Fenley v. Tulsa Inspection Resources, LLC

Filing 23

MEMORANDUM AND ORDER granting defendant's 5 Motion to Dismiss for Improper Venue. This case is dismissed without prejudice to refiling in state court. Signed by District Judge John W. Lungstrum on 05/01/2015. (mg)

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF KANSAS
Tommy L. Fenley,
Plaintiff,
v.

Case No. 15-2316-JWL

Tulsa Inspection Resources, LLC,

Defendant.
MEMORANDUM & ORDER
Plaintiff Tommy L. Fenley, individually and on behalf of all persons similarly situated,
filed suit against defendant Tulsa Inspection Resources, LLC alleging violations of the overtime
provisions of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. Relying on a forum
selection clause in the employment agreement executed by the parties, defendant moves to
dismiss plaintiff’s complaint for improper venue pursuant to Federal Rule of Civil Procedure
12(b)(3). As explained in more detail below, the motion is granted.1

Background
In his complaint, plaintiff alleges that defendant Tulsa Inspection Resources, LLC
provides pipeline inspection services and pipeline integrity services to companies in the oil and
gas industry. Plaintiff alleges that he was employed by defendant as a non-exempt welding
inspector and that, in that capacity, he performed and reviewed welding inspections on newly1

Because the court grants the motion to dismiss on the basis of the forum selection clause, the
court does not address defendant’s alternative motion to transfer venue pursuant to 28 U.S.C. §
1404(a).

laid gas pipelines in and around Kansas. According to plaintiff, he and all putative collective
action members are “blue collar workers who are primarily engaged in manual labor duties” and
whose work requires “the utilization of techniques and procedures obtained primarily from
industry manuals, standards and codes.” Plaintiff alleges that defendant compensated plaintiff
and putative collective action members pursuant to a “daily rate” compensation system that did
not take into account all hours worked in a workweek and did not account for overtime hours.
As alleged in the complaint, defendant paid plaintiff and putative collective action members a
“set amount” per each day worked regardless of the number of hours actually worked. Plaintiff
alleges that defendant’s compensation scheme violates the overtime provisions of the FLSA and
that such violations were willful.
In support of its motion to dismiss, defendant relies on a forum selection clause in the
employment agreement executed by plaintiff.

Specifically, paragraph 4 of the parties’

agreement states in full as follows:
Any controversy, claim or litigation arising out of or relating to the employee’s
duties to the Employer including, but not limited to, any of the rights and
obligations set forth in this Employment Agreement shall in all events be
determined by the District Court of Tulsa County, Oklahoma which shall have
exclusive jurisdiction in the event of any dispute which results in litigation.
Further, both parties acknowledge that the Employee was hired by the Employer at
the company’s offices located in Tulsa, Oklahoma and that the Employee
acknowledges and consents that jurisdiction of any dispute arising under this
Employment Agreement or in any manner concerning the Employee is proper in
Tulsa County, Oklahoma.
Employment Agreement ¶ 4. The employment agreement contains no provisions concerning
compensation—overtime or otherwise—for plaintiff’s work.

2

Analysis
Defendant moves to dismiss plaintiff’s complaint on the grounds that the forum selection
clause in the parties’ employment agreement mandates that plaintiff’s suit be brought in state
court in Tulsa County, Oklahoma.2 In support of its argument, defendant relies on the following
language of paragraph 4:
Any controversy, claim or litigation arising out of or relating to the employee’s
duties to the Employer including, but not limited to, any of the rights and
obligations set forth in this Employment Agreement shall in all events be
determined by the District Court of Tulsa County, Oklahoma which shall have
exclusive jurisdiction in the event of any dispute which results in litigation.
Plaintiff does not dispute that this portion of paragraph 4 constitutes a mandatory forum
selection clause. Indeed, Tenth Circuit case law supports the conclusion that the forum selection
clause highlighted by defendant is clearly mandatory. American Soda, LLP v. U.S. Filter
Wastewater Group, Inc., 428 F.3d 921, 927 (10th Cir. 2005) (clause was mandatory where it
designated Colorado state courts as the “exclusive” forum for the resolution of disputes); Excell,
Inc. v. Sterling Boiler & Mech., Inc., 106 F.3d 318, 320 (10th Cir.1997) (clause that stated that
“[j]urisdiction shall be in the State of Colorado, and venue shall lie in the County of El Paso,
Colorado,” is mandatory because of its specific county designation and use of the obligatory
word “shall”).

2

Although not referenced by plaintiff in his complaint, the court may consider the substance of
the parties’ employment agreement without converting defendant’s motion into one for
summary judgment. See Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801, 809-10 (7th
Cir. 2011) (“When ruling on a motion to dismiss for improper venue, the district court is not
‘obligated to limit its consideration to the pleadings [or to] convert the motion to one for
summary judgment’ if the parties submit evidence outside the pleadings.”).
3

Nonetheless, plaintiff opposes dismissal of his case on the grounds that the mandatory
forum selection clause does not cover this dispute—a dispute which plaintiff contends is
covered instead by a separate, permissive forum selection clause in paragraph 4 of the
agreement. In that regard, plaintiff highlights the sentence immediately following the clause
relied upon by defendant:
Further, both parties acknowledge that the Employee was hired by the Employer at
the company’s offices located in Tulsa, Oklahoma and that the Employee
acknowledges and consents that jurisdiction of any dispute arising under this
Employment Agreement or in any manner concerning the Employee is proper in
Tulsa County, Oklahoma.
Tenth Circuit case law supports plaintiff’s characterization of this clause as a permissive forum
selection clause, see Excell, 106 F.3d at 321 (providing as an example of a permissive forum
selection clause as one in which the parties “agree that in the event of litigation between them,
Franchise Owner stipulates that the courts of the State of Michigan shall have personal
jurisdiction over its person, that it shall submit to such personal jurisdiction, and that venue is
proper in Michigan.”) or, more accurately, as a non-exclusive consent to jurisdiction. See K&V
Scientific Co. v. BMW, 314 F.3d 494, 500-01 (10th Cir. 2002).
To be clear, plaintiff does not contend that the “separate clauses” contained in paragraph
4 conflict with one another such that the permissive clause trumps the mandatory clause; he
contends that the clauses cover substantively different disputes such that both may be interpreted
harmoniously. According to plaintiff, the mandatory clause covers only those disputes “relating
to the employee’s duties to the Employer” and the permissive clause covers those disputes “in
any manner concerning the Employee.”

Plaintiff contends that his claims relate only to

defendant’s duties to him—the duty to compensate plaintiff and putative collective action
4

members in accordance with the FLSA—and have no bearing on plaintiff’s duties under the
employment agreement. Under plaintiff’s interpretation of paragraph 4, then, his claims fall
outside the scope of the mandatory clause and within the scope of the permissive clause because
the dispute “concerns” the employee.
Defendant disputes plaintiff’s piecemeal reading of paragraph 4, asserting that the
paragraph contains only one forum selection clause and that the clause mandates the dismissal of
plaintiff’s suit. Defendant also contends that in any event plaintiff’s lawsuit necessarily falls
within the scope of the mandatory language. The court agrees with defendant. Plaintiff argues
that interpreting paragraph 4 as one cohesive forum selection clause renders the second sentence
of the paragraph meaningless, thereby violating a cardinal rule of contract construction. See
Greystone Constr., Inc. v. National Fire & Marine Ins. Co., 661 F.3d 1272, 1283-84 (10th Cir.
2011) (in interpreting contract, court must give effect to all provisions so that none will be
rendered meaningless). The court disagrees. The second sentence is reasonably interpreted as
providing additional factual support (and a requirement that the parties submit to the personal
jurisdiction of the Tulsa County, Oklahoma courts) for the selection (in the first sentence) of
Tulsa County, Oklahoma as the exclusive venue for the litigation of employment disputes. This
interpretation is supported by the fact that the parties used the word “further” to connect the two
sentences of paragraph 4. As defined in Black’s Law Dictionary, the term “further” means
“additional” and means “something beyond what has been said or likewise, or also.” Black’s
Law Dictionary 466 (6th ed. 1991). In such circumstances, the nonexclusive jurisdictional
provision in the second sentence does not undermine the mandatory forum selection clause in
the first sentence. See Muzumdar v. Wellness Int’l Network, Ltd., 438 F.3d 759, 761-62 (7th Cir.
5

2006) (“non-exclusive jurisdiction” language of one provision could not undermine strongly
worded mandatory forum selection clause set forth in another provision; permissive language
did not amount to forum selection, had no bearing on otherwise enforceable mandatory forum
selection clause, and simply required parties to submit to personal jurisdiction of Texas courts).
But even if the court read the two sentences of paragraph 4 as two separate forum
selection clauses, the mandatory clause in the first sentence covers the claims in plaintiff’s
complaint. That clause covers any dispute “arising out of or relating to” the employee’s duties
to the employer “including, but not limited to” any of the rights and obligations set forth in the
employment agreement. Because the clause is expressly not limited to disputes arising out of
the employment agreement, the fact that the employment agreement does not speak to
compensation issues does not mean that the clause does not cover plaintiff’s claims. Plaintiff’s
FLSA claims certainly “relate to” plaintiff’s duties to defendant. Whether he was an exempt or
non-exempt employee for purposes of the FLSA will be central to resolving this “controversy.”
In fact, plaintiff himself sets forth his duties in his complaint, presumably to support the
conclusion that he qualifies for overtime compensation under the FLSA because he performed
non-exempt work. For these reasons, the parties’ dispute is covered by the mandatory forum
selection clause contained paragraph 4 of the parties’ employment agreement.3
Finally, because plaintiff does not provide, and the court cannot find, authority that would
allow the court to transfer to the state court system a case that originated in federal court,
plaintiff’s case must be dismissed. See Mozingo v. Trend Personnel Services, 504 Fed. Appx.
3

Plaintiff’s FLSA claims may be brought in state court. See 29 U.S.C. § 216(b) (FLSA action
“may be maintained against any employer (including a public agency) in any Federal or State
court of competent jurisdiction . . . ).
6

753, 758 n.2 (10th Cir. 2012) (transfer not available when forum selection clause specifics a
non-federal forum).4

IT IS THEREFORE ORDERED BY THE COURT THAT defendant’s motion to
dismiss for improper venue (doc. 5) is granted and this case is dismissed without prejudice to
refiling in state court.

IT IS SO ORDERED.

Dated this 1st day of May, 2015, at Kansas City, Kansas.

___s/ John W. Lungstrum_________
John W. Lungstrum
United States District Judge

4

Plaintiff does not suggest in his submissions that enforcing the mandatory forum selection
clause would be unreasonable or unjust or that the clause is invalid for any reason. See Niemi v.
Lasshofer, 770 F.3d 1331, 1351-52 (10th Cir. 2014).
7