Mozingo et al v. Oil States Energy Services, L.L.C. et al

BRIEF in Support re Motion for Partial Summary Judgment

W.D. Pa.August 24, 2016

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF PENNSYLVANIA ------------------------------------------------------------------- x SAMMY MOZINGO, JAMIE HOLLOWAY, GEORGE BOLEN, JR., DON BRATTON, MICHAEL BURCHIK, BARRETT DUPELCHAIN, WAYNE EDDY, MICHAEL FRANCIS, MATTHEW FRICK, MICHAEL GEORGE, KARI GORDON, CHRIS GRYMES, STEPHEN SOLTESZ-HAUGHTON, MILTON HOLIFIELD, DANIEL HOLIFIELD, MICHAEL HOLIFIELD, RYAN KARMANN, BRIAN KUBIAK, CHADRICK LEOPAUL, JASON LETT, DONALD LEWIS, GREG MORRILL, ROBERT PICKEL, SCOT POND, RYAN SHOWS, JEFFREY STEFFISH, BRIAN TULLY, STEPHEN WALTERS, MATT WILLIAMS, Plaintiffs, v. OIL STATES ENERGY SERVICES, L.L.C. f/k/a SPECIALTY TANK SUPPLY, OIL STATES ENERGY SERVICES HOLDING, INC., OIL STATES INTERNATIONAL, INC. Defendants. : : : : : : : : : : : : : : : : : : : : : : : : Civil Action No. 2:15-529 Judge Cathy Bissoon ------------------------------------------------------------------- x Memorandum of Law in Support of Plaintiffs’ Motion for Partial Summary Judgment Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 1 of 64 i INTRODUCTION This case asks whether the manual operation of heavy machinery is a nonexempt job duty for which an employee is entitled to overtime compensation. Defendant Oil States Energy Services, LLC provides equipment and services to energy companies that extract natural gas through a process known as hydraulic fracturing, or “fracking.” Oil States employed the 15 plaintiffs in this action as frac hands, grease operators, and crane operators.1 Once a gas well is drilled, the frac hands assemble and install colossal valves called frac stacks, which are used to open and close the well during fracking operations. Grease operators assist with one aspect of those fracking operations by providing pressure control services: While a third party uses a “wireline” to insert its tools into the well, the grease operators use pressure control equipment to prevent the water in the well from escaping the well. The crane operators use large cranes to hoist and move the pressure control equipment and frac stacks operated by the frac hands and grease operators. There is no question that these are blue-collar jobs involving repetitive manual labor. Indeed, Oil States admits as much. The vice president of human resources, who is charged with classifying employees as exempt or nonexempt, testified that the crane operator job function is a nonexempt, manual-labor function. And the Oil States assistant manager who oversees pressure control operations testified that the grease operators and crane operators perform “repetitive work” that involves “pretty much the same thing every day”: “We are going to be rigging up. We are going to be stabbing on the well. We are going to be running in hole. We are going to be pulling out of the hole. We are going to rig down, pull off well, move to next well. Running in hole, running out hole. Move to next well. Up until the end of the job. . . . It’s fairly boring.” 1 The third amended complaint names three defendants: Oil States Energy Services, LLC; Oil States Energy Services Holding, Inc.; and Oil States International, Inc. The parties agree that Oil States Energy Services, LLC employed the plaintiffs and is therefore the correct defendant. Accordingly, the plaintiffs no longer seek relief from the other two defendants. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 2 of 64 ii Despite the unquestionably blue-collar nature of their job duties, Oil States classified the plaintiffs as exempt from the overtime provisions of the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PMWA). Oil States contends that they were exempt executives or administrators because they did not have direct supervision at well sites. Yet the plaintiffs did not perform administrative duties, did not direct the work of other employees, and did not make any operational or business decisions. The undisputed evidence shows that the plaintiffs’ primary duty was to assemble and operate the heavy machinery that Oil States leases to energy companies. Oil States also invokes the motor carrier exemption as a defense to liability. That exemption does not apply, however, to employees whose job involves, “in whole or in part,” the operation of non-commercial vehicles (i.e., vehicles weighing 10,000 pounds or less). Oil States assigned a non- commercial pickup truck to each plaintiff, and the plaintiffs used those vehicles daily to travel to gas wells, purchase fuel for their equipment, deliver tools and parts to other operators, and purchase supplies from nearby stores. Thus the plaintiffs did not qualify for the motor carrier exemption. In addition, the Pennsylvania motor carrier exemption only applies to “motor carriers” that transport passengers for hire. Oil States is a fracking contractor, not a limousine service, and Pennsylvania’s motor carrier exemption does not apply. The plaintiffs are therefore entitled to damages under the FLSA and PMWA, which raises the question of how to calculate those damages. Oil States paid the plaintiffs a monthly salary plus a non-discretionary “job bonus” for each shift worked at a gas well. To calculate overtime damages, the salary in converted to an hourly rate. Pennsylvania law requires overtime to be paid at one-and- one-half times that hourly rate. Federal law sometimes allows employers to pay overtime at one- half the hourly rate, but the Department of Labor prohibits the half-rate when plaintiffs are paid non- discretionary bonuses. Thus the overtime damages for the salary must be calculated using a multiplier of 1.5, not 0.5. The plaintiffs are also entitled to overtime for the bonuses; once again, Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 3 of 64 iii Pennsylvania law requires those overtime damages to be calculated using a 1.5 multiplier, though the federal regulations permit Oil States to use a half-rate multiplier for the bonuses. The plaintiffs are also entitled to liquidated damages under the FLSA because Oil States did not act reasonably and in good faith when classifying the plaintiffs as exempt. An employer does not act reasonably and in good faith unless the employer makes some effort to assess the applicability of the overtime exemptions. Oil States never sought to determine whether the grease operators, crane operators, and frac hands qualified for the overtime exemption, so the plaintiffs are entitled to liquidated damages. And those damages are owed for an extended three-year limitations period, rather than the standard two-year limitations window, because Oil States recklessly disregarded the overtime laws. BACKGROUND2 Defendant Oil States Energy Services, LLC (Oil States) provides various “completion” services to energy companies engaged in the extraction of natural gas. (PCSMF ¶ 4.) The completion phase of gas extraction is the middle phase, between the drilling and production phases. (PCSMF ¶¶ 151-153.) Once a natural gas well has been drilled and lined with a cement casing, energy companies hire an assortment of contractors to “stimulate” the well through a process known as hydraulic fracturing, or fracking. (PCSMF ¶¶ 154, 164.) Those fracking operations are overseen by the “company representative,” who is the energy company’s primary agent at the well site. (PCSMF ¶ 165.) During fracking operations, the well pad looks similar to a huge construction site, with various contractors performing different aspects of the project. (PCSMF ¶ 164.) The company representative directs all of those contractors, including Oil States. (PCSMF ¶ 165.) 2 This background section is merely intended to provide a general synopsis of the work that the plaintiffs performed. The facts are set forth in much greater detail in the Plaintiffs’ Concise Statement of Material Facts (“PCSMF”). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 4 of 64 iv From its district offices in Canonsburg and Watsontown, Oil States leases an assortment of equipment to energy companies performing fracking operations in Pennsylvania, West Virginia, and Ohio. (PCSMF ¶¶ 4-7.) Operations at the Canonsburg and Watsontown districts are administered by a team of managers, including a regional manager, district manager, assistant manager, field service manager, and operations supervisors. (PCSMF ¶¶ 8-10, 12-13, 21-28.) Those managers supervise a team of employees called field service supervisors, who spend their days at well sites operating the equipment that Oil States leases to energy companies. (PCSMF ¶¶ 24-26, 166, 293- 299.) The field service supervisors are known as grease operators, crane operators, or frac hands, depending on what type of equipment they operate.3 (PCSMF ¶¶ 169, 293-299.) Fracking Overview A quick overview of fracking: A natural gas well is fracked in “stages,” and each stage consists of two steps. (PCSMF ¶¶ 155-156.) In step one, a contractor uses a long wireline to insert plugs into the well to seal off a specific zone within the well. (PCSMF ¶¶ 156-157.) After the wireline crew sets the plugs, a tool called a perforating gun fires several explosives in the sealed zone of the well to perforate the cement casing that lines the well. (PCSMF ¶¶ 158-160.) Then, during step two of the stage, a different contractor pumps a high-pressure fracking solution into the well. (PCSMF ¶ 161.) That solution fills up the plugged zone of the well, is forced out of the well casing through the perforations, and fractures the shale rock surrounding the well casing, creating fissures in the rock. (PCSMF ¶ 162.) Natural gas trapped in the rock will then flow through the 3 Four of the plaintiffs worked exclusively as crane operators: Mr. Burchik, Mr. Eddy, Mr. Lett, and Mr. Pickel. Three of the plaintiffs worked exclusively as grease operators: Mr. Bolen, Mr. Haughton, and Mr. Steffish. One plaintiff, Mr. Kubiak, worked exclusively as a frac hand. Five plaintiffs worked as grease operators on some jobs and crane operators on other jobs: Mr. Bratton, Mr. Gordon, Mr. Karmann, Mr. Pond, and Mr. Williams. Finally, two plaintiffs worked as frac hands on most jobs but sometimes assisted as grease operators: Mr. Frick and Mr. George. (PCSMF ¶¶ 350, 353-354, 369-369, 382, 398-399, 413, 430-431, 444, 457-458, 472-476, 491, 494, 507, 514, 523-524, 536, 555, 568-570.) Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 5 of 64 v fissures, through the perforations in the cement casing, and into the well, where it will be pumped to the surface after the entire well has been perforated and fracked. (PCSMF ¶ 163.) Pressure Control The grease operators and crane operators assisted with the wireline operations performed during step one of the fracking process; specifically, they provided “pressure control” services for the wireline contractor. (PCSMF ¶¶ 166, 169.) The pressure inside a natural gas well is typically between 5,000 and 15,000 pounds per square inch (psi). (PCSMF ¶ 167.) As the wireline is inserted into the well to set the plugs or fire the perforating guns, a seal must be created around the wireline to prevent the high-pressure liquid inside the well from escaping out the top of the well. (PCSMF ¶ 168.) This is called pressure control. Sometimes the wireline contractor is able to perform the pressure control operations itself, but other times the energy company overseeing the well site hires Oil States to perform those pressure control operations. The grease operators were responsible for operating the pressure control equipment, which pumps grease around the wireline at a high pressure to maintain a seal. (PCSMF ¶¶ 168-170, 209-234.) The pressure control equipment weighs thousands of pounds and must be suspended over the well during the wireline operations; the crane operators were responsible for that task. (PCSMF ¶¶ 209-234, 261-270.) Oil States employs drivers who bring the pressure control equipment and crane to the well site at the beginning of a job; Oil States assigns a pickup truck to each grease operator and crane operator, and they follow the drivers to the well site in their pickup trucks. (PCSMF ¶¶ 91-93, 132- 144, 175-184.) At the well site, the grease operator and crane operator consult with the company representative to determine where to place their equipment, and then they “rig up” their equipment. (PCSMF ¶¶ 185-208.) The crane operator unloads the heaviest equipment with the crane while the grease operator removes the smaller equipment from the trailer by hand. (PCSMF ¶¶ 190-208.) Once everything is removed, they assemble the machinery. The crane operator hoists one piece of the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 6 of 64 vi equipment onto another while the grease operator uses wrenches and sledgehammers to tighten the bolts; that process is repeated until each piece of equipment—including the grease head, lubricator, flange, tool trap, flow cross, and blowout preventer—has been assembled. (PCSMF ¶¶ 190-202.) When the string of pressure control equipment is fully assembled, the crane operator hoists it into the air while the grease operator helps the wireline contractor run its wireline and tools through the pressure control equipment. (PCSMF ¶¶ 195, 204.) The lead engineer from the wireline crew gives the instruction to begin the job. (PCSMF ¶¶ 209-215.) The crane operator lifts the pressure control equipment into the air, and the grease operator screws the equipment onto the wellhead. (PCSMF ¶¶ 204, 214.) From that point on, the grease operator’s job is to run the grease unit—a large machine that pumps high-pressure grease through a series of hoses and into the grease head, where it creates a seal around the wireline. (PCSMF ¶¶ 217-221.) The grease operator uses gauges to monitor the pressure inside the well, and if the pressure starts to climb, the grease operator uses various levers and knobs to increase the pressure in the grease head. (PCSMF ¶¶ 217-221.) The grease operator’s mission is to keep the grease pressure about 1,500 pounds per square inch (psi) above the well pressure. (PCSMF ¶ 218.) If the grease pressure gets too low, some of the liquid inside the well squirts out the top of the well. (PCSMF ¶¶ 222-224.) In that event, the grease operator increases the grease pressure in an effort to regain seal; if necessary, the grease operator will ask the wireline contractor to stop the wireline for five minutes while the grease operator equalizes the pressure. (PCSMF ¶ 224.) The grease operator stands at the grease unit and monitors the grease pressure until the wireline contractor has finished the stage. (PCSMF ¶¶ 217-227.) When the wireline has been removed from the well, the grease operator unscrews the pressure control equipment from the well and then lifts an 80-pound “nightcap” onto the well to seal the well. (PCSMF ¶¶ 227-231.) The crane operator lowers the equipment to the ground, and while the wireline crew replaces the tools on the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 7 of 64 vii wireline, the grease operator refills the grease tank and fuel tank on his grease unit. (PCSMF ¶¶ 228- 233.) When the wireline engineer gives the order, they begin the next stage. (PCSMF ¶ 234.) Because the fracking contractor and wireline contractor cannot work on the same well at the same time, most energy companies perform simultaneous fracking operations on two adjacent wells, allowing the fracking contractor to pump the fracking solution into one well while the wireline contractor inserts its tools into the other. (PCSMF ¶ 234.) The grease operator and crane operator continue this process until all of the wells have been fracked. It is a repetitive and laborious process: The grease operator spends most of the day standing at the grease unit, and between each stage he attaches and detaches the pressure control equipment, places one nightcap onto the well while removing another, rearranges the grease hoses between the two wells, and replaces any worn parts. (PCSMF ¶¶ 217-235.) All of that continues until the end of the job, when the equipment must be rigged down—another arduous process. (PCSMF ¶¶ 236-242.) Fracking is a 24-hour operation, and Oil States typically sends two crews for each job—one crew for the 12-hour day shift and another crew for the 12-hour night shift. (PCSMF ¶¶ 253-255, 310.) Generally speaking, each crew includes one grease operator and one crane operator, and those two operators are the only Oil States employees at the well site. (PCSMF ¶¶ 254-255, 310.) But occasionally a job will require heavier equipment rated for higher pressures, and Oil States usually sends two grease operators for each of those shifts because the equipment’s weight makes it especially difficult to rig up and maneuver.4 (PCSMF ¶¶ 256-261.) The grease operators and crane operators spend most nights in hotels, and the jobs can last anywhere from a few days to a month, 4 Oil States divides the field service supervisors into levels: Field Service Supervisor I, II, III, or IV. A Field Service Supervisor II is qualified to operate the 10,000 psi pressure control equipment, while a Field Service Supervisor III is qualified to operate the 15,000 psi equipment. That is the only difference between the two levels. (PCSMF ¶¶ 65-72.) Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 8 of 64 viii depending on how many wells are being fracked. (PCSMF ¶¶ 306.) Once the job is complete, the operators use their assigned pickup trucks to drive to the next job or back to the shop. Frac Hands Three of the 15 plaintiffs were “frac hands.” (PCSMF ¶¶ 281.) Once a well has been drilled, frac hands go to the well and install a “frac stack,” which is a series of 5,000-pound valves that are used to open and close the well during fracking operations. (PCSMF ¶ 282.) After the frac stack has been delivered to the well, the frac hand drives to the well site with a crane operator to assemble the frac stack. (PCSMF ¶¶ 283-285.) The crane operator uses a crane to position the valves over the well, and the frac hand assembles the valves into a frac stack using large bolts and a torque wrench. (PCSMF ¶ 286.) The frac hand then tests the frac stack with a hydrostatic test pump, which runs water through the valves at a high pressure to locate any leaks. (PCSMF ¶ 287.) Once the frac stack is assembled and tested, it sits at the well site until the energy company is ready to begin fracking operations. At that point the frac hand returns to the site, and throughout the fracking operations the frac hand is responsible for opening and closing the valves upon instructions from the company representative. (PCSMF ¶¶ 288-289.) At the end of the job, the frac hand and crane operator disassemble the frac stack. (PCSMF ¶ 290.) Shop Work Between 2012 and 2015, the plaintiffs typically worked a “30 and 10” schedule, meaning they were scheduled to work for 30 consecutive days and then had 10 days off. (The plaintiffs were required to request their days off, and they often worked through their scheduled days off.) When they were not working at a well site, they were required to work in the shop. The grease operators and crane operators spent their shop days cleaning the pressure control equipment in the wash bay; breaking down each piece of equipment (including the lubricator, pump- in sub, tool trap, grease head, and blowout preventer); replacing the o-rings, rubbers, flow tubes, Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 9 of 64 ix gaskets, and brass in the equipment; replacing the rams; refilling the fuel and grease tanks on the grease unit; reeling out the hoses and wiping them down; identifying any mechanical issues to be repaired by the mechanic; rebuilding each piece of equipment; repainting each piece of equipment; lubricating all of the parts; and performing hydrostatic testing on the equipment to look for leaks or other defects. (PCSMF ¶¶ 272-280.) Likewise, the frac hands spent their time breaking down and cleaning the valves, replacing the o-rings and other parts, rebuilding and lubricating the valves, and testing the valves for leaks. (PCSMF ¶ 293.) When all of that was complete, they swept the floor and cleaned their pickup trucks. (PCSMF ¶¶ 278-279.) The grease operators, crane operators, and frac hands also spent their shop days performing “hotshots.” A hotshot is an industry term used to describe a delivery of something to a well site: A supply, tool, or piece of equipment that is needed at a well site is delivered to the well site by someone who is not otherwise working at that well site. (PCSMF ¶ 96.) When a grease operator needs a part or tool at a well site, he calls the shop to request the part or tool, and someone then “hotshots” that item to the well site. (PCSMF ¶ 96.) The grease operators, crane operators, and frac hands working in the shop were frequently asked to use their assigned pickup trucks to hotshot small tools and parts to well sites scattered all over Pennsylvania, West Virginia, and Ohio. (PCSMF ¶¶ 96, 278, 373, 390, 405, 504, 515, 518, 543.) Compensation Structure Oil States paid the plaintiffs a fixed monthly salary (generally between $3,000 and $4,000) plus a non-discretionary “job bonus” for each shift charged to the customer. (PCSMF ¶¶ 311-322.) The plaintiffs received one job bonus for each 12-hour shift that was charged to the customer. (PCSMF ¶ 313.) As long as the customer was billed for the shift, the operator received a bonus. (PCSMF ¶ 318-321.) Oil States did not pay any overtime compensation to the grease operators, Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 10 of 64 x crane operators, or frac hands—even when they were trainees.5 (PCSMF ¶ 315.) Oil States classified the plaintiffs as exempt from the overtime requirements, and in April 2015 the plaintiffs filed this lawsuit challenging their exempt classification. (See ECF No. 1.) STANDARD A party may move for summary judgment on any of the issues, claims, or defenses in a case. See Fed. R. Civ. P. 56(a). Summary judgment is warranted “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.” Id. “An issue is genuine only if there is a sufficient evidentiary basis on which a reasonably jury could find for the non-moving party, and a factual dispute is material only if it might affect the outcome of the suit under governing law.” Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006). The court must review the evidence in the light most favorable to the non-moving party and draw all inference in its favor. Id. 5 In July 2015, Oil States changed its compensation structure and began to pay the grease operators, crane operators, and frac hands an hourly wage plus overtime. In this lawsuit the plaintiffs do not seek any damages for work performed after July 2015. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 11 of 64 1 ARGUMENT I. THE PLAINTIFFS ARE ENTITLED TO OVERTIME UNDER FEDERAL AND STATE LAW. The FLSA and PMWA generally require employers to compensate their employees at a rate of one-and-one-half times each employee’s standard wage for each hour over forty that an employee works in a week. 29 U.S.C. § 207(a)(1); 43 P.S. § 333.104(c). Certain types of employees are exempt from that mandate, see 29 U.S.C. § 213, but the FLSA’s exemptions must be narrowly construed against the employer, which bears the burden of proving “‘plainly and unmistakably’” that an employee qualifies for one of the exemptions. Packard v. Pittsburgh Transp. Co., 418 F.3d 246, 250 (3d Cir. 2005) (quoting Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992)); see also A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945) (“To extend an exemption to other than those plainly and unmistakably within its terms and spirit is to abuse the interpretive process and to frustrate the announced will of the people.”). Oil States seeks shelter behind a smorgasbord of exemptions: the motor carrier exemption, executive exemption, administrative exemption, highly compensated exemption, outside sales exemption, and combination exemption. The defendant’s reliance on such a variety of exemptions betrays the fact that the plaintiffs, whose job was to operate heavy machinery, were laborers whose job duties do not fit within the statutory overtime exemptions. Thus the plaintiffs are entitled to summary judgment on the issue of liability. A. THE PLAINTIFFS WERE NOT SUBJECT TO THE MOTOR CARRIER EXEMPTION. The first affirmative defense that Oil States invokes is the motor carrier exemption—an exemption for commercial truck drivers who are subject to U.S. Department of Transportation (DOT) regulations governing the number of hours they may drive without rest. The motor carrier exemption “provides that overtime pay is not required for ‘any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 12 of 64 2 service.’” McMaster v. E. Armored Servs., Inc., 780 F.3d 167, 169 (3d Cir. 2015) (quoting 29 U.S.C. § 213(b)(1)). But the plaintiffs were not commercial truck drivers; most of them were not qualified to drive commercial vehicles for Oil States, and those who were qualified to drive commercial vehicles did so no more than a couple of times per month. And more significantly for present purposes, the motor carrier exemption does not apply to employees who drive non- commercial vehicles. The plaintiffs used small (i.e., non-commercial) pickup trucks for all of their work-related travel, and thus the motor carrier exemption does not apply. We address the federal exemption before examining its Pennsylvania counterpart. i. The Federal Motor Carrier Exemption Does Not Apply to Employees Who Drive Non-Commercial Vehicles. The federal motor carrier exemption has undergone a few facelifts in recent years, and to understand its current scope, some historical context is important. a. Congress intended the motor carrier exemption to cover employees who are regulated by the DOT. Three years before President Roosevelt signed the FLSA into law, Congress enacted the Motor Carrier Act of 1935 (MCA) to regulate “the rapidly burgeoning motor transportation industry.” Friedrich v. U.S. Computer Servs., 974 F.2d 409, 412 (3d Cir. 1992). The MCA vested the Interstate Commerce Commission, and later the DOT, with jurisdiction to regulate motor carriers whose activities affected the safety of roads used in interstate commerce. See Levinson v. Spector Motor Serv., 330 U.S. 649, 682-84 (1947). One aspect of that regulatory authority was the power to implement hard caps on the number of hours that certain drivers were permitted to work in a given time period. Id. at 658. When Congress enacted the FLSA in 1938, the U.S. Department of Labor (DOL) was charged with responsibility for implementing and enforcing its 40-hour-per-week overtime requirements. But Congress included in the FLSA an exemption, called the motor carrier Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 13 of 64 3 exemption, for all transportation workers who were subject to regulation under the MCA. See 29 U.S.C. § 213(b)(1). To prevent the FLSA from interfering with the MCA’s highway-safety objectives, see Levinson, 330 U.S. at 661-62, “Congress ensured that regulatory jurisdiction under the MCA and the FLSA would not overlap by providing that the FLSA did not apply where the [DOT] had power to set maximum hours.” Friedrich, 974 F.2d at 412. Congress subjected motor carriers to the DOT’s maximum-hour requirements rather than the DOL’s overtime requirements because the DOT’s stringent maximum-hour requirements would enhance highway safety more effectively than the DOL’s overtime requirements. Levinson, 330 U.S. at 657. That regulatory approach worked in theory, but it failed in practice because the DOT elected not to exercise the full scope of its authority. Although the MCA authorized the DOT to regulate employees operating any motor vehicle in interstate commerce, the DOT only promulgated regulations governing commercial motor vehicles, which are “those vehicles weighing over 10,000 pounds, designed to transport more than 15 passengers, or used in the transportation of hazardous materials.” Friedrich, 974 F.2d at 413-16. Accordingly, employees who drove vehicles weighing 10,000 pounds or less were not eligible for overtime because they were subject to the motor carrier exemption, but they also were not subject to the DOT’s maximum-hour requirements, leaving them in a regulatory “blind spot.” See Brooks v. Halsted Commc’ns, Ltd., 620 F. Supp. 2d 193, 197 (D. Mass. 2009). Congress remedied this regulatory gap with two bills in August 2005 and June 2008. The 2005 Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), Pub. L. No. 109-59, 119 Stat. 1144, amended the MCA to limit the DOT’s regulatory authority to entities that provided transportation in commercial motor vehicles. Because the scope of the FLSA’s motor carrier exemption was coterminous with the scope of the DOT’s Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 14 of 64 4 regulatory authority, the erasure of the DOT’s regulatory authority over employees who drove vehicles weighing less than 10,001 pounds made those employees eligible for overtime. But the SAFETEA-LU turned out to be an awkward regulatory patch, and in 2008 Congress enacted the SAFETEA-LU Technical Corrections Act (TCA), 110 Pub. L. No. 110-244, 122 Stat. 1572. Section 305 of the TCA restored the DOT’s jurisdiction over all interstate motor carriers, but section 306 amended the FLSA to create a carve-out to the motor carrier exemption for employees who operate vehicles weighing 10,000 pounds or less. See 122 Stat. 1572.6 Under that carve-out, the FLSA’s time-and-a-half overtime protections apply to any employee whose work is defined “in whole or in part” as that of a “driver, driver’s helper, loader, or mechanic” and who “performs duties on motor vehicles weighing 10,000 pounds or less,” the motor carrier exemption notwithstanding. See McMaster v. E. Armored Servs., Inc., 780 F.3d 167, 171-72 (3d. Cir. 2015). b. The Technical Corrections Act carve-out to the motor carrier exemption covers each of the 15 plaintiffs. The TCA lies at the heart of this case, and its effect is clear: Since the TCA was enacted in 2008, the motor carrier exemption does not apply to “an employee of a motor carrier whose job, ‘in whole or in part,’ affects the safe operation of vehicles lighter than 10,000 pounds, except vehicles designed to transport hazardous materials or large numbers of passengers.” McMaster, 780 F.3d at 169-72. That description covers all 15 of the plaintiffs.7 Oil States assigned a company pickup truck to each of the 15 plaintiffs, and the plaintiffs used those pickup trucks on a daily basis for all of their work-related travel. (PCSMF ¶¶ 91-93, 6 For whatever reason, the TCA has not been codified in the United States Code. It is nonetheless the law of the land. See Aikins v. Warrior Energy Servs. Corp., 2015 WL 1221255, at *3 n.2 (S.D. Tex. Mar. 17, 2015). 7 Because the 2008 TCA carve-out to the motor carrier exemption applies to each plaintiff, the Court need not consider whether the motor carrier exemption applies in the first place. Thus we do not address that question here. If, however, the Court rejects our arguments in this section, the plaintiffs do not waive and expressly reserve their arguments concerning whether the motor carrier exemption applied to those plaintiffs who were ineligible to operate commercial vehicles. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 15 of 64 5 355, 370, 387, 400, 422, 435, 451, 460, 478, 497, 515, 526, 539, 556, 571.) Before the plaintiffs traveled to a well site for a new job, they drove to the shop to inspect the equipment and collect the small tools and parts needed for the job. (PCSMF ¶¶ 176-178.) Those tools, parts, and supplies—including flow tubes, hand pumps, fittings, rags, filters, nuts, bolts, torque wrenches, hand wrenches, hammers, sledgehammers, pipe wrenches, slings, lubricator stands, fuel cans, pliers, o-rings, screwdrivers, chain tongs, WD-40, brake cleaner, antifreeze, motor oil, brass, rubbers, absorbent pads (diapers), and hoses—were loaded into their trucks and driven to the well sites. (PCSMF ¶¶ 97-98, 178-181.) Throughout the job the plaintiffs used their pickup trucks on a daily basis. The plaintiffs traveled back and forth between their hotel and the job site in the pickup truck. (PCSMF ¶¶ 92, 105, 306.) Each pickup truck had a spare diesel fuel tank bolted to the bed of the truck, and the plaintiffs used those tanks to refuel all of the equipment at the well site, including the grease unit, the crane, the generators, and the ground heaters. (PCSMF ¶¶ 100-102.) To satisfy the unquenchable thirst of that equipment, the plaintiffs refilled the diesel tank two or three times per week. (PCSMF ¶¶ 103-105.) The plaintiffs also used their pickup trucks to purchase tools and supplies near the well sites; on rare occasions the plaintiffs drove back to the shop in the middle of a job to collect supplies. (PCSMF ¶¶ 92, 106, 357, 387, 515.) Thus the pickup trucks were an integral component of the work that the plaintiffs performed at the well sites. (PCSMF ¶ 93.) The plaintiffs also used their pickup trucks while working in the shop—not just to travel between the shop and their home, but also to perform “hotshots.” A “hotshot” is a trip in a vehicle to deliver something to a well site. (PCSMF ¶ 96.) When a grease operator, crane operator, or frac hand runs out of certain supplies at a well site, or needs a specific tool, the operator calls the office and asks a manager or dispatcher to send the needed item to the well site. (PCSMF ¶ 96.) The dispatcher or manager then sends another operator to “hotshot” the requested item using the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 16 of 64 6 operator’s assigned pickup truck. (PCSMF ¶ 96.) The plaintiffs performed these hotshots as often as two or three times per week. (PCSMF ¶¶ 278, 373, 390, 405, 504, 515, 518, 543.) All of these trips comprised activities affecting the safe operation of motor vehicles. See Aikins v. Warrior Energy Servs. Corp., 2015 WL 1221255, at *6-7 (S.D. Tex. Mar. 17, 2015) (holding that the plaintiffs’ regular use of small pickup trucks to fill fuel tanks qualified as “perform[ing] duties on motor vehicles weighing 10,000 pounds or less” within the meaning of the TCA). And because the plaintiffs used non-commercial vehicles for all of these trips, the TCA insulates them from the motor carrier exemption. See McMaster, 780 F.3d at 169-72. With two exceptions, all of the pickup trucks assigned to the plaintiffs during the limitations period qualified as small vehicles under the TCA. Though the TCA refers to “motor vehicles weighing 10,000 pounds or less,” 122 Stat. 1572, § 306, the DOL looks to a vehicle’s Gross Vehicle Weight Rating8 (GVWR) to determine whether it qualifies as a small vehicle for TCA purposes. See U.S. Dep’t of Labor Field Assistance Bulletin 2010-2 (Nov. 4, 2010), available at http://www.dol.gov/whd/FieldBulletins/fab2010_2.htm. Most courts have adopted that same standard, concluding that the use of GVWR instead of a vehicle’s actual weight “establishes an objective and predictable standard for determining whether the [motor carrier exemption] applies.” McCall v. Disabled Am. Veterans, 723 F.3d 962, 966 (8th Cir. 2013); see also Roche v. S-3 Pump Serv., Inc., 154 F. Supp. 3d 441, 446-47 (W.D. Tex. 2016). As Exhibit 1 below illustrates, 27 of the 29 pickup trucks assigned to the plaintiffs had a GVWR of 10,000 pounds or less. Only two plaintiffs were assigned pickup trucks with a GVWR over 10,000 pounds: Between May and June of 2012, Mr. Karmann drove a Dodge 5500 pickup truck with a GVWR over 10,000 pounds, and between May 2012 and April 2013, Mr. Bratton 8 Gross Vehicle Weight Rating is “the value specified by the manufacturer as the loaded weight of a single motor vehicle.” 49 C.F.R. § 390.5. In other words, it is the maximum permissible fully-loaded weight of a vehicle as specified by the manufacturer. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 17 of 64 7 drove a Chevrolet 3500 pickup truck with a GVWR over 10,000 pounds. (See Exhibit 1.) The plaintiffs do not dispute that Mr. Karmann and Mr. Bratton were covered by the FLSA motor carrier exemption while those trucks were assigned to them. But Oil States assigned small vehicles to those plaintiffs throughout the rest of the limitations period, and the other 13 plaintiffs were only assigned small vehicles during the limitations period. (See Exhibit 1.) Thus, with the exception of those two intervals for Mr. Karmann and Mr. Bratton, the plaintiffs operated vehicles with a GVWR of 10,000 pounds or less throughout the limitations window. If the Court assesses the TCA’s coverage using actual weight instead of GVWR, all 15 plaintiffs were subject to the TCA for the duration of the limitations period—including the spells when Mr. Bratton and Mr. Karmann drove the Dodge 5500 and Chevrolet 3500. As shown below, the actual curb weight (i.e., the weight of the fully fueled vehicle with no occupants or baggage) of the pickup trucks assigned to plaintiffs ranged between 5,221 pounds and 7,598 pounds. (See Exhibit 1.) Thus, even the heaviest trucks assigned to the plaintiffs would not exceed 10,000 pounds in actual weight unless the plaintiffs always carried about 2,500 pounds of tools and equipment in the truck—which did not happen. Cf. Aikins, 2015 WL 1221255, at *4 n.4 (stating that it didn’t matter whether the court used GVWR or actual weight to determine TCA coverage because the GVWR and actual weight of a Ford F-250 are less than 10,001 pounds). Throughout this litigation, Oil States has focused on the relatively infrequent trips that certain plaintiffs made in commercial vehicles (i.e., vehicles with a GVWR over 10,000 pounds). But for purposes of determining the plaintiffs’ eligibility for overtime, it makes no difference whether certain plaintiffs made trips in commercial vehicles for Oil States. The courts agree that employers must pay overtime compensation to employees who drive both small vehicles and commercial vehicles. See, e.g., Roche v. S-3 Pump Serv., Inc., 2016 WL 51282, at *5 (W.D. Tex. Jan. 4, 2016); Garcia v. W. Waste Servs., Inc., 969 F. Supp. 2d 1252, 1257-59 (D. Idaho 2013); Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 18 of 64 8 Botero v. Commonwealth Limousine Serv., Inc., No. 12-10428, 2013 WL 3929785, at *13 (D. Mass. July 25, 2013); O’Brien v. Lifestyle Transp., Inc., 956 F. Supp. 2d 300, 306-07 (D. Mass. 2013); Mayan v. Rydbom, Inc., 2009 WL 3152136, at *6 (E.D. Pa. Sept. 30, 2009). The Third Circuit recently confirmed that employees who drive both commercial vehicles (i.e., vehicles with a GVWR over 10,000 pounds) and small vehicles (i.e., vehicles with a GVWR of 10,000 pounds or less) are entitled to overtime. In McMaster v. Eastern Armored Services, Inc., an employee spent 51% of her workdays operating commercial vehicles and 49% of her days operating small vehicles. 780 F.3d at 168. The court of appeals held that the employee was entitled to overtime under the TCA’s carve-out to the motor carrier exemption even though she spent most of her time operating vehicles that weighed more than 10,000 pounds. Id. at 170 & n.4. Accordingly, each of the 15 plaintiffs is entitled to overtime under the TCA’s 2008 carve- out to the motor carrier exemption because the plaintiffs regularly operated vehicles with a Gross Vehicle Weight Rating and actual weight of 10,000 pounds or less. Exhibit 1: Plaintiff-by-Plaintiff Analysis of Motor Carrier Exemption Name CDL? List of DOT Drivers? Assigned Pickup Trucks (During Limitations Period) George Bolen, Jr. No N/A 1. No Vehicle May 2012 to October 2012 2. Ford F-250 (VIN # 1FT7W2B62BEB81778) October 2012 to September 2013 GVWR: 9,001 lbs. 3. Chevrolet 1500 (VIN # 3GCRKSE30AG294853) September 2013 to November 2013 GVWR: 7,000 lbs. Weight: 5,344 lbs. 4. Ford F-250 (VIN # 1FT7W2BT1BEC19894) November 2013 to end of employment GVWR: 10,000 lbs. Weight: 7,598 lbs. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 19 of 64 9 Donald Bratton, Jr. Yes Removed in February 2014 1. Chevrolet 3500 (VIN # 1GCJK836X9F155999) May 2012 to April 2013 GVWR: 11,400 lbs. Weight: 7,282 lbs. 2. Chevrolet 1500 (VIN # 3GCEK13338G125044) April 2013 to May 2013 GVWR: 7,000 lbs. Weight: 5,221 lbs. 3. Ford F-250 (VIN # 1FTSW21P26EC63861) May 2013 to June 2013 GVWR: 8,400 lbs. 4. Medical Leave June 2013 to January 2014 5. Ford F-150 (VIN # 1FTVX1EF5BKE08859) January 2014 to end of employment GVWR: 8,200 lbs. Weight: 5,701 lbs. Michael Burchik Yes Yes 1. Ford F-150 (VIN # 1FTVX1EF3BKE08861) May 2012 to end of employment GVWR: 8,200 lbs. Weight: 5,701 lbs. Wayne Eddy Yes Removed in December 2014 1. Ford F-150 (VIN # 1FTVX1EF5BKE08862) May 2012 to end of employment GVWR: 8,200 lbs. Weight: 5,701 lbs. Matthew Frick No N/A 1. Ford F-250 (VIN # 1FT7W2BT1BEB08794) May 2012 to November 2014 GVWR: 10,000 lbs. Weight: 7,598 lbs. 2. Ford F-250 (VIN # 1FT7W2B6XFEB25867) November 2014 to end of employment GVWR: 10,000 lbs. Weight: 6,828 lbs. Michael George No N/A 1. No Vehicle Beginning of employment to October 2013 2. Chevrolet 2500 (VIN # 1GCHK29667E520667) October 2013 to end of employment GVWR: 9,200 lbs. Weight: 6,617 lbs. Kari Gordon Yes Removed in late 2011 1. Chevrolet 3500 (VIN # 1GCHK33678F144684) May 2012 to September 2012 GVWR: 9,900 lbs. Weight: 6,883 lbs. 2. Ford F-250 (VIN # 1FT7W2BT0BEB22234) September 2012 to end of employment GVWR: 10,000 lbs. Weight: 7,492 lbs. Stephen Haughton Yes Removed in March 2012 1. Ford F-250 (VIN # 1FT7W2BT2BEC34727) May 2012 to end of employment GVWR: 10,000 lbs. Weight: 7,492 lbs. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 20 of 64 10 Ryan Karmann Yes Removed in 2015 1. Dodge 5500 May 2012 to June 2012 GVWR: More than 10,000 lbs. 2. Ford F-250 (VIN # 1FT7W2BT1CEB86929) June 2012 to May 2015 GVWR: 10,000 lbs. Weight: 7,443 lbs. 3. Ford F-150 (VIN # 1FTFW1EF4EKF29507) May 2015 to July 2015 GVWR: 7,350 lbs. Weight: 5,586 lbs. Brian Kubiak No N/A 1. Ford F-250 (VIN # 1FT7W2BTXCEB86931) May 2012 to August 2012 GVWR: 9,0001 lbs. 2. Ford F-250 (VIN # 1FT7W2BT6BEC15467) August 2012 to end of employment GVWR: 9,001 lbs. Jason Lett Yes Yes 1. Ford F-150 (VIN # 1FTVX1EF7BKE08863) May 2012 to end of employment GVWR: 8,200 lbs. Weight: 5,461 lbs. Robert Pickel No N/A 1. Ford F-250 (VIN # 1FT7W2BT2BEB87988) May 2012 to end of employment GVWR: 10,000 lbs. Weight: 7,443 lbs. Scot Pond No N/A 1. No Vehicle May 2012 to October 2012 2. Chevrolet 2500 (VIN # 1GCHC29235E240406) October 2012 to January 2013 GVWR: 9,001 lbs. 3. Chevrolet 1500 (VIN # 3GCEK13338G125044) January 2013 to May 2013 GVWR: 7,000 lbs. Weight: 5,221 lbs. 4. Ford F-250 (VIN # 1FTSW21RX8ED29125) May 2013 to October 2014 GVWR: 10,000 lbs. Weight: 7,510 lbs. 5. Ford F-250 (VIN # 1FT7W2B6XFEB25870) October 2014 to end of employment GVWR: 10,000 lbs. Weight: 6,828 lbs. Jeffrey Steffish Yes Removed in March 2013 1. Ford F-250 (VIN # 1FT7W2BT2BEC33285) May 2012 to April 2015 GVWR: 10,000 lbs. Weight: 7,492 lbs. 2. Ford F-150 (VIN # 1FTFW1EF8EKF29509) April 2015 to July 2015 GVWR: 7,350 lbs. Weight: 5,586 lbs. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 21 of 64 11 Matthew Williams Yes Removed in 2012 1. Chevrolet 2500 (VIN # 1GC1KXC81BF113755) May 2012 to July 2015 GVWR: 10,000 lbs. Weight: 7,354 lbs. (PCSMF ¶¶ 355-356, 370-371, 387-388, 400-401, 422-423, 435-436, 451-452, 460-461, 478-479, 497-498, 515-516, 526-527, 539-540, 556-557, 571-572.) ii. The Pennsylvania Motor Carrier Exemption Does Not Apply to Oil States or the Plaintiffs. The Pennsylvania General Assembly enacted the Minimum Wage Act (PMWA) in 1968. See Act of January 17, 1968, P.L. 11, No. 5, 43 P.S. § 333.104(c). As originally enacted, the PMWA did not include a motor carrier exemption; the General Assembly added the motor carrier exemption in 1990. See Sanders v. Loomis Armored, Inc., 614 A.2d 320, 321 (Pa. Super. Ct. 1992). The Pennsylvania motor carrier exemption reads: “Employment in the following classifications shall be exempt from the overtime provisions of this act: . . . (7) Any employe[e] of a motor carrier with respect to whom the Federal Secretary of Transportation has power to establish qualifications and the maximum hours of service under 49 U.S.C. § 3102(b)(1) and (2) (relating to requirements for qualifications, hours of service, safety and equipment standards).” 43 P.S. § 333.105(b)(7). That exemption did not cover the plaintiffs, for two reasons. First, the Pennsylvania motor carrier exemption (PMCE), by its plain terms, only applies to employees of motor carriers—not employees of motor private carriers. That sets it apart from the federal motor carrier exemption, which expressly applies to both motor carriers and motor private carriers. Because Oil States is a motor private carrier rather than a motor carrier, the plaintiffs were outside the scope of the PMCE. Second, insofar as the Court adopts a purposive interpretation of the PMCE rather than a strict textual construction, Pennsylvania law favors the incorporation of the 2008 TCA into the PMCE. Thus the PMCE did not apply to the plaintiffs on account of their use of small vehicles. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 22 of 64 12 a. The Pennsylvania motor carrier exemption excludes “motor private carriers” such as Oil States. The federal motor carrier exemption applies to “any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of Title 49.” 29 U.S.C. § 213(b)(1). By contrast, the Pennsylvania motor carrier exemption only applies to “[a]ny employe[e] of a motor carrier with respect to whom the Federal Secretary of Transportation has power to establish qualifications and the maximum hours of service.” 43 P.S. § 333.105(b)(7) (emphasis added). The highlighted discrepancy between the two statutes is crucial because Oil States is not a “motor carrier.” The scope of the federal motor carrier exemption is governed by § 31502, which authorizes the DOT to regulate both “motor carriers” and “motor private carriers.” See 49 U.S.C. § 31502(b). The terms “motor carrier” and “motor private carrier” are defined in 49 U.S.C. § 13102. According to those definitions, a motor carrier is “a person providing motor vehicle transportation for compensation,” while a motor private carrier is “a person, other than a motor carrier, transporting property by motor vehicle . . . for sale, lease, rent, or bailment or to further a commercial enterprise.” § 13102(14)-(15); see also 49 U.S.C. § 14504(a) (differentiating between motor carriers and motor private carriers). Thus the federal motor carrier exemption applies to both motor carriers that provide vehicle transportation to passengers and motor private carriers that transport property for sale, lease, rent, or other commercial purposes. The Pennsylvania motor carrier exemption, by contrast. is expressly limited to employees of motor carriers.9 See 43 P.S. § 333.105(b)(7). That limitation is presumed to be intentional: When 9 The PMCE does not define the term “motor carrier.” Because the PMCE cites the Motor Carrier Act, Pennsylvania law presumes that the General Assembly intended the term “motor carrier” in the PMCE to have the same definition as Congress gave the term “motor carrier” in the Motor Carrier Act. See Chevalier v. Gen. Nutrition Centers, Inc., 2014 WL 6909692, at *9 (Pa. Ct. Cmn. Pl. Oct. 20, 2014) (“[T]he most reasonable explanation for the decision of the General Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 23 of 64 13 the General Assembly enacted the PMCE is 1990, the federal motor carrier exemption applied to “‘any employee with respect to whom the Secretary of Transportation has power to establish qualifications and maximum hours of service.’” See Kosin v. Fredjo’s Enter., Ltd., 1989 WL 13175, at *1 (N.D. Ill. Fed. 14, 1989) (citing the 1989 version of 29 U.S.C. § 213(b)(1)). Yet the Pennsylvania General Assembly chose to use different language, restricting the PMCE to employees of motor carriers. The General Assembly was clearly aware of the federal statute, and its decision to use different language must not be ignored. See Friedrich v. U.S. Computer Servs., Inc., 833 F. Supp. 470, 476 (E.D. Pa. 1993). Thus the PMCE must be read to exclude employees of motor private carriers. See Cerutti v. Frito Lay, Inc., 777 F. Supp. 2d 920, 940-41 (W.D. Pa. 2011) (“As a matter of statutory construction, this court applying Pennsylvania law is bound to follow the law that the Pennsylvania legislature has enacted. An interpretation of a Pennsylvania statute begins with the text of the statute.”). That means the Pennsylvania motor carrier exemption does not apply to employees of Oil States—including the plaintiffs. Oil States is a motor private carrier, not a motor carrier, because the company does not transport passengers for compensation; rather, the company uses its vehicles to transport property for commercial purposes. See, e.g., Musarra v. Digital Dish, Inc., 454 F. Supp. 2d 692, 705-23 (S.D. Ohio 2006) (holding that a company that delivered and installed television equipment was a motor private carrier); Anderson v. Timber Prods. Inspection, Inc., 334 F. Supp. 2d 1258, 1261-62 (D. Or. 2004) (holding that a company that inspected lumber and wood products, and used vehicles to transport the inspection equipment, was a motor private carrier). Because Oil States is not a motor carrier, the plaintiffs were not “employe[es] of a motor carrier with respect to whom the Federal Secretary of Transportation has power to establish Assembly to enact legislation that did not define ‘regular rate’ . . . is that federal law had already done so and the General Assembly intended to borrow the federal scheme.”). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 24 of 64 14 qualifications and the maximum hours of service.” 43 P.S. § 333.105(b)(7). Thus the Pennsylvania motor carrier exemption does not apply. b. The Pennsylvania motor carrier exemption incorporates the 2008 Technical Corrections Act. Since Congress enacted the TCA in 2008 to extend federal overtime protections to employees who drive small vehicles, the Pennsylvania General Assembly has not amended the PMCE to expressly incorporate the TCA into Pennsylvania law. But if the Court overlooks the textual exclusion of motor private carriers from the PMCE and determines that the Pennsylvania General Assembly intended for the PMCE to track the federal exemption, notwithstanding the textual discrepancy between the federal and state laws, then the Court must conclude that the PMCE, like the FMCE, includes a carve-out for employees who drive small vehicles. When the words of a Pennsylvania statute “are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit.” 1 Pa. C.S.A. § 1921(b). Thus the Court should apply the PMCE as written, which requires the exclusion of motor private carriers such as Oil States. But if the Court concludes that the PMCE’s text is ambiguous, then the proper interpretation of the PMCE turns on “the intention of the General Assembly.” 1 Pa. C.S.A. § 1921(a). That requires an examination of the factors set forth in 1 Pa. C.S.A. § 1921(c), including the “circumstances under which [the statute] was enacted,” the “mischief to be remedied” by the statute, the “object to be attained” by the statute, “statutes upon the same or similar subjects,” the “consequences of a particular interpretation,” and the “contemporaneous legislative history.” Every single one of those factors supports an interpretation of the PMCE that incorporates the TCA. The purpose of the PMWA is to protect workers by providing them with overtime pay, see 43 P.S. § 333.101, and that purpose is accomplished by incorporating the TCA into the PMCE. If the PMCE is not interpreted to exclude employees who drive small vehicles, those employees will be stuck in a regulatory “blind spot”: They will be exempt from the Pennsylvania overtime Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 25 of 64 15 requirements on account of the PMCE, but they will not be subject to the DOT’s hours-of-service protections because they do not drive commercial vehicles. That would cause great mischief, and the PMCE should not be interpreted to create that unjust result. The implied incorporation of the TCA into the PMCE is also consistent with state and federal decisions interpreting the PMWA. The PMWA “mirrors the Fair Labor Standards Act,” and the two statutes “have identity of purpose.” Commonwealth v. Stuber, 822 A.2d 870, 873 (Pa. Cmwlth. Ct. 2003). Pennsylvania courts interpreting the PMWA therefore give deference to federal interpretations of the FLSA. Id.; see also Caiarelli v. Sears, Roebuck & Co., 46 A.3d 643, 645 n.2 (Pa. 2012) (per curiam) (McCaffery, J., dissenting) (noting the Pennsylvania Supreme Court’s consensus view that courts interpreting PMWA provisions should “give deference to a federal court’s interpretation” of an analogous FLSA provision when the PMWA and FLSA provisions “substantially parallel[] one another on the issue under consideration.”). Thus, in recognition of the “identity of purpose” between the FLSA and PMWA, the Court should interpret the PMCE to track the FMCE and to exclude employees who drive small vehicles. That interpretation is demanded by the factors outlined in 1 Pa. C.S.A. § 1921(c). To be sure, there are exceptions where the Pennsylvania courts have interpreted the PMWA to diverge from the FLSA. In Bayada Nurses, Inc. v. Commonwealth, 8 A.3d 866, 882-83 (Pa. 2010), the Pennsylvania Supreme Court held that the PMWA’s exemption for domestic-service workers should not be read “identically to, or in pari materia with,” the FLSA’s domestic-service exemption. But that conclusion was rooted in two considerations. First, the court noted that the Pennsylvania General Assembly and the U.S. Congress had intentionally used different language in the domestic-service exemptions of their respective statutes. See id. at 882-83 (“[I]t becomes clear that the language of the two statutes is materially distinct, and, further, that the federal regulatory approach and our Commonwealth’s regulatory approach have differed with respect to Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 26 of 64 16 the scope of the domestic services exemption—with Pennsylvania’s domestic services exemption under the [PMWA] being more limited, and, thus, more protective of the right of a worker to a minimum wage and overtime.” Second, the court held that it was permissible for Pennsylvania to enact a narrower domestic-services exemption than the FLSA because the FLSA “establishes only a national floor under which wage protections cannot drop, but more generous protections provided by a state are not precluded.” Id. at 883 (citing 29 U.S.C. § 218). The Supreme Court observed that “[c]ourts confronting related issues have held that the FLSA does not prohibit state regulation of wages and overtime if the state’s standards are more beneficial to workers.” Id. (emphasis added). Thus the Bayada court permitted an interpretation of the PMWA that deviated from the FLSA because the PMWA’s domestic-service exemption was narrower, and therefore more favorable to employees, than the FLSA’s parallel exemption. As noted in the preceding section, the first Bayada condition is present here. Whereas Congress chose to apply the FMCE to all employees who are subject to regulation by the DOT, the General Assembly limited the PMCE to employees of motor carriers. But if this Court is considering whether the PMCE excludes employees who drive small vehicles, it means the Court has dismissed that textual discrepancy and determined that the PMCE tracks the FMCE. Thus, for purposes of determining whether the PMCE should be interpreted to track the FMCE, the first Bayada condition does not apply. With respect to the second Bayada condition, if the PMCE were interpreted to exclude the limiting language of the TCA, the PMCE would fall below the “national floor” established by the FLSA and would be less beneficial to workers, which is exactly what the Pennsylvania Supreme Court prohibited in Bayada. See Bayada, 8 A.3d at 883. Since the 2008 enactment of the TCA, the FMCE requires employers to pay overtime to certain workers even when those workers are Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 27 of 64 17 subject to the jurisdiction of the Secretary of Transportation. If the PMCE does not incorporate the TCA, the PMCE will continue to exempt those workers from the PMWA’s overtime protections, leaving them in a regulatory “blind spot” under Pennsylvania law. See Brooks v. Halsted Commc’ns, Ltd., 620 F. Supp. 2d 193, 197 (D. Mass. 2009). Bayada rejects that outcome. Admittedly one court has held that the PMCE does not incorporate the TCA. See Cerutti v. Frito Lay, Inc., 777 F. Supp. 2d 920, 941 (W.D. Pa. 2011). But the analysis in Cerutti does not apply here because Cerutti purported to adopt a plain-text analysis of the PMCE. See id. at 941. For the reasons stated in the preceding section, a plain-text interpretation of the PMCE results in the exclusion of motor private carriers from the PMCE’s scope—an issue that was not addressed in Ceruti. The plaintiffs believe that to be the correct interpretation. But if the Court rejects a plain- text analysis and interprets the PMCE to cover motor private carriers, then the Court must reject the analysis in Cerutti, which used a strict textual analysis. And once the Court rejects a plain-text analysis, the factors enumerated in 1 Pa. C.S.A. § 1921(c) support an interpretation of the PMCE that excludes employees who drive small vehicles. Thus the plaintiffs are entitled to overtime under the PMCE, irrespective whether the Court uses a strict textual construction of the PMCE or a purposive interpretation. An analysis of the PMCE’s plain text shows that it excludes motor private carriers, while an analysis of the PMCE’s purpose supports an interpretation of the PMCE that tracks the FMCE—including the carve-out for employees whose job includes the operation of vehicles weighing 10,000 pounds or less. B. THE PLAINTIFFS WERE NOT EXEMPT EXECUTIVES. The executive exemption applies to an employee “(i) whose primary duty is management of the enterprise in which the employee is employed (or a customarily recognized subdepartment of that enterprise), (ii) who “customarily and regularly directs the work of two or more other employees,” and (iii) who “has the authority to hire or fire other employees or whose suggestions Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 28 of 64 18 and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees are given particular weight.” 29 C.F.R. § 541.100(a); see also 34 Pa. Code 231.82. The plaintiffs did not perform any of those functions, let alone all three. i. The Plaintiffs Did Not Manage the Enterprise. There is no evidence in the record to suggest that the plaintiffs’ “primary duty” was to manage the enterprise. “Management of the enterprise” includes activities such as: interviewing, selecting, and training employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees' productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures. 29 C.F.R. § 102. The evidence shows that the grease operators, crane operators, and frac hands did not perform those tasks. Oil States employed five levels of managers at the Canonsburg and Watsontown districts: a regional manager, district manager, assistant manager, field service manager, and operations supervisors. (PCSMF ¶¶ 8, 10, 11-28.) Those employees managed the enterprise from the district office while the field service supervisors traveled to well sites to perform the pressure control services, crane services, and frac-stack services for which Oil States was hired by its customers. (PCSMF ¶¶ 8, 10, 21, 24-28, 41-64, 185-280.) Simply put, the plaintiffs did not perform any of the management activities set forth above. The plaintiffs did not review job applications, select applicants to interview, conduct interviews, or make hiring decisions; all of those tasks were performed by the district manager and regional manager. (PCSMF ¶¶ 45-51.) The plaintiffs did not set pay rates or work schedules; the human Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 29 of 64 19 resources department determined compensation, and the district manager, field service manager, and operations supervisors prepared the work schedules. (PCSMF ¶¶ 43, 52.) The plaintiffs did not receive or resolve employee complaints; all grievances were handled by the district manager, assistant manager, field service manager, operations supervisors, and human resources department. (PCSMF ¶ 44.) The plaintiffs did not plan or control the budget; corporate headquarters created the budget, and the district manager and regional manager ensured compliance with that budget. (PCSMF ¶ 41.) The plaintiffs did not choose when to purchase new equipment or what types of equipment and supplies to purchase; the corporate office decided when to purchase new equipment, and the district manager and regional manager worked with the corporate office to determine what types of equipment and supplies to purchase. (PCSMF ¶ 42.) The plaintiffs did not complete performance evaluations of other employees; the district manager did that. (PCSMF ¶¶ 60-61.) And the plaintiffs were not involved in disciplinary action other than in their capacity as fact witnesses; all disciplinary decisions were made by the district manager and regional manager in consultation with the human resources department. (PCSMF ¶¶ 53-59.) In short, the plaintiffs did not perform any of the activities that constitute “management of the enterprise.” Furthermore, even if Oil States could marshal evidence that the plaintiffs occasionally performed some of those tasks, no reasonable factfinder could conclude that the plaintiffs’ “primary duty” was the management of the enterprise. “The term ‘primary duty’ means the principal, main, major or most important duty that the employee performs,” 29 C.F.R. § 541.700(a), and the principal duty of the grease operators, crane operators, and frac hands was, without question, to assemble and operate their equipment at well sites. Oil States was hired to provide pressure control service, crane services, and frac stacks in connection with fracking operations at natural gas well sites, and Oil States sent the plaintiffs to perform those services. (PCSMF ¶¶ 164, 166, 169, 186-271, 281-291.) When the plaintiffs were not operating equipment Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 30 of 64 20 at well sites, they rebuilt and tested the equipment in the shop, or they delivered parts and tools to grease and crane operators working at other well sites. (PCSMF ¶¶ 96, 273-280, 293.) They did not spend their spare time crunching numbers, building spreadsheets, and rewriting company policies. Thus the plaintiffs were not primarily responsible for managing the enterprise. ii. The Plaintiffs Did Not Direct the Work of Two or More Employees. The plaintiffs also did not “customarily and regularly direct the work of two or more other [Oil States] employees.” 29 C.F.R. § 541.104(a). Though Oil States calls its equipment operators “field service supervisors,” that position does not entail the supervision of other employees; rather, the grease operators, crane operators, and frac hands are labeled “field service supervisors” because they supervise the equipment while working at well sites. (PCSMF ¶¶ 296, 307-309.) The job title is also irrelevant for purposes of applying the overtime exemptions. See 29 C.F.R. § 541.2. In addition, the plaintiffs could not regularly direct the work of two or more other employees because there were rarely more than two Oil States employees present at a well site. Grease operators and crane operators typically worked in pairs, with one person operating the pressure control equipment and the other operating the crane. (PCSMF ¶¶ 254-255.) For starters, there was almost never more than one Oil States crane operator at a well site. (PCSMF ¶¶ 262- 271, 310.) There were, occasionally, two grease operators present at a well site, but that only occurred when Oil States was using pressure control equipment rated for 15,000 psi (as opposed to 10,000 psi). That 15,000 psi equipment was heavier and more difficult to operate, so Oil States typically sent one lead operator and one secondary operator to work each shift. (PCSMF ¶¶ 256- 261, 310.) But the lead operator did not direct the work of the secondary operator; on most jobs the two operators were equals who alternated between the lead and secondary positions. (PCSMF ¶¶ 257-260.) And in all events, there were never more than two grease operators working those jobs (PCSMF ¶ 310), so the lead operator never directed the work of two or more other employees. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 31 of 64 21 See McPherson v. LEAM Drilling Sys., LLC, 2015 WL 1470554, at *8 (S.D. Tex. Mar. 30, 2015) (stating that an employee cannot customarily and regularly direct the work of two or more other employees if the employees typically work in “two man teams”). The same was true of the frac hands. When Oil States was hired to assemble, install, and operate a frac stack, the company typically assigned one frac hand and one crane operator to the job. (PCSMF ¶¶ 281-292.) The frac hand and crane operator worked together as associates to complete the job, and they were the only two Oil States employees present at the well site. (PCSMF ¶ 281-292.) When operating a test pump, by contrast, frac hands were typically sent to the well site in pairs: One frac hand operated the pump while the other frac hand monitored the frac stack for leaks. (PCSMF ¶ 292.) But once again, the two frac hands worked as equals, and neither person directed the work of the other. (PCSMF ¶ 292.) To be sure, Oil States occasionally sent new employees to well sites to shadow more experienced employees and to observe operations at the well site.10 (PCSMF ¶¶ 73-81.) But on those occasions, the more experienced employee was not “directing the work” of the new employee; rather, the senior employee was performing his typical job duties—assembling and operating the equipment or crane. (PCSMF ¶ 78.) The junior employee was simply there to observe and learn the job. (PCSMF ¶¶ 74, 78.) An employee who explains his methods to another employee while he works cannot be said to direct the work of that other employee. See McPherson, 2015 WL 1470554, at *8 (stating that senior employees cannot be considered “primarily managers” when their only supervisory responsibility is to train more junior employees while jointly operating a piece of equipment with a junior employee). 10 Oil States never sent anyone to shadow Mr. Burchik, Mr. George, Mr. Eddy, Mr. Kubiak, Mr. Lett, or Mr. Steffish. (PCSMF ¶¶ 396, 409, 434, 505, 521, 565.) Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 32 of 64 22 Oil States also never sent two or more trainees to shadow the same person. (PCSMF ¶ 77.) Thus, even if a factfinder could conclude that some plaintiffs directed the work of the trainees who shadowed them at well sites, the plaintiffs never directed the work of two or more other Oil States employees because the plaintiffs were never being shadowed by more than one other employee. Oil States therefore cannot establish that the grease operators, crane operators, or frac hands ever directed the work of two or more other employees—let alone that they did so “customarily and regularly.” See 29 C.F.R. § 541.104(a). iii. The Plaintiffs Did Not Have Hiring and Firing Authority. The plaintiffs also had no authority to hire and fire other employees, and their suggestions and recommendations concerning personnel decisions were not given “particular weight.” To determine whether an employee’s suggestions are afforded “particular weight,” relevant factors include “whether it is part of the employee's job duties to make such suggestions and recommendations; the frequency with which such suggestions and recommendations are made or requested; and the frequency with which the employee's suggestions and recommendations are relied upon.” 29 C.F.R. § 541.105. The plaintiffs had no authority to hire other Oil States employees, nor did their district managers afford “particular weight” to their hiring recommendations. The district managers review job applications, select candidates to interview, and decide which candidates to hire; field service supervisors do not participate in the interviews and have no authority to hire anyone. (PCSMF ¶¶ 45-47, 51.) Field service supervisors only participate in the hiring process insofar as they may refer friends and acquaintances for open positions. (PCSMF ¶¶ 48-50.) But Oil States accepts referrals from all employees, including shop hands. (PCSMF ¶ 48.) Certainly referrals were not “part of the [field service supervisors’] job duties,” 29 C.F.R. § 541.105, and there is in fact no evidence that the plaintiffs made a single hiring recommendation. Cf. Smith v. FracTech Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 33 of 64 23 Servs., LLC, 2011 WL 96868, at *22 (E.D. Ark. Jan. 11, 2011) (holding that the defendant failed to meet its burden on the hiring-and-firing element where the defendant “provided evidence that some field engineers may have made occasional recommendations regarding hiring, firing, or promotions, but no evidence that any of these recommendations were given any particular weight, were part of the field engineers' duties, were frequently made, or were frequently relied on”). The plaintiffs’ limited authority to refer candidates for consideration by management does not satisfy the hiring-and-firing element of the executive exemption. See Davis v. Mountaire Farms, Inc., 453 F.3d 554, 558-59 (3d Cir. 2006). Likewise, the plaintiffs had no authority to discipline other employees. All disciplinary decisions were made by the district manager and regional manager, in consultation with the human resources department. (PCSMF ¶¶ 53-59.) In the course of investigating an incident, the district manager and regional manager would speak with everyone who had relevant knowledge, including field service supervisors. (PCSMF ¶ 54.) But the field service supervisors were not involved in disciplinary action other than in that capacity as potential fact witnesses. (PCSMF ¶ 59.) Finally, Oil States gave no “particular weight” to any suggestions the field service supervisors made concerning the “advancement, promotion, or any other change of status of other employees.” 29 C.F.R. § 541.100(a). For one thing, an executive’s personnel recommendations can only be afforded “particular weight” if those recommendations “pertain to employees whom the executive customarily and regularly directs.” 29 C.F.R. § 541.105. The plaintiffs did not customarily and regularly direct other Oil States employees, as explained above, so any personnel recommendations that the plaintiffs made could not be given “particular weight” within the meaning of the executive exemption. For another thing, the plaintiffs never made suggestions or recommendations concerning the promotion or advancement of other employees. The plaintiffs were not involved in Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 34 of 64 24 performance evaluations, which were conducted by the district manager, assistant manager, and field service manager. (PCSMF ¶¶ 60-61.) And the plaintiffs did not decide when new employees were ready to work on their own at well sites: The plaintiffs never completed written evaluations of the new employees’ performance; indeed, the district manager seldom even asked about a trainee’s job performance.11 (PCSMF ¶¶ 79-80, 361-364, 469, 534.) On the few occasions when the district manager did ask the plaintiffs to describe a trainee’s aptitude, the district manager did not rely on that assessment to decide whether the trainee was prepared to work on his own in the field. Rather, once a trainee had shadowed several other employees, the district manager sent the field service manager to a well site to observe the trainee and evaluate the trainee’s performance. (PCSMF ¶¶ 24-26, 61, 79-81.) The trainee is only sent into the field on his own when the field service manager and district manager have independently determined that the trainee is able to perform the job. (PCSMF ¶¶ 79-81, 361-364, 469, 534.) Thus the plaintiffs did not make recommendations concerning the promotion or advancement of new employees, even when they were asked to assess a new employee’s abilities. Cf. Pressler v. FTS USA, LLC, 2010 WL 5105135, at *1-2 (E.D. Ark. Dec. 9, 2010) (holding that an employee charged with evaluating the job performance of other employees did not qualify for the executive exemption because the employee’s evaluations included no recommendations concerning advancement or promotion). In sum, the plaintiffs were not exempt executives, and the plaintiffs are entitled to summary judgment with respect to the executive exemption of the FLSA and PMWA. 11 Furthermore, the decision to send a new employee to work on his own at a well site does not constitute an advancement, promotion, or other change of status under the FLSA or PMWA. The terms “advancement,” “promotion,” and “other change of status” only encompass a “tangible employment action” such as “‘hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits.’” In re Enter. Rent- a-Car Wage & Hour Emp’t Practices Litig., 2012 WL 4356762, at *15-16 (W.D. Pa. Sept. 24, 2012). Thus the decision to send an employee to work at a well site does not qualify. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 35 of 64 25 C. THE ADMINISTRATIVE EXEMPTION DOES NOT APPLY. Oil States also invokes the administrative exemption, which applies to employees (i) whose primary duty is the performance of office or non-manual work directly related to the company’s general business operations and (ii) whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200(a); see also 34 Pa. Code 231.83. Yet the plaintiffs were equipment operators, not office workers, and Oil States may not use the administrative exemption to shield itself from liability. i. The Plaintiffs Did Not Perform Office Work Directly Related to the General Business Operations. An exempt administrator’s principal duty must be the performance of non-manual or office work directly related to the employer’s general business operations. 29 C.F.R. § 541.200(a)(2); 34 Pa. Code 231.83(a)(1). There are two components to that test: whether the primary duty involves office or non-manual work, and whether the work is directly related to the company’s general business operations. Oil States cannot establish either component. a. The plaintiffs were laborers, not office workers. No reasonable factfinder could conclude that the “primary duty” of the grease operators, crane operators, and frac hands was the performance of office or non-manual work. To the contrary, any objective assessment of the plaintiffs’ job duties leads inexorably to the conclusion that each plaintiff’s primary duty was the performance of manual labor—not office work. Consider each of the three job functions in turn. The frac hands typically arrives at the well first. Once the drilling contractor has drilled and the cemented the well, Oil States sends the frac hands to assemble, install, and test the frac stacks. (PCSMF ¶¶ 285-287.) Frac stacks are large valves, weighing thousands of pounds each, that attach to the wellhead; the valves are opened and closed between each fracking stage, and they are designed to allow the wireline and fracking contractors to access the well with their tools. (PCSMF ¶ 282.) A frac hand manually assembles a Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 36 of 64 26 frac stack at a well site using bolts and torque wrenches; once the frac stack is assembled, the frac hand uses large pumps to test the equipment for leaks. (PCSMF ¶¶ 286-287.) When the equipment is assembled and tested, the frac hand’s job is to open and close the valves using large metal wheels attached to the valves; the frac hand stands next to the frac stack and turns the wheel on the company representative’s command. (PCSMF ¶ 288.) When the job is complete, the frac hand disassembles the frac stack using wrenches and hammers, and then he returns to the shop and awaits the next job. ((PCSMF ¶¶ 290-293.) The assembly and operation of the pressure control equipment is similarly demanding work that requires mechanical skills, not management training. (PCSMF ¶¶ 235, 67-68.) When a grease operator arrives at a well site to begin a new job, the operator dons his coveralls, gloves, and harness before unloading the grease package from the trailer. (PCSMF ¶¶ 186-191, 303.) The grease operator manually assembles the various components of the pressure control equipment using bolts, sledgehammers, torque wrenches, and chain wrenches—a process that takes up to six hours. (PCSMF ¶¶ 191-202, 205-206.) Once the equipment is assembled, the grease operator awaits instruction from the company representative or the wireline engineer, who decide when the wireline operations will begin. (PCSMF ¶¶ 212-216.) When the grease operator receives that command, he screws the pressure control equipment onto the wellhead and then operates the grease unit by manipulating various levers and knobs that control the pressure of the grease inside the grease head. (PCSMF ¶¶ 204, 217-221.) The grease operator’s fundamental job—the reason he is present at the well site—is to adjust the knobs and levers on the grease unit to ensure that the fluids inside the well do not escape while the wireline contractor is inserting the tools used to plug and perforate the well. (PCSMF ¶¶ 217-221.) When the fracking contractor has completed each fracking stage, the grease operator disassembles his equipment and travels to the next well, where he repeats the process. (PCSMF ¶¶ 227-235, 266.) Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 37 of 64 27 Crane operators operate cranes—another manual-labor function. (PCSMF ¶¶ 263-266.) After arriving at a well, the crane operator’s first responsibility is to find the appropriate parking spot, which depends on the reach of the crane’s boom, the location of the wellheads, and the weight of the equipment to be lifted. (PCSMF ¶¶ 186-188.) After parking the crane, the crane operator spreads the outriggers and levels the crane. (PCSMF ¶ 189.) Then he gets to work. The crane operator’s essential job is to manipulate the levers, knobs, and pedals in the crane cab to lift the heavy equipment used by the grease operator, wireline contractor, and fracking crew. (PCSMF ¶¶ 190-208, 225, 228-229, 234, 237-241, 251-252, 263-266.) The crane operator monitors the crane’s computer to ensure that the lifts do not exceed the crane’s specified capabilities; if the crane operator is unsure of the crane’s capabilities, he consults his crane manual and load charts. (PCSMF ¶¶ 267-268, 270.) If the crane operator is asked to exceed the crane’s stated capabilities, the crane operator must call the managers for instructions. (PCSMF ¶¶ 269, 304-305.) The quintessentially blue-collar nature of these job positions extends to the work the frac hands, grease operators, and crane operators perform in the shop. When the plaintiffs were not working at a well site, they were cleaning and rebuilding their equipment in the shop. The frac hands spent their shop days breaking down and cleaning the valves, replacing the o-rings, rebuilding the frac stacks, and testing the valves for leaks. (PCSMF ¶ 293.) Meanwhile the grease operators and crane operators clean the pressure control equipment in the wash bay area; break down each piece of equipment (including the lubricator, pump-in sub, tool trap, grease head, and blowout preventer); replace the o-rings, rubbers, flow tubes, gaskets, and brass in the equipment; replace the rams; refill the fuel and grease tanks on the grease unit; reel out the hoses and wipe them down; notify the mechanic of any mechanical issues with the equipment; rebuild each piece of equipment; repaint each piece of equipment; lubricate all of the parts; and perform hydrostatic testing on the equipment to look for leaks or other defects. (PCSMF ¶¶ 273-276, 278-279.) Though Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 38 of 64 28 there was an office attached to the shop, the plaintiffs only used that office to attend mandatory training sessions and to relax; they did not work in the office. (PCSMF ¶ 280.) In short, every one of these duties performed by the frac hands, grease operators, and crane operators is fairly characterized as manual labor. (See PCSMF ¶¶ 235, 265-266.) Thus Oil States cannot establish that the “principal, main, major or most important duty” performed by the grease operators, crane operators, and frac hands is the performance of non-manual or office work. See 29 C.F.R. §§ 541.700(a); 541.200(a)(2). b. The plaintiffs did not run the company’s business operations. Nor is the primary duty of the frac hands, grease operators, and crane operators to perform work “directly related to the management or general business operations” of Oil States. 29 C.F.R. § 541.201(a). “To meet this requirement, an employee must perform work directly related to assisting with the running or servicing of the business.” 29 C.F.R. § 201(a). That was not the role performed by the grease operators, crane operators, and frac hands who worked at Oil States. To ascertain whether an employee is an exempt administrative worker, the Third Circuit distinguishes between administrative workers and production workers. See Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 903-04 (3d Cir. 1991). “The concept of a ‘production worker’ is not limited to individuals involved in the manufacture of tangibles”; rather, the “administrative/production dichotomy turns on whether the services or goods provided by the employee constitute the market offerings of the employer, or whether they contribute to the running of the business itself.” In re Enter. Rent-a-Car Wage & Hour Emp’t Practices Litig., 2012 WL 4356762, at *17 (W.D. Pa. Sept. 24, 2012). Courts thus look to whether the employee’s primary duty is to run the business or to carry out the business’s day-to-day affairs; the former is an exempt function, while the latter is not. Id. (citing Davis v. J.P. Morgan Chase & Co., 587 F.3d 529, 535 (2d Cir. 2009); Bratt v. Cnty. of L.A., 912 F.2d 1066, 1070 (9th Cir. 1990)). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 39 of 64 29 The plaintiffs undoubtedly qualify as production workers rather than administrative workers under that framework. Oil States is an oilfield contractor; energy companies hire Oil States to provide pressure control services, crane services, and frac stacks in connection with fracking operations at natural gas well sites. (PCSMF ¶¶ 4-5, 164, 166.) And the frac hands, grease operators, and crane operators are the Oil States employees who travel to well sites and provide those services. (PCSMF ¶¶ 169, 281-282.) In other words, pressure control and crane services are the “marketplace offerings” that Oil States provides, and the plaintiffs were the employees who actually provided those services to the market. See id. When Shell or Chevron hire Oil States to perform pressure control services, those companies are paying Oil States to provide pressure control equipment and a grease operator to run that equipment. According to the DOL, the types of activities that fall on the administrative side of administrative/production dichotomy are activities in areas such as tax, finance, accounting, budgeting, auditing, insurance, purchasing, procurement, advertising, marketing, research, human resources, labor relations, internet and database administration, and legal compliance. 29 C.F.R. § 541.201(b). Oil States employed a regional manager, district managers, assistant managers, field service managers, operations supervisors, human resources representatives, and a throng of back- office workers to perform these activities and to handle other functions related to “running and servicing the business.” The plaintiffs did not perform these activities; they wore coveralls and hard hats when they worked, not collared shirts and pocket protectors. (PCSMF ¶ 303.) Accordingly, no reasonable factfinder could conclude that the primary duty of any plaintiff—including the frac hands, grease operators, and crane operators—was the performance of non-manual or office work directly related the management or business operations of Oil States. Cf. Smith, 2011 WL 96868, at *22-23, *29 (holding that fracking field engineers and field coordinators performed nonexempt production work rather than exempt administrative work Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 40 of 64 30 because the field engineers and field coordinators traveled to the job sites and participated in the fracking process, which was the employer’s “primary output”). ii. The Plaintiffs Did Not Exercise Discretion and Independent Judgment with Respect to Matters of Significance. The plaintiffs’ primary duty also did not include the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200(a)(3); see also 34 Pa. Code 231.83(2). The DOL has identified relevant considerations: whether the employee has authority to formulate, affect, interpret, or implement management policies or operating practices; whether the employee carries out major assignments in conducting the operations of the business; whether the employee performs work that affects business operations to a substantial degree, even if the employee's assignments are related to operation of a particular segment of the business; whether the employee has authority to commit the employer in matters that have significant financial impact; whether the employee has authority to waive or deviate from established policies and procedures without prior approval; whether the employee has authority to negotiate and bind the company on significant matters; whether the employee provides consultation or expert advice to management; whether the employee is involved in planning long- or short-term business objectives; whether the employee investigates and resolves matters of significance on behalf of management; and whether the employee represents the company in handling complaints, arbitrating disputes or resolving grievances. 29 C.F.R. § 541.202(b). The primary duty of the frac hands, grease operators, and crane operators was to assemble and operate their equipment; that was the service Oil States advertised to its customers, and it was the reason those customers hired Oil States. Those duties—the assembly and operation of pressure control equipment, cranes, and frac stacks—did not involve the “exercise of discretion and independent judgment with respect to matters of significance.” When the plaintiffs traveled to well sites to operate the equipment, they did not choose which jobs Oil States would perform or what rates Oil States charged to its customers; they did not formulate company policies, plan business objectives, or arbitrate disputes and grievances; and they did not enter into contracts or commitments on behalf of Oil States. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 41 of 64 31 To be sure, the plaintiffs made certain decisions regarding the operation of their equipment while working at well sites. After consulting with the company representative, crane operators decided how to position the crane in order to reach each well on the pad. (PCSMF ¶¶ 186-188.) When the wireline contractor informed the grease operators that the well pressure was increasing, the grease operators decided when to adjust their grease pressure in order to maintain the seal around the wireline. (PCSMF ¶¶ 217-221.) And the frac hands decided where to place the flowback lines so that the flowback lines have a direct path from the flow cross to the flowback tank, without having to wrap around other equipment. (PCSMF ¶ 285.) But these types of decisions do not qualify as the exercise of independent judgment. When a crane operator considers whether the crane is capable of performing a certain lift, the crane operator consults and relies on the crane manual and load charts that set forth in detail each crane’s capabilities. (PCSMF ¶¶ 188, 267-270.) That amounts to the application of well-established techniques and procedures, which is not the exercise of discretion and independent judgment. See 29 C.F.R. §§ 541.202, 541.704; see also 29 C.F.R. § 1926.1417 (OSHA guidelines requiring strict compliance with crane operator’s manual). Similarly, when the crane operator monitors the wind and watches for lightning, the operator is merely implementing OSHA’s safety directives; the operator does not formulate his own policies to determine whether the crane can be operated in a lightning storm. (PCSMF ¶ 271.) And when the grease operator adjusts the pressure in the grease head to ensure that the grease pressure remains about 1,500 psi above the well pressure, the grease operator is simply doing what he was told to do in pressure control school. (PCSMF ¶¶ 82-85, 87.) That is not the exercise of independent judgment. See 29 C.F.R. § 541.704. These decisions also cannot be characterized as the exercise of discretion and independent judgment with respect to matters of significance. “The term ‘matters of significance’ refers to the level of importance or consequences of the work performed,” 29 C.F.R. § 541.202(a), and the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 42 of 64 32 factors outlined in 29 C.F.R. § 541.202(b) make clear that the discretion must be related to operational or administrative decisions. The mere fact that the result of the plaintiffs’ daily job decisions could entail financial losses for Oil States or its customers does not mean those decisions related to matters of significance. See 29 C.F.R. § 541.202(f). The determination of where to place a flowback line to minimize wear and tear, or when to increase grease pressure to avoid losing the grease seal, is not at all comparable to the types of business decisions outlined in 29 C.F.R. § 541.202(b). There are significant decisions made at well sites: which wells to frac, whether to frac more than one well simultaneously, how many stages are needed to frac the well, what chemicals and tools are best suited for a particular well, when to begin the fracking operations, and when to release the contractors to leave the well site. Those types of operational decisions have real consequences. But all of those decisions were made by the company representative, usually in consultation with the wireline and fracking engineers. Nothing in the record suggests the plaintiffs participated in those decisions. Indeed, Oil States required the plaintiffs to call management whenever a decision of significance needed to be made. When the plaintiffs encountered a problem or an abnormal situation at a well site, they called their managers, who would prescribe a course of action. (PCSMF ¶ 304.) The plaintiffs also called their managers whenever someone at the well site, including the company representative, asked the plaintiffs to do something unsafe, or to do something that was inconsistent with the company’s standard operating procedures. (PCSMF ¶ 305.) Thus the plaintiffs made decisions related to the operation of their equipment, while the company representative and engineers handled all administrative decisions. In sum, the evidence shows that the plaintiffs did not exercise discretion or independent judgment with respect to matters of significance, either at the well site or in the shop. The plaintiffs were skilled blue-collar laborers, not administrators. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 43 of 64 33 D. THE HIGHLY COMPENSATED EXEMPTION DOES NOT APPLY. Oil States also contends that the plaintiffs are exempt highly compensated employees. The FLSA’s highly compensated exemption states that employees are exempt from the overtime requirements if they (i) earn at least $100,000 in total annualized compensation and (ii) customarily and regularly perform one of more of the exempt duties identified in the executive, administrative, and professional exemptions. 29 C.F.R. § 541.601(a). There are three problems with the defendant’s attempt to use this exemption. First, the PMWA, unlike the FLSA, does not include a separate exemption for highly compensated employees. See Sloane v. Gulf Interstate Field Servs., Inc., 2016 WL 878118, at *5 (W.D. Pa. Mar. 8, 2016); Galdo v. PPL Elec. Utils. Corp., 2016 WL 454416, at *3 (E.D. Pa. Feb. 5, 2016). Thus for purposes of the PMWA, Oil States must establish that the plaintiffs performed all of the exempt duties identified in either the executive or administrative exemption. Second, during various years of their employment, several plaintiffs did not earn sufficient income from Oil States to qualify for the highly compensated exemption. Specifically, Mr. Bolen, Mr. Eddy, Mr. Frick, Mr. Kubiak, and Mr. Pond earned less than $100,000 in total annualized compensation in 2012. (PCSMF ¶¶ 367, 412, 429, 506, 554.) Mr. Frick and Mr. George earned less than $100,000 in total annualized compensation in 2013. (PCSMF ¶¶ 429, 443.) And Mr. Frick earned less than $100,000 in total annualized compensation in 2014 and 2015 as well. (PCSMF ¶ 429.) Thus the FLSA’s highly compensated exemption does not apply to those plaintiffs during those years. Cf. Orr v. James D. Julia, Inc., 2008 WL 2605569, at *14 n.7 (D. Maine June 27, 2008) (noting that the highly compensated exemption is applied on a year-by-year basis). Third, to invoke the FLSA’s highly compensated exemption with respect to the years in which the plaintiffs earned more than $100,000, Oil States still must satisfy one of the duties tests set forth in the FLSA’s administrative and executive exemptions. See 29 C.F.R. § 541.601(a)(2). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 44 of 64 34 In other words, with respect to each highly compensated plaintiff, Oil States must prove plainly and unmistakably that (a) the plaintiff’s primary duty was to manage the enterprise, (b) the plaintiff customarily and regularly directed the work of two or more other Oil States employees, (c) the plaintiff had the authority to hire or fire other employees or made suggestions and recommendations as to the hiring, firing, advancement, promotion, or other change of status that were given particular weight, (d) the plaintiff’s primary duty was the performance of office or non- manual work directly related to the company’s business operations, or (e) the plaintiff’s primary duty included the exercise of discretion and independent judgment with respect to matters of significance. See 29 C.F.R. §§ 541.100, 541.200. As explained in sections I.B and I.C above, the plaintiffs did not satisfy any of those duties tests while working as frac hands, grease operators, and crane operators. The undisputed record evidence establishes that the primary duty of a frac hand, grease operator, and crane operator is to assemble, operate, and maintain the pressure control equipment, cranes, and frac stacks that Oil States leases to companies performing fracking operations. The plaintiffs did not manage their employer’s operations, did not regularly supervise two or more other employees, did not hire and fire employees, and did not make operational decisions at the well sites. The plaintiffs were laborers, not administrators or executives. Quite significantly, the DOL’s regulations state in plain terms that the FLSA’s highly compensated exemption “only applies to employees whose primary duty includes performing office or non-manual work.” 29 C.F.R. § 541.601(d); see also Ferrara v. 4JLJ, LLC, 150 F. Supp. 3d 813, 820 (S.D. Tex. 2016) (stating that the highly compensated exemption only applies if “the employee’s primary duties [are] office-related or non-manual”). That caveat makes clear that the plaintiffs’ duties were outside the scope of the highly compensated exemption. The plaintiffs’ “principal, main, major or most important duty” consisted of the assembly and operation of the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 45 of 64 35 pressure control equipment, cranes, and frac stacks. That involves lifting, hammering, and moving heavy metal equipment and then manipulating a series of knobs and levers—all of which is manual labor. (PCSMF ¶¶ 191-252, 264-266, 286-292.) The highly compensated exemption also expressly excludes “non-management employees in maintenance, construction and similar occupations . . . who perform work involving repetitive operation with their hands, physical skill and energy . . . no matter how highly paid they might be.” Id. The plaintiffs unquestionably fit that definition, as Oil States has acknowledged. The Oil States manager responsible for supervising grease operators and crane operators testified that the work performed by those employees is “repetitive” manual labor. (PCSMF ¶ 235.) Specifically, he emphasized the “repetitive nature of the work on site” and noted that, absent exceptional circumstances, the activities of the grease operators and crane operators are “going to be pretty much the same thing every day.” (See Exhibit 5, Blank Depo., at 188:12-189:10.) He continued: “We are going to be rigging up. We are going to be stabbing on the well. We are going to be running in hole. We are going to be pulling out of the hole. We are going to rig down, pull off well, move to next well. Running in hole, running out hole. Move to next well. Up until the end of the job. . . . It’s fairly boring.” (Id.) The vice president of human resources at Oil States, who is responsible for making all decisions concerning the exempt or nonexempt status of employees at the company, likewise conceded that the crane operator is a nonexempt manual labor position, and that crane operators are entitled to overtime. (PCSMF ¶¶ 265, 345-347.) These admissions track the language of the DOL’s regulations. See 29 C.F.R. 541.601(d) (excluding from the white-collar exemptions “employees who perform work involving repetitive operations with their hands, physical skill and energy); 29 C.F.R. § 541.3(a) (excluding from the white-collar exemptions “manual laborers and other ‘blue collar’ workers”). The admissions also Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 46 of 64 36 must be imputed to the defendant. See Fed. R. Evid. 802(d)(2)(D); Penda Corp. v. STK, LLC, 2004 WL 1628907, at *5 (E.D. Pa. July 16, 2004). Thus the evidence establishes that the plaintiffs’ primary duty did not involve office or non-manual work, that the plaintiffs’ primary duty did not consist of any of the exempt duties identified in the executive and administrative exemptions, and that the plaintiffs were nonexempt blue-collar workers who performed work involving repetitive operation with their hands, physical skill, and energy. Each of those reasons is a sufficient basis on which to award summary judgment to the plaintiffs with respect to the FLSA’s highly compensated exemption. E. THE PLAINTIFFS WERE NOT OUTSIDE SALESPEOPLE. Oil States also invokes the exemption for outside sales employees. That exemption applies, in relevant part, to any employee (1) whose primary duty is to obtain orders or contracts for services and (2) who is customarily and regularly engaged away from the employer’s place of business when obtaining those orders. 29 C.F.R. § 541.500(a); see also 34 Pa. Code 231.85. By its clear terms, that exemption does not apply to these plaintiffs. To determine whether the plaintiffs obtained orders or contracts for services, consider the “hallmark activities” of an outside salesperson, including (1) whether the plaintiffs earned sales commissions, (2) the level of supervision of the plaintiffs, (3) the amount of sales work the plaintiffs performed outside the shop, and (4) whether the plaintiffs independently solicited new business. See Chenensky v. N.Y. Life Ins. Co., 2009 WL 4975237, at *5 (S.D.N.Y. Dec. 22, 2009). Those “hallmark activities” do not describe the plaintiffs’ work for Oil States. Oil States employed salespeople whose sole job was to sell the services performed by the grease operators, crane operators, and frac hands. (PCSMF ¶¶ 35-40.) There is no evidence that the plaintiffs ever obtained any orders or contracts for any product or service offered by Oil States. The plaintiffs did not solicit or take orders for products or services, did not set or negotiate the prices for any product Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 47 of 64 37 or service sold by Oil States, and received no commissions or other special compensation for anything that Oil States sold. (PCSMF ¶¶ 36-40.) At most, the plaintiffs may have performed a little nonexempt promotional work. “Promotional activities designed to stimulate sales that will be made by someone else are not exempt outside sales work.” 29 C.F.R. § 541.503(b); see also 29 C.F.R. § 541.503(a) (“[P]romotional work that is incidental to sales made, or to be made, by someone else is not exempt outside sales work.”). Insofar as any plaintiff discussed upcoming jobs with a company representative, those conversations would be incidental to sales made by the salespeople; that type of informal conversation does not constitute a sale in and of itself because the plaintiffs never took sales orders from customers. See id. In short, the “primary duty” of the salespeople was to sell pressure control and crane services to customers; the primary duty of the operators, on the other hand, was to perform those services. That conclusion is consistent with another “hallmark” of outside salespeople: that their work is “unsuitable to an hourly wage.” Chenensky, 2009 WL 4975237, at *5. Outside salespeople are exempt from the overtime laws—and paid commissions instead of an hourly wage—because they set their own start times, work hours, and daily schedules based on the demands of their customers. See, e.g., Miranda-Albino v. Ferrero, Inc., 455 F. Supp. 2d 66, 78-79 (D.P.R. 2006). The plaintiffs did not set their own work hours or schedules, and clearly their positions were “suitable to an hourly wage,” given that Oil States now pays an hourly wage. (PCSMF ¶ 316.) Thus Oil States cannot establish that the primary duty of the plaintiffs was to conduct outside sales, and the plaintiffs are entitled to summary judgment on this defense. F. THE COMBINATION EXEMPTION DOES NOT APPLY. The FLSA’s so-called “combination exemption” states that an employee is exempt if her primary duty is to perform a combination of the exempt white-collar duties. See 29 C.F.R. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 48 of 64 38 § 541.708 (“[A]n employee whose primary duty involves a combination of exempt administrative and exempt executive work may qualify for exemption.”).12 In essence, the combination exemption provides “that the performance of exempt executive work cannot be the basis for preventing an otherwise exempt administrative employee from being exempted because his primary duty is blended between executive and administrative work and vice versa.” In re Enter. Rent-a-Car Wage & Hour Emp’t Practices Litig., 2012 WL 4356762, at *21 (W.D. Pa. Sept. 24, 2012); see also IntraComm, Inc. v. Bajaj, 492 F.3d 285, 293-96 (4th Cir. 2007) (stating that the combination exemption only relates to the primary-duty elements of the white collar exemptions and does not supplant the other elements of the executive or administrative exemption). To invoke this exemption, Oil States must show that the plaintiffs’ primary duty was the performance of exempt administrative and executive duties. The evidence does not back that claim, and the FLSA’s combination exemption does not apply for all of the reasons stated in section I.D above. Simply put, the plaintiffs’ primary duty as frac hands, grease operators, and crane operators was to assemble and operate their equipment—quintessentially blue-collar functions that are not listed as exempt duties in the administrative or executive exemptions. The combination exemption does not apply to employees whose primary duty is the performance of nonexempt functions, see In re Enter. Rent-a-Car, 2012 WL 4356762, at *21, and the FLSA makes clear that all blue-collar workers and manual laborers—including all employees whose work involves repetitive manual operations, physical skill, and energy—are entitled to overtime. See 29 C.F.R. 541.601(d); 29 C.F.R. § 541.3(a). Thus the plaintiffs are entitled to summary judgment on this defense as well. 12 The PMWA does not include a combination exemption. See 43 P.S. 333.105 (listing all PMWA exemptions). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 49 of 64 39 II. OIL STATES IS NOT ENTITLED TO ANY DAMAGES OFFSETS. Oil States also claims that it is entitled to a damages offset for the salary payments Oil States made to the plaintiffs for workweeks when they performed no work, for “any compensation or benefits that Plaintiffs received by virtue of being exempt that they would not have received if they were non-exempt,” and for “any actual pay” that the plaintiffs received “for extra hours worked beyond their shift.” (See Exhibit 2, Interrogatory Responses, ¶ 19.) These offsets are invalid. The FLSA permits overtime offsets when an employer pays an employee extra compensation at a premium rate for hours worked outside the employee’s normal working hours. See 29 U.S.C. § 207(h)(2) (citing § 207(e)(5), (6), (7)). And that is the only circumstance in which the FLSA permits offsets. See Wheeler v. Hampton Twp., 399 F.3d 238, 245 (3d Cir. 2005) (“Where a credit is allowed, the statute says so.”). Courts do not permit employers to offset overtime damages with non-work pay. See id. The salary that Oil States paid to the plaintiffs for work performed during their days off was paid at a “non-premium fixed weekly rate,” and consequently those payments cannot be used to “offset premium overtime payments.” See Brumley v. Camin Cargo Control, Inc., 2010 WL 1644066, at *9-10 (D.N.J. Apr. 22, 2010). Oil States has not identified either the “compensation or benefits that Plaintiffs received by virtue of being exempt that they would not have received if they were non-exempt,” or the “actual pay” that the plaintiffs received “for extra hours worked beyond their shift.” (See Exhibit 2, Interrogatory Responses, ¶ 19.) Nonetheless, it seems that these offsets would also be prohibited because they are not expressly permitted under § 207(h)(2). Oil States did not pay the plaintiffs the type of extra premium compensation described in § 207(e)(5), (6), or (7)—the only type of compensation that can be credited against overtime damages—and the plaintiffs are therefore entitled to summary judgment with respect to the defendant’s request for offsets. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 50 of 64 40 III. THE PLAINTIFFS ARE ENTITLED TO LIQUIDATED DAMAGES. The plaintiffs are entitled to liquidated damages because Oil States did not act reasonably and in good faith when classifying the plaintiffs as exempt. See 29 U.S.C. § 260. An employer who fails to pay wages as required by the FLSA is ordinarily liable for back wages and “an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Under the FLSA, an award of liquidated damages is mandatory except where the employer shows it acted reasonably and in good faith. Seymour v. PPG Indus., Inc., 891 F. Supp. 2d 721, 733-34 (W.D. Pa. 2012) (citing Brooks v. Vill. of Ridgefield Park, 185 F.3d 130, 137 (3d Cir. 1999); Greene v. Safeway Stores, Inc., 210 F.3d 1237, 1245 (10th Cir. 2000)). “The FLSA plainly envisions that liquidated damages in an amount equal to the unpaid overtime are the norm for violations of [the statute].” Mayhew v. Wells, 125 F.3d 216, 220 (4th Cir. 1997); see also O’Hara v. City of Pittsburgh, 2011 WL 402542, at *3 (W.D. Pa. Sept. 9, 2011) (“Double damages are the norm, single damages the exception.”); Pontius v. Delta Fin. Corp., 2007 WL 1496692, at *11 (W.D. Pa. Mar. 20, 2007) (same). That’s because FLSA liquidated damages are not penalties exacted by law, but, rather, compensation to the employee occasioned by the delay in receiving owed wages. See Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 707 (1945). Courts have limited discretion to deny an award of liquidated damages only if the employer meets its burden of demonstrating that it acted in subjective “good faith” and had objectively “reasonable grounds” for believing that its conduct did not violate the FLSA. Chao v. A-One Medical Servs., 346 F.3d 908, 919 (9th Cir. 2003). The district court is not empowered with the discretion to reduce or eliminate liquidated damages until “the employer . . . come[s] forward with plain and substantial evidence to satisfy the good faith and reasonableness requirements.” Seymour, 891 F. Supp. 2d at 734 (citing Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 907 (3d Cir. 1991); Brooks, 185 F.3d at 137). The burden of proof for this affirmative defense is a Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 51 of 64 41 “difficult” one, and even if the employer carries its burden, the court retains the discretion to award liquidated damages. See Alvarez v. IBP, Inc., 339 F.3d 894 (9th Cir. 2003). Where a defendant makes only “bald assertions” that its violations were committed in good faith, the court must award liquidated damages. Martin v. Albrecht, 802 F. Supp. 1311, 1316 (W.D. Pa. 1992). The evidence shows that Oil States acted neither reasonably nor in good faith when classifying the frac hands, grease operators, and crane operators as exempt. To avoid an award of liquidated damages, “the employer must show at a minimum that it undertook to apply the FLSA’s requirements to the particular job at issue.” Young v. Cooper Cameron Corp., 2006 WL 1562377, at *8-10 (S.D.N.Y. June 6, 2006). Yet Oil States admits that never happened. Oil States inherited the field service supervisor position through a merger with another company, STS; that merger was completed on January 1, 2012. (PCSMF ¶¶ 2, 327.) Following the merger, Oil States presumed that the exempt classification of the field service supervisor position was correct. (PCSMF ¶ 328.) Oil States had no process in place for reviewing the exempt classification of particular job positions, and Oil States did not reclassify any job positions as exempt or nonexempt. (PCSMF ¶¶ 329-331.) Between 2011 and 2013, the former vice president of human resources, who was responsible for making all classification decisions, never spoke with anyone in the legal department about overtime compliance; in fact, she never had any conversations about overtime laws while she worked at Oil States. (PCSMF ¶¶ 332-334.) Because Oil States made no effort to determine whether the exempt classification of the field service supervisors was correct, Oil States cannot benefit from the good-faith defense. See Young, 2006 WL 1562377, at *8-10. In its interrogatory responses, Oil States declared that the company classified its field service supervisors as exempt because its human resources manager “knew . . . the oilfield services industry, including the industry practice of paying field service personnel a salary plus a job bonus and classifying such personnel as exempt.” (See Exhibit 2: Interrogatory Responses, ¶ 15.) But Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 52 of 64 42 acting “in accord with prevailing industry practice” is insufficient to establish a good-faith defense. Bowrin v. Catholic Guardian Soc., 417 F. Supp. 2d 449, 473 (S.D.N.Y. 2006). And the evidence also shows that the statements in the defendant’s declaration were false: The vice president of human resources and the northeast regional manager testified that they never discussed overtime policies with representatives from other companies before early 2015. (PCSMF ¶¶ 336-338.) Thus Oil States made no effort to assess the plaintiffs’ exempt classification, and the plaintiffs are entitled to an award of liquidated damages.13 IV. THE FLSA STATUTE OF LIMITATIONS SHOULD BE THREE YEARS. The plaintiffs are also entitled to a three-year statute of limitations under the FLSA.14 The FLSA’s two-year statute of limitations may be extended to three years if “the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988); see also 29 U.S.C. § 255(a). That standard is satisfied “where an employer had reason to suspect that his conduct violated the FLSA, but did not make a good faith effort to confirm this information and comply.” Solis v. A-1 Mortg. Corp., 934 F. Supp. 2d 778, 810 (W.D. Pa. 2013) (citing Martin v. Selker Bros., Inc., 949 F.2d 1286, 1296 (3d Cir. 1991)). Reckless conduct also includes the “continuation of a pay practice without further investigation after being put on notice that the practice violates the FLSA,” Solano v. Ali baba Mediterranean Grill, Inc., 2016 WL 808815, at *5 (S.D.N.Y. Mar. 2, 2016), and “[e]mployers may[] be found to have acted recklessly pursuant to the FLSA if they made neither a diligent review nor consulted with counsel regarding their overtime practices and classifications 13 Liquidated damages are further justified by the evidence discussed in the next section. 14 The PMWA’s statute of limitations is always three years, and it stretches back to April 22, 2012—i.e., three years before the original class-action complaint was filed—on account of the tolling principles set forth in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 53 of 64 43 of employees,” Trimmer v. Barnes & Noble, Inc., 31 F. Supp. 3d 618, 627 (S.D.N.Y. 2014) (internal quotation marks omitted). There is overwhelming evidence that Oil States acted recklessly when classifying the frac hands, crane operators, and grease operators as exempt. Consider the crane operators first. The job description for the crane operator position, which was created in March 2012, states that it is a nonexempt position. (PCSMF ¶¶ 343-345; Exhibit 28 (Job Description).) The current and former vice president of human resources—the position responsible for making all exemption decisions— testified that they understood the crane operators to be nonexempt. (PCSMF ¶¶ 345-347.) They believed the crane operators were being paid overtime compensation, and the testified that no one at Oil States had the authority to withhold overtime compensation from an employee in a position that the human resources department classified as nonexempt. (PCSMF ¶¶ 347-348.) Yet Oil States did not pay overtime compensation to the plaintiffs who worked as crane operators,15 even though they performed a job function that the human resources department had classified as nonexempt. That is unquestionably willful or reckless conduct. Furthermore, Oil States classified its trainees and entry-level employees as exempt, even though these employees spent their time rebuilding equipment in the shop and observing more experienced employees at the well sites. The FLSA requires employers to pay overtime to trainees “who are not actually performing the duties of an executive, administrative, professional, outside sales or computer employee.” 29 C.F.R. § 541.705. The vice president of human resources acknowledges that the Field Service Supervisor I position is an “entry-level position,” and the company further acknowledges that new employees spend up to six months learning the job before 15 Mr. Bratton, Mr. Burchik, Mr. Eddy, Mr. Gordon, Mr. Lett, and Mr. Pickel were all hired to be crane operators; Mr. Karmann, Mr. Pond, and Mr. Williams were hired for other positions but worked as crane operators on certain jobs. (PCSMF ¶¶ 369, 382-384, 398-399, 446, 473-475, 509-510, 523-524, 536, 570.) Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 54 of 64 44 they are permitted to perform the duties of a grease operator. (PCSMF ¶¶ 66, 73-76.) Yet Oil States still classified these trainees as exempt, and indeed never even considered classifying these entry- level positions as nonexempt. That deliberate indifference toward the exempt classification of trainees and entry-level operators is reckless conduct. See Gallagher v. Lackawanna Cnty., 2010 WL 134922, at *5 (M.D. Pa. Mar. 31, 2010). That is, in fact, how the human resources department approached the issue of overtime exemptions generally. The vice president of human resources testified that Oil States applied its overtime exemptions to job positions as opposed to the job duties that are actually performed by individual employees. (PCSMF ¶¶ 341.) That is flatly improper under the FLSA, which says that a “job title alone is insufficient to establish the exempt status of any employee.” 29 C.F.R. § 541.2. “The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee’s salary and duties meet the requirements of the [applicable regulations].” Id. Yet Oil States applied its exemptions by job position and wholly disregarded the duties performed by individual employees, ignoring whether individual employees actually performed exempt duties. (PCSMF ¶¶ 340-341.) Though Oil States relied primarily on the highly compensated exemption, moreover, the company made no effort to verify that individual grease operators and frac hands earned more than $100,000 per year. (PCSMF ¶ 339.) In other words, the company applied exemptions without making any effort to determine whether the exemptions actually applied. That must be considered reckless conduct. Cf. Falzo v. Cnty. of Essex, 2008 WL 2064811, at *8 (D.N.J. May 14, 2008) (stating that the three-year statute applies when an employer “did not make adequate inquiry into exactly what was required of them by the FLSA”). Insofar as Oil States relied on the motor carrier exemption, moreover, the undisputed evidence shows that, in 2011 and 2012, Oil States hired designated DOT drivers to transport its commercial vehicles and purchased non-commercial pickup trucks for the grease and crane Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 55 of 64 45 operators for the express purpose of avoiding DOT regulations. (PCSMF ¶¶ 133-141.) Again: Oil States purchased non-DOT pickup trucks for its grease operators and crane operators, removed them from the list of DOT-regulated drivers, told them to stop completing DOT driver logs, and then continued to classify them as exempt on the basis that they were subject to regulation by the DOT. (Id.) That conduct is not just reckless, but willful. Oil States willfully sought to avoid DOT regulation for its grease operators, crane operators, and frac hands but nevertheless continued to avail itself of an overtime exemption for employees who are regulated by the DOT. Finally, Oil States claims that, in classifying the grease operators, crane operators, and frac hands as exempt, it relied on the fact that its competitors were also classifying those employees as exempt. (See Exhibit 2, Interrogatory Responses, ¶ 15.) But the depositions show that this assertion is false: The human resources department and regional manager did not monitor overtime policies at other companies between 2011 and 2014. (PCSMF ¶¶ 336-338.) This false defense should be deemed evidence of willfulness or recklessness. Furthermore, insofar as Oil States managers asked job applicants “how they were paid by their prior employers” (See Exhibit 2, Interrogatory Responses, ¶ 15), those managers would have learned that most of the plaintiffs had been paid an hourly wage and overtime compensation in similar positions. (PCSMF ¶¶ 381, 456, 471, 490, 522, 535, 553, 566-567, 582, 584, 586-587, 589, 591.) Thus the district managers and human resources representatives at Oil States knew that other companies were paying an hourly wage and overtime to employees performing similar jobs, including grease operator and crane operator jobs. The defendant’s failure to review its overtime policies (or even to consult the legal department) even though it knew its competitors were paying overtime amounts to reckless conduct under the FLSA. See Trimmer, 31 F. Supp. 3d at 627; Falzo, 2008 WL 2064811, at *9-10; Albanese v. Bergan Cnty., 991 F. Supp. 410, 425 (D.N.J. 1997). Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 56 of 64 46 Any piece of this evidence would permit a jury to conclude that Oil States acted willfully or recklessly when classifying its grease operators, crane operators, and frac hands as exempt; taken together, the evidence leads inexorably to the conclusion that the defendant’s classification of its grease operators, crane operators, and frac hands was in reckless disregard of the FLSA. Accordingly, the plaintiffs are entitled to a three-year statute of limitations under the FLSA. See Solis, 934 F. Supp. 2d at 810-12. V. DAMAGES MUST BE CALCULATED USING A 1.5x MULTIPLIER. The final issues pertain to the calculation of damages for unpaid overtime. Overtime pay under both the FLSA and PMWA is a product of the employee’s “regular rate of pay” and some multiplier that represents a premium for overtime work. See 29 U.S.C. § 207(a)(1) (stating that compensation for hours worked in excess of 40 hours per week must be paid “at a rate not less than one and one-half times the regular rate at which [the employee] is employed”); 43 P.S. § 333.104(c) (stating that employees “shall be paid for overtime not less than one and one-half times the employe[e]’s regular rate”). But there is substantial disagreement about how to calculate those variables. Because federal and state regulations differ, we address the two laws separately. A. OIL STATES MAY NOT USE THE MISSEL DAMAGES FORMULA. The plaintiffs’ compensation included two components: a fixed monthly salary and a non- discretionary job bonus for each shift charged to and paid by the customer. (PCSMF ¶ 311.) When calculating overtime, both components of the plaintiffs’ pay must be incorporated into the plaintiff’s regular rate of pay. See 29 U.S.C. § 207(e) (listing the types of compensation that may be excluded from the regular rate of pay); 29 C.F.R. § 778.208 (noting that discretionary bonuses must be incorporated into the regular rate of pay when calculating overtime). But the formula for calculating the regular rate of pay varies depending on the type of compensation. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 57 of 64 47 Under federal law, the conversion of non-discretionary bonuses into a “regular rate of pay” is straightforward. When the employer is able to attribute the bonuses to specific workweeks, the bonus income is “apportioned back over the workweeks of the period during which it may be said to have been earned.” 29 C.F.R. § 778.209(a). The overtime compensation owed for those bonuses is “equal to one-half of the hourly rate of pay allocable to the bonus for that week multiplied by the number of statutory overtime hours worked during the week.” Id.; see also See U.S. Dep’t of Labor, Wage & Hour Division, Fact Sheet #54 (July 2009), available at https://www.dol.gov/whd/regs/compliance/whdfs54.pdf. For example, if an employee earned $500 in non-discretionary bonuses during a 60-hour workweek, the regular rate of pay attributable to those bonuses would be $8.33 per hour ($500 / 60), and the overtime compensation owed for the bonuses would be $83.33 (20 overtime hours x $8.33 rate x 0.5 multiplier). There is, however, less clarity on the question of how to calculate overtime damages for a salaried employee. The FLSA requires overtime compensation to be paid “at a rate not less than one and one-half times the regular rate,” 29 U.S.C. § 207(a)(1), and thus the default overtime multiplier is 1.5—unlike the 0.5 multiplier used above for bonus income. But there is an exception to that default rule that permits employers to use a 0.5 multiplier in certain circumstances. The exception is called the Missel formula because it was first articulated in Overnight Motor Transport Co. v. Missel, 316 U.S. 572 (1942). The Missel exception generally applies when an employer and a salaried employee have a clear mutual understanding that the employee’s work hours will fluctuate from week to week and that the salary is intended to compensate the employee for all hours worked each week—irrespective whether the employee works 30 hours in the workweek or 90. See Seymour v. PPG Indus., Inc., 891 F. Supp. 2d 721, 735-37 (W.D. Pa. 2012). In that situation, the employer may calculate the employee’s regular rate of pay by dividing the salary compensation paid for the week by the total number of hours worked during the week. Id. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 58 of 64 48 at 736 & n.9. To calculate the overtime compensation owed for the week, that regular rate of pay is multiplied by the number of overtime hours worked during the week, and that sum is multiplied by an overtime multiplier of 0.5 rather than 1.5. In other words, the overtime compensation owed for the salary is calculated in the same manner as the overtime compensation owed for the bonus, as explained above. Id. But the Missel formula is not available to Oil States because employers may not invoke the Missel half-rate formula in FLSA misclassification cases. See, e.g., Zulewski v. Hershey Co., 2013 WL 633402 (N.D. Cal. Feb. 20, 2013); McCoy v. N. Slope Borough, 2013 WL 4510780 (D. Alaska Aug. 26, 2013); Wallace v. Countrywide Home Loans, Inc., 2013 WL 1944458 (C.D. Cal. Apr. 29, 2013); Blotzer v. L-3 Commc’ns Corp., 2012 WL 6086931 (D. Ariz. Dec. 6, 2012); Monahan v. Emerald Perf. Materials, LLC, 705 F. Supp. 2d 1206, 1216-17 (W.D. Wash. 2010); Russell v. Wells Fargo & Co., 672 F. Supp. 2d 1088, 1013-14 (N.D. Cal. 2009); see also Snodgrass v. Bob Evans Farms, LLC, 2015 WL 1246640, at *7 (S.D. Ohio Mar. 18, 2015) (collecting cases). As these courts have concluded, the Missel reasoning does not cohere with the realities of a misclassification case. As one court has explained, “[I]n the context of an FLSA misclassification suit when consent [to the payment scheme] is inferred from the employee’s conduct, that conduct will always, by definition, have been based on the false assumption that he was not entitled to overtime compensation.” Wallace, 2013 WL 1944458, at *7. Thus “an employee cannot achieve a clear, mutual understanding as to whether a fixed salary is intended to cover all hours worked unless the understanding includes some provision for the payment of overtime; without it, there is no understanding as to an ‘agreed wage’ under Missel.” Costello v. Home Depot USA, Inc., 944 F. Supp. 2d 199, 207 (D. Conn. 2013). Because Oil States misclassified the plaintiffs as exempt, the company may not avail itself of the half-rate formula to calculate overtime damages. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 59 of 64 49 In addition, even if the Missel half-rate formula were allowed in misclassification cases involving salaried employees, that formula cannot be used in this particular context because Oil States did not pay its grease and crane operators a fixed weekly wage for all hours worked. The plaintiffs were paid non-discretionary bonuses that caused their wages to vary significantly from week to week, and that pay structure precludes the application of a half-rate formula. Courts that have encountered this unique pay structure (a fixed salary plus regular, non-discretionary bonuses) in misclassification cases have prohibited the use of a half-rate formula to compute damages. See, e.g., O’Brien v. Town of Agawam, 350 F.3d 279, 287 (1st Cir. 2003) (payment of premium for night shift); Ayers v. SGS Control Servs., Inc., 2007 WL 3171342, at *9 (S.D.N.Y. Oct. 9, 2007) (payment of premium for sea duty); Adeva v. Intertek USA, Inc., 2010 WL 97991, at *2-3 (D.N.J. Jan. 11, 2010) (payment of off-shore pay); Brantley v. Inspectorate Am. Corp., 821 F. Supp. 2d 879, 890 (S.D. Tex. 2011) (payment of off-shore bonuses). The DOL shares this view. In April 2011 the DOL promulgated a range of amendments to the regulations implementing the FLSA’s overtime requirements. See Updating Regulations Issued Under the Fair Labor Standards Act (“Final Rule”), 76 Fed. Reg. 18832-01 (Apr. 5, 2011) (codified at 29 C.F.R. Part 778). In the Final Rule, the DOL stated unequivocally that the payment of non- discretionary bonuses is both incompatible with the fluctuating workweek requirements and “inconsistent with the requirement of a fixed salary payment set forth by the Supreme Court in Overnight Motor Transport v. Missel.” 76 Fed. Reg. at 18850. The DOL explained that this rule prevents an employer from “pay[ing] a greatly reduced fixed salary and shift[ing] a large portion of employees’ compensation into bonus and premium payments, potentially resulting in wide disparities in employees’ weekly pay depending on the particular hours worked.” Id. Thus a salaried employee’s overtime damages may not be computed using a half-rate formula if the Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 60 of 64 50 employee did not receive a fixed weekly wage. See id.; see also Regan v. City of Charleston, 131 F. Supp. 3d 541 (D.S.C. 2015); Wills v. Radio Shack Corp., 981 F. Supp. 2d 245 (S.D.N.Y. 2013). Accordingly, the FLSA overtime damages attributable to the non-discretionary job bonuses must be calculated using a half-rate multiplier, but the overtime damages attributable to the salary must be calculated using a 1.5 multiplier because the plaintiffs did not receive fixed weekly wages. B. THE PMWA REQUIRES A 1.5X OVERTIME MULTIPLIER. The PMWA does not allow employers litigating misclassification cases to apply a ½-rate multiplier to compute overtime damages. Every court to address this issue has reached this conclusion. See, e.g., Verderame v. RadioShack Corp., 31 F. Supp. 3d 702, 707-08 (E.D. Pa. 2014); Chevalier v. Gen. Nutrition Centers, Inc., 2014 WL 6909692, at *9 (Pa. Ct. Cmn. Pl. Oct. 20, 2014); Foster v. Kraft Foods Global, Inc., 285 F.R.D. 343, 345-48 (W.D. Pa. 2012) (Bissoon, J.); Cerutti, 777 F. Supp. 2d at 943-45. As the Verderame court explained in granting the plaintiffs’ motion for summary judgment on this issue, although the PMWA allows an employer and an employee to reach an agreement to establish the employee’s regular rate of pay on all hours worked, the PMWA “does not permit the employer and employee to contract around the requirement that overtime be paid at ‘1½ times’ that rate.” Verderame, 31 F. Supp. 3d at 708. That rule applies to the overtime damages attributable to the plaintiffs’ salary compensation as well as the overtime damages attributable to their non-discretionary bonuses. The FLSA expressly permits employers to use a half-rate multiplier when calculating the amount of overtime owed for non-discretionary bonuses. See 29 C.F.R. § 778.209(a). But the PMWA includes no such provision. In Chevalier v. General Nutrition Centers, Inc., 2016 Pa. Dist. & Cnty. Dec. LEXIS, at *5 (Pa. Ct. Cmn. Pl. May 11, 2016), the employee earned commissions in addition to her salary. To calculate the overtime compensation owed for those commissions, the employer sought to use a half-rate formula and to calculate the regular rate of pay using the total number of hours worked Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 61 of 64 51 each week, rather than a 40-hour workweek. The court rejected that position and held that the regular rate of pay attributable to the commissions must be calculated using a 40-hour workweek and that the overtime damages must be calculated using a 1.5 multiplier. Id. at *5-8. Thus the plaintiffs’ PMWA and FLSA damages must be calculated using an overtime multiplier of 1.5x rather than 0.5x. CONCLUSION For all of these reasons, Oil States is liable to each plaintiff for the failure to pay overtime in violation of the Fair Labor Standards Act, 29 U.S.C. § 207(a)(1), and the Pennsylvania Minimum Wage Act, 43 P.S. § 333.104(c). Oil States is not entitled to any offsets or credits for any amounts previously paid to Plaintiffs. Oil States did not act reasonably and in good faith when classifying the plaintiffs as exempt under the Fair Labor Standards Act, 29 U.S.C. § 207(a)(1), and the plaintiffs are entitled to an award of liquidated damages under 29 U.S.C. § 216(b). Oil States willfully misclassified the plaintiffs within the meaning of 29 U.S.C. § 255(a), and the statute of limitations for the plaintiffs’ claims under the Fair Labor Standards Act, 29 U.S.C. § 207(a)(1), should be three years from the date on which the plaintiff joined this action. Damages under the Fair Labor Standards Act should be paid at the rate of one-and-one-half times each plaintiff’s rate of pay for all salary compensation and one-half times the rate of pay for all bonus compensation, and damages under the Pennsylvania Minimum Wage Act should be paid at the rate of one-and- one-half times each plaintiff’s rate of pay for all salary compensation and one-and-one-half times the rate of pay for all bonus compensation. Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 62 of 64 52 Dated: August 24, 2016 Pittsburgh, PA Respectfully submitted, /s/ Zachary K. Warren Joseph H. Chivers, Esq. jchivers@employmentrightsgroup.com Zachary K. Warren, Esq. zkw@employmentrightsgroup.com THE EMPLOYMENT RIGHTS GROUP 100 First Avenue, Suite 650 Pittsburgh, PA 15222 Tel.: (412) 227-0763 Counsel for Plaintiffs Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 63 of 64 Certificate of Service I hereby certify that, on this 24th day of August, 2016, a true and correct copy of this Memorandum of Law in Support of Plaintiffs’ Motion for Partial Summary Judgment was filed electronically via the Court’s CM/ECF system, which will send notice and copies to counsel of record. By: /s/ Zachary K. Warren Zachary K. Warren, Esq. THE EMPLOYMENT RIGHTS GROUP 100 First Avenue, Suite 650 Pittsburgh, PA 15222 zkw@employmentrightsgroup.com Tel.: (412) 227-0763 Counsel for Plaintiffs Case 2:15-cv-00529-CB Document 165 Filed 08/24/16 Page 64 of 64