Brashear v. Halliburton Energy Servs., Inc.

MICHAEL BRASHEAR, et al., Plaintiffs, v. HALLIBURTON ENERGY SERVICES, INC., Defendant.

Case No.: 1:20-cv-0505 - NONE JLT

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

August 10, 2020

FINDINGS AND RECOMMENDATIONS GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION

(Doc. 10)

Michael Brashear, Benito Contreras, Kenneth Dollar, Terry Foster, and Ricardo Rodriguez are employed by Halliburton Energy Services, Inc. and seek to hold their employer liable for wage and hour violations under California law. (See Doc. 1) Halliburton asserts Plaintiffs agreed to arbitrate claims arising out of their employment and seeks to compel arbitration. (Doc. 10)

The Court found the matter suitable for decision without oral arguments, and the motion was taken under submission on August 6, 2020. (Doc. 1) For the following reasons, the Court recommends Defendant's motion to compel arbitration be GRANTED and the action be STAYED.

I. Background

Plaintiffs allege they are nonexempt employees who did not "earn twice minimum wage" as employees of Halliburton. (Doc. 1 at 3, ¶13) In 2008, Terry Foster began working as an Associate Field Professional in Halliburton's Wireline Perforating Services Department and has remained "a non-exempt Field Professional approximately twelve years." (Doc. 10-2 at 3, Merritt Decl. ¶ 6; Doc. 1 at 2, ¶ 10) Ricardo Marin Rodriguez began his employment with Halliburton in 2010 as a Service Operator, but since June 2017 has been employed in a cement position. (Doc. 1 at 3, ¶ 11) Benito Contreras was hired in 2011 as a Service Operator, though his position was specifically "an LP01-ESG-Operator Asst I-L&P in Halliburton's Open Hole Logging Department." (Doc. 1 at 2, ¶ 8; Doc. 10-2 at 3, Merritt Decl. ¶ 9) Similarly, Michael Brashear was initially hired in 2013 as a Service Operator in the "LP01-Operator Asst I-L&P" position. (Doc. 1 at 3, ¶ 12; Doc. 10-2 at 3, Merritt Decl. ¶ 7) After being laid off, Brashaer returned to Halliburton in 2017 in the Service Operator position of LP02-Operator Assistant II-L&P. (Doc. 1 at 3, ¶12; Doc. 10-2 at 3, Merritt Decl. ¶ 8) Kenneth Dollar was employed by Halliburton as a Field Professional from February 2018 to April 2020. (Doc. 1 at 3; Doc. 10-2 at 2-3, Merritt Decl. ¶ 5)

Plaintiffs each executed offer letters to accept their positions with Halliburton. (See Doc. 10-2 at 31-61) These offer letters included the terms of employment—including the salary and benefits—and informed Plaintiffs that their acceptance of the positions meant they agreed to be bound to Halliburton's Dispute Resolution Program. (See id.) Specifically, the offer letters executed by Foster, Contreras, and Brashear (in 2013) provide in relevant part:

Your acceptance of employment means you also agree to and are bound by the terms of the Halliburton Dispute Resolution Program, effective January 1, 1998. The Halliburton Dispute Resolution Program binds the employee and the Company to handle workplace problems through a series of measures designed to bring a timely resolution. This will be truth both during your employment and after your employment should you terminate.

(Doc. 10-2 at 38 [Foster], 42 [Brashear], 53 [Contreras]) In addition, the offer letters executed in 2017 and 2018 by Brashear, Rodriguez, and Dollar provide in relevant part:

Your decision to accept employment constitutes your agreement to resolve all employment related disputes with your employer by arbitration under the Halliburton Dispute Resolution Program ("DRP"). A copy of the DRP Plan and Rules may be accessed at the Halliburton website at http://www.halliburton.com/public/pubsdata/related_docs/DRP_Plan_Rules.pdf. Under the DRP, all employment disputes that are not otherwise resolved by mutual agreement must be arbitrated under the DRP rules. This agreement is binding on both you and the company. This agreement constitutes a waiver of your right to a jury trial. The arbitrator shall apply the substantive law applicable to the dispute and shall not abridge or enlarge the legal rights, remedies or defenses of the parties. The decision of the arbitrator shall be final and binding on you and the company and may be confirmed in, and judgment upon the award entered by, any court of competent jurisdiction. The DRP is herein incorporated by reference. By signing and returning this letter, you acknowledge that you have reviewed the DRP and agree to its terms.

(Doc. 10-2 at 48 [Brashear 2017], 59 [Rodriguez]; Doc. 24 at 7 [Dollar])

Plaintiffs allege they "perform physical and repetitive labor" for Halliburton on oil wells. (Doc. 1 at 3, ¶ 13) Plaintiffs report the Service Operators position requires the employees—including Brashear, Contreras, and previously Rodriguez— to "load the company trucks and drive them." (Id.) In addition, they report Field Service Professionals, such as Foster and Dollar, to "calibrate the equipment and prepare paperwork at the shop" and "call[] in others while they are on their way to the shop." (Id.)

According to Plaintiffs, their work schedules are written for an entire year, and "[t]he only way Plaintiffs get work is to pick up their phones when they are on a six day on-call schedule." (Doc. 1 at 3, ¶v13) Plaintiffs report: "They are supposed to pick up their phones immediately and arrive at the shop within an hour of when they get the call. Sometimes they have to be at the shop sooner." (Id.) They report Halliburton employees "are disciplined if they do not pickup their phones fast enough," and the discipline may include "being put at the bottom of the call schedule. (Id.) Plaintiffs report they were not issued cell phones and used "their [personal] cell phones to accept the on-call calls, and otherwise communicate with [Halliburton] about work related issues." (Id., ¶v14) They report they are not paid for time spent "waiting to be called in to work notwithstanding they are supposed to answer their phones immediately when called..., and report into the shop within 1 hour or less." (Id., ¶v15)

On April 9, 2020, Plaintiffs initiated this action by filing a complaint, asserting the following claims for relief: (1) minimum wage violations under Cal. Labor Code § 1194, (2) overtime and double time violations under Cal. Labor Code § 1194, (3) violations of California's controlled standby and/or report time law, (4) "common count for work and labor performed (quantum meriut)", (5) penalties under Cal. Labor Code § 226, (6) failure to provide reimbursement for cellular phone bills under Cal. Lab. Code § 2802, and (7) violations of California's Business and Professions Code. (See generally Doc. 1 at 1, 4-10)

On July 9, 2020, Halliburton filed the motion to compel arbitration now pending before the Court, asserting Plaintiff previously agreed to arbitrate claims encompassed in this lawsuit. (Doc. 10) Halliburton observes, "Each Plaintiff signed agreements in which they agreed to be bound by the DRP." (Doc. 10-1 at 7) In addition, the company "provided each Plaintiff hard-copies of updated versions ofthe DRP via the internet and a mailing program." (Id.) Thus, Halliburton contends "Plaintiffs [should] be compelled to submit their claims to individual arbitration." (Id.) Plaintiffs filed their opposition to the motion on July 27, 2020 (Doc. 17), to which Halliburton filed a reply on August 3, 2020 (Doc. 19).

II. Halliburton's Dispute Resolution Program

Halliburton implemented the Dispute Resolution Program ("DRP") for disputes "[b]etween the Company and the Company's present and former Employees and Applicants for employment, including those related to or arising out of a current, former or potential employment relationship with the Company." (Doc. 10-3 at 7, DRP §1) Halliburton asserts its "DRP sets forth a detailed plan for resolution of employment-related disputes without the expense and delay of court litigation." (Doc. 10-1 at 7)

Disputes covered by the DRP include "all legal and equitable claims, demands, and controversies, of whatever nature or kind, whether in contract, tort, under statute or regulation, or some other law, between persons bound by the Plan . . ." (Doc. 10-3 at 8, DRP § 2(E)) Thus, the DRP encompasses disputes related to "the terms, conditions, or termination of such employment," "benefits or incidents of employment," and "allegations of discrimination based on race, sex, religion, national origin, age, veteran status or disability; sexual or other kind of harassment; wrongful discharge;... [and] failure to pay wages." (Id.)

Under the DRP, parties may engage in individual arbitration to resolve their disputes. (See Doc. 10-3 at 10, DRP § 4) Class actions, collective actions, and consolidated claims are not permitted "unless all parties to the Dispute consent in writing." (Id.) A party "may initiate proceedings [under the DRP] by serving a written request to initiate proceedings on [the American Arbitration Association] or [Judicial Arbitration and Mediation Services]" or serving a written request to Halliburton's Dispute Resolution Plan Administrator. (Id. at 16-17, Resolution Rules § 3) Employees initiating arbitration are required to pay a $50 fee, while "[i]f the demand for mediation or arbitration is initiated by [Halliburton], such fees will be paid by the Company." (Id. at 25-26, Resolution Rules § 31(E),(F))

III. Legal Standard

The Federal Arbitration Act applies to arbitration agreements in any contract affecting interstate commerce and "governs the allocation of authority between courts and arbitrators." Cox v.Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); 9 U.S.C. § 2. The FAA provides that written arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. This provision "create[s] a body of federal substantive law of arbitrability applicable to any arbitration agreement within the coverage of the Act....