The Plaintiffs, including Kelli Salazar, Wayne Carpenter, Rodney Lopez, and Gregory Hanna who were either current or former drivers for Defendant, The Driver Provider (“DP”), initiated legal proceedings under the Fair Labor Standards Act (FLSA). They contended that the Defendants misclassified them and did not adequately compensate them, contravening the FLSA regulations. Specifically, the Plaintiffs argued that they did not meet the criteria for the 7(i) exemption as outlined in the FLSA and thus were not exempt from the FLSA’s overtime compensation provisions. Section 7(i) of the FLSA exempts certain commissioned employees from the overtime compensation requirement of the FLSA. This exemption applies to retail and service employees.
Plaintiffs engaged Randall G. O’Neal as an expert witness to offer his testimony about whether Plaintiffs met the requirements for the 7(i) exemption under the FLSA.
Labor and Employment Expert Witness
Randall G. O’Neal is a wage and hour consultant based in Garland, Texas, with extensive expertise spanning over seven years. His consultancy focuses primarily on matters pertaining to the Fair Labor Standards Act of 1938 (FLSA) and federal minimum wage and overtime laws. Prior to his consultancy career, O’Neal served the United States Department of Labor (DOL) in various roles within the Wage and Hour Division (WHD) for approximately 40 years. Notably, in the 20 years leading up to his retirement in 2015, he held the positions of Director of Regional Operations and Director of Enforcement for the 11-state Southwest Region, covering states such as Arkansas, Colorado, Louisiana, and Texas, among others. O’Neal holds a Bachelor of Science in Business Administration from Oklahoma State University, earned in 1972.
Discussions by the Court
Plaintiffs designated O’Neal as an expert in federal wage-and-hour matters and DOL enforcement actions. O’Neal, a retired DOL employee, had a career spanning approximately forty years with the Wage and Hour Division (WHD), where he held various positions, including director of regional operations and regional director of enforcement. His testimony primarily focused on the applicability of the 7(i) exemption to Driver Provider. However, the Court’s summary judgment order determined that Defendants did not qualify for the 7(i) exemption, rendering only a small portion of O’Neal’s report relevant to the proceedings.
Plaintiffs indicated their readiness to limit O’Neal’s testimony to matters concerning willfulness, specifically concerning Defendants’ assertions of good faith reliance on the 2012 DOL investigation, advice from legal counsel, and the classification of Drivers as exempt employees. However, Defendants objected and sought the complete exclusion of O’Neal’s opinion and testimony. The Court examined the highlighted portion of O’Neal’s report provided by Plaintiffs and proceeded to address the remaining issues sequentially.
In his report, O’Neal expressed his opinion that the WHD would likely reject any assertion of reliance upon the 2012 DOL investigation regarding the existence of a 7(i) exemption from the overtime payment at issue here. Plaintiffs contended that O’Neal’s opinions on Defendants’ claim of good faith reliance on the 2012 DOL investigation should be heard at trial. They argued that O’Neal’s report highlighted flaws in the 2012 investigation, undermining Defendants’ reliance on it. Defendants countered that this amounted to an impermissible legal conclusion.
The Court concurred that admitting O’Neal’s testimony regarding good faith reliance would be inappropriate because determining whether Defendants relied in good faith on the 2012 investigation was a matter for the jury to decide and did not necessitate expert testimony. The focus of O’Neal’s report predominantly centered on the potential application of the 7(i) exemption. However, the Court observed that his opinion on good faith reliance was detached from the 7(i) exemption. Consequently, all he provided was a conclusion that Defendants could not have relied in good faith on the 2012 investigation, which was held to be improper for two reasons.
First, experts may opine on an issue of fact within the jury’s province. However, they may not give testimony stating legal conclusions based upon those facts. The Court held that O’Neal’s testimony cannot be admitted for this very reason, as it invades on the province of the jury and in fact hinders rather than assists the jury. Second, this conclusion drew inferences about Defendants’ intent or state of mind. The Court citing Krause v. Cnty. of Mohave, 459 F. Supp. 3d 1258, 1264 (D. Ariz. 2020), held that the opinion testimony submitted by O’ Neal attempted to substitute O’Neal’s own judgment for that of the jury’s despite the jury being fully capable of examining the witnesses and evidence to decide whether Defendants’ conduct constituted a willful violation or good faith reliance.
O’Neal’s report included a short opinion regarding DP’s counsel’s statements, suggesting potential improper reliance on the 2012 investigation. Plaintiffs asserted that O’Neal’s testimony would aid jurors in comprehending the issues and his report would shed light on DP’s attempts to evade liability based on the prior investigation and their counsel’s alleged advice. Defendants reiterated their objection, contending that O’Neal’s testimony would constitute an improper legal conclusion.
The Court affirmed Defendants’ position, stating that the question of whether Defendants relied in good faith on their counsel’s advice fell squarely within the jury’s jurisdiction. Additionally, the Court noted that O’Neal’s opinion on this matter presupposed that the 2012 investigation was flawed, implying that the counsel and DP could not have relied on it in good faith. Furthermore, the Court has determined that genuine questions of material fact persisted on this matter which is why O’Neal’s testimony on this topic would constitute a legal conclusion. After all, the jury could ascertain this issue for themselves and determine whether DP relied in good faith on their counsel’s advice.
Plaintiffs argued that O’Neal’s opinions regarding DP’s reliance that Drivers were exempt employees should be heard at trial. Defendants, however, maintained their stance that this constituted an impermissible legal conclusion. This opinion paralleled the earlier assertion that Defendants could not have relied on the 2012 investigation. O’Neal indicated in his report that it was his belief that the WHD would dismiss any claims of reliance upon the 2012 investigation for the existence of a 7(i) exemption. He further noted that this reliance on the investigation was purportedly used to support the claimed applicability of the 7(i) exemption.
The Court held that the 7(i) exemption was no longer at issue.
Separating the lack of application of the exemption from the alleged lack of good faith reliance upon it only left a legal conclusion. O’Neal’s testimony would essentially assert that DP could not have in good faith believed the exemption applied. The Court added that this opinion amounted to a conclusion regarding willfulness and would only serve to complicate matters, as per Federal Rule of Evidence 403. Additionally, the determination of whether there was good faith reliance regarding employee classifications fell well within the jury’s purview and hence did not necessitate expert testimony due to its lack of technical complexity.
The Court acknowledged O’Neal’s knowledge regarding DOL operations and investigations but did not permit O’Neal to testify to his general legal conclusions. Considering the inapplicability of the 7(i) exemptions and the Court’s assessments of the remaining issues with O’Neal’s opinion, the Court decided to strike both his testimony and report in their entirety.
Held
The Court granted Defendants’ Motion to Strike the Expert Testimony and Report of Plaintiffs’ Expert Randall O’Neal.
The Court has not arrived on an outcome for this case since the remaining issues involved in this case still await resolution.
Key Takeaways
The expert testimony regarding the Fair Labor Standards Act (FLSA) and the application of the 7(i) exemption presented several key points. Randall G. O’Neal, a seasoned wage and hour consultant, was engaged to provide legal assessments related to the 7(i) exemption. Plaintiffs, comprised of current or former drivers for The Driver Provider, initiated legal proceedings under the FLSA, alleging misclassification and inadequate compensation by the Defendants, in violation of FLSA regulations. At the heart of the dispute was the contention over the applicability of the 7(i) exemption, with Plaintiffs arguing they were entitled to overtime compensation. However, the Court’s summary judgment determined Defendants did not qualify for the exemption, limiting the relevance of O’Neal’s opinion. Consequently, the Court excluded O’Neal’s testimony on various matters, ruling that such opinions amounted to impermissible legal conclusions and were within the jury’s jurisdiction. The Court underscored the jury’s role in determining issues such as good faith reliance and employee classifications, emphasizing that expert testimony should not overshadow the jury’s decision-making authority. Ultimately, the Court decided to strike O’Neal’s testimony and report entirely due to their limited relevance and potential to confuse the issues at hand.
Case Details
| Case Caption | Salazar v. Driver Provider Phx. LLC |
| Docket Number | 2:19cv5760 |
| Court | United States District Court, Arizona |
| Citation | 2024 U.S. Dist. LEXIS 27174 |
| Order Date | February 16, 2024 |
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