Texas court rules on willfulness and employer status in overtime case

A federal district court in San Antonio recently issued an opinion which is instructive on the issues of willfulness as well as an individual owner’s liability as a joint employer under the FLSA.  In Guyton v. Legacy Pressure Control, Case No. 5:15-cv-1075-RCL (W.D. Tex. Jan. 18, 2017), two former employees sued Legacy Pressure Control, alleging that they were denied overtime pay while employed as Operators for the company.  As operators, the workers were responsible for maintaining oilfield pressure control.  Both parties moved for summary judgment on a number of issues.  The Court found that fact issues precluded entry of summary judgment on the issues of willfulness as well as the individual owners’ status as employers.

FLSA claims are generally subject to a two year statute of limitations, but when the defendant is found to have “willfully” violated the statute, claims against the defendant are subject to a three year statute of limitations. 29 U.S.C. § 255.  On the issue of willfulness, the Court stated:

Whether defendants knew they were violating the FLSA or recklessly disregarded the FLSA requirements is hotly contested by the parties, and both have introduced evidence on this question. Questions remain regarding whether plaintiffs raised complaints about overtime pay or compensation structure, and whether defendants subsequently ignored such complaints or dealt with them properly and in accordance with the FLSA. Questions also remain regarding whether defendants actually consulted with legal counsel, and the result of such consultation. Given these genuine disputes of material fact, the Court will deny summary judgment on the issue of willfulness.

Turning to the issue of the employer status of the individual owners of Legacy, the Court again found issues of fact to preclude entry of summary judgment.  The plaintiffs argued that one of the owners was an employer because in addition to maintaining employment records, she also had the power to hire and fire employees, she was responsible for the method of payment to plaintiffs because she figured and ran the checks and handled payroll reductions, and she was involved in operation control of the company as the president and HR administrator, handling incoming faxes, insurance, and workers’ compensation coverage and claims.  The Defendants argued that this owner was solely involved in paying the workers, and thus did not have enough control over the workers to constitute an employer under the FLSA.  The Court stated, “[b]oth sides have introduced evidence tending to show that the [the owners] either did or did not perform the functions considered under the economic reality test. Again, the Court would need to weigh the evidence to determine whether either [the Legacy owners] exercised operating control over plaintiffs and therefore should be considered employers under the FLSA. The Court will therefore deny summary judgment to both parties on this issue.”

This opinion demonstrates that issues such as willfulness and employer status are often fact-intensive and will often require a trial to determine.

About the author: Josh Borsellino is a Texas attorney based in Fort Worth.  He represents workers, primarily those in the oil and gas sector, on claims for unpaid overtime.  Over the past three years, Josh has filed more than thirty lawsuits, representing workers in every federal district in Texas, and has also represented workers outside of Texas.  For a free evaluation of your unpaid overtime matter, call Josh at 817.908.9861 or complete this online contact form.