Bennett v. McDermott International Inc

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

KENDRICK BENNETT, ET AL CASE NO. 2:19-CV-00158

VERSUS JUDGE JAMES D. CAIN, JR.

MCDERMOTT INTERNATIONAL MAGISTRATE JUDGE KAY

INC., ET AL.

MEMORANDUM RULING

Before the court are three Motions to Dismiss filed under Federal Rule of Civil

Procedure 12(b)(6) by, respectively, defendants Cameron LNG, LLC (“Cameron LNG”)

[doc. 17], Chiyoda International Corporation (“Chiyoda”) [doc. 19], and CB&I, LLC

(“CB&I”), McDermott International Inc. (“McDermott”), and Chiyoda [doc. 25], as well

as a Supplemental Motion to Dismiss [doc. 69] filed by CB&I, Chiyoda, and McDermott.

Plaintiffs oppose all motions.

1.

BACKGROUND

These motions relate to a suit filed by plaintiffs Kendrick Bennett and Courtlande

Collins, on behalf of themselves and others similarly situated, against the above-narned

defendants. Plaintiffs assert that they work/worked for defendants at the Cameron LNG

Liquefaction Project in Hackberry, Louisiana, and are required to ride on employer-

provided buses between designated parking lots and the job site. Doc. 15. They claim that

they are entitled to compensation for time spent on this commute. Accordingly, they seek

monetary and injunctive relief under the Louisiana Wage Payment Act (“LWPA”),

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Louisiana Revised Statute § 23:631 ef seg., and the minimum wage and

provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. Id. They

seek certification as a collective/class action under the FLSA and Federal Rule of Civil

Procedure 23. /d.; docs. 30, 62.

The defendants now move for dismissal of the plaintiffs’ claims. Cameron LNG and

Chiyoda argue that the claims against them must be dismissed because they are not/the

plaintiffs’ employers. Doc. 17, att. 1; doc. 19, att. 1. Chiyoda also argues that plaintiffs’

FLSA minimum wage claims are mathematically impossible and that plaintiff Bennett’s

LWPA claim must be dismissed because he is still employed. Doc. 19, att. 1. CB&I,

McDermott, and Chiyoda assert that plaintiffs’ minimum wage claims are mathematically

impossible, that their FLSA claims are implausible under the Portal-to-Portal Act, and □□

their claims are insufficiently pled in that they improperly “lump” defendants ce:

Doc. 25, att. 1; doc. 42. Finally, CB&I, Chiyoda, and McDermott assert that plaintiffs’

LWPA claims are preempted by the FLSA. Doc. 69.

II.

MOTION TO DISMISS STANDARDS

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows for dismissal of a claim

when a plaintiff “fail[s] to state a claim upon which relief can be granted.” When reviewing

such a motion, the court should focus on the complaint and its attachments. Wilson v.

Birnberg, 667 F.3d 591, 595 (Sth Cir. 2012). The court can also consider matters of which

it may take judicial notice, including matters of public record. Hall v. Hodgkins, 305 Fed.

App’x 224, 227 (5th Cir. 2008) (unpublished) (citing Lovelace v. Software Spectrum te

78 F.3d 1015, 1017-18 (5th Cir. 1996) and Norris v. Hearst Trust, 500 F.3d 454, 461 n. 9

(5th Cir. 2007)).

Such motions are also reviewed with the court “accepting all well-pleaded facts as

true and viewing those facts in the light most favorable to the plaintiff.” Bustos v. Martini

Club, Inc., 599 F.3d 458, 461 (5th Cir. 2010). However, “the plaintiff must plead enough

facts ‘to state a claim to relief that is plausible on its face.’” In re Katrina Canal Breaches

Litig., 495 F.3d 191, 205 (5th Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550

544, 570 (2007)). Accordingly, the court’s task is not to evaluate the plaintiff's likelihood

of success, but instead to determine whether the claim is both legally cognizable and

plausible. Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC, 594 F.3d 383, 387 (Sth

Cir. 2010).

Il.

APPLICATION

A, Employer Status

Both the LWPA and the minimum wage and overtime provisions of the FLSA

obligate employers to pay certain wages owed to their employees. La. Rev. Stat. § 23:681;

29 U.S.C. §§ 206-07. Accordingly, a plaintiff must allege that he was employed by |the

defendant during the relevant time period in order to state a claim under either statute.

Johnson v. Heckmann Water Resources, Inc., 758 F.3d 627, 630 (Sth Cir. 2014); Bergeron

v. Ochsner Health Sys., 2017 WL 3648451, at *3 (E.D. La. Aug. 24, 2017).

Louisiana courts use a five-factor test to evaluate whether an employer/employee

relationship exists under the LWPA, with a focus on the employer’s right to exercise

control over the employee’s performance. Mendoza v. Essential Quality Constr., Inc., .

F.Supp.2d 680, 686 (E.D. La. 2010). Meanwhile, the FLSA defines an employer as “any

person acting directly or indirectly in the interest of an employer in relation to

employee.” 29 U.S.C. § 203(d). To this end the court uses an economic reality test,

balancing four factors. Gray v. Powers, 673 F.3d 352, 355 (Sth Cir. 2012).

Bennett and Collins asset that they “worked for the Defendant(s) at the Cameron

LNG Liquefaction Project,” with Bennett working as a welding foreman from December

2016 until the present and Collins working as a pipefitter from December 2016 until amu

2018. Doc. 15, ff] 14-15. Chiyoda and Cameron LNG move for dismissal of all claims due

to plaintiffs’ failure to plausibly plead enough facts to establish an employment relationship

with either defendant.

The plaintiffs offer no allegations as to their employment status or relation to ithe

defendants other than to assert defendants’ role in the liquefaction project and label them

as employers. “Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements” are insufficient even at the pleading stage. Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009). As district courts have noted, however, “[t]he contention that a

particular defendant is an employer ‘is the very definition of a factual allegation upon

which plaintiffs are entitled to offer proof.” Rodriguez v. Gold & Silver Buyers, Inc., 2013

WL 5372529, at *3 (S.D. Tex. Sep. 24, 2013) (quoting Moreno v. EDCare Mgmt., Inc.,

243 F.R.D. 258, 260 (W.D. Tex. 2007)); see, e.g., Mejia v. Bros. Petrol., LLC, 2015

3619894, at *3-*4 (E.D. La. Jun. 9, 2015) (cursory allegation of employer status sufficient

under FLSA claim); Bodnar v. Newport Corp. of La., 2011 WL 4575122, at *4—*5 □□□□□

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La. Sep. 29, 2011) (same, under the LWPA). Accordingly, plaintiffs’ allegations of

employment status suffice to support their FLSA and LWPA claims.

B. State Law Claims

I. Bennett’s LWPA claim

Chiyoda asserts that Bennett’s LWPA claim must be dismissed because he admits

that he is still employed. The LWPA “creates liability for an employer who fails to timely

pay wages owed to an employee after the employee voluntarily leaves employment.” Becht

v. Morgan Bldg. & Spas, Inc., 843 So.2d 1109, 1111-12 (La. 2003). ccortiogt a

plaintiff must show that his employment with the defendant has ended in order to prevail

on such a claim. E.g., Bergeron, supra, 2017 WL 3648451 at *3. Bennett alleges that he

“is currently employed by Defendant(s),” but as plaintiffs note, only purports to represent

other claimants as to the FLSA claims. Doc. 15, 4 14 & n. 2. Collins, on the other hand,

asserts that he “concluded his employment” in August 2018 and purports to represent

others similarly situated on both the FLSA and LWPA claims. Jd. at § 15 & nj 3.

Accordingly, Bennett does not assert a LWPA claim and the motion to dismiss must be

denied on this basis.

2. Preemption of LWPA claims

Defendants contend that plaintiffs’ LWPA claim is preempted by their claims

unpaid minimum wage and overtime pay under the FLSA. The FLSA preempts state law

and penalties for employees engaged in interstate commerce on claims of legal entitlement

to compensation. Bell v. Associated Wholesale Grocers, Inc., 2019 WL 1979935, at)*1

(E.D. La. 2019) (citing Divine v. Levy, 36 F.Supp. 55, 58 (W.D. La. 1940)). Where the

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FLSA applies, the LWPA cannot be used to pursue a claim of legal entitlement to es.

England v. Adm’rs of the Tulane Educ. Fund, 2016 WL 6520146, at *6 (E.D. La. val 3,

2016). The LWPA, however, creates liability for failure to pay wages “then due under □□□

terms of employment” upon an employee’s discharge. La. Rev. Stat. § 23:631. Claims

based on non-payment of agreed-upon wages may therefore be maintained under |the

LWPA’s broad scope and are not preempted by the FLSA. E.g., Tillman v. La. Children’s

Med. Ctr., 2017 WL 1399619, at *3 (E.D. La. Apr. 19, 2017).

Plaintiffs have alleged that they were non-exempt employees within the meaning of

the FLSA and that they were engaged in interstate commerce. Doc. 15, { 106. Accordingly,

they maintain that they are legally entitled to compensation for their hours spent

commuting under the FLSA’s minimum wage and overtime payment provisions. They

insist that their LWPA claim, on the other hand, is based on nonpayment of agreed-upon

wages. Doc. 92. They allege, in relevant part, that defendants have violated the LWP

failing to pay “earned wages for all hours worked,” specifically those spent riding

waiting for the employers’ buses, within the required time. Doc. 15, 4 121. They do not,

however, show or allege any agreement to pay for this time.

As defendants note, claims for agreed-upon wages under the LWPA requir a

demonstration that the time is compensable under some agreement, internal policy, or

procedure. See, e.g., England, 2016 WL 6520146, at *6 (allowing LWPA claim for agreed-

upon wages to proceed alongside FLSA overtime claim, because the claim was for benefits,

including paid time off, specifically designated under employer’s internal policies); see

also Nassauer v. Marine Offshore Catering Co., 413 So.2d 946, 948 (La. Ct. App. Ist Cir.

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1982) (finding that employees were entitled to wages for hours spent traveling to and re

rig based on evidence that it was “normal procedure” for company to compensate for

time). Plaintiffs do not point to any agreement or other entitlement to travel/wait time

compensability, other than the basis set forth under their FLSA claim. This omission is

fatal to their ability to show that the state law claims are not preempted, given their

admission that their legal entitlement claims are covered by the FLSA. Accordingly, |the

LWPA claim and Rule 23 class allegations raised thereunder must be dismissed with

prejudice.

C. Implausibility of FLSA Claims under Portal-to-Portal Act

Plaintiffs claim that defendants violate the minimum wage and overtime provisions

of the FLSA by refusing to pay them for time spent on the mandatory transportation system

as well as for wait time relating to that transportation. Doc. 15. Defendants argue that the

plaintiffs’ FLSA claims are barred by the Portal-to-Portal Act, 29 U.S.C. § 254. Doc. 25,

att. 1.

I. Compensability of travel to and from work

The Portal-to-Portal Act was enacted to limit employers’ liability under the FLSA,

and exempts from compensation:

(1) walking, riding, or traveling to and from the actual place of

performance of the principal activity or activities which such employee is

employed to perform; and

(2) activities which are preliminary to or postliminary to said principal

activity or activities.

29 U.S.C. § 254(a). Defendants assert that time spent on the bus is exempted as travel to

and from work by the plain language of § 254(a)(1). Plaintiffs maintain that the time is

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compensable “because, among other reasons, the form of transportation in ... is

required and/or rendered mandatory by the Defendants.” Doc. 15, § 8 (emphasis in

original); see doc. 44, pp. 20-45.

In Vega v. Gasper, 36 F.3d 417 (5th Cir. 1994), the Fifth Circuit held that

laborers’ travel time to and from fields, on transport provided by the employer,

ordinary to- and from-work travel and therefore not compensable under § 254(a)(1). Jd. at

424-25. To this end it noted that (1) the workers performed no work during or before|the

bus rides; (2) the workers’ use of the bus was voluntary; (3) the workers’ mere receipt of

instructions from a supervisor during this time was insufficient to render the time

compensable; (4) the length of travel time in itself did not render the time compensable;

and (5) the workers did not have to travel between job sites on these buses. Jd. at 425; see

also Johnson v. RGIS Inventory Specialists, 554 F.Supp.2d 693 (E.D. Tex. 2007) (finding

that travel time in a company van was non-compensable based on many of the same

factors). The court later considered a mandatory transportation scheme in Griffin v. S & B

Engineers & Constructors, Ltd., 507 F. App’x 377 (Sth Cir. 2013) (unpublished), and

likewise found that the time was non-compensable under § 254(a)(1).

Plaintiffs argue that the court should disregard Griffin’s unpublished analysis and

instead focus on the limited consideration of voluntariness under Vega and Johnson.|To

this end they also point to Morrillion v. Royal Packing Co., 995 P.2d 139 (2000), in which

the California Supreme Court, focusing only on the compulsory nature of the system, held

that employees were entitled to compensation under California wage laws for time sn

on employer-mandated transit. Plaintiffs contend that Morrillion is persuasive because

“California’s law is nearly analogous to the FLSA — in fact a derivative of the FLSA —land

[it] involves a case where a forced busing system was in place.” Doc. 44, p. 42.

however, the court noted that the FLSA “differs substantially from the state scheme” pos

declined to consider any federal case law. 995 P.2d at 147. In particular, the state labor

code and wage orders at issue “do not contain an express exemption for travel time similar

to that of the Portal-to-Portal Act” and the court “decline[d] to import any federal stand,

which expressly eliminates substantial protections to employees, by implication.” Id at

148, 152.

The analysis in Griffin, on the other hand, is highly persuasive. There the Fifth

Circuit considered a mandatory transportation scheme in which the employer provided

buses that took employees to and from the plant from a parking lot six or seven miles away,

in round trips totaling forty to sixty minutes a day. 507 F. App’x at 378-79. While snl

buses, employees were required to obey employer’s rules of conduct and subject to

disciplinary action, including termination, if they violated them. Jd.

As the Griffin court observed, no circuit has found that time spent on mandatory

transportation schemes was per se compensable under the FLSA. Circuits to consider □□

issue have regarded the factor skeptically. See Bonilla v. Baker Concrete Constr. Inc., 487

F.3d 1340, 1343 (11th Cir. 2007) (“The fact that the workers were required to □□

authorized transportation . . . is not relevant to the outcome of this case because even

mandatory travel time is exempted from compensation under the Portal to Portal Act,”);

Smith v. Aztec Well Svcg. Co., 462 F.3d 1274, 1288 (10th Cir. 2006) (“[N]othing in the

[Portal-to-Portal Act] indicates that there is a per se exception for employees just vecelse

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they must travel with their coworkers.”) Though the voluntariness of the transportation

scheme was mentioned in both Vega and Johnson, it was not dispositive in either. F inally,

the Griffin court noted that the mandatory busing system was well within the scope □

following Department of Labor interpretative statement:

Examples of walking, riding, or traveling which may be performed outside _|

the workday and would normally be considered “preliminary” or

“postliminary” activities are . . . (2) riding buses between a town and an_

outlying mine or factory where the employee is employed; and (3) ridingon

buses or trains from a logging camp to a particular site at which the logging

operations are actually conducted.

Id. at 383 (quoting 29 C.F.R. § 790.7(f)).! Accordingly, the court applied the other factors

mentioned in Vega and, concluding that the limitations on travel were not “integral and

{

indispensable” to the plaintiff's work, held that the time was non-compensable one §

254(a)(1). Jd. at 382-83.

Plaintiffs in this matter allege that the transportation system “is not ordinary home-

to-work travel, nor is it a normal incident of employment.” Doc. 15, { 6. To this end they

claim that they are required to travel on employer-provided buses between designated

parking areas and the job site in Hackberry, Louisiana, “with the trips spanning some

from twenty (20) minutes to one (1) hour one way.” Jd. at § 30. They maintain that the

a

! Plaintiffs argue that their travel is within the scope of § 790.7(c). That section states, in relevant part:

[W]here an employee travels outside his regular working hours at the direction and on the business

of his employer, the travel would not ordinarily be “walking, riding, or traveling” of the type referred

to in section 4(a). One example would be a traveling employee whose duties require him to travel

from town to town outside his regular working hours; another would be an employee who has gone

home after completing his day's work but is subsequently called out at night to travel a substantial

distance and perform an emergency job for one of his employer's customers.

29 C.F.R. § 790.7(c). Plaintiffs’ allegations do not show that they are “on the business” of their employer during the

travel time, and the transportation scheme at issue bears no resemblance to the examples offered. Instead, it fits

squarely within the parameters of § 790.7(f) above.

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system is inconvenient because it adds time to the commute for many employees and

because they cannot spend that time engaging in their choice of recreational or personal

activities. /d. at §] 79-84. They contend that unspecified employees were “at “pe

required” to accept work calls and discuss job duties while on the buses. Jd. at 73. Finally,

they allege that the system has numerous benefits for the employer, including assuring its

compliance with government regulations. Jd. at 1 78. They admit, however, that they, do

not perform any work between arrival at the designated parking area and drop-off a

job site. Jd. at 99.

It is not the importance of the transportation scheme to defendants, or even! its

inconvenience to plaintiffs, that matters here. Instead, “[a] restriction imposed on te

manner in which plaintiffs can travel to and from their workplace is relevant only if it

shows that their travel time was integral and indispensable to their principal activities.”

Griffin, 507 F. App’x at 383 (quoting Smith v. Aztec Well Svcg. Co., 462 F.3d 1274, pes

(10th Cir. 2006)).* As the Supreme Court held shortly after Griffin, a court errs under the

“integral and indispensable” test when it focuses on whether the employer required

activity or received a benefit from it. Integrity Staffing Solutions, Inc. v. Busk,_ _U.S._\_,

135 S.Ct. 513, 519 (2014). Instead, the inquiry is “tied to the productive work that he

employee is employed to perform.” Id. (emphasis in original). The Fifth Circuit has

recognized Busk as abrogating Vega, which lends even greater weight to Griffin’s analysis

? Defendants argue that the “integral and indispensable” test is not applicable to this case because plaintiffs’ □□□□□

time is excluded by the plain language of § 254(a)(1). Doc. 53, p. 12. As Griffin shows above, however, this tebt is

activity to resolving the extent to which the employer’s control of the transportation might render it a compensable

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and the de-emphasizing of convenience and compulsoriness as factors. See Bridges v.

Empire Scaffold, LLC, 875 F.3d 222, 227-28 (Sth Cir. 2017).

Plaintiffs raise numerous allegations relating to the benefits of the apts

system to the employer(s) and its inconveniences to the employees, but do not assert that

the transportation had any connection to their own productive work.’ Their reliance the

concerns raised in a California case, which distinguished itself from relevant federal law,

is scarcely creditable. Meanwhile, all relevant federal authority shows that a mandatory

transportation scheme — even one that benefits the employer — does not make he

employees’ commute compensable under the exclusions imposed by the plain language of

the Portal-to-Portal Act, absent considerations not even alleged here. Related guidance

from the Department of Labor likewise shows that schemes like the one at issue, where

workers are transported en masse to and from remote work sites, are precisely wg

types of commutes contemplated under the Act’s exclusions.

Plaintiffs observe that Griffin and related cases were decided on motions

summary judgment. They argue that dismissal is “exceptionally premature” at this Pei

due to their limited opportunity to engage in discovery. However, they fail to present □□

allegations that would distinguish the scheme at issue here from the one considered there

in any relevant capacity. While they allege greater wait times, discussed below, they □□□□

not shown that these wait times have any connection to the productive work that ne

plaintiffs were employed to perform. Additionally, their allegations that some employees

———

3 Their chief allegation of restriction or inconvenience appears to be that they are required to meet at designated

parking locations before boarding the buses, but the busing examples contained in the Department of Labor guidance

above do not appear limited to instances in which the employees would be picked up directly from their homes. |

12.

— rather than any plaintiff yet identified in this suit — occasionally took work calls are

insufficient to show that anything connected to the plaintiffs’ principal activities was done

during this commute, especially in light of their admission that no work was done until

they reached the job site. Accordingly, defendants succeed in showing that the FLSA

claims, as they relate to travel time, are barred under the Portal-to-Portal Act.

2. Compensability of wait time □

Plaintiffs also allege that defendants have not provided enough buses to support this

scheme and that they are required to arrive at their parking areas “several hours early” in

order to be guaranteed a seat at their chosen stop and a timely arrival at work. Doc. 15,

{4 65-66. They maintain that they are also entitled to compensation for the pre-shift wait

time. Doc. 44, pp. 45-50.

Plaintiffs rely on case law examining the compensability of wait time based on

“whether the time is spent [predominantly] for the employer’s benefit or for fhe

employee’s.” Preston v. Settle Down Enterprises, Inc., 90 F.Supp.2d 1267, 1278-79 □ D.

Ga. 2000) (internal quotations omitted). As the Supreme Court made clear in Busk, supra,

however, the test for compensability is not whether the activity is done for the employer’s

benefit or whether the employer requires the activity. 135 S.Ct. at 519. Instead, the cones

test is whether the activity is integral and indispensable to the employee’s principal

activities. Jd. Under this test the Fifth Circuit recently held that employees who arrived at

their job site early due to a limited number of shuttle buses were not ot to

compensation for their wait time, because they were not required to begin their principal

activities (erecting and dismantling scaffolding) until their shifts began. Bridges, 875 Fi3d

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at 226-28. Here plaintiffs have admitted that they do not do any work until arriving the

job site, and their claim that unspecified employees occasionally took calls while nding the

bus is not enough to show that their time spent waiting for the bus was integral pn

indispensable to any of their principal activities. Under the binding precedent set by

Bridges and Busk, they cannot state a claim for compensable wait time.

Defendants have demonstrated plaintiffs’ inability to recover under the FLSA pnd

the court need not consider the other arguments raised relating to the impossibility of

plaintiffs’ minimum wage claims or the degree to which the allegations impermissibly

lump defendants together. Plaintiffs’ federal claims and the collective action allegations

raised thereunder must be dismissed.

D. Request for Leave to Amend :

Finally, plaintiffs seek leave to amend their petition if it is found deficient in fy

manner. Doc. 44, pp. 51-52. They also protest that they have been unable to conduct

discovery due to defendants’ “incessant” motions to dismiss. /d. at 39. Plaintiffs have

chosen to sue multiple entities as employer, however, and are not entitled to complain when

each entity brings its own motion to dismiss.

While Rule 15(a) requires the district court to grant leave to amend freely, “Tl]eave

to amend is in no way automatic.” Marucci Sports, LLC v. NCAA, 751 F.3d 368, 378 (5th

Cir. 2014). The court has the discretion to deny leave based on a variety of factors,

including undue delay, bad faith or dilatory motive, repeated failures to cure deficiencies

by amendments previously allowed, undue prejudice to the opposing party, and futility of

amendment. Id.

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Plaintiffs assert that any pleading deficiency “is amenable to correction upon

amendment,” but do not actually show how they would respond to the numerous legal

deficiencies above. Instead, they have persisted on supporting their claims with cases

invalidated by recent Supreme Court precedent and by reliance on a self-distinguishing

state court case. This court has devoted significant time to considering the motions to

dismiss, while defendants have also dedicated time and resources to pointing out the flaws

in plaintiffs’ causes of action. Accordingly, the request for leave to amend is denied and

does not serve as a barrier to dismissal of the suit.

IV.

CONCLUSION

For the reasons stated above, the Motion to Dismiss [doc. 17] filed by Cameron

LNG will be denied and the Motion to Dismiss [doc. 19] filed by Chiyoda will be denied

in part and denied as moot in part. The Motion to Dismiss [doc. 25] filed by defendants

CB&I, McDermott, and Chiyoda will be granted in part and denied as moot in part and the

Motion to Dismiss [doc. 69] filed by those parties will be granted, resulting in the dismissal

with prejudice of all claims in this matter. The Motion for Sanctions [doc. 64] filed by

CB&] will remain pending before the court.

THUS DONE in Chambers on this / S day of bine , 2019)

UNITED STATES DISTRICT JUDGE

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