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Taylor v. Amspec, L.L.C.

United States District Court, S.D. Texas, Houston Division

June 7, 2017

WELL TAYLOR, Plaintiffs,
AMSPEC, L.L.C., formerly known as AMSPEC SERVICES, L.L.C., Defendant.


          Lee H Rosenthal Chief United States District Judge.

         Six former employees sued AmSpec for overtime pay under the Fair Labor Standards Act (FLSA), 29 U.S.C. §207. The plaintiffs contend that AmSpec improperly calculated the regular rate of pay used to determine their overtime wages by excluding payments for work done on scheduled days off. AmSpec moved for summary judgment that it properly calculated and paid overtime, because the payments reimbursed the plaintiffs for mileage and other work expenses that were properly excluded from the regular rate and overtime calculations. The employees responded, and AmSpec replied. (Docket Entry Nos. 37, 38, 40). Based on the parties' motions and responses, the record, and the applicable law, AmSpec's motion for summary judgment is denied. A hearing is set for June 21, 2017, at 9:00 a.m. to set a trial date.

         The reasons for the ruling are explained below.

         I. Background

         AmSpec is a limited liability company that inspects and analyzes petroleum-based products, storage tanks, and shipping devices. The six plaintiffs-Well Taylor, Joseph Cavallini, Sadrick Terrell, Bruce Marks, Eric Galindo, and Robert Narvaez-were employed as inspectors with AmSpec between September 2012 and November 2014.[1] Their job duties included sampling and measuring fuel shipments. These duties required the plaintiffs to drive their personal vehicles from one work location to another during the workday. Mr. Narvaez was based at AmSpec's Seabrook branch office. The other five employees were based at the Houston branch office.

         The plaintiffs worked hours that varied from week to week, depending on when cargo ships came and went. AmSpec paid using the fluctuating workweek method under 29 C.F.R. §778.114. The parties agree that Hanson v. Camin Cargo Control, Inc., No. CIV. A. H-13-0027, 2015 WL 1737394 (S.D. Tex. Apr. 16, 2015) sets out the proper way to calculate the regular rate of pay under the fluctuating workweek method. (See Docket Entry No. 38 at 2). “The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.” 29 C.F.R. §778.109. If the plaintiffs received some overtime payment that was erroneously calculated, that amount is deducted from the half-time premium owed in order to determine the final amount of unpaid overtime due. Hanson, 2015 WL 1737394, at *8.

         The parties agree that the plaintiffs except Mr. Narvaez worked on days that were scheduled as days off. The plaintiffs received payments for this work in amounts varying from $100 to $200, usually in checks separate from their regular paychecks. The parties disagree as to whether AmSpec properly excluded these payments from the plaintiffs' regular hourly rate in calculating overtime under the fluctuating workweek method. AmSpec contends that the payments were reimbursements for mileage and other work-related expenses, and were properly excluded from the regular rate calculation under 29 U.S.C. §207(e)(2) and 29 C.F.R. §778.217(a). AmSpec moves for summary judgment on the ground that it properly excluded the payments from the regular rate calculation. Alternatively, AmSpec argues that if some part of the payments was compensation for working on scheduled days off, the remaining parts were reasonable approximations for mileage-expense reimbursements and were properly excluded from the calculation. The plaintiffs contend that ample record evidence shows that the payments were for work and had to be included in the regular rate of pay. Because it was not, the plaintiffs contend that summary judgment dismissing the overtime claim is improper.

         II. The Summary Judgment Standard

         “Summary judgment is required when ‘the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Trent v. Wade, 776 F.3d 368, 376 (5th Cir. 2015) (quoting Fed.R.Civ.P. 56(a)). “A genuine dispute of material fact exists when the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Nola Spice Designs, LLC v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The moving party ‘bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'” Id. (quoting EEOC v. LHC Grp., Inc., 773 F.3d 688, 694 (5th Cir. 2014)); see also Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

         “Where the non-movant bears the burden of proof at trial, the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial.” Id. (quotation marks omitted); see also Celotex, 477 U.S. at 325. Although the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th Cir. 2005). “A fact is ‘material' if its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Sossamon v. Lone Star State of Texas, 560 F.3d 316, 326 (5th Cir. 2009) (quotation omitted). “If the moving party fails to meet [its] initial burden, the motion [for summary judgment] must be denied, regardless of the nonmovant's response.” United States v. $92, 203.00 in U.S. Currency, 537 F.3d 504, 507 (5th Cir. 2008) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per curiam)).

         “Once the moving party [meets its initial burden], the nonmoving party must ‘go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.'” Nola Spice , 783 F.3d at 536 (quoting LHC Grp., 773 F.3d at 694). The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party's claim. Baranowski v. Hart, 486 F.3d 112, 119 (5th Cir. 2007). “This burden will not be satisfied by ‘some metaphysical doubt as to the material facts, by conclusory allegations, by unsubstantiated assertions, or by only a scintilla of evidence.'” Boudreaux, 402 F.3d at 540 (quoting Little, 37 F.3d at 1075). In deciding a summary judgment motion, the court draws all reasonable inferences in the light most favorable to the nonmoving party. Connors v. Graves, 538 F.3d 373, 376 (5th Cir. 2008); see also Nola Spice, 783 F.3d at 536.

         III. The Summary Judgment Evidence

         The plaintiffs rely on their deposition transcripts as well as on text messages between Mr. Galindo and AmSpec supervisor Richard Hanson. The plaintiffs contend that the documents show that they were asked to work on scheduled days off and received checks for this work as “day-off pay” separate from, and in addition to, their ordinary paychecks. AmSpec itself uses the term “day-off pay” in its briefs to refer to these payments. But AmSpec contends that the term does not mean what it says: it does not reflect the true nature of the payments as expense reimbursements, not wages. (Docket Entry No. 40 at 5).

         In his deposition, Mr. Galindo testified that Mr. Hanson, his supervisor, had from time to time offered him day-off pay for working on a scheduled day off, and that he received day-off pay of $175 to $200 per day. (Docket Entry No. 38-1 at 4). Mr. Galindo also testified that his day-off payments varied depending on the number of tanks he inspected on those days or on “how bad[ly AmSpec] needed help.” (Id. at 3-4). He testified that he understood that the payments were meant to be “under the table.” (Id. at 3) Mr. Hanson had told him to ...

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