Category Archives: Collective Actions

E.D.N.Y.: Named-Plaintiff’s Failure to File Consent to Join Not Fatal to Collective Action, Where Defendants Acknowledged Intent to Proceed as Collective Action in Answer and Plaintiff Filed Sworn Affidavit

Ahmed v. T.J. Maxx Corp.

This case was before the court on the plaintiff’s motion to conditionally authorize a collective action, pursuant to Section 216 of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. As discussed here, the court held that the plaintiff had “commenced” his FLSA case for the purposes of serving as the representative plaintiff in a collective action, notwithstanding his initial failure to file a formal consent to join, as required by 216(b), by virtue of the defendant’s admissions regarding same in their answer and the fact that plaintiff filed an sworn (signed) affidavit in support of his motion.

Discussing the issue, the court explained:

Defendants maintain, as an initial matter, that Ahmed’s case cannot proceed as a collective action because Ahmed himself has not filed a consent form as required by section 216(b) of the FLSA. (Defendant’s Memorandum of Law in Opposition to Plaintiff’s Motion for Conditional Certification, hereinafter “Def. Mem. of Law in Opp’n”, at 19.) It is defendant’s position that the FLSA requires a plaintiff—even a named plaintiff—to opt-in to his or her own action in order to proceed as a collective action. (Id.)

Although the cases upon which defendants rely provide that all plaintiffs must affirmatively opt in to a suit in order to proceed as part of a collective action, see, e.g. Gonzalez v. El Acajutla Restaurant, Inc., No. 04 Civ. 1513, 2007 U.S. Dist. LEXIS 19690, at *14–15 (E.D.N.Y. Mar. 20, 2007), courts in this Circuit have held that the FLSA itself does not require such written consent in order for a plaintiff to file a motion for conditional certification, see, e.g. Aros v. United Rentals, Inc., 269 F.R.D. 176, 181 (D.Conn.2010) (“The court concludes that denying the Motion for Conditional Certification … would undermine the FLSA’s broad remedial purpose”). Moreover, “[t]he purpose of this consent requirement … is to put the Defendants on notice, which many courts have noted is somewhat redundant with regard to named plaintiffs,” particularly when the named plaintiff has submitted sworn affidavits to the court, participated in depositions, and otherwise taken necessary action to pursue his claims and demonstrate that he “intends to participate in the lawsuit.” D’Antuono v. C & G of Groton, Inc., No. 11 Civ. 33, 2012 U.S. Dist. LEXIS 49788, at *6–7, 10–11 (D.Conn. Apr. 9, 2012).

Given that defendants expressly acknowledged, in their answer, that Ahmed purports to bring this action “pursuant to FLSA, 20 U.S.C.s. 216(b), on behalf of ‘Assistant Mangers’ employed in T.J. Maxx stores” (see Answer at ¶ 8), it cannot be said that defendants lacked notice of Ahmed’s consent, nor can it be said that defendants were unaware of Ahmed’s intent to pursue his claims as part of a collective action, particularly as Ahmed has already participated in a deposition and has submitted an affidavit in support of the instant motion. Consequently, while the form of Ahmed’s consent may not have strictly adhered to the preferred standard in FLSA collective actions, the substance of Ahmed’s complaint and his conduct throughout the discovery process was sufficient to satisfy the purpose of the written consent requirement. Furthermore, since defendants first raised this issue, Ahmed has filed a formal written consent with the Court. At this point, Ahmed is in compliance with not only the spirit, but also the letter of the written consent requirement. Thus, this Court finds that defendants had sufficient notice of Ahmed’s intent to proceed with a collective action, and this Court will therefore consider Ahmed’s request for conditional certification as a collective action on its merits.

Click Ahmed v. T.J. Maxx Corp. to read the entire Memorandum Opinion and Order.

While this case is certainly helpful to practitioners in the situation where the named-plaintiff has not filed a consent to join, as a practical matter (especially in courts outside of the Second Circuit), the best practice is to file a consent to join on behalf of all plaintiffs and opt-in plaintiffs, including the named-plaintiffs, to avoid the necessity of even addressing this issue.  Further, it should be noted that even in this case, the named-plaintiff ultimately did file a consent to join, after the issue had been raised by the defendants in their opposition to his motion for conditional certification.

EDITOR’S NOTE:  Within days of the Ahmed decision, another court- this one in the Eleventh Circuit- was faced with a similar issue.  In that case the plaintiff had actually styled his complaint as an individual claim, excluding language that he sought to proceed on a collective action basis.  Nonetheless, the court held that the defendants had adequate notice of plaintiff’s intent to proceed as a collective action, and ultimately granted plaintiff’s motion for conditional certification.  See  Hogan v. Allstate Beverage Co., Inc., 2012 WL 6027748, at *5 (M.D. Ala. Dec. 4, 2012).

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M.D.Tenn.: Defendants’ Request to Have Putative Class Opt Into Specific Claims, As Opposed to the Case as a Whole Rejected

Ware v. T-Mobile USA

This case was before the court following an order that conditionally certified the case as a collective action. The plaintiffs alleged that they performed uncompensated work prior to the commencement of their shifts and during their unpaid meal breaks. They also alleged that the defendant underpaid employees by failing to include certain required payments in the regular rate of pay when it calculated overtime. The plaintiffs claim that, by failing to compensate employees for pre-shift work and work performed during unpaid meal breaks and by miscalculating the regular rate of pay, the defendant violated the Fair Labor Standards Act (“FLSA”). In the Memorandum Opinion in which it conditionally certified the case, the court also ordered the parties to confer and attempt to submit agreed-upon-notice and consent forms.  Whereas the plaintiffs proposed a relatively basic consent to join form, the defendant took the position that each opt-in plaintiff should be required to specifically opt-in to one or both of the specific claims alleged by the plaintiffs. Rejecting the defendant’s proposed approach and adopting that of the plaintiffs- whereby opt-ins could simply opt into the case as a whole- the court explained:

T–Mobile urges the court to adopt its proposed consent form. It asserts that the form merely attempts to obtain otherwise discoverable information from the opt-in plaintiffs concerning the specific claims they intend to assert. (Docket No. 108, at 2–3.) T–Mobile adds that gaining this information from the consent form will reduce the costs of written discovery. (Id. at 3.)

The plaintiffs raise numerous objections to T–Mobile’s proposed consent form. Chief among them is that the form is contrary to the plain language of the FLSA. (Docket No. 111, at 2.) The remaining objections raised by the plaintiffs include that T–Mobile: (1) is attempting to re-litigate the issue of conditional certification through the questions contained in its proposed consent form; (2) seeks information from opt-in plaintiffs lacking the benefit of counsel that is properly obtainable through discovery; and (3) urges the approval of a consent form that will confuse opt-in plaintiffs. (Docket No. 111, at 5–6, 8–13.) The plaintiffs thus request that the court adopt their proposed consent form, as they contend that it is clear, concise, and lacks any misleading information. (Docket No. 111, at 7–8.)

Having considered the parties’ contentions, the court finds that the text of the FLSA’s statutory provisions settles the instant dispute. The relevant provision provides, in pertinent part, that:

An action to recover the liability prescribed in either of the preceding sentences may be maintained against any employer … in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. 29 U.S.C. § 216(b) (emphasis added). The plain language of this statutory text expressly provides that, in filing a written consent form, an opt-in plaintiff joins an action to redress his or employer’s statutory liability. Indeed, Section 216(b) lacks any requirement that opt-in plaintiffs consent to join specific claims within the broader action.

In Prickett v. Dekalb County, 349 F.3d 1294, 1297 (11th Cir.2003), the Eleventh Circuit Court of Appeals interpreted the aforementioned statutory text in the same manner. The issue before the court in that case concerned whether opt-in plaintiffs were required to submit new consent forms after the named plaintiffs added a claim to the original complaint. Prickett, 349 F.3d at 1296. In concluding that the filing of new consent forms was not required, the Eleventh Circuit commenced its analysis by examining the text of 29 U.S.C. § 216(b). Id. at 1296–97. It noted that the plain language of Section 216(b) “indicates that plaintiffs do not opt-in or consent to join an action as to specific claims, but as to the action as a whole.” Id. at 1297 (emphasis added). The Eleventh Circuit added that, by referring to opt-in plaintiffs as “party plaintiffs,” “Congress indicated that opt-in plaintiffs should have the same status in relation to the claims of the lawsuit as do the named plaintiffs.” Id. See also Fengler v. Crouse Health Sys., Inc., 634 F.Supp.2d 257, 262–63 (N.D.N.Y.2009) (citing Prickett for this proposition and vacating a Magistrate Judge’s decision to include a paragraph in the consent form that limited the opt-in plaintiffs’ claims to only one of two asserted in the complaint).

After rejecting the defendant’s attempt o distinguish Prickett and Fengler, the court reasoned:

In the instant case, T–Mobile’s proposed consent form compels opt-in plaintiffs to make a decision that the FLSA does not mandate, that is, it requires them to select the specific claims they wish to assert. T–Mobile can readily obtain information concerning such claims after the opt-in plaintiffs have joined this action by using any one of the discovery devices contained in the Federal Rules of Civil Procedure. Indeed, in correspondence exchanged between the parties’ counsel prior to the filing of the proposed consent forms, counsel for T–Mobile acknowledged the availability of targeted interrogatories as a means of ascertaining the specific claims each opt-in plaintiff plans to assert in this lawsuit. (Docket No. 115, Ex. E.) In any event, because T–Mobile’s proposed consent form fails to comply with the FLSA’s express requirements, the court declines to approve it for delivery to members of the nationwide conditional class.

Click Ware v. T-Mobile USA to read the entire Memorandum and Order.

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C.D.Cal.: Motion for Corrective Action Granted Where Defendant Provided Insufficient Info to Putative Class Members When Obtaining Releases

Gonzalez v. Preferred Freezer Services LBF, LLC

This case was before the court on the plaintiff’s motion for corrective action, under Federal Rules of Civil Procedure 23, on grounds that the defendant had improperly contacted potential plaintiffs to this putative class action in efforts ‘to obtain releases from its employees concerning the claims pled by [Gonzalez] in this action.’ The plaintiff sought an order requiring the defendant to release the names and contact information of individuals from whom the defendant had attempted to extract releases. The court granted the plaintiff’s motion, applying Rule 23’s protections to an FLSA case.

The court described the relevant facts/procedural history as follows:

Gonzalez brought a collective action on behalf of himself and other of Preferred Freezer’s employees for unpaid overtime pay under California law and the Fair Labor Standards Act, 29 U.S.C. § 216(b). (Mot.2.) In August 2012, Preferred Freezer unilaterally drafted a “Release Agreement” that it provided to its employees, who are potential plaintiffs to this putative class action. (Mot.6–7.) The Agreement explained that in exchange for a settlement payment “in full satisfaction of all claims that Employee has, had or could have had arising out of the lawsuit or in any way related thereto,” the employee waived any and all claims arising out of a “former employee['s]” wage-and-hour lawsuit or in any way related to the lawsuit. (Mot.7.) But the Release Agreement did not state when this unnamed lawsuit was filed, the name of the former employee, the names of the employee’s attorneys, the attorneys’ contact information, or the period of time covered by the release. (Id.)

The court explained that the plaintiff learned of the defendant’s actions that were the subject of the motion, when a putative class member who had been approached by the defendant contacted plaintiff’s counsel. After discussing the general concept that settlements are favored, the court explained how the manner in which the defendant obtained the general releases here was misleading:

The waiver Preferred Freezer tendered its employees was misleading in many ways. It did not include any information regarding this class action, except that a former employee had brought a lawsuit against Preferred Freezer. (Sinay Decl. Exs. A, B.) The waiver did not attach the Complaint, any information on when the case was filed, nor any information regarding the essence of the case. (Mot.7.) Preferred Freezer also did not include Gonzalez’s counsel’s contact information. (See Gamez Decl. Ex. 1.) Even when Preferred Freezer’s agents spoke to the potential plaintiffs, the agents never provided them with the name of the case. (Gamez Decl. ¶ 6.) Furthermore, Preferred Freezer’s counsel never contacted Gonzalez’s counsel to confer over possible communication to Preferred Freezer’s employees regarding the potential settlement. (Mot.6.) Thus, the waiver misleadingly failed to provide the potential plaintiffs with adequate notice of this case in order to make an informed decision regarding waiver of their rights.

While the facts surrounding the manner in which the defendant had obtained the releases were uncontested, the defendant argued that corrective action was inappropriate and that: (1) defendant’s first amendment right to communicate with the putative class should not be hindered; (2) putative class members of a 216(b) collective actions are not entitled to the same protections as those in a Rule 23 class action; (3) the DOL supervised the settlements at issue; and (4) they did provide enough information to the settling class members, so as to alleviate concerns that the releases were obtained based on misleading information.

Noting that the plaintiff was not seeking to invalidate the releases at this juncture, and was not seeking to stop the defendant from communicating with putative class members, the court granted the plaintiff’s motion. The court granted the plaintiff’s motion as follows:

In response to Preferred Freezer’s misleading contact with putative class members in this action, Gonzalez asks that the Court orders Preferred Freezer to provide names, addresses, and telephone numbers for each and every person contacted by Preferred Freezer regarding the waiver. (Mot.25.) Gonzalez also requests that any communication to potential plaintiffs should include all the important information relating to Gonzalez’s case. (Mot.24.) For the reasons discussed above, the Court finds this request reasonable and therefore GRANTS Gonzalez’s motion.

Preferred Freezer is therefore ORDERED to provide Gonzalez with the contact information of all of those prospective plaintiffs in this case with whom Preferred Freezer has had contact regarding settlement. Furthermore, any communication that either party has with putative plaintiffs must include the following information: (1) the name of this case; (2) the case number; (3) a summary of the basis of Gonzalez’s claims; (4) the name of Gonzalez’s attorneys and their contact information; and (5) a statement concerning the effect of executing Preferred Freezer’s released documents will have on its employees’ ability to participate in this lawsuit.

Click Gonzalez v. Preferred Freezer Services LBF, LLC to read the entire Order Granting Plaintiff’s Motion for an Order for Corrective Action.

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Respondent-Employer Enjoined From Requiring Current Employee Putative Class Members From Waiving Right to Participate in Class/Collective Action, Once Putative Class/Collective Action Pending

Herrington v. Waterstone Mortgage Corp.

In this case, the claimant-employees had initially filed their case as a class/collective action in federal court. Pursuant to arbitration agreements that the plaintiffs had signed during their employment, the defendant successfully moved to compel the plaintiffs to pursue their claims in arbitration. Because the arbitration agreement at issue called for arbitration pursuant to the American Arbitration Association’s (AAA) rules governing arbitration, the plaintiffs successfully argued that a Rule 23 type opt-out mechanism rather than 216(b)’s opt-in governed as the appropriate class mechanism. Twelve (12) days after the arbitrator’s holding that an opt-out class procedure would govern, the defendant began requiring all current employees to sign a new arbitration clause, which if enforced, would have precluded the current employees from participating in the putative class action, yet to be certified. Arguing that the respondent-employer’s unilateral effort to defeat putative class members’ participation in the arbitration required thorough remedial measures, the claimant-employees moved for a protective order and temporary restraining order to:

(1) Enjoin any further dissemination of the letter to current employees with the class-waiver form; (2) Enjoin any effort by the respondent-employer or its counsel to chill participation in the case, including prohibiting any further unauthorized communication with any class members concerning joining the case, except as approved by the arbitrator; (3) Enjoin retaliation by [Waterstone] against any individual participating in the case; (4) Direct that [Waterstone] (in a form and manner supervised by the Arbitrator or on consent of claimants’ counsel) promptly notify all class members who received Exhibits A and B of the impropriety of [Waterstone's] acts and the invalidity of the waivers it solicited; (5) Sanction [Waterstone] with monetary relief for its improper behavior [ ] so that [Waterstone] does not achieve any of the benefit of chilling individuals from participating in this case; (6) Reserve the opportunity for individuals to join the case post-judgment, should they opt-out now, given their employer’s clear statement of its desire that they not join this case; (7) Award Claimant’s costs and attorneys’ fees for the time spent on the motion; [and] (8) Award such further relief in the future, as may become necessary to remedy the ill effects of [Waterstone's] improper behavior.

In opposition, the respondent-employer argued that the motion should be denied because: (1) the arbitrator lacked jurisdiction over the issue presented, because the parties had not agreed to arbitrate the issue of the permissibility of the subsequent class-waivers; (2) it was procedurally improper, because a class or collective action had yet to be certified; and (3) the employees had not demonstrated the requisite irreparable harm to warrant the relief sought.

Initially, the arbitrator rejected the respondent-employer’s jurisdictional argument:

It is true that a class has not yet been certified. Indeed, the clause-construction award that contemplates a class arbitration may itself be vacated by the District Court. However, even if the motion to certify a class should be denied, or if the Court should vacate the clause-construction award, the arbitration may continue as a collective proceeding (opt in) as a result of Judge Crabb’s direction that Herrington “must be allowed to join other employees to her case.” (D. Ct. Decn. at 18).

The arbitrator similarly rejected the argument that the relief sought was premature:

Whether a proceeding continues as a class procedure or a collective procedure, it must be protected from coercive or misleading communications that are designed to, or have the effect of, persuading or intimidating potential claimants to withhold their participations. The law realistically recognizes that such improper communications may be just as effective pre-certification as post-certification. Therefore, it is within the jurisdiction – indeed, it is the duty – of the judge or arbitrator before whom such a proceeding is pending to protect the integrity of the proceeding and to require that all information conveyed by the parties to potential class members about the proceeding be accurate, not coercive, and not misleading.

Waterstone’s argument that control over communications cannot arise until a class is certified is simply wrong. The power (jurisdiction) to control the parties’ communications to class members or putative class members can arise at least as early as when the initial pleading is filed. See, e.g. Hoffman-LaRoche at 487 (“[I]t lies within the discretion of a district court to begin its involvement early at the point of the initial notice.”).

The arbitrator added:

Waterstone’s contention that it has “has never consented to arbitrate its management decisions as to the nature and form of employment agreements with employees who are not parties to this case” (Jurisd. Memo at 1) assumes that this arbitration is about what kind of dispute resolution provision going forward Waterstone may provide in its form employment agreement. The assumption is false. Herrington brought this arbitration to recover past minimum wages and overtime compensation allegedly due to her and to her fellow employees. Jurisdiction over that claim was established with the filing of the demand for arbitration, and it is the duty of the arbitrator to preserve and protect the integrity of the proceedings with respect to that claim. The entire dispute that is subject to this arbitration is therefore to be resolved under the dispute resolution provisions of the pre-Amendment employment agreement that governs Herrington’s claims.

Instead, the arbitrator held that once the proceeding had commenced, the employer-respondent could not require the potential class members to waive their rights to participate in the case, as members of the class:

However, whatever may be the legality or enforceability of either Option A or Option B in future disputes that might arise between Waterstone and its mortgage-loan employees, those amendments can have no impact on this Herrington arbitration or on the employee class’s rights or choices in it. Once Herrington commenced her arbitration under the original arbitration clause in the employment agreement, Waterstone could not change the nature or course of this pending arbitration by requiring the putative claimants in this proceeding to agree to an entirely different dispute-resolution regime. This arbitration must, therefore, continue under the Agreement that governed when it was commenced, the Agreement that Waterstone, itself, argued successfully to the District Court requires Herrington’s dispute to be arbitrated.

Thus, the arbitrator granted the claimant-employees’ their requested relief.

Click Herrington v. Waterstone Mortgage Corp. to read the entire Decision and Order on Claimant’s Application for Protective Order, Temporary Restraining Order and Preliminary Injunction.

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Mootness and the FLSA: Where Are We Now?

With the Supreme Court set to weigh in on the issue next term, decisions continue to widely diverge on the issue of whether on employer may moot a collective action by paying damages to a plaintiff-employee or plaintiff-employees after they have filed suit seeking their wages pursuant to the FLSA. Recent weeks have brought more confusion to the issue. As discussed below, the Eleventh Circuit held in a non-FLSA claim that absent an actual judgment full tender of money damages alone is insufficient to render a case moot. Within days however, a different court sitting within the Ninth Circuit held that an employer properly mooted an entire collective action when it made payments to the entire class in amounts all parties agreed represented all money damages for a 2 year statute of limitations period, plus liquidated damages. In yet another decision a court within the Third Circuit held that an employer could not moot a collective action by tendering class damages calculated at a “half-time” rate, because an issue of fact existed as to whether that was the appropriate methodology for calculating such damages.

Zinni v. ER Solutions, Inc.

These three consolidated cases were before the Eleventh Circuit on the plaintiff-employee’s appeal of an order granting the defendant’s motion to dismiss for lack of subject matter jurisdiction. In each of the consolidated cases, at the court below the defendant had tendered the full monetary damages available to the plaintiff, but had not served an offer of judgment (OJ) or offered a stipulated judgment to the plaintiff. The trial court dismissed the plaintiff’s claim on mootness grounds. Summarizing the issue before the court, the Eleventh Circuit explained:

This consolidated appeal presents the issue of whether a settlement offer for the full amount of statutory damages requested under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq., moots a claim brought pursuant to the FDCPA. Appellants Anthony W. Zinni, Blanche Dellapietro, and Naomi Desty appeal the district court’s dismissal of their complaints for lack of subject matter jurisdiction. In each case, an Appellee sent an e-mail offering to settle an Appellant’s FDCPA case for $1,001—an amount exceeding by $1 the maximum statutory damages available for an individual plaintiff under the FDCPA. Appellees also offered attorneys’ fees and costs in each case, but did not specify the amount of fees and costs to be paid. Appellants did not accept the settlement offers. The district court subsequently granted Appellees’ motions to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), holding that the offers left Appellants with “no remaining stake” in the litigation. The district court then dismissed Appellants’ complaints with prejudice. We conclude the settlement offers did not divest the district court of subject matter jurisdiction.

After distinguishing a settlement from an accepted offer of judgment and discussing case law pertaining to each distinct situation, the Eleventh Circuit held that absent an actual judgment a mere offer of settlement cannot moot a claim:

The district court erred in finding Appellees’ settlement offers rendered moot Appellants’ FDCPA claims because the settlement offers did not offer full relief. See id. Each of the Appellants requested that the district court enter judgment in his or her favor and against an Appellee as part of the prayer for relief in the complaint. Appellees’ settlement offers, however, did not offer to have judgment entered against them. Because the settlement offers were not for the full relief requested, a live controversy remained over the issue of a judgment, and the cases were not moot. See Friends of Everglades, 570 F.3d at 1216.

Although the case concerned claims under the Fair Debt Collection Practices Act (FDCPA) the reasoning of the court is equally applicable to cases under the FLSA. In fact to a large extent the court relied on FLSA jurisprudence in reaching its decision.  At least within the Eleventh Circuit, this case seems to put to bed the short-lived argument fueled by the same court’s decision less than two years ago in the Dionne opinions.

Click Zinni v. ER Solutions, Inc. to read the entire Opinion.

Orozco v. Borenstein

Amazingly, before the ink could even dry on the Zinni opinion, 2 days later, a court in the District of Arizona was faced with a virtually identical issue. However, unlike the Eleventh Circuit (and like the Order reversed in Zinni) the court ruled that an FLSA defendant could moot an entire class’ claims simply by tendering the maximum money damages due. Thus, the Orozco court granted the defendant’s motion to dismiss on mootness grounds, for lack of subject matter jurisdiction, following a tender.

Describing the issue before it, the court explained:

Plaintiff brings this putative class action pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., the Arizona Wage Act, A.R.S. § 23–350, et seq., and the Arizona Minimum Wage Act, A.R.S. § 23–363, et seq. Plaintiff worked as an oven operator in the bagel baking operations of defendant Bada Bing Baking, LLC, doing business as Chompie’s Wholesale Bakery (defendants collectively referred to as the “Bakery”). Plaintiff contends that the Bakery violated the FLSA, as well as Arizona’s wage statutes, by failing to pay plaintiff and other similarly situated employees the required federal and state minimum wages for covered nonexempt employees. Plaintiff contends that, although the employees are paid slightly more than the minimum wage required by federal and state law, 29 U.S.C. § 206(a), A.R.S. § 23–363(A), the Bakery has implemented a policy of deducting certain work-related expenses from the employee’s paychecks, leaving their net pay below minimum wage. Specifically, plaintiff alleges that the Bakery deducts $12.50 per paycheck for uniform laundering, $10.00 for initial and lost electronic keys, $5.00 for initial and lost time cards, and $24.00 for “food handlers” health cards from Maricopa County.

After this lawsuit was filed, the Bakery reimbursed 51 current and former “minimum wage” employees for the uniform-related fees incurred in the 2 years preceding the filing of this lawsuit, along with liquidated damages as prescribed by 29 U.S.C. § 216(b). The Bakery contends that because it has tendered full payment for all claimed violations, there is no remaining live case or controversy, rendering this case moot.

For reasons known only to the plaintiff and his attorney, the plaintiff did not raise any issue regarding the defendant’s failure to allow the entry of judgment on the claims. Instead, the plaintiff contended that he had not been fully compensated for his claims because (1) he sought damages for a third year due to the Defendant’s “willful” FLSA violations, and (2) he was not reimbursed for certain other items. However, due to insufficiencies it cited in the plaintiff’s pleadings and his declaration submitted in opposition to the defendant’s motion, the court granted the defendant’s motion and dismissed the case.

Of note, the court declined to resolve the issue of whether the plaintiff was entitled to attorneys fees as the prevailing party, instead reserving on the issue until plaintiff had filed a motion for attorneys fees pursuant to the District of Arizona’s local rules.

Click Orozco v. Borenstein to read the entire Order.

Seymour v. PPG Industries, Inc.

In the final case discussed, the defendant actually did tender an offer of judgment, pursuant to FRCP 68, however it was arguably insufficient and thus, the defendant’s motion to dismiss was denied on that basis.

Interestingly, the parties in this salary misclassification collective action case had stipulated to the number of hours each of the plaintiffs had worked during the periods relevant to the claims. However, the parties disagreed as to how the plaintiffs’ damages were due to be calculated. As in many such cases, the defendant argued that the damages were to be calculated using the FWW or half-time methodology, while the plaintiffs asserted time and a half damages were due. Because the issue of how to calculate damages- and ultimately the amount of same- remained unresolved, the court held that the defendant’s offer of judgment could not be said to definitively by “full relief.” Thus, the defendant’s motion to dismiss for lack of subject matter jurisdiction was dismissed on this grounds.

Click Seymour v. PPG Industries, Inc. to read the entire Memorandum Opinion and Order.

So what’s the takeaway here? While it remains clear that a defendant cannot moot a claim where the damages themselves are in dispute, plaintiffs faced with offers that they believe provide full monetary relief, would be wise to demand a judgment as well if the goal is to avoid a dismissal on mootness grounds so that a settlement offer alone cannot moot their claim. Another extra step is to seek a declaratory judgment in the actual complaint.

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7th Cir.: Named-Plaintiffs Who Settled Their Individual Claims Following Decertification Retained Standing to Appeal Decertification Based on Possibility of Incentive Awards

Espenscheid v. DirectSat USA, LLC

This case presented the relatively novel issue of whether the named-plaintiffs in a decertified class/collective action retain standing to appeal decertification once they have settled their individual claims. Noting that it was a case of first impression, the Seventh Circuit held that individual employees had sufficient interest for standing to appeal decertification, in large part because they retained a financial stake inasmuch as the stood to receive incentive awards if the class/collective action was ultimately successful.

Briefly discussing the relevant procedural history and facts the court explained:

The district judge certified several classes but later decertified all of them, leaving the case to proceed as individual lawsuits by the three plaintiffs, who then settled, and the suits were dismissed. The settlement reserved the plaintiffs’ right to appeal the decertification, however, and they appealed. The defendants then moved to dismiss the appeal on the ground that the plaintiffs had suffered no injury as a result of the denial of certification and so the federal judiciary has lost jurisdiction of the case.

The court distinguished the case from one in which the defendant seeks to moot or “pick off” a class/collective by making an offer of judgment that exceeds the named-plaintiff’s damages and reasoned that the named-plaintiffs retained standing by virtue of prospective incentive awards, if the case were to proceed as a class/collective rather than individual basis:

One might think that because the plaintiffs settled, the only possible injury from denial of certification would be to the unnamed members of the proposed classes; and if therefore the plaintiffs have no stake in the continuation of the suit, they indeed lack standing to appeal from the denial of certification. Premium Plus Partners, L.P. v. Goldman, Sachs & Co., 648 F.3d 533, 534–38 (7th Cir.2011); Pettrey v. Enterprise Title Agency, Inc., 584 F.3d 701, 705–07 (6th Cir.2009). This is not a case in which a defendant manufactures mootness in order to prevent a class action from going forward, as by making an offer of judgment that exceeds any plausible estimate of the harm to the named plaintiffs and so extinguishes their stake in the litigation. As we explained in Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 546–47 (7th Cir.2003) (citations omitted), “the mooting of the named plaintiff’s claim in a class action by the defendant’s satisfying the claim does not moot the action so long as the case has been certified as a class action, or … so long as a motion for class certification has been made and not ruled on, unless … the movant has been dilatory. Otherwise the defendant could delay the action indefinitely by paying off each class representative in succession.”

But the plaintiffs point us to a provision of the settlement agreement which states that they’re seeking an incentive reward (also known as an “enhancement fee”) for their services as the class representatives. In re Synthroid Marketing Litigation, 264 F.3d 712, 722 (7th Cir.2001); In re Continental Illinois Securities Litigation, 962 F.2d 566, 571–72 (7th Cir.1992); In re United States Bancorp Litigation, 291 F.3d 1035, 1038 (8th Cir.2002); 2 Joseph M. McLaughlin, McLaughlin on Class Actions § 6:27, pp. 137–42 (6th ed.2010). The reward is contingent on certification of the class, and the plaintiffs argue that the prospect of such an award gives them a tangible financial stake in getting the denial of class certification revoked and so entitles them to appeal that denial.

After an extensive discussion of incentive payments to class representatives, the Seventh Circuit adopted the plaintiffs reasoning.  Additionally the court noted that judicial economies could never be preserved if the named-plaintiffs forfeited standing when they settled their individual claims, because another named-plaintiff would simply come forward and start the entire process anew, the court held that the named-plaintiffs here retained their standing to pursue class/collective issues, notwithstanding the settlement of their individual claims.  Thus, the court denied the defendants motion to dismiss.

Click Espenscheid v. DirectSat USA, LLC to read the entire Order denying Defendants’ Motion to Dismiss.

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D.Colo.: Statute of Limitations Tolled During Time Motion for Conditional Certification Pending

Stransky v. HealthONE of Denver, Inc.

This case was before the court on the plaintiffs’ Motion to Toll the Statute of Limitations, which was filed simultaneously with the plaintiffs’ motion for conditional certification of the case as a collective action. In granting the plaintiffs motion (in part) and tolling the statute of limitations as of the date on which the plaintiffs sought conditional certification, the court looked to the both the procedural realities of the opt-in provisions of 216(b) and the remedial purpose behind the FLSA. Significantly, the court noted that there would be no prejudice to the defendant in granting such tolling while the potential plaintiffs would be significantly prejudiced by the continued expiration of their respective statutes of limitations if the tolling were not granted.

After discussing cases from around the country that have granted equitable tolling under similar circumstances, largely based upon the amount of time that it took for the court to rule upon a plaintiff’s pending motion for conditional certification, because same is in the interests of justice, the court honed in on the policy supporting such decisions:

In the case of a collective FLSA action, a least one district court in the Tenth Circuit has explained that the unique circumstances of a collective action “is not only significant but justifies tolling the limitations period [ ] for the FLSA putative class until the court authorizes the provision of notice to putative class members or issues an order denying the provision of notice.” In re Bank of America Wage and Hour Emp’t Litig., No. 10–MDL–2138, 2010 WL 4180530 (D.Kan. Oct.20, 2010). In making that equitable tolling determination, the court in In re Bank of America utilized a flexible standard, where a court considers five factors in determining whether to equitably toll a statute of limitations: (1) lack of notice of the filing requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one’s rights; (4) absence of prejudice to the defendant; and (5) the plaintiff’s reasonableness in remaining ignorant of the particular legal requirement. Id. (citing Graham–Humphreys, 209 F.3d at 561).

Plaintiffs argue that the statue of limitations should be equitably tolled here in the interest of justice in order to protect the Opt-in Plaintiffs’ diminishing claims. The Court agrees. Although early notice to Opt-in Plaintiffs in a collective action such as this is favored, such notice was not possible here as Defendant is in sole possession of the names and last known physical addresses of all potential Opt-in Plaintiffs. As such, allowing Opt-in Plaintiffs’ claims to diminish or expire due to circumstances beyond their direct control would be particularly unjust. The Tenth Circuit has also recognized the possible need for equitable tolling under such conditions. See Gray v. Phillips Petroleum Co., 858 F.2d 610, 616 (10th Cir.1988) (tolling statute of limitations where plaintiffs were lulled into inaction and defendant did not show that any “significant prejudice” would result from allowing plaintiffs to proceed; defendant was “fully apprised” of the plaintiffs’ claims). Moreover, Defendant will not be prejudiced by such equitable tolling. See Baden–Winterwood, 484 F.Supp.2d at 828–29 (defendant not prejudiced because it “had full knowledge that the named Plaintiff brought the suit as a collective action on the date of the filing” and “was fully aware of its scope of potential liability.”). Indeed, Defendant fails to claim it would be prejudiced in any manner, let alone prejudiced unduly, were this Court to toll the applicable limitations period. Thus, having considered the particular facts of this case, the Court finds that the interests of justice are best served by tolling the statute of limitations for the Opt-in Plaintiffs in this case.

However, while the court granted the plaintiffs motion, it declined to toll the statute of limitations back to the date of the filing of the original complaint. Instead, the court held the appropriate date to begin tolling was the date on which the plaintiffs filed their motion for conditional certification.

Click Stransky v. HealthONE of Denver, Inc. to read the entire Corrected Order Granting in Part Plaintiffs’ Motion to Toll the Statute of Limitations.

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U.S.S.C. Grants Cert to Decide Whether a Defendant-Employer Can Moot a Putative Collective Action By “Picking Off” the Named Plaintiff

Genesis HealthCare Corp. v. Symczyk

As reported by law360 and the ScotusBlog, today the Supreme Court announced that it had granted Certiori to a Defendant-employer who sought to moot a putative collective action by offering “full relief” to the named-Plaintiff before she could file a motion seeking conditional certification of her claims as a collective action.

Initially, the trial court dismissed the plaintiff’s claims noting that:

 [Plaintiff] does not contend that other individuals have joined her collective action. Thus, this case, like each of the district court cases cited by Defendants, which concluded that a Rule 68 offer of judgment mooted the underlying FLSA collective action, involves a single named plaintiff. In addition, Symczyk does not contest Defendants’ assertion that the 68 offer of judgment fully satisfied her claims….

However, the Third Circuit reversed reasoning, in part:

When Rule 68 morphs into a tool for the strategic curtailment of representative actions, it facilitates an outcome antithetical to the purposes behind § 216(b). Symczyk’s claim-like that of the plaintiff in Weiss—was “acutely susceptible to mootness” while the action was in its early stages and the court had yet to determine whether to facilitate notice to prospective plaintiffs. See Weiss, 385 F.3d at 347 (internal quotation marks omitted). When the certification process has yet to unfold, application of the relation back doctrine prevents defendants from using Rule 68 to “undercut the viability” of either’ type of representative action. See id. at 344.

In sum, we believe the relation back doctrine helps ensure the use of Rule 68 does not prevent a collective action from playing out according to the directives of § 216(b) and the procedures authorized by the Supreme Court in Hoffmann–La Roche and further refined by courts applying this statute. Depriving the parties and the court of a reasonable opportunity to deliberate on the merits of collective action “conditional certification” frustrates the objectives served by § 216(b). Cf. Sandoz, 553 F.3d at 921 (explaining “there must be some time for a[n FLSA] plaintiff to move to certify a collective action before a defendant can moot the claim through an offer of judgment”). Absent undue delay, when an FLSA plaintiff moves for “certification” of a collective action, the appropriate course—particularly when a defendant makes a Rule 68 offer to the plaintiff that would have the possible effect of mooting the claim for collective relief asserted under § 216(b)—is for the district court to relate the motion back to the filing of the initial complaint.

Now the Supreme Court will apparently be weighing in on the issue.  

Of note, the plaintiff was a single plaintiff and had not sought conditional certification of a collective action at the time the defendant sought to moot the claim.  We will see how much, if at all, these facts play into the Court’s decision to come. 

Click ScotusBlog to read the briefs and Overtime Law Blog, to read our initial post regarding the 3rd Circuit’s Opinion.

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D.Conn.: Although Named Plaintiff Must File Consent to Join, Affidavit Submitted in Opposition to Motion to Dismiss Satisfied Consent Requirement

D’Antuono v. C & G of Groton, Inc.

This case was before the court on defendant’s motion for summary judgment. The defendant contended that the case should be dismissed, due to plaintiff’s failure to file a written consent to join within the relevant 3 year statute of limitations, as required by the FLSA. The case revolved around the somewhat novel issue of whether a named Plaintiff, who fails to file a written consent to join her own FLSA case, can nonetheless be deemed to have satisfied the consent requirement, by virtue of filing a written affidavit with the court that states her intention to proceed with an FLSA claim in court. Here, the court found that, on the facts presented, it was a close call. However, in line with the remedial purposes of the FLSA, the court agreed that plaintiff “consented” to join her FLSA case when she filed a prior affidavit in opposition to defendant’s motion to dismiss, because it was written evidence of her intention to participate in the case.

Framing the issue before it, the court explained:

The question presented is whether Mr. Cruz’s signed March 11, 2011 affidavit, attached as an exhibit to Plaintiffs’ response in opposition to a motion to dismiss, constitutes a signed, written consent filed with the court. In full, the only possibly relevant statement provides: “Given my current financial circumstances and my understanding of the costs associated with arbitration, I cannot afford to arbitrate my claims and I could not afford to undertake this litigation and pursue my rights if I had the risk of paying the Defendants’ costs if I lost at arbitration.” Pls.’ Mem. in Opp’n [doc. # 26–4] Ex. D ¶ 9 (Decl. of Ramona Cruz). At the time it was filed, Ms. Cruz was one of three named plaintiffs in this suit. All of the three named plaintiffs submitted signed affidavits with final paragraphs substantially similar to the text quoted above. See Pls.’ Mem. in Opp’n [docs. # 26–2, 26–3] Ex. B ¶ 13 (Decl. of Nicole D’Antuono), Ex. C ¶ 12 (Decl. of Karen Vilnit).

Discussing the authority cited by the parties, the court found no case to be on all fours with the facts presented:

The Court has located no dispositive precedent or closely analogous case. The cases most often cited by the parties are all distinguishable on the facts. See, e.g., Manning, 2011 WL 4583776, at *2–3 (finding that named plaintiff who had submitted a signed declaration stating ” ‘I am the named Plaintiff in this action’ ” and describing the facts of the litigation had met the consent requirement, but that named plaintiffs who had been deposed but had submitted no signed documents did not); Perkins, 2009 WL 3754097, at *3 n. 2 (holding that named plaintiff who submitted a signed declaration in support of a motion for class certification describing her job duties and stating that she ” ‘did not release any claims relating to unpaid overtime wages which are the subject of this litigation’ … insufficient to demonstrate her desire to take part in this action as a plaintiff”); Mendez, 260 F.R.D. at 52 (finding that named plaintiff who had submitted a signed affirmation in support of a motion for class certification stating ” ‘I am the Named Plaintiff in the above-captioned matter’ ” sufficient to meet the consent requirement).

Holding that plaintiff’s prior affidavit satisfied the requirement that all plaintiffs file a consent to join, the court reasoned:

Defendants’ arguments on the facts of prior cases are not convincing. It is irrelevant that Ms. Cruz does not explicitly claim to be a named plaintiff in the action; furthermore, the caption on her signed declaration states as much. Additionally, the fact that her declaration was submitted in response to a motion to dismiss, rather than in support of a motion for class certification, carries little weight. While a declaration attached to a motion for class certification may bolster a plaintiff’s argument that the declaration was meant to serve as a notice of consent, the inverse is not true.

Instead, the Court must determine, as a matter of law, whether Ms. Cruz’s signed declaration manifests a clear intent to be a party plaintiff. This question is a close one, and one which would not have arisen had Ms. Cruz’s counsel simply ensured that a written consent form was filed along with the complaint. Despite this lapse, the Court reads Ms. Cruz’s affidavit broadly as implicitly verifying the complaint, expressing an interest that legal action be taken to protect her rights, and expressing an interest in being a party plaintiff. See Manning, 2011 WL 4583776, at *3; Perkins, 2009 WL 3754097, at *3 n. 2; Mendez, 260 F.R.D. at 52. Unlike the plaintiff in Perkins, Ms. Cruz has expressed an interest not only in preserving her legal claims, but in “undertak[ing] this litigation and pursu[ing her] rights.” Pls.’ Mem. in Opp’n [doc. # 26–4] Ex. D ¶ 9 (Decl. of Ramona Cruz). Furthermore, while participation in a deposition is not dispositive or sufficient for the notice requirement, see Manning, 2011 WL 4583776, at *3, the Court finds that the fact that Ms. Cruz has already willingly undergone a lengthy deposition relevant in the evaluation of whether she intended to participate in this case. Finally, the Court notes that the two potential purposes of the notice requirement-ensuring both that the Defendants are aware of all potential plaintiffs and that each individual plaintiff intends to participate in the lawsuit—are both satisfied.

Thus, the court concluded that plaintiff’s affidavit was sufficient to meet the notice requirement.  Moreover, since the affidavit was filed within the three year statute of limitations, the court determined that plaintiff had satisfied the notice or consent requirement of the FLSA.

Click D’Antuono v. C & G of Groton, Inc. to read the entire Memorandum of Decision.

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S.D.N.Y.: Delay Caused By the Time Required for Court to Rule on Motion for Conditional Certification Is ‘Extraordinary Circumstance’ Justifying Equitable Tolling

McGlone v. Contract Callers, Inc.

This case was before the court on plaintiff’s motion for conditional certification of a collective action, seeking to permit court approved notice.  The court noted that another court, presented with a similar motion for conditional certification had previously denied same due to very significant differences in the factual circumstances in the employees’ work, depending on location.  Nonetheless the court granted plaintiff’s motion and conditionally certified the case with respect to the district in which the plaintiff was employed.  As discussed here, the court also granted plaintiff’s motion to equitably toll the statute of limitations for putative class members, as of the date the plaintiff filed his motion for conditional certification.  In so doing, the court joined other courts who have held that court delay in issuing a decision on a motion for conditional certification is of itself an “extraordinary circumstance” warranting the tolling of the statute of limitations.

Addressing the equitable tolling issue, the court said:

Normally in a FLSA collective action, the statute of limitations for each plaintiff runs when he or she files written consent with the court electing to join the lawsuit, not when the named plaintiff files the complaint. See 29 U.S.C. § 256(b). However, courts have discretion to equitably toll the limitations period in appropriate cases in order “to avoid inequitable circumstances.” Yahraes v. Restaurant Assocs. Events Corp., 2011 WL 844963, at *1 (E.D.N.Y. Mar.8, 2011). The Honorable Steven M. Gold stated that “the delay caused by the time required for a court to rule on a motion, such as one for certification of a collective action in a FLSA case, may be deemed an ‘extraordinary circumstance’ justifying application of the equitable tolling doctrine.” Id. at *2 (collecting cases). While plaintiffs wishing to pursue their rights cannot sit on them indefinitely, those whose putative class representatives and their counsel are diligently and timely pursuing the claims should also not be penalized due to the courts’ heavy dockets and understandable delays in rulings. Accordingly, the statute of limitations will be tolled as of the date of the filing of this motion.

While courts remain split on this issue, this is a good example of a court ruling on equitable tolling with the remedial purposes of the FLSA in mind.

Click McGlone v. Contract Callers, Inc. to read the entire Opinion.

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