Summary
noting that "a majority of courts have adopted a two-step process"
Summary of this case from Brown v. Trinity Prop. Mgmt.Opinion
No.: 4:01CV00661 WRW
October 25, 2002
ORDER
I. Procedural Status:
Plaintiffs have moved to conditionally designate this case as a collective action under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., to allow notice and an opportunity to other similarly situated claims representatives to "opt in," and to designate plaintiffs as adequate class representatives of the collective action.
Both parties have submitted numerous briefs, exhibits and affidavits to support their positions. In addition to the voluminous record, I held a conference allowed by Fed.R.Civ.P. 16 and was enlightened by both parties on the issues which must be addressed in deciding whether the case should proceed as a collective action. Based upon the record and the law as outlined below, plaintiffs' motion is GRANTED with the limitations set forth in this order.
II. Collective Actions:
The FLSA bars class actions in which a "representative employee" provides the means by which one person may sue on behalf of others, and allows "similarly situated" employees to join in a suit by filing notice of consent with the court. Specifically, under 29 U.S.C. § 721 (b) of the FLSA, employees similarly situated with plaintiffs must "opt in" to the class by filing a written consent with the Court in order to be bound by the outcome of the action. Conditional certification of a collective action and the issuance of notice do not require this Court to adjudicate the merits of plaintiffs' claims, but rather require a determination that the proposed members in the collective action are similarly situated. Hoffman-La Roche v. Sperling, et al., 493 U.S. 165, 173 (1989). I make no determination here as to the merits of the parties claims.
III. Defendants' argument that claims representatives are exempt employees as a matter of law is rejected:
The defendants argue that claims representatives are exempt from overtime as a matter of law in this circuit. For that proposition they rely on Bliston v. Hartford Accident and Indemnity Company, 441 F.2d 1365 (8th Cir. 1971) and a Department of Labor (DOL) regulation which defendants stale explicitly exempts adjusters. 29 C.F.R. § 541.205 (c)(5) and DOL wage and hour opinion letter No. 563 (1967). I reject defendants argument that the authority cited requires me to rule as a matter of law on that issue.
It is true that the Bliston Court affirmed a district court opinion finding a claims adjuster exempt from overtime under the ELSA and added that plaintiff conceded that he had uncontrolled settlement authority of $3,000 per case and that the bulk of cases were settled within his authority. However, the Bliston Court also affirmed many other findings of the district court to support its ruling. Specifically, the Court affirmed findings that the plaintiff exercised a great deal of discretion in the performance of his duties, was completely unsupervised, and was encouraged by his employer to exercise discretion. Id. 1366. Additionally, the Bliston opinion reviews wage and hour opinion letter No. 563 (1967) cited by defendants here, and correctly states the language of the letter, that "claims adjusters can come within the exemption." Id. 1366 (emphasis added). For these reasons, I reject the defendants argument that claims adjusters are exempt under the overtime provisions before this court in this case as a matter of law.
IV. This action is conditionally certified as a collective action:
The parties agree in their briefs that the initial inquiry I must make in determining whether to conditionally certify this as a collective action is to determine whether the proposed membership is similarly situated. In doing this, a majority of courts have adopted a two-step process by conditionally ordering the class to proceed as a collective action at a notice stage and permitting motions to decertify after discovery. Mooney v. Aramco Servs. Co., 54 F.3d 1207 (5th Cir. 1995). The parties agree that this Circuit has not addressed the precise issue and have directed me to district court opinions in the circuit. I find that the affidavits of the plaintiffs, job descriptions, and supporting deposition testimony of Mr. O'Brian and Mr. Yeargin support an order to allow this case to proceed as a collective action.
V. The Plaintiffs are representatives of the proposed collective action:
The motion addressed here asks me to appoint the named plaintiffs as class representatives. It appears from the affidavits submitted that they are all claims representatives adjusting workers compensation claims in the states of Arkansas and Oklahoma. They all allege that the work they perform for the defendants does not qualify for the exemption and that they are denied overtime for their work. Importantly, they have retained adequate class counsel and the defendants have not objected to their adequacy as representatives, but only to whether plaintiffs are similarly situated to other claims adjustors. I find that Plaintiffs' have met the threshold necessary to proceed as representatives of the collective action.
Defendants have directed my attention to the fact that plaintiff, Jeff Gibbs, did not submit an affidavit, that he is the only plaintiff that worked in the Dallas, Texas Workers Compensation Service Center rather than Arkansas and, that he lacks any demonstrable connection to the Little Rock Service Center or to the other plaintiffs. Defendants suggest that it may well be appropriate, at a subsequent date, to sever his case. (Def. Brief p. 6). That motion is not before me. In any event, workers compensation claims adjusters are not part of the conditional certification in view of the limitations on the membership because of different geographic locations, different supervisors, different types of insurance policies, different underwriting, different state laws governing workers compensation and other reasons stated in the limitations portion of this order.
V. Limitations on the Collective Action:
The Plaintiffs' motion requests that I certify an "opt-in" collective action with the class consisting of all current and former claims representatives who have worked for the defendants at any time during the last three years, and request that I allow notice of the action and "opt-in" consent forms to all potential collective plaintiffs. Defendants point out that this motion seeks approval of a "collective action" under the FLSA for over 800 AIGC adjustors in various job categories at 54 separate locations in 28 states. Defendants clarify the expansive nature of the proposed action by stating that there are 544 exempt-classified adjustors in workers compensation claims; 227 in property and casualty claims; 49 in complex claims; and 53 in construction claims. Concluding, there appear to be 773 exempt persons who adjust claims, working in 14 discrete job titles, with multiple functional variations within those job titles, working in 54 different locations in 28 states. These facts demonstrated by the defendants regarding the number, classification and geographic location of the potential membership of the collective action do not appear to be disputed by plaintiffs.
In arguing for an expansive definition of membership, plaintiffs assert that the goal of judicial economy weighs heavily in favor of certification and that issuance of notice to potential membership relying on Hoffman-La-Roche v. Sterling, 493 U.S. 165, 170 (1989) articulating the public policy and reasons for favoring collective action when the appropriate conditions are met. It is important to this case, that, in La-Roche, the Supreme Court went on to rule that trial courts had authority to compel employers to provide names of potential plaintiffs in pre-trial discovery, to approve a consent form and to manage the action in a manner that is orderly, sensible, and not otherwise contrary to statutory commands or the provisions of the Federal Rules of Civil Procedure. Id. 170. This decision is made with the teachings of La-Roche in mind.
A. The collective action is limited to workers compensation claims adjustors in Arkansas and Oklahoma.
The plaintiffs have failed to provide facts sufficient to find, even at this low threshold, a factual nexus between adjusters of workers compensation claims and the various other adjuster categories. Workers compensation claims are sufficiently distinct, and they vary from state to state and supervisor to supervisor. Baum v. Shoneys's, Inc. 1998 WL 968390, 5 WH Cases2d 127 (M.D. Fla. 1998). Plaintiffs have failed to demonstrate that their actual job duties are similar to those of the putative class consisting of a wide variety of types of insurance. Morisky v. Public Service Electric Gas Co., 111 F. Supp. 49 (D.N.J. 2000). The Morisky Court correctly noted, in refusing to authorize a collective action, that FLSA cases differ from those of employment discrimination in that the focus is not on the employer's action but on the nature of the employees' job duties in the context of the relevant exemption. Id. at 498. The plaintiffs have focused on the fact that the exemption exists in the various job categories and have not demonstrated that the actual duties performed are sufficiently the same for me to find they are "similarly situated" in all states having service center.
In addition, plaintiffs, affidavits demonstrate knowledge limited to the Little Rock, Arkansas, center and do not establish that employees with the same job titles at other locations in the 29 states are similarly situated. Hayes v. Singer Co., 696 F.2d 884, 887 (11th Cir. 1983)
Finally, the geographic size of the action proposed by the plaintiffs is not reasonable. The benefits, however great they may be, of collective action must be orderly and sensible. Hoffman- La-Roche at 170. In my decision, I have balanced the benefits of proceeding as a collective action against prejudice to the defendants and judicial inefficiencies.
For the reasons stated, the collective action is conditionally certified to include putative class members, as defined above of present and former workers compensation claims adjusters from September 25, 1998, to the date of certification. Counsel for the plaintiffs and defendants are directed to confer and attempt to agree on the Notice to Opt In within 10 days from the entry of this order. If agreement is not reached, the notice proposed by plaintiff is to be filed and counsel for defendants have 10 days to object to the notice.