NORA BARRY FISCHER, District Judge.
This wage and hour collective/class action challenges the compensation system that Houston-based staffing company Defendant Gulf Interstate Field Services, Inc. ("Gulf") utilizes to pay inspectors that it places to work on projects for clients operating in the oil and gas industry at sites throughout the United States. (Docket No. 1). Plaintiff Thomas Sloane ("Sloane") worked as a welding inspector for Gulf during parts of 2014 at a compression station operated by Kinder Morgan in Wyalusing, Bradford County, Pennsylvania and also on a Kinder Morgan pipeline project in Oklahoma. (Docket No. 99-6 at ¶ 4; Sloane Deposition 3/24/16). Sloane claims that Gulf improperly designated him as an exempt employee and that he was paid under a day rate system that did not guarantee any portion of his salary in violation of the Fair Labor Standards Act, ("FLSA"), 29 U.S.C. § 201, et seq. and the Pennsylvania Minimum Wage Act, ("PMWA"), 43 P.S. § 333.101, et seq. (Docket No. 1). Sloane seeks conditional certification of a nationwide collective action under the FLSA consisting of approximately 1,860 inspectors during the past three years and a related class action comprised of an estimated 158 inspectors who worked in Pennsylvania throughout the same time period. (See Docket Nos. 85, 86, 126, 127).
There are presently two related motions pending before the Court, albeit in different procedural postures. (Docket Nos. 85, 126). First, Sloane's motion for conditional certification of the nationwide FLSA collective action is fully briefed and counsel provided oral argument as to same at a motion hearing held on May 26, 2016. (Docket Nos. 85, 86, 92, 93, 99, 101, 103, 109, 115, 117-120; Hr'g Trans. 5/26/16). Second, Sloane's motion for conditional certification of the Pennsylvania class was more recently filed, with further briefing still due under the Court's scheduling Order. (Docket Nos. 74, 126, 127). For the following reasons, the Court finds that Sloane has failed to demonstrate any connection of this action to the Western District of Pennsylvania, despite the Court providing him with a full and fair opportunity to do so. According, this matter will be transferred to the U.S. District Court for the Middle District, Williamsport Division pursuant to 28 U.S.C. § 1404(a), i.e., the District wherein Sloane worked at the Wyalusing, Pennsylvania compressor site. Finally, this Court will decline to rule on the pending motions in deference to the transferee court.
This lawsuit represents the second attempt of Plaintiff's counsel to bring a nationwide FLSA collective action against Gulf asserting that the payment system for its inspectors violates federal overtime laws. In Hughes v. Gulf Interstate Field Services, Inc., 2015 WL 4112312 (S.D. Ohio July 7, 2015), the U.S. District Court for the Southern District of Ohio denied conditional certification of a nationwide collective and certified a more narrow collective action that includes only Gulf employees placed at a project in Ohio operated by Mark West. Id. at *4. The Hughes matter is ongoing and the Docket Report at Civil No. 2:14-cv-00432-EAS-EPD reflects that motions filed by Gulf seeking summary judgment and decertification are presently pending before the District Court.
With that backdrop, the Court returns to the relevant facts of this matter. Houston-based Gulf provides construction inspection services for companies that operate oil and gas transportation systems, including pipelines. (Docket No. 85-6 at 5, Sprick Deposition I at 12:15-20). Gulf's executive, human resources and payroll functions are performed in Texas. (Docket Nos. 99-5; 99-6; 99-9). During the past three years, Gulf has placed approximately 1,860 inspectors with at least forty-seven (47) different clients on projects located in thirty-nine (39) states. (Docket Nos. 85-11 at 7; 99-6 at ¶ 5; 99-9 at ¶ 3). Gulf maintains separate contractual agreements with each of its clients and charges them for services rendered by inspectors on a cost reimbursable basis. (See e.g., Docket No. 99-9 at ¶¶ 10, 11). The client agreements typically consist of general terms and conditions and a rate sheet which identifies the charge to the client in terms describing the markup on inspector salaries that must be paid by the client for the inspector services. (Id.).
The inspectors working for Gulf have 10 different titles, including: chief inspector; assistant chief inspector; welding inspector; utility inspector; corrosion inspector; COR inspector; environmental inspector; safety inspector; coating inspector and electrical inspector. (Docket No. 115-2 at 3, 6). The parties generally dispute whether the duties of the inspectors are meaningfully different or not but appear to agree at least that chief inspectors and assistant chief inspectors have supervisory authority over the others. (Docket Nos. 86, 99, 101, 109). The parties also contest whether Gulf pays certain of its inspectors
Despite the designation of inspectors as exempt employees, the company requires each individual inspector to fill out a weekly timesheet. (See e.g., Docket No. 95-5, Ex. 4). The inspectors are instructed to write 10 hours in the time column for each day that was worked during the calendar week. Sloane Deposition 3/24/16 at 188, 229. (Per diem and mileage are also reported on the timesheet). The inspector forwards the timesheets to his/her supervisor, who conducts an initial review of same and then sends it to the back office employees in Houston. (Id.). Necessary adjustments are made to the timesheets by the human resources department, at which time they are sent to the client as proof that the inspector worked during the weeks in question. (Id.).
Gulf placed approximately 158 inspectors with clients on projects within the Commonwealth of Pennsylvania during the past three years. Within this timeframe, from January of 2014 through September of 2014, Gulf had a contract with Kinder Morgan to provide inspectors on a compression station project in Wyalusing, Pennsylvania. (Docket No. 99-9 at P 11). This site is located in Bradford County, Pennsylvania, which is in Northeastern Pennsylvania and within the Williamsport Division of the Middle District of Pennsylvania. See Middle District of Pennsylvania, County Map,
A total of eight inspectors were sent by Gulf to work on the Kinder Morgan project in Wyalusing. (Docket No. 99-9 at ¶ 23). Sloane is one of those eight individuals and he worked as a welding inspector at that site from April 14, 2014 through September of 2014. (Docket No. 99-6 at ¶ 4; Sloane Deposition 3/24/16). He was then transferred to another Kinder Morgan project in Oklahoma where he worked until October 20, 2014, at which time he was laid off. (Id.). Sloane was the only Gulf inspector staffing the Kinder Morgan project in Oklahoma at the time he was there. (Id.).
Aside from his work for Gulf at the Wyalusing site during the relevant time period, Sloane has no connection to Pennsylvania. He is a native Texan and lives in Comal County, Texas, which is near San Antonio. (Docket No. 1-1). He is a high school graduate and a veteran of the United States Army. See Sloane Deposition 3/24/16 at 55-60. Sloane has some experience in the oil and gas industry and has earned a number of certifications, including certification as a welding inspector.
As noted, Sloane was employed by Gulf as a welding inspector from April 14, 2014 through October 20, 2014. The initial pay letter dated April 11, 2014 describes Sloane's compensation as "salary: $386.00/Calendar day (as approved by client)." (Docket No. 85-14). The gross amount of Sloane's pay for all seven days of a work week was $2,702.00, i.e., $386.00 times seven. The second pay letter dated June 17, 2014, states that his compensation is "Fixed Salary: $386/Day — Guaranteed seven (7) days per week." (Docket No. 99-6). The second pay letter continues to explain that:
(Id.). Sloane admitted that he signed this second letter, although he claimed he did not read it prior to doing so. Sloane Deposition at 181. Sloane submitted timesheets to his supervisor as required by Gulf, marking all days that he worked in the field with 10 hours, as he was instructed. (Docket No. 95-5, Ex. 4). Some of timesheets that Sloane submitted indicate that he worked less than all seven days during a particular week. (Id.). Gulf made adjustments to those timesheets prior to sending them to Kinder Morgan, reflecting that he worked 10 hours on every day during the weeks that he was assigned to that client. (Id.). Gulf's pay records indicate that Sloane was paid the full gross amount of $2,702.00 for every week of his employment, aside from the first and last weeks, which resulted in reduced pay because his start and end dates did not correspond to the beginning and end of the weeks for pay purposes. (Docket No. 95-5, Ex. 3; Docket No. 99 at 19). Hence, Sloane's actual gross pay did not meaningfully change after the issuance of the second pay letter in June of 2014. (Id.).
At this juncture, five individuals have filed opt-in notices seeking to join the FLSA collective action against Gulf. (Docket Nos. 14; 15; 18; 54; 75). Notably, the declarations and other evidence pertaining to these individuals make clear that
The declarations submitted by these individuals contain the same rote statements that during their respective employment they: worked between six and seven days per week and more than 10 hours per day; almost always worked more than 40 hours per week; and were not paid overtime compensation during weeks when they worked more than 40 hours. (Docket Nos. 85-23; 85-24; 85-25; 85-26). As is reflected in the above chart, two of the opt-ins, Justin Bish and Rodney LaLonde, worked on projects for MarkWest in Ohio and therefore, are a part of the ongoing Hughes litigation in the Southern District of Ohio for those time periods listed in the above chart. (See Docket Nos. 85-24; 85-26).
Sloane became involved in this matter after hearing a radio advertisement several times during the period of March through August of 2015 when he was working in the Corpus Christi, Texas area for another employer.
Around the same time, the litigation of the Hughes case against Gulf was ongoing. The District Court denied the motion for conditional certification of the FLSA collective action in Hughes on July 7, 2015. See Hughes, 2015 WL 4112312. Approximately one week later, on July 16, 2015, Sloane electronically signed a "Notice of Consent" form titled "In re: FLSA Claims Against: Gulf Interstate Field Services, Inc., et al," which states that he "consent[ed] to be a party plaintiff in an action to collect unpaid wages [and] agreed to be bound by the Professional Services Agreement." (Docket No. 1-2). Two months after electronically signing this form, on September 16, 2015, Sloane filed his Class and Collective Action Complaint in this District Court. (Docket No. 1). The Class and Collective Action Complaint avers that "[v]enue in this Court is proper pursuant to 28 U.S.C. § 1391. The events giving rise to Plaintiff's claims occurred within this District, and Defendant conducts business in this District." (Id. at ¶ 3). The pleading continues that "Plaintiff Thomas Sloane is a Texas resident who was employed by Gulf Interstate as a pipeline inspector in Western Pennsylvania and Oklahoma between approximately April 2014 and October 2014." (Id. at ¶ 4). Aside from the assertions that Sloane had worked in this District for Gulf, there are no other specific factual allegations describing where Gulf operates in the Western District of Pennsylvania. (See generally Docket No. 1). Sloane's attorneys selected the Pittsburgh Division on the attachment to the Civil Cover Sheet, rather than Erie or Johnstown, and the matter was assigned by the Clerk of Court to this Court. (Docket No. 1-1 at 2). Gulf has not objected to the propriety of venue in this District as it did not move to transfer venue as part of its Motion to Dismiss that was previously denied by this Court and later conceded that venue is appropriate in its Answer. (Docket Nos. 6, 7, 66, 73).
The Court sua sponte raised the issue of whether venue should be transferred to the Middle District of Pennsylvania at a motion hearing convened on May 26, 2016 for the purpose of hearing argument on the pending motion for conditional certification of the FLSA collective action. See Hr'g Trans. 5/26/16 at 4-8. At the hearing, the Court initially outlined the above facts indicating that the evidence submitted by the parties proved that: the allegation that Sloane worked in this District was false; that none of the other opt-ins worked for Gulf in Pennsylvania or this District; and, at most, perhaps a pipeline traversed the Erie Division. Id. In response to the Court's inquiry, Plaintiff's counsel indicated that he was not prepared to address venue at that time but that he would look into the matter. Id. He represented to the Court that the case was filed in this District based upon the investigation of counsel that Sloane had been working for Gulf in this District, which may have been erroneous. Id. at 15-16. Plaintiff's counsel set forth no general objection to his claim proceeding in the Middle District, conceding that there were many of these types of actions pending in that District. Id. The only argument made by counsel against transferring venue was that the Court should conditionally certify the collective action before transferring so that the notice of the suit could be provided to any affected individuals. Id. at 17. At the hearing, counsel for Gulf did not counter the Court's assessment that venue should be transferred to the Middle District of Pennsylvania or that there was no evidence in the record that Sloane or any of the opt-ins had worked for Gulf in the Western District of Pennsylvania. See Hr'g Trans. 5/26/16 at 76-80.
At the conclusion of the motion hearing, the Court entered an order setting a schedule for the parties to file any supplemental briefs addressing the issues raised during the course of the motion hearing, which necessarily included the venue issue raised by the Court. (Docket Nos. 115, 116; Hr'g Trans. 5/26/16 at 85-86). The parties made supplemental filings on June 2, 2016, June 3, 2016, June 16, 2016 and June 23, 2016. (Docket Nos. 117, 118, 119, 120, 123, 125). However, none of these submissions addressed the Court's concerns about maintaining venue in this District or objected to the proposed transfer to the Middle District of Pennsylvania. (See id.). On July 25, 2016, the Court received the official transcript of the May 26, 2016 from the official court reporter
The discretionary transfer statute, 28 U.S.C. § 1404(a), provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." 28 U.S.C. § 1404(a). It is well established that this Court retains "broad discretion" to transfer venue when justice so requires after weighing the private and public factors set forth in Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995). See also Ogundoju v. Attorney General of U.S., 390 F. App'x. 134, 137 n.2 (3d Cir. 2010). The relevant private interests include: (1) each party's forum preference; (2) where the claims arose; (3) the convenience of the parties; (4) the convenience of the witnesses; and (5) the location of the books and records. Jumara, 55 F.3d at 879. The cited public interests include: (1) the enforceability of the judgment; (2) practical considerations of expediting trial and reducing costs; (3) administrative difficulties in the two fora due to court congestion; (4) the local interest in deciding local controversies; (5) public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law. Id.
The Court will proceed to evaluate whether this case should be transferred to the U.S. District Court for the Middle District of Pennsylvania under the discretionary transfer statute, 28 U.S.C. § 1404(a), without much assistance from the parties because they failed to specifically address the venue concerns raised by the Court in any of their supplemental filings. (Docket Nos. 117, 118, 119, 120, 123, 125). The sole objection lodged by Sloane to the proposed discretionary transfer is that this Court should issue the notice to similarly situated individuals to who are potentially the subject of the motion to conditionally certify the FLSA collective action prior to transferring the matter. See Hr'g 5/26/16 at 15-17. As this argument was raised during the course of the motion hearing, Sloane's counsel did not support this position with any legal authority, and despite the implication that they would "figure it out" after the hearing, they have not done so through supplemental briefing or otherwise. Id. Having further considered the matter, the Court finds that it is in the interests of judicial comity to transfer this case prior to rendering a decision on the pending motion for conditional certification and defer to the transferee court to make that determination.
The Court reaches this decision for several reasons. First, as is more fully discussed below, a fair weighing of the Jumara factors in this case leads this Court to exercise its broad discretion and transfer the case to the Middle District of Pennsylvania given that there has been no evidence presented to this Court of any potentially affected inspectors working for Gulf within the Western District of Pennsylvania during the relevant timeframe. See Jumara, 55 F.3d at 883. Second, the transferee court that will be presiding over the matter going forward should be provided with the opportunity to evaluate the parties' evidence and address the scope of any collective and/or class action, particularly given the role of judicial administration over this type of litigation as any settlement of FLSA claims and Rule 23 class actions require judicial approval. See 28 U.S.C. § 216(b); see also Erheart v. Verizon Wireless, 609 F.3d 590, 593 (3d Cir. 2010) ("Under FED. R. CIV. P. 23(e), a district court's primary role is to determine whether the settlement is fundamentally fair, reasonable, and adequate.") (citations omitted). Third, this litigation has been contentious, to say the least,
Fourth, the Hughes case remains ongoing in the Southern District of Ohio with defense motions for summary judgment and to decertify pending and any rulings by that Court may be persuasive to the Judge deciding the parties' arguments in this particular litigation such that it makes good sense to await that decision prior to addressing the merits. See e.g., United States v. Stock, 2012 WL 202761, at *8 (W.D. Pa. Jan. 23, 2012) (noting that only cases from the Court of Appeals for the Third Circuit and the Supreme Court of the United States are binding on a U.S. District Judge but that District Court decisions may be persuasive). For example, it would be an odd result if this Court certified a collective action of any scope (national or limited to the Kinder Morgan project) and then shortly thereafter the Hughes court enters a ruling decertifying the collective action of the MarkWest employees. Finally, the Court does not believe that Sloane's argument that delayed notification seriously affects the rights of potentially affected inspectors is well-taken, in light of the facts that:
Accordingly, the Court will move on to its transfer analysis without resolving the pending motion for conditional certification of the FLSA collective action. Cf. In re Joann Patenaude, 210 F.3d 135, 146 (3d Cir. 2000) ("Deference is not abdication."). Having carefully considered the matter, the Court holds that the relevant private and public Jumara factors support a discretionary transfer to the Middle District of Pennsylvania.
In this Court's estimation, the most relevant of the private Jumara factors, the first, second and fourth factors, all weigh in favor of the proposed transfer. See Jumara, 55 F.3d at 883. With respect to the first of the private factors, it is true that the Western District of Pennsylvania is the plaintiff's choice of forum but his forum preference is "lightly disturbed" by the transfer to the District where he worked for Gulf that has led to his overtime claim. As is detailed above, Sloane's counsel conceded that the case was filed here based on the erroneous assumption that Sloane had worked in this District, as is alleged in the Complaint.
The convenience of the potential witnesses also favors transfer to some degree. In this regard, although the Gulf-Kinder Morgan contract has concluded, the compressor station is still operating there and it remains likely that potentially affected inspectors still work and/or reside in that area, and/or that third party witnesses from Kinder Morgan are located within the Middle District of Pennsylvania. See e.g., Carpenters Combined Funds, Inc. v. Kelly Systems, Inc., 2015 WL 3457872, at *9 (W.D. Pa. May 29, 2015) (interests of non-party witnesses properly considered as part of evaluation). In contrast, the Court has no evidence that there are any witnesses located within this District. The remaining factors directing the Court to review the convenience of the parties and the location of the books and records are neutral in the Court's analysis. See Jumara, 55 F.3d at 883. To this end, the parties are actively litigating this matter from afar as neither the parties nor the opt-ins are Pennsylvania residents
The Court reaches the same conclusion when viewing the public Jumara factors. See Jumara, 55 F.3d at 883. The most relevant of the public factors is that there is a local interest in deciding local controversies. Here, the citizens of the Middle District of Pennsylvania have an interest in having the local courts decide whether a business operating in that District violated federal overtime laws or not. See e.g., Carpenters, 2015 WL 3457872, at *10 (holding that ERISA controversy was localized in the District where the affected union members worked). In contrast, as there is no connection to this District, none of the citizens here would have any interest in this case — a complex matter that involves possibly 2,000 inspectors working in other locales.
The factor surrounding court congestion also favors a transfer. This Court compared the two Districts over one year ago in Carpenters, pointing out that the Middle District has a greater weighted civil filing score than this Court but that the Middle District has a full complement of District Judges. Id. at *11. The Court reasoned at the time that court congestion was neutral as both courts had capable jurists and robust ADR Programs. Id. Revised statistics from the Administrative Office of the Federal Courts are similar but the Court must underscore that this District is now approaching four full years of operating with 3 empty District Judge seats
Based on the foregoing, the Court finds that Sloane has failed to show cause why this matter that his attorneys erroneously filed in this District should not be transferred to the U.S. District Court for the Middle District of Pennsylvania pursuant to 28 U.S.C. § 1404(a). An appropriate Order follows transferring this matter to the Williamsport Division of that District, forthwith.
(Docket No. 85-1).
