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Hughes v. Gulf Interstate Field Services, Inc.

United States Court of Appeals, Sixth Circuit

December 19, 2017

Tom Hughes and Desmond McDonald, on behalf of themselves and others similarly situated, Plaintiffs-Appellants,
v.
Gulf Interstate Field Services, Inc., Defendant-Appellee.

          Argued: October 6, 2017

         Appeal from the United States District Court for the Southern District of Ohio at Columbus. No. 2:14-cv-00432-Edmund A. Sargus Jr., Chief District Judge.

         ARGUED:

          Richard J. Burch, BRUCKNER BURCH PLLC, Houston, Texas, for Appellants.

          James J. Swartz, Jr., POLSINELLI PC, Atlanta, Georgia, for Appellee.

         ON BRIEF:

          James A. Jones, BRUCKNER BURCH PLLC, Houston, Texas, Robert E. DeRose, Robi J. Baishnab, BARKAN MEIZLISH HANDELMAN GOODIN DEROSE WENTZ, LLP, for Appellants.

          James J. Swartz, Jr., J. Stanton Hill, POLSINELLI PC, Atlanta, Georgia, Mark A. Knueve, VORYS, SATER, SEYMOUR AND PEASE LLP, Columbus, Ohio, for Appellee.

          Before: MERRITT, MOORE, and ROGERS, Circuit Judges.

          OPINION

          KAREN NELSON MOORE, Circuit Judge.

          Tom Hughes and Desmond McDonald served as welding inspectors for Gulf Interstate Field Services on a pipeline-construction project in Ohio between 2013 and 2014. In 2014, they and others similarly situated brought suit under the Fair Labor Standards Act (FLSA) and the comparable Ohio Minimum Fair Wage Standards Act (OMFWSA), asserting that they were entitled to overtime pay for weeks in which they worked more than forty hours. Gulf Interstate argued, and the district court ruled on summary judgment, that Hughes, McDonald, and other employees like them were instead exempt from the overtime requirements because they qualified as highly compensated employees under the governing regulations.

         Though Hughes and McDonald concede that they were paid in a manner and at a rate consistent with being exempt, they argue that those facts do not resolve the question under the text of the regulations. Instead, they argue, it matters whether their salaries were guaranteed, and in turn, whether a rational trier of fact could have concluded that there was no such guarantee. Because such a guarantee does matter, and because there is a genuine issue of material fact as to whether such a guarantee existed, we REVERSE the district court's grant of summary judgment to Gulf Interstate and remand for further proceedings.

         I. BACKGROUND

         Hughes and McDonald began working for Gulf Interstate as welding inspectors in January and June 2013, respectively, on a pipeline project in Ohio for a Gulf Interstate client called MarkWest. R. 31-1 (Hughes Decl.) (Page ID #151-52); R. 31-2 (McDonald Decl.) (Page ID #155); see also R. 42-13 (Kramer Decl., Exs. BA-BB) (Page ID #600, 602). Prior to beginning their work, they each received an offer letter from Gulf Interstate stating that they were entitled to, in addition to a weekly per diem and computer stipend, a salary of "$337.00/Day Worked." R. 31-1 (Hughes Decl., Ex. 1) (Page ID #154).[1] Rate sheets exchanged between Gulf Interstate and MarkWest regarding the project also listed, among various "Cost Components, " a "Daily Rate, " with a note appended clarifying that the "[d]ay rate" would be "paid on days worked." R. 93-2 (Sprick Dep., Ex. 3) (Page ID #3182).

         Correspondence between MarkWest and Gulf Interstate offers further discussion of the arrangement. After Gulf Interstate's director asked whether inspectors were "paid for DAYS WORKED only (whether its [sic] 1, 2, 3, etc), or is there a 5, 6, or 7 day minimum ?", a MarkWest manager replied: "[Inspectors are p]aid for days worked only. This was explained to all of the inspectors coming in. These projects are based on a 6 day work week @ 10 hours a day (salaried position). As is the case anywhere any additional hours worked in a day is [sic] not paid." R. 93-2 (Sprick Dep., Ex. 12) (Page ID #3241).

         There is also evidence that welding inspectors were told orally that they would be working "six days a week" and ten hours a day, an arrangement known by industry shorthand as "six 10s." R. 90-9 (Hughes Dep.) (Page ID #1637); see R. 42-2 (Hill Decl.) (Page ID #310) ("It was my expectation . . . that . . . either one of my subordinates or I explained to each Plaintiff that they would be paid a daily rate multiplied by six in each week . . . ."); see also 90-10 (McDonald Dep.) (Page ID #1750, 1752); R. 90-20 (Williamson Dep.) (Page ID #2684). And Gulf Interstate's Field Services Manager, Catherine Kramer, testified that inspectors were to be paid for six days even if they worked five ...


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