Schindler v. Whiting Petroleum Corp.
ORDER Denying Defendant's 20 Motion to Dismiss, by Judge William J. Martinez on 12/01/2017. (angar, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 17-cv-1051-WJM-NYW
CRAIG SCHINDLER, individually and on behalf of all others similarly situated,
WHITING PETROLEUM CORP.,
ORDER DENYING DEFENDANT’S MOTION TO DISMISS
Plaintiff Craig Schindler (“Plaintiff”) brings this collective action complaint
(“Complaint”) against Defendant Whiting Petroleum Corp. (“Defendant”) to recover
unpaid overtime wages and other damages under the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. §§ 201 et seq. (ECF No. 1.) Defendant filed a Motion to Dismiss
(“Motion”), alleging that Defendant is not an “employer” for FLSA purposes. (ECF No.
20.) Plaintiff filed a Response to Defendant’s Motion to Dismiss (“Response”) (ECF No.
26) and Defendant filed a Reply in Support of Motion to Dismiss Collective Action
Complaint (“Reply”) (ECF No. 29). For the reasons set forth below, Defendant’s Motion
I. LEGAL STANDARD
As will become clear below, Defendant’s principal argument is that Plaintiff has
failed to sufficiently allege that Defendant was Plaintiff’s “employer” for FLSA purposes.
(See ECF No. 20 at 1.) The parties dispute whether FLSA “employer” status is a
jurisdictional element (and therefore subject to challenge under Federal Rule of Civil
Procedure 12(b)(1)) or a traditional merits element (and therefore subject to challenge
under Rule 12(b)(6)). The Court need not resolve this jurisdictional/non-jurisdictional
dispute, however, because the answer would have no practical effect in this case.
There are three practical consequences of deeming an element “jurisdictional.”
First, if the Court has any doubt that the element has been satisfied, the Court must
raise the issue sua sponte—it cannot wait for a party to raise the question, or deem it
waived because a party did not timely raise it. Williams v. Life Sav. & Loan, 802 F.2d
1200, 1202 (10th Cir. 1986) (“It is well settled that a federal court must dismiss a case
for lack of subject matter jurisdiction, even should the parties fail to raise the issue. A
court’s lack of subject matter jurisdiction cannot be waived by the parties, nor can it be
conferred upon the district court by agreement of the parties.” (citations omitted)).
Here, this is not an issue because Defendant obviously has raised a jurisdictional
Second, a defendant challenging subject matter jurisdiction under Rule 12(b)(1)
can introduce evidence beyond the pleadings. Davis ex rel. Davis v. United States, 342
F.3d 1282, 1296 (10th Cir. 2003). This is in contrast to a Rule 12(b)(6) motion, where
defendants are limited, for the most part, to challenging the plaintiff’s allegations as
stated on the face of the complaint. Ridge at Red Hawk, LLC v. Schneider, 493 F.3d
1174, 1177 (10th Cir. 2007). But this distinction has no relev ance here because
Defendant has not introduced any evidence beyond the pleadings. In other words,
Defendant has offered only “a facial attack on the complaint’s allegations as to subject
matter jurisdiction. Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). “In
reviewing a facial attack on the complaint, a district court must accept the allegations in
the complaint as true,” id., similar to a Rule 12(b)(6) motion, see Ridge at Red Hawk,
493 F.3d at 1177.
Third, in a Rule 12(b)(1) motion, the burden of proof ultimately falls on the
Plaintiff to establish subject matter jurisdiction, Basso v. Utah Power & Light Co., 495
F.2d 906, 909 (10th Cir. 1974), rather than requiring the defendant to disprove
jurisdiction. This is potentially in contrast to a Rule 12(b)(6) motion, where the
defendant technically has the burden to demonstrate the plaintiff’s failure to state a
claim—although courts rarely think of Rule 12(b)(6) motions in terms of the respective
parties’ burdens. Here, however, Plaintiff’s well-pleaded allegations must be accepted
as true, Holt, 46 F.3d at 1002, so the shifted burden in a Rule 12(b)(1) setting has
essentially no effect.
For all of these reasons, the Court finds it immaterial whether “employer” status
under the FLSA is a jurisdictional or non-jurisdictional element of Plaintiff’s claim. The
question would be the same under either Rule 12(b)(1) or Rule 12(b)(6), i.e., whether
the Plaintiff’s allegations, taken as true, plausibly suggest that Defendant was Plaintiff’s
employer for FLSA purposes.
Plaintiff’s complaint alleges that he worked “exclusively for Whiting” as a Rig
Welder from May 2015 until April 2016. (ECF No. 1 at 2.) During this time, he was paid
the same hourly rate for all hours worked, including those in excess of 40 hours in a
workweek. (Id. at 2.) He was not given any overtime compensation, allegedly in
violation of the FLSA. (Id.)
Defendant “Whiting is an independent exploration and production company with
an oil focused asset base.” (Id. at 3.) The proposed putative class is made up of
individuals who worked as Rig Welders. (Id.) While exact job titles and duties differed,
these employees were all classified as independent contractors and subjected to the
same payment scheme for similar work. (Id.) Their primary job duties included
receiving blueprints in creation of welding components, welding pipes using various
cutting processes, and maintaining the rig structure. (Id. at 3–4.) Plaintiff was typically
scheduled to work 12-hour shifts, for as many as 7 days a week—Plaintiff worked in
excess of 40 hours each week while employed by Whiting. (Id. at 4.)
Plaintiff’s complaint states that “Whiting and/or the company it contracted with
exercised control over all aspects of [Plaintiff’s] job.” (Id.) Plaintiff’s daily and weekly
activities were routine and “largely governed by standardized plans, procedures, and
checklists created by [Defendant] and/or the operator [Defendant] contracted with.” (Id.
at 5.) According to the Complaint, “[v]irtually every job function was pre-determined by
[Defendant] and/or the Operator [that Def endant] contracted with, including the tools to
use at the job site, the data to compile, the schedule of work, and related work duties.”
(Id.) Defendant also determined Plaintiff’s hours, work locations, and rates of pay. (Id.
at 4.) Although Plaintiff often worked off-site without direct supervision from Defendant,
Defendant “still controlled all aspects of [Plaintiff’s] job activities by enforcing mandatory
compliance with [Defendant’s] and/ or its client’s policies and procedures.” (Id.)
Plaintiff did not incur operating expenses like rent, payroll, marketing, or insurance.
(Id.) Defendant prohibited Plaintiff from working other jobs for other companies while
he was working on jobs for Defendant, and Plaintiff was economically dependant on
Defendant during his employment. (Id.) Plaintiff’s earning opportunity was based on the
number of days Defendant scheduled him to work. (Id.)
Plaintiff argues that he was wrongly classified as an independent contractor and
is therefore entitled to overtime compensation for all hours worked in excess of 40
hours in each workweek. (Id. at 6.) Plaintiff says he was not employed by Defendant
on a project-by-project basis. (Id.) Even while classified as an independent contractor,
Plaintiff was regularly on call for Defendant and/or its clients and was expected to be
available to work whenever needed. (Id.)
Defendant’s Motion to Dismiss argues that Plaintiff has not established that
Defendant was his employer within the meaning of the FLSA. (ECF No. 20 at 1.)
Defendant relies on the “economic realities” test (discussed in detail below) to contend
that because Plaintiff’s Complaint alleges that his activities were controlled by
Defendant and/or Defendant’s clients, some other entity—aside from Defendant—may
have been Plaintiff’s employer under the FLSA. (Id.) Plaintiff responds that the factors
in the economic realities test are analyzed at the summary judgment stage, not the
motion to dismiss stage. (ECF No. 26 at 7.) Defendant replies that the economic
realities test applies at the motion to dismiss stage to determine whether an entity is an
employer under the FLSA. (Id. at 2.)
“[D]istrict courts within the Tenth Circuit, including Colorado, have applied the
economic realities test at both the motion to dismiss and summary judgment phase.”
Coldwell v. Ritecorp Envtl. Prop. Sols., 2017 WL 1737715, at *5 (D. Colo. May 4, 2017).
The Court need not categorically declare the propriety of the economic realities test at
the motion to dismiss phase because it is satisfied here regardless.
Under the economic realities test, courts will consider “whether the alleged
employer (1) had the power to hire and fire the employees, (2) supervised and
controlled employee work schedules or conditions of employment, (3) determined the
rate and method of payment, and (4) maintained employment records.” Harris v.
Universal Contracting, LLC, 2014 WL 2639363, at *6 (D. Utah June 12, 2014) . “No one
of the four factors standing alone is dispositive. Instead, the [...] test encompasses the
totality of circumstances.” Id. (brackets and ellipses in original).
Defendant maintains that it does not qualify as an employer under the FLSA
based on the economic realities test because in the Complaint, Plaintiff alleges that
“[Defendant] and/or its clients” exercised control over all aspects of his job. (ECF No.
20 at 3–4 (boldface in original).) Because Plaintiff often worked with Defendant’s
clients, Defendant argues that: (1) “Plaintiff admits that [Defendant] did not supervise
his work,” (2) “[Defendant] did not exercise control over Plaintiff[—]another entity did,”
(3) “[Defendant did not control the equipment or facilities used[—]another entity did,”
and (4) “Plaintiff is not alleging that Defendant hired or fired him.”
The First Circuit considered a similar situation in which the defendant was solely
responsible for hiring temporary workers, had the power to refuse to send a worker
back to a job site, supervised and controlled employee work schedules, and decided
which workers were to be assigned to particular job sites at client companies. Baystate
Alternative Staffing, Inc. v. Herman, 163 F.3d 668, 676 (1st Cir. 1998). As in the
present case, the defendant in that case argued that it “did not exercise any direct, onthe-job supervision of the workers at the client companies.” Id. The First Circuit held,
“In these circumstances, we do not perceive the absence of direct supervisory oversight
of the workers’ day-to-day activities to be dispositive.” Id. The court noted that
“although the client companies were solely responsible for on-site supervision of the
workers, [defendant] exercised indirect supervisory oversight of the workers through its
communications with client companies . . . . Thus, [defendant] retained the authority to
intervene if problems arose with a worker’s job performance.” Id. The court further
reasoned that “an employer does not need to look over his workers’ shoulders every
day in order to exercise control. In any event, it is the totality of the circumstances, and
not any one factor, which determines whether a worker is the employee of a particular
alleged employer.” Id. The First Circuit “conclude[d] that the absence of direct, on-site
supervision does not preclude a determination that [defendants] are the employers of
the temporary workers within the broad definition of the FLSA.” Id.
Plaintiff discussed factors relevant to the economic realities test in his Complaint
(ECF No. 1) as follows:
(1) Plaintiff was hired by Defendant. (Id. at 3.) Plaintiff explains that “to provide
services to many of its customers, [Defendant] contracts with certain companies to
provide it with personnel to perform the necessary work.” (Id.) “Plaintiff worked
exclusively for [Defendant] from approximately March 2015 until April 2016 as a Rig
Welder.” (Id.) Defendant “prohibited [Plaintiff] from working other jobs for other
companies while he was working on jobs for [Defendant].” (Id. at 5.)
(2) Defendant supervised and controlled employee work schedules or conditions
of employment. (Id.) “Even though [Plaintiff] often worked away from [Defendant’s]
offices without the presence of a direct [Defendant] supervisor, [Defendant] still
controlled all aspects of [Plaintiff’s] job activities by enforcing mandatory compliance
with [Defendant’s and/or its client’s policies and procedures.” (Id. at 4.) “Virtually every
job function was pre-determined by [Defendant] and/or the operator [Defendant]
contracted with, including the tools to use at a job site, the data to com pile, the
schedule of work, and related work duties.” (Id. at 5.) Additionally, “[Defendant] set
[Plaintiff’s] rates of pay [and] his work schedule.” (Id.) “[T]he daily and weekly activities
of the Putative Class Members were routine and largely governed by standardized
plans, procedures, and checklists created by [Defendant] and/or the operator
[Defendant] contracted with.” (Id.)
(3) Defendant determined the rate and method of payment. (Id.) Plaintiff states
that his “earning opportunity was based on the number of days [Defendant] scheduled
him to work.” (Id.) Defendant set the Plaintiff’s rates of pay and paid all of its rig
welders according to the same payment scheme. (Id. at 3.)
No party makes any direct argument about the fourth factor in the economic
realities test, i.e., the sorts of employment records Defendant may have kept. But “[n]o
one of the four factors standing alone is dispositive.” Harris, 2014 WL 2639363, at *6.
At this phase, the Court finds that Plaintiff’s allegations regarding the first three factors
are sufficient to plausibly assert, at this pleading phase of the case, that the Defendant
was Plaintiff’s “employer” within the meaning of the FLSA.
For the reasons set forth above, Defendant’s Motion to Dismiss (ECF No. 20) is
Dated this 1st day of December, 2017.
BY THE COURT:
William J. Martínez
United States District Judge
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