Tag Archives: Fed.R.Civ.P. 34

D.Nev.: Defendant Compelled to Produce Time and Pay Records Maintained by Third-Party Payroll Company, Notwithstanding Objection That They Did Not “Possess” Same

Kiser v. Pride Communications, Inc.

This case was before the court on plaintiff’s motion to compel the production of discovery related his wages and hours.  As discussed here, the defendants objected to such discovery.  Defendants’ primary objection was that it did not have actual possession of the discovery sought.  Rather, defendants maintained that they should not be responsible to produce the discovery, because it was in the possession of their third-party payroll vendor.  The court rejected defendants’ contention and ordered the production of the discovery.

Overruling defendants’ objection regarding physical custody of the discovery sought, the court explained:

“Defendants’ objection based on their assertion that they do not possess the requested documents or electronically kept data because “a third-party vendor … process[ed][the] payroll” is overruled. Pursuant to Fed.R.Civ.P. 34, documents sought in discovery motions must be within the “possession, custody, or control” of the party upon whom the request is served. However, the “phrase ‘possession, custody, or control’ is disjunctive and only one of the numerated requirements need be met.” Soto v. City of Concord, 162 F.R.D. 603, 619 (N.D.Cal.1995)(quoting Cumis Ins. Society, Inc. v. South–Coast Bank, 610 F.Supp. 193, 196 (N.D.Ind.1985). Therefore, “actual possession” is not required. Soto, 162 F.R.D. at 619. Rather, a “party may be ordered to produce a document in the possession of a non-party entity if that party has a legal right to obtain the document or has control over the entity who is in possession of the document.” Id (internal citation omitted).

Here, the fact that defendants do not actually possess the documents does not matter. As admitted to in their response (# 28–1 Exhibit B) and their opposition (# 29), the defendants requested and ordered the third-party payroll vendor, Southwest Payroll Service, Inc., to perform the acts of processing and maintaining the payroll and the accompanying records. Thus, it is “inconceivable” that the defendants lack the ability to request and obtain such records from Southwest Payroll Service, Inc. Id. at 620 (holding that when a third-party physician performed evaluations on officers at the request of the defendant, “it seems inconceivable that the [defendant] lacks the ability to obtain such evaluations upon demand .”). Therefore, the court finds that such records are in Pride’s control, and should be disclosed in response to the plaintiffs’ request. Id. at 619 (finding that the “term ‘control’ includes the legal right of the producing party to obtain documents from other sources on demand)(emphasis added)(internal citations omitted); See also Japan Halan Co. v. Great Lakes Chem. Corp., 155 F.R.D. 626, 627 (N.D.Ind.1993)(holding that close business relationships constituted control of documents held by a third-party.).

Accordingly, and for good cause shown,

IT IS ORDERED that plaintiffs Anthony Kiser et al’s Motion To Compel The Production Of Documents (# 28) is GRANTED.

IT IS FURTHER ORDERED that defendants Pride Communications, Inc. et al shall produce the requested documents, in any and all available forms, on or before November 30, 2011.”

As more and more employers, small and large, continue to rely on third-party payroll vendors, this will likely be a decision with wide-felt impact in wage and hour circles.  Especially in cases involving so-called ESI (Electronically Stored Information)- where the employer transmits data to a payroll service like ADP or Paychex and retains little or none of the required records itself, this decision seems to say that anything the payroll company has, the defendant will be deemed to “have” as well.

Click Kiser v. Pride Communications, Inc. to read the entire Order.

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D.Kan.: FLSA Plaintiffs’ Motion to Compel Entry Into Defendant’s Facility To Conduct A Time & Motion Study Related To “Walk Time” Claims Granted

McDonald v. Kellogg Co.

In this Fair Labor Standards Act (“FLSA”) wage and hour case, plaintiffs, current and former hourly production employees at defendant’s bakery facility, claimed that defendant violated the overtime provisions of the FLSA, 29 U.S.C. § 201 et seq., by, among other things, failing to compensate them for time spent walking to and from workstations.  Following a ruling on the parties’ cross motions for summary judgment– which in part held that plaintiffs’ time spent walking to their workstations was compensable– plaintiffs’ moved to compel defendant to allow entry into its facility for the purpose of conducting a time and motion study related to plaintiffs’ walk time.

Describing the plaintiffs’ proposed study the court explained:

“Plaintiffs have served a request, pursuant to Fed.R.Civ.P. 34, seeking access to defendant’s bakery facility for their expert, Dr. Kenneth S. Mericle, to gather data on the time employees spend walking to and from their workstations (see doc. 195). Dr. Mericle proposes to use Radio Frequency Identification technology (“RFID”) to gather this data.  To conduct an RFID study, Dr. Mericle would first place electronic readers at the employees’ locker rooms and at the time clocks outside their workstations. Next, Dr. Mericle would issue credit-card-sized cards to employees to carry with them during the study. When the cards pass in the proximity of the readers, a time stamp in the reader would record the time that the employee passed through the area. Thus, the readers would record the time that card-carrying employees leave the locker room and the time that they arrive at the workstations (and vice versa). In addition, Dr. Mericle would place small sensors at various locations in the factory, such as bathrooms, to register detours in the employees’ paths to and from their workstations. Plaintiffs suggest that only Dr. Mericle and, perhaps, one other individual would need to be on-site during the study to ensure that there are no problems with the RFID equipment.

Plaintiffs request that Dr. Mericle enter defendant’s facility on two occasions. On the first entry, Dr. Mericle would simply observe plant conditions and employee habits in order to plan placement locations for the RFID readers and sensors. On the second entry, Dr. Mericle would set up the readers and sensors, and issue cards to the employees. Plaintiffs propose that the study then be conducted over a period of several days.

Defendant objects to the RFID study as overreaching discovery. Defendant asserts that nothing in the Federal Rules of Civil Procedure requires it to alter its factory by attaching readers and sensors to its property, or to mandate that its employees carry reader cards. According to defendant, the proposed RFID study is overly broad and burdensome.”

Granting plaintiffs’ motion, the court reasoned:

“In objecting to plaintiffs’ proposed RFID study, defendant broadly asserts that “[c]onducting such a study during working hours will consume considerable time at [defendant’s] expense, will interfere with operations, potentially jeopardize the safety of individuals conducting the study, and expose [defendant’s] proprietary production processes to disclosure to third parties.”  Defendant suggests that plaintiffs can estimate employee walking time much more simply by measuring the distances between employee locker rooms and workstations, and then using expert information concerning reasonable walk times.

The court rejects defendant’s objections and grants plaintiffs’ motion to compel. Pursuant to Rules 34(a)(2) and 26(b)(1), the court clearly has the authority to order access to defendant’s facility for the purpose of conducting the RFID study and gathering relevant walk-time data. While there may be, as defendant suggests, alternate means to gather data regarding employee walking time, such is not the test for determining whether the discovery requested should be compelled. Defendant is not at liberty to dictate how plaintiffs should gather information to support their case.  Rather, the rules permit plaintiffs to enter defendant’s property for the purpose of gathering relevant information unless defendant makes a “particularized showing” that the discovery plaintiffs propose would create an undue burden or danger. Defendant has made no attempt to meet this burden-defendant has not submitted an affidavit discussing the burdens or dangers that would accompany the proposed RFID study, nor has defendant even “provide[d] a detailed explanation as to the nature and extent of the claimed burden.”  Although during the hearing defense counsel requested an opportunity to supplement the record in this regard, the undersigned denied defendant’s tardy request for a second bite at the apple.

Considering the record as it stands, the court finds that defendant has offered no support for its conclusory assertion that the proposed RFID study would consume a considerable amount of defendant’s time and would interfere with defendant’s operations. As plaintiffs explained at the hearing, the readers and sensors can be placed unobtrusively and without having to make permanent modifications to defendant’s property. They will record no data other than the time that the cards pass in their vicinity. Indeed, this proposed methodology appears to be less intrusive than other methods of conducting time and motion studies (e.g., videotaping employees or having experts follow employees as they walk the designated paths). With regard to defendant’s concern that its proprietary information is at risk, the Stipulated Protective Order already entered in this case (doc. 56) is sufficient to protect defendant’s trade secrets.

Nor has defendant demonstrated or explained what legitimate safety concerns would be faced by persons conducting the study. Nonetheless, the court will permit defendant to conduct safety-training, limited to one hour, as a prerequisite for access to the facility. In addition, as discussed below, defendant’s safety manager may accompany Dr. Mericle while he is in the facility.

Finally, as to defendant’s complaint that its employees should not be required to carry the small reader cards, the court agrees that no employee should be compelled to carry the card against his or her will. However, as noted by plaintiffs, the vast majority of hourly production workers whose walk time the RFID study would measure are opt-in plaintiffs in this case. The court finds it likely that these employees will voluntarily carry the card. The court permits plaintiffs’ counsel and expert to supply cards to employees who voluntarily consent to carry them during the study.”

Click McDonald v. Kellogg Co. to read the entire order.

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Filed under Discovery, Donning and Doffing, Work Time