Huddleston v. Chucks Transport Incorporated et al

Filing 50

MEMORANDUM OPINION. Signed by Judge Royce C. Lamberth. (rf) (Main Document 50 replaced on 1/10/2019) (rf).

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 1 of 27

FI IED

UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS

JAN

JAMES T. HUDDLESTON,

092019

cLERK. US DISTRICT Ct.ERK
TEXAS

)

BY

Plamtiff,

)
)

)

V.

Civil Case No. 5:17-1228

)

CHUCKS TRANSPORT
INCORPORATED Ct al.,

)
)
)

Defendants.

)

MEMORANDUM OPINION
The FLSA promises employees tirne-and-ahaIf pay for weekly work exceeding forty
hours. 29 U.S.C. § 207(a)(l). James Huddlestbn says he routinely workd fifty-hour weeksand
maybe even seventy-five-hour weeksas an inside salesman for trucking company Chucks
Transport. But he claims Chucks never paid him overtime. So he sued Chucks for backpay and
liquidated damages.
1-luddleston now moves for summary judgment. Chucks opposes the motion, arguing
1-luddleston falls within the FLSA's exemption for administrative or executive employees. And

Chucks files two other motions to thwart summary judgment: a motion to amend its answer to
specifically plead that exemption; and a riotion to exclude Huddleston's expert, Collin Miller,
who analyzed Huddleston's email activity to deduce his work schedule. For his part, Huddleston

moves to.strike Chucks president Mary Brandt's declaration, which Chucks uses to oppose
summary judgment.

Deciding if the record supports summary judgment requires determining the record's
contents. The Court will grant Chucks's motion for leave to amend since Chucks shows good

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 2 of 27

cause under Rule 16 and nothing justifies denying leave under Rule 15. The Court will further

grant Chucks's motion to exclude Miller's' irrelevant and misleading email analysis. But the

Court will deny Huddleston's motion to strike, since his objections to Brandt's declaration are
meritless.
Given that record, the Court will grant-in-part and deny-in-part Huddleston's summary

judgment motion. Importantly, his motion answers questions about Chucks's CEO's joint and
several liability; Chucks's liability for so4e unpaid overtime; and Chucks's liability for
liquidated damages. But the parties need trial to determine Huddleston's status under the FLSA,

Chucks's total liability, the applicable statute of limitations, and the total damage award.
1.

The Court will grant Chucks's motion for leave to amend because Chucks shows good
cause under 1ule 16 and because ncthing justifies denying leave under Rule 15.
Chucks seeks leave to amend its answer to include a citation to the FLSA's exemption for

administrative, executive, or professional employees 29 U.S.C. § 213(a)(l). Though Chucks

generally maintained the FLSA exempte Huddleston throughout this litigation, it specifically
invoked the § 213(a)(l) exemption for the first time in discovery responses. By then, Huddleston

argues, Chucks waived its application, entitling Huddleston to summary judgment on his
nonexempt status. Chucks disagrees, arguing in its summary judgment opposition that
Huddleston had fair notice of Chucks's exemption theory.

But with this motion, Chucks hedges its bet. In addition to opposing Huddleston's waiver
argument on the merits, Chucks seeks to nip its bud by adding a formal citation to § 213(a)(1) to
its answer. Yet Chucks filed its motion fiye weeks after the amendment deadline. Regardless, the

Court will grant the motion since Chucks shows good cause under Rule 16 and since nothing

justifies denying leave under Rule 15.
2

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 3 of 27

Where a party seeks leave to amend "after a scheduling order's deadline to amend has

expired," Rule 16(b)(4) requires the movant show good cause. Fahim

v.

Marriot Hotel Servs.,

Inc., 551 F.3d 344, 348 (5th Cir. 2008). Once they do, the "more liberal [amendment] standard of

Rule 15(a) will apply." Id.
Good cause under Rule 16(b)(4) turns on four factors: "(1) the explanation for the failure
to timely move for leave to amend; (2) the importance of the amendment; (3) potential prejudice

in allowing the amendment; and (4) the a)ailabi1ity of a continuance to cure such prejudice." Sw.
Bell Tel. Co. v. City ofEl Paso, 346 F.3d 541,546(5th Cir. 2003) (internal quotation marks
omitted). (quoting S& W Enters., LLC v. Scuthtrust Bank ofAla., NA, 315 F.3d 533, 535(5th Cir.

2003)).

.

Assuming a late movant shows gOod cause, Rule I 5(a)(2) requires the Court "freely give
leave" to amend "when justice so requires." Circuit precedent further directs the Court to deny
leave only if amendment would cause un1ue delay or prejudice, if movants seek leave to amend

in bad faith, if movantsrepeatedly failed to cure prior deficiencies, or if amendment would be
futile. See United States ex rel. Willard v. Humana Health Plan of Texas Inc., 336 F.3d 375, 386

(5th Cir. 2003).
Here, Chucks argues good cause exists because its failure to formally plead the

exemption was an oversight; because the amendment could be critical to avoiding an adverse
judgment; and because no prejudice wouM result, since Huddleston already explored Chucks's
exemption theory in discovery and briefed it in his summary judgment motion. For good
measure,. Chucks cites Vanzzini v. Action Meat Distributors, inc., 995 F. Supp. 2d 703, 713 (S.D.

Tex. 2014), where Judge Ellison allowed an employer to add an FLSA exemption to its answer
five weeks after the amendment deadline "because preventing Defendants from asserting this
3

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 4 of 27

defense may have led to recovery by employees who are actually exempt from recovery under

the FLSA."
Huddleston opposes the motion by claiming that Chucks lacked diligence and that
allowing amendment would require additional discovery and summary judgment briefing. And
he distinguishes

Vanzzini

since that employerunlike Chucks heresought leave to amend

before filing for summary judgment. Instead he cites language from two unreported Southern

District of Texas cases suggesting "[t]o successfully plead the affirmative defense of exemption
from FLSA provisions that govern minimum wage and overtime requirements, the defendant
must identify the exemption of the FLSA by name." Pl.'s Resp. 4 (internal quotation marks
Fran/cr

v.

Tyhan, Jnc., 1o. 15-191, 2016 WL 1531752, at *2 (S.D. Tex. Apr.

15, 2016)) (citing Vargas

v.

HWC Gen. Maini., LLC, No.

omitted) (quoting

11-875, 2012 WL 948892 (S.D. Tex.

Mar. 20, 2012)), ECF No. 37.

But Chucks adequately shows good cause under the Fifth Circuit's test. Nothing suggests
it intentionally put-off identifying a specific exemption. Chucks's general exemption theory was
obvious in both its answer (at ¶114, 17, ECF No. 4), and its joint Rule 26 report (at 1, ECF No.
11) ("Defendants allege that Mr. Huddleston is exempt from the provisions of the Fair Labor

Standards Act."), and it specifically identified the § 21 3(a)(1) exemption in response to

Huddleston's interrogatories (at 6, ECF No. 32-3). Moreover, amendment is critically important
since Chuckss case hinges on the exemption's applicability. Finally, amendment would not
prejudice Huddleston; Not only has Huddleston' known about Chucks's general exemption theory

since the beginning, he explored the issue during discovery, even acknowledging during a
deposition that "I understand.

..

you conidered [Huddleston] a salaried-exempt employee."

7/30/18 Tr. 37:11-15, ECF No. 32-7. Nor would amendment subject Huddleston to additional
4

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 5 of 27

costs or delays: he already spends eight paes in his summary judgment motion arguing §

213(a)(l)'s applicability as if Chucks specifically pled it.
Indeed, though Huddleston makes much of Chucks waiting to seek leave until after filing

for summary judgment, perhaps Chucks's motion came so late because Huddleston waited so
long to object. When Chucks asked Huddleston via interrogatory to identi1' support for his

nonexempt status, Huddleston responded

tlithout

objection. 5, ECF No. 32-6. Huddleston could

have refused to answer the question as outside the.pleadings' scope, but instead he waited
fourteen more weeks to foist his objection at the summary judgment stage.

Huddleston's cited authority is sinilar1y unavailing. Neither Franks nor Vargas requires
employers to identify a specific exemption. Instead, they hold an employer need only aver a

belief the FLSA exempted an employee. The Franks court held a generic citation to 29 U.S.C.

§

207 and 213provisions with dozens of exemptions covering everyone from wreathmakers to
car dealership service advisorssufficiently pled an exemption theory. See 2016 WL 1531752,
at *23. And the Vargas court only deemed that defendant-employer's' pleading insufficient

because it lacked a factual basis for any exemption and failed to specify whether the exemption
came from the FLSA at all. See 2012 WL 948892, at *3 (striking an affirmative defense alleging

"[slome or all of Plaintiff's claims.. . are barred. . . by statutory exemptions.

. .

under the

FLSA and any applicable state law" (omissions in original)). Chucks's answer suffers from

neither deficiency. What's more, the cases cited in Franks and Vargas support Chucks, not
Huddleston. See, e.g., Florida v. DLT3 9irls; Inc., No. 11-3624, 2012 'WL 1565533, at *3 (S.D.
Tex. May 2, 2012) (citing Morrison v. &ec. Aircraft Refinishing, Inc., 434 F. Supp. 2d 1314,
1318 (S.D. Fla. 2005) ("Where a defendant pleads generally that a plaintiff is not coveredunder

the FLSA, but fails to identify the specifi FLSA exemptions that are applicable, the defendant
5

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 6 of 27

should be given leave to amend the defens."); Hanzlik v. Birach, No: 09-221,2009 WL
2147845, at *4 (E.D. Va. July 14, 2009) ('1Forcing a defendant to cite each and every applicable

statute and regulation that may support an FLSA exemption at the answer stage would be
contrary to the spirit of Rule 8.")) (holding an allegation that "Plaintiff was an exempt

administrative and/or executive employee under Section 13(a)(1) of the FLSA" gave the
plaintiff-employee sufficient notice).

And given this good cause, the Court will grant leave under Rule 15(a)(2). Simply put,
nothing justifies denying amendment. As explained, it causes virtually no delay or prejudice, nor

does it appear to be in bad faith. And since Huddleston already argues a missing citation in

Chucks's answer entitles him to summary judgment, amending the answer to cite § 213(a)(1) is
not futile. The Court will thus grant Chucks's motion for leave to amend.

H. The Court will grant Chucks's motinn to exclude Miller's irrelevant and misleading
email analysis.
To prove his total weekly hours, Huddleston testified he worked in the office from about

6:30 AM to 6 PM during the week and from roughly 7:30 AM to

12

PM every other weekend.

See Huddleston DecI. ¶9, ECF No. 27-3. And to buttress his testimony, Huddleston hired expert

Cohn Miller to analyze Huddleston's email activity to reconstruct when Huddleston started and
stopped working. If permitted, Miller would offer graphs summarizing Huddleston's emails'

quantity and timing. But Chucks seeks to exclude Miller, arguing his graphs are irrelevant,
unreliable, and unhelpful to the factfinder. The Court agrees, and will grant Chucks's motion to

exclude.

6

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 7 of 27

A. Legal Standard

Federal Rule of Evidence 402 prolibits irrelevant evidence. And under Rule 403,
evidence is relevant if "it has any tendency to make a [material] fact more or less probable."

Rule 702 permits a quatified expert's testhnony if it helps the factfinder understand the
evidence or determine a fact in issue, if it relies on sufficient facts or data, and if it results from
reliable principles and methods applied to the case's facts. An expert's principles and methods

are reliable if they are valid and properly applied. Dauber! v.
579, 592-93

Merrel! Dow Pharm., 509 U.s.

(1993).

B. Because Miller's analysis is unreliable and unhelpful to the factflnder, the Court

excludes it from the record.

Anned with Huddleston's 250,00O work emails, Miller used software to graphically
represent Huddleston's schedule based on when he sent emails. Absent more exact evidence of

Huddleston's workday, Miller's analysis

legantlyif imperfectlyproxies his schedule. Like

many Americans, Huddleston's work reqi ired him to frequently communicate through email.
And even though Huddleston's position included many other tasks, and even though Huddleston

(again, like many Americans) occasionally sent personal emails from his work account, neither
fact undoes the evidence's strong support :for Huddleston's testimony.

And on one hand, Miller's graphs bear several indicia of admissibility. They appear
relevant since they make it more likely Huddleston worked the hours he said he did. Moreover,

they help the factfinder digest the massive quantity of emails. With adequate time and
manpower, the factfinder could take all the emails Chucks produced, cull those Huddleston

actually sent, and arrange them to determine the general trend of daily start and stop times.
Instead, Huddleston helpfully hired Miller to lift this weight.
7

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 8 of 27

Yet Miller's graphs suffer from tw fatal reliability flaws. First, his dataset stretches back
to January 1, 2012. But in any event, the lortal-to-Portal Act bars Huddleston from recovering

unpaid overtime from before December 4,20l4. Thus Miller's roughly five-year analysis (from
January 1, 2012 to Huddleston's resignation on January 7, 2017) relies

onat leastnearly

three years of irrelevant data. Suppose Huddleston's 2012-2014 schedule differed from his

2015-2016 schedule (which is really all that matters here). Miller's charts would mislead the
factfinder about Huddleston's schedule during the relevant period.
Second, his Y-axes' exponential scalingjumping from 10, 100, 1000, and 10,000 in
equal incrementsobfuscates the significance of the relative bar heights. Take the columns

representing weekday emails sent from 7:00-7:30 AM and from 7:30-8:00 AM. At first glance,
the two intervals' bar heights seem roughly the same order of magnitude. But comparing the bar
heights to the Y-axis reveals an approximately 50% increase from 7:00-7:30 AM (around 900

emails) to 7:30-8:00 AM (roughly 1350 ernails). So Miller's summary doubly misleads.
Since Miller's graphs are unreliable and unhelpful in their current form, the Court will
grant Chucks's motion to exclude.

III. The Court will deny Huddleston's motion to strike Brandt's declaration since his
objections lack merit.
With this motion, Huddleston tries to strike one of Chucks's best pieces of evidence: its

president's description of Huddleston's administrative duties, which casts doubt on his claimed
nonexempt status. But since Huddleston'sobjections lack merit, the Court

will

deny his motion.

Seeking to kill Brandt's declaration by a thousand cuts, Huddleston first objects to its
second paragraph under the best evidence rule and the personal knowledge requirement. Next,

Huddleston claims its fourth paragraph contains impermissible legal conclusions. Huddleston
8

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 9 of 27

further argues its fifth paragraph contains hearsay, violates the personal knowledge requirement,
and offers an improper and inconsistent

leal conclusion. Huddleston raises similar objections to

its sixth paragraph, along with the best evidence rule. He claims that its seventh paragraph also
violates the best evidence rule and that it includes improper conclusions. He deems its eighth

paragraph "textbook hearsay." Objs. Summ. J. Evid. 4. And he argues its ninth paragraph

violates the hearsay rule, the personal knowledge requirement, the best evidence rule, and the

authentication requirement.
But Huddleston misunderstands the evidentiary standard for summary judgment. The
issue is not whetherthe declaration would be admissible, but only whether its substance is
"capable of being
v.

'presented in a fomi that would be admissible" at trial. LSR Consulting, LLC

Wells Fargo Bank,

NA., 835 F.3d 530,534(5th Cir. 2016) (quoting Fed. R. Civ. P. 56(c)(2)).

For that reason, Huddleston's hearay, best evidence, and authentication objections fail.
To the extent Brandt references written policies in paragraphs two and seven, Chucks could

admit them as business records.

See

Fed. R. Evid. 803(6). Chucks could admit the "hearsay" in

paragraphs five, six, and nine as opposing-party statements. See Fed. R. Evid. 801(d)(2). And
paragraph eight's contested statement asserts the decjarant's then-existing mental state, an

exception to the general hearsay bar. See Fed. R. Evid. 803(3). Finally, since Brandt is also

Chucks's records custodian, see Brandt Deci. ¶ 10, ECF No. 35-1, paragraph nine's content
easily clears any authentication hurdle. See Fed. R. Evid. 901(b)(1).

So too for Huddleston's personal Idiowledge objections. As Chucks's president, Brandt
can testilS' about Chucks's general operatin (paragraph two), its employees' roles and

responsibilities (paragraphs five and six), and a review she personally conducted (paragraph
nine). See Fed. R. Evid. 602.
9

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 10 of 27

Huddleston's objections to Brandt's opinion testimony fall similarly short. Though
witnesses may not opine on "purely legal matters," Rule 701 permits lay witnesses to provide

opinion testimony bearing on mixed questions of law and fact. Askanase v. Fatfo, 130 F.3d 657,
673 (5th Cir. 1997); see also Fed. R. Evid) 704 ("An opinion is not objectionable just because it

embraces an ultimate issue."). That's all Brandt does here. "FLSA claims typically involve

complex mixed questions of fact and law," Barrentine

v.

Arkansas-Best Freight Sys., Inc., 450

US. 728, 743 (1981), and "[t]he decision 'whether an employee is exempt under the (FLSA is
primarily a question of fact." Smith v. City offackson, 954 F.2d 296,298(5th Cir. 1992)
(quoting Blakmon v. Brookshire Grocery Co., 835 F.2d1 135, 1137(5th Cir. 1988)). So neither
deséribing Huddleston's job as a "supervisory and management role" (paragraphE four and six)

nor explaining what his duties entailed (paragraphs five and seven) offend Rule 701, despite the
testimony's bearing on Huddleston's exempt status.
Since his objections lack merit, the Court will deny Huddleston's motion to strike.

IV. The Court wifl grant-in-part and deny-in-part Huddleston's summary judgment
motion.
Seeking to reduce or eliminate the need for trial, Huddleston moves for summary

judgment on eight distinct issues. Deciding each issue independently requires some logical jiu

jitsu, assuming answers for some questions to decide others. This is especially true since
Huddleston cannot obtain summary judgr

on the most important questionwhether he was

exempted from the FLSA's overtime pay

But the juice is worth this squeeze, since

his motion resolves three important quest
severally liable. Second, that Chucks wo
third, that Chucks would be liable for liqt

First, that Chucks's CEO would be jointly and
be liable for some weekly unpaid overtime. And

damages. But trial remains necessary to answer
10

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 11 of 27

other questions: Does the § 213(a)(1) exemption apply toFluddleston? Is Chucks liable for
additional unpaid overtime? Can Chucks recover two or three years of unpaid overtime? And
what are the total damages?
To bring a successful unpaid overtime claim, a plaintiff-employee must prove four
elements:
1. that an

employeremployee relationship existed during the claimed period;

2. that the FLSA covered the employee;
3. that the defendant-employer failed to pay overtime; and

4. the unpaidôvertime amount.
Johnson

v.

Heclanann Water Res. (CVR),

Inc., 758 F.3d 627,630(5th Cir. 2014). Once the

employee establishes each element with a ,reponderance of the evidence, the burden shifts to the
employer either to disprove the employee's claimed hours or to prove the FLSA exempted the
employee. Id.

Under the Portal-to-Portal Act, employees must bring unpaid overtime claims within two
years. 29 U.S.C. § 255(a). But

if an employee proves the employer willfully violated the FLSA,

the limitation period extends to 3 years. Id An employer willfully violates the FLSA if it "knew

or showed reckless disregard for.

..

whether its conduct was prohibited by the statute." Singer v.

City of Waco, 324 F.3d 813, 821 (5th Cir. 2003) (omission in original) (internal quotation marks

omitted) (quoting Reich v.

Bay, Inc.,

23 F.3d 110, 117 (5th Cir. 1994)).

Here, Huddleston seeks summary judgment on all or part of each element and on the
applicable statute of limitations. For element one, he cites evidence establishing Chucks's CEO

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 12 of 27

Emerson Nelson was a separate "employer" under the FLSA and therefore jointly and severally
liable for any violation. For element two, he argues procedurally that Chucks waived any FLSA
exemption by failing to specify one in its

and claims substantively that he does not fall

within the § 213(a)(1) exemption. For dc

nt three, he argues Chucks admits liability for at

least 9.75 weekly in-office unpaid overtit

hours and marshals additional evidence suggesting

Chucks's liability extends to ten more in-

ice and fifteen out-of-office weekly unpaid overtime

hours. For element four, Huddleston claii

Chucks owes liquidated damages equal to the unpaid

overtime amount. And since he seeks to

ect unpaid overtime from three years before his

complaint, Huddleston moves for swnmary judgment that Chucks's wiliflully violated the FLSA.

Deciding these issues requires following the familiar summary judgment standard.
"[S]ummary judgment is proper if... 'there is no genuine issue as to any material fact.. . [and]
the moving party is entitled to judgment as a matter of law." Celolex Corp.

v.

Caireu,

477 U.s.

317,322(1986) (quoting Fed. R. Civ. P.56(c)). Once the moving party identifies a valid basis
for summary judgment, the opposing party must identify "specific facts showing there is a
genuine issue for trial." Id. at 323-24 (internal quotation marks omitted) (quoting Rule 56(e)). To
succeed, the opposing party must also provide evidence allowing a reasonable factfinder to find
in its favor. Davis v. Fort Bend Cly., 765 F.3d 480,484(5th Cir. 2014).

Based on that standard, and assuming the FLSA's overtime requirement applies,

Huddleston merits summary judgment that Nelson would be jointly and severally liable as an
employer, that Chucks would be liable for at least 19.75 weekly unpaid overtime hours, and that

Chucks would be liable for liquidated damages. Yet Huddleston cannot obtain summary

judgment on whether Huddleston actually falls within the

12

§

213(a)(1) exemption; whether

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 13 of 27

Chucks would be liable for an additional ten in-office weekly unpaid overtime hours; or whether
any FLSA violation would be willful.

A. Huddleston deserves summaiy judgment on Nelson's joint and several liability
as an FLSA employer.
Chucks does not directly contest elson'sjoint and several liability if the FLSA overtime
requirement applies to Fluddleston. Nor ccu1d it. "The dominant theme in the case law is that
those who have operating control over employees within companies may be individually liable
for FLSA

violations committed by the companies." Gray v. Powers, 673 F.3d 352,357(5th Cir.

2012). To determine if a company official has operational control, the Fifth Circuit considers
four

factors:

1.

whether the official could hire and fire employees;

2. whether the official supervised and controlled work schedules or employment conditions;
3. whether the official determined th payment rate and method; and

4. whether the official maintained employment records.
Williams v. Henagan, 595

Here, all

F.3d 610,620(5th Cir. 2010).

four elements

support deeming Nelson a jointly and severally liable FLSA

employer. Though Nelson formally delegated hiring and firing to other executives, he still
oversaw "all levels within the compan[y],'l E-mail from Emerson Nelson to all Chucks

Employees (Nov. 20,2016, 8:48 PM), ECF No. 27-8; set the work schedule; gave the final word
on pay rates and methods; and oversaw record maintenance. See Huddleston DecI. ¶ 13.
Accordingly, assuming Chucks's liability, Huddleston merits summary judgment that Nelson
would be jointly and severally liable.
13

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 14 of 27

B. Huddleston cannot obtain summary judgment on his nonexempt status given a

factual dispute about his primary responsibility.
Huddleston advances procedural and substantive grounds for summary judgment that the
FLSA did not exempt him from its overtinie pay requirement. But Chucks contends it

procedurally and substantively justified applying the exemption for executive or administrative

workers. See 29 U.S.C. §21 3(a)(1) (exempting workers "employed in a bona fide executive,
administrative, or professional capacity" fiom the FLSA's overtime pay requirement).

Summaiy judgment cannot resolve this dispute. Huddleston loses procedurally since
Chucks can amend its complaint and sinceHudd1eston was not prejudiced. Norcan he win
substantively, since 'evidence supports both positions.
1.

Huddleston's procedural argument fails because Chucks can amend its
complaint and because Huddleston was not prejudiced.

As discussed regarding Chucks's motion for leave to amend, see supra Part I, Huddleston
initially claims Chucks waived § 213(a)(l)'s applicability by failing to specifically plead it. In all
events, granting Chucks's motion for leave to amend moots this argument. But Huddleston's

argument would fail regardless, since Huddleston had adequate notice of Chucks's general
exemption theory and since Chucks's failuTe to specifically cite § 21 3(a)( 1) in its answer did not
prejudice him.
An employer's claim that the FLSA exempted an employee is an affirmative defense. See
Corning Glass Works

v.

Brennan,

417 U.SL 188, 196-97 (1974). And Federal Rule of Civil

Procedure 8(c) requires defendants plead affirmative defenses "with enough specificity or factual
particularity to give the plaintiff 'fair notice' of the defense that is being advanced."

Woodfield v.

Bowman, 193 F.3d 354, 362' (5th Cir. 1 999). But "[w}here the [affirmative defenseJ is raised in
14

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 15 of 27

the trial court in a manner that does not result in unfair surprise. . . technical failure to comply

precisely with Rule 8(c) is not fatal." Rogrs v. McDorman,

521

F.3d 381, 385-86(5th Cir.

2008) (internal quotation marks omitted) (quoting Allied Chem. Corp v. Mackay, 695 F.2d 854,

855-56(5th Cit. 1983)). "More specifically, a defendant does not waive an affirmative defense if

it is raised at a 'pragmatically sufficient time, and (the plaintiff] was not prejudiced in its ability
to respond.'" Arismendez v.

Nightingale Home Health Care, Inc.,

2007) (alteration in original) (quoting Lucas v.

United States,

493 F.3d 602,610(5th Cir.

807 F.2d 414,418 (5th Cir. 1986)).

Here, as Part I notes, Chucks's general exemption theory gave Huddleston enough notice

to explore the § 213(a)(1) issue during discovery. Nor did Chucks's failure to specifically cite §
21 3(a)(1) in its answer prejudice Huddleston: he spends eight pages in his summary judgment

motion arguing its applicability as

if Chucks had pled it. So Huddleston's procedural argument

fills flat.
2. Huddleston's substantive arguments fail because the parties dispute his

primary job duty.

Huddleston also argues he does no meet the substantive definition of an executive or
administrative employee. Labor Department regulations define executive and administrative
employees under § 213(a)(1). 29 C.F.R. § 4L100 defines executive employees as those meeting

a salary requirement, primarily tasked with managing (at least) an organizational department or
subdivision with (at least) two additional employees, and having input on hiring and firing
decisions. Section 541.200 defines administrative employees as those meeting the same salary
requirement, primarily tasked with office or non-manual work relating to the business's

management or general operations, and expected to exercise independent judgment on significant
matters. An employee's primary task is "the principal, main, major or most important duty that
15

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 16 of 27

the employee performs." § 541.700. Yet ifjan employee's primaiy task is neither fully executive
nor fully administrative, § 541.708 shoehoms into the exemption employees whose primary task

blends executive and administrative

Huddleston offers two reasons he falls outside the department's definitions. First, he
claims he does not meet the salary requirenent. That argument fails. Second, he contends his
primary responsibility was inside sales, no the discretionary managerial tasks the regulations
contemplate. But because the parties

Huddleston's primary responsibility, that argument

fails, too.

a. Huddleston
As an initial stab, Huddleston
requirement because Chucks deducted
As

§

54 1.602 explains, "[ajn

§ 541.100

he does not meet §* 541.100 and 541.200's salary

losses from his pay.
is not paid on a salary basis if deductions from the

employee's predetermined compensation are müde.
business." To argue Chucks violated this

Huddleston's predetermined

by the operating requirements of the

from your pay." ECF No. 27-9 at 1-2.
showing any deductions caine not from

but from commissions on top of his base salary. See

Brandt Dccl. ¶ 3; see also Nelson Dep. Tr
commissions do not violate

..

Huddleston points to a policy stating, "If

you lose money on files you [sic] will be
But Chucks cites undisputed

and 541.200's salary requirement.

§

:17-24, ECF No. 27-5. And since deductions from

541.100 anl 541 .200's salary requirement, Huddleston's first

substantive argument fails.

16

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 17 of 27

b. The parties

disute Huddleston's primary responsibility.

On his second pass, Huddleston cilims he does not fall within the regulatory definitions
because his primary responsibility was inside sales, not the discretionary managerial tasks §

541.lOOand54I.200 describe.
To be sure, evidence in the record upports Huddleston's position. When Chucks sued
Huddleston in state court for breach of coikract, it described Huddleston's job as "assist[ing]

Plaintiffs' customers by brokering freight transportation services." Pis.' Original Pet. 17-8, ECF
No. 27-1. Chucks also admits it required Huddleston to "communicate[} with customers

directly," Def.'s 1st Am. Objs. & Resps. 6, ECF No. 27-2, and to seek approval on every sale.

Pis.' Original Pet. ¶ 8; Brandt Dep. Tr. 66:11-25, 71:1-10, ECF No. 27-6. This evidence portrays
Huddleston as primarily an inside salesmana cog in the wheelnot primarily an executive or
administrator. And if so, he likely falls outside the § 213(a)(1) exemption. See 69 Fed. Reg.

22,122,22,146 (Apr. 23, 2004) ("The [Labor] Department agrees that employees whose primary
duty is inside sales cannot qualify as exempt employees."); see also

Martin

v.

Cooper Elec.

Supply Co., 940 F.2d 896, 903-07 (3d Cii. 1991) (holding the FLSA exempts inside sales

employees as "production rather than administrative employees" who do not "perform 'work of

substantial importance to the management or operation' of an employer's business" (quoting 29

CFR § 541.205(a) (1991))).
But unfortunately for Huddleston, Chucks cites contradictory evidence suggesting §
541.100 and 541.200 should apply. This evidence highlights Huddleston's unsupervised and
discretionary tasks: He managed fuel advance requests for all Chucks freight carriers.

Huddleston Dep. Tr. 94:23-95:22. He unilaterally implemented and distributed broad policies to

Chucks's dispatch team. Brandt Dccl. ¶5; Emails from Travis Huddleston (Aug.Sept. 2014),
17

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 18 of 27

ECF No. 36-1;Huddleston Dep. Tr. 74:1-75:13, 85:14-86:20; Email from Travis Huddleston to

dispatch®chuckstranspoitcom (Aug. 11, 2014, 8:59 AM), ECF No. 36-3; Email from Travis
Huddleston to [e-mail] (Aug. 11, 204,9:24 AM), ECF No. 36-4. He
spear-headed mandatory weekly training sessions. Email from Travis Huddleston to Chuck &

Mary Brandt (Aug. 21, 2014,2:46 PM), ECF No. 35-13; see also Brandt Deci. ¶ 7. He managed

the multiperson night dispatch team, provided their training and educational materials, and
served as their point person for problems. Brandt Dccl. ¶ 6; Huddleston Dep. Tr. 76:18-82:3;
Email from Travis Huddleston to dispatchchuckstransport.com (Aug. 8, 2014,9:36 AM), ECF
No. 36-5; Email from Travis Huddleston to dispatchchuckstkansport.com (Aug. 11, 2014, 8:39
AM), ECF No. 35-11; Email from Travis Huddleston to dispatchchuckstransport.com &

Deiphin Bartek (Aug. 11, 2014 8:39 AM), ECF No. 36-6. And he developed the night dispatch's

policies and maintained its customer contact records. Brandt Deci. ¶ 6; Huddleston Dep. Tr.

76:18-82:3; Email from Travis Huddleston to [e-mail] (Aug. 8, 2014,
9:36 AM); Email from Travis Huddleston to dispatch®chuckstransport.com (Aug. 11, 2014,
8:39 AM); Email from Travis Huddleston to dispatch®chuckstransport.com & Deiphin Bartek
(Aug. 11, 2014, 8:39 AM).

Given this dispute over whether Huddleston was primarily a salesperson, an executive, an
administrator, or some executive-administrative hybrid, summary judgment fails. The parties

need trial to determine Huddleston's "principal, main, major, or most important" duty, and
whether that classifies him as an executive employee, an administrative employee, a blend of
both, or just an inside salesman.

18

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 19 of 27

C. Assuming he is entitled to overtime pay, Huddleston merits summary judgment
on Chucks's liability for 24.75 weekly unpaid overtime hours.

Huddleston also moves for summary judgment on liability, premised on his nonexempt
status. And he offers three theories for that liability's extent. At least, he claims Chucks admits

liability for 9.75 weekly in-office unpaid overtime hours. But he argues his own testimony as
well as a 1500-page spreadsheet documenting Huddleston's activity on Chucks's internal

software establish additional liability for another ten weekly in-office unpaid overtime hours.
And he argues his own testimony on unpaid out-of-office work should add another fifteen

overtime hours to the weekly total

If the

§ 21 3(a)( I) exemptiân does

not apply, Huddleston deserves summary judgment on

Chucks's liability forjust 24:75 weekly uiipaid overtijiie hours. In short, Chucks does not
identiAj any contradictory evidence allowing a reasonable factfinder to find in its favor as to the

9.75 in-office and 15 out-of-office unpaid overtime hours weekly. But since Chucks does cite

evidence contradicting the ten additional in-office hours, summary judgment fails for them.
FLSA liability turns on an employee's total hours worked. This total includes "work

performed away from the premises or the job site, or even at home. If the employer knows or has
reason to believe that the work is being performed, he must count the time as hours worked." 29
C.F.R. § 7785.12. It also includes "all the time during which an employee is necessarily required
to be on the employer's premises," irrespective of any mental or physical exertion. See 29 C.F.R.
§ 785.7 (internal

quotation marks omitted) (quoting Anderson v.

Mt. Clemens Pottery Co., 328

U.s. 680, 690-91 (1946)).

If the employer failed to keep tim records, the employee need only provide "sufficient
evidence to show the amount and extent

f that work as a matter ofjust and reasonable
19

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 20 of 27

inference." Beliz v. W.H. McL eod& Sons Packing Co., 765 F.2d 1317, 1330(5th Cir. 1985)
(quoting Mt. Clemens, 328 U.s. at 687). "'1[T]he employer cannot be heard to complain that the

damages lack the exactness and precision

f measurement' . . . . workers may satisfS' their burden

with admittedly inexact or approximate evidence." Id. at 1330-31 (quoting Donovan v.

Grantham, 690 F.2d 453,458(5th Cir. 1982)). Numerous FLSA cases hold an employee's own
testimony regarding his hours establishes a "just and reasonable inference." See, e.g., Beliz, 765
F.2d at 1330-31; Donovan v. Hamm's Drive Inn, 661 F.2d 316,318(5th Cir. 1981); O'Meara-

Sterling v. Mitchell, 299 F.2d 401,403-04 (5th Cir. 1962). And once the employee provides
sufficient evidence, "[t]he burden then shills to the employer to 'disprove the employee's
testimony that the Act was violated." Id. at 1330 (quoting Skipper v. Superior Diaries, Inc., 512

409,420(5th Cir. 1975)).
Since Chucks concedes it did not maintain time records, Def. Chucks Transport Inc.'s 1st
Am. Objs. & Resps. 4-5, ECF No. 27-2, the just and reasonable inference standard applies. And

Huddleston can satisfy that burden for even his most expansive liability theory.

First, Chucks concedes potential liability for 9.75 weekly in-office unpaid overtime
hours. Chucks admitted Huddleston's minimum "work schedule was Monday through Friday
7:30 a.m. to 5:00 p.m., and one-half day every other Saturday." Def. Chucks Transport Inc.'s 1st

Am. Objs. & Resps. 7. In other words, Chucks required Huddleston work in the office for 49.75

hours each week. So though Chucks maintains the FLSA does not guarantee Huddleston
overtime,' if it loses on that issue, it has conceded liability for 9.75 weekly in-office unpaid

overtime hours.

And this figure is the floor, not a ceiling. Huddleston further testifies he worked an
additional fifteen hours weekly outside the office. Huddleston Dccl. ¶ 10. These hours count
20

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 21 of 27

towards Huddleston's weekly total since Nelson and Brandt both knew Huddleston worked

outside the office. Nelson Dep. Tr. 95:8-98:4; Brandt Dep. Tr. 20:17-22.

Chucks does not attempt to dispmve Huddleston's testimony regarding his out-of-office
hours, as the FLSA would require. Nor does Chucks even try to clear the lower summary
judgment hurdle of identii'ing contradictory evidence allowing a reasonable trier-of-fact to find
in its favor. Their opposition brief argues tnly Huddleston's evidence deserves little weight. But

that does not defeat summary judgment. &e Davis, 765 F.3d at 484 (quoting Turner v. Baylor
Richardson Med Cir., 476

F.3d 337, 343 (5th Cir. 2007)) ("A party cannot 'defeat summary

judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of

evidence."); see also Donovan, 661 F.2d t 318 (affirming judgment for plaintiff-employees
supported solely on their own testimony since "[a]fter the employees testified, [defendantemployer] produced no evidence of the precise hours worked, nor did it 'negative the

reasonableness of the inference to be drawn from the employee's evidence" (quoting Mi.
Clemens, 328 U.S. at 688)); O'Mewa-Sierling, 299 F.2d at 404 (affirming judgment for plaintiff-

employee since "[t}he employer failed to carry the burden under the Mi. Clemens doctrine of
producing evidence to show the precise time worked or to negative the inference drawn from the

evidence of the employee"). So Huddleston should obtain summary judgment on Chucks's
liability for 24.75 weekly unpaid overtime hours-9.75 in-office and 15 out-of-office.

Yet summary judgment fails on Huld1eston's claim for another ten in-office unpaid
overtime hours. To be sure, Huddleston can establish these hours by just and reasonable
inference. Brandt and Nelson concede Huddleston sometimes worked in the office outside his

minimum hours. Nelson Dep. Tr. 46:6-14; Brandt Dep. Tr. 17:14-18:13. And Huddleston
testified he actually worked in the office from roughly 6:30 A.M. to 6:00 P.M. during the week,
21

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 22 of 27

and approximately 4.5 hours every other Saturday. Huddleston Dccl. ¶ 9. That estimate accords

with data from a 1500-page spreadsheet documenting when Huddleston entered data into

Chucks's Carrier Status Report software.' So Huddleston may be able to win on these additional
ten hours at trial.

But Huddleston cannot obtain summary judgment on these hours since Chucks marshals

just enough contradictory evidence to éviice a factual dispute. For one, Nelson testified
Huddleston did not reu1arly come into th office before 7:30 AM. Nelson Dep. Tr. 49:15-25.
And internal recordsavailable for the final fifteen of the twenty-five months for which

Huddleston seeks unpaid overtimedemonstrate Huddleston logged into his work computer
before 7:00 AM just 7% of the time, and before 6:40 AM only 3% of the time, despite claiming
to routinely start work at 6:30 AM. See ECF No. 35-7.
All in alland again assuming Huddleston is nonexemptHuddleston wins partial

summary judgment becausejust and reasonable inference establishes Chucks's liability for 24.75
weekly unpaid overtime hours, and because Chucks fails to identif' evidence allowing a

reasonable factfinder to find in its favor asto those hours. But because Chucks disputes

Huddleston's claim for ten more hours, trial will determine Chucks's total liability.

To summarize the spreadsheet, Huddleston generates a scatterplot (at p.7, ECF No. 27) depicting his timestamped software activity. As was true for Miller's proposed analysis of Huddleston's email traffic, see supra Part
II, the scatterplot artfully captures a rough proxy of Huddleston's daily schedule.
And critically, it evades the reliability concerns plaguing Miller's analysis. Though the scatterplot also depicts
data from outside the statute of limitations, the irrelevant portion is easily segregable (indeed, Chucks helpfully does
so at p.1'! of its opposition, ECF No. 35). And it is accurately drawn to scale.
Nor is it "hearsay," as Chucks contends. See Def.'s Resp. 16. The underlying 1500-page spreadsheet would be
admissible as a business record under Federal Rule of Evidence 803(7). Because Chucks has a copy of the
spreadsheet (Chucks produced it), and because the spreadsheet is a "voluminous writing.. . that cannotbe
conveniently examined in court," Rule 1006 permits Huddleston to admit the scatterplot to prove the spreadsheet's
contents. See also Huddleston's Mot. Summ. .1. 7 n2 (offering to provide the spreadsheet for the Court's inspection).

I

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 23 of 27

that Chucks willfully violated the
that Chucks would have to pay
FLSA, but can obtain summary judgment

D. Huddleston cannot obtain summary judgment

liquidated damages.
Finally, Huddleston seeks summary judgment that Chucks willfully violated the FLSA
and that Chucks would be liable for. liquidated damages equal to the unpaid overtime amount.
The two issues seem superficially distinct. Whether an employer willfully violated the

FLSA determines the applicable statute of limitations. And whether an employer must pay
liquidated damages depends on whether the employer reasonably believed it was complying with
the FLSA. See § 216(b), 260.

But the two inquiries ask the same question from different sides and with different
burdens. To determine willfulness, the employee must prove the employer knowingly or

recklessly violated the FLSA. But to escape liquidated damages liability the employer must

prove it reasonably believed it complied with the law.
Here, Huddleston cannot conclusively show Chucks knowingly or recklessly violated the
FLSA. Yet Chucks cannot sufficiently show it reasonably believed it was complying with the
FLSA, either. So Huddieston loses summaky judgment on willfulness but wins suminazy

judgment on liquidated damages.
1.

Huddleston cannot obtain summary judgment that Chucks willfully
violated the FLSA since the parties dispute whether Chucks's CEO
adequately investigated the company's no-overtime policy.

To obtain summary judgment on

illfIilness, Huddleston cites evidence suggesting

Chucks adopted a blanket no-overtime policy despite knowing about the FLSA's overtime pay

requirement, and without investigating if the policy complied.

If true, Chucks may have willfully

violated the FLSA by consciously disregarding a substantial risk its policy violated the overtime

23

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 24 of 27

pay requirement. See

5

C.F.R. §

551.104

"Reckless disregard of the requirements of the Act

means failure to make adequate inquiry into whether conduct is in compliance with the Act.").
But Chucks correctly identifies a factual dispute. After all, Nelson did not admit he never
asked about the no-overtime policy's permissibility. Instead, he gave every defense attorney's
favorite deposition answer: "I don't recalL" Nelson Dep. Tr. 53:3-61:25. Since this cracks the

door to a factual dispute, Huddleston cannot obtain summary judgment that Chucks willfully
violated the FLSA.
2. Huddleston may obtaii summary judgment that Chucks would be liable
for liquidated damages since Chucks neither pleads nor proves it
reasonably believed it complied with the FLSA during the period at issue.

Huddleston's related claim for suntmary judgment on liquidated damages is slightly
different; it is really a no-evidence summary judgment claim. Because here, Chucks bears the

burden, but cites no evidence showing it reasonably believed its no-overtime policy complied
with the FLSA's overtime requirement

"Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to establish the

existence of an element essential to that p rty's case, and on which that party will bear the
burden of proof at trial." Celotex Corp., 447 U.S. at 32Z With discovery closed, Huddleston

moved for summary judgment against Chucks on whether Chucks reasonably believed it
complied with the FLSAan issue on which Chucks bears the burden at trial. And Chucks failed
to make a sufficient contrary showing.

Chucks's brief merely rehashes arguments for why the § 21 3(a)( 1) exemption should
apply. But that is

of no moment to this issue. Applying an exemption is a legal question turning
24

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 25 of 27

on statutory interpretation; determining reasonable belief requires evidence. Often the two

inquiries are coextensive. The law absolvs employers who correctly anticipate their compliance,
and punishes employers who flagrantly violate the overtime requirement. But sometimes the two

inquiries diverge. An employer faced with a close question may reasonably believe it complied,
yet find itself on the wrong side of the law when an employee challenges its policy in court. The
law relaxes the penalty for those mistaken judgments, limiting the employer's liability to
backpay. So too may a naïve or consciously blind employer who unreasonably believes its

payment policy complies catch a lucky break in court. The Jaw does not charge for these pleasant
surprises. But proving one's reasonable belief requires more than legal arguments for why an

exemption should apply. And here, Chucks does not provide any evidence supporting its belief

that its no-oveftime policy complied with the law's overtime requirement. So since Chucks lails
to meet its burden, Huddleston wins summary judgment that Chucks did not have a reasonable

belief it complied with the FLSA. If the FLSA owes Huddleston overtime, Chucks will have to
pay liquidated damages.

Even still, it seems odd to grant summary judgment that Chucks did not have a
reasonable belief its policy was FLSA-coipIiant but to let Chucks prove at trial it did not
willfully violate the FLSA. But that is the 'law. Whether Nelson adequately investigated the

legality of Chucks's no-overtime policy is relevant only to the extent the summary judgment
standard "mirrors the standard for a direct?d verdict under" Rule

50.

Anderson

v.

Liberly Lobby,

Inc., 477 U.S. 242,250(1986). Under Rule 50(a), judgment is appropriate "[i]f a party has been
fully heard on an issue.. . and the court fmds a reasonable jury would not have a legally

sufficient evidentiary basis to find for the party on that issue."

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 26 of 27

Ultimately, evidence that Nelson cannot recall if he investigated the legality of Chucks's

reasonably
no-overtime policy is not a sufficient evidentiary basis for a jury to conclude Chucks

evidentiary
believed its no-overtime policy complied with the FLSA. But it may be a sufficient
basis to find Chucks did not knowingly or recklessly violate the FLSA. Put differently,

if Nelson

knew about the FLSA and chose not to pay overtime, but can't remember if he investigated
whether that was legal, he couldn't reasonably believe he was complying with the law. Under
those cireumstances, that belief would b unreasonable. But even an unreasonable belief may
shield him from willfully flouting the law. Cf Cheek v.
*

*

United States, 498 U.S. 192, 202 (1991).

*

In the end, Huddleston's swnmary judgment does not eliminate the need for trial.

Questions persist on Huddleston's none,)empt status, Chucks's liability for additional overtime,

the applicable statute of limitations, and he total damage award. But assuming for purposes of
this motion that Huddleston is nonexem1k, it does establish that Chucks's CEO would be jointly
and severally liable;that Chucks would be liable for some unpaid weekly overtime; and that
Chucks would be liable for liquidated damages.
V. Conclusion

To review: The Court will grant chuck's motion [32] for leave to amend since Chucks
shows good cause under Rule 16 and si ce nothing justifies denying leave under Rule 15. The

Court will further grant Chuck's motior [401 to exclude Miller, since his testimony is irrelevant
and misleading. But the Court will den) Huddleston's motion (42] to strike since his objections

to Brándt's declaration lack merit.

26

Case 5:17-cv-01228-RCL Document 50 Filed 01/09/19 Page 27 of 27

Additionally, the Court will grant-in-part and deny-in-part lluddleston

s

summary

judgment motion [27]. Huddleston wins summary judgment thtn Nelson would be jointly and
severally liable as an employer, and that--assuming the FLSA entitled Fluddlcston io overtime
Chucks would be liable for at least 2435 weekly hours and fbr liquidated damages. But the

parties need trial to resolve whether Huddkston actually faUs within the

§ 21

3(a)( 1) exemption:

whether Chucks is liable for an additional ten hours weekly: arid whether any purported FLSA

violations were willful.
An accompanvinQ order follows.

Date: January

j,

T2

2019

Royce C. Lamberth
t..nitcd States District Judge

27