United States District Court, N.D. West Virginia
OPINION AND ORDER GRANTING IN PART AND DENYING IN PART THE
UNITED STATES DEPARTMENT OF LABOR'S MOTION FOR SUMMARY
JUDGMENT [DKT. NO. 51], DENYING DEFENDANTS' MOTION FOR
SUMMARY JUDGMENT [DKT. NO. 47], AND DENYING DEFENDANTS'
MOTION FOR ATTORNEY FEES [DKT. NO. 49]
M. KEELEY UNITED STATES DISTRICT JUDGE.
case, the United States Department of Labor
(“DOL”) alleges that the defendants, Fire &
Safety Investigation Consulting Services, LLC (“Fire
& Safety”), and Christopher Harris
(“Harris”), violated the provisions of the Fair
Labor Standards Act (“FLSA” or “the
Act”) by failing properly to pay their employees
overtime compensation. The defendants deny these allegations,
contending that they permissibly paid their employees a fixed
rate for a set amount of overtime, and often paid their
employees in excess of what the Act requires.
are the parties' competing motions for summary judgment.
For the reasons that follow, the Court GRANTS in
part and DENIES in part the
DOL's motion (Dkt. No. 51), and DENIES
the defendants' motion (Dkt. No. 47).
FACTUAL AND PROCEDURAL BACKGROUND
received his master's degree in safety management from
West Virginia University in 2001, and holds a number of
certifications in the safety and fire investigation
industries (Dkt. No. 52-3 at 13-14). After garnering
experience as a fire investigator and firefighter, Harris
founded Fire & Safety in Bridgeport, West Virginia, in
2008 (Dkt. Nos. 52-1 at 2; 52-3 at 15-20). Fire & Safety
provided fire investigation and security guard services in
the oil and gas industry for several years. Then, around
2013, it began to employ environmental site safety
consultants (Dkt. No. 52-3 at 23), to provide “onsite
safety and environmental consulting services for the oil and
gas industry” in West Virginia and Pennsylvania (Dkt.
No. 52-1 at 3).
could be assigned to several phases of an oil and gas
operation, “such as drilling, hydraulic fracturing,
coil tubing, WSU, drill out, construction, midstream,
production etc., based on their knowledge and
experience” (Dkt. No. 52-2 at 3). For each phase, a
consultant conducted site safety inspection and hazard
identification, as well as job safety analysis review and
coaching. Id. Consultants were also involved in
environmental monitoring, accident investigation, and the
documentation of daily events. Id. at 3-4. As
described by Harris, Fire & Safety provided consultants
to oil and gas operators to “observe, document and
report” whether contractors were “in compliance
with recommended safety practices” (Dkt. No. 52-3 at
December 23, 2014, through December 6, 2016, consultants were
regularly scheduled to work on the basis of what is known in
the oil and gas industry as a “hitch.” See
id. at 38-39. More particularly, Fire & Safety
assigned the consultants to work 12 hours per day for 14
consecutive days, to be followed by 14 consecutive days off.
This schedule resulted in an 84-hour workweek and a total of
168 hours during every two-week hitch (Dkt. No. 52-2 at 8).
Although Fire & Safety initially paid all of its
employees primarily on the basis of straight time and
overtime rates, it eventually transitioned to a payment
scheme and paid consultants on the basis of a “hitch
rate” (Dkt. No. 52-5 at 32). In fact, a number of
employment offer letters issued by Fire & Safety from
2014 through 2016 communicated the prospective employee's
rate of pay as a fixed amount per hitch (Dkt. No. 52-4 at
consultant worked less than a full 168-hour hitch, Fire &
Safety adjusted the employee's pay pursuant to a
“blended rate.” To calculate the consultant's
blended rate, the company divided his hitch rate by 168, the
total number of hours normally worked in a hitch. If a
consultant did not work exactly 168 hours in a hitch, his pay
would be determined by multiplying the number of hours he
actually worked by his blended rate (Dkt. No. 52-5 at 44-50).
For instance, a consultant usually paid $5, 000 per hitch
would have a blended hourly rate of $29.76. If that
particular consultant worked only 6 days of a 14-day hitch,
he was paid $2, 142.72. Id. at 51-52.
October 2015, an anonymous consultant complained to the DOL
Wage & Hour Division that Fire & Safety was violating
the FLSA by failing to pay overtime (Dkt. No. 47-9). Wage
& Hour Investigator Karen Mathes (“Mathes”)
was assigned to the case on December 11, 2015, and first met
with the defendants on January 21, 2016, to review records
and ensure their compliance with the Act (Dkt. No. 52-8 at
52-53, 175). Ultimately, Mathes determined that Fire &
Safety had failed to pay proper overtime and keep accurate
records, and calculated back wages due in the amount of $855,
684.16. Id. at 176. Although Fire & Safety
agreed to take corrective action in the future, it refused to
pay the back wages. In a Compliance Action Report dated
January 26, 2017, Mathes recommended that the DOL litigate
the case. Id. at 175-77.
filed the pending complaint against Fire & Safety and
Harris on February 22, 2017 (Dkt. No. 1). Although, as the
defendants have noted, the DOL's complaint is not a model
of clarity, the upshot of its allegations is that the
defendants improperly paid the consultants the same hourly
rate for overtime work that it paid them for regular work.
Id. at 3-5. In support of this allegation, the DOL
attached to the complaint “Schedule A, ” which
listed 68 employees who allegedly had not been paid proper
overtime wages. Id. at 8-9. As relief, the DOL
sought back wages, liquidated damages, and an injunction.
Id. at 6-7.
discovery, the parties filed motions for summary judgment,
which are now fully briefed and ripe for review (Dkt. Nos.
47; 51). In addition, the defendants have moved for
attorney's fees and costs, and have filed an objection to
the DOL's Revised Schedule A (Dkt. Nos. 49; 60; 66).
FLSA was enacted “to protect all covered workers from
substandard wages and oppressive working hours” by
requiring a minimum wage and limiting the number of
“hours an employee may work without receiving overtime
compensation.” Trejo v. Ryman Hospitality
Props., Inc., 795 F.3d 442, 446 (4th Cir. 2015) (quoting
Barrentine v. Arkansas-Best Freight Sys., Inc., 450
U.S. 728, 739 (1981)). As relevant to this action, the Act
[N]o employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, 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.
29 U.S.C. § 207(a)(1).
“employer” is “any person acting directly
or indirectly in the interest of an employer in relation to
an employee, ” and an “employee” is
“any individual employed by an employer.”
Id. § 203(d), (e)(1). The Act defines an
“enterprise” as “the related activities
performed (either through unified operation or common
control) by any person or persons for a common business
purpose.” Id. § 203(r)(1). An enterprise
is subject to the FLSA if it is “engaged in commerce or
in the production of goods for commerce, ” which means
that it “has employees engaged in commerce or in the
production of goods for commerce, or that [it] has employees
handling, selling or otherwise working on goods or materials
that have been moved in or produced for commerce by any
person, ” and “is an enterprise whose annual
gross volume of sales made or business done is not less than
$500, 000.” Id. § 203(s)(1)(A).
is no dispute that the employees of Fire & Safety are
covered by the FSLA. In their answer, the defendants admitted
that Fire & Safety is an “enterprise” subject
to the provisions of the FLSA (Dkt. No. 15 at 2). They have
further admitted that their “employees regularly use
goods and supplies from out of state, such as company owned
vehicles, company owned laptops, phones, tools, safety gear,
pens, pencils, and paper, ” and that Fire &
Safety's “gross volume of sales made or business
done was not less than $500, 000 for each of the years 2013,
2014, 2015 and 2016" (Dkt. No. 52-1 at 3).
the defendants dispute that Harris himself qualifies as an
“employer” subject to liability under the Act. To
effectuate the remedial purpose of the FSLA, the Fourth
Circuit broadly construes the meaning of its terms. See
Schultz v. Capital Int'l Sec., Inc., 466 F.3d 298,
304 (4th Cir. 2006). During the relevant time, Harris was the
100% owner of Fire & Safety; was responsible for hiring,
directing work, and controlling the schedules of certain
employees; determined the rate and method of pay for
employees; and was responsible, in part, for assigning,
scheduling, and supervising work (Dkt. Nos. 15 at 2; 52-1 at
3-4; 52-2 at 12). This is more than sufficient to satisfy the
definition of an “employer” under the Act.
Accord Hugler v. Dominion Granite & Marble, LLC,
No. 1:17CV229, 2017 WL 2671300, at *3 (E.D. Va. June 21,
2017). Therefore, the Court concludes that Harris is an
employer within the meaning of the Act.
Objection to Revised Schedule A
February 22, 2018, the DOL filed Revised Schedule A, which
contains three additional employees, Thomas Archer, Dwayne
Clements, and Christopher Oliverio. According to the DOL,
“[i]nformation received subsequent to the filing of the
Secretary's complaint has revealed that these three
employees of the Defendants are owed back wages for
violations of the [FLSA] as alleged in the complaint in
addition to the employees identified in the original Schedule
A” (Dkt. No. 60 at 1). The defendants have objected to
the DOL's addition of the three employees, arguing that,
by filing Revised Schedule A, the DOL has essentially amended
the complaint after motions for summary judgment have been
filed (Dkt. No. 66).
allegations in the original complaint, however, were not
confined to those employees specifically listed in Schedule
A. In addition to referencing “certain present and
former employees listed in the attached Schedule A, ”
the complaint indicated that back wages and liquidated
damages may be due for “certain present and former
employees presently unknown” (Dkt. No. 1 at 6).
Therefore, there has been no attempt by the DOL to amend its
complaint by filing a Revised Schedule A, and the Court
OVERRULES the defendants' objection
(Dkt. No. 60).
Motions for Summary Judgment
the DOL and the defendants have moved for summary judgment.
Summary judgment is appropriate where the “depositions,
documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes
of the motion only), admissions, interrogatory answers, or
other materials” establish that “there is no
genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a), (c)(1)(A). When ruling on a motion for summary
judgment, the Court reviews all the evidence “in the
light most favorable” to the nonmoving party.
Providence Square Associates, LLC v. G.D.F., Inc.,
211 F.3d 846, 850 (4th Cir. 2000). The Court must avoid
weighing the evidence or determining its truth and limit its
inquiry solely to a determination of whether genuine issues
of triable fact exist. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986).
moving party bears the initial burden of informing the Court
of the basis for the motion and of establishing the
nonexistence of genuine issues of fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Once the moving party
has made the necessary showing, the non-moving party
“must set forth specific facts showing that there is a
genuine issue for trial.” Anderson, 477 U.S.
at 256 (internal quotation marks and citation omitted). The
“mere existence of a scintilla of evidence”
favoring the non-moving party will not prevent the entry of
summary judgment; the evidence must be such that a rational
trier of fact could reasonably find for the nonmoving party.
Id. at 248-52.
Whether the Defendants Violated the FLSA by Failing to Pay
Their Employees an Overtime Premium.
parties each contend that they are entitled to summary
judgment regarding the question of whether the defendants
violated the FLSA by failing to pay the consultants overtime
compensation. The DOL insists that Fire & Safety failed
to pay overtime because it “paid employees the same
hourly rate for every hour they worked, regardless of whether
they worked fewer than 40 hours in a workweek or more than 40
hours” (Dkt. No. 52 at 12). The defendants contend that
they properly paid a fixed rate per hitch, which was based on
both straight time and overtime wages, and actually overpaid
the consultants when utilizing the blended rate (Dkt. No.
Evidence That the Defendants Complied with the FSLA by Using
a Fixed Rate.
discussed, the FLSA requires employers to pay their employees
an overtime premium of one and one-half times the
“regular rate” for hours worked in excess of 40
during any given week. 29 U.S.C. § 207(a)(1).
“That requirement was meant ‘to spread employment
by placing financial pressure on the employer' and
‘to compensate employees for the burden of a workweek
in excess of the hours fixed in the Act.'”
Calderon v. GEICO Gen. Ins. Co., 809 F.3d 111, 121
(4th Cir. 2015) (quoting Walling v. Helmerich &
Payne, Inc., 323 U.S. 37, 40 (1944)).
does not “impose upon the almost infinite variety of
employment situations a single, rigid form of wage agreement,
” but the agreement must contemplate a “regular
rate” and overtime pay in compliance with the Act.
149 Madison Ave. Corp. v. Asselta, 331 U.S. 199,
203-04 (1947). To that end, ...