Laughlin v. Jim Fischer Inc

Filing 117

ORDER signed by Chief Judge William C Griesbach on 5/16/2019 Denying 98 Motion to Reopen Discovery, Denying 108 Motion for Reconsideration. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

JOSHUA LAUGHLIN, and
GREG SCOTTO JUNIOR
on behalf of themselves and
all others similarly situated,
Plaintiffs,
v.

Case No. 16-C-1342

JIM FISCHER, INC.,
Defendant.

ORDER DENYING PLAINTIFFS’ MOTION FOR RECONSIDERATION
AND MOTION TO REOPEN DISCOVERY

Plaintiffs Joshua Laughlin and Greg Scotto, Jr., allege that their former employer, Defendant
Jim Fischer, Inc., violated the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and
Wisconsin’s wage laws, Wis. Stat. § 109.01, et seq., by, among other things, failing to properly
compensate them for hours worked in excess of forty per week. Presently before the court is
Plaintiffs’ motion for reconsideration of a portion of the court’s order denying-in-part and grantingin-part Plaintiffs’ motion for summary judgment. Specifically, Plaintiffs ask the court to reconsider
its conclusion that the overtime compensation Fischer paid Plaintiffs did not violate Section
207(g)(2) of the FLSA and Wisconsin law. Also before the court is Plaintiffs’ motion to reopen
discovery that was filed before the court ruled on Plaintiffs’ motion for summary judgment. For the
reasons that follow, the motions will be denied.

LEGAL STANDARD
Motions to reconsider denials of summary judgment are governed by Rule 54(b), which
provides that non-final orders “may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.” Fed. R. Civ. P. 54(b); Galvan
v. Norberg, 678 F.3d 581, 587 n.3 (7th Cir. 2012) (stating “Rule 54(b) governs non-final orders and
permits revision at any time prior to the entry of final judgment, thereby bestowing sweeping
authority upon the district court to reconsider a [summary judgment motion]”). “The ‘standard
courts apply in reconsidering their decisions is generally the same under both Rule 59(e) and Rule
54(b).’” Cheese Depot, Inc. v. Sirob Imports, Inc., No. 14 C 1727, 2019 WL 1505399 at *1 (N.D.
Ill. Apr. 5, 2019) (quoting Morningware, Inc. v. Hearthware Home Prods., Inc., No. 09 C 4348,
2011 WL 1376920, at *2 (N.D. Ill. Apr. 12, 2011)).
Motions for reconsideration serve a very limited purpose in federal civil litigation: “to
correct manifest errors of law or fact or to present newly discovered evidence.” Rothwell Cotton
Co. v. Rosenthal & Co., 827 F.2d 246, 251 (7th Cir. 1987) (quoting Keene Corp. v. Int’l Fidelity
Ins. Co., 561 F. Supp. 656, 665–66 (N.D. Ill. 1976), aff’d 736 F.2d 388 (7th Cir. 1984)). “A
‘manifest error’ is not demonstrated by the disappointment of the losing party. It is the ‘wholesale
disregard, misapplication, or failure to recognize controlling precedent.’” Oto v. Metro. Life Ins.
Co., 224 F.3d 601, 606 (7th Cir. 2000) (quoting Sedrak v. Callahan, 987 F. Supp. 1063, 1069 (N.D.
Ill. 1997)). “Such motions are disfavored and should be ‘rare.’” Acantha LLC v. DePuy
Orthopaedics Inc., No. 15-C-1257, 2018 WL 2290715, at *1 (E.D. Wis. May 19, 2018) (quoting
Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990)).

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ANALYSIS
A.

Motion for Reconsideration
On March 31, 2019, the court granted-in-part and denied-in-part Plaintiffs’ motion for

summary judgment. Relevant to Plaintiffs’ motion for reconsideration, the court denied summary
judgment in favor of Plaintiffs on the issue of whether Fischer failed to pay Plaintiffs overtime in
accordance with the requirements of the FLSA. In reaching its conclusion, the court relied on 29
U.S.C. § 207(g)(2) and the regulations interpreting that provision. Section 207(g)(2) provides:
No employer shall be deemed to have violated subsection (a) by employing any
employee for a workweek in excess of the maximum workweek applicable to such
employee under such subsection if, pursuant to an agreement or understanding
arrived at between the employer and the employee before performance of the work,
the amount paid to the employee for the number of hours worked by him in such
workweek in excess of the maximum workweek applicable to such employee under
such subsection—
...
(2) in the case of an employee performing two or more kinds of work for which different
hourly or piece rates have been established, is computed at rates not less than one and onehalf times such bona fide rates applicable to the same work when performed during
nonovertime hours.
The regulations interpreting this provision state that employees who are paid on the basis of a piece
rate for the work performed during nonovertime hours or employees who perform two or more
different kinds of work for which different straight time hourly rates are established may agree with
their employer in advance of the performance of the work that they will be paid during overtime
hours at a rate not less than one and one-half times the hourly nonovertime rate for the work being
performed during the overtime hours. See 29 C.F.R. §§ 778.418, 778.419.

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This court denied Plaintiffs’ motion because there was a factual issue as to whether an
agreement was reached between Plaintiffs and Fischer:
Fischer’s employee handbook informed employees that “[h]ours worked over
forty-hours (40) per week will be paid at time and one-half (1 ½) of the job rate.”
[Dkt] No. 83-5 at 3. As Fischer employees received this handbook prior to their first
time on a jobsite and signed the handbook stating that they understood all of its
terms, it was permissible for Fischer to calculate overtime premiums based on one
and one-half times the rate applicable to the specific type of work. That appears to
be what Fisher did here. If a bona fide agreement was reached, then no FLSA
violation occurred. Plaintiffs’ motion for summary judgment on this issue will
therefore be denied.
Dkt. No. 107 at 19.
Plaintiffs assert that the court erred when it stated “[i]f a bona fide agreement was reached,
then no FLSA violation occurred,” id., because the compensation they received is not in accordance
with § 207(g)(2)’s requirement that overtime pay be “computed at rates no less than one and onehalf times such bona fide rates applicable to the same work when performed during nonovertime
hours.”
As an example of Fischer’s violation of § 207(g)(2), Plaintiffs cite the week of July 31
through August 6, 2016. On Monday, August 1, Laughlin worked 10.75 hours. In accordance with
the agreement between Fischer and its employees that hours worked above ten in a given day would
be paid at one and one-half times the rate of the work being done, Laughlin was paid a daily
overtime premium for the 0.75 hours he worked above 10. Of the 0.75 hours, 0.50 were paid at a
daily overtime premium based on the higher laborer rate of $22.14, and 0.25 were paid at a daily
overtime premium based on the lower mobilization rate of $20.00. Laughlin then proceeded to
work ten hours on Tuesday and ten hours on Wednesday, all of which he was compensated for at
an hourly rate based on the type of work done. On Thursday, August 4, Laughlin worked 9.50
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hours, for which he was compensated at the normal laborer rate. On Friday, August 5, Laughlin
worked a total of 10.50 hours, the first 0.50 of which were compensated at the normal laborer rate,
and the remaining ten at an overtime rate of one and one-half times the laborer rate. Plaintiffs argue
that after Laughlin worked 9.25 hours on Thursday, the remaining 0.25 hours worked Thursday and
the first 0.50 hours worked Friday should have been paid at a weekly overtime rate equal to one and
one-half times the rate of the work done because Laughlin had worked a total of 40 hours for the
week at that point—10.75 hours Monday, 10 hours Tuesday, 10 hours Wednesday, and 9.25 on
Thursday. As a result of Fischer’s failure to pay Laughlin at one and one-half times the rate for
those 0.75 hours, and the fact that those hours worked were done at the higher laborer rate, Plaintiffs
assert that Fischer did not fully compensate Laughlin because a portion of the daily overtime from
Monday was calculated based on the lower laborer rate, thus resulting in him receiving twenty-six
cents less in overtime premium pay for the week than he would have received had those 0.75 hours
been paid at the overtime premium rate.
In essence, Plaintiffs contend that daily overtime premiums can only offset weekly overtime
premiums on a dollar-for-dollar basis, i.e., the amount of daily overtime premium paid must equal
the amount of weekly overtime premium owed, and that an hour-for-hour offset, where the number
of hours paid at a daily overtime premium offsets an equal number of hours when calculating when
an employee reaches 40 hours worked for the week, is impermissible. The regulations interpreting
§ 207(g)(2), however, expressly allow for an hour-for-hour offset:
Where overtime rates are paid pursuant to statute or contract for hours in excess of
8 in a day, or in excess of the applicable maximum hours standard, or in excess of
the employees’ normal working hours or regular working hours . . . the requirement
of section 7(g)(1) and 7(g)(2) will be met if the number of such hours during which

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overtime rates were paid equals or exceeds the number of hours worked in excess
of the applicable maximum hours standard for the particular workweek.
29 C.F.R. § 778.421 (entitled Offset Hour for Hour). Here, the total number of hours compensated
at an overtime premium rates, 10.75, equals the total number of hours worked in excess of the 40hour weekly maximum, 10.75, thus satisfying the requirements of § 778.421 and 29 U.S.C. §
207(g)(2). Regarding the twenty-six cent disparity, “[i]t is not necessary to determine whether the
total amount of compensation paid for such hours equals or exceeds the amount of compensation
which would be due at the applicable rates for work performed during the hours after the applicable
maximum in any workweek.” 29 C.F.R. § 778.421. Thus, the twenty-six cent difference is
irrelevant.
Plaintiffs’ reliance on Estrella v. P.R. Painting Corp., 356 F. App’x 495 (2d Cir. 2009),
where the court affirmed the trial court’s decision, albeit on different grounds, that the employer’s
compensation method of its employees who performed two or more kinds of work at different
hourly rates did not satisfy § 207(g)(2)’s requirements, is misplaced. There, the employer always
paid its employees at a higher rate for the first 35 hours worked each week and at a lower rate for
the next 5 hours worked “and at one-and-a-half times the lower rate for every hour worked over 40.”
Id. at 496. Because the employer could not definitively prove that every hour worked over 40 was
spent doing lower-rate work, the court affirmed the trial court’s decision establishing liability
because the employer could not prove that its payment method satisfied § 207(g)(2)’s requirements.
Id. at 497. Contrary to Plaintiffs’ portrayal of the case, the employer did not satisfy § 207(g)(2)’s
requirements because it could not prove that the work performed was actually lower rate work, not
the fact that the overtime work was compensated at a lower rate. The court even acknowledged that

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if in fact all the overtime worked was indeed work done at the lower rate, § 207(g)(2)’s
requirements would be met: “[i]f . . . [the employees] in fact worked all overtime hours on MRA
jobs—to which the lower rate applied—[the employer’s] payment method satisfies § 207(g)(2)
because it compensated [the employees] at ‘one and one-half times’ the rate ‘applicable to the same
work when performed during nonovertime hours.’” Id. Here, there is no allegations or indications
that Fischer paid Plaintiffs at a different rate than the rate for the type of work performed. The fact
that the work performed may happen to be at a lower rate does not violate § 207(g)(2).
Consequently, this court’s statement that “[i]f a bona fide agreement was reached, then no FLSA
violation occurred” is not a manifest error of law.
A further point should be made. Plaintiffs’ motion for summary judgment sought a ruling
on the proper method to calculate overtime for employees who are paid at different rates for
different work throughout the week, not a determination of the total amount of unpaid overtime to
which Plaintiffs believe they are entitled. Because of the opaque and confusing language of the
regulations, calculation of overtime pay for employers who pay their employees at different rates
for different work, or who pay occasional non-discretionary bonuses or commissions, can be a
complex task over which even reasonable accountants can disagree. Sometimes, the amounts in
dispute are minuscule. It is within this legal landscape that Plaintiffs’ claims arise. In support of
their argument that they were underpaid, Plaintiffs offer by way of example one week in which
Laughlin, who worked for Jim Fischer for only two months, worked 10.75 hours of overtime.
Plaintiffs’ calculation of overtime for that week yields an amount that is only 26 cents more than
the actual amount paid by Jim Fischer. At this point, it is unclear whether adopting Plaintiffs’
manner of calculating overtime for other weeks would yield any greater difference from what was
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actually paid, the same difference, or even less. Yet, Plaintiffs have not only submitted extensive
summary judgment filings on the issue, but now seek reconsideration of a ruling that did not dismiss
their claim and instead simply concluded that factual issues remained. One can only hope that the
parties, faced with a trial over so small an amount of damages, will be able to reach a settlement of
the claim. Plaintiffs should also bear in mind that “although the [attorneys] fee award need not be
proportionate to the amount of damages a plaintiff actually recovers, it is a factor that a court should
consider when contemplating a reduction of the modified lodestar amount.” Spegon v. Catholic
Bishop of Chicago, 175 F.3d 544, 558 (7th Cir. 1999) (citing City of Riverside v. Rivera, 477 U.S.
561, 574 (1986)). In any event, the motion for reconsideration is denied.
B.

Motion to Reopen Discovery
Prior to the court’s order denying-in-part and granting-in-part Plaintiffs’ motion for

summary judgment, Plaintiffs filed a 7(h) motion to reopen discovery related to “whether American
Funds assumed or disclaimed legally required fiduciary responsibilities with respect to prevailing
wage 401(k) contributions that Jim Fischer deposited with American funds.” Dkt. No. 98 at 4. In
its order on Plaintiffs’ motion for summary judgment, the court cited 29 C.F.R. § 778.215(a)(4),
which states “[t]he employer’s contributions must be paid irrevocably to a trustee or third person
pursuant to an insurance agreement, trust or other funded arrangement. The trustee must assume
the usual fiduciary responsibilities imposed upon trustees by applicable law.” Because the
regulation “is silent as to whether a third person must assume the usual fiduciary responsibilities,”
and Fischer makes non-revocable 401(k) contributions to a third-party custodian, American Funds,
the court held that Fischer’s 401(k) plan meets § 778.215(a)(4)’s requirements. Dkt. No. 107 at 16.
Consequently, there is no need to reopen discovery to determine if American Funds assumed a
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fiduciary responsibility because whether American Funds has assumed such a responsibility is
irrelevant to determining whether Fischer’s 401(k) plan is a bona fide plan and its contributions to
it can be excluded under 29 U.S.C. § 207(e)(4). As a result, Plaintiffs’ motion to reopen will be
denied.
CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion for Reconsideration (Dkt. No. 108) and Motion
to Reopen Discovery (Dkt. No. 98) are DENIED.
SO ORDERED this 16th day of May, 2019.
s/ William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court

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