Guyton et al v Legacy Pressure Control, Inc., et al

Filing 57

MEMORANDUM OPINION AND ORDER. Signed by Judge Royce C. Lamberth. (aej)

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
JA
CLERK

)

BILLY GUYTON, et at.,

1

8 20j7

U.S.

WESRNO,OIS7RICT COURT

)
)

Plaintiffs,

)
)

v.

)

Case No: 5:15-cv-1075-RCL

)

LEGACY PRESSURE CONTROL, et at.

)
)

)

Defendants.

)
MEMORANDUM OPINION

I.

INTRODUCTION
Plaintiffs Billy Guyton and David Brown bring this action under the Fair Labor Standards

Act ("FLSA") alleging that their former employer, Legacy Pressure Control, and its president, Isha
M. Myrick, and vice president, Robert D. Myrick, violated Section 7 of the FLSA, 29 U.S.C.

§

207, 21 5(a)(2), by failing to pay overtime wages for work exceeding forty hours per week. Both

plaintiffs and defendants have moved for summary judgment.

See

Defs.' Mot. Sum. J., ECF No.

38; Pls.' Mot. Sum. J., ECF No. 40. The Court finds that genuine disputes

of material fact exist

with regard to the Highly Compensated Executive ("HCE") exemption of the FLSA, whether

defendants willfully violated the FLSA, and defendants Robert Myrick and Isha Myrick's status
as employers under the FLSA.

The Court will grant partial summary judgment in favor of

plaintiffs with respect to several of defendants' affirmative defenses, but will otherwise deny
summary judgment to both parties.

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II.

BACKGROUND
Defendant Legacy Pressure Control ("Legacy") is an oilfield services company that

provides wireline pressure control, pressure pumping, and test-torque services. Defendant Isha

Myrick is the president of Legacy, and her son, defendant Robert Myrick is the vice president.
Plaintiffs formerly worked as Operators for Legacy between 2013 and 2015.

The nature of

plaintiffs' jobs as operators is a matter of contention between the parties. The Court can deduce,
however, that Operators perform their duties on site in the oilfields, standing on an equipment

platform known as a "skid," and are responsible for maintaining oilfield pressure control.
Operators either worked as part of a two man crew, switching shifts every twelve hours, or as part

of a four man crew where each Operator was accompanied by a Helper for twelve hour shifts.
During the course of these shifts Operators often spent up to several hours of down time on site.

Defendants have moved for summary judgment on three grounds: 1) plaintiffs are exempt
from the FLSA overtime regulations under the HCE exemption; 2) a two year statute of limitations

applies because plaintiffs have failed to demonstrate defendants' willfulness; and 3) Isha Myrick
does not qualify as an "employer" under the FLSA and should be dismissed. Plaintiffs have moved
for summary judgment on the following grounds: 1) Robert and Isha Myrick are both "employers";
2) no FLSA exemptions are applicable to either plaintiff; and 3) defendants have failed to provide

evidence supporting their affirmative defenses.

III.

LEGAL STANDARDS
A.

Summary Judgment

Summary judgment is appropriate "if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P.

56(a). A dispute is genuine "if he evidence is such that a reasonable jury could return a verdict for

2

the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of
fact "is material if its resolution could affect the outcome of the action." Thompson v. Goetzmann,
337 F.3d 489, 502 (5th Cir. 2003). The Court must view the facts and any inferences to be drawn

from them in the light most favorable to the non-movant, id., but it may not make credibility
determinations or weigh the evidence. Austin v. Will-Burt Co., 361 F.3d 862, 866 (5th Cir. 2004).
B.

FLSA Exemptions

"Under the FLSA, employers must pay overtime compensation to covered employees who
work more than forty hours a week." Cleveland v. City ofElmendorf 388 F.3d 522, 526 (5th Cir.
2004), citing 29 U.S.C. 207(a)(1). The FLSA includes, however, several exemptions for specific

categories of employees, including the HCE exemption, under which employees are not entitled
to overtime wages.

The FICE exemption provides that

compensation of at least $100,000 is deemed exempt.

. .

"[am

employee with total annual

if the employee customarily and regularly

performs any one or more of the exempt duties or responsibilities of an executive, administrative,
or professional employee."

29 C.F.R.

§

541.601(a).'

To perform a duty "customarily and

regularly" means to perform it with "a frequency that must be greater than occasional but which,

of course, may be less than constant." 29 C.F.R. § 541.701.
Executive employee duties include 1) "management of the enterprise in which the

employee is employed or of a customarily recognized department or subdivision thereof;" 2)

"customarily and regularly direct[ing] the work of two or more other employees;" and 3) having
"the authority to hire or fire other employees or [being an employee] whose suggestions and
recommendations as to the hiring, firing, advancement, promotion or any other change of status of

As of December 1, 201 6after the relevant activity in this case occurred and after the pending motions were

filedthis regulation was changed to read that an employee must receive total annual compensation of at least
$134,004 to qualify for exemption. See 29 C.F.R.

§

541.601(b).

other employees are given particular weight." 29 C.F.R.

§

541.1 0O(a)(2)(4). Administrative

employee duties include 1) "perfonn[ing] office or non-manual work directly related to the

management or general business operations of the employer or the employer's customers;" and 2)
"exercis[ingJ
C.F.R.

§

. . .

discretion and independent judgment with respect to matters of significance." 29

541 .200(a)(2)(3). A highly compensated employee need not perform all of the job duties

of an executive or administrative employee; he or she merely needs to perform any one or more of
the duties.

See 29

C.F.R.

§

541.601(c). Thus an employee qualifies for the lICE exemption if he

meets the salary threshold and regularly and customarily performs one of the above listed job
duties.
The HCE exemption "applies only to employees whose primary duty includes performing

office or non-manual work," sometimes known as "blue collar" work. 29 C.F.R.

§

541.601(d). If

an employee's primary duty is manual labor, the HCE exemption does not apply, regardless of

how much they are paid. Id. "Primary duty" means "the principal, main, major or most important
duty that the employee performs," considering "all the facts in a particular case, with the major

emphasis on the character of the employee's job as a whole." 29 C.F.R. § 541.700(a). While the
time spent performing certain work is useful in determining an employee's primary duty, it is not
the sole determining factor. 29 C.F.R.

§

541.700(b). Manual labor includes "work involving

repetitive operations with [a worker's] hands, physical skill and energy," the skills and knowledge
for performance of which is gained "through apprenticeships and on-the-job training, not through
the prolonged course of specialized intellectual instruction required for exempt learned

professional employees." 29 C.F.R.

§

541.3(a).

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C.

Willfulness

FLSA claims, such as those raised here, are generally subject to a two year statute of
limitations, but causes of action arising out of willful violations of the Act are subject to a three

year statute of limitations. 29 U.S.C.

§

255. An employer's violation of the FLSA is willful if it

"knew or showed reckless disregard for the matter of whether its conduct was prohibited by the
statute," for example when "an employer actually knew its pay structure violated the FLSA or

ignored complaints that were brought to its attention." Zannikos v. Oil Inspections (U S.A.), Inc.,
605 F. App'x 349, 360 (5th Cir. 2015) (citing McLaughlin

v.

Richland Shoe Co., 486 U.S. 128,

132-33 (1988)). However, "[m]ere knowledge of the FLSA and its potential applicability does
not suffice, nor does conduct that is merely negligent or unreasonable." Id.
D.

Definition of "Employer"

Under the FLSA, an "[e}mployer' includes any person acting directly or indirectly in the
interest of an employer in relation to an employee." 29 U.S.C.

§

203(d). To determine whether a

person qualifies as an "employer," the Fifth Circuit uses the "economic reality" test, which

considers whether the alleged employer "(1) possessed the power to hire and fire the employees,
(2) supervised and controlled employee work schedules or conditions of employment, (3)

determined the rate and method of payment, and (4) maintained employment records." Gray

v.

Powers, 673 F.3d 352, 355 (5th Cir. 2012) (internal quotation marks omitted). Merely holding the
position as an officer or shareholder of a company does not qualify an individual as an employer
under the FLSA where operational control does not exist. See id. at 35 5-56.

Iv.

ANALYSIS
For the following reasons, the Court holds that genuine disputes of material fact exist with

regard to 1) whether plaintiffs qualify for the HCE exemption; 2) whether defendants willfully

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violated the FLSA; 3) whether Robert or Isha Myrick qualify as employers; and 4) defendants'
good faith defense. The Court will deny summary judgment on these issues. The Court finds that

because defendants' did not address several of their other affirmative defenses or the Motor Carrier
Act exemption, the Court will grant summary judgment to plaintiffs on these issues.
A.

Genuine disputes of material fact exist regarding whether plaintiffs qualify for
the HCE exemption

The parties here dispute whether plaintiffs qualify for the HCE exemption, and both sides

have moved for summary judgment on this issue. Defendants argue that plaintiffs met the

$100,000 threshold and that they performed three different executive or administrative duties: 1)

plaintiffs trained Helpers to become Operators, directed their work, and provided feedback
regarding Helpers' work and whether they should be promoted, cf 29 C.F.R.
the

"management"

duties

of executive employees);

§

2) plaintiffs'

541.102 (describing

suggestions

and

recommendations as to the promotion of Helpers to Operators was given particular weight, cf 29
C.F.R.
site,

cf

§

541.1 00(a)(4); and 3) plaintiffs' exercised significant discretion and judgment while on

29 C.F.R.

§

541 .200(a)(3). Defendants further argue that plaintiffs qualify for the HCE

exemption because they are not manual laborers. They argue that there is no evidence that

plaintiffs' primary duty was manual labor, as manual labor only constituted approximately 10% of
plaintiffs' job duties.
Plaintiffs counter that the HCE exemption does not apply because they are manual laborers

whose duties were to perform pressure control tasks, including "monitoring, managing, and
overseeing pressure changes at the well head of a fracking site while wirelines companies perform

wireline runs in connection with fracking operations," who "worked outdoors with boots, hard
hats, and coveralls," and who used tools such as wrenches and hammers. Plaintiffs contend that it

does not matter whether they performed these tasks 10% of the time, as they spent most time

waiting in the field for their next manual task to begin. In addition, plaintiffs argue that plaintiffs'

work was not directly related to the management or general business operations of the company,

that they did not exercise discretion and independent judgment with respect to matters of
significance, and their recommendations with regard to the promotion of Helpers were not given

particular weight.
Courts in this Circuit have considered whether various types of oil field operators or
inspectors qualify as manual or blue collar workers.

As these types of employees are not

specifically addressed in the FLSA regulations, as opposed to, for example, carpenters,

electricians, and mechanics, see 29 C.F.R.

§

541.601(d), the determination of whether such

employees are manual laborers turns largely on the facts of each case. See generally McPherson
v.

LEAMDrillingSys., LLC, No. 4:14-CV-02361, 2015 WL 1470554, at *12 (S.D. Tex. Mar. 30,

2015) (discussing conditional class certification of"MWDs [Measuring While Drilling] and other

oilfield service workers falling on the border of the executive exemption") (emphasis added).
Other courts have come to different conclusions when faced with the question of whether oil field
operators, or other similar employees, qualify as manual laborers. Compare, e.g., Ferrara v. 4JLJ,
LLC, 150 F. Supp. 3d 813 (S.D. Tex. 2016) (denying summary judgment in a case where a Frac

Supervisor contended that "primary job duties included a significant amount of manual labor in
the field producing the product of the company," but the company argued that he "seldom, if ever,

performed manual labor and instead directed others to do so"), and Pye v. Oil States Energy Servs.,
No. 5:15-cv-678, Docket No. 33 (W.D. Tex. 2017) (adopting a Report and Recommendation,

docket No. 28, finding that a field service operator's primary

dutieswhich included loading

equipment, traveling, and setting up, operating, and taking down equipmentwere the

performance of manual work), with McPherson, 2015 WL 1470554, at *12 (analyzing similar

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cases and finding that MWDs were not manual laborers where "manual labor occupied only a
small fraction of their time,

. . .

[o]perating the MWD tool is not traditional manual labor but is

performed automatically from a makeshift

office,...

[and] [t]he limited manual labor performed

during installation and removal of the MWD tool does not appear to be enough by itself to satisfy
the blue collar exclusion")

The Court finds that summary judgment is not appropriate for either party here because
genuine disputes of material fact exist with regard to whether plaintiffs qualify as manual laborers.

Defendants maintain that plaintiffs' primary duty was controlling and maintaining the pressure of
grease injected into the wells so as to prevent blowouts, accomplished by visually monitoring

gauges and turning a knob to adjust grease levels. They argue that other tasks considered manual

labor"connecting hoses to the skid; filling up the grease unit on a tote; tightening nuts with a
wrench, torque wrench, or hammer; moving hoses to keep them from getting tangled on the well
head; using hand pumps; torque testing; moving grease around with a forklift or bringing it off the

truck; opening and closing the tool trap; and going up in a man

lift"only constituted

10%

of

plaintiffs' job duties. Defendants argue that the other 90% of plaintiffs' jobs duties, including
visually monitoring the gauges and turning a knob, did not qualify as manual labor.
Plaintiffs have introduced evidence showing that they performed their job duties out in an

oilfield, and that their primary duties included operating pressure control equipment, monitoring
gauges, supervising the setup of equipment, and rigging jobs up and down. Plaintiffs' evidence

shows that they worked outdoors with boots, hard hats, coveralls, and tools, and they contend that
the work is "hot, dangerous, and sweaty." With regard to defendants' argument that plaintiffs only
spent 10% of their time performing manual labor, plaintiffs respond that they spent the rest of their

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time simply waiting to perform manual tasks (their primary duties), and that waiting cannot be

considered a primary duty.
Given the aforementioned arguments and evidence, the Court finds that genuine disputes

of material fact exist regarding several key issues. First the parties dispute what exactly plaintiffs'
primary duties were as operators; plaintiffs only concede that their primary duties during the skid

operation processas opposed to their primary duties as a wholewas monitoring gauges and

controlling the amount of grease being injecting into the well to prevent blowouts. Furthermore,
disputes exist regarding whether that duty should be considered "manual labor" at all. In addition,
the parties dispute the importance of other tasks performed by plaintiffs, such as connecting and
moving hoses, filling up the grease unit, tightening nuts, breaking down the guns and subs, using
hand pumps, torque testing, moving grease, opening and closing the tool trap, and going up the

man lift. Finally, they disagree on how much time was spent performing manual labor; defendants
say only 10%, but plaintiffs claim that this is a mischaracterization of the testimony and that

plaintiffs were engaged to wait for the majority of their time on site.
Therefore, because neither Congress nor the Fifth Circuit have definitively determined

whether oil field operators are manual laborers, and because courts within this Circuit have reached

different conclusions, and given the genuine disputes of fact present in this case, the Court finds
that summary judgment is not appropriate. In order to decide these issues, the Court would need
to weigh the evidence. Such an action is improper at the summary judgment stage. See Austin,
361 F.3d at 866. The Court will deny summary judgment on the question

exemption to the FLSA applies to plaintiffs. See Ferrara

v.

of whether the HCE

4JLJ LLC, 150 F. Supp. 3d 813, 820

(S.D. Tex. 2016) (finding that genuine disputes of material fact precluded summary judgment on

the question of the HCE exemption when the parties disputed, among other things, whether the

employee's primary duties constituted manual labor).
B.

Genuine disputes of material fact exist regarding defendants' willfulness

The parties similarly dispute whether defendants willfully violated the FLSA, and therefore
whether a two or three year statute of limitations should apply. Defendants claim that plaintiffs

have failed to present evidence showing that defendants actually knew they were violating the
FLSA or that plaintiffs complained about their compensation structure or lack of overtime pay,

and that defendants ignored such complaints. They argue that the evidence instead shows that

defendants acted upon a reasonable belief that plaintiffs were exempt from overtime requirements,
and that after questions arose, defendants consulted with legal counsel. Plaintiffs dispute that

defendants acted upon a reasonable belief that plaintiffs were exempt from overtime, pointing to
evidence showing that defendants made overtime payments to some operators, that they received
complaints regarding overtime from plaintiff Guyton, and that they changed their policies to pay
operators overtime.
Again, the Court finds that summary judgment is inappropriate on the question of

willfulness due to the existence of genuine disputes of material fact. Whether defendants knew

they were violating the FLSA or recklessly disregarded the FLSA requirements is hotly contested
by the parties, and both have introduced evidence on this question. Questions remain regarding

whether plaintiffs raised complaints about overtime pay or compensation structure, and whether

defendants subsequently ignored such complaints or dealt with them properly and in accordance
with the FLSA. Questions also remain regarding whether defendants actually consulted with legal
counsel, and the result of such consultation. Given these genuine disputes of material fact, the
Court will deny summary judgment on the issue of willfulness. See Weliman
Shipyard, Inc., No. CIV.A. 14-831, 2015 WL 2169786, at
10

*34 (E.D. La. May

v.

Grand Isle

8, 2015).

C.

Genuine disputes of material fact exist regarding Isha Myrick's and Robert
Myrick's status as employers

Finally, defendants contend that Isha Myrick should be dismissed from this case as she
does not qualify as an employer under the FLSA. They argue that "Isha Myrick's sole involvement
in Plaintiffs' employment was management of their employment records and processing of their

paychecks," which does not show she exerted operating control over plaintiffs under the economic
reality test. In contrast, plaintiffs move for summary judgment that Isha Myrick does qualify as
an employer, arguing that in addition to maintaining employment records, Isha Myrick also

actually performed the other three functions considered as part of the economic reality test. She

had the power to hire and fire employees, she was responsible for the method of payment to
plaintiffs because she figured and ran the checks and handled payroll reductions, and she was
involved in operation control of the company as the president and HR administrator, handling

incoming faxes, insurance, and workers' compensation coverage and claims. Plaintiffs have also
moved for summary judgment on the question of whether Robert Myrick qualifies as an employer

of the plaintiffs. Defendants respond that even though some evidence exists showing that Robert
Myrick controlled aspects of plaintiffs' employment, the Court should deny summary judgment
because questions exist regarding Mr. Myrick's operational control over the plaintiffs'
employment.
The Court finds that genuine disputes of material fact preclude summary judgment on this

issue of whether Isha or Robert Myrick qualify as employers of plaintiffs. Both sides have

introduced evidence tending to show that the Myricks either did or did not perform the functions

considered under the economic reality test. Again, the Court would need to weigh the evidence to
determine whether either Isha or Robert Myrick exercised operating control over plaintiffs and
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therefore should be considered employers under the FLSA.

The Court will therefore deny

summary judgment to both parties on this issue.
D.

Defendants have waived most of their affirmative defenses

In their Amended Answer, ECF No. 22, defendants raise thirteen affirmative defenses.

Plaintiffs have moved for summary judgment on the first, fourth, fifth, seventh, tenth, eleventh,
twelfth, and thirteenth defenses. Because defendants have failed to address or dispute the on the

first, fourth, seventh, tenth, eleventh, twelfth, and thirteenth defenses, the Court will grant
summary judgment in favor of plaintiffs on these issues. See Bollschweiler v. El Paso Elec. Co.,
166 F. Supp. 3d 808, 8 15-16 (W.D. Tex. 2016). With regard to defendants' fifth defense, that the

compensation structure was made in good faith and that defendants had reasonable grounds for
believing that they were not in violation of the FLSA, the Court finds that sunmiary judgment is

not appropriate for the same reasons it is not appropriate on the question of willfulness, discussed
above. The Court will deny summary judgment.

E.

Defendants have waived their Motor Carrier Act argument

In their Amended Answer, defendants also claim that plaintiffs' claims are barred by the

Motor Carrier Act ("MCA") exemption. Plaintiffs have moved for summary judgment that the
MCA does not apply in this case. Because defendants have failed to dispute or address this issue,
the Court will grant partial summary judgment in favor of plaintiffs on the MCA issue.
V.

CONCLUSION
In conclusion, the Court finds that genuine disputes of material fact largely preclude

summary judgment in favor of either party. The Court will, however, grant summary judgment to
plaintiffs on the issues of the MCA exemption and defendants' first, fourth, seventh, tenth,
eleventh, twelfth, and thirteenth affirmative defenses. It will deny summary judgment on the issues

of whether the HCE exemption applies to plaintiffs, whether defendants acted willfullyand
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therefore whether a two or three year statute of limitations applies, and whether Robert or Isha
Myrick qualify as employers under the F'LSA. A separate Order accompanies this Memorandum

Opinioit

Date: January

AZ 2017
United States District Judge

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