Hughes v. Gulf Interstate Field Services, Inc.

878 F.3d 183
CourtCourt of Appeals for the Sixth Circuit
DecidedDecember 19, 2017
Docket17-3112
StatusPublished
Cited by15 cases

This text of 878 F.3d 183 (Hughes v. Gulf Interstate Field Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hughes v. Gulf Interstate Field Services, Inc., 878 F.3d 183 (6th Cir. 2017).

Opinion

OPINION

KAREN NELSON MOORE, Circuit Judge.

Tom Hughes and Desmond McDonald served as welding inspectors for Gulf Interstate Field Services on a pipeline-construction project in Ohio between 2013 and 2014. In 2014, they and others similarly situated brought suit under the Fair Labor Standards Act (FLSA) and the comparable Ohio Minimum Fair Wage Standards Act (OMFWSA), asserting that they were entitled to overtime pay for weeks in which they worked more than forty hours. Gulf Interstate argued, and the district court ruled on summary judgment, that Hughes, McDonald, and other employees like them were instead exempt from the overtime requirements because they qualified as highly compensated employees under the governing regulations.

Though Hughes and McDonald concede that they were paid in a manner and at a rate consistent with being exempt, they argue that those facts do not resolve the question under the text of the regulations. Instead, they argue, it matters whether their salaries were guaranteed, and in turn, whether a rational trier of fact could have concluded that there was no such guarantee. Because such a guarantee does matter, and because there is a genuine issue of material fact as to whether such a guarantee existed, we REVERSE the district court’s grant of summary judgment to Gulf' Interstate and remand for further proceedings.

I. BACKGROUND

Hughes and McDonald began working for Gulf Interstate as welding inspectors in January and June 2013, respectively, on a pipeline project in Ohio for a Gulf Interstate client called MarkWest. R. 31-1 (Hughes Deck) (Page ID #151-52); R. 31-2 (McDonald Deck) (Page ID #155); see also R. 42-13 (Kramer Deck, Exs. BA-BB) (Page ID #600, 602). Prior to beginning their work, they each received an offer letter from Gulf Interstate stating that they were entitled to, in addition to a weekly per diem and computer stipend, a salary of “$337.00/Day Worked.” R. 31-1 (Hughes Decl., Ex. 1) (Page ID #154). 1 Rate sheets exchanged between Gulf Interstate and MarkWest regarding the project also listed, among various “Cost Components,” a “Daily Rate,” with a note appended clarifying that the “[d]ay rate” would be “paid on days worked.” R. 93-2 (Sprick Dep., Ex. 3) (Page ID #3182).

Correspondence between MarkWest-and Gulf Interstate offers further discussion of the arrangement. After Gulf Interstate’s director asked whether inspectors were “paid for DAYS WORKED only (whether its [sic] 1, 2, 3, etc), or is there a 5, 6, or .7 day minimum ?”, a MarkWest manager replied: “[Inspectors are p]aid for. days worked only. This was explained to all of the inspectors coming in. These projects are based on a 6 day work week @ 10 hours a day (salaried position). As is the case anywhere any additional hours worked in a day is [sic] not paid.” R. 93-2 (Sprick Dep., Ex.' 12) (Page ID #3241).

There is also evidence that welding inspectors were told orally that they would be working “six days a week” and ten hours a day, an arrangement known by industry shorthand as “six 10s.” R. 90-9 (Hughes Dep.) (Page ID #1637); see R. 42-2 (Hill Decl.) (Page ÍD #310) (“It was my expectation ... that ... either one of my subordinates or I explained to each Plaintiff that they would be paid a daily rate multiplied by six in each week....”); see also 90-10 (McDonald Dep.) (Page ID #1750, 1752); R. 90-20 (Williamson Dep.) (Page ID #2684). And Gulf Interstate’s Field Services Manager, Catherine Kramer, testified that inspectors were to be paid for six days even if they worked five days, although she stated that this aspect of the arrangement was “n‘ot‘ explained” in the offer letters. R. 93-3 (Kramer Dep.) (Page ID #3253). 2

Over the course of their employment, Hughes and McDonald earned an annualized rate of more than $100,000 per year. See R. 42-6 (Kramer Dep.) (Page ID #364) (attesting that Hughes earned nearly $109,000 “for work performed in 2013” and that McDonald earned nearly $83,000 “for work performed from April' 15, 2013 through December 31, 2013”). Along with others similarly situated, they received pay for at least six days of ten-hour shifts per week, they earned pay for holidays (some worked, some unworked), and McDonald (again, along with others similarly situated 3 ) received pay on days that he was out sick. See R. 42-6-42-13 (Kramer Decl, & Exs. A-BJ) (Page ID #356-643). 4 During the .months that they worked, in- other words, there does not appear to have been a week during which, Hughes and McDonald did not receive pay consistent, with a guarantee of a weekly salary equivalent to six. days of work at ten hours per day.- 5 See id.; see also R. 90-2 (Mot. for Decertifi-cation, App’x A) (Page ID #1063-1116).

In May 2014, Hughes and McDonald brought suit on behalf of themselves and others similarly situated under the FLSA, see 29 U.S.C. § 207, and the OMFWSA, see Ohio Rev. Code § 4111.03. R. 1 (Compl. ¶1) (Page ID #1). In January 2015, they moved to certify an FLSA collective action and an OMFWSA class action under 29 U.S.C. § 216(b) and Federal Rule of Civil Procedure 23, respectively. R. 30 (PL Mot. for Conditional and Class Certification) (Page ID #112). In July 2015, the district court granted Hughes and McDonald’s motion for FLSA conditional certification but denied their motion for OMFWSA class certification. R. 59 (Dist. Ct. Certification Op. & Order at 1) (Page ID #764).

In November 2015, Gulf Interstate moved for summary judgment, arguing that “undisputed evidence establishes each element of the highly compensated employee exemption to overtime pay under the Fair Labor Standards Act and analo-. gous Ohio state law.” R. 91-1 (Gulf Interstate’s Brief in Support of Mot. for Summ. J, at 1) (Page ID #3056). The district court granted Gulf Interstate’s motion, concluding that Hughes and McDonald were exempt on the grounds that “actual payment practice”—regardless of the existence of guarantee—controlled the question and “there [was] no dispute that Plaintiffs were actually paid the requisite amount.” R. 110 (Dist. Ct. Summ. J. Op. & Order at 6) (Page ID #3740). After a successful motion for clarification, R. 117 (Clarification Order) (Page ID #3772), a successful motion to sever and stay, R. 129 (Severance Order) (Page ID #3848), and an entry of final judgment, under Rule 54(b) as to Hughes and McDonald, see R. 131 (Final J. Order) (Page ID #3855), this appeal followed.

II. DISCUSSION

This case turns on. two issues: (1) whether it matters, for purposes of the salary-basis requirement, whether at least arguably day-rate workers like Hughes and McDonald were guaranteed the requisite minimum weekly salary, and (2) if so, whether there was in fact such a guarantee.

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878 F.3d 183, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hughes-v-gulf-interstate-field-services-inc-ca6-2017.