White v. Wood Grp. Mustang

1

BILLY WHITE, individually and on behalf of all others similarly situated, Plaintiff, v. WOOD GROUP MUSTANG, INC., AND RHI TALENT USA INC. f/k/a ALTABLUE, INC. Defendants.

Civil Action No. 4:21-cv-3985

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

September 23, 2024

ORDER

ANDREW S. HANEN, UNITED STATES DISTRICT JUDGE.

Pending before the Court is Plaintiff Billy White's (“White”) Opposed Motion for Notice Under Swales. (Doc. No. 36). Defendants Wood Group USA Inc. (“Wood Group”) and RHI Talent USA, Inc. (“RHI”)^[1] (collectively, “Defendants”) responded in opposition. (Doc. No. 39). White replied. (Doc No. 42). Having considered the motion and the relevant pleadings, the Court finds that Plaintiff's Motion should he GRANTED with modifications to the putative collective members entitled to notice. (Doc. No 36).

BACKGROUND

White brought this action under the Fair Labor Standards Act, 29 U.S.C. §§ 201-219, and the Portal-to-Portal Act, 29 U.S.C. §§ 251-262, (collectively “FLSA”) seeking damages for Defendants' alleged failure to pay White sufficient overtime compensation while working for Defendants. (Doc. No. 1). White filed the lawsuit individually and as a FLSA collective action “on behalf of all similarly situated current and former employees of Defendants who, like Plaintiff, were not paid time and one-half their respective regular rates of pay for all hours worked over 40 in each seven-day workweek in the time period of three years preceding the date this lawsuit was filed and forward.” (Id. at 1).

While some of the facts are disputed (and will be discussed below), for the purposes of this motion, the general allegations are as follows: Wood Group provides engineering and project management services and utilizes RHI to provide temporary workers. (Doc. No. 39 at 6-7). White was employed as a civil inspector on a Wood Group project in Wink, Texas and Jal (Cowboy), New Mexico. As a cement inspector/civil inspector, he “ensured proper concrete placements, correct structural and miscellaneous steel installations, and coordinated proper gradation, road, and sidewalk placement, drainage, and re-vegetation of the facility site. [He] also ensured that all permits were acquired by clients and contractors and that any concrete testing was carried out per project.” (Doc. No. 36-1 at 2).

White alleges that when he worked for Wood Group (and later RHI) in Wink, Texas and Jal (Cowboy), New Mexico between October 15, 2018, and April 26, 2019, he was paid an hourly rate of approximately $44.23 per hour and a “non bona fide per diem pay” in the amount of approximately $206 per day. (Id. at 2). White alleges that he and others similarly situated were not paid the overtime they were due because Defendants failed to include the per diem payments in the regular rate of pay when calculating the one and one-half overtime pay. (Id.). White, therefore, seeks to hold both RHI and Wood Group jointly and severally liable under the theory of joint employment. (Doc. No. 19 at 3). The parties have conducted limited discovery that they agreed was appropriate under the relevant standards set in Swales v. KLLM Transport Services, L.L.C., 985 F.3d 430 (5th Cir. 2021). White claims he has “adduced sufficient evidence to demonstrate the existence of a class of similarly situated current and former employees” such that this Court should permit Plaintiff to send notice of this action to a collective of current and former Wood Group/RHI hourly employees whose per diem pay was not included in the regular rate of pay when calculating overtime. (Doc. No. 36 at 8). Defendants disagree.

LEGAL STANDARD

FLSA protects employees by establishing a minimum hourly wage, maximum work hours, and overtime compensation for work beyond 40 hours per week. 29 U.S.C. §§ 206(a)(1), 207(a). An FLSA case may be brought “by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). The 1947 Portal-to-Portal Act amended FLSA's collective-action procedure, requiring similarly situated employees to opt-in via written consent. Swales, 985 F.3d at 435. In 1989, the Supreme Court decided Hoffmann-La Roche Inc. v. Sperling, holding that a district court has discretion to authorize and facilitate notice of a pending collective action to potential plaintiffs. 493 U.S. 165, 169 (1989).

The district court's notice-giving role is “pivotal to advancing the goals and evading the dangers of collective actions.” Id. The Fifth Circuit has instructed that "'when managing a putative FLSA collective action, ‘a district court should identify, at the outset of the case, what facts and legal considerations will be material to determining whether a group of employees is similarly situated. And then it should authorize preliminary discovery accordingly.'” Loy v. Rehab Synergies, L.L.C., 71 F.4th 329, 336 (5th Cir. 2023) (quoting Swales, 985 F.3d at 441). “To decide whether a group of employees is similarly situated, the district court must consider whether merits questions can be answered collectively.” Id. (internal quotation marks omitted). “If answering the merits questions "requires a highly individualized inquiry into each potential opt-in's circumstances,' then the employees are likely not similarly situated.” Id. (quoting Swales, 985 F.3d at 442). Plaintiff bears the burden to establish that they are similarly situated. Id.

Prior to the Fifth Circuit's opinion in Swales, district courts often followed the two-step Lusardi approach to determine whether employees were “similarly situated” prior to giving notice to potential collective members. Loy, 71 F.4th at 336. In step one, a district court conditionally certified a collective based on pleadings and affidavits, “requir[ing] little more than ‘substantial allegations.'” Swales, 985 F.3d at 436-37. In step two, the court would entertain a motion to decertify at the conclusion of discovery. Id. at 437. In Swales, however, the Fifth Circuit rejected Lusardi's “lenient” approach, instead instructing district courts to “rigorously scrutinize the realm of ‘similarly situated' workers” from the “outset of the case, not after a lenient, step-one ‘conditional certification.'” Id. at 434. In scrutinizing, district courts must consider “all available evidence.” Id. at 443.

Although the Swales court rejected Lusardi's two-step approach, it did not dispose of it wholesale. The Fifth Circuit has clarified that “courts may still find it useful to consider the Lusardi factors to help inform or guide the similarly situated analysis given the similarities between Swales and Lusardi's second step.” Loy, 71 F.4th at 337. Under the Lusardi factors, courts consider “the disparate factual and employment settings of the individual plaintiff's; the various defenses available to the defendant which appear to be individual to each plaintiff; and fairness and procedural considerations.” Id. “That said, use of these factors is not mandatory, as there is no one-size-fits-all analysis or mechanical test to apply.” Id. The bottom line is that “the district court has broad, litigation-management discretion cabined by the FLSA's similarly situated requirement.” Id. (citing Swales, 985 F.3d at 443) (cleaned up).

“When and whether notice is issued depends on if the available evidence demonstrates that the similarly situated threshold has been met.” Hebert v. Technipfmc USA, Inc., No. 4:20-CV-2059, 2021 WL 1137256, at *2 (S.D. Tex. Feb. 5, 2021). “If the pleadings and preliminary discovery show' sufficient similarity between the plaintiff and potential opt-in plaintiffs, the court may issue notice before additional discovery is completed.” Id. “However, if the plaintiff and potential opt-in plaintiffs have demonstrably different work experiences, courts have the discretion to choose between multiple next steps.” Id. (internal quotation marks omitted). “After identifying the material facts and legal considerations at issue, the Court may decide (i) collective action is not appropriate; (ii) additional discovery is needed to make a determination; or (iii) a certain category of employees is similarly situated and should be given notice.” Young v. Energy Drilling Co., 534 F.Supp.3d 720, 724 (S.D. Tex. 2021) (citing Swales, 985 F.3d at 443).

ANALYSIS

Plaintiff seeks leave to send notice of this action to a collective of Wood Group/RHFs hourly employees who received additional per diem payments and whose regular rate of pay (for the purpose of calculating overtime) did not include the per diem payments. Once notice is sent, such potential plaintiffs would have the opportunity to “opt in” to this action via written consent.

Plaintiff argues that he has met his burden under Swales to show that this group of employees is “similarly situated” because: 1) Defendants' allegedly violative overtime pay policy applied equally to 19 categories of non-exempt employees and 2) Defendants' defenses can be asserted and determined on a collective basis. In response, Defendants argue that determining whether an employee's expense reimbursements (per diem payments) were reasonable or “disproportionately large” is an analysis that must be done on a case-by-case basis. Additionally, Defendants argue that determining whether RHI and Wood Group were a particular plaintiff's “joint employer” is a heavily fact-dependent inquiry that requires adjudication on an individual, rather than collective, basis. Defendants also contend that “Plaintiff fails to provide any evidence that demonstrates he is similarly situated to individuals who worked in different geographic locations.” (Doc. No. 39 at 6).

The primary issue for this Court to decide is whether Plaintiff has met his burden to show that the...