Jordan v. Helix Energy Solutions Group, Inc., No. 4:2016cv01808 - Document 39 (S.D. Tex. 2018)
Court Description: MEMORANDUM OPINION AND ORDER denying 27 MOTION for Summary Judgment , denying 29 MOTION for Partial Summary Judgment as to Certain Affirmative Defenses (Joint Pretrial Order due by 11/2/2018. Docket Call set for 11/9/2018 at 03:00 PM in Courtroom 9B before Judge Sim Lake.) (Signed by Judge Sim Lake) Parties notified. (aboyd, 4) (Main Document 39 replaced on 10/11/2018) (aboyd, 4).
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Jordan v. Helix Energy Solutions Group, Inc. Doc. 39 Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 1 of 36 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION RALPH JORDAN, Individually and and On Behalf of All Others Similarly Situated, § § § § Plaintiff, § § § § v. HELIX ENERGY SOLUTIONS GROUP, INC., CIVIL ACTION NO. H-16-1808 § § § § Defendant. MEMORANDUM OPINION AND ORDER Plaintiff Ralph Jordan ("Jordan" or "Plaintiff") brought this action against defendant ("Helix" or "Defendant") Helix Energy Solutions asserting claims §§ 207 and 211. 1 ("FLSA"), 29 Pending before the court are Defendant Helix Energy Solutions Group, ("Defendant's MSJ") Inc., for violation of the overtime provisions of the Fair Labor Standards Act U.S.C. Group, Inc.'s Motion for Summary Judgment (Docket Entry No. 27), and Plaintiff Ralph Jordan's Motion for Partial Summary Judgment ("Plaintiff's MPSJ") (Docket Entry No. 29). For the reasons stated below, Plaintiff's MPSJ will be denied, plaintiff's objection to certain paragraphs of the Kenric McNeal Declaration will be overruled, and Defendant's MSJ will be denied. 1 See Plaintiff's Original Entry No. 1, p. 2 ~~3-4. Complaint ("Complaint"), Docket Dockets.Justia.com Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 2 of 36 I. A. Factual and Procedural Background Factual Background Helix provides, inter alia, rigless offshore well intervention services using specialized well intervention vessels. Jordan and the only other individual to opt-in to this action, Christopher Gordon ("Gordon"), worked as drillers on Helix's Q4000 and Q5000 vessels, respectively. Both the Q4000 and the Q5000 are semisubmersible rigless vessels used to conduct well intervention in water depths of up to 10, 000 feet. Kenric McNeal, Helix's Director of Human Resources, states in his declaration that because these vessels are rigless no actual drilling occurs. 2 Each vessel has a drill crew consisting of some combination of roughnecks, assistant derrickmen, derrickmen, and assistant drillers, all of whom are classified as non-exempt and paid on an hourly basis with overtime. 3 On the vessels the drill crew is supervised by the 2 Declaration of Kenric McNeal ("McNeal Declaration"), Exhibit A to Defendant's MSJ, Docket Entry No. 27-1, p. 2 ~~ 3-5. Although plaintiffs object to ~~8-9 of the McNeal Declaration as inadmissible parole evidence, see Plaintiff Ralph Jordan's Response in Opposition to Defendant's Motion for Summary Judgment ("Plaintiff's Response"), Docket Entry No. 35, pp. 23-24, plaintiffs have not objected to other paragraphs the declaration. All page numbers for docket entries in the record refer to the pagination inserted at the top of the page by the court's electronic filing system, CM/ECF. 3 McNeal Declaration, Entry No. 27-1, p. 2 ~6. Exhibit A to -2- Defendant's MSJ, Docket Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 3 of 36 driller. 4 Helix classified the driller position as exempt, and at all relevant times, plaintiffs were aware of that classification. 5 A driller spends the majority of his time sitting in a control room, monitoring a series of computer screens to ensure that the well intervention operations are running smoothly. 6 Drillers also review the well program with the toolpusher, company man, engineer, superintendents, and any service hands, and subsea if the driller disagrees with any portion of the well program, he makes recommendations to the toolpusher. 7 crews. 8 their Drillers also supervise drill Drillers complete performance appraisal evaluations for drill crew members every hitch, which entails scoring 4 Driller Job Description, Exhibit D-1 to Defendant's MSJ, Docket Entry No. 27-9, p. 1. See also Oral and Videotaped Deposition Ralph C. Jordan ("Jordan Deposition"), pp. 54:19-57:20, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 5-6. 5 See Oral Videotaped Deposition Mr. Christopher L. Gordon ("Gordon Deposition"), p. 56:5-12, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 6. 6 See Jordan Deposition, pp. 50:23-51:16, 66:10-20, 92:3-93:5, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 4, 7, 1314; Gordon Deposition, pp. 57:21-59:16, 112:15-113:12, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 7, 18-19. 7 Jordan Deposition, pp. 66:21-69:11, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 7-8; Gordon Deposition, pp. 122:1131:9; Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 2123. 8 Jordan Deposition, pp. 54:19-553, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, p. 5. See also Oral Deposition of Helix Rig Supervisor Chad Crenshaw ("Crensahw Deposition"), pp. 5:1-3 (stating his position as Rig Supervisor), 9:24-10:4, 45:3-16, Exhibit E to Defendant's MSJ, Docket Entry No. 27-15, pp.3, 4 and 8. -3- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 4 of 36 individuals on competency and commenting on areas of strength and areas in need of training. 9 Helix hired Jordan as an assistant driller in February of 2008, and Jordan worked in that position until October of 2013 when he was promoted to the position of driller. 10 Jordan worked as a driller 2016 from October discharged. 11 of 2013 until June of when he was Helix calculated Jordan's pay on a daily basis, which during his employment as a driller, ranged from $923.00-$1,014.00 per day. 12 Jordan's daily rate of pay stayed constant regardless of the number of hours he worked in a day. 13 Jordan was paid on a bi-weekly basis and he always received more than $455.00 for any week that he worked. 14 Jordan earned more than $100,000.00 each complete year he worked as a driller. 15 9 Jordan Deposition, pp. 72:22-77:16, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 8-10; Gordon Deposition, pp. 63:1925, 90:9-91:21, Exhibit C to Defendant's MSJ, Docket Entry No. 273, pp. 8 and 14; Crensahw Deposition, pp. 16:3-17:4, 45:11-13, Exhibit E to Defendant's MSJ, Docket Entry No. 27-15, pp. 5-6, 8. 10 Jordan Deposition, p. 46:10-19, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, p. 3; McNeal Declaration, Exhibit A to Defendant's MSJ, Docket Entry No. 27-1, p. 3 ~11. 11 McNeal Declaration, Entry No. 27-1, p. 3 ~12. Exhibit A to Defendant's MSJ, Docket 12 Jordan Deposition, pp. 83:22-84:7, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, p. 11. 13 Id. at 87:13-15, Docket Entry No. 27-8, p. 12. 14 Id. at 86:6-8, Docket Entry No. 27-8, p. 12. 15 Id. at 84:8-85:16, Docket Entry No. -4- 27-8, pp. 11-12. See (continued ... ) Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 5 of 36 Helix hired Gordon as a driller Gordon worked in that position until discharged. 16 in November of 2013, and June of 2015 when he was Helix rehired Gordon as a driller in July of 2015 and he worked in that position until December of 2016 when he was demoted to the position of assistant driller. 17 Gordon's pay on a daily basis, Helix calculated which during his employment as a driller, ranged from $923.00-$985.00 per day. 18 Gordon's daily rate of pay stayed constant regardless of the number of hours he worked, he was paid on a bi-weekly basis, always received more than $455.00 in any week that he worked, and earned more than $100,000.00 each year he worked as a driller. 19 15 ( • • • continued) also Jordan's 2014-2016 W2s, Exhibit D-6 to Defendant's MSJ, Docket Entry No. 27-14. 16 Gordon Deposition, pp. 55:9-11, 75:2-14, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 6 and 10. See also Gordon's Offer of Employment, Exhibit C-2 to Defendant's MSJ, Docket Entry No. 27-5. 17 Gordon Deposition, pp. 75:15-18, 78:14-21, 118:20-25, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 10, 11, and 20. See also Gordon's Rehire Letter, Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6. 18 Gordon Deposition, pp. 55:12-15, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 6; See also Gordon's Offer of Employment, Exhibit C-2 to Defendant's MSJ, Docket Entry No. 27-5; and Gordon's Rehire Letter, Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6. 19 Gordon Deposition, pp. 54:7-55:18 Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 6. See also Gordon's 2014-2016 W2s, Exhibit C-4 to Defendant's MSJ, Docket Entry No. 27-7. -5- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 6 of 36 B. Procedural History On June 23, 2016, Jordan filed individually and on behalf of all seeking damages an Original others Complaint, similarly situated, for unpaid overtime wages pursuant to the FLSA based on allegations that Helix misclassified him as exempt and improperly paid him on a day rate basis with no overtime compensation. 20 On July 18, plaintiff's 2016, Helix filed its Original Answer denying allegations, and asserting several affirmative defenses, including that Jordan was exempt from the FLSA's overtime requirements under the executive, highly compensated, administrative, and combination exemptions. 21 The parties stipulated to conditional certification, 22 and only one other individual, Christopher Gordon ("Gordon") , joined the class. 23 20 See Complaint, Docket Entry No. 1, pp. 1, 4-5. 21 See Defendant Helix Energy Solutions Group, Inc.'s Original Answer and Affirmative Defenses to Plaintiff's Original Complaint ("Original Answer"), Docket Entry No. 7, p. 2 '][3. See also Defendant's Response, Docket Entry No. 36, p. 10 n.1 ("Helix withdraws its affirmative defense on the professional exemption.") . 22 See Stipulation and Order Signed by Judge Lake Conditional Certification and Notice, Docket Entry No. 15. 23 See Notice of Consent, Docket Entry No. 18. -6- Re: Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 7 of 36 On April 27, 2018, Helix filed Defendant's MSJ, asserting that no genuine issues of material fact exist that Jordan and Gordon are exempt under two FLSA exemptions: the executive and highly compensated exemptions, that it is entitled to summary judgment on the issue of willfulness, and that fact issues exist on the administrative and combination exemptions. 24 On April 30, 2018, Jordan filed his MPSJ, arguing that Helix waived its right to assert FLSA exemptions as affirmative defenses, and that even if it did not waive its affirmative defenses, Helix cannot meet its burden on the executive, highly compensated, administrative, combination, professional, and foreign exemptions, and that Helix cannot prove that it acted in good faith. 25 Both parties have filed responses in opposition to the other party's summary judgment motion, 26 and replies in support of their respective motions for summary judgment. 27 24 Defendant' s MSJ, Docket Entry No. 27. 25 Plaintiff's MPSJ, Docket Entry No. 29. 26 See Plaintiff's Response, Docket Entry No. 35; Defendant Helix Energy Solutions Group, Inc.'s Response to Plaintiffs' Partial Motion for Summary Judgment ("Defendant's Response"), Docket Entry No. 36. 27 See Defendant Helix Energy Solutions Group, Inc.'s Reply in Support of Defendant's Motion for Summary Judgment ("Defendant's Reply"), Docket Entry No. 37; Plaintiff Ralph Jordan's Reply in Support of His Motion for Partial Summary Judgment ("Plaintiff's Reply"), Docket Entry No. 38. -7- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 8 of 36 II. Standard of Review Summary judgment is warranted if the movant establishes that there is no genuine dispute as to any material fact and that it is entitled to judgment as a matter of law. An examination material. ( 1986) . of substantive law Fed. R. Civ. P. 56(a). determines to facts are Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2510 Material facts are those facts that "might affect the outcome of the suit under the governing law." as which a material fact exists if the Id. evidence A genuine issue is such that a reasonable trier of fact could resolve the dispute in the nonmoving party's favor. Id. at 2511. plain of language judgment "after Rule The Supreme Court has interpreted the 56 (a) adequate time to mandate for the discovery entry of summary and motion, upon 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 that party will bear the burden of proof at trial." Corp. v. Catrett, 106 S. Ct. 2548, 2552 (1986). Celotex The movant must inform the court of the basis for summary judgment and identify relevant excerpts from depositions, pleadings, answers to interrogatories, admissions, or affidavits that demonstrate there are no genuine fact issues. Id. at 2553. If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party "must produce evidence that 'would entitle it -8- to a directed verdict if the Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 9 of 36 evidence went uncontroverted at trial.'" Dallas/Fort Worth International Airport Board v. INet Airport Systems, Inc., 819 F.3d 245, 255 (5th Cir. 2016) Rally's, Inc., 939 (quoting International Shortstop, Inc. v. F.2d 1257, 1264-65 (5th Cir. 1991)). For example if a defendant moves for summary judgment on the basis of an affirmative defense, "it must establish beyond dispute all of the defense's essential elements." Healthcare Inc., 468 F.3d 237, Bank of Louisiana v. Aetna U.S. 241 (5th Cir. 2006). If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. Celotex, 106 S. Ct. 2553. If the movant satisfies its initial burden, the burden shifts to the nonmoving party to show by affidavits, depositions, answers to interrogatories, summary exist. judgment is admissions on file, not or other evidence that warranted because Celotex, 106 S. Ct. 2553. genuine fact issues The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. must draw all reasonable Id. In reviewing the evidence "the court inferences in favor of the nonmoving party, and it may not make credibility determinations or weigh the evidence." Reeves v. Sanderson Plumbing Products, Inc., 12 0 S. Ct. 2097, (2000). 2110 Factual controversies are to be resolved in -9- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 10 of 36 favor of the nonmovant, "but only when . . both parties have submitted evidence of contradictory facts." Corp., 37 F. 3d 1069, 1075 (5th Cir. 1994) Little v. Liquid Air (en bane) (per curiam). "When parties file cross-motions for summary judgment, must] review evidence and 'each party's inferences nonmoving party." motion in the independently, light most [the court viewing favorable to the the Cooley v. Housing Authority of City of Slidell, 747 F.3d 295, 298 (5th Cir. 2014) (quoting Ford Motor Co. v. Texas Department of Transportation, 264 F.3d 493, 498 (5th Cir. 2001)). III. Jordan employees has under Cross-Motions for Summary Judgment alleged the that FLSA and failing to pay them overtime. 28 he that and Gordon Helix were violated non-exempt the FLSA by Helix has responded that Jordan and Gordon were exempt from the FLSA's overtime requirements under the executive, administrative, professional, combination, and/or highly compensated employee exemptions. 29 Helix argues that it is entitled to summary judgment that Jordan and Gordon were exempt from the FLSA's overtime provisions as a matter of law under the executive and highly-compensated exemptions, and, if not, that plaintiffs are 28 See Complaint, Docket Entry No. l. See Original Answer, Docket Entry No. 7, p. 2 ~3. See also Defendant's Response, Docket Entry No. 36, p. 10 n.1 ("Helix withdraws its affirmative defense on the professional exemption.") , p.10 n.6 (same). 29 -10- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 11 of 36 unable to establish that any violation of the FLSA was willful. 30 Jordan argues that plaintiffs are entitled to summary judgment that he and Gordon are not exempt from the FLSA's overtime provisions as a matter of law under the executive, administrative, professional, combination, highly compensated, and foreign employee exemptions, and that Helix practices. 31 did not have a good faith basis for its pay Jordan also argues that Helix has waived its exemption and good faith defenses by failing to plead the factual basis for them. 32 Helix argues in response that it never asserted the foreign exemption, that it withdraws its affirmative defense on the professional exemption, and that genuine issues of material fact preclude granting plaintiff's motion for summary judgment that he and Gordon are not exempt under the administrative and combination exemptions. 33 Helix also argues that its affirmative defenses are sufficiently pleaded. 34 30 Defendant' s MSJ, Docket Entry No. 27, pp. 6, 11-20; Defendant's Response, Docket Entry No. 36, pp. 16-17 and 19-26. 31 Plaintiff' s MPSJ, Docket Entry No. 2 9, pp. Plaintiff's Response, Docket Entry No. 35, pp. 23-41. 32 Plaintiff' s MPSJ, Docket Entry No. 29, pp. 17, (exemption defenses), and 34-35 (good faith defenses). 33 17, 19, 23-36; 21-23 Defendant's Response, Docket Entry No. 36, p. 10 n.1, p. 26 n.6, and pp. 27-32. 34 Id. at 17-18. -11- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 12 of 36 A. Applicable Law The FLSA provides that "[n]o employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times § the regular 207 (a) (2). rate The at FLSA which does, exemptions to this requirement. he is however, employed." include See Zannikos v. a employees, requirements executive, [of the however, are FLSA] . ") . administrative, exempt Workers u.s.c. number of Oil Inspections (U.S.A.), Inc., 605 F. App'x 349, 352 (5th Cir. 2015) ("Certain 29 from (per curiam) the overtime employed in bona fide or professional capacities are exempt from the FLSA's overtime requirements. See 29 U.S.C. § 213(a) (1) (exempting employed from § 207 "any employee in a executive, administrative, or professional capacity bona fide ."). The Department of Labor ("DOL"), which is tasked with administering the FLSA, 29 U.S.C. exemptions. § 204, has published regulations that define these Pursuant to the DOL regulations highly compensated employees who perform at least one of the duties of an executive, administrative, or professional employee are exempt from the FLSA's overtime requirements, see 29 C.F.R. perform "a combination of administrative[, and] 541.601, and employees who duties professional[] exempted from the FLSA' s § exempt § for employees," are also overtime requirements. 541.708. -12- executive, See 2 9 C. F. R. Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 13 of 36 "[T]he general rule [is] that the application of an exemption under the [FLSA] is a matter of affirmative defense on which the employer has the burden of proof." 94 S. Ct. 2223, 2229 (1974). Corning Glass Works v. Brennan, "[T] he ultimate determination of whether an employer qualifies for an exemption under the FLSA is a question of law." Singer v. City of Waco, Texas, 324 F.3d 813, 818 (5th Cir. 2003), cert. denied, 124 S. Ct. 1406 (2004) v. Howard Wilson Chrysler-Plymouth, (citing Lott Inc., 203 F.3d 326, 331 (5th Cir. 2000)). "That ultimate determination, however, relies on many factual determinations that can be resolved by a jury." also Zannikos, 605 F. App' x at 352 Id. See ("Whether an employee falls within an exemption is a question of law; the amount of time the employee devotes to particular duties, as well as the significance of those duties, are questions of fact."). Jordan construed general asserts against rule employer. that the have the employer. 35 long been Exemptions construed from narrowly be narrowly the FLSA' s against (citing Songer v. Dillon Resources, Inc., 618 F. 3d 467, 471 (5th Cir. 2010)). 138 S. Ct. 1134 However, in Encino Motorcars, LLC (2018), the Supreme Court rejected that premise stating: The [circuit court] also invoked the principle that exemptions to the FLSA should be construed narrowly . . . 35 the See Allen v. Coil Tubing Services, L.L.C., 755 F.3d 279, 283 (5th Cir. 2014) v. Navarro, FLSA exemptions must Plaintiff's MPSJ, Docket Entry No. 29, pp. 19-21. -13- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 14 of 36 We reject this principle as a useful guidepost for interpreting the FLSA. Because the FLSA gives no "textual indication" that is exemptions should be construed narrowly, "there is no reason to give [them] anything other than a fair (rather than a 'narrow') interpretation." The narrow-construction principle relies on the flawed premise that the FLSA "pursues" its remedial purpose "at all costs." But the FLSA has over two dozen exemptions in§ 213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA's purpose as the overtime-pay requirement. We thus have no license to give the exemption anything but a fair reading. Id. at 1142. are to be The Fifth Circuit has now held that FLSA exemptions given Technologies, Supreme "fair reading." 890 F.3d 575, L.L.C., Court exemptions a Carley 579 recently clarified that 'a fair reading,' as (5th v. Crest Cir. courts are opposed to Pumping 2018) to ("The give the FLSA narrow interpretation previously espoused by this and other circuits."). B. Helix Has Not Waived Its Affir.mative Defenses Asserting that "Helix has done nothing in the way of identifying "the factual basis for the applicability of any [FLSA] exemption, " 36 identifying and the that "Helix particular has good done faith nothing in defense ( s) the on way of which it intends to rely, and it has done even less in the way of alleging facts that, if true, would allow it to prevail on its defense ( s) , " 37 plaintiffs argue 36 Id. at 22. 37 Id. at 34. that the court -14- should enter judgment on the Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 15 of 36 pleadings dismissing Helix's exemption defenses with prejudice under Federal Rule of Civil Procedure 12(c) . 38 Helix responds that its affirmative defenses are specifically pleaded in its Original Answer, 39 and specifically enumerated in response to plaintiff's Tenth Interrogatory. 40 Plaintiffs reply that "Helix claims that the requisite factual detail is contained in its discovery response," 41 but that pursuant to Federal Rule of Civil Procedure 12(d), "[t]he Court . is prohibited from considering that evidence." 42 Rule 8(c) (1) of the Federal Rules of Civil Procedure requires a litigant to "affirmatively state any avoidance or affirmative defense." Fed. R. Civ. P. 8 (c) (1). "Failure to timely plead an affirmative defense may result in waiver and the exclusion of the defense from the case." LSREF2 Baron, L.L.C. v. Tauch, 751 F.3d 394, 398 (5th Cir. 2014). "The traditional standard for [pleading] affirmative defenses is that they must contain 'enough specificity or factual particularity to give the plaintiff "fair notice" of the defense that is being advanced.'" United States ex. rel Parikh v. 38 Id. at 23. 39 Defendant's Response, Docket Entry No. 36, p. 17. 40 Id. at 17-18 (citing Interrogatory 10 attached as Exhibit F to Defendant's Response, Docket Entry No. 36-17, pp. 3-4). 41 Plaintiff's Reply, Docket Entry No. 38, p. 5. -15- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 16 of 36 Citizens Medical Center, 302 F.R.D. 416, 418 (S.D. Tex. 2014) quoting Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999)). The fair notice standard applied to affirmative defenses in Woodfield was derived from the pleading standard for complaints then in effect under Conley v. Gibson, 78 S. Ct. 99 (1957), i.e., "'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. at 103. The Supreme Court's subsequent decisions in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), have changed the pleading standard for complaints to require factual content that allows the court to draw a reasonable inference that the claim is plausible. Twombly, 127 S. Ct. at 1965; Iqbal, 129 S. Ct. 1937 at 1949-50. The Fifth Circuit has not decided whether the pleading standard announced in Twombly and Iqbal extends to affirmative defenses, issue. and district courts in this circuit are split on the See Parikh, 302 F.R.D. at 418 (listing cases). The Fifth Circuit has applied the fair notice standard in opinions after Twombly and Iqbal suggesting that the lesser standard of fair notice remains the appropriate standard for affirmative defenses. See, ~' LSREF2, 751 F.3d at 398; Garrison Realty, L.P. v. Fouse Architecture & Interiors, 2013) (per curiam). P.C., 546 F. App'x 458, 465 (5th Cir. Nevertheless, in this case it is not necessary -16- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 17 of 36 to choose between the standards because Helix not only identified in its Original Answer the specific affirmative defenses on which it relies in its motion for summary judgment, but also provided plaintiffs the factual basis for those defenses well before the pending motions for summary judgment were filed. Helix included in its answer the following statements regarding affirmative defenses: 3. Based upon information and belief, with the exception of assistant drillers, Plaintiff, other drillers, and other day-rate workers are exempt from the overtime provisions of 2 9 U.S. C. § 2 07 pursuant to the provisions of 29 U.S.C. § 213, including the administrative, executive, professional exemptions, some combination thereof, and/or the highly compensated employee exemption. Assistant drillers are paid on an hourly basis with overtime compensation for hours worked over forty in a workweek. 4. Any acts or omissions by Helix with respect to the payment of wages to its assistant drillers, drillers, and day-rate workers, like Plaintiff, were undertaken in good faith reliance on the regulations and interpretations of the Wage Hour Administration of the United States Department of labor and/or legal advice or opinions from outside counsel and were based on long-standing industry standards and practices. 43 An exemption must be asserted as an affirmative defense to a claim under the FLSA. See Brennan, 94 S. Ct. at 222 9 ("the general rule [is] that the application of an exemption under the [FLSA] is a matter of affirmative defense on which the employer has burden 43 of proof") . Because Helix's Original 0riginal Answer, Docket Entry No. 7, p. 2 -17- Answer ~~3-4. the provided Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 18 of 36 specificity by identifying both the specific exemptions in the FLSA on which Helix seeks summary judgment, i.e., the executive and highly compensated employee exemptions, and good faith, Helix did not waive these affirmative defenses. See Woodfield, 193 F.3d at 362 (pleading the name of an affirmative defense may be sufficient to avoid waiver). See also Lucas v. NOYPI, Inc., No. Civ. A. H-11- 1940, 2012 WL 4754729, at *2 (S.D. Tex. October 3, 2012), aff'd, 536 F. App'x 416 (5th Cir. 2013) (finding that defendant properly raised the affirmative defense for the Motor Carrier Act Exemption when the defendant stated in their answer "Defendants affirmatively plead that they were not required to pay overtime to Plaintiff because his position was subject to an exemption to the payment of overtime under the FLSA, including, but not limited to, the motor carrier exemption in Section 13 (b) (1) of the FLSA. "); Rodriguez v. Physician Laboratory Services, LLC, Civil Action No. 7:13-CV-622, 2014 WL 847126, at *3 (S.D. Tex. March 4, 2014) (holding that merely seeking to "invoke the 'good faith defense' . . [g] ives the plaintiff fair notice of the nature of the defense, and avoids an unfair surprise with an unexpected defense"). Tyhan, Inc., No. April 15, 2016) CV H-15-191, See also Franks v. 2016 WL 1531752, at *3 (S.D. Tex. (to plead the affirmative defense of an exemption from the FLSA successfully, the defendant need only identify the exemption of the FLSA by name); Floridia v. DLT 3 Girls, Inc., No. 4:11-CV-3624, 2012 WL 1565533, at -18- *4 (S.D. Tex. May 2, 2102) Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 19 of 36 (accepting a good faith defense that stated that "Defendants' acts or omissions, if found to be in violation of the FLSA, were in good faith and based upon reasonable grounds for believing that its actions did not violate the FLSA."). Even a technical failure to comply precisely with the pleading requirements of Rule 8(c) may be excused as long as "the affirmative defense is raised in the trial court in a manner that does not result in unfair surprise." 381, 385 (5th Cir. 2008)). Rogers v. McDorman, 521 F.3d At the heart of Rule 8 (c) is the concern that a "defendant should not be permitted to 'lie behind a log' and ambush a plaintiff with an unexpected defense." defendant does not waive a defense if it was Id. raised at "A a 'pragmatically sufficient time' and did not prejudice the plaintiff in its ability to respond." Rogers, 521 F. 3d at 386). LSREF2, "Unfair 751 F. 3d at surprise and 398 (quoting prejudice are central concerns underlying the requirement that a defendant timely plead affirmative defenses." Id. at 402. Plaintiffs do not and cannot contend that they were surprised by the motion for highly compensated requirements summary judgment based on the executive and employee because in exemptions addition to to the FLSA' s overtime naming these specific affirmative defenses in its Original Answer, Helix provided the factual plaintiff's basis for them in response Interrogatory: -19- to Tenth Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 20 of 36 Helix submits that Driller position, held by Plaintiff, is exempt under the seaman, highly compensated, administrative and/or executive exemptions, and/or some combination thereof. Drillers work offshore. They are exempt because they make well in excess of $100,000. Drillers do not "drill" per se but rather supervise the activities of the drill crew, including al drilling documentation, logs, and International Association of Drilling Contract paperwork. Drillers customarily and regularly direct the work of two or more subordinate members of the drill crew. Drillers also work with the Superintendent and the oil and gas client to review and revise various aspects of the well program. Drillers also ensure that the dimensions of the bottom hole assembly components are measured and logged. Drillers generally perform non-manual work directly related to Helix's business and that of its customers. They exercise discretion and independent judgment regarding matters of significance, and they provide suggestions and recommendations on the advancement of other drill crew members. 44 Although plaintiffs argue that Rule 12(d) prohibits the court from considering Helix's response to plaintiff's Tenth Interrogatory in ruling on their Rule 12(c) motion for judgment on the pleadings, plaintiff's reliance on Rule 12 (d) is misplaced. Rule 12(c) of the Federal Rules of Civil Procedure provides: "After the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." Rule 12(d) provides: If, on a motion under Rule . . 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56. All parties must be given a reasonable opportunity to present all material that is pertinent to the motion. 44 Defendant' s Response, Docket Entry No. 36, pp. 17-18 (quoting Interrogatory 10, Exhibit F to Defendant's Response, Docket Entry No. 36-17, pp. 3-4). -20- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 21 of 36 Fed. R. Civ. P. 12(d). The parties to this action have both filed a motion summary judgment that cite matters outside the pleadings. for Both parties have also filed a response to the opposing party's motion, and a reply in support of their own summary judgment motion. Each of these filings reference matters outside of the pleadings that have not been excluded by the Accordingly, court. the court concludes that both parties have received a reasonable opportunity to present all material that is pertinent to the pending motions. Under these circumstances Rule 12(d) does not prohibit the court from considering evidence submitted by Helix in response to Jordan's motion for judgment on the pleadings under Rule 12(c) but, instead, requires the court to treat that motion as one for summary judgment under Rule 56 pursuant to which matters outside the pleadings may be considered. Because Helix not only identified in its Original Answer the specific affirmative including those defenses on which it on which seeks it summary intended judgment, executive and highly compensated employee exemptions, provided plaintiffs the factual basis for those to rely, i.e., the but also defenses in response to interrogatories provided to plaintiffs well before the pending motions for summary judgment were filed, the court concludes that Helix has not waived those affirmative defenses, and that plaintiffs are not entitled to summary judgment on that basis. -21- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 22 of 36 C. Fact Issues Regarding Whether Plaintiffs Were Paid on a Salary Basis Preclude Granting Either Party's Summary Judgment Motion Because Helix has withdrawn its assertion of the professional exemption, and stated that it never pleaded the foreign exemption, the issue before the court is the applicability of the executive, administrative, combination, and highly compensated employee exemptions. Helix argues that it is entitled to summary judgment that and Jordan Gordon were exempt from the FLSA' s overtime provisions as a matter of law under the executive and highlycompensated exemptions, 45 and that genuine issues of material fact preclude granting plaintiff's motion for summary judgment that he and Gordon are not exempt under the administrative and combination exemptions. 46 judgment Plaintiffs argue that they are entitled to summary that they are not exempt from the FLSA's overtime provisions as a matter of law under any of these exemptions. 47 Common to each of the exemptions at issue is the requirement that the employee be paid on a salary basis of at least $455 per week. 29 C.F.R. § 541.600 (a) ("To qualify as an exempt executive, administrative or professional employee under section 13(a) (1) of the [FLSA], an employee must be compensated on a salary basis at a rate of not less than $455 per week. exclusive of board, 45 Defendant's MSJ, Docket Entry No. 27, pp. 6, 11-20; Defendant's Response, Docket Entry No. 36, pp. 16-17 and 19-26. 46 Defendant' s Response, pp. 27-32. Docket Entry No. 47 3 6, p. Plaintiff' s MPSJ, Docket Entry No. 2 9, pp. Plaintiff's Response, Docket Entry No. 35, pp. 23-41. -22- 2 6 n. 6, 17, and 2 3-36; Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 23 of 36 lodging or other facilities."). See also 29 C.F.R. § 541.100 (a) (executive employees); 29 C.F.R. § 541.200(a) (1) employees); 29 C.F.R. § 541.601 (administrative (highly compensated employees); IntraComm, Inc. v. Bajaj, 492 F.3d 285, 295-96 (4th Cir. 2007) curiam) (1) (per (citing DOL letter opinions in support of conclusion that employees must combination be paid on exemption) . a salary basis "Salary basis" to qualify for the is defined in the regulations as follows: (a) General rule. An employee will be considered to be paid on a "salary basis" within the meaning of these regulations 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. Subject to the exceptions provided in paragraph (b) of this section, an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee's predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available. 29 C.F.R. § 541.602(a). Paragraph (b) of§ 541.602 provides that deductions may be made from the wages of salaried employees in certain circumstances, such as absences of a full day or more for personal reasons or unpaid disciplinary suspensions of a full day or more, without destroying the salary basis of the pay. 29 C.F.R. § 541.602(b). See also Cowart v. Ingalls Shipbuilding, Inc., 213 F.3d 261, (5th Cir. 264 2000) (citing predecessor regulation 29 C.F.R. § 541.118 (a) (2)). -23- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 24 of 36 1. Defendant Fails to Establish as a Matter of Law that Plaintiffs Were Paid on a Salary Basis As evidence that the plaintiffs were paid on a salary basis, Helix cites Jordan's pay statements showing that he was paid on a bi-weekly basis and received no less than $923.00 per week, 48 deposition testimony of both plaintiffs showing that they were paid on a bi-weekly basis, 49 that at all relevant times they were paid more than $455.00 a week, 50 and that for any day they worked, their daily rate remained unchanged regardless of the amount of hours worked in the day or the quality of the work performed. 51 Helix also cites the declaration of Kenric McNeal, Helix's Director of Human Resources, that "Helix pays its Drillers a day rate, which is a predetermined sum that remains constant regardless of the hours worked in a day and the quality of the work 48 Defendants' MSJ, Docket Entry No. 27, p. 12 (citing Jordan pay statements, Exhibit D-5 to Defendant's MSJ, Docket Entry No. 28). 49 Defendants' MSJ, Docket Entry No. 27, p. 12 (citing Jordan Deposition, p. 46:20-23, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, p. 3; Gordon Deposition, p. 55:12-15, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 6). 50 Id. (citing Jordan Deposition, p. 86:6-8, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, p. 12; Gordon Deposition, p. 80:10-12, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 11) . 51 Id. at 12-13 (citing Jordan Deposition, pp. 83:22-84:7, 87:115, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 11-12; Gordon Deposition, pp. 54:7-55:3; Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, p. 6). -24- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 25 of 36 performed." 52 Plaintiffs object to this evidence on grounds that it is inadmissible parole evidence that contradicts the unambiguous terms and conditions of their employment as stated in the written 2015. 53 offer of employment sent to Gordon on July 27, McNeal's declaration is consistent with the letters, 54 plaintiffs' deposition testimony, statements plaintiffs, all and of which plaintiffs reflect that received, a 55 plaintiffs' offer and plaintiffs' pay Helix day However, agreed rate of to pay pay that remained constant regardless of the number of hours worked and pursuant to which they each received more than $455.00 for any week in which consistent they with worked. 56 the Because plaintiffs' the own McNeal testimony declaration and is evidence, plaintiffs' objection to this evidence will be overruled. 52 Id. at 13 (citing McNeal Declaration, Defendant's MSJ, Docket Entry No. 27-1, p. 2 ~8). Exhibit A to 53 Plaintiff's Response, Docket Entry No. 35, pp. 23-24 (citing Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6). 54 See July 27, 2015 Offer Letter to Gordon, Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6; and February 27, 2008 Offer Letter to Jordan, Exhibit D-4 to Defendant's MSJ, Docket Entry No. 28-1. 55 See Jordan Deposition, pp. 83:20-84:7, 86:6-87:15, Exhibit D to Defendant's MSJ, Docket Entry No. 27-8, pp. 11-12; Gordon Deposition, pp. 54:7-55:3, 80:10-12, Exhibit C to Defendant's MSJ, Docket Entry No. 27-3, pp. 6, 11. 56 See Jordan Pay Statements, Exhibit D-5 to Defendant's MSJ, Docket Entry No. 28. -25- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 26 of 36 Citing Faludi v. US Shale Solution, LLC, No. H-16-3467, 2017 WL 5969261, No. *1 17-20808 because (S.D. (5th Tex. Cir. undisputed November 30, December evidence 26, shows 2017), 2017), that appeal docketed, Helix Jordan and argues that Gordon were guaranteed a minimum of $923.00 for any day that they worked, the salary-basis test is satisfied. 57 As evidence that plaintiffs were guaranteed a minimum of $923.00 for any day that they worked, Helix cites Jordan's deposition testimony that $923.00 per day was the lowest amount he was paid, 58 Jordan's pay statements, of employment " [ f] ollowing sent are to the Gordon proposed stating in compensation 59 and the offer pertinent elements for part, this position which should be in accordance with our prior discussions: Pay rate: $923.00 per day (to be paid on a bi-weekly basis) ." 60 In Faludi defendant amounts . the stating, plaintiff had a written agreement "Company shall pay Consultant the with the following .," the least of which was $1,000.00 for each day he performed services. 2017 WL 5969261, at *9. When the plaintiff 57 Defendant' s MSJ, Docket Entry No. 27, pp. 12-13. See also Defendant's Response, Docket Entry No. 36, pp. 19-20; Defendant's Reply, Docket Entry No. 37, p. 5. 58 Id. at 13 (citing Jordan Deposition, pp. 84:1-7, to Defendant's MSJ, Docket Entry No. 27-8, p. 11). 59 Id. No. 28). D-5 to Defendant's MSJ, Docket Entry Id. (citing Exhibit C-3 No. 27-6). to Defendant's MSJ, Docket Entry 60 (citing Exhibit Exhibit D -26- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 27 of 36 sued for violation defendant $1,000 of the FLSA's overtime requirements, the sought summary judgment arguing inter alia that "the daily amount guaranteed under the Agreement therefore 'guaranteed Faludi at least $1,000.00 for each week he performed any services, thus exceeding the $455.00 threshold.'" Id. at *9. This court held that because "$1,000 per day was guaranteed if [the plaintiff] showed up for work and performed the agreed upon services[, t]his satisfies the minimum guaranteed amount required to be paid on a salary basis." Id. at *10. Faludi is distinguishable and does not control the outcome of this case for two reasons. First, in Faludi the parties had a written agreement that guaranteed the plaintiff pay that exceeded $455.00 for any week in which he worked. written agreement governing the plaintiffs' Here, there was no employment. Even though the letters offering the plaintiffs employment referenced day rates that exceeded $455.00, and the plaintiffs received pay that exceeded that amount for every week they worked, the evidence also shows that the day rate plaintiffs were paid changed from time to time and therefore was not as Helix contends, an amount that was both predetermined and guaranteed not to drop below $455.00 per day. 61 Faludi is also distinguishable because 61 See Jordan Deposition, pp. 83:20-84:7, Exhibit D to Defendant's MSJ, Docket Entry No. 28-8, p. 11 (testifying that his day rate changed from $985.00, to $1,014.00, to $923.00). -27- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 28 of 36 [t]he precise question raised by the parties' arguments [there was] whether the language of 29 C.F.R. § 541.602(a) allowing the exemption as long as the employee's predetermined pay 'is not subject to reduction because of variations in the . . quantity of the work performed' includes a voluntary reduction by the employee as opposed to a reduction by the employer. Id. Voluntary reductions in pay initiated by the plaintiffs are not at issue in this case. Accordingly, the court is not persuaded that Faludi controls the outcome of this case. Helix has presented undisputed evidence that plaintiffs were paid at a rate that satisfied the pay rate required for them to be qualified for one of the exemptions at issue, exceeded $455.00 for each week worked. i.e., See 29 C.F.R. § a rate that 541.600(a). While Helix has presented evidence from which a reasonable trier of fact could conclude that plaintiffs were guaranteed to receive a qualifying rate of pay for each week worked, Helix has not presented evidence that requires such a finding as a matter of law. Helix has similarly presented evidence from which a reasonable fact finder could - but need not - conclude that plaintiffs "regularly receive[d] 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," as required by 29 C.F.R. § 541.602(a). However, Helix has neither argued nor presented any evidence capable of establishing that plaintiffs received the full salary for any week in which they -28- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 29 of 36 performed any work without regard to the number of days or hours worked, as also required by 29 C.F.R. § 541.602(a) ("an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked") . The court therefore concludes that Helix has failed to carry its burden of establishing that it is entitled to judgment as a matter of law that plaintiffs were paid on a "salary basis." Accordingly, Defendant's MSJ will be denied. 2. Plaintiffs Fail to Establish as a Matter of Law that They Were Not Paid on a Salary Basis Plaintiffs argue that because undisputed evidence shows that Helix paid them on a day-rate basis as opposed to a salary basis, they are entitled to summary judgment because the salary basis test is not satisfied. 62 Plaintiffs argue that contrary to Helix's contention that they were guaranteed a minimum of $923.00 for any day they worked, the offer letter that Gordon received establishes as a matter of law that he was an at-will employee guaranteed nothing. 63 Citing Gordon's offer of employment, plaintiffs argue that "the sole pieces of documentary evidence that outline the 62 Plaintiff's MPSJ, Docket Entry No. 29, pp. 24-26. See also Plaintiff's Response, Docket Entry No. 35, pp. 16-17 and 25-33. 63 Plaintiff's Response, Docket Entry No. 35, p. 29. See also Plaintiff's Reply, Docket Entry No. 38, p. 6 (asserting "No Evidence of a Guarantee Means That the Drillers Were Not Paid on a Salary Basis"). -29- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 30 of 36 terms and conditions of Jordan's and Gordon's employment expressly disclaim any guarantees. " 64 Gordon's offer of employment stated: This letter only serves to communicate a contingent offer of employment and is not intended to create, nor is it to be construed to constitute, an employment contract between you and Helix. Your employment with Helix will be "at-will," that is the employment relationship can be terminated at any time by either you or Helix. 65 Citing Dufrene v. Browning Ferris, Inc., 207 F.3d 264, 268 (5th Cir. 2000), and Hughes v. Gulf Interstate Field Services, 878 F.3d 183, 187-93 (6th Cir. 2017), plaintiffs argue that they were not paid on a salary basis because "Helix admits the wages it paid to Jordan and Gordon were computed 'by multiplying the number of days worked by their daily wage.'" 66 Chevron Corp., No. C-16-02089, Plaintiffs also cite McQueen v. 2018 WL 1989937, *1 (N.D. Calif. April 3, 2018), for holding that payment of $1,000.00 per day did not qualify as payment on a salary basis. 67 Dufrene defendant involved employer to a dispute calculate 64 over the overtime method pay used for by the non-exempt Plaintiff' s Response, Docket Entry No. 35, p. 32 Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6). (citing 65 Gordon' s offer of employment, Exhibit C-3 to Defendant's MSJ, Docket Entry No. 27-6, p. 3. 66 Plaintiff' s MPSJ, Docket Entry No. 2 9, p. 2 6 (quoting Dufrene v. Browning-Ferris, Inc., 994 F. Supp. 748, 754 (E. D. La. 1998), aff'd, 207 F. 3d 264 (5th Cir. 2000)). See also Plaintiff's Response, Docket Entry No. 35, p. 27; Plaintiff's Reply, Docket Entry No. 38, pp. 6-8. 67 Plaintiff's Response, Docket Entry No. 35, pp. 28-29. -30- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 31 of 36 employee plaintiffs. pay was to be At issue was whether the employee's overtime calculated under 29 C.F.R. § 778.112 governing employees paid a day rate, or under 29 C.F.R. § 778.114 governing employees paid a fixed salary for fluctuating hours. The undisputed evidence showed that the employees were paid a day rate of $74.50 or $76.00 for each day's work regardless of the number of hours worked in a day, worked. and that they were not paid for days not 207 F.3d at 268. provided the appropriate The district court held that method for calculating § 778.112 overtime pay reasoning: The distinction between the two regulations is explicit: Section 778.112 applies to workers who are "paid a flat sum for a day's work or for doing a particular jobn and, in contrast, § 778.114 applies to employees who are "employed on a salary basis. n Department of Labor Regulations provide that an employee is considered to be paid "on a salary basisn within the meaning of the regulations "if under his employment agreement he regularly receives each pay period on a weekly or less frequent basis, a predetermined amount constituting all or part of his compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to the exceptions provided below, the employee must receive his full salary for any week in which he performs any work without regard to the number of days or hours worked.n 29 C.F.R. § 541.118(a) 68 (emphasis added). Plaintiffs fail to meet this definition because they generally do not receive compensation for the days they do not work. The workers do not receive a flat salary per week regardless of how many days of the week they have worked. Instead, they are paid a daily rate, and their weekly salary is computed by multiplying the number of days 68 This regulation has since been revised and renumbered to 29 C.F.R. § 541.602(a). See Cowart, 213 F.3d at 264. -31- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 32 of 36 worked by their daily wage. Accordingly, it is clear that they are covered by§ 778.112, not § 778.114. 994 F. Supp. district at 754. court's On appeal the Fifth Circuit affirmed the determination that § 7 7 8. 112 applied to the employees, stating that "employees here are not paid a salary for a workweek. Instead, they are paid for the number of days they work in a week: a day-rate." 207 F.3d at 268. Hughes involved a dispute over whether employees paid a day rate of $337.00 were exempt from the FLSA's overtime requirements because they qualified as highly compensated employees. The employees conceded that they were paid in a manner and at a rate consistent with being exempt, but they argued that it mattered whether their salaries were guaranteed, trier of fact guarantee. could have concluded and whether a that there was rational no such The district court granted summary judgment to the defendant employer, but the Sixth Circuit reversed explaining that the plaintiffs had introduced evidence that their salary was calculated at the rate of $337.00 per day worked, that there was thus "reason to conclude that their pay was calculated more frequently than weekly[, a]nd it is very much disputed whether what they received weekly was in fact guaranteed." Helix argues that Dufrene factually distinguishable 69 Defendant's and Hughes from this case. 69 Response, Docket -32- Entry 878 F.3d at 189. are legally and/or Helix argues No. that 36, pp. 19-20; (continued ... ) Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 33 of 36 Dufrene and Hughes are factually distinguishable because the employees at issue in those case were undisputedly paid day rates that did not satisfy the requirement that an exempt employee be compensated on a salary basis at a rate of not less than $455 per week. See 29 C.F.R. § 541.600. See Dufrene, 994 F. Supp. at 750 (employees paid day rates ranging from $61.75-$76.00); Hughes, 878 F.3d at 185 and 189 (employees paid a day rate of $337.00). While this factual distinction is relevant to whether the rate of weekly pay requirement is satisfied, it has no bearing on whether the other requirements for establishing that plaintiffs were paid on a "salary basis" are satisfied. Helix argues that Dufrene is legally distinguishable because at issue there was which of two methodologies for calculating overtime pay applied to undisputedly non-exempt employees. Helix argues that "Dufrene does not establish that a salary based on a day rate fails the salary basis requirement for exemptions under the FLSA, because it does not consider this issue." 70 While Helix is correct that the precise question at issue in Dufrene was not the precise question at issue here, the Dufrene court's discussion of§ 541.602(a)'s predecessor, 29 C.F.R. § 541.118(a), indicates that satisfying§ 541.600(a)'s weekly minimum rate of payment of 69 ( • • • continued) Defendant's Reply, Docket Entry No. 37, pp. 2-5. 70 Defendant's Response, Docket Entry No. 36, pp. 19-20. -33- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 34 of 36 $455.00 is only one of several requirements that must be met to establish that employees are paid on a "salary basis." In addition to receiving a weekly minimum rate of payment, employees must also receive their "full salary for any week in which they perform any work without regard to the Dufrene, F. 994 Supp. at number 754 of days (citing predecessor of 29 C.F.R § 541.602(a)). this requirement cannot be 29 or hours C.F.R. worked." 541.118(a), § While plaintiffs argue that satisfied in this case because the undisputed evidence establishes that they were paid a day rate, "merely because an employee's earnings are computed on a daily rate basis does not mean that the employee is not paid on a basis." Akins v. Worley Catastrophe Response, LLC, Civil Action No. 12-2401, 2013 WL 19077486, *4 29 C.F.R. on an salary § 604(b) hourly, exemption or a (E.D. La. May 8, 2013) (quoting ("An exempt employee's earnings may be computed daily violating or a the shift salary basis, basis without losing requirement, if the 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 a reasonable relationship exists between the guaranteed amount and the amount actually earned.")). The deposition excerpts and other evidence presented by plaintiffs are not sufficient to carry their burden of showing that they were not paid on a salary basis. Defendants have presented competent summary judgment evidence, consisting of the declaration testimony of Kenric McNeal, Helix's Director of Human Resources, -34- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 35 of 36 excerpts from plaintiffs' statements, deposition testimony, and plaintiffs' offers plaintiffs' of employment, pay showing that material fact issues are in dispute concerning whether plaintiffs were paid on a salary basis, including but not limited to, whether plaintiffs were guaranteed a minimum of at least $455 per week for the weeks that they worked, and whether plaintiffs were paid their full rate and did not have their wages reduced based quantity of work when they did not work full weeks. on the Because the question of whether plaintiffs were paid on a salary basis remains in dispute, they cannot prevail on their motion for partial summary judgment on their contentions that they were not exempt executive, administrative, combination, or highly compensated employees. Accordingly, plaintiffs' motion for partial summary judgment will be denied. D. Genuine Issues of Material Fact Preclude Granting Party's Summary Judgment Motion on Willfulness Either Helix moves for summary judgment on the issue of willfulness arguing that plaintiffs cannot present any evidence that Helix knew its pay practices violated the FLSA. 71 Plaintiffs move for summary judgment on the issue of willfulness contending there is no genuine issue of conclusion material that fact Helix that would willfully allow violated a the jury to avoid the FLSA. 72 For the reasons stated in the preceding sections, the court has concluded 71 Defendant's MSJ, Docket Entry No. 27, pp. 19-20. 72 Plaintiff's MPSJ, Docket Entry No. 29, p. 35. -35- Case 4:16-cv-01808 Document 39 Filed in TXSD on 10/11/18 Page 36 of 36 that genuine issues of material fact exist as to whether Helix violated the FLSA. Reviewing the parties' cited evidence leads the court to conclude that genuine issues of material fact also exist as to whether any violation that Helix may have made was willful. Therefore, both parties' motions for summary judgment on the issue of willfulness will be denied. IV. For the objection to reasons Conclusions and Order stated in § III.C.1, above, plaintiffs' of the McNeal Declaration are OVERRULED, and for ~~8-9 the reasons stated in §§ III.C.1 and III.D, above, Helix Energy Solutions Group, Inc.'s Motion for Summary Judgment (Docket Entry No. 27) is DENIED. For the reasons stated in§§ III.B, III.C.2, and III.D, above, Plaintiff Ralph Jordan's Motion for Partial Summary Judgment (Docket Entry No. 29) is DENIED. The Joint Pretrial Order must be filed by November 2, 2018. Docket Call will be held on November 9, 2018, at 3:00p.m. in Courtroom 9-B, 9th Floor, United States Courthouse, 515 Rusk Avenue, Houston, Texas 77002. SIGNED at Houston, Texas, this 11th day SIM LAKE UNITED STATES DISTRICT JUDGE -36-
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