United States District Court, W.D. Virginia, Abingdon Division
R. ALEXANDER ACOSTA, SECRETARY OF LABOR,, Plaintiff,
MOUNTAIN MASONRY, INC., ET AL., Defendants.
P. Jones United States District Judge.
M. Barefield, Office of the Regional Solicitor, U.S.
Department of Labor, Arlington, Virginia, for Plaintiff';
John M. Lamie, Browning Lamie & Gifford, PC, Abingdon,
Virginia, for Defendants Mountain Masonry, Inc., and Billy
Cook, as President and Individually.
Fair Labor Standards Act case, the defendants are in default
and the court has received evidence as to the amount of a
default judgment. The defendants have objected to the amount
of back wages to be paid and to certain aspects of injunctive
relief requested by the Secretary of Labor
("Secretary"). For the reasons set forth in this
Opinion, . I will sustain in part and overrule in part the
accordance with Federal Rule of Civil Procedure 52(a), and
based on my opportunity to assess the credibility of the
witnesses, the following are my findings of fact, based on
the evidence presented at an evidentiary hearing held on the
plaintiffs request for a default judgment.
Young, a Labor and Hour Investigator with the Department of
Labor, visited the offices of defendant-employer Mountain
Masonry, Inc. ("Mountain Masonry") in January 2016
to review payroll documents, time records, and other records
of the business! A complaint from an employee to the
Department of Labor prompted Young's investigation. Young
had sent a letter to Mountain Masonry in advance of the
meeting notifying Mountain Masonry of when she would be
visiting and the reason for her visit, and listing documents
she wished to review. She had also communicated with
codefendant Billy Cook, the owner of Mountain Masonry, before
her visit, and he had sent her some records to review.
her visit, Young reviewed boxes of pay stubs. The pay stubs
contained descriptions of work performed and listed
deductions. She was also shown a separate box of pay stubs
that contained no descriptive information regarding the
purpose of the payments. Cook told Young that those pay stubs
represented reimbursements for travel expenses or per diem
payments. No deductions had been taken from those payments.
Prior to reviewing the separate box of pay stubs, Young asked
Cook why there were no overtime payments noted on the payroll
documents. Cook replied that his employees did not work much
told Young that Mountain Masonry had a practice of issuing
two separate paychecks per pay period. The first check
represented payment for 40 hours per week, with appropriate
deductions withheld. The second check represented payment at
the regular hourly rate for any hours worked in excess of 40
hours, plus three dollars per hour for each hour that the
employee worked at a distant job site. Cook told Young that
this additional three-dollars-per-hour payment was a
"per diem" or travel bonus. Employees reported to
Young that their hours worked had been tracked accurately by
the foremen at their job sites.
investigation revealed that 112 employees had been paid at
their regular pay rate for hours worked in excess of 40 hours
per week. These employees were not paid 150% of their regular
wage for overtime hours as the law required. Young used the
pay stubs provided by the defendants to calculate the amount
of back wages the defendants owed to the workers as a result
of the failure to pay a 50% premium on overtime hours. Per
Department of Labor policy, she did not include back wages
for employees who were owed less than $20. Young calculated
that the defendants owed workers $98, 198.11 in back wages
incurred from October 28, 2013 through June 26, 2016.
point during the investigation, Young learned what the second
set of paychecks represented and directed Cook to stop paying
employees in the above-described fashion. Following that
directive, Mountain Masonry continued to issue two sets of
paychecks, but the second set of paychecks no longer
indicated what portion of the payment was for overtime hours
and what portion was for the so-called per diem. Young used
the hourly rates from the regular pay stubs to calculate the
amounts from the second pay stubs that represented payment
for hours worked in excess of 40 per week. By October 2016,
Mountain Masonry had come into compliance with the law and
was no longer issuing separate paychecks or paying workers
their standard hourly rates for overtime hours.
did not deduct the per diem payment amounts from the amount
of back wages owed because she concluded that the per diem
payments were not intended as compensation for hours worked.
Rather, based on representations by Cook and employees, the
per diem payments were intended to cover incidental expenses
incurred by employees due to the fact that they were working
at sites far from home. Mountain Masonry paid for the
workers' hotel accommodations while they were working at
distant sites, but it did not pay for their meals.
White, a former employee of Mountain Masonry, testified on
behalf of the Secretary. White worked for Mountain Masonry
for approximately a year in 2015. He was paid his normal
hourly rate for all hours worked and was not paid a 50%
premium on hours worked over 40 per week. He was paid with
two separate paychecks, as described above. He had previously
worked for Cook 10 to 12 years earlier, and Cook had not paid
him an overtime premium at that time. The defendants never
paid White back wages for overtime hours he worked in 2015.
He did receive a bonus of three dollars per hour when he was
working at remote sites. He understood that this payment was
intended to Compensate him for travel expenses, like meals
away from home. He did not receive the per diem amount when
working at sites closer to home. White explained that he
agreed to perform extra work at his normal hourly rate
because he needed the money.
testified that he did not force employees to work overtime
but allowed them to decide how many hours they wanted to
work. The employees understood that they would not receive a
50% premium on overtime hours. Cook testified that he treated
overtime hours as independent contractor labor, even though
he treated the same workers as employees for their regular 40
hours of work each week. When working at a remote job site,
each worker received an additional four hours of pay to
compensate for driving time, regardless of the actual time it
took them to travel to and from the job site.
longer allows workers to work more than 40 hours per week. He
has retained the services of an accounting firm to ...