Bone v. XTO Energy, Inc.
| Docket Number | Civil Action 21-1460 |
| Decision Date | 23 August 2023 |
| Parties | CORY BONE AND LUIS CARRILLO, Individually and on behalf of all others similarly situated, Plaintiffs, v. XTO ENERGY, INC., Defendant. |
| Court | U.S. District Court — District of Delaware |
This case involves allegations by Plaintiffs Corey Bone and Luis Carrillo (“Plaintiffs”) that Defendant XTO Energy, Inc. (“XTO”) violated the Fair Labor Standards Act (“FLSA”). Plaintiffs are former Safety Consultants who were paid for work done for XTO. Pursuant to Section 216(b) of the FLSA, Plaintiffs seek to bring a collective action on behalf of themselves and current and former Safety Consultants who were paid by XTO for their services and did not receive overtime wages under the FLSA. XTO contends that Plaintiffs and the potential collective members on whose behalf they seek to file this action are not employees of XTO, but are independent contractors who utilize an online platform operated by RigUp, Inc.[1]to advertise their services to companies like XTO.
About three-and-a-half months after Plaintiffs filed their Motion for Conditional Certification of the class of Safety Consultants (Doc. No. 74), RUSCO Operating, LLC and Ally Consulting, LLC (collectively referred to as “RUSCO”), non-parties in this case, filed a Motion to Intervene under Rule 24, Federal Rules of Civil Procedure. (Doc. No. 96.) Both companies are wholly owned subsidiaries of Workrise Technologies, Inc. “whose operations do not materially differ for purposes of this Motion.” (Doc. No. 97 at 5.) RUSCO seeks to intervene in this lawsuit, arguing that it has an interest in this case because each Safety Consultant used its services and entered into binding arbitration agreements with RUSCO. In addition RUSCO attached to its Motion to Intervene a Motion to Compel Arbitration it will file if the Court permits RUSCO to intervene. (Id. at 19; Doc. No. 97-1.) For reasons that follow, the Court will grant RUSCO's Motion to Intervene (Doc. No. 96).
On September 25, 2020, Plaintiffs, on behalf of themselves and others similarly situated, filed an Amended Complaint against XTO alleging that XTO violated the FLSA by failing to pay overtime wages. (Doc. No. 25.) On February 16, 2022, Plaintiffs filed a Motion for Conditional Certification and Court-Authorized Notice. (Doc. No. 74.) Plaintiffs and members of the proposed collective action are current and former Safety Consultants who worked for XTO and allegedly did not receive overtime wages under the FLSA. (Doc. No. 75 at 8.) Plaintiffs allege that XTO “avoided paying Plaintiffs and the Putative Class Members overtime by improperly classifying them as independent contractors and requiring these workers to utilize staffing companies.” (Id. at 9.) Two staffing companies that apparently referred workers to XTO are RUSCO Operating, LLC and Ally Consulting. As noted above, these companies are collectively referred to as “RUSCO” due to their similar operations and their status as wholly owned subsidiaries of Workrise Technologies, Inc.
On June 2, 2022, RUSCO filed the Motion to Intervene under Rule 24, Federal Rule of Civil Procedure. (Doc. No. 96.) “RUSCO operates an online platform (an ‘app') by which independent contractors market their services to oil-and-gas operators, and by which oil-and-gas operators search for and connect with independent contractors that meet the needs of particular projects.” (Doc. No. 97 at 7.) Safety Consultants and other workers use the app to “market their services” to oil-and-gas operators like XTO. (Id.) RUSCO asserts that Plaintiffs and the putative plaintiffs are independent contractors and that they, as well as RUSCO, benefit from their independent contractor status. (Id. at 7-9.) In its Motion, “RUSCO insists that when the workers it serves have disputes concerning payment or the terms of their work, those disputes be decided privately in arbitration.” (Id. at 9.) RUSCO argues that “through selective pleading, this lawsuit pointedly excludes RUSCO and Ally-the parties who paid [Plaintiffs and the proposed collective action members] and with whom [they] had an actual agreement concerning their classification as independent contractors.” (Id. at 5.) Attached to its Motion to Intervene is a Motion to Compel Arbitration that RUSCO will file if the Motion to Intervene is granted. (See Doc. No. 97-1.)
RUSCO seeks to intervene in this lawsuit under the two rules governing intervention described in Rule 24. (Id. at 6.) Specifically, RUSCO argues (1) that it may intervene as of right under Rule 24(a) because its interest in the litigation would be impaired by the case's disposition and it would be inadequately represented by XTO, and (2) that it “may also intervene as a matter of permission” under Rule 24(b) because there are common questions of law and of fact between its claims and defenses and those of XTO. (Id. at 12-19.) Although RUSCO argues it meets the requirements for permissive intervention under Rule 24(b), that argument need not be discussed because, as noted infra, RUSCO meets the requirements of intervention as of right under Rule 24(a).
Federal Rule of Civil Procedure 24 allows parties to intervene in a lawsuit in two ways-
(1) intervention as of right and (2) permissive intervention:
Fed. R. Civ. P. 24. In other words, “Rule 24 allows non-parties to ensure their interests in the merits of the case are not ‘adversely affected by litigation conducted without their participation.'” CPR Mgmt. v. Devon Park Bioventures, L.P., 19 F.4th 236, 242 (3d Cir. 2021) (quoting Stallworth v. Monsanto Co., 558 F.2d 257, 265 (5th Cir. 1977)).
In Commonwealth v. President United States of America, the Third Circuit Court of Appeals described the requirements for intervention of right under Rule 24(a):
A party that has filed a timely motion has a right to intervene under Rule 24(a) if it can show three things: (1) a sufficient interest in the litigation; (2) “a threat that the interest will be impaired or affected, as a practical matter, by the disposition of the action”; and (3) that its interest is not adequately represented by the existing parties to the litigation.”
888 F.3d 52, 57 (3d Cir. 2018) (quoting Kleissler v. U.S. Forest Serv., 157 F.3d 964, 969 (3d Cir. 1998)).
As a threshold matter, a motion to intervene under Rule 24 must be timely. As the Third Circuit held in Wallach v. Easton Corp.:
A district court's timeliness inquiry for both types of Rule 24 motions requires considering the totality of the circumstances arising from three factors: “(1) the stage of the proceeding; (2) the prejudice that delay may cause the parties; and (3) the reason for the delay.” In re Cmty. Bank of N. Va., 418 F.3d 277, 314 (3d Cir. 2005); In re Fine Paper Antitrust Litig., 695 F.2d 494, 500 (3d Cir. 1982) (). These three factors are necessarily bound up in one another, see, e.g., Mountain Top Condo. Ass'n v. Dave Stabbert Master Builder, Inc., 72 F.3d 361, 370 (3d Cir. 1995) (“[T]he stage of the proceeding is inherently tied to the question of the prejudice the delay in intervention may cause to the parties already involved.”), and we maintain “a general reluctance to dispose of a motion to intervene as of right on untimeliness grounds because the would-be intervenor actually may be seriously harmed if not allowed to intervene,” Benjamin ex rel. Yock v. Dep't of Pub. Welfare of Pa., 701 F.3d 938, 949 (3d Cir. 2012).
837 F.3d 356, 371-72 (3d Cir. 2016). For reasons discussed below, RUSCO's Motion to Intervene (Doc. No. 96) is timely.
Motions to intervene filed by individuals or entities with a purported interest in the litigation within several months of ascertaining their interest generally are considered timely, especially when little to no discovery has been conducted. See, e.g., UPS Worldwide Forwarding, Inc. v. United States Postal Serv., 853 F.Supp. 800, 807 (D. Del. 1994), rev'd on other grounds, 66 F.3d 621 (3d Cir. 1995) (); Jet Traders Inv. Corp. v. Tekair, Ltd., 89 F.R.D. 560, 568 (D. Del. 1981) (). Moreover, “District Courts are instructed to assess the prejudice that would befall either party that is ‘attributable to any time delay.'” Wallach, 837 F.3d at 377 (quoting Mountain Top, 72 F.3d at 370).
“The mere passage of time, however, does not render an application [to intervene] untimely.” Mountain Top, 72 F.3d at 369 (citing Bank of Am. Nat'l Trust & Sav. Ass'n v. Hotel Rittenhouse Assocs....
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