Houston Courts Deny Conditional Certification in Two FLSA Collective Actions

In Richardson v. Wells Fargo Bank, N.A. (S.D. Tex., February 2, 2012) and Andel v. Patterson-UTI Drilling Co., LLC, (S.D. Tex., February 15, 2012), the Houston Federal Court sent a clear message to  seekers of conditional certification in FLSA collective actions.  Namely, it will take much more than an employee’s belief to meet the criteria that there is either a “nationwide policy or plan” or that they are all “similarly situated” to gain certification.


Both cases were heard by the District Court at the initial conditional certification stage with varying degrees of discovery.  Rejecting the applicability of Wal-Mart Stores, Inc. v. Dukes, (S.Ct. 2011), and paying homage to the conflict prevalent in the Fifth Circuit concerning which standard to apply, the  Court in both instances took pains to note that it was applying the more “lenient standard” of Lusardi v. Xerox Corp. (D.N.J. 1987).  This being said, the leniency ended there.


In Richardson, the Court was faced with a number of bankers who we claiming they were forced to work odd hours off the clock under what they contended was a nationwide policy or plan.  The Court noted that Wells Fargo had “clear written policies mandating accurate recordkeeping of employee’s time and payment of overtime when working outside scheduled [times].”  Of course, all employees had nearly identical affidavits wherein they all expressed their belief that certain bank managers expected them to work off the clock.  However, the Court was not persuaded.  While there were instances of rogue conduct or misinterpretations by certain bank managers, there was no proof that the managers consistently failed to follow the bank’s written policy (or that the bank knew of and adopted the inappropriate conduct).  Given this, the Court rejected conditional certification.


The Court reached a similar result in Andel.  In that case, the plaintiffs were welders who were all claiming misclassification as independent contractors.  Applying the “economic realities” test of Thibault v. Bellsouth Telecomms., Inc. (5th Cir. 2010), the Court stated that whether an individual is an employee or independent contractor is “highly dependent on the particular situation presented, and this requires an intensive factual analysis.”  Consequently, the Court ruled that “this individualized analysis precludes certification.”


The lessons to take from these cases are clear.  First, all companies should review their written policies or plans to make certain that they dovetail with FLSA.  Second, defense attorneys should press the Court to look behind any self-serving declaration of plaintiffs to determine if there is really a policy or plan that replaces written policies.  Finally, a forceful objection to conditional certification can be made in any case where misclassification is alleged.


Bryant S. Banes
Managing Shareholder
Neel, Hooper & Banes, P.C.
Houston, Texas