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Morgan v. Yellowjacket Oilfield Services, LLC

United States District Court, S.D. Texas, Corpus Christi Division

June 12, 2017




         Plaintiff, Victor Morgan (Morgan) filed this action against his former employer, Yellowjacket Oilfield Services, LLC (YJOS), alleging violation of the Fair Labor Standards Act (FLSA) for failure to pay overtime compensation for all hours worked over 40 in a workweek. Before the Court is YJOS's Motion for Summary Judgment on Release Issue (D.E. 14), claiming that Morgan previously settled and released his FLSA claim in connection with another case against YJOS: Juarez vs. Yellowjacket Oilfield Services, LLC, No. 2-15-cv-329 (S.D. Tex. October 31, 2016) (Ramos, J.) (Juarez). Also before the Court are Morgan's response (D.E. 15), YJOS's reply (D.E. 18), and each party's supplemental brief on the ratification and tender-back rule (D.E. 27, 30). For the reasons set out below, the motion for summary judgment (D.E. 14) is DENIED.


         Employment and Filing of Juarez and Morgan Actions.

         YJOS employed Morgan as a mixing plant operator from April 10 to June 13, 2014. D.E. 14-1. According to YJOS, he worked a total of six days in the field during that time. Id. Morgan claims 40 to 60 hours of unpaid overtime. D.E. 15, p. 9. On July 31, 2015, co-worker Jonathan Juarez filed his FLSA case against YJOS as a collective action. D.E. 14-2. While the Juarez case was pending, on April 19, 2016, Morgan filed this case in his individual capacity only. D.E. 1.

         Juarez Settlement.

         Soon after Morgan initiated this case, on April 25, 2016, the parties in Juarez filed a motion for a stipulated judgment based upon a settlement agreement, which this Court approved the same day. D.E. 14-3. See also, Juarez, D.E. 36. Pursuant to the Juarez agreement, a settlement class was formed that included Morgan within its scope, should Morgan agree to opt in. D.E. 25. Putative members of the settlement class were to be given the option of joining in the settlement through a notice and claim form. If they agreed, they would receive a payment calculated pursuant to the negotiated, agreed-upon, and court-approved formula. Id.

         Notice of the Morgan Action.

         Morgan's lawsuit was served upon YJOS after the Juarez settlement was approved. On May 20, 2016, YJOS filed its answer in Morgan's case, which was silent on any issue related to a settlement, accord and satisfaction, or release. There is no evidence that Morgan's counsel was aware of any settlement of the Juarez case or that the scope of its settlement class included Morgan.

         YJOS Solicits Morgan's Settlement Through Juarez.

         With or without YJOS's knowledge of Morgan's pending litigation, the third-party claims administrator for the Juarez settlement, ILYM Group, Inc. (ILYM), proceeded with settlement administration. While the specific date is not clear from the record, ILYM sent a notice of settlement to YJOS's employees, including Morgan, sometime before June 1, 2016. D.E. 18, pp. 24, 29. The notice of settlement-which had been submitted to the Juarez Court for approval and bore the Juarez case caption-informed employees that a settlement had been reached on FLSA claims, that the Court had approved the settlement, and that the employees were entitled to participate as “class members.” Id.

         The notice stated that recipients had two options: “(1) participate in the Settlement and receive a Settlement Payment by returning a Settlement Claim Form; (2) do nothing and receive no compensation.” Id., p. 25. Attached to the notice of settlement was a settlement claim form. Id., p. 22. The settlement claim form told employees their estimated settlement amount and that by signing and dating the form, they would become eligible to receive payment. Id. Further, it stated that by signing, an employee agreed to “waive, release, and discharge any and all claims . . . including but not limited to . . . relief arising under the FLSA.” Id., p. 23. Employees that signed agreed “to be bound by the judgment entered in this case” and affirmed that they were “consenting to joining the above-captioned lawsuit.” Id. They were instructed that, if they had questions, they should contact ILYM or “Class Counsel”-attorneys for plaintiffs in the Juarez action. D.E. 14-4, p. 6.

         ILYM has demonstrated that as of June 1, 2016, it received a settlement claim form, bearing a signature that purports to be that of Victor Morgan and which YJOS attests matches Morgan's signature on other YJOS employee paperwork. D.E. 14-4, p. 6; D.E. 15-2; D.E. 18, p. 30. Morgan denies that he received the settlement notice and signed any claim form. D.E. 15-2. However, it is undisputed that his attorney had no contemporary notice of the solicitation of Morgan's settlement through the Juarez case. D.E. 15-1.

         Morgan's ...

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