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Moresi v. Resource Energy Ventures

United States District Court, W.D. Louisiana, Lafayette Division

September 10, 2018

Moresi, et al
v.
Resource Energy Ventures and Construction Company LLC

          Brian A. Jackson Judge

          REPORT AND RECOMMENDATION

          CAROL B. WHITEHURST MAGISTRATE JUDGE

         Before the undersigned, on referral from the district judge, is a Motion For Summary Judgment Dismissing Petition of Dylan Moresi filed by Defendant Gulf Coast Services, Inc. (“GSSI”) [Rec. Doc. 48] and an Opposition filed by Plaintiff Dylan John Moresi (“Moresi”) and Opt-In Complainants, Wilfred Henry, Jr. (“Henry”), Colby Babino (“Babino”), Nathaniel Thomas (“Thomas”) and Desmond J. Connor, Sr. (“Connor”) (“Plaintiffs”) [Rec. Doc. 53]. For the following reasons, the undersigned will recommend that GSSI's Motion be DENIED.

         I. Background

         The record provides that GSSI agreed with BAE Systems Inc. to build portions of one or more vessels at a BAE facility in Mobile Alabama in 2015, pursuant to BAE's plans and specifications. R. 44-2, Dec. Of Dupuy, GSSI employee in Operations, ¶ 2. On occasion, customers of GSSI, such as BAE in this case, request more welders and fitters than are on GSSI's payroll. GSSI entered into a Master Services Agreement (“MSA”) with Resource Energy Ventures and Construction Company LLC (“REVCO”) on February 20, 2015 to provide labor services to GSSI pursuant to the MSA in connection with the work for BAE. Id., R. 44-2, Dupuy Affidavit. The MSA required that REVCO comply with all federal law, and promptly pay its workers for the labor supplied. R. 44-2. The MSA required REVCO to pay 100% of amounts due directly to REVCO employees. It authorized REVCO to provide subcontractor labor if it choose to do so. It required REVCO to carry Workers' Compensation coverage, Longshore and Harbor workers compensation coverage, and employer's liability coverage for the workers it provided regardless of their classification. See R. 42, Dupuy Affidavit, R. 44, pp. 2, 8-9. The record indicates that the workers signed written agreements with REVCO which provided that any payment for their services was to be paid directly from GSSI to REVCO and not to the employees themselves, and that they were hired as “independent contractors.” R. 44-5, 44-6, 44.7, 44-8. GSSI contends, without support, that it did not seek to classify REVCO-supplied workers as independent contractors or employees. R. 48-1.

         On August 21, 2015, Moresi filed this action against REVCO on behalf of himself and all others similarly situated. Moresi alleged that he and putative plaintiffs were current and former employees, who were misclassified as independent contractors by REVCO, as they should have been classified as non- exempt employees entitled to overtime pay under the FLSA. R. 1. Moresi further alleged he was hired and employed with REVCO beginning on July 19, 2015 as a “welder” and remained in that position until July 31, 2015. Id. His job involved working as a welder and welder's helper for an average of sixty (60) hours per week. Moresi alleged he was paid $24.00 per hour by REVCO, without overtime. Id. He further alleged other similar workers were paid an hourly rate and no overtime. Id. REVCO filed an Answer generally denying Moresi's claims on October 29, 2015. R. 5.

         On January 14, 2016, Moresi amended the Complaint to add GSSI, alleging that “REVCO was merely a front or sham company” and GSSI was Moresi's “true employer, ” or alternatively that GSSI was a “joint employer within the meaning of the FLSA.” R. 14, ¶ 12. The Amended Complaint alleged claims identical to those originally alleged against REVCO. In support of his allegation that REVCO and GSSI were joint employers, Moresi alleged that he and potential plaintiffs: (1) did not supply their own equipment; (2) were supervised and controlled by their employer; (3) worked exclusively for REVCO and GSSI; (4) looked exclusively to REVCO and GSSI for their income and current and future employment; (5) were not required to and did not provide any materials, equipment or property in connection with the rendering of their services; (6) were supervised and controlled and “highly scrutinized” by REVCO and GSSI and its customers as to the work they performed as well as the “means, methods, techniques and standards” used; (7) relied on REVCO and GSSI and their customers to provide them with work, equipment, supplies, direction and supervision to do their work on a full-time basis in exchange for hourly compensation; (8) were not required to provide Employer Identification Numbers; (9) did not enter into independent contractor agreements with REVCO and GSSI; (10) work was integral to the business operations of REVCO and GSSI; and, (11) were relied on by REVCO and GSSI as its sole source of labor in order to engage its business operations and render services to its customers. R. 1. REVCO filed an answer to the Amended Complaint and GSSI filed an Answer and Cross Claim against REVCO. R. 16, 24. Henry, Babino, Thomas and Connor filed Notices of Consent to join Moresi in this lawsuit. R. 22, 23, 26, 31.

         II. Ruling on Conditional Class Certification

          Plaintiffs filed a Motion For Conditional Class Certification pursuant to 29 U.S.C. § 216(b) against REVCO and GSSI seeking to certify a collective action on behalf of those similarly situated employees who were not paid overtime for hours worked in excess of forty (40) hours in a work week. R. 38. While REVCO filed no opposition, GSSI opposed the motion arguing that Plaintiffs' claims against it were based upon the unsupported claim that GSSI classifies employees of its subcontractor, in this case REVCO, as independent contractors and pays its own employees the same rate as REVCO-which it denied. GSSI stated that it paid its own employees (“GSSI employees”) $24.00 per hour plus time and one-half for every hour they worked over 40 per week. GSSI further stated that it paid to REVCO $40.00 per hour for each hour worked by REVCO's workers─a composite rate more than adequate to cover REVCO workers' wages and overtime. GSSI contended that instead of paying REVCO's workers the overtime amount it received from GSSI, REVCO kept the money.

         The Court considered Plaintiffs' motion for conditional certification under the Lusardi analysis which included Plaintiffs' declarations and depositions filed into the record. In its opposition, GSSI cited excerpts from the depositions of Moresi, Babino, Henry and Connor arguing that their declarations contained “false information” related to wages and overtime paid as well as Plaintiffs' agreements to be designated as independent contracts.

         In its ruling the Court evaluated the evidence in the record, focusing on the complete depositions of Moresi, Babino, Henry and Connor. R. 54; R. 52-5, 52-4, 52-2, 52-3. The Court noted in its conditional certification ruling that the Plaintiffs' depositions established that: “they were provided an ID card with their picture and GSSI's name on it; they were trained at GSSI's facility; GSSI supplied their OSHA orientation; GSSI supplied their tools for welding; their only supervisors at the Project were GSSI employees; GSSI kept records of the hours they worked; GSSI monitored their time sheets; GSSI's name was on the check; GSSI handled employment termination (i.e. resignation, firing, laying off); they did not know or understand what an independent contractor was; and, they thought taxes would be withheld from their pay checks. R. 54, pp. 11-12. Thus, the Court held there was “sufficient evidence to find at this stage that GSSI and REVCO were joint employers under the FLSA, and Plaintiffs were entitled to additional discovery on the existence of a joint relationship between them.”

         III. Law and Analysis

         A. Motion For Summary Judgment Standard

         Summary Judgment under Federal Rule of Civil Procedure 56 must be granted where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. Proc. 56. The movant has the initial burden of “showing the absence of a genuine issue as to any material fact.” Adickes v. S. H. Kress & Co., 398 U.S. 144, 157 (1970). The respondent must then “produce evidence or designate specific facts showing the existence of a genuine issue for trial.” Engstrom v. First Nat. Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995). Evidence that is “merely ...


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