Blanco v. Xtreme Drilling and Coil Services, Inc.

Filing 24

ORDER. ORDERED that Defendant Xtreme Drilling and Coil Services, Inc.'s Motion for Partial Summary Judgment 17 is GRANTED. ORDERED that plaintiff's first claim for relief is dismissed. Signed by Judge Philip A. Brimmer on 03/08/17. (jhawk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 16-cv-00249-PAB-CBS
JOSE BLANCO, on behalf of himself and all similarly situated persons,
Plaintiff,
v.
XTREME DRILLING AND COIL SERVICES, INC., a Texas corporation,
Defendant.

ORDER

This matter is before the Court on Defendant Xtreme Drilling and Coil Services,
Inc.’s Motion for Partial Summary Judgment [Docket No. 17]. Defendant seeks
summary judgment that it is not subject to the Colorado Minimum Wage Order (“Wage
Order”), 7 Colo. Code Regs. § 1103-1:1 et seq. The Court has jurisdiction pursuant to
28 U.S.C. § 1332.
I. BACKGROUND
The case arises out of a wage and hour dispute. Plaintiff contends that
defendant failed to pay him overtime wages required under the Wage Order. See
Docket No. 1 at 2-3, ¶ 7.
Defendant is in the oil and gas industry. Statement of Undisputed Material Facts
(“SUMF”) 10, Docket No. 17 at 3, ¶ 10. Defendant provides drilling services to oil and
natural gas exploration companies. SUMF 2-3, Docket No. 17 at 2, ¶¶ 2-3. Def endant
owns the drilling rigs that it uses to provide such services. SUMF 16, Docket No. 17 at

3, ¶ 16.
Plaintiff is a former employee of defendant. Docket No. 7 at 2, ¶ 2. He states in
his declaration that he worked in various manual labor jobs where he “helped set up,
maintain and operate Xtreme’s drilling rigs as well as breaking down the equipment at
the end of jobs.” Docket No. 18-1 at 1, ¶ 2. 1 Plaintiff states that his duties included
“cleaning the rig, tightening its parts and pipes and refilling drilling mud.” Id., ¶ 3.
II. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 when
the “movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed f act is “material” if
under the relevant substantive law it is essential to proper disposition of the claim.
Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes
over material facts can create a genuine issue for trial and preclude summary
judgment. Faustin v. City & Cty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An
issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a
verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.
1997).
Where “the moving party does not bear the ultimate burden of persuasion at trial,
it may satisfy its burden at the summary judgment stage by identifying a lack of
evidence for the nonmovant on an essential element of the nonmovant’s claim.”
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Defendant does not contest any of these statements in its reply. See Docket

No. 20.
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Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th Cir. 2001) (quoting
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998) (internal quotation
marks omitted)). “Once the moving party meets this burden, the burden shifts to the
nonmoving party to demonstrate a genuine issue for trial on a material matter.”
Concrete Works of Colo., Inc. v. City & Cty. of Denver, 36 F.3d 1513, 1518 (10th Cir.
1994) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). The nonmoving party
may not rest solely on the allegations in the pleadings, but instead must designate
“specific facts showing that there is a genuine issue for trial.” Celotex, 477 U.S. at 324;
see Fed. R. Civ. P. 56(e). “To avoid summary judgment, the nonmovant must
establish, at a minimum, an inference of the presence of each element essential to the
case.” Bausman, 252 F.3d at 1115 (citation omitted). When reviewing a motion for
summary judgment, a court must view the evidence in the light most favorable to the
non-moving party. Id.; see McBeth v. Himes, 598 F.3d 708, 715 (10th Cir. 2010).
III. ANALYSIS
The Wage Order “regulates wages, hours, working conditions and procedures for
certain employers and employees” in four “industries”:
(A) Retail and Service
(B) Commercial Support Service
(C) Food and Beverage
(D) Health and Medical.
7 Colo. Code Regs. § 1103-1:1. The parties’ dispute is focused on whether defendant
is in the “Commercial Support Service” industry. The Wage Order defines this industry
to include “any business or enterprise engaged directly or indirectly in providing
services to other commercial firms through the use of service employees who perform
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duties such as: clerical, keypunching, janitorial, laundry or dry cleaning, security,
building or plant maintenance, parking attendants, equipment operations, landscaping
and grounds maintenance.” 7 Colo. Code Regs. § 1103-1:2(B). The Wage Order “is
remedial in nature and its coverage should be liberally construed.” Bowe v. SMC Elec.
Prods., Inc., 945 F. Supp. 1482, 1484 (D. Colo. 1996).
Under Colorado law, the “primary objective of statutory construction ‘is to
effectuate the intent of the General Assembly by looking to the plain meaning of the
language used, considered within the context of the statute as a whole.’” Salazar v.
Butterball, LLC, 644 F.3d 1130, 1143 (10th Cir. 2011) (quoting Bly v. Story, 241 P.3d
529, 533 (Colo. 2010)) (“Butterball”).2 “If the language is ambiguous, Colorado courts
look beyond that language ‘for other evidence of legislative intent and purpose, such as
legislative history or other rules of statutory construction.’” Id. at 1143-44 (quoting
Crandall v. City and Cty. of Denver, 238 P.3d 659, 662 (Colo. 2010)). In construing
particular terms, Colorado courts “consider the context of the term at issue and
construe it consistently with other terms in the statutory framework.” Boulder Cty. Bd. of
Comm’rs v. HealthSouth Corp., 246 P.3d 948, 951 (Colo. 2011).
Defendant argues it is not subject to the W age Order because it is not in the
Commercial Support Service industry. In defendant’s view, what makes Commercial
Support Service a distinct industry “is that such businesses use service employees to

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Colorado courts construe regulations by applying the same principles used to
construe statutes. Rags Over the Arkansas River, Inc. v. Colorado Parks & Wildlife Bd.,
360 P.3d 186, 192, as modified on denial of reh’g (Colo. App. Mar. 26, 2015), cert.
denied sub nom. Rags Over the Arkansas River, Inc. v. Colorado Dep’t of Nat. Res.,
2015 WL 6445387 (Colo. Oct. 26, 2015).
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support the day-to-day operations of other firms across all sectors of the economy.”
Docket No. 17 at 8. Defendant argues that its operations are limited to the oil and gas
sector and the “companies with which Xtreme contracts do not have the capability of
performing the services that Xtreme provides utilizing their own employees.” Id. at 10.
Defendant also argues that its employees’ operations of the drilling equipment do not
make them “equipment operators” under the Wage Order. 7 Colo. Code Regs. § 11031:2. Defendant claims that “Xtreme’s employees do not operate any equipment for
Xtreme’s customers, but instead perform specific drilling services utilizing Xtreme’s own
drilling rigs.” Docket No. 17 at 11. Defendant analogizes its services to those
performed in the construction industry, which are listed as excluded from the Wage
Order in the “Fact Sheet” issued by the Colorado Department of Labor and
Employment’s Division of Labor (“Department of Labor”). Docket No. 17-2.
Plaintiff responds that defendant improperly seeks to read additional constraints
into the Wage Order by limiting Commercial Support Services to employees who (1)
perform tasks that could be performed by employees of the supported company and (2)
support firms in multiple industries. Docket No. 18 at 6. Plaintiff analogizes the
services he performed to those performed by landscaping companies, which are
subject to the Wage Order. Id. at 6-7. Plaintiff also argues that it would be improper to
create an exception for oil drilling because the Wage Order already has specific
exceptions for particular industries, and the work performed by plaintiff is analogous to
the low-skilled work performed by other employees subject to the Wage Order. Id. at 7-

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8; see also 7 Colo. Code Regs. § 1103-1:6(c) (Ski Industry).3
The Court agrees with defendant that it is not in the Commercial Support Service
industry. Like the definition of “Food and Beverage” industry, the definition of the
Commercial Support Service industry must be read “as a whole.” Butterball, 644 F.3d
at 1144. The Commercial Support Services industry is limited to “any business or
enterprise engaged directly or indirectly in providing services to other commercial firms
through the use of service employees who perform duties such as: clerical,
keypunching, janitorial, laundry or dry cleaning, security, building or plant maintenance,
parking attendants, equipment operations, landscaping and grounds maintenance.” 7
Colo. Code Regs. § 1103-1:2. One aspect common to all of the jobs or services listed
in the Wage Order’s definition of Commercial Support Service is that the employees
perform routine, everyday tasks that larger employers often farm out to other
companies. See Cartier v. W. Elec. Coordinating Council, No. 14-cv-0079-WJM-MJW,
2015 WL 3581346, at *5 (D. Colo. June 9, 2015) (“Although the Court does not take the
definition’s list of specific occupations to be exclusive, the Court cannot ignore the
common theme. All perform relatively low-skilled sorts of work that companies often
‘farm out’ to vendors.”). While defendant contracts with other companies, it is for a
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Plaintiff argues that defendant has a heightened burden to establish it is “plainly
and unmistakably” exempted, Docket No. 18 at 4, but the higher burden is related to
employers attempting to show their employees are subject to the exemptions in the Fair
Labor Standards Act, not the W age Order. Bowe v. SMC Elec. Prods., Inc., 935 F.
Supp. 1126, 1132 (D. Colo. 1996), opinion adhered to on reconsideration, 945 F. Supp.
1482 (D. Colo. 1996). Further, defendant does not argue that it is subject to the
exemptions in the Wage Order. See 7 Colo. Code Regs. §§ 1103-1:5 (Administrative
Employee, Executive or Supervisor, Professional, and Outside Salesperson); 1103-1:6
(Salespersons, parts-persons, and mechanic; Commission Sales; Ski Industry; and
Medical Transportation).
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discrete task that is contracted out due to its specialized, not its routine, nature.
Plaintiff’s reliance on the low-skilled nature of his work as a roughneck and his
operation of equipment in that role is unavailing because the Wage Order applies
based on industry, not the type of work an individual worker performs. 7 Colo. Code
Regs. § 1103-1:1. Consequently, in analyzing whether the Wage Order applies to a
particular employer, courts look to whether the employer’s operations fit the industry
definition, not whether any of the company’s employees perform services that may be
supplied in a particular industry. Butterball, 644 F.3d at 1143-44.
Plaintiff focuses on the term “equipment operations,” which is one of the
examples listed in the definition of Commercial Support Services, and claims that he
“operate[d] drilling equipment” and therefore works in the Commercial Support Services
industry. Docket No. 18 at 5. Even if “equipment operations” is ambiguous, despite
appearing in a list of presumably similar types of jobs, other information from the
Department of Labor shows that the definition of Commercial Support Services does
not cover all businesses that employ equipment operators for contract work. A Fact
Sheet from the Department of Labor regarding Colorado Minimum Wage Order 32
(revised December 2015) indicates that the W age Order does not apply to “a variety of
other industries such as construction, manufacturing, [and] wholesale.” Docket No. 172; see also Butterball, 644 F.3d at 1144 (relying on the Fact Sheet’s statement that the
Wage Order does not apply to “construction, manufacturing, wholesale” to reject a
claim that the Wage Order applied to wholesale food manufacturers). The Court
agrees with defendant that the services it performs are analogous to those in the
construction industry that involve the performance of a discrete, specialized task on a
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contract basis, similar to a construction firm completing a portion of a building or
structure and, once finished, moving on to a different task or a different construction
site. While construction workers operate equipment and construction companies can
work on a contract basis for commercial enterprises, the Fact Sheet makes clear that
the Department of Labor nonetheless does not interpret the W age Order as applying to
the construction industry. See Docket No. 17-2. Thus, even if “equipment operations”
is ambiguous and such ambiguity renders the definition of “Commercial Support
Services” ambiguous, extrinsic evidence in the form of the Fact Sheet supports
defendant’s interpretation that defendant is not in the Commercial Support Services
industry, but instead is in one of the “variety of other industries” to which the Wage
Order does not apply. Docket No. 17-2. Therefore, the Wage Order does not apply to
plaintiff’s job and the Court will enter summary judgment on plaintiff’s claim under the
Wage Order.

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IV. CONCLUSION
For the foregoing reasons, it is
ORDERED that Defendant Xtreme Drilling and Coil Services, Inc.’s Motion for
Partial Summary Judgment [Docket No. 17] is GRANTED. It is further
ORDERED that plaintiff’s first claim for relief is dismissed.

DATED March 8, 2017.
BY THE COURT:

s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge

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