Bennett v. McDermott Intl

Case: 19-30763 Document: 00515824500 Page: 1 Date Filed: 04/16/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
April 16, 2021
No. 19-30763 Lyle W. Cayce
Clerk
Kendrick Bennett, individually and on behalf of all others similarly
situated; Courtlande Collins, individually and on behalf of all others
similarly situated,
Plaintiffs—Appellants,
versus
McDermott International, Incorporated; Chicago
Bridge & Iron Company; Chiyoda International
Corporation; Cameron L N G, L.L.C.; C B & I, L.L.C.,
Defendants—Appellees.
Appeal from the United States District Court
for the Western District of Louisiana
2:19-CV-158
Before Wiener, Costa, and Willett, Circuit Judges.
Per Curiam:*
In this Fair Labor Standards Act collective action, Plaintiffs allege that
the defendant companies, their employers, forced them to spend hours
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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waiting for and riding on buses to access a rural worksite. Plaintiffs want to
be compensated for this time. They argue that the unique nature of the
mandatory transportation system renders their commute time compensable
under the FLSA and the Louisiana Wage Payment Act.
The problem is that compensability under the FLSA turns on
whether an activity is “integral and indispensable” to the work an employee
is “employed to perform.” Integrity Staffing Sols., Inc. v. Busk, 574 U.S. 27,
30 (2014). The named plaintiffs were employed as a welding foreman and a
pipefitter. 1 And they fail to allege that they performed activities related to
welding or pipefitting during their travel time. Further, Plaintiffs concede
that they had no agreement with Defendants regarding the compensability of
their commute time, dooming their LWPA claims, as the Louisiana statute
only covers agreed-upon wages. La. R. S. § 23:631.
For these reasons, we agree with the district court’s dismissal of
Plaintiffs’ claims. We disagree, however, that dismissal of the FLSA claims
should have been with prejudice. Thus, we affirm the dismissal of the LWPA
claims but vacate and remand the dismissal of the FLSA claims, with
instructions to dismiss those claims without prejudice.
I
Defendants entered into a contract relating to a natural gas
liquefaction facility in Hackberry, Louisiana. To move forward with their
joint venture, Defendants needed approval from the Federal Energy
Regulatory Commission. FERC approved the project subject to several
conditions—one of which concerned traffic congestion, as Hackberry is a
rural location whose only point of access is a small state road. Defendants
1
Hundreds of other employees, with job titles ranging from crane operators to
electricians, have opted into the lawsuit.
2
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agreed to mitigate the traffic issue by implementing a transportation system
for the workers hired to build the liquefaction facility. The parties disagree
about whether the project could have gone forward without the
transportation scheme. The workers characterize the scheme as a
precondition to regulatory approval whereas the companies allege that
FERC “merely incorporated” their proposed transportation system.
The transportation system requires workers to ride employer-
provided buses to and from the liquefaction facility. To get on a bus, workers
must travel to designated park-and-ride sites. The workers allege that it is
difficult to get a parking spot at the sites and that sometimes there are not
enough seats on the buses. As a result, workers need to get to the park-and-
ride sites hours early, and if they miss the bus at that first site, they have to
drive to another one. Workers are prohibited from using their own vehicle to
commute to or from work, even if the bus is full or they live closer to the job
site than to the park-and-ride site. Plaintiffs allege that this commuting
process can take “several hours” each day, yet they are not compensated for
this significant amount of time.
Plaintiffs sued Defendants under the Fair Labor Standards Act and
the Louisiana Wage Protection Act, seeking regular wages and overtime
wages (depending on an individual’s total weekly hours) for time spent
commuting via the mandatory bus system. 2 In response, Defendants filed a
flurry of motions to dismiss. On several occasions throughout the motion-to-
dismiss briefing, Plaintiffs requested leave to amend the pleadings.
2
Plaintiffs allege that both the time they spent waiting for the buses and commuting
on the buses is compensable. Because wait-time claims are analyzed under the same
standards as commute-time claims, Vega v. Gasper, 36 F.3d 417, 425 (5th Cir. 1994), we
analyze the two claims together.
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The district court dismissed all of Plaintiffs’ claims. The court held
that the Portal-to-Portal Act, which amended the FLSA to exempt commute
time, barred Plaintiffs’ claims. The court further decided that the FLSA
preempted the state-law LWPA claims. In its preemption analysis, the
district court also noted that Plaintiffs failed to allege a violation of the
LWPA, which only covers “agreed-upon” wages. Finally, the court denied
Plaintiffs’ request to amend the complaint because Plaintiffs failed to
articulate how they would cure the complaint’s legal infirmities. Plaintiffs
timely appealed.
II
We review a district court’s ruling on a motion to dismiss de novo,
“taking the actual allegations of the complaint as true, and resolving ‘any
ambiguities or doubts regarding the sufficiency of the claim in favor of the
plaintiff.’” Jones v. Alcoa, Inc., 339 F.3d 359, 362 (5th Cir. 2003). We review
a district court’s denial of leave to amend for abuse of discretion. Stripling v.
Jordan Production Co., LLC, 234 F.3d 863, 872 (5th Cir. 2000).
III
Because this appeal concerns the interaction between the FLSA,
statutory amendments to the FLSA, and a Louisiana wage statute, we first
provide a brief introduction to each law.
The FLSA, enacted in 1938, sets a minimum wage and requires
overtime pay for employees who work more than forty hours in a workweek.
29 U.S.C. § 201, et seq. But the FLSA does not define “work.” The Supreme
Court initially took a broad view of “work” when applying the FLSA,
construing the term to cover travel time, such as “time spent traveling
between mine portals and underground work areas, and the time spent
walking from timeclocks to work benches.” Busk, 574 U.S. at 31 (internal
citations omitted).
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This expansive view “provoked a flood of litigation,” and “Congress
responded swiftly” by passing the Portal-to-Portal Act. Id. at 31–32. The Act
amended the FLSA by exempting employers from liability for two categories
of work-related activities: “(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).
As to the first category, Department of Labor regulations emphasize that
“[n]ormal travel from home to work” is not compensable. 29 C.F.R.
§ 785.35.
Congress then amended the Portal-to-Portal Act through the
Employee Commuting Flexibility Act. See Pub. L. No. 104–188 § 2102, 110
Stat. 1755, 1928 (1996) (codified at 29 U.S.C. § 254(a)). The ECFA states
that when an employee uses an employer’s vehicle for travel to and from
work, that travel time is not “part of the employee’s principal activities”
(and thus not compensable) if two conditions are met: (1) “the use of such
vehicle for travel is within the normal commuting area for the employer’s
business”; and (2) “the use of the employer’s vehicle is subject to an
agreement on the part of the employer and the employee.” 29 U.S.C.
§ 254(a). Under the ECFA, “merely commuting in a[n] [employer]-owned
vehicle is insufficient; the plaintiffs must perform additional legally
cognizable work while driving to their workplace in order to compel
compensation for the time spent driving.” Adams v. United States, 471 F.3d
1321, 1325 (Fed. Cir. 2006).
Unlike the FLSA and its amendments, the Louisiana statute at issue,
the LWPA, does not establish a minimum wage or overtime protection. See
La. R. S. § 23:631; Joffrion v. Excel Maint. Servs., Inc., 2011 WL 5190524, at
*2 (M.D. La. Sept. 20, 2011), report and recommendation adopted, 2011 WL
5238795 (M.D. La. Oct. 31, 2011) (“This Court has previously recognized
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that Louisiana does not have a state statute that provides for the recovery of
overtime wages absent a contract to pay overtime. Absent a contract,
payment of overtime wages is governed exclusively by the FLSA.”). Nor
does it mention commute time. Instead, the statute provides that contracted-
for wages—“the amount then due under the terms of employment”—must
be paid to an employee within a certain time frame after termination or
resignation. La. R. S. 23:631(A)(1)(a).
Plaintiffs argue that the time spent riding the buses to and from the job
site is compensable under both the FLSA and LWPA. Defendants counter
that the commute time is just that—commute time involving no actual work
connected to Plaintiffs’ construction jobs. Defendants also assert that the
FLSA preempts the LWPA. Even if there is no preemption, Defendants
argue that Plaintiffs failed to state a cognizable claim under Louisiana law.
Finally, Plaintiffs argue that the district court improperly denied their request
to amend the complaint.
We first address the federal claims (FLSA) then turn to the state-law
claims (LWPA). We end by discussing Plaintiffs’ request for leave to amend.
A
Generally speaking, work-related activities that take place before and
after hours are compensable only if they are “an integral part of” and
“essential to the principal activities of the employees.” Steiner v. Mitchell,
350 U.S. 247, 254 (1956). The Supreme Court has explained that an activity
is “integral and indispensable to the principal activities that an employee is
employed to perform if it is an intrinsic element of those activities and one
with which the employee cannot dispense if he is to perform his principal
activities.” Busk, 574 U.S. at 33. Thus, integral and indispensable equals
compensable.
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For example, the Supreme Court has held that changing clothing and
showering at a battery factory (to remove battery fluid), as well as sharpening
knives at a meatpacking facility, were integral and indispensable, even though
these activities fell outside regular work hours. Id. at 34 (citing Steiner, 350
U.S. at 249, 251 (battery plant) and Mitchell v. King Packing Co., 350 U.S. 260,
262 (1956) (meatpacking facility)). On the contrary, the Court has held that
the time poultry-plant employees spent “waiting to don protective gear” was
not integral and indispensable. Busk, 574 U.S. at 34 (citing IBP, Inc. v.
Alvarez, 546 U.S. 21, 42 (2005)). That is because the waiting time was “two
steps removed from the productive activity on the assembly line.” IBP, Inc.,
546 U.S. at 23. Similarly, the Supreme Court found noncompensable the time
employees spent going through security screenings because the defendant
“did not employ its workers to undergo security screenings, but to retrieve
products from warehouse shelves and package those products for shipment.”
Busk, 574 U.S. at 35.
While commuting to work is necessary for any job, Congress and the
Supreme Court have made clear that FLSA coverage is tied to the
employee’s “principal activity”—the work the “employee is employed to
perform.” 29 U.S.C. § 254(a). That is why “[n]ormal travel from home to
work is not” compensable “worktime.” 29 C.F.R. § 785.35. Travel time
becomes compensable, however, if it is intertwined with the employee’s
principal activities, “such as travel from job site to job site during the
workday.” 29 C.F.R. § 785.38. Employers must also pay for time spent
traveling to and from work if the employee is doing actual work while
traveling. See 29 C.F.R. § 785.41; DA&S Oil Well Servicing, Inc. v. Mitchell,
262 F.2d 552, 555 (10th Cir. 1958). When no work is performed, other circuits
have routinely held that commute time, even time spent on an employer-
mandated transportation system, is not compensable. Bonilla v. Baker
Concrete Constr., Inc., 487 F.3d 1340, 1343 (11th Cir. 2007) (mandatory vans
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from security checkpoint to job site); Smith v. Aztec Well Servicing Co., 462
F.3d 1274, 1290 (10th Cir. 2006) (carpool from convenience store to drilling
location); Smith v. Allegheny Tech., Inc., 754 F. App’x 136, 140 (3d Cir. 2018)
(unpublished) (mandatory shuttle from hotel to plant). As our caselaw has
developed, we have reached the same conclusion.
First in Vega v. Gaspar, we held that the employers were not liable
under the FLSA for time their employees spent on voluntary bus rides from
El Paso to the farm fields. 36 F.3d 417 (5th Cir. 1994), abrogated on other
grounds, Bridges v. Empire Scaffold, L.L.C., 875 F.3d 222, 228 (5th Cir. 2017).
This was so even though the bus trip took several hours each workday. Id. at
424. In holding that the travel time was “ordinary to-work or from-work
travel,” we emphasized that even though the employees received some
information during the trip about their workday, the employees voluntarily
used the bus system and did not perform any actual work on the bus. Id. at
425.
Then in Griffin v. S&B Engineers & Constructors, Limited, an
unpublished decision, we extended the Vega analysis to mandatory bus
systems. 507 F. App’x 377 (2013). We held that the “mandatory busing
scheme arrangement [was] simply normal traveling time.” Id. at 382.
Defendants argue that Griffin “conclusively precludes” Plaintiffs’
claims. Our unpublished cases are not precedent and therefore cannot
conclusively preclude anything. See 5th Cir. R. & IOP 47.5.4. Nevertheless,
our reasoning in Griffin applies here. We first noted in Griffin that the
mandatory nature of the transportation scheme did not necessarily render the
commute time compensable. Griffin, 507 F. App’x at 383. The Third, Tenth,
and Eleventh Circuits have all held the same. See Bonilla, 487 F.3d at 1343;
Smith, 462 F.3d at 1290; Allegheny Tech., Inc., 754 F. App’x at 136. We also
relied on DOL interpretative statements, which explain that commute time,
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including “riding on buses between a town and outlying mine or factory
where the employee is employed,” is usually not compensable. Griffin, 507
F. App’x at 383 (citing 29 C.F.R. § 790.7(f)). In sum, our Griffin opinion
explained that whether commute time is compensable does not depend on
the logistics of the travel scheme. It depends on whether work is done during
the travel.
Plaintiffs distinguish Griffin in two ways. First, they focus on the
enterprise as a whole—they argue that the transportation plan is an “integral
part” of the project because the project would not have gone forward without
FERC’s approval of the plan. Second, Plaintiffs emphasize how
inconvenient and time consuming the mandatory scheme is. Employees must
arrive at the park-and-ride sites hours early to ensure they have a seat on the
bus. And some employees must travel past the worksite to catch a bus
traveling in the opposite direction to start work. Neither argument is
consistent with the text and purpose of the FLSA.
What the FLSA, the Portal-to-Portal Act, and the ECFA make clear
is that commuting, by itself, is logistical—not integral and indispensable.
Congress passed the Portal-to-Portal Act, which specifically exempts
commute time, to overturn the Supreme Court’s broad definition of “work,”
which previously included time spent “riding on buses between a town and
outlying mine or factory.” 29 U.S.C. § 254(a); 29 C.F.R. § 790.7(f). And the
ECFA makes clear that even commute time spent driving an employer’s
vehicle is often not compensable. 3
Further, the FLSA test for compensability is whether the activity is
“integral and indispensable” to the employee’s “principal activities.” As
3
At oral argument, Plaintiffs’ counsel conceded that the “ECFA doesn’t have a
lot of effect on this case.”
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explained above, “principal activities” refers to the employee’s work—the
tasks the “employee is employed to perform.” 29 U.S.C. § 254(a)(1).
Plaintiffs want us instead to construe “principal activities” in reference to
the Defendants—they even say as much in their complaint: “This wait time
[for the buses] is not preliminary or postliminary activity; it is an integral part
of Defendants’ principal activities.” Indeed, Plaintiffs’ complaint refers to
the Defendants’ principal activities three separate times. This is not a faithful
interpretation of the FLSA—a statute entirely concerned with when and
how much an employer must pay for the activities of its employees. Plus, if
we read the statute as referring to an employer’s principal activities, then
there is no limiting principle. Everyone would be entitled to commute-time
compensation because an employee’s commute is always necessary to the
employer’s work getting done.
We acknowledge that the employees spend a great deal of time on the
mandatory bus system and that the busing system is inefficient for many
employees. But those factors do not turn commute time into compensable
work time under the FLSA. The line Congress chose to draw was whether
the commute time involved work—work specific to what the employee is
employed to do. See Mitchell, 262 F.2d at 555 (holding that commute time
was compensable because truck drivers were “transporting equipment
without which the principal activities could not be performed”); Burton v.
Hillsborough Cty, 181 F. App’x 829 (11th Cir. 2006) (holding compensable
commute time spent driving an employer-provided vehicle that carried
necessary tools to a secure parking site after the workday ended). And
Plaintiffs’ only allegation that concerns the work they were employed to
perform is that “[u]pon information and belief, employees are, at times,
required to accept work calls and/or discuss job duties for that particular day
while on the buses.”
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This allegation does not cross the compensability line—even at the
motion-to-dismiss stage. In Vega, we held that the brief information
concerning the day’s work that the employees received during their commute
did not transform the travel time into compensable time. Vega, 36 F.3d at 425.
So even accepting Plaintiffs’ allegation as true, the discussion of job duties
on the bus is inadequate. That leaves only the allegation that “at times,” the
employees had to accept work calls. This statement is about sporadic work,
and it is not particularized to Plaintiffs’ jobs in any way. It therefore fails to
meet the requisite level of plausibility that could convert the commute time
into work time. 4
To sum up, commuting is only compensable when the commute is
connected to the employees’ specific work obligations. Here, Plaintiffs fail to
allege that they were working while commuting or that the commute was
intertwined with their welding and pipefitting duties. They instead allege that
the mandatory bus system is inefficient and integral to Defendants’ joint
venture. Even if discovery revealed the truth of these allegations, Defendants
would not be liable for unpaid wages. The district court therefore properly
dismissed Plaintiffs’ FLSA claims.
B
The district court also dismissed Plaintiffs’ state-law claims, holding
that the FLSA preempted the LWPA. We need not reach the preemption
issue, though, as Plaintiffs failed to state a claim under the LWPA. The
4
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has
facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged. The plausibility
standard is not akin to a probability requirement, but it asks for more than a sheer possibility
that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
citations and quotation marks omitted).
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LWPA protects wages “due under the terms of employment.” La R. S.
§ 23:631. To prove “terms of employment,” a plaintiff need not show a
written agreement existed; a “normal procedure” or “internal policy” will
suffice. See, e.g., Blanton v. Malkem Int’l Co., 628 So. 2d 178, 182 (La. Ct.
App. 1993).
Plaintiffs concede that no “express agreement exists” in which
Defendants promised compensation for commute time. And allegations from
the complaint indicate that neither internal policy nor normal practice
mandated compensation for travel time. In the complaint, Plaintiffs allege
that they cannot clock in until they get to the jobsite, and they are prohibited
from putting travel time on their time sheets. These allegations undermine,
if not entirely preclude, any argument that compensated commute time was
a “term of employment.”
Plaintiffs also argue that the travel time should be considered part of
the “work” they were hired to do and thus an implicit term of their
employment. Plaintiffs analogize their case to tort and workers’
compensation cases where courts found that travel time was within the
“scope” or “course” of employment. See Jackson v. Long, 289 So. 2d 205,
208 (La. Ct. App. 1974) (holding that for temporary worker dispatched to job
site, an essential part of the temp agency’s business was making sure the
worker arrived at the site); Orgeron v. McDonald, 639 So. 2d 224, 227 (La.
1994) (holding that driving to unexpected second shift without going home
in between was within scope of employment for vicarious liability). But these
cases did not hold that the employers owed wages for travel time; they held
that the employer was liable (vicariously or via workers’ compensation) for
accidents that occurred during travel within the scope of employment. In
contrast, the LWPA requires that Plaintiffs prove they were owed wages
under a “term of employment.” Plaintiffs have failed to plead any such term
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existed concerning their commute time. 5 The district court properly
dismissed the LWPA claim.
C
Finally, Plaintiffs argue that the district court abused its discretion by
denying them leave to amend their complaint. District courts should “freely
give leave” for parties to amend pleadings “when justice so requires.” Fed.
R. Civ. P. 15(a)(2). We have stated that district courts should allow
amended complaints “unless there is a substantial reason to deny” the
request. Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 598 (5th Cir. 1981).
For example, denial might be appropriate if the movant caused “undue
delay,” repeatedly failed to cure deficiencies, or if the amendments would be
futile. Foman v. Davis, 371 U.S. 178, 182 (1962).
After reciting these standards, the district court first noted that
Plaintiffs failed to “show how they would respond to the numerous legal
deficiencies” in the complaint. The court also stated that it had devoted
significant time and resources to the motions briefing.
The court did not abuse its discretion regarding the LWPA claims.
This is because Plaintiffs concede that there is no relevant “term of
employment”—an essential element of their claim. Thus, amendment would
be futile. See Goldstein v. MCI WorldCom, 340 F.3d 238, 254 (5th Cir. 2003)
(“[I]f a complaint as amended could not withstand a motion to dismiss, then
5
Also, in a related case with similar claims and the same defendants as here, a
Louisiana district court dismissed the state-law claims with prejudice. See Hampton v.
McDermott International, Inc., 2019 WL 5617025 (W.D. La. Oct. 30, 2019). The district
court in Hampton found no “agreement or understanding of any sort” that the companies
would compensate workers for time spent on the mandatory bus system. Id. at *3.
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the amendment should be denied as futile.”) (quoting Wright & Miller, 6
Fed. Prac. & Proc. Civ. § 1489).
As to the FLSA claims, the district court did abuse its discretion by
not giving ample weight to the early stage of the case and the fact that
Plaintiffs had only amended once before. As we explained above, for
commute time to be compensable, the commute must be connected to a
plaintiff’s specific work obligations. Plaintiffs have alleged that some
employees engage in sporadic work on the bus rides. While this vague
allegation fails to cross the plausibility line, it would not be futile to attempt
to overcome this deficiency. Indeed, as Plaintiffs have pointed out, a similar
case is pending before a different district court. See Hampton, 2019 WL
5617025, at *2. And the complaint in that case, against the same defendants
and involving the same busing system, alleges more substantial work is
happening during the bus rides. Given “the consequences of dismissal on the
complaint alone,” district courts “often afford plaintiffs at least one
opportunity to cure pleading deficiencies before dismissing a case.” Great
Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th
Cir. 2002). The district court here should do the same.
IV
The district court properly dismissed all of Plaintiffs’ claims. But
under the liberal pleading rules, Plaintiffs should get another bite at the
FLSA apple. Therefore, we AFFIRM the district court’s judgment as to
the LWPA claims. But we VACATE and REMAND the judgment as to the
FLSA claims, with instructions to dismiss those claims without prejudice.
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