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Shanks v. Carrizo Oil & Gas, Inc.

United States District Court, Fifth Circuit

December 11, 2013

JAMES SHANKS, Plaintiff,
CARRIZO OIL & GAS, INC., Defendant.


MELINDA HARMON, District Judge.

Pending before the Court is Plaintiff's Motion for FLSA Conditional Certification and Notice under 29 U.S.C. § 216(b) (Doc. 15) filed by Plaintiff James Shanks ("Shanks"). Plaintiff's proposed class includes "all individuals who, at any point, during the past three years prior to the filing of this lawsuit, worked for Defendant on any of Defendant's oil and gas projects as Pumpers and Production Foreman and did not receive overtime pay." (Doc. 15, at 8). Defendant Carrizo Oil & Gas, Inc. ("Carrizo") argues in opposition that Plaintiff has failed to meet his burden to demonstrate that class treatment is appropriate in this case. (Def.'s Resp. at 8, Doc. 24). Upon review and consideration of the motion and the responses thereto, [1] the relevant legal authority, and for the reasons stated below, the Court concludes that the motion should be denied.

I. Background

Carrizo is an energy company engaged in the exploration, development, and production of oil and gas. (Doc. 24, at 2). Shanks was employed by Carrizo as a production foreman. (Doc. 15, at 3). As a production foreman, Shanks "[did] production work in the field, prepared samples for testing, set up and ran steam generators, worked on rigs, pulled pumps and tubing, worked on wells, inspected equipment, took temperatures on wells, maintained a gas line, and cleaned equipment and wells." (Aff. James Shanks, at ¶¶ 2, 9; Doc. 15-2). Shanks was paid a flat salary of $5, 500 per month. (Doc. 15-2, at ¶ 5). From his date of hire in March 1994 until 2010, Shanks worked from approximately 6:00 a.m. until 6:00 p.m., and occasionally into the evenings. (Doc. 15-2, at ¶ 7). His work schedule consisted of nineteen days of consecutive work followed by two days off; then five days of consecutive work followed by two days off. (Doc. 15-2, at ¶ 6). Thereafter, the schedule would repeat. His schedule changed in July 2012, when Shanks began working Monday through Friday with every weekend off. (Doc. 15-2, at ¶ 6). That schedule continued until Shanks's termination in October 2012. (Doc. 15-2, at ¶ 6).

Shanks filed this action on behalf of himself and others similarly situated who worked for Carrizo as production foremen and pumpers in oil and gas projects in "Texas, Colorado, Ohio, Pennsylvania, and Louisiana." (Doc. 15, at 1). Shanks alleges that Carrizo violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et. seq. by failing to pay production foremen and pumpers overtime pay of time-and-a-half for all hours worked in excess of forty per work week. (Doc. 15, at 1). In support of his motion for conditional certification, Shanks offers his own declaration wherein he states:

"I believe that employees working as Production Foremen and Pumpers for Carrizo Oil & Gas primarily in the Eagle Ford Shale in South Texas, the Barnett Shale in North Texas, the Marcellus Shale in Appalachia, the Niobrara Formation in Colorado, the Utica Shale in Eastern Ohio, and in onshore trends along the Texas and Louisiana Gulf Coast region worked a similar number of hours, performed similar duties, and were also paid on a salary basis like me." (Doc. 15-2, at ¶ 10).

Shanks also states that Carrizo's failure to properly compensate him and the other potential class members results from "a policy or practice of misclassifying employees as subcontractors." (Doc. 15, at 7).

Carrizo objects to class treatment for this action on the grounds that Shanks has failed to meet his burden to show that some identifiable facts or legal nexus binds the proposed class, and he has failed to assert or allege the existence of any other plaintiff interested in joining the suit. (Doc. 24, at 1). In support of Carrizo's objections, it offers the declarations of Sheldon Lowery ("Lowery"), a production manager, (Doc. 24-1) and Michelle Bailey ("Bailey"), Carrizo's Vice President of Human Resources (Doc. 24-2).

In Lowery's declaration, he describes Carrizo's domestic assets in Texas, Colorado, Pennsylvania, and Ohio. (Doc. 24-1, at ¶¶ 2-3). He explains that Camp Hill, the Texas site where Shanks was employed, is the only Carrizo operation that uses steam injection wells, whereas all of the other assets are developed by horizontal drilling utilizing hydraulic fracturing technology. (Doc. 24-1, at ¶¶ 3-4). Therefore, he claims, "[t]he operations at the Camp Hill asset are different from the operations in other regions where Carrizo has wells." (Doc. 24-1, at ¶ 4.) Lowery also states that the primary duties of a production foreman are to "monitor, manage and oversee the operations of wells." (Doc. 24-1, at ¶ 5). "Production foremen spend, on average, 70% to 90% of their time each work week supervising and overseeing the work of the pumpers and the contractors;... and 10% to 30% of each work week performing physical or manual work." (Doc. 24-1, at ¶¶ 5, 7).

In Bailey's declaration, she states that between 2010 and the present, Carrizo employed eleven production foremen and fifteen pumpers throughout its sites. (Doc. 24-2, at ¶¶ 3-4). Production foremen are classified as exempt for purposes of overtime compensation, and many of them earn over $100, 000 per year. (Doc. 24-2, at ¶ 3.) Pumpers at Carrizo's Barnett, Eagle Ford, Marcellus, and Niobrara sites are classified as non-exempt and receive overtime pay when their hours exceed forty in a given work week. (Doc. 24-2, at ¶ 5). Pumpers at Camp Hill are paid on salary and do not receive overtime pay. (Doc. 24-2, at ¶ 5). Carrizo also hires contractors to complete the pumper work at its Barnett, Eagle Ford, Marcellus, and Niobrara assets. (Doc. 24-2, at ¶ 6).

Carrizo argues that because Shanks worked at only one site, Camp Hill, he has no basis for his assertion that employees at other sites are similarly situated to him. (Doc. 24, at 10). Additionally, Carrizo contends that the differences among its various sites in how production foremen and pumpers are classified and paid preclude certification in this case. (Doc. 24, at 11). Finally, Carrizo points out that Shanks's job duties at Camp Hill are not typical of other production foremen. (Doc. 24, at 12).

II. Legal Standard

Under the FLSA, nonexempt employees must earn a minimum wage of $7.25 per hour, and no employer shall employ any nonexempt employee in excess of forty hours per week without compensation at one and one-half times the regular rate. 29 U.S.C. §§ 206(a), 207(a). Section 216(b) of the FLSA permits an employee to bring an action "for and [on] behalf of himself... and other employees similarly situated." Id. at § 216(b). Collective actions serve the purpose of decreasing litigation costs by efficiently resolving common issues of law and fact in a single proceeding. Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 170 (1989). To certify a collective action under the FLSA, two requirements must be satisfied. "First, the named representative and the putative members of the prospective FLSA class must be similarly situated. Second, the pending action must have a general effect." England v. New Century Fin. Corp., 370 F.Supp.2d 504, 507 (M.D. La. 2005). Class treatment is not appropriate where the action arises from circumstances that are "purely personal to the plaintiff, and not from any generally applicable rule or policy." Id.

The Fifth Circuit has noted the two different tests that courts apply to determine if the putative class members are "similarly situated." Mooney v. Armaco Srvcs. Co., 54 F.3d at 1213-14 (5th Cir. 1995). Like most district courts, this Court has generally adopted the two-stage approach articulated in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), which consists of (i) a notice stage, followed by (ii) a decertification stage.[2] See Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 916 n.2 (5th Cir. 2008) (finding that "collective actions typically proceed in two stages"). At the notice stage of the Lusardi approach, the district court first makes a preliminary determination of whether potential plaintiffs are similarly situated to the named plaintiff. Mooney, 54 F.3d at 1213-14. If they are, then the court conditionally certifies the action and authorizes notice to potential plaintiffs to opt in, and the suit "proceeds as a representative action throughout discovery." Id. at 1214. Generally, after the close of discovery, the defendant initiates the second stage by filing a motion for "decertification." Id. At the decertification stage, the Court makes a factual determination of whether the plaintiffs are "similarly situated" based on the discovery evidence. Id. If the court determines from the discovery evidence that the ...

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