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Kotowski v. JGM Fabricators & Erectors, Inc.

United States District Court, E.D. Pennsylvania

July 30, 2019

RICHARD R. KOTOWSKI, Plaintiff,
v.
JGM FABRICATORS & ERECTORS, INC., et al., Defendants.

          MEMORANDUM OPINION

          TIMOTHY R. RICE, U.S. 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, see Fed.R.Civ.P. 52(a), are informed by my credibility findings of several key witnesses. I have measured their testimony against other evidence and documents and assessed their demeanor, bias, and candor while testifying. I discredit Kotowski's testimony as embellished and exaggerated based upon his demeanor. I also discredit the testimony of Michael Weyant based upon his apparent bias and evidence of his poor reputation for truthfulness. See Fed.R.Evid. 608(a); see also N.T. 3/13/2019 at 40-42; N.T. 3/14/2019 at 64.

         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. See Pl. Ex. (“P”) 1. Although Kotowski and others, including Messner, Jr., occasionally were required to assist with manual labor or emergency tasks, such instances were the exception to Kotowski's primary role as a well-compensated and essential executive with managerial responsibilities.

         FINDINGS OF FACT[1]

         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. Id.; N.T. 3/11/19 at 47. He reported directly to Joseph Messner, Jr., president and chief executive officer (“CEO”) of JGM. P1; N.T. 3/13/2019 at 165; N.T. 3/14/2019 at 7; Stip. ¶¶ 5-6.

         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.

         JGM's Business

         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. Id. at 18; N.T. 3/11/2019 at 78; N.T. 3/12/2019 at 96. Staffing varies depending on the size of the job. N.T. 3/13/2019 at 11-12. JGM directly employs some laborers on a permanent basis and obtains others on a temporary basis from staffing companies such as Tradesmen International. Id. at 122; N.T. 3/11/2019 at 77, 196-97.

         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, id. at 57, but currently, JGM superintendents are hourly employees, making $35 per hour plus overtime, N.T. 3/13/2019 at 47, 145. In 2018, JGM superintendent Brian Sell earned $103, 000, or approximately $1, 980 per week, including approximately ten hours per week of overtime pay. Id. at 47-48; cf. N.T. 3/14/2019 at 56-57 (Sell's 2016 hours).

         Kotowski's Tenure with JGM

         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. Id. at 126. Messner, Jr. told Kotowski that JGM employees would “cold call” the contacts and leverage Kotowski's relationships to obtain business for JGM. Id.

         11. Kotowski also made several phone calls to potential clients to try to secure business. Id. at 127-29. Kotowski helped JGM obtain work for the company Clorox through one of these calls. Id. at 125; N.T. 3/14/2019 at 84. Messner, Jr. did not direct Kotowski to call Clorox; rather, Kotowski did this on his own following a conversation with Messner, Jr. about contacts to target as potential clients. N.T. 3/11/2019 at 124.

         12. Kotowski went to lunch with contacts at Adjunct Technology and Agilent, but those meetings did not result in JGM business. Id. at 127-28. Similarly, Kotowski had meetings at Croda, Pittsburgh Tank, and Formosa, none of which resulted in JGM business. Id.; N.T. 3/14/2019 at 82. Kotowski also called a contact at the Port of Wilmington twice, and made a site visit once, but these efforts similarly did not result in JGM business. N.T. 3/11/2019 at 129.

         13. Kotowski undertook an initiative to hire additional skilled workers for JGM, including ordering magnets for employees' trucks that advertised JGM was hiring. Id. at 192. He also provided JGM with job descriptions from his previous company so that JGM could use them in posting available positions. N.T. 3/14/2019 at 19.

         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.[2] N.T. 3/13/2019 at 131-32; see also N.T. 3/14/2019 at 89 (Kotowski spent 30-40% of his time in the office).

         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. Id. at 152.

         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)[3] training, that he completed at the JGM office. Id. at 86, 89-90; P5 at JGM80-82.

         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. Id. at 90, 92; N.T. 3/12/2019 at 151; N.T. 3/18/2019 at 29. Kotowski's completion of those tasks was essential to JGM's success. N.T. 3/18/2019 at 30-31 (Kotowski's successor testifying those tasks were essential); N.T. 3/14/2019 at 67.

         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.[4] Id. at 94.

         20. Kotowski was responsible for approving paid time off (“PTO”) requests for all field employees.[5] Id. at 97; N.T. 3/11/2019 at 170-71; e.g., Def. Ex. (“D”) 5 at 1-2. Kotowski also had authority to deny PTO. N.T. 3/11/2019 at 174; e.g., D5 at 3-4.

         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. Id.; N.T. 3/18/2019 at 28-29.

         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.[6] Id. at 29; N.T. 3/13/2019 at 99. When they needed to hire direct JGM employees, Gunther provided resumes to Kotowski, who would decide whether to request an interview. N.T. 3/13/2019 at 100; N.T. 3/11/2019 at 194-95, D7 (emails from Kotowski responding “no” or “looks good” in response to candidates provided by Gunther). Gunther then coordinated interviews and Kotowski, or another JGM executive in his absence, conducted the interviews. N.T. 3/13/2019 at 101-02; N.T. 3/11/2019 at 194-95; D7. Gunther also coordinated hiring additional employees from Tradesmen at Kotowski's direction.[7] N.T. 3/13/2019 at 104-05.

         25. Although Messner, Jr. could overrule his decisions, Kotowski generally had independent hiring authority.[8] Id. at 101-02; N.T. 3/12/2019 at 17; see also N.T. 3/13/2019 at 10-11 (Kotowski offered JGM superintendent Brian Sell a job immediately after interview). Kotowski also would direct Gunther when he wanted to extend an offer to an employee and confirm the terms of those offers, including pay rate. N.T. 3/13/2019 at 102-03.

         26. Kotowski, as well as project superintendents and forepersons, held authority to terminate Tradesmen laborers, and Kotowski could also terminate JGM employees.[9] Id. at 107- 08; N.T. 3/11/2019 at 134, 202; N.T. 3/12/2019 at 17.

         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. See, e.g., N.T. 3/13/2019 at 36, 113. Although Messner, Jr. objected to granting certain individuals raises in rare ...


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