Flores et al v. Act Event Services Inc et al

Filing 54

Memorandum Opinion and Order granting 42 Motion for Summary Judgment; denying 34 MOTION to Dismiss for Lack of Jurisdiction And in the Alternative, and if Necessary, Motion for Partial Summary Judgment, 38 MOTION to Dismiss for Lack of Jurisdiction and Alternatively, Motion for Partial Summary Judgment. Furthermore, as mentioned in footnote two, the court DIRECTS the plaintiffs, if they intend to pursue their claims against the estate of Gaona, to substitute the representative of Gaonas estate for the deceased Gaona by 3/6/2015. (Ordered by Senior Judge A. Joe Fish on 2/11/2015) (ykp)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

LUCIA FLORES, ET AL.,
Plaintiffs,
VS.
ACT EVENT SERVICES, INC., ET AL.,
Defendants.

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CIVIL ACTION NO.
3:14-CV-2412-G

MEMORANDUM OPINION AND ORDER

Before the court are the defendants’ motions to dismiss for lack of jurisdiction
and, in the alternative, motions for partial summary judgment (docket entries 34, 38)
and the plaintiffs’ motions under Federal Rule of Civil Procedure 56(d)1 (docket

1

The plaintiffs incorrectly filed Rule 56(f) motions. Plaintiffs’ Brief in
Support of Plaintiffs’ 56(f) Motion and in the Alternative, Response to Defendant
ACT’s Motion (“Plaintiffs’ Response to ACT”) at 1 (docket entry 43); Plaintiffs’ Brief
in Support of Plaintiffs’ 56(f) Motion and in the Alternative Response to Final
Touch’s Motion (“Plaintiffs’ Response to Final Touch”) at 1 (docket entry 48). The
plaintiffs’ briefing, however, indicates they intended to make a Rule 56(d) motion.
Plaintiffs’ Response to ACT at 2 (requesting for “additional time to take the
depositions of the key witnesses in this dispute and to conduct written discovery”);
FED. R. CIV. P. 56(d) (“If a nonmovant shows by affidavit or declaration that, for
(continued...)

entries 42, 47). For the reasons discussed below, the defendants’ motions are denied
and the plaintiffs’ motions are granted.
I. BACKGROUND
A. Factual Background
This case concerns an employment compensation dispute under the Fair Labor
Standards Act (“FLSA”). The plaintiffs were employees for ACT Event Services, Inc.
(“ACT”), Roman Luis Gaona2 (“Gaona”), and Final & Touch Cleaning Services
(“Final Touch”) (collectively, “the defendants”). They allege the defendants violated
the FLSA by failing to pay compensable travel time, abide by federal minimum wage

1

(...continued)
specified reasons, it cannot present facts essential to justify its opposition, the court
may: (1) defer considering the motion or deny it; (2) allow time to obtain affidavits
or declarations or to take discovery; or (3) issue any other appropriate order.”).
Although the plaintiffs cited the wrong rule when filing their motion, the defendants
understood the substance of the motion. See ACT’s Reply in Support of its Motion
to Dismiss and, in the Alternative and if Necessary, Motion for Partial Summary
Judgment (“ACT’s Reply) at 1 (“Plaintiffs claim they need to conduct discovery to be
able to refute ACT’s offers of judgment.”) (docket entry 50). Thus, the court will
treat the motion as an appropriately filed Rule 56(d) motion.
2

On December 6, 2014, the court received notice of Gaona’s death.
Statement Noting a Party’s Death (docket entry 45). The plaintiffs indicated their
intent to “pursue the action against the Representative of his Estate.” Plaintiffs’
Response to Final Touch at 2 n.1. Therefore, pursuant to Federal Rule of Civil
Procedure 25(a)(1), the court directs the plaintiffs to substitute the representative of
Gaona’s estate for the deceased Gaona as a defendant in this action. According to
Rule 25(a), that substitution must occur within 90 days of December 6, 2014 (i.e., by
March 6, 2015), or “the action . . . against the decedent must be dismissed.”
-2-

laws, and provide overtime compensation. Second Amended Collective Action
Complaint (“Complaint”) ¶¶ 1, 56-74 (docket entry 30).
The defendants argue that this court no longer has jurisdiction over the dispute
because (1) they made offers of judgment to eight plaintiffs and (2) four of the
plaintiffs accepted settlements following a Department of Labor (DOL) investigation
into ACT’s business.3 See Appendix in Support of ACT Event Service, Inc.’s Motions
(“ACT’s Appendix”), exhibits A-11 – B-8, at 31-55 (docket entry 36); ACT Event
Services, Inc.’s Brief in Support of its Motions (“ACT’s Brief”) at 4-6 (docket entry
35). However, the plaintiffs claim the timesheets used to calculate both the offers of
judgment and DOL settlements “do not accurately reflect the actual time work[ed]”
because they fail to account for travel and wait time. Plaintiffs’ Response to ACT at
5-6.4 If this is true, then according to the plaintiffs, the court retains jurisdiction over
all of the claims. See id. at 5-6. The plaintiffs also allege that ACT may have “acted

3

In total, there are eleven individual plaintiffs. One of the plaintiffs,
Gloria Torres, received both an offer of judgment and a settlement check following
the DOL investigation. See Complaint; Notice of Correction to Second Amended
Collective Action Complaint (docket entry 46).
4

The defendants make identical motions and use the same arguments to
support their motions. See ACT’s Brief; Roman Luis Gaona and Final Touch
Cleaning Services’ Brief in Support of Their Motions (docket entry 39). The
plaintiffs’ response briefs are similarly duplicative. See Plaintiffs’ Response to ACT;
Plaintiffs’ Response to Final Touch. Therefore, throughout this opinion, the court
will only cite to one of the relevant briefs unless citation to both is necessary.
-3-

fraudulently regarding the DOL investigation and settlement,” which they contend
counsels against enforcing a Section 216(c) waiver. Id. at 6-7, 9-10.
B. Procedural Background
After this court issued an opinion granting in part and denying in part the
defendants’ initial motions to dismiss5 (docket entry 23), the defendants filed
additional motions to dismiss for lack of jurisdiction, and in the alternative, for
partial summary judgment (docket entries 24, 27). The plaintiffs then filed an
amended complaint, see Complaint, leading the court to issue orders withdrawing the
defendants’ motions (docket entries 33, 37). The defendants refiled these motions
(docket entries 34, 38), to which the plaintiffs filed responses and Federal Rule of
Civil Procedure 56(d) motions (docket entries 42, 47). Then ACT, but neither
Gaona nor Final Touch, filed a reply to the plaintiffs’ response (docket entry 50).
The plaintiffs filed an unopposed motion for leave to file a surreply (docket entry 52),
which included as attachments a draft of their surreply and an appendix. In an order
granting the motion, the court instructed the plaintiffs to “electronically file their
surreplies no later than January 8, 2015” (docket entry 53) (emphasis in original).

5

In this opinion, the court concluded that the plaintiffs’ pleadings were
sufficient with regard to FLSA coverage. Memorandum Opinion and Order at 15-17.
However, only one individual plaintiff, Rosa Hernandez, made allegations creating a
plausible inference that the defendants violated her FLSA rights. Id. at 18-22. The
court dismissed the claims of the other individually named plaintiffs and the putative
class, but the court granted the plaintiffs leave to amend their complaint. Id. at 1925.
-4-

The plaintiffs did not follow the court’s order and thus the court has not considered
the surreply.
II. ANALYSIS
A. Legal Analysis
1. Valid Waivers Under Section 216(c)
The Fair Labor Standards Act, 29 U.S.C. §§ 201-219, provides employees with
various rights, most notably the right to minimum wage and overtime pay, against
FLSA-covered employers. Individuals can enforce these rights by bringing a private
cause of action in a court of competent jurisdiction. 29 U.S.C. § 216(b).
Alternatively, the Department of Labor is “authorized to supervise the payment of
the unpaid minimum wages or the unpaid overtime compensation . . ..” Id. § 216(c).
“[T]he agreement of any employee to accept such [DOL-supervised] payment shall
upon payment in full constitute a waiver by such employee of any right” to bring a
private cause of action in court. Id. The statute indicates that a valid waiver requires
“(a) that the employee agree to accept the payment which the [DOL] determines to
be due and (b) that there be ‘payment in full.’” Solis v. Hotels.com Texas, Inc., No. Civ.
A. 3:03-CV-0618-L, 2004 WL 1923754, at *2 (N.D. Tex. Aug. 26, 2004) (Lindsay,
J.) (alteration in original) (quoting Sneed v. Sneed’s Shipbuilding, Inc., 545 F.2d 537,
539 (5th Cir. 1977)).

-5-

With respect to the first requirement, “[a]n agreement is more than the
acceptance of funds, as it must exist independent of payment.” Favata v. National
Oilwell Varco, L.P., C.A. No. C-12-082, 2013 WL 1222378, at *3 (S.D. Tex. Feb. 7,
2013) (quoting Dent v. Cox Communications Las Vegas, Inc., 502 F.3d 1141, 1146 (9th
Cir. 2007)) (internal quotations omitted). “Typically an employee manifests assent
by signing a receipt (either a standard WH-58 or another form authorized by the
DOL), which puts the employee on notice of the resulting waiver.” Id. (quoting Dent,
502 F.3d at 1147) (internal quotations omitted). Absent an employee’s signature on
a receipt, “cashing of checks . . . [usually does] not release [the employee’s] full
claims.” Walton v. United Consumers Club, Inc., 786 F.2d 303, 307 (7th Cir. 1986)
(Easterbrook, J.).
However, a few courts have concluded that even absent a signature, if “a
release was provided with the check,” then an employee executes an enforceable
waiver by “cashing [the] check issued under a DOL-supervised settlement.” Favata,
2013 WL 1222378, at *3 (citations omitted). For example, in Heavenridge v. Ace-Tex
Corporation, No. 92-75610, 1993 WL 603201, at *1 (E.D. Mich. Sept. 3, 1993), the
employee received, along with a check, a WH-58 waiver form stating that “acceptance
of back wages due under the Fair Labor Standards Act [would] give[ ] up any right”
under Section 216(b) to initiate a private suit. The court concluded the employee
executed a valid waiver by cashing the check. Id. at *1-3. Representing the most

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liberal approach to enforcing waivers, Heavenridge demonstrates that to enforce a
waiver courts require, at a minimum, that employees receive notice that by cashing
the check they waive their right to bring private claims. Id. at *2-3.
When an employer believes an employee executed a valid waiver, it should
raise the waiver defense through a Rule 12(b)(6) motion rather than a Rule 12(b)(1)
motion.6 Centeno v. Facilities Consulting Group, Inc., Civil Action No. 3:14-CV-3696-G,
2015 WL 247735, at *7 (N.D. Tex. Jan. 20, 2015) (Fish, J.). The Supreme Court
has recognized that “‘[s]ubject matter jurisdiction in federal-question cases is
sometimes erroneously conflated with a plaintiff’s need and ability to prove the
defendant bound by the federal law asserted as the predicate for relief -- a meritsrelated determination.’” Arbaugh v. Y & H Corporation, 546 U.S. 500, 511 (2006)
(quoting 2 J. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 12.30[1] (3d ed. 2005)).
Thus, the Court announced a rule to simplify this inquiry: “[W]hen Congress does
not rank a statutory limitation on coverage as jurisdictional, courts should treat the
restriction as nonjurisdictional in character.” Id. at 516. Because Section 216(c)
6

The court notes, however, that a Rule 12(b)(6) motion is not
appropriate in all cases. To present a waiver defense, defendants generally must
attach relevant documents to their motion to dismiss. If the complaint does not
reference these specific documents, or at least the relevant DOJ settlement, then the
court cannot consider these documents when ruling on a Rule 12(b)(6) motion. See
In re Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (stating that
for a court to consider documents attached to a motion to dismiss, the documents
must be mentioned in the complaint and central to the plaintiff’s claims), cert. denied,
552 U.S. 1182 (2008). In such a case, the defendant should file a Rule 56 summary
judgment motion to assert the waiver defense.
-7-

contains no language linking the waiver to a court’s jurisdiction under the FLSA, this
court will treat the waiver as nonjurisdictional. See Min Fu v. Hunan of Morris Food
Inc., Civ. No. 12-05871 (KM), 2013 WL 5970167, at *4 (D.N.J. Nov. 6, 2013)
(“[T]he waiver provision of 29 U.S.C. § 216(c) . . ., which is the statutory basis of the
DOL Release, contains no such limitation on jurisdiction.”). As such, a Rule 12(b)(6)
motion is the appropriate tool for raising the waiver defense.
2. The Cases or Controversies Requirement
a. Dismissing Cases for a Lack of Subject-Matter Jurisdiction
Federal courts may only adjudicate “cases” or “controversies.” U.S. CONST.
art. III, § 2. “Such a case or controversy must exist throughout the litigation; in other
words, the case cannot be moot. Thus, if a case has been rendered moot, a federal
court has no constitutional authority to resolve the issues that it presents.” Sandoz v.
Cingular Wireless LLC, 553 F.3d 913, 915 (5th Cir. 2008) (citations and internal
quotations omitted), overruled in part by Genesis Healthcare Corporation v. Symczyk,
U.S.

, 133 S. Ct. 1523, 1529 (2013) (rejecting Sandoz’s application of the relation-

back doctrine to prevent employers from “picking-off” named plaintiffs to defeat
FLSA collective action certification). Because the case or controversy requirement is
at the heart of a federal court’s jurisdiction to hear a dispute, a court can raise the
issue sua sponte at any stage of litigation. Trugreen Landcare, LLC v. Scott, 512 F. Supp.
2d 613, 618 (N.D. Tex. 2007) (Fitzwater, J.) (“[T]he court must notice its own lack

-8-

of subject matter jurisdiction sua sponte, if necessary.”). If, however, the court fails to
consider the issue, a defendant can file a Rule 12(b)(1) motion. See, e.g., Rollins v.
Systems Integration, Inc., No. 4:05-CV-0408-Y, 2006 WL 3486781, at *1, *5 (N.D.
Tex. Dec. 4, 2006) (Means, J.) (granting a defendant’s Rule 12(b)(1) motion to
dismiss the plaintiff’s claims).
In instances where a defendant initiates the court’s jurisdictional review, courts
must distinguish between “facial” and “factual” attacks. Paterson v. Weinberger, 644
F.2d 521, 523 (5th Cir. 1981). “[I]f the defense merely files a Rule 12(b)(1) motion,
the trial court is required merely to look to the sufficiency of the allegations in the
complaint because they are presumed to be true.” Id. Therefore, a court’s analysis of
a “facial attack” resembles the review of a Rule 12(b)(6) motion. See TF-Harbor, LLC
v. City of Rockwall, Texas, 18 F. Supp. 3d 810, 817 (N.D. Tex. 2014) (Fitzwater, C.J.),
aff’d,

Fed. Appx.

, 2015 WL 511372 (5th Cir. Feb. 9, 2015)..

In contrast, “[i]f a defendant makes a ‘factual attack’ upon the court’s subject
matter jurisdiction over the lawsuit, the defendant submits affidavits, testimony, or
other evidentiary materials.” Paterson, 644 F.2d at 523. In this situation, “[a] court
can find that subject matter jurisdiction is lacking based on (1) the complaint alone;
(2) the complaint supplemented by undisputed facts evidenced in the record; or
(3) the complaint supplemented by undisputed facts plus the court’s resolution of
disputed facts.” Ballew v. Continental Airlines, Inc., 668 F.3d 777, 781 (5th Cir. 2012)

-9-

(citation and internal quotations omitted). When facing a “factual attack,” a plaintiff
generally should “submit facts through some evidentiary method.” Paterson, 644 F.2d
at 523. Bearing the burden of proof, the plaintiff must prove by a preponderance of
the evidence that the court possesses jurisdiction to hear the dispute. Ballew, 668
F.3d at 781 (citation omitted).
b. Differentiating Challenges to Subject-Matter
Jurisdiction From Attacks on the Merits
Defendants cannot substitute “factual attacks” under Rule 12(b)(1) for Rule
56 motions.7 “[W]here issues of fact are central both to subject matter jurisdiction
and the claim on the merits, [the Fifth Circuit has] held that the trial court must
assume jurisdiction and proceed to the merits.” Montez v. Department of the Navy, 392
F.3d 147, 150 (5th Cir. 2004). “‘This refusal to treat indirect attacks on the merits
as Rule 12(b)(1) motions provides, moreover, a greater level of protection to the
plaintiff who in truth is facing a challenge to the validity of his claim: the defendant is
forced to proceed under . . . Rule 56 . . . which place[s] greater restrictions on the
district court’s discretion.’” Id. (quoting Williamson v. Tucker, 645 F.2d 404, 415 (5th
Cir.), cert. denied, 454 U.S. 897 (1981)). Thus, in federal question cases, a
defendant’s attack under Rule 12(b)(1) will often be “a challenge to the existence of a

7

Because a “factual attack” requires submission of documents outside the
pleadings, its analogue among motions attacking the merits is a Rule 56 motion
rather than a Rule 12(b)(6) motion.
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federal cause of action,” which is appropriately treated as an attack on the merits
rather than the court’s subject matter jurisdiction. Williamson, 645 F.2d at 415.
3. Mooting Claims Through Offers of Judgment
a. Examples of Rule 12(b)(1) Motions Following Offers of Judgment
Federal Rule of Civil Procedure 68 provides defendants with one method for
eliminating a live case or controversy: “[A] party defending against a claim may serve
on an opposing party an offer to allow judgment on specified terms, with the costs
then accrued.” FED. R. CIV. P. 68(a). In the Fifth Circuit, if an employer makes an
offer of judgment fully satisfying an employee’s FLSA claims, then those claims are
rendered moot regardless of whether the employee accepts the offer. See Sandoz, 553
F.3d at 914, 919. After issuing an offer of judgment, an employer can present a
“factual attack” on jurisdiction by filing a Rule 12(b)(1) motion supported by the
offer of judgment and other relevant documents. See Rollins, 2006 WL 3486781, at
*1-2. Before a court can declare the claims moot and consequently dismiss them,
however, it must determine if the offer of judgment fully satisfies the employee’s
claims.
In Rollins, this court granted the employer’s Rule 12(b)(1) motion after the
employer made an offer of judgment covering unpaid overtime wages, liquidated
damages under Section 216(b), and costs and reasonable attorney’s fees. Id. at *2,
*5. The employer submitted time cards to support its calculation of unpaid overtime

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wages, thus creating a “factual attack” on the court’s jurisdiction. Id. at *2. In
response, the employee submitted no evidence disputing the employer’s calculations;
instead, he merely argued that “he should not be obligated to tender substantial proof
of his allegations at this stage of the litigation.” Id. at *3 (internal quotations and
brackets omitted). With the employer’s evidence unrebutted, the court concluded
that the “offer of judgment [made the employee] whole” and therefore eliminated any
live case or controversy. Id. at *5; see also Ward v. Bank of New York, 455 F. Supp. 2d
262, 268-70 (S.D.N.Y. 2006) (concluding that the employer’s offer of judgment
mooted any FLSA claims because the employee failed to submit any evidence
challenging the employer’s time sheets).
When facing a “factual attack,” the majority of employees have not followed
this ill-advised approach. In Reed v. TJX Companies, Inc., No. 04 C 1247, 2004 WL
2415055, at *1 (N.D. Ill. Oct. 27, 2004), the court denied the employer’s Rule
12(b)(1) motion after the employee contested the sufficiency of the offer of
judgment. The employee highlighted that the employer did “not clarify how [it]
identified that a particular time report had been edited nor how [it] determined that
other time reports had not been edited,” issues pertinent to the calculation of
outstanding wages. Id. Furthermore, in only analyzing edits to the time sheets, the
employer failed to address the employee’s claim that “he was asked to clock in and
out for a lunch break while he continued, in actuality, to work.” Id.

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In Reyes v. Carnival Corporation, No. 04-21861-CIV, 2005 WL 4891058, at *23 (S.D. Fla. May 25, 2005), the employer made an offer of judgment exceeding the
employee’s own preliminary damages computation; nevertheless, the court rejected
the employer’s “factual attack.” To support its conclusion, the court noted that “the
plaintiff in this case disputes that [the employer’s] offer is for more than the
maximum amount of damages he could recover under the FLSA.” Id. at *3. While
the employer’s offer was based on the employee’s own estimate, “[t]he parties
dispute[d] whether Plaintiff [was] provided all the documents in [the employer’s]
possession regarding the number of hours Plaintiff actually worked.” Id.
Furthermore, “the Plaintiff’s Rule 26 disclosure states that it is merely a preliminary
estimate due to incomplete records in the possession of the Plaintiff.” Id. These
factors prevented the court from concluding “that the offer of judgment [was]
definitively for more than the Plaintiff could recover at trial. . . .” Id.
b. Similarities Between the Rule 12(b)(1) Analysis Following
an Offer of Judgment and a Summary Judgment Inquiry
While ostensibly working within the framework of Rule 12(b)(1), the Reed and
Reyes courts’ analyses mirror a summary judgment inquiry. The employee in Reed
defeated the motion partially by “showing that the materials cited do not establish
the absence or presence of a genuine dispute. . . .” FED. R. CIV. P. 56(c)(1)(B).
Among other things, he demonstrated that the employer’s declaration left
unaddressed the allegation that he was required to work during lunch time. 2004
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WL 2415055, at *1. Thus, the Reed court concluded that “it is not unreasonable to infer
that [the employee] will be able to show he is entitled to” recover more than the offer.
2004 WL 2415055 at *2 (emphasis added).
Both courts mentioned the importance of additional discovery. Reyes, 2005
WL 4891058, at *2 (“Plaintiff argues that the offer of judgment does not offer
complete relief because it is based on the estimates in Plaintiff’s initial Rule 26(a)
disclosures, which are made only based upon the information then reasonably
available, prior to the completion of discovery and without access to [the employer’s]
complete wage and hour records concerning the Plaintiff that would allow for a more
accurate estimation of his damages.”); Reed, 2004 WL 2415055, at *1 (The employee
“has and does dispute that [the employer’s] $500 offer would compensate him fully
for his claims. It is not for this court to engage in extensive fact determination at this
preliminary stage of litigation[, as it would require] a far-reaching and suppositionlaced inquiry.”). When this situation arises in the context of a summary judgment
motion, the court possesses authority to provide additional time for discovery by
either denying the motion or deferring its consideration. See FED. R. CIV. P. 56(d),
(e). Noting that until further discovery took place there was no basis “to conclude
that the offer of judgment is definitively for more than the Plaintiff could recover at
trial,” the Reyes court followed this approach by denying the defendant’s motion.
2005 WL 4891058 at *3 (emphasis added).

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The italicized text in the two preceding paragraphs reveals the hallmark of this
comparison: the Reed and Reyes courts applied a burden of proof arguably identical to
that used under Rule 56. Although composed of different language, the standards
used by the two courts are quite similar. If a court cannot “definitely” conclude the
moving party’s argument is correct, then the nonmoving party’s contention is most
likely “not unreasonable,” and vice versa. Reyes, 2005 WL 4891058 at *3; Reed, 2004
WL 2415055 at *2. Moreover, the moving party’s argument is “not unreasonable” if
and only if “a reasonable jury could return a verdict for the nonmoving party” -- the
latter of these burdens being a common formulation of the summary judgment
standard. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). This analysis
demonstrates that, in all but name, the Reed and Reyes courts conducted a summary
judgment inquiry.
c. The Reed and Reyes Courts Indirectly Apply the Montez Rule
In many cases, a defendant’s Rule 68 offer of judgment is nothing more than a
“factual attack” on the plaintiff’s claims. If the parties still dispute the merits, then in
making a Rule 12(b)(1) motion following an offer of judgment, a defendant presents
an “indirect attack[ ] on the merits as [a] Rule 12(b)(1) motion[ ].” Montez, 392 F.3d
at 150 (quoting Williamson, 645 F.2d at 415). The Reyes and Reed courts recognize
the true character of the defendants’ attacks. Consequently, they provide the
plaintiffs with a “greater level of protection [required when] . . . facing a challenge to

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the validity of [their] claim[s]” by analyzing a Rule 12(b)(1) motion as if it were a
Rule 56 motion.8 Id. (quoting Williamson, 645 F.2d at 415). Under the same
circumstances in the Fifth Circuit, courts must deny the motion and have parties
refile a Rule 56 motion.9 Id. While these two approaches apply different procedures,
they produce the same functional result. Absent application of one of these
approaches, the general Rule 12(b)(1) standard would require the plaintiff to prove
factual disputes, which concern the merits of the claims, by a preponderance of the
evidence -- a burden of proof in direct conflict with the Rule 56 standard. Ballew, 668
F.3d at 781 (citation omitted).

8

Courts rely on Rule 56 for clear and effective procedures for analyzing
the parties’ evidentiary submissions. The Federal Rules of Civil Procedure explicitly
require courts to convert motions to dismiss under Rule 12 into summary judgment
motions in two instances:
If, on a motion under Rule 12(b)(6) or 12(c),
matters outside the pleadings are presented to
and not excluded by the court, the motion
must be treated as one for summary judgment
under Rule 56. All parties must be given a
reasonable opportunity to present all the
material that is pertinent to the motion.
FED. R. CIV. P. 12(d). A “factual attack” creates a circumstance paralleling those
specifically addressed in Rule 12(d). Therefore, courts draw from Rule 56 in this
circumstance as well.
9

Rollins may appear to be an exception to this rule. However, in Rollins,
the plaintiff did not dispute the defendant’s calculations. Therefore, the offer of
judgment conclusively provided full relief, depriving the court of jurisdiction. Rollins,
2006 WL 3486781, at *2-3, *5.
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4. Compensation for Wait and Travel Time Under the FLSA
Whether employees use idle time for their benefit or the employer’s benefit
determines if such time is compensable under the FLSA. Mireles v. Frio Foods, Inc.,
899 F.2d 1407, 1411 (5th Cir. 1990). “If the idle time is spent predominantly for
the benefit of the employer, the employee is said to be ‘engaged to be waiting’ and is
entitled to compensation.” Id. (internal quotations and citation omitted). For
example, “[w]aiting benefits the employer when it is requested or required by the
employer.” Vega v. Gasper, 36 F.3d 417, 425 (5th Cir. 1994). “On the other hand, if
the time primarily benefits the employee, the employee is ‘waiting to be engaged’ and
is entitled to compensation only for that time spent in productive work.” Mireles, 899
F.2d at 1411 (internal quotations and citation committed).
With respect to travel time, “employees are entitled to compensation for travel
time that is a principal activity of the employee.” Vega, 36 F.3d at 424. “Principal
activities” are those “performed as part of the regular work of the employees in the
ordinary course of business. . . . [the] work is necessary to the business and is
performed by the employees, primarily for the benefit of the employer.” Id. (quoting
Dunlop v. City Electric, Inc., 527 F.2d 394, 401 (5th Cir. 1976)). The Portal-to-Portal
Act declared that home-to-work travel is generally not a “principal activity” and thus
not compensable. See 29 U.S.C. § 254.

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While most applications of the home-to-work travel rule are straight forward,
employer-operated transportation systems require courts to undertake detailed factspecific inquiries. In Vega, the defendant used a bus to transport farm workers up to
two-and-a-half hours to harvest crops. 36 F.3d at 423. The Fifth Circuit concluded
that the farm workers’ travel time was not compensable because, among other things,
they did not load tools onto the bus, they did not perform any work on the bus, and
the transport system was not mandatory (i.e., employees could commute directly to
the work location). 36 F.3d at 425.
Regarding the last of these factors, the Fifth Circuit has rejected the argument
that the mandatory character of a “transportation scheme per se renders such travel
time compensable under the FLSA.” Griffin v. S&B Engineers & Constructors, Limited,
507 Fed. App’x 377, 382 (5th Cir.), cert. denied,

U.S.

, 134 S.Ct. 111 (2013).

In Griffin, the employees experienced a six-to-seven mile mandatory commute on
employer-owned buses from a parking lot to the nearby plant. Id. at 378. Employees
could engage in personal activities and performed no work related-activities while on
the buses. Id. at 383. Based on these facts, the Fifth Circuit concluded that such
travel time was not compensable. Id. Together these cases indicate that no single
factor is “dispositive in concluding [that] travel time [is] noncompensable;” rather,
courts in the Fifth Circuit always “discuss[ ] several factors” before reaching a
conclusion. Id.

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B. Application of Law to Fact
1. The Court Will Analyze the Waiver Defense Under Rule 12(b)(6)
The defendants asserted their Section 216(c) waiver defense through a Rule
12(b)(1) motion. ACT’s Brief at 1. As discussed above, a Rule 12(b)(6) motion is
the proper tool for raising the waiver defense. See Min Fu, 2013 WL 5970167, at *4.
Despite this procedural miscue, the court will assess the waiver defense as if the
defendants had properly raised it through a Rule 12(b)(6) motion. Lopez-Santiago v.
Coconut Thai Grill, Civil Action No. 3:13-CV-4268-D, 2014 WL 840052, at *3 n.4
(N.D. Tex. Mar. 4, 2014) (Fitzwater, C.J.) (“Districts courts can in their discretion
treat a Rule 12(b)(1) motion as a Rule 12(b)(6) motion and analyze it under the Rule
12(b)(6) standard.”) (citing Peckmann v. Thompson, 966 F.2d 295, 297 (7th Cir.
1992)).
2. The Defendants Fail to Establish that the
Relevant Plaintiffs Waived Their Claims
The defendants provided the court with both a Form WH-56 listing the wages
the DOL determined owed to the relevant employees (i.e., Lucia Flores, Daniel
Moreno, Abel Moreno, and Gloria Torres) and checks cashed by those employees.
ACT’s Appendix, exhibits A-11 -- A-15, at 31-37. These documents demonstrate the
DOL’s involvement with the settlement process and the employees’ receipt of full
payment. See id. However, the defendants fail to provide the court with any
documents indicating the employees’ agreement to waive their claims.
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The court has no indication that the employees were on notice that by cashing
the checks they waived their claims, let alone that they affirmatively “manifest[ed]
assent by signing a receipt (either the standard WH-58 or another form authorized by
the DOL) . . ..” Dent, 502 F.3d at 1147. The memo line of the cashed checks
includes the phrase, “FLSA settlement 1674494, 1/23/2011 -- 1/27/2013.” ACT’s
Appendix, exhibits A-12 -- A-15, at 34-37. This phrase fails to explicitly inform
employees that by cashing their checks they waive any claims. Deeming this
inconspicuous and ambiguous phrase adequate notice would encourage employers to
forgo providing WH-58 forms when settling FLSA claims. Without any evidence
indicating the plaintiffs’ agreement, the court must deny both the defendants’ Rule
12(b)(6) motions and their motions for partial summary judgment.
3. The Offers of Judgment Fail to Moot the Relevant Claims
The parties dispute whether the offers of judgment should include
compensation for travel and wait time. According to the plaintiffs, they were
“required to show up and would show up at a designated meeting area at least one
(1) hour before being taken to the event by an ACT vehicle” and should be “paid for
the time waiting to leave for the event at the designated wait area” and for their travel
time. Appendix in Support of Plaintiffs’ Motions, exhibits B-L, at 9-89 (docket entry
44); see also Plaintiffs’ Response to ACT at 5-6. In contrast, the defendants contend
that the FLSA does not cover the relevant travel and wait time because the provided

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transportation was “[f]or the convenience of the workers” and “workers [were] not
required to use the method of transportation provided by ACT, but [were] made
aware of the option.” Appendix in Support of ACT’s Reply, exhibit A, at 1 (docket
entry 51).
At this stage of the litigation, the characterization of the travel and wait time -the primary dispute between the parties -- is an issue “of fact . . . central both to
subject matter jurisdiction and the claim on the merits.” Montez, 392 F.3d at 150.
To provide a “greater level of protection to the plaintiff[s] who in truth [are] facing a
challenge to the validity of [their] claim[s],” the defendants should raise this
challenge through a Rule 56 motion. Id. (quoting Williamson, 645 F.2d at 415).
Additionally, if the defendants made a Rule 56 motion with respect to the
claims covered by the offers of judgment, at the present moment, the court would
defer consideration of the motion until additional discovery had taken place. See
FED. R. CIV. P. 56(d). The timesheets alone are unlikely to demonstrate the
defendants’ alleged failure to compensate travel and wait time. Rather, the plaintiffs
must have an opportunity to “take depositions, including the depositions of
Corporate Representatives for ACT Event Services or Final Touch Cleaning Services,
Inc.[,]” before the court will consider ruling on a summary judgment motion.
Plaintiffs’ Response to Act at 2. Therefore, despite denying the defendants’ summary
judgment motions, the court nonetheless grants the plaintiffs’ Rule 56(d) motions.

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III. CONCLUSION
For the reasons discussed above, the defendants’ motions to dismiss and
motions for partial summary judgment are DENIED and the plaintiffs’ Rule 56(d)
motions are GRANTED. Furthermore, as mentioned in footnote two, the court
DIRECTS the plaintiffs, if they intend to pursue their claims against the estate of
Gaona, to substitute the representative of Gaona’s estate for the deceased Gaona by
March 6, 2015.
SO ORDERED.

February 11, 2015.

___________________________________
A. JOE FISH
Senior United States District Judge

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