United States District Court, D. Vermont
DAVID BANFORD, ROBERT MILLER, GARY STRATTON, and SCOTT MCGRATTY, Plaintiffs,
ENTERGY NUCLEAR OPERATIONS, INC., Defendant
For David Banford, Robert Miller, Gary Stratton, Scott McGratty, Plaintiffs: Joseph C. Galanes, Esq., Galanes Law, Norwich, VT; Joshua R. Diamond, Diamond & Robinson, PC, Montpelier, VT.
For Entergy Nuclear Operations, Inc., Defendant: David P. Mason, Esq., PRO HAC VICE, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Boston, MA; Geoffrey J. Vitt, Esq., Vitt, Brannen & Loftus, P.L.C., Norwich, VT; Matthew J. Connolly, Esq., PRO HAC VICE, Law Office of Matthew J. Connolly, Cambridge, MA; Renee Williams Masinter, Esq., PRO HAC VICE, Entergy Services, Inc., New Orleans, LA.
OPINION AND ORDER
William K. Sessions III, District Judge.
Plaintiffs David Banford, Robert Miller, Gary Stratton and Scott McGratty brought this suit against Defendant Entergy Nuclear Operations, Inc. (" Entergy" ). The Plaintiffs challenged their designation as exempt employees for purposes of overtime pay under the Fair Labor Standards Act (" FLSA" or " the Act" ) and a related state statute. After a four-day trial, the jury found that 1) Entergy had misclassified each Plaintiff as exempt, 2) Entergy's misclassification was willful, and 3) there was not an understanding between Entergy and each of the Plaintiffs that their salaries would cover all hours in the workweek above and below forty hours.
The parties have filed post-trial motions. Plaintiffs move for a judgment order incorporating the jury verdict. ECF No. 195. Entergy renews its motion for judgment as a matter of law or, in the alternative, moves for a new trial. ECF Nos. 198, 201.
For the reasons described in detail below, the Court grants Entergy's motion for judgment as a matter of law on the fluctuating workweek issue with respect to Plaintiffs Miller and Stratton only. The Court denies Entergy's motion for judgment as matter of law in all other respects and denies Entergy's motion for a new trial. Accordingly, the Court denies Plaintiffs' motion with respect to Plaintiffs Miller and Stratton on the fluctuating workweek issue only. The Court grants Plaintiffs' motion for judgment incorporating the jury verdict in every other respect.
I. Relevant Background
Vermont Yankee Nuclear Power Plant (" Vermont Yankee" ) is operated by Entergy. The plant previously relied on The Wackenhut Corporation (" Wackenhut" ) to provide independent security services. In around 2009, Vermont Yankee brought its security staff in house. The Plaintiffs were previously employed by Wackenhut, and some performed functions while Wackenhut employees similar to those they perform now that they are employed by Entergy. Wackenhut classified its employees in similar roles as non-exempt and they received time-and-a-half for overtime.
The Plaintiffs are four Security Shift Supervisors (" SSS" ) at Vermont Yankee. Five SSS's work with a minimum of four Security Officers (" SO" ) and together the SO's and SSS's comprise a security " shift." All the SSS's and SO's wear a uniform and carry the same weaponry during the shift. Each shift works for twelve hours at a time, either days or nights. The shift is responsible for round-the-clock security at Vermont Yankee. The SO's are the lowest rung of the security hierarchy and the SSS's are one level above the SO's. The SSS's are supervised by Security Operations Supervisors (" SOS" ). The SO's are members of a union but the SSS's and SOS's are not.
SSS's usually work four twelve-hour days in a row followed by four days off. This means that some weeks they work for at least forty-eight hours and some they work less than forty. This four on/four off schedule was the same schedule that Wackenhut used. During their four days on, SSS's divide their time between four roles: Central Alarm System (" CAS" ) Operator, Secondary Alarm System (" SAS" ) Operator, Field Support Supervisor (FSS), and Lead Shift Supervisor (LSS). While in the CAS/SAS role SSS's use computers and video monitors to observe activity in the plant. SAS is essentially duplicative of CAS and operates as redundant backstop. The FSS has a variety of duties that include making rounds and checking on the SO's for alertness. The FSS must also be ready to respond to a contingency. Finally, the LSS is the lead SSS for the day and oversees the shift while also performing a variety of clerical duties. During a four-day period SSS's spend one day in the LSS role. On the other three days they rotate between CAS, SAS, and FSS.
Vermont Yankee leadership developed a Security Plan, which is a set of procedures that have been designed to address the different types of scenarios that might lead to an armed intrusion or attack, often referred to as a contingency event. Procedure 0904 is a document that implements aspects of the Vermont Yankee Security Plan. The Security Plan and Procedure 0904 could not be introduced into evidence or discussed with specificity during the trial because they both contain what is referred to as safeguards information or SGI. SGI is any information that federal
law prohibits disclosing that relates to security issues at nuclear power plants. See 42 U.S.C. § 2167.
Vermont Yankee is now in the process of being decommissioned, which means that there will be an accompanying reduction in force. In other words, many individuals will no longer have jobs as the security needs of the plant change.
Entergy has classified the SSS's as exempt employees. They are paid a fixed salary and do not receive any extra pay if they work more than forty hours in a week. However, SSS's are eligible to participate in the Management Incentive Program (" MIP" ), through which they earn yearly bonuses that depend on a variety of factors.
The parties stipulated to the number of overtime hours the Plaintiffs worked as well as each Plaintiff's respective weekly salary. Based on the jury's verdict and the parties' stipulation, the Plaintiffs have calculated their damages to total $535,406.35, which includes liquidated damages.
II. Entergy's Motion for Judgment as a Matter of Law
A. Legal Standard
Entergy renews its mid-trial motion for judgment as a matter of law under Federal Rule of Civil Procedure 50. To succeed on a Rule 50 motion, the moving party must show that, after a full hearing on an issue at trial, " there is no legally sufficient evidentiary basis for a reasonable jury to resolve the issue in favor of the non-moving party." Cross v. New York City Transit Authority, 417 F.3d 241, 247 (2d Cir. 2005) (internal quotation omitted). In reviewing a Rule 50 motion, a court must " 'draw all reasonable inferences in favor of the nonmoving party'" and " 'may not make credibility determinations or weigh the evidence.'" Id. (quoting Reeves. v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)).
A movant's burden in securing Rule 50 relief is " particularly heavy" after a jury has deliberated and returned its verdict. Id. at 248. A Rule 50 motion must be denied unless " 'the evidence is such that, without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable [persons] could have reached.'" Id. (quoting Samuels v. Air Transp. Local 504, 992 F.2d 12, 14 (2d Cir. 1993)). In other words the court may only grant a Rule 50 motion in this posture if there is " 'such a complete absence of evidence supporting the verdict that the jury's finding could only have been the result of sheer surmise or conjecture, or . . . [there is] such an overwhelming amount of evidence in favor of the movant that reasonable and fair minded men [and women] could not arrive at a verdict against him.'" Id. (quoting Song v. Ives Labs., Inc., 957 F.2d 1041, 1046 (2d Cir. 1992)).
Judgment as a matter of law on an issue as to which the movant bears the burden of proof is " rare." Broadnax v. City of New Haven, 415 F.3d 265, 270 (2d Cir. 2005) (internal quotation omitted).
Entergy raises several arguments as to why the jury's verdict should be set aside and the Court should enter judgment as a matter of law in its favor. The Court addresses each argument with Entergy's " particularly heavy" burden in mind. Cross, 417 F.3d at 248.
1. Fluctuating Workweek
Plaintiffs filed a pre-trial motion in limine that sought to preclude the use of the fluctuating workweek (" FWW" ) method for determining damages. The Court addressed the propriety of the FWW
method after the parties submitted their proposed jury instructions. The Court held that applying the FWW method in a mischaracterization case is appropriate only if the jury makes certain factual findings or the parties stipulate to those facts. ECF No. 179 at 2-3. The parties stipulated to some of these factual predicates, so the only issue for the jury was to determine the nature of the agreement between the parties. Specifically the jury was asked " whether Entergy and the Plaintiff agreed that the Plaintiff's salary would cover all hours in the workweek above and below 40 hours." ECF No. 182 (jury verdict form). The jurors were instructed that in determining the nature of the employment agreement that they " must consider whether the Plaintiffs knew that their hours would fluctuate and whether the Plaintiffs agreed that their fixed salary would cover all the hours they worked." ECF No. 181 at 21 (jury charge); see also ECF No. 179 at 17 (FWW opinion).
Applying the FWW method is appropriate if it is clear that the Plaintiffs' overtime premiums would have been calculated using the FWW method if the Plaintiffs had been properly characterized. There is no dispute that Entergy intended that each Plaintiff's salary would cover all hours worked regardless of their number. Mr. Patrick testified that he was involved in hiring the Plaintiffs. ECF No. 191, 167:14-16. He stated that the SSS's would receive the same pay regardless of whether they worked more or less than forty hours in a week, even if they took a sick day or a vacation day. ECF No. 191, 163:12-164:6. He also testified that Entergy would not dock an employee's pay if he were to miss a scheduled day of work but did not have any leave time remaining. ECF No. 191, 164:13-16. Finally, Mr. Patrick testified that he uses standard language when interviewing all candidates for SSS positions. ECF No. 191, 167:25-168:2. He claimed that he tells candidates that the SSS job is a salaried position but certain circumstances may require them to work an extra shift without reimbursement. ECF No. 191, 168:2-11.
There is no evidence in the record that undermines this summary of Entergy's side of the understanding. The Court's analysis, therefore, depends on evaluating each Plaintiff's state of mind. Without a clear understanding on both sides, there can be no meeting of the minds required to apply the FWW method as a matter of law.
As the jury was instructed, and consistent with its FWW opinion, ECF No. 179 at 17, the Court must consider whether the Plaintiffs knew that their hours would fluctuate and whether they agreed that their fixed salary would cover all the hours they worked. The Court finds that there is no legally sufficient evidentiary basis for a reasonable jury to resolve these questions in favor of Mr. Miller or Mr. Stratton. Neither Mr. Miller nor Mr. Stratton offered live testimony at trial. The Plaintiffs simply did not present any evidence with respect to Mr. Miller and Mr. Stratton's respective states of mind. Entergy, on the other hand, submitted excerpts of each Plaintiff's deposition testimony that were read to the jury during its case. The only evidence regarding Mr. Stratton's understanding of his hours and compensation was an acknowledgement that he would be receiving a salary and a bonus. ECF No. 191, 57:22-58:3. Mr. Miller's only testimony was that he knew that he would no
longer be in the union and that he would be getting a fixed biweekly amount of pay. ECF No. 191, 61:12-24. This suggests that they both knew that their salary was fixed. There is simply no testimony from either Mr. Miller or Mr. Stratton that rebuts Mr. Patrick's testimony that he gave them the standard " spiel" when they were hired informing them that they would receive a salary and would not be reimbursed for an extra shift. ECF No. 191, 167:25-168:11. It was therefore unreasonable for the jury to conclude Mr. Miller and Mr. Stratton did not understand that their salary would cover all the hours that they worked because the Plaintiffs presented no evidence to the contrary. Applying the FWW method to calculate their damages is appropriate.
Accordingly the Court will enter judgment as a matter of law on this issue with respect to Mr. Miller and Mr. Stratton. This decision only affects the amount of their damages. The Court will require the parties to recalculate Mr. Miller's and Mr. Stratton's damages using the FWW method.
Mr. Banford and Mr. McGratty present a somewhat more complicated case. Some evidence suggests that Mr. Banford and Mr. McGratty knew that their hours would fluctuate above and below forty hours and that they would be receiving a steady salary no matter how many hours they worked. See ECF No. 189, 198:9-18; ECF No. 190, 58:15-16, 61:7-8. However, the evidence is not clear as to whether Mr. Banford and Mr. McGratty agreed that their fixed salary would cover all the hours they worked regardless of their number. Mr. Banford testified that he thought that if he worked a day of overtime he could take another day off within that time period " as a kind of comp time." ECF No. 189, 177:9-13. This suggests he thought he might be compensated in some way if he worked an extra day during the shift when he was not scheduled to work. A reasonable jury could also have inferred that his expectations were simply not on the same page as Entergy's when he testified, that he was " sold a false bill of goods." Id. 177:13.
Likewise, a reasonable jury could have inferred that Mr. McGratty did not agree that his salary would cover all the hours he worked regardless of their number. Mr. McGratty testified that there was no discussion as to whether his salary would cover overtime hours and he had no understanding about overtime when he was hired. ECF No. 190, 58:17-19, 58:24-59:1. Mr. McGratty also stated that if his leave time was exhausted and he did not come to work that his pay would be docked. ECF No. 190, 88:7-12. This suggests that he thought he might receive less than his usual salary under some circumstances.
The parties stipulated to the number of hours the Plaintiffs worked and the amount that they were paid each week. Entergy argues that because Plaintiffs were consistently paid the same amount but their hours fluctuated from week to week that this is sufficient to find an " implied understanding established by this course of conduct" as a matter of law. ECF No. 200 at 5. The Court agrees that it is appropriate for factfinders to consider implicit factors when evaluating whether there was a meeting of the minds, but simply demonstrating a fixed salary and variable hours is insufficient, standing
alone, to prove each Plaintiff knew and agreed that his salary would cover all hours worked as a matter of law. Mr. Banford's and Mr. McGratty's testimony about their respective states of mind was sufficient for a reasonable jury to conclude there was no meeting of the minds between Entergy and these two Plaintiffs. A reasonable jury could have found that even if both generally knew their hours might fluctuate, neither understood that his salary would cover all the hours he worked regardless of their number. Therefore, judgment as a matter of law on this issue is warranted, but only with respect to Mr. Miller and Mr. Stratton.
A violation is " willful" within the meaning of 29 U.S.C. § 255(a) if " the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute." Parada v. Banco Industrial De Venezuela, C.A., 753 F.3d 62, 71 (2d Cir. 2014) (internal quotation omitted). If an employer acts unreasonably but not recklessly, its action should not be considered willful. Id. Moreover, merely negligent conduct is not willful. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). The Plaintiff bears the burden of proof on the issue of willfulness. Parada, 753 F.3d at 71.
A reasonable jury could have concluded that Entergy's mischaracterization of the Plaintiffs as non-exempt was willful. There is no evidence in the record suggesting that Entergy knew its classification of the SSS's was prohibited by the FLSA. However, there was sufficient evidence to support a finding that Entergy showed a reckless disregard as to whether its conduct was prohibited by the FLSA. This finding is supported by three categories of evidence.
First, during the transition from Wackenhut to in-house security, Entergy conducted no analysis as to whether or not certain employees' move from a non-salaried, non-exempt status to salaried, exempt status was appropriate. Mr. Banford testified that he had reason to believe that Entergy was aware of how he got paid at Wackenhut because it was " common sense" that since Entergy hired Wackenhut " [t]hey knew the pay structure." ECF No. 189, 176:10-16. Mr. Spitzfaden testified that he was in charge of compliance with the FLSA. ECF No. 191, 153:17-20. He was aware that Entergy started taking security forces from Wackenhut and converting them to in-house security force. ECF No. 191, 153:21-25. However, he was not aware that some employees were moving from non-exempt to exempt categories. ECF No. 191, 154:1-18. Moreover, Mr. Spitzfaden testified
that he was not asked to analyze whether a conversion of some of those workers was appropriate under the terms of the FLSA even though he was responsible for oversight. ECF No. 191, 154:19-25. This suggests Entergy was willfully ignorant when it brought its security force in house. This demonstrates recklessness disregard sufficient to support a finding of willfulness.
Next, Mr. Banford's testimony suggested that the Plaintiffs ended up receiving smaller bonuses than they were promised. A jury could have inferred that Entergy acted recklessly with respect to their exemption status in order to pay them less than they might have made if they were properly characterized. Mr. Banford testified that he was afraid that his salary was too low and that he earned more as an officer. ECF No. 189, 177:24-178:4. Mr. Patrick told him that he had never seen a bonus fall below fifteen percent. ECF No. 189, 178:19-21. However, Mr. Banford testified that one year the majority of supervisors got between five and seven percent but he received something closer to three percent. He testified that he also received less than fifteen percent in other years. ECF No. 189, 178:24-179:2. Mr. McGratty also testified that he was promised a bonus of fifteen percent during his interview. ECF No. 190, 58:15-16.
Finally, the jury could have found that Entergy's representations about the nature of the overtime Plaintiffs would be performing were not borne out in practice. For example, Mr. Banford testified that he applied for the SSS position because he was " told that . . . it would be minimal overtime" but " none of this took place." ECF No. 189, 177:7-13. The jury also could have considered the charts presenting the total number of hours and numbers of hours over forty each Plaintiff worked. Defs.' Exs. Y, Z, AA, BB. These charts reveal that the number of overtime hours fluctuated widely over time and even totaled more than 20 hours in some weeks. After the first year, there does not appear to be any kind of regularity in the Plaintiffs' schedules with respect to either the number of work hours or overtime hours. This suggests the understanding that the Plaintiffs' schedule would be consistent did not take place in practice.
This evidence of Entergy's willful ignorance and disingenuousness with respect to its promises to the Plaintiffs could have lead a reasonable jury to conclude that Entergy acted recklessly in classifying the Plaintiffs as exempt. Therefore, judgment as a matter of law on this issue is not warranted.
3. FLSA Exemptions
Entergy argues that the Plaintiffs in this case were properly classified as exempt because they were covered by the executive exemption, 29 C.F.R. § 541.100, the administrative exemption, 29 C.F.R. § 541.200, or a combination of both, 29 C.F.R. § 541.708.
To demonstrate the executive exemption applied, Entergy had to prove 1) that the Plaintiffs' primary duty was the management of the enterprise in which they were employed or of a customarily recognized department or subdivision thereof, 2) the Plaintiffs customarily and regularly directed the work of two or more other employees,
and 3) the Plaintiffs had the authority to hire or fire other employees or their suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees was given particular weight. 29 C.F.R. § 541.100.
To demonstrate the administrative exemption applied, Entergy had to prove 1) the Plaintiffs' primary duty was the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers, and 2) the Plaintiffs' primary duty included the exercise of discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200.
An employer bears the burden of proving that its employees fall within an exempted category. Ramos v. Baldor Specialty Foods, Inc., 687 F.3d 554, 558 (2d Cir. 2012).
a. Primary Duty
Both exemptions require the factfinder to consider and decide the nature of the Plaintiffs' primary duty. An employee's primary duty is the principal, main, major or most important duty. Determining what the employee's primary duty is depends on all the facts of a particular case with the major emphasis on the character of the employee's job as a whole. 29 C.F.R. § 541.700.
At trial the Plaintiffs argued that their primary duty was to act as first responders while Entergy argued that the Plaintiffs' primary duty was either management or administration or a combination of both. The parties largely agreed about the various activities SSS's perform each day. However, they presented sharply conflicting evidence about how those activities should be characterized ...