Faludi v. US Shale Solutions LLC

Filing 34

MEMORANDUM OPINION AND ORDER granting in part and denying in part 14 MOTION for Summary Judgment, denying 18 MOTION for Leave to File Amended Complaint, denying 19 MOTION for Partial Summary Judgment (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)

United States District Court
Southern District of Texas

ENTERED
November 30, 2017

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

JEFF FALUDI

David J. Bradley, Clerk

§
§
§
§

I

Plaintiff,
v.

§
§
§
§
§

US SHALE SOLUTIONS LLC,
Defendant.

CIVIL ACTION NO. H-16-3467

MEMORANDUM OPINION AND ORDER

Plaintiff Jeff Faludi ("Faludi" or "Plaintiff") brought this
action against defendant US Shale Solutions LLC
"Defendant")

asserting

claims

for

violation

provisions of the Fair Labor Standards Act

of

("US Shale" or
the

overtime

( "FLSA") . 1

Pending

before the court are Plaintiff's Motion for Leave to Amend His
Complaint

("Plaintiff's Motion to Amend")

(Docket Entry No. 18) ,

Defendant's Motion for Summary Judgment ("Defendant's MSJ") (Docket
Entry No. 14), and Plaintiff's Motion for Partial Summary Judgment
("Plaintiff's MPSJ")

(Docket Entry No. 19).

For the reasons stated

below, Plaintiff's Motion to Amend and Motion for Summary Judgment
will be denied, and Defendant's Motion for Summary Judgment will be
granted in part and denied in part.

1

See Plaintiff's
Entry No. 1.

Original

Complaint

("Complaint") ,

Docket

I.
A.

Factual and Procedural Background

Factual Background

Plaintiff Jeffrey Faludi received a Doctor of Jurisprudence
in 1998. 2

After he graduated from law school, Faludi worked as an

attorney for several years as an associate and partner at a law
firm, and then as in-house counsel for oil and gas companies such
as Willbros International. 3

Though Faludi was licensed to practice

in Texas and Louisiana, his law licenses were suspended by August
of 2014. 4

US Shale was established in August of 2014 in Houston,

Texas, to provide strategic solutions to the oil and gas industry. 5
Faludi and the CEO of US Shale, Jerrit Coward, were colleagues at
Willbros International. 6

In August of 2014 US Shale became the

parent company of four subsidiaries that provide site planning,
construction, and maintenance support operations. 7

Jerrit Coward

2

See Faludi CV, Exhibit B-3 to Defendant's MSJ, Docket Entry
No. 14-3, pp. 83-90.
Page citations throughout this Memorandum
Opinion and Order are to the pagination imprinted by the federal
court's electronic filing system at the top and right of the
document.
3

Id.

4

See Oral and Videotaped Deposition of Jeff Faludi ("Faludi
Deposition"), Exhibit B to Defendant's MSJ, Docket Entry No. 14-3,
p. 4 line 16 - p. 5 line 5.
5

See Declaration of Joseph Rozelle ("Rozelle Declaration") ,
Exhibit C to Defendant's MSJ, Docket Entry No. 14-4.
6

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 21 line 22 - p. 22 line 7.
7

See Rozelle Declaration, Exhibit C to Defendant's MSJ, Docket
Entry No. 14-4.
-2-

offered Faludi a consulting position to help US Shale integrate its
health and risk benefits between US Shale and the four companies it
had purchased. 8
contract

Faludi agreed to work at US Shale and signed a

entitled the

Services Agreement

Independent

Contractor Master Consulting

(the "Agreement")

on November 6,

2014. 9

The

Agreement stated that Faludi "has been engaged to provide services
to

US

Shale

benefits." 10

Solutions,

Inc.,

in

helping

it

obtain

employee

The Agreement also stated that US Shale would pay

Faludi $1,000 for each day he performed services in Houston and
$1,350 for each day he performed services outside of Houston. 11

US

Shale provided Faludi with an office and reimbursed him for his
computer,

cell phone,

and work-related travel

expenses. 12

The

Agreement required Faludi to provide US Shale with invoices that
identified

the

hours

or days

he

performed

services. 13

Faludi

8

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 22 lines 7-21.
9

See id. at 23 line 6 - 24 line 20; Independent Contractor
Master Consulting Services Agreement ("Agreement"), Exhibit B-4 to
Defendant's MSJ, Docket Entry No. 14-3, pp. 92-105.
10

See Agreement, Exhibit B-4 to Defendant's MSJ, Docket Entry
No. 14-3, p. 104 (US SHALE 000013).
llid.
12

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 51 lines 12-16; Agreement, Exhibit B-4 tc
Defendant's MSJ, Docket Entry No. 14-3, p. 105 (US SHALE 000014).
13

See Agreement, Exhibit B-4 to Defendant's MSJ, Docket Entry
No. 14-3, p. 104 (US SHALE 000013).
-3-

usually worked in the office five days a week and testified that it
would be unusual if he were absent . 14

Faludi submitted the required

invoices --many of which listed amounts less than $1,000 per day
depending on the amount of time Faludi worked that day. 15
performed

various

services

corporate development,

for

US

IT management,

Shale,

including

Faludi
work

on

administrative and human

resource matters, and legal analyses of contracts and settlement
negotiations. 16

Faludi represented himself as "General Counsel" of

US Shale "multiple times. " 17

Faludi' s annualized compensation was

approximately $260,000 during his engagement with US Shale. 18
January of 2016 Versa Capital Management,

LLC

("Versa Capital")

began providing management services to US Shale. 19
of 2016 a

In

In early March

representative of Versa Capital spoke with Faludi to

discuss the possibility of US Shale offering Faludi an executive

14

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 8 lines 7-10.
15

See id. at 43 line 9
44 line 11 and 45 lines 3-19;
Invoices, Exhibit A-2 to Faludi Declaration, Docket Entry No. 19-1,
pp. 28-52.
16

See Declaration of Jeffrey E. ("Jeff") Faludi, Jr. ( "Faludi
Declaration"), Exhibit A to Plaintiff's MPSJ, pp. 1-3 ' ' 7, 14;
Exhibits B-17 through B-21 and D-1 through D-9 to Defendant's MSJ,
Docket Entry Nos. 14-3 and 14-5.
17

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 70 lines 9-14.
18

Id. at 33 lines 13-21.

19

See Rozelle Declaration, Exhibit C to Defendant's MSJ, Docket
Entry No. 14-4.
-4-

position, but US Shale decided not to do so. 2 °

Faludi's relation-

ship with US Shale ended on March 31, 2016. 21
B.

Procedural History

Faludi filed a Complaint seeking damages for unpaid overtime
wages pursuant to the FLSA. 22
several

affirmative

In its answer US Shale asserted
including

defenses,

that

Faludi

was

an

independent contractor, not an employee, and that if Faludi were an
employee he was paid on a

salary basis and qualified as a

law

professional or highly-compensated employee exempt from the FLSA
overtime pay requirements. 23
against
Texas,

us
for

On January 31, 2017, Faludi filed suit

Shale in the 334th District Court of Harris County,
breach

of

contract

and

tortious interference with contract.
filed

their

Original

Answer,

against

Versa

Capital

for

US Shale and Versa Capital
Affirmative

Defenses,

and

Counterclaims in state court on March 13, 2017.
US Shale filed its Motion for Summary Judgment in this court
on September 6, 2017. 24

Two days later Faludi filed his Motion to

20

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14, pp. 125:19-127:3, 129:1-21, 134:16-19.
21

See Declaration, Exhibit A to Plaintiff's MPSJ, p. 12,

22

See Complaint, Docket Entry No. 1, pp. 1, 4-5.

23

~52.

See Defendant's Answer and Affirmative Defenses ("Answer") ,
Docket Entry No. 4. at 6-7.
24

Defendant's MSJ, Docket Entry No. 14.
-5-

Amend and his Motion for Partial Summary Judgment.

US Shale filed

a Response in Opposition to Plaintiff's Motion for Leave to Amend
His Complaint. 25

Both parties filed responses in opposition to the

other party's summary judgment motions. 26
II.

Plaintiff's Motion for Leave to Amend

Plaintiff seeks leave to add a claim against us Shale for
retaliation under the FLSA because US Shale filed counterclaims
against him in state court. 27

Defendant urges the court to deny

Plaintiff's Motion to Amend because of
delay,

the

futility of

the amendment,

Plaintiff's unjustified
and the undue prejudice

Defendant would suffer if the Motion to Amend is granted. 28
A.

Standard of Review

If a scheduling order has been entered establishing a deadline
for amendments to pleadings, Federal Rule of Civil Procedure 15(a)
provides the standard for requests to amend that are filed before

25

Docket Entry No. 22.

26

See Plaintiff's Response to Defendant's Motion for Summary
Judgment, Docket Entry No. 20; Defendant's Response to Plaintiff's
Motion for Partial Summary Judgment ("Defendant's Response") ,
Docket Entry No. 21.
27

See Defendants Versa Capital Management, LLC's and US Shale
Solutions,
LLC's Original Answer, Affirmative Defenses,
and
Counterclaims, Defendants' Exhibit A to Plaintiff's Motion to
Amend, Docket Entry No. 18-1, pp. 12-23.
28

See Defendant's Amended Response in Opposition to Plaintiff's
Motion for Leave to Amend His Complaint, Docket Entry No. 23, p. 1.
-6-

the scheduling order's deadline has expired, and Federal Rule of
Civil Procedure 16(b) provides the standard for requests to amend
that are filed after the scheduling order's deadline has expired.
Marathon Financial Insurance, Inc., RRG v. Ford Motor Co., 591 F.3d
458, 470 (5th Cir. 2009); Fahim v. Marriott Hotel Services, Inc.,
551 F.3d 344, 348 (5th Cir. 2008).
Plaintiff filed his Complaint on November 22,
Entry No.

1);

US

(Docket Entry No.
scheduling

(Docket

Shale

filed

4) .

The court held an initial pretrial and

conference

Control Order

2016

its Answer on December 23,

on March

3,

(Docket Entry No.

2017,

11).

and

entered a

2016

Docket

The Docket Control Order

contained the notation "None" on the lines provided for deadlines
to file motions to amend the pleadings and motions to add new
parties.

The

court

wrote

"None"

because

Plaintiff's

counsel

indicated at the pretrial conference that he would need no further
amendments or additions to the pleadings.

See Breaux v. Tri Star

Freight Systems, Inc., Civil Action No. H-16-846, 2016 WL 6581929,
at *2 (S.D. Tex. November 7, 2016)

("The 'N/A' notation next to the

amendment deadlines on the Scheduling Order indicates that, at the
Rule 16 conference, the parties indicated that they would not need
to amend their pleadings,
pleadings

at

Nevertheless,
September

8,

any

time

Plaintiff
2017.

The

not that the parties may amend their
without

filed

seeking

the

court

pending

leave

Motion

can understand how

-7-

do

to
to

so.") .

Amend

on

Plaintiff's

counsel would be confused by the entry of "None" and could conclude
that

the

amended

court meant

that

Neither

pleadings.

Defendant's

responses
Instead,

standard.

there

consider under Rule

to

it

were

Plaintiff's
addressed

each analyzed the
Because

15.

no deadlines
Motion

the

for

to

Amend

applicable

factors

filing

Rule

nor
16

the court would

neither party addressed

the

requirements under Rule 16 and because of the confusion caused by
the "None" entry on the Docket Control Order, the court will apply
the more liberal Rule 15 standard.
B.

Analysis

Federal Rule of Civil Procedure 15(a) allows a party to amend
its pleading once as

a

matter of

course within 21 days

after

serving it or within 21 days after service of a responsive pleading
or service of Rule 12 (b),
15(a) (1) (A) and (B)

(e), or (f) motions.

Fed. R. Civ. P.

In all other cases Rule 15(a) requires the

opposing party's written consent or leave of the court and states,
"[t]he court should freely give leave when justice so requires."
Id. at (2).

Rule 15(a) provides "a strong presumption in favor of

granting leave to amend."

Financial Acquisition Partners LP v.

Blackwell, 440 F.3d 278, 291 (5th Cir. 2006).

"A decision to grant

leave is within the discretion of the court, although if the court
'lacks a "substantial reason" to deny leave, its discretion "is not
broad enough to permit denial."'"
Mortgage

Co.,

50

F.3d 1298,

State of Louisiana v. Litton

1302-03
-8-

(5th

Cir.

1995)

(quoting

Jamieson By and Through Jamieson v. Shaw, 772 F.2d 1205, 1208 (5th
The Supreme Court has identified five factors to

Cir. 1985)).
consider

in

complaint:

determining
(1)

whether

undue delay,

(2)

to

grant

leave

to

amend

a

bad faith or dilatory motive,

(3) repeated failure to cure deficiencies by previous amendments,
(4) undue prejudice to the opposing party, and (5) futility of the
amendment.

United States ex rel. Steury v. Cardinal Health, Inc.,

625 F.3d 262, 270 (5th Cir. 2010)

(citing Foman v. Davis, 83 S. Ct.

2271 230 (1962)) •
1.

Delay

Rule 15(a) contains no time limit for permissive amendment but
"' [a]t some point[,] time delay on the part of a plaintiff can be
procedurally fatal.'"
831,

836

199, 203

(5th Cir.

Whitaker v. City of Houston, Texas, 963 F.2d

1992)

(5th Cir. 1981).

(quoting Gregory v. Mitchell,

634 F.2d

"In that situation the plaintiff must

meet the burden of showing that the delay was due to oversight,
inadvertence, or excusable neglect, a burden which properly shifts
to the party seeking to amend where apparent lack of diligence
exists."

Gregory, 634 F.2d at 203

(internal citations omitted).

Where, as here, the defendant has moved for summary judgment
before the plaintiff moves for leave to amend, the Fifth Circuit is
hesitant to approve an amendment.
United States,
the

See Overseas Inns S.A. P.A. v.

911 F.2d 1146, 1151 (5th Cir. 1990).

Fifth Circuit affirmed the district
-9-

In Overseas

court's denial of

the

motion to amend,

reasoning that since the defendant had already

filed for summary judgment based on the current pleadings,
grant

[the plaintiff]

"[t]o

leave to amend is potentially to undermine

the [defendant's] right to prevail on a motion that necessarily was
prepared

without

reference

to

an

unanticipated

amended

. A party should not, without adequate grounds, be

complaint.

permitted to avoid summary judgment by the expedient of amending
its complaint"

Id.

The court further noted that one year before

the plaintiff filed its motion to amend,
summary judgment.

Id.

the plaintiff moved for

"Accordingly, that motion represented 'that

the case was fully at issue, that all theories of liability and all
defenses had been presented, and that the case was ripe for summary
judgment."'

Id.

quoting Pharo v. Smith,

621 F.2d 656,

664

(5th

Cir), reh'g granted cause remanded on other grounds, 625 F.2d 1226
(1980).
Although Faludi filed his Motion for Summary Judgment on the
same day as his Motion to Amend, the same principles apply.

Faludi

did not move to amend his Complaint until after Defendant filed its
Motion for Summary Judgment and nearly six months after Defendant
filed its state-court counterclaim.

Plaintiff offers no explana-

tion for this delay.
2.

Futility
(a)

Applicable Law

"[L]eave to amend need not be granted when it would be futile
to do so."

F.D.I.C. v. Conner, 20 F.3d 1376, 1385 (5th Cir. 1994)
-10-

(citation omitted) .
survive

a

Rule

"An amendment is futile if it would fail to

12 (b) ( 6)

motion."

National Collegiate Athletic Ass'n,
2014).
'the

Marucci

Sports,

751 F.3d 368,

378

L.L.C.

v.

(5th Cir.

"Therefore, we review the proposed amended complaint under
same

standard

Rule 12(b) (6) .'"

Id.

of

legal

sufficiency

as

applies

under

(quoting Stripling v. Jordan Production Co.,

LLC, 234 F.3d 863, 873 (5th Cir. 2000).
A motion

to

Procedure 12(b) (6)

dismiss

pursuant

to

Federal

Rule

of

Civil

for failure to state a claim for which relief

may be granted tests the formal sufficiency of the pleadings and is
"appropriate when a defendant attacks the complaint because it fails
to state a legally cognizable claim."
F.3d 158,

161

(5th Cir.

2001),

Ramming v. United States, 2 81

cert.

United States, 122 S. Ct. 2665 (2002).

denied sub nom Cloud v.
The court must accept the

factual allegations of the complaint as true, view them in a light
most favorable to the plaintiff, and draw all reasonable inferences
in the plaintiff's favor.

Id.

"When a federal court reviews the sufficiency of a
complaint, before the reception of any evidence either by
affidavit or admissions, its task is necessarily a
limited one.
The issue is not whether a plaintiff will
ultimately prevail but whether the claimant is entitled
to offer evidence to support the claims."
Swierkiewicz v. Sorema N.A.,
Scheuer

v.

Rhodes,

94

S.

122 S. Ct.
Ct.

1683,

992,
1686

997

(2002)

(1974)).

(quoting
To

avoid

dismissal a plaintiff must allege "enough facts to state a claim to
relief that is plausible on its face."
-11-

Bell Atlantic Corp.

v.

Twombly,

127

standard"

S.

Ct.

requires

1955,
"more

1974
than

an

unlawfully-harmed-me accusation."
1937,

1949

(2009) .

"Where a

This

(2007).

"plausibility
the-defendant-

unadorned,

Ashcroft v.

Iqbal, 129 S. Ct.

complaint pleads

facts

that are

'merely consistent with' a defendant's liability, it 'stops short
of the line between possibility and plausibility of "entitlement to
relief."'"

Id.

considering

a

(quoting Twombly,

motion

to

dismiss

127 S.

Ct.

district

at

1966).

courts

are

When

able

to

consider documents that are attached to a motion to dismiss if they
are "referred to in the plaintiff's complaint and are central to
the plaintiff's claim."
533,

536

(5th Cir.

Scanlan v. Texas A&M University, 343 F.3d

2003)

(citing Collins v. Morgan Stanley Dean

Witter, 224 F.3d 496, 498-99 (5th Cir. 2000)).
(b)

Analysis

To establish a prima facie case for a Title VII retaliation
claim Faludi must
activity,
(iii)

(ii)

show that:

an

adverse

" ( i)

he

employment

engaged in a
action

protected

occurred,

and

there was a causal link between the protected activity and

the adverse employment action."
Inc., 670 F.3d 644, 657
Parcel Service,

Inc.,

Hernandez v. Yellow Transportation,

(5th Cir. 2012)

554 F. 3d 510,

523

(citing Taylor v. United
(5th Cir.

2008)).

An

employment action is "materially adverse" if "it well might have
dissuaded a reasonable worker from making or supporting a charge of
discrimination."

Burlington Northern and Santa Fe Railway Co. v.
-12-

White,

s. Ct. 2405, 2415

126

(2006)

(internal quotation marks

omitted) .
Faludi
response

alleges

to

a

retaliation. " 29

that

FLSA

"[t] he

lawsuit

Although the

filing
is

[]

forms

expanded beyond merely hiring,

Fifth,

have

held

that

firing,

an

a

counter-claim

clearly

actionable

in
as

of actionable conduct have

reassignment after Burlington Northern,
the

of

failing to promote,
some circuits,

employer's

and

including

post-termination

counterclaim is not actionable as retaliation under Title VII.
Hernandez v. Crawford Building Material Co., 321 F.3d 528, 529 (5th
Cir. 2003).
In Hernandez the plaintiff sued his employer under Title VII,
and his employer brought a counterclaim for theft in its original
answer.

Id. at 529.

complaint

to

The plaintiff then supplemented his original

allege

that

the

employer's

counterclaim

retaliatory employment action under Title VII.

Id.

was

a

The Fifth

Circuit recognized that other circuits have allowed a counterclaim
to support a retaliation lawsuit, but that "companies and citizens
have a

constitutional right to file

lawsuits,

tempered by the

requirement that the suits have an arguable basis."

Id. at 532

(quoting Scrivner v. Socorro Indep. Sch. Dist., 169 F.3d 969, 972
(5th Cir. 1999) (internal quotations omitted) .
given

its

29

strict

interpretation

of

The court held that

retaliation

claims

"an

See Plaintiff's Motion to Amend, Docket Entry No. 18, p. 3.
-13-

employer's filing of a counterclaim cannot support a retaliation
claim in the Fifth Circuit."

Id. at 532-33.

After Hernandez the Supreme Court broadened the standard for
retaliation claims.
But

neither

specifically

the

See Burlington Northern, 126 S. Ct. at 2415.
Fifth

Circuit

addressed

whether

nor

Supreme

new

the

the

standard

Court

has

allows

counterclaim to support a retaliation claim under Title VII.

a

This

court recently held that Hernandez still applies in this circuit.
See Madrigal v.
WL

4611287,

Kleberg County,

*5-6

(S.D.

Tex.

Civil Action No.

Sept.

06,

2016)

2:15-345,

2016

(explaining

that

"[b]ecause cases considering the question have treated Burlington
Northern as
holding,

undermining Hernandez's

rationale

rather

than

its

Hernandez's holding that filing a counterclaim is

not an adverse employment action remains precedent this Court is
bound to follow.").
Because a counterclaim cannot otherwise

support a retaliation

claim, Plaintiff has not pled facts sufficient to support a claim
for retaliation against US Shale.

Plaintiff's proposed amendment

would therefore be futile.
3.

Prejudice

The addition of a new claim for relief at this late date nearly ten months after the Complaint was filed - would needlessly
extend the litigation and cause the defendants additional expense.
Absent any reasonable explanation from Plaintiff for the cause of
his delay or any reasonable basis for the court to conclude that
-14-

the proposed new retaliation claim would not be futile, the court
concludes

that

allowing

the proposed amendment

would not

only

require the court to abandon long-established deadlines, but would
also delay the trial and prejudice the defendant.
4.

Conclusion

Because of Plaintiff's delay,
amendment,

and

the

undue

the futility of the proposed

prejudice

it

would

cause

Defendant,

Plaintiff's Motion to Amend His Complaint will be denied. 30
III.

Motions for Summary Judgment

Faludi argues that he was a non-exempt employee under the FLSA
as a matter of law and that US Shale violated the FLSA by failing
to

pay

him

overtime. 31

us

Shale

argues

that

Faludi

was

an

independent contractor not subject to the FLSA, or otherwise was an
exempt employee under the FLSA. 32

Faludi and US Shale have both

moved for summary judgment.
A.

Standard of Review

Summary judgment is warranted if the movant establishes that
there is no genuine dispute as to any material fact and that it is
entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a).

30

Even assuming arguendo the Defendant's state court counterclaim could support Plaintiff's retaliation claim, the court would
deny the Motion to Amend because of the Plaintiff's delay and the
prejudice to Defendant of allowing an amendment at this late date.
31

See Complaint, Docket Entry No. 1.

32

See Defendant's MSJ, Docket Entry No. 14.
-15-

An

examination

material.
(1986).

of

substantive

law

determines

to a

facts

are

Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2510
Material facts are those facts that

outcome of the suit under the governing law."
as

which

material

fact

exists

if

the

"might affect the

Id.

A genuine issue

evidence

is

such that

a

reasonable trier of fact could resolve the dispute in the nonmoving
party's favor.

Id. at 2511.

Where, as here, both parties have moved for summary judgment,
both "motions must be considered separately, as each movant bears
the burden of establishing that no genuine issue of material fact
exists and that it is entitled to judgment as a matter of law."
Shaw Constructors v.

ICF Kaiser Engineers,

538-39 (5th Cir. 2004).

Inc.,

395 F. 3d 533,

The movant must inform the court of the

basis for summary judgment and identify relevant excerpts

from

pleadings, depositions, answers to interrogatories, admissions, or
affidavits

that

demonstrate

there

are

no

genuine

Celotex Corp. v. Catrett, 106 S. Ct. 2548, 2553

fact

issues.

(1986); see also

Wallace v. Texas Tech Univ., 80 F.3d 1042, 1046-47 (5th Cir. 1996).
If a

defendant moves

affirmative defense,

for

summary

judgment on the basis of an

"it must establish beyond dispute all of the

defense's essential elements."

Bank of Louisiana v. Aetna U.S.

Healthcare Inc., 468 F.3d 237, 241

(5th Cir. 2006).

A defendant

may also meet its initial burden by pointing out that the plaintiff
has failed to make a showing adequate to establish the existence of
an issue of material fact as to an essential element of plaintiff's
-16-

case.

Celotex Corp., 106 S. Ct. at 2552.

its initial burden,
show

by

affidavits,

If the movant satisfies

the burden shifts to the nonmoving party to
depositions,

answers

to

interrogatories,

admissions on file, or other evidence that summary judgment is not
Celotex Corp., 106

warranted because genuine fact issues exist.
S. Ct. at 2552.

In reviewing the evidence "the court must draw all reasonable
inferences in favor of the nonmoving party,
credibility determinations

or weigh the

Sanderson Plumbing Products,

and it may not make

evidence."

Reeves

Inc., 120 S. Ct. 2097, 2110

v.

(2000).

But conclusory claims, unsubstantiated assertions, or insufficient
evidence will not satisfy the nonmovant' s burden.
at 1047.

If the nonmovant fails

to present specific evidence

showing there is a genuine issue for trial,
appropriate.

Topalian v.

Ehrman,

Wallace, 8 0 F. 3d

summary judgment is

954 F.2d 1125,

1132

(5th Cir.

1992) .
B.

Analysis

The FLSA establishes a general rule that employers must pay
overtime wages

to employees who work in excess of forty hours

during a seven-day workweek.
659,

666

(5th

Cir.

2001)

See Vela v. City of Houston, 276 F.3d
(citing

29

U.S.C.

§

207 (a) (1)).

A

plaintiff alleging a violation of the overtime requirement bears
the burden of proving by a preponderance of

the evidence that

(1) he was in an employment relationship with the defendant,
-17-

(2) he

was engaged in activities within the coverage of the FLSA,
worked

over

forty

hours

within

a

workweek

without

(3) he

overtime

compensation, and (4) he is owed a definite amount of compensation.
29

U.S.C.

§

207(a) (1);

Zermeno v.

Cantu,

No.

H-10-1792,

2011

WL 2532904, at *2 (S.D. Tex. June 24, 2011).
1.

Employee or Independent Contractor

Under the

FLSA

"the

term

employed by an employer."

'employee'

u.s.c.

29

§

means

any

individual

To determine

203 (e) (1).

whether a worker qualifies as an employee under the FLSA the court
asks whether,

as

a

matter of

economic

reality,

the worker

is

economically dependent on the alleged employer or is instead in
business for himself.

Hopkins v.

338, 343 (5th Cir. 2008).
exhaustive factors:

Cornerstone America,

545 F.3d

The court considers the following non-

(1)

the degree of control exercised by the

alleged employer; (2) the extent of the relative investments of the
worker and the
worker's
alleged

alleged employer;

opportunity
employer;

for

(4)

performing the job; and

profit

the
(5)

( 3)
or

skill

the

loss
and

degree
is

to which the

determined by

initiative

required

the
in

the permanency of the relationship.

Thibault v. Bellsouth Telecommunications, Inc., 612 F.3d 843, 846
(5th Cir. 2010); Hopkins, 545 F.3d at 343.
determinative
economic

dependence

each factor
of

the

is

alleged

a

tool

"No single factor is
used to gauge

employee

[on

the

the

alleged

employer] , and each must be applied with this ultimate concept in
mind."

Hopkins, 545 F.3d at 343 (citations omitted)
-18-

(emphasis in

original) .

The

contractual

designation

of

the

worker

independent contractor is not necessarily controlling.
612

as

an

Thibault,

The ultimate determination of whether an

F.3d at 845-46.

individual is an employee within the meaning of the FLSA is a
question of law.

Brock v. Mr. W Fireworks, Inc., 814 F.2d 1042,

1045 (5th Cir. 1987).
Defendant

does

not

dispute

that

Plaintiff

was

not

paid

overtime compensation or that he was engaged in activities within
the coverage of the FLSA, but instead argues that Plaintiff was an
independent contractor based on facts supporting all five factors.
Defendant argues that it did not control the manner in which and
method by which Plaintiff provided services because Faludi worked
independently

and

managed

his

own

workload

schedule. 33

and

Defendant cites an email from US Shale's Chief Financial Officer
and Treasurer to Faludi that lists tasks and writes,
accept

these

missions

let

me

know. " 34

Defendant

"[i]f you

argues

that

Plaintiff controlled his opportunity for profit and loss because he
could

choose

to

accept

projects 35

and

that

Plaintiff

made

33

See Defendant's MSJ, Docket Entry No. 14, p. 15 (citing
Faludi Deposition, Exhibit B to Defendant's MSJ, Docket Entry
No. 14-3, p. 36 line 11 - p. 37 line 13 and p. 40 line 12 - p. 41
line14).
34

See Email, Exhibit B-5
No. 14-3, p. 107.

to Defendant's MSJ,

35

Docket Entry

See Defendant's MSJ, Docket Entry No. 14, p. 16 (citing
Faludi Deposition, Exhibit B to Defendant's MSJ, Docket Entry
No. 14-3, p. 36 line 11 - p. 37 line 13 and p. 40 line 12 - p. 41
line14).
-19-

investments
computer,

in

his

paying

business

his

own

by

providing

continuing

investing in home office equipment. 36

his

own

education

phone

and

expenses,

and

As to the fourth factor,

Defendant argues it gave Faludi certain projects, such as analyzing
contracts and evaluating litigation exposure, precisely because of
his legal education, experience, and unique skills he could apply
to them. 37

Defendant argues that Faludi's job lacked permanency

because he performed services for US Shale for about a year and a
half and could terminate his employment relationship with 15 days'
notice. 38

Defendant

argues

that

Faludi

was

not

economically

dependent on US Shale because he was able to pursue other business
opportunities while working for US Shale 39 and because he did not
seek work after his engagement with US Shale ended. 40

36

See Defendant's MSJ, Docket Entry No. 14, p. 16 (citing Tax
Records, Exhibit B-22 and B-23 to Defendant's MSJ, Docket Entry
No. 14-3, pp. 161-173).
37

See Defendant's MSJ, Docket Entry No. 14, p. 17 (citing
Exhibits D-1 through D-9 of Declaration of Brad Culberson,
Exhibit D to Defendant's MSJ, Docket Entry No. 14-5, pp. 1-13;
Exhibits B-17 through B-21 to Defendant's MSJ, Docket Entry
No. 14-3, pp. 150-160).
38

See Defendant's MSJ, Docket Entry No. 14, p. 17; Agreement,
Exhibit B-4 to Defendant's MSJ, Docket Entry No. 14-3, p. 94 (US
SHALE 000003).
39

See Defendant's MSJ, Docket Entry No. 14, p. 18 (citing
Faludi Deposition, Exhibit B to Defendant's MSJ, Docket Entry
No. 14-3, p. 18 lines 8-13).
40

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 7 lines 3-22.
-20-

Plaintiff responds that Defendant's MSJ should be denied and
his own MPSJ on the same issue should be granted because the facts
show that Faludi was an employee. 41

Faludi argues that he worked

full-time under US Shale's controlled schedule;

"he went to a US

Shale office daily; he had no opportunity to 'lose' money; he was
provided an office and reimbursed for his computer, cell phone and
work-related travel; and he worked exclusively

for US Shale during

his tenure with no other source of income." 42

He points out that

the Agreement's non-compete clause prohibited him from working for

us

Shale's competitors worldwide. 43
Although Faludi signed the

"Agreement,"

which stated that

"[t]he Consultant shall be an independent contractor

•

I

n44

the

contractual designation of a worker as an independent contractor is
not necessarily controlling.
contract

was

not

reflective

Thibault, 612 F.3d at 845-46.
of

the

true

relationship

If the
and

the

defendant exercised considerable control over the plaintiff,
reasonable
plaintiff

jury
was

could
an

conclude

employee.

that

in

Because

economic
Faludi's

reality

a

the

Declaration,

Plaintiff's MPSJ, Defendant's Exhibits, and Defendant's MSJ raise

41

See Plaintiff's Response to Defendant's Motion for Summary
Judgment, Docket Entry No. 20; Plaintiff's MPSJ, Docket Entry
No. 19.
42

See Plaintiff's MPSJ, Docket Entry No. 19, p. 6.

43Id.

44

See Agreement, Exhibit B-4 to Defendant's MSJ, Docket Entry
No. 14-3, p. 93 (US SHALE 000002).
-21-

genuine issues of material fact with respect to the five factors
the court is to consider in determining whether the plaintiff is an
employee or an independent contractor under the economic reality
analysis, neither party is entitled to summary judgment.
2.

Exemptions Under the FLSA

US Shale argues that even if Faludi were an employee, he was
exempt as a matter of law under the highly-compensated professional
exemption and the practice of law professional exemption. 45

An

employee is entitled to overtime compensation unless the employer
can prove that the employee falls within one of several statutory
exemptions.
2001) .

Vela v. City of Houston, 276 F.3d 659, 666 (5th Cir.

"[T] he ultimate determination of whether an employe [e]

qualifies for an exemption under the FLSA is a question of law."
Singer v. City of Waco, Texas, 324 F.3d 813, 818

(5th Cir. 2003)

(citing Lott v.

Inc.,

Howard Wilson Chrysler-Plymouth,

326, 331 (5th Cir. 2000)).

203 F.3d

"That ultimate determination, however,

relies on many factual determinations that can be resolved by a
jury."

The

inquiry into an employee's exempt

"intensely factbound and case specific."
F.2d 1220,

1226

(5th Cir.

1990).

status

is

Dalheim v. KDFW-TV, 918

Exemptions

from

the

FLSA' s

general rule are narrowly construed against the employer, and the
application of an exemption is an affirmative defense on which the
employer bears the burden of proof.

45

See Allen v.

Coil Tubing

See Defendant's MSJ, Docket Entry No. 14, pp. 18-19.
-22-

Services, L.L.C., 755 F.3d 279, 283 (5th Cir. 2014)

(citing Songer

v. Dillon Resources, Inc., 618 F.3d 467, 471 (5th Cir. 2010)).
Under

the

FLSA

"any

employee

employed

in

a

bona

fide

. (as such

executive, administrative, or professional capacity

terms are defined and delimited from time to time by regulations of
the Secretary

)"

[of Labor]

overtime pay requirements.

are exempt

29 U.S.C.

§

from the

213 (a) (1).

FLSA' s

Some highly-

compensated employees are also exempt from the FLSA requirements.
29 C.F.R

§

541.601.

"Job titles are not determinative.

Rather, it

is the employee's salary and primary duties that determine his or
her qualification as
541.700(a) ."

an exempt

employee.

29

C.F.R.

§§

541.2,

Ferrara v. 4JLJ, LLC, 150 F. Supp. 3d 813, 816 (S.D.

Tex. Jan. 11, 2016) .
(a)

Highly-Compensated Professional Exemption

(i)

Applicable Law

US Shale argues that Faludi's job duties "qualify him as a
highly

compensated

exempt

employee

under

professional or administrative exemptions." 46

either

the

learned

To qualify for the

"highly-compensated employee" exemption the employee must (1) make
at least $100,000 in annual compensation,
least
(2)

$455

per

week

paid

on

a

which must include at

salary

"customarily and regularly perform[]

or

fee

basis,

and

any one or more of the

exempt duties or responsibilities of an executive, administrative

46

Id. at 23.
-23-

or professional
541.601(a),

employee

If

541.601(b) (1);

541.602;

29
see

C.F.R.
also

§§

541.600(a),

Zannikos

v.

Oil

Inspections (U.S.A.), Inc., 605 F. App'x 349, 359 (5th Cir. 2015).
The $100,000 threshold can include commissions and certain bonuses.
See id.

541.601 (b) (1).

§

The $100,000 requirement may be satisfied

if the employee works less than the full year as long as he is paid
a pro rata portion of the $100,000 based on the period of time he
worked.

See id.

§

541.601 (b) (3).

The court concludes that Faludi performed the duties of a
learned professional.

Duties of a learned professional include

work requiring advanced knowledge in a field of science or learning
customarily

acquired

by

a

prolonged

intellectual instruction.

29 C.F.R

Part

Faludi

III (B) (2) (b)

knowledge,
perform

acquired

services

reviewing

below,

through

for

contracts

US
and

541.301(a).

applied his

his

Shale

§

course

education
and

strategic

its

of

specialized

As explained in

specialized

and

experience,

subsidiaries

counseling

legal

on

to

such

other

as

legal

matters.
(ii}
An

Salary-Basis

employee is considered paid on a "salary basis" where the

employee's regular, predetermined pay "is not subject to reduction
because of variations
performed."

29 C.F.R.

in the
§

quality or quantity of

541.602 (a).

the

work

An exempt employee "must

receive the full salary for any week in which the employee performs
-24-

any work without regard to the number of days or hours worked.
Exempt employees need not be paid for any workweek in which they
Id.

perform no work"

An employee's compensation need not be

calculated weekly:
An exempt employee's earnings may be computed on an
hourly, a daily or a shift basis, without losing the
exemption or violating the salary basis requirement, if
the employment arrangement also includes a guarantee of
at least the minimum weekly required amount paid on a
salary basis regardless of the number of hours, days or
shifts worked, and a reasonable relationship exists
between the guaranteed amount and the amount actually
earned. The reasonable relationship test will be met if
the weekly guarantee is roughly equivalent to the
employee's usual earnings at the assigned hourly, daily
or shift rate for the employee's normal scheduled
workweek.
Id.

541.604(b) (emphasis added).

§

apply

"when

employees

are

Although exempt status does not

covered

by

a

policy

that

permits

disciplinary or other deductions in pay 'as a practical matter,'"
Auer v.

Robbins,

117

S.

Ct.

905,

911

(1997),

the

regulations

contain certain exceptions to the prohibition against deductions
from pay.

See id.

§

541.602(b).

For instance, the employer may

make deductions from pay "when an exempt employee is absent from
work for one or more full days for personal reasons, other than
sickness or disability."

Id.

§

541. 602 (b) ( 1) .

An employer who makes improper deductions may also lose the
exemption "if the

facts

demonstrate

that

the employer did not

intend to pay employees on a salary basis."

Id.

§

541.603(a).

This intent is demonstrated if the employer has an "actual practice
of

making

improper

deductions"

or

-25-

"an employment

policy

that

creates a 'significant likelihood' of such deductions."
117

S.

Ct.

at

911.

" [A] n

improper

Id.; Auer,

deduction alone

will

necessarily render an employee non-exempt; intent is key."
v.

Patrick O'connor & Associates,

L.P.,

not

Fraser

2016 WL 4159753,

Civil

Action No. 4:11-03890, at *7 (S.D. Tex. Aug. 4, 2016).
If an employer has a clearly communicated policy that
prohibits the improper pay deductions . . . and includes
a complaint mechanism, reimburses employees for any
improper deductions and makes a good faith commitment to
comply in the future, such employer will not lose the
exemption for any employees unless the employer willfully
violates the policy by continuing to make improper
deductions after receiving employee complaints.
29 C.F.R.

541.603 (d).

§

The Agreement between Faludi and US Shale stated "Company
shall

pay

Consultant

the

following

amounts

while

working

Company on the Project" and provides a table as follows:

for

47

Domestic
Hourly Rate

Houston, TX
Day Rate

Day Rate for
Work Outside
of Houston,
TX.

*Signing
Bonus

**Retention
Bonus

N/A

$1,000USD

$1,350USD

N/A

N/A

The Agreement also required Faludi to provide invoices which "shall
clearly specify the hours or days worked,
and any expenses incurred." 48

the Services provided,

In his Motion for Partial Summary

Judgment Faludi argues that his compensation records show that
47

See Agreement, Exhibit B-4 to Defendant's MSJ, Docket Entry
No. 14-3, p. 104 (US SHALE 000013).
48

Id.

~

4.
-26-

every invoice he submitted to US Shale contains at least one entry
with a daily rate less than $1, 000. 49
explains

why

less

than

$1, 000

for

one

In his deposition Faludi
day would appear on an

invoice:
Q. Okay.
And I see
a day and -- and I
Tuesday, November
there's $500.
Why
1,000?

there's, you know, a thousand dollars
notice that if you look down there at
18th and Wednesday, November 19th
would there be $500,000 -- $500, not

A. You know, just -- that was probably a weekend. Could
have been -- it could have been any day.
Q. Well, it says Tuesday and Wednesday on A. Okay.

Oh, yeah, it sure does.

Right on the side.

Q. Yeah.
A. So in any event, it just means that I did not go to
the office and work a full day.
Okay.
And I -- I didn't notice anything in your
independent contractor agreement about partial days or
anything like that. So where did this come from that you
only submitted a bill for $500 in -- in that day and not
Q.

A. Just me being a nice guy and not billing them for a
full day when I wasn't there but half a day or a quarter
of a day or whatever that day was.
Q. So then,

like, on Thursday, November 11th and then -

A. I wasn't even there, so I didn't bill that day.
Q. Yeah.
So Wednesday, Thursday, and Friday the next
week, no
nothing billed.
So I assume that means you
didn't work those days?
A. That would be correct.

49

See Invoices, Exhibit A-2 to Faludi Declaration, Docket Entry
No. 19-1, pp. 28-52.
-27-

Q. So if you look down there, this is June of 2015.
It
says June 13th, 2015, June 14th, 2015. That's a week
those are weekend days?
A. Yes, sir.
Q. You would apply that same -- if you worked a morning,
you•d put a half a day.
If you worked, you know, into
the afternoon, you'd put 750.
If you worked just a
couple hours or so, then you•d put 250? Is that kind of
what you did?
A. That's what I did, yes, sir; and I -- I tried to
correspond the rates for the cost of the computer. So on
I prorated those along with it.
Q. And you never -- did anybody ever tell you to do that
or did you ever tell anybody how you were doing it or
somebody said, "Well, why did you only put down 750 for
this Friday?" Did -- any discussions on that at all?
A. Nobody ever asked.

No discussions.

50

Faludi argues that because his daily pay was reduced based on the
time he worked and because Defendant knew about and approved of the
reductions, he was not paid on a salary basis. 51

Defendant responds

that "it was Faludi who unilaterally and arbitrarily reduced the
amounts

he

invoiced

US

Shale,

contrary

Independent Contractor Agreement." 52
$1, 000

daily

amount

guaranteed

to

the

terms

of

his

Defendant also argues that the

under

the

Agreement

therefore

50

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 43 line 9 - p. 44 line 11 and p. 45 lines 3-19.
51

See Plaintiff's MPSJ, Docket Entry No. 19, p. 9; Plaintiff's
Reply, Docket Entry No. 25, p. 6; Email and Invoices, Exhibit A-3
(pp. 53-67) and A-4 (pp. 68-70) to Faludi Declaration, Docket Entry
No. 19-1.
52

See Defendant's Response, Docket Entry No. 21, pp. 6, 18.
-28-

"guaranteed Faludi at least $1,000.00 for each week he performed
any services, thus exceeding the $455.00 threshold. " 53

The summary

judgment evidence establishes that US Shale actually paid Faludi at
least the minimum guarantee for every week in which he performed
services despite deductions on the invoices made by Faludi. 54

But

"a claim that an employee actually was paid more than $455 each
week

is

receive

distinct
that

from a

they were

Keen

amount."

showing that

Enterprises,

v.

DXP

guaranteed to
Inc.,

2016

WL 3253895, Civil Action No. 5:15-137-0LG, at *5 (W.D. Tex. June 6,
2016) .
The precise question raised by the
whether

the

exemption as

language
long as

of

29

C.F.R.

§

parties'

541.602(a)

arguments
allowing

the employee's predetermined pay

subject to reduction because of variations in the .

is
the

"is not

. quantity of

the work performed" includes a voluntary reduction by the employee
as opposed to a reduction by the employer.

Neither party has cited

any controlling authority on this issue.

The court concludes that

the

prevent

purpose

of

the

regulation

is

to

employers

from

promising a guaranteed amount of compensation and later reducing
that amount to the detriment of the employee.
is inconsistent with this purpose.
protect

employees

from

an

Plaintiff's argument

The regulation is designed to

employer's

power

to

make

improper

53

See Defendant's MSJ, Docket Entry No. 14, pp. 22-23.

54

See Defendant's Response, Docket Entry No. 21, pp. 17-18.
-29-

deductions, not to give employees the ability to eliminate employer
reliance

on

exemptions

per

the

FLSA

by

reducing

their

own

Even though Faludi reduced his own compensation,

compensation.
$1, 000

to

day

was

guaranteed

if

he

performed the agreed upon services.

showed

up

for

work

and

This satisfies the minimum

guaranteed amount required to be paid on a salary basis.

Because

the court concludes that Faludi was paid on a salary basis and
performed the duties of a learned professional, Defendant's Motion
for Summary Judgment will be granted as to this exemption.
(b)

Practice of Law Professional Exemption

For the professional exemption to apply persons employed in a
professional capacity must satisfy certain work descriptions and be
compensated on a salary or fee basis.

29 C.F.R.

541.300.

§

The

term "employee employed in a bona fide professional capacity" also
means

" [a] ny employee who is the holder of a valid license or

certificate permitting the practice of law .
engaged in the practice thereof . . .

"

Id.

. and is actually
§

541.304 (a) (1).

salary and primary duty requirements of 29 C.F.R.
apply to employees covered under this exemption.

The

541.300 do not

§

Id.

§

541.304 (d).

Thus, the relevant question is whether Faludi was "actually engaged
in the practice"

of

law with a

"valid license

or

certificate

permitting the practice of law."
The Texas Government Code defines the "practice of law" as
"the giving of advice or the rendering of any service requiring the
-30-

use

of

legal

skill

or

knowledge,

such

as

preparing

a

will,

contract, or other instrument, the legal effect of which under the
facts and conclusions involved must be carefully determined."

Tex.

Gov't Code § 81.101(a).
The evidence shows that Plaintiff engaged in the practice of
law.

Exhibits B-14 and B-17 through B-21 to Faludi's Deposition

reflect that he analyzed case strategies and coordinated with law
firms about settlement and other litigation matters. 55

Exhibits D-1

through D-9 to Defendant's MSJ show that Faludi revised or analyzed
contracts like Master Service Agreements, Confidentiality and NonDisclosure Agreements, and other Compete and Project Agreements for
US Shale. 56

He reviewed the contracts, made proposals or revisions,

and pointed out strengths and weaknesses in them. 57

Faludi used his

legal judgment and skill gained through his legal education and
experiences to analyze contracts and assess legal risks during his
time at

us

Shale.

The court therefore concludes that Faludi was

engaged in the practice of law while employed by US Shale.
Faludi argues that he is nevertheless not exempt because he
did

not

have

a

valid

license

as

required

by

29

C.P.R.

55

See Exhibits B-14, p. 146; B-17, p. 150; B-18, p. 155; B-19,
pp. 156-158; B-20, p. 159; B-21, p. 160 to Defendant's MSJ, Docket
Entry No. 14-3.
56

See Exhibits D-1 to D- 9 to Defendant's MSJ,
No. 14-5.
57Id.

-31-

Docket Entry

§

541.304(a) . 58

Faludi was licensed to practice in Louisiana and

Texas, but his licenses were suspended during the time he worked
for US Shale. 59

Although Faludi's licenses are technically valid,

he is not eligible to practice law.

The court therefore concludes

that Plaintiff did not hold a valid license permitting the practice
of law as the exemption requires.
Defendant argues that Faludi is "estopped from denying his
exempt status under the practice of law professional exemption by
his own actions and repeated declarations to the IRS, US Shale, and
others

that

relevant

he

was

in

time period. " 60

fact

a

practicing

Plaintiff

attorney

responds

that

during

the

the

estoppel

doctrine does not apply because there is "no evidence in the record
that

US

Shale

hired

Faludi

to be

a

lawyer based on Faludi' s

misrepresentation that he had a valid law license." 61

Faludi did

not tell anyone at US Shale that his licenses were suspended but he
reasoned "I don't think anybody ever asked me because no one hired
me to be a lawyer. " 62
"It

is

unclear whether

the

equitable

defenses

of

waiver,

estoppel, unclean hands, and laches are available under the FLSA."

58

See Plaintiff's MPSJ, Docket Entry No. 19, p. 9.

59

See State Bar Letters, Exhibit A-5
Docket Entry No. 19-1, pp. 72-74.

to

Plaintiff's MPSJ,

60

See Defendant's MSJ, Docket Entry No. 14, p. 21.

61

See Plaintiff's Reply, Docket Entry No. 25, p. 8.

62

See Faludi Deposition, Exhibit B to Defendant's MSJ, Docket
Entry No. 14-3, p. 70 lines 7-8.
-32-

See Tran v. Thai, Civil Action No. H-08-3650, 2010 WL 5232944, at
*7 (S.D. Tex. Dec. 16, 2010)

(applying the doctrine that estoppel

is

to

generally

plaintiff's

inapplicable
motion

for

FLSA

partial

claims

summary

and

granting

judgment

as

to

the
the

defendant's affirmative defense of, inter alia, estoppel); see also
Ayers v. Consolidated Construction Services of SW Florida,

Inc.,

Civil Action No. 2:07-123-FtM-29DNF, 2007 WL 4181910, at *2 (M.D.
Fla. Nov. 26, 2007)

(granting motion to strike laches and estoppel

affirmative defenses because of "the general rule that an employee
cannot waive her rights under the FLSA without supervision by the
Secretary of

Labor or

the

Court") ;

Perez-Nunez

v.

N.

Broward

Hospital District, Civil Action No. 08-61583-MOORE, 2009 WL 723873,
at

*2

(S.D.

Fla.

March

13,

2009)

("The

doctrines

of

waiver,

estoppel and laches are generally not applicable to FLSA claims.") .
There is, however, at least one circumstance in which estoppel
applies

in an FLSA case.

In Brumbelow v. Quality Mills, Inc., 462

F.2d 1324, 1327 (5th Cir. 1972), the Court found "[o]n the narrow
facts of this [FLSA] case, the court correctly granted a directed

verdict on the basis that the appellant was estopped and could not
profit from her own wrong in furnishing false

[reports of hours

worked]

(emphasis added) .

to the employer"

(citations omitted)

District courts have refused to apply estoppel in FLSA claims based
on Brumbelow's holding without similar facts.

See, e.g., Cordero

v. Voltaire, LLC, Civil Action No. A-13-CA-253-LY, 2013 WL 6415667,
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at *10 n.14 (W.D. Tex. Dec. 6, 2013); Allen v. City of Texas City,
Civil Action No.

G-10-176,

2014

WL

2547763,

at

*5

(S.D.

Tex.

June 5, 2014); Howard v. John Moore, L.P., Civil Action No. H-131672, 2014 WL 5092469, at *1 (S.D. Tex. Oct. 9, 2014).
The facts of this case are not similar to those in Brumbelow.
Defendant has provided no case law, and the court is not aware of
any, that would apply estoppel under the facts of this case.

Even

if estoppel were available in this case, estoppel is a fact issue
for a jury to decide.

The practice of law professional exemption

does not apply because Faludi did not hold a valid license.

The

court will therefore deny Defendant's Motion for Summary Judgment
on that issue.
IV.

Conclusions and Order

For the reasons stated in Section II above, Plaintiff's Motion
for Leave to Amend His Complaint (Docket Entry No. 18) is DENIED.
For the
Motion

for

reasons

Partial

stated

in Section III

Summary Judgment

(Docket

above,

Plaintiff's

Entry No.

19)

is

DENIED.

For the

reasons

stated in Section I I I above,

Motion for Summary Judgment
PART and DENIED IN PART.

matter

of

law

that

Faludi

(Docket Entry No.

14)

Defendant's

is GRANTED IN

Because the court has concluded as a
was

exempt

from

the

FLSA overtime

provision under the highly compensated professional exemption, the
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court will enter a final judgment that Faludi take nothing from
defendant and that this action be dismissed with prejudice.
SIGNED at Houston, Texas, this 30th day of November, 2017.

"'SSMLAKE
UNITED STATES DISTRICT JUDGE

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