Opinion
2:20-CV-01948-MJH
07-08-2021
MATTHEW WALDECKER, INDIVIDUALLY AND FOR OTHERS SIMILARLY SITUATED; Plaintiff, v. HYPERSPRING, LLC, Defendant
OPINION AND ORDER
Plaintiff, Matthew Waldecker, individually and on behalf of others similarly situated, bring the within collective action against Hyperspring, LLC, for overtime payment as required by the Fair Labors Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). (ECF No. 18). Plaintiff has also filed a Notice of Consents to Opt-In to the collective action on behalf of Randy Guthrie and Bryan Hays. (ECF No. 22). Hyperspring has moved to strike Guthrie and Hays Consent Opt-ins pursuant to Fed. R. Civ. P. 12(f). (ECF No. 23).
Plaintiffs have also moved for conditional certification and court-authorized notice. (ECF No. 27). On July 6, 2021, the Court held oral argument on Hyperspring's Motion to Strike and on Plaintiffs' Motion for Conditional Certification, and the matters are now ripe for consideration. After consideration of Hyperspring's Motion to Strike Consent to Opt-In as Class Member and Brief in Support (ECF Nos. 23 and 24), Plaintiffs' Response in Opposition (ECF No. 26), Hyperspring's Reply, the arguments of counsel, and for the following reasons, Hypersprings' Motion to Strike will be denied. Further, after consideration of Plaintiffs' Motion for Conditional Certification and Brief in Support (ECF Nos. 27 and 28), Hyperspring's Response in Opposition (ECF No. 38), Plaintiffs' Reply (ECF No. 39), the arguments of counsel, and for the following reasons, Plaintiffs' Motion will be granted as to conditional certification.
I. Motion to Strike Consent Opt-Ins
A. Background
Plaintiff, Matthew Waldecker, filed an amended putative collective action against Hyperspring, alleging violations of the Fair Labor Standards Act, 29 U.S.C.§ 201, et seq. ("FLSA") and the Pennsylvania Minimum Wage Act, 43 P.S. § 33.104 ("PMWA") claiming that Hyperspring failed to pay Plaintiff and other similarly situated employees overtime. Waldecker alleges that Hyperspring is a limited liability company that maintains its headquarters in Huntsville, Alabama. (ECF No. 18 at ¶ 22). Hyperspring also maintains that it has a registered office and registered agent in Wilmington, Delaware. (ECF No. 23-2). Waldecker avers that he worked for Hyperspring in and around Pittsburgh, Pennsylvania. Id. at ¶ 12. On March 12, 2021, Waldecker filed Notices of Consent for two former employees, Randy Guthrie and Bryan Hays. (ECF No. 22). However, Hyperspring asserts that both of its former employees did not work in or around Pennsylvania. Therefore, Hyperspring argues that this Court has no personal jurisdiction over the claims by Guthrie and Hays and requests that their Notices of Consents be stricken.
B. Discussion
Hyperspring contends that Notices of Consent to Opt-in for Gurthrie and Hays should be stricken because the Court has neither general nor specific jurisdiction for either opt-in Plaintiffs' claims. Plaintiffs first argue that Fed. R. Civ. P. 12(f) only applies to Pleadings and that a Notice of Consent is not a pleading; however, Plaintiffs maintain that, even if Rule 12(f) applied, Hyperspring failed to meet the rule's requirements. Plaintiffs also contend that Hyperspring's personal jurisdiction argument fails because it consented to general jurisdiction in Pennsylvania. (ECF No. 26-1 and 26-2). Hyperspring registered to do business in Pennsylvania in both 2015 and 2018. Id. Specifically, Plaintiffs maintain that under Pennsylvania's consent-by-registration statute, 42 Pa.C.S. § 5301(a)(2)(i), registration by a foreign corporation, like Hyperspring, confers general jurisdiction to courts in Pennsylvania. Setting Rule 12(f) procedural issues aside, the central focus for the Court, especially given the potential for other out-of-state opt-ins, is to determine whether the Court has jurisdiction over the claims of Guthrie and Hays.
General jurisdiction may be asserted over a defendant even when the cause of action has no relation to the defendant's contacts with the forum if the defendant's " 'affiliations with the [s]tate are so 'continuous and systematic' as to render them essentially at home in the forum [s]tate.' " Daimler AG v. Bauman, 571 U.S. 117, 128 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 920 (2011) ).
Under Pennsylvania's jurisdictional statute, consent may also serve as a basis for jurisdiction:
(a) The existence of any of the following relationships between a person and this Commonwealth shall constitute a sufficient basis for jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over such person, or his personal representative in the case of an individual, and to enable such tribunals to render personal orders against such person or representative:
....
(2) Corporations.—
42 Pa.C.S. § 5301. Since 1991, the Third Circuit has held that business registration under § 5301 was a sufficient basis for Pennsylvania courts to exercise personal jurisdiction over a company. Bane v. Netlink, Inc., 925 F.2d 637, 641 (3d Cir. 1991). In its analysis, Bane noted that "[c]onsent is a traditional basis for assertion of jurisdiction long upheld as constitutional." Id. Hyperspring contends that Pennsylvania's jurisdictional statute violates its Due Process rights by expanding the scope of "general personal jurisdiction" beyond the holdings of Daimler. In essence, Hyperspring argues that Bane is no longer good law given the pronouncements in Daimler.(i) Incorporation under or qualification as a foreign corporation under the laws of this Commonwealth.
(ii) Consent, to the extend authorized by the consent.
(iii) The carrying on of a continuous and systematic part of its general business within this Commonwealth.
A majority of district courts within the Third Circuit who have considered the constitutionality of the consent-by-registration statute have held that it validly confers general personal jurisdiction upon defendants. As one such court observed, despite Daimler's holding, the Supreme Court "did not address 'the interplay between consent to jurisdiction and the due process limits of general jurisdiction.' " Kraus v. Alcatel-Lucent, 441 F. Supp. 3d 68, 75 (E.D. Pa. 2020) (quoting Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., Civ. A. No. 16-665, 2017 WL 3129147, at *11 (E.D. Pa. Jul. 24, 2017)). And just a few years prior to Daimler, The Supreme Court indicated that "[a] person may submit to a State's authority in a number of ways.... [including] explicit consent." J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 (2011).
See e.g. Healthcare Servs. Grp., Inc. v. Moreta, Civ. A. No. 19-2260, 2019 WL 6117353, at *6 (E.D. Pa. Nov. 15, 2019); Sciortino v. Jarden, Inc., 395 F. Supp. 3d 429, 438 (E.D. Pa. 2019); Williams v. Takeda Pharm. Am., Inc., Civ. A. No. 18-4774, 2019 WL 2615947, at *3 (E.D. Pa. June 26, 2019); Aetna Inc. v. Kurtzman Carson Consultants, LLC, Civ. A. No. 18-470, 2019 WL 1440046, at *4-6 (E.D. Pa. Mar. 29, 2019); Gorton v. Air & Liquid Sys. Corp., Civ. A. No. 1:17-1110, 2019 WL 757945, at *5-6 (M.D. Pa. Feb. 20, 2019); Youse v. Johnson & Johnson, Civ. A. No. 18-3578, 2019 WL 233884, at *3-4 (E.D. Pa. Jan. 16, 2019); Shipman v. Aquatherm L.P., Civ. A. No. 17-5416, 2018 WL 6300478, at *2 (E.D. Pa. Nov. 28, 2018); Aetna Inc. v. Mednax, Inc., Civ. A. No.18-2217, 2018 WL 5264310, at *4-5 (E.D. Pa. Oct. 23, 2018); Mendoza v. Electrolux Home Prod., Inc., No. 4:17-CV-02028, 2018 WL 3973184, at *3-4 (M.D. Pa. Aug. 20, 2018); Allstate Ins. Co. v. Electrolux Home Prod, No. 5:18-CV-00699, 2018 WL 3707377, at *4-5 (E.D. Pa. Aug. 3, 2018); Gorton v. Air & Liquid Sys. Corp., 303 F. Supp. 3d 278, 298 (M.D. Pa. 2018); Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., Civ. A. No. 16-665, 2017 WL 3129147, at *11 (E.D. Pa. July 24, 2017); Bors v. Johnson & Johnson, 208 F. Supp. 3d 648, 655 (E.D. Pa. 2016).
As Judge Stickman aptly synthesized in a recent FLSA collective action:
[W]hile its apparent that Bane was issued well before Daimler, and to that extent applied previous standards of general jurisdiction, [...], Daimler simply did not address the validity of foreign business consent statutes. In the absence of Supreme Court precedent directly on point, the Court will apply Third Circuit precedent which, while older than Daimler, unquestionably addresses the issue in question.Tupitza v. Texas Roadhouse Mgmt. Corp., 1:20-CV-2, 2020 WL 6268631, at *4 (W.D. Pa. Oct. 21, 2020). This Court agrees with that assessment and will similarly conclude that Bane controls here. Therefore, because Pennsylvania's foreign business consent statute is enforceable under Bane, the Court may maintain general jurisdiction over Hyperspring with regard to the out-of-state, consenting parties because Hyperspring consented to jurisdiction in the Commonwealth as part of registering to do business.
Accordingly, Hyperspring's Motion to Strike will be denied.
II. Motion for Conditional Certification
A. Background
In this action, Hyperspring LLC allegedly failed to pay Matthew Waldecker, and other workers like him, overtime as required by the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). See 29 U.S.C. § 201 and 43 P.S. § 33.104 et seq. (ECF No. 18 at ¶ 1). The Amended Complaint alleges that Hyperspring pays Waldecker, and other workers like him, the same hourly rate for all hours worked ("straight time for overtime"), including those in excess of 40 hours in a workweek. Id. at ¶ 5. Plaintiffs define Straight Time Workers as: all current or former employees of Hyperspring who were paid "straight time for overtime" at any time during the last three years. Id. at ¶ 19.
The records show Hyperspring paid Waldecker and the Straight Time Workers the same hourly rate for all hours worked - regardless of the number of hours they worked in a day or workweek. Id. When Plaintiff and the Straight Time Workers worked over 40 hours in a week, Hyperspring paid them at the same hourly rate it paid them for the hours they worked under 40 in that same week. (ECF Nos. 28-1 at ¶ 8; 28-2 at ¶ 8; 28-9 at ¶ 7; 28-3; 28-4; 28-6; 28-7; 28-8). When Waldecker and the Straight Time Workers worked fewer than 40 hours in a week, Hyperspring paid them only for the hours they worked that week. (ECF Nos. 28-1 at ¶ 7, 9; 12; 28-2 at ¶ 7, 9, 12; 28-3; 28-6; 28-4 (explaining the "base salary" is only paid during weeks in which the minimum number of hours are worked, and the hourly rate is only paid for each hour worked above the minimum); 28-7 (same); 28-8 (same). If Waldecker and the Straight Time Workers did not work in a given week, Hyperspring did not pay them a guaranteed salary. Id.; (ECF No. 28-5 at pp. 9-10).
In their Motion for Class Certification (ECF No. 27), Plaintiffs contend that, under the lenient standard for conditional certification, Waldecker and the Straight Time Workers should be certified as conditional class, and this Court should permit Plaintiff to issue notice.
B. Legal Standard for Conditional Certification
Section 7 of the FLSA requires employers to pay overtime to certain employees who work more than 40 hours in a work week. 29 U.S.C. § 207(a). Under the FLSA, a plaintiff may bring a collective action behalf of themselves "and other employees similarly situated" to recover unpaid overtime compensation. 28 U.S.C. § 216(b).
Courts in the Third Circuit "follow a two-step process for deciding whether an action may properly proceed as a collective action under the FLSA." Camesi v. Univ. of Pittsburgh Med. Ctr., 729 F.3d 239, 243 (3d Cir. 2013). At the first step, "the court makes a preliminary determination as to whether the named plaintiffs have made a modest factual showing that the employees identified in their complaint are similarly situated." Id. A plaintiff's burden at the first step is light and can be met by "produc[ing] some evidence, beyond pure speculation, of a factual nexus between the manner in which the employer's alleged policy affected her and the manner in which it affected other employees." Symczyk v. Genesis HealthCare Corp., 656 F.3d 189, 195 (3d Cir. 2011), rev'd on other grounds sub nom., Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66 (2013). If this burden is satisfied, "the court will 'conditionally certify' the collective action for the purpose of facilitating notice to potential opt-in plaintiffs and conducting pre-trial discovery." Camesi, 729 F.3d at 243. This "conditional certification" is not really a certification at all—instead, "[i]t is actually the district court's exercise of its discretionary power ... to facilitate the sending of notice to potential class members, and is neither necessary nor sufficient for the existence of a representative action under the FLSA." Zavala v. Wal Mart Stores, Inc., 691 F.3d 527, 536 (3d Cir. 2012).
At the second step, "with the benefit of discovery," the court "makes a conclusive determination as to whether each plaintiff who has opted into the collective action is in fact similarly situated to the named plaintiff." Camesi, 729 F.3d at 243. The second step can be "triggered" by "the plaintiff's motion for 'final certification,' by the defendants' motion for 'decertification,' or, commonly, by both." Id. Determining whether class members are similarly situated during the second stage "generally requires the consideration of three factors: (1) the disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to the defendant; and (3) fairness and procedural considerations." Kuznyetsov v. W. Penn Allegheny Health Sys., Inc., No. 10-948, 2011 WL 6372852, at *2 (W.D. Pa. Dec. 20, 2011) (citations omitted).
In sum, the first stage looks at "whether 'similarly situated' plaintiffs do in fact exist, while at the second stage, the District Court determines whether the plaintiffs who have opted in are in fact 'similarly situated' to the named plaintiffs." Zavala, 691 F.3d at 536 n.4. "Courts typically rely on the pleadings and affidavits of the parties to determine the suitability of conditional certification." Waltz v. Aveda Transp. & Energy Servs., Inc., No. 16-469, 2016 WL 7440267, at *2 (M.D. Pa. Dec. 27, 2016) (citation omitted). Given the "modest burden" at the first stage of the proceedings, "motions for conditional certification are generally successful." Id.; see also Bowser v. Empyrean Servs., LLC, 324 F.R.D. 346, 352 (W.D. Pa. 2018) (the first step's "fairly lenient standard typically results in a grant of conditional certification").
C. Discussion
Plaintiffs request that the Court conditionally certify and authorize them to send notice to:
All current or former employees of HyperSpring who were paid "straight time for overtime" at any time during the past three years ("Straight Time Workers").Plaintiffs argue that they can satisfy their lenient burden to identify a common policy or practice alleged to violate the FLSA, namely Hyperspring's uniform straight time for overtime pay scheme that deprived Plaintiffs and Straight Time Workers of overtime in violation of the FLSA. Hyperspring argues that the Court should deny conditional certification because Plaintiffs supply no evidence of a common unlawful policy, a policy that violates the FLSA, an illegal pay policy based upon the "reasonable relationship" test, and that the Plaintiff is not similarly situated to the putative class.
1. Merits-Based Defenses
Hyperspring maintains that Plaintiffs supply no evidence of a common unlawful policy, a policy that violates the FLSA, or an illegal pay policy based upon the "reasonable relationship" test. Plaintiffs contend that not only would Hyperspring's arguments otherwise fail, but also that the conditional certification stage does not consider such merit-based defenses. At the step-one inquiry, the Court does not weigh the evidence, resolve factual disputes, or reach the merits of plaintiff's claims. See Pereira v. Foot Locker, 261 F.R.D. 60, 67 (E.D.Pa.2009); Bowser v. Empyrean Servs., LLC, 324 F.R.D. 346, 353 (W.D. Pa. 2018).
Here, the Court must adhere to the two-tiered process outlined by the Third Circuit in Camesi, and at this time, the Court cannot address and adjudicate either Hyperspring's defenses or the merits of Plaintiffs' FLSA claims. Upon this Court's review of the submissions of the parties and the arguments of counsel, Hyperspring is asking the Court to "weigh evidence" and "resolve factual disputes." Such review will be reserved for later in this litigation. Therefore, the Court must, at this time, reject Hyperspring's merits-based opposition to Plaintiffs' Motion for Conditional Certification. The Court will address Hyperspring's defenses and the merits of Plaintiffs' claims at the appropriate time.
2. Similarly Situated Plaintiffs
Next, Hyperspring argues that Waldecker is not similarly situated to the proposed class. In particular, Hyperspring maintains that Plaintiffs have provided only pure speculation that other employees were similarly impacted by an alleged common policy. It also contends that Plaintiff attempts to certify a class of employees from various job positions who experienced the pay scheme in different manners. Further, Hyperspring argues that Plaintiff supplies no evidence that Hyperspring's pay practices impacted other employees in the same manner as he alleges it impacted him. Plaintiffs counter that courts routinely certify FLSA Collective Actions based upon uniform straight time for overtime pay practices. Plaintiffs argue the Straight Time Workers are similarly situated because:
• The Straight Time Workers worked on an hourly basis for Hyperspring;
• The Straight Time Workers were all subjected to Hyperspring's straight time for overtime pay plan;
• Hyperspring admitted to using hourly pay on the Straight Time Workers paystubs;See ECF Nos. 28-1 to 28-9.
• The Straight Time Workers were paid the same straight time hourly rate for all hours worked;
• The Straight Time Workers were only paid for hours actually worked and tracked according to their timesheets;
• The Straight Time Workers were never guaranteed any amount that was not tied to the hours they worked each week;
• The Straight Time Workers regularly worked in excess of 40 hours a week; and
• The Straight Time Workers were not paid overtime for hours worked in excess of 40 hours in any given week.
At the first stage of certification, plaintiffs must only present "some evidence, beyond mere speculation, of a factual nexus between the manner in which the employer's alleged policy affected [them] and the manner in which it affected the other employees." Hively v. Allis-Chalmers Energy, Inc., No. 13-106, 2013 WL 5936418, at *3 (W.D. Pa. Nov. 5, 2013). "Generally, plaintiffs meet the standard by producing some evidence indicating common facts among the parties' claims, and/or a common policy affecting all the collective members." Id.
"Any dissimilarities in job functions which would exclude a class member will be reevaluated at stage two when discovery is complete." Bowser v. Empyrean Servs., LLC, 324 F.R.D. 346, 352 (W.D. Pa. 2018). Similarly, "[t]hat potential plaintiffs held different jobs, in different departments, in different locations does not preclude conditional certification because all were subjected to the same allegedly unlawful policy." Id. at 352-53. Ultimately, allowing early notice and full participation by the opt-ins "assures that the full 'similarly situated' decision is informed, efficiently reached, and conclusive." Sperling v. Hoffmann-La Roche, Inc., 118 F.R.D. 392, 406 (D.N.J. Jan. 5, 1988). Once the notice and opt-in period are complete, the court will have the benefit of knowing the actual makeup of the class. Thus, early notice helps courts to manage the case because it can "ascertain the contours of the action at the outset." Hoffmann La Roche v. Sperling, 493 U.S. 165, 172, 110 S.Ct. 482 (1989).
Here, Plaintiffs seek collective treatment for a specific type of worker (Hyperspring's hourly employees) who were all subjected to the same pay policy (Hyperspring's uniform straight time for overtime pay scheme). While there may be dissimilarities that the Court will scrutinize at later stages of this case, this Court is not tasked to parse that analysis now. And while questions remain as to whether the policy implemented by Hypersping was legal under the FLSA, Plaintiffs have sufficiently asserted a common policy that affected a putative collective. Therefore, Plaintiffs present sufficient evidence to meet a modest factual showing that they and other Straight Time Workers are similarly situated for the alleged FLSA violations.
Accordingly, Plaintiff's Motion for Conditional Certification will be granted.
ORDER
And Now this 8th day of July 2021, after consideration of Hyperspring's Motion to Strike Consent to Opt-In as Class Member and Brief in Support (ECF Nos. 23 and 24), Plaintiffs' Response in Opposition (ECF No. 26), Hyperspring's Reply, the arguments of counsel, and for the foregoing reasons, Hypersprings' Motion to Strike is DENIED.
Further, after consideration of Plaintiffs' Motion for Conditional Certification and Brief in Support (ECF Nos. 27 and 28), Hyperspring's Response in Opposition (ECF No. 38), Plaintiffs' Reply (ECF No. 39), the arguments of counsel, and for the foregoing reasons, Plaintiffs for Conditional Certification is GRANTED. The following class is CERTIFIED:
All current or former employees of HyperSpring who were paid "straight time for overtime" at any time during the past three years ("Straight Time Workers").A decision regarding Authorization for Notice to the Putative Class Members is deferred. Counsel shall meet and confer regarding proposed Notice and Consent forms and shall file a joint status report in the next ten (10) days regarding any remaining disputes as to proposed Notice and Consent Forms as well as a proposed schedule.
BY THE COURT:
/s/_________
Marilyn J. Horan
United States District Judge