United States District Court, S.D. Texas, Houston Division
Rosenthal Chief United States District Judge.
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.
reasons for the ruling are explained below.
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. 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.
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.
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.
The Summary Judgment Standard
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).
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
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
The Summary Judgment Evidence
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).
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 ...