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Timestamp: 2019-04-18 20:55:25+00:00

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FindACase | Fenley v. Wood Group Mustang, Inc.
Fenley v. Wood Group Mustang, Inc.
WOOD GROUP MUSTANG, INC., Defendant.
GEORGE C. SMITH, JUDGE UNITED STATES DISTRICT COURT.
(3) WGM's Motion to Exclude is DENIED.
This case arises out of WGM's treatment of various Inspectors as exempt from the overtime provisions of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”) the Ohio Minimum Fair Wage Standards Act, Ohio Revised Code Chapter 4111, et seq. (“OMWA”), the Pennsylvania Minimum Wage Act, 43 P. S. § 333.104(c); 34 Pa. Code § 231.41 (“PMWA”); and the Illinois Minimum Wage Law (“IMWL”) 820 Ill. Comp. Sta. 105 § 4a (1). Named Plaintiffs Tommy Fenley (Ohio), William Peveto (Illinois), and Brockrobert Tagarook (Pennsylvania) are all current or former Inspectors at WGM for all or part of the relevant class periods. Plaintiffs claim that WGM classified them, and all other Inspectors employed by WGM around the country during this time period, as “DAY-Non Exempt Day Rate” employees, but improperly treated them as exempt, salaried employees under the FLSA and applicable state wage laws. Plaintiffs further allege they, and other Inspectors, often worked more than 40 hours per week and were not paid overtime in violation of 29 U.S.C. § 207(a)(1).
WGM is a publicly-traded corporation incorporated in Ohio and headquartered in Houston, Texas. (Doc. 99, Am. Compl. ¶ 8). WGM operates in the gas and oil industry, with its business including “project management, construction management, engineering and procurement services to the offshore, onshore, oil sands, pipeline, refining, chemicals, and automation sectors.” (Id. ¶ 9). WGM assigns its Inspectors to projects at the request of its clients for the purpose of inspecting the construction/assembly of pipeline systems. (Doc. 110-7, Gust. Decl. ¶ 3).
WGM's business structure includes five business units within its oil and gas division, one of which is named the “Pipeline Business Unit.” The Pipeline Business Unit is tasked with “design[ing] and oversee[ing] the building of the pipeline.” The Inspection Services Department is a “job family” within the Pipeline Business Unit. All Inspectors that Plaintiff seeks to represent here are- or were-employed within the Inspection Services Department.
(Doc. 54, Cond. Cert. Op. and Ord. at 3) (internal citations omitted). The Inspections Services Department is managed by Andrew Gust (Doc. 108-4, VanDyk Dep. at 84:1-10). Gust reports directly to the Vice President of the Pipeline Business Unit, Mark Nussbaum. (Id. at 85:4-12). The Pipeline Business Unit was overseen by its Business Unit President, John Ellison. (Id. at 85:13-86:1).
There is no dispute that upon being hired by WGM, all Inspectors were assigned the pay code “DAY-Non Exempt Day Rate” within WGM's Human Resources Information System (“HRIS”). (Id. at 88:22-89:5). Further, WGM's employee handbook and internal Overtime Policy manual clarifies that all Exempt personnel are “compensated on a salary basis” and “Non-Exempt day rate Mustangers (DAY) receive a day rate that is inclusive of all hours worked, including overtime.” (Doc. 108-3, Overtime Policy). At all times relevant, all Inspectors were categorically classified as described above. (Doc. 108-4, VanDyk Dep. at 105:8-10).
WGM has identified at least 13 different types of Inspectors comprising the conditionally certified class. Unsurprisingly, the parties disagree over these positions' job responsibilities and the extent to which different types of Inspectors perform similar duties. Both parties extensively cite record deposition testimony to support their respective positions. Irrespective of Inspectors' specific titles or duties, the mechanics of how they were compensated was uniform. Four different WGM employees with firsthand knowledge regarding how the payroll process works testified to a common practice. Inspectors were instructed to enter a “1” on their timesheets for days worked and a “0” for days they did not work. There were also circumstances in which Inspectors entered a “.5” for a half day worked. The timesheets do not reflect how many hours an Inspector worked on a given day. These timesheets are given to a field office where clerks manually enter the “1's or .5's” recorded by the Inspectors. Finally, this information is compiled in WGM's corporate office and checks are issued. (See Doc. 123-14, Archer Dep. at 43:12-23 (describing that Inspectors track days, not hours); Doc. 123-15, Geigler Dep. at 53:4-54:19 (same); Doc. 123-17, Fournerat Dep. at 21:6-22:19, 75:10-79:2 (confirming that Inspectors are paid on the number of days they work and describing the payroll process in general); Doc. 123-16, Zammit Dep. at 64:9-66:2 (generally describing payroll process). In general, whatever is reported on the timesheet is what Inspectors are paid. (Doc. 123-17, Fournerat Dep. at 90:4-6). Accordingly, Plaintiffs' theory of the case is that Inspectors are paid a full day's rate for each day they report as worked, and thereby do not satisfy the salary basis test.
Despite this seemingly straightforward methodology of payment, WGM contends that Inspectors were actually paid a guaranteed weekly day rate (of 5, 6, or 7 days) depending on the terms of contracts between WGM and clients for individual projects. (Doc. 110-7, Gust Decl. ¶ 5). WGM argues that this arrangement, subject to certain permissible reductions, satisfies the salary basis test.
All current and former employees of [WGM] who were classified with the pay code “DAY - Non Exempt Day Rate, ” and who worked in WGM's Pipeline Services Inspection Department as an inspector (or an equivalent position) in the United States in any workweek between three years prior to the date of the Court's Order and the present (“Inspectors”).
(Doc. 54). Fenley then distributed Court-approved notice of the FLSA collective action to potential members of the Collective. The FLSA notice period has closed, and a total of 93 Inspectors (including the four named Plaintiffs) who worked for WGM around the country have filed consent forms to join the FLSA collective action. On November 21, 2016, Fenley was granted leave to amend his Complaint to add additional plaintiffs and causes of action arising under the state laws of Illinois, Pennsylvania, and California. (Doc. 98).
Meanwhile, the parties conducted discovery regarding Rule 23 class certification of Ohio, Illinois, Pennsylvania, and California classes, decertification of the nationwide collective action, and dispositive motions. WGM deposed 12 of the Opt-In Plaintiffs, Plaintiffs deposed at least 6 WGM employees (other than Inspectors), and both WGM and Plaintiffs retained an expert to opine on WGM's pay policies. The parties do not agree on the exact number, but there appear to be at least 122 current or former employees falling within the definition of Plaintiffs' proposed Rule 23 classes. (Doc. 117-2, Briles Decl. ¶ 3).
On May 18, 2017, Plaintiffs filed their Motion for Class Certification of the state claims under Federal Rule of Civil Procedure 23(b)(3) on behalf of those Inspectors who had worked for WGM in Ohio, Illinois, and Pennsylvania. (Doc. 108). The same day, WGM filed its Motion to Decertify the FLSA collective action. (Doc. 110). While those motions remained pending, WGM moved to exclude the expert testimony of Plaintiffs' expert witness, Colleen Vallen. (Doc. 119).
Although filed last out of the three pending motions, the Court will address WGM's Motion to Exclude first because it bears on the record to be considered in deciding the Motion to Decertify. The Court will then consider WGM's Motion to Decertify and Plaintiffs' Motion for Class Certification in turn.
(d) the expert has reliably applied the principles and methods to the facts of the case.
Fed. R. Evid. 702. In parsing the rule, the Sixth Circuit has read it to require three criteria: (1) the witness must be qualified; (2) the witness's testimony must be relevant; and (3) the witness's testimony must be reliable. In re Scrap Metal Antitrust Litig., 527 F.3d 517, 528-29 (6th Cir. 2008).
(4) whether the theory or technique enjoys general acceptance within a relevant scientific community.
Id. at 429-30 (internal quotation marks and citations omitted). Moreover, “expert testimony prepared solely for purposes of litigation, as opposed to testimony flowing naturally from an expert's line of scientific research or technical work, should be viewed with some caution.” Id. at 434.
The proponent of expert testimony must establish its admissibility by a preponderance of proof. Nelson v. Tenn. Gas Pipeline, Co., 243 F.3d 244, 251 (6th Cir. 2001) (citing Daubert, 509 U.S. at 592 n.10). Whether to admit expert testimony is within the district court's discretion. Johnson, 484 F.3d at 429 (citation omitted).
Here, WGM challenges the admissibility of Vallen's testimony because two out of the three conclusions she reached are not relevant and the third was misleading and irrelevant. As those are the only stated grounds for objecting to the admission of her testimony-and this Court finding no independent reason to exclude her testimony-the Court's analysis will be limited to those issues.
Identify each Project on which Plaintiff, any Opt-In Plaintiff, and any State Law Class Member worked during the applicable Relevant Time Period, and for each Project identified, state (i) whether you allege that Inspectors working on that Project would be guaranteed to be paid a certain number of day rate payments each week; (ii) the number of days per week you allege Inspectors were guaranteed pay for that Project (i.e., 5, 6 or 7 days); and (iii) whether the alleged guarantee for that Project was dependent on the number of days the Inspector worked in a week.
All class members were guaranteed a weekly salary based on a day-rate of 5, 6, or 7 days, dependent upon the particular project. The guaranteed weekly salary was not dependent upon the number of days an inspector worked.
Specifically, Ms. Vallen's analysis found that 65% of Opt-In Plaintiffs were paid less than the minimum guaranteed day rate on at least once instance, and 7.9% of all weeks worked by Opt-In Plaintiffs were inconsistent with WGM's alleged minimum guarantee. Similarly, when including the relevant data for the Rule 23 Class Members as well, Ms. Vallen's analysis found that 62.1% of all Opt-In Plaintiffs and Class Members were paid less than the minimum guaranteed day rate on at least once instance, and 7.2% of all weeks worked were inconsistent with WGM's alleged minimum guarantee.
(Doc. 123, Pls.' Exclusion Resp. at 12 (citing Doc. 123-9, Supp. Vallen Report ¶¶ 37-38)) (internal citations omitted).

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