United States District Court, W.D. Oklahoma
TOMMY WHITLOW, on behalf of himself and all other similarly situated individuals, Plaintiff,
CRESCENT CONSULTING, LLC. Defendant.
L. RUSSELL, UNITED STATES DISTRICT JUDGE
the Court is Whitlow's Motion for Conditional
Certification. [Doc. 30]. The matter is fully briefed. For
the reasons set forth herein, Plaintiff's Motion is
GRANTED IN PART and DENIED IN PART. The Court will
conditionally certify a class consisting of all persons that
served as drilling consultants for Crescent Consulting, LLC,
and were paid as independent contractors, that were provided
a 1099 rather than a W-2, and paid a “day-rate”
without overtime at any time since April 29,
Fair Labor Standards Act (“FLSA”) ensures that
certain employers pay their employees overtime compensation
if earned. See 29 U.S.C. § 207. The Act creates
a private right of action for “one or more
employees” to bring an action against their employer to
recover unpaid wages or overtime compensation on
“behalf of himself or themselves and other employees
similarly situated.” 29 U.S.C. § 216(b). Unlike a
class action under Rule 23, an action on behalf of similarly
situated employees under the FLSA is denoted a collective
action, and putative plaintiffs must “opt in”
rather than “opt out.” See 29 U.S.C.
§ 216(b)(“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.”) Pursuant to these
provisions, Tommy Whitlow challenges the pay he received from
Defendant Crescent Consulting LLC.'s in his capacity as a
drilling consultant. He seeks to pursue this action on behalf
of all “drilling consultants employed by, or working on
behalf of, Crescent Consulting, LLC as independent
contractors and paid on a day rate any time between three
years prior to the date of [any order certifying a collective
action] and the present.” [Doc. No. 30, pp. 13-14]. As
noted above, § 216(b) permits similarly situated
employees to pursue a collective action; however, the term
“similarly situated” is not defined by the FLSA.
See Thiessen v. Gen. Elec. Capital Corp., 267 F.3d
1095, 1102 (10th Cir. 2001).
Thiessen, the Tenth Circuit discussed three
approaches to assessing whether putative plaintiffs are
similarly situated and therefore certification of a
collective action is appropriate: the ad hoc
approach, the Rule 23 approach, and the spurious approach.
Id. at 1102-03. The court was called upon to
consider whether, in the context of an action under the Age
Discrimination in Employment Act (“ADEA”), the
district court erred in utilizing the ad hoc
approach. Under this approach, the district court undertakes
a two-step inquiry, the first of which utilizes a lenient
standard for assessing whether putative plaintiffs are
similarly situated. Step one, known as the notice step,
mandates “nothing more than substantial allegations
that the putative class members were together the victims of
a single decision, policy, or plan.” Id. at
1102 (internal quotation marks omitted). Step one
certification is the vehicle by which the Court authorizes
the named plaintiff to give notice to the other similarly
situated persons, granting them the opportunity to opt in by
filing a consent with the Court. Step two, which occurs after
discovery, invokes a stricter level of review, the Court
considering “(1) disparate factual and employment
settings of the individual plaintiffs; (2) the various
defenses available to defendant which appear to be individual
to each plaintiff; (3) fairness and procedural
considerations; and (4) whether plaintiffs made the filings
required . . . .” Id. at 1103 (internal
quotation marks omitted). The second stage is commonly
referred to as the decertification stage. In
Thiessen the T enth Circuit approved reliance on the
ad hoc approach, although it noted that all three
approaches generally call for consideration of “the
same or similar factors.” Id. at 1105. Since
Thiessen, the undersigned has applied the two-step
approach in FLSA actions, despite the fact that
Thiessen arose under the ADEA. See Hart v.
Sandridge Energy, Inc., Case No. 14-cv-00178-R (Doc. No.
76); Foust v. CPI Security Services Inc., Case No.
16-cv-1447-R (Doc. No. 54); Benson v. Plaster & Wald
Consulting Corp., Case. No. 16-cv-801-R (Doc. No. 37).
Nothing in Defendant's brief convinces this Court that
its prior holdings were inappropriate or that it should
deviate from application of the ad hoc approach to
certification in this FLSA action.
such, at this first step the Court is concerned with whether
Mr. Whitlow has made substantial allegations that the
drilling consultants were the victims of a single decision,
policy or plan. Mr. Whitlow alleges in his November 21, 2016
Complaint that he was employed by Crescent Consulting as an
oilfield contractor and/or consultant. [Complaint, ¶ 6].
He contends he and other drilling consultants were improperly
classified by Defendant as independent contractors, and paid
a day rate^72;that is a set amount of compensation for
each day worked irrespective of the number of hours
worked^72;without overtime for hours worked in excess of
forty in any given workweek. Plaintiff Whitlow contends he
worked in excess of forty hours each week while engaged by
Crescent Consulting, and that Defendant's failure to
compensate him for these hours violated the FLSA.
See 29 U.S.C. § 207(a)(1).
forth above, because the Court is at the “notice stage,
” it limits inquiry to whether Mr. Whitlow makes
substantial allegations that the putative members of the
class were victims of a single policy or plan. Mr. Whitlow
alleges and presents evidence that Defendant retained persons
it identified as independent contractors to serve as drilling
consultants for third parties, such as Sandridge Energy and
Chesapeake Energy. These persons were allegedly paid a set
day rate, regardless of the number of hours worked in a day,
and more importantly, without regard to whether the drilling
consultant worked more than forty hours in a given workweek.
Plaintiff alleges the putative plaintiffs were subject to a
compensation-scheme that violates the FLSA because they are
not properly considered exempt from the overtime provisions
of the Act, but yet received no overtime pay. Plaintiff also
submits affidavits from other drilling consultants that
support his contention that they were similarly situated in
that they were paid according to the same structure and
performed similar duties on well sites. The Court finds that
the allegations and evidence submitted are sufficient to
establish that the putative plaintiffs are similarly situated
so as to permit conditional certification.
contends conditional certification is inappropriate in this
misclassification case in part because the issue of whether
any particular Plaintiff was an employee of Defendant, rather
than an independent contractor, will require an individual
analysis under the economic realities test. See e.g.
Baker v. Flint Engineering and Const. Co., 137 F.3d
1436, 1440 (10th Cir. 1998)(noting that in light
of the breadth of the definition of “employ”
under the FLSA, that the status of a person under the FLSA is
not limited to common law concepts of employees or
independent contractors, but rather focuses on the economic
realities of the relationship). Adopting district court
authority from outside the Tenth Circuit, Defendant argues
that the Court should consider the economic realities test in
conjunction with evidence it submitted and conclude that the
putative plaintiffs are not similarly situated and therefore
conditional certification is appropriate.
Courts are split as to whether the economic realities test
should be utilized when determining whether to conditionally
certify a class in an FLSA action concerning an allegedly
wrongful independent contractor designation. . . . Some
courts have held that the economic realities inquiry is only
appropriate at the decertification stage. . . . Other courts
have held that the economic realities test ought to inform
the assessment of whether class members are similar enough to
warrant conditional certification. . . .
Tamez v. GHP Billiton Petroleum (Americas), Inc.,
2015 WL 7075971 (W.D.Tex. Oct. 5, 2015)(collecting cases).
The undersigned agrees with those courts that have concluded
the economic realities inquiry is appropriate at step two of
the ad hoc approach, that is in addressing a motion
for decertification. As noted by the court in Carter v.
XPO Last Mile, Inc., 2016 WL 5680464 (N.D.Cal.
Oct. 3, 2016):
I am also not persuaded by the analyses of courts that reject
conditional FLSA certification in independent contractor
misclassification cases solely because the independent
contractor analysis is fact intensive and because there are
alleged differences between class members (e.g., hours
worked, investments made). If that were the test, no
independent contractor misclassification case could be
certified under FLSA. See Demauro v. Limo, Inc., No.
8:10-CV-413-T-33AEP, 2011 WL 9191, at *3 (M.D. Fla. Jan. 3,
2011) (“the individualized analysis needed to determine
whether each driver is an independent contractor or employee
for FLSA purposes precludes class certification.”);
In re FedEx Ground Package Sys., Inc., Employment
Practices Litig., 662 F.Supp.2d 1069, 1083 (N.D. Ind.
2009) (denying conditional certification because “the
court must take into consideration the actual history of the
parties' relationship, necessitating an individualized
examination of the multiple factors relating to each
drivers' employment.”). Whether there are
materially significant differences is best tested at the
“second step” of the FLSA certification process.
See, e.g., Gilbert v. Citigroup, Inc., C-08-0385 SC,
2009 U.S. Dist. LEXIS 18981, * 10, 2009 WL 424320 (N.D. Cal.
Feb. 18, 2009) (“Defendants' concern about
individualized inquiries does not require the Court to deny
conditional certification....Under the two-stage
certification procedure, Defendants can present this evidence
and make these arguments as part of a motion to decertify the
class once discovery is complete.”).
Id. at *5. The Court finds here that Plaintiff has
sufficiently alleged and presented evidence to support his
burden at step one. Each of the identified plaintiffs allege
payment at a day rate, regardless of the number of hours
worked in a week. Each putative plaintiff was engaged by
Defendant Crescent Consulting, LLC to serve as drilling
consultant and assigned to the jobsite of a Crescent client.
The putative plaintiffs describe their job duties similarly.
Furthermore, as noted in Tamez, “[w]hereas
here, Plaintiffs allege that the compensation scheme is in of
itself a violation of the FLSA. No further factual inquiry is
necessary. . . . [L]iability can be determined collectively
without limiting the class to a specific job position.”
2015 WL 7075971, at * 3. Having rejected Defendant's
contention that the Court should delve into the economic
realities test at step one, the Court concludes that
conditional certification is appropriate with regard to those
persons engaged as drilling consultants by Defendant and
whose pay is reported via 1099^72; that is the consultant
was treated by Defendant as independent contractor. The
remaining issues are how broadly defined the conditional
class should be and the timing, content, and method of notice
to be given to putative plaintiffs.
regard to the breadth of the class, Plaintiff Whitlow
contends notice should be extended to all drilling
consultants engaged by Defendant Crescent Consulting, LLC at
its various locations across the United States.
Defendant's alternative to challenging conditional
certification is to argue that the class should be limited to
drilling consultants who worked for Chesapeake, SandRidge, or
Samson in Alfalfa, Beckham, Major, Roger Mills, or Woods
County, Oklahoma, or in Barber, Clark, Comanche, Finney or
Harper County, Kansas. Defendant contends this limitation is
appropriate because the Plaintiffs that have thus far opted
in worked for Chesapeake, Samson, and Sandridge in those
locations during the alleged statutory period. Crescent
Consulting contends that “Plaintiffs offer no
substantial basis in their brief or their declarations that
support the conclusion that drilling consultants who worked
for these operators in other locations or for other operators
in any locations are similarly
situated and, thus, should be included among the putative
class.” [Doc. No. 72, p. 21].
Reply in support of certification Plaintiff Whitlow attaches
excerpts from the deposition of Colley Andrews,
Defendant's corporate representative. Mr. Andrews
testified that consultants for Crescent Consulting, LLC do
not have the option of being W-2 employees, but rather must
agree to be treated as independent contractors. [Doc. No.
74-5, p. 63].[5" name="FN5" id=
"FN5">5] Defendant identified one client, BP, Lower
48, that required drilling consultants be employees of the
company supplying the workers. As a result those persons were
employed by a different entity under the same umbrella of
entities. [Id. at 73-74]. Based on the testimony of
Mr. Andrews as well as the opt-in of Larry Henry who worked
in Ohio and West Virginia, the Court finds that Plaintiff has
established that the same independent contractor's
policies were utilized company-wide. “[G]eographic
commonality is not necessary to satisfy the FLSA collective
action's ‘similarly situated' requirement, so
long as the employees were impacted by a common
policy.” McCloud v. McClinton Energy Grp.,
L.L.C. 2015 WL 737024, *8 (W.D. Tex. Feb. 20,
2015)(quotation marks omitted quoting Vargas v.
Richardson Trident Co., 2010 WL 370155, at *8 (S.D.Tex.
Feb. 22, 2010)). Thus, “‘if there is reasonable
basis to conclude that the same policy applies to multiple
locations of a single company, certification is
appropriate.'” Id. (brackets
omitted)(quoting Rueda v. Tecon Servs., 2011 WL
2566072, at *4, 2011 U.S. Dist. LEXIS 69356, at *4 (S.D. Tex.
2011)). The Court finds a reasonable basis to conclude a
singular policy with regard to drilling consultants and a
lack of overtime pay, and accordingly, concurs with
Plaintiff's request for conditional certification of
drilling consultants working on behalf of Crescent
Consulting, LLC as independent contractors.
collective action is conditionally approved, “the court
has managerial responsibility to oversee the joinder of
additional parties to assure that the task is accomplished in
an efficient and proper way.” Hoffmann-LaRoche v.
Sperling, 5');">493 U.S. 165, 170-71, 110 S.Ct. 482 (1989).
“The overarching policies of the FLSA's collective
suit provisions require that the proposed notice provide
accurate and timely notice concerning the pendency of the
collective action, so that [putative collective action
members] can make informed decisions about whether to
participate.” Whitehorn v. Wolfgang's
Steakhouse, Inc., 5');">767 F.Supp.2d 445, 450 (S.D.N.Y. 2011)
(internal citations and quotations omitted).Defendant makes
objections to both the substance of Plaintiff's ...