Free Statement - District Court of Arizona - Arizona

SUPPLEMENT TO EXPERT REPORT OF BRIAN T. FARRINGTON {N
HUTTON, ETAL. v. BANK OFAJMIERICA
Subsequent to the tiling of my Expert Report in this case, I was presented with copies of
two documents prepared by the expert for the Plaintiffs, Oran Clemons. The tirst of these was
entitled "Rebuttal to Defendanfs Expert Report? and the second was called "Final Supplement
to Expert Report of Oran Clemons? I have been asked by counsel for Defendant, Ryley Carloclc
& Applewliite, PA., to review and corrnnent on these documents.
Should Mr. Clemons raise additional issues subsequent to this report, I reserve the right
to rebut them. F
BACKGROUND AND QUALIIl'ICAT`IONS
No substantive change since original report filed.
DATA AND OTHER INFORMATION CONSIDERED IN FORMING OPINIONS
l have listed below the additional data and other information I considered in prep~
aring this Supplemental Report.
l. Payroll records of Kathleen McGrory, 3/31/0l·3/Bl/05, Bates labeled
PD32426273.
2. Payroll records of Eames Reilly, 9/30/0l·~6/l 5/02, Bates labeled PD32746277.
. 3. Payroll records of leAnn Davis, 7/15/02-3/31/05, Bates labeled PD327S—
3297.
4. Payroll records of Gary Parsell, 3/31/Ol-6/l 5/O2, Bates labeled PD32986302.
5.. Payroll records of Nancy l..yl‘togt, 3!3l!Ol—3/3l!02, Bates labeled PD3303·
3304. _ __
6. Payroll records of Larry Kelly, 3/31/0149/ 12/02, Bates labeled PD3305-3311.
7. Payroll records of lulia Cooper, 3/31/Ol-3/3l/05, Bates labeled PD33l2-3341..
8. Payroll records • loaquin Leal, 7/ 15/02-3/ l5/04, Bates labeled PD33426353.
9. Payroll records of Natalie Flarnm-Stutenroth, 3/3 l/01-6/l 5/02, Bates labeled
PD3354—335 8.
l0. Payroll records of Lynn Bcgdonas—Shore, 3/Bl/Ol·4/25!02, Bate labeled
PD3359-3362.
ll. Payroll records of Terry Krebsbach, 3/31/Ol~—3/31/O3, Bates labeled PD3363»
3375.
12. Payroll records of`R.obert Mohriey, 3/31/01-7/15/02, Bates labeled PD3376-
3380.
13. Payroll records of Valerie Staggs, 3/31/01-3/Bl/05, Bates labeled PD33Sl-
3410.
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Finally, M12 Clemons estimates that the client managers averaged 58 hours per week.
The actual average is, of course, ultimately a matter of fact, I will only note that the client
managers I interviewed reported working far fewer hours, and that was the testimony of Mr.
Cortopassi and of market managers as well.
E. Damages
Without expressing any opinion on the methodology of computing back wages suggested
by Mr. Clemons, I note that if his estimates of hours worked are high, as suggested above, then
the damages are inflated accordingly. Also, he posits a three year statute of limitations. The
general statute of limitations in the FLSA. is two years, and is extended to three years only in the
event that a court deterrnines that violations not only existed but were willful, See 29 USC §
255. To be willful, violations must result from more than rnere ncligence-—·~the employer must
know that its conduct violated the law, or act in reckless disregard as to whether its conduct
violated the law. The burden of proving that violations are willful is on the employees asserting
willfulness. See Mclsauglgin v. Richland Shoe, 486 U.S. 128 (1988), In light of the extensive
efforts to achieve compliance outlined by Mr. Cortopassi, Plaintiffs face an uphill battle in
proving willfulness. Indeed, ifPlmtiH`s were working overtime and actively concealing the fact
from their supervisors, might not be a violation at all. There is case law that suggests that an
employer is not required to pay for hours worked if the employer not only did not know but in
the exercise of reasonable diligence had no reason to know that work was being done, See, for
instance, _Qa_y_is v. Food Lion, 792 F,2d 1274 (4* Cir, 1986), So it is inappropriate for Mr.
Clemons to assume a three~year statute of limitations without noting that its application is
conditioned upon Plaintiffs meeting their burden of proof with regard to wilifulness.
In this context, it is worthwhile to examine the assertion made by M12 Clemons that in a
private telephone conversation with the District Director of the Albuquerque District Office of
the U. S. Department of Labor, Wage and Hour Division, he had learned that there were 79
"compliance actions" initiated "against the Bank in the past 10 yB8.1`S,” including 5 in Arizona
The Albuquerque District Director is neither the ofiicial custodian of such records nor the
Disclosure Officer under the Freedom of Information Act (“FOIA")-—those distinctions belong
to the appropriate Regional Adn1ir1istrator-and there is a process in place for verifying or
certifying records disclosed under FOIA, which was not followed in obtaining the inforrnaticn in
question. The information about 79 compliance actions is, therefore, entirely nnofncial, Even if
the unofficial information Mr. Clemons received were accurate, however, it means little without
a great deal more background. When USDOT,./WH refers to a "cornpliance action" ("C/A"), it
can be a {nil investigation, looking at compliance in an entire company or subdivision of a
company. Compliance actions can also be "1irnited investigationsf which are focused only on a
particular pay practice or compliance issue, etc. For example, some investigations are limited to
child labor compliance, which would have little relevance to the instant case. And some C/A’s
are no more than conciliations. These are C/A’s where one or a few employees allege some
violation which the USDOL/WH supervisor reviewing the complaint does not feel is worth
investigating. The Investigator to whom the complaint is assigned is told to make a quick phone
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call to try to resolve the matter, but io do no fact iimdirag and to close it quickly whether
successful cr net. The most-common conciliation issues are complaints that a last paycheck for a
tcmuimatcd employee was not received. The Accemmtability Review standards require that
District Of§ccs average less than 2 hours ef investigator per conciliation, and comciliatiums with
more than 2 hours charged are Bagged for supervisory review.
Ln short, few meaningful inferences can be ckawn Hom the bare assertion that a national
company with thousands of employees had 79 C/A’s cave? a 10 year period, evan if there were
official evidence ofthe truth of the assertion, which in this case there is noi.
H. Final Sugglcmcut to Exgcrt Regurt of Oran Clemons
A. Salary Basis
Much of what Mr. Clemens discusses in tbds section of his repeat has already been
covered, such as the "Fu11 Time N0n»Exempt" heading amd the employment agrcmcmts Mr.
Clemons gives us more dctaii on the Sherry Weaver situation, which at this time the Bank
believes is the only instance ef an employee in thc category of the Plaintiffs being docked for a
partial day absence. As I noted, this hardly argues either a policy or a practice, and under old
541.1 18(a)(6) such a deduction does not result in less ofcxcmptiun even for Ms. Weaver alone if
it was either inadvertent 01* for lack of work, with the Bank having the option t0 pay her for the
time in question and cure the alleged violation.
Ivhz. Clemons also repeats the ‘1mdcrstauding" of same of the Plaintiffs that they would
bc docked even for partial day absences if they exhausted their leave. I have addressed this
misunderstanding above.
There is, however, a new issue raised by Mr. Clemons, and that is what the Bank calls
purchased time eff, Employees have thc uppommity to purchase up to an additional week of
paid leave. M12 Clemons takes the position that because this purchased time eff could be used in
partial day increments, and since it has to be purchased, it amounts to partial day docking.
Unformnatcly for Mr. Clcm0ns‘ theory, thc purchased time off is purchased by bcnciit
dcliays available under the B2m}<’s Eingc benefit plan. In addition to their salaries, Bank
employees in categories like that of the Plaintiffs receive a certain ammmt of pre-tax benefit
dollars. They cam spend this money on any combination 0f thc Bzmk’s available benefits, such as
group medical insurance, and also on purchased time 0f£ Bcncit dollars 11ct"spcnt" cm bcneiits
are then taxed and the net amount paid to employees.
'1`hcre is no dispute between M1: Clemons and me 0vcr the dciiniticn pf a salary as, in
part, a predetermined amount of money constituting all OI part of the emp}0yees’ total
compensation. In the case of the Plaintiffs and other regular Bank employees, they are paid their
predetermined salaries. Over amd above their salaries, such employees get the benefit package
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hc‘s right and the 01.1:2111 managers can only operate vfathiu the guidelines sct out in thc Freedom
to Act document, that’s picnty of discretion and independent judgment for exemption. (sw: my
initial Report for an cxtcusivc discussion can me amount of discretion and independent judgment
needed). In this context, it‘s also wcrthwbilc to note that thc new regulations codiicd a principal
already fmmd in same important GOULHL decisions, thai the existence of guidelines dcscs not in
itself make it impossible to make discretionary decisions: "Thc use of manuals, guidelines or
other established procedures containing or relating to highly technical, scicmifac, legal, Euaucial
ur other similarly complex mmm that can be understood or interpreted only by those with
advanced or spcciaiizcd knuwlcdgc ur skilis docs not preclude cxcmpticm .... ” 29 CFR 54}.704
(emphasis added).
D. Reporting Hours Worked
Ou this at least Mr. Ciemons and 1 agrw-om· infcnmatiun regarding bums wozkcd is
completely divergent. The employees hc interviewed claim to be. working {cmg hours, and
fluthcr claim to have been told oniy to report a few of thc overtime hours they worked. The
employees I interviewed were told to mpmt all hours worked, and did not work anywhere ucar as
much as the Pi:aimi&§ claim. The diicrcnccs will ba resolved by the tzdcr of fact.
c0n4i=1:,NsAr1uN
Professional services mic for cxpcn ccnsultaricm is $250 par hour, and for testimony in
deposition or ax trial, $300, plus reasonable expenses.
Dated: October 20, 2005 Brian T. _ gu 7 l
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