Opinion
CIVIL ACTION NO. 1:21-cv-223-AT
2022-01-21
Emilio CAMPO, individually and on behalf of those similarly situated, Plaintiff, v. GRANITE SERVICES INTERNATIONAL, INC. ; and FieldCore Services Solutions, LLC, Defendants.
Andrew W. Dunlap, Pro Hac Vice, Michael A. Josephson, Pro Hac Vice, Richard M. Schreiber, Pro Hac Vice, Josephson Dunlap Law Firm, Houston, TX, Charles Ryan Morgan, Morgan & Morgan, P.A., Orlando, FL, Andrew R. Frisch, Morgan & Morgan, P.A., Plantation, FL, Jeremy Stephens, Morgan & Morgan, PA, Atlanta, GA, for Plaintiff. Brett Christopher Bartlett, Kevin Michael Young, Lennon Haas, Zheyao Li, Seyfarth Shaw, LLP, Atlanta, GA, for Defendants.
Andrew W. Dunlap, Pro Hac Vice, Michael A. Josephson, Pro Hac Vice, Richard M. Schreiber, Pro Hac Vice, Josephson Dunlap Law Firm, Houston, TX, Charles Ryan Morgan, Morgan & Morgan, P.A., Orlando, FL, Andrew R. Frisch, Morgan & Morgan, P.A., Plantation, FL, Jeremy Stephens, Morgan & Morgan, PA, Atlanta, GA, for Plaintiff.
Brett Christopher Bartlett, Kevin Michael Young, Lennon Haas, Zheyao Li, Seyfarth Shaw, LLP, Atlanta, GA, for Defendants.
ORDER
AMY TOTENBERG, UNITED STATES DISTRICT JUDGE
This matter is before the Court on Defendants’ Motion to Dismiss [Doc. 14]. Plaintiff Emilio Campo brings this case as a putative collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. In the Amended Complaint, Campo seeks to recover unpaid overtime wages based on Defendants’ alleged practice of paying their employees "straight time" for overtime hours. For the reasons set forth below, the Court DENIES Defendants’ motion to dismiss.
I. Background
For purposes of this Order, the Court accepts the facts alleged in Campo's Amended Complaint as true and construes these facts in the light most favorable to Campo. Hill v. White , 321 F.3d 1334, 1335 (11th Cir. 2003).
Defendants Granite Services International, Inc. ("Granite") and FieldCore Services Solutions, LLC ("FieldCore") provide field, technical, and support services for the power generation and oil and gas industries. (Am. Compl., Doc. 8 ¶ 33.) Campo worked for Defendants as an Environment, Health, and Safety Advisor from approximately August 2019 to February 2020. (Id. ¶ 13.) During that time Campo performed work in Iowa, Minnesota, and Wyoming. (Id. ¶ 36.) Campo alleges that while he was working for Defendants he was neither guaranteed nor actually paid a full salary. (Id. ¶¶ 5–6.) Instead, he alleges that he was paid at the hourly rate of $48 per hour for all hours that he worked even when he worked more than 40 hours in a workweek. (Id. ¶¶ 14, 38–39.)
In his Amended Complaint, Campo alleges that Granite rebranded itself as FieldCore in 2017 and that the two entities qualify as joint employers for purposes of the FLSA. (Am. Compl., Doc. 8 ¶¶ 1, 22–23.) Although Defendants contend that Campo "never worked for" Granite, (Defs.’ Mot. to Dismiss, Doc. 14 at 1), they have not moved to dismiss Granite from the case on that basis.
Prior to initiating this lawsuit, Campo participated in a related action against these same Defendants, Greinstein v. FieldCore Services Solutions, LLC , No. 2:18-CV-208 (N.D. Tex.). See Greinstein v. FieldCore Services Solutions, LLC , No. 2:18-CV-208, 2020 WL 6821005, at *1 (N.D. Tex. Nov. 20, 2020) (noting that "[s]ince filing suit, three former EHS employees ha[d] opted-in as plaintiffs" including "Emilio Campo, an EHS Manager who worked for Defendants in Iowa, Minnesota, and Wyoming from August 2019 until February 2020"). Much like Campo has done in this case, the lead plaintiff in Greinstein alleged that Defendants violated the FLSA by paying him "the same hourly rate for all hours worked including those in excess of forty hours in a single work week." 2020 WL 6821005, at *1. The court ultimately limited the scope of the collective action in that matter to plaintiffs who resided in or worked for Defendants in Texas on the theory that the Court lacked jurisdiction over out-of-state plaintiffs’ claims. Id. at *4, *9. In so holding, the court determined that it lacked specific personal jurisdiction over the out-of-state plaintiffs’ claims because they bore no relation to the State of Texas, and Defendants were not subject to general jurisdiction in Texas because they were both Delaware corporations with a principal place of business in Georgia. Id. at *3–*4. Campo was dismissed as a plaintiff in Greinstein shortly after the collective action was limited to Texas. See Order Terminating Plaintiff Emilio Campo, Greinstein v. FieldCore Servs. Sols., LLC , No. 2:18-CV-208 (N.D. Tex. Dec. 23, 2020), Doc. 130. Campo initiated his lawsuit in this Court on January 14, 2021, (Compl., Doc. 1), and a few weeks later he filed an Amended Complaint, which is the operative complaint in this case, (Am. Compl., Doc. 8).
In his Amended Complaint, Campo alleges that Defendants violated the FLSA by paying him "straight time" pay for overtime hours instead of paying him at the 1.5 times rate required by 29 U.S.C. § 207(a)(1). (Id. ¶ 70.) Pursuant to the FLSA's collective action provision, Campo also seeks to represent "all other similarly situated workers who were paid by Defendants’ straight time for overtime system, regardless of job title." (Id. ¶¶ 16, 18) (citing 29 U.S.C. § 216(b) ). Campo seeks a declaratory judgment that Defendants’ pay practices violated the FLSA as well as "overtime wages ... in an amount equal to 1.5 times his rate of pay, plus liquidated damages, attorney's fees, and costs." (Id. ¶¶ 73–74.) Defendants promptly moved to dismiss the Amended Complaint. (Defs.’ Mot. to Dismiss ("Defs.’ MTD"), Doc. 14.) In their motion, Defendants argue that Campo fails to state a claim for relief under the FLSA because he was a highly compensated employee who was exempt from the Act's overtime requirements. (Id. at 12–19.)
II. Legal Standard
To survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). For the purposes of a motion to dismiss, the court must accept all factual allegations in the complaint as true; however, the court is not bound to accept as true a legal conclusion couched as a factual allegation. Twombly , 550 U.S. at 555, 127 S.Ct. 1955. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Iqbal , at 679, 129 S.Ct. 1937. Although the plaintiff is not required to provide "detailed factual allegations" to survive dismissal, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 678, 129 S.Ct. 1937 ; Twombly , 550 U.S. at 555, 127 S.Ct. 1955.
III. Discussion
The Court begins with a review of the relevant law. As Campo notes, the FLSA prohibits covered employers from employing anyone for more than 40 hours in a workweek, unless the employee receives compensation for any overtime hours "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)(2)(C). But as Defendants point out, the Act also expressly exempts from this requirement "any employee employed in a bona fide executive, administrative, or professional capacity." Id. § 213(a)(1). The Act's implementing regulations clarify that this exemption also applies to certain "highly compensated employees." Litz v. Saint Consulting Grp., Inc. , 772 F.3d 1, 3 (1st Cir. 2014) (citing 29 C.F.R. § 541.601 ); see also Hughes v. Gulf Interstate Field Servs., Inc. , 878 F.3d 183, 188 (6th Cir. 2017) (similar). The Court will refer to this particular exemption as the "HCE exemption."
As one Circuit has observed, the HCE exemption is "a less burdensome way to prove an executive, administrative, or professional exemption," but it is "not a separate exemption." Coates v. Dassault Falcon Jet Corp. , 961 F.3d 1039, 1042 n.2 (8th Cir. 2020).
The FLSA's implementing regulations provide that for any category of exemption under Section 213, including the HCE exemption, "[t]he exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee's salary and duties meet the requirements of the regulations in this part." 29 C.F.R. § 541.2. Consistent with that general rule, under the HCE exemption, "an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee." Id. § 541.601(a)(1). The regulations further clarify that the employee's total annual compensation "must include at least $684 per week paid on a salary or fee basis." Id. § 541.601(b)(1). And the exemption "applies only to employees whose primary duty includes performing office or non-manual work." Id. § 541.601(d). Put differently, three tests must be satisfied for an employee to qualify for the HCE exemption: (1) a salary-basis test; (2) a salary-level test; and (3) a duties test. Hughes , 878 F.3d at 188.
Beginning with the salary-basis test, the regulations state,
An employee will be considered to be paid on a "salary basis" within the meaning of this part if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.
29 C.F.R. § 541.602(a). Employers are also permitted to provide employees who earn at least $684 per week with "additional compensation" consistent with the exemption. See id. § 541.604(a) ("[T]he exemption is not lost if an exempt employee who is guaranteed at least $684 each week paid on a salary basis also receives additional compensation based on hours worked for work beyond the normal workweek."). The regulations add that "[s]uch additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include paid time off." Id. Additionally, 29 C.F.R. § 541.604(b) clarifies that "[a]n exempt employee's earnings may be computed on an hourly, a daily or a shift basis, without losing the exemption or violating the salary basis requirement" if (1) "the employment arrangement also includes a guarantee of at least the minimum weekly required amount paid on a salary basis regardless of the number of hours, days or shifts worked," and (2) "a reasonable relationship exists between the guaranteed amount and the amount actually earned."
If the salary-basis test is satisfied, the employee's "salary level" must also exceed the threshold contemplated by the regulations. That means the employee must receive a "total annual compensation of at least $107,432," id. § 541.601(a)(1), and "at least $684 per week paid on a salary or fee basis," id. § 541.601(b)(1). For purposes of calculating the employee's total annual compensation, "[t]he employer may utilize any 52–week period as the year, such as a calendar year, a fiscal year, or an anniversary of hire year." Id. § 541.601(b)(4). However, "[i]f the employer does not identify some other year period in advance, the calendar year will apply." Id.
Finally, the employee's work must satisfy the duties test. The regulations state, "A high level of compensation is a strong indicator of an employee's exempt status, thus eliminating the need for a detailed analysis of the employee's job duties." Id. § 541.601(c). Therefore, "a highly compensated employee will qualify for exemption if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee[.]" Id.
Importantly, "the employer bears the burden of proving its entitlement to an exemption." Chin Hui Hood v. JeJe Enters., Inc. , No. 1:14-cv-2405, 2014 WL 12767347, at *1 (N.D. Ga. Oct. 3, 2014) (citing Morgan v. Family Dollar Stores, Inc. , 551 F.3d 1233, 1269 (11th Cir. 2008) and Evans v. McClain of Ga., Inc. , 131 F. 3d 957, 965 (11th Cir. 1997) ). Thus, for Defendants to prevail, they must establish that the exemption applies "by ‘clear and affirmative evidence.’ " Id. (quoting Birdwell v. City of Gadsden , 970 F.2d 802, 805 (11th Cir. 1992) ). The question at this stage is whether Defendants have shown by clear and affirmative evidence that the HCE exemption applies despite the fact that this case is only at the pleading stage.
Although, as Campo argues, the application of an affirmative defense is generally a fact-intensive question, there may be some circumstances in which defendants can satisfy their evidentiary burden based on materials properly considered by the Court at the pleading stage. Accordingly, the Court will first address what materials the Court can properly consider for purposes of determining whether the HCE exemption applies. Then, after making that determination, the Court will address whether the exemption applies based on the materials that are appropriately subject to the Court's consideration at this juncture.
A. Scope of the Materials the Court Can Consider
Ordinarily, the evidence the Court considers on a motion to dismiss should be limited to the four corners of the complaint; otherwise, the motion would have to be converted to a motion for summary judgment. See 5C Charles Allen Wright et al., Federal Practice and Procedure § 1366 (3d ed. 1998) (noting that "whenever outside matters are presented to and not excluded by the court, the matter will be considered by the appellate court as one for summary judgment"). However, under the incorporation by reference doctrine, the court can consider materials outside of the complaint without converting a motion to dismiss to a motion for summary judgment when they are "(1) central to the plaintiff's claim; and (2) undisputed." Horsley v. Feldt , 304 F.3d 1125, 1134 (11th Cir. 2002). Additionally, when considering a motion to dismiss, a court can take judicial notice of facts that "are not subject to reasonable dispute because they are capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Bryant v. Avado Brands, Inc. , 187 F.3d 1271, 1278 (11th Cir. 1999) (citing Fed. R. Evid. 201(b) ). Relying on these principles, Defendants argue that the Court can consider various documents outside the four corners of the Amended Complaint without converting their motion to dismiss to a motion for summary judgment. Specifically, Defendants argue that the Court can consider the following documents from Greinstein : a declaration Campo included in support of the plaintiffs’ conditional certification motion; the conditional certification motion itself; a show cause order issued by the court; Campo's offer letter; and portions of his pay stubs. Defendants argue that the Court can consider these materials because (1) they are central to Campo's claim and their authenticity is not in dispute, and (2) the Court can take judicial notice of the documents as "filings in other district courts." (Defs.’ MTD, Doc. 14 at 8–10.) Defendants also contend that the Court can consider the remainder of Campo's pay records, which Campo did not include among the materials he submitted in Greinstein , because they establish the hours Campo worked and the pay he received — making them central to his claim — and Campo "does not question the pay records’ authenticity." (Id. at 11–12.)
As will become clear below, for purposes of this Order the Court only needs to address whether it can consider Campo's declaration from Greinstein . The Court concludes that it cannot.
For one thing, Defendants cite no case law for the proposition that filings from another case in a different forum can be central to the claims in a distinct judicial proceeding. Although Defendants do cite case law in support of the idea that courts can take judicial notice of "public filings in other district courts," see (Defs.’ MTD, Doc. 14 at 9) (citing Harford v. Delta Air Lines, Inc. , No. 1:06-cv-2218, 2008 WL 268820, at *2 (N.D. Ga. Jan. 30, 2008) ), they cite no cases that would support taking judicial notice of this particular type of public filing — a declaration filed in a separate case — in these specific circumstances. Nor do Defendants cite any cases that would support taking judicial notice of this type of document for the purpose Defendants seek to introduce it here in the context of a motion to dismiss.
As the Eleventh Circuit has explained, "[j]udicial notice of court records is ordinarily confined to determining what happened in the course of a proceeding—when a plaintiff filed a complaint, what claims were argued and adjudicated, and so on." Kerruish v. Essex Holdings, Inc. , 777 F. App'x 285, 293 (11th Cir. 2019). Moreover, "[i]n addressing whether a court properly takes judicial notice of the nature or substance of court filings and other legal documents, the Eleventh Circuit has distinguished between taking judicial notice of the fact that court records or court rulings exist versus taking judicial notice of the truth of matters stated within those court records or court rulings." Auto Owners Ins. Co. v. Morris , 191 F. Supp. 3d 1302, 1304 (N.D. Ala. 2016) (emphasis in original). Specifically, "a court may take judicial notice of a document filed in another court not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings." Id. (quoting United States v. Jones , 29 F.3d 1549, 1553 (11th Cir. 1994) ). Consequently, "a court may take notice of another court's order only for the limited purpose of recognizing the ‘judicial act’ that the order represents or the subject matter of the litigation." Id. (quoting Jones , 29 F.3d at 1553 ).
Defendants’ request for judicial notice of Campo's declaration goes beyond that limited purpose. In this case, Defendants rely on Campo's declaration for more substantive purposes, such as for the proposition that Campo performed the exempt duties or responsibilities of an executive, administrative or professional employee under the relevant regulations. In other words, Defendants are not requesting judicial notice simply to "establish the fact of such litigation and related filings"; they are requesting judicial notice to establish the truth of the assertions contained in the filing itself. While Campo's declaration may be relevant evidence at summary judgment, a request for judicial notice in the context of a motion to dismiss is not the appropriate vehicle for addressing it. As such, the Court will not consider the declaration for purposes of resolving Defendants’ motion.
B. Application of the HCE Exemption
Though the parties vigorously dispute whether Campo satisfies both the salary-basis test and the salary-level test, the Court need not reach these issues at this stage because the Court can resolve Defendants’ motion based solely on the present factual disputes with respect to the application of the duties test.
For example, the parties dispute whether Campo was guaranteed a pre-determined salary for each week that he worked, whether Campo actually received that salary, and whether Defendants should be required to show that Campo's actual compensation bore a reasonable relationship to his guaranteed weekly salary. The Court finds that it is necessary address these issues on a more fully developed factual record.
To satisfy this test, Defendants would have to show that Campo "customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee[.]" Id. § 541.601(c). Notably, Campo says little if anything about his job duties in the Amended Complaint. All he alleges is that he "worked for Defendants as an Environment, Health, and Safety Advisor," and that Defendants "provide field services and technical and support services for the power generation and oil and gas industries." (Am. Compl., Doc. 8 ¶¶ 13, 33.) That leaves the Court with little to no information about what duties Campo customarily and regularly performs, much less whether they qualify as the exempt duties or responsibilities of an executive, administrative, or executive employee.
The executive employee exemption covers employees "[w]hose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; ... [w]ho customarily and regularly directs the work of two or more other employees; and ... [w]ho has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight." 29 C.F.R. § 541.100(a)(2)–(4). The administrative employee exemption covers employees "[w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers; and ... [w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance." Id. § 541.200(a)(2)–(3). The professional employee exemption covers employees "[w]hose primary duty is the performance of work: (i) Requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or (ii) Requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor." Id. § 541.300(a)(2).
In an effort to fill in the gaps, Defendants primarily rely on Campo's own description of his job duties in his declaration from Greinstein ; however, as previously noted, the Court cannot consider that declaration for purposes of resolving Defendants’ motion to dismiss. Though Defendants also note that the regulations do not require a "detailed analysis" of the employee's job duties when the employee is highly compensated, (Defs.’ MTD, Doc. 14 at 16) (citing 29 § 541.601(c) ), a less detailed analysis is not no analysis. And as this Court has previously acknowledged, "[t]he Eleventh Circuit recognizes that the primary duty inquiry is ‘necessarily fact-intensive.’ " Chin Hui Hood , 2014 WL 12767347, at *2 (citing Rodriguez v. Farm Stores Grocery, Inc. , 518 F.3d 1259, 1264 (11th Cir. 2008) ). Indeed, the regulations themselves state that "[d]etermination of an employee's primary duty must be based on 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).
Currently, the Court lacks a sufficient factual record to make that necessarily fact-intensive determination. The Court therefore agrees with Campo's assertion that the parties will have to engage in discovery before the Court can attempt to resolve the material issues raised in this litigation. Accordingly, Defendants’ motion to dismiss is denied.
IV. Conclusion
For the foregoing reasons, the Court DENIES Defendants’ Motion to Dismiss [Doc. 14].
IT IS SO ORDERED this 21st day of January, 2022.