Pogue v. Chisholm Energy Operating, LLC
Decision Date | 16 March 2021 |
Docket Number | No. 2:20-cv-00580-KWR-KK,2:20-cv-00580-KWR-KK |
Parties | KELLY POGUE, Individually and on Behalf of all others Similarly situated, Plaintiff, v. CHISHOLM ENERGY OPERATING, LLC, Defendant. |
Court | U.S. District Court — District of New Mexico |
THIS MATTER comes before the Court upon Defendant's Motion to Dismiss (Doc. 31) and Motion to Compel Arbitration (Doc. 33). Having reviewed the parties' pleadings and the applicable law, the Court finds that Defendant's motions are not well-taken and, therefore, are DENIED.
This is a putative class action under the Fair Labor Standards Act ("FLSA") and New Mexico Minimum Wage Act ("NMMWA"). Plaintiff alleges that Defendant failed to pay him and others similarly situated overtime.
Plaintiff signed an independent contractor agreement with third-party DTC Energy Group, Inc. ("DTC"), to perform services for DTC's clients. DTC is an oilfield consulting firm. One of those clients was Defendant. Plaintiff now alleges that Defendant violated the FLSA and New Mexico Minimum Wage Act by failing to pay him and others overtime. Plaintiff was a well site supervisor for Defendant from July 2017 to December 2019.
On July 20, 2016, Plaintiff through his limited liability company entered into an Independent Contractor Agreement ("ICA") with DTC Energy. It provided that "[t]his Independent Contractor Agreement ("Agreement") effective July 20, 2016... is made by and between DTC Energy Group, Inc.... and JKP Consulting, LLC..."). Doc. 32-1 at 6. "[Plaintiff] acknowledges said Services are required to fulfill [DTC's] obligations to its client ("Client Operator") as provided by separate contract." Id. The agreement also required Plaintiff to carry certain insurance and required DTC to provide commercial generally liability insurance per the requirements of any contracts with the clients.
Finally, the Independent Contractor Agreement provided that it would be construed Doc. 32-1 at 10.
DTC and Defendant entered into a Master Supply Agreement and work order on or around June 29, 2017. The Master Supply Agreement is silent on arbitration and provides that Texas law would apply. The work order between DTC and Defendant provided that DTC, as contractor, would "consult with, advise, and provide supervisory and support services to Company's VP of operations." Doc. 32-2 at 21. It provided that DTC would provide Plaintiff "for purposes of well site supervision." Id. It provided that Contractor (DTC) would be paid $1700 per 12-hour shift, and that contractor would be expected to work 14 consecutive days consisting of 12-hour shifts. Contractor would be scheduled 2 weeks on and 2 weeks off. It also provided that if contractor was required to work longer than 12 hours per shift, Contractor would be paid at a rate of $142 perhour. Doc. 32-2 at 22. It finally provided that contractor would provide all equipment, service, and supplies necessary to perform the work in a professional, diligent and efficient manner. Id.
In turn, DTC completed a "new hire request form" for Plaintiff. It provided that he would serve as an independent contractor for Chisholm Energy as a "Completions Supervisor." It also provided he would be paid at a rate of $1585 but invoiced at $1700 by DTC. It also provided he would be paid $132 per hour of time over 12 hours per day, and would be invoiced at $142. Doc. 32-1 at 13.
Plaintiff was paid through DTC. DTC charged Defendant a $1,700 day rate, and Defendant received $1,585 per day. Plaintiff received an additional $132 per hour for hours worked over twelve. Plaintiff received payment from DTC through is limited liability company, JP Consulting LLC. Plaintiff received a 1099-MISC from DTC in 2017 and 2018 from DTC. Doc. 32-1 at 15-16.
Defendant seeks to dismiss the complaint for (1) lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1), or alternatively (2) failure to state a claim under Fed. R. Civ. P. 12(b)(6). Defendant also seeks to enforce the ICA arbitration clause against Plaintiff. At issue is whether Defendant, a non-signatory to the ICA, can enforce the arbitration clause under the theories of (1) third-party beneficiary and (2) equitable estoppel.
Defendant argues that this case should be dismissed because it is not an employer under the FLSA. The FLSA provides that "[a]n action to recover . . . may be maintained against any employer . . . in any . . . court of competent jurisdiction by any one or more employees . . . ." 29 U.S.C. § 216(b) (emphasis added).
Defendant argues that the language in 29 U.S.C. § 216(b) shows that the employment relationship is a jurisdictional issue. The FLSA provides that "[a]n action to recover . . . may be maintained against any employer . . . in any . . . court of competent jurisdiction by any one or more employees . . . ." 29 U.S.C. § 216(b) (emphasis added).
This language does not clearly state that the employer/employee relationship is jurisdictional rather than an element of the claim. See Arbaugh v. Y&H Corp., 546 U.S. 500, 516, 126 S. Ct. 1235, 1245, 163 L. Ed. 2d 1097 (2006)() ; Montes v. Janitorial Partners, Inc., 859 F.3d 1079, 1084 (D.C. Cir. 2017) ) .
The Court believes that the "the existence of an employee/employer relationship under the FLSA is an element of the plaintiff's meritorious FLSA claim and does not implicate this Court's threshold subject matter jurisdiction." Fuentes v. Compadres, Inc., No. 17-CV-01180-CMA-MEH, 2018 WL 1444209, at *4 (D. Colo. Mar. 23, 2018) (). Therefore, the Court will apply Rule 12(b)(6) standards. Moreover,the Court will not consider Defendant's documents because they were not attached to the complaint or incorporated into it, and Plaintiff does not rely upon them to state his claim.
Defendant alternatively argues that Plaintiff does not state a claim for relief under the FLSA. The Court disagrees.
Defendant largely argues that Plaintiff failed to allege sufficient facts to plausibly state that it was an employer. However, as Plaintiff argues, he need not provide hyper-detailed facts to adequately state a plausible claim.
To plead an FLSA claim, a plaintiff need only allege: (1) he was employed by the defendant; (2) he worked more than 40 hours in a week; and (3) he was not paid overtime for those hours in excess of 40 hours. See Kenney v. Helix TCS, Inc., 939 F.3d 1106, 1109 (10th Cir. 2019), cert. denied, 141 S. Ct. 241, 208 L. Ed. 2d 19 (2020).
Plaintiff need only provide a "short and plain statement of the claim showing that the pleader is entitled to relief" to state plausible FLSA allegations. Fed. R. Civ. P. 8(a)(2); Rayfield v. Sandbox Logistics, LLC, 217 F. Supp. 3d 1299, 1300 (D. Colo. 2016) ( ); see also McDonald v. Kellogg Co., No. 08-2473-JWL, 2009 WL 1125830, at *2 (D. Kan. April 27, 2009) ( ); Renteria-Camacho v. DIRECTV, Inc., No. 14-2529, 2015 WL 1399707, at *3 (D. Kan. Mar. 26, 2015) ( ).
Whether Plaintiff was employed by Defendant is not determined by contract, but the economic realities test. Acosta v. Paragon Contractors Corp., 884 F.3d 1225, 1235 (10th Cir. 2018); Baker, 137 F.3d at 1440. The economic realities analysis uses six factors: (1) the degree of control exercised by the alleged employer over the worker; (2) the worker's opportunity for profit or loss; (3) the worker's investment in the business; (4) the permanence of the working relationship; (5) the degree of skill required to perform the work; and (6) the extent to which the work is an integral part of the alleged employer's business. Id. No single factor is determinative. Acosta, 884 F.3d at 1235.
Plaintiff asserts that the following are sufficient to allege that Plaintiff was employed by Defendant:
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