Summary
In Knecht, the plaintiff sought to conditionally certify a class against a single corporation, C&W Facility Services (“defendant”).
Summary of this case from McClurg v. Dall. Jones Enters.Opinion
Case No. 2:20-cv-3899
04-20-2021
Chad KNECHT, on behalf of himself and others similarly situated, Plaintiff, v. C & W FACILITY SERVICES, INC., Defendant.
Matthew J.P. Coffman, Adam C. Gedling, Kelsie Hendren, Coffman Legal, LLC, Columbus, OH, for Plaintiff. Janay Marie Stevens, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, Kyla J. Miller, Pro Hac Vice, Noah A. Finkel, Pro Hac Vice, Seyfarth Shaw LLP, Chicago, IL, for Defendant.
Matthew J.P. Coffman, Adam C. Gedling, Kelsie Hendren, Coffman Legal, LLC, Columbus, OH, for Plaintiff.
Janay Marie Stevens, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, Kyla J. Miller, Pro Hac Vice, Noah A. Finkel, Pro Hac Vice, Seyfarth Shaw LLP, Chicago, IL, for Defendant.
OPINION AND ORDER
MICHAEL H. WATSON, JUDGE
Chad Knecht ("Plaintiff") sues C&W Facility Services Inc. ("Defendant") under the Fair Labor Standards Act of 1938 ("FLSA"), the Ohio Minimum Fair Wage Standards Act ("Ohio Wage Act"), and the Ohio Prompt Pay Act ("OPPA") for failure to properly pay overtime wages and failure to maintain accurate records. Plaintiff seeks to bring the FLSA claim as a collective action pursuant to 29 U.S.C. § 216(b) and the Ohio-law claims as a class action under Federal Rule of Civil Procedure 23. He now moves for conditional certification of the FLSA claim. Mot. Certify, ECF No. 14. Defendant partially opposes conditional certification. Resp., ECF No. 18. For the following reasons, the Court GRANTS Plaintiff's motion.
Defendant's motion for leave to file a sur-reply, ECF No. 26, is DENIED . The only arguably "new" argument Plaintiff made in his reply brief concerns the manner in which the meal deduction policy was effectuated—via the timekeeping system or otherwise. Although Plaintiff's reply brief was much more detailed than his Complaint with respect to this issue, the Court can properly address this argument without a sur-reply. In any event, the Court has read the proposed sur-reply, and it would not change the Court's conclusion.
I. FACTS
The following facts are taken from Plaintiff's Complaint.
"Defendant provides facility maintenance, cleaning, and related services for businesses and organizations throughout the United States." Compl. ¶ 9, ECF No. 1. Plaintiff is an Ohio citizen. Id. ¶ 4.
From 2016 to 2018, Plaintiff worked for Defendant at Defendant's plant in Etna, Ohio, as an hourly Maintenance Technician, which was a non-exempt position. Id. ¶ 5. Thereafter, Plaintiff was promoted to Assistant Maintenance Manager, a salaried position, and remained in that position until 2020. Id.
While employed by Defendant as an hourly worker, Defendant automatically deducted 30 minutes for a meal break from Plaintiff's daily timesheet, regardless of whether the meal break was actually taken or was interrupted. Id. ¶ 7. In fact, Plaintiff's meal break was often interrupted or eliminated because he was required to repair machinery and equipment during the break time. Id. ¶¶ 20–21. There was no way for Plaintiff to report a missed or interrupted meal break or otherwise override the automatic deduction of 30 minutes from the daily time sheet. Id. ¶ 22.
Because Plaintiff was not paid for this time worked, he regularly worked for more than forty hours a week without receiving overtime compensation. Id. ¶ 24. This was a company-wide practice that affected other, similarly situated employees as well. Id. ¶¶ 18–25.
II. STANDARD OF REVIEW
The FLSA authorizes employees to bring collective actions against employers to recover damages for unpaid wages provided two conditions are met: (1) the employees are "similarly situated" and (2) all plaintiffs provide written consent to become a party and such consent is filed with the court. 29 U.S.C. § 216(b). Courts within the Sixth Circuit generally apply a two-step procedure for determining whether an FLSA case should proceed as a collective action. Comer v. Wal-Mart Stores, Inc. , 454 F.3d 544, 546–47 (6th Cir. 2006).
The first step, commonly referred to as "conditional certification," takes place prior to the completion of discovery and requires the plaintiff to make an initial showing that the employees in the proposed class are "similarly situated." Id. at 546 (quoting 29 U.S.C. § 216(b) ). At this first stage, "conditional certification may be given along with judicial authorization to notify similarly situated employees of the action," which allows plaintiffs to opt-in to the lawsuit. Monroe v. FTS USA, LLC , 860 F.3d 389, 397 (6th Cir. 2017) (citing Comer , 454 F.3d at 546 ).
At the conditional certification stage, a "plaintiff must only ‘make a modest factual showing’ that [the plaintiff] is similarly situated to the other employees he is seeking to notify." Waggoner v. U.S. Bancorp , 110 F. Supp. 3d 759, 764 (N.D. Ohio 2015) (quoting Comer , 454 F.3d at 546–47 ); see also Myers v. Marietta Mem. Hosp. , 201 F. Supp. 3d 884, 890 (S.D. Ohio 2016). The standard employed during this initial stage of the litigation is "fairly lenient ... and typically results in ‘conditional certification’ of a representative class." Myers , 201 F. Supp. 3d at 890 (quoting Comer , 454 F.3d at 547 ). Whether plaintiffs are similarly situated depends on a number of factors, including the "factual and employment settings of the individual[ ] plaintiffs, the different defenses to which the plaintiffs may be subject on an individual basis, [and] the degree of fairness and procedural impact of certifying the action as a collective action." O'Brien v. Ed Donnelly Enter., Inc. , 575 F.3d 567, 585 (6th Cir. 2009) (citation omitted), abrogated on other grounds by Campbell-Ewald Co. v. Gomez , 577 U.S. 153, 160, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). A plaintiff need not show a single FLSA-violating policy but rather can demonstrate that the claims of the named plaintiffs and the putative class are unified by "common theories of defendants’ statutory violations, even if the proofs of these theories are inevitably individualized and distinct." Id. Plaintiffs are only required to show that their position is "similar, not identical, to the positions held by the putative class members." Lewis v. Huntington Nat'l Bank , 789 F. Supp. 2d 863, 867 (S.D. Ohio 2011) (quoting Pritchard v. Dent Wizard Int'l , 210 F.R.D. 591, 595 (S.D. Ohio 2002) ).
During the conditional certification phase, "a court ‘does not generally consider the merits of the claims, resolve factual disputes, or evaluate credibility.’ " Myers , 201 F. Supp. 3d at 890 (quoting Waggoner , 110 F. Supp. 3d at 765 ). Courts have instead considered "whether potential plaintiffs were identified; whether affidavits of potential plaintiffs were submitted; whether evidence of a widespread discriminatory plan was submitted; and whether as a matter of sound class management, a manageable class exists." Fairfax v. Hogan Transp. Equip., Inc. , No. 2:16-cv-680, 2017 WL 4349035, at *2 (S.D. Ohio 2017) (quoting Lewis , 789 F. Supp. 2d at 868 ). Still, conditional certification is "by no means final." Comer , 454 F.3d at 546 (quoting Pritchard , 210 F.R.D. at 595 ).
If the Court determines that the potential plaintiffs are similarly situated, "[t]he Court must then determine that the proposed notice is ‘timely, accurate, and informative’ as to properly notify the proposed class." Green v. Platinum Restaurants Mid-America, LLC , No. 3:14-cv-439-GNS, 2015 WL 6454856, at *2 (W.D. Ky. Oct. 26, 2015) (quoting Hoffmann-La Roche, Inc. v. Sperling , 493 U.S. 165, 166, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989) ).
The second step of an FLSA collective action follows discovery and receipt of all opt-in forms from putative plaintiffs. Comer , 454 F.3d at 547. At this time, the Court will examine the factual basis of Plaintiffs’ proposed class more closely and will apply a stricter standard in evaluating whether Plaintiffs are "similarly situated." Id. (quoting Morisky v. Public Serv. Elec. & Gas Co. , 111 F. Supp. 2d 493, 497 (D.N.J. 2000) ). If the Court determines at this second phase that the Plaintiffs are not similarly situated, it will de-certify the class, dismiss the opt-in plaintiffs without prejudice, and proceed with the lawsuit on the named plaintiffs’ individual claims. Smith v. Lowe's Home Ctrs. , 236 F.R.D. 354, 357 (S.D. Ohio 2006).
III. ANALYSIS
This matter is before the Court on the first step—conditional certification. Defendant partially opposes Plaintiff's motion for conditional certification. Resp., ECF No. 18. Defendant argues that Plaintiff seeks to certify a class that is too broad and asks the Court to limit the class in three ways. First, Defendant asks the Court to limit the class to only employees who lived or worked in Ohio, contending the Court lacks personal jurisdiction over Defendant with respect to any claims of opt-in plaintiffs who lived or worked at a facility of Defendant's outside of Ohio. Second, Defendant seeks to limit the class to only those hourly, non-exempt maintenance employees who were subjected to the meal deduction policy as administered via the electronic timekeeping system. Third, Defendant seeks to limit the class to those hourly, non-exempt maintenance employees who worked for Defendant, as opposed to a different but perhaps related entity. The Court addresses each of these contentions below.
A. Personal Jurisdiction Over Out-of-State Opt Ins
First, Defendant contends that conditional certification should be limited to employees that either lived or worked in Ohio because this Court lacks personal jurisdiction over Defendant with respect to any claims brought by employees who did not live or work in Ohio. Resp. 3–7, ECF No. 18. Specifically, Defendant argues that Bristol-Myers Squibb Co. v. Superior Court of California , ––– U.S. ––––, 137 S. Ct. 1773, 198 L.Ed.2d 395 (2017) (" BMS ") and its progeny "establish that courts lack jurisdiction over claims of out-of-state [opt ins] in a putative collective action" unless general jurisdiction exists. Id. at 3. Further, Defendant argues that conditional certification is a proper stage at which to raise the personal jurisdiction argument because "this determination is a threshold matter." Id. at 6. To support its position, Defendant relies on various district courts that have applied BMS to FLSA conditional certification motions. See id. at 4–7.
For ease of reference, employees who did not live or work in Ohio will be referred to as "out-of-state opt ins."
Plaintiff disagrees and contends both that a response to a motion for conditional certification is an improper vehicle for raising a personal jurisdiction argument and that such argument fails on the merits in any event because the BMS holding does not apply to FLSA suits.
The Court begins this analysis by noting that the issue of whether BMS applies to FLSA collective actions is not settled. It has not been decided by any circuit, and district courts are divided. The question is, however, currently under review by the Sixth Circuit in Canaday v. The Anthem Cos., Inc. , No. 20-5947 (6th Cir. Aug. 19, 2020). The parties are ORDERED to notify the Court when a decision is rendered in that case.
District courts across the country have taken various approaches. Some district courts have considered the personal jurisdiction issue on a motion to dismiss and concluded that BMS applies to FLSA collective actions such that federal district courts lack personal jurisdiction over defendants with respect to claims brought by out-of-state opt ins. E.g. , Hutt v. Greenix Pest Control, LLC , No. 2:20-cv-1108, 2020 WL 6892013, at *8 (S.D. Ohio Nov. 24, 2020) ; Rafferty v. Denny's Inc. , No. 5:18-cv-2409, 2019 WL 2924998, at *7 (N.D. Ohio July 8, 2019) ; Maclin v. Reliable Reports of Texas, Inc. , 314 F. Supp. 3d 845, 849–50 (N.D. Ohio 2018). Many of these courts liken opt-in plaintiffs in FLSA suits to plaintiffs in mass torts rather than to absent class members in class actions.
Others have similarly held that BMS applies to FLSA collective actions and precludes the exercise of personal jurisdiction over claims by out-of-state opt ins but have done so in a ruling on a motion for conditional certification rather than a motion to dismiss. See, e.g. , Vallone v. CJS Sols. Grp., LLC , 437 F. Supp. 3d 687, 691 (D. Minn. 2020) ; Greinstein v. Fieldcore Servs. Sols., LLC , No. 2:18-CV-208-Z, 2020 WL 6821005, at **3–6 (N.D. Tex. Nov. 20, 2020). Procedurally, these courts justified addressing personal jurisdiction at the conditional certification stage as necessary to ensure notice was provided only to individuals who could properly join the class. Greinstein , 2020 WL 6821005, at *3.
The majority of district courts, however, have concluded—either at the motion to dismiss stage or on a motion for conditional certification—that BMS does not apply to FLSA collective actions. See, e.g. , Chavez v. Stellar Mgmt. Grp. VII, LLC , No. 19-CV-01353-JCS, 2020 WL 4505482, at **6–7 (N.D. Cal. Aug. 5, 2020) (noting that the majority of district courts have found BMS does not apply while the minority have found BMS does apply); Hammond v. Floor & Decor Outlets of Am., Inc. , No. 3:19-CV-01099, 2020 WL 2473717, at *15 (M.D. Tenn. May 13, 2020) ("The court concludes that the holding in BMS does not extend to cases such as this one, involving an FLSA collective action filed in federal courts ...."); Swamy v. Title Source, Inc. , No. C 17-01175 WHA, 2017 WL 5196780, at *2 (N.D. Cal. Nov. 10, 2017). Courts in this group have found that applying BMS to FLSA collective actions would frustrate the intent of Congress to permit nationwide FLSA claims and splinter most nationwide actions. Swamy , 2017 WL 5196780, at *2. Further, courts have limited BMS ’s holding to the jurisdiction of state courts, finding BMS does not apply to federal courts addressing a federal question. See Chavez , 2020 WL 4505482, at *7.
Moreover, at least two district courts have refused to evaluate the personal jurisdiction issue at the conditional certification stage if the court has personal jurisdiction over the defendant for all named plaintiffs’ claims. See, e.g. , Warren v. MBI Energy Servs., Inc. , Case No. 1:19-cv-00800-RM-STV, 2020 WL 5640617, at *2 (D. Colo. Sept. 22, 2020) (finding that raising the BMS argument at the conditional certification stage "puts the proverbial cart before the horse"); Belt v. P.F. Chang's China Bistro, Inc. , No. 18-3831, 2020 WL 3829026, at **7–8 (E.D. Pa. Jul. 8, 2020) ("[T]he Court cannot decide whether it has jurisdiction over individuals who have not yet opted-in because they are not parties to the collective action."); cf. Parker v. IAS Logistics DFW, LLC , No. 20 C 5103, 2021 WL 170788, at *4 (N.D. III. Jan. 19, 2021) ("Defendant's motion to dismiss for lack of personal jurisdiction is denied without prejudice to renewal after a determination on conditional certification."). In Belt , the court held that it was "inappropriate to reach the question of personal jurisdiction before individuals have even been given notice of the collective action and the opportunity to opt-in." 2020 WL 3829026, at *7. Even though additional employees had filed written consents and would likely join the suit, the court held that such persons were not yet opt-in plaintiffs because the court hadn't yet approved the conditional certification. Id. at *8.
The courts applying BMS to collective actions and the courts refusing to apply BMS to collective actions both make persuasive arguments. As mentioned above, the Sixth Circuit is considering the issue and is expected to render a decision shortly that will be binding on this Court. Accordingly, this Court finds the best approach is to follow the lead of the last group of cases and decline to consider the personal jurisdiction argument at this juncture. This approach balances Plaintiff's desire to provide notice to those who are similarly situated, while also avoiding prejudice against Defendant. Opt-in plaintiffs can be dismissed at subsequent stages of the litigation if Defendant re-raises the issue of personal jurisdiction via a motion to dismiss or motion to de-certify after the close of the opt-in period. Most importantly, this approach is in line with how other jurisdictional disputes are typically handled. Defendants generally cannot preemptively prevent a party from joining a suit due to lack of jurisdiction; they must wait until the party attempts to join, then move for dismissal. This approach is especially justified where, as here, the only opt-in plaintiff who will remain after this Opinion and Order also worked in Ohio, and it is unclear whether any out-of-state opt-ins will even join the suit.
B. Scope of the Meal Deduction Policy
In his complaint, Plaintiff seeks to define the class as:
All current and former hourly, non-exempt maintenance employees of Defendant who worked over 40 hours in any
workweek and were subject to Defendant's meal deduction policy during the three years preceding the filing of this Complaint and continuing through the final disposition of this case ("FLSA Collective" or "FLSA Collective Members").
Compl. ¶ 32, ECF No. 1 (emphasis added). In his motion for conditional certification, the reference to Defendant's alleged "meal deduction policy" is dropped, and the definition of the class is proposed as:
All current and former hourly, non-exempt maintenance employees of Defendant who were scheduled to work 40 or more hours in any workweek during the three (3) years preceding the filing of this Motion and continuing through the final disposition of this case.
Mot. Certify 18, ECF No. 14.
This definition, unconstrained by the meal deduction policy, would be too broad as it would include within the class even employees who were not subjected to Defendant's alleged FLSA violation. That is, even taking Plaintiff's allegations as true and assuming that the meal deduction policy itself applied to every hourly, non-exempt maintenance employee, there are no plausible allegations that every such employee was prohibited from taking an uninterrupted meal break and therefore worked in excess of 40 hours without being paid overtime. The better approach is to limit the class to those hourly, non-exempt maintenance employees who were subject to the meal deduction policy and who, because of that policy, worked more than 40 hours in a given week without being paid overtime. Such a definition properly limits the class to those alleged to have suffered the FLSA violation.
Defendant argues for an even narrower definition, however. Specifically, Defendant asks the Court to exclude from the class anyone who worked in California or who punched in and out for their meal breaks, arguing that such employees would not be similarly situated to Plaintiff because, unlike Plaintiff, their 30-minute meal breaks were not deducted via the timekeeping system.
For conditional certification, Plaintiff needs to "show only that his position is similar, not identical, to the positions held by the putative class members." Comer , 454 F.3d at 547 (internal quotation marks and citation omitted). The Sixth Circuit has long recognized that this similarity can be shown in at least two ways: by suffering from "a single, FLSA-violating policy’ or [that] their claims are ‘unified by common theories of defendants’ statutory violations, even if the proofs of these theories are inevitably individualized and distinct.’ " Ford v. Carnegie Mgmt. Servs., Inc. , No. 2:16-cv-18, 2016 WL 2729700, at *2 (S.D. Ohio May 11, 2016) (quoting O'Brien , 575 F.3d at 585 (emphasis added)). In Ford , the plaintiffs alleged that their employer was underpaying them by systematically reducing their timesheets for meal breaks that did not occur. Id. The allegedly improper reduction occurred in two separate ways, and the defendant argued the difference in process prevented the putative members from being "similarly situated." This Court disagreed and held that employees of various McDonald's locations were "unified under the common theory" that their employer reduced their compensable time by recording meal breaks that did not occur. Id.
Plaintiff's Complaint here does not exclusively tie the automatic meal deduction policy to the timekeeping system. Rather, the policy is consistently described as simply automatically deducting a 30-minute meal break regardless of whether the employee actually took an uninterrupted, 30-minute meal break. Therefore, the policy may be implemented differently in different situations: a system may have reduced an employee's timesheet without any specific human intervention, a manager may have reduced the timesheet as a matter of regular practice, or an employee may have reduced her timesheet herself on instructions from her manager. See Knecht Decl. ¶¶ 8–9, ECF No. 22-2. The manner in which the 30 minutes is automatically deducted, however, does not affect the issue of whether the automatic deduction itself violates the FLSA when the employee does not take the break. Accordingly, the Court sees no need to limit the class to those whose deduction occurred via an electronic timekeeping system as opposed to another manner.
Further, Defendant's argument that no employees in California currently receive an automatic 30-minute meal deduction from the electronic timekeeping system is likewise unpersuasive. California employees may have been subject to the meal deduction policy via a method other than the timekeeping system, and even with respect to the timekeeping system, they may have been subject to the meal deduction policy at some point during the pertinent statute of limitations. See Meaney Decl. ¶ 5, ECF No. 18-2 ("There are no employees in the state of California currently receiving the auto deduction for meal periods through the timekeeping system." (emphasis added)); Norris Decl. ¶ 13, ECF No. 14-2 ("Within the last month or so, C&W has stopped applying the automatic meal deduction.").
In sum, the Court agrees in part with Defendant that the scope of the proposed class is too broad, and the Court offers below a working definition for the parties to consider.
C. Proper Defendant
Finally, Defendant argues that the class must be limited to employees who worked for it as opposed to those who worked for unnamed but potentially related entities. Resp. 8–9, ECF No. 18.
The Complaint in this case is brought against a single Defendant: "C&W Facility Services Inc." Compl. 1, ECF No. 1. Defendant argues, however, that four of the five putative opt-in plaintiffs worked for a different entity—Cushman & Wakefield. Resp. 2–3, 8–9, ECF No. 18. Defendant contends that "[e]mployees who worked for another defendant could not be similarly situated to Plaintiff" and thus should be excluded from the putative class. Id. at 9.
In response, Plaintiff concedes that "C&W [Facility Services Inc.], Cushman [& Wakefield], and Cushman [& Wakefield] U.S. are ‘technically’ different entities." Reply 17, ECF No. 22. However, Plaintiff contends that this technicality amounts to a "distinction without a difference." Id. Plaintiff argues these other, unnamed entities are related to Defendant and, thus, their employees should be included within the putative class to the extent the related entities also employed the meal deduction policy. Id. at 17–20. Specifically, Plaintiff argues that while the entity name on the employees’ paystubs may be different, all the employees suffered from the "same FLSA-violating policies used by these related entities as a single enterprise." Id. at 19.
Plaintiff offers three ways the Court can include within the class employees of entities that were not sued in this case: first, Plaintiff says the Court could simply amend the definition to include employees "who were paid by any C&W-related entity." Id. at 18. Second, Plaintiff asserts that counsel can file a new lawsuit naming additional defendants. Id. at 19. Third, Plaintiff offers to amend his initial complaint to include the additional defendants after the Court conditionally certifies this case as a collective action. Id. at 18 n.58. After offering these options, one of the putative opt-ins in this case, Gary Salone, did file a complaint on behalf of himself and others similar situated against Cushman & Wakefield U.S. Inc., Cushman & Wakefield, Inc., and John Doe Corporations 1–10 for alleged FLSA violations. See Salone v. Cushman & Wakefield, Inc. , No. 2:21-cv-414, ECF No. 1 (S.D. Ohio filed Jan. 29, 2021). This new Complaint was filed by Plaintiff's counsel and directly mentions this case. Id. at 12, 18 n.1.
For purposes of the current motion, the Court limits conditional certification to employees of C&W Facilities Services, Inc. The Court is hesitant to include individuals in the putative class who worked for entities that are not named as defendants because such defendants were not served in this case and had no opportunity to be heard on the certification motion. Moreover, now that the Salone case has been filed, allegations against those additional entities will be handled in that case unless Plaintiff moves, and is granted leave, to amend the Complaint herein. Accordingly, the parties are DIRECTED to provide a joint list to the Court of anyone who has opted-in to this case who did not work for Defendant. Their claims will be dismissed from the case sub judice without prejudice.
The Court recognizes that Plaintiff's preference is to conditionally certify a class in this case that includes employees of multiple entities. However, the Court simply does not find it proper when those entities were not named as defendants. Plaintiff could have, but did not, name the additional defendants in the original Complaint and could have, but did not, move to amend the Complaint immediately after Defendant responded to the motion for certification.
D. Working Definition
The parties are ORDERED to confer and present to the Court a joint proposed definition, form of notice, and opt-in form. For the class definition, the Court proposes the following as a starting point in the discussion:
All current and former hourly, non-exempt maintenance employees of C&W Facility Services, Inc. who, from July 31, 2017, through the final disposition of this case, worked at least 40 hours in any workweek and had a 30-minute meal period deducted from their compensable hours worked during that workweek despite being unable to take the full 30-minute meal break.
The parties shall submit the joint definition, notice, opt-in form, and list of opt-ins who should be dismissed from this case within FOURTEEN DAYS of the date of this Opinion and Order.
IV. CONCLUSION
For the above reasons, the Court GRANTS Plaintiff's motion for conditional certification consistent with the conclusions herein. The parties shall notify the Court when the Sixth Circuit renders a decision in Canaday . The Clerk shall remove ECF Nos. 14 & 26 from the Court's pending motions list.