United States District Court, W.D. Texas, El Paso Division
R. ALEXANDER ACOSTA, Secretary of Labor, United States Department of Labor, Plaintiff,
FIVE STAR AUTOMATIC FIRE PROTECTION, LLC, Defendant.
MEMORANDUM OPINION AND ORDER DENYING DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT
R. MARTINEZ UNITED STATES DISTRICT JUDGE.
day, the Court considered Defendant Five Star Automatic Fire
Protection's ("Five Star") "Motion for
Summary Judgment" (ECF No. 22) [hereinafter
"Motion"], filed on April 28, 2017, Plaintiff R.
Alexander Acosta, Secretary of Labor, United States
Department of Labor's ("DOL"), "Response
to Defendant's Motion for Summary Judgment" (ECF No.
35) [hereinafter "Response"], filed on May 19,
2017, and Five Star's "Reply to [DOL's] Response
in Opposition to [Five Star's] Motion for Summary
Judgment" (ECF No. 40) [hereinafter "Reply"],
filed on May 22, 2017, in the above-captioned
cause. After due consideration, the Court is of
the opinion that Five Star's Motion should be denied for
the reasons set forth below.
FACTUAL AND PROCEDURAL BACKGROUND
case stems from the DOL's allegations that Five Star did
not properly compensate some of its current and former
employees from 2013 to 2015, and failed to maintain accurate
payroll records in violation of the Fair Labor Standards Act
("FLSA"). Compl. 1-2, July 7, 2016, ECF No. 1.
Specifically, the DOL attaches a list to its Complaint
("DOL List") containing the names of fifty-four
current and former employees for whom back wages are sought.
Compl. Ex. A. The DOL alleges that the employees did not
include pre- and post-shift time that they worked on their
time cards and that the employees were not properly
compensated for this time. Compl. 2. Five Star denies that it
failed to properly compensate any of its employees. Mot. 2.
Star is a business located in El Paso, Texas that designs and
installs fire sprinkler systems. Mot. Factual App. 1 (ECF No.
22-1) [hereinafter "Motion Appendix"]; Resp.
Factual App. 2 (ECF No. 35-1) [hereinafter "Response
Appendix"]. Luis Palacios is the owner and President of
Five Star,  Veronica Palacios is Luis Palacios's
wife and Vice-President of Five Star,  Jorge Cobian is a
"Construction Supervisor, " and Mary Ann Morales is the
Star employs the following categories of "construction
employees:" (1) foremen; (2) helpers, and (3)
sprinkler-fitter apprentices. Mot. App. 2; Resp. App. 2.
These construction employees perform most of their
installation work away from Five Star's headquarters at
project sites and are paid on an hourly basis. Mot. App. 2;
Resp. App. 2. Five Star generally uses "two-man
crews" consisting of a foreman and a helper to perform
work at project sites in El Paso County. Mot. App. 3; Resp.
the relevant time period, Five Star required that
construction employees record the total number of hours they
worked on time cards, but did not require that employees
include the start or end time on the time cards. Mot. App. 6;
Morales Dep. 25-26
The DOL Investigation and Report
assigned its investigator Sandra Alba ("Investigator
Alba") to conduct an investigation into Five Star's
company practices to determine whether Five Star had violated
the FLSA. Resp. Ex. Dep. of Sandra Alba, at 13 (ECF No. 35-3)
[hereinafter "Alba Deposition"]. During her
investigation, Investigator Alba visited the Five Star
facility on four separate occasions and also visited some of
the project work sites. Alba Dep. 22, 84-85. While at the
Five Star facility, Investigator Alba interviewed various
employees. Alba Dep. 24: 14-18. Investigator Alba also
interviewed current and former employees outside of the Five
Star facility via telephone and in person on multiple
occasions. Id., at 22-23.
her first visit to the Five Star facility, Investigator Alba
met with Mrs. Palacios. Alba Dep. 39-42; VP Dep. 19-20.
During this initial visit, Mrs. Palacios provided
Investigator Alba with general information regarding company
practices and the employees' day-to-day activities. Alba
Dep. 41-42. Mrs. Palacios also gave Investigator Alba a tour
of the Five Star facility, id. at 42, after which
Investigator Alba also requested time and payroll records for
the previous two years for all Five Star employees. Alba Dep.
42; VP Dep. 20.
her second visit to the Five Star facility, Investigator Alba
met briefly with Mrs. Palacios again and was provided with a
list of employees and dates of employment for the relevant
time period but was not provided with complete payroll
records for all employees. Alba Dep. 32-33. Instead,
Investigator Alba was provided with the two most recent
payroll records. Id. Investigator Alba avers that
she never received the complete payroll records that she
requested. Id. at 32. During that same visit,
Investigator Alba also began conducting employee interviews
at the Five Star facility. Id. at 32-33; VP Dep. 20.
her third visit to the Five Star facility, which Investigator
Alba referred to as the "preliminary final conference,
" Investigator Alba met with both Mr. and Mrs. Palacios
to inform them that she had determined, from her
investigation, that Five Star had violated the FLSA. Alba
Dep. 30-31; VP Dep. 22-23. Mr. and Mrs. Palacios denied that
any employees were owed any money. LP Dep. 172; VP Dep. 23;
Alba Dep. 30. According to Investigator Alba, she also
informed Mr. and Mrs. Palacios that back wages would need to
be calculated for all construction employees for the relevant
time period, and Mr. Palacios requested additional time to
consult with his attorney. Alba Dep. 30-32.
her fourth and final visit to the Five Star facility, which
Investigator Alba referred to as the "final conference,
" Investigator Alba met with Mr. and Mrs. Palacios again
to ascertain whether Mr. Palacios had computed the back wages
and to discuss her computation of back wages with them.
Id. at 31-32. Investigator Alba claims that Mr.
Palacios indicated that he was not in agreement with the
findings, and therefore, had not computed back wages.
Id. at 34. Investigator Alba asked Mr. Palacios
whether he wanted her to show him the documentation but he
refused to review it because he was not in agreement that any
of the employees were entitled to back wages. Id. at
Investigator Alba created a document detailing her findings
and conclusions as a result of her investigation.
See Resp. Ex. Certified Narrative and Addendum (ECF
No. 35-2) [hereinafter "Report"]. The DOL has
provided Investigator Alba's Report as primary evidence
of its FLSA overtime claims on behalf of Five Star's
employees. See generally Resp.
DOL's Authentication Officer certified the Report as a
"true copy of a document in the DOL." Report DL
1-126. The Report details Investigator Alba's conclusion
that Five Star did not properly compensate its construction
employees for overtime hours worked from September 23, 2013
through September 20, 2015. Report 77-78. Specifically,
Investigator Alba included the following findings in her
the relevant time period, Cobian required that construction
employees report to the Five Star facility at 6:30 a.m. (or
6:45 a.m. at the latest) to gather materials needed for the
day and load the company vehicles with these materials.
Id. at 77. Construction employees then reported to
job sites at 7:00 a.m. Alba Dep. 34. After construction
employees left the project sites at 3:30 p.m. each day, they
were required to return the company vehicles to Five
Star's facility and would arrive at the Five Star
facility anytime between 3:30 p.m. and 4:00 p.m. Report 77.
employees did not include their pre-shift work loading
materials into company vehicles or their post-shift work
returning the vehicles to the Five Star facility on their
time cards. Id.; Alba Dep. 90. Consequently,
construction employees were not properly compensated for this
time. Report 77; Alba Dep. 90. Specifically, Investigator
Alba concluded that Five Star did not compensate employees on
the DOL List for 3.75 hours of overtime per week. Report 78.
Alba explained during her deposition testimony that she
computed back wages in the following manner. In the absence
of records, Investigator Alba reconstructed the construction
employees* hours based on information that she gathered
during her investigation. Alba Dep. 53. Specifically,
Investigator Alba determined, based on information that Mrs.
Palacios and employees provided to her, that construction
employees worked from 7:00 a.m. to 3:30 p.m., five days a
week. Id. at 34. Consequently, Investigator Alba
calculated additional uncompensated time as overtime.
Id.; 29 U.S.C. § 207(a) (providing that hours
worked in excess of forty per week is compensable overtime).
on employee interviews, Investigator Alba also used a
conservative average for the amount of uncompensated overtime
spent pre- and post-shift. For example, employee interviews
revealed that employees engaged in uncompensated pre-shift
time lasting anywhere from fifteen to thirty minutes each
work day; Investigator Alba applied the fifteen-minute figure
in computing back wages. Id. at 50. Similarly,
employee interviews revealed that employees engaged in
uncompensated post-shift time lasting anywhere from thirty
minutes to an hour; Investigator Alba applied the
thirty-minute figure in her back wages computation.
Id. at 53.
Mr. Palacio's Affidavit and Deposition Testimony and
Cobian's Deposition Testimony
primary evidence in support of its Motion, Five Star has
submitted Mr. Palacios's affidavit along with forms from
sixteen current and former employees asserting that they have
been properly compensated. First LP Aff.
Palacios asserts the following in his affidavit:
• Five Star construction employees use an honor system
to record all of their time on a company time card. First LP
Aff. ¶ 12.
• The construction employees are instructed to include
all work time on their time cards. Id. at ¶ 13.
• Construction employees are "on-the-clock"
when they start actual work at Five Star's facility, if
any. Id. at ¶I4.
• "Shop employees" deliver the materials that
construction employees need to complete projects directly to
project sites in advance. The materials are then stored at
the site. Id. at ¶ 24.
• It is not normally the construction employees'
responsibility to load company vehicles with project
materials and deliver the materials to the project sites.
Id. at ¶ 25.
• On rare occasions construction employees might need to
load materials needed for projects, which takes between one
and two minutes. Id.
• Any material amount of time (i.e., over two minutes)
that construction employees spend loading, unloading, and
delivering materials is considered paid time and the
construction workers are paid for all their loading and
unloading time. Id. at ¶ 15.
Cobian asserted during his deposition testimony that
construction employees are compensated for time spent
returning company vehicles to the Five Star facility, Cobian
Dep. 64, and that the majority of time the materials are
already at the project sites, id. at 28.
to Federal Rule of Civil Procedure 56(a), a court "shall
grant summary judgment if 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." A genuine
dispute will be found to exist "if the evidence is such
that a reasonable jury could return a verdict for the
nonmoving party." Rogers v. Bromac Title Servs.,
LLC, 755 F.3d 347, 350 (5th Cir. 2014) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)) (internal quotation marks omitted).
Federal Rule of Civil Procedure 56(c), the party moving for
summary judgment bears the initial burden of. . .
'identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of
material fact.'" Norman v. Apache Corp., 19
F.3d 1017, 1023 (5th Cir. 1994) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)).
56(c) mandates the entry of summary judgment... upon motion,
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that
party's case, and on which the party will bear the burden
of proof at trial." Celotex Corp., 477 U.S. at
323. Where this is the case, "there can be 'no
genuine issue as to any material fact, ' since complete
failure of proof concerning an essential element of ...