Tag Archives: Decertification

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.

Leave a comment

Filed under Class Certification, Collective Actions, Decertification

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.

Leave a comment

Filed under Collective Actions, Decertification

S.D.Fla.: Defendant May Not Seek SJ Against Individual Plaintiffs Where Case Remains Certified At Stage 2

Hernandez v. Starbucks Coffee Co.

In this case plaintiffs, “store managers” at Starbucks claimed they had been uniformly misclassified as exempt employees and wrongly denied overtime as a result.  The case was before the court on defendant’s motion for summary judgment regarding 4 individual plaintiffs in the (certified) class—on the ground that these Plaintiffs offered generally consistent testimony that compels the conclusion that they are exempt “executive” employees as a matter of law.  Significantly, prior to defendant filing its motion for summary judgment, the court had denied defendant’s motion to decertify the class.  The court denied defendant’s motion, largely on the ground that it is inappropriate for a defendant to attempt to target individual plaintiffs for summary judgment, where the class is proceeding as a whole and liability will therefore be determined on a classwide rather than individual basis.

The court explained:

“Before reaching the merits of this argument, the Court must first consider whether it is even proper for Defendant to move for summary judgment as to selected individual Plaintiffs when the Court is presented with a collective action. Relying upon Hogan v. Allstate Ins. Co., 361 F.3d 621, 623 (11th Cir.2004), Defendant argues that where a “FLSA collective action has been conditionally certified but no ruling has been made as to whether the case will proceed to trial as a collective action, the district court may entertain summary judgment motions as to individual plaintiffs.” [DE–241, pg. 12]; see also Lindsley v. Bellsouth Telecomm., Inc., Case No. 07–6569, 2009 WL 322144, at *2 (E.D.La. Feb.9, 2009) (denying motion to strike motion for summary judgment against an individual, named plaintiff, finding it “appropriate to choose [the individual plaintiff] as a test plaintiff to resolve the issue of employee versus independent-contractor status.”).

In response, Plaintiffs argue that the Court should reject Defendant’s attempt to have its motion treated as one directed to only certain individuals, as opposed to the class as a whole, pointing to Judge Marra’s conclusion in Pendlebury v. Starbucks Coffee Company, Case No. 04–80521–CIV–KAM, DE–495 (S.D. Fla. filed Jan. 8, 2008). Plaintiffs point out that unlike Hogan, 361 F.3d at 623, neither this Court nor Plaintiffs have consented to a “test plaintiff” procedure, and Defendant cannot randomly select certain individual Plaintiffs and at the same time seek to prohibit Plaintiffs from using testimony from other Plaintiffs in order to oppose the entry of summary judgment. Defendant attempts to refute this argument by contending that Rule 56(a) permits it to seek summary judgment as to a claim or defense, or part of a claim or defense, and reiterates the holding in Hogan. Defendant also argues that Plaintiffs have not cited to any authority prohibiting the Court from considering such a motion where as here the Court has not yet conducted a stringent review of the propriety of collective treatment.

Importantly, subsequent to Defendant filing the instant motion for summary judgment, on June 28, 2011, this Court denied Defendant’s motion for decertification [DE–300], concluding that Plaintiffs are similarly situated and can proceed as a class. As such, the Court has now conducted a stringent review of the propriety of collective treatment and found collective treatment to be appropriate. Defendant’s reliance on Hogan as its basis for moving for summary judgment as to only four (4) individual Plaintiffs is misplaced. Defendant similarly attempted to raise this argument and rely on Hogan in filing its motion for partial summary judgment in Pendlebury. The Pendlebury court rejected Defendant’s argument, pointing out that in Hogan the court had specifically authorized the selection of test plaintiffs for purposes of discovery and motions for summary judgment. Case No. 04–80521–CIV–KAM, DE–495 at pg. 3. The court concluded that “allowing Defendant to move for summary judgment against particular individuals who are indistinguishable from other members of the class defeats the entire purpose of a collective action.” Id. at 5. Instead, the court held that since the action was certified as a collective action, the court would “only address dispositive motions that resolve common issues of law or fact as to the entire class or an identifiable subclass.” Id.

Similarly here, the Court has already concluded that collective treatment is appropriate and has not authorized the use of “test” plaintiffs. Instead it appears that Defendant unilaterally selected individuals as its “test” plaintiffs. Notably, Defendant does not argue that these Plaintiffs somehow represent a “subclass” or otherwise address the Pendlebury court’s ruling on this issue in any manner. Consequently, the Court finds that it is not proper for Defendant to move for summary judgment as to individual Plaintiffs given the Court’s recent conclusion that Plaintiffs shall proceed as a class.”

Leave a comment

Filed under Class Certification, Collective Actions

S.D.Tex.: Defendant’s Motion to Dismiss Collective Action Allegations Denied; Argument Inappropriately Raised at Pleading Stage

Richardson v. Wells Fargo Bank, N.A.

This case was before the court on the Motion to Dismiss Collective Action Allegations, or, in the Alternative, Motion for More Definite Statement (“Motion”).  Plaintiff, a former personal banker for Wells Fargo, filed this collective action alleging that Defendant violated the Fair Labor Standards Act (“FLSA”) by failing to pay him overtime compensation for hours worked in excess of forty (40) per week. Plaintiff purported to sue also on behalf of all Wells Fargo personal bankers throughout the United States.  Defendant filed the Motion, asserting that Plaintiff failed to plead sufficient facts to support the collective action allegations.

Holding such a motion was inappropriately made at the pleading stage, the court explained:

“Plaintiff alleges sufficient facts in his Complaint to satisfy the pleading requirements for collective actions under the FLSA. Plaintiff alleges that he and other similarly-situated personal bankers working for Wells Fargo were improperly classified as non-exempt, regularly worked more than forty hours per week, and were not paid overtime compensation for those additional hours. These are all factual allegations that, if proven, state a plausible claim for relief under the FLSA. See, e.g., Hoffman v. Cemex, Inc., 2009 WL 4825224, *3 (S.D.Tex. Dec.8, 2009) (Rosenthal, J.).

Additionally, dismissal of the collective action allegations under Rule 12(b)(6) is not appropriate. Whether the case should proceed as a collective action is properly addressed when Plaintiff moves for conditional certification and issuance of notice to the class. Id. at *4 (citing Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1212 (5th Cir.1995)).

For the same reasons that dismissal under Rule 12(b)(6) is unwarranted, there is no need for Plaintiff to file a more definite statement. Plaintiff alleges an adequate factual basis for the FLSA claim and the Federal Rules require no more at this stage.

Plaintiff has adequately pled his FLSA claim. Whether the case should proceed as a collective action will be determined if and when Plaintiff moves for conditional certification and the issuance of notice.”

Armed with recent Supreme Court jurisprudence (Iqbal and Twombly), FLSA defendants are making more and more motions to dismiss as here.  However, as this court correctly held, such motions, in effect, to “decertify” collective actions before they reach “stage 1″ or the conditional certification stage are inappropriately made at the pleading stage of a case.

Click Richardson v. Wells Fargo Bank, N.A. to read the entire Memorandum and Order.

Leave a comment

Filed under Collective Actions

7th Cir.: District Court Erred In Dismissing FLSA Claims; Court Was Required To Consider Most Efficient Way To Adjudicate Claims and Subclaims; Plaintiffs Have Right To Pursue Claims Individually

Alvarez v. City of Chicago

In this case a collective action had previously been consolidated with a multiple-Plaintiff non-collective action.  Each of the Plaintiffs presented a variety of claims and between the hundreds of plaintiffs there were 10 different types of claims.  The Court below granted the Defendant’s motion for summary judgment against all plaintiffs, reasoning that the plaintiffs were not similarly situated because each plaintiff raised a different combination of the ten subclaims, such that the plaintiffs could not be readily divided into homogenous subgroups.  The district court also noted that arbitration pursuant to the collective bargaining agreement, while not mandatory, might be a more efficient way to resolve the paramedics’ claims.  The court did not reach the merits of the ten subclaims raised by the plaintiffs.  Instead, it dismissed the claims of all plaintiffs, without prejudice, and directed them to pursue arbitration.  The Seventh Circuit reversed however, noting that, the Court failed to consider the efficiency of adjudicating the claims as a collective action, and, that the named Plaintiffs in each of the consolidated cases had the right to proceed with their individual claims, regardless of whether they were similarly situated to the other class members.

The Court reasoned:

“The Fair Labor Standards Act gives employees the right to bring their FLSA claims through a “collective action” on behalf of themselves and other “similarly situated” employees. 29 U.S.C. § 216(b) (2006). A collective action is similar to, but distinct from, the typical class action brought pursuant to Fed.R.Civ.P. 23. The principle difference is that plaintiffs who wish to be included in a collective action must affirmatively opt-in to the suit by filing a written consent with the court, while the typical class action includes all potential plaintiffs that meet the class definition and do not opt-out.

The City-and the district court’s opinion-relies heavily on our decision in Jonites v. Exelon Corp., 522 F.3d 721 (7th Cir.2008). In Jonites, we affirmed the dismissal of a collective action brought on behalf of more than a thousand lineman and other hourly workers employed by Commonwealth Edison. The Jonites plaintiffs alleged that two types of purportedly off-duty time were really compensable work. The first involved Com Ed’s “call-out” policy, which required off-duty workers to respond to at least 35% of the calls from their employer for additional manpower on an emergency basis. The frequency of these call-outs varied widely among workers; some were called as often as once every five and a half days on average, and others no more than once a month. The employees took the position that they were entitled to be paid for “some of the time” during which they were subject to call, with the amount to be determined by the trier of fact. The second challenge was to the lunch policy, which required workers at job sites to remain awake and be alert for trespassing and the theft of tools. However, only part of the class worked the daytime shift, to which the lunch policy applied. We held that as to both of these claims, the purported class was “hopelessly heterogenous” because liability would require significant individual fact-finding and many of the workers had no conceivable claim at all. Id. at 725-26. We further held that the individual plaintiffs must either file individual suits, create homogenous classes, or ask the union to file grievance proceedings under the collective bargaining agreement. Id. at 726. Because the purported class here is made up of plaintiffs who each have a different combination of subclaims, defendants argue that it is similarly heterogenous and was properly dismissed in favor of arbitration.

Appellants argue that this case is different from Jonites because the plaintiffs here appear to be similarly situated with regard to individual subclaims, but are heterogenous only because there are several different combinations of those subclaims. For example, whether any given paramedic is entitled to recover on the uniform pay theory depends on the legal question of whether such pay should have been included in the base rate, and the simple factual question of whether the particular paramedic received uniform pay. Instead of dismissing their claims as heterogenous, plaintiffs argue, the district court should have allowed them to split their claims into homogenous subclasses. See, e.g., Fravel v. County of Lake, No. 2:07-cv-253, 2008 WL 2704744 (N.D.Ind. July 7, 2008) (allowing plaintiffs to proceed collectively and grouping the plaintiffs into four distinct subclasses depending on which theory of liability applied to them). Plaintiffs suggest that here, as in Fravel, “[r]esolving common questions as a class, even through the additional mechanism of sub-classes, remains inherently more efficient” than splitting the action into four separate collective actions or allowing individual claims by each plaintiff. Id. at *3.

The district court appeared to agree with the plaintiffs’ characterization of their subclaims, noting that the City’s liability to any particular plaintiff on any given subclaim turns only upon a single uniform policy and whether that policy impacted that particular plaintiff. However, the district court refused to adopt the Fravel approach, concluding that the number of subclaims made the plaintiffs “hopelessly heterogenous” and that arbitration would be more efficient.

A district court has wide discretion to manage collective actions. See Hoffmann-La Roche v. Sperling, 493 U.S. 165, 171 (1989). However, it appears that here the district court may have mistakenly read Jonites to forbid it from adopting a subclaim approach merely because the variety of subclaims renders the class “heterogenous.” The problem with the Jonites class, however, was not that the plaintiffs had different subclaims, but rather that determining whether any given plaintiff had a viable claim depended on a detailed, fact-specific inquiry, and many plaintiffs lacked any conceivably viable claim altogether. Jonites, 522 F.3d at 723, 725-26; see also Mooney v. Aramco Services Co., 54 F.3d 1207, 1214-15 (5th Cir.1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003) (affirming decertification of collective action where employees who brought ADEA claim were subject to “vastly disparate employment situations” and defense was likely to center on purported reasonable factors other than age specific to each employee). If common questions predominate, the plaintiffs may be similarly situated even though the recovery of any given plaintiff may be determined by only a subset of those common questions.

Similarly, the district court mistakenly compared the efficiency of proceeding through subclaims only to the perceived efficiency of arbitration. Plaintiffs have the right to proceed individually and may be able to form more tailored classes. See Jonites, 522 F.3d at 725 (noting that a collective bargaining agreement cannot preempt or waive a worker’s right to a judicial remedy for FLSA violations). Thus, if it appears plaintiffs are prepared to proceed individually or through separate classes, the district court must consider whether these other mechanisms for judicial resolution of their claims are more or less efficient than a collective action comprised of various subclaims. Cf. Fravel, supra. In Jonites, the circumstances suggested that plaintiffs had “no stomach for proceeding case by case.” Id. at 726. Here, the twelve Caraballo plaintiffs filed their complaint as individuals and moved for summary judgment as individuals. Indeed, there is nothing apparent from the record to indicate that the fifty-four named plaintiffs in Alvarez were unwilling to proceed individually. Yet the district court dismissed their claims in favor of arbitration without considering whether it was better to address sixty-five individual claims or one collective action comprised of ten subclaims.

Finally, the district court erred when it dismissed the claims of the named plaintiffs. When a collective action is decertified, it reverts to one or more individual actions on behalf of the named plaintiffs. See Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208, 1218 (11th Cir.2001) (citing Mooney, 54 F.3d at 1213-14); see also Fox v. Tyson Foods, Inc., 519 F.3d 1298, 1301 (11th Cir .2008) (affirming decertification of an FLSA collective action, dismissal of the opt-in plaintiffs, and severance of each of the named plaintiffs into separate individual actions). Defendants do not argue that arbitration under the collective bargaining agreement preempts litigating these issues in federal court. Plaintiffs are entitled, at minimum, to pursue their claims individually. Whether they are permitted to do so in one action or several is committed to the sound discretion of the district court, but misjoinder of parties is never a ground for dismissing an action. See Fed.R.Civ.P. 21. We therefore reverse the district court’s dismissal of the named plaintiffs’ claims in both the Alvarez and Caraballo actions.

Sifting through the subclaims of each of the myriad plaintiffs is an unenviable task. But plaintiffs are nonetheless entitled to their day in court. Moreover, it appears that here, common questions predominate with regard to each theory of liability. The parties have already filed cross-motions for summary judgment on the merits of these common questions. After the district court determines the validity of these subclaims, calculation of each plaintiff’s award (if any) will be largely mechanical. On remand, given that the claims of the named plaintiffs will still be before it, the district court should consider whether a collective action might be the most efficient judicial resolution of this matter after all.”

To read the entire decision click here.

Leave a comment

Filed under Collective Actions, Municipal Employees

E.D.Tenn.: Defendant’s Motion For Decertification Denied; Common Pay Practice/Policy Overcomes Individual Facts And Defenses

Johnson v. Koch Foods, Inc.

This case was before the court on Defendant’s Motion for Decertification or, in the Alternative, Motion for Separate Trials.  Denying Defendant’s Motion, the Court held that despite disparate factual and employment settings, that these differences are not material because the plaintiffs are all subject to a common policy or plan, payment by production line time, which they allege violates the FLSA.

Analyzing Defendant’s Motion the Court explained, “[p]ursuant to § 216(b) of the FLSA, employees can sue on their own behalf or on the behalf of “similarly situated” persons. “Section 216(b) establishes two requirements for a representative action: 1) the plaintiffs must actually be ‘similarly situated,’ and 2) all plaintiffs must signal in writing their affirmative consent to participate in the action.” Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir.2006) (citing 29 U.S.C. § 216(b); Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, 167-68 (1989)).

“Although the FLSA does not define the term ‘similarly situated,’ courts generally do not require prospective class members to be identical.” Moss v. Crawford & Co., 201 F.R.D. 398, 409 (W.D.Pa.2000). The Sixth Circuit has adopted a two-step inquiry for the determination of whether members of the class are in fact similarly situated. See Comer, 454 F.3d at 546; see also Wilks v. Pep Boys, No. 3:02-0837, 2006 WL 2821700, at *2 (M.D.Tenn. Sept. 26, 2006) (cases cited therein). The first step occurs at the “notice stage,” which is usually in the initial part of the case when the court determines whether notice of the lawsuit should be given to the putative members of the class. Pep Boys, 2006 WL 2821700, at *2 (citing White v. MPW Indus. Servs., Inc., 236 F.R .D. 363, 366 (E.D.Tenn.2006)). At this stage, a fairly lenient standard is used to determine whether plaintiffs are similarly situated for a class to be preliminarily certified. See Frank v. Gold’n Plump Poultry, Inc., No. 04-CV-1018 (PJS/RLE), 2007 WL 2780504, at *2 (D.Minn. Sept. 24, 2007).

The second step occurs after discovery has been taken and is precipitated if and when the defendant files a motion for decertification of the class. See Pep Boys, 2006 WL 2821700, at *2; Moss, 201 F.R.D. at 409. “At this juncture, the court uses a higher standard to analyze the similarly situated issue.” Moss, 201 F.R.D. at 409 (citations omitted); see also Comer, 454 F.3d at 547 (“At the second stage, following discovery, trial courts examine more closely the question of whether particular members of the class are, in fact, similarly situated.”).

There are primarily three factors that district courts consider at the decertification stage to determine whether the plaintiffs who have opted in are similarly situated. These factors are: “(1) the disparate factual and employment settings of the individual plaintiffs, such as a) job duties; b) geographic location; c) supervision; and d) salary; (2) the various defenses available to defendant that appear to be individual to each plaintiff; and (3) fairness and procedural considerations.” Pep Boys, 2006 WL 2821700, at *3 (citing Moss, 201 F.R.D. at 409).

As noted above, an agreed order was entered in this case in which the court conditionally certified this action as a collective action under 29 U.S.C. § 216(b) and identified the conditional class. The court authorized notice to be distributed to the conditional class, and approximately 150 current and former Koch Foods employees have opted into this lawsuit. Koch Foods now seeks to decertify the class claiming that the plaintiffs are not all similarly situated and therefore this case cannot go forward as a collective action. At this stage, the court employs the higher standard and the factors described above to resolve this issue. In doing so, the court has reviewed the hundreds of pages submitted in support of and opposition to this motion.

Koch Foods has presented extensive amounts of evidence and argues in exhaustive detail what it says are the many differences among the plaintiffs. As noted, the court has reviewed this evidence and will not specifically cite to it here. Koch Foods points out that the live and de-bone plants perform different functions in the chicken processing sequence. The evidence also shows that regarding both plants there are many different departments, work and meal shifts, clothing items worn by employees, and donning and doffing practices of the various employees. Koch Foods also points out that the plaintiffs work for different supervisors who exercise different levels of flexibility regarding whether an employee is marked tardy if he or she is late coming to the production line.

Koch Foods also argues that the defenses available to it require decertification. Koch Foods anticipates presently individualized defenses, such as that some of the plaintiffs are already paid for donning, doffing, washing, and walking time. It also expects to show that some employees are not required to wear various clothing items and that other clothing items benefit workers in different ways, depending on the employee’s position and plant location.

Based on these arguments, Koch Foods contends that the plaintiffs are not similarly situated. Therefore, the class should be decertified; the opt-in plaintiffs should be dismissed without prejudice; and the named plaintiffs should proceed with their individual actions.

In their response, plaintiffs do not dispute that there are disparate factual and employment settings, nor do they dispute that employees use different equipment and protective gear. They contend, however, that these differences are not material because the plaintiffs are all subject to a common policy or plan, payment by production line time, which they allege violates the FLSA. Plaintiffs argue that this common policy or plan overrides or outweighs the myriad of factual and employment differences. They also contend that any defenses Koch Foods can assert will be applicable to all the plaintiffs

One of the factors material to many courts’ analysis of the plaintiffs’ factual and employment settings is whether they were all impacted by a “single decision, policy, or plan.” See Moss, 201 F.R.D. at 409-10 (citing Thiessen v. Gen. Elec. Capital Corp., 996 F.Supp. 1071, 1082 (D.Kan.1998)). The existence of this commonality may assuage concerns about plaintiffs’ otherwise varied circumstances. See Hill v. Muscogee County Sch. Dist., No. 4:03-CV-60, 2005 WL 3526669, at *3-*4 (M.D.Ga. Dec. 20, 2005) (finding that the plaintiffs “had met their burden of showing that they [were] similarly situated with regard to employment setting and job duties by presenting substantial allegations of a pattern of potential FLSA violations); Moss, 201 F.R.D. at 410 (finding that the plaintiffs’ claim that they were subjected to a common, impermissible practice trumped the disparity in their employment situations). Pep Boys, 2006 WL 2821700, at *3.

Plaintiffs have submitted evidence that they are paid by production line time and that this payment does not capture donning and doffing, waiting, sanitizing or walking. They have shown that they must be washed and dressed when they take their places on the production line, but they are not paid until the line starts to run. The evidence submitted by plaintiffs also shows that production line time does not capture the time for doffing gear at the beginning of the meal break; donning gear at the end of the meal break; or washing and sanitizing during the meal break. Koch Foods deducts thirty minutes each day from plaintiffs’ shift time for the unpaid meal break. Plaintiffs argue that because they are all subject to the same policy or plan, i.e. payment by production line time that does not capture tasks they must perform without compensation, they are similarly situated, and this commonality overcomes the factual and employment differences emphasized by Koch Foods.

In Bouaphakeo v. Tyson Foods, Inc., 564 F.Supp.2d 870 (N.D.Iowa 2008), the district court dealt with a similar circumstance. Plaintiffs were current and former employees of a pork processing plant operated by Tyson Foods who were paid on a “gang time” system. “Gang time is sometimes called ‘line time,’ ‘shift time,’ or ‘mastercard time’.” Id. at 879 n. 2. Plaintiffs, like those in this case, claimed this system violated the FLSA. The district court found that there were “some very big factual differences” among the hourly employees because they were spread out across six departments and they performed different duties under different supervisors. However, the court concluded that there was a common factor among the employees, the gang time pay system, that bound the putative plaintiffs together. The court held that the “potential plaintiffs are similarly situated if the collective action class is limited to only those production employees that are paid via gang time. Gang time, after all, is the company-wide policy that Plaintiffs claim violates the FLSA.” Id. at 900.

The court believes that in this case the common policy or practice of paying plaintiffs by production line time is the factor that binds them together. Because of this common factor, the factual differences and the variations in plaintiffs’ employment settings do not make this collective action improper. The class is limited to those workers, as specified in the notice, “whose pay was computed or is computed based in whole or in part on production line time.”  Viewed from this perspective, the argument by Koch Foods concerning its need to put on individualized defenses carries less weight as it should have a general defense to the use of this common pay practice. In addition, allowing this case to go forward as a collective action “takes into account the ‘fundamental purpose’ of the FLSA by lowering the costs to plaintiffs and efficiently resolving the issues in one proceeding.” Id.

The Sixth Circuit has specifically noted that the FLSA “must not be interpreted or applied in a narrow, grudging manner.” See Dunlop [v. Carriage Carpet Co.], 548 F.2d [139,] 144 [ (6th Cir.1977) ]. As such, the court’s decision to allow the plaintiffs to proceed collectively is in line with Congress’s determination that defendants will not always have the opportunity to pursue individual defenses against FLSA plaintiffs but, instead, must collectively defend a suit that is so pursued. See 29 U.S.C. § 216(b). Pep Boys, 2006 WL 2821700, at *8

Koch Foods argues in the alternative that if the court does not decertify this action, the court should order separate trials for the two plants, live and de-bone. Koch Foods relies on Fed.R.Civ.P. 42(b), which provides in pertinent part: “For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, crossclaims, counterclaims, or third-party claims.”

When considering whether to order separate trials, a court “must consider several issues such as potential prejudice to the parties, potential confusion to the jury, and the relative convenience and economy which would result.”   In re Beverly Hills Fire Litig., 695 F.2d 207, 216 (6th Cir.1982) (footnote and citations omitted). In addition, “[i]t is well settled that the ordering of separate trials is within the sound discretion of the trial judge.” Id. (citations omitted); see also Climer v. Dillenbeck, No. 08-cv-11074, 2009 WL 2168867, at *1 (E.D.Mich. July 21, 2009) (quoting 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2388 (3d ed., 2008)(“It is well-established by a wealth of case law that ultimately the question of whether to conduct separate trials under Rule 42(b) should be, and is, a matter left to the sound discretion of the trial court on the basis of the circumstances of the litigation before it.”)).

The court has considered the circumstances of this case and the relevant factors set out above and finds no substantial reason for two trials. The plants are located in the same complex, and while they perform different types of jobs, the workers in both plants are paid on the basis of production line time. This common policy or practice was the primary factor in defeating decertification. The differences between the plants, like the differences between the various jobs performed by the workers, can be dealt with at trial. Therefore, the court will deny the request by Koch Foods to have separate trials for each plant.”

For the reasons stated above, the Court denied both prongs of Defendant’s Motion.

Leave a comment

Filed under Collective Actions

W.D.Mo.: Minor Differences In Plaintiffs’ Situations Do Not Warrant Decertification

Fast v. Applebee’s Intern., Inc.

This case was before the Court on Defendant’s Motion to Decertify the class (stage 2). The Court denied Defendant’s Motion, finding that the Plaintiffs were similarly situated, such that the case should proceed as a collective action, notwithstanding minor differences in each employees situation.

The Court identified three factors to consider on a Motion to Decertify: “(1) individual plaintiff’s disparate factual and employment settings, (2) defenses which are individual to each plaintiff, and (3) fairness and procedural considerations. See Keef v. M.A. Mortenson Co., No. 07-CV-3915 (JMR/FLN), 2009 WL 465030 (D.Minn. Feb. 24, 2009).”

Evaluating the evidence before it the Court stated, “Plaintiffs have shown that they are similarly situated with respect to their job requirements and pay provisions. First, they have demonstrated that their claims involve substantially similar factual and employment settings, despite minor variances restaurant-to-restaurant. Applebee’s applied national uniform policies and practices relevant to its servers and bartenders, including policies concerning the tip credit, manager bonuses for productivity, complaint resolution, and job descriptions. Plaintiffs performed substantially the same job tasks under national guidelines. Plaintiffs were subject to similar pay structures.

The minor differences in Plaintiffs’ situations do not warrant decertification. See generally Frank v. Gold’N’Plump Poultry, Inc ., No. 04-CV01018 (PJS/RLE), 2007 WL 2780504 (D.Minn. Sept. 24, 2007). Applebee’s focuses on differences in Plaintiffs’ situations which vary by restaurant. Any challenges which might be posed by these differences will be addressed through dividing the class into subclasses by restaurant.

Second, liability in this case turns on class-wide claims and defenses, most notably whether Applebee’s improperly took the tip credit for general maintenance and preparation work done by the class. Evidence contradicting Plaintiffs’ claims may be resolved by a finder of fact at trial. See Pendlebury v. Starbucks Coffee Co., 518 F.Supp.2d 1345, 1363 (S.D.Fla.2007) (finding that conflicts in evidence concerning the amount of time store managers spent performing nonmanagerial work did not require decertification). Both Applebee’s and the Plaintiffs benefit from having these matters resolved collectively. As to due process concerns, representative testimony is contemplated by the FLSA and Applebee’s can defend with representative testimony just as Plaintiffs can seek to prove their claims with representative testimony.

Third, fairness and other procedural considerations weigh in favor of maintaining class certification. The FLSA is a remedial statute which should be read in favor of coverage. Kelly v. Alamo, 964 F.2d 747 (8th Cir.1992). The judicial system will benefit from efficient resolution of the common issues in Plaintiffs’ claims which arise from the same alleged FLSA violations. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989) (evaluating ADEA class). Applebee’s interest in defending Plaintiffs’ small claims individually must be balanced against the rights of Plaintiffs, many of whom could not bear the costs of individual trials to redress the alleged violations. Id.

Plaintiffs have established that they are sufficiently similarly-situated. No fairness or procedural considerations raised by Applebee’s warrants disturbing the Court’s conclusion that this case should proceed to trial collectively.” Accordingly the Court denied Defendant’s Motion to Decertify.

Leave a comment

Filed under Collective Actions