United States District Court, S.D. Texas, Houston Division
S. HANEN, UNITED STATES DISTRICT COURT.
Parties and their counsel appeared before this Court for a
bench trial for the determination of their claims in the
above-styled and numbered case. Each side presented evidence
during trial, produced briefing, and made their respective
arguments as to the effects of the evidence, and the Court
hereby issues its findings of fact and conclusions of law.
The Court will first give a brief background and set out the
facts to which the Parties have agreed. Next the Court will
recount in detail the relevant testimony and other evidence
adduced at trial. Finally, the Court sets out its findings of
fact and conclusions of law.
Jerod Hobbs ("Hobbs"), Ronald Lee
("Lee"), Arlen Jones ("Jones"), and
Jordan Arroyo ("Arroyo") were field engineers that
worked for E.V. Incorporated (hereinafter
"EVO").Plaintiffs filed suit against EVO, Maurice
McBride ("McBride"),  Francis Neill
("Neill"), and Sam Copeman ("Copeman").
The Plaintiffs brought this action seeking unpaid overtime
and liquidated damages under the Fair Labor Standards Act
("FLSA"), claiming they worked more than 8-hour
days/40-hour weeks during the course of their employment with
EVO and were not paid overtime wages as required by the FLSA.
concede that Plaintiffs were not paid overtime, but they
differ with Plaintiffs on whether Plaintiffs are owed
overtime and differ significantly on the frequency that
overtime pay might be due, if indeed any is due. They also
concede that there were occasions when the Plaintiffs worked
in excess of 40-hour weeks, but they claim that Plaintiffs
were not entitled to overtime wages because they are exempt
from the requirements of the FLSA under the administrative,
highly compensated, and outside sales exemptions.
Agreed Findings of Fact Submitted by the Parties
a company that provides downhole video camera services for
the oil and gas industry. (Doc. No. 98 "Joint Pretrial
Order" ¶ 6.1). EVO has specialized and proprietary
camera technology which allows it to assist its customers in
reviewing well conditions, such as to identify, diagnose, or
photograph conditions that interrupt operations at a
wellsite. EVO is an enterprise in commerce within the meaning
of 29 U.S.C. § 203(s)(1) and § 203(r).
(Id. ¶ 6.2-6.3). EVO has and had an annual
gross volume of sales made or business done of not less than
$500, 000. (Id. ¶ 2). EVO is a domestic
for-profit corporation incorporated under the laws of the
State of Texas with its principal place of business in Harris
County, Texas. (Id. ¶ 6.4). The other
individual defendants-Copeman and Neill-are citizens of the
United Kingdom. (Id. ¶ 6.6-6.8). The Parties
agreed that EVO and Neill are employers under the FLSA.
(Id. ¶ 6.9-6.10).
individual Defendants were executives at EVO or one of its
affiliates. (McBride acted as interim CEO of EVO from June or
July 2015 until April 2016). (Id. ¶ 6.11).
Copeman served as Director of EVO, Corporate Officer of EVO,
and acted as President of EVO. (Id. ¶ 6.12).
The time frame in which Copeman held these positions is
discussed in more detail below. Since the Parties conceded
Neill was an employer as that term is defined in the FLSA and
since the Court directed a verdict on that issue in favor of
McBride at trial, it will concentrate any discussions of
individual liability on Copeman.
Plaintiffs Employment with EVO
employed the four Plaintiffs as field engineers.
(Id. ¶ 6.18). Hobbs, Lee, Jones, and Arroyo
were EVO's employees within the meaning of the FLSA.
(Id. ¶ 6.13). The Plaintiffs worked for EVO for
the following periods of time:
• Hobbs: September 1, 2011 until August 6, 2018
• Lee: September 4, 2014 until May 4, 2018
• Jones: April 2011 through October 5, 2014
• Arroyo: January 1, 2013 to January 26, 2016
(Id. ¶ 6.14-6.17). As field engineers, the
Plaintiffs would travel to customers' wellsite locations
where they would obtain downhole video and provide EVO's
customers with a thumb drive containing the downhole video,
the job log, and individual pictures as requested by the
customer that the field engineer collected throughout the
job. (Id. ¶ 6.20-6.22). The job logs and
summaries were prepared on location by the field engineers,
as well as real-time annotations of the downhole video for
the customers. (Id. ¶ 6. 33). At the job site,
field engineers interfaced with wireline operators,
engineers, and company representatives-often called the
"company man." (Id. ¶ 6.32).
the course of their employment with EVO, the Parties agree
that Plaintiffs were typically the sole EVO representative at
a customer's site. (Id. ¶ 6.31). As field
engineers, the Plaintiffs did not handle employee grievances
or complaints (id. ¶ 6.24), did not discipline
other employees (id. ¶ 6.25), and did not and
could not set or adjust the rate of pay of other employees
(id. ¶ 6.23).
their employment, the Plaintiffs were located in different
states. Hobbs, whose original title was "West Virginia
Base Manager," was initially located in West Virginia
and then was transferred to Oklahoma as a field engineer.
(Id. ¶ 6.26-6.27). Lee was based in Colorado.
(Id. ¶ 6.30). Jones was based in Oklahoma.
(Id. ¶ 6.28). Arroyo was based in California.
(Id. ¶ 6.29).
field engineers, Plaintiffs earned a salary of at least
$455.00 per week. (Id. ¶ 6.19).
agreed recovery period for Hobbs is March 24, 2014 to August
6, 2018. (Id. ¶ 6.36). Hobbs' compensation
during those time periods was as follows:
• 2014: $163, 392.01
• 2015: $164, 750.00
• 2016: $110, 576.50
• 2017: $125, 140.33
• 2018: $85, 393.19
(Id. ¶ 6.37). The agreed recovery period for
Lee is September 2, 2014 to May 4, 2018. (Id. ¶
6.38). Lee's compensation during the time period was as
• 2014: $24, 783.25
• 2015: $100, 839.46
• 2016: $72, 541.51
• 2017: $75, 150.80
• 2018: $29, 972.33
(Id. ¶ 6.39). The agreed recovery period for
Jones is March 24, 2014 to October 5, 2014. (Id.
¶ 6.42). Jones' compensation during the time period
was as follows:
• $122, 932.07
(Id. ¶ 6.43). The agreed recovery period for
Arroyo is March 24, 2014 to January 26, 2016. (Id.
¶ 6.40). Arroyo's compensation during the time
period was as follows:
• 2014: $58, 752.00
• 2015: $60, 530.88
• 2016: $9, 875.00
(Id. ¶ 6.41). During their employment with EVO,
Defendants treated Plaintiffs as exempt employees for
overtime purposes. (Id. ¶ 6.44).
The Testimony and Other Evidence Adduced at Trial
General Background Information about EVO
a wholly owned subsidiary of E.V. Holdings. (EVO Ex. 93 at
14:17-15:7) ("E.V. Holdings owns ... E.V. Offshore
Limited in the U.K. and E.V. Offshore owns E.V., Inc.
[EVO].") The related companies in this corporate family
include E.V. Holdings, E.V. Finco, and E.V. Offshore, but
these entities are not at issue in this case. Although some
of the chief executives at issue in this case were on the
board of E.V. Holdings, such as Copeman and McBride, in those
positions they nonetheless maintained executive
responsibilities over EVO.
case involves a large number of non-party individuals who are
repeatedly mentioned in the testimony and exhibits.
Accordingly, the Court will briefly address the names and
titles of the most frequently mentioned persons:
• Francis Neill: Former CEO of EVO.
• Maurice McBride: Acted as interim CEO of EVO from June
or July 2015 until April 2016.
• Fraser Louden ("Louden"): The replacement
CEO of EVO after Neill left.
• Sam Copeman: CFO of EVO.
• Jonathan Thursby ("Thursby"): Developed the
downhole video technology and vision for the company. He
served on the executive board as Chief Technical Officer
• Troy Sutherlin: VP U.S. Lands of EVO. In this
capacity, he directly or indirectly supervised Plaintiffs.
• Arthur White ("White"): Rockies District
Manager / Technical Manager. In this capacity, he reported to
Sutherlin and supervised Lee. He later replaced Sutherlin in
2016 as the VP U.S. Lands.
• Gregg Linville ("Linville"): California
Manager (Consultant). He supervised and trained Arroyo.
• Monica Flores ("Flores"): Another Financial
Controller for EVO.
EVO produced an organizational of its company in
Plaintiffs' Exhibit 5, which the Court now describes in
relevant part. The executive management sector was made up of
a first tier-the CEO (Neill, McBride, and later Louden)-then
a tier consisting of the CFO (Copeman), Chief Technical
Officer (Thursby), VP Marketing, Engineering and
Manufacturing Manager, President Americas, Europe/Asia Region
Manager, and "MENA" Asia Region Manager. Under
President Americas was a third tier, consisting of the
"GOM" Manager, VP U.S. Land (Sutherlin), and VP
Canada. (Plaintiffs' Ex. 5 at l). Copeman directly supervised
three Financial Controllers (Trudi O'Brien, Alan
Hardingham, and Monica Flores) and an IT Support Engineer.
(Id. at 2).
the North American region, the three regions (GOM, U.S. Land,
and Canada) each had similar divisions with slight
differences in nomenclature. In particular, the regions had
supervisors over the field engineers and a separate sales
engineer or sales manager. (Id. at 7-9). The U.S.
Land chain of command at one point in time appeared as
(Id. at 9). As the chart shows, Sutherlin oversaw
the entire U.S. region. There were three specifically
designated salespersons, one in Houston, one in Dallas, and
one in the Rockies District. Several field engineers reported
directly to Sutherlin, including Hobbs. Others in the Rockies
District, such as Ron Lee, reported to White, who in turn
reported to Sutherlin. The California prong consisted only of
Arroyo reporting to Linville. (Id.). Jones is not
listed in any organizational charts in evidence but was
directly supervised by Sutherlin.
Copeman 's Role as a Purported Employer
Court now turns to the relevant factual findings regarding
Copeman's role with EVO as it relates to the Plaintiffs.
Some of the more relevant evidence includes the following:
• The Parties provided designated excepts from
Copeman's deposition in lieu of live testimony. In those
designations, Copeman testified to the following facts:
o Copeman held positions as both the director of EV Holdings
and as the Chief Financial Officer ("CFO") of E.V.
Holdings and CFO of E.V. Finco. (Plaintiffs Ex. 94 at 9:3-15;
o Copeman's responsibilities as CFO of E.V. Holdings were
as follows: "There were several key facets to that job.
One was to be a part of the - or to help formulate the
business plan for the company and produce annual budgets.
Then during the year to then be able to understand and
explain variances against that budget in our actual
performance, to ensure we had sufficient financing to deliver
that business plan, to directly supervise the financial
controllers of the business, and that's all I can
remember at this point." (Id. at 9:16-25).
o In the capacity of CFO of E.V. Holdings, Copeman worked as
the direct supervisor of the financial controller of EVO.
(Id. at 11:15-19).
o In 2015, Copeman held the position of president of EVO.
During that time, his responsibilities were still of those of
CFO of E.V. Holdings, which were to supervise the financial
controller of EVO. (Id. at 19:2-12; 15:1-20).
o As the president of EVO, Copeman lacked power to hire or
fire employees or to set wages, did not have the
responsibility of maintaining employment records or
supervising employee schedules, and did not determine rate
and method of payment for employees. (Id. at
o Copeman was not involved in the decision whether to
classify field engineers as exempt or non-exempt employees
under the FLSA. (Id. at 67:18-21).
• On February 26, 2016, Copeman signed letters to both
Hobbs and Lee indicating that due to an economic downturn,
their terms of employment and salaries would be changed. The
letter indicated that it was an offer to continue employment
under the new terms, which would be withdrawn if not accepted
within three days. (Plaintiffs Exs. 52, 73).
• The Statement of Employee Particulars, which detailed
the terms of employment for Lee, was signed by Copeman in
March 2016 on behalf of the company. (Plaintiffs Ex.
• In Defendant's Supplemental Objections and Answers
to Plaintiffs' First Set of Interrogatories, EVO was
asked to identify "each person involved in job
classifications as exempt or non-exempt and/or decisions to
pay or not pay overtime wages to these employees."
(Plaintiffs' Ex. 3, ROG 1). In response, EVO averred that
"Troy Sutherlin made recommendations regarding job
classification, compensation, and salaries . . . Sam Copeman
participated in some discussions regarding EVO employees'
salaries and compensation. Francis Neill approved certain
salary and compensation recommendations made by Sutherlin
and/or Copeman." (Id.).
• At trial, Louden confirmed his response to a prior
interrogatory in which he stated that the decision regarding
exempt v. non-exempt determinations was made between McBride
• Neill testified that Copeman was the CFO, in which
position he produced letters of employment, put employees on
payroll, and maintained employment records.
• Sutherlin testified to the following regarding
o Sutherlin testified that he explained to Copeman how the
pay schemes had worked at ExPro, his previous employer, but
that the structure for pay was already set by the time
Sutherlin joined EVO.
o He testified that EVO had an executive compensation
committee, consisting of Copeman, Neill, and Thursby, amongst
others. He averred that the committee met once annually after
conducting appraisals and the committee would adjust rates of
o He testified that Copeman wrote the employee manual for
o Sutherlin made recommendations regarding salaries and
bonuses to the executive committee, which included Copeman.
o Sutherlin also testified that Copeman was not involved in
the day-to-day operations of EVO.
• Plaintiffs were required to fill out self-appraisal
forms to evaluate their performance prior to an appraisal
meeting, revisions to the appraisal form were reviewed and
approved by "SC." (EVO Ex. 51).
• Plaintiffs testified that they did not know Copeman
but did receive communications from him during their
employment with EVO:
o During the trial, Hobbs testified that he did not interact
with Copeman but had a couple of letters signed by him. Hobbs
testified that he never met Copeman but when his salary was
cut, Copeman was the one who signed the letter as EVO's
corporate secretary notifying him of the change.
o Lee testified that he did not know Copeman. He also
testified to receiving a letter telling him his pay would be
cut from Copeman, but said he had only ever seen the name on
EVO organizational charts but did not interact with him. Lee
also explained that he had no personal interactions with
Copeman and did not know what the extent of Copeman's
involvement in his employment conditions were.
o Jones testified that he did not know Copeman. He
acknowledged that in his employment agreement, all notices
were supposed to be sent to Copeman.
o Arroyo testified that he only knew of Copeman through the
documents he had signed relating to Arroyo. He did not recall
interacting with Copeman.
Plaintiff's Employment with EVO
Court already noted, Plaintiffs were employed by EVO as field
engineers. Their primary duty in that role is a point of
significant contention between the Parties. Plaintiffs were
not trained or licensed professional engineers but learned
their skills either through on-the-job training or
employer-provided training courses. The Court will describe
what the evidence submitted to the Court shows about their
employment with EVO: their qualifications, job descriptions,
and the day-to-day activities of their job.
Initial Hires and Plaintiffs' Employment
arrived at EVO at different times and with different
professional and educational backgrounds. Hobbs was hired to
work at EVO in 2011, and he had previously worked in a
similar capacity at ExPro, a competitor of EVO's. Hobbs
initially held the title of "West Virginia Regional
Manager" when he was first hired at EVO in September
2011. (Plaintiffs' Ex. 71). He testified that he had no
particular managerial responsibilities in that position, but
rather worked as a field engineer and tried to find new jobs
whenever he was not in the field. Hobbs' title was
formally changed in 2016 to "Senior Field
Engineer," but he testified that he moved to Oklahoma in
2013 and began working only as a field engineer at that time.
employed as a field engineer by EVO and was based in Colorado
under the direct supervision of White. He testified that in
his previous positions, he was "a missile facility
specialist" with the United States Air Force.
was hired in 2011 and had been previously employed by DHV
International where he started running similar video
equipment back in 1989. His initial employment agreement as
of June 2011 shows that he was hired as "Lead Field
Engineer." (Plaintiffs Ex. 29).
was also employed as a field engineer by EVO. His immediate
supervisor was Greg Linville, the California Regional
Manager. As was stated in his job description, which Linville
and Arroyo agreed to as of June 11, 2013, Arroyo was a
"trainee field engineer" and his purpose of the job
was to "operate EV Downhole video equipment, on
location, in a professional, competent and safe manner in
order to satisfy the clients [sic] requirements."
(Plaintiffs' Ex. 14 at 2). His job description listed the
following relevant components: "to successfully operate
and to have sufficient working knowledge of EV Downhole Video
(Electrical) equipment that you are required to use";
"to pack and load out equipment in a correct and
efficient manner"; establish good rapport with onsite
client engineers"; "assist in the base duties,
making reports, packing kits etc. when required";
"to remain alert to onsite opportunities for providing
other group services"; and "to be available for
work at short notice when required." (Id.).
had approximately one year of "oilfield-related"
experience prior to beginning his employment as a field
engineer as a chemical inventory employee with GT Analytical.
(EVO Ex. 15). Arroyo's resume indicates that before then,
he was employed as a pusher/hydro-tester/maintenance employee
with Brinderson Construction; maintenance at a different
construction company; wait staff at a restaurant; and an
after-school program coordinator. His educational background
consisted of an Associate Degree in Science from Ventura
Community College. (Id.).
testified that his understanding when he was hired to be a
field engineer trainee was somewhat different than the other
Plaintiffs. He testified that he was hired to assist Greg
Linville with a lot of the physical tasks that Linville could
not handle since he was a little bit older in age. Arroyo
explained that these tasks included carrying the tools,
cleaning up the tools, picking up the tools, and the other
physical activity involved in the job.
Arroyo had an extended job description included in the
record. Arroyo's signed job description included ...