ALGENON L. MARBLEY, District Judge.
This is an action under federal and state law for unpaid overtime wages and related relief. The matter is now before the Court on two motions: Plaintiffs' Motion for Conditional Class Certification, Expedited Discovery, and Court-Supervised Notice to Potential Opt-in Plaintiffs Pursuant to 29 U.S.C. § 216(b); and Plaintiffs' Emergency Motion for Protective Order, Cease and Desist Order, the Immediate Granting of Plaintiffs' Motion for Court Supervised Notice, Sanctions, and Corrective Actions (Docs. 30 & 40). The Court heard oral argument on both of these motions, and the matters are now ripe for decision. For the reasons that follow, the Plaintiffs' Motion for Conditional Class Certification is
Plaintiffs are current or former Mortgage Loan Officers ("MLOs") employed by Defendant The Huntington National Bank ("Huntington") during the time period from January 2008 to the present. As MLOs, Plaintiffs sell Huntington's residential mortgage products. Huntington pays the majority of its MLOs according to its Production Commission and Incentive Compensation Plan ("Plan"). Huntington pays those MLOs who work out of Huntington's corporate offices under its Production Commission and Incentive Compensation Plus Salary Plan ("Salary Plan"). All MLOs are paid under one of these two plans. MLOs paid under the Plan receive only commission earned for loans closed, and MLOs paid under the Salary Plan receive a combination of commission and salary. Huntington pays its MLOs in bi-monthly draws that it offsets against the employee's commission earnings, which are paid only after a mortgage closes.
Plaintiffs challenge two of Huntington's wage practices. First, although MLOs routinely work more than forty hours per week,
Plaintiff Tom Lewis filed a three-count complaint on January 18, 2011 (Doc. 1). Plaintiffs then filed two amended complaints, the first adding Plaintiff Matthew Coulter and the second removing several named defendants and replacing them with Defendant Huntington (Docs. 15 & 26).
The FLSA requires covered employers to pay overtime wages to employees who work more than forty hours per week unless the employees fall into the category of exempted employees. 29 U.S.C. §§ 207(a)(1) & 213(a). One such category includes those employees working in a bona fide administrative capacity as defined by regulations issued by the Secretary of Labor. 29 U.S.C. § 213(a)(1). The DOL issued regulations in 2004 addressing the exemption status of employees in the financial services industry. See 29 C.F.R. § 541.203(b). In 2006, the DOL issued an Opinion Letter stating that the administrative exemption applies to mortgage loan officers who perform a set of specified duties. Then, in March 2010, the DOL issued its Administrator's Interpretation 2010-1 concluding that the typical mortgage loan officer does not qualify for the administrative exemption.
Huntington Bank believed on the basis of the 2004 regulations and the 2006 Opinion Letter that the FLSA did not oblige it to pay overtime wages to its MLOs.
The Court will first address the Plaintiffs' motion for conditional class certification. As clarified at oral argument, Huntington does not directly challenge the Plaintiffs' right to conditional class certification for the Nationwide Class. Instead, Huntington's responsive memorandum argues for its entitlement to partial summary judgment on the overtime claims. Discovery on the summary judgment motion has not yet completed (see Doc. 37). In this matter, time is of the essence because "the commencement of a collective action under § 216(b) does not toll the statute of limitations period for plaintiffs who have failed to opt-in." Musarra v. Digital Dish, Inc., No. C2-05-545, 2008 WL 818692, at *2, 2008 U.S. Dist. LEXIS 110003, at *7 (S.D.Ohio Mar. 24, 2008).
Although Huntington presents no direct challenge to the Plaintiffs' entitlement to conditional class certification, the Court will briefly explain why it concludes that the Plaintiffs' have carried their burden of showing entitlement to certification.
Conditional class certification for FLSA collective actions is available under 29 U.S.C. § 216(b). At the notice stage before discovery has occurred, Plaintiffs must only make a modest showing that they are similarly situated to the proposed class of employees. Harrison v. McDonald's Corp., 411 F.Supp.2d 862, 865 (S.D.Ohio 2005). "In order to establish that other employees are similarly situated to the named plaintiff, the named plaintiff need only show that [his] position [is] similar, not identical, to the positions held by the putative class members." Pritchard v. Dent Wizard Intern. Corp., 210 F.R.D.
Most courts have required plaintiffs to produce a factual basis for the allegation of class-wide FLSA violations. See Pritchard, 210 F.R.D. at 595. The Court should consider "`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.'" Heaps, 2011 WL 1325207, at *2, 2011 U.S. Dist. LEXIS 40089, at *6 (quoting Olivo v. GMAC Mortgage Corp., 374 F.Supp.2d 545, 548 (E.D.Mich.2004)); see also Sniffen v. Spectrum Indus. Serv., 2007 WL 1341772, at *1-2, 2007 U.S. Dist. LEXIS 35206, at *4 (S.D.Ohio Feb. 13, 2007) (granting conditional class certification where plaintiffs submitted affidavits and payroll records showing failure to pay overtime).
In this case, all factors weigh in favor of conditional certification. In support of their motion, the Plaintiffs have offered the allegations in their complaint and declarations of the Named Plaintiffs. This evidence shows that the putative Nationwide Class all perform the same job functions and are all compensated according to either the Plan or the Salary Plan, both of which implement the same system of payment for commission earnings. Additionally, Huntington has provided the affidavit of Annette Houck, Huntington's Associate General Counsel and Senior Vice President, who admits that all MLOs perform identical job duties and are compensated according to a unified system. Thus, the Plaintiffs have produced some evidence supporting their contention that the putative class was subject to a common policy and are therefore similarly situated. Moreover, named Plaintiff Lewis claims that there were approximately 175 active MLOs at the time he resigned in January 2011. This suggests that the putative class of current or former employees is a manageable size.
For the foregoing reasons, the Court
The Plaintiffs contend that Huntington's recently-concluded overtime back wage payment process was misleading and coercive and ask the Court to intervene. The Plaintiffs have raised two categories of complaints. First, the Plaintiffs challenge the Acknowledgments as misleading and void as a matter of law. Second, the Plaintiffs allege that Huntington has harassed or intimidated Named or Opt-in Plaintiffs in an attempt to discourage other MLOs from joining the lawsuit.
The Plaintiffs first argue that the Acknowledgments are deficient because they do not inform the MLOs that Huntington is obligated to pay back wages regardless of whether they sign the Acknowledgments; they improperly place the burden on the MLO to disclose all accrued overtime hours; they require the MLO to affirm that their disclosure of accrued overtime hours is complete, which could be used to limit the amount of back wages to which the MLOs are entitled; they fail to inform the MLOs that they could be entitled
Second, Plaintiffs allege that Huntington's actions towards the Opt-in Plaintiffs is aimed at discouraging putative plaintiffs from joining the suit. According to the Plaintiffs, Huntington has harassed and intimidated Opt-in Plaintiff Rebecca Gray to discourage putative plaintiffs from joining the suit. Huntington has also refused to pay overtime compensation accrued since February 27, 2011, when Huntington began requiring MLOs to record their hours worked, to Opt-in Plaintiffs Rebecca Gray, Erin Bishop, and Brian Heibel. This is in contrast to its treatment of non-plaintiffs.
The Plaintiffs ask for four distinct remedies for these alleged infractions: (1) a declaration that the Acknowledgments are void; (2) remedial notice; (3) restrictions on Huntington's communications with its MLOs; and (4) costs.
The Court shall analyze the Plaintiffs' motion through the lens of its powers to supervise and manage class actions. Having conditionally certified the Nationwide Class, the Court has "`both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and the parties.'" Hoffmann-La Roche v. Sperling, 493 U.S. 165, 171, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989) (quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 100, 101 S.Ct. 2193, 68 L.Ed.2d 693 (1981)). One district court in a similar procedural posture relied solely on its supervisory powers to rule on the plaintiff's motion for a protective order; it did not, as Huntington now requests, use the framework applied in motions for preliminary injunction. See Belt v. Emcare Inc., 299 F.Supp.2d 664 (E.D.Tex.2003) (granting emergency protective order). The Court is nevertheless mindful that it must proceed cautiously when ruling on matters not yet fully briefed by both sides.
The Plaintiffs request that the Court declare the Acknowledgments void as a matter of law because Huntington obtained them in a coercive manner and because FLSA claims cannot be settled privately. Huntington, however, concedes that FLSA rights can only be settled through the supervision of the Secretary of Labor or the courts. See, e.g., Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728, 740, 101 S.Ct. 1437, 67 L.Ed.2d 641 (1981) ("FLSA rights cannot be abridged by contract or otherwise waived because this would `nullify the purposes' of the statute and thwart the legislative policies it was designed to effectuate.") (quoting Brooklyn Savings Bank v. O'Neil, 324 U.S. 697, 707, 65 S.Ct. 895, 89 L.Ed. 1296 (1945)); Walton v. United Consumers Club, 786 F.2d 303, 306 (7th Cir.1986) (FLSA has "bann[ed] private settlements of disputes about pay"); Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352-1353 (11th Cir.1982) ("There are only two ways in which back wage claims arising under the FLSA can be settled or compromised by employees. First, under section 216(c), the Secretary of Labor is authorized to supervise payment to employees of unpaid wages owed to them.... The only other route for compromise of FLSA claims is provided in the context of suits brought directly by employees against their employer under section 216(b) to recover back wages for FLSA violations. When employees bring a private action for back wages under the FLSA, and present to the district court a proposed settlement, the district court
Because Huntington is not asserting that the Acknowledgments are valid settlements or waivers of liability, there is no need for the Court to declare them void. The Court accordingly
The Plaintiffs have submitted a proposed Notice of Collective Action Lawsuit (Doc. 30-2). Since filing that proposal, the Plaintiffs have requested the addition of corrective language necessary because of Huntington's distribution of the Acknowledgments. The Plaintiffs would like to include two pieces of additional information: (1) that the Acknowledgments are void, and (2) that signing a settlement form does not preclude participation in this lawsuit.
Having conditionally certified the Nationwide Class, the Court has the authority to supervise notice to potential plaintiffs. See Hoffmann-La Roche, 493 U.S. at 172, 110 S.Ct. 482 ("By monitoring preparation and distribution of the notice, a court can ensure that it is timely, accurate, and informative."). The Court accordingly
The Plaintiffs next request that the Court restrict Huntington's communications with its MLOs in the following ways: (1) prohibiting Huntington and its agents from communicating with potential plaintiffs in an effort to obtain a signed Acknowledgment; (2) prohibiting Huntington or its agents from intimidating, threatening, coercing, or in any manner discriminating against potential plaintiffs; (3) prohibiting Huntington or its agents from obtaining declarations from potential plaintiffs; and (4) prohibiting Huntington or its agents from communicating with potential plaintiffs concerning the payment of wages owed to them under the FLSA or the Ohio Wage Act. The Court notes
The Plaintiffs' second and fourth requested restrictions are not moot but implicate Huntington's First Amendment rights. See Mevorah v. Wells Fargo Home Mortg., Inc., No. 05-1175 MHP, 2005 WL 4813532, at *3, 2005 U.S. Dist. LEXIS 28615, at *10 (N.D.Cal. Nov. 17, 2005) ("[C]ommunications to potential class members by both parties are generally permitted, and also considered to constitute constitutionally protected speech.") (citing Gulf Oil Co., 452 U.S. at 101, 101 S.Ct. 2193). An instructive case is Belt v. Emcare Inc., 299 F.Supp.2d 664 (E.D.Tex. 2003). In Belt, the court noted that it must balance its "broad authority to manage the collective action" against the defendant's First Amendment rights. Id. at 667 (citing Gulf Oil, 452 U.S. at 101, 101 S.Ct. 2193). Collecting cases, the court explained as follows:
Id. at 667-68 (internal citations omitted); see also Oetinger v. First Residential Mortg. Network, Inc., NO. 3:06CV-381-H, 2008 WL 2168965, at *2, 2008 U.S. Dist. LEXIS 41281, at *7 (W.D.Ky. May 23, 2008) (prohibiting "communications which would frustrate the policies of a collective action"); Murton v. Measurecomp, LLC, No. 1:07CV3127, 2008 WL 5725628, at *4-5, 2008 U.S. Dist. LEXIS 108085, at *13-14 (N.D.Ohio, Dec. 2, 2008).
The Court finds that the Acknowledgments alone are not so misleading, coercive, or improperly aimed at undermining the class to justify a curtailment of Huntington's speech. In Belt, the act that justified granting a prohibition on communication between the defendant and potential class members was the mailing of a letter the day before the court-sanctioned notice was set to issue that discussed the pending litigation and grossly mischaracterized the nature of the suit. 299 F.Supp.2d at 668. In Mevorah, the defendant's counsel telephoned potential class members and gave misleading information about the nature of the class action. 2005 WL 4813532, at *3-4, 2005 U.S. Dist. LEXIS 28615, at *12. In the case sub judice, in contrast, Huntington decided to pay some overtime back wages before the Plaintiffs filed the lawsuit, and the Acknowledgment never even mentions the litigation, much less provides false or misleading information about it. Cf. M.L. Stern Overtime Litig., 250 F.R.D. 492, 497 (S.D.Cal.2008) (noting that communications between employer and employees who are potential class members is not improper even if it contains "`some self-serving advocacy for defendant's position'") (quoting Keystone Tobacco Co. v. United States Tobacco
The Plaintiffs' next set of allegations is more troubling. Opt-in Plaintiffs Erin Bishop, Brian Heibel, and Rebecca Gray have submitted affidavits in which they allege that, because they have joined the lawsuit, they have not received overtime compensation for hours worked beginning February 27, 2010; other MLOs, they claim, who have not joined the lawsuit have received such compensation. Plaintiff Gray also alleges that Human Resources representative Lynn Kuhlman told Gray that all MLOs except for those participating in the lawsuit would be paid overtime beginning in February 2010.
Plaintiff Gray further alleges that Huntington has harassed her since she joined the lawsuit on January 18, 2011. She claims that Huntington investigated her twice for violations of company policy, first in March and again in April, for infractions she did not commit. Prior to joining the lawsuit, Gray had an unblemished employment record. Plaintiff Bishop has stated that, having witnessed Huntington's actions towards Gray, she now fears retaliation for joining the lawsuit, as well.
Such behavior, if proven, would warrant more severe restrictions from this Court. The alleged retaliation is of the kind that could very well discourage potential plaintiffs from joining the class for fear of retaliation. It would also demonstrate Huntington's intent to undermine the class, which in turn justifies finding a "sufficient threat of abuse to warrant enjoining all defendants." Belt, 299 F.Supp.2d at 669. At this time, however, the Court only has the Plaintiffs' evidence. In order to generate a "clear record" from which to make "specific findings," Gulf Oil Co., 452 U.S. at 101, 101 S.Ct. 2193, the Court will allow Huntington an opportunity to submit rebuttal evidence, including but not limited to affidavits from supporting witnesses. Huntington is hereby
Plaintiffs move that Huntington bear their costs in prosecuting the Emergency Motion and in mailing the remedial notice. As for the latter request, the Court finds that the addition of the corrective language does not significantly add to the cost of mailing the initial notice, and the Court in its discretion will not shift the cost for this process. As for the former, the plaintiffs have not indicated the source of the Court's authority for imposing monetary sanctions on Huntington. The Plaintiffs' motion for attorneys' fees and costs is therefore
For the foregoing reasons, the Plaintiffs' Motion for Conditional Class Certification, Expedited Discovery, and Court-Supervised Notice to Potential Opt-in Plaintiffs (Doc. 30) is
The Court