Sanchez v. Schlumberger Tech. Corp.

JAIME SANCHEZ, et al, Plaintiffs, v. SCHLUMBERGER TECH. CORP., Defendant.

CIVIL ACTION NO. 2:17-CV-102

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISION

ENTERED: January 31, 2020

January 30, 2020

ORDER ON OBJECTIONS TO MEMORANDUM AND RECOMMENDATION

Before the Court are Plaintiffs' and Defendant Schlumberger Technology Corporation's (STC) objections (D.E. 191, 192) to Magistrate Judge Jason Libby's memorandum and recommendation (M&R) (D.E. 190) on seven pending motions, including Defendant's motion to decertify this conditionally certified collective action under the Fair Labor Standards Act (FLSA).¹ The parties responded to each other's objections, and replied to those responses. D.E. 193-96.

For the following reasons, all objections are OVERRULED. D.E. 191, 192. The Court adopts the M&R. Defendant's motion for decertification is GRANTED. D.E. 161. Defendant's motion for partial summary judgment on willfulness is DENIED. D.E. 160. Defendant is ORDERED to specify which, if any, affirmative defenses it intends to assertagainst the named plaintiffs. The Court will then issue a separate order on Plaintiffs' motion for partial summary judgment on Defendant's affirmative defenses. D.E. 122. All other motions addressed in the M&R are DENIED as moot. D.E. 155, 156, 158, and 159. Because the Court decertifies this collective action, the claims of all opt-in plaintiffs are DISMISSED WITHOUT PREJUDICE.

STANDARD OF REVEW

A district court "shall make a de novo determination of . . . specified proposed findings and recommendations to which objection is made." 28 U.S.C. § 636(b)(1). It may also "accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge." Id. And while it must apply de novo review to objected-to portions of a recommendation, it "should not be compelled to ignore that the parties had a full and fair opportunity to present their best evidence to the magistrate judge." Freeman v. Cty. of Bexar, 142 F.3d 848, 852 (5th Cir. 1998).

Litigants may not "use the magistrate judge as a mere sounding-board for the sufficiency of the evidence." Id. And the district court "need not consider frivolous, conclusive, or general objections." Talbert v. Lynch, No. PE:16-CV-00018-RAJ, 2017 WL 11236935, at *1 (W.D. Tex. Feb. 17, 2017) (citing Battle v. U.S. Parole Comm'n, 834 F.2d 419 (5th Cir. 1987)). "[F]ailure to make appropriately specific objections excuses the district judge from doing a de novo review." 12 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE & PROCEDURE § 3070.1 (3d ed. 2019).

DISCUSSION

I. Defendant's Motion for Decertification

The parties previously stipulated to conditionally certify this case as a collective action under the FLSA. D.E. 77. Since then, potential class members have opted in to the action, and the class consists of thirty-nine alleged employees of STC: one Field Service Supervisor/Cement Field Specialist, twenty Measurement while Drilling Operators (MWDs), and eighteen Directional Drillers (DDs). D.E. 190, p. 8.²

Defendant has since moved for decertification. In determining decertification, courts must examine whether class members are "similarly situated" such that collective action is appropriate. Portillo v. Permanent Workers, L.L.C., 662 F. App'x 277, 281 (5th Cir. 2016). They consider three factors in making this decision: "(1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to [defendant] which appear to be individual to each plaintiff; [and] (3) fairness and procedural considerations." Id. (quotations omitted). Distinctions among class members "must make a difference relevant to the legal issues presented." Roussell v. Brinker Int'l, Inc., 441 F. App'x 222, 226-27 (5th Cir. 2011). Plaintiffs bear the burden of proving that individual class members are similarly situated. Lagos v. Cogent Commc'ns, Inc., No. CV H-11-4523, 2014 WL 12776418, at *4 (S.D. Tex. Mar. 12, 2014). And the decision to decertify is "within the district court's discretion." Falcon v. Starbucks Corp., 580 F. Supp. 2d 528, 534 (S.D. Tex. 2008).

Applying this standard, the Magistrate Judge recommended granting Defendant'smotion. He reasoned that each of the three factors weighed in favor of decertification. In a similar vein, he recommended that the Court not create subclasses for Plaintiffs within each of the three job categories. Plaintiffs objected to these recommendations.

A. Plaintiffs' Objections

Plaintiffs spend much of their brief arguing against decertification without identifying any flaw in the M&R. The Court will not consider these arguments, which fail to "specif[y] proposed findings and recommendations to which objection is made." 28 U.S.C. § 636(b)(1). Having reviewed the M&R, the Court finds it employed the proper analysis and, according to the evidence, came to the correct conclusions regarding decertification. The Court therefore adopts the recommendation regarding this issue except with regard to Plaintiffs' specific objections, which it reviews de novo, below. See Talbert, 2017 WL 11236935, at *1 (citing Battle v. U.S. Parole Comm'n, 834 F.2d 419 (5th Cir. 1987)).

1. Relevance of Differences among Plaintiffs

Plaintiffs correctly note there are three major issues in this case, including (1) whether Plaintiffs are employees or independent contractors; (2) if they are employees, whether the FLSA's administrative exemption applies; and (3) if they are employees, whether the FLSA's highly compensated employee exemption applies. Plaintiffs object that the Magistrate Judge improperly considered six differences among Plaintiffs that have no bearing on these legal issues and, therefore, cannot support decertification: (1) Plaintiffs worked in three different positions; (2) some MWDs and DDs worked as leads while others did not; (3) some MWDs and DDs worked alone whileothers worked with a crew; (4) some Plaintiffs were classified as independent contractors and others were classified as employees; (5) some class members were paid day rates and others were paid hourly rates; and (6) day rates varied among class members. The Court considers each in turn.

First. The Magistrate Judge correctly found that the differences in job titles weighed in favor of decertification. As Plaintiffs recognize, one of the most important issues in this case is whether Plaintiffs were employees or independent contractors. To make this determination, the Court must apply the "economic-realities" test, which requires examination of the five non-exhaustive factors originally prescribed in United States v. Silk, 331 U.S. 704 (1947). These factors focus on various aspects of Plaintiffs' work arrangements.³

Varying job titles, at the very least, suggest that such arrangements also varied. See Sanders v. Latshaw Drilling Co., LLC, No. 3:16-CV-1093-S, 2019 WL 1209769, at *3 (N.D. Tex. Mar. 14, 2019) ("Plaintiffs' testimony reveals that their actual job performance differed in many ways[.] As an initial matter, there are three different job titles within the putative collective action."). The Magistrate Judge correctly weighed this in favor of decertification, especially given that his recommendation identifies other specific differences among the job categories. The objection is OVERRULED.

Second. The Magistrate Judge correctly considered that some MWDs and DDs worked as leads while others did not. Lead workers had greater authority and skill than non-lead workers. D.E. 161-1, 161-4. This is relevant to the first and fourth Silk factors—the degree of control exercised by the alleged employer and the skill required to perform the job. See Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 381 (5th Cir. 2019) ("As stated, the control factor leans in favor of IC status. Premier did not dictate how plaintiffs completed the directional-drilling calculations."). It is also relevant to Defendant's administrative exemption defense. See Sanders, 2019 WL 1209769, at *5 ("[T]he administrative exemption requires, inter alia, that the employee's primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.") (citations and quotations omitted). The objection is OVERRULED.

Third. The Magistrate Judge correctly considered that some MWDs and DDs worked alone while others worked with a crew. At the outset, he did not consider this in isolation. Rather, he found that there were "differences as to where and in what type of setting certain MWDs and DDs worked and whether they worked alone or in a group, with or without supervision." D.E. 190, p. 14. Together, these differences demonstrated varying levels of discretion and authority, as they relate to the administrative exemption. See Sanders, 2019 WL 1209769, at *5. The Court also finds they are relevant to the first and fourth Silk factors. See Parrish, 917 F.3d at 381. The objection is OVERRULED.

Fourth. The Magistrate Judge correctly considered that some Plaintiffs were classified as independent contractors and some were classified as employees. Plaintiffs recognize the relevance of "uniform classification decision[s]" to decertification. D.E.191, p. 20. Yet the evidence suggests Defendant did not make a uniform decision to classify all class members as independent contractors. Eight of the thirty-nine class members were classified as employees at some point during the relevant time period, including Plaintiffs in each of the three job categories. D.E. 162-1, p. 6.⁴ The objection is OVERRULED.

Fifth. The Court agrees with Plaintiffs that the Magistrate Judge should not have considered any distinction between purported Plaintiffs who were paid hourly rates and those paid daily rates, as the conditionally certified class only included workers paid on a "day-rate basis." D.E. 77. By definition, the class was identical in this regard. But, as explained below, this single error does not render the...