TIMOTHY R. RICE, Magistrate Judge.
I must determine whether Plaintiff Richard Kotowski, a high-ranking construction company executive earning $150,000 annually, plus bonus, is entitled to overtime wages because he was required to perform manual labor as his primary job duty. I find by a preponderance of the evidence that Kotowski worked primarily, and almost exclusively, in an executive capacity that is exempt from overtime compensation.
My factual findings, as enumerated below,
I credit the testimony of Brian Sell and Kim Gunther, both of whom conceded information helpful to Kotowski, but also largely contradicted Kotowski. I also credit the testimony of Joseph Messner, Jr., who corroborated the testimony of Sell and Gunther. I acknowledge the potential bias of Sell, Gunther, and Messner, Jr., based upon their status as employees of Defendant JGM Fabricators & Erectors, Inc. ("JGM"). Nevertheless, their testimony is corroborated by documents and by the inherent nature of the work performed in the steel construction industry. For example, the type of complex construction involved here could not have been timely completed unless Kotowski functioned in a leadership role, as contemplated by his terms of employment.
1. On June 10, 2015, JGM offered Kotowski the position of director of field construction services, P1; N.T. 3/12/2019 at 147; N.T. 3/13/2019 at 46, at an annual salary of $150,000, plus potential bonus of up to 20% of his salary, P1.
2. Kotowski accepted, and worked at JGM from June 2015 until March 2018.
3. Kotowski's offer letter stated that his responsibilities included: "Business development, estimating, Safety/training and management of all field operations and employees. Assist in the strategic planning and direction for the growth of the company." P1 (errors in original).
4. JGM and Messner, Jr. hired Kotowski with the expectation that Kotowski would not perform manual labor. N.T. 3/14/19 at 12-13. Likewise, Kotowski did not expect or desire to perform manual labor. Kotowski believed he was hired to oversee the field construction services division and perform the duties outlined in his offer letter. N.T. 3/11/19 at 46-47.
5. JGM provides industrial construction and steel fabrication services. Stip. ¶ 4; N.T. 3/13/2019 at 124. The field construction services division generally provides labor for JGM projects. N.T. 3/13/2019 at 11-12.
6. JGM typically uses several manual laborers, who are the primary source of direct work on a project; one or more forepersons, who oversee a crew of laborers and assist in the direct work; and one or more superintendents, who coordinate things as scheduling and budget, oversee crews, and sometimes assist in the direct work.
7. As director of field construction services, Kotowski typically oversaw each entire project, which included directing the work of up to 35 employees. N.T. 3/11/2019 at 197; N.T. 3/12/2019 at 17, 133; N.T. 3/13/2019 at 138; Stip. ¶ 8.
8. During Kotowski's tenure with JGM, Joe Messner, Jr. earned an annual salary of $150,000, N.T. 3/18/2019 at 10, and J.P. Messner, director of estimating, made $110,000. N.T. 3/12/2019 at 156. Superintendents earned an annual salary of around $110,000 without overtime,
9. While employed with JGM, Kotowski earned the $150,000 salary reflected in his offer letter, or approximately $2,885.00 per week, with no overtime pay. N.T. 3/11/2019 at 47; Stip. ¶ 7. He also was provided a vehicle and phone. N.T. 3/11/2019 at 158.
10. Kotowski provided Messner, Jr. with his contact list, which consisted of approximately 1,100 contacts accumulated over his time employed with other companies.
11. Kotowski also made several phone calls to potential clients to try to secure business.
12. Kotowski went to lunch with contacts at Adjunct Technology and Agilent, but those meetings did not result in JGM business.
13. Kotowski undertook an initiative to hire additional skilled workers for JGM, including ordering magnets for employees' trucks that advertised JGM was hiring.
14. Kotowski had a desk at JGM's headquarters in Coatesville, Pennsylvania, where he completed administrative tasks. N.T. 3/11/2019 at 224; N.T. 3/13/2019 at 129-30. The amount of time Kotowski spent at his desk varied, but he generally spent between one and three days per week there from 6 a.m. until 2:30 p.m., or on average, eight hours per day.
15. Kotowski routinely participated in project kickoff meetings at JGM headquarters. N.T. 3/11/2019 at 185-86; N.T. 3/13/2019 at 89-91. At these meetings, JGM personnel would discuss an upcoming project and its estimate, including the schedule according to which the work was to be completed and the manpower, labor, tools, and equipment built into the estimate. N.T. 3/13/2019 at 89-91. These meetings varied in length, but typically lasted about an hour.
16. Kotowski also attended occasional company meetings and monthly safety meetings held at JGM headquarters. N.T. 3/11/2019 at 85-86.
17. Kotowski was responsible for certain trainings, including CPR certification and MSHA (Miner Safety)
18. Kim Gunther, a JGM project management employee, served as a coordinator for field construction services and reported directly to Kotowski. N.T. 3/13/2019 at 83-85, 93, 119. Gunther assisted Kotowski with ordering equipment, machinery, job trailers, and safety equipment for projects.
19. Gunther also was required to submit vendor invoices to Kotowski and could not process the invoices for payment without Kotowski's approval. N.T. 3/13/2019 at 93-94. No further approval was necessary for those invoices; Kotowski had final authority.
20. Kotowski was responsible for approving paid time off ("PTO") requests for all field employees.
21. Kotowski conducted performance reviews for all superintendents and forepersons, as well as many laborers, although superintendents also sometimes performed laborer reviews. N.T. 3/13/2019 at 113.
22. At least initially, Kotowski maintained master lists of JGM's equipment resources and personnel. D8, Att. 1 at 2-3; N.T. 3/14/2019 at 27-28. The master manpower list depicted categories of JGM employees, such as office-administration, sales/estimating, field, and shop. D8, Att. 1 at 3. Kotowski listed himself in the office/administration category, rather than the field category.
23. Kotowski also implemented a weekly manpower schedule, which depicted all ongoing JGM jobs and their assigned workers, along with employees in other divisions of the company, such as office employees. D8, Att. 1 at 4 (manpower schedule"); N.T. 3/13/2019 at 89-90. Kotowski listed himself under the category "office" and not under any of the active projects. D8, Att. 1 at 4. Kotowski also implemented a monthly labor master plan, which depicted JGM's active and upcoming projects in detail with corresponding dates, completion percentages, and estimated remaining manpower hours. D8, Att. 2 at 5 (labor master plan); N.T. 3/18/2019 at 46-47. Kotowski stopped preparing these documents in late 2015. N.T. 3/18/2019 at 47.
24. Kotowski directed Gunther to locate employees when he wanted to hire both skilled JGM employees and laborers from agencies such as Tradesmen International.
25. Although Messner, Jr. could overrule his decisions, Kotowski generally had independent hiring authority.
26. Kotowski, as well as project superintendents and forepersons, held authority to terminate Tradesmen laborers, and Kotowski could also terminate JGM employees.
27. Kotowski generally had authority to grant raises, often arising out of performance reviews. N.T. 3/12/2019 at 17; N.T. 3/13/2019 at 23-24, 36, 113. He also granted raises in response to employee requests when he thought it was appropriate.
28. Kotowski had authority to promote field employees and did so on at least two occasions. N.T 3/11/2019 at 183-84; N.T. 3/12/2019 at 17.
29. Kotowski also participated in estimating, or compiling project components to develop an overall cost and budget for completing a project.
30. Kotowski participated in estimating approximately 80% of the 100 to 120 projects for which JGM submitted bids.
31. Kotowski also traveled to job sites to ensure compliance with company policies and safety, adherence to project schedules, and quality control. N.T. 3/11/2019 at 73. While on a job site, Kotowski typically led an hour-long crew meeting to begin the workday, during which he went over necessary safety equipment and daily goals, divided laborers into teams, and issued daily assignments.
32. On large projects with multiple crews, Kotowski would sometimes lead a crew himself, during which he supervised and directed the work of laborers.
33. J.P., Bonura, and Sell each observed Kotowski on job sites doing such things as working in job trailers, discussing work on-site with superintendents, directing employees' work, meeting with clients, and performing other management duties.
34. Kotowski had the freedom to dictate his own schedule, although there were times he was directed by Messner, Jr. to visit certain job sites because of extraordinary circumstances.
35. JGM employees were not always able to easily locate Kotowski because he was traveling between job sites and the JGM office, or for other reasons. N.T. 3/13/2019 at 115; N.T. 3/12/2019 at 153-54.
36. As of the date of trial, Kotowski's LinkedIn profile stated the following summary of his experience with JGM:
D2 (errors in original). Despite contending that he did not write this LinkedIn summary, Kotowski knew it was publicly posted and allowed it to remain posted from 2014 until 2019. N.T. 3/11/2019 at 162-63. Such conduct establishes his endorsement of the content, and is consistent with other evidence.
37. Kotowski's duties such as ordering, scheduling, and directing employee work were crucial to JGM success because additional manual laborers could always be obtained from Tradesmen or similar agencies. N.T. 3/13/2019 at 53-55 (Sell testimony); N.T. 3/14/2019 at 12-13, 67-68 (Messner, Jr. testimony); N.T. 3/18/2019 at 30-31 (Bonura testimony). However, without a director of field construction services, no one would be in the position to make high-level executive decisions that impacted the entire enterprise. N.T. 3/13/2019 at 53-55; N.T. 3/14/2019 at 12-13, 67-68; N.T. 3/18/2019 at 30-31.
38. Kotowski was terminated by JGM on March 3, 2018. N.T. 3/11/2019 at 122.
1. Kotowski claims that while employed with JGM, he regularly worked more than forty hours per week but was never paid overtime in violation of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201 et seq., and Pennsylvania Minimum Wage Act of 1968 ("PMWA"), 43 Pa. Stat. § 333.101 et seq. He seeks back pay damages in the amount of his unpaid overtime compensation, liquidated damages, pre- and post-judgment interest, costs, expenses, and fees. Compl. (doc. 1) at 11.
2. Both the FLSA and PMWA entitle an employee who works more than forty hours in a week to receive overtime pay at a rate of "at least one and one-half times the employee's regular wage for hours worked in excess of forty hours per week." 29 U.S.C. §§ 206, 207; 43 Pa. Stat. § 333.104(c).
3. Kotowski has presented a prima facie case of unpaid overtime under the FLSA and the PMWA: (1) Kotowski was employed by JGM; (2) JGM was engaged in interstate commerce; (3) Kotowski worked over forty hours in at least one workweek; and (4) Kotowski was paid an annual salary of $150,000, plus bonus, without overtime compensation. Stip. ¶¶ 1-3; Findings of Fact ("FOF") ¶¶ 1, 9;
4. Executive employees are exempt from the overtime provisions of the FLSA and the PMWA. 29 U.S.C. § 213(a)(1); 29 C.F.R. § 541.100(a); 43 Pa. Stat. § 333.105(a)(5). Those exemptions are to be construed fairly, not narrowly or against the employer, because the FLSA does not "pursue its remedial purpose at all costs."
5. JGM argues Kotowski was an executive employee exempt from overtime provisions of the FLSA and the PMWA. Def. Proposed Conclusions of Law ("Def. COL") ¶ 25. JGM must prove: (1) Kotowski earned at least $455 per week; (2) his "primary duty was management of the enterprise . . . or of a customarily recognized department or subdivision thereof"; (3) he "customarily and regularly direct[ed] the work of two or more other employees"; and (4) he had authority to hire or fire employees, or his recommendations as to the hiring, firing, advancement, or promotion of employees were given particular weight.
6. The parties dispute only Kotowski's (2) primary duties and (4) hiring/firing authority in his position with JGM.
7. To fall under the executive exemption, Kotowski's primary duty must have been "management of the enterprise . . . or of a customarily recognized department or subdivision thereof." 29 C.F.R. § 541.100(a).
8. Field construction services is a "customarily recognized department" of JGM. P1.
9. "Primary duty" means the "principal, main, major or most important duty" when considering Kotowski's job as a whole. 29 C.F.R. § 541.700(a). To be executively exempt, Kotowski's primary duty must have been the performance of exempt work, i.e., management.
10. "Management" of the enterprise includes interviewing, selecting, and training employees; setting employees' pay rates and schedules; directing employees' work; conducting performance reviews; providing for employee safety; and planning work techniques, assignments, equipment, and supplies. 29 C.F.R. § 541.102.
11. As director of field construction services, Kotowski routinely performed the following "management" tasks: ordering equipment and materials; approving invoices and PTO requests; conducting performance reviews; scheduling manpower; selecting, interviewing, and hiring job candidates; granting raises; promoting and terminating employees; and assisting in preparing estimates. FOF ¶¶ 19-30. Kotowski also was involved with business development in providing JGM with his contacts, attending prospective client meetings, and making phone calls on JGM's behalf.
12. Kotowski relies on
13. Kotowski's performance of management tasks was critical to JGM project success, because additional laborers could be obtained from staffing agencies like Tradesmen, but management of the entire enterprise could not be performed by an ordinary laborer or even field superintendent.
14. Likewise, Kotowski's participation in estimating was crucial to accurate preparation of those estimates.
15. Although Kotowski argues that he was forced to perform manual labor due to JGM's aggressive project schedules and difficulty retaining labor, Pl. COL ¶¶ 22-23, the record does not indicate that he routinely and consistently performed the amount of manual labor that he alleges,
16. Kotowski also argues that because his management responsibilities went to the production of the "very product or service integral to the business operation of the employer, as opposed to tasks that are ancillary to the employer's principal service," he is ineligible for the exemption. Pl. COL ¶ 12 (citing
17. This factor weighs in favor of the conclusion that Kotowski's primary duty was management.
18. Although the amount of time spent on exempt duties is considered, "primary duty does not connote the most time-intensive of an employee's functions," but instead the "principal, main, major or most important duty performed by the employee, regardless of how much time he devotes to it."
19. Kotowski spent approximately 30% of his time in the office and 70% of his time on job sites. FOF ¶ 14. While in the field, he functioned as a manager, undertaking such tasks as supervising and directing laborers' work, holding safety meetings, and planning the following day's work.
20. This factor weighs in favor of the conclusion that Kotowski's primary duty was management.
21. Exempt executives generally choose whether to perform exempt or nonexempt duties at any given time, whereas nonexempt employees who sometimes perform exempt duties are usually directed to do so by a supervisor. 29 C.F.R. § 541.106(a).
22. Kotowski argues that Messner, Jr. directed him both to remain on job sites and to perform required non-exempt work. Pl. COL ¶¶ 33-34.
23. Kotowski was relatively free from direct supervision. He retained authority to hire, fire, and promote employees, despite occasional input from Messner. Jr. He was free to dictate his own schedule, as evidenced by multiple emails inquiring as to his whereabouts and testimony that he was sometimes difficult to locate. FOF ¶¶ 24-28, 34-35.
24. Although he sometimes was directed by Messner, Jr. to visit specific job sites or perform tasks in a certain way,
25. This factor weighs in favor of the conclusion that Kotowski's primary duty was management.
26. Kotowski earned approximately $2,885.00 per week in 2018. FOF ¶ 9. Brian Sell, a superintendent, earned approximately $1,980 per week in 2018, including appropriate overtime pay.
27. Kotowski was among the highest-paid employees at JGM, earning the same amount earned at the time by the company CEO and more than the director of estimating.
28. I need not consider Kotowski's salary projections for JGM superintendents.
29. This factor weighs in favor of the conclusion that Kotowski's primary duty was management.
30. Because all four factors weigh in favor of JGM, Kotowski's primary duty was the performance of exempt work. 29 C.F.R. § 541.700(a).
31. To satisfy the final prong of the exemption, JGM must prove that Kotowski had authority to hire or fire employees, or his recommendations as to such matters were given "particular weight." 29 C.F.R. § 541.100(a);
32. I may consider whether it is part of the job description to make such recommendations, whether the recommendations pertain to individuals the employee directs and supervises, and the frequency with which such recommendations are made.
33. Kotowski argues he made only occasional suggestions regarding hiring, firing, and promotion, and JGM fails to show any "causal impact" of those suggestions. Pl. COL ¶¶ 43-44. I disagree.
34. Kotowski frequently directed Gunther to conduct searches when additional field employees were needed. FOF ¶ 24. Gunther then provided him with potential candidates and he would approve or disapprove of scheduling interviews after reviewing their resumes.
35. For example, just moments after interviewing Brian Sell, Kotowski offered Sell a job without consulting with Messner, Jr.
36. Kotowski conceded that he had the authority to hire individuals from Tradesmen or other staffing agencies, and also had the authority to terminate both JGM employees and Tradesmen laborers, such as in the case of safety infractions.
37. Even in instances where Messner, Jr. overruled Kotowski's decisions, he solicited Kotowski's opinion, as evidenced by his testimony that he would never hire a field employee without their direct supervisor's input.
38. Kotowski's recommendations as to hiring, firing, and advancement of JGM field employees were, at the very least, given particular weight.
39. JGM has met its burden of proving by a preponderance of the evidence that Kotowski was employed by JGM in a bona fide executive capacity pursuant to 29 U.S.C. § 213(a)(1). Kotowski was therefore exempt from the overtime pay provisions of the FLSA and the PMWA.
An appropriate Order accompanies this Opinion.
