Tag Archives: 29 U.S.C. § 216(b)

N.D.Ill.: Plaintiffs’ Motion for “Partial Decertification,” Seeking Subclasses by State Granted

Medina v. Happy’s Pizza Franchise, LLC

In an emerging trend in FLSA cases, this case was before the court on the plaintiffs’ motion for decertification.  The motion followed the defendants’ motion to dismiss, pursuant to FRCP 19, for failure to join necessary parties, franchisees who owned and operated its franchises.  The court granted plaintiffs’ motion, but noted that it was not considering the motion so much as a decertification motion in the collective action context, as a motion to subclass the existing opt-ins by geographic region (state).

Describing the relevant background the court explained:

Happy’s Pizza is a chain of franchise restaurants that sells pizza, chicken, seafood, and ribs in several states. Happy’s Pizza Franchise, LLC, sells the right to operate restaurants and use the Happy’s name and recipes to what it contends are independent franchisee corporations. Happy Asker is the sole member of Happy’s Pizza Franchise, LLC. Happy’s Pizza Chicago # 1, Inc. and Happy’s Pizza Chicago # 2, Inc. are two of the franchisee corporations. They operate restaurants in Chicago.

Plaintiffs filed suit in May 2010, alleging that Happy’s regularly directed them to work more than forty hours a week but did not pay them overtime wages in violation of the FLSA. All three plaintiffs alleged that they had worked at the Chicago Happy’s restaurants operated by the defendant corporations. Medina and Escobar also alleged that they had worked in Happy’s restaurants in Lansing and Ann Arbor, Michigan and that they had been subjected to the same practices there. Plaintiffs sought to include in the case similarly situated Happy’s employees who likewise had not been paid appropriate overtime wages.

The Court granted conditional certification and authorized the plaintiffs to send notice to Happy’s employees. At least 254 plaintiffs have opted into the lawsuit, although the parties dispute the exact number. Among the opt-in plaintiffs, a majority worked for Happy’s restaurants in either the Eastern or Western Districts of Michigan. Approximately fifty plaintiffs worked for Happy’s restaurants in Ohio, all in the Northern District of Ohio, and twenty-three of the opt-in plaintiffs worked for Happy’s restaurants in Illinois, all in the Northern District of Illinois. Only about twenty of the opt-in plaintiffs worked for Happy’s restaurants that are operated by the two Happy’s franchises named as defendants, Happy’s Pizza Chicago # 1 and Happy’s Pizza Chicago # 2. The remaining opt-in plaintiffs worked for forty-six other Happy’s restaurants. Defendants contend these restaurants are all operated by distinct franchisee corporations that are not defendants in this suit.

Following the defendants’ motion to dismiss, based on plaintiffs’ failure to join the franchisees whom various opt-ins worked for as defendants, the plaintiffs moved for what they called partial decertification, asking the court to transfer all of the opt-in plaintiffs who had not worked for Happy’s restaurants in this district to the appropriate districts in Michigan or Ohio.

Among other things, in opposition to the plaintiffs’ motion, the defendants argued: (1) partial decertification followed by transfer of the opt-in plaintiffs, was inappropriate, because decertification of a collective action results in dismissal of opt-in plaintiffs; (2) that the court lacked the authority to transfer the Ohio and Michigan plaintiff subclasses to district courts in those states; (3) that the court should have considered their motion to dismiss prior to addressing plaintiffs motion; and (4) that neither 1 nor the proposed 4 collective actions were appropriate because the plaintiffs were not similarly situated to one another, having worked for different franchisees.

The court rejected each of the defendants’ contentions, reasoning in part:

In this case, the use of subclasses, based on the judicial districts in which the plaintiffs worked, will similarly be a more efficient mechanism for adjudicating the plaintiffs’ claims. As defendants have argued, the plaintiffs from the different judicial districts worked at different restaurants, which suggests that a significant part of the evidence for each subclass would be distinct. Defendants also note that the Michigan and Ohio plaintiffs cannot bring supplemental claims under Illinois law, as the named plaintiffs have done, and that they may be in a position to assert supplemental state law claims based on Michigan and Ohio law, which the Illinois plaintiffs cannot bring. Dividing the plaintiffs into subclasses will allow those claims to be more effectively handled as well…

Because there is no basis to conclude at this point that the plaintiffs are not similarly situated, there is no reason to decertify the collective action and dismiss the opt-in plaintiffs. Instead, the Court divides the opt-in plaintiffs into subclasses and severs from this case the three subclasses containing the Michigan and Ohio opt-in plaintiffs.

Click Medina v. Happy’s Pizza Franchise, LLC to read the entire Memorandum Opinion and Order.

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2 New Decisions Regarding Enforcement of Arbitration Agreements in Context of FLSA Claims Reach Opposite Results

Recent weeks have brought more opinions regarding the issue of whether specific arbitration agreements are enforceable.  However, as two recent opinions show, these decisions continue to be fact-specific in virtually all instances, and judge and/or state-law specific in others.  In the first case, Carey v. 24 Hour Fitness USA Inc., relying on Texas state law, the Fifth Circuit affirmed a lower court’s decision holding that an arbitration agreement allowing the employer to unilaterally change the terms lacked the necessary consideration to render the agreement enforceable.  In a second case, LaVoice v. UBS Financial Services, Inc., a court within the Southern District of New York examined a different arbitration-related issue- the substantive unconscionability of a collective action waiver- concluding that compelling a potentially high value FLSA claim to arbitration on an individual basis does not conflict with the substantive law regarding the FLSA’s collective action provisions.  Significantly, the court’s conclusion in this regard appears to conflict with another recent holding discussed here, in which another court within the same district held that collective action waivers are unenforceable per se, because they prevent employees from vindicating their substantive statutory rights under the FLSA.

Carey v. 24 Hour Fitness USA Inc.

Law360 aptly summarized this decision as follows:

“The Fifth Circuit on Wednesday allowed a proposed overtime class action against 24 Hour Fitness USA Inc. to go forward, finding an arbitration agreement at issue contained an ‘escape hatch’ for the fitness chain that made it unenforceable.

In a unanimous, published opinion, the appeals court upheld a Texas federal court’s ruling that the arbitration agreement in 24 Hour Fitness’ employee handbook was illusory because it allowed the company to retroactively modify or terminate the agreement.

Because 24 Hour Fitness reserved the right to unilaterally adjust the conditions of employment — including those which required employees to arbitrate claims on an individual basis — the appeals court found that the arbitration agreement was invalid from the outset.

‘If a 24 Hour Fitness employee sought to invoke arbitration with the company pursuant to the agreement, nothing would prevent 24 Hour Fitness from changing the agreement and making those changes applicable to that pending dispute if it determined that arbitration was no longer in its interest,’ the panel said.

Click Carey v. 24 Hour Fitness USA Inc. to read the entire Fifth Circuit Opinion.

 

LaVoice v. UBS Financial Services, Inc.

In LaVoice, the court held that an arbitration agreement, requiring individual arbitration was enforceable, despite plaintiff’s argument that such an scheme would deprive plaintiff of substantive statutory rights to proceed collectively under the FLSA.  Discussing the issue, the court reasoned:

“…LaVoice also argues that the arbitration agreements between him and UBS are unenforceable because they would preclude him from exercising his statutory rights. To support this position, LaVoice likens the class waivers in the instant case with those that were found unenforceable in the Amex line of cases. LaVoice also draws comparison between his circumstances and those of the plaintiff in Sutherland v. Ernst & Young LLP, 768 F.Supp.2d 547 (S.D.N.Y.2011).

The enforceability of a class action waiver in an arbitration agreement must be considered on a case-by-case basis “on its own merits, governed with a healthy regard for the fact that the FAA is a congressional declaration of a liberal federal policy favoring arbitration agreements.” Amex II, 634 F.3d at 199. Turning to the class waiver at issue and LaVoice’s specific circumstances, this Court finds that the “practical effect of enforcement of the waiver” in the instant case would not “preclude” LaVoice from exercising his rights under the statutes. Id. at 196. The Court comes to its finding that LaVoice’s statutory rights will not be precluded by enforcement of the class waiver after reviewing his submissions regarding: his estimated damages claim, his estimated attorneys’ fees, his estimated expert fees, his disinclination to pursue his claims individually, his counsel’s disinclination to pursue the claims individually, and his likelihood of success at arbitration.

Although LaVoice and Defendants contest the value of LaVoice’s overtime claim, in reaching its decision, the Court accepts the figure cited in LaVoice’s own opposition papers of overtime claims between $127,000 to $132,000. Aff. Jeffrey G. Smith in Supp. of Opp’n. to Mot. to Compel Arbitration at ¶ 5. Assuming this self-reported value of claims, the Court finds that LaVoice’s circumstances differ drastically on their face from those of the plaintiffs in either the Amex line of cases or Sutherland. Plaintiffs in those cases could each only claim de minimus damages of less than $6000.

With respect to the estimated attorneys’ fees, the Court finds that, unlike the arbitration agreement at issue in Sutherland, the arbitration agreements at issue in the instant case would permit LaVoice to recover an award of attorneys’ fees. Since the agreements authorize the arbitrator(s) to “award whatever remedies would be available to the parties in a court of law” and awards of attorneys’ fees are mandatory for the prevailing party under the FLSA, the agreements themselves crate no impediment to LaVoice’s recovery of fees. See Ex. 6 to Decl. of Matthew Levitan at 20; Ex. 10 to Decl. of Matthew Levitan at 3; and 29 U.S.C. § 216(b) (“The court in such action shall … allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.”) The instant case is therefore distinguishable from Sutherland and its consideration of attorneys’ fees in determining whether plaintiff’s claims were unarbitrable. See also Banus v. Citigroup Global Mkts., Inc., No. 09–7128, 2010 WL 1643780, at *10 n. 61 (S.D.N.Y. Apr.23, 2010) (enforcing class action waiver in arbitration agreement where plaintiff’s estimated recovery was $45,675.36 and attorney’s fees would be “at least $100,000.”)

The court also evaluated and rejected plaintiff’s claim that expert costs to be incurred would be prohibitive in an individual claim, whereas spreading the cost over a collective group would be more palatable and rejected same, in the context of plaintiff’s proffered argument that his counsel would be disinclined to pursue his claims on an individual basis by themselves.

The court concluded, “[i]n light of the foregoing, the Court finds that LaVoice has not met his “burden of showing the likelihood of incurring” such “prohibitively expensive” costs such that the class waiver provisions in the instant action would preclude him from bringing his claims against Defendants in an individual or collective capacity. Amex II, 634 F.3d at 197 (citing Randolph, 531 U.S. at 92.)”

Click LaVoice v. UBS Financial Services, Inc. to read the entire Memorandum and Order compelling the case to arbitration on an individual basis.

As more and more cases are decided following recent United States Supreme Court jurisprudence on arbitrability and class waiver issues, it’s becoming more and more clear that the results are very fact-specific to each case.  Hopefully, higher courts will begin to weigh in on some of the broader issues and give some clarity in the near future.

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S.D.Fla.: Defendants Did Not Moot FLSA Case By Tender of Unpaid Wages and Liquidated Damages Without Attorneys Fees and Costs

Diaz v. Jaguar Restaurant Group,  LLC

In the first post-Dionne II case, a court in the Southern District has denied an FLSA defendants’ motion to dismiss based on tender of unpaid wages and liquidated damages, absent payment of attorneys fees and costs.  The bizarre procedural history involved the defendants “tender” of wages and liquidated damages, only after prevailing at trial, and reversal at the Eleventh Circuit due to the trial court’s order permitting the defendants to amend their answer to assert a previously unpled exemption during the trial.

The Order reads in part:

“To a great extent, the pending motion to dismiss has now been rendered moot by the Eleventh Circuit’s substitute opinion entered in the case of Dionne v. Floormasters Enterprises, Inc., No. 09-15405 (11th Cir. Jan. 13, 2012), which clarified that the Court’s opinion in that case is limited to its very narrow facts and, specifically, requires a concession of mootness and does not apply to the tender of full payment of amounts claimed by the employee in a FLSA case before trial or after judgment. The pending motion is based entirely upon a proposed extension of the Court’s now-withdrawn original opinion. Moreover, other cases that considered the issues raised here rejected attempts to expand the scope of the original opinion. See, e.g., Tapia v. Florida Cleanex, Inc., No. 09-21569 (S.D. Fla. Oct. 12, 2011) (Ungaro, J., D.E. 67, collecting cases). Judge Ungaro’s opinion has now been sustained by the Eleventh Circuit on rehearing. And, even under the original panel opinion, the Court could not possibly find that Defendant’s unilateral actions taken after a trial and an appeal rendered Plaintiff’s claim for damages and attorneys’ fees moot. But, in any event, the entire issue is now moot for purposes of this case.”

Click Diaz v Jaguar Restaurant Group, LLC to read the entire Order (contained in the Docket Sheet for the case at Docket Entry 108).

Thanks to Rex Burch for the head’s up on this Order.

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11th Cir.: Following Tender of Unpaid Wages and Liquidated Damages, an Employer Only Moots a Case if the Plaintiff Agrees to Dismissal, Absent Payment of Mandatory Fees and Costs

Dionne v. Floormasters Enterprises, Inc.

Following a controversial opinion that created more questions than it answered, the Eleventh Circuit reconsidered it’s prior Opinion in this case and in so doing largely restricted its holding to the unique facts presented in the case.  Previously the Court had held that  an employer, who denies liability for nonpayment for overtime work, need not pay attorney’s fees and costs pursuant to 29 U.S.C. § 216(b) of the Fair Labor Standards Act (“FLSA”) if the employer tenders the full amount of overtime pay claimed by an employee, and moves to dismiss on mootness grounds where the employee concedes that “the claim for overtime should be dismissed as moot.  Although the prior Opinion seemed restricted to these unique facts where the employee conceded that the overtime claim should be dismissed (but attempted to reserve as to fees/costs), courts throughout the Eleventh have since expanded the holding to scenarios where the employee makes no such stipulation.  Here, the Eleventh Circuit affirmed the prior decision, but clarified and limited its applicability.

Significantly, the Eleventh Circuit included the following footnote in its new Opinion:

“Our decision in this matter addresses a very narrow question: whether an employee who conceded that his claim should be dismissed before trial as moot, when the full amount of back pay was tendered, was a prevailing party entitled to statutory attorney’s fees under § 216(b). It should not be construed as authorizing the denial of attorney’s fees, requested by an employee, solely because an employer tendered the full amount of back pay owing to an employee, prior to the time a jury has returned its verdict, or the trial court has entered judgment on the merits of the claim.”

It remains to be seen exactly how the new Dionne Opinion will be applied by trial courts, but it does appear that much of the uncertainty created by the initial Opinion has now been resolved.  To that end, it appears that a Plaintiff who has suffered a theft of his or her wages can now safely accept tender of such wages (and liquidated damages) in response to a lawsuit to collect same, without fear that the employer can avoid payment of mandatory fees and costs, as long as they do not agree that the tender moots the case.

Click Dionne v. Floormasters Enterprises, Inc. to read the entire Opinion on Petition for Rehearing.

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E.D.Pa.: Dukes Does Not Affect Court’s Analysis On 216(b) Conditional Cert Motion; Defendant’s Motion to Reconsider Denied

Spellman v. American Eagle Exp., Inc.

In one of the first decisions, post-Dukes, to clarify what affect the Supreme Court’s recent decision will have on conditional certification of FLSA cases, the answer appears to be not much.

In Dukes, the Supreme Court held that the trial court had inappropriately certified a class of over a million women employed by Wal-mart, based on claims of gender bias.  The Supreme Court reasoned that the plaintiffs had not met their burden to demonstrate the requisite commonality required by FRCP 23.  In the wake of Dukes, there was much speculation as to whether courts would extend the reasoning in Dukes to cases seeking conditional certification of collective actions under 216(b) of the FLSA.  In one of the first decisions rendered on this issue, the answer appears to be a resounding no.

This case was before the court on the defendant’s motion seeking reconsideration of the court’s prior order conditionally certifying a class of drivers employed by defendant.  Plaintiffs alleged that defendant, a trucking company, improperly misclassified all of its drivers as independent contractors, when they were really employees.  Holding that plaintiffs had met their lenient burden of proof as so-called stage one, the court conditionally certified a nationwide class of drivers, all of whom had been classified as independent contractors.  Following the Duke’s decision, the defendant sought reconsideration of the order conditionally certifying the class.  Denying the motion, the court explained that the differences between FRCP 23, the class action provision under which Dukes was decided and 216(b), the opt-in provision for FLSA collective actions render Dukes inapplicable in the context of an FLSA collective action.  As such, the court denied defendant’s motion.

The court reasoned:

“The instant case is a collective action brought pursuant to the FLSA, 29 U.S.C. § 216(b). Unlike Rule 23 class actions. the FLSA requires collective action members to affirmatively opt in to the case. See § 216(b). To determine whether the proposed group of plaintiffs is “similarly situated,” and therefore qualified to proceed as a conditional collective action, a district court applies a two-step test. See Smith v. Sovereign Bancorp, Inc., No. 03–2420, 2003 U.S. Dist. LEXIS 21010 (E.D.Pa. Nov. 13, 2003). In the first step, which is assessed early in the litigation process, the plaintiff at most must make only a “modest factual showing” that the similarly situated requirement is satisfied. See Bosley v. Chubb Corp., No. 04–4598, 2005 U.S. Dist. LEXIS 10974, at *7–9 (E.D.Pa. Jun. 3, 2005). The Plaintiffs have made this modest factual showing, and this Court’s analysis is not affected by Dukes. The second step of the collective action certification process will be conducted at the close of class-related discovery, at which time this Court will conduct “a specific factual analysis of each employee’s claim to ensure that each proposed plaintiff is an appropriate party.” Harris v. Healthcare Servs. Grp., Inc., No. 06–2903, 2007 U.S. Dist. LEXIS 55221, at *2 (E.D.Pa. Jul. 31, 2007). At this second stage, AEX may argue that Dukes‘s analysis of what constitutes a “common question” is persuasive to this Court’s analysis of whether an FLSA collective action should be certified. In the interim, AEX’s motion for reconsideration is denied.”

Click Spellman v. American Eagle Exp., Inc. to read the entire Order.

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S.D.N.Y.: SOL Equitably Tolled, Where Decision on Plaintiffs’ Motion for Conditional Certification Delayed, Notwithstanding Plaintiffs’ Diligence In Pursuing Same

Yahraes v. Restaurant Associates Events Corp.

This case was before the court on plaintiffs’ motion seeking equitable tolling of their FLSA claims.  During oral argument on plaintiffs’ motion to certify that this case may proceed as a collective action pursuant to 29 U.S.C. § 216(b), the court had questioned whether the 2007 FLSA claims, even assuming that defendants’ violation was willful, were still viable or were now time-barred.  Plaintiffs conceded that, absent an order equitably tolling the statute of limitations, their claims were indeed outside of the statute of limitations.  However, Plaintiffs argued that, since they had moved for conditional certification very early on in the case and only through events outside of their control had a decision on same been delayed, the court was due to toll the statute of limitations.  The court agreed and tolled the statute of limitations.

The court reasoned:

“The FLSA provides for a two-year statute of limitations generally, with an additional one-year extension for willful violations. 29 U.S.C. § 255(a). In a FLSA collective action, the statute of limitations runs for each plaintiff until he files written consent with the court to join the lawsuit. Id. § 256(b). Thus, unlike the statute of limitations in a Rule 23 class action which is tolled for all putative class members upon the filing of the complaint, the limitations periods in a FLSA action continues to run until an individual affirmatively opts into the action. Moreover, “[s]igned consents do not relate back to the original filing date of the complaint.” Lee v. ABC Carpet & Home, 236 F.R.D. 193, 199 (S.D.N.Y.2006). Nonetheless, the court has the discretion to equitably toll the limitations period.

Federal courts should grant equitable tolling “sparingly,” Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990), and “only … in [ ] rare and exceptional circumstance[s],” Zerilli-Edelglass v. New York City Transit Auth., 333 F.3d 74, 80 (2d Cir.2003) (alteration in original) (internal quotation marks omitted). Equitable tolling is generally reserved for situations “where the claimant has actively pursued his judicial remedies by filing a defective pleading during the statutory period, or where the complainant has been induced or tricked by his adversary’s misconduct into allowing the filing deadline to pass.”   Irwin, 498 U.S. at 96. Nevertheless, “[a] statute of limitations may be tolled as necessary to avoid inequitable circumstances.” Iavorski v. U.S. Immigration & Naturalization Serv., 232 F.3d 124, 129 (2d Cir.2000). In determining whether equitable tolling is warranted, the Second Circuit has stated that a court “must consider whether the person seeking application of the equitable tolling doctrine (1) has acted with reasonable diligence during the time period she seeks to have tolled, and (2) has proved that the circumstances are so extraordinary that the doctrine should apply.” Zerilli-Edelglass, 333 F.3d at 80-81 (internal quotation marks omitted).

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. See Abadeer v. Tyson Foods, Inc., 2010 WL 5158873, at *2-4 (M.D.Tenn. Dec.14, 2010); Israel Antonio-Morales v. Bimbo’s Best Produce, Inc., 2009 WL 1591172, at *1 (E.D.La. Apr.20, 2009) (collecting cases for the proposition that “[c]ourts routinely grant equitable tolling in the FLSA collective action context to avoid prejudice to actual or potential opt-in plaintiffs that can arise from the unique procedural posture of collective actions”); Stickle v. Sciwestern Mkt. Support Ctr., 2008 WL 4446539, at *22 (D.Ariz. Sept.30, 2008) (collecting cases); Owens v. Bethlehem Mines Corp., 630 F.Supp. 309, 312 (S.D.W.V.1986). But see Hintergerger v. Catholic Health Sys., 2009 WL 3464134, at *14-15 (W.D.N.Y. Oct.21, 2009) (denying tolling for the time period while certification motion was pending).

Plaintiffs argue for equitable tolling primarily on the ground that they have diligently pursued their claims and, through no fault of their own, have been frustrated in their attempts to send notice any sooner to potential 216(b) opt-in plaintiffs. Docket Entry 96. I find that the circumstances of this case, and in particular plaintiffs’ diligence in pursuing the FLSA claims on behalf of putative opt-ins, warrant equitable tolling to avoid an inequitable result. A discussion of the procedural history of this case will explain the “extraordinary circumstances” present here that justify tolling.

In addition, plaintiffs contend that Judge Townes’ tolling is still ongoing. Docket Entries 96, 102. For the reasons just stated, I do not reach this question either.

Less than one month after filing an amended complaint, plaintiffs filed a fully-briefed motion to certify the collective action.FN4 Docket Entries 33-39. In their opposition to plaintiffs’ certification motion, defendants noted that one of the defendants, Amerivents, had recently entered into an agreement with the New York State Department of Labor (“NYSDOL”) to pay unpaid wages. Docket Entry 41 at 14. During a conference in June, 2010, Judge Townes issued a stay of the proceedings until November 19, 2010, to await the result of the NYSDOL investigation. The parties agree that plaintiffs’ claims were tolled for approximately 160 days while the stay was in place. See Docket Entry 102 n. 3 (stating that 160 days is “the minimum undisputed number of days the statute of limitations was tolled”); see also Tr. 5.

After the stay was lifted, defendants requested leave to re-brief their opposition to the certification motion, and sought to defer the certification motion until Judge Townes decided their motion to dismiss, which had not yet even been filed. Docket Entry 81. During a telephone conference held in December, 2010, I set a short briefing schedule for the certification motion, with the fully-briefed motion due at the end of January, 2011. At the oral argument held on February 9, 2011, I granted plaintiffs’ motion for certification of the collective action.

This procedural history demonstrates that plaintiffs have vigorously pursued their claims and, through no fault of their own, have been delayed in prosecuting their action and distributing 216(b) notice to potential opt-in plaintiffs. Moreover, defendants’ actions-re-briefing the certification motion, seeking to defer certification in anticipation of dispositive motions, and failing to produce documents in connection with the NYSDOL investigation have frustrated plaintiffs’ diligent attempts to ensure that claims did not expire. I attribute no trickery or wrongdoing on the part of defendants. I do, however, conclude that defendants will not be prejudiced by any tolling because they have been on notice since the complaint was served in March, 2010, that they were potentially liable for 2007 FLSA claims. Accordingly, in the interest of fairness, I find equitable tolling is warranted from the date plaintiffs served their original certification motion, May 3, 2010, to June 8, 2010, the date Judge Townes issued the stay (a period of 37 days), and from the date plaintiffs re-filed their certification motion, December 17, 2010, to February 9, 2011, the date I granted it (a period of 55 days). The additional 92 days will permit any collective member who timely opts in to maintain a FLSA claim based on wages allegedly due for labor performed in September, 2007, assuming plaintiffs establish defendants’ willful violation of the statute.

For the reasons stated above, I find equitable tolling of plaintiffs’ FLSA claims warranted in light of the procedural history of this case.”

Click Yahraes v. Restaurant Associates Events Corp. to read the entire decision.

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2d. Cir.: Contested Attorney’s Fee Petition Must Be Accompanied By Contemporaneous Time Records

Scott v. City of New York

After prevailing at trial, the Plaintiff in this Fair Labor Standards Act (FLSA) case, moved for an award of attorney’s fees and costs pursuant to 216(b).  The Defendant opposed the amount of attorney’s fees sought by Plaintiff’s attorney.  The trial court awarded plaintiffs’ attorney partial attorney fees, based on the fees asserted.  The Defendant appealed the award, asserting that the fee award was improper, inasmuch as the Plaintiff’s attorney had not submitted contemporaneous time records in support of his fee application.  Plaintiff’s attorney cross-appealed from denial of certain of those fees.  On appeal, the Second Circuit held that a contested attorney’s fee petition must be accompanied by contemporaneous time records.  Therefore, they remanded the case back to the trial court in order to make a detailed finding regarding appropriate fees to be awarded (or in the alternative to state the basis for an exemption from such requirements).

Click Scott v. City of New York to read the entire opinion.

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E.D.Va.: Notwithstanding Prior Conditional Certification Of Almost Identical Class, Class Conditionally Certified

Pollard v. GPM Investments, LLC

This case was before the court on the plaintiff’s motion for conditional certification.  The defendant opposed the motion on several grounds.  As discussed here, the court rejected the defendant’s arguments that conditional certification was inappropriate because: (1) the case and proposed class were largely duplicative of another case that had previously been certified, and (2) the plaintiffs had waited too long to move for conditional certification.

Rejecting the defendant’s argument that the case was not appropriate for certification, due to another almost identical case, that had previously been certified, the court stated:

“A class action filed in the District of Connecticut makes nearly identical allegations against Defendant as the instant case. Store managers who worked for Defendant between March 14, 2005, and October 22, 2008 received notice of the Connecticut litigation and were invited to join the class action. Plaintiffs argue that the Court should order that notice of the present litigation be issued to all store managers employed by Defendant since February 22, 2007, including those who received notice of the Connecticut litigation. Plaintiffs assert that the store managers who were given notice of the Connecticut litigation and those who joined that litigation should be given the opportunity to join the instant litigation to ensure that they are properly compensated for the overtime hours they may have worked since the Connecticut litigation’s notice period. Plaintiffs further assert that choosing not to join one § 216(b) action should not preclude a person from joining another action.

Defendant, on the other hand, argues that the Court should limit notice to (1) deli managers and (2) store managers who were not noticed in Connecticut case. Defendant states that this is fair because one of the goals of § 216(b) is to avoid “a multiplicity of duplicative suits….” Hoffmann, 493 U.S. at 172. Defendant also asserts that it is not asking the Court to limit or prohibit a second FLSA class action that has the same pool of plaintiffs. Instead, Defendant asks the Court to put the burden on Plaintiffs to show that the rights of the potential class members who received notice but did not join the Connecticut litigation will be prejudiced if they are not given a second opportunity to opt-in. Defendant argues that Plaintiffs cannot satisfy this burden because there is no evidence that the store managers who received notice of the Connecticut case and declined to join would be prejudiced if they did not receive a second notice. Defendant also asserts that the forty-eight store managers who are already plaintiffs in the Connecticut case should not be re-noticed because they chose to join the Connecticut litigation and that decision should not be disturbed.

Defendant has imposed upon Plaintiffs a burden where none exists. Furthermore, Defendant acknowledges that there is no authority that limits the right of potential plaintiffs to receive notice of § 216(b) lawsuits. As such, the Court will not impose this burden on Plaintiffs. To the extent Defendant believes potential class members should not be permitted, Defendant may raise those arguments at the second stage of the process.”

Rejecting the defendant’s argument regarding the timeliness of plaintiff’s motion, the court stated:

“Defendant argues that Plaintiffs unreasonably delayed in bringing the instant Motion in an attempt to obtain a four or five month delay in the trial of this matter. Defendants note that Plaintiffs waited nearly six months after filing the Complaint to request Court-supervised notice pursuant to § 216(b) of the FLSA. Because Plaintiffs’ requested notice period would expire after the November 22, 2010 trial date in this matter, Defendants argue that Plaintiffs’ request is untimely and should be denied. Plaintiffs assert that Defendant has made no argument that it has been prejudiced by Plaintiffs’ delay in bringing the Motion and that continuing the trial date should not present an issue because “[t]he judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” Hoffman, 493 U.S. at 170.

Because Defendant has not shown that it has suffered prejudice due to the timing of Plaintiffs’ Motion, the Court finds that the Motion is not untimely.”

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W.D.Mo.: Where Over 1,000 Opt-ins, “Full Discovery” Targeting All Class Members Inappropriate

Dernovish v. AT&T Operations, Inc.

This case involved a collective action brought under the Fair Labor Standards Act (“FLSA”). Plaintiffs, call center employees, alleged that Defendant failed to pay them for some time spent working, while they were in the process of logging in to Defendant’s computer system, prior to their scheduled shift.  The issue before the Court was what proper scope of discovery should be granted to Defendant, with respect to the over 1,000 members of the opt-in class.  While the Defendant maintained that all opt-ins were parties and thus, they were entitled to full discovery from each and every class member, the Plaintiffs disagreed.  The Court held that the opt-ins need only produce limited discovery responses, because they were akin to class members in a Rule 23 class.

Discussing the issue, the Court said:

“The Court holds Plaintiffs’ view is more appropriate. Normally, a class action governed by Rule 23(b)(3) would permit those defined by the class definition to opt out of the suit. The FLSA effectively changes the normal situation in two ways: it creates its own class action device that replaces the one created in Rule 23 and requires individuals defined by the class definition to opt in, not opt out. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989) (describing section 216(b) as permitting “employees to proceed on behalf of those similarly situated”); Anderson v. Unisys Corp., 47 F.3d 302, 305 n. 6 (8th Cir.1995) (declaring that “Certification of ADEA class actions is governed by 29 U.S.C. § 216(b) rather than Fed.R.Civ.P. 23.”); Kelley v. Alamo, 964 F.2d 747, 749 (8th Cir.1992) (“the FLSA provides for a form of ‘class action’ suit under” section 216(b)); Kloos v. Carter-Day Co., 799 F.2d 397, 399-400 (8th Cir.1986) (describing section 216(b) as creating a “type of statutory class action”). Other courts have reached the same conclusion. E.g., Alvarez v. City of Chicago, No. 09-2020, slip op. at —- (7th Cir. May 21, 2010) (“A collective action is similar to, but distinct from the typical class action…. The principle difference is that plaintiffs who wish to be included in a collective action must affirmatively opt-in to the suit….”); Thompson v. Weyerhaeuser Co., 582 F.3d 1125, 1127 (10th Cir.2009) (“the opt-in class mechanism of the [FLSA] authorizes class actions when the complaining parties are ‘similarly situated.’ ”); Smith v. T-Mobile USA Inc., 570 F.3d 1119, 1122 (9th Cir.2009) (“A plaintiff seeking FLSA collective action certification does not have a procedural right to represent a class in the absence of any opt-in plaintiffs.”); Ruehl v. Viacom, Inc., 500 F.3d 375, 379 & n. 3-4 (3d Cir.2007). This characterization suggests the permissible scope of discovery for the class members is not necessarily intended to be as great as it is for the actual parties to the case.

Another factor affecting the scope of discovery is the measure of damages, which consists of “the payment of wages lost and an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). This determination is based on a formula, not subjective testimony; there is no recovery for pain and suffering or emotional distress. Defendant’s policies provide the commonality that binds the class together. If it is determined that employees were required to login before the start of their shift, damages will be calculated by multiplying the applicable wage by the amount of time necessary to login, multiplied again by the number of days the employee worked. There is also no great need to rely on the employees’ memory to ascertain damages-the superior, more reliable evidence resides in Defendant’s records.”

The Court was careful to note that the Defendant was entitled to some individualized discovery:

“Nothing the Court has said, however, means that Defendant is not entitled to any information about the individuals who opt in. Even in a traditional class action under Rule 23, class members may be required to supply a certain amount of information. However, allowing the “full” range of discovery defeats the purpose of permitting a collective/class action by denying the efficiencies such a procedure is intended to produce. The nature and extent of the discovery effort is subject to the trial court’s discretion and depends on the nature of the case and the purported need for the information. Manual for Complex Litigation (Fourth) at 256.

With these principles in mind, the Court has reviewed Defendant’s discovery requests. The Court concludes it is appropriate and proper for those who opt-in to the case to answer Interrogatory Number Two. This interrogatory asks the individual to identify job titles, supervisors, and locations worked for Defendant. The remaining interrogatories ask for information that is more readily (and conclusively) found in Defendant’s records (such as Interrogatories 3 and 5), carries a significant burden that can be obviated by seeking discovery from the named Plaintiffs (such as Interrogatories 1 and 4), or ask for information that is of dubious importance in the case (such as Interrogatories 6, 7, 8, and 9).

The Request for Production of Documents presents an additional problem: Defendant has posed “contention”-type requests. For instance, Defendant asks the class members to produce “[a]ll documents regarding your assertion that AT & T ‘required these call center employees to be ready to work at the beginning of their scheduled shift.’ “ The undersigned generally finds such interrogatories to be unnecessary at best and inappropriate at worst . Here, requiring the class members to supply the documents will result in significant duplication and inefficiencies that are not warranted in the circumstances of this case. The class members will be required to produce any documents they may have responsive to requests 2 and 3, and submit any such documents along with their answer to Interrogatory Number Two. The remaining requests for documents need not be answered by the class members.”

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Filed under Collective Actions, Discovery

D.S.C.: South Carolina Is Sovereign Immune From FLSA Suits Seeking Money Damages

Morris v. South Carolina Dept. of Corrections

In this case Plaintiff, an employee of the South Carolina Department of Corrections (“SCDC”), sought compensation for overtime work under Section 16(b) of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b).  The Defendant moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), claiming it was sovereign immune from such claims.  The Court agreed and granted Defendant’s motion to dismiss stating:

“SCDC argues that Plaintiff’s claim is barred because the state is immune from claims for money damages brought under Section 16(b). In making these arguments, SCDC relies on Alden v. Maine, which held that states are immune from private suits filed in state courts for damages brought under Section 16(b) of the FLSA. Based on Alden and its progeny, Defendant argues that state agencies are immune from private suits for money damages under the FLSA whether that suit is brought in state or federal court. See Alden v. Me., 527 U.S. 706, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999); see also Dkt. No. 15 at 4. Plaintiff disagrees, arguing that Alden applies only to FLSA suits brought in state court. Dkt. No. 16 at 2.

State Sovereign Immunity. The doctrine of state sovereign immunity bars suits in federal court for money damages against an “unconsenting State.” Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); see also Alden, 527 U.S. at 713 (noting that, while “Eleventh Amendment immunity” is often used as convenient shorthand for state sovereign immunity, the latter is “a fundamental aspect of the sovereignty which the States enjoyed before the ratification of the Constitution, and which they retain today … except as altered by the plan of the Convention or certain constitutional Amendments.”). This immunity extends to “arm[s] of the State,” Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 50 L.Ed.2d 471 (1974), including state agencies and state officers acting in their official capacity.   Gray v. Laws, 51 F.3d 426, 430 (4th Cir.1995). This doctrine does not, however, preclude private suits against state officials (but not the state or state agency itself) for prospective or declaratory relief designed to remedy ongoing violations of federal law. Ex parte Young, 209 U.S. 123, 157, 28 S.Ct. 441, 52 L.Ed. 714 (1908); see also Virginia v. Reinhard, 568 F.3d 110 (4th Cir.2009).

Congress may abrogate state sovereign immunity, but “only by stating unequivocally its desire to do so and only pursuant to a valid exercise of constitutional authority.” Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 484 (4th Cir.2005) (citing Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 55, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996)).  Section 5 of the Fourteenth Amendment to the United States Constitution, the Amendment’s enforcement provision, provides one (and possibly the only) basis on which Congress may, under specific circumstances, abrogate state sovereign immunity. Nev. Dep’t of Human Res. v. Hibbs, 538 U.S. 721, 727, 123 S.Ct. 1972, 155 L.Ed.2d 953 (2003) (noting that, while Congress may abrogate the States’ sovereign immunity under Section 5 of the Fourteenth Amendment, it may not do so “pursuant to its Article I power over commerce”) (citing Fitzpatrick v. Bitzer, 427 U.S. 445, 456, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976)); see also Seminole Tribe, 517 U.S. at 73 (“Article I cannot be used to circumvent the constitutional limitations placed upon federal jurisdiction”).

Applied to Section 16(b) of the FLSA. In Alden, the Supreme Court held that states are immune from private suits for damages brought under Section 16(b) of the FLSA in state court. The Court’s reasoning was based, in part, on the principle that Congress cannot extend state court jurisdiction beyond where it may extend federal court jurisdiction. See 527 U.S. at 754 (“We are aware of no constitutional precept that would admit of a congressional power to require state courts to entertain federal suits which are not within the judicial power of the United States and could not be heard in federal courts.”). Put differently, as applied to Section 16(b) of the FLSA, it is precisely because Congress lacks the authority to subject states to suit in federal court that it also lacks the authority to subject states to suit in their own courts. Thus, the Alden rationale fully supports Defendant’s position.

Prior to Alden, the Fourth Circuit ruled that state sovereign immunity bars Section 16(b) claims for damages brought by state employees in federal court. See Abril v. Va., 145 F.3d 182, 186-89 (4th Cir.1998) (concluding that Section 16(b) was not a valid abrogation of state sovereign immunity under Congress’s Section 5 enforcement powers). No subsequent rulings appear to alter this rule, which is consistent with the rationale in Alden. As explained in Rodriguez v. Puerto Rico Federal Affairs Administration, a post-Alden decision addressing a Section 16(b) claim for damages, Seminole Tribe and Alden operate in tandem to protect states from liability for money damages under the FLSA. Rodriguez v. P.R. Fed. Affairs Admin., 435 F.3d 378, 380 (D.C.Cir.2006) (“Taken together, Seminole Tribe and Alden mean that state employees no longer have any ‘court of competent jurisdiction,’ 29 U.S.C. § 216(b), in which to sue their employers for FLSA violations.”). While not binding, the court finds the Rodriguez court’s reasoning persuasive.”

Thus, the Court concluded that, “SCDC is immune from suits for money damages brought pursuant to Section 16(b) of the FLSA, 29 U.S.C. § 216(b).”  Accordingly, Plaintiff’s case was dismissed.

To read the Court’s entire decision, click here.

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Filed under Sovereign Immunity