Summary
denying plaintiff's motion to void releases where no signatories of the releases were plaintiffs in the class action
Summary of this case from Williams v. Sake Hibachi Sushi & Bar, Inc.Opinion
Civil No. 3:01-CV-2487-H
March 11, 2002
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff's Expedited Motion for Notice to Potential Plaintiff's and Limited Expedited Discovery, filed February 7, 2002; and Defendant's Response thereto, filed February 19, 2002. Also before this Court is Plaintiff's Expedited Motion to Void Releases, for Corrective Notice, for Protective Order, and for Limited Expedited Discovery, filed February 12, 2002; and Defendant's Response thereto, filed February 22, 2002. Upon review of the pleadings, briefs, and relevant authorities, the Court is of the opinion for the reasons stated below that Plaintiff's Motion for Notice and for Limited Discovery should be DENIED, that Plaintiff's Motion to Void Releases, for Corrective notice and for Limited Discovery should also be DENIED, and that Plaintiff's Motion for a Protective Order should be DENIED.
I. BACKGROUND
Plaintiff alleges a violation of the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. § 201, et seq., on behalf of herself and other similarly situated former and current employees of the Defendant. (Compl. at 1). Defendant is an ophthalmologist who maintains two offices in Dallas, Texas. (Resp. Mot for Notice at 2). Plaintiff states that she began working for the Defendant in April 2000 and that the Defendant failed to pay her and other similarly situated employees the required time and a half for hours worked in excess of forty hours per week. (Compl. at 2). Plaintiff states that she and others were employed on a fluctuating workweek basis. See 29 C.F.R. § 778.114 (a) (2001). The requirements for a "fixed salary for fluctuating hours" plan are: (1) the employee's hours of work fluctuate from week to week; (2) there is a mutual understanding between the employee and employer that the salary will constitute straight time pay for the hours worked; and (3) the amount of salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours he or she works is greatest. Id. The regulations provide that overtime pursuant to a fluctuating workweek plan is calculated at one-half the rate in addition to salary. See 29 C.F.R. § 778.114 (a) (2001). Plaintiff alleges that pursuant to the agreement she had with the Defendant, her salary should have been $13 per hour or $520 per week. Plaintiff states, however, that Defendant failed to pay this base salary and therefore, she should have received overtime payments calculated at one and one-half times her "hourly" rate because Defendant failed to comply with the requirements for a fluctuating workweek plan.
Plaintiff's statement that she was paid $13 per hour is puzzling. The regulations provide that under the fluctuating workweek plan, the hourly rate would change from week to week depending on the number of hours an employee worked. For example, an employee whose salary is $250 per week and "during the course of 4 weeks works 40, 44, 50, and 48 hours, [would have a] regular hourly rate of pay in each of these weeks [of] approximately $6.25, $5.68, $5, and $5.21." 21 C.F.R. § 778.114 (b) (2001). Therefore, if Plaintiff was truly a fluctuating workweek employee, she would not have an hourly rate. Nevertheless, Defendant does not contest Plaintiff's assertions and admits that Plaintiff is owed overtime. (Resp. at 3).
Plaintiff asserts that other employees did not receive overtime payments in accordance with the FLSA. In furtherance of this claim, Plaintiff requests (1) the Court order that notice be provided to similarly situated employees under 29 U.S.C. § 216 (b); (2) Court approval of the dissemination notice; and (3) limited discovery of the name, address, telephone number, date of birth, and social security number of all similarly situated employees. Defendant argues that Plaintiff has not made the requisite showing that this suit is proper for class treatment under the FLSA.
In addition, after learning of Plaintiff's claims, Defendant alleges that she paid and obtained releases from other employees to whom she owed overtime pay. (Resp. Mot. to Void Releases at 3). Plaintiff contends that (1) the releases are void; (2) that the Court must approve corrective notice; (3) that a Protective Order issue to prevent Defendant from contacting putative members; and (4) that the Court permit limited discovery. Defendant contends that Plaintiff lacks standing to pursue voiding the releases and that corrective notice is unnecessary in this case.
II. ANALYSIS
A. Motion for Notice and Limited Discovery
The FLSA provides that a suit may be instituted "by one or more employees for or in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216 (b). This type of class action, also called a collective or representative action, is different from a FED. R. Civ. P. 23 class action in that the members of the class are permitted to "opt-in" rather than "opt-out" of the class. See Mooney, et al. v. ARAMCO Servs. Co., et at., 54 F.3d 1207, 1212 (5th Cir. 1995). Rule 23 and § 216(b) class actions are "mutually exclusive and irreconcilable" and those who choose not to opt-in to an class action under § 216(b) are not bound by and may not benefit from the judgment. LaChapelle v. Owens-Illinois, Inc., 513 F.2d 286, 288-89 (5th Cir. 1975).
The Supreme Court has provided that District Courts have discretion to authorize notice to similarly situated employees that they may opt-in to a class, but that notice is by no means mandatory. See Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 169 (1989); see also Camper, et al. v. Home Quality Mgmt., Inc., 200 F.R.D. 516, 519 (D. Md. 2000) ("The relevant inquiry then is not whether the Court has discretion to facilitate notice, but whether this is an appropriate case in which to exercise discretion."). Although Sperling addressed the issue of whether District Courts have this discretion in Age Discrimination in Employment Act ("ADEA") cases, the ADEA incorporates § 216(b) of the FLSA. See id. at 167. In addition, other courts have held that the analysis in Sperling and other ADEA cases involving questions of the opt-in process should be applied to cases solely based on the FLSA. See H R Block, Ltd. v. Housden Beard, 186 F.R.D. 399, 400 (E.D. Tex. 1999); see also Garner v. G.D. Searle Parmaceuticals Co., 802 F. Supp. 418, 422 (M.D. Ala. 1991).
The determination of whether this Court should exercise its discretion involves the analysis of two tests, neither one of which carries more weight than the other. See Mooney, 54 F.3d 1207, 1216 (5th Cir. 1995). The first test derives from Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987) and involves a two prong analysis. First, the Court must make an initial inquiry into whether the Plaintiff has provided sufficient evidence that similarly situated potential Plaintiffs exist. See Mooney, 54 F.3d at 12 13-14. At this stage, the Court uses a lenient standard to determine whether similarly situated persons exist, and if the Court determines that certification is appropriate, then it usually "conditionally certifies" the class. See id at 1214. Second, the Court reexamines the class after notice, time for opting-in, and discovery have taken place. See id. If the Court finds that the class is no longer made up of similarly situated persons, then it may decertify the class. See id. This inquiry is usually conducted upon a motion filed by the Defendant. See id.
In pursuit of the first inquiry, this Court finds that Plaintiff failed to present sufficient evidence that similarly situated Plaintiffs exist. Unsupported assertions of widespread violations are not sufficient to meet Plaintiff's burden. See Haynes v. Singer Co., Inc., 696 F.2d 884, 887 (11th Cir. 1983). Some Courts have found class certification appropriate where potential Plaintiffs were identified. See Garner Karn v. G.D. Searle Pharmaceuticals, 802 F. Supp. 418, 422 (M.D. Ala. 1991). Other Courts have looked to affidavits of potential plaintiffs. See Belcher v. Shoney's, Inc., 927 F. Supp. 249, 252 (M.D. Tenn. 1996). Here, however, Plaintiff has not submitted affidavits or even names of potential Plaintiffs. Plaintiffs only proof of a widespread violation of the FLSA is the conclusory allegation that all the employees "were subjected to improper deductions from what should be their fixed salaries." (Resp. Mot. for Notice at 2). Defendant provides that she underpaid her employees, but also explains that she has reimbursed almost all of them after realizing her errors. Therefore, it is unclear whether there exist potential Plaintiffs that satisfy the "similarly situated" requirement. Plaintiff fails to address this issue and the Court cannot approve even conditional certification without more of a showing.
Defendant asserts that:
Upon learning of Hall's claim that she was improperly paid, Dr. Burk's office administrator conducted an audit of the practice's payroll records and calculated the amount each current and former employee should have been paid with overtime paid at time and a half. All current employees have received payment for the full difference between what they were paid and what they should have been paid. With respect to former employees, notices were sent to all of them and as of the date of this Response, checks have been mailed to seven (7) of the eleven (11) former employees. Two more have signed for the letter but not yet requested checks. Two others have either not claimed their letters or they have been returned for forwarding. The total amount paid to all current and former employees is approximately $11,500.
(Resp. Mot. for Notice at 3).
The second test used by the Court in Shushan v. University of Colorado, 132 F.R.D. 263, 265 (D. Colo. 1990) is composed of the requirements of FED. R. Civ. P. 23(c), i.e. "numerosity," "commonality," "typicality," and "adequacy of representation." Plaintiff has completely failed to make a showing under this test, except for the conclusory allegations provided in the Complaint and therefore fails this test. See H R Block, Ltd., 186 F.R.D. at 401.
This Court has a "responsibility to avoid the `stirring up' of litigation through unwarranted solicitation." Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 266-67 (D. Minn. 1991). At this time, Plaintiff has failed to provide factual evidence in support of either test and therefore Plaintiff's Motion for Notice should be DENIED without prejudice. Given the Court's reasons as stated above, it is unnecessary to reach the merits of Plaintiff's request for limited discovery and it is also DENIED.
B. Motion to Void Releases, for Corrective Notice, and for Limited Expedited Discovery
Subsequent to filing the Motion for Notice and Limited Discovery, Plaintiff filed an Expedited Motion to Void Releases, for Corrective Notice, for Protective Order, and for Limited Expedited Discovery. This Motion addresses the validity of "releases" signed by current and former employees of the Defendant in exchange for receipt of back pay. Without addressing the merits of Plaintiff's argument that the releases are void, this Court finds that Plaintiff lacks standing to assert a claim of the putative Plaintiffs' (i.e. the other employees) settlements. To establish standing,
[F]irst, the Plaintiff must have suffered an `injury in fact' — an invasion of a legally protected interest which is (a) concrete and particularized (citations omitted); and (b) `actual or imminent, not `conjectural' or `hypothetical' (citations omitted). Second, there must be a causal connection between the injury and the conduct complained of — the injury has to be `fairly . . . traceable to the challenged action of the defendant, and not the result of the independent action of some third party not before the Court. Third, it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1991). In this case, Plaintiff has not established an injury caused by the putative Plaintiffs' settlements. Courts have voided releases where signatories of the releases were Plaintiffs in the class action, but the only Plaintiff here has not signed a release. See O'Brien v. Encotech Constr. Servs., Inc., 203 F.R.D. 346, 349 (N.D. Ill. 2001) ("Plaintiffs assert that two named Plaintiffs . . . have signed releases, and both wish to be part of the current action. Therefore, standing and ripeness are not impediments to the filing of a motion to declare their releases void."). The Court finds that Plaintiff does not have standing to contest the releases and therefore, Plaintiff's Motion to Void Releases is DENIED. Given this ruling, the Motion for Corrective Notice and for Limited Discovery is also DENIED.
C. Motion for Protective Order
Plaintiff's two-sentence, conclusory request for a protective order should be denied. This Court has authority to intervene in the notice process, see O'Brien, 203 F.R.D. at 348, but the reasons cited by the Plaintiff are insufficient to warrant issuing a Protective Order at this time. Plaintiff's Motion for Protective Order is hereby DENIED without Prejudice.
III. CONCLUSION
Given the Court's reasons stated above, Plaintiff's Motion for Notice and for Limited Discovery is DENIED, Plaintiff's Motion to Void Releases, for Corrective notice and for Limited Discovery is also DENIED, and Plaintiff's Motion for a Protective Order is DENIED.
SO ORDERED.