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Prim v. Ensign United States Drilling, Inc.

United States District Court, D. Colorado

September 30, 2019

MATTHEW PRIM, individually and on behalf of all others similarly situated, Plaintiff,
v.
ENSIGN UNITED STATES DRILLING, INC., Defendant.

          ORDER

          PHILIP A. BRIMMER CHIEF UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff’s Unopposed Motion for Preliminary Conditional Certification of Proposed Settlement Class and Preliminary Approval of the Parties’ Proposed Settlement and Notice to Putative Class Members [Docket No. 49]. Plaintiff renews his request that the Court approve the parties’ settlement of plaintiff’s claims under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq. The Court has jurisdiction pursuant to 28 U.S.C. § 1331.

         I. BACKGROUND

         On September 30, 2015, plaintiff filed his complaint, individually and on behalf of all others similarly situated, alleging that defendants violated the FLSA. Docket No. 1. Plaintiff was employed by defendant and worked in an oilfield as an hourly employee. Id. at 2, ¶ 7. Plaintiff and other employees received bonuses as a component of their compensation including “Safety Bonuses and/or Performance Bonuses.” Id., ¶ 8. Defendant excluded these bonuses from calculations of plaintiff’s and other employees’ regular rate of pay, and therefore failed to pay plaintiff and the putative class members overtime at the rate required by the FLSA. Id. at 2-3, ¶ 9.

         On February 15, 2017, plaintiff filed a motion seeking approval of the settlement between the parties and dismissal of this lawsuit with prejudice. Docket No. 33. The Court denied the motion without prejudice, noting several issues that prevented the Court from being able to approve the parties’ settlement. Docket No. 39. Specifically, the Court found that: (1) plaintiff had not provided sufficient information to support final class certification; (2) there were insufficient facts demonstrating a bona fide dispute; (3) “the impact of the settlement on the class [was] too opaque” to allow the Court to determine whether the settlement was fair and reasonable; (4) the parties had offered no explanation as to why it was appropriate to require class members to abide by a confidentiality agreement; and (5) plaintiff’s request for attorney’s fees failed to address 11 out of 12 of the Johnson factors. Id.

         Plaintiff filed an amended motion and revised proposed settlement agreement on January 26, 2018. Docket Nos. 42, 42-1. The Court again denied plaintiff’s motion without prejudice. Docket No. 43. The Court found that it was unable to approve the proposed settlement because plaintiff had not moved for conditional certification of the collective action. Id. at 3. Further, the Court determined that it could not evaluate the appropriateness of final certification, the fairness of the agreement, or the reasonableness of the parties’ agreed-upon fees award because plaintiff had failed to provide the putative class members with notice and an opportunity to opt in to the lawsuit. Id. at 5. In addition, the Court noted three deficiencies in plaintiff’s motion that were to be addressed in any future motion: (1) plaintiff’s failure to provide sufficient information regarding plaintiff Prim’s participation in the lawsuit, in order to allow the Court to assess whether the $7, 500 proposed enhancement award was reasonable; (2) counsel’s failure to provide information regarding the amount of time spent litigating the case or the reasonable hourly rates of the attorneys involved; and (3) the notice’s failure to sufficiently inform putative class members of the nature of the claims, the rights of those who choose not to opt in to the lawsuit, and the terms of the settlement agreement. Id. at 7-9.

         On February 19, 2019, plaintiff filed this motion seeking (1) preliminary conditional certification of the proposed settlement class; (2) preliminary approval of the proposed settlement; and (3) approval of the parties’ proposed notice to putative class members. Docket No. 49 at 1-2. With his motion, plaintiff submitted copies of the settlement agreement and settlement notice. See Docket Nos. 49-1, 49-2.

         II. ANALYSIS

         A. Class Certification

         The FLSA provides that an employee or employees may bring an action “[on] behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). Courts determine whether plaintiffs are “similarly situated” for purposes of FLSA collective action certification in two stages. Thiessen v. GE Capital Corp., 267 F.3d 1095, 1105 (10th Cir. 2001). A court’s initial certification comes at the notice stage, where courts use a fairly lenient standard to determine whether plaintiffs are similarly situated for purposes of sending notice to putative class members. Id. at 1102. Plaintiff is required to prove “nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy or plan.” Id.; see also Stransky v. HealthONE of Denver, Inc., No. 11-cv-02888-WJM-MJW, 2012 WL 6548108, at *4 (D. Colo. Dec. 14, 2012). This is a “lenient” standard, Baldozier v. Am. Fam. Mut. Ins. Co., 375 F.Supp.2d 1089, 1092 (D. Colo. 2005), “which typically results in conditional certification of a representative class.” Renfro v. Spartan Computer Servs., Inc., 243 F.R.D. 431, 432 (D. Kan. 2007). The second stage, which comes at the conclusion of discovery, applies a stricter standard of “similarly situated, ” including application of at least four factors, to determine whether the case can proceed as a collective action. Thiessen, 267 F.3d at 1102-03.[1]

         Plaintiff seeks final certification of a class of “hourly oilfield employees who worked for Defendant during the Class Period[2] who received Operator Safety Bonuses and Mud Bonuses” (collectively, the “Contested Bonuses”). Docket No. 42-1 at 4. Plaintiff claims that defendant informed plaintiff and the other class members when they were hired that they would receive “Operator Safety Bonuses” upon certain events, such as the completion of a project where no injuries or accidents occurred, and would receive “Mud Bonuses” based on the number of days that they worked. Docket No. 49 at 2-3. Plaintiff argues that the Contested Bonuses were non-discretionary and alleges that defendant wrongfully failed to include the bonuses in its calculation in determining the class members’ overtime rates. Id. at 3.[3] Defendant’s failure to do so, according to plaintiff, violates the FLSA. Id. at 7.

         Plaintiff alleges that all putative class members are hourly employees of defendant’s and all regularly worked more than 40 hours per workweek during the Class Period. Docket No. 1 at 2, ¶ 7. He states that the putative class members received the Contested Bonuses, but that defendant excluded the Bonuses from its calculation of the class members’ regular rate of pay and, as a result, the class members were not paid their proper overtime rates. Id. at 2-3, ¶¶ 8-9.

         The Court finds that plaintiff has provided substantial allegations that the putative class members are similarly situated. He alleges that the putative class members were all subject to defendant’s policy of excluding the Contested Bonuses from their overtime rate calculations. This is sufficient for conditional class certification. See Thiessen, 267 F.3d at 1102; see also MacDonald v. Covenant Testing Tech., LLC, No. 18-cv-02290-NRN, 2019 WL 1755282, at *4 (D. Colo. Apr. 18, 2019) (finding that plaintiff had provided substantial allegations that putative class members were similarly situated when plaintiff claimed that defendant wrongly excluded per diem payments in calculation of overtime pay). For this reason, the Court will conditionally certify a collective action consisting of all hourly oilfield employees who worked for defendant from January 18, 2014 until January 18, 2017 and who received Operator Safety Bonuses and Mud Bonuses during that time frame.

         B. The Settlement

         In a suit by employees against their employer to recover back wages under the FLSA, the parties must present any proposed settlement to the district court for review and a determination of whether the settlement agreement is fair and reasonable. See Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350, 1353 (11th Cir. 1982). Requiring court approval of FLSA settlements effectuates the purpose of the statute, which is to “protect certain groups of the population from substandard wages and excessive hours . . . due to the unequal bargaining power as between employer and employee.” Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706 (1945). To approve the settlement agreement, the Court must find that (1) the litigation involves a bona fide dispute, (2) the proposed settlement is fair and equitable to all parties concerned, and (3) the proposed settlement contains a reasonable award of attorney’s fees. Lynn’s Food Stores, 679 F.2d at 1354.

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