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Baucum v. Marathon Oil Corp.

United States District Court, S.D. Texas, Houston Division

July 14, 2017

CHANCE BAUCUM, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
v.
MARATHON OIL CORP., Defendant.

          MEMORANDUM OPINION AND ORDER

          SIM LAKE UNITED STATES DISTRICT JUDGE.

         Plaintiff, Chance Baucum, Individually and On Behalf of All Others Similarly Situated, filed this action against defendant, Marathon Oil Corporation ("Marathon"), to recover unpaid overtime wages and other damages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b). Pending before the court is Plaintiff s Motion for Conditional Certification and Court-Authorized Notice (Docket Entry No. 19). After considering Defendants's Response to Plaintiff's Motion for Conditional Certification and Court-Authorized Notice, (Docket Entry No. 22), Plaintiff's Reply in Support of Conditional Certification and Court-Authorized Notice (Docket Entry No. 61), and the applicable law, the court concludes that the pending motion should be granted and notice provided to all persons who worked for Marathon as HES Advisors and/or Solids Control Operators who were classified as independent contractors and paid a day-rate with no overtime compensation at any time from July 14, 2014 to the present.

         I. Factual Allegations and Procedural Background

         A. Factual Allegations[1]

         Marathon is a global oil and gas exploration and production company operating worldwide and throughout the United States, including in Texas. Plaintiff alleges that to provide services to many of its customers, Marathon classifies as independent contractors certain workers who are employed on a day-rate basis. Plaintiff alleges that he worked for Marathon as a Health, Environment, and Safety ("HES") Advisor from approximately June 2013 to June 2016, and that throughout his employment Marathon classified him as an independent contractor and paid him a day-rate with no overtime compensation for hours worked in excess of 40 hours in a workweek. Plaintiff alleges that other workers like him regularly worked at well sites in excess of 40 hours each week, but that instead of paying them overtime as required by the FLSA, Marathon improperly classified them as independent contractors and paid them a daily rate with no overtime. Plaintiff alleges that he and all the putative class members shared the same or similar job requirements and pay provisions, were subjected to the same or similar policies and procedures, worked the same or similar hours, and were denied overtime as a result of the same illegal pay practice.

         B. Procedural Background

         Plaintiff filed this action on November 6, 2016, alleging willful violation of the FLSA, and seeking an order holding Marathon liable for unpaid back wages due to Plaintiff and the potential putative FLSA class, and for liquidated damages equal in amount to their unpaid compensation.[2] On April 21, 2017, plaintiff filed the pending motion for conditional certification and court-authorized notice seeking to certify a class and provide notice to: "All persons who worked for Marathon as H[ES] Advisors and/or Solids Control Operators who were classified as independent contractors and paid a day-rate with no overtime compensation at any time from, 2014 to the present."[3] Plaintiff argues that "[b]ecause Marathon denied Baucum and the putative class members overtime under its uniform compensation policy, these workers are similarly situated."[4]

         On May 19, 2017, Marathon filed its response opposing plaintiff's motion for class certification.[5] Marathon agrees that conditional certification is appropriate with respect to HES Advisors, but argues that plaintiff's motion for conditional class certification should be denied as to Solids Control Operators because HES Advisors and Solids Control Operators have different job duties, use different equipment, have different supervisors, and different reporting structures and therefore are not similarly-situated.[6] Attached as Exhibit I to Marathon's response are Marathon's proposed changes to the notice and consent documents.

         On May 25, 2017, plaintiff filed a reply in support of his motion for conditional certification and court-authorized notice arguing that evidence submitted by both parties shows that HES Advisors and Solids Control Operators are sufficiently similar to justify notice because:

• Both positions were treated as independent contractors by Marathon
• Both positions were supplied to Marathon by Sub-Contractors
• Both positions were paid a day rate with no overtime.[7]

         II. Applicable Law and Standard of Review

         The FLSA requires covered employers to pay non-exempt employees for hours worked in excess of defined maximum hours, 29 U.S.C. § 207(a), and allows employees to sue their employers for violation of its hour and wage provisions. See 29 U.S.C. §§ 215-16. An employee may sue his employer under the FLSA on "behalf of himself . . . and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become a party and such consent is filed in the court in which such action is brought." 29 U.S.C. § 216(b). Although § 216(b) neither provides for court-authorized notice nor requires certification for a representative action under the FLSA, certification has been recognized as a useful case management tool for district courts to employ in appropriate cases. Hoffmann-La Roche Inc. v. Sperling, 110 S.Ct. 482, 486 (1989) ("A collective action allows . . . plaintiffs the advantage of lower individual costs to vindicate rights by the pooling of resources. The judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged . . . activity.").

         When a plaintiff seeks certification to bring a collective action on behalf of others and asks the court to approve a notice to potential plaintiffs, the court has discretion to approve the collective action and facilitate notice to potential plaintiffs. Id. at 487 (ADEA action);[8] Villatoro v. Kim Son Restaurant, L.P., 286 F.Supp.2d 807, 809 (S.D. Tex. 2003) (FLSA action). The court also has discretion to modify the proposed class definition if it is overly broad. See Baldridge v. SBC Communications, Inc., 404 F.3d 930, 931-32 (5th Cir. 2005) (recognizing the court's power to "limit the scope" of a proposed FLSA action) . See also Heeq v. Adams Harris, Inc., 907 F.Supp.2d 856, 861 (S.D. Tex. 2012) ("A court also *has the power to modify an FLSA collective action definition on its own' if the 'proposed class definition does not encompass only similarly situated employees.'"). Because collective actions may reduce litigation costs for the individual plaintiffs and create judicial efficiency, courts favor collective actions when common issues of law and fact arise from the same alleged activity. Sperling, 110 S.Ct. at 486.

         An FLSA cause of action "may be commenced within two years after the cause of action accrued . . . except that a cause of action arising out of a willful violation may be commenced within three years after, the cause of action accrued." 29 U.S.C. § 255(a). "Based on the statute of limitations, courts have recognized that class certification is appropriately limited to workers employed by the defendant up to three years before notice is approved by the court." Tolentino v. C & J Spec Rent Services Inc., 716 F.Supp.2d 642, 654 (S.D. Tex. 2010). "Thus, the notice period must commence three years prior to the court's approval of notice." Id.

         The term "similarly situated" is not defined in the FLSA. See, e.g., 29 U.S.C. § 216. The Fifth Circuit has declined to set a specific standard for courts to apply when considering whether employees are sufficiently similar to support maintenance of a collective action. See Mooney v. Aramco Services Co., 54 F.3d 1207, 1216 (5th Cir. 1995) (expressly declining to decide which of two analyses is appropriate), overruled on other grounds by Desert Palace, Inc. v. Costa, 123 S.Ct. 2148 (2003).[9] Courts faced with this issue typically apply one of two standards, i.e., the two-step analysis described in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), or the "spurious class action" analysis described in Shushan v. University of Colorado, 132 F.R.D. 263 (D. Colo. 1990). See Mooney, 54 F.3d at 1214.

         The Lusardi analysis proceeds in two stages: (1) a notice stage followed by (2) a decertification stage. See Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 915-16 n.2 (5th Cir. 2008). At the notice stage the court makes a decision, usually based solely on the pleadings and any affidavits that have been submitted, whether to certify the class conditionally and give notice to potential class members. See Mooney, 54 F.3d at 1213-14. The decision is made using a "fairly lenient standard" because the court often has minimal evidence at this stage of the litigation. Id. at 1214. Courts, in fact, "appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy or plan." Id. & n.8. Thus, notice stage analysis typically results in conditional certification of a representative class. Id. After conditional certification the "putative class members are given notice and the opportunity to 'opt-in, '" id., after which the action proceeds as a collective action. Id.

         The second stage of the Lusardi approach - the "decertification stage" - is typically precipitated by the defendant filing a motion to decertify after the opt-in period has concluded and discovery is largely complete. Id. "At this stage, the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question." Id. If the court finds the claimants are no longer made up of similarly situated persons, it decertifies the class and dismisses the opt-in plaintiffs without prejudice. Id. If the class is still similarly situated, the court allows the collective action to proceed. Id. If the class is not still similarly-situated, then the original plaintiff proceeds to trial on his individual claims. Id.

         The Shushan analysis follows a procedure that is similar to the class certification procedure used under Federal Rule of Civil Procedure 23 ("Rule 23"). While the Fifth Circuit has explicitly left open the question of whether the Lusardi approach, the Shushan approach, or some third approach should be used to determine whether employees are sufficiently similar to support maintenance of a collective action, see Russell v. Brinker International, Inc., 441 Fed.Appx. 222, 226 (5th Cir. 2011), because Shushan applies the analysis used for class actions brought under Rule 23, and because the Fifth Circuit has described Rule 23's "opt out" procedure as fundamentally and irreconcilably different from § 216(b)'s "opt in" procedure, see LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 288 (5th Cir. 1975) (per curiam), most courts in this district follow the Lusardi approach. See Sandoz, 553 F.3d at 915 n.2. This court, therefore, will analyze plaintiff's motion using the Lusardi approach.

         At this initial state of the Lusardi approach a plaintiff need only make a minimal showing to persuade the court to issue notice to potential class members. Mooney, 54 F.3d at 1214 (recognizing that courts apply a "fairly lenient standard" at the initial stage of the analysis). In the absence of Fifth Circuit guidance on the appropriate test to use at this stage of the analysis, courts are split on the appropriate elements to consider. Some courts use three elements, requiring the plaintiff to show that: (1) there is a reasonable basis for crediting the assertion that aggrieved individuals exist; (2) those aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and defenses asserted; and (3) those individuals want to opt in to the lawsuit. See, e.g., Heeg, 907 F.Supp.2d at 861; Tolentino, 716 F.Supp.2d at 653. Other courts, however, have rejected the third element as non-statutory. See, e.g., Drever v. Baker Hughes Oilfield Operations, Inc., Civil Action No. H-08-1212, 2008 WL 5204149, at *3 (S.D. Tex. Dec. 11, 2008) (rejecting argument that FLSA collective action can be certified only if the plaintiff proves that others are interested in opting in to the lawsuit). Because the third element is not statutorily required and because requiring evidence of putative class members who are willing to join a collective action before an appropriate class has even been defined conflicts with the Supreme Court's directive that the FLSA be liberally construed to effect its purposes, see Tony and Susan Alamo Foundation v. Secretary of Labor, 105 S.Ct. 1953, 1959 (1985), the court agrees that plaintiff need not present evidence of the third element at this stage of the litigation.

         Ill. Analysis

         A. Class Certification

         1. There is a Reasonable Basis for Crediting Plaintiff's Assertion that Other Aggrieved Individuals Exist

         To satisfy the first element of the test that courts apply at the initial notice stage of the Lusardi analysis plaintiff need only show that there is a reasonable basis for believing that other aggrieved individuals exist. Heeg, 907 F.Supp.2d at 862. Plaintiff contends that "[e]ven though notice has yet to go out, additional H[ES] Advisors and/or Solids Control Operators who were paid a day-rate have opted-in as plaintiffs to this matter."[10] Attached to plaintiff's motion are the declarations of one other HES Advisor, Gerald Bounds, [11] and one Solids Control Operator, John Smith, [12] both of whom state that despite regularly working more than forty hours per week they did not receive overtime and were, instead, paid a day rate. Bounds and Smith also state that they know other similarly situated former coworkers who would be interested to learn about their rights and the opportunity to join this action.[13] By presenting the declarations of Bounds and Smith, representing, respectively, one HES Advisor and one Solids Control Operator, both of whom state that despite regularly working more than forty hours per week they did not receive overtime and were, instead, both paid a day rate, plaintiff has satisfied the first element of the Lusardi test by showing that there is a reasonable basis for believing plaintiff s assertion that other aggrieved individuals exist who worked for Marathon as both HES Advisors and Solids Control Operators.

         2. There is a Reasonable Basis for Believing that a Class of Similarly Situated Persons Exists

         To satisfy the second element of the test that courts apply at the initial notice stage of the Lusardi analysis plaintiff must demonstrate a reasonable basis for believing that a class of similarly situated persons exists. See Heeq, 907 F.Supp.2d at 862 (citing Lima v. International Catastrophe Solutions, Inc., 493 F.Supp.2d 793, 798 (E.D. La. 2007)). "Potential class members are considered similarly situated to the named plaintiff if they are similarly situated in terms of job requirements and similarly situated in terms of payment provisions.'" Id. (quoting Ryan v. Staff Care, Inc., 497 F.Supp.2d 820, 825 (N.D. Tex. 2007). "*A court may deny plaintiffs' right to proceed collectively if the action arises from circumstances purely personal to the plaintiff, and not ...


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