Kerr v. K. Allred Oilfield Services, LLC

District Court, D. New Mexico·Decided November 19, 2020·No. 2:20-cv-00477·Unknown

Opinion

UNITED STATES DISTRICT COURT

DISTRICT OF NEW MEXICO ______________________

BILLY KERR, individually and on behalf of all others similarly situated,

Plaintiff,

v. No. 2:20-CV-00477-WJ-SMV

K. ALLRED OILFIELD SERVICES, LLC, d/b/a KAOS and KEITH ALLRED,

Defendants.

MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFF’S MOTION FOR CONDITIONAL CERTIFICATION; ORDER FOR THE PARTIES TO CONFER ON THE PROPOSED NOTICE PACKET; and ORDER FOR THE PARTIES TO SUBMIT A JOINT NOTICE PACKET AND JOINT RESPONSE

THIS MATTER comes before the Court upon Plaintiff’s motion for conditional certification, filed October 1, 2020 (Doc. 24). Having reviewed the parties’ briefing and the applicable law, the Court finds that Plaintiff’s motion is well-taken, and is, therefore, GRANTED. The parties are ORDERED to confer regarding the Proposed Notice Packet (Docs. 24, Appendix 1–5) and notice procedure (Doc. 24 at 15–16). The parties shall submit a Joint Proposed Notice Packet and a Joint Response, described herein, within 35 DAYS from the date of entry of this Order. BACKGROUND Plaintiff Billy Kerr (“Plaintiff”) alleges that Defendants K. Allred Oilfield Services, LLC and Keith Allred (referred to jointly as “Kaos”) misclassified certain workers as independent contractors in order to avoid paying them overtime wages as required under state and federal law. Plaintiff is suing Kaos to recover unpaid wages and other damages. The First Amended Complaint, filed June 19, 2020, (Doc. 10) asserts three causes of action: Violations of the Fair Labor Standards Act (“FLSA”) (Count I); Violations of the New Mexico Minimum Wage Act (“NMMWA”) (Count II); and Unjust Enrichment (Count III). Doc. 10. Plaintiff brings this action individually and on behalf of similarly situated employees pursuant to the FLSA, and also as a Rule 23 class action pursuant to the NMMWA. The current motion (hereinafter “Motion”) seeks an Order

allowing notice to potential plaintiffs and conditional certification pursuant to the collective action provision in the FLSA; the Motion is not for class certification pursuant to Federal Rule of Civil Procedure 23. Doc. 24. After Plaintiff filed the Motion, Defendants filed a Response in opposition on October 29, 20201 (Doc. 27) and Plaintiff filed a Reply in support on November 12, 2020 (Doc. 28). The Motion is now briefed and the Court is fully informed and advised. Doc. 29. Plaintiff seeks conditional certification and notice on the grounds that a group of other similarly situated workers exists and that Kaos knowingly subjected such individuals to a single unlawful wage policy that denied payment for all overtime hours worked. Specifically, the

proposed class encompasses Kaos workers who were classified as independent contractors and paid a day rate. Kaos2 is primarily an equipment rental provider in the energy sector, with operations spread across the Southwest. The company specializes in providing equipment, support services, and personnel for clients in the energy, industrial, and commercial sectors. Plaintiff Billy Kerr worked for Kaos as a flowback operator, providing services to a third-party client at two

1 Magistrate Judge Stephen M. Vidmar granted Defendants’ unopposed motion for a time extension to respond to Plaintiff’s Motion for Conditional Certification. Doc. 26 (Text Order).

2 For facts relating the general business practices of Kaos and the timeline of Mr. Kerr’s work with the company, the Court relies on the Declaration of Defendant Keith Allred (Doc. 27-1) and the invoices Mr. Kerr submitted to Kaos (Doc. 27-8). project sites in New Mexico. His first work assignment ran from May 22, 2019 to July 12, 2019. The second assignment ran from August 26, 2019 to October 21, 2019. DISCUSSION I. FLSA Wage Requirements Under the Fair Labor Standards Act, an employee may bring a collective action on behalf

of “similarly situated” employees as a remedy for violation of the FLSA. 29 U.S.C. § 216(b). The purpose of collective action is to give “plaintiffs the advantage of lower individual costs to vindicate rights by the pooling of resources,” and to benefit the judicial system “by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged . . . activity.” Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989). Unlike Federal Rule of Civil Procedure 23 class actions, putative class members under the FLSA must opt-in to the class rather than opt out. Thiessen v. General Electric Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001), cert. denied, 536 U.S. 934 (2002); § 216(b) (“No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such

consent is filed in the court in which such action is brought.”). District courts have discretion to authorize a party asserting FLSA claims on behalf of others to notify putative class members that they may choose to “opt-in” to the suit. Hoffmann-La Roche, 493 U.S. at 169. Court-authorized notice protects against misleading communications by the parties, resolves the parties’ disputes regarding the content of any notice, assures joinder of additional parties is accomplished properly and efficiently, and expedites resolution of the dispute. Id. at 170–171. The FLSA requires employers to pay covered employees who work longer than forty hours in a given workweek “at a rate not less than one and one-half times the regular rate at which [the employee] is employed.” 29 U.S.C. § 207(a)(1). As the Tenth Circuit has explained, “[t]he purpose of FLSA overtime is to compensate those who labored in excess of the statutory maximum number of hours for the wear and tear of extra work and to spread employment through inducing employers to shorten hours because of the pressure of extra cost.” Chavez v. City of Albuquerque, 630 F.3d 1300, 1304 (10th Cir. 2011) (citation and quotation marks omitted). II. Two-Stage Collective Action Certification

The relevant question under § 216(b) is whether the plaintiff is “similarly situated” to members of the proposed class, as opposed to satisfying the criteria under Rule 23 for class certification. Theissen, 267 F.3d at 1102 (explaining that Congress adopted the “similarly situated” standard instead of Rule 23 standards). Section 216(b) does not define “similarly situated,” but this Court and many district courts in the Tenth Circuit apply the two-step (also called the “two-stage”) ad hoc approach approved in Theissen v. GE Capital Corp. for determining whether the members of the proposed action satisfy § 216(b). See Thiessen, 267 F.3d at 1105 (“Arguably, the [two-step] ad hoc approach is the best of the three approaches outlined because it is not tied to the Rule 23 standards.”); Valencia v. Armada Skilled Home Care of NM, LLC, No. 18-CV-1071

KG/JFR, 2020 WL 2768977 (D.N.M. May 28, 2020) (applying two-stage ad hoc approach to FLSA collective action certification); Calvillo v. Bull Rogers, Inc., No. 16-cv-919-WJ-GBW, 267 F. Supp. 3d 1307 (D.N.M. 2017) (same); Cf. In re Chipotle Mexican Grill, Inc., No. 17-1028, 2017 WL 4054144, at *2 (10th Cir. Mar.

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