Senegal v. Fairfield Industries Incorporated
Filing
274
MEMORANDUM OPINION granting in part, denying in part 191 MOTION for Summary Judgment , granting in part, denying in part 185 MOTION for Partial Summary Judgment , denying 207 MOTION for Decertification (Signed by Magistrate Judge Nancy K Johnson) Parties notified.(sjones, 4)
United States District Court
Southern District of Texas
ENTERED
November 21, 2018
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
DARNELL SENEGAL, individually
and on behalf of others
similarly situated
Plaintiff,
v.
FAIRFIELD INDUSTRIES, INC.,
d/b/a FAIRFIELD NODAL,
Defendant.
§
§
§
§
§
§
§
§
§
§
§
§
David J. Bradley, Clerk
CIVIL ACTION NO. H-16-2113
MEMORANDUM OPINION
Pending before the court1 is Plaintiff’s Motion for Partial
Summary
Judgment
(Doc.
185),
Defendant’s
Motion
for
Summary
Judgment (Doc. 191), and Defendant’s Motion for Decertification
(Doc. 207).
The court has considered the motions, the responses,
all other relevant filings, and the applicable law.
For the
reasons set forth below, the court GRANTS Plaintiff’s motion for
summary judgment in part and DENIES it in part, GRANTS Defendant’s
motion for summary judgment in part and DENIES it in part, and
DENIES Defendant’s Motion for Decertification.
I.
Darnell
Senegal
Case Background
(“Plaintiff”)
filed
this
action
against
Fairfield Industries, Inc. (“Defendant”) under the Fair Labor
1
The parties consented to proceed before the undersigned magistrate
judge for all proceedings, including trial and final judgment, pursuant to 28
U.S.C. § 636(c) and Federal Rule of Civil Procedure 73. See Doc. 46, Ord. Dated
Sept. 27, 2016.
Standards Act2 (“FLSA”).3 Plaintiff alleged that Defendant violated
the FLSA by failing to pay Plaintiff and other similarly situated
employees (collectively “Plaintiffs”) their statutorily required
overtime pay.4
A.
Factual Background
Defendant offers geological survey services to the oil and gas
industry by using oceanographic seismic vessels to perform the
surveys.5
These vessels had a marine crew and a seismic crew.6
Plaintiffs worked as part of the seismic crew, which consisted of
observers, the gun department, mechanics, navigators, and marine
mammal observers.7
The observers “were generally responsible for
hanging the ‘nodes’ on the lines and deploying and retrieving them”
as well as “remov[ing] the nodes after they were retrieved and
secur[ing]
and
stor[ing]
the
lines
and
nodes.”8
The
gun
department’s role was to set up the air guns that were towed behind
the vessel on strings, to bring the air guns back on the vessel for
2
See 29 U.S.C. §§ 201-219.
3
See Doc. 41, Pl.’s 1 st Am. Compl.
4
See id.
5
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Decl. of Pl.
pp. 1-2.
6
See Doc. 245, Ex. 3 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Comb p. 1.
7
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Decl. of Pl.
8
Id.
p. 2.
2
storage, and to maintain the air guns and firing lines.9
The
mechanics maintained the survey equipment, including the compressor
for the air guns and the conveyor used in the release and return of
the nodes.10 The navigators oversaw the gun mechanics and observers
in the collection of data.11
Plaintiff was employed by Defendant
from August 1994 to May 2016, and worked as a lineman, boat
operator, gun mechanic helper, and gun mechanic shift leader.12
Everyone on the seismic crew was employed by Defendant, and
the seismic crew had consistent duties on all of Defendant’s
vessels.13
The seismic crew on each vessel would work a shift of
either twenty-eight or thirty-five days followed by an equal number
of days off.14 In 2000, Defendant began looking into an alternative
way to pay its employees.15
Defendant sought the advice of counsel
and was advised of a day-rate plan in a March 2000 letter.16
Defendant was informed that overtime still needed to be paid under
9
See id. p. 3.
10
See id.
11
See id.
12
See id.
13
See id.
14
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Def.’s Resps.
to Pl.’s 1 st Set of Interrogs. pp. 12-13.
15
See Doc. 243-1, Ex. 1 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Steve Mitchell p. 3-4.
16
See id.; Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Mar. 3,
2000, Letter pp. 73-75.
3
the day-rate plan.17
Shortly thereafter, Defendant began paying its employees a day
rate based on twelve-hour days.18
Subsequently, Defendant added a
half hour per day and started paying its employees based on twelveand-one-half-hour days.19
compensate
Defendant’s
The additional half hour was intended to
employees
shifts and safety meetings.20
plan
allegedly
pays
for
transition
times between
Accordingly, Defendant’s day-rate
employees
for
87.50
hours
per
week
and
incorporates 47.50 hours of overtime per week.21 Under the day-rate
plan, employees made the same amount of pay regardless of the
number of hours
Plaintiffs
worked.22
worked
The parties hotly dispute whether
consistent
twelve-hour
shifts
inconsistent hours that regularly exceeded twelve.23
or
worked
Defendant
never tracked the amount of hours each employee worked, but,
17
See id.
18
See Doc. 243-1, Ex. 1 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Steve Mitchell p. 3-4.
19
See id.
20
See id.
21
See id.
22
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Pl.’s
Acknowledgement Form p. 78 (“I will be paid a flat sum for a day’s work for
[Defendant], without regard to the number of hours worked in the day.”); App. to
Pl.’s Mot. for Partial Summ. J., Employee Logs pp. 106-126.
23
See Doc. 185, Pl.’s Mot. for Partial Summ. J. p. 3; Doc. 242, Def.’s
Resp. to Pl.’s Mot. for Partial Summ. J. p. 5; Doc. 186, App. to Pl.’s Mot. for
Partial Summ. J., Decl. of Pl.
p. 3-4; Doc. 243-1, Ex. 1 to Def.’s Resp. to
Pl.’s Mot. for Partial Summ. J., Decl. of Steve Mitchell p. 3-4.
4
rather, kept track of the number of days each worked.24
Defendant
claims that its employees were required to receive authorization to
work more than 87.5 hours a week.25
In 2013, a lawsuit with similar allegations to the present
suit was filed.
See Sandel v. Fairfield Indus. Inc, 2015 WL
7709583, at *1 (S.D. Tex. June 25, 2015).
As a result of the suit,
in 2013, Defendant sent a memorandum to its employees to explain
its pay plan.26
Defendant also circulated a form for employees to
sign acknowledging that their day rate included overtime.27
After
additional confusion, Defendant sent another memorandum attempting
to clarify the pay plan, accompanied by another acknowledgement
form.28
Defendant alleges that, following the Sandel lawsuit, it
began keeping spreadsheets containing each “employee’s current pay,
hourly rate, daily hours, day rate, overtime hours, overtime pay
and weekly pay.”29
A second component of Defendant’s pay plan included its
24
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Comb Dep. p.
37 (pp. 15-16 of Dep.).
25
See Doc. 245, Ex. 3 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Comb p. 4-5.
26
See Doc. 243-1, Ex. 1 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Steve Mitchell pp. 5-6.
27
See id. p. 6-7.
28
See id. p. 5-6.
29
See Doc. 242, Def.’s Resp. to Pl.’s Mot. for Partial Summ. J. p. 7;
Ex. 1 to Def.’s Resp. to Pl.’s Mot. for Partial Summ. J., Decl. of Steve Mitchell
p. 6-7.
5
accrued-days-off policy. In 2000, Defendant began giving employees
one paid day off per day worked.30
Thus, because Defendant’s
employees worked four-or five-week shifts followed by an equal
amount of days off, they essentially received pay for every day
whether they were working a shift or not.
As a result of the
policy, Defendant’s employees’ day rate was decreased.31
Defendant
alleges that the “generous” days-off policy was initiated to
provide its employees with a more consistent stream of income.32
Defendant discontinued the day-rate and days-off policies on
December 19, 2015.33 Defendant paid Plaintiffs pursuant to the dayrate plan and days-off policy from 2000 through December 2015.34
Defendant ceased all operation and ownership of vessels in May
2016.35
B.
Procedural Background
Plaintiff filed his complaint on July 15, 2016, alleging
violations of the FLSA.36
30
See id. pp. 7-8.
31
See id.
32
See id. pp. 6-7.
33
See id. pp. 7-8.
34
Plaintiff filed an amended complaint on
See id.
35
See Doc. 245, Ex. 3 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Decl. of Comb p. 4-5.
36
See Doc. 1, Pl.’s Compl.
6
September 26, 2016.37
Plaintiff filed a motion to certify class on November 14,
2016, seeking to certify the following class: “All current and
former seismic crewmembers employed by [Defendant] and paid on a
day-rate basis at any time during the last three years.”38
The
proposed class of seismic crewmembers includes: “observers (i.e.,
the
linesman
(or
line
chiefs),
junior
observers,
shift
lead
observers, chief observers, and party managers); the gun department
(i.e., gun mechanic helpers, gun mechanic trainees, gun mechanics,
gun shift leaders, and gun mechanic chiefs); the mechanics (i.e.,
compressor mechanics and back deck mechanics); the navigators
(i.e.,
the
navigators,
shift
lead
navigators,
navigators); and marine mammal observers.39
and
chief
On March 27, 2017, in
a memorandum opinion, the court conditionally certified Plaintiff’s
proposed class.40
However, at the same time, the court dismissed
all marine crewmembers who had opted into Plaintiff’s lawsuit as
they were not seismic crewmembers.41
At the time of the court’s opinion, over forty putative class
37
See Doc. 41, Pl.’s 1 st Am. Compl.
38
Doc. 59, Pl.’s Mot. to Certify Class p. 2.
39
See id.
40
See Doc. 77, Mem. Op. Dated Mar. 27, 2017.
41
See id. p. 13.
7
members had opted into the lawsuit.42 Since the court conditionally
certified
Plaintiff’s
proposed
class,
over
ninety
additional
putative class members have opted into the lawsuit.43
On April 11, 2018, Plaintiff filed its pending motion for
partial summary judgment.44
On May 4, 2018, Defendant filed its
pending motion for summary judgment.45
On May 4, 2018, Defendant
filed its pending motion for decertification.46
unopposed
motion,
the
court
dismissed
seven
Following an
inactive
opt-in
plaintiffs on May 11, 2018.
On May 16, 2018, Defendant responded to Plaintiff’s motion for
partial summary judgment.47
On May 25, 2018, Plaintiff responded
to Defendant’s motion for summary judgment.48
In
June 2018,
Plaintiff responded to Defendant’s motion for decertification, and
the parties filed replies to all three pending motions.49
42
See Docs. 5-14, 16-22, 25-31, 34-36, 40, 47-51, 53-54, 56-57, 64, 66,
76, Consents to Join a Collective/Class Action.
43
See
Docs.
78-126,
Collective/Class Action.
129-167,
170-172,
Consents
to
Join
44
See Doc. 185, Pl.’s Mot. for Partial Summ. J.
45
See Doc. 191, Def.’s Mot. for Summ. J.
46
See Doc. 207, Def.’s Mot. for Decertification.
47
See Doc. 242, Def.’s Resp. to Pl.’s Mot. for Partial Summ. J.
48
a
See Doc. 265, Pl.’s Resp. to Def.’s Mot. for Summ. J.
49
See Doc. 271, Pl.’s Resp. to Def.’s Mot. for Decertification; Doc.
267, Pl.’s Reply in Support of Mot. for Partial Summ. J.; Doc. 268, Def.’s Reply
in Support of Mot. for Summ. J.; Doc. 272, Def.’s Reply in Support of Mot. for
Decertification.
8
II.
Summary Judgment Standard
Summary judgment is warranted when the evidence reveals that
no genuine dispute exists on any material fact and the moving party
is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(a);
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Stauffer v.
Gearhart, 741 F.3d 574, 581 (5th Cir. 2014).
A material fact is a
fact that is identified by applicable substantive law as critical
to the outcome of the suit.
U.S. 242,
248
(1986);
Anderson v. Liberty Lobby, Inc., 477
Ameristar
Jet
Charter,
Inc.
v.
Signal
Composites, Inc., 271 F.3d 624, 626 (5th Cir. 2001). To be genuine,
the dispute regarding a material fact must be supported by evidence
such that a reasonable jury could resolve the issue in favor of
either party.
See Royal v. CCC & R Tres Arboles, L.L.C., 736 F.3d
396, 400 (5th Cir. 2013)(quoting Anderson, 477 U.S. at 248).
The movant must inform the court of the basis for the summary
judgment motion and must point to relevant excerpts from pleadings,
depositions, answers to interrogatories, admissions, or affidavits
that demonstrate the absence of genuine factual issues.
Celotex
Corp., 477 U.S. at 323; Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th
Cir. 1992).
The movant may meet this burden by demonstrating an
absence of evidence in support of one or more elements of the case
for which the nonmovant bears the burden of proof.
See Celotex
Corp., 477 U.S. at 322; Exxon Corp. v. Oxxford Clothes, Inc., 109
F.3d 1070, 1074 (5th Cir. 1997).
If the moving party carries its
9
burden, the nonmovant may not rest on the allegations or denials in
his pleading but must respond with evidence showing a genuine
factual dispute.
Stauffer, 741 F.3d at 581 (citing Hathaway v.
Bazany, 507 F.3d 312, 319 (5th Cir. 2007)).
III.
The
FLSA
requires
Legal Standard
covered
employers
to
pay
non-exempt
employees time and a half for hours worked in excess of forty hours
in a week.
29 U.S.C. § 207(a).
It allows employees to bring an
action against their employers for violation of its hour and wage
provisions.
See 29 U.S.C. §§ 215-216.
An employee may bring this
action against his employer on “behalf of himself . . . and other
employees
similarly situated.
No
employee
shall
be
a
party
plaintiff to any such an action unless he gives his consent in
writing to become such a party and such consent is filed in the
court in which such action is brought.” 29 U.S.C. § 216(b). Courts
have the authority to implement the representative action process
by facilitating notice to potential plaintiffs, in other words, to
persons
alleged
plaintiff(s).
to
be
“similarly
situated”
to
the
named
Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165,
171-74 (1989).
In the Fifth Circuit, the determination of whether plaintiffs
are similarly situated is generally made by using one of two
analyses: (1) the two-step analysis described in Lusardi v. Xerox
Corp., 118 F.R.D. 351, 359 (D.N.J. 1987); or (2) the “spurious
10
class action” analysis described in Shushan v. Univ. of Colo., 132
F.R.D. 263 (D. Colo. 1990).
See Mooney v. Aramco Servs. Co., 54
F.3d 1207, 1216 (5th Cir. 1995) (expressly declining to decide which
of the two analyses is appropriate).50
In the earlier memorandum opinion, the court chose to analyze
Plaintiff’s
claims
pursuant
to
Lusardi.51
Under
the
Lusardi
approach, the court first “determines whether the putative class
members’ claims are sufficiently similar to merit sending notice of
the action to possible members of the class.”
Acevedo v. Allsup’s
Convenience Stores, Inc., 600 F.3d 516, 519 (5th Cir. 2010) (citing
Mooney, 54 F.3d at 1213-14). The court makes this determination by
using
a
fairly
lenient
standard,
requiring
only
“substantial
allegations that the putative class members were together the
victims of a single decision, policy, or plan.”
1214 & n.8.
Mooney, 54 F.3d at
If the court determines that the employees are
similarly situated, then notice is sent and new plaintiffs may “opt
in” to the lawsuit.
Acevedo, 600 F.3d at 519 (citing Mooney, 54
F.3d at 1214).
The second stage of the Lusardi approach—the "decertification
stage"—is typically precipitated by the defendant filing a motion
to decertify after the opt-in period has concluded and discovery is
50
Mooney was an action under the Age Discrimination in Employment Act
(“ADEA”), but it is informative here because the ADEA explicitly incorporates
Section 216(b) of the FLSA to also provide for an “opt-in” class action procedure
for similarly-situated employees. See Mooney, 54 F.3d at 1212.
51
See Doc. 77, Mem. Op. Dated Mar. 27, 2017, p. 9.
11
largely complete.
Id.
"At this stage, the court has much more
information on which to base its decision, and makes a factual
determination on the similarly situated question."
Id.
If the
court finds the claimants are no longer made up of similarly
situated persons, it decertifies the class and dismisses the opt-in
plaintiffs without prejudice. Id. If the class is still similarly
situated, the court allows the collective action to proceed.
Id.
The present case is at the “decertification stage” of the Lusardi
analysis.
IV. Analysis
Plaintiff moves for partial summary judgment and asks that the
court find that: (1) Defendant’s “pay practices violated the FLSA;”
(2) Defendant’s violation was willful; (3) there was not a “goodfaith basis for [Defendant’s] pay practices;” (4) “the seismic
crewmembers
were
not
exempt
executive,
administrative
or
professional employees;” (5) the seismic crewmembers were not
exempt seamen;” and (6) the seismic crewmembers did not qualify for
the FLSA’s foreign exemption.52
Defendant also moves for summary judgment and requests that
the court find that: (1) its pay practices did not violate the
FLSA; (2) Plaintiffs are not entitled to compensation for time
spent
unloading
participating
52
in
groceries,
safety
attending
drills;
(3)
safety
Defendant’s
meetings,
or
payments
for
See Doc. 185, Pl.’s Mot. for Partial Summ. J. p. 1.
12
accrued days off are excluded from the regular rate for overtime
purposes; and (4) Plaintiffs cannot prove damages because they
failed to provide damages calculations.
Additionally, Defendant
moves for decertification of Plaintiff’s conditionally certified
class on the basis that: (1) Plaintiff cannot establish liability
on a class-wide basis; (2) Defendant “has numerous individualized
defenses that are not uniformly applicable to the entire class;”
and
(3)
“fairness
and
procedural
considerations
require
decertification.”
The court begins by noting that Plaintiff has made numerous
objections to Defendant’s summary judgment evidence.
The court
finds it unnecessary to rely on any of the objected-to material in
making its rulings.
Accordingly, the court declines to rule on
Plaintiff’s objections.
A.
Liability Under the FLSA
Both parties have moved for summary judgment on the issue of
whether Defendant’s pay practices violated the FLSA.
The major
question before the court is whether Defendant’s pay practices
complied with Section 778.309 of Title 29 of the Code of Federal
Regulations (“CFR Title 29"), which provides statements of general
policy or interpretation of the FLSA’s provisions. Section 778.309
provides that:
Where an employee works a regular fixed number of hours
in excess of the statutory maximum each workweek, it is,
of course, proper to pay him, in addition to his
compensation for nonovertime hours, a fixed sum in any
13
such week for his overtime work, determined by
multiplying his overtime rate by the number of overtime
hours regularly worked.
29 C.F.R. § 778.309.
Conversely, Section 778.310 of CFR Title 29
provides that:
A premium in the form of a lump sum which is paid for
work performed during overtime hours without regard to
the number of overtime hours worked does not qualify as
an overtime premium even though the amount of money may
be equal to or greater than the sum owed on a per hour
basis. . . . The reason for this is clear. If the rule
were otherwise, an employer desiring to pay an employee
a fixed salary regardless of the number of hours worked
in excess of the applicable maximum hours standard could
merely label as overtime pay a fixed portion of such
salary sufficient to take care of compensation for the
maximum number of hours that would be worked. The
Congressional purpose to effectuate a maximum hours
standard by placing a penalty upon the performance of
excessive overtime work would thus be defeated. For this
reason, where extra compensation is paid in the form of
a lump sum for work performed in overtime hours, it must
be included in the regular rate and may not be credited
against statutory overtime compensation due.
29 C.F.R. § 778.310 (emphasis added).
From the plain language of CFR Title 29, it is clear that
Defendant’s daily rate pay policy is only in compliance with the
FLSA if Plaintiffs worked a fixed number of hours each day.
somewhat
counterintuitive,
it
is
also
evident
that
the
While
FLSA
prohibits paying a fixed daily sum where the hours vary, but never
go above a set maximum.
For example, it is proper under the FLSA
to pay a fixed sum of $1,060 per week for exactly 84 hours of work
14
each week and to characterize this as a $10 per hour base-rate.53
However, it would be improper to pay the same rate of $1,060 per
week for a varying number of hours each week even if the varying
number of hours never exceeded 84.
Although the second scenario
would seem to benefit the worker as he would make the same pay,
never work more than he did in the first scenario, and would
presumably work less on occasion, such a scenario is expressly
prohibited because it is against the purpose of the FLSA to
“effectuate a maximum hours standard.”
See 29 C.F.R. § 778.310.
The parties have presented evidence that suggests both of the
above scenarios were occurring.
Accordingly, summary judgment is
not appropriate for either party.
It is necessary that a jury
determine whether the facts of the case are consistent with Section
778.309 or Section 778.310.
Both parties’ motions for summary
judgment on this issue are DENIED.
B.
Willfulness of Defendant’s Violation
Plaintiffs
also
ask
the
court
to
find
that
Defendant’s
violation of the FLSA was willful, and therefore, Plaintiffs may
avail themselves of the FLSA’s three-year statute of limitations
for willful violations rather than the FLSA’s standard two-year
statute of limitations.54 Fact issues regarding the number of hours
53
Twelve hours per day at seven days per week equates to 84 hours per
week. $10 x 84 = $840. $5 (overtime premium) x 44 (overtime hours) = $220. $840
+ $220 = $1,060.
54
See Doc. 185, Pl.’s Mot. for Partial Summ. J. p. 20.
15
actually worked by Plaintiffs preclude a finding that the FLSA was
violated. Accordingly, the court cannot rule on the willfulness of
an undetermined violation. Plaintiff’s motion for summary judgment
on this issue is DENIED.
C.
Defendant’s Good Faith Defense
Plaintiffs argue that Defendant’s good faith defenses should
be dismissed because Defendant has not pled any supporting facts.
Defendant pled its good faith defense by stating “[Defendant’s]
actions were taken in good faith, and [Defendant] had reasonable
grounds for believing that its actions were in compliance with the
FLSA;
therefore,
[P]laintiff
is
not
entitled
to
liquidated
damages.”55 “To successfully plead a good faith defense under the
FLSA, merely pleading ‘good faith’ is sufficient to provide the
plaintiff with fair notice of the nature of the defense.”
Franks
v. Tyhan, Inc., 2016 WL 1531752, at *3 (S.D. Tex. Apr. 15, 2016).
Defendant
has
met
this
low
pleading
bar.
Additionally,
by
providing evidence that Defendant sought and followed the advice of
counsel before implementing the pay plan at issue, Defendant has
provided evidence supporting its good faith defense.
For these
reasons, Plaintiff’s motion for summary judgment on Defendant’s
good faith defense is DENIED.56
55
This is an issue for the trier of
See Doc. 75, Def.’s 1 st Am. Ans. to Pl.’s 1 st Am. Compl. p. 8.
56
See Doc. 243-1, Ex. 1 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Declaration of Steve Mitchell p. 3.
16
fact.
D.
Defendant’s FLSA Exemptions Defenses
Plaintiff moves for summary judgment on Defendant’s defenses
that the class fell under the FLSA exemptions for executive,
administrative, or professional employees.
Plaintiff likewise
moves for summary judgment on Defendant’s defenses that the class
fell under the FLSA’s seamen and foreign exemptions.
1.
Seamen Exemption
Seamen are exempt from the FLSA’s hours requirements.
U.S.C. § 213(b)(6).
29
An employee is regarded as a seamen under the
FLSA “if he performs, . . . aboard a vessel, service which is
rendered primarily as an aid in the operation of such vessel as a
means of transportation, provided he performs no substantial amount
of work of a different character.”
29 C.F.R. § 783.31.
Defendant
acknowledges that most of the Plaintiffs who qualified for the
seamen exemption have been dismissed from the lawsuit and that the
seismic employees do not qualify for the exemption.
However,
Defendant maintains, and supports with appropriate evidence, that
Plaintiffs Michael Barnhill and Amos Payton worked at both seismic
and marine crew positions, the latter of which qualifies for the
seamen
exemption
Accordingly,
the
defense,
seamen
during
the
exemption
57
relevant
defense
time
periods.57
survives
summary
See Doc. 249, Ex. 7 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Barnhill Dep.; Doc. 253 Ex. 17 to Def.’s Resp. to Pl.’s Mot. for Partial
Summ. J., Payton Dep.
17
judgment, but only as to Michael Barnhill and Amos Payton.
2.
Executive, Administrative, or Professional Exemption
Plaintiff moves for summary judgment on Defendant’s executive,
administrative, and professional exemption defenses.
The court
addresses all three defenses collectively as they are dismissed for
the same reason.
Common to all three exemption defenses is that
the employee be “[c]ompensated on a salary or fee basis pursuant to
§ 541.600 . . . .”
541.300(a)(1).
29 C.F.R. §§ 541.100(a)(1), 541.200(a)(1),
“An employee will be considered to be paid on a
‘salary basis’ within the meaning of this part 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.”
29 C.F.R. § 541.602.
Section 541.604(b) of CFR Title
29 addresses day rates and provides that:
[a]n exempt employee's earnings may be computed on an
hourly, a daily or a shift basis, without losing the
exemption or violating the salary basis requirement, if
the employment arrangement also includes a guarantee of
at least the minimum weekly required amount paid on a
salary basis regardless of the number of hours, days or
shifts worked, and a reasonable relationship exists
between the guaranteed amount and the amount actually
earned.
The evidence clearly establishes that Defendant tracked the number
of days each employee worked and paid each by multiplying days
18
worked by the employee’s day rate.58
based
on
the
number
of
days
worked
Thus, Plaintiffs were paid
not
on
a
salary
basis.
Accordingly, Plaintiff’s motion on this issue is GRANTED.
3.
Foreign Exemption
The FLSA does not apply “to any employee whose services during
the workweek are performed in a workplace within a foreign country
or within territory under the jurisdiction of the United States .
. . .”59
29 U.S.C. § 213(f).
Defendant argues that the exemption
applies to certain Plaintiffs employed on vessels that were near
foreign countries.
Plaintiff argues that the exemption does not
apply to employees who work aboard vessels.
This issue was recently addressed in Kaluom v. Stolt Offshore,
Inc., 474 F. Supp. 2d 866 (S.D. Tex. 2007).
that “the Fifth Circuit . . .
The Kaluom court found
definitively [found] that a United
States flag vessel is considered American territory.”
(quotation marks omitted).
Id. at 879
The Kaluom court then reasoned that:
[i]f the Fifth Circuit considers U.S. vessels to be U.S.
“territory,” then would not § 213(f) of the FLSA, which
does not delineate vessels as being one of the protected
territories, prohibit the FLSA's applicability to all
U.S. vessels? While the plain language of the subsection,
read alone, would support such a conclusion, the answer
is “no.” One need only consider the other subsections of
58
See Doc. 186, App. to Pl.’s Mot. for Partial Summ. J., Comb Dep. p.
37 (pp. 15-16 of Dep.) & Employee Logs pp. 106-126.
59
The following U.S. territories are an exception: “a State of the
United States; the District of Columbia; Puerto Rico; the Virgin Islands; outer
Continental Shelf lands defined in the Outer Continental Shelf Lands Act (ch.
345, 67 Stat. 462) [43 U.S.C. 1331 et seq.]; American Samoa; Guam; Wake Island;
Eniwetok Atoll; Kwajalein Atoll; and Johnston Island.” 29 U.S.C. § 213(f).
19
§ 213 to realize that if such an interpretation were
made, the subsections would clearly be in conflict.
Section 213(a)(12) exempts “any employee employed as a
seaman on a vessel other than an American vessel” from
the FLSA minimum wage and maximum hour requirements.
There would be no need to differentiate between seamen in
American and non-American vessels at all if Congress had
intended for § 213(f) to exempt workers on all vessels.
Also, § 213(b)(6) exempts “any employee employed as a
seaman” from the maximum hour provisions, but not from
the minimum wage provisions, of the Act. If § 213(f)
exempted all workers on vessels from all the provisions
of the FLSA, then why would Congress have specifically
exempted seamen from the maximum hour provisions and not
the minimum wage provisions? It is clear that Congress
did not intend for § 213(f) to apply to seamen and
vessels at all. Instead, § 213(f) applies to specific
geographical locations.
Id.
at
879-880.
persuasive.
The
court
Accordingly,
finds
the
Plaintiff’s
reasoning
motion
is
in
Kalulom
GRANTED
with
respect to Plaintiffs who worked aboard American vessels. However,
any Plaintiffs who worked aboard non-American flagged vessels are
expressly exempted from the FLSA’s minimum wage and maximum hours
requirements.
29 U.S.C. § 213(a)(12).
Defendant has presented
evidence that some Plaintiffs may have worked aboard non-American
vessels for some or all of the relevant period.60 Thus, Plaintiff’s
motion is DENIED with respect to any Plaintiffs who worked aboard
non-American flagged vessels.
60
See Doc. 252, Ex. 14 to Def.’s Resp. to Pl.’s Mot. for Partial Summ.
J., Brad Lyles Dep. pp. 57-58; Doc. 251, Ex. 13 to Def.’s Resp. to Pl.’s Mot. for
Partial Summ. J., Neal Estay Dep. pp. 95-96; Doc. 253, Ex. 17 to Def.’s Resp. to
Pl.’s Mot. for Partial Summ. J., Gerald Price Dep. pp. 36-37; Doc. 250, Ex. 8 to
Def.’s Resp. to Pl.’s Mot. for Partial Summ. J., Nicholas Bradford Dep. p. 48.
20
E.
Plaintiffs’ Compensable Hours
Defendant argues that Plaintiffs cannot be compensated for the
time
they
spent
drills, and
unloading
attending
groceries,
participating
safety meetings.
An
in
activity
safety
must
be
“integral and indispensable to the principal activities that an
employee is employed to perform” in order to be compensable under
the FLSA.
Integrity Staffing Sols., Inc. v. Busk, 135 S. Ct. 513,
519 (2014).
discussed
In Sandel v. Fairfield Inc., a lawsuit briefly
above
where
another
group
of
Defendant’s
seismic
employees alleged violations of the FLSA, this exact issue was
addressed.
2015 WL 7709583, at *1 (S.D. Tex. June 25, 2015).
The
Sandel court found that the safety meetings were indispensable to
the principal activities that Plaintiffs were required to perform
because:
[t]here were numerous chances for harm both to the
employees and the public at large on and around a major
vessel. The required safety meetings were to ensure a
safe workplace for the employees themselves and all other
persons the ship might encounter in the ordinary course
of business. Accordingly, Defendant’s Motion for Summary
Judgment that attendance at mandatory safety meetings was
not compensable is denied.
Id. at 5.
The Sandel court also found that:
“general housekeeping duties, such as the unloading of
groceries and other similar tasks, which were simply a
part of living aboard a sea-going vessel, are not
compensable. Whether such activities were required or
not is without legal consequence.
Rather the
determination of compensability turns on whether the
activity is “integral and indispensable to the principal
activities that an employee is employed to perform.
Moving groceries and general housekeeping do not rise to
21
the level of integral and indispensable as the Supreme
Court would recognize it for the purposes of seismic data
collection work.
Id. (citations and quotations omitted).
The court finds the Sandel court’s analysis of these issues
persuasive.
While the Sandel court addressed safety meetings and
not drills, the court finds that the analysis applies equally to
both.
Accordingly, Defendant’s motion for summary judgment on the
compensable hours issue is GRANTED as to Plaintiffs’ time spent
unloading groceries and DENIED as to the other compensable-hour
categories.
F.
Plaintiffs’ Paid Days Off
Defendant asks that the court find that Defendant’s payments
for accrued days off must be excluded from the regular rate for
overtime purposes.
court.
This issue was also addressed by the Sandel
The Sandel court reasoned that before 2000, Defendant’s
employees received all of their compensation during the 28-or 35day shifts that they worked.
Id. at 3.
However, Defendant began
withholding a portion of its employees’ pay so that half was paid
during their shifts and half was paid during their time off.
Id.
As in the present case, Defendant argued in Sandel that 29 C.F.R.
§ 778.200(a)(2) and 29 U.S.C. § 207(e)(2) explicitly allowed
“vacation
time to
be
excluded
from
the
computation
of total
enumeration for the purposes of an overtime rate calculation.” Id.
at 4.
22
Section 778.200(a)(2) and Section 207(e)(2) provide that an
employee’s regular rate does not include “[p]ayments made for
occasional periods when no work is performed due to vacation,
holiday, illness, failure of the employer to provide sufficient
work, or other similar cause . . . .”
The Sandel court found that
the 28-or 35-day-off periods “do not count as ‘vacation’ as the
statute would have it mean.”
Id.
The Sandel court reasoned that
the statutes contemplated “variable vacation time taken off by the
employee” not regular periods of work followed by equal time off as
in the present case.
Id.
The Sandel court also noted the
difficulty in crediting Defendant’s explanation because, if true,
in one year, the Plaintiffs would earn approximately six months of
vacation for six months of work.
Id. n. 3.
The court notes that the parties have argued over whether the
Sandel court’s holding on this issue is binding in the present
case.
The court finds it unnecessary to consider whether the
Sandel court’s holding is binding because the court finds the
Sandel court’s analysis on the time-off duty issue persuasive.
Accordingly, Defendant’s motion for summary judgment on the timeoff duty issue is DENIED.
G.
Plaintiffs’ Damages Calculations
Defendant argues that Plaintiffs failed to disclose damages
computations
so
Plaintiffs’
entire
case
should
be
dismissed.
Federal Rule of Civil Procedure (“FRCP”) 26 provides that “a party
23
must . . . provide to the other parties . . . a computation of each
category of damages claimed by the disclosing party—who must also
make available for inspection and copying . . . the documents or
other evidentiary material . . . on which each computation is based
. . . .”
FRCP 37(c)(1) provides that “[i]f a party fails to
provide information or identify a witness as required by Rule 26(a)
or (e), the party is not allowed to use that information or witness
to supply evidence on a motion, at a hearing, or at a trial, unless
the failure was substantially justified or is harmless.”
Plaintiff has provided Defendant with a damages summary that
indicates the total amount of damages incurred by each Plaintiff
depending
on
whether
limitations is used.61
a
two-year
or
three-year
statute
of
To the extent Plaintiff’s disclosure was
untimely, the court finds that Defendant was not harmed. The court
finds that Plaintiff’s disclosure is adequate at the current stage
in the litigation.
Whether or not this evidence will be adequate
at trial is a matter not addressed by the court.
Defendant’s
motion for summary judgment regarding failure to disclose damages
calculations is DENIED.
H.
Motion to Decertify
The remaining question before the court in the second step of
the Lusardi analysis is whether the potential class members are
61
1
st
See Doc. 266, App. to Pl.’s Resp. to Def.’s Mot. for Summ. J., Pl.’s
Supp. Disclosures pp. 102, 106-108.
24
similarly
situated.
Potential
class
members
are
considered
similarly situated to the named plaintiff if they are:
"similarly
situated"
with
respect to
their
job
requirements and with regard to their pay provisions. The
positions need not be identical, but similar. A court may
deny a plaintiff's right to proceed collectively only if
the action arises from circumstances purely personal to
the plaintiff, and not from any generally applicable
rule, policy, or practice.
Yaklin v. W-H Energy Servs., Inc., No. C-07-422, 2008 WL 1989795,
at *2 (S.D. Tex. May 2, 2008) (Jack, J.) (unpublished) (internal
quotations
and
citations
omitted).
If
the job
duties
among
putative class members vary significantly, then class certification
should be denied.
See, e.g., Dreyer, 2008 WL 5204149, at *3;
Aguirre v. SBC Commc'ns, Inc., No. H-05-3198, 2007 WL 772756, at *9
(S.D. Tex. Mar. 12, 2007) (Rosenthal, J.) (unpublished).
Defendant
moves
for
decertification
of
Plaintiff’s
conditionally certified class on the basis that: (1) Plaintiff
cannot establish liability on a class-wide basis; (2) Defendant
“has
numerous
individualized
defenses
that
are
not
uniformly
applicable to the entire class;” and (3) “fairness and procedural
considerations require decertification.”
1.
Class-wide Liability
As discussed more thoroughly above, the court finds that a
fact issue exists on whether Plaintiff can show Defendant’s classwide
liability.
Plaintiffs
have
Defendant’s first argument.
25
met
their
burden
regarding
2.
Individualized Defenses
Defendant lists the following as “individualized defenses that
are not uniformly applicable to the entire class:” (1) “defenses to
liability and damages;” (2) “[s]ome [P]laintiffs are exempt from
the overtime requirements of the FLSA;” (3) “[s]ome [P]laintiffs’
claims
are
time-barred;”
(4)
“credibility
issue
plague
some
Plaintiffs;” (5) “[s]ome [P]laintiffs’ claims are subject to credit
and/or
offset;”
and
(6)
“[a]dditional
defenses
are
available
against certain [P]laintiffs.”62
a.
Liability and Damages Defenses
Many of the individual liability and damages issues of which
Defendant complains are a direct result of Defendant’s failure to
keep proper records of the hours worked by each employee.
See 29
U.S.C. § 211(c) (“Every employer . . . shall make, keep, and
preserve such records of the persons employed by him and of the
wages, hours, and other conditions and practices of employment
maintained by him . . . .”).
Defendant only kept logs of the days
each employee worked without recording the hours worked each day.63
Defendant identifies the differences in the number of hours
62
See Doc. 207-2, Def.’s Mem. in Support of Mot. for Decertification
pp. 13-23.
63
Defendant claims that following the Sandel lawsuit, it began keeping
more detailed records that include hours worked. However, the only spreadsheets
found in the summary judgment evidence are unconvincing. See Doc. 186, App. to
Pl.’s Mot. for Partial Summ. J., Employee pay rate logs pp. 128-132.
The
spreadsheets merely list what each employee was paid per day and then broke down
how each employee’s pay was allocated based on a 12.5 hour day. The spreadsheets
do not show when and for how long each employee worked.
26
worked between each Plaintiff as a major issue for trying the case
on a collective basis. Defendant believes that each Plaintiff will
have to prove that they were not compensated for more than 47.5
hours
of
overtime
each
week.
However,
to
show
class-wide
liability, Plaintiffs need only show that they were not working a
consistent amount of hours each day.
If class-wide liability is
established, then Plaintiffs will need to prove their individual
damages. Decertifying the class because the individuals within the
class did not suffer the exact same amount of damages would
erroneously result in the decertification of almost all FLSA class
actions.
b.
Exemption Defenses
As discussed above, most of Defendant’s exemption defenses are
factually not applicable.
The remaining exemption defenses affect
only a small number of Plaintiffs and will likely only affect the
amount of uncompensated overtime the affected Plaintiffs can claim
under the FLSA.
The court finds that the small burden of these
individual defenses does not necessitate decertifying the entire
class.
If Defendant still believes that any class member is
completely exempted, it may raise the issue in a Rule 50 motion.
c.
Time-barred Claims
None of the Plaintiffs’ claims are time-barred if Plaintiffs
can prove
that
Defendant
willfully
violated
question can be answered on a class-wide basis.
27
the FLSA.
This
If Defendant did
not willfully violate the FLSA it will be minimally time consuming
to identify the claims that are outside of the FLSA’s two-year
statute
of
limitations.
In
fact,
Plaintiffs
have
already
identified the expected differences in damages for each Plaintiff
under a two-year versus three-year statute of limitations.64
This
issue can primarily be dealt with class-wide, and, to the extent
that
it
cannot,
it
is
too
easily
dealt
with
to
necessitate
decertifying the class.
d.
Credibility Issues
Defendant argues that some of the Plaintiffs have credibility
issues that will need to be addressed on cross-examination, making
trying the case as a class action inefficient.
Even if true, it
would be inefficient to try the case individually.
The case turns
on whether Plaintiffs were paid a fixed daily rate for a varied
number of hours.
e.
Credit or Offset of Claims
Defendant’s argument regarding the credit or offset of some of
the Plaintiffs’ claims is rejected because these issues can be
addressed if liability is established on a class-wide basis.
The
fact that a few Plaintiffs may have their claims credited or offset
does not necessitate that the entire class be decertified.
64
1
st
See Doc. 266, App. to Pl.’s Resp. to Def.’s Mot. for Summ. J., Pl.’s
Supp. Disclosures pp. 102, 106-108.
28
f.
Additional Defenses
In its additional defenses section, Defendant reargues its
points regarding individual defenses to liability and damages, and
exemption defenses.
These issues have already been addressed.
In
addition, Defendant argues that a small number of Plaintiffs are
subject to dismissal for failure to participate in discovery,
failure to consent before the end of the opt-in period, and lack of
standing.65
As discussed above, many of the Plaintiffs Defendant
identifies as problematic have been dismissed since the filing of
the pending motions.
The court declines to decertify the entire
class over a few issues that are more properly addressed in a
separate motion.
3.
Fairness and Procedural Considerations
Defendant’s
arguments
regarding
fairness
and
procedural
considerations rehash issues previously considered.
Defendant
argues that Plaintiff cannot fairly establish liability or damages
with representative evidence. For the reasons discussed above, the
court declines to decertify the class on this basis.
As a whole, Plaintiffs claims arise from Defendant’s generally
applicable pay policy.
While Defendant is correct that some
individual issues are present, the predominant issue is whether
Defendant paid Plaintiffs a fixed daily rate for varied amounts of
work.
65
Accordingly, Defendant’s motion for decertification is
See id. p. 23.
29
DENIED.
V.
Conclusion
For the reasons set out above Plaintiff’s motion for partial
summary judgment is GRANTED as to: (1) Defendant’s executive,
administrative,
and
professional
FLSA
exemption
defenses; (2)
Defendant’s seamen FLSA exemption defense, except against two
Plaintiffs
in
a
limited
capacity
as
discussed
above;
(3)
Defendant’s foreign FLSA exemption defense against all Plaintiffs
who
worked
aboard
an
relevant time period.
American
flagged
vessel
throughout
the
All other relief requested in Plaintiff’s
motion for summary judgment is DENIED. Defendant’s motion for
summary judgment is granted in part such that Plaintiff cannot
claim hours worked for time spent unloading groceries.
All other
relief requested by Defendant’s motion for summary judgment is
DENIED.
Defendant’s motion for decertification is DENIED.
SIGNED in Houston, Texas, this 21st day of November, 2018.
______________________________
U.S. MAGISTRATE JUDGE
30
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