Opinion
Civil Action File No. 1:04-CV-718-WBH.
June 29, 2004
ORDER
Before the Court are Plaintiffs' Motion for Conditional Certification, for Defendant to Disclose Names and Addresses of Similarly Situated Employees, and for Approval of Notice to Potential "Opt-In" Plaintiffs [6]; Plaintiffs' Motion for Leave to File Amended Complaint [18]; Defendant CompUSA, Inc.'s ("CompUSA") Motion to Dismiss [2n]; Plaintiffs' Motion to Spike Amended Answer [21]; CompUSA's Motion for Leave to File Amended Answer [31]; CompUSA's Emergency Motion for the Court to Issue Cease and Desist Order [34-1] and to Impose Fees or Sanctions [34-2]; and Plaintiffs' Motion for Leave to File Sur-Reply [44].
BACKGROUND
On March 12, 2004, four named Plaintiffs, on behalf of themselves and others similarly situated, filed this Fair Labor Standards Act ("FLSA") case against Defendant CompUSA. CompUSA owns and operates approximately 225 retail computer supply stores throughout the United States. Plaintiffs, former commercial sales representatives ("CSRs") for CompUSA, claim that they were regularly required to work more than 40 hours per week without being paid overtime. Plaintiffs allege that prior to February 1, 2004, CompUSA intentionally mischaracterized CSRs as exempt from overtime pay under the FLSA. According to Plaintiffs, this mischaracterization occurred as part of a company-wide policy that affected CSRs at all CompUSA locations. On February 1, 2004, CompUSA changed its policy and now defines CSRs as non-exempt employees subject to overtime pay. As of the date of this Order, nine current or former CompUSA commercial sales employees have filed notices of consent to participate as Plaintiffs ("opt-in Plaintiffs") in this action.
On April 13, 2004, Plaintiffs moved for conditional certification of this action as a collective action under the FLSA, disclosure of the names and addresses of all persons employed by CompUSA as CSRs between March 12, 2001 and the present, and approval of their proposed notice to potential opt-in employees. Approximately one month later, CompUSA filed a motion to dismiss the action as moot in light of an offer of full relief to Plaintiffs. Most recently, on June 8, 2004, CompUSA filed an emergency motion for the Court to issue a cease and desist order to prevent Plaintiffs and their counsel from communicating with potential plaintiffs. In addition to these substantive motions, Plaintiffs and CompUSA seek leave of Court to file amended pleadings.
DISCUSSION
I. Motion for Leave to Amend ComplaintPursuant to Federal Rule of Civil Procedure 15(a), Plaintiffs move to amend their complaint to assert a claim for retaliation under the FLSA by named Plaintiff James L. Powell, and to correct the misspelling of named Plaintiff Terry McLaurin's name in the caption of the case. Plaintiffs were unable to include the retaliation claim in the original complaint because Powell had not yet been terminated. CompUSA does not oppose the motion. As the proposed amendments will not prejudice CompUSA or delay the case, Plaintiffs' motion for leave to amend is GRANTED. The First Amended Complaint attached to the motion shall be deemed filed and served upon CompUSA as of the date of this Order.
Rule 15(a) provides that "a party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served . . . otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a).
II. Motion to Strike Amended Answer
Plaintiffs move to strike CompUSA's Amended Answer and Affirmative Defenses because CompUSA did not obtain leave of Court or Plaintiffs' consent as required by Rule 15(a). CompUSA contends that the amendment should be allowed because the amended answer was filed within the deadlines set forth in the Joint Preliminary Report and Discovery Plan, and Plaintiffs have suffered no prejudice. A review of the docket reveals that CompUSA has now filed a motion for leave to file the amended answer, and Plaintiffs have not opposed that motion. Accordingly, Plaintiffs' motion to strike is DENIED AS MOOT. Furthermore, as the proposed amendments will not prejudice Plaintiffs or delay the case, CompUSA's motion for leave to amend is GRANTED. The Amended Answer and Affirmative Defenses attached to the motion shall be deemed filed and served upon Plaintiffs as of the date of this Order.
CompUSA seeks to correct an incomplete response, amend a previously asserted defense, and add a defense based on lack of subject matter jurisdiction in light of its offer of relief to Plaintiffs.
III. Motion to Dismiss
CompUSA moves for the dismissal of Plaintiffs' claims on the ground that its offer of full relief to Plaintiffs renders the case moot and deprives the Court of subject matter jurisdiction. On or around April 2, 2004, CompUSA submitted a written offer to Plaintiffs, through their counsel, to provide full relief to each Plaintiff for the amount of overtime pay claimed "based on an affidavit from each [Plaintiff] stating the number of hours worked each week during their employment up until the contested pay practice stopped in February 2004." CompUSA also offered to pay liquidated damages and reasonable attorneys' fees. Along with the offer letter, CompUSA forwarded time records for Plaintiffs' review. Since the motion to dismiss was filed, CompUSA has extended the same offer to five of the opt-in Plaintiffs. Most recently, it appears that CompUSA has extended more formal Rule 68 offers of judgment to the named Plaintiffs.
Section 216(b) of the FLSA permits employees in a private action to recover their unpaid overtime compensation, an additional equal amount as liquidated damages, a reasonable attorney's fee, and costs. 29 U.S.C. § 216(b).
Additional notices of consent have been filed since briefing closed on the motion to dismiss. It is not clear whether CompUSA has made similar offers to these opt-in Plaintiffs.
Rule 68 provides, in relevant part: "At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued . . . If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer." Fed.R.Civ.P. 68. According to Plaintiffs, CompUSA has not extended Rule 68 offers to the opt-in Plaintiffs.
Plaintiffs rejected CompUSA's April 2 offer and now argue that dismissal is inappropriate because the offer falls short of full relief, and discovery is required to resolve all disputes regarding the number of unpaid overtime hours. Plaintiffs assert that, notwithstanding the fact that no dollar amount has been specified, the offer does not represent full relief because CompUSA conditioned its offer on a confidentiality clause and non-admission of liability. In reply, CompUSA represents that it does not seek to impose a confidentiality agreement on Plaintiffs, and it will stipulate to the entry of judgment on a non-admission basis. CompUSA also asserts that it has identified all existing documents that reflect the hours worked by Plaintiffs, how much they were paid, and the manner in which they were paid.
As a general rule, settlement of the plaintiffs claims moots the action because the plaintiff no longer has a legally cognizable interest in the outcome. See Cameron-Grant v. Maxim Healthcare Services, Inc., 347 Fad 1240, 1244 (11th Cir. 2003);Mackenzie v. Kindred Hospitals East, LLC, 276 F. Supp. 2d 1211, 1218 (M.D. Fla. 2003). Several district courts have held that an offer of judgment of full relief, even if rejected, renders the action moot. See Mackenzie, 276 F. Supp. 2d at 1219 (FLSA collective action); Wiskur v. Short Term Loans. LLC, 94 F. Supp. 2d 937 (N.D. Ill. 2000) (Truth in Lending Act class action); Ambalu v. Rosenblatt, 194 F.R.D. 451 (E.D.N.Y. 2000). In Ambalu, a case relied on by CompUSA, the plaintiff filed a class action alleging violations of the Fair Debt Collection Practices Act. Before the class was certified, the defendant offered the plaintiff the maximum amount of damages to which he was entitled under the statute. Because the offer represented all that the plaintiff could hope to recover, the court concluded that plaintiff had no remaining stake in the outcome of the case. Consequently, the court entered judgment as offered by the defendant. Ambalu, 194 F.R.D. at 453.
In a more analogous FLSA overtime case, however, a district court denied a motion to compel the plaintiffs to accept offers of judgment because the amount of overtime pay owed to each plaintiff remained in dispute. Yates v. Applied Performance Technologies, Inc., 205 F.R.D. 497, 502-03 (S.D. Ohio 2002). InYates, the plaintiffs rejected sum certain offers because the defendants refused to provide them with supporting payroll and time sheet records. In holding that it would he inappropriate to compel acceptance of the offers, the court noted that the parties had not reached a consensus about the number of overtime hours, and none of the plaintiffs had made a demand for a sum certain.Id. at 503. The court distinguished Ambalu, where the plaintiffs demand was for a sum certain and the offer was equal to the demand Id. at 502.
Similarly, Plaintiffs in this case have not made sum certain demands, and it is clear that the parties have not yet reached a consensus on the amount of overtime pay owed to each Plaintiff. As the parties are still in the process of determining the correct amount of damages, the Court finds that the matter is still in dispute and dismissal of Plaintiffs' claims would be inappropriate at this time. Therefore, CompUSA's motion to dismiss is presently DENIED.
Moreover, the Court is unaware of the content of the Rule 68 offers, and it is unclear whether such offers have been extended to the opt-in Plaintiffs.
IV. Emergency Motion for Cease and Desist Order
CompUSA moves the Court to prevent Plaintiffs and/or their counsel from issuing unauthorized notice to potential plaintiffs. The motion was filed after CompUSA discovered that an e-mail message was sent by "Former CompUSA Commercial Sales Representatives" to 27 CompUSA employees on June 4, 2004, notifying them of the action and their right to opt-in. On June 17, unidentified former CSRs sent another message to potential plaintiffs entitled "Press Release: Federal Class Action Labor Lawsuit Filed Against CompUSA." CompUSA contends that the messages are inappropriate because they contain misleading and factually inaccurate statements, and Plaintiffs' motion for conditional certification and approval of notice is still pending before the Court. CompUSA seeks a restriction on "written materials that are broadcast in an indiscriminate manner such as by wide-spread e-mails."
Plaintiffs contend, correctly, that they are not required to rely on court-facilitated notice to notify potential opt-in plaintiffs of the action. See Mackenzie, 276 F. Supp. 2d at 1221 n. 6; Tucker v. Labor Leasing, Inc., 872 F. Supp. 941, 949 (M.D. F1a. 1994) (noting that "[section] 216(b) does not require parties to obtain judicial approval before seeking to locate other `similarly situated' persons . . . it is not the court's role to prohibit plaintiffs from attempting to gather these consents") (citations omitted). As the Court has not yet prescribed a particular form of notice or placed restrictions on Plaintiffs' contact with potential class members, the Court finds that sanctions against Plaintiffs are unwarranted. However, the Court is troubled by the fact that the messages contain factual and legal conclusions that may mislead potential plaintiffs as to their eligibility to participate in the action and the extent of CompUSA's potential liability. Therefore, until the Court rules on the motion for conditional certification and approval of notice, Plaintiffs shall not include such unqualified, misleading statements in their communications with potential plaintiffs.
For example, the June 4 message includes the following statements: (1) "If you are a past or present Commercial Sales Representative before March 1, 2004 you are entitled to join this lawsuit;" (2) "The position of Commercial Sales Representative was not a qualified exempt position . . . CompUSA reclassified the position to hourly nonexempt position but that did not excuse CompUSA from obligations to pay all overtime to all such classified employees for the last 3 years;" and (3) "If you worked any hours over 8 in any day, without the required (2) fifteen minute rest breaks, and on weekends without being paid for those hours you are entitled to be paid for all of your unpaid overtime hours plus damages and interest." The June 17 message also states that "CompUSA management deliberately implemented a corporate wide policy that encouraged or implicitly forced hundreds of Commercial Sales Representatives to work thousands of uncompensated hours." These statements are presented as conclusions rather than as Plaintiffs' contentions.
V. Hearing
The Court will hear from counsel regarding the issues raised in Plaintiffs' Motion for Conditional Certification, Disclosure of Names and Addresses of Similarly Situated Employees, and Approval of Notice. The Court will also hear from counsel regarding the status of the Rule 68 offers of judgment and the possibility of expedited discovery to determine the amount of Plaintiffs' damages. The hearing will take place at 10:00 a.m. on Wednesday, July 7, 2004.
CONCLUSION
For the reasons stated above, Plaintiffs' Motion for Conditional Certification, for Defendant to Disclose Names and Addresses of Similarly Situated Employees, and for Approval of Notice to Potential "Opt-In" Plaintiffs [6] REMAINS PENDING; Plaintiffs' Motion for Leave to File Amended Complaint [18] is GRANTED; CompUSA's Motion to Dismiss [20] is presently DENIED; Plaintiffs' Motion to Strike Amended Answer [21] is DENIED AS MOOT; CompUSA's Motion for Leave to File Amended Answer [31] is GRANTED; CompUSA's Emergency Motion for the Court to Issue a Cease and Desist Order [34-1] is GRANTED IN PART and DENIED IN PART; CompUSA's Motion to Impose Fees or Sanctions [34-2] is DENIED; and Plaintiffs' Motion for Leave to File Sur-Reply [44] is summarily GRANTED. The Clerk is DIRECTED to file the First Amended Complaint and the Amended Answer and Affirmative Defenses as of the date of this Order.
It is so ORDERED.