Certification Granted in Silvertip Completion Services Lawsuit

Moreno v. Silvertip Completion Services Operating, LLC, Slip Copy (2020)

2020 WL 7974011 Only the Westlaw citation is currently available.

United States District Court, W.D. Texas, Midland-Odessa Division.

Sergio MORENO, individually and on behalf of all others similarly situated, Plaintiffs, v.

SILVERTIP COMPLETION SERVICES OPERATING, LLC, Defendant.

NO. MO:19-CV-00240-DC-RCG | Signed 04/01/2020 Attorneys and Law Firms Travis M. Hedgpeth, The Hedgpeth Law Firm, PC, Houston, TX, Jack Siegel, Siegel Law Group PLLC, Dallas, TX, for Plaintiffs.

Angeles Garcia Cassin, Shira R. Yoshor, Greenberg Traurig, L.L.P., Houston, TX, Noel A. Lesica, Pro Hac Vice, Greenberg Traurig, LLP, Florham Park, NJ, for Defendant.

ORDER GRANTING IN PART PLAINTIFF'S MOTION FOR NOTICE AND CONDITIONAL CERTIFICATION RONALD C. GRIFFIN, UNITED STATES MAGISTRATE JUDGE *1 BEFORE THE COURT is Plaintiff Sergio Moreno's Motion for Notice to Potential Plaintiffs and Conditional Certification (“Motion for Notice and Conditional Certification”). (Doc. 9). This case is before the undersigned through an Order pursuant to 28 U.S.C. § 636 and Appendix C of the Local Court Rules for the Assignment of Duties to United States Magistrate Judges. (Doc. 6). The undersigned has authority to enter this order pursuant to 28 U.S.C. § 636(b)(1)(A). See, e.g., Esparza v. C&J Energy Servs., Inc., No. 5:15–CV–850-DAE, 2016 WL 1737147, at *1 (W.D. Tex. May 2, 2016) (noting conditional certification involves non-dispositive issues); Wedel v. Vaughn Energy Servs., LLC, No 2:15–CV–93, 2015 WL 5920034, at *1 (S.D. Tex. Oct. 6, 2015) (same). After reviewing the record

and relevant law, the Court GRANTS IN PART Plaintiff's Motion for Notice and Conditional Certification. (Doc. 9).

I. BACKGROUND On October 15, 2019, Plaintiff filed, individually and on behalf of those similarly situated, his Original Complaint against Defendant Silvertip Completion Services Operating, LLC. (Doc. 1). Defendant is an oil-and-gas service company that provides wireline and pumping services to its customers in the Permian Basin. Id. Plaintiff sues Defendant for unpaid overtime wages under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et. seq., for his work as a wireline operator. Id. Plaintiff alleges that he was classified as a “non-exempt employee” and that he and other nonexempt employees regularly worked over forty hours per week but their overtime pay was incorrectly calculated. (Doc. 9 at 3). Plaintiff claims Defendant “categorically excluded all additional pay—other than hourly pay—provided to the [non-exempt employees] from the regular rate of pay” when calculating their overtime rates. Id. On November 22, 2019, Plaintiff filed the instant Motion for Notice and Conditional Certification. (Doc. 9). Plaintiff seeks conditional certification of the following class:

All workers employed by Defendant in the United States in the last three years who were paid on a non-exempt basis and received Additional Pay that Defendant excluded from the regular rate to calculate overtime.

Id. If the Court conditionally certifies the class, Plaintiff requests that the Court order Defendant to produce contact information of those potential class members. (Doc. 9 at 11).

Plaintiff further moves the Court to approve his proposed method of notice, which would include the issuance of notice via mail, email, and text message. Id. After seeking and receiving an extension of time to respond, Defendant filed a response in opposition on December 13, 2019. (Doc. 14).

Plaintiff filed a reply on December 23, 2019. (Doc. 19). This matter is now ready for disposition.

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Moreno v. Silvertip Completion Services Operating, LLC, Slip Copy (2020)

II. LEGAL STANDARD An employee may bring an action for violations of the minimum wage and overtime provisions of the FLSA either individually or as a collective action on behalf of himself and “other employees similarly situated.”

29 U.S.C. §

216(b). Unlike a class action filed under

Federal Rule

of Civil Procedure 23(c), a collective action under § 216(b) provides a procedure for plaintiffs to “opt-in,” i.e., affirmatively notify the court of their intention to become parties to the collective action. Roussell v. Brinker Int'l, Inc., 441 F. App'x 222, 225 (5th Cir. 2011) (citing Sandoz v.

Cingular Wireless LLC, 553 F.3d 913, 916 (5th Cir. 2008)).

Although the Fifth Circuit has declined to adopt a specific test to determine when a court should conditionally certify a class or grant notice in a case brought under the FLSA, the majority of courts within the Fifth Circuit have adopted the Lusardi two-stage approach, after F.R.D. 351 (D.N.J. 1987).

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Lusardi v. Xerox Corp., 118 1

See, e.g., Vanzzini v. Action Meat Distribs., Inc., 995 F. Supp. 2d 703, 719 (S.D. Tex. 2014) (applying Lusardi); Mateos v. Select Energy Servs., LLC, 977 F. Supp. 2d 640, 643 (W.D. Tex. 2013); Tice v. AOC Senior Home Health Corp., 826 F. Supp. 2d 990, 994 (E.D. Tex. 2011); Marshall v.

Eyemasters of Tex., Ltd., 272 F.R.D. 447, 449 (N.D. Tex. 2011).

*2 The two stages of the Lusardi approach are the “notice stage” and the “decertification stage.” See Mooney v.

Aramco Servs. Co., 54 F.3d 1207, 1216 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v.

Costa, 539 U.S. 90 (2003). At the notice stage, the district court “determines whether the putative class members' claims are sufficiently similar to merit sending notice of the action to possible members of the class.”

Acevedo v. Allsup's Convenience Stores, Inc., 600 F.3d 516, 519 (5th Cir. 2010). “Because the court has minimal evidence, this determination is made using a fairly lenient standard, and typically results in ‘conditional certification’ of a representative class.”

Mooney, 54 F.3d at 1214. If the court finds that the putative class members are similarly situated, then conditional certification is warranted and the

plaintiff will be given the opportunity to send notice to potential class members. Id. After the class members have opted in and discovery is complete, the defendant may then file a decertification motion—the second stage of the Lusardi approach—asking the court to reassess whether the class members are similarly situated. Id. At that point, the court will fully evaluate the merits of the class certification. Id.

III. DISCUSSION The Court's analysis here need only address the first stage of the Lusardi inquiry. Plaintiff must 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.”

Tolentino v. C & J Spec–Rent Servs., Inc., 716 F. Supp. 2d 642, 647 (S.D. Tex. 2010). During the notice stage, the court makes its decision “usually based only on the pleadings and any affidavits which have been submitted[.]”

Id. Courts “appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination.”

Mooney, 54 F.3d at 1214 n.8. “FLSA collective actions are generally favored because such actions reduce litigation costs for the individual plaintiffs and create judicial efficiency by resolving in one proceeding common issues of law and fact arising from the same alleged activity.”

Tolentino, 716 F. Supp. 2d at 646.

Defendant argues that Plaintiff incorrectly claims Defendant had a policy of categorically excluding additional pay from the regular rate of pay. (Doc. 14 at 1). Further, Defendant argues that its exclusion of discretionary bonuses and per diem payments from its overtime calculations was both reasonable and lawful. Id. at 1–3. Next, Defendant argues that the proposed class members and Plaintiff are not similarly situated, and that Plaintiff has failed to show that others seek to opt-in to this action. Id. Finally, Defendant argues that if the Court conditionally certifies the class then Plaintiff's proposed method of notice should be revised. Id. A. Merits-Based Arguments Are Irrelevant at the Conditional Certification Stage The Court finds that Defendant's argument regarding whether it had a policy of categorically excluding additional pay

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Moreno v. Silvertip Completion Services Operating, LLC, Slip Copy (2020)

from its employees' regular rate of pay is a merits-based argument. (See Doc. 14 at 1). Similarly, Defendant's argument that it acted both reasonably and lawfully in its exclusion of discretionary bonuses and per diem payments from its overtime calculations goes to the ultimate merits of this case. Id. at 1–3. “At this procedural stage, the court does not resolve factual disputes, decide substantive issues going to the ultimate merits, or make credibility determinations.”

McKnight v. D. Houston, Inc., 756 F. Supp. 3d 794, 802 (S.D. Tex. 2010) (quoting Lynch v. United Servs.

Auto. Ass'n, 491 F. Supp. 2d 357, 386 (S.D.N.Y. 2007)).

Defendant's merits-based arguments are best addressed at the decertification stage of the Lusardi inquiry. See Laney v.

Clements Fluids Mgmt., LLC, No. 6:18-CV-497-JDK-KNM, 2019 WL 2751087, at *9 (E.D. Tex. May 3, 2019) (citing Casanova v. Gold's Tex. Holdings Grp., Inc., No SA:13CV-1161-DAE, 2014 WL 6606573, at *3 (W.D. Tex. Nov. 19, 2014)).

B. Existence of Aggrieved Co-Workers *3 In support of his Motion for Notice and Conditional Certification, Plaintiff submits his own declaration and the declaration of opt-in plaintiffs Phillip Acevedo and Christian Gilby. (Docs. 9-1, 9-2, 13). Additionally, on February 11, 2020, Cash Bellew filed a consent to join this suit. (Doc. 21). Plaintiff attests he worked for Defendant as a wireline operator from approximately January 2019 until August 2019. (Doc. 9-1 at 1). Mr. Acevedo claims he also worked for Defendant as a wireline operator from approximately January 2019 until August 2019. (Doc. 9-2 at 1). Mr. Gilby states he worked for Defendant as a wireline operator from approximately November 2018 until March 2019. (Doc. 13-1). All three declarants claim that Defendant failed to properly pay them their overtime wages by categorically excluding additional pay from the calculation of the overtime rate, including non-discretionary bonuses, job ticket bonuses, and stage completion pay. (Doc. 9-1 at 1; Doc. 9-2 at 1; Doc. 13-1 at 1). All three declarants further attest that through their employment with Defendant, they have personal knowledge and experience with Defendant's compensation policies for non-exempt employees. Id. The declarants state they obtained this knowledge through observations of and conversations with other non-exempt employees. Id. At the notice stage, a district court may credit a plaintiff's assertion that aggrieved individuals exist where “there is a factual nexus that binds the named plaintiffs and potential class members as victims of a particular alleged policy or

practice.” Pruneda v. Xtreme Drilling & Coil Servs., Inc., No. 5:16-CV-91-DAE, 2016 WL 8673853, at *8 (W.D. Tex. April 14, 2016) (quoting Black v. Settlepou, P.C., No. 3:10–CV– 1418–K, 2011 WL 609884, at *3 (N.D. Tex. Feb. 14, 2011)).

Further, “allegations in pleadings and affidavits are generally sufficient to support a claim for conditional certification” and to establish a sufficient factual nexus to allow notice to potential opt-in plaintiffs. Id. (quoting Pacheo v. Aldeeb, No. 5:14–CV–121–DAE, 2015 WL 1509570, at *3 (W.D. Tex. Mar. 31, 2015)). However, the contents of affidavits and declarations must still be based on personal knowledge. See Lee v. Metrocare Servs., 980 F. Supp. 2d 754, 762 (N.D. Tex. 2013).

The Court finds that Plaintiff, Mr. Acevedo, and Mr. Gilby are familiar with Defendant's compensation policies as a result of their work experience with Defendant and interactions with other employees and contractors. The pleadings and declarations allege that Defendant implemented the same policy of underpayment with respect to many of its employees. (Docs. 1, 9-1, 9-2, 13-1). Given the lenient standard at the conditional certification phase, the evidence is sufficient to credit “the assertion that aggrieved individuals exist.”

Tolentino, 716 F. Supp. 2d at 647.

C. Aggrieved Co-Workers Similarly Situated to Plaintiff At the notice-stage under Lusardi, a plaintiff need only provide substantial allegations that class members were victims of a single decision, policy, or plan. Pedigo v. 3003 S. Lamar, LLP, 666 F. Supp. 2d 693, 698 (W.D. Tex. 2009).

A plaintiff is not required to show that class members are identical. Walker, 870 F. Supp. 2d at 468. Rather, plaintiffs must show that class members are “similarly situated ... in relevant respects given the claims and defenses asserted.”

Id. at 466.

Defendant argues that Plaintiff has failed to show that he and the proposed class members are similarly situated because Plaintiff seeks conditional certification of all non-exempt employees regardless of job title. (Doc. 14 at 4–6). Plaintiff, Mr. Acevedo, and Mr. Gilby attest that Defendant paid them and other non-exempt employees in the same manner by failing to include additional pay in the calculation of proper overtime rates. (Doc. 9-1 at 1; Doc. 9-2 at 1; Doc. 13-1 at 1). Defendant claims that it determines its wireline

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Moreno v. Silvertip Completion Services Operating, LLC, Slip Copy (2020)

operators' bonuses after each job stage, but it determines its pumping operators' bonuses at the end of each job. Id. Further, Defendant asserts that its pumping operators do not receive a per diem. Id. at 5. Plaintiff argues that regardless of the exact job title, the pay policy was largely the same for all of Defendant's non-exempt employees. (Doc. 9 at 9).

A class that encompasses a wide range of job positions may be conditionally certified as long as the differences between class members are not material to the allegations of the case.

Behnken v. Luminant Min. Co., LLC, 997 F. Supp. 2d 511, 522 (N.D. Tex. 2014) (“Because it appears from the record developed thus far that the employees' job classifications, descriptions, or duties do not affect any of the facts that are material to plaintiffs' claim, these differences are not sufficient to defeat conditional certification”). Here, the purported dissimilarities between members of Plaintiff's proposed class are irrelevant because a common scheme or policy allegedly affects all non-exempt employees. *4 While the Court acknowledges that Defendant's employees have dissimilar job positions, these dissimilarities are not legally relevant because the alleged FLSA violations in this case do not turn on the nature of the work performed.

See Tamez v. BHP Billiton Petroleum, No. 5:15-CV-330, 2015 WL 7075971, at *3–4 (W.D. Tex. Oct. 5, 2015).

While courts generally require that members of an FLSA class have similar job titles and responsibilities, in the present case the proposed class includes only non-exempt workers. See Pacheco, 2015 WL 1509570, at *7. Thus, the alleged FLSA violations do not depend on the job title or responsibilities of each plaintiff. If Plaintiff and opt-in plaintiffs prevail on their claims, then Defendant violated the FLSA with regard to every non-exempt employee whose additional pay was not used in calculating their overtime rate —regardless of each plaintiff's particular job position. See Minyard v. Double D Tong, Inc., No. MO:16-CV-00313-RAJ, 2017 WL 5640818, at *3 (W.D. Tex. Mar. 22, 2017). Because Plaintiff alleges that the compensation scheme is in and of itself a violation of the FLSA, no further factual inquiry into the job duties of each potential plaintiff is necessary. As such, liability can be determined collectively without limiting the class to a specific job position.

In the instant case, the claims of the putative class members are similar in that they are allegedly compensated under the

Oct. 7, 2004) (“The claims of the putative class members are similar in that ... they were compensated under the same regimen. Thus, under plaintiffs' theory of the case, the fact that [they] had somewhat different duties and rates of pay is immaterial.”). Because the dissimilar job responsibilities among the class have not been shown to be relevant to Plaintiff's FLSA allegations, they are not a barrier to conditional certification. Accordingly, at this stage, Plaintiff has made the “modest factual showing” required to demonstrate that he and other potential plaintiffs are similarly situated. See Pedigo, 666 F. Supp. at 698.

D. Similarly Situated, Aggrieved Individuals Want to Opt-In Lastly, Defendant argues Plaintiff has failed to show that others desire to opt-in to this suit. (Doc. 14 at 10). However, three additional individuals have already opted-in to this suit.

(Docs. 9-2, 13-1, 21). Additionally, Plaintiff's declaration, as well as the declarations of the other individuals who have opted-in to this suit, attest that they believe there are others who would like to join this suit. See id. Accordingly, considering the lenient standard at this stage, the Court finds Plaintiff has made a sufficient showing that others wish to join this suit. See, e.g.,

Dyson v. Stuart Petroleum Testers,

Inc., 308 F.R.D. 510, 514 (W.D. Tex. 2015); Pacheco, 2015 WL 1509570, at *8 (two declarations attesting “many” current and former employees would join lawsuit found to be a sufficient basis for conditional certification); Reid v. Timeless Restaurants, Inc., 3:09-CV-2481-L, 2010 WL 4627873, at *3 (N.D. Tex. Nov. 5, 2010) (finding “evidence from two individuals who experienced similar employment pay practices ... and [who] stated that they are aware of others who also experienced them” sufficient to support motion for conditional certification); Tolentino, 716 F. Supp. 2d at 653 (finding two declarations of similarly situated individuals and complaint sufficient to demonstrate the existence of employees who would opt-in).

In sum, Plaintiff has demonstrated: “(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.”

Tolentino, 716 F. Supp. 2d at 647. Accordingly, the Court conditionally certifies the following class:

same regimen.

Aguilar v. Complete Landsculpture, Inc., No. 3:04-CV-0776-D, 2004 WL 2293842, at *4 (N.D. Tex. © 2021 Thomson Reuters. No claim to original U.S. Government Works.

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Moreno v. Silvertip Completion Services Operating, LLC, Slip Copy (2020)

All workers employed by Defendant in the United States in the last three years who were paid on a non-exempt basis and received Additional Pay that Defendant excluded from the regular rate to calculate overtime. 2

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The Court notes that Defendant argues the class definition should be restricted to the past two years because it did not begin operating until 2018. (See Doc. 14 at 10). However, Defendant provided no case law for this proposition and the Court finds the change from three years to two years would have no practical bearing as there should be no plaintiffs seeking to join this suit for claims arising out of employment that occurred prior to Defendant coming into existence.

*5 For the above reasons, and because the parties are to confer regarding the notice to the class, Plaintiff's Motion for Notice and Conditional Certification is hereby GRANTED IN PART. (Doc. 9).

Regarding notice to the potential plaintiffs, the parties are ORDERED to confer in an attempt to agree upon the content and form of notice as well as an appropriate manner for distributing it.

If the parties cannot agree on the content, form, and distribution of notice, Defendant is ORDERED to file any remaining objections to Plaintiff's proposed notice.

It is further ORDERED that within twenty-one (21) days of this Order, the parties shall file with the Court their proposed method of notice.

It is so ORDERED. All Citations Slip Copy, 2020 WL 7974011

IV. CONCLUSION

End of Document

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