Heeg v. Adams Harris, Inc., Civil Action No. H–12–00684.

• Decision Date: 31 October 2012
• Docket Number: Civil Action No. H–12–00684.
• Citation: 907 F.Supp.2d 856
• Parties: Timothy HEEG & Kristin Semon, On Behalf of Themselves and Others Similarly Situated, Plaintiffs, v. ADAMS HARRIS, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

907 F.Supp.2d 856

Timothy HEEG & Kristin Semon, On Behalf of Themselves and Others Similarly Situated, Plaintiffs,

v.ADAMS HARRIS, INC., Defendant.

Civil Action No. H–12–00684.

United States District Court,

S.D. Texas,

Houston Division.

Oct. 31, 2012.

Richard J. Burch, Bruckner Burch PLLC, Houston, TX, for Plaintiffs.

Julia Y. Trankiem, Michele J. Beilke, Reed Smith LLP, Los Angeles, CA, Murphy Scott Klasing, Ogden Gibson Et Al., Houston, TX, for Defendant.

MEMORANDUM AND ORDER

LEE H. ROSENTHAL, District Judge.

The plaintiffs, Timothy Heeg and Kristin Semon, have moved for conditional class certification and for issuance of notice to potential opt-in class members.(Docket EntryNo. 20).The plaintiffs' proposed class includes “all hourly workers that Adams Harris paid at ‘straight time’ rates for hours worked in excess of forty in a workweek in the past 3 years.”( Id.,Ex. 6).Adams Harris's arguments in opposition include that the plaintiffs failed to show that they are similarly situated to the putative class members and that the computer-professional exemption applies.(Docket Entry No. 22, at 3).

Based on the pleadings; the motion, response, and reply; the record; the arguments of counsel; and the relevant law, this court grants in part the plaintiffs' motion for conditional class certification.The class is defined as follows:

Project Professionals classified as exempt computer professionals and independent contractors who worked at Adams Harris from June 30, 2009 to June 30, 2012; were paid hourly; and worked for Adams Harris clients on accounting matters, corporate-cost analysis, and financial audits related to vendor invoices and payment.

The reasons for this ruling are explained below.

I.Background

Adams Harris provides professional-services staffing in the areas of audits, finance, tax, and technology.In this suit, the plaintiffs alleged they and others worked for Adams Harris in different client offices as “Project Professionals.”

Heeg, Semon, and a third individual, Kristine Tram Woodward, filed declarations in support of the motion for conditional certification.Heeg stated that he did auditing and cost-control work as a cost accountant for British Petroleum North America, working on a “finance team responsible for determining what had been spent and what was being spent on a daily basis,” and on a “vessel procurement team” where he helped to create “a master vessel list used to track the boats BP chartered,”(Docket EntryNo. 20, Ex. 2, ¶ 2).Semon stated that she was a “finance chief” for BP North America doing primarily “forensic auditing to determine what was being spent by BP on a daily basis” and also reviewing invoices to verify proper payments to vendors, ( Id.,Ex. 3, ¶ 2).Woodard stated that she was a “cost engineer” for BP North America, working on cost estimating and forecasting cost controls, reviewing contractor payments, and developing “report tracking tools to better manage reporting of expenditures and contractor payments.”( Id.,Ex. 4, ¶ 2).All three asserted that they were paid hourly.They allege that they worked more than 40 hours some weeks but were paid straight time for all hours.

The two plaintiffs allege that they were Adams Harris Project Professionals and paid under the same policy of straight time for overtime hours.They seek conditional certification of a collective action consisting of “[a]ll hourly workers that Adams Harris paid at ‘straight time’ rates for hours worked in excess of forty in a workweek in the past 3 years.”(Docket Entry No. 20, at 4).

Adams Harris raises a number of objections to collective-action treatment.The objections include that: the plaintiffs have failed to show that there are other putative class members who are interested in joining their proposed class; the Project Professionals were not similarly situated because their job duties, clients, office locations, and employment terms differed; the hourly workers were computer professionals who were exempt from the FLSA's overtime requirements; and other hourly workers, including Woodard, were exempt as independent contractors.(Docket Entry No. 21, at 10–13, 14–16).Tracy Tyler, Managing Director for Adams Harris's Houston office from September 2006 to June 2012, gave an affidavit.She stated that Adams Harris professional employees were all called “Project Professionals” but they worked on a variety of different tasks.These employees also had different work experience, different degrees (most had B.A.s but many also had advanced degrees, including M.B.A.s), and different certifications (such as Certified Public Accountant, Certified Information Systems Auditor, and Certified Internal Auditor).(Docket Entry 21, Ex. 1, ¶ 2–3).

According to Tyler, the Project Professionals were either “Hourly” or “Salaried,” depending on their project and on individual negotiated work arrangements.( Id.,¶ 5).The Project Professionals were divided into groups.One group was made up of “computer professionals,” some paid hourly and the rest salaried.( Id.,¶ 6).Tyler stated that “[o]nly hourly computer professionals were paid at straight time rates for hours worked over forty in a workweek.”( Id.,¶ 7).There were 18 hourly Project Professionals who worked as computer professionals from March 5, 2009 through June 2012.According to Tyler, they were “all paid at least $27.63 per hour,”( Id.,¶ 8).After June 30, 2012, Adams Harris did not employ Project Professionals or independent contractors.( Id.,¶ 22.)

According to Tyler, each Project Professional, including those working as computer professionals and paid on an hourly basis, did different work and had different compensation arrangements.( Id.,¶¶ 4, 6, 9–11).Heeg, for example, was paid on a salaried basis from October 2008 through March 2009.He was rehired on an hourly basis with no overtime rates from June 2010 to October 2011.After that date, he was paid a reduced hourly rate but with overtime rates for hours worked in excess of 40.Heeg's work focused on vendor payments.( Id.,¶¶ 9–11).Semon worked on a salaried basis from October 2008 to March 2009, focusing on Sarbanes–Oxley audit issues.She was then rehired on an hourly basis with no overtime pay, working as a cost analyst and on a separate project relating to antibribery and corruption audits involving domestic and internal vendors.She later worked as a SOX expert for another Adams Harris client.( Id.,¶¶ 12–15).Semon and Heeg were the only hourly computer professionals working at BP North America.The other 16 worked in other cities in Georgia and Texas for one of “at least ten clients” that were themselves diverse.( Id.,¶ 16).Tyler listed examples of computer professionals' work responsibilities.These descriptions included providing computer systems security audits; building data centers; providing data extraction and analysis for operational or forensic purposes; ensuring regulatory compliance; and serving as a client's outsourced IT department.( Id.,¶ 17).

The threshold issue is whether the two plaintiffs have shown that there is a class of similarly situated individuals meeting the standard for conditional collective-action certification.

II.The Applicable Legal Standard

Under § 207(a) of the FLSA, covered employers are required to compensate nonexempt employees at overtime rates for time worked in excess of statutorily defined maximum hours.Section 216(b) provides a right of action for employees against employers who violate § 207.Similarly situated employees may “opt-in” to a lawsuit under § 207(a).Courts recognize two methods for determining whether to certify a collective action on a conditional basis or authorize notice to similarly situated employees: the spurious class action Shushan approach, or the two-step Lusardi approach.Aguirre v. SBC Communications, Inc.,2006 WL 964554, at *4(S.D.Tex.April 11, 2006)(citingShushan v. Univ. of Colo. at Boulder,132 F.R.D. 263(D.Colo.1990);Lusardi v. Xerox Corp.,118 F.R.D. 351(D.N.J.1987)).The Fifth Circuit has not determined which method is more appropriate.Mooney v. Aramco Servs. Co.,54 F.3d 1207, 1216(5th Cir.1995).Most courts use the Lusardi approach.Aguirre, 2006 WL 964554, at *4;see alsoJohnson v. Big Lots Stores, Inc.,2007 WL 5200224, at *3(E.D.La.Aug. 21, 2007)(“Since Mooney district courts in the Fifth Circuit have uniformly used [the Lusardi approach] to determine whether a collective [action] should be certified under the FLSA.”).

The first step of the Lusardi analysis requires a minimal showing by the plaintiff that (1) there is a reasonable basis for crediting the assertions that aggrieved individuals exist, (2) those aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and defenses asserted, and (3) those individuals want to opt in to the lawsuit.Maynor v. Dow Chem. Co.,2008 WL 2220394, at *6(S.D.Tex.May 28, 2008).“ ‘A court may deny plaintiffs' right to proceed collectively if the action arises from circumstances purely personal to the plaintiff, and not from any generally applicable rule, policy, or practice.’ ”Aguirre,2006 WL 964554, at *5(quotingEngland v. New Century Fin. Corp.,370 F.Supp.2d 504, 507(M.D.La.2005)).A court also “has the power to modify an FLSA collective action definition on its own” if the “proposed class definition does not encompass only similarly situated employees.”Dreyer v. Baker Hughes Oilfield Operations, Inc.,2008 WL 5204149, at *3(S.D.Tex.Dec. 11, 2008)(citingBaldridge v. SBC Commc'ns, Inc.,404 F.3d 930, 931–32(5th Cir.2005)).Because the court's decision at this first step is usually based only on the pleadings and affidavits, the standard is lenient and typically results in conditional certification.Id.Discovery usually has not been conducted at this stage, and courts do not review the underlying merits of the action in determining whether to grant conditional...