Davis v. Skylink Ltd.

BRION DAVIS, DAVID FAIRBURN and CURTIS PARKER,Individually and On Behalf of Others Similarly Situated, Plaintiffs,

v.SKYLINK LTD., an Ohio Limited Liability Company, Defendant.

CIVIL ACTION NO. 3:11-0094

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA HUNTINGTON DIVISION

ENTER: July 12, 2012

MEMORANDUM OPINION AND ORDER

Pending are Defendant's Motion for Summary Judgment (ECF No. 46), Defendant's Motion to Exclude (ECF No. 59), Plaintiffs' Motion to Amend Complaint (ECF No. 57), and Plaintiffs' Motion to Amend Scheduling Order (ECF No. 58). For the reasons set forth below, Defendant's Motion for Summary Judgment (ECF No. 46) is GRANTED, and Plaintiffs' Motion to Amend Complaint (ECF No. 57) is DENIED. Plaintiffs' Motion to Amend Scheduling Order (ECF No. 58) and Defendant's Motion to Exclude (ECF No. 59) are DENIED as moot.

I. Background

Defendant Skylink, LTD., ("Skylink") is a limited liability company that provides satellite installation services for DirectTV in West Virginia and surrounding states. Skylink hires installation and repair technicians to conduct its business. Rather than paying its technicians an hourly wage, Skylink utilizes a "point" system, which compensates them on a per-job basis.Under this system, the rate of pay depends in large part on the type of work completed. The plaintiffs, Brion Davis, David Fairburn, and Curtis Parker ("Plaintiffs"), worked as installation and repair technicians for Skylink at various times between 2007 and 2010. Plaintiffs bring this collective action complaint under the Fair Labor Standards Act ("FLSA"), § 29 U.S.C. § 201 et seq., alleging various violations of the FLSA, including Defendant's failure to pay overtime as required by 29 U.S.C §§ 206, 207, and 215(a)(2). See Complaint, ECF No. 1.

Defendant Skylink moved to dismiss all claims, arguing that several of the FLSA sections cited in Plaintiff's Complaint did not provide for a private cause of action. The Court granted the motion to dismiss in part, dismissing all claims except Plaintiffs' claim for Defendant's failure to pay overtime. ECF No. 18 (June 15, 2011). On August 1, 2011, the Court entered a scheduling order setting deadlines for discovery but suspending other deadlines pending the resolution of dispositive motions. ECF No. 24.

In November 2011, Defendant moved for summary judgment. ECF No. 46. Before that motion was resolved, Plaintiffs filed a Motion to Amend the Complaint (ECF No. 57) and a Motion to Amend the Scheduling Order to Allow Further Discovery (ECF No. 58). Plaintiffs argue that supplemental discovery responses provided by Defendant after the discovery deadline provided new information justifying amendment of the complaint and additional discovery. The Court ordered supplemental briefing on the motions to amend on April 26, 2012 (ECF No. 72), and held a motions hearing on July 2, 2012. This matter is now ripe for resolution.

II. Defendant's Motion for Summary Judgment

A. Standard

To obtain summary judgment, the moving party must show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R. Civ. P. 56(a). In considering a motion for summary judgment, the Court will not "weigh the evidence and determine the truth of the matter[.]" Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Instead, the Court will draw any permissible inference from the underlying facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).

Although the Court will view all underlying facts and inferences in the light most favorable to the nonmoving party, the nonmoving party nonetheless must offer some "concrete evidence from which a reasonable juror could return a verdict in his [or her] favor[.]" Anderson, 477 U.S. at 256. Summary judgment is appropriate when the nonmoving party has the burden of proof on an essential element of his or her case and does not make, after adequate time for discovery, a showing sufficient to establish that element. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The nonmoving party must satisfy this burden of proof by offering more than a mere "scintilla of evidence" in support of his or her position. Anderson, 477 U.S. at 252.

B. Analysis

The pending Motion for Summary Judgment addressed the claims in Plaintiffs' original Complaint, and was ripe before Plaintiffs' motions to amend were filed. Therefore, the Court will resolve it before turning to the motions to amend.

Defendant moves for summary judgment on the sole claim remaining after this Court's ruling on Defendant's Motion to Dismiss: that Defendant failed to properly record and pay overtime. Under the FLSA, employees are entitled to recover for unpaid overtime compensation. 29 U.S.C. §§ 207, 216(b) ("An employer who violates the [FLSA's overtime provisions] . . . shall be liable to the employee or employees affected in the amount of their . . . unpaid overtime compensation . . . and in an additional equal amount as liquidated damages."). Plaintiffs allegethat they were not paid adequate overtime compensation for the work they completed beyond 40 hours per week because Defendant failed to keep sufficient time records of their work.

The Court denied Defendant's Motion to Dismiss this claim, as it relied on materials outside the pleadings to establish the sufficiency of its piece-rate pay plan. See ECF No. 18, at 6 ("Where materials outside of the pleadings are actually considered by the Court, a motion to dismiss must be treated as a motion for summary judgment under Rule 56, and the parties must be given a reasonable opportunity to present evidence pertinent to the motion.") (quoting Fed. R. Civ. P. 12(d)). Now, however, the parties have had adequate opportunity to discover and present relevant facts, and the motion is properly before the Court as a summary judgment motion.

Plaintiffs assert that Defendant's method of paying them per point, rather than per hour, fails to adequately include overtime hours worked. Defendant responds that its "points" system falls within a permissible pay procedure under the FLSA, a "piece rate" compensation system. See 29 U.S.C. § 207(g); 29 C.F.R. § 778.111. Defendant claims that under this method, Plaintiffs received one-third of a point for each job completed, and were paid one and a half times their "effective hourly rate" for each hour that they work over 40 in a given week. The Court finds that the points system is a piece rate system within the meaning of the FLSA and, as such, is a permissible compensation system. Plaintiffs provide no evidence of overtime worked but not compensated as a function of Defendant's use of the point system.¹ Absent any such evidence, the Court GRANTS Defendant's Motion for Summary Judgment on this claim. See Anderson, 477 U.S. at 256 (non-moving party must offer some "concrete evidence from which a reasonable juror could return a verdict in his [or her] favor[.]").

With this determination, the Court has now dismissed or granted summary judgment on all the claims pleaded in Plaintiffs' original Complaint. Normally, this would result in dismissal of the action in its entirety. However, because Plaintiffs' Motion to Amend Complaint was filed before Defendant's Motion for Summary Judgment was resolved, the Court will examine the Motion to Amend to determine whether the proposed amendments offer a sufficient basis for sustaining this action.

III. Plaintiffs' Motion to Amend

Plaintiffs seek to amend their Complaint, and ask the Court to amend the scheduling order to re-open discovery. ECF Nos. 57, 58. When a motion to amend is filed after the deadline, the moving party must show "good cause" for amendment. Fed. R. Civ. P. 16(b). Further, an amendment which is futile need not be allowed. See Edell & Associates, P.C. v. Law Offices of Angelos, 264 F.3d 424, 446 (4th Cir. 2001) (amendment is futile where the opposing party would be entitled to summary judgment on the amended claim).

The proposed Amended Complaint (ECF No. 57, Ex. 2) adds two claims² to those asserted in the original Complaint (ECF No. 1). It alleges that Defendant failed to properly pay overtime as required by the FLSA because: 1) Defendant improperly calculated the number of hours worked by each Plaintiff; and 2) Defendant did not compensate Plaintiffs for the time spent commuting home from the final job worked each day. Plaintiffs argue that there is good cause for allowing these amendments because they only became aware of the factual bases for the amendments after receiving Defendant's late-produced discovery.

A. Calculation Error

Plaintiffs' first proposed claim asserts that Defendant improperly calculated the number of hours worked by each Plaintiff in a day. Defendant's compensation system incorrectly converted the minute values of the time each Plaintiff worked into one hundredths, rather than sixtieths, of an hour. For example, one hour, thirty minutes would have been recorded as 1.3 hours, not 1.5 hours. Because of this error, the three Plaintiffs, together, were underpaid by a total of 9.73 overtime hours over the course of their combined employment with Defendant. See Pls.' Expert Report, ECF No. 51, Ex. 1, at 1; Def.'s Response, ECF No. 62, at 4.

Defendant admits this calculation error and represents that it has issued corrected paychecks. Defendant argues, however, that the claim is not cognizable under the FLSA because the unpaid wages at issue are "de minimis." "As a general rule, employees cannot recover for otherwise compensable time if it is de minimis." Lindow v. United States, 738 F.2d 1057, 1061—62 (9th Cir.1984)); see also Perez v. Mountaire Farms, Inc., 650 F.3d. 350, 373—74 (4th Cir. 2011) (citing Lindow). Although the de minimis analysis usually applies when an employer decides not to compensate employees for a small part of their working activities, it is also applicable in ...