Case: 22-20095 Document: 00516818139 Page: 1 Date Filed: 07/12/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
July 12, 2023
No. 22-20095 Lyle W. Cayce
Clerk
Jose Flores; Jean Romero-Rodriguez; Brandon
Villarreal,
Plaintiffs—Appellants,
versus
FS Blinds, L.L.C.,
Defendant—Appellee.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:19-cv-4114
Before Wiener, Higginson, and Wilson, Circuit Judges. *
Cory T. Wilson, Circuit Judge:
This is an overtime case. Three installers of window blinds sued FS
Blinds, L.L.C., the company for which they worked. The district court
granted summary judgment to FS Blinds, determining that Plaintiffs had not
met their prima facie burden to show they worked overtime. The court
dismissed the case, and Plaintiffs appealed.
*
Judge Wiener concurs only in the judgment.
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We reverse. Plaintiffs have met the lenient standard under Anderson
v. Mt. Clemens Pottery Co., 328 U.S. 680, 686–88 (1946), and therefore
survive summary judgment, at least as to whether, if employees, Plaintiffs
worked overtime. But we decline to reach whether Plaintiffs were employees
or independent contractors and instead remand for the district court to
consider that question anew in view of this opinion.
I.
FS Blinds, a seller and installer of window blinds in Texas, engaged
Plaintiffs Jose Flores, Jean Romero-Rodriguez, and Brandon Villarreal to
install blinds. Flores worked for FS Blinds from mid-April 2018 until early
October 2019. Romero-Rodriguez did so from early March until late October
2019, and Villareal worked from early August 2018 until early April 2020,
though he performed no work for FS Blinds for several weeks during that
period.
Plaintiffs measured windows for blinds, delivered and installed blinds,
and repaired damaged blinds, mostly in newly constructed homes. While the
company’s office and warehouse are in Pearland, Plaintiffs traveled to job
sites across the greater Houston area. Because FS Blinds treated Plaintiffs as
independent contractors, it did not maintain records of the hours Plaintiffs
spent performing work for the company. Instead, Plaintiffs received flat fees
for each window measurement, blinds installation, or blinds repair completed
without regard to how long the job took or the travel time from one job site
to the next. FS Blinds owned the warehouse and maintained the inventory
of blinds, but Plaintiffs traveled to job sites in their own vehicles and used
their own tools to complete the jobs.
Plaintiffs did not have set work schedules. Instead, each afternoon,
FS Blinds sent them lists of jobs for the next day. The next morning,
Plaintiffs picked up the day’s blinds from FS Blinds’s warehouse. Flores and
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Romero-Rodriguez had early pickup times, arriving at the warehouse
between 5:00 and 5:30 a.m. Villarreal had a later time, between 7:00 and 8:00
a.m. After pickup, Plaintiffs left the warehouse and traveled to job sites to
complete their assignments. Each Plaintiff was largely responsible for
managing his own schedule throughout the day. So long as the day’s job list
did not specify otherwise, Plaintiffs could complete the jobs in any order they
chose. And if they failed to complete all the jobs on the day’s list, they could
roll jobs over to the next day.
Plaintiffs’ daily quitting times varied. Flores usually finished between
8:30 and 10:00 p.m. but sometimes worked as late as midnight. Romero-Rodriguez usually finished between 7:30 and 8:30 p.m. Villarreal, between
7:00 and 10:00 p.m.
While their usual weekly work schedules were Monday through
Friday, Plaintiffs sometimes worked Saturdays. Other times, they worked
fewer than five full days, at times working as little as one day a week. And as
noted above, Villareal did no work at all for FS Blinds during several weeks
over the course of his year-and-a-half stint with the company. Despite the
variations in their schedules, Plaintiffs assert they each worked an average of
“around 70 hours per week.”
In October 2019, Plaintiffs sued FS Blinds for failing to pay overtime
compensation, as required under the Fair Labor Standards Act (FLSA). See
29 U.S.C. § 207. FS Blinds countered that “Plaintiffs were classified as
independent contractors” and therefore were ineligible for overtime
compensation. See
id.
After discovery, both sides moved for summary judgment. The
district court denied Plaintiffs’ motions, but it granted summary judgment to
FS Blinds. The court determined that Plaintiffs had failed to meet their
prima facie burden to show they worked overtime. Based on that conclusion,
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the court dismissed Plaintiffs’ claims. The court denied summary judgment
as to whether Plaintiffs were independent contractors, stating only that “a
genuine question of material fact exists regarding Plaintiffs’ employee
status.” After the district court entered its final judgment, Plaintiffs timely
appealed.
II.
We review a summary judgment de novo, applying the same legal
standards as the district court. Certain Underwriters at Lloyd’s, London v.
Axon Pressure Prods. Inc., 951 F.3d 248, 255 (5th Cir. 2020). “[O]n cross
motions for summary judgment,” we “address[] each party’s motion
independently, viewing the evidence and inferences in the light most
favorable to the nonmoving party.” CANarchy Craft Brewery Collective, LLC
v. Texas Alcoholic Beverage Comm’n,
37 F.4th 1069, 1074 (5th Cir. 2022)
(quotation omitted). Summary judgment is appropriate when “the movant
shows that 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. P. 56(a).
III.
The FLSA requires that employers pay certain employees overtime
compensation. 29 U.S.C. § 207. Employers who fail to pay the requisite
compensation are liable to the affected employees for unpaid overtime.
Id.
§ 216(b). But the statute’s overtime protections apply only to covered
“employees,” not to independent contractors. Id. § 207. This case centers
on these two questions: (A) whether Plaintiffs worked overtime for which
they were not paid, and (B) whether they were employees of FS Blinds, or
independent contractors.
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A.
We begin with overtime. All parties agree that because FS Blinds did
not keep records of Plaintiffs’ hours, the burden-shifting standard from Mt.
Clemens, 328 U.S. at 686–88, applies. The district court determined that
Plaintiffs had not met their prima facie burden under Mt. Clemens because
they “fail[ed] to substantiate their overtime claims with any specific facts,
relying on conclusory and speculative assertions.” But under our precedent,
Mt. Clemens is a not a tall slope. Plaintiffs have summited it.
1.
First, the Mt. Clemens standard.
Usually, a plaintiff who brings a claim for unpaid overtime bears “the
burden of proving that he performed work for which he was not properly
compensated.” 328 U.S. at 687. This burden is “easily discharge[d]” where
an employer keeps accurate records of an employee’s hours, as the FLSA
requires. Id.; see also
29 U.S.C. § 211 (providing that employers must “make,
keep, and preserve” records of employees’ hours).
But Mt. Clemens recognized that the FLSA’s recordkeeping regime
may inadvertently incentivize employers to “fail[] to keep proper records”
because those records may later aid a plaintiff in proving overtime liability.
328 U.S. at 687. Such a perverse incentive would “penalize the employee by
denying him any recovery on the ground that he is unable to prove the precise
extent of uncompensated work,” thereby contravening “[t]he remedial
nature of [the FLSA] and the great public policy which it embodies.”
Id.
To alleviate this concern, the Supreme Court in Mt. Clemens created
a burden-shifting rule that applies when an employer has failed to keep
records, or where such records are “inaccurate or inadequate.” Id. In such
cases, a plaintiff need only come forward with evidence that shows “that he
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has in fact performed work for which he was improperly compensated” and
further shows “the amount and extent” of unpaid overtime worked “as a
matter of just and reasonable inference.” Id. Under this relaxed standard, a
plaintiff need not prove “the precise extent of uncompensated work,”
id.,
though he must present more than “unsubstantiated assertions,” Harvill v.
Westward Commc’ns, L.L.C.,
433 F.3d 428, 441 (5th Cir. 2005).
Once a plaintiff has made this prima facie showing, “[t]he burden then
shifts to the employer to come forward with evidence” that rebuts the
plaintiff’s claims. Mt. Clemens, 328 U.S. at 687. The employer can discharge
this burden by presenting either “evidence of the precise amount of work
performed or . . . evidence to negative the reasonableness of the inference to
be drawn from the employee’s evidence.”
Id. at 687–88. “If the employer
fails to produce such evidence, the court may then award damages to the
employee, even though the result be only approximate.”
Id. at 688.
While the Mt. Clemens framework might seem “lenient,” it is “rooted
in the view that an employer [should not] benefit from its failure to keep
required payroll records, thereby making the best evidence of damages
unavailable.” U.S. Dep’t of Labor v. Five Star Automatic Fire Prot., L.L.C.,
987 F.3d 436, 440 (5th Cir. 2021).
2.
Next, whether Plaintiffs have met their prima facie burden.
Plaintiffs each estimate an average workweek of 70 hours. 1 To
substantiate this estimate, each Plaintiff testified about his usual work
1
The district court miscast Plaintiffs’ testimony to denote an “unwavering stance
that they worked 70 hours per week even on weeks when doing so would be impossible.”
To the contrary, Plaintiffs have consistently contended that they worked an average of 70
hours per week, not that they worked 70 hours every week.
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schedule, including his usual daily starting and quitting times. This
testimony supported that Plaintiffs each averaged workdays between 11 and
17 hours. Some of this testimony was corroborated by testimony from FS
Blinds. 2 In addition, Plaintiffs also produced work orders documenting the
jobs they completed during a sample week. 3
Based on the record before us, Plaintiffs have presented enough to
satisfy their “lenient” prima facie burden under Mt. Clemens. See Five Star,
987 F.3d at 440. Their testimony alone would be sufficient. See Hobbs v.
EVO, Inc.,
7 F.4th 241, 257 (5th Cir. 2021) (“This leniency [under Mt.
Clemens] has led us to accept estimates of weekly overtime hours derived
from plaintiffs’ testimony as adequate evidence[.]”); see also Beliz v. W.H.
McLeod & Sons Packing Co.,
765 F.2d 1317, 1331 (5th Cir. 1985) (finding
plaintiffs’ testimony regarding “personal knowledge of the work
performed . . . was sufficient to establish, by reasonable inference, the hours
worked”); Hodgson v. Ricky Fashions, Inc.,
434 F.2d 1261, 1264 (5th Cir. 1970)
(same). This is so even though Plaintiffs’ testimony offers only an estimated
average of hours worked. See Reeves v. Int’l Tel. and Tel. Corp.,
616 F.2d 1342,
1352 (5th Cir. 1980) (finding plaintiffs met their burden by offering “an
estimated average workweek of approximately 75 hours”); see also Donovan
v. Hamm’s Drive Inn,
661 F.2d 316, 318 (5th Cir. 1981) (“The court found,
2
For example, an FS Blinds representative corroborated that installers began
arriving at the warehouse each morning at 5:30 a.m.
3
Using these records, Plaintiffs estimated hours worked during that sample week
at well over 40 hours. Before the district court, Plaintiffs contended that these summary
estimates were admissible under Rule 1006 of the Federal Rules of Evidence. But the
district court neither mentioned the summaries in its order nor ruled on the summaries’
admissibility. FS Blinds now contends that these summaries are inadmissible, but the
parties dispute whether FS Blinds properly preserved this issue by objecting in the district
court. We need not decide the issue. Even without the summaries, Plaintiffs’ testimony
and work orders are sufficient to establish the Mt. Clemens inference.
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based on the testimony of employees, that certain groups of employees
averaged certain numbers of hours per week and awarded back pay based on
those admittedly approximate calculations.”).
In addition to their testimony, though, Plaintiffs offered supporting
work orders and some corroborating testimony from FS Blinds. All told, this
record evidence hurdles Plaintiffs’ Mt. Clemens burden. See Skipper v.
Superior Dairies, Inc., 512 F.2d 409, 417, 419 (5th Cir. 1975) (holding plaintiff
met his burden by offering his own testimony and “73 different delivery lists”
showing jobs he completed); see also O’Meara-Sterling v. Mitchell,
299 F.2d
401, 404 (5th Cir. 1962) (finding plaintiff’s testimony and the timecards of
his successor “adequate” to meet his burden).
The district court thus erred when it rejected Plaintiffs’ claims as no
more than unsubstantiated assertions. It reached that conclusion relying on
Kirk v. Invesco, Limited, 700 F. App’x 334, 336 (5th Cir. 2017), and Ihegword
v. Harris County Hospital District,
929 F. Supp. 2d 635, 668 (S.D. Tex. 2013).
Of course, neither Kirk nor Ihegword is binding. 4 In any event, we do not find
either case persuasive.
This case’s contrast with Harvill shows why. In Harvill, we rejected
the plaintiff’s Mt. Clemens claim as mere “unsubstantiated assertions”
because she “offered no factual allegations at all to substantiate her claims,”
including “no evidence of the amount or the extent of hours she worked
without compensation” and “no evidence that [her employer] was aware she
worked overtime hours without compensation.” 433 F.3d at 441 (emphases
4
This court’s unpublished opinions “do not establish any binding law for the
circuit[.]” Salazar v. Molina, 37 F.4th 278, 286 (5th Cir. 2022). Likewise, “[a] decision of
a federal district court . . . is not binding precedent in either a different judicial district, the
same judicial district, or even upon the same judge in a different case.” Camreta v. Greene,
563 U.S. 692, 709 n.7 (2011).
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in original). Only on appeal did Harvill “add[] to her argument” an alleged
number of unpaid overtime hours. Id. Unlike in Harvill, Plaintiffs here have
sufficiently substantiated their claim, proffering not only an estimated
number of unpaid overtime hours worked but also specific testimony and
records to support their estimates. 5
The district court also conflated the lenient Mt. Clemens standard with
the more stringent standard that applies in other overtime cases. The district
court relied on Garner v. Chevron Phillips Chemical Company, L.P., for the
proposition that each Plaintiff must “prov[e], with definite and certain
evidence, that he performed work for which he was not properly
compensated.” Garner, 834 F. Supp. 2d 528, 545–46 (S.D. Tex. 2011). But
as Garner itself makes clear,
id. at 546, that standard applies in overtime cases
where the employer has kept the required time records, not in Mt. Clemens
cases. Considering the record before us and under the proper standard,
Plaintiffs have met their prima facie burden.
3.
In response, FS Blinds must rebut Plaintiffs’ showing. Mt. Clemens,
328 U.S. at 687. Because FS Blinds did not keep records of Plaintiffs’ time,
it cannot produce “evidence of the precise amount of work [Plaintiffs]
5
On appeal, FS Blinds points for support to Fairchild v. All American Check
Cashing, Inc., 815 F.3d 959 (5th Cir. 2016), and Garcia v. U Pull It Auto & Truck Salvage,
Inc.,
657 F. App’x 293 (5th Cir. 2016). But both cases are inapposite. Fairchild does not
involve the Mt. Clemens standard at all, as the employer there maintained timesheets.
815
F.3d at 965. In Garcia, the plaintiff’s assertions were insufficiently specific not because
they failed to show he worked overtime, but because they failed to show he worked
overtime for which he was not paid. 657 F. App’x at 297–98. That is not disputed here. We
also note that Garcia is unpublished and, therefore, not precedential. See Salazar,
37 F.4th
at 286.
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performed.” Id. But the company can “‘disprove’ the evidence adduced”
by Plaintiffs. Skipper,
512 F.2d at 420. It fails to do so.
FS Blinds points to Plaintiffs’ deposition testimony and their varied
weekly compensation. To be sure, FS Blinds is correct that Plaintiffs’
schedules varied week-to-week. But Plaintiffs have never asserted that they
worked 70 hours every week. Instead, they have consistently maintained that
they worked an average of 70 hours per week. See supra n.1. Therefore, FS
Blinds’s broad-brush contention that Plaintiffs could not possibly have
worked 70 hours every week does not in itself overcome Plaintiffs’ overtime
allegations.
At most, FS Blinds has identified certain weeks when each Plaintiff
worked fewer than 70 hours, or no overtime at all. But FS Blinds nowhere
offers undisputed summary judgment evidence demonstrating that Plaintiffs
did not work any unpaid overtime. Nor does FS Blinds counter Plaintiffs’
testimony about their usual start and end times. Thus, while the company
has offered evidence that may well bear on the amount of overtime Plaintiffs
worked, i.e., the compensation they are owed, FS Blinds has failed to negate
Plaintiffs’ proof that they in fact worked overtime for which they were not
compensated.
B.
But there is a “but.” Though Plaintiffs have met their prima facie
burden under Mt. Clemens to show that they worked unpaid overtime,
thereby defeating summary judgment on this issue, Plaintiffs may
nonetheless not recover if they were independent contractors, rather than
employees. See Hopkins v. Cornerstone Am., 545 F.3d 338, 342 (5th Cir. 2008)
(“[T]he FLSA applies to employees but not to independent contractors[.]”).
In their competing motions for summary judgment, Plaintiffs asserted
that they were employees, while FS Blinds contended that Plaintiffs were
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independent contractors. The district court denied summary judgment to
either side on the issue. In a single sentence in its order disposing of the
motions, the district court determined that “a genuine dispute of material
fact exists regarding Plaintiffs’ employee status.” Given its overtime
holding, the district court did not analyze the issue further. On appeal, both
Plaintiffs and FS Blinds urge us to resolve the issue, though they urge us to
reach opposite conclusions.
In determining whether workers are employees or independent
contractors, “the pertinent question is whether the alleged employees, as a
matter of economic reality, are economically dependent on the business to
which they supply their labor and services,” or are “in business for
[them]sel[ves].” Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369,
379 (5th Cir. 2019) (quotations and citation omitted). To answer, courts
consider five factors:
(1) the degree of control exercised by the alleged employer;
(2) the extent of the relative investments of the worker and the
alleged employer;
(3) the degree to which the worker’s opportunity for profit or
loss is determined by the alleged employer;
(4) the skill and initiative required in performing the job; and
(5) the permanency of the relationship.
Id. (quoting Hopkins,
545 F.3d at 343). While these factors are “nonexhaustive,” “[o]nly the economic realities are legally relevant.”
Id. at 379–
80. So we do not consider labels attached to the relationship by the alleged
employees or employer unless they “mirror economic reality.”
Id. at 380
(quotations omitted). The ultimate determination about whether a worker is
an employee or independent contractor is a question of law.
Id. at 377. But
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the findings as to the five factors and the “historical findings of fact that
underlie [those] finding[s]” are questions of fact. Id. at 378.
Though the district court denied summary judgment on this issue, we
could choose to address the question here to the extent it provides an
alternate ground for affirmance. See Doctor’s Hosp. of Jefferson, Inc. v. Se.
Med. All., Inc., 123 F.3d 301, 307 (5th Cir. 1997) (“A district court’s grant of
summary judgment may be affirmed on grounds supported by the record
other than those relied on by the court.”). “But we have no obligation to do
that.” George v. SI Group, Inc.,
36 F.4th 611, 626 (5th Cir. 2022) (Oldham,
J., concurring in part) (citing Sanders-Burns v. City of Plano,
594 F.3d 366, 383
(5th Cir. 2010)).
Whether Plaintiffs are independent contractors or employees is “fact
intensive.” Hathcock v. Acme Truck Lines, Inc., 262 F.3d 522, 527 (5th Cir.
2001); cf. Parrish,
917 F.3d at 380 (“Like every FLSA action in a similar
posture, the instant cross-motions for summary judgment are ‘very fact
dependent.’” (citation omitted)). But the district court’s order did not
grapple with the facts in this case, only determining without explanation that
“a genuine question of material fact exist[ed.]” Nor did the district court
decide whether to consider the additional factors proffered by the parties—
namely, whether Plaintiffs were integral to FS Blinds’s operation and
whether Plaintiffs represented themselves as independent contractors.
Of course, this approach was not unreasonable given the court’s
conclusion that Plaintiffs failed to substantiate their prima facie case; that
holding made it unnecessary to delve any deeper into Plaintiffs’ employment
relationship with FS Blinds. With our reversal of that holding, however, this
alternative ground for summary judgment is again salient. Mindful that we
are a “court of review, not of first view,” Landry’s, Inc. v. Ins. Co. of the State
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of Penn., 4 F.4th 366, 372 n.4 (5th Cir. 2021), we decline to reach the issue to
allow the district court to consider it first. 6
IV.
Finally, a word on damages. Should the district court conclude that
Plaintiffs are employees (instead of independent contractors) and otherwise
entitled to recover unpaid overtime compensation, it should then proceed to
“do the best [it] can in assessing damages.” Mitchell v. Riley, 296 F.2d 614,
616 (5th Cir. 1961). “We do not minimize [the district court’s] difficulties”
in “translat[ing]” the facts of this case “into dollars” for damages. Mitchell
v. Mitchell Truck Line, Inc.,
286 F.2d 721, 725 (5th Cir. 1961). But under Mt.
Clemens, the “[d]ifficulty of ascertainment is no longer confused with right
of recovery.”
Id. (citation omitted). Though Plaintiffs’ estimates are likely
not “perfectly accurate,” they can still “provide[] a sufficient basis” for an
award of damages under Mt. Clemens. Marshall v. Mammas Fried Chicken,
Inc.,
590 F.2d 598, 599 (5th Cir. 1979).
In this process, FS Blinds has no right “to complain that the damages”
determined by the district court inevitably will “lack the exactness and
precision of measurement that would be possible had [it] kept records in
accordance with the [FLSA’s] requirements.” Mt. Clemens, 328 U.S. at 688;
see also Mitchell Truck Line,
286 F.2d at 725 (“The employer cannot really
complain that matters are left in great uncertainty.”). Nevertheless, the
district court may consider whether FS Blinds has identified errors in
Plaintiffs’ calculations. “It may well be that in this process the [district
6
We also note that this court applies a “presumption [that] weighs in favor of
submission of [employee-status] inquiries to the jury.” Hathcock, 262 F.3d at 527. This
can be overcome where the facts “permit[] only one reasonable conclusion.”
Id. We leave
it to the district court to determine in the first instance whether the facts here overcome
that presumption for Plaintiffs or for FS Blinds.
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court] will feel that further evidence should be taken.” Mitchell Truck Line,
286 at 726. And if the evidence adduced substantiates errors in Plaintiffs’
alleged overtime amounts, the district court should reduce damages awarded
accordingly. See Hobbs, 7 F.4th at 258 (“We note that the district court
reduced the number of hours claimed by each Plaintiff based on errors that
[the Defendant] brought to its attention.”).
V.
The district court erred in holding that Plaintiffs failed to meet their
prima facie burden to substantiate overtime under Mt. Clemens. The court’s
summary judgment in favor of FS Blinds based on this conclusion was
therefore likewise in error. Accordingly, we reverse the district court’s grant
of summary judgment on this issue and remand for further proceedings
consistent with this opinion. We foreshadow no outcome as to the questions
that remain for the district court to consider on remand—including whether
Plaintiffs were employees of FS Blinds or independent contractors, and, if
they were employees, the appropriate overtime compensation to be awarded
as damages in this action. We hold only that Plaintiffs have met their prima
facie burden under Mt. Clemens to show they worked overtime.
REVERSED and REMANDED.
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