Wallace v. Ecm Energy Service, Inc.BRIEF in Support re Motion to CompelW.D. Pa.May 26, 2017 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA WILLIAM WALLACE, JOSHUA BAY, LAURA CONLEY, LISA LUCI and KALIB WEHR, on behalf of themselves and all others similarly situated, Plaintiffs v. ECM ENERGY SERVICE, INC., Defendant Civil Action No. 2:16cv1693 INDIVIDUAL AND COLLECTIVE/CLASS ACTION COMPLAINT Electronically Filed Jury Trial Demanded PLAINTIFFS’ BRIEF IN SUPPORT OF MOTION TO STRIKE AND RESPONSE TO DEFENDANT’S RENEWED MOTION TO DISMISS AND COMPEL ARBITRATION HISTORY Defendant ECM was subject to a Department of Labor investigation for failure to pay overtime wages to its traffic employees paid on a day rate, who worked from May 12, 2012 to August 31, 2013 in Pennsylvania, Ohio and West Virginia. The Department concluded that the class of 85 employees were due $97,516.77 in overtime wages for that time period. In a final conference held May 16, 2014 Defendant ECM agreed to pay all nonexempt employees the applicable minimum wage, to pay all nonexempt employees proper overtime premium for all hours worked over 40 in a work week and to keep an accurate record of hours worked for all nonexempt employees as required by CFR 516 (DOL Report, Exhibit A). Defendant ECM was subject to a second Department of Labor investigation for failure to pay overtime wages to its traffic employees who worked from May 11, 2014 to Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 1 of 22 January 16, 2016 in Pennsylvania, Ohio and West Virginia. Following the initial Department of Labor investigation, ECM adopted a scheme to evade full overtime payment to its traffic employees by ostensibly paying straight time and overtime at a low hourly rate and supplementing the resulting amount with a lump sum payment resulting in an amount equal to the employees’ day rates for the number of days worked in the week. In the second investigation, the Department concluded that the scheme was not in compliance with the Act, and found a class of 157 employees were due $386,817.25 in overtime wages for that time period. In a final conference on July 12, 2016 Defendant ECM disagreed on paying the back wages. The DOL concluded, “Based on the above, it is recommended that all workers be given their rights under section 16b to file suit against subject employer and to try to collect the back wages due to them (DOL Report, Exhibit B). DOL notified Plaintiff Wallace of his right to sue, forwarding their calculations showing he was due $930.38 for work performed from August 7, 2015 through September 26, 2015. Plaintiff Wallace filed suit on November 9, 2016 individually and as a class and collective action on behalf of himself and the other 157 similarly situated employees under Section 216(b) seeking his statutory right to overtime wages pursuant to the Fair Labor Standards Act and under the Pennsylvania Minimum Wage Act. On January 20, 2017 Defendant ECM filed a Motion to Compel Arbitration and Dismiss Plaintiff’s Complaint, attaching an arbitration agreement signed by Plaintiff Wallace on August 21, 2015. Plaintiff filed a timely response. On April 6, 2017 the Court entered an order denying Defendant ECM’s Motion, but permitting ECM to file a Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 2 of 22 renewed Motion to Compel Arbitration on or before May 19, 2017. Defendant did not file a renewed motion to compel arbitration within the time period allowed by the court. On May 11, 2017 Plaintiff Wallace filed an amended complaint, adding four additional named plaintiffs and seeking their statutory right to unpaid wages and overtime wages pursuant to the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Act, the Ohio Minimum Fair Wage Standards Act, the Ohio Prompt Pay Act, the West Virginia Wage Payment Act and West Virginia Code §21-5C-3(a). The Amended Complaint also contained allegations that Defendant maintained false records concerning all time worked by traffic employees. Defendant ECM’s answer is due May 25, 2017. ARGUMENT I. DEFENDANT’S RENEWED MOTION TO DISMISS WAS NOT FILED IN ACCORDANCE WITH THE COURT’S ORDER OF APRIL 6, 2017 AND MUST BE DISMISSED The Court’s order of April 6, 2017 denied Defendant ECM’s Motion to Compel Arbitration, but granted leave to permit Defendant ECM to file a renewed motion to dismiss on or before May 19, 2017. Federal Rule of Civil Procedure 6(a)(4) specifies that the “Last Day” is defined as midnight in the court’s time zone. Federal Rule of Civil Procedure 6(b) specifies that the court may extend time for good cause, but a request for a time extension must be made before the time has expired. Defendant ECM failed to file a renewed motion to dismiss before midnight May 19, 2017 and failed to request an extension of time before the time expired and therefore Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 3 of 22 they are precluded from filing such a motion nunc pro tunc. District Courts in the Third Circuit have universally held that untimely filed motions must be dismissed, unless good cause is shown see Mellon Nat’l Bank & Trust Co. v. Nationwide Mut. Ins. Co. 32 F.R.D. 365 (W.D. Pa. 1962)(untimely motion dismissed), Gentle Laser Solutions Inc. v. Sona Int’l Corp. 2008 U.S. Dist. LEXIS 69873 (D.N.J. 2008)(untimely motion dismissed), Oldcastle Precast, Inc. v. VPMC, Ltd. 213 U.S. Dist. LEXIS 104775 (E.D. Pa. 2013) (untimely motion dismissed), Newland Moran Real Estate v. Green Cay Prop Inc. 41 F. Supp. 2d 576 (V.I. 1999)(court found excusable neglect where hurricane prevented counsel from receiving notice of motion due date). Simply, Defendant’s Motion was filed well beyond the due date and must be struck from the record. II. DEFENDANT’S RENEWED MOTION TO DISMISS AND COMPEL ARBITRATION LACKS SUBSTANTIVE MERIT AND CANNOT BE GRANTED 1. LEGAL STANDARD The Third Circuit recently “clarified the standards to be applied to motions to compel arbitration, identifying the circumstances under which district courts should apply the standard for a motion to dismiss as provided by Rule 12(b)(6) of the Federal Rules of Civil Procedure, and those under which they should apply the summary judgment standard found in Rule 56.” Guidotti v. Legal Helpers Debt Resolution, LLC. 716 F.3d 764, 767 (3d Cir. 2013). As the Court of Appeals instructed, “when it is apparent, based on ‘the face of a complaint, and documents relied upon in the complaint,’ that certain of a party’s claims ‘are subject to an enforceable arbitration clause, a motion to compel Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 4 of 22 arbitration should be considered under a Rule 12 (b)(6) standard without discovery’s delay.’” Id. at 776 (quoting Somerset Consulting, LLC v. United Capital Lenders, LLC 832 F. Supp 2d 474, 482(E.D. Pa. 2011). However, if the complaint and its supporting documents are unclear regarding the agreement to arbitrate, or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate an issue, then “the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing on [the] question..”…”After limited discovery, the court may entertain a renewed motion to compel arbitration, this time judging the motion under a summary judgment standard.” Id. (quoting Somerset Consulting, 832 F.Supp. 2d at 482). The Federal Arbitration Act (FAA), 9 U.S.C. Section 1-16 expresses a “strong federal policy in favor of resolving disputes through arbitration.” Century Indem. Co. v. Certain Underwriters at Lloyd’s London, 584 F.3d 513, 522 (3d. Cir. 2009). The FAA mandates that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25(1983). Even in light of the FAA, however, arbitration is “strictly a matter of contract.” Bel-Ray Co. v. Chemrite(Pty)Ltd., 181 F.3d 435, 444(3d Cir. 1999). A party cannot be compelled to submit a dispute to arbitration unless it has agreed to do so.” Century Indem. Co. v. Certain Underwriters at Lloyd’s London, 584 F.3d at 324. A disputed claim must be arbitrated if “there is a valid agreement to arbitrate between the parties.” Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014). Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 5 of 22 2. ARGUMENT A. THERE IS NO CONTRACTUAL AGREEMENT TO ARBITRATE BETWEEN DEFENDANT ECM AND PLAINTIFF WALLACE AND ALL OTHER CLASS MEMBERS WHO WERE EXISTING EMPLOYEES, BUT WERE FORCED TO SIGN THE AGREEMENT WITHOUT CONSIDERATION Defendant ECM produced Plaintiff Wallace’s time sheets. Exhibit D shows Wallace worked from August 7, 2015 to September 26, 2015. Defendant ECM produced Plaintiff Wallace’s arbitration agreement. Exhibit E shows the agreement was not signed until August 21, 2015. Moreover, in Defendant ECM’s Answers to Interrogatories they admit that Plaintiff Wallace was not the only one of the 157 traffic employees who signed the arbitration agreement after he was already employed by ECM, and without any consideration: Interrogatory g. Were any existing employees asked to execute the “Mutual Agreement to Arbitrate Claims”? If so, what are their names, addresses and e- mail addresses? Were these employees offered any consideration for executing the forms? Was it a condition of ongoing employment for existing employees to execute these forms? ANSWER: ECM objects to the phrase “existing employees” as vague and undefined. Subject to the foregoing objection, ECM states that all traffic employees have entered into an arbitration agreement in consideration of new and/or continued employment with ECM and the parties’ mutual agreement to arbitrate any claims between them. Interrogatory f. Was any separate consideration offered to applicants in exchange for executing the “Mutual Agreement to Arbitrate Claims”? ANSWER: ECM objects to this Request to the extent it calls for a legal conclusion. Subject to the foregoing objection, the mutual agreement to arbitrate any claims along with the new and/or continued employment with ECM constituted the consideration for the arbitration agreement. Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 6 of 22 In order to determine whether the parties entered into a valid arbitration agreement, a federal court must apply “ordinary state-law principles that govern the formation of contracts.” Kirleis v. Dickie, McCamey & Chilcote, P.C. 560 F.3d 156, 160 (3d Cir 2009). Under Pennsylvania law, “contract formation requires: (1) a mutual manifestation of intention to be bound, (2) terms sufficiently definite to be enforced, and (3) consideration.” Kirleis 560 F. 3d at 160. Under Pennsylvania law, there was no contract between Plaintiff Wallace, and the other traffic employees who signed the arbitration agreement after commencing employment, and Defendant ECM. In Socko v. Mid-Atlantic Sys. of CPA, Inc. 126 A.3d 1266 (2015) the Pennsylvania Supreme Court made this broad ruling: “As with other contracts, for an employment agreement containing a restrictive covenant to be enforced, consideration is crucial, whether the covenant is entered into prior to, during, or after employment ends. Thus, to be valid, a covenant not to compete must be consummated with the exchange of consideration. Capital Bakers Inc. v. Townsend 231 A.2d 292, 293- 294 (Pa. 1967). (restrictive covenant in employment contract executed 12 years after the start of employment was unenforceable for lack of consideration). If a noncompetition clause is executed at the inception of the employment, the consideration to support the covenant may be the award of the position itself. Barb-Lee Mobile Frame Co. v. Hoot 206 A. 2d 59, 61 (Pa. 1965)…When a non-competition clause is required after an employee has commenced his or her employment, it is enforceable only if the employee receives “new” and valuable consideration-that is, some corresponding benefit or favorable change in employment status. See Pulse Technologies, Inc. 67 A. 3d at781- 782. Sufficient new and valuable consideration has been found by our courts to include, Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 7 of 22 inter alia, a promotion, a change from part-time to full-time employment or even a change to a compensation package of bonuses, insurance benefits, and severance benefits. Without new and valuable consideration, a restrictive covenant is unenforceable. Maintenance Specialties, Inc. v. Gottus 414 A. 2d 278,281 (Pa. 1984). More specifically, the mere continuation of the employment relationship at the time of entering into the restrictive covenant is insufficient to serve as consideration for the new covenant, despite it being an at-will relationship terminable by either party. Pulse Technologies, Inc.; George W. Kistler, Inc. v. O’Brien 347 A d 311, 316 (Pa. 1975).” Socko 126 A. 3d at 1274-1275. Although Socko dealt with a covenant not to compete, the Court couched their ruling in the broad language, “As with other contracts” Socko 126 A. 3d at 1274. Certainly this ruling applies to similar contracts, such as arbitration agreements. As such, Wallace and the other traffic employees who signed the arbitration agreements after their commencement began did not enter into a contract with Defendant ECM because there was no consideration given in exchange for their agreement to arbitrate, and therefore the arbitration agreement cannot be enforced against them. B. THE ARBITRATION AGREEMENT IS INAPPLICABLE IN THIS CASE In pertinent part, the “Mutual Agreement to Arbitrate Claims” (Exhibit E), provides, As a condition of the at-will employment relationship between ECM Energy Services, Inc. (hereinafter referred to as “the Company”) and the undersigned Employee (collectively “Parties”), and in consideration of Employee’s employment or continued employment with the Company, the Parties mutually agree that any and all disputes, claims or controversies arising out of or relating to this Agreement, the terms and conditions of Employee’s employment, the Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 8 of 22 employment relationship between the Parties, or the termination of the employment relationship, that are not resolved by their mutual agreement shall be resolved by final and binding arbitration by a neutral arbitrator in accordance with the American Arbitration Association Employment Arbitration Rules…(First Paragraph of First Page). The document then specifies what actions are not covered under the “Agreement”: By signing this Agreement, the Parties expressly waive their right to a jury trial, bench trial, and their right to bring, maintain, participate in, or receive money from, any class, collective, or representative action, whether in court, arbitration or any other proceeding except when based upon a statutory right. (Second Paragraph, First Page). Wallace and the other named plaintiffs claims, and the claims of a prospective class, are based solely on their statutory right to overtime and unpaid wages pursuant to the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Act, the Ohio Minimum Fair Wage Standards Act, the Ohio Prompt Pay Act, the West Virginia Wage Payment Act and West Virginia Code §21-5C-3(a). By Defendant ECM’s own document, they have exempted this lawsuit from their “Arbitration Agreement.” In the Third Circuit, the court will not re-write arbitration agreements for employers in order for employers to employ the desired result. In Novosad v. Broomall Operating Co. LP 2017 U.S. App. LEXIS 6120 (3d Cir. April 10, 2017) Novosad filed a putative class and collective action to recover overtime wages under the FLSA. Broomall filed a Motion to Dismiss and Compel Arbitration because Novosad had signed an arbitration agreement at commencement of employment. Novosad pointed to language in the arbitration agreement that stated the agreement “covers only claims by individuals and does not cover class or collective actions.” Although recognizing the strong federal Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 9 of 22 policy favoring arbitration, the Third Circuit confirmed the District Court’s denial of Broomall motion, based on the plain language of the arbitration agreement. Similarly, in this case the Arbitration Agreement excludes claims based upon statutory rights, and this lawsuit is solely based on the Plaintiffs’ statutory right to timely wage payment and payment of overtime wages. C. THE CLASS WAIVER CONTAINED IN THE ARBITRATION AGREEMENT IS ILLEGAL The portion of the Arbitration Agreement which affect the signator’s ability to participate in a class or collective action violates Section 7 of the National Labor Relations Act 29 U.S.C. Section 151 et. seq. (the NLRA) and is unenforceable. Specifically, Section 7 of the NLRA provides, “employees shall have the right to self- organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection 29 U. S. C. Section 157 (emphasis added). Is the right to bring a collective action under 29 U.S.C. Section 216(b) or a class action under Federal Rule of Civil Procedure 23 to recover unpaid overtime wages a protected “other concerted activity”? The purpose behind Section 7’s enactment supports such a reading. When interpreting a word in a statute, the whole statutory text and purpose must be considered. Dolan v. U.S. Postal Serv. 546 U.S. 481, 486 (2006). A court should not be guided “by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.” Kelly v. Robinson 479 U.S. 36, 43 (1986). Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 10 of 22 The labor policy concerns at the time of the NLRA’S enactment and the issue it was designed to address indicate that Section 7 protects the right of employees to act collectively to assert legal claims against an employer. In Eastex, Inc. v. NLRB, the Supreme Court recognized this and remarked that Section 7 protects employees “when they seek to improve working conditions through resort to administrative and judicial forums.” 437 U.S. 556, 566 (1978). The Court reasoned that “Congress knew well enough that labor’s cause often is advanced on fronts other than collective bargaining and grievance settlement within the immediate employment context Id. At 565. Likewise, in NLRB v. City Disposal Sys. Inc., the Supreme Court observed the importance the NLRA placed on collective action against an employer: “It is evident that, in enacting Section 7 of the NLRA Congress sought generally to equalize the bargaining power of the employee with that of his employer by allowing employees to band together in confronting an employer regarding the terms and conditions of their employment.” 465 U.S. 822, 835 (1984). Congress gave no indication that Section 7 was “intended to limit [Section 7] protection to situations in which an employee’s activity and that of his fellow employees combine with another in any particular way.” Id. Simply, the NLRA unambiguously protects the right of employees to bring a collective action, as a “concerted activity”. But even if this term is ambiguous, an analysis under Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. 467 U.S. 837 (1984) yields the same result. Specifically, the National Labor Relations Board (NLRB) has been delegated the power and responsibility to interpret the NLRA. NLRB v. City Disposal Sys. Inc. 465 U.S. 822, 829(1984). Because the Board is charged with administering the NLRA a court cannot “simply impose its own construction of the Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 11 of 22 statute.” Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. 467 U.S. 837, 843 (1984). If Congress has directly spoken to the question at issue through the text of the statute, that is the end of inquiry as both the Board and a court must give effect to the intent of Congress. But if Congress has not unambiguously expressed its intent, the question then is whether the Board’s answer is based on a permissible construction of the statute. If the Board has adopted a reasonable construction, it is “entitled to considerable deference.” City Disposal Sys.465 U.S. at 829, see also ABF Freight System Inc. v. NLRB 510 U.S. 317, 324 (1994), observing that the Board’s views regarding the scope of the NLRA are entitled to “the greatest deference.” On at least two occasions the NLRB has interpreted Section 7 to provide a substantive right to class or collective remedies. see Murphy Oil USA, Inc. 361 NLRB No. 72 at *6-7 (2014)(“Murphy”) enf. denied 808 F. 3d 1013 (5th Cir. 2015) and D.R. Horton 357 NLRB No. 184 at*16 (2012) 737 F. 3d 344 (5th Cir. 2013). Section 7 confers a substantive right: D.R. Horton 357 NLRB No. 184 at*12 “Rule 23 may be a procedural rule, but the Section 7 right to act concertedly by invoking Rule 23…or other legal procedurals is not”. The FAA’s savings clause renders the class waiver in the Arbitration Agreement unenforceable. Specifically, Section 2 of the FAA provides that valid written arbitration agreements shall be enforceable “save upon such grounds as exist at law or in equity for th revocation of any contract.” 9 U.S.C. Section 2. This section renders arbitration agreements invalid “by generally applicable contract defenses, such as fraud, duress or unconscionability AT&T Mobility LLC v. Concepcion 563 U.S. 333, 339(2011). Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 12 of 22 Illegality is also among those contract defenses Buckeye Check Cashing, Inc. v. Cardegna 546 U.S. 440, 444 (2006). The class waiver in the Arbitration Agreement fits under the FAA’s savings clause because it violates the NLRA and is deemed illegal under Section 8(a)(1). Importantly, the invalidity of the class waiver is not predicated upon the fact that it is contained in an arbitration agreement. Illegality of the class waiver has nothing to do with the designation of arbitration as the forum. “It would equally violate the NLRA for [the employer] to require its employees to sign a contract requiring the resolution of all work related disputes in court and in ‘separate proceedings.’ The same infirmity would exist if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings.” Chan v. Fresh & Easy, LLC (In re Fresh & Easy, LLC) 2016 Bankr. LEXIS 3690, *22 (B.R. Del. 2016), citing Morris v. Ernst & Young, LLP 834 F. 3d 975 (9th Cir. 2016) see also Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016). The FAA and the NLRA do not conflict on this issue. The statutes can be harmonized by application of the FAA’s savings clause, and thus the class waiver in the arbitration agreement is unenforceable under Section 7 of the NLRA. In this case, the arbitration agreement itself excludes all actions brought under a statutory right, and the claims in this case are purely statutory under the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Act, the Ohio Minimum Fair Wage Standards Act, the Ohio Prompt Pay Act, the West Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 13 of 22 Virginia Wage Payment Act, West Virginia Code §21-5C-3(a) and the National Labor Relations Act. D. THE ARBITRATION AGREEMENT IS PROCEDURALLYAND SUBSTANTIVELY UNCONSCIONABLE By any measure, Defendant ECM’s actions in attempting to avoid compliance with the Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, the Pennsylvania Wage Payment and Collection Act, the Ohio Minimum Fair Wage Standards Act, the Ohio Prompt Pay Act, the West Virginia Wage Payment Act and West Virginia Code §21-5C-3(a) have been extraordinary. After the Department of Labor investigation cited their failure to pay overtime wages to its traffic employees paid on a day rate, who worked from May 12, 2012 to August 31, 2013 in Pennsylvania, Ohio and West Virginia which concluded the class of 85 employees were due $97,516.77, Defendant ECM attended a final conference on May 16, 2014 in which they agreed to pay all nonexempt employees the applicable minimum wage, to pay all nonexempt employees proper overtime premium for all hours worked over 40 in a work week and to keep an accurate record of hours worked for all nonexempt employees as required by CFR 516 (DOL Report, Exhibit A). No sooner had Defendant ECM left that conference, they immediately took every step possible to continue their violation of these state and federal statutes, but also to insulate themselves from any future legal liability for their intentional violations of these statutes. Specifically, rather than pay overtime wages due to their traffic employees paid on a day rate, they simply continued with a scheme to effectively pay the day rate with no Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 14 of 22 premium for overtime worked. Rather than keep accurate records of all time worked, Defendant instructed its traffic employees that they were required to work off the clock, performing tasks such as attending daily safety meetings, continuing to work until their replacement arrived and faxing reports from remote locations all off the clock and without any wage payment. Finally, they sought to insulate themselves from legal liability by requiring all new and existing employees to sign the Arbitration Agreement, which they believed would shield them from any concerted legal action by the class of individuals they had wronged. Indeed, as soon as the DOL informed Wallace of his right to pursue his claim under 16(b) of the FLSA his was told by his employer he had waived any such right! In this context, Defendant ECM made the following admissions in their Answers to Interrogatories: 1. Attached hereto are five forms entitled “Mutual Agreement to Arbitrate Claims” supplied to Plaintiffs’ counsel. These forms were signed by each of the five plaintiffs and are dated from August 11, 2014 through August 21, 2015. a. At some point in time, did it become Defendant’s policy to request or require all traffic employees to sign identical or similar “Mutual Agreement to Arbitrate Claims” forms? ANSWER: ECM objects to the Request to the extent Plaintiffs attempt to present twelve discrete interrogatories as a single interrogatory. Pursuant to Fed. R. Civ. P. 33(a), discrete subparts are to be treated as separate interrogatories, and therefore, for these purposes, this request counts as twelve (12) interrogatories. Subject to the foregoing objection, and in response to subpart (a), ECCM states that all traffic employees employed by ECM review and sign an arbitration agreement in connection with their employment b. If the answer is in the affirmative, when was this policy first put into practice? Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 15 of 22 ANSWER: ECM objects to the Request on the grounds that the term policy is vague and ambiguous as the arbitration agreements are entered into mutually between ECM and its employees. Subject to the foregoing objection, ECM states that it began entering into arbitration agreements with its employees prior to 2014. c. After this policy was first put into practice, was the form presented to all applicants for employment in the position of “traffic employee”? ANSWER: ECM objects to the use of the word “form” as it is unclear what “form” Plaintiffs are referring to as the agreements to arbitrate have varied slightly over the past few years. Subject to the forgoing objection, ECM states that all traffic employees have entered into agreements to arbitrate. d. Was the signing of this or a similar form a pre-requisite to the applicant gaining employment with Defendant as a “traffic employee”? ANSWER: ECM states that the agreement to arbitrate all disputes arising from or relating to the employment relationship was a condition of new and/or continued employment with ECM. e. Did any applicant for the position of “traffic employee” refuse to sign the “Mutual Agreement to Arbitrate Claims”? If so, did Defendant refuse to hire the applicant(s) or was the applicant(s) hired despite the refusal to sign the form? Please provide the last known name, address and e-mail of any person who refused to sign the form. ANSWER: No. f. Was any separate consideration offered to applicants in exchange for executing the “Mutual Agreement to Arbitrate Claims”? ANSWER: Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 16 of 22 ECM objects to this Request as it calls for a legal conclusion. Subject to the foregoing objection, the mutual agreement to arbitrate any claims along with the new and/or continued employment with ECM constituted the consideration for the arbitration agreement. g. Were any existing employees asked to execute the “Mutual Agreement to Arbitrate Claims”? If so, what are their names, addresses and e-mail addresses? Were these employees offered any consideration for executing the forms? Was it a condition of ongoing employment for existing employees to execute these forms? ANSWER: ECM objects to the phrase “existing employees” as vague and undefined. Subject to the foregoing objection, ECM states that all traffic employees have entered into an arbitration agreement in consideration of new and/or continued employment with ECM and the arties’ mutual agreement to arbitrate any claims between them. The interrogatories and Answers to Interrogatories are Exhibit F. Pertinent portions of Plaintiffs depositions are Exhibit G. Plaintiff Bay testified that he has a high school diploma and two years of vocational school (Page 6), he didn’t understand what an arbitration agreement was (Page 8, 19), he has worked in a series of temporary jobs and as a dishwasher (Page 7-10), he never entered into an arbitration agreement prior to ECM (Page 9) and the arbitration agreement he signed was in a thick packet of other documents he signed when he began employment at ECM (Page 16-19). Plaintiff Conley testified that she is a high school graduate with three weeks of health schooling (Page 5), she has worked as a security guard, at Walmart, as a maid, and as a home health aide and never entered into an arbitration agreement (Pages 6-12), she Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 17 of 22 signed a series of documents when she was hired, including the arbitration agreement but she had never seen the arbitration agreement until the day of her deposition (Page 15-17). Plaintiff Luci testified that she is a high school graduate (Page 5), she has worked at a convenience store, a bar and a hospice (Page 5-7), at ECM she was handed a packet of documents to read and sign, there was no one there to explain the documents and she doesn’t understand what an arbitration agreement is (Page 11, 15). Plaintiff Wallace testified that he has forty college credits from various institutions (Page 7, 8), prior to ECM he was a salesman of heavy equipment and now is an instructor in heavy equipment operation and truck driving (Page 9, 10), he never signed an arbitration agreement and understood that an arbitration agreement was an agreement to arbitrate all disputes (Page 11). Plaintiff Wehr testified she is a high school graduate (Page 6), she has worked as a laborer and a home health aide (Page 6-9), she never had signed an arbitration agreement (Page 10) and she signed a series of documents when she was hired at ECM, including the arbitration agreement, but she didn’t recognize any of the documents (Page 14-16). There is no question the Arbitration Agreement signed by the traffic employees was procedurally unconscionable. In Herzfeld v. 1416 Chancellor, Inc. 2015 U.S. Dist. LEXIS 95256 *22, *23 (E.D. Pa 2015) the court cited the relevant Third Circuit precedents. Procedural unconscionability concerns the process under which parties entered into the contract, where there is an “absence of meaningful choice on the part of one of the parties.” Hopkins v. New Day Financial 643 F. Supp. 2d 704, 717 (2009) (quoting Witmer v. Exxon Corp, 434 A. 2d 1222, 1228 (1981). Factors include: (1) the Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 18 of 22 take-it-or-leave-it nature of the standardized form of the document, (2) the parties relative bargaining positions (3) the degree of economic compulsion motivating the adhering party. Salley v. Option One Mortg. Corp. 925 A. 2d 115, 125 (Pa. 2007)(quoting Delta Funding Corp. v. Harris 912 A. 2d 104, 11 (NJ, 2006)). The first and most significant inquiry in a procedural unconscionability analysis is whether the arbitration agreement is presented in a take-it-or-leave-it manner Nino v. Jewelry Exchange, Inc. 609 F. 3d 191, 201 (3d. Cir. 2010). Upon Defendant ECM’s own admission every existing or new employee was forced to sign the arbitration agreement or they would be fired or not hired. There was no bargaining permitted. Indeed, only Wallace even knew what the document meant. Not only were new job applicants forced to sign the arbitration agreements, but existing employees were also forced to sign the agreements, under the threat of dismissal. Except for Wallace, the five plaintiffs had worked only low wage jobs and were applying for a job paying $140 per day for a twelve hour work day. On the other hand, ECM had just been informed of their legal duty to keep accurate time records and pay overtime wages to this class of individuals, yet chose not to do so. They believed their Arbitration Agreements would effectively prevent any concerted effort on the part of their employees and the arbitration procedure would be too costly and time consuming for many of their employees (such as Wallace, who is owed $930.38) from pursuing their legal rights. Concerning substantive unconscionability, the evaluation requires a sliding scale approach where the procedural unconscionability is very high, a lesser degree of substantive unconscionability may be required . Salley v. Option One Mortg. Corp. 925 Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 19 of 22 A. 2d 115, 119 (Pa. 2007). Certainly the Arbitration Agreement in this case is not so draconian as those agreements employed in earlier cases like Nino v. Jewelry Exchange, Inc. 609 F. 3d 191, 201 (3d. Cir. 2010), which contained clauses making any claim practically impossible. However, the procedural unconscionability here was extreme, and the fee shifting and cost of arbitration provisions in the arbitration agreement involved in this case certainly effectively prevented the litigation of claims like that of Wallace. Therefore this arbitration agreement was also substantively unconscionable. CONCLUSION Defendant’s Renewed Motion to Dismiss and Compel Arbitration must be struck from the record, as it was not timely filed. Moreover, the Motion is substantively defective for a number of reasons. First, existing employees were forced to sign the arbitration agreement in order to keep these jobs. For these employees, there was no consideration offered in exchange for signing the agreement, so the contract fails for lack of consideration. Second, the arbitration agreement is inapplicable in this case, by its own terms, as the claims of the plaintiffs are purely statutory claims and these claims have been excluded from the arbitration agreement’s exclusion clause. Third, waiver of the employees to act in a concerted action violates the National Labor Relations Act. Finally, the arbitration agreement is both procedurally and substantively unconscionable. Respectfully submitted, By:/s/ John R. Linkosky, Esquire By:/s/ Joseph E. Fieschko, Jr., Esquire John R. Linkosky, Esquire Joseph E. Fieschko, Jr., Esquire Pa. I.D. No. 66011 Pa. I.D. No. JOHN LINKOSKY & ASSOC. FIESCHKO & ASSOCIATES 715 Washington Ave. Suite 2230, 436 Seventh Ave Carnegie, PA 15106 Pittsburgh, PA 15219 Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 20 of 22 412 278-1280 412 281-2204 FAX 412-278-1282 FAX 412-338-9169 linklaw@comcast.net joe@fieschko.com Dated: May 26, 2017 Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 21 of 22 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA WILLIAM WALLACE, JOSHUA BAY, LAURA CONLEY, LISA LUCI and KALIB WEHR, on behalf of themselves and all others similarly situated, Plaintiffs v. ECM ENERGY SERVICE, INC., Defendant Civil Action No. 2:16cv1693 INDIVIDUAL AND COLLECTIVE/CLASS ACTION COMPLAINT Electronically Filed Jury Trial Demanded CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Plaintiffs' Motion to File Amended Complaint Pursuant to F.R.C.P. 15(a)(2) was electronically filed, on the 26th day of May, 2017, to the following: Brian P. Benestad Laura A. Lange BURNS WHITE, LLC McGuire Woods, LLP Four Northshore Center 625 Liberty Ave, 23rd Floor 106 Isabella Street Pittsburgh, PA 15222 Pittsburgh, PA 15212 /s/Joseph E. Fieschko Jr. Joseph E. Fieschko Jr., Esquire Attorney for Plaintiffs Case 2:16-cv-01693-DSC Document 36 Filed 05/26/17 Page 22 of 22 EXHIBIT A Case 2:16-cv-01693-DSC Document 36-1 Filed 05/26/17 Page 1 of 3 Case ID: 1686568 Energy Construction Management, LLC EIN # 27-3141841 130 Court St. Suite 203 Williamsport, PA 17701 FLSA Narrative Report Coverage The subject firm is a PA based company that serves the oil and gas industry providing water transport, escort car services and equipment rentals nationwide. They are located at 1000 Commerce Park Dr. Suite 301 Williamsport, PA 1770I (570) 888-523-9095. Firm began operations in 2010 and is registered as a Limited Liability Corporation in the state ofPA. Principal owners of the firm are LYCO Industries who owns 77.7%, majority stockholders at 28% areWilliam Higgins, chairman, Dave Pfleegor Vice Chairman, 13 minority stockholders and 22.3% owned by 11members Harry Wahl, President, William Higgins, Co-Chairman, Bob Russell, CEO, and Dave Pfleegor, Co- Chairman as managingmembers. There are currently.employees. All employees are covered on an enterprise basis under section 3(s)(1)(a) of the FLSA for SIP 05/06/2012 - 05/0512014. According to information provided by the Controller Bill Pitcavage, the ADV for 2012 was~IIIII~I, in 2011 •• " and in 2010 $~~~~~r (See exhibit C-l-b). Section 3(d) employer.:During the investigation the WHI mainly dealt with Benefits Administrator. However, Harry Wahl is the employer as defined by section 3(d) of the Act. responsi for hiring and firing employees; setting schedules; setting employees' pay rates; and is involved in the daily operations of the business. (See exhibit'Cd) Attorney: John Martin & Robert Tribeck - Rhoads and Sinon LLP. 1 South Market Square, 12thFloor. Harrisburg, PA. 17108.(717) 233-:5731. Prior history: This firm has no prior history Exemptions 541.200- Administrative-Human Resource Manager, Controller- Paid a guaranteed salary over $455 per week. Primary duties are theperformance of office work directly related to the general operations of the business that use discretion and independent judgment in their decision making. Decisions include formulating interpreting and implementing employment and HR policies and procedures. (See exhibit B-5) 541.100- Executive-Water Manager, Escort Manager, Field Supervisor- Paid a guaranteed salary of $455 per week. Regularly directs the work of two or more people and has direct input in performance evaluations, hiring/firing of employees and assigninent of daily work duties. (See exhibit B-20, B-21) 541.601- Highly Compensated Employees- President, COO- Yearly salaries range from $143,988 to $179,998. Perform non-manual work directly related to the management of the business and manage two or more employees. Section 13(b)(1) is claimed and applicable to the following employees 13(b)(l)- Drivers- Claimed and applicable to water truck drivers as the tri axle trucks used to haul water weigh over 10,000 Ibs.The drivers routinely travel out of state to their OH branch to dispose of water and to NY to pick up / .rop off frac tanks. All drivers are in the available pool to be called upon to travel out of state. Mountain Energy " ivides hot shot truck services, which is the delivery of requested items (parts, piping, etc.) by commercial vehicle to various locations within the US. They have been to TX, AZ, WY, and more, along with traveling through all of the states that are between us and the destination. (See exhibits B-7, B-8, B-I0, B-13) -ection 13(a)(I) is claimed and not applicable to the following employees " ' 1.200_Payroll/Benefits Administrator, Accounting Specialist, Accounts Payable/P ',ceivable Manager, , .. ministrative Assistant- Paid a guaranteed weekly salary ranging from $673.08 to $( .)1.54. This exemption is not applicable to the following employees who do routine data entry, enter basic payroll, li.>equick books and answer phones. They do not make decisions with regards to matters of significance. (See exhibits B-1 to B-4, B-6) Status of Compliance EXHIBIT A Case 2:16-cv-01693-DSC Document 36-1 Filed 05/26/17 Page 2 of 3 Findings: Section 6 _Minimum Wage - A review of existing payroll records and employee interviews revealed no violations. (See exhibits B-1 to B-25). Section 7-0verfime: A review of existing payroll records and employee interviews revealed overtime violations during the period of!O§!J~,-Ol:?.t9Jl~tJlIW3 where the firm paid 85 employees on a day .rate basis with 110 overtime premium for hours wOfI(e,f'over 40 in a work week. These employees were not l3(b) 1exempt from overtime premium because they did not drive vehicles over 10,000 lbs. The firm only kept records of days worked by employees so records had to be reconstructed. Hours were reconstructed using employee interviews, record of days worked, hours of day light compared to hours of allowable drive time in states of operations. (See exhibits B- 9, B-II, B-12. B-14 to B-19, B-23, B-24 and B-25) Back wages were computed using the following computation. Example: Total Weekly Earnings I HW = RR X .5= Y2 t Due Y2t due X OT hrs =BjWDue $600/48= $12.50 X .5 = $6.25 $6.25 x 8 = $50 (BW due) A total of $97.516.77 lis due 85 employees. (See exhibit A-l-a to A-Bz) .~ _,_' - -. '_. -. ~ Section 11-Recordk.eeping: The employer failed to maintain accurate time records for all employees. The employer did not maintain time records for multiple employees who were denied the 541 exemption. Section n-ciu« Labor: No violations were revealed in the investigation as no minors were employed. (See exhibits B-1 to B-25).,Child labor bulletin 1330 was discussed and provided to the finn. ~i!i:eS=:~vas held at the establishment on 12/18/2013. The attendees werewm_, Owner Hany Wahl and Attorney John Martin. Enterprise coverage was discussed with the finn as well as overtime and recordkeeping violations were discussed in detail. Tbe finn was advised that overtime was due for the pilot car drivers because they are not exempt under 13(b)1. l3(b)1 was discussed in detail, as well as" how the back wages were calculated. The firm's attorney advised they would like some time to review the case and issue a position statement, as well as the current pay structure the firm follows. Due to the holidays the firm asked for time to issue a statement. WHI Mowday granted this. Oll<'(»)/16/2014, a Fin~ Conference was held via phone with Attorney Jolm Martin. The overtime and -- recordkeeping violations were reviewed again. The finn agreed to future compliance. The fum also agreed !9 compliance in the following ways: :'Po'pay all nonexempt employees the applicable minimum wage TE.P~¥_aJ1_~onexempt,e1l1ployeesproper overtime premium for all hours worked over40 in a work week. T6:keep an a"e'curate'F~-c0HI.0fhonrsworked for-all nonexempt employeesasrequifed byCFR 516. The parties were then advised of the possibility of future re-investigation, as well as the possibility of future eMP's. Back wage methodology was discussed and the employer agreed to pay the BWs by 06/30/2014. J\1r. Wahl signed the WH-56. which is in the file. WHI provided the WH-58 to Attorney Martin and explained the back wage payment procedure. The complainant could not be reached throughout the investigation. Publications provided: FS #19. #44. #77A HRG. WH-1330, and Part 541. Recommendations: I recommend this file be closed administratively upon receipt of back wages. WHI Case 2:16-cv-01693-DSC Document 36-1 Filed 05/26/17 Page 3 of 3 EXHIBITB Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 1 of 6 () ECM Energy Services, Inc. DBA ECM Energy Services 5640 Glenn HWY Cambridge. Ohio 43725 Phone #: 888-523-9095 Case # 1776544EIN*_ Main Office: 130 Court sr, Suite 203 Williamsport. PA )7701 FLSA Narrative Report Investigation period: O5IllJ2014 to OVl6l2016 COVERAGE Subject establishment is an Energy Service Company in the United State focused on natural gas and oil field equipment rentals, water logistic and pilot car services. Traci Herrick. Human Resources Manager und~rs!ln, stated subject company has been in business since 2010. had a GADV of over ~ dollars for 2013 and 2014 and employee over 120 workers who handle goods which have crossed state lines. All employees are covered on an enterprise basis under section 3(S) (1) (A) (ii) of the act for the entire investigation period. Traci Herrick. Human Resources Manager and contact person. stated that corporate office is located in Williamsport, PA. She also stated that the Ohio location has been in operation since January 20J2 and is the only location currently open besides the Corporate Office. Here in Ohio company provides water hauling and traffic control to the "Cracking industries". Traci Herrick staled that last year subject corporation had two (02) additional locations (Washington. PA & Clarksburg, WV) but as of the end of 2015 they have been closed. Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 2 of 6 All other employees (dispatcher. administrative. driver, mechanic) at the Ohio location were paid an hourly rate plus overtime at ~ for any hours over 40 in a work week. At initial conference on Oll28fJ.016 with Traci Herrick, Human Resources Manager. and WHl Sapia. it was explained to WHl Sapia the following; As of the end of 2015, employer has closed the locations out of Clarksburg, WV and Washington, PA due to lack of work. Corporate offICe remains inWilliamsport, PA. Traci Herrick, Human resow:ces manager. stated that besides 3-5 managers here in Ohio all of the employees get paid by the hour with overtime at T~ All employees maintain time sheet records of all hours worked and all employees get pay every two weeks. Traci Herrick. Human resources managcl". also stated that the "traffic employees" get pay on a daily tate (from S140 to $2OOIday) but they are guarantee at least the MW and OT for all hours worked. These workers are schedule a 12 hour shift and based on Traci Herrick. this is how the company pays this classifICation of workers. Example: Ohio pays a S140lday and employee is schedule to work a 12 hour shift, 6 days a week for a total of: ($14Ox6days)=$84OIweek and worked (12 hour shiftx6 dayslweek)=n hours aweek. .. the employee's hours are tracked through the payroll system to calculate the straight time at 40 hourslweek, the pay is tracked as "traffic" at a default of minimum wage per each state law. Additional overtime is tracked as "overtime" in the payroll system and calculates at time-and a half. Then there is a third pay calculation of "daily diff", this would be a default pay code for any additional earnings due to the employee to get their wages to the $14Olday" So. this Ohio employee. should receive $840 inwages for woating 72 hom:s a week. 40 boursx$8.1O/hour=$324.00 Overtime 32 hours xS12.15=$388.8 Daily Diff=$127.20 or ($840-324-388.80). Pennsylvania and Weat Virginia "traffic employees" are paid $160 per day and compensation was also based on the above example. (See exhibit 0-2) As of January 2016, employer does not employ any "traffic employees" due to lack of work. When asked Trod Herrick, Human Resources Manager, about why the ~~ffic employees" are not paid by the hour. she stated that this is the way the Industry pays. In addition, Traci Herrick also stated that subject company was investigated by the DOL Wage Hour back in 2014, prior to her joining the company, and the employer was found inviolation of not paying proper overtime and not keeping track of hours worked. Employees were paid on a daily rate with no overtime. During that time. employer was advise to keep track of hours worked and to pay overtime and Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 3 of 6 Section Jed) fIIUIiorer: Traci Herrick, Payroll/BenefilSlHuman Resources Manage. out of the corporate office was the contact penon for ECM Energy Services and WHI Sapia. However. HaIry Wahl, CEOIPresident/O, is the employer as defined by section 3(d) of the Act He is responsible for hiring and fIring employees; setting schedules; setting employees' pay rates; and is involved in the daily operations of the business. (See exhibit C-2) QEMPTIONS The following ex.emptions were found applicable at the Cambridge. Ohio location: 541.100- Executive- ApplicabJe to Scottie Clark, Regional Manager, 8-6 Paid a salary of over Sl,OOOIweek. Overall responsible for operations of Ohio, WV & PA locations. Manages the divisions and department heads and also directly supervises the dispatchers and drivers at this locations. Has authority on any hiring. discipline. or termination of employees at location. 541.100-Executive-Applicable to Jack Matisko. Safety Manger, 8-11 'lbis employee is paid a guaranteed salary of over $455 per week. Regularly directs the work. of two or more people and has direct input in perfonnance evaluations. hiring/firing of employees and assignment of daily work duties. 541.200- Administrative- Applicable to Kurt Ragsdale, Technology Strategist, B-15 Paid a guaranteed salary over $455 per week. Primary duties are the performance of office work directly related to the general operations of the business that use discretion and independent judgment in their decision making. Decisions include formulating, interpreting, developing, creating and implementing new software systems and technologies to be used in all of their equipment. Section 13(b)(1): All drivers and mechanics were found to be ex.empt meeting the criteria under 13(b){1} being employed by a privatc motor carrier and whosc duties affected the safety of operation of the motor vehicle in transportation on public highways in interstate or foreign commerce. All drivers drove, and mechanics worked on, vehicles which weighed greater than 10,000 lbs, and in any four-month period any driver could have been called upon 10.or actually did. engage in the carrier's interstate activities by driving across state lines. Employer did not claim the 13(bXl) exemption. Employer paid all drivers aDd mechanics and hourly rm.eplus overtime at 1Vl. Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 4 of 6 • • they came up with the above formula. This was done prior to Traci Herrick joining the company. TraffIC enlpIoyee duties iadaded tile rollowiag; -Traffic controllflagger-set along the road (not highway) into the "pad"& direct the traffic in and out, -Manifold attendant-works in the "pad". Attach hose to the water truck to either get "fresh water'· into the pit area or haul"dirty water" out of the pit area. -escort service- escorted trucks into pads but vehicles drove as "escort vehicles" were less than 10,000 pounds. VIOlations Sec:doa , - No violations found. The lowest pay rate was $15 per hour. SectIon 7 - ER failed to pay proper OT at T Y.z to traffic employee. These employees were paid on a daily rate basis with 110 overtime premium for haul'S wodced over 40 ina work week. These employees were not l](b)l exempt from overtime premium because they did not drive vehicles over 10,000 Ibs. and they did not cross state lines. These employees kept track of the hours worked and employer calculate the pay basedon aU hours worked. .AaIditBaI .... time is due to ... "traI'Iic eBIpIoyee" .leIIew; 0Id0-55 employees due $181,986.30 inback wages PA-34 employees due$3S,761.52 inbade wages WV-68 employees due $169,069.43 inback wages As a result employer failed to pay pI'Vper overtime to 157 workers ia the 8IIICIUIIt or $386,117.25 iIIlJack ....... Seetioa 11..The employer failed to record the overtime premium in overtime weeks on the payroll records. Sedioa 12: NoViolations Found. There were no minors employed under 18years of age employed at this establishment DISPOSI'l10N A final conference was held OIlMay 11,2016 al55 Hickory street Wa.'lhington, PA 15301 with Hmy Wahl, President & CBO; Traci Hettick. HR and WHI Sapia. Coverage and exemptions under the act were discussed and the provi.~ion.'4of MW, OTt RK & CL were also explained at thi.1i time. The above violations were explained and how to correct them was also explained. At this time.Mr. Harry Wahl. President & CEO, stated that he understands the provision.. of the ~ agreed. to continue in compliance with all the applicable laws but will like to review his notes from tbe previous investigation because he believes that this was the agreement signed between Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 5 of 6 his company and the Department of Labor .. Mr. Wahl requested some time to review the notes and get back to WHI. On May ZO, 2016. WHI Sapia received a call from John Martin, attorney representing finn. 717- 237-6734. Mr. Martin explained that this was the agreement between DOL and his clients company. Mr. Martin agreed on providing documents and exhibits showing the settlement agreement by May 27. 2016. In addition. Mr. Martin understood that in order to have future compliance. his client will not be able to pay these workers (Traffic employees) on a daily rate withoUt additional compensation for overtime as explained at Reg. 77S.112. Mr. Martin understood and agreed to notify his client if ECM decides to hire these workers again to comply with section 778.112. On May 27. 2016. WHl Sapia received a package from Mr. John Martin, Attorney representing fmn. Subject package was the explanation and information between his client response to the US DOL and the DOL response if any. Itappears that ECM Energy Services explained how the company will pay/comply this classification of workers in the future but MODO never responded to the attorney's response. (See exhibit 0-0). A discussion in regard to this package was held and WHI Sapia explained to Mr. Martin the need to pay the back wages. Mr~Martin disagreed with my findings~disagreed with paying the back wages but agreed to discuss the above with ADD Dudash. On July 12.2016. ADD Dudash had a teleconference call with John Martin, Attorney representing firm. Mr. Martin disagreed on paying the back wages. ADD Dudash explained that all employees due back wages will be giving their "private rights" under section 16b of the FLSA to pursue the back wages on their own. --~\ Based on the above, it is recommended that allworkers be given their rights under section 16b to file suit against subject employer and to try to collect the back wages due them. Administrative closing is recommended after all workers have been notified of their rights under section 16b of the FLSA Public:ations ProYided: FLSA. 785. 77S, 541. 516. CL 101. HRO. Fact sheet#: 2.15. 15(a),21, 22, 23 and Fact sheet # 44. ~J~J±~., ~~-~:TH~p~ia~--------- WHI Case 2:16-cv-01693-DSC Document 36-2 Filed 05/26/17 Page 6 of 6 EXHIBIT C . - -- --------- Case 2:16-cv-01693-DSC Document 36-3 Filed 05/26/17 Page 1 of 3 U.S. Department of Labor Employment Standards Administration Wage & Hour Division 230 S. Dearborn Street, Room 530 Chicago, IL 60604 September 12, 2016 CERTIFIED NO: 701421200001 4774 6471 William Wallace 466 Duck Hollow Road Uniontown, PA 15401 Dear Mr. Wallace: This letter responds to your ABA request of August 6, 2016 in which you requested your back wage computation and the investigator's narrative report regarding ECM Energy Services. Your request was received in our office on September 7, 2016. Enclosed are the documents you requested. If you have any questions, you may reach me at 312- 596-7188. /,inCerelY, II! /')U/\Li,-Hitj~ /t£/) Karen R. Chaiki ,. <.... Regional Admin trator Wage and Hour Division Case 2:16-cv-01693-DSC Document 36-3 Filed 05/26/17 Page 2 of 3 -'1/ S9-HM IWD:J -- , ~ &e.. S 300 S3SVM >f3V81Vl.Ol ",'1.61. OdO 1'6'96£ 88'01- S'9& .LO ~S'L9&. 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