket
Entry No. 19-2, pp. 14, 15, and 37).
~5;
3
Id. at 8 (citing Barner Declaration, Docket Entry No. 19-1,
pp. 2-3 ~~7 and 9; Spangler Deposition, pp. 74:1-76:14, Docket
Entry No. 19-2, p. 21).
3
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 4 of 46
excess of 10,000 pounds to jobsites in different states.
4
Spangler
would start a typical day by meeting with the client before his
shift to discuss planned tasks.
Spangler would then meet with his
crew to discuss tasks to be completed during their shift, assign
personnel
to
various
tasks,
and
ensure
understood their responsibilities. 5
that
the
crew members
The crew members wore video
cameras so that once work began, Spangler could sit with the client
in his truck or in a trailer and monitor the video feed on his
computer.
Spangler
used
his
observations
to
direct
the
crew
through the shift, allocate resources to accomplish project goals,
and keep time sheets.
Once
a
Spangler reported to a project manager. 6
project was
completed,
Spangler would work out
Mourik's office until the next project started.
project
duties
included
writing
a
report
of
Spangler's post-
summarizing
Mourik' s
performance, completing performance reviews for his crew members,
and preparing proposals for new projects. 7
4
Id. (citing Barner Declaration, Docket Entry No. 19-1, p. 4
~8, and Spangler Deposition, pp. 57:15-58:8, Docket Entry No. 19-2,
pp. 16-17) .
5
Id. at 9 (citing Barner Declaration, Docket Entry No. 19-1,
pp. 4-5 ~10, and Spangler Deposition, pp. 88:20-89:3, 90:9-22,
Docket Entry No. 19-2, pp. 24-25).
6
Id. at 9-10 ((citing Barner Declaration, Docket Entry No. 191, p. 5 ~11, and Spangler Deposition, pp. 88:4-6, 94:12-97:18,
Docket Entry No. 19-2, pp. 24 and 26).
7
p.
Id. at 10 ((citing Barner Declaration, Docket Entry No. 19-1,
5 ~13, and Spangler Deposition, pp. 84:7-11, 99:14-100:23,
(continued ... )
4
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 5 of 46
III.
Analysis
Alleging that Mourik wrongfully misclassified him as exempt
and failed to pay him overtime when he worked more that 40 hours in
a workweek,
Spangler asserts claims under 29 U.S.C.
unpaid overtime and statutory damages. 8
§
216(b)
for
Mourik argues that it is
entitled to complete summary judgment on plaintiff's FLSA claim
because Spangler was properly classified as exempt from the FLSA's
overtime
provisions
pursuant
to
the
executive,
administrative,
combination, and/or motor carrier exemptions, and because Mourik
acted in good faith such that any FLSA violation was not willful.
9
Spangler responds by arguing that Mourik is not entitled to summary
judgment on his FLSA claim because the alleged exemptions do not
apply to him,
and by filing a cross-motion for partial summary
judgment on the four exemptions asserted by Mourik. 10
Spangler
admits, however, that Mourik did not act willfully for purposes of
extending the statute of limitations from two to three years under
29 U.S.C.
§
255(a), but argues that Mourik did act willfully for
purposes of liquidated damages.u
Mourik replies that Spangler's
7
( • • • continued)
104:4-105:14, Docket Entry No. 19-2, pp. 23, 27, 28).
8
Complaint, Docket Entry No. 1.
9
Defendant's FAMSJ, Docket Entry No. 19.
10
Plaintiff's Response and CMPSJ, Docket Entry Nos. 23 and 24,
pp. 4-5.
urd.
at
20
("Mourik
[i] s
[c] orrect
5
on
[w] illfulness for
(continued ... )
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 6 of 46
motion for partial summary judgment should be denied as untimely
and without good cause. 12 Alternatively, Mourik argues that genuine
issues of material fact for trial preclude granting the motion. 13
A.
Plaintiff's Motion for Partial Summary Judgment is
and Without Good Cause.
Unt~ely
Mourik moved for summary judgment on Spangler's FLSA claims on
April 26, 2017. 14
Mourik's motion for summary judgment was timely
filed because on December 2,
Order
No.
Granting
Joint
Motion
2016,
to
the court signed the Proposed
Extend
Deadlines
(Docket
13), requiring the parties to mediate by February 24,
Entry
2017,
stating "[d]ispositive motions will be due thirty days after the
mediator or magistrate judge declares an impasse," and setting the
dates for filing the joint pretrial order and for holding docket
call as June 2, 2017, and June 9, 2017, respectively.
On March 30,
2017, the mediator filed an ADR Memorandum to Clerk of Court Report
of Appointment and Fees (Docket Entry No. 15), stating: "The case
referred to ADR did not
settle."
Mourik' s
motion
for
summary
judgment was timely filed because it was filed less than thirty
days after the mediator declared an impasse.
11
( • • • continued)
[l]imitations [p]urposes.").
12
Defendant's Response, Docket Entry No. 27, pp. 5-6.
13
Id.
14
Defendant' s FAMSJ, Docket Entry No. 19.
at 6.
6
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 7 of 46
On May 5,
2017,
Mourik filed Defendant's Opposed Expedited
Motion to Extend Scheduling Order Deadlines (Docket Entry No. 20),
urging the court to extend the dates for filing the joint pretrial
order and holding docket call until at least thirty days after
resolution of its motion for summary judgment.
Mourik's motion
acknowledged that Spangler's response to its motion for summary
judgment was due on May 17, 2017.
On May 16, 2017, Spangler filed
Plaintiff's Response to Motion to Extend Scheduling Order Deadlines
(Docket Entry No. 21), urging the court to deny Mourik's motion to
extend deadlines,
pursuant
to
the
arguing that he was prepared to try the case
existing
deadlines,
and
that
"Mourik
is
not
entitled to a continuance because it waited so long to file its
motion [for summary judgment]."
On May 16, 2017, the court signed
the Proposed Order Granting Defendant's Opposed Expedited Motion to
Extend Scheduling Order Deadlines
that
(Docket Entry No.
"the Scheduling Order deadlines
Scheduling
Order
shall
be
issued,
are
as
22),
stating
terminated and a
new
following
necessary,
resolution of the Defendant's Motion for Summary Judgment."
On May 17,
2017,
Spangler
filed
his
response
to Mourik' s
motion for summary judgment and a cross-motion for partial summary
judgment seeking summary judgment on Mourik's exemption defenses.
15
Mourik responds that Spangler's cross-motion for partial summary
judgment
15
should be denied because it was
not
timely
filed
and
Plaintiff's Response and CMPSJ, Docket Entry Nos. 23 and 24.
7
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 8 of 46
because
Spangler
has
not
shown
good
cause
for
late
filing.
16
Spangler replies that his cross-motion is timely because the day
before
he
filed
Scheduling
it
the
Order meaning
deadline in place." 17
court
that
terminated
"there
the
is
no
deadlines
in
dispositive
the
motion
Spangler also argues that
[e]ven if the deadline had not been terminated, the Court
would have been warranted in considering the crossmotion, given that (1) the cross-motion arises from the
same evidence and legal issues as the motion, ( 2) the
cross-motion raises no new issues, and (3) Mourik has
already argued (and the Court has agreed) that there is
good cause to decide the summary judgment issues before
trying the case.
Once again, the Court need not reach
that issue in light of its order terminating the Schedule
Order deadlines. 18
"Rule 16(b)
entered,
it
provides that once a scheduling order has been
'may be modified only for good cause and with the
judge's consent.'"
Marathon Financial Ins.,
Motor Co., 591 F.3d 458, 470 (5th Cir. 2009)
P. 16 (b) ( 4)) .
Inc.,
RRG v.
Ford
(quoting Fed. R. Civ.
"The good cause standard requires the 'party seeking
relief to show that the deadlines cannot reasonably be met despite
the diligence of the party needing the extension.'" S&W Enterprises
L.L.C. v. SouthTrust Bank of Alabama, NA,
Cir. 2003).
315 F.3d 533,
535
(5th
Courts consider four factors to determine whether good
cause has been established: "(1) the explanation for the failure to
16
Defendant's Response, Docket Entry No. 27, pp. 5-6.
17
Plaintiff's Reply, Docket Entry No. 28, p. 1.
18
Id. at 2.
8
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 9 of 46
timely
move
amendment;
(4)
for
leave
to
(2)
amend;
the
importance
of
the
(3) potential prejudice in allowing the amendment; and
the availability of a continuance to cure such prejudice."
Marathon, 591 F.3d at 470 (quoting Southwestern Bell Telephone Co.
v. City of El Paso, 346 F.3d 541, 546 (5th Cir. 2003).
Spangler filed his cross-motion for summary judgment three
weeks beyond the due date without moving to amend the Scheduling
Order or showing good cause.
Spangler's argument that his cross-
motion is, in fact, timely because the court had granted Mourik's
motion to extend deadlines by terminating the existing deadlines is
without merit because the motion the court granted only sought to
extend
the
deadlines
that
had
not
already
expired,
i.e.,
the
deadlines for filing the joint pretrial order and holding docket
call.
to
Mourik did not ask and the court did not grant any request
extend deadlines
Since, moreover,
for
filing motions
for
summary
judgment.
Spangler has failed either to argue or to show
that good causes exists for extending the deadline to file motions
for summary judgment, the court concludes that good cause does not
exist and that Spangler's cross-motion for summary judgment should
be denied as untimely and without good cause.
Alternatively, and
to avoid further delay, for the reasons explained in the succeeding
sections of this Memorandum Opinion and Order, the court concludes
that
genuine
issues
of
material
fact
preclude
the
court
from
granting summary judgment or partial summary judgment to Mourik or
to Spangler.
9
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 10 of 46
B.
Applicable Law: The Fair Labor Standards Act
"The FLSA 'requires an employer to pay overtime compensation
to any employee working more than forty hours in a workweek.'"
Olibas v. Barclay, 838 F.3d 442, 448 (5th Cir. 2016)
(quoting Allen
v. Coil Tubing Services, L.L.C., 755 F.3d 279, 282 (5th Cir. 2014)
(citing 29 U.S.C.
are
liable
for
additional
§
216(b).
207(a) (1))).
§
Employers who violate the FLSA
"unpaid overtime
equal
amount
as
compensation
liquidated
and
Willful violations are subject to a civil penalty not to
29 U.S.C. § 216(e) (2).
violation "is
employer either
'willful'
if the
reckless disregard for
the statute."
Cir.
plaintiff
willful.
an
u.s.c.
29
damages."
exceed $1,000.00 per violation.
(5th
in
bears
cert.
the
knew or
showed
whether its conduct was prohibited by
Singer v. City of Waco,
2003),
An FLSA
denied,
burden
of
124
S.
proving
324 F.3d 813,
Texas,
Ct.
1406
that
any
(2004).
violation
821
The
was
See Samson v. Apollo Restaurant, Inc., 242 F.3d 629, 636
(5th Cir.),
cert.
denied,
122
S.
Ct.
63
(2001)
("Generally,
a
plaintiff suing under the FLSA carries the burden of proving all
elements of his or her claim.").
There are, however, exemptions to
the FLSA, which are construed narrowly against the employer,
and
for which the employer bears the burden of proof.
Olibas, 838 F.3d
at
"[T]he
448
(citing
Allen,
755
F.3d
at
283).
ultimate
determination of whether an employer qualifies for an exemption
under the FLSA is a question of law."
"That
ultimate
determination,
however,
Singer,
relies
determinations that can be resolved by a jury."
10
324 F.3d at 818.
on
Id.
many
factual
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 11 of 46
C.
Application of the Law to the Facts
1.
Fact Issues Preclude Granting Either
Judgment as to the Executive Exemption.
Party
Summary
An employee satisfies the executive exemption to the FLSA if
the employee is:
(1)
Compensated on a salary basis at a rate of not less
than $455 per week
.,
(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.
§
Relying
541.100(a).
primarily on
excerpts
from
Spangler's
deposition,
Mourik argues that Spangler satisfies all four elements of the
executive exemption. 19
Spangler does not dispute that he satisfies
the first three elements of the executive exemption,
but argues
that the fourth element "does not apply because [he] had no power
to
hire,
fire,
or
make
personnel
decisions,
and
because
his
recommendations on those matters were given no weight at all. " 20
19
Defendant' s FAMSJ, Docket Entry No. 19, pp. 5-18; Defendant's
Reply, Docket Entry No. 26, pp. 3-6.
20
Plaintiff's Response and CMPSJ, Docket Entry Nos. 23 and 24,
(continued ... )
11
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 12 of 46
Citing Rainey v. McWane,
Inc.,
552 F.Supp.2d 626,
632
(W.D. Tex.
2008), aff'd 314 F.App'x. 693 (5th Cir. 2009); Gellhaus v. Wal-Mart
Stores,
Inc.,
769 F.Supp.2d 1071, 1082
Stevenson Beer Distributing Co.,
Tex.
2014);
and Carranza
v.
(E.D. Tex. 2011); King v.
11 F.Supp.3d 772,
782-83
(S.D.
Red River Oilfield Services,
LLC,
No. H-15-3631, 2017 WL 387196 (S.D. Tex. January 25, 2017), Mourik
replies that "Spangler had greater authority over personnel matters
than was present in each of the foregoing cases,
and in each of
those cases the court granted summary judgment on the executive
exemption. " 21
When
examining
recommendations
as
whether
to
the
an
hiring,
employee's
firing,
suggestions
advancement,
or
and
any
change of status of other employees are given particular weight,
courts consider "whether it is part of the employee's job duties to
make such suggestions and recommendations; the frequency with which
such suggestions and recommendations are made or requested; and the
frequency
with
relied upon."
which
such
29 C.F.R.
§
suggestions
541.105.
and
recommendations
are
Although the alleged executive
does not need to have the authority to make ultimate decisions, "an
executive's
suggestions
and
recommendations
must
pertain
to
20
( • • • continued)
p. 4.
See also id. at 5
three elements.").
("There is no dispute as to the first
21
Defendant's Reply, Docket Entry No. 26, p. 6.
at 3-6.
12
See also id.
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 13 of 46
employees whom the executive customarily and regularly directs."
Id.
Occasional
suggestions
with
co-worker's status will not qualify.
regard
to
the
change
of
a
Id.
The summary judgment evidence concerning Spangler's duties
consists solely of testimony from Spangler and Mourik's Director of
Human Resources, Melissa Barner. 22
Spangler testified that without
prior approval he had authority to issue a subordinate everything
from "a verbal warning to a write-up or removal .
shift." 23
[from his]
Spangler testified that if he thought an employee was
impaired on the job he could recommend that the employee be removed
22
Spangler objects to Barner's testimony as incompetent opinion
testimony that is not based on personal knowledge. Spangler argues
that "Ms. Barner does not claim that she worked with or supervised
Mr. Spangler, nor does she claim that she has any knowledge of how
his recommendations were treated by his real world managers.
Instead, she simply parrots Mourik's legal position." Plaintiff's
Response and CMPSJ, Docket Entry Nos. 23 and 24, p. 9.
See also
Plaintiff's Reply, Docket Entry No. 28, pp. 2-3. Mourik counters
that Barner's Declaration is expressly made on personal knowledge,
her position as Financial Controller and Director of Human
Resources, and her knowledge of the duties of various j cbs at
Mourik, including the job held by Spangler.
See Defendant's
Response, Docket Entry No. 27, p. 17 (citing Barner Declaration,
Docket Entry No. 19-2, p. 2 ~~ 1-2).
The Fifth Circuit has held
that in the summary judgment context district courts may rely on
affidavits where the affiant's "personal knowledge and competence
to testify are reasonably inferred from their positions and the
nature of their participation in the matters to which they swore."
Direct TV, Inc. v. Budden, 420 F.3d 521, 530 (5th Cir. 2005).
Because Barner's Declaration expressly states that it is based on
personal knowledge, and because Barner's competency to testify is
reasonably inferred from her position as Director of Human
Resources, Spangler's objection to Barner's testimony will be
overruled.
23
Spangler
Deposition,
p.
85:9-15,
p. 23.
13
Docket
Entry
No.
19-2,
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 14 of 46
or tested, and that on one occasion Mourik followed his suggestion
and took a person off of the job for testing, 24 but that when he
removed someone from his shift that person would not be discharged
but, instead, would be reassigned to a different project or shift. 25
Spangler testified that he "was never involved in the actual hiring
of employees, " 26 and that although he occasionally wrote performance
reviews for members of his crew,
he did not know if his reviews
were used to make personnel decisions. 27
Spangler testified that
on one occasion he suggested that Mourik hire Chris Cotton,
husband of his brother's ex-wife, and Mourik hired him. 28
Barner testified:
13.
Upon completion of a project, Spangler would work
out of the Mourik office until the next project. Spangler
wrote a report summarizing the performance of the Company
on the project as part of his post-project duties.
Performance reviews on each of the employees that
detailed [] each crew member's performance [would be]
completed by Spangler, and these reviews would be used to
make decisions regarding promotion and compensation.
Spangler also completed and approved time sheets for his
crew at the conclusion of the project.
While in the
office, Spangler would also work on proposals for
upcoming projects and related tasks.
14.
Spangler was also
employees on his crew,
responsible for disciplining
including everything from "a
24Id. at 116:14-23, Docket Entry No. 19-2, p. 31.
25Id. at 86:11-23, Docket Entry No. 19-2, p. 24.
26Id. at 82:22-23, Docket Entry No. 19-2, p. 23.
27Id. at 81:11-84:16, Docket Entry No. 19-2, pp. 22-23.
2Bid. at 111:4-25, Docket Entry No. 19-2, p. 30.
14
the
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 15 of 46
verbal warning to a write-up or removal of the person
from my shift.u Though Spangler could not unilaterally
terminate employees, his suggestions would be given
weight by his supervisor and he had occasion to suspend
employees from a job for performance issues. Spangler's
suggestions or recommendations regarding hiring, were
also given weight by his supervisor.
For example,
Spangler recommended Chris Cotton for hire, and his
supervisor gave that recommendation substantial deference
such that Cotton was hired. 29
While undisputed evidence shows that when Spangler worked out
of Mourik's office between projects his duties included completion
of post-project performance reviews for his crew members, Spangler
testified that he only occasionally wrote such performance reviews
and
did
not
know
if
his
reviews
were
used
to
make
decisions
regarding hiring, firing, compensating, or changing the employment
status
of
his
crew
members.
Although
Barner
testified
that
Spangler's performance reviews were given weight by his supervisor,
Mourik has not offered evidence that any of Spangler's written
performance reviews were ever used to promote, discharge, or change
the
employment
status
of
anyone.
While
there
is
undisputed
evidence that Spangler was allowed to write up employees and/or
remove
employees
Spangler's actions
from
his
shift,
there
is
no
evidence
that
ever lead Mourik to discharge or discipline
anyone he directed. The only evidence of any hiring recommendation
that Spangler ever made is evidence of a single recommendation to
hire Chris Cotton,
29
the husband of Spangler's brother's ex-wife.
Barner Declaration, Docket Entry No. 19-1, p. 2.
15
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 16 of 46
Although undisputed evidence shows that Mourik hired Cotton, there
is no evidence
showing the
role
that
played in the decision to hire Cotton.
Spangler's
recommendation
Nor is there any evidence
showing that Cotton was hired to work in a position that Spangler
directed.
Mourik argues that courts have found even a small number
of recommendations resulting in hires or promotions sufficient to
establish the fourth element of the executive exemption, but the
cases that Mourik cites all involved evidence that the plaintiffs'
recommendations effected changes in employment status for employees
whose work the plaintiffs directed.
In Rainey, 552 F.Supp.2d at 626, the evidence showed that the
defendant's human resources department performed initial hiring,
but that for the first ninety days of a new employee's employment
the plaintiffs were responsible for performing weekly evaluations
on
each
new
employee.
The
evidence
also
showed
that
the
plaintiffs' evaluations were used to determine which new employees
would become permanent and which would be transferred to another
department.
The evidence also showed that
the plaintiffs were
could initiate a disciplinary process against employees by filing
a request for action with the human resources department, and that
the plaintiffs
could only remember
a
few
times
when
the
human
resources department did not punish an employee after disciplinary
action had been requested.
The court held the fourth element of
the executive exemption was satisfied.
16
Id. at 632.
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 17 of 46
In Gellhaus,
769 F.Supp.2d at 1071,
the plaintiff testified
that her duties as assistant manager included interviewing, hiring,
and "coaching" employees,
and that "employee coaching" entailed
reviewing an employee's performance.
The evidence showed that some
of the plaintiff's recommendations regarding hiring and changes in
employment
status were
followed as
several of her
subordinates
received pay raises based in part on her performance reviews.
The
evidence also showed that the plaintiff disciplined employees by
issuing written or verbal warnings, the culmination of which could
be discharge.
of law that
The court held that these facts proved as a matter
the defendant
particular weight.
gave the plaintiff's
recommendations
Id. at 1081-83.
In King, 11 F.Supp.3d at 772, the parties disputed whether the
plaintiff, a team leader, had authority to hire or fire employees.
Recognizing
that
whether
the
plaintiff
had
authority
to
make
ultimate employment decisions was not dispositive as long as his
recommendations were given particular weight, the court looked to
the weight given to the plaintiff's suggestions.
Observing that
the plaintiff's job description included the ability to write up
salesmen for poor rotation, that the plaintiff occasionally asked
the operations manager to discipline underperforming employees, and
that although the plaintiff's requests to discipline an employee
were not always granted, similar requests from other team leaders
17
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 18 of 46
were routinely granted, the court concluded that the plaintiff's
recommendations were given particular weight.
In Carranza,
2017 WL 387196,
Id. at 783.
the evidence showed that the
plaintiff provided suggestions regarding the hiring, compensation,
firing and transfer of crew members, and that his suggestions were
usually followed by his manager. The evidence showed that shortly
after he was hired, the plaintiff asked to hire two individuals,
the
defendant
negotiated
plaintiff
pay
granted
his
raises
for
could not
request,
those
remember
and
two
defendant
the
plaintiff
individuals.
ever
having
later
Moreover,
denied his
requests either to hire someone for his crew or to raise one of his
crew members' pay.
Additional evidence showed that plaintiff had
input regarding termination and/or transfer of his crew members
including at least one specific individual who was transferred from
plaintiff's crew soon after plaintiff complained about him.
The
court held that this evidence satisfied the fourth element of the
executive exemption.
Id. at *4.
Because the evidence in this case regarding the weight that
was given to Spangler's recommendations for changes in employment
status for people that he directed is substantially less than the
evidence before the courts in Rainey, Gellhaus, King, or Carranza,
the court concludes that genuine issues of material fact preclude
granting summary judgment to either party on this issue.
18
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 19 of 46
2.
Fact Issues Preclude Granting Either Party
Judgment as to the Administrative Exemption.
Summary
An employee satisfies the administrative exemption to the FLSA
if the employee is:
(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 judgment with respect to matters of
significance.
29 C.F.R.
§
541.200(a).
Relying primarily on
Mourik
argues
that
all
excerpts
three
from
elements
Spangler's
for
deposition,
application
of
the
administrative exemption are satisfied. 30 Spangler does not dispute
that
the
first
element
of
the
administrative
exemption
is
satisfied, but he argues that the second and third elements are not
applicable,
and that he is entitled to summary judgment on this
issue because he "worked in the actual business operations and had
no discretion over matters of importance." 31
30
Defendant's FAMSJ, Docket Entry No. 19 pp. 7-14; Defendant's
Reply, Docket Entry No. 26, pp. 6-9.
31
Plaintiff's Response and CMPSJ, Docket Entry Nos. 23 and 24,
p. 5.
19
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 20 of 46
(a)
Whether Spangler's Primary Duty Was the Performance
of Office or Non-manual Work Directly Related to
the General Business Operations of Mourik or
Mourik's Customers Is a Fact Issue.
The second element of the administrative employee exemption
requires that the employee's "primary duty is the performance of
office or non-manual work directly related to the management or
general
business
customers."
operations
of
the
employer
or
the
employer's
Spangler testified that
29 C.F.R. §§ 541.200 (a) (2).
his primary duty was the performance of non-manual work:
Q.
Do you admit that your primary job function was not
manual labor at Mourik?
A.
I do admit that.
32
Thus, the issue before the court is whether Spangler's primary duty
as a Project Supervisor was directly related to the management or
general
business
operations
of
Mourik
or
Mourik's
customers.
Primary duty means "the principal, main, major, or most important
duty
that
the
employee
performs."
29
C.F.R.
§
541.700(a).
"Consistent with the regulations, the Fifth Circuit has held that,
as a
general
rule,
an employee's
'primary duty'
require over fifty percent of his work time."
will
typically
Cornejo v. Sy Food,
Inc., Civil Action No. H-07-2571, 2009 WL 1617074, at *4 (S.D. Tex.
April 22,
32
p.
2009)
(citing Lott v.
Spangler Deposition,
p.
Howard Wilson Chrysler-Plymouth,
115:18-20,
31.
20
Docket Entry No.
19-2,
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 21 of 46
Inc., 203 F.3d 326, 331 (5th Cir. 2000)) ._"However, time is not the
sole parameter to be considered."
Id.
A non-exhaustive list of factors courts consider when
determining an employee's primary duty include: (1) "the
relative importance of the exempt duties as compared with
other types of duties," ( 2) "the amount of time spent
performing exempt work," ( 3) "the employee's relative
freedom
from
direct
supervision,"
and
( 4)
"the
relationship between the employee's salary and the wages
paid to other employees for the kind of nonexempt work
performed by the employee."
Zannikos v. Oil Inspections (U.S.A.), Inc., 605 F. App'x 349, 352
n. 1 (5th Cir. 2015)
(citing 29 C.F.R.
§
541.700(a)).
To meet [the "directly related to the management or
general business operations"] requirement, an employee
must perform work directly related to assisting with the
running or servicing of the business, as distinguished,
for example, from working on a manufacturing production
line or selling a product in a retail or service
establishment.
29 C.F.R.
§
541.201(a).
The distinction between administrative and
production tasks is not dispositive, but has long been part of the
administrative exemption analysis.
The Fifth Circuit has stated
that "the relevant distinction 'is between those employees whose
primary
duty
enterprise
is
[and]
commodity or
administering
those
commodities,
whose
the
business
primary
whether
goods
enterprise exists to produce and market."
858 F.3d 331, 336 (5th Cir. 2017)
F.2d 1220, 1230 (5th Cir. 1990)).
21
duty
or
affairs
is
of
the
producing
the
services,
that
the
Dewan v. M-I, L.L.C.,
(quoting Dalheim v. KDFW-TV, 918
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 22 of 46
Citing the district court's opinion in Dewan v.
No. 2016 WL 695717
(S.D. Tex. February 22, 2016),
M-I Swaco,
rev'd,
858 F.3d
331 (5th Cir. 2017), Mourik argues that Spangler's primary duty was
directly related to its management and general business operations
because "just like the mud engineer in Dewan,
Spangler provided
consulting services to Mourik's customers, who looked to [him] to
provide technical expertise on industrial maintenance and cleaning
processes." 33
Mourik also argues that Spangler's primary duty was
directly related to its management and general business operations
because Spangler's "work focused on the
business by supervising his crew." 34
'management'
of Mourik's
Mourik also cites Gallegos v.
Equity Title Company of America, Inc., 484 F.Supp.2d 589, 594 (W.O.
Tex.
2007),
'directly
for
related
that
to
court's
statement
management
that
policies
or
"[t]he
general
test
of
business
operations' is met by many persons employed as advisory specialists
and
consultants
of
Construction Services,
August
19,
2403628
2005),
(W.O.
Pa.
various
kinds,"
and
"'"'W~e""'l"".S:::.,__v-=--=-._
Inc., No. 04-52, 2005 WL 2176829
report
and
September
recommendation
29,
2005),
for
adopted,
its
__;A:.. .:.,:,:d:.. .:v""'a""'n=c'-"e'-=d
(W.O.
Pa.
2005
holding
WL
that
developing construction bids and contracting with subcontractors
33
Defendant' s FAMSJ,
Docket Entry No. 19 p. 21.
34Id.
22
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 23 of 46
and suppliers for projects was directly related to the general
business operations of the employer construction company. 35
In
Dewan,
the
District
court
held that mud engineers who
performed no manual work and spent nearly all of their working time
continually monitoring the mud for quality control fell within the
FLSA's
administrative
related
to
compliance
the
exemption
defendant's
with
29
C.F.R.
because
general
their
business
541.201(b),
§
duties
and
directly
operations
because
the
in
two
plaintiffs acted as advisors or consultants to the defendant's
customers in compliance with 29 C.F.R.
WL 695717, at *31.
§
541.201(c).
Dewan, 2016
The court held that the mud engineers not only
perform non-manual duties, but also were responsible for creating,
maintaining, and monitoring the mud product, promoting additional
products
to
customers,
and
working
as
on-site
consultants,
providing independent management of the mud performance.
*22,
*31.
customers
The mud engineers'
by
providing
duties
"advice
and
Id. at
included consulting with
recommendations
regarding
problems and optimizing the mud system's operations that would then
be
implemented
by
production
line
workers,"
choosing
which
"additives to introduce into the mud to attain the desired level of
performance,
customers."
and
promoting
and
Id. at *22, *23.
23
selling
company
products
to
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 24 of 46
Mourik argues that Spangler's duties are comparable to the
duties performed by the mud engineers in Dewan. 36
But the Fifth
Circuit recently reversed the district court's holdings in Dewan.
See
Dewan,
858
F.3d at
331. 37
In
so
doing
the
Fifth Circuit
reasoned:
It is true that Section 541.201(a) provides that the
administrative exemption applies to work relating to the
"general business operations" of an employer. What needs
to be kept distinct, though, is that the exemption
applies when the employee is involved with "administering
the business affairs of the enterprise," not with
"producing the commodity" of the business. Dalheim, 918
F.2d at 1230. Supplying the drilling-fluid systems seems
more related to producing the commodities than the
administering of M-I's business.
The district court also found that "nearly all of
[the plaintiffs'] working time related directly to
continually monitoring the mud for quality control, in
compliance with 29 C. F.R. § 541.201 (b).
"
That
section of the regulation identifies functional areas
that are directly related to management and includes
"quality control" in a list that also contains "areas
such as tax; finance; accounting; budgeting; auditing;
insurance;
purchasing; procurement;" and others.
29 C.F.R. § 541.201(b).
The regulation's reference to
"quality control," particularly considering the list of
which it is a part, seems to mean the quality of the mud
being provided to M-I's customers and not with monitoring
and adding materials to the mud as it is being used in
drilling wells to ensure that its properties stay within
the specifications set forth in the mud plan developed by
project engineers.
The district court also determined that the
plaintiffs' work as mud engineers was "directly related
to
the
general
business
operations"
because
the
plaintiffs "acted as advisors or consultants to M-I's
36Id.
37
Plaintiff's Supplemental Response, Docket Entry No. 25.
24
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 25 of 46
,
customers, in compliance with 29 C.F.R. § 541.201(c)
That regulation only sets forth two examples of the types
of employees that may be exempt: tax experts and
financial consultants. 29 C.F.R. § 541.201(c).
Id.
at 336-37.
Citing the Ninth Circuit's opinion in Bratt v.
County of Los Angeles,
"instructive
on
the
912 F.2d 1066,
type
of
work
1070
that
an
(9th cir.
exempt
1990),
as
advisor
or
consultant must perform," id. at 337, the Fifth Circuit explained:
In determining whether probation officers fit within the
regulation's concept of advisor, that court held this to
be the test: "whether the activities are directly related
to management policies or general business operations."
. That is, the focus is not on a general concept of
advice
or
consultancy
but
rather
on
"policy
determinations [for] how a business should be run or run
more efficiently.
"
Id.
Through that lens, the
probation
officers
were
not
clearly
"engaged
in
'servicing' a business within the meaning of" the
regulations.
Further support for this reasoning can be found in
a 1997 opinion letter issued by the Wage and Hour
Division of the Department of Labor, which is "entitled
to respect" to the extent it is persuasive.
See
Christensen v. Harris County, 529 U.S. 576, 587, 120
S. Ct. 1655, 146 L.Ed.2d 621 (2000). In responding to an
inquiry on whether background investigators fit within
the FLSA's administrative exemption, the opinion letter
clarified the type of advice an exempt employee provides:
the relevant regulation "is directed at advice on matters
that involve policy determinations, i.e., how a business
should be run or run more efficiently, not merely
providing information in the course of the customer's
daily business operation." U.S. Dep't of Labor, Wage &
Hour Div., Op. Letter (Sept. 12, 1997). Generally, this
requires an exempt employee to participate "in important
staff functions of the employer or the employer's clients
or customers as opposed to the production functions."
Id.
(citations omitted)
25
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 26 of 46
Citing its own opinion in Zannikos, 605 Fed. Appx. at 350, as
having provided a useful description of "the type of advisory role
an exempt employee must perform," id., the Fifth Circuit explained
that in Zannikos
we
held
that
the
plaintiffs'
work
as
marine
superintendents
fit
within
this
element
of
the
administrative exemption; the employees argued they did
not perform non-manual work directly related to the
general business operations of the employer's customer.
Id. at 353.
Our analysis required us to be fairly
precise about the work:
The plaintiffs' work, including that relating to
line blending, primarily included supervision, quality
control,
and
ensuring
compliance
with
applicable
standards.
They did not transfer oil, blend oil, or
manufacture or sell petroleum products themselves.
Instead, they oversaw these functions and provided [the
employer's] customers with inspection and operational
support services.
Such services are not considered
production.
Id.
We also found that the employees' "primary duties
included work in several functional areas explicitly
listed as administrative in Section 541.201 (b), including
quality control,
safety,
and legal and regulatory
compliance." Id. Having "concluded that the plaintiffs
performed non-manual work directly related to the
management of [the employer's] customers," we deemed it
"inconsequential" whether they performed the same task
"directly related to the management" of their employer.
Id. at 354.
Id. at 337-38.
Applying these principles to the facts of Dewan,
the Fifth Circuit held:
There are significant distinctions between the work
performed by these mud engineers [at issue in Dewan] and
the Zannikos marine superintendents. The latter oversaw
the
work
performed by
the
customers'
employees,
contractors, and equipment. Id. at 351. Mud engineers,
on the other hand, neither assured compliance with health
and safety standards nor engaged in tasks likely to
26
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 27 of 46
qualify as the "general administrative work applicable to
the running of any business."
See Davis, 587 F.3d at
535. "[W]ork that [i]s primarily functional rather than
conceptual" does not meet the standard. See id.
We
conclude that the district court erred in granting
summary judgment on the issue of whether the plaintiffs'
work could be classified as .
. work directly related
to the general business operations of M-I's customers.
Id. at 338.
As evidence that Spangler provided consulting services to its
customers, Mourik merely analogizes Spangler's duties to the duties
performed by the mud engineers in Dewan. 38
Mourik does not cite any
evidence showing that Spangler provided services related to tax or
financial consulting,
the only two examples of exempt consulting
identified in the regulations, 29 C.F.R.
858 F.3d at 336-37.
if
any
§
541.201(c).
See Dewan,
Nor does Mourik cite any evidence showing what
"consulting
services"
or
"technical
expertise
on
industrial maintenance and cleaning processes," Spangler provided
to Mourik's customers that involved policy matters,
business
providing
should
be
run
information
business operation."
or
in
run
the
more
course
efficiently,
of
the
i.e.,
"how a
not
merely
customer's
daily
See id. at 337.
As evidence that Spangler's "work focused on the 'management'
of Mourik's business by supervising his crew," Mourik cites only
the testimony provided by Barner and Spangler describing Spangler's
typical work day and duties.
38
See
§
II, above.
This evidence shows
Defendant's FAMSJ, Docket Entry No. 19 p. 21.
27
Case 4:16-cv-00349 Document 29 Filed in TXSD on 08/08/17 Page 28 of 46
that Spangler began his workdays by meeting with the client before
his shift to discuss planned tasks, that Spangler's meeting with
the client was followed by a meeting with his crew to discuss the
tasks to be completed during their shift and to assign personnel to
various
tasks,
moni taring
the
and
crew's
Spangler used his
shift,
allocate
sheets. 40
that
Spangler
work
via
observations
resources
Spangler
argues
to
spent
video
the
feed
to direct
accomplish
that
this
rest
to
the
of
his
day
computer. 39
his
crew through the
goals,
evidence
and
keep
shows
time
that
his
"primary duty involved the actual, ongoing business operations of
the company, not general business operations such as accounting or
human resources. " 41
The
regulations
explain
that
"[w] ork
directly
management or general business operations includes,
limited
to,
accounting;
work
in
budgeting;
functional
areas
auditing;
such
insurance;
as
related
but
to
is not
tax;
finance;
quality
control;
purchasing; procurement; advertising; marketing; research; safety
and
health;
personnel
management;
human
resources;
employee
39
Id. at 9 (citing Barner Declaration, Docket Entry No. 19-1,
pp. 4-5
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