Jordan v. Helix Energy Solutions Group, Inc.
Filing
39
MEMORANDUM OPINION AND ORDER denying 27 MOTION for Summary Judgment , denying 29 MOTION for Partial Summary Judgment as to Certain Affirmative Defenses (Joint Pretrial Order due by 11/2/2018. Docket Call set for 11/9/2018 at 03:00 PM in Courtroom 9B before Judge Sim Lake.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4) (Main Document 39 replaced on 10/11/2018) (aboyd, 4).
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 1 of 36
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
RALPH JORDAN, Individually and
and On Behalf of All Others
Similarly Situated,
§
§
§
§
Plaintiff,
§
§
§
§
v.
HELIX ENERGY SOLUTIONS GROUP,
INC.,
CIVIL ACTION NO. H-16-1808
§
§
§
§
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff Ralph Jordan ("Jordan" or "Plaintiff") brought this
action
against
defendant
("Helix" or "Defendant")
Helix
Energy
Solutions
asserting claims
§§
207 and 211. 1
("FLSA"),
29
Pending before the court are Defendant
Helix Energy Solutions Group,
("Defendant's MSJ")
Inc.,
for violation of the
overtime provisions of the Fair Labor Standards Act
U.S.C.
Group,
Inc.'s Motion for Summary Judgment
(Docket Entry No.
27),
and Plaintiff Ralph
Jordan's Motion for Partial Summary Judgment ("Plaintiff's MPSJ")
(Docket Entry No. 29).
For the reasons stated below, Plaintiff's
MPSJ will be denied, plaintiff's objection to certain paragraphs of
the Kenric McNeal Declaration will be overruled, and Defendant's
MSJ will be denied.
1
See Plaintiff's Original
Entry No. 1, p. 2 ~~3-4.
Complaint
("Complaint"),
Docket
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 2 of 36
I.
A.
Factual and Procedural Background
Factual Background
Helix
provides,
inter
alia,
rigless
offshore
well
intervention services using specialized well intervention vessels.
Jordan and the only other individual to opt-in to this action,
Christopher Gordon ("Gordon"), worked as drillers on Helix's Q4000
and Q5000 vessels, respectively.
Both the Q4000 and the Q5000 are
semisubmersible rigless vessels used to conduct well intervention
in water depths of up to 10, 000
feet.
Kenric McNeal,
Helix's
Director of Human Resources, states in his declaration that because
these vessels are rigless no actual drilling occurs. 2
Each vessel
has a drill crew consisting of some combination of roughnecks,
assistant derrickmen, derrickmen, and assistant drillers,
all of
whom are classified as non-exempt and paid on an hourly basis with
overtime. 3
On the vessels the drill crew is supervised by the
2
Declaration
of
Kenric
McNeal
("McNeal
Declaration"),
Exhibit A to Defendant's MSJ, Docket Entry No. 27-1, p. 2 ~~ 3-5.
Although plaintiffs object to ~~8-9 of the McNeal Declaration as
inadmissible parole evidence, see Plaintiff Ralph Jordan's Response
in Opposition
to
Defendant's
Motion
for
Summary
Judgment
("Plaintiff's Response"),
Docket Entry No.
35,
pp.
23-24,
plaintiffs have not objected to other paragraphs the declaration.
All page numbers for docket entries in the record refer to the
pagination inserted at the top of the page by the court's
electronic filing system, CM/ECF.
3
McNeal Declaration,
Entry No. 27-1, p. 2 ~6.
Exhibit A to
-2-
Defendant's
MSJ,
Docket
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 3 of 36
driller. 4
Helix classified the driller position as exempt, and at
all relevant times, plaintiffs were aware of that classification. 5
A driller spends the majority of his time sitting in a control
room, monitoring a series of computer screens to ensure that the
well intervention operations are running smoothly. 6
Drillers also
review the well program with the toolpusher, company man,
engineer,
superintendents,
and
any
service
hands,
and
subsea
if
the
driller disagrees with any portion of the well program, he makes
recommendations to the toolpusher. 7
crews. 8
their
Drillers also supervise drill
Drillers complete performance appraisal evaluations for
drill
crew
members
every
hitch,
which
entails
scoring
4
Driller Job Description, Exhibit D-1 to Defendant's MSJ,
Docket Entry No. 27-9, p. 1.
See also Oral and Videotaped
Deposition Ralph C. Jordan ("Jordan Deposition"), pp. 54:19-57:20,
Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 5-6.
5
See Oral Videotaped Deposition Mr. Christopher L. Gordon
("Gordon Deposition"), p. 56:5-12, Exhibit C to Defendant's MSJ,
Docket Entry No. 27-3, p. 6.
6
See Jordan Deposition, pp. 50:23-51:16, 66:10-20, 92:3-93:5,
Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 4, 7, 1314; Gordon Deposition, pp. 57:21-59:16, 112:15-113:12, Exhibit C to
Defendant's MSJ, Docket Entry No. 27-3, pp. 7, 18-19.
7
Jordan Deposition, pp. 66:21-69:11, Exhibit D to Defendant's
MSJ, Docket Entry No. 27-8, pp. 7-8; Gordon Deposition, pp. 122:1131:9; Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 2123.
8
Jordan Deposition, pp. 54:19-553, Exhibit D to Defendant's
MSJ, Docket Entry No. 27-8, p. 5.
See also Oral Deposition of
Helix Rig Supervisor Chad Crenshaw
("Crensahw Deposition"),
pp. 5:1-3 (stating his position as Rig Supervisor), 9:24-10:4,
45:3-16, Exhibit E to Defendant's MSJ, Docket Entry No. 27-15,
pp.3, 4 and 8.
-3-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 4 of 36
individuals on competency and commenting on areas of strength and
areas in need of training. 9
Helix hired Jordan as an assistant driller in February of
2008, and Jordan worked in that position until October of 2013 when
he was promoted to the position of driller. 10
Jordan worked as a
driller
2016
from October
discharged. 11
of
2013
until
June
of
when
he
was
Helix calculated Jordan's pay on a daily basis, which
during his employment as a driller, ranged from $923.00-$1,014.00
per day. 12
Jordan's daily rate of pay stayed constant regardless
of the number of hours he worked in a day. 13
Jordan was paid on a
bi-weekly basis and he always received more than $455.00 for any
week that he worked. 14
Jordan earned more than $100,000.00 each
complete year he worked as a driller. 15
9
Jordan Deposition, pp. 72:22-77:16, Exhibit D to Defendant's
MSJ, Docket Entry No. 27-8, pp. 8-10; Gordon Deposition, pp. 63:1925, 90:9-91:21, Exhibit C to Defendant's MSJ, Docket Entry No. 273, pp. 8 and 14; Crensahw Deposition, pp. 16:3-17:4, 45:11-13,
Exhibit E to Defendant's MSJ, Docket Entry No. 27-15, pp. 5-6, 8.
10
Jordan Deposition, p. 46:10-19, Exhibit D to Defendant's MSJ,
Docket Entry No. 27-8, p. 3;
McNeal Declaration, Exhibit A to
Defendant's MSJ, Docket Entry No. 27-1, p. 3 ~11.
11
McNeal Declaration,
Entry No. 27-1, p. 3 ~12.
Exhibit A to Defendant's MSJ,
Docket
12
Jordan Deposition, pp. 83:22-84:7, Exhibit D to Defendant's
MSJ, Docket Entry No. 27-8, p. 11.
13
Id. at 87:13-15, Docket Entry No. 27-8, p. 12.
14
Id. at 86:6-8, Docket Entry No. 27-8, p. 12.
15
Id. at 84:8-85:16,
Docket Entry No.
-4-
27-8,
pp. 11-12.
See
(continued ... )
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 5 of 36
Helix hired Gordon as
a
driller
Gordon worked in that position until
discharged. 16
in November of
2013,
and
June of 2015 when he was
Helix rehired Gordon as a driller in July of 2015 and
he worked in that position until
December of 2016 when he was
demoted to the position of assistant driller. 17
Gordon's pay on a daily basis,
Helix calculated
which during his employment as a
driller, ranged from $923.00-$985.00 per day. 18
Gordon's daily rate
of pay stayed constant regardless of the number of hours he worked,
he was paid on a bi-weekly basis, always received more than $455.00
in any week that he worked, and earned more than $100,000.00 each
year he worked as a driller. 19
15
( • • • continued)
also Jordan's 2014-2016 W2s, Exhibit D-6 to Defendant's MSJ, Docket
Entry No. 27-14.
16
Gordon Deposition, pp. 55:9-11, 75:2-14, Exhibit C to
Defendant's MSJ, Docket Entry No. 27-3, pp. 6 and 10.
See also
Gordon's Offer of Employment, Exhibit C-2 to Defendant's MSJ,
Docket Entry No. 27-5.
17
Gordon Deposition, pp. 75:15-18, 78:14-21, 118:20-25, Exhibit
C to Defendant's MSJ, Docket Entry No. 27-3, pp. 10, 11, and 20.
See also Gordon's Rehire Letter, Exhibit C-3 to Defendant's MSJ,
Docket Entry No. 27-6.
18
Gordon Deposition, pp. 55:12-15, Exhibit C to Defendant's
MSJ, Docket Entry No. 27-3, p. 6; See also Gordon's Offer of
Employment, Exhibit C-2 to Defendant's MSJ, Docket Entry No. 27-5;
and Gordon's Rehire Letter, Exhibit C-3 to Defendant's MSJ, Docket
Entry No. 27-6.
19
Gordon Deposition, pp. 54:7-55:18 Exhibit C to Defendant's
MSJ, Docket Entry No. 27-3, p. 6. See also Gordon's 2014-2016 W2s,
Exhibit C-4 to Defendant's MSJ, Docket Entry No. 27-7.
-5-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 6 of 36
B.
Procedural History
On
June
23,
2016,
Jordan
filed
individually and on behalf of all
seeking damages
an
Original
others
Complaint,
similarly situated,
for unpaid overtime wages pursuant to the FLSA
based on allegations that Helix misclassified him as exempt and
improperly
paid
him
on
a
day
rate
basis
with
no
overtime
compensation. 20
On July 18,
plaintiff's
2016,
Helix filed its Original Answer denying
allegations,
and
asserting
several
affirmative
defenses, including that Jordan was exempt from the FLSA's overtime
requirements
under
the
executive,
highly
compensated,
administrative, and combination exemptions. 21
The parties stipulated to conditional certification, 22 and only
one other individual,
Christopher Gordon
("Gordon") ,
joined the
class. 23
20
See Complaint, Docket Entry No. 1, pp. 1, 4-5.
21
See Defendant Helix Energy Solutions Group, Inc.'s Original
Answer and Affirmative Defenses to Plaintiff's Original Complaint
("Original Answer"), Docket Entry No. 7, p. 2 '][3.
See also
Defendant's Response, Docket Entry No. 36, p. 10 n.1 ("Helix
withdraws its affirmative defense on the professional exemption.") .
22
See Stipulation and Order Signed by Judge Lake
Conditional Certification and Notice, Docket Entry No. 15.
23
See Notice of Consent, Docket Entry No. 18.
-6-
Re:
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 7 of 36
On April 27, 2018, Helix filed Defendant's MSJ, asserting that
no genuine issues of material fact exist that Jordan and Gordon are
exempt
under
two
FLSA
exemptions:
the
executive
and
highly
compensated exemptions, that it is entitled to summary judgment on
the
issue
of
willfulness,
and
that
fact
issues
exist
on
the
administrative and combination exemptions. 24
On April 30, 2018, Jordan filed his MPSJ, arguing that Helix
waived its right to assert FLSA exemptions as affirmative defenses,
and that even if it did not waive its affirmative defenses, Helix
cannot
meet
its
burden
on
the
executive,
highly
compensated,
administrative, combination, professional, and foreign exemptions,
and that Helix cannot prove that it acted in good faith.
25
Both parties have filed responses in opposition to the other
party's summary judgment motion,
26
and replies in support of their
respective motions for summary judgment. 27
24
Defendant' s MSJ, Docket Entry No. 27.
25
Plaintiff's MPSJ, Docket Entry No. 29.
26
See Plaintiff's Response, Docket Entry No. 35; Defendant
Helix Energy Solutions Group, Inc.'s Response to Plaintiffs'
Partial Motion for Summary Judgment ("Defendant's Response"),
Docket Entry No. 36.
27
See Defendant Helix Energy Solutions Group, Inc.'s Reply in
Support of Defendant's Motion for Summary Judgment ("Defendant's
Reply"), Docket Entry No. 37; Plaintiff Ralph Jordan's Reply in
Support of His Motion for Partial Summary Judgment ("Plaintiff's
Reply"), Docket Entry No. 38.
-7-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 8 of 36
II. Standard of Review
Summary judgment is warranted if the movant establishes that
there is no genuine dispute as to any material fact and that it is
entitled to judgment as a matter of law.
An
examination
material.
( 1986) .
of
substantive
law
Fed. R. Civ. P. 56(a).
determines
to
facts
are
Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2510
Material facts are those facts that "might affect the
outcome of the suit under the governing law."
as
which
a
material
fact
exists
if
the
Id.
evidence
A genuine issue
is
such
that
a
reasonable trier of fact could resolve the dispute in the nonmoving
party's favor.
Id. at 2511.
plain
of
language
judgment
"after
Rule
The Supreme Court has interpreted the
56 (a)
adequate
time
to mandate
for
the
discovery
entry of
summary
and
motion,
upon
against a party who fails to make a showing sufficient to 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."
Corp. v. Catrett, 106 S. Ct. 2548, 2552
(1986).
Celotex
The movant must
inform the court of the basis for summary judgment and identify
relevant
excerpts
from
depositions,
pleadings,
answers
to
interrogatories, admissions, or affidavits that demonstrate there
are no genuine fact issues.
Id. at 2553.
If the dispositive issue is one on which the moving party will
bear the burden of proof at trial, the moving party "must produce
evidence
that
'would entitle
it
-8-
to
a
directed
verdict
if
the
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 9 of 36
evidence
went
uncontroverted
at
trial.'"
Dallas/Fort
Worth
International Airport Board v. INet Airport Systems, Inc., 819 F.3d
245, 255 (5th Cir. 2016)
Rally's,
Inc.,
939
(quoting International Shortstop, Inc. v.
F.2d 1257,
1264-65
(5th
Cir.
1991)).
For
example if a defendant moves for summary judgment on the basis of
an affirmative defense, "it must establish beyond dispute all of
the defense's essential elements."
Healthcare
Inc.,
468
F.3d
237,
Bank of Louisiana v. Aetna U.S.
241
(5th
Cir.
2006).
If
the
dispositive issue is one on which the nonmoving party will bear the
burden of proof at trial, the moving party may satisfy its burden
by
merely
pointing
out
that
the
evidence
in
the
record
is
insufficient with respect to an essential element of the nonmoving
party's claim.
Celotex, 106 S. Ct. 2553.
If the movant satisfies its initial burden, the burden shifts
to the nonmoving party to show by affidavits, depositions, answers
to interrogatories,
summary
exist.
judgment
is
admissions on file,
not
or other evidence that
warranted because
Celotex, 106 S. Ct. 2553.
genuine
fact
issues
The nonmovant may not rest upon
the pleadings, but must identify specific facts that establish a
genuine issue for trial.
must
draw all
reasonable
Id.
In reviewing the evidence "the court
inferences
in favor
of the
nonmoving
party, and it may not make credibility determinations or weigh the
evidence."
Reeves v. Sanderson Plumbing Products, Inc., 12 0 S. Ct.
2097,
(2000).
2110
Factual controversies are to be resolved in
-9-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 10 of 36
favor of the nonmovant,
"but only when
.
. both parties have
submitted evidence of contradictory facts."
Corp., 37 F. 3d 1069, 1075 (5th Cir. 1994)
Little v. Liquid Air
(en bane) (per curiam).
"When parties file cross-motions for summary judgment,
must]
review
evidence
and
'each
party's
inferences
nonmoving party."
motion
in
the
independently,
light
most
[the court
viewing
favorable
to
the
the
Cooley v. Housing Authority of City of Slidell,
747 F.3d 295, 298 (5th Cir. 2014)
(quoting Ford Motor Co. v. Texas
Department of Transportation, 264 F.3d 493, 498 (5th Cir. 2001)).
III.
Jordan
employees
has
under
Cross-Motions for Summary Judgment
alleged
the
that
FLSA and
failing to pay them overtime. 28
he
that
and
Gordon
Helix
were
violated
non-exempt
the
FLSA by
Helix has responded that Jordan and
Gordon were exempt from the FLSA's overtime requirements under the
executive, administrative, professional, combination, and/or highly
compensated employee exemptions. 29 Helix argues that it is entitled
to summary judgment that Jordan and Gordon were exempt from the
FLSA's overtime provisions as a matter of law under the executive
and highly-compensated exemptions, and, if not, that plaintiffs are
28
See Complaint, Docket Entry No. l.
See Original Answer, Docket Entry No. 7, p. 2 ~3.
See also
Defendant's Response, Docket Entry No. 36, p. 10 n.1 ("Helix
withdraws its affirmative defense on the professional exemption.") ,
p.10 n.6 (same).
29
-10-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 11 of 36
unable to establish that any violation of the FLSA was willful. 30
Jordan argues that plaintiffs are entitled to summary judgment that
he and Gordon are not exempt from the FLSA's overtime provisions as
a matter of law under the executive, administrative, professional,
combination, highly compensated, and foreign employee exemptions,
and
that
Helix
practices. 31
did
not
have
a
good
faith
basis
for
its
pay
Jordan also argues that Helix has waived its exemption
and good faith defenses by failing to plead the factual basis for
them. 32
Helix argues in response that it never asserted the foreign
exemption,
that
it
withdraws
its
affirmative
defense
on
the
professional exemption, and that genuine issues of material fact
preclude granting plaintiff's motion for summary judgment that he
and Gordon are not exempt under the administrative and combination
exemptions. 33
Helix also argues that its affirmative defenses are
sufficiently pleaded. 34
30
Defendant' s MSJ,
Docket Entry No.
27,
pp.
6,
11-20;
Defendant's Response, Docket Entry No. 36, pp. 16-17 and 19-26.
31
Plaintiff' s MPSJ, Docket Entry No. 2 9, pp.
Plaintiff's Response, Docket Entry No. 35, pp. 23-41.
32
Plaintiff' s MPSJ, Docket Entry No. 29, pp. 17,
(exemption defenses), and 34-35 (good faith defenses).
33
17,
19,
23-36;
21-23
Defendant's Response, Docket Entry No. 36, p. 10 n.1, p. 26
n.6, and pp. 27-32.
34
Id. at 17-18.
-11-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 12 of 36
A.
Applicable Law
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
207 (a) (2).
rate
The
at
FLSA
which
does,
exemptions to this requirement.
he
is
however,
employed."
include
See Zannikos v.
a
employees,
requirements
executive,
[of the
however,
are
FLSA] . ") .
administrative,
exempt
Workers
u.s.c.
number
of
Oil Inspections
(U.S.A.), Inc., 605 F. App'x 349, 352 (5th Cir. 2015)
("Certain
29
from
(per curiam)
the
overtime
employed in bona
fide
or professional capacities are exempt
from the FLSA's overtime requirements.
See 29 U.S.C. § 213(a) (1)
(exempting
employed
from
§
207
"any
employee
in
a
fide
.").
executive, administrative, or professional capacity
bona
The
Department of Labor ("DOL"), which is tasked with administering the
FLSA, 29 U.S.C.
exemptions.
§
204, has published regulations that define these
Pursuant to the DOL regulations highly compensated
employees who perform at least one of the duties of an executive,
administrative, or professional employee are exempt from the FLSA's
overtime requirements, see 29 C.F.R.
perform "a
combination of
administrative[,
and]
541.601, and employees who
duties
professional[]
exempted from the FLSA' s
§
exempt
§
for
employees," are also
overtime requirements.
541.708.
-12-
executive,
See 2 9 C. F. R.
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 13 of 36
"[T]he general rule [is] that the application of an exemption
under the [FLSA]
is a matter of affirmative defense on which the
employer has the burden of proof."
94 S.
Ct.
2223,
2229
(1974).
Corning Glass Works v. Brennan,
"[T] he ultimate determination of
whether an employer qualifies for an exemption under the FLSA is a
question of law."
Singer v. City of Waco, Texas, 324 F.3d 813, 818
(5th Cir. 2003), cert. denied, 124 S. Ct. 1406 (2004)
v. Howard Wilson Chrysler-Plymouth,
(citing Lott
Inc., 203 F.3d 326,
331
(5th
Cir. 2000)). "That ultimate determination, however, relies on many
factual determinations that can be resolved by a jury."
also Zannikos,
605 F.
App' x at 352
Id.
See
("Whether an employee falls
within an exemption is a question of law; the amount of time the
employee devotes to particular duties, as well as the significance
of those duties, are questions of fact.").
Jordan
construed
general
asserts
against
rule
employer.
that
the
have
the
employer. 35
long
been
Exemptions
construed
from
narrowly
be
narrowly
the
FLSA' s
against
(citing Songer v. Dillon Resources, Inc., 618
F. 3d 467, 471 (5th Cir. 2010)).
138 S. Ct.
1134
However, in Encino Motorcars, LLC
(2018),
the Supreme Court rejected
that premise stating:
The [circuit court] also invoked the principle that
exemptions to the FLSA should be construed narrowly . . .
35
the
See Allen v. Coil Tubing Services, L.L.C., 755 F.3d 279,
283 (5th Cir. 2014)
v. Navarro,
FLSA exemptions must
Plaintiff's MPSJ, Docket Entry No. 29, pp. 19-21.
-13-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 14 of 36
We reject this principle as a useful guidepost for
interpreting the FLSA.
Because the FLSA gives no
"textual indication" that is exemptions should be
construed narrowly, "there is no reason to give [them]
anything other than a fair (rather than a 'narrow')
interpretation."
The narrow-construction principle
relies on the flawed premise that the FLSA "pursues" its
remedial purpose "at all costs." But the FLSA has over
two dozen exemptions in§ 213(b) alone, including the one
at issue here.
Those exemptions are as much a part of
the FLSA's purpose as the overtime-pay requirement.
We
thus have no license to give the exemption anything but
a fair reading.
Id. at 1142.
are
to
be
The Fifth Circuit has now held that FLSA exemptions
given
Technologies,
Supreme
"fair
reading."
890
F.3d 575,
L.L.C.,
Court
exemptions
a
Carley
579
recently clarified that
'a
fair
reading,'
as
(5th
v.
Crest
Cir.
courts
are
opposed
Pumping
2018)
to
to
("The
give
the
FLSA
narrow
interpretation previously espoused by this and other circuits.").
B.
Helix Has Not Waived Its Affir.mative Defenses
Asserting
that
"Helix
has
done
nothing
in
the
way
of
identifying "the factual basis for the applicability of any [FLSA]
exemption, " 36
identifying
and
the
that
"Helix
particular
has
good
done
faith
nothing
in
defense ( s)
the
on
way
of
which
it
intends to rely, and it has done even less in the way of alleging
facts that, if true, would allow it to prevail on its defense ( s) , " 37
plaintiffs
argue
36
the
court
Id. at 22.
37
that
Id. at 34.
-14-
should
enter
judgment
on
the
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 15 of 36
pleadings
dismissing
Helix's
exemption defenses
with
prejudice
under Federal Rule of Civil Procedure 12(c) . 38
Helix responds that its affirmative defenses are specifically
pleaded in its Original Answer,
39
and specifically enumerated in
response to plaintiff's Tenth Interrogatory. 40
Plaintiffs reply that "Helix claims that the requisite factual
detail is contained in its discovery response," 41 but that pursuant
to Federal Rule of Civil Procedure 12(d), "[t]he Court
. is
prohibited from considering that evidence." 42
Rule 8(c) (1) of the Federal Rules of Civil Procedure requires
a litigant to "affirmatively state any avoidance or affirmative
defense."
Fed. R. Civ. P. 8 (c) (1).
"Failure to timely plead an
affirmative defense may result in waiver and the exclusion of the
defense from the case."
LSREF2 Baron, L.L.C. v. Tauch,
751 F.3d
394, 398 (5th Cir. 2014).
"The traditional standard for [pleading]
affirmative defenses is that they must contain 'enough specificity
or factual particularity to give the plaintiff "fair notice" of the
defense that is being advanced.'"
United States ex. rel Parikh v.
38
Id. at 23.
39
Defendant's Response, Docket Entry No. 36, p. 17.
40
Id. at 17-18 (citing Interrogatory 10 attached as Exhibit F
to Defendant's Response, Docket Entry No. 36-17, pp. 3-4).
41
Plaintiff's Reply, Docket Entry No. 38, p. 5.
-15-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 16 of 36
Citizens Medical Center,
302
F.R.D.
416,
418
(S.D.
Tex.
2014)
quoting Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999)).
The
fair
notice
standard
applied
to
affirmative
defenses
in
Woodfield was derived from the pleading standard for complaints
then in effect under Conley v. Gibson, 78 S. Ct. 99 (1957), i.e.,
"'a short and plain statement of the claim'
that will give the
defendant fair notice of what the plaintiff's claim is and the
grounds upon which it rests."
Id. at 103.
The Supreme Court's
subsequent decisions in Bell Atlantic Corp. v. Twombly, 127 S. Ct.
1955 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937
(2009), have
changed the pleading standard for complaints to require factual
content that allows the court to draw a reasonable inference that
the claim is plausible.
Twombly, 127 S. Ct. at 1965; Iqbal, 129 S.
Ct. 1937 at 1949-50.
The
Fifth
Circuit
has
not
decided
whether
the
pleading
standard announced in Twombly and Iqbal extends to affirmative
defenses,
issue.
and district courts in this circuit are split on the
See Parikh, 302 F.R.D. at 418 (listing cases).
The Fifth
Circuit has applied the fair notice standard in opinions after
Twombly and Iqbal
suggesting that
the
lesser
standard of fair
notice remains the appropriate standard for affirmative defenses.
See,
~'
LSREF2, 751 F.3d at 398; Garrison Realty, L.P. v. Fouse
Architecture & Interiors,
2013)
(per curiam).
P.C.,
546 F. App'x 458,
465
(5th Cir.
Nevertheless, in this case it is not necessary
-16-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 17 of 36
to choose between the standards because Helix not only identified
in its Original Answer the specific affirmative defenses on which
it relies in its motion for summary judgment, but also provided
plaintiffs the factual basis for those defenses well before the
pending motions for summary judgment were filed.
Helix
included
in
its
answer
the
following
statements
regarding affirmative defenses:
3.
Based upon information and belief,
with the
exception of assistant drillers, Plaintiff, other
drillers, and other day-rate workers are exempt
from the overtime provisions of 2 9 U.S. C. § 2 07
pursuant to the provisions of 29 U.S.C. § 213,
including
the
administrative,
executive,
professional exemptions, some combination thereof,
and/or the highly compensated employee exemption.
Assistant drillers are paid on an hourly basis with
overtime compensation for hours worked over forty
in a workweek.
4.
Any acts or omissions by Helix with respect to the
payment of wages to its assistant drillers,
drillers, and day-rate workers, like Plaintiff,
were undertaken in good faith reliance on the
regulations and interpretations of the Wage Hour
Administration of the United States Department of
labor and/or legal advice or opinions from outside
counsel and were based on long-standing industry
standards and practices. 43
An exemption must be asserted as an affirmative defense to a
claim under the FLSA.
See Brennan, 94 S. Ct. at 222 9 ("the general
rule [is] that the application of an exemption under the [FLSA] is
a matter of affirmative defense on which the employer has
burden
43
of
proof") .
Because
Helix's
Original
0riginal Answer, Docket Entry No. 7, p. 2
-17-
Answer
~~3-4.
the
provided
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 18 of 36
specificity by identifying both the specific exemptions in the FLSA
on which Helix seeks summary judgment,
i.e.,
the executive and
highly compensated employee exemptions, and good faith, Helix did
not waive these affirmative defenses.
See Woodfield, 193 F.3d at
362 (pleading the name of an affirmative defense may be sufficient
to avoid waiver).
See also Lucas v. NOYPI, Inc., No. Civ. A. H-11-
1940, 2012 WL 4754729, at *2
(S.D. Tex. October 3, 2012), aff'd,
536 F. App'x 416 (5th Cir. 2013)
(finding that defendant properly
raised the affirmative defense for the Motor Carrier Act Exemption
when the defendant stated in their answer "Defendants affirmatively
plead that they were not required to pay overtime to Plaintiff
because his position was subject to an exemption to the payment of
overtime under the FLSA, including, but not limited to, the motor
carrier exemption in Section 13 (b) (1) of the FLSA. "); Rodriguez v.
Physician Laboratory Services, LLC, Civil Action No. 7:13-CV-622,
2014 WL 847126,
at
*3
(S.D.
Tex.
March 4,
2014)
(holding that
merely seeking to "invoke the 'good faith defense' .
. [g] ives the
plaintiff fair notice of the nature of the defense, and avoids an
unfair surprise with an unexpected defense").
Tyhan,
Inc., No.
April 15, 2016)
CV H-15-191,
See also Franks v.
2016 WL 1531752, at *3
(S.D.
Tex.
(to plead the affirmative defense of an exemption
from the FLSA successfully, the defendant need only identify the
exemption of the FLSA by name); Floridia v. DLT 3 Girls, Inc., No.
4:11-CV-3624,
2012
WL
1565533,
at
-18-
*4
(S.D.
Tex.
May
2,
2102)
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 19 of 36
(accepting a good faith defense that stated that "Defendants' acts
or omissions, if found to be in violation of the FLSA, were in good
faith and based upon reasonable grounds for believing that its
actions did not violate the FLSA.").
Even a technical failure to comply precisely with the pleading
requirements
of
Rule
8(c)
may
be
excused
as
long
as
"the
affirmative defense is raised in the trial court in a manner that
does not result in unfair surprise."
381,
385
(5th Cir.
2008)).
Rogers v. McDorman, 521 F.3d
At the heart of Rule
8 (c)
is
the
concern that a "defendant should not be permitted to 'lie behind a
log' and ambush a plaintiff with an unexpected defense."
defendant
does
not
waive
a
defense
if
it
was
Id.
raised
at
"A
a
'pragmatically sufficient time' and did not prejudice the plaintiff
in its ability to respond."
Rogers,
521
F. 3d
at
386).
LSREF2,
"Unfair
751
F. 3d at
surprise
and
398
(quoting
prejudice
are
central concerns underlying the requirement that a defendant timely
plead affirmative defenses."
Id. at 402.
Plaintiffs do not and cannot contend that they were surprised
by the motion for
highly
compensated
requirements
summary judgment based on the executive and
employee
because
in
exemptions
addition
to
to
the
FLSA' s
overtime
naming
these
specific
affirmative defenses in its Original Answer,
Helix provided the
factual
plaintiff's
basis
for
them
in
response
Interrogatory:
-19-
to
Tenth
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 20 of 36
Helix submits that Driller position, held by Plaintiff,
is
exempt
under
the
seaman,
highly
compensated,
administrative and/or executive exemptions, and/or some
combination thereof.
Drillers work offshore.
They are
exempt because they make well in excess of $100,000.
Drillers do not "drill" per se but rather supervise the
activities of the drill crew, including al drilling
documentation, logs, and International Association of
Drilling Contract paperwork.
Drillers customarily and
regularly direct the work of two or more subordinate
members of the drill crew.
Drillers also work with the
Superintendent and the oil and gas client to review and
revise various aspects of the well program.
Drillers
also ensure that the dimensions of the bottom hole
assembly components are measured and logged.
Drillers
generally perform non-manual work directly related to
Helix's business and that of its customers.
They
exercise discretion and independent judgment regarding
matters of significance, and they provide suggestions and
recommendations on the advancement of other drill crew
members. 44
Although plaintiffs argue that Rule 12(d) prohibits the court
from
considering
Helix's
response
to
plaintiff's
Tenth
Interrogatory in ruling on their Rule 12(c) motion for judgment on
the pleadings,
plaintiff's reliance on Rule 12 (d)
is misplaced.
Rule 12(c) of the Federal Rules of Civil Procedure provides: "After
the pleadings are closed - but early enough not to delay trial - a
party
may
move
for
judgment
on
the
pleadings."
Rule
12(d)
provides:
If, on a motion under Rule .
. 12(c), matters outside
the pleadings are presented to and not excluded by the
court, the motion must be treated as one for summary
judgment under Rule 56. All parties must be given a
reasonable opportunity to present all material that is
pertinent to the motion.
44
Defendant' s Response, Docket Entry No. 36, pp. 17-18 (quoting
Interrogatory 10, Exhibit F to Defendant's Response, Docket Entry
No. 36-17, pp. 3-4).
-20-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 21 of 36
Fed. R. Civ. P. 12(d).
The
parties
to
this
action
have
both
filed
a
motion
summary judgment that cite matters outside the pleadings.
for
Both
parties have also filed a response to the opposing party's motion,
and a reply in support of their own summary judgment motion.
Each
of these filings reference matters outside of the pleadings that
have
not
been excluded by
the
Accordingly,
court.
the
court
concludes that both parties have received a reasonable opportunity
to present all material that is pertinent to the pending motions.
Under these circumstances Rule 12(d) does not prohibit the court
from
considering
evidence
submitted
by
Helix
in
response
to
Jordan's motion for judgment on the pleadings under Rule 12(c) but,
instead, requires the court to treat that motion as one for summary
judgment
under
Rule
56
pursuant
to
which matters
outside
the
pleadings may be considered.
Because Helix not only identified in its Original Answer the
specific
affirmative
including those
defenses
on which it
on
which
seeks
it
summary
intended
judgment,
executive and highly compensated employee exemptions,
provided
plaintiffs
the
factual
basis
for
those
to
rely,
i.e.,
the
but
also
defenses
in
response to interrogatories provided to plaintiffs well before the
pending
motions
for
summary
judgment
were
filed,
the
court
concludes that Helix has not waived those affirmative defenses, and
that plaintiffs are not entitled to summary judgment on that basis.
-21-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 22 of 36
C.
Fact Issues Regarding Whether Plaintiffs Were Paid on a Salary
Basis Preclude Granting Either Party's Summary Judgment Motion
Because Helix has withdrawn its assertion of the professional
exemption, and stated that it never pleaded the foreign exemption,
the issue before the court is the applicability of the executive,
administrative,
combination,
and
highly
compensated
employee
exemptions.
Helix argues that it is entitled to summary judgment
that
and
Jordan
Gordon
were
exempt
from
the
FLSA' s
overtime
provisions as a matter of law under the executive and highlycompensated exemptions,
45
and that genuine issues of material fact
preclude granting plaintiff's motion for summary judgment that he
and Gordon are not exempt under the administrative and combination
exemptions. 46
judgment
Plaintiffs argue that they are entitled to summary
that
they
are
not
exempt
from
the
FLSA's
overtime
provisions as a matter of law under any of these exemptions. 47
Common to each of the exemptions at issue is the requirement
that the employee be paid on a salary basis of at least $455 per
week.
29 C.F.R.
§
541.600 (a)
("To qualify as an exempt executive,
administrative or professional employee under section 13(a) (1) of
the [FLSA], an employee must be compensated on a salary basis at a
rate of not less than $455 per week.
exclusive of board,
45
Defendant's MSJ,
Docket Entry No.
27, pp.
6,
11-20;
Defendant's Response, Docket Entry No. 36, pp. 16-17 and 19-26.
46
Defendant' s Response,
pp. 27-32.
Docket Entry No.
47
3 6,
p.
Plaintiff' s MPSJ, Docket Entry No. 2 9, pp.
Plaintiff's Response, Docket Entry No. 35, pp. 23-41.
-22-
2 6 n. 6,
17,
and
2 3-36;
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 23 of 36
lodging or other facilities.").
See also 29 C.F.R. § 541.100 (a)
(executive employees); 29 C.F.R. § 541.200(a) (1)
employees);
29 C.F.R.
§ 541.601
(administrative
(highly compensated employees);
IntraComm, Inc. v. Bajaj, 492 F.3d 285, 295-96 (4th Cir. 2007)
curiam)
(1)
(per
(citing DOL letter opinions in support of conclusion that
employees
must
combination
be
paid on
exemption) .
a
salary basis
"Salary
basis"
to
qualify
for
the
is
defined
in
the
regulations as follows:
(a) General rule. 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.
Subject to the
exceptions provided in paragraph (b) of this section, an
exempt employee must receive the full salary for any week
in which the employee performs any work without regard to
the number of days or hours worked.
Exempt employees
need not be paid for any workweek in which they perform
no work.
An employee is not paid on a salary basis if
deductions from the employee's predetermined compensation
are made for absences occasioned by the employer or by
the operating requirements of the business. If the
employee is ready, willing and able to work, deductions
may not be made for time when work is not available.
29 C.F.R. § 541.602(a).
Paragraph (b) of§ 541.602 provides that
deductions may be made from the wages of salaried employees in
certain circumstances, such as absences of a full day or more for
personal reasons or unpaid disciplinary suspensions of a full day
or more, without destroying the salary basis of the pay.
29 C.F.R.
§ 541.602(b).
See also Cowart v. Ingalls Shipbuilding, Inc., 213
F.3d 261,
(5th Cir.
264
2000)
(citing predecessor regulation 29
C.F.R. § 541.118 (a) (2)).
-23-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 24 of 36
1.
Defendant Fails to Establish as a Matter of Law that
Plaintiffs Were Paid on a Salary Basis
As evidence that the plaintiffs were paid on a salary basis,
Helix cites Jordan's pay statements showing that he was paid on a
bi-weekly basis
and
received
no
less
than
$923.00
per
week,
48
deposition testimony of both plaintiffs showing that they were paid
on a bi-weekly basis,
49
that at all relevant times they were paid
more than $455.00 a week, 50 and that for any day they worked, their
daily rate remained unchanged regardless of the amount of hours
worked in the day or the quality of the work performed. 51
Helix also cites the declaration of Kenric McNeal,
Helix's
Director of Human Resources, that "Helix pays its Drillers a day
rate, which is a predetermined sum that remains constant regardless
of
the
hours
worked
in
a
day
and
the
quality
of
the
work
48
Defendants' MSJ, Docket Entry No. 27, p. 12 (citing Jordan
pay statements, Exhibit D-5 to Defendant's MSJ, Docket Entry
No. 28).
49
Defendants' MSJ, Docket Entry No. 27, p. 12 (citing Jordan
Deposition, p. 46:20-23, Exhibit D to Defendant's MSJ, Docket Entry
No. 27-8, p. 3; Gordon Deposition, p. 55:12-15, Exhibit C to
Defendant's MSJ, Docket Entry No. 27-3, p. 6).
50
Id. (citing Jordan Deposition, p. 86:6-8, Exhibit D to
Defendant's MSJ, Docket Entry No. 27-8, p. 12; Gordon Deposition,
p. 80:10-12, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3,
p. 11) .
51
Id. at 12-13 (citing Jordan Deposition, pp. 83:22-84:7, 87:115, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 11-12;
Gordon Deposition, pp. 54:7-55:3; Exhibit C to Defendant's MSJ,
Docket Entry No. 27-3, p. 6).
-24-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 25 of 36
performed." 52
Plaintiffs object to this evidence on grounds that
it is inadmissible parole evidence that contradicts the unambiguous
terms and conditions of their employment as stated in the written
2015. 53
offer of employment sent to Gordon on July 27,
McNeal's
declaration
is
consistent
with
the
letters, 54 plaintiffs' deposition testimony,
statements
plaintiffs,
all
and
of
which
plaintiffs
reflect
that
received,
a
55
plaintiffs'
offer
and plaintiffs' pay
Helix
day
However,
agreed
rate
of
to
pay
pay
that
remained constant regardless of the number of hours worked and
pursuant to which they each received more than $455.00 for any week
in
which
consistent
they
with
worked. 56
the
Because
plaintiffs'
the
own
McNeal
testimony
declaration
and
is
evidence,
plaintiffs' objection to this evidence will be overruled.
52
Id.
at 13
(citing McNeal Declaration,
Defendant's MSJ, Docket Entry No. 27-1, p. 2 ~8).
Exhibit
A
to
53
Plaintiff's Response, Docket Entry No. 35, pp. 23-24 (citing
Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6).
54
See July 27, 2015 Offer Letter to Gordon, Exhibit C-3 to
Defendant's MSJ, Docket Entry No. 27-6; and February 27, 2008 Offer
Letter to Jordan, Exhibit D-4 to Defendant's MSJ, Docket Entry
No. 28-1.
55
See Jordan Deposition, pp. 83:20-84:7, 86:6-87:15, Exhibit
D to Defendant's MSJ, Docket Entry No. 27-8, pp. 11-12; Gordon
Deposition, pp. 54:7-55:3, 80:10-12, Exhibit C to Defendant's MSJ,
Docket Entry No. 27-3, pp. 6, 11.
56
See Jordan Pay Statements, Exhibit D-5 to Defendant's MSJ,
Docket Entry No. 28.
-25-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 26 of 36
Citing Faludi v. US Shale Solution, LLC, No. H-16-3467, 2017
WL 5969261,
No.
*1
17-20808
because
(S.D.
(5th
Tex.
Cir.
undisputed
November 30,
December
evidence
26,
shows
2017),
2017),
that
appeal docketed,
Helix
Jordan
and
argues
that
Gordon
were
guaranteed a minimum of $923.00 for any day that they worked, the
salary-basis test is satisfied. 57
As evidence that plaintiffs were
guaranteed a minimum of $923.00 for any day that they worked, Helix
cites Jordan's deposition testimony that $923.00 per day was the
lowest amount he was paid, 58 Jordan's pay statements,
of
employment
" [ f] ollowing
sent
are
to
the
Gordon
proposed
stating
in
compensation
59
and the offer
pertinent
elements
for
part,
this
position which should be in accordance with our prior discussions:
Pay rate: $923.00 per day (to be paid on a bi-weekly basis) ." 60
In
Faludi
defendant
amounts .
the
stating,
plaintiff had
a
written
agreement
"Company shall
pay Consultant
the
with the
following
.," the least of which was $1,000.00 for each day he
performed services.
2017 WL 5969261, at *9.
When the plaintiff
57
Defendant' s MSJ, Docket Entry No. 27, pp. 12-13.
See also
Defendant's Response, Docket Entry No. 36, pp. 19-20; Defendant's
Reply, Docket Entry No. 37, p. 5.
58
Id. at 13 (citing Jordan Deposition, pp. 84:1-7,
to Defendant's MSJ, Docket Entry No. 27-8, p. 11).
59
Id.
No. 28).
D-5
to
Defendant's MSJ,
Docket Entry
Id. (citing Exhibit C-3
No. 27-6).
to
Defendant's MSJ,
Docket Entry
60
(citing Exhibit
Exhibit D
-26-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 27 of 36
sued
for
violation
defendant
$1,000
of
the
FLSA's
overtime
requirements,
the
sought summary judgment arguing inter alia that "the
daily
amount
guaranteed
under
the
Agreement
therefore
'guaranteed Faludi at least $1,000.00 for each week he performed
any services, thus exceeding the $455.00 threshold.'"
Id. at *9.
This court held that because "$1,000 per day was guaranteed if [the
plaintiff]
showed
up
for
work
and
performed
the
agreed
upon
services[, t]his satisfies the minimum guaranteed amount required
to be paid on a salary basis."
Id. at *10.
Faludi is distinguishable and does not control the outcome of
this case for two reasons.
First,
in Faludi the parties had a
written agreement that guaranteed the plaintiff pay that exceeded
$455.00
for
any week in which he worked.
written
agreement
governing
the
plaintiffs'
Here,
there was no
employment.
Even
though the letters offering the plaintiffs employment referenced
day rates that exceeded $455.00, and the plaintiffs received pay
that exceeded that amount for every week they worked, the evidence
also shows that the day rate plaintiffs were paid changed from time
to time and therefore was not as Helix contends, an amount that was
both predetermined and guaranteed not to drop below $455.00 per
day. 61
Faludi is also distinguishable because
61
See Jordan Deposition,
pp.
83:20-84:7,
Exhibit D to
Defendant's MSJ, Docket Entry No. 28-8, p. 11 (testifying that his
day rate changed from $985.00, to $1,014.00, to $923.00).
-27-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 28 of 36
[t]he precise question raised by the parties' arguments
[there
was]
whether
the
language
of
29
C.F.R.
§
541.602(a) allowing the exemption as long as the
employee's predetermined pay 'is not subject to reduction
because of variations in the .
. quantity of the work
performed' includes a voluntary reduction by the employee
as opposed to a reduction by the employer.
Id.
Voluntary reductions in pay initiated by the plaintiffs are
not at issue in this case.
Accordingly, the court is not persuaded
that Faludi controls the outcome of this case.
Helix has presented undisputed evidence that plaintiffs were
paid at a rate that satisfied the pay rate required for them to be
qualified for one of the exemptions at issue,
exceeded $455.00 for each week worked.
i.e.,
See 29 C.F.R.
§
a rate that
541.600(a).
While Helix has presented evidence from which a reasonable trier of
fact could conclude that plaintiffs were guaranteed to receive a
qualifying
rate
of
pay
for
each
week
worked,
Helix
has
not
presented evidence that requires such a finding as a matter of law.
Helix has similarly presented evidence from which a reasonable fact
finder could - but need not -
conclude that plaintiffs "regularly
receive[d] 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," as
required by 29 C.F.R.
§
541.602(a).
However,
Helix has neither
argued nor presented any evidence capable of establishing that
plaintiffs received the full
salary for any week in which they
-28-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 29 of 36
performed any work without regard to the number of days or hours
worked,
as also required by 29 C.F.R.
§
541.602(a)
("an exempt
employee must receive the full salary for any week in which the
employee performs any work without regard to the number of days or
hours
worked") .
The court therefore
concludes
that
Helix has
failed to carry its burden of establishing that it is entitled to
judgment as a matter of law that plaintiffs were paid on a "salary
basis."
Accordingly, Defendant's MSJ will be denied.
2.
Plaintiffs Fail to Establish as a Matter of Law that They
Were Not Paid on a Salary Basis
Plaintiffs argue that because undisputed evidence shows that
Helix paid them on a day-rate basis as opposed to a salary basis,
they are entitled to summary judgment because the salary basis test
is not
satisfied. 62
Plaintiffs
argue that
contrary to Helix's
contention that they were guaranteed a minimum of $923.00 for any
day they worked, the offer letter that Gordon received establishes
as a matter of law that he was an at-will employee guaranteed
nothing. 63
Citing Gordon's offer of employment, plaintiffs argue
that "the sole pieces of documentary evidence that outline the
62
Plaintiff's MPSJ, Docket Entry No. 29, pp. 24-26.
See also
Plaintiff's Response, Docket Entry No. 35, pp. 16-17 and 25-33.
63
Plaintiff's Response, Docket Entry No. 35, p. 29.
See also
Plaintiff's Reply, Docket Entry No. 38, p. 6 (asserting "No
Evidence of a Guarantee Means That the Drillers Were Not Paid on a
Salary Basis").
-29-
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 30 of 36
terms and conditions of Jordan's and Gordon's employment expressly
disclaim any guarantees. " 64
Gordon's offer of employment stated:
This letter only serves to communicate a contingent offer
of employment and is not intended to create, nor is it to
be construed to constitute, an employment contract
between you and Helix.
Your employment with Helix will
be "at-will," that is the employment relationship can be
terminated at any time by either you or Helix. 65
Citing Dufrene v.
Browning Ferris,
Inc.,
207 F.3d 264,
268
(5th
Cir. 2000), and Hughes v. Gulf Interstate Field Services, 878 F.3d
183, 187-93
(6th Cir. 2017), plaintiffs argue that they were not
paid on a salary basis because "Helix admits the wages it paid to
Jordan and Gordon were computed 'by multiplying the number of days
worked by their daily wage.'" 66
Chevron Corp.,
No.
C-16-02089,
Plaintiffs also cite McQueen v.
2018 WL 1989937,
*1
(N.D.
Calif.
April 3, 2018), for holding that payment of $1,000.00 per day did
not qualify as payment on a salary basis. 67
Dufrene
defendant
involved
employer
to
a
dispute
calculate
64
over
the
overtime
method
pay
used
for
by
the
non-exempt
Plaintiff' s Response, Docket Entry No. 35, p. 32
Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6).
(citing
65
Gordon' s offer of employment, Exhibit C-3 to Defendant's MSJ,
Docket Entry No. 27-6, p. 3.
66
Plaintiff' s MPSJ, Docket Entry No. 2 9, p. 2 6 (quoting Dufrene
v. Browning-Ferris, Inc., 994 F. Supp. 748, 754 (E. D. La. 1998),
aff'd, 207 F. 3d 264 (5th Cir. 2000)). See also Plaintiff's
Response, Docket Entry No. 35, p. 27; Plaintiff's Reply, Docket
Entry No. 38, pp. 6-8.
67
Plaintiff's Response, Docket Entry No. 35, pp. 28-29.
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Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 31 of 36
employee plaintiffs.
pay was
to be
At issue was whether the employee's overtime
calculated under
29
C.F.R.
§
778.112
governing
employees paid a day rate, or under 29 C.F.R. § 778.114 governing
employees
paid
a
fixed
salary
for
fluctuating
hours.
The
undisputed evidence showed that the employees were paid a day rate
of $74.50 or $76.00 for each day's work regardless of the number of
hours worked in a day,
worked.
and that they were not paid for days not
207 F.3d at 268.
provided
the
appropriate
The district court held that
method
for
calculating
§
778.112
overtime
pay
reasoning:
The distinction between the two regulations is explicit:
Section 778.112 applies to workers who are "paid a flat
sum for a day's work or for doing a particular jobn and,
in contrast, § 778.114 applies to employees who are
"employed on a salary basis. n
Department of Labor
Regulations provide that an employee is considered to be
paid "on a salary basisn within the meaning of the
regulations "if under his employment agreement he
regularly receives each pay period on a weekly or less
frequent basis, a predetermined amount constituting all
or part of his compensation, which amount is not subject
to reduction because of variations in the quality or
quantity of the work performed.
Subject to the
exceptions provided below, the employee must receive his
full salary for any week in which he performs any work
without regard to the number of days or hours worked.n
29 C.F.R. § 541.118(a) 68 (emphasis added).
Plaintiffs
fail to meet this definition because they generally do
not receive compensation for the days they do not work.
The workers do not receive a flat salary per week
regardless of how many days of the week they have worked.
Instead, they are paid a daily rate, and their weekly
salary is computed by multiplying the number of days
68
This regulation has since been revised and renumbered to 29
C.F.R. § 541.602(a). See Cowart, 213 F.3d at 264.
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Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 32 of 36
worked by their daily wage.
Accordingly, it is clear
that they are covered by§ 778.112, not § 778.114.
994 F.
Supp.
district
at 754.
court's
On appeal the Fifth Circuit affirmed the
determination
that
§
7 7 8. 112
applied
to
the
employees, stating that "employees here are not paid a salary for
a workweek.
Instead,
they are paid for the number of days they
work in a week: a day-rate."
207 F.3d at 268.
Hughes involved a dispute over whether employees paid a day
rate of $337.00 were exempt from the FLSA's overtime requirements
because
they
qualified
as
highly
compensated
employees.
The
employees conceded that they were paid in a manner and at a rate
consistent with being exempt,
but they argued that it mattered
whether their salaries were guaranteed,
trier
of
fact
guarantee.
could
have
concluded
and whether a
that
there
was
rational
no
such
The district court granted summary judgment to the
defendant employer, but the Sixth Circuit reversed explaining that
the
plaintiffs
had
introduced
evidence
that
their
salary
was
calculated at the rate of $337.00 per day worked, that there was
thus
"reason
to
conclude
that
their
pay
was
calculated
more
frequently than weekly[, a]nd it is very much disputed whether what
they received weekly was in fact guaranteed."
Helix
argues
that
Dufrene
factually distinguishable
69
Defendant's
and
Hughes
from this
878 F.3d at 189.
case. 69
Response,
Docket
-32-
Entry
are
legally
and/or
Helix argues
No.
that
36, pp. 19-20;
(continued ... )
Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 33 of 36
Dufrene
and
Hughes
are
factually
distinguishable
because
the
employees at issue in those case were undisputedly paid day rates
that did not satisfy the requirement that an exempt employee be
compensated on a salary basis at a rate of not less than $455 per
week.
See 29 C.F.R. § 541.600.
See Dufrene,
994 F. Supp. at 750
(employees paid day rates ranging from $61.75-$76.00); Hughes, 878
F.3d at 185 and 189 (employees paid a day rate of $337.00).
While
this factual distinction is relevant to whether the rate of weekly
pay requirement is satisfied,
it has no bearing on whether the
other requirements for establishing that plaintiffs were paid on a
"salary basis" are satisfied.
Helix argues that Dufrene is legally distinguishable because
at
issue
there was which of two methodologies
for
calculating
overtime pay applied to undisputedly non-exempt employees.
Helix
argues that "Dufrene does not establish that a salary based on a
day rate fails the salary basis requirement for exemptions under
the FLSA, because it does not consider this issue." 70
While Helix
is correct that the precise question at issue in Dufrene was not
the precise question at issue here, the Dufrene court's discussion
of§ 541.602(a)'s predecessor, 29 C.F.R. § 541.118(a), indicates
that satisfying§ 541.600(a)'s weekly minimum rate of payment of
69
( • • • continued)
Defendant's Reply, Docket Entry No. 37, pp. 2-5.
70
Defendant's Response, Docket Entry No. 36, pp. 19-20.
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Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 34 of 36
$455.00 is only one of several requirements that must be met to
establish that employees are paid on a "salary basis."
In addition
to receiving a weekly minimum rate of payment, employees must also
receive their "full salary for any week in which they perform any
work without
regard to the
Dufrene,
F.
994
Supp.
at
number
754
of days
(citing
predecessor of 29 C.F.R § 541.602(a)).
this
requirement
cannot be
29
or hours
C.F.R.
worked."
541.118(a),
§
While plaintiffs argue that
satisfied in this
case because the
undisputed evidence establishes that they were paid a day rate,
"merely because an employee's earnings are computed on a daily rate
basis does not mean that the employee is not paid on a
basis."
Akins v. Worley Catastrophe Response, LLC, Civil Action
No. 12-2401, 2013 WL 19077486, *4
29 C.F.R.
on
an
salary
§
604(b)
hourly,
exemption
or
a
(E.D. La. May 8, 2013)
(quoting
("An exempt employee's earnings may be computed
daily
violating
or
a
the
shift
salary
basis,
basis
without
losing
requirement,
if
the
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.")).
The
deposition
excerpts
and
other
evidence
presented
by
plaintiffs are not sufficient to carry their burden of showing that
they were not paid on a salary basis.
Defendants have presented
competent summary judgment evidence, consisting of the declaration
testimony of Kenric McNeal, Helix's Director of Human Resources,
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Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 35 of 36
excerpts from plaintiffs'
statements,
deposition testimony,
and plaintiffs'
offers
plaintiffs'
of employment,
pay
showing that
material fact issues are in dispute concerning whether plaintiffs
were paid on a salary basis, including but not limited to, whether
plaintiffs were guaranteed a minimum of at least $455 per week for
the weeks that they worked, and whether plaintiffs were paid their
full
rate
and
did
not
have
their
wages
reduced
based
quantity of work when they did not work full weeks.
on
the
Because the
question of whether plaintiffs were paid on a salary basis remains
in dispute, they cannot prevail on their motion for partial summary
judgment on their contentions that they were not exempt executive,
administrative,
combination,
or
highly
compensated employees.
Accordingly, plaintiffs' motion for partial summary judgment will
be denied.
D.
Genuine Issues of Material Fact Preclude Granting
Party's Summary Judgment Motion on Willfulness
Either
Helix moves for summary judgment on the issue of willfulness
arguing that plaintiffs cannot present any evidence that Helix knew
its pay practices violated the FLSA. 71
Plaintiffs move for summary
judgment on the issue of willfulness contending there is no genuine
issue
of
conclusion
material
that
fact
Helix
that
would
willfully
allow
violated
a
the
jury
to
avoid
the
FLSA. 72
For
the
reasons stated in the preceding sections, the court has concluded
71
Defendant's MSJ, Docket Entry No. 27, pp. 19-20.
72
Plaintiff's MPSJ, Docket Entry No. 29, p. 35.
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Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 36 of 36
that genuine issues of material fact exist as to whether Helix
violated the FLSA.
Reviewing the parties' cited evidence leads the
court to conclude that genuine issues of material fact also exist
as to whether any violation that Helix may have made was willful.
Therefore, both parties' motions for summary judgment on the issue
of willfulness will be denied.
IV.
For
the
objection to
reasons
Conclusions and Order
stated
in
§
III.C.1,
above,
plaintiffs'
of the McNeal Declaration are OVERRULED, and for
~~8-9
the reasons stated in §§ III.C.1 and III.D,
above,
Helix Energy
Solutions Group, Inc.'s Motion for Summary Judgment (Docket Entry
No. 27) is DENIED.
For the reasons stated in§§ III.B, III.C.2, and III.D, above,
Plaintiff
Ralph
Jordan's
Motion
for
Partial
Summary
Judgment
(Docket Entry No. 29) is DENIED.
The Joint Pretrial Order must be filed by November 2, 2018.
Docket Call will be held on November 9, 2018, at 3:00p.m. in
Courtroom
9-B,
9th
Floor,
United
States
Courthouse,
515
Rusk
Avenue, Houston, Texas 77002.
SIGNED at Houston, Texas, this 11th day
SIM LAKE
UNITED STATES DISTRICT JUDGE
-36-
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