Opinion
Case No. 6:18-CV-131-JDK
10-30-2019
John STEWART, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. LONE STAR EXTERIORS, LLC, and Chris Smith Defendants.
William S. Hommel, Jr., Hommel Law Firm, Tyler, TX, for Plaintiff. Eric J. Kolder, Ramey & Flock, PC, Tyler, TX, for Defendants.
William S. Hommel, Jr., Hommel Law Firm, Tyler, TX, for Plaintiff.
Eric J. Kolder, Ramey & Flock, PC, Tyler, TX, for Defendants.
ORDER
JEREMY D. KERNODLE, UNITED STATES DISTRICT JUDGE This case arises under the Fair Labor Standards Act of 1938, Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified as amended at 29 U.S.C. §§ 201 – 219 (1938) ) ("FLSA"). The parties have filed cross-motions for summary judgment. Docket Nos. 44 & 48. As explained below, the Court GRANTS-IN-PART and DENIES-IN-PART Plaintiffs' motion for partial summary judgment and DENIES Defendants' motion for summary judgment.
I.
Defendant Lone Star Exteriors, LLC is a construction company that provides roofing, gutter, and window installation services. Docket No. 44 at 2; Docket No. 49, Ex. C at 6:11–16. Defendant Chris Smith is the owner and manager of Lone Star. Docket No. 48, Ex. A at 6:3–5; Docket No. 58 (oral argument). Plaintiffs formerly worked for Lone Star—John Stewart and John Hopkins as foremen, and Jacob Mullins and TJ Timmons as laborers. Docket No. 44 at 2; Docket No. 48, Ex. A at 12:17–19; Docket No. 49, Ex. C at 7:11–14.
Lone Star classified all Plaintiffs as independent contractors, not employees, for purposes of the FLSA. Docket No. 48, Ex. A at 8:13–18. It is undisputed that Lone Star paid Plaintiffs Hopkins, Mullins, and Timmons a "day rate" that varied for each Plaintiff, was "not subject to any negotiation," and did not account for any overtime. Docket No. 48, Ex. A at 12:4–6; id. at 16:12–18; id. , Ex. B at 3, 5, 7, 9. The pay arrangement for Plaintiff Stewart is disputed. Smith testified that Stewart received fifteen percent of "the job total for his services," id. at 19:23–20:16, but Stewart testified that he was paid a day rate of $160, regardless of how long he worked that day. Docket No. 54, Ex. 2 at 4.
The Parties agree that Plaintiffs were generally expected to begin work at 6:30 AM each morning, when Smith would assign the work for the day. Id. at 10:14–19, 10:20–22. Smith testified that Plaintiffs determined when they were finished each day based "on how quick they got their assigned tasks done[.] [They] could have been done in four hours, could have been done in ten hours, just depending on the pace they want to work and how much they got at it." Id. at 17:10–16. Plaintiffs uniformly testified that they generally worked longer than eight-hour days: Stewart said he averaged twelve-fourteen hours per day, id. at 4; Hopkins worked a total of seventy-eighty hours per week, twelve-fourteen hours per day, and six-seven days per week, id. at 12, 14; Mullins averaged twelve-fourteen hours per day and worked six-seven days per week, id. at 20–21; and Timmons stated that he averaged twelve hours per day and worked five-six days per week, id. at 27–28. In their declarations, each Plaintiff swore that he "generally worked at least 10 hours each workday" and that he "worked between 60 and 70 hours per week." Docket No. 49, Ex. B at 2–9.
Plaintiff Stewart brought this case on March 19, 2018, individually and on behalf of others similarly situated, and alleged that Defendants violated the FLSA by failing to pay overtime wages. Docket No. 1. Plaintiffs Hopkins, Mullins, and Timmons later filed consents to join the case. Docket Nos. 19, 34, 35. Plaintiff Cody Thurlkill consented to join the case after the motions for summary judgment were fully briefed. Docket No. 57. The Court granted conditional certification of the collective action on December 18, 2018. Docket No. 26.
At the conclusion of discovery, Defendants moved for summary judgment, arguing that Plaintiffs could not present sufficient evidence showing the amount and extent of their work as a matter of just and reasonable inference. Docket No. 44. Plaintiffs cross-moved for partial summary judgment on the issues of their employee status, Defendants' good faith defense to liquidated damages, and Smith's liability as a manager. Docket No. 48. The Court held oral argument on both motions on October 16, 2019.
II.
A.
Summary judgment is proper when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c) ; Celotex Corp. v. Catrett , 477 U.S. 317, 323–25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Ragas v. Tenn. Gas Pipeline Co. , 136 F.3d 455, 458 (5th Cir. 1998). A fact is material only if will affect the outcome of the case. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute is genuine only if the evidence could lead a reasonable jury to find for the nonmoving party. See id. In determining whether a genuine issue of material fact exists, the Court views all inferences drawn from the factual record in the light most favorable to the nonmoving party, here the Plaintiffs. Id. ; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
After the moving party has made an initial showing that there is no evidence to support the nonmoving party's claim, the nonmoving party must assert competent summary judgment evidence to create a genuine fact issue. Matsushita , 475 U.S. at 586, 106 S.Ct. 1348. Mere conclusory allegations, unsubstantiated assertions, improbable inferences, and unsupported speculation are not competent summary judgment evidence. See Eason v. Thaler , 73 F.3d 1322, 1325 (5th Cir. 1996) ; Forsyth v. Barr , 19 F.3d 1527, 1533 (5th Cir. 1994). The nonmoving party must identify evidence in the record and articulate how that evidence supports his claim. Ragas , 136 F.3d at 458. Summary judgment must be granted if the nonmoving party fails to make a showing sufficient to establish the existence of an element essential to its case and on which it will bear the burden of proof at trial. Celotex , 477 U.S. at 322–23, 106 S.Ct. 2548.
B.
Congress enacted the FLSA in 1938 after finding "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." Parrish v. Premier Directional Drilling, L.P. , 917 F.3d 369, 378 (5th Cir. 2019) (quoting 29 U.S.C. § 202(a) ). The statute covers "employees" and defines an "employee" as "any individual employed by an employer." 29 U.S.C. § 203(e)(1). "Given the remedial purposes of the legislation, an expansive definition of ‘employee’ has been adopted by the courts." Usery v. Pilgrim Equip. Co. , 527 F.2d 1308, 1311 (5th Cir. 1976).
The FLSA prohibits employers from failing to provide employees with overtime pay when they work more than forty hours in a week:
[N]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times
the regular rate at which he is employed.
29 U.S.C. § 207(a)(1). "If an employer violates the overtime-compensation requirement, it is ‘liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.’ " Parrish , 917 F.3d at 379 (quoting 29 U.S.C. § 216(b) ).
In bringing an FLSA action, plaintiffs must establish a prima facie case by proving four elements:: "(1) that there existed an employer-employee relationship during the unpaid overtime periods claimed; (2) that the employee engaged in activities within the coverage of the FLSA; (3) that the employer violated the FLSA's overtime wage requirements; and (4) the amount of overtime compensation due." Johnson v. Heckmann Water Res. (CVR), Inc. , 758 F.3d 627, 630 (5th Cir. 2014). Plaintiffs must prove each element by "a preponderance of the evidence." Parrish , 917 F.3d at 379. "If ‘the employee establishes a prima facie case, the burden then shifts to the employer to "come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence." ’ " Id. (quoting Johnson , 758 F.3d at 630 ).
III.
Both sides filed summary judgment motions. Docket Nos. 44 & 48. The Court addresses each motion in turn.
A.
Plaintiffs seek summary judgment on three grounds: (1) Plaintiffs' employee status, (2) Defendants' good faith defense to liquidated damages, and (3) Smith's liability as a manager. Docket No. 48. As an initial matter, the Court grants Plaintiffs' motion regarding Defendants' good faith defense to liquidated damages and Smith's liability as a manager because Defendants concede summary judgment is appropriate on these grounds. See Docket No. 58, Tr. at 30:18–31:1. The Court denies the motion with respect to Plaintiffs' employee status because Defendants have presented genuine disputes of material fact.
Plaintiffs also argue that the Court should disregard Smith's affidavit as a "sham affidavit" because it conflicts with his deposition testimony. Docket No. 55 at 2. After reviewing Smith's affidavit and testimony, the Court sees no reason to disregard Smith's affidavit as a sham because the Court cannot find any "inherent inconsistency between [his] affidavit and ... deposition." Eure v. Sage Corp. , 61 F. Supp. 3d 651, 658 (W.D. Tex. 2014) (quoting Axxiom Mfg., Inc. v. McCoy Invs., Inc. , 846 F. Supp. 2d 732, 749 (S.D. Tex. 2012) ).
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1.
The wage and hour provisions in the FLSA apply only to "employee[s]." 29 U.S.C. § 203(e) ; see Usery , 527 F.2d 1308, 1310–11. Thus, as part of their prima facie case, Plaintiffs must show "that there existed an employer-employee relationship during the unpaid overtime periods claimed" by a preponderance of the evidence. Johnson , 758 F.3d at 630. "In the present setting, a relevant question is whether the alleged employee so economically depends upon the business to which he renders his services, such that the individual, as a matter of economic reality, is not in business for himself." Thibault v. Bellsouth Telecomms., Inc. , 612 F.3d 843, 845 (5th Cir. 2010). "The contractual designation of the worker as an independent contractor is not necessarily controlling." Id. at 845–46.
Five "non-exhaustive" factors guide this analysis:
(1) the degree of control exercised by the alleged employer; (2) the extent of the relative investments of the worker and the alleged employer; (3) the degree to which the worker's opportunity for profit or loss is determined by the alleged employer; (4) the skill and initiative required in performing the job; and (5) the permanency of the relationship.
Hopkins v. Cornerstone Am. , 545 F.3d 338, 343 (5th Cir. 2008). "No single factor is determinative. Rather, each factor is a tool used to gauge the economic dependence of the alleged employee, and each must be applied with this ultimate concept in mind." Id. (citation omitted). Thus, "it is not what [plaintiffs] could have done that counts, but as a matter of economic reality what they actually do that is dispositive." Parrish , 917 F.3d at 380 (quoting Brock v. Mr. W Fireworks, Inc. , 814 F.2d 1042, 1047 (5th Cir. 1987) ).
2.
Plaintiffs argue that they were employees of Lone Star under the FLSA as a matter of law. Docket No. 48 at 8–13. Defendants respond that at this stage, "[a]t the very least, a genuine dispute of material fact exists regarding whether Plaintiffs were employees or independent contractors." Docket No. 54 at 4–6. In light of the conflicting evidence noted below, the Court agrees with Defendants.
"It is common in FLSA cases that ‘there are facts pointing in both directions’ regarding the issue of employee status." Wherley v. Schellsmidt , No. 3:12-CV-0242-D, 2013 WL 5744335, at *6 (N.D. Tex. Oct. 23, 2013) (quoting Herman v. Express Sixty-Minutes Delivery Serv., Inc. , 161 F.3d 299, 305 (5th Cir. 1998) ). While employee status is a question of law, "[t]he determination of whether an individual is an employee or independent contractor is highly dependent on the particular situation presented." Thibault , 612 F.3d at 848 ; see also Hobbs v. Petroplex Pipe & Constr., Inc. , No. MO:17-CV-00030-DC, 2018 WL 3608773, at *3 (W.D. Tex. June 21, 2018) (denying summary judgment where the parties "do not provide a factual basis that enables the Court to determine the correct answer to the central legal question").
Defendants have presented genuine disputes of material fact regarding at least three of the five factors at issue. For example, the Parties dispute the control that Defendants exercised over Plaintiffs' work. See Parrish , 917 F.3d at 381–82 ("[A]lthough plaintiffs were provided an already designed well plan [by their alleged employer], they made that plan work."). Plaintiffs claim that Lone Star "provided all plans and specifications for the projects, gave specific instructions on when, where and how the work was to be performed, including the manner of fabrication of the equipment and the details of [their] work." Docket No. 48, Ex. B at 3, 5, 7, 9. But Smith swore that Lone Star did not "specify how the work was to be done at its contracted jobsites" and that the foremen "controlled how the work was accomplished at each job site." Docket No. 54, Ex. 1 at 2.
The Parties also dispute the skill of Plaintiffs' work. Plaintiffs all swore that the work they "performed for Lone Star Exteriors required no specialized training or experience. [They] performed general construction duties while working for Lone Star Exteriors." Docket No. 48, Ex. B at 3, 5, 7, 9. However, when listing their prior work history, Plaintiffs Stewart and Timmons both testified that they had prior experience working for a roofing company. See Docket No. 54, Ex. 2 at 6, Ex. 3 at 6. Further, Smith swore that Plaintiffs' "roofing and gutter construction skills were not commonly held by the public at large and required prior training to perform." Docket No. 54, Ex. 1 at 2. Additionally, the Parties dispute whether Plaintiffs' work was permanent. Smith swore that Plaintiffs "worked on a project-by-project basis, were not paid during down periods, and were not guaranteed work." Docket No. 54, Ex. 1 at 2. But Plaintiffs testified that they were permanent employees of Lone Star. Docket No. 48, Ex. B at 2, 4, 6, 8; Docket No. 54, Ex. 2 at 4, Ex. 3 at 4, Ex. 4 at 4.
Genuine disputes of material fact exist, and thus the Court denies Plaintiffs' motion for summary judgment on the issue of Plaintiffs' employee status. See, e.g., Hobbs v. Petroplex Pipe & Constr., Inc. , 2018 WL 3608773, at *3 ; Wherley v. Schellsmidt , No. 3:12-CV-0242-D, 2013 WL 5744335, at *6 (N.D. Tex. Oct. 23, 2013).
Accordingly, the Court GRANTS-IN-PART and DENIES-IN-PART Plaintiffs' Motion for Partial Summary Judgment (Docket No. 48).
B.
In their summary judgment motion, Defendants argue that Plaintiffs cannot prove that they performed work for which they were improperly compensated. Docket No. 44 at 7. While Defendants concede that Lone Star failed to keep time records, they argue that Plaintiffs' evidence amounts only to "speculative and uncorroborated testimony" regarding the amount and extent of their work. Id. at 5, 7. The Court disagrees. Plaintiffs have presented enough evidence to create "a triable issue of fact ... regarding Plaintiffs' proof of hours work[ed] and the resulting damages." Docket No. 49 at 4.
"An employee bringing an action pursuant to the FLSA, based on unpaid overtime compensation, must first demonstrate that she has performed work for which she alleges she was not compensated." Harvill v. Westward Commc'ns, L.L.C. , 433 F.3d 428, 441 (5th Cir. 2005). Under the FLSA, employers are required to keep proper time records. 29 U.S.C. § 211(c) ; 29 C.F.R. § 516.2(a)(7). When employers violate this statutory duty, "and employees thereby have no way to establish the time spent doing uncompensated work, the ‘remedial nature of [the FLSA] and the great public policy which it embodies ... militate against making’ the burden of proving uncompensated work ‘an impossible hurdle for the employee.’ " Tyson Foods, Inc. v. Bouaphakeo , ––– U.S. ––––, 136 S. Ct. 1036, 1047, 194 L.Ed.2d 124 (2016) (quoting Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680, 687, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946) ). When accurate time records are unavailable, therefore, "an employee has met this burden of proof if she ‘proves that [she] has in fact performed work for which [she] was improperly compensated and if [she] produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.’ " Kirk v. Invesco, Ltd. , 700 F. App'x 334, 336 (5th Cir. 2017) (quoting Harvill , 433 F.3d at 441 ). "The burden [then] shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence." Id. (quoting Harvill , 433 F.3d at 441 ).
To raise a " ‘just and reasonable inference’ as to the amount and extent of her work, an employee need not prove ‘the precise extent of uncompensated work.’ " Id. at 336–37 (quoting Anderson v. Mt. Clemens Pottery Co. , 328 U.S. 680, 687, 66 S.Ct. 1187, 90 L.Ed. 1515 (1946) ). "The evidence of hours worked need not be perfectly accurate as long as it provides a sufficient basis to calculate the number of hours worked." Little v. Tech. Specialty Prods., LLC , 940 F. Supp. 2d 460, 470 (E.D. Tex. 2013). "Evidence can include plaintiff's testimony as to when and how many overtime hours he worked, plaintiff's affidavit to such, etc." Ford v. Hous. Indep. Sch. Dist. , 97 F. Supp. 3d 866, 873 (S.D. Tex. 2015).
Here, Defendants argue that Plaintiffs lack sufficient evidence to raise a just and reasonable inference as to the amount and extent of their work. But Plaintiffs uniformly testified that on average they worked more than eight hours per day for five or more days per week. For example, each Plaintiff swore that Smith ordered them to arrive at work at 6:30 AM and that they "worked between 60 to 70 hours per week." Docket No. 49, Ex. A at 6, 15, 22, 29, Ex. B at 2–9. Plaintiffs presented evidence that Stewart averaged twelve-fourteen hours per day for each week he worked, Docket No. 49, Ex. A at 4; Hopkins worked a total of seventy-eighty hours per week, twelve-fourteen hours per day, and six-seven days per week, id. at 12, 14; Mullins averaged twelve-fourteen hours per day and he worked six-seven days per week, id. at 20–21; and Timmons worked on average twelve hours per day and worked five-six days per week, id. at 27–28.
Defendants presented no rebuttal evidence. Rather, Smith's testimony arguably corroborates Plaintiffs' evidence. Smith confirmed that each Plaintiff began work at 6:30 AM and that at least on some days, Plaintiffs worked longer than eight hours. Docket No. 49, Ex. C at 10: 14–19, 17:12–16. Defendants argue that this case is similar to Kirk , in which the Fifth Circuit found that the plaintiff failed to present sufficient evidence to raise a just and reasonable inference that she worked overtime. See 700 F. App'x at 337. But in Kirk , there was evidence rebutting plaintiff's proof, including an employee policy stating that plaintiff was expected to work only "37.5 hours each week." Id. at 335. Here, no such evidence exists, and in fact, Smith's testimony arguably corroborates Plaintiffs' testimony.
Accordingly, Plaintiffs have presented more than "speculative and uncorroborated" evidence regarding the amount and extent of their work as a matter of just and reasonable inference. See, e.g., Prince v. MND Hosp. , Inc., No. H-08-2617, 2009 WL 2170042, at *6 (S.D. Tex. July 20, 2009) ; Beck v. Access eForms, LP , No. 4:16-CV-00985, 2018 WL 4537241, at *5 (E.D. Tex. Aug. 8, 2018) ; Metcalfe v. Revention, Inc. , No. 4:10-CV-3515, 2012 WL 3930319, at *8 (S.D. Tex. Sept. 10, 2012) ; Garner v. Chevron Phillips Chem. Co., L.P. , 834 F. Supp. 2d 528, 546–47, 556 (S.D. Tex. 2011) ; Ting Yao Lin v. Hayashi Ya II, Inc. , No. 08 Civ. 6071, 2009 WL 289653, at *3 (S.D.N.Y. Jan. 30, 2009).
The Court therefore DENIES Defendants' Motion for Summary Judgment (Docket No. 44).
IV.
Accordingly, the Court GRANTS-IN-PART and DENIES-IN-PART Plaintiffs' Motion for Partial Summary Judgment (Docket No. 48) because (1) Defendants concede that summary judgment is appropriate regarding their good faith defense to liquidated damages and Smith's liability as a manager, and (2) Defendants presented genuine disputes of material fact regarding Plaintiffs' employee status.
The Court DENIES Defendants' Motion for Summary Judgment (Docket No. 44) because Plaintiffs presented sufficient evidence for a jury reasonably to conclude that they performed work for which they were improperly compensated.
So ORDERED and SIGNED this 30th day of October, 2019.