Jackie Burson worked for Oil Patch Group, Inc., an oilfield rental and service company, until the relationship ended in March or April 2022. He later joined a lawsuit to recover unpaid overtime, and he claims Oil Patch Group fired him for doing so — a retaliation claim under 29 U.S.C. § 215(a)(3) of the FLSA. On October 12, 2022, Burson filed for Chapter 7 bankruptcy in the Northern District of Texas, disclosing a personal injury claim for his daughter but not his FLSA retaliation claim. The bankruptcy court issued a no-asset discharge of $152,429.53 in debt and closed the case. Three months after his bankruptcy discharge, Burson sued Oil Patch Group in the Southern District of Texas.
Oil Patch Group moved for summary judgment on judicial estoppel grounds, arguing that Burson's decision to file the lawsuit contradicted prior sworn statements he made, and legal positions he knowingly took, in his recent bankruptcy proceedings. Magistrate Judge Dena Hanovice Palermo, sitting by consent of the parties, agreed that the first two elements of judicial estoppel were met: Burson's failure to list the retaliation claim in his schedules was plainly inconsistent with pursuing it in federal court, and the bankruptcy court accepted that position when it granted the no-asset discharge.
The ruling turned on the third element — whether Burson acted inadvertently. The court held there is a genuine issue of material fact on that question. At a November 15, 2022 creditor meeting, Burson voluntarily told Trustee Jeff Mims about both his unpaid wages and retaliation claims, explained that he had not listed the retaliation claim because he was unsure whether it had been filed, and agreed to amend his schedules. The Trustee directed that an amendment be filed. But less than a week later — and before the amendment was completed — the Trustee reported to the bankruptcy court that no distributions would be made and all assets would be abandoned, and the court closed the case. The opinion notes there is no evidence in the record explaining what happened between the November 15 creditor meeting and the Trustee's report on November 23, 2022.
Judge Palermo held that while Burson could have financially benefited from concealing the claim, his voluntary oral disclosure to the Trustee and agreement to amend the schedules also support a finding that he lacked the motive to conceal. That conflict, she held, is for a jury to resolve.
Even setting aside the intent dispute, the court held that equitable considerations independently weigh against applying judicial estoppel. After Burson filed his summary judgment response, the parties agreed to reopen the bankruptcy proceeding, and the bankruptcy court entered an agreed order doing so. On December 1, 2025, Burson notified the district court that the Trustee had elected to retain and pursue the retaliation claim on behalf of the bankruptcy estate, retaining Burson's counsel. Judge Palermo held that invoking judicial estoppel under those circumstances would excuse Oil Patch Group from potential liability while leaving Burson's creditors — who are owed $87,839.00 in secured claims and $64,590.53 in nonpriority unsecured claims according to the last filed schedule — without a potential recovery. Citing Fifth Circuit precedent, she noted there is no per se rule estopping any party who fails to disclose potential claims to a bankruptcy court, and that any harm to the judicial process was cured by revoking Burson's discharge and reopening the proceedings.
The Trustee may now pursue the retaliation claim for the benefit of Burson's creditors. The parties still dispute whether Burson was an employee or independent contractor, an issue the court noted is not currently before it.