Carlton v. JHook Investments, Inc.

          FINDINGS OF FACT AND CONCLUSIONS OF LAW

          Kristine G. Baker, United States District Court Judge

         Plaintiffs Casy Carlton, Jonathan Jones, and Bobby Harrison bring this action against defendants JHook Investments, Inc. (“JHook”), Jeff Hooker, and Ivy Hall, Inc. (“Ivy Hall”), under the overtime provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the overtime provisions of the Arkansas Minimum Wage Act (“AMWA”), Arkansas Code Annotated § 11-4-201 et seq. (Dkt. No. 1). Defendants filed a motion for summary judgment (Dkt. No. 17). Plaintiffs also filed a motion for partial summary judgment (Dkt. No. 20). The Court denied both defendants’ motion for summary judgment and plaintiffs’ motion for partial summary judgment (Dkt. No. 40).

         Plaintiffs then filed a motion for order to provide documents and incorporated brief (Dkt. No. 43). The Court held a hearing on this motion on February 1, 2019. For the reasons stated by the Court at that hearing, the Court grants plaintiffs’ motion for order to provide documents Id.).

         Separate plaintiff Mr. Jones has filed a motion to dismiss without prejudice (Dkt. No. 49). In this motion, Mr. Jones requests that the Court dismiss his claims without prejudice (Id.). The Court finds that Mr. Jones’ motion to dismiss without prejudice accords with the terms of Federal Rule of Civil Procedure 41(a)(2). The Court therefore dismisses without prejudice Mr. Jones’ claims against defendants. Accordingly, to the extent the Court in this Order refers to “plaintiffs, ” the Court is referring only to Mr. Carlton and Mr. Harrison.

         This matter came before the Court for a bench trial. The parties were represented by counsel. Pursuant to Federal Rule of Civil Procedure 52(a), the Court makes the following findings and conclusions. The Court denies defendants’ oral motion for a directed verdict under Federal Rule of Civil Procedure 52(c). The Court determines that plaintiffs have sustained their burden of proof and are entitled to damages, as set forth below.

         I. Findings Of Fact

         1. A bench trial was held on this matter on February 4, 2019.

         2. Plaintiffs filed proposed findings of fact (Dkt. No. 45). Defendants agreed with many of those proposed findings of fact, except to the extent set forth below (Dkt. No. 48). To the extent defendants did not object to plaintiffs’ proposed findings of fact, such findings are adopted by the Court as its findings and cited below.

         3. The following individuals testified at trial: Mr. Hooker, Mr. Carlton, Mr. Harrison, Tim Moody, Jim Heverly, Tony Martin, and Tammy Moody.

         4. At trial, plaintiffs introduced six exhibits. Both sides agreed to rely upon these exhibits:

a. Exhibit 1 contains partial payroll records for each of the plaintiffs when they worked for defendants (Ex. 1).

b. Exhibit 2 is an earning statement for Mr. Harrison dated November 13, 2015 (Ex. 2).

c. Exhibit 3 includes “Employee Commission Log” sheets that have Mr. Carlton’s name written in the heading (Ex. 3).

d. Exhibit 4 includes “Employee Commission Log” sheets that have Mr. Harrison’s name written in the heading (Ex. 4).

e. Exhibit 5, which originally included Mr. Jones’ commission logs, was substituted by agreement of the parties for a collection of payroll records for Mr. Harrison.

f. Exhibit 6 is a spreadsheet prepared by plaintiffs that lists the following information for each plaintiff by pay period: work location, regular on-duty hours, call-out time, hours per week, regular pay, commission, total earnings, regular pay rate, overtime pay rate, unpaid overtime wages, liquidated damages, and total damages (Ex. 6).

         5. Plaintiffs also presented three new exhibits attached to their post-trial briefing. The first post-trial exhibit is a summary of Exhibit 3 that was introduced at trial (Dkt. No. 55-1). This post-trial exhibit is a spreadsheet that lists every day that Mr. Carlton worked for defendants and lists how much time per day, according to his commission sheets, Mr. Carlton worked after-hours (Id.). This exhibit also includes weekly totals of after-hours time worked by Mr. Carlton, as well as the amount of after-hours work he performed on his on-call and off-call weeks (Id.).

         6. The second post-trial exhibit is a spreadsheet that calculates revised damages for Mr. Harrison, taking into account the new payroll records for Mr. Harrison that are included in Exhibit 5 (Dkt. No. 55-2). The third post-trial exhibit is a spreadsheet calculating after-hours worked by Mr. Harrison as reflected in Mr. Harrison’s commission sheets introduced as Exhibit 4 at trial (Dkt. No. 55-3).

         A. Defendants

         7. Separate defendant JHook is a for-profit corporation registered to conduct business in the State of Arkansas (Dkt. No. 45, ¶ 1). JHook operates a towing services company based in North Little Rock, Arkansas, under the business name of JHook Towing and Recovery (Id., ¶ 2). JHook also completes some recovery services and has a repair shop operating as a small mechanic garage for tractor trailers. JHook had a previous location in Lonoke before it was suspended by state police for improper staffing. From June 2015 until early 2017, JHook had 11 to 12 drivers out of approximately 13 to 20 total employees.

         8. Separate defendant Mr. Hooker is an individual and resident of Arkansas (Id., ¶ 3). Mr. Hooker is an officer and director of JHook (Id., ¶ 4). Mr. Hooker testified that he is sole owner of JHook, though he conceded that his wife may be a co-owner. Mr. Hooker is an officer, director, and owner of Ivy Hall.

         9. Separate defendant Ivy Hall is a for-profit corporation registered to conduct business in the State of Arkansas (Id., ¶ 5). Ivy Hall provides towing services in and around Jacksonville (Id., ¶ 6). Ivy Hall files a separate tax return than JHook, and has a separate federal tax I.D., payroll, bank account, phone number, fax machine, email address, and logo. From June 2015 into early 2017, Ivy Hall employed three to four employees.

         10. JHook and Ivy Hall’s revenue primarily consists of towing fees, sales of wrecked vehicles, and repairs of large trucks (Id., ¶ 7). Both JHook and Ivy Hall’s primary revenue is derived from fees for tows for the general public, police departments, and car dealerships, and, for JHook only, big tows such as tractor-trailers. JHook and Ivy Hall obtain revenue each year from selling unclaimed vehicles to car dealerships and tractor repair.

         11. Defendants contend that Ivy Hall is a separate towing wrecking company.

         12. Defendants also called Mr. Moody, Mr. Heverly, Mr. Martin, and Ms. Moody to testify.

         13. Mr. Moody is the general manager of JHook and Ivy Hall and has been for 11 to 12 years. Mr. Moody conducts initial interviews of prospective employees for the businesses, and Mr. Hooker will sometimes come in once the prospective employee is determined to be qualified.

         14. Mr. Heverly is employed at JHook and has worked as a roll back driver for close to five years.

         15. Mr. Martin is employed at Ivy Hall and has worked as a rollback driver for ten years.

         16. Ms. Moody is employed at JHook and has worked as a dispatcher for six years.

         17. Mr. Hooker testified that JHook and Ivy Hall infrequently borrow and loan employees to each other. When this occurs, according to Mr.Hooker, the employee is still paid by the company that employs him.

         18. Mr. Hooker and Mr. Moody have set the method and manner of payment for JHook and Ivy Hall drivers. Mr. Hooker testified to having three methods to pay a driver: (1) an hourly rate; (2) an overtime rate; and (3) a commission. Rollback drivers are to be paid salary plus commission for every call they run. Drivers are self-reporting and turn in a weekly commission sheet in order to calculate their pay.

         B. Mr. Carlton’s Job Duties

         19. Mr. Carlton entered into an employer-employee relationship with JHook and Mr. Hooker in February 2016 (Id., ¶ 8). In February 2016, JHook and Mr. Hooker hired Mr. Carlton as a tow truck driver (Id., ¶ 9). Mr. Carlton worked for JHook and Mr. Hooker until February 2017 (Id.). Mr. Carlton performed towing services and other duties incidental to towing on JHook and Mr. Hooker’s behalf (Id., ¶ 10). Mr. Carlton worked in three different locations: Jacksonville, North Little Rock, and Lonoke (Id., ¶ 11).

         20. Mr. Carlton entered an employer-employee relationship with Ivy Hall and Mr. Hooker in February 2016. Mr. Carlton was dispatched out of JHook’s Lonoke location during November 2016, and he was dispatched out of the North Little Rock location from December 2016 until February 2017 (Ex. 6).

         21. While employed, Mr. Carlton drove a rollback truck, and his primary duties were performing towing services and other duties incidental to towing on behalf of JHook and Ivy Hall.

         22. Plaintiffs assert that after JHook and Mr. Hooker hired Mr. Carlton as a tow truck driver, Ivy Hall regularly dispatched Mr. Carlton to perform towing services on its behalf (Dkt. No. 45, ¶ 12). Defendants deny this assertion and state that, if it occurred, it was infrequent (Dkt. No. 48, ¶ 2). At the hearing, testimony was presented that, while at Ivy Hall, Mr. Carlton would receive calls from JHook to perform towing services on JHook’s behalf. While at JHook, Mr. Carlton would also receive calls from Ivy Hall to perform towing services on its behalf (Id.).

         23. Mr. Carlton performed towing services for defendants solely within the State of Arkansas (Dkt. No. 45, ¶ 13). JHook assigned Mr. Carlton to drive a “rollback” truck (Id., ¶ 14).

         24. JHook’s rollback trucks were manufactured, either wholly or partially, in a location outside the State of Arkansas (Id., ¶ 15).

         25. Mr. Carlton’s rate of pay was $250.00 per week, plus commissions (Id., ¶ 16). The commission percentage he received was 25% of the total cost of the tow. Mr. Hooker testified that he could not testify as to whether Mr. Carlton ever worked more than 40 hours in a week. Mr. Hooker also testified that he could not remember if Mr. Carlton was ever paid hourly due to a large truck accident.

         26. Mr. Carlton did not possess a commercial drivers’ license (“CDL”) when he performed towing services for defendants (Id., ¶ 45). None of the defendants ever required Mr. Carlton to possess or obtain a CDL to perform duties as a driver (Id., ¶ 46).

         C. Mr. Harrison’s Job Duties

         27. Defendants represented that Mr. Harrison worked for defendants as a tow truck driver from at least June 2015 through February 2017. Mr. Harrison worked in three different locations: Ivy Hall in Jacksonville, JHook in North Little Rock, and JHook in Lonoke (Id., ¶ 32). Mr. Harrison performed towing services and other duties incidental to towing on JHook and Mr. Hooker’s behalf (Id., ¶ 36).

         28. From May 2015 to June 2016, Mr. Harrison’s rate of pay was $250.00 per week, plus commissions. The commission percentage he received was 25% of the total cost of the tow. Around the end of June 2016 or the first of July 2016, Mr. Harrison’s rate of pay was changed to receive $15.00 an hour, plus commissions at 30% of the total cost of the tow. Mr. Harrison’s pay change occurred because he received his CDL.

         29. While at Ivy Hall, Mr. Harrison drove an F-650 large-wrecker and a 1500 Chevy tow truck. The F-650 wrecker was for towing large semi-trucks and box trucks. He also testified that he drove the Chevy 1500 tow truck approximately once a week, and he testified that the Chevy 1500 tow truck had a gross vehicle weight rating (“GVWR”) of 10, 000 pounds or less.

         30. Mr. Hooker testified that, if Mr. Harrison did drive a Chevy 1500 tow truck, he did so infrequently. Mr. Hooker also testified that he has no evidence that Mr. Harrison did not drive the Chevy 1500 tow truck at least once a week. Mr. Hooker stated that he knows that Mr. Harrison only infrequently used the Chevy 1500 tow truck because Mr. Hooker was onsite when Mr. Harrison worked from 2016 until 2017.

         31. While at JHook in North Little Rock, Mr. Harrison testified to driving an F-650 rollback, large wreckers, and a parts truck. He also testified to driving the parts truck for business purposes one to two times a week and that the parts truck had a GVWR of 10, 000 pounds or less. Mr. Hooker testified there was a Chevy 1500 pickup truck located in North Little Rock that Mr. Harrison used infrequently.

         32. While at JHook in Lonoke, Mr. Harrison testified to driving a large wrecker, a rollback, and an F-250 service truck. He also testified to driving the F-250 service truck once or twice a week and that the F-250 had a GVWR of 10, 000 pounds or less.

         33. It was not common for Mr. Harrison, as part of his employment, to take a vehicle out of the state of Arkansas. Mr. Harrison once took either a truck or a trailer to Las Vegas on JHook’s behalf.

         D. Work Schedules

         34. The regular work schedule for defendants’ tow truck drivers was 8:00 a.m. to 5:00 p.m., with a one-hour lunch. Mr. Carlton testified that he was always subject to being called out during his lunch breaks, which he testified meant that, if he went to get lunch and he received a call, he would have to take the call, especially if it was a police call. Mr. Carlton also testified that he often took his lunch with him on calls because he could not afford to eat out. Mr. Harrison testified that, during the day, he would eat food while working and that he could not recall any particular days when this did not happen.

         35. Mr. Heverly testified that he was able to take a full lunch hour on a regular basis but would have had to leave lunch for a tow if called by the dispatcher.

         36. Ms. Moody testified that she would go to the next driver if she called a driver while he or she was in the middle of lunch. She also testified that, if there was not another driver available, the driver on lunch would take the call and then return to lunch. Ms. Moody stated that she does not pull away drivers from their lunches often, except for police calls.

         37. Mr. Moody testified that drivers were supposed to take their hour lunch whenever there was a break between calls.

         38. Mr. Heverly testified to leaving the site regularly to take lunch, and he remembered Mr. Harrison leaving the yard to eat lunch. He also testified that he recalled Mr. Carlton bringing his lunch and eating in the break room. Mr. Heverly testified that he did not know how long plaintiffs’ lunches lasted.

         39. Mr. Carlton testified that he used time outside of calls to mow grass, pick up parts in the yard, and perform other duties besides driving a tow truck. Mr. Moody and Mr. Hooker testified that there was down time for plaintiffs when they were not working during business hours and that plaintiffs were paid for that time. Mr. Hooker also testified that waiting and being ready to go to a tow is a part of the job.

         40. Mr. Moody testified that there is not much grass to cut at Ivy Hall and that there is an individual, Willie Kline, who is paid to cut the grass and do clean up.

         41. Mr. Carlton testified that drivers were to be on-call and paid commission on tows after 5:00 p.m. or before 8:00 a.m.

         42. Mr. Moody testified that drivers were on-call every other week.

         43. Mr. Carlton and Mr. Harrison testified that they did not keep any record of the hours worked for JHook or Ivy Hall. Mr. Hooker testified that he did not know how many hours Mr. Carlton worked during his employment. Mr. Hooker also testified that he did not have any records of how many hours Mr. Harrison worked prior to Mr. Harrison obtaining his CDL.

         44. Mr. Hooker testified that a driver would be the only person to know whether he or she did or did not work overtime. Mr. Hooker also testified that he has made no efforts to ensure that rollback drivers are not driving more than 40 hours in a week.

         45. Ms. Moody testified that drivers would have a better understanding of the weekly average number of hours they worked on-call in the evenings and the weekends.

         46. In addition to the regular work schedule, Mr. Carlton testified to working an extra two hours every other Saturday to run the Ivy Hall office. While at Ivy Hall, Mr. Carlton estimated, based on his recollection, that he worked an average 47 hour or 45 hour regular on-duty hour work week based on Saturday work days.

         47. Mr. Carlton testified to being on-call for an average of 15 hours weekly as a best estimate of unpaid hours for the whole time period. This estimate was based off his recollection of a seven-day work week, working through his lunch hours, two to three after-hour calls a night, and being on-call during Saturday and Sunday.

         48. While at JHook in Lonoke, Mr. Carlton testified to being constantly on-call. Mr. Carlton also testified to being on-call approximately 26 unpaid hours per week while at the North Little Rock location. The estimate was based off a seven-day work ...