Dacar v. Saybolt, L.P.
914 F.3d 917
| 5th Cir. | 2018Background
- Saybolt paid two groups of inspectors: some under standard FLSA time-and-one-half overtime (non-FWW) and others under the fluctuating workweek (FWW) method with a fixed weekly salary plus additional time-based incentive premiums (day-off, offshore, holiday).
- Saybolt included those incentive payments in the weekly "regular rate" when computing overtime under its FWW scheme; non-FWW inspectors were ineligible for incentives.
- Plaintiffs (112 opt-ins) sued, alleging incentive payments made Saybolt ineligible to use the FWW method and seeking unpaid overtime and liquidated damages; they also alleged willfulness.
- District court found Saybolt violated the FWW requirements, awarded damages using the plaintiffs’ model (40‑hour divisor and time‑and‑a‑half multiplier), and awarded liquidated damages; it also held Saybolt’s conduct was not willful. The court had applied judicial estoppel to bar Saybolt from contesting the damages model.
- Fifth Circuit: affirmed liability and non-willfulness; reversed judicial estoppel and the district court’s damages calculation; vacated liquidated damages order and remanded for recalculation consistent with including all hours actually worked in the regular‑rate divisor and applying time‑and‑a‑half because Saybolt failed to meet FWW preconditions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of Saybolt's use of FWW | Incentives were incompatible with FWW; plaintiffs lacked a true fixed salary | Incentives may be included in regular rate under FWW; regs don’t expressly forbid incentives | Saybolt violated FWW: incentive payments varied straight‑time pay and disqualified use of FWW |
| Willfulness (extension of limitations) | Saybolt acted recklessly or knowingly in using FWW with incentives | Saybolt relied on counsel and unsettled law; not reckless | No willfulness: reasonable but ultimately incorrect legal position; plaintiffs failed to show reckless or knowing violation |
| Judicial estoppel re: damages methodology | N/A (plaintiffs relied on their 40‑hour model) | Saybolt initially proposed comparator model and later argued FWW damages; district court barred later argument as estopped | Reversed: no plainly inconsistent earlier position accepted by the court; estoppel did not apply |
| Proper damages formula and liquidated damages | Use 40‑hour divisor to compute regular rate and time‑and‑a‑half multiplier; do not offset incentives | Regular rate should divide total remuneration by all hours actually worked; if FWW invalid, use all hours in divisor and time‑and‑a‑half; alternatively, apply FWW denominator and one‑half multiplier or use non‑FWW comparators | Reverse district’s 40‑hour divisor approach; regular rate must use hours the salary was intended to compensate (here, all hours actually worked); because FWW prerequisites not met, apply 1.5 multiplier. Liquidated damages vacated and remanded for reconsideration |
Key Cases Cited
- O'Brien v. Town of Agawam, 350 F.3d 279 (1st Cir.) (time‑based premiums inconsistent with FWW fixed‑salary requirement)
- Lalli v. Gen. Nutrition Centers, Inc., 814 F.3d 1 (1st Cir.) (distinguishes performance‑based bonuses from time‑based premiums under FWW)
- Singer v. City of Waco, 324 F.3d 813 (5th Cir.) (regular‑rate divisor should include all hours actually worked even when FWW is inapplicable)
- McLaughlin v. Richland Shoe Co., 486 U.S. 128 (Sup. Ct.) (willfulness standard: knowledge or reckless disregard)
- Overnight Motor Transp. Co. v. Missel, 316 U.S. 572 (Sup. Ct.) (regular rate equals wage divided by hours)
- Brantley v. Inspectorate Am. Corp., 821 F. Supp. 2d 879 (S.D. Tex.) (FWW prerequisites and incompatibility of incentive premiums)