Summary
granting conditional class certification
Summary of this case from Carter v. Indianapolis Power Light CompanyOpinion
Cause No. IP00-1230-C-T/G
March 29, 2001
Mark R Waterfill Dann Pecar Newman Kleiman Pc Indianapolis, IN.
James D Masur II Locke Reynolds LLP Indianapolis, IN.
ENTRY ON PLAINTIFF'S MOTION FOR PERMISSION TO NOTIFY SIMILARLY SITUATED INDIVIDUALS OF A RIGHT TO OPT-IN
Though this Entry is a matter of public record and is being made available to the public on the court's web site, it is not intended for commercial publication either electronically or in paper form. The reason for this caveat is to avoid adding to the research burden faced by litigants and courts. Under the law of the case doctrine, the ruling or rulings in this Entry will govern the case presently before this court. See, e.g., Tr. of Pension, Welfare, Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Elec., 223 F.3d 459, 468 n. 4 (7th Cir. 2000); Avitia v. Metro. Club of Chicago, Inc., 49 F.3d 1219, 1227 (7th Cir. 1995). However, a district judge's decision has no precedential authority and, therefore, is not binding on other courts, on other judges in this district, or even on other cases before the same judge. See, e.g., Howard v. Wal-Mart Stores, Inc., 160 F.3d 358, 359 (7th Cir. 1998) ("a district court's decision does not have precedential authority"); Malabarba v. Chicago Tribune Co., 149 F.3d 690, 697 (7th Cir. 1998) ("district court opinions are of little or no authoritative value"); United States v. Articles of Drug Consisting of 203 Paper Bags, 818 F.2d 569, 571 (7th Cir. 1987) ("A single district court decision . . . has little precedential effect. It is not binding on the circuit, or even on other district judges in the same district."). Consequently, though this Entry correctly disposes of the legal issues addressed, this court does not consider the discussion to be sufficiently novel or instructive to justify commercial publication of the Entry or the subsequent citation of it in other proceedings.
Plaintiff, Ivan Krieg, filed a three count complaint against Defendant, Pell's, Inc. ("Pell"), alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207 et seq. In his current motion, Mr. Krieg petitioned the court for permission to notify similarly situated individuals of their right to opt-in to this lawsuit pursuant to 29 U.S.C. § 216.
The notice Mr. Krieg seeks to distribute reads as follows:
NOTICE Re: Fair Labor Standards Act ("FLSA") Action Against Pell's Incorporated
Dear Sir or Madam:
A lawsuit was filed on August 1, 2000 by a former manager of a Pell's Store Repair [sic] store. The lawsuit claims that Pell's violated the FLSA, 29 U.S.C. § 207, et. [sic] seq., by refusing to pay overtime for hours worked in excess of forty hours. The lawsuit principally seeks back pay for unpaid overtime and double damages for violations of the FLSA.
If you are among the persons to whom this notice is addressed and you wish to have your right to overtime pay with Pell's litigated in this case, you should file your consent to be made a party plaintiff with the clerk of the court. It is entirely your own decision whether or not to file a consent with this court. If you do elect to become a party plaintiff, you may elect to be represented by the present Plaintiff's attorney, or by an attorney of your choosing.
If you choose to be represented by the current attorneys, you may write to them directly. If you file consent through a separate attorney, your Notice of Consent should be under the caption of the case as listed above, should contain your name, address, telephone number, date of birth, date of signing and signature and should state: "I hereby consent to be a party plaintiff in this case."
As already stated, you are not required to join in this case by filing your consent or to take any action. It is completely voluntary whether or not to enter into this lawsuit. However, your determination whether or not take action [sic] should be made promptly. Unless a Notice of Consent is actually filed with the court on or before ___, you will not be permitted to join in this case. If you do not file a consent for joining this case, you will not receive any back overtime pay or other relief from the case if the Plaintiffs prevail in this litigation. Any such relief would be available to you only if you proceeded by bringing an independent action within the time provided by law.
If, however, you decided to join in the case by filing your Consent, you will be bound by the judgment of the court on all issues of the case, whether it is favorable or unfavorable to you. This Notice is for the sole purpose of determining the identity of those persons who wish to be involved in this case. Although the court has authorized the sending of this notice, there is no assurance at this time that the court will grant any relief.
The FLSA prohibits Pell's or anyone from discriminating or retaliating against you if you choose to take part in this case.
Notice provided by, DANN PECAR NEWMAN KLEIMAN, Professional Corporation
I. Background
Mr. Krieg's complaint alleges that from November 28, 1995, until April 28, 2000, he was employed as a manager at Pell's Kokomo, Indiana, shoe repair store. Pell operates approximately one hundred forty shoe repair stores throughout the United States. Mr. Krieg asserts that Pell failed to pay him and other similarly situated managers overtime pay to which they were entitled in violation of the FLSA.II. Discussion
The FLSA, 29 U.S.C. § 216(b), provides that an employee may bring a cause of action on his own behalf and on behalf of similarly situated employees. Thus, 29 U.S.C. § 216 (b) authorizes a representative action. See Woods v. New York Life Ins. Co., 686 F.2d 578, 580 (7th Cir. 1982) (citation omitted). However, "[n]o employee shall be a party plaintiff to any such action unless" he or she opts-in to the action. 29 U.S.C. § 216(b). For this reason, the representative plaintiff has a right "to notify the people he would like to represent that he has brought a suit." Woods, 686 F.2d at 580 (citation omitted).
However, because an employee may only bring a cause of action on behalf of other employees that are "similarly situated" (as opposed to all other employees), 29 U.S.C. § 216(b), it follows that the employee seeking to bring a cause of action on behalf of others must make a threshold showing that the employees on whose behalf he seeks to bring a cause of action are in fact similarly situated to him. See Haynes v. Singer Co., 696 F.2d 884, 887 (11th Cir. 1983) ("As a preliminary matter, it is not disputed that plaintiffs have the burden of demonstrating a reasonable basis for crediting their assertions that aggrieved individuals existed in the broad class that they proposed."); Severtson v. Phillips Beverage Co., 137 F.R.D. 264, 267 (D.Minn. 1991) ("To obtain court authorization to send the proposed notice, plaintiffs must submit evidence establishing at least a colorable basis for their claim that a class of `similarly situated' plaintiffs exist."). Although, it not required that a court finally determine that the "similarly situated" requirement of section 216(b) is satisfied before allowing notice to be sent. See Severtson, 137 F.R.D. at 267. To do so would have the effect of putting an FLSA class action in a "chicken and egg limbo." Id.
Mr. Krieg does not dispute that this threshold requirement does in fact exist. Rather, he disputes Pell's assertion that he has failed to make the requisite showing. As evidence that employees similarly situated to Mr. Krieg do exist, Mr. Krieg submitted the affidavit of Stacey Collins. In her affidavit, Ms. Collins represents that from September 1998 until May 2000, she was employed by Pell as a Payroll Administrator. (See Collin's Aff. ¶ 2.) She goes on to state, "During my employment at Pell's, I learned that the majority of the managers of the Pell's Shoe Repair Stores were paid based upon a salary rate, and not by the hour. I also learned that these managers were not paid overtime." (See id. ¶ 3.) This evidence is enough to establish a colorable basis that a class of similarly situated employees does exist. Of course, as stated above, it is impossible to conclude at this stage of the litigation that all managers employed by Pell during the relevant time period are in fact similarly situated to Mr. Krieg. However, Mr. Krieg has come forward with evidence sufficient to conclude that at least some employee-managers exist who are similarly situated to him. That being the case, Mr. Krieg will be allowed to notify other employee-managers who may be similarly situated to him that he has brought a suit.
Pell objects to the consideration of paragraph 3 of Ms. Collin's affidavit on the grounds that the information contained therein is privileged and is hearsay. First, the statements made in paragraph 3 do not reveal any communication between Ms. Collins and an attorney. Rather, it is clear that Ms. Collins is reporting facts which were familiar to her in her role as a Payroll Administrator. UpJohn Co. v. United States, 449 U.S. 383, 395 (1981), the case upon which Pell bases its privilege objection, specifically holds that, "The [attorney-client] privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney[.]" Moreover, the court notes that there is no evidence that Ms. Collins learned the information which she reported in paragraph 3 in a communication with an attorney, nor can such an inference be made. Next, Pell offers no explanation as to how the information relayed in this paragraph is inadmissible hearsay. Although Ms. Collins states that while at Pell "she learned" these things, she does not say that she was told these things from other people. Rather, it is reasonable to infer that she had first hand knowledge of this information as a result of her employment as a Payroll Administrator. Ms. Collins is testifying to facts, not out of court statements, and, thus, what she is offering is not inadmissible hearsay. For these reasons, Pell's objections are OVERRULED and paragraph 3 of Ms. Collins' affidavit will be considered in ruling on the present motion.
As an aside, the court notes that in response to Mr. Krieg's interrogatory seeking identifying information regarding persons employed by Pell as managers at its shoe repair stores, Pell objects, stating in part that the interrogatory is not reasonably calculated to lead to the discovery of admissible evidence, and does not disclose the information requested.
As indicated above, Mr. Krieg submitted to the court a copy of the notice he intends to send. Pell objects to certain portions as they exist and requests that language changes be made. Pell's objections do not reach the substantive content of the message being conveyed, but rather appear to be an attempt by Pell to have the message conveyed in light more favorable to it. However, it is not Pell that is requesting the notice be sent, but rather it is Mr. Krieg. Therefore, the court will not permit Pell to rewrite Mr. Krieg's notification letter absent a colorable objection to misleading language used by Mr. Krieg. That said, the court will address Pell's specific objections.
Pell first objects to language contained in the first paragraph. Pell asserts that it has not been charged with "refusing" to pay overtime as the second sentence of that paragraph suggests, but that the claim asserted is that Pell "did not pay" overtime. Pell requests that the language be changed to reflect this discrepancy. Whether Pell "refused" to pay overtime or "did not pay" overtime is a distinction without difference in the context of the notice. In any event, to the extent that "refused" suggests that Pell was on notice of the need to pay overtime but still did not do so, there is evidence (see discussion below) that Pell did indeed "refuse" to pay overtime. Accordingly, the court will not require Mr. Krieg to change the language of this sentence. Nor will the court require Mr. Krieg to include language in this paragraph to the effect that he seeks relief for being retaliated against, as Pell requests. Such language is unnecessary to include in this notice.
Next, Pell complains of "wholly unnecessary" language contained in the second paragraph. Pell suggests that the paragraph should be rewritten and submits to the court an alternative second paragraph. The alternative paragraph that Pell submits is merely a difference in form and reflects no substantive objection to the message conveyed in Mr. Krieg's second paragraph; it by no means alters the meaning of the paragraph. For the reasons stated above, Mr. Krieg will not be required to change the language of the second paragraph to conform to the language that Pell would prefer be used.
Pell also complains of the language used in the final two sentences of the fourth paragraph and submits alternative language. Again, the alternative language Pell submits is just that — alternative language. It by no means changes the meaning of the message conveyed in those sentences. And, those sentences as written do not create a "patently false impression in any addressee" as Pell suggests. Thus, Mr. Krieg will not be required to change the final two sentences of this paragraph to substitute Pell's language for his own.
Pell's last objection is that the second to last paragraph does not include an admonition that if a plaintiff joins the suit, he or she is at risk of costs being imposed. Pell cites no authority for the inclusion of such language, and this court finds that such language is not necessary to include in the notice. The notice by no means addresses all the risks of joining the putative class, and such is not the purpose of the notice. Rather, should a particular plaintiff consider joining the class, it would be the duty of that plaintiff's attorney to inform the perspective class member of the risks he or she is undertaking. Accordingly, Pell's request to include this warning language is rejected.
Finally, Pell argues that should notice be allowed, a two-year statute of limitations, as opposed to a three-year statute, should apply. Pell asserts that in order to extend the statute of limitations to three years, it is necessary that the cause of action arise out of a "willful violation" of the FLSA, and that such a showing has not been made. 29 U.S.C. § 255(a). Mr. Krieg does not dispute that ordinarily the statute of limitations applicable to his cause of action would be two years. However, he does dispute Pell's assertion that evidence of a willful violation does not exist.
"An employer acts willfully, for purposes of establishing the proper statute of limitations, where he knows or shows reckless disregard for whether his actions are unlawful under the FLSA." Bankston v. State of Illinois, 60 F.3d 1249, 1253 (7th Cir. 1995). Mr. Krieg argues that Pell was put on notice of the FLSA's requirement to pay overtime, but yet purposefully failed to pay overtime in violation of the FLSA. As evidence that Pell's alleged violation was willful, Mr. Krieg points to Ms. Collins' affidavit. In her affidavit, Ms. Collins states that in 1999, she informed Brent Clark, Pell's CEO and general counsel, "that the manner in which they were paying store managers was illegal under the [FLSA]." (Collins Aff. ¶ 4.) Furthermore, she informed Cindy Powers, Pell's controller, that "failure to pay overtime wages to the store managers was a violation of the FLSA." (Collins Aff. ¶¶ 6-7.) After Ms. Collins made these statements to Mr. Clark and Ms. Powers, there is no evidence that Pell altered the manner in which it paid overtime. Thus, it is logical to infer that Pell was on notice that its practice may be in violation of the FLSA, but did not attempt to change its unlawful practices so as to conform with the requirements of the FLSA. Of course, this inference assumes that Pell's practices were unlawful, which is by no means a foregone conclusion. Rather, such a bold assumption is appropriate when determining whether there exists a basis from which a jury could conclude that Pell's violation (if indeed there was a violation) was willful so as to extend the statute of limitation to three years as opposed to two. All this is relevant, of course, in determining to whom notice should be sent, not to determine whether Pell in fact acted willfully. As the Seventh Circuit has instructed, "It is the jury's province to decide which limitations period, two or three years, applies in light of the plaintiffs' evidence that the defendants acted willfully." Bankston, 60 F.3d at 1253. Because there is evidence from which a jury could conclude that a violation of the FLSA as alleged in this case was willful, the three-year statute of limitations will apply regarding to whom notice should be sent.
Pell objects to this statement as both privileged and hearsay; it is neither. What Ms. Collins told Mr. Clark is not protected by the attorney-client privilege in this instance because Ms. Collins' conversation with Mr. Clark was in no way an effort to seek legal advice on behalf of Pell and is therefore outside the scope of the privilege. (See Collins Aff. ¶ 4; Clark Aff. ¶¶ 4-7.) See United States v. Frederick, 182 F.3d 496, 500 (7th Cir. 1999) ("Communications from a client that neither reflect the lawyer's thinking nor are made for the purpose of eliciting the lawyer's professional advice or other legal assistance are not privileged."); see also Upjohn, 449 U.S. at 390 (information protected by the attorney-client privilege includes that given to a corporate counsel to enable that counsel to provide the corporate client with legal advice). Moreover, it is not hearsay because it is not offered for the truth of the matter asserted, but rather to show that Pell had notice that its actions may be in violation of the FLSA. Therefore, it will be considered for that limited purpose. Pell's objection is thus OVERRULED.
Pell objects to paragraph 7 of Ms. Collins' affidavit on the ground that the information contained therein is privileged and is hearsay. The communication between Ms. Collins and Ms. Powers is not privileged. There is no evidence whatsoever that Ms. Powers was an attorney representing Pell at any time. Also, the communication is not hearsay because it is not offered for the truth of the matter asserted, but rather to show that Pell had notice that its actions may be in violation of the FLSA. Accordingly, it will be considered for that limited purpose. Pell's objection is OVERRULED.
For the foregoing reasons, Plaintiff's motion is GRANTED. In accordance with its ruling in this Entry the court ORDERS that (1) Defendant provide names and last known addresses of all managers employed by Defendant from March 29, 1998, to the present within thirty days of this Entry; (2) Plaintiff's counsel notify such managers of their right to opt-in within fifteen days of receiving this list of managers from Defendant by sending via first class mail to each manager identified a copy of the notification letter approved by this court and (3) potential opt-in plaintiffs shall have one hundred twenty days from the date such notification letters are post marked to file a notice with the Clerk of this Court indicating their consent to opt-in as a plaintiff in this cause of action. Also, the form of the notice submitted by Mr. Krieg and reproduced in footnote 2 of this Entry is APPROVED and all changes suggested by Defendant to the language used in that notice are REJECTED.
The court notes that in paragraph 14 of Mr. Clark's affidavit, Defendant requests sixty days as opposed to the thirty days suggested by Plaintiff within which to compile this list. (See Clark Aff. ¶ 14.) ("Particularly in view of the upcoming holidays, a time frame of (60) days would be more appropriate than the thirty (30) days requested by plaintiff's counsel, due to manpower limitations."). The request for sixty days was due at least in part to the 2000 holiday season. Being that the holidays have long past, that concern is no longer valid. Additionally, Defendant suggests that because of an upgrade in the company computer system the information that Plaintiff requests will be time consuming to provide, as payroll records for 1997 and 1998 can only be ascertained by reviewing hard copies of W-2 forms and there are only two employees who will be able to compile this information. (See id.) Defendant's concern regarding payroll records for 1997 is no longer valid as payroll records for that year need not be searched. Also, Defendant's burden regarding 1998 payroll records has been significantly reduced as it need not search those records for approximately the first quarter of the year. Plaintiff opposes Defendant's request because the statute of limitations continues to run and the additional thirty days may preclude some plaintiffs' rights to opt-in. See 29 U.S.C. § 256(b). Balancing the needs of Plaintiff, including those plaintiffs who may choose to opt-in, and Defendant, the court finds that thirty days is an appropriate amount of time for Defendant to satisfy the court's order in the Entry.
The court notes that the parties have recently filed what are in effect cross motions for summary judgment. It is possible that a determination of whether Plaintiff's individual claim can go forward will be made before the opt-in responses are received. However, the court does not view that as a problem. The showing made relative to the motion addressed by this Entry is sufficient to support the sending of notices. If Plaintiff's individual claim fails, there very well may be others who have viable claims who can then represent the class. Therefore, the pending summary judgment motions will not affect the notice process.
ALL OF WHICH IS ORDERED.