Hobbs v. Petroplex Pipe And Construction, Inc.

360 F.Supp.3d 571

Joseph HOBBS and Drake Feeney, Individually and on Behalf of All Others Similarly Situated, Plaintiffs,

v.PETROPLEX PIPE AND CONSTRUCTION, INC., Defendant.

MO:17-CV-00030-DC

United States District Court, W.D. Texas, Midland-Odessa Division.

Signed March 7, 2019

Chris R. Miltenberger, Law Office of Chris R. Miltenberger, PLLC, Southlake, TX, for Plaintiffs.

Dustin A. Paschal, Paul W. Simon, Simon Paschal PLLC, Dallas, TX, Jason Brent Freeman, Freeman Law, PLLC, Frisco, TX, for Defendant.

FINDINGS OF FACT & CONCLUSIONS OF LAW

DAVID COUNTS, UNITED STATES DISTRICT JUDGE

On September 4, 2018, the Court conducted a bench trial in this case, concerning whether Defendant Petroplex Pipe & Construction, Inc. failed to pay Plaintiffs Joseph Hobbs and Drake Feeney, individually and on behalf of all others similarly situated, wages in accordance with the Fair Labor Standards Act. After careful consideration, the Court makes the following findings of fact and conclusions of law, as required by Rule 52(a) of the Federal Rules of Civil Procedure.

I. BACKGROUND

Plaintiffs brought this lawsuit against Defendant pursuant to the Federal Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq. , which requires employers to pay employees at least one and one-half times the regular rate for hours worked in excess of forty hours per week. See 29 U.S.C. 207(a)(1) ; (Doc. 1). According to Plaintiffs, Defendant violated 29 U.S.C. § 207 by requiring that Plaintiffs work an excess of forty hours per week during one or more weeks of employment and not compensating them at the statutory rate of one and one-half times the regular rate for those hours worked in excess of forty hours per work week. (Doc. 1 at 7). Instead, Defendant classified Plaintiffs as independent contractors and paid them at a straight time hourly rate. Id. at 6. Plaintiffs further maintain that Defendant's actions were willful and/or showed a reckless disregard for the provisions of the FLSA. Id. at 9. Defendant counters that Plaintiffs are not "employees" of Defendant as that term is defined and interpreted under the FLSA. (Doc. 9 at 10). Thus, Defendant was under no obligation to pay Plaintiffs at the statutory rate of one and one-half times the regular rate for those hours worked in excess of forty hours per work week. Id. Finally, Defendant argues that Plaintiffs failed to offer evidence that shows Defendant acted willfully in violation of the FLSA. Id.

The parties agree that Defendant is subject to the FLSA and to the applicable damages, should Defendant be found liable. Thus, this case turns on whether there was an employer-employee relationship between the parties, and, if so, whether Defendant acted in willful violation of the FLSA.

II. STIPULATED FACTS

Plaintiffs and Defendant stipulated to the following facts:

1. Defendant is an oilfield contractors services company located in Midland, Texas.

2. Defendant is subject to the FLSA.

3. Defendant is an enterprise engaged in commerce as defined by the FLSA.

4. Defendant has been in business for thirty years.

5. Defendant is owned by JoAnn Bridges.

6. TR Bridges is Defendant's President.

7. Benjamin Humphrey (Humphrey) was hired in February 2014 as a W-2 employee with the job duties of a welder helper. Humphrey was paid overtime at time and a half his regular rate when he was a welder helper. Humphrey became a contracted welder in or around August 2014 and held that position until February 2015. Humphrey was not paid overtime when he worked as a welder because Defendant hired Humphrey as an independent contractor.

8. Plaintiff Joseph Hobbs (Hobbs) worked for Defendant from February 2014 to January 2017.

9. Plaintiff Drake Feeney (Feeney) worked for Defendant on two separate occasions, a 6-month period and a 4-month period.

(See Doc. 80; see also Trial Tr. 7:19–7:23).

10. The parties agree on the hours worked during the relevant workweeks and the money paid to Plaintiffs during those workweeks.

11. The parties agree that depending on (a) the Court's determination regarding independent contractor versus employee status; (b) the Court's determination regarding the inclusion or not of the "per diem" in the "regular rate;" and (c) the Court's determination on whether a two-year or three-year statute of limitations applies, the following chart accurately lists the Plaintiffs' alleged damages.

 Without Per Diem in Regular Rate
HOBBS Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                  $41,910.00                $74,130.00
 Liquidated Damages               $41,910.00                $74,130.00
       TOTAL $83,820.00 $148,260.00
FEENEY Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                   $8,890.00                $33,530.00
  Liquidated Damages               $8,890.00                $33,530,00
       TOTAL $17,780.00 $67,060.00
HUMPHREY Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                           -                $17,320.00
  Liquidated Damages                       -                $17,320.00
       TOTAL                               -                $36,640.00
TOTAL $101,600.00 $249,960.00

Without Per Diem in Regular Rate
HOBBS Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                  $46,970.90                $82,751.73
  Liquidated Damages              $46,970.90                $82,751.73
       TOTAL $93,941.80 $165,503.47
FEENEY Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                   $9,947.46                $37,100.13
  Liquidated Damages               $9,947.46                $37,100.13
       TOTAL $19,894.92 $74,200.25
HUMPHREY Two-Year Statute of Three-Year Statute of
Limitations Limitations
                                           -                $19,267.79
  Liquidated Damages                       -                $19,267.79
       TOTAL                               -                $38,535.59
TOTAL $113,836.72 $278,239.31

(See Doc. 106; see also Trial Tr. 302:1–302:10).

III. FINDINGS OF FACT

The Court finds the following by a preponderance of the evidence:

1. During the relevant time period, Defendant provided pipe welding and fabrication services primarily to its customer Pioneer. Defendant also provided other types of services, such as roustabout work, treatment of produced oil at the customer's facilities, dirt work, ditching, pipe installation, environmental cleanup, and NORM cleanup.

2. During the relevant time period, all of the Plaintiffs worked exclusively for Defendant as welders. Plaintiffs could be called at any time during the day to complete emergency jobs for Defendant. Plaintiffs provided their services to Pioneer only by virtue of their relationship with Defendant and under Defendant's Master Services Agreement with Pioneer.

3. Defendant hired Plaintiffs to complete all welding work for Defendant and moved Plaintiffs to subsequent projects once Plaintiffs completed an assigned project.

4. Plaintiffs became certified welders and took various tests at the direction of Defendant to stay up to date with Pioneer's certification requirements. Defendant paid for Plaintiffs' welding certifications––those required by Pioneer––and for hours Plaintiffs spent completing the tests to become certified pipe welders.

5. Defendant trained Plaintiffs to drive a forklift and paid Plaintiffs for hours they spent training on how to operate a forklift.

6. While working for Defendant, Plaintiffs completed pipe-welding, structural welding, maintenance jobs, and occasionally drove forklifts. However, Plaintiffs worked primarily as pipe welders.

7. Pioneer, not Defendant, dictated the specific welding procedures, provided diagram schemes for Plaintiffs to use while completing their respective projects, and owned the pipe the Plaintiffs welded on.

8. A third-party company employed by Pioneer inspected Plaintiffs' welding.

9. Defendant assigned Plaintiffs welding work with Pioneer and maintained daily time records for each Plaintiff that it would then bill to Pioneer. On some occasions, such as on hard bid jobs, Defendant tracked Plaintiffs hours but did not bill Pioneer on an hourly basis.

10. Plaintiffs took the same break and lunch times as Defendant's employees and were required to work between 7:00 a.m. and 5:00 p.m. At times, Plaintiffs were required to stay after 5:00 p.m. Plaintiffs did not think they could refuse a job or leave early out of fear of being replaced or terminated. If Plaintiffs were late, they were sent home.

11. Plaintiffs were disciplined by Defendant for not complying with Pioneer's requirements. For example, Plaintiffs were sent home if they failed to wear safety gear.

12. Plaintiffs supplied their own trucks, welding machines, and several specialized welding tools, such as beveling machines, grinders, torches, torch hoses, leads, jack stands, hand tools, levels, and squares. Plaintiffs were also accountable for their meals and housing.

13. Defendant paid for and supplied consumables, such as oxygen, acetylene for coating, welding rods, buffing wheels, grinding disks, face shields, and sanding pads. The type of consumables required was dictated by Pioneer. Additionally, Defendant provided the forklift needed to move pipes and other items at the project site.

14. Defendant also hired welder helpers to assist Plaintiffs, some of which were suggested by Plaintiffs, and, once hired, assigned the welder helpers to projects.

15. Defendant paid Plaintiffs a fixed hourly rate of $80 or $70, depending on the year, plus a $100 per diem as reimbursement for fuel and to compensate Plaintiffs for using their welding equipment and trucks. The $100 per diem was agreed to by the parties based on the industry standard. Plaintiffs were not required to turn over expenses to justify the per diem payment. Plaintiffs were also paid an hour to drive to a location and an additional hour to drive from a

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