Court Opinion

ID: 9948291
Source: CourtListenerOpinion
Date Created: 2024-03-06 20:00:41.048682+00
Date Added: 2024-06-11T14:29:26.488860
License: Public Domain

RECOMMENDED FOR PUBLICATION
                                Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                       File Name: 24a0047p.06

                    UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT

                                                             ┐
 KEITH JONES, individually and on behalf of all others
                                                             │
 similarly situated,
                                                             │
                                   Plaintiff-Appellee,       │
                                                              >        No. 23-3247
                                                             │
        v.                                                   │
                                                             │
 PRODUCERS SERVICE CORPORATION,                              │
                            Defendant-Appellant.             │
                                                             ┘

  Appeal from the United States District Court for the Southern District of Ohio at Columbus.
                 No. 2:17-cv-01086—Edmund A. Sargus, Jr., District Judge.

                                   Argued: October 26, 2023

                               Decided and Filed: March 6, 2024

                    Before: GIBBONS, BUSH and DAVIS, Circuit Judges.

                                      _________________

                                            COUNSEL

ARGUED: Danielle Crane, KEGLER BROWN HILL & RITTER, Columbus, Ohio, for
Appellant. Josh Sanford, SANFORD LAW FIRM, PLLC, Little Rock, Arkansas, for Appellee.
ON BRIEF: Danielle Crane, Nicholas Bobb, KEGLER BROWN HILL & RITTER, Columbus,
Ohio, for Appellant. Josh Sanford, SANFORD LAW FIRM, PLLC, Little Rock, Arkansas, for
Appellee.
                                    _________________

                                             OPINION
                                      _________________

       JULIA SMITH GIBBONS, Circuit Judge. We confront a question of first impression in
this Circuit: when, under § 207(f) of the FLSA, do an employee’s job duties “necessitate”
irregular hours?
 No. 23-3247                         Jones v. Producers Serv. Corp.                                         Page 2

                                                          I.

         Producers Service Corporation (“PSC”), a hydraulic fracking and acidization services
business, appeals the district court’s order granting summary judgment to several of its current
and former employees in their suit against the company for unpaid overtime compensation.1
Plaintiffs are oilfield technicians who assemble and disassemble well-servicing equipment,
operate that equipment, and “perform all ancillary services related to [PSC’s] servicing
operation[s].” DE 62-1, Decl. Leeper, Page ID 993, ¶ 10. They bring this action under the Fair
Labor Standards Act (“FLSA” or the “Act”), the Ohio Minimum Fair Wage Standards Act
(“OMFWSA”), and the Ohio Prompt Pay Act (“OPPA”), charging that PSC fails to pay its
oilfield technicians a lawful overtime premium for all hours worked over forty per week. PSC
stakes its compliance with the FLSA — and by extension, the OMFWSA and OPPA2 — on its
contention that it pays its oilfield technicians in accordance with a Belo plan, a statutorily-
authorized exception to the FLSA’s overtime provisions that allows an employer to pay a fixed
salary to employees who work fluctuating hours. 29 U.S.C. § 207(f).

         On cross-motions for summary judgment, the district court found that PSC could not
establish one of the four prerequisites to a valid Belo plan because its oilfield technicians work
irregular schedules not by necessity, but instead due to factors within PSC’s control — chiefly,
the predetermined weekly schedules from which PSC forces plaintiffs to pick. The district court
therefore granted plaintiffs’ motion for summary judgment and denied PSC’s.3 The parties then

         1PSC also appeals the district court’s denial of PSC’s own motion for summary judgment.

         2Analysis of plaintiffs’ FLSA claims proves coextensive with analysis of plaintiffs’ claims under the
OMFWSA and OPPA. As this court noted in Douglas v. Argo-Tech Corp., 113 F.3d 67 (6th Cir. 1997), the relevant
statutory language in the OMFWSA “parallels” that of the FLSA. Id. at 69 n.2. Moreover, plaintiffs allege a
violation of the OPPA, which governs the timing of wage payments, only to the extent that the purportedly untimely
wage payments are those to which plaintiffs are allegedly entitled by virtue of PSC’s violations of the FLSA and
OMFWSA.
         3While the district court denied PSC’s summary judgment motion in full, it granted plaintiffs’ motion
strictly on the issue of liability, holding the damages portion of the motion in abeyance pending additional briefing.
The district court later partially denied and partially granted plaintiffs’ Rule 56 motion as to damages, finding that
the parties genuinely disputed portions of the calculation underlying plaintiffs’ unpaid overtime. Although PSC
appeals the consent judgment into which this latter order merged, see Greene v. United States, No. 21-5398, 2022
WL 13638916, at *2 (6th Cir. Sept. 13, 2022), PSC suggests in its reply brief that we need not address the
subsequent order if we reverse the district court’s initial summary judgment decision. We address this suggestion at
the conclusion of this opinion, in footnote five.
 No. 23-3247                      Jones v. Producers Serv. Corp.                                  Page 3

reached a settlement agreement — given effect through the entry of a consent judgment — that
provided for $400,000 in damages, costs and fees but maintained PSC’s right to appeal the
district court’s summary judgment orders.

                                                    II.

        We review the district court’s grant and denial of summary judgment de novo. Pearce v.
Chrysler Grp. LLC Pension Plan, 893 F.3d 339, 345 (6th Cir. 2018). Summary judgment is
appropriate only when no genuine issue of material fact remains, and the moving party is entitled
to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986) (citing
Fed. R. Civ. P. 56(a)). When reviewing the record on summary judgment, we take all facts and
reasonable factual inferences in the light most favorable to the nonmovant. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “[I]f the evidence is such that a
reasonable jury could return a verdict for the nonmoving party,” then summary judgment will not
lie. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

                                                   III.

                                                    A.

        The FLSA requires that an employer pay a given employee “one and one-half times” that
employee’s regular rate of pay for each hour the employee works in excess of forty in a single
workweek. 29 U.S.C. § 207(a)(1). But, as an exception to this general rule, the Act permits an
employer to implement an alternative compensation arrangement, known as a “Belo plan,” in
which the employer sets a guaranteed weekly wage for all hours worked in a week up to sixty. 4
Id. § 207(f). Congress enacted the Belo plan exception “to provide stable salaries for employees
whose work weeks fluctuate and who would otherwise face financial burdens from below-
normal work weeks.” Donovan v. Tierra Vista, Inc., 796 F.2d 1259, 1260 (10th Cir. 1986)
(citing A. H. Belo, 316 U.S. at 635). And the exception does not benefit wage earners alone, it
simultaneously aids employers “by enabling [them] to anticipate and control in advance at least
some part of [their] labor costs.” 29 C.F.R. § 778.404.

         4Belo plans draw their name from the Supreme Court case, Walling v. A. H. Belo Corp., 316 U.S. 624
(1942), that in part inspired Congress’ enactment of § 207(f).
 No. 23-3247                   Jones v. Producers Serv. Corp.                              Page 4

       To qualify its remuneration regime as a Belo plan, an employer must satisfy the four
prerequisites set forth in the Act: (1) the subject employee must work “pursuant to a bona fide
individual contract” or a collective bargaining agreement; (2) the employee’s job duties must
“necessitate irregular hours of work”; (3) the employee’s contract must “specif[y] a regular rate
of pay” for hours up to forty per week and a rate equal to one and one-half times that rate for
hours over forty; and (4) the employee’s contract must provide a weekly pay guarantee for no
more than sixty hours, based on the specified rates.          29 U.S.C. § 207(f).     Whether an
employment contract “which purports to qualify an employee for exemption under [29 U.S.C.
§ 207(f)]” indeed amounts to a bona fide Belo plan “is a matter for determination by the courts.”
29 C.F.R. § 778.414(a). The words used in an employee’s employment agreement will yield to
“the actual practice of the parties thereunder,” id., and the employer bears the burden of proving
the presence of the four requirements set forth in § 207(f) at trial. Usery v. Yates, 565 F.2d 93,
97 (6th Cir. 1977) (citing Mitchell v. Ky. Fin. Co., 359 U.S. 290, 291 (1959)); see also Donovan
v. Brown Equip. & Serv. Tools, Inc., 666 F.2d 148, 152–53 (5th Cir. 1982).

                                                B.

       Although PSC’s compensation structure forms the locus of plaintiffs’ suit, the fine details
of how PSC remunerates its oilfield technicians are largely irrelevant at this stage. The district
court granted summary judgment to plaintiffs (and denied it to PSC) on the basis of a single
finding: that PSC could not convince a reasonable jury that its oilfield technicians’ job duties
necessitate irregular hours. If this finding was in error, the proper course is not to analyze the
remaining Belo plan factors, but instead to reverse the district court and issue a general remand
for further proceedings. See Bluegrass Materials Co., LLC v. Freeman, 54 F.4th 364, 373 (6th
Cir. 2022) (general remand appropriate when reversing grant of summary judgment that
produced a “domino effect” on “multiple, interrelated issues”); Sutton v. St. Jude Med. S.C., Inc.,
419 F.3d 568, 575 (6th Cir. 2005) (“As a general rule, appellate courts do not consider any issue
not passed upon below.”) (quoting Dubuc v. Mich. Bd. of Law Exam’rs, 342 F.3d 610, 620 (6th
Cir. 2003)). We therefore focus our attention on the same question the district court asked:
whether plaintiffs’ job duties require irregular hours. 29 U.S.C. § 207(f).
 No. 23-3247                  Jones v. Producers Serv. Corp.                             Page 5

        At the outset, the parties make this inquiry somewhat simpler: they agree that PSC’s
oilfield technicians maintain “irregular” hours. Thus, we need only answer the following:
whether the irregular hours plaintiffs work are “necessitate[d]” by their job duties. 29 U.S.C.
§ 207(f).

        Under what circumstances an employee’s duties “necessitate” irregular hours for
purposes of § 207(f) of the FLSA is a question of first impression in this Circuit. And at first
blush, the plain language of the Act might suggest that any irregular hours to which an employer
subjects his employee are “necessitate[d]” by the employee’s duties, since the ordinary
workplace hierarchy instructs that an employee’s duties include heeding the direction of his or
her employer. See United States ex rel. Felten v. William Beaumont Hosp., 993 F.3d 428, 431
(6th Cir. 2021) (“We usually interpret a statute according to its plain meaning, without inquiry
into its purpose.”).

        But this rather simplistic view of § 207(f) accords with none of the extra-statutory
sources that help inform our understanding of the Belo plan exception, which we note was itself
born out of the Supreme Court’s judicial “gloss” on the FLSA. McComb v. Roig, 181 F.2d 726,
727–28 (1st Cir. 1950); see also Brown Equip. & Serv. Tools, 666 F.2d at 152–53 (discussing
§ 207(f)’s origins). First, we consider the Supreme Court decisions that served as prologue to
Congress’s adoption of what is now § 207(f): Walling v. A. H. Belo Corp., 316 U.S. 624 (1942),
and Walling v. Halliburton Oil Well Cementing Co., 331 U.S. 17 (1947). In both cases, the
employees at issue worked “substantially fewer hours as well as substantially more than the
statutory forty-hour standard because of the unpredictable irregularity inherent in the nature of
their duties.” Foremost Dairies, Inc. v. Wirtz, 381 F.2d 653, 656 n.5 (5th Cir. 1967). The
newspaper employees at issue in Belo worked “a few hours a day” during slow periods and up to
twelve hours a day “[i]n times of news activity.” Fleming v. A. H. Belo Corp., 121 F.2d 207, 215
(5th Cir. 1941) (Sibley, J., concurring), aff’d sub nom. A. H. Belo, 316 U.S. 624. The oil well
servicing employees at issue in Halliburton worked “more than 100 hours” in some weeks and
“less than 30” in others. 331 U.S. at 21. In neither case did the Court confront employees whose
irregular schedules were “necessitated” by their job duties in an all-encompassing sense, which
would capture irregular hours dictated by workplace supervisors.            Instead, the Court
 No. 23-3247                   Jones v. Producers Serv. Corp.                             Page 6

contemplated employees whose irregular hours were “necessitated” by their job duties in a
narrower sense, contingent upon a meaning of “duties” that speaks to the nature of the
employees’ occupation rather than the mercurial preferences of their boss.

       For another interpretive lodestar, the “[Department of Labor]’s interpretative regulations
under the FLSA ‘constitute a body of experience and informed judgment to which courts may
properly resort for guidance.’” Justice v. Metro. Gov’t of Nashville, 4 F.3d 1387, 1393 (6th Cir.
1993) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)) (cleaned up). And here, the
Department’s interpretation of “necessitate” provides a more nuanced understanding of the
§ 207(f) exception than a plain reading would dictate:

       Even if an employee does in fact work a variable workweek, the question must
       still be asked whether his duties necessitate irregular hours of work. The
       subsection is not designed to apply in a situation where the hours of work vary
       from week to week at the discretion of the employer or the employee, nor to a
       situation where the employee works an irregular number of hours according to a
       predetermined schedule. The nature of the employee’s duties must be such that
       neither he nor his employer can either control or anticipate with any degree of
       certainty the number of hours he must work from week to week.

29 C.F.R. § 778.405.

       For a third source of guidance, we note that the Department’s view aligns with both of
the principal purposes underlying the Belo plan exception — providing employees in naturally
volatile industries with “the security of a regular weekly income,” and offering their employers a
more predictable payroll. A. H. Belo, 316 U.S. at 633 (payroll), 635 (regular income); see also
29 C.F.R. § 778.404 (discussing the exception’s purposes). Indeed, if irregular hours were
sufficient irrespective of their cause, then employers could “effectively manipulate
‘irregularity,’” scheduling days off to create the façade of irregular hours and then implementing
a Belo plan that deflated their employees’ wages. See Donovan v. Welex, Div. of the Halliburton
Corp., 550 F. Supp. 855, 858 (S.D. Tex. 1982); see also A. H. Belo, 316 U.S. at 637–39 (Reed,
J., dissenting) (describing the risk of wage-deflationary employment contracts created by the
majority holding). Moreover, if the employee’s forthcoming irregular hours are known to the
employer in advance, then the employer finds no need for the payroll predictability that a Belo
plan provides — he already possesses it. See Harp v. Cont’l/Moss-Gordin Gin Co., 259 F. Supp.
 No. 23-3247                    Jones v. Producers Serv. Corp.                              Page 7

198 (M.D. Ala. 1966) (finding employer’s purported Belo plan invalid where “the defendant-
employer . . . seemed to have control over the number of hours which each of these plaintiffs
would work each week,” as it “necessarily follow[ed] that the nature of the duties of these
plaintiff-employees was not such that the employer could not control, or anticipate with any
degree of certainty, the number of hours they were required to work from week to week”), aff’d
sub nom. Cont’l/Moss-Gordin Gin Inc. v. Harp, 386 F.2d 995 (5th Cir. 1967) (per curiam).

       Finally, we look to our sister circuits, as well as the district courts, that have confronted
this same question. At least two circuit courts of appeal have relied on § 207(f)’s judicial roots
and interpretive regulations to conclude that “necessitate” suggests more than mere cause-and-
effect between an employee’s schedule — presumably dictated to him by his employer — and
the hours that he works. See Brown Equip. & Serv. Tools, 666 F.2d at 154 (finding § 207(f)
inapplicable where employees’ irregular schedules owed to “holidays, vacations, illnesses, and
other personal reasons” rather than “a shortage or unavailability of work”); Tierra Vista, 796
F.2d at 1260 (adopting the Fifth Circuit’s interpretation). And district courts widely apply the
interpretation set forth in the DOL’s interpretive regulations. See, e.g., Boll v. Fed. Rsrv. Bank of
St. Louis, 365 F. Supp. 637 (E.D. Mo. 1973) (applying 29 C.F.R. § 778.405), aff’d, 497 F.2d 335
(8th Cir. 1974); Mascol v. E & L Transp., Inc., 387 F. Supp. 2d 87, 104 (E.D.N.Y. 2005) (same);
Szabo v. Muncy Indus., LLC, 661 F. Supp. 3d 337, 346 (M.D. Pa. 2023) (same).

       In summary, we find that the available interpretive sources point in a single direction: for
purposes of 29 U.S.C. § 207(f), an employee’s job duties “necessitate” irregular hours when the
inherent nature of the employee’s work — i.e., the inalienable qualities of his industry,
profession, or specific position — place the employee’s hours beyond either his or his
employer’s power to control or predict.

                                                 C.

       With the benefit of the foregoing legal principles, we can answer the dispositive question
in this appeal:   whether PSC has produced evidence from which a reasonable jury could
conclude that its oilfield technicians’ job duties “necessitate irregular hours of work.” 29 U.S.C.
§ 207(f).
 No. 23-3247                    Jones v. Producers Serv. Corp.                              Page 8

       As noted previously, the parties agree that PSC’s oilfield technicians work widely varied
hours from week to week — upwards of eighty in some weeks and fewer than twenty in others.
Plaintiffs attribute this week-to-week irregularity to the two preset work calendars from which
PSC forces its oilfield technicians to choose. Under one schedule, technicians work fourteen
consecutive days before taking a week off. Under the other, technicians work a seven-on, four-
off, then seven-on and three-off schedule. Irrespective of their choice, technicians work fourteen
days in a given twenty-one-day period of employment.

       These scheduling options result from two attributes of PSC’s industry. First, fracking
and acidization services at oil and gas wells are often around-the-clock operations. PSC’s
oilfield technicians thus work in alternating twelve-hour shifts (i.e., twelve hours on, twelve
hours off). Second, oil and gas wells often sit in remote locations, requiring that oilfield
technicians travel long distances to reach their worksite. PSC’s technicians therefore typically
reside in hotels or “man camp[s]” while on the job. DE 60, Dep. Parks, Page ID 813, 20:18–
21:7. In light of these realities, PSC offers its oilfield technicians their choice between the two
schedules to, in the words of PSC’s vice-president of finance and administration, “give [the
technicians] some options as far as their ability to be at home versus being out for two solid
weeks.” Id. at 813, 18:15–17. Plaintiffs maintain that most, if not all, of the irregularity in their
weekly working hours derives from their prearranged time off.

       Although it acknowledges its scheduling practices, PSC offers a competing explanation.
It contends that it implemented its Belo plan for precisely the purpose the Supreme Court
identified in the Belo case — guaranteeing its oilfield technicians a consistent wage in an
otherwise inconsistent industry.    PSC maintains that just as the energy industry overall is
cyclical, so too is the fracking and acidization services business that PSC operates. Its Belo plan,
PSC argues, helps it retain talent through up and down cycles.

       As evidence that volatile demand drives the irregularity in its technicians’ weekly hours,
PSC identifies three items in the record. First, PSC cites the sworn declaration of Frank Leeper,
PSC’s President. Leeper asserts that in his experience with PSC, “fluctuations in the energy
industry” drive irregular work and pay for oilfield workers. DE 62-1, Decl. Leeper, Page ID
993, ⁋ 14. Second, PSC notes that several plaintiffs responded affirmatively when asked if a lack
 No. 23-3247                   Jones v. Producers Serv. Corp.                              Page 9

of work, or an industry downturn, accounted for the weeks in their timesheet records that
evidence active employment, but few if any working hours. And third, PSC points to plaintiffs’
timesheet records themselves, arguing that Plaintiffs cannot account for numerous weeks during
which they were employed, not on scheduled time off, and yet performed little work.

       We find that PSC has presented evidence creating a genuine dispute of fact as to the
reason behind plaintiffs’ irregular schedules. This conclusion stems from two observations.
First, although plaintiffs rightly point out that many of the weeks during which they worked
fewer than forty hours are weeks in which they enjoyed scheduled time off, PSC correctly
observes that several plaintiffs worked well under forty hours during weeks in which they took
little or no scheduled time off. Put differently, the timesheet evidence is a decidedly mixed bag.
On the one hand, the available timesheet records for plaintiffs DeAngelo Adams, Michael
Bogner and Jesus Casarez largely support plaintiffs’ contentions: of the catalogued weeks
during which they worked fewer than forty hours, Adams took scheduled time off in 94%
(15/16) of those weeks, Bogner took time off in 92% (22/24) of those weeks, and Casarez took
time off in 100% of those weeks (2/2). On the other hand, the available timesheet records for
plaintiffs Nathaniel Jones, Keith Jones, and Casey Foster tell a different story: of the catalogued
weeks during which they worked fewer than forty hours, Nathaniel Jones enjoyed scheduled time
off in only 23% (3/13) of those weeks, Keith Jones took time off in only 28% (2/7) of those
weeks, and Foster took time off in only 58% (7/12) of those weeks.

       Second, PSC provides a plausible and supportable explanation for the weeks that
plaintiffs worked fewer than forty hours despite taking no time off: swings in demand for its
services.   Given Frank Leeper’s position as PSC’s president — presumably an individual
intimately familiar with PSC’s operations and finances — a reasonable jury could believe his
contention that plaintiffs’ irregular hours, where otherwise unexplained by scheduled time off,
resulted from fluctuations in demand. And indeed, several plaintiffs stated that their irregular
hours at times stemmed from insufficient work. Although plaintiffs argue that this testimony
was vague or elicited by leading questions, we must not weigh the evidence and resolve these
arguments at the summary judgment stage. Anderson, 477 U.S. at 249. Whatever the strength of
PSC’s broader argument, PSC’s facts — viewed in the light most favorable to PSC — present a
 No. 23-3247                         Jones v. Producers Serv. Corp.                                       Page 10

question for the jury. Summary judgment, at least so far as it concerns the cause of plaintiffs’
irregular hours, was therefore improper.

                                                         IV.

         For the foregoing reasons, we reverse the district court’s grant of summary judgment to
plaintiffs as to liability, affirm the district court’s denial of summary judgment to PSC, vacate the
district court’s consent judgment, and remand the suit for further proceedings not inconsistent
with this opinion.5

         5In its Reply brief, PSC states that “[i]f this Court determines that the District Court’s November 14, 2019
Opinion and Order . . . was improperly decided and remands for further proceedings, it need never reach” the district
court’s summary judgment order on damages. CA6 R. 20, Reply Br., at 6. Because we grant PSC its requested
relief on the district court’s first summary judgment order, we treat this statement as a contingent withdrawal of its
appeal of the district court’s second summary judgment order. We therefore decline to address the later order.