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Phillips v. Pearson's Painting, Inc.

United States District Court, D. Nebraska

September 25, 2015

PEARSON'S PAINTING, INC., a Nebraska Corporation; Defendant.


Joseph F. Bataillon Senior United States District Judge

This matter is before the Court following a nonjury trial. Plaintiff claims defendant failed to pay him overtime in violation of Fair Labor Standards Act, 29 U.S.C. § 201 et. seq (“FLSA”) and the Nebraska Wage Payment and Collection Act, Neb. Rev. Stat. § 48-1228 et seq. (“NWPCA”). Defendant disputes plaintiff’s claims and alleges plaintiff received all the wages due and owing to him. The Court makes the following Findings of Fact and Conclusions of Law pursuant to Fed.R.Civ.P. 52.


At all times relevant, defendant Pearson's Painting, Inc. existed as a Nebraska corporation with a principal place of business in Blair, Washington County, Nebraska. The Company contracts to perform commercial and residential painting in Nebraska and Iowa. It averages 20 employees at a given time, and it has more than $500, 000 in annual sales. Defendant concedes that it is subject to the wage-payment requirements of the FLSA and NWPCA. Bob Pearson is the sole owner, director and president of the Company. He is responsible for the company’s day-to-day operations, employee scheduling and payroll. Plaintiff is a former employee of defendant. Plaintiff's employment with defendant ended on May 6, 2013. During his employment with defendant, plaintiff was an hourly employee.

Defendant employed plaintiff as a painter and a foreman for approximately 8 years prior to the filing of this lawsuit.[1] Mr. Pearson and Mr. Phillips had known each other for thirty years. Plaintiff started working at $18.00 per hour, and by the end of his career with the defendant, he made $24.00 per hour. He worked multiple job sites at any given time. He worked on federal contracts, worked on the Midtown job, as well as numerous other jobs. During plaintiff’s employment, he worked at several federally-funded jobsites that were subject to the Davis-Bacon Act of 1931. As a foreman, plaintiff reported directly to Bob Pearson and Superintendent Craig Wessel.

Plaintiff testified that he used his own truck and sometimes received gas money reimbursement. The defendant paid for his hotels and expenses via a company credit card. He often bought supplies for the jobs, using a Sherman Williams account in the defendant’s name. He testified that there was no punch clock for hours worked, but they used a note pad and could use as many time cards as necessary. The cards were turned in on Monday morning, and defendant paid his employees on Tuesdays by paper check. Plaintiff testified that he typically started work at 7:00 a.m. and ended at 3:30 p.m. He further testified he started 15 minutes early to set up the site and stayed 15 minutes late. He indicated that Bob Pearson told him to do this and to not put it on his time card. He also received a ½ hour unpaid lunch break. The time card listed the date, job, and name of the employees, hours worked and then sometimes plaintiff would write his extra time on the back of the card. See Ex. 101. He did not keep a copy of the time cards. He testified that he only received about 5% of these time cards in discovery, and claims 90% are missing. He contends that he was not paid for: picking up supplies for the company before the regular shift commenced at 7 a.m.; arriving early to the job site to take attendance for crew members as they arrived at the job site; working after the regular shift ended at 3:30 p.m.; working full shifts on Saturdays and Sundays; and generally any hours in excess of 40 hours per week.

Plaintiff argues he did work Saturdays and Sundays in addition to the regular week. See e.g., Exs. 201 at 41, 43, 46, 59 and 66. Many of the handwritten time cards are contained in Ex. 201. Defendant contends that with regard to Ex. 201 at 19, plaintiff reported no overtime.

Plaintiff and defendant were close friends, and they worked certain jobs on their off hours. For these jobs plaintiff received cash, generally 50% of the money they received for Saturday or Sunday jobs. He testified that he did not get overtime for these hours. He generally received overtime hours only if he worked 3-5 hours of overtime during the week. If he did get paid, plaintiff contends it was in the form of an expense check that equaled straight time money. He never received a 1099 for any of this after hours work.

Plaintiff kept some of his pay stubs. See e.g, Ex. 119. The payroll transaction detail is submitted as Ex. 107. Plaintiff further contends that he was given extra money for “repairs”, and he did not make these “repairs.” See e.g., Ex. 118 at 5, 14 (truck repairs); (ladder expenses for $420.00).

Plaintiff relies in large measure on the Sherwin Williams invoices and Boyd Jones records, in support of his argument that he worked overtime for the defendant. In this regard plaintiff contends that the invoices at these two businesses show sales, and therefore, he must have been working on those dates. Plaintiff contends there are 97 instances where defendant should pay him overtime.

The Department of Labor conducted an audit of defendant’s business in 2012, pursuant to a complaint by the plaintiff. After completing the audit, the Department of Labor found only $1, 100.00 in money due to all employees. The Department of Labor audited each employee and the subcontractors.

Bob Pearson testified and stated he pays his employees weekly. He generally has about 20 employees, and sometimes up to 30. He typically has three jobs going on simultaneously, and the workweek starts on Sunday and ends Saturday. Time is either turned into him on cards, or the hours are called into him. There are no written policies in this regard. He testified that the plaintiff rarely worked on Saturdays or Sundays and did not work for the company on Saturday or Sunday. Bob Pearson generally prepares a written summary of the payroll. Jason Pearson, Bob Pearson’s son, then uses the payroll summary to complete the digital time cards, as set forth in Ex. 102. The digital time records reflect the total time worked per week, not per day. Often the paper cards were destroyed after the time was called in by phone. Further, Bob Pearson denies that he ever told plaintiff to show up 15 minutes early or stay 15 minutes late. He testified that plaintiff was very jealous of defendant’s son coming to work. Mr. Pearson terminated plaintiff in May, 2013. He heard that plaintiff was smoking in the parking lot, was stealing equipment from other contractors, and had a 12 foot Hiller Electric ladder on top of his truck. Mr. Pearson testified that plaintiff was leaving early but reporting full time work.

Mr. Pearson testified that plaintiff did work some overtime. See Ex. 205, at 1-4, 10, 30, 38, 41, 57, 68; Ex. 202, p 88; Ex. 201, p. 50. Exhibits 217, 218 and 219 show only 6 hours in overtime. The backs of the cards for Ex. 201 pp. 26, 27, 30, 41, 46, were not produced. Plaintiff contends, though, that the timekeeping practices contrast with the payroll records. See Ex. 107; handwritten timesheets submitted to the company by Charles “Chuck” Phillips, Ex. 101; handwritten summaries prepared by Bob Pearson, Ex. 101; the company’s internal computerized timesheets for Phillips, Ex. 102; timesheets submitted to the Department of Labor by the company, Ex. 120-123; sales invoices from the Sherwin-Williams Company regarding purchases made by “Chuck” on the company’s account, Ex. 103; and daily jobsite reports generated by general contractors Boyd Jones Construction and the Weitz Company, regarding work performed by Pearson’s Painting work crews on Saturdays and Sundays, Ex. 104-105.

Brian Mahlendorf, a general contractor for Weitz Co. testified that defendant is a painting subcontractor for him. He used the defendant in his Midtown project from 2009-2013. He stated that he kept logs on the site and number of employees, although he did not track them by name. He testified that generally Pearson’s crews did not work overtime hours. Robert Volz, the ex-vice president for Boyd Jones Construction, also testified that Pearson is a subcontractor for their project. See Ex. 104.

Jerry Elder testified that he worked for Pearson painting for 7 years as a foreman. Elder testified about the time keeping practices. He indicated that the employees used time sheets. See Ex. 201. He further testified that he sometimes gives a verbal report and calls it into the defendant on Mondays. If he calls it in, he then destroys the card. He testified that he does not get overtime pay except maybe once a year, and if he works Saturdays or Sundays, he takes straight time compensation time off during the week. The crew can work without him being there, and deliveries from Sherman Williams are made and signed for by others in his absence. Mr. Elder also testified that defendant told him not to work over 40 hours per week. As far as he knows plaintiff never complained that he was underpaid or shorted pay. After the termination, plaintiff told Mr. Elder that he wanted to ...

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