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Sandoval-Zelaya v. A Tires

United States District Court, E.D. North Carolina, Western Division

September 28, 2017

ROSSEL SANDOVAL-ZELAYA, SALVADOR MONTOYA, and EDWARD HERNANDEZ, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
A TERES, BRAKES, LUBES, AND MUFFLERS, INC., FLORES WELDING, INC., JULIO FLORES, and MARIELLE BELHASSEN, Defendants.

          ORDER

          JAMES C. DEVER III Chief United States District Judge.

         Rossel Sandoval-Zelaya ("Zelaya"), Salvador Montoya ("Montoya") and Edward Hernandez ("Hernandez") (collectively, "named plaintiffs") seek relief under the Fair Labor Standards Act, ("FLSA"), 29 U.S.C. §§ 201 et secu and the North Carolina Wage and Hour Act ("NCWHA"), N.C. Gen. Stat. § 95-25.1, et seq.. from A Tires, Brakes, Lubes, and Mufflers, Inc. ("A Tires"), Flores Welding, Inc. ("Flores Welding"), Julio Flores ("Flores"), and Marielle Belhassen ("Belhassen") (collectively, "defendants"). The named plaintiffs seeks summary judgment as to liability [D.E. 133], good faith, and willfulness [D.E. 141]. Defendants seek partial summary judgment as to the statute of limitations [D.E. 152] and move for decertification of the collective action under the FLSA [D.E. 155]. As explained below, the court grants defendants' motion for partial summary judgment as to the statute of limitations, denies defendants' motion for decertification of the collective action under the FLSA, declines to exercise supplemental jurisdiction over the NCWHA class action, and grants in part and denies in part plaintiffs' motions for summary judgment as to liability, good faith, and willfulness.

         I.

         Flores Welding is a welding subcontractor. Belhassen Dep. [D.E. 62-2] 5-6. A Tires is an auto repair shop. [D.E. 134] ¶ 7; [D.E. 167] ¶ 7. The companies operate within the same facility. [D.E. 134] ¶¶ 6, 8; [D.E. 167] ¶¶ 6, 8. Belhassen is the vice president, secretary, and treasurer of A Tires and Flores Welding. [D.E. 134] ¶ 10; [D.E. 167] ¶ 10. Flores is a corporate officer and president of A Tires and Flores Welding. [D.E. 134] ¶ 11; [D.E. 167] ¶ 11. A Tires and Flores Welding use the same employee handbooks, and the rules apply equally to employees of both companies. See Belhassen Dep. [D.E. 62-2] 21-22; [D.E. 62-13] (A Tires Employee Handbook); [D.E. 62-14] (Flores Welding Employee Handbook). The employee handbooks state that all non-exempt employees are to be compensated at time-and-a-half for hours worked over 40 hours in a single workweek. See [D.E. 62-13] 6, 12; [D.E. 62-14] 6, 12.

         From 2005 through 2011, Zelaya worked as a mechanic for defendants and received hourly wages. See3dAm.Compl. [D.E. 72] ¶¶ 29-30; Answer [D.E. 73] ¶¶ 29-30; Zelaya Dep. [D.E. 134-8] 3. Zelaya asserts that he was told to report no more than 40 hours of work per week, regardless of how many hours he worked, and that defendants never paid him for more than 40 hours of work. 3d. Am. Compl. ¶ 34; Zelaya Decl. [D.E. 50-1] ¶¶ 3-4; 2d Zelaya Decl. [D.E. 62-3] ¶¶ 3-5; Zelaya Dep. [D.E. 134-8] 6. Zelaya also asserts that defendants maintained a policy of never paying employees for work performed early, before the normal workday, or late, after the normal workday. 2d Zelaya Decl. [D.E. 62-3] ¶ 3. Zelaya claims that he worked between twelve and fourteen hours per day, including on Saturdays. See 2d Zelaya Decl. [D.E. 62-3]¶5.[1] Because Zelaya was not paid for hours beyond 40 hours per week, he was never paid overtime pay at time-and-a-half. 2d Zelaya Decl. [D.E. 62-3] ¶ 8.

         From August through September 2012, Hernandez worked for defendants as a welder and was paid hourly wages. Hernandez Decl. [D.E. 62-7] ¶ 1. From August 2011 through November 2012, and from January 2013 through March 2013, Montoya worked for defendants as a welder and was paid hourly wages. Montoya Decl. [D.E.62-4] ¶ 1. Hernandez and Montoya traveled to work sites as part of their job duties and assert that defendants had a policy of not paying employees for all hours worked, including not paying employees for time spent loading and unloading equipment onto trucks at defendants' shop at the beginning and end of the day, time spent traveling from defendants' shop to the jobsite, or time spent on the weekend preparing trucks for out-of-town projects. Montoya Decl. [D.E.62-4] ¶ 4; Hernandez Decl. [D.E. 62-7] ¶ 4. Both assert that employees were paid for work starting "at 7:00 a.m. at a jobsite" and ending "at 5:30 p.m., " minus a one-hour lunch, but that they would "routinely work[] more than eight (8) hours [per] day and forty (40) hours per week." Montoya Decl. [D.E.62-4] ¶¶ 5, 7; Hernandez Decl. [D.E. 62-7] ¶¶ 5, 7.

         Hernandez and Montoya assert that they were never paid time-and-a-half for overtime hours worked and that they were not reimbursed for meals while working on projects out of town. See Montoya Decl. [D.E. 62-4] ¶¶ 11, 13; Hernandez Decl. [D.E. 62-7] ¶¶ 10-11. Montoya asserts that defendants deducted from his wages for "tools and/or OSHA training'' and that he "believefs]" he was not given proper notice and did not authorize those deductions. See Montoya Decl. [D.E.62-4] ¶ 12. Montoya and Hernandez assert that although they performed work by arriving early at defendants' shop, preparing the work truck, and traveling to the jobsite, they were never compensated for that time. Montoya and Hernandez also claim that when they were paid overtime, they were paid at their regular wage rate rather than time-and-a-half. Compl. ¶ 3 5; Hernandez Decl. [D.E. 62-7] ¶¶ 4-6; Montoya Decl. [D.E. 52-1] ¶¶ 2-4. Montoya contends that he was not paid for "between 5 and up to 25 hours per week." See Montoya Decl. [D.E. 62-4] ¶ 5. Hernandez contends that he was not paid for "between 5 and 25 hours per week, " although he does not say how much of this difference he believes was attributable to unpaid vehicle loading and how much was due to a separate assertion that employees would be paid according to the amount of hours their supervisor reported. See Hernandez Decl. [D.E. 67-2] ¶ 6. Zelaya does not claim that he was denied compensation for hours spent loading and unloading trucks or traveling to worksites, but he does assert that he was never paid overtime and was not paid for work performed before and after the employer-defined workday. See 2d Zelaya Decl. [D.E. 62-3] ¶¶ 4-6. Montoya and Hernandez do not assert that they were prohibited from reporting more than 40 hours of work per week.

         A.

         On November 21, 2013, Zelaya sued defendants, claiming violations of the FLSA [D.E. 1]. On December 31, 2013, Zelaya amended his complaint [D.E. 12]. On February 20, 2014, Zelaya amended his complaint a second time [D.E. 34].

         On December 16, 2014, Zelaya filed a third amended complaint, which added Montoya and Hernandez as plaintiffs [D.E. 72]. The third amended complaint includes aputative collective-action claim against defendants for violating the FLSA and a putative class-action claim against defendants for violating the NCWHA. Id. In count one, plaintiffs claim that defendants violated the FLSA by failing to pay plaintiffs at time-and-a-half for overtime hours worked. M. ¶¶ 70-78. In count two, plaintiffs claim that the FLSA statute of limitations should be three years instead of two years because defendants willfully violated the FLSA. Id. ¶¶ 79-80. In count three, plaintiffs allege that defendants violated the NCWHA by failing to pay all wages owed and failing to reimburse plaintiffs for training, tools, travel, and meal expenses. Id. ¶¶ 81-92. Although brought as putative class and collective actions, the third amended complaint describes the basis for the named plaintiffs' individual theories of recovery. Zelaya claims that defendants told him not to report any hours beyond 40 in a workweek and that he would not be paid for any overtime hours. Id. ¶ 34. Hernandez and Montoya claim that they were not paid for certain hours spent loading or unloading trucks at defendants' shop or time spent traveling from defendants' shop to the jobsite. Id. ¶ 35.

         On September 28, 2015, the court granted named plaintiffs' motion for conditional collective-action certification of the FLSA claim and class certification of the NCWHA claim [D.E. 94]. The court certified the classes for the purposes of counts one and three as

All current and former employees of Flores Welding, A Tires, Julio Flores, and Marielle Belhassen who resided in North Carolina and worked or currently work as laborers, and who performed work in North Carolina or Virginia at any time from November 21, 2010 through [deadline for opting-in] and who were, as a matter of practice, not allowed to report all of their hours worked and thus were not fully compensated for such hours;
and
All current and former employees of Flores Welding, A Tires, Julio Flores, and Marielle Belhassen who resided in North Carolina and worked or currently work as laborers, and who performed work in North Carolina or Virginia at any time from November 21, 2011 through the present, from whom (1) deductions for the cost of tools or required certifications were taken, without the proper advance notice to make such deductions or without the opportunity to rescind the authorization at least seven days prior to the deduction taking place; or (2) were subject to unreimbursed travel expenses in contravention of the above-listed employers' written policies.

[D.E. 94] 12-13 (alteration in original). On November 20, 2015, notice of the action was mailed to all putative plaintiffs and class members [D.E. 99].

         On November 16, 2016, named plaintiffs moved for summary judgment as to liability [D.E.133] and filed a statement of material facts [D.E. 134, 136] and a supporting memorandum [D.E.135]. On December 2, 2016, named plaintiffs moved for summary judgment on the issues of good faith and wilfulness [D.E. 141] and filed a statement of material facts [D.E. 142] and a supporting memorandum[D.E. 143]. OnFebruary3, 2017, defendantsmovedforsummaryjudgmentastothe statute of limitations [D.E. 152] and for decertification of the ...


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