United States District Court, S.D. West Virginia, Charleston
R. ALEXANDER ACOSTA, SECRETARY OF LABOR, UNITED STATES DEPARTMENT OF LABOR, Plaintiff,
TEAM ENVIRONMENTAL, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
T. COPENHAVER, JR. UNITED STATES DISTRICT JUDGE
are four motions: (1) plaintiff R. Alexander Acosta's,
Secretary of Labor, United States Department of Labor, (the
“Secretary”) motion to exclude the expert report
and testimony of Donald Nestor (“Mr. Nestor”),
filed June 16, 2017; (2) the Secretary's motion to
exclude the expert report and testimony of Kevin A.
Highlander (“Mr. Highlander”), filed October 5,
2017; (3) the Secretary's motion for partial summary
judgment, filed September 21, 2017; and (4) defendant TEAM
Environmental, LLC's (“Team”) motion to defer
consideration of the Secretary's motion for partial
summary judgment or, alternatively, to stay, filed October 5,
Factual and Procedural Summary
following summary is taken from the record, read in the light
most favorable to the nonmoving party, Team. Team is a West
Virginia corporation with its principal place of business at
50 Simmons Drive, Millwood, West Virginia. (Mot. Partial
Summ. J., Ex. E ¶¶ 1-2.) Team provides inspection
services for companies in the natural gas industry.
(Id. ¶ 4.) Gas companies typically do not have
enough inspection work to justify hiring inspectors of their
own, so they contract with Team to supply inspectors for
specific jobs. (Deposition of Dennis Weekley (“Weekley
Dep.”) 13-16, 18, 32; Mot. Partial Summ. J., Ex. E
¶ 1.) Team's inspectors ensure that its clients'
projects comply with the clients' specifications as well
as government regulations, such as those promulgated by state
departments of transportation. (Weekley Dep. 50.) It employs
between 80 and 110 people depending on job demand,
(Id. 23, 31-32), and has job sites in West Virginia,
Ohio, and Pennsylvania. (Id. 53-54, 62.) From 2012
to 2016, its gross annual income increased from about $10
million to about $25 million. (Deposition of Randy
Heatherington (“Heatherington Dep.”) 38-39.)
wages that Team paid its inspectors for a specific job were
governed by bidding contracts called requests for quotes or
requests for pricing (together, “RFP”). (Weekley
Dep. 36-37.) Gas companies send RFPs to contractors like Team
that then bid on how much its inspectors will get paid for a
particular job. (Id. 37-38; see id. 143.)
Team's practice was to pay its employees a flat
“day rate, ” which means it paid its inspectors a
set amount each day. (Id. 140, 142.) Generally, RFPs
permitted Team to pay an inspector the day rate even if the
inspector did not work the full day for reasons such as
inclement weather, personal issues, and holidays.
(Id. 44, 53-44, 81-81, 226-28; Deposition of Guy
Sayre, Jr. (“Sayre Dep.”) 63-64.) Under some
RFPs, Team's inspectors were guaranteed payment of the
day rate regardless of whether they actually worked at all on
a given day. (Id. 80, 82, 158, 168-69, 225-26; Sayre
inspectors consistently worked over forty hours each week,
and most inspectors worked at least fifty or sixty. (Weekley
Dep. 80, 199-200; see Mot. Partial Summ. J., Ex. D.)
The common theme under most RFPs was that Team did not pay
any overtime. (Weekley Dep. 92-93, 200, 202-03; see
Affidavit of Dennis Weekley (“Weekley Aff.”)
¶¶ 20-27.) Only one gas company occasionally
permitted Team to pay overtime for hours worked over ten per
day for a fifty or sixty hour work week. (Weekley Dep.
105-06, 148-49, 156-59, 176-79.) At any rate, many of
Team's employees earned over $100, 000 per year. (Resp.
Opp'n Partial Summ. J., Ex. E.)
complaint concerning Team's overtime policy prompted the
Department of Labor to open an investigation in 2014.
(See Resp. Opp'n Mot. Partial Summ. J., Ex. B;
Weekley Dep. 92, 100.) Prior to the investigation, Team had
no knowledge of whether any of its inspectors should have
received overtime pay or whether they were exempt from
overtime. (Weekley Dep. 100-03, 179-80; see
Heatherington Dep. 24-25) Further, Team had never consulted
an attorney or an accountant concerning compliance with the
Fair Labor Standards Act (“FLSA”). (Weekley Dep.
100-03, 179-80; Deposition of Carson Chenoweth
(“Chenoweth Dep.”) 29.) Nevertheless, Team was
party to at least two third-party service contracts requiring
it either to pay “overtime as legally required, ”
(Mot. Partial Summ. J., Ex. G), or to “comply . . .
with . . . the Fair Labor Standards Act, ”
(id., Ex. H).
Secretary filed suit against Team in this court on April 8,
2016, invoking the court's federal question jurisdiction.
On June 22, 2017, the Secretary filed an amended complaint.
The Secretary alleges that Team failed to pay its inspectors
overtime for hours worked over forty in a week in violation
of section 7 of the FLSA, 29 U.S.C. § 207 (2016). (Am.
Compl. ¶ IV.2.) Section 7(a)(1) states that
no 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 rate at which he is employed.
found in violation of section 7 “shall be liable to the
employee or employees affected in the amount of their unpaid
minimum wages, or their unpaid overtime compensation, as the
case may be, and in an additional equal amount as liquidated
damages.” 29 U.S.C. § 216(b). The Secretary seeks,
inter alia, payment of unpaid overtime compensation,
liquidated damages pursuant to the FLSA, and injunctive
Motion to Defer Consideration and, Alternatively, to Stay
Federal Rule of Civil Procedure 56(d) provides that
[i]f a nonmovant shows by affidavit or declaration that, for
specified reasons, it cannot present facts essential to
justify its opposition [to a motion for summary judgment],
the court may . . . defer considering the motion . . . .
56(d) motions should be granted with liberality. McCray
v. Md. Dep't of Transp., 741 F.3d 480, 484 (4th Cir.
2014). “Generally speaking, ‘summary judgment
[must] be refused where the nonmoving party has not had the
opportunity to discover information that is essential to his
opposition.'” Harrods Ltd. v. Sixty Internet
Domain Names, 302 F.3d 214, 244 (4th Cir. 2002)
(alteration in original) (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 n.5 (1986)).
asks the court to defer consideration of the Secretary's
motion for partial summary judgment so it can complete
discovery related to the gas industry standard of using the
day rate method of compensation. (See Mem. Supp.
Defer or Stay 5.) Team argues that compliance with industry
standards is relevant to defending against the imposition of
liquidated damages under the FLSA. (See id.) As
later noted herein during the discussion of the proposed
testimony of defendant's expert, Donald Nestor,
additional evidence of an industry standard of pay methods
would not change the court's decision to grant the
Secretary's motion for summary judgment on the issue of
liquidated damages. Thus, the discovery Team seeks to
complete is not “essential to [its] opposition.”
Harrods Ltd., 302 F.3d at 244.
Team moves for a stay of this action. “[T]he power to
stay proceedings is incidental to the power inherent in every
court to control . . . its docket.” Landis v. N.
Am. Co., 299 U.S. 248, 254 (1936). This power is not
unlimited: “proper use of this authority calls for the
exercise of judgment which must weigh competing interests and
maintain an even balance. The party seeking a stay must
justify it by clear and convincing circumstances outweighing
potential harm to the party against whom it is
operative.” Williford v. Armstrong World Indus.,
Inc., 715 F.2d 124, 127 (4th Cir. 1983) (internal
quotations and citations omitted).
insists that this action should be stayed pending the Supreme
Court's grant or denial of the petition for a writ of
certiorari in E.I. DuPont de Nemours & Co. v.
Smiley, docket number 16-1189. That petition presents
the following question:
Does the FLSA prohibit an employer from using compensation
paid to employees for non-compensable, bona fide meal breaks
that it included in their regular rate of pay as a credit
against compensation owed for work time?
for Writ of Certiorari at ii, Smiley, No. 16-1189.
Team argues that, although the present action “does not
involve the issue of credit for meal breaks, it does involve
the issue of whether [Team] is entitled to a credit for
payments to employees . . . for idle and weather days not
worked.” (Mem. Supp. Defer or Stay 9; accord
Reply Supp. Defer or Stay 11.) Thus, according to Team, its
liability “hinge[s] on the same exact determination of
law under Section 7(h)(1) of the FLSA” as the
employer's liability in Smiley. (Reply Supp.
Defer or Stay 11; accord Mem. Supp. Defer or Stay
10.) The Secretary responds that the question presented in
Smiley is constrained to meal breaks. (Resp.
Opp'n Defer or Stay 6.) Even if the court finds that
Smiley is apposite here, the Secretary argues that
the outcome of Smiley pertains to damages, which is
not at issue in the pending motion for partial summary
judgment. (Id. 7.)
court agrees with the Secretary: Smiley bears on the
present case, if at all, only to the extent of calculating
overtime compensation owed, i.e. damages. The pending issue
on the Secretary's motion for partial summary judgment is
limited to liability. Team has consequently failed to produce
“clear and convincing circumstances” that a stay
is warranted. The motion for a stay is denied.
Motion for Partial Summary Judgment
to Federal Rule of Civil Procedure 56(a), summary judgment is
appropriate only “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.”
to materiality, . . . [o]nly disputes over facts that might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment. Factual
disputes that are irrelevant or unnecessary will not be
counted.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986) (citing 10A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure
§ 2725 (2nd ed. 1983)).
genuineness, “summary judgment will not lie if the
dispute about a material fact is ‘genuine, ' that
is, if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id.
The moving party has the initial burden of
“‘showing' - that is, pointing out to the
district court - that there is an absence of evidence to
support the nonmoving party's case.” Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986); see also
Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013).
If the movant carries its burden, the non-movant must
demonstrate that “there is sufficient evidence favoring
[it] for a jury to return a verdict” in its favor.
Anderson, 477 U.S. at 249 (citation omitted);
see also Dash, 731 F.3d at 311. “Although the
court must draw all justifiable inferences in favor of the
nonmoving party, the nonmoving party must rely on more than