WILLIAM H. STEELE, Chief District Judge.
This matter comes before the Court on plaintiffs' Motion for Conditional Certification and Court-Facilitated Notice (doc. 30), plaintiffs' Motion for Curative Provision in the Notice (doc. 78), and defendants' Motion to Strike (doc. 85). All Motions are ripe for disposition.
The named plaintiffs are current or former servers employed by defendants, Robert W. Omainsky and Fried Stewed Nude, Inc., at Wintzell's Oyster House restaurant locations in Downtown Mobile, Alabama, and Saraland, Alabama.
In their Motion for Conditional Certification, plaintiffs elaborate on their FLSA claim as follows: Although the FLSA generally establishes a minimum hourly wage of $7.25, employers may claim a "tip credit" by paying tipped employees a cash wage up to $5.12 per hour below that minimum wage, as long as certain conditions are satisfied. One such requirement is that "all tips received by such employee have been retained by the employee, except that this subsection shall not be construed to prohibit the pooling of tips among employees who customarily and regularly receive tips." 29 U.S.C. § 203(m). In a nutshell, plaintiffs' FLSA cause of action is that defendants "have consistently required servers to share tips with non-tipped employees," namely dishwashers, rendering the tip pool invalid, such that defendants could not properly claim a tip credit for servers and "Defendants are thus liable for the difference between the reduced cash wage it paid them and the minimum wage required by . . . law." (Doc. 30, at 22, 25.) For their part, defendants deny that their tip pool arrangement was improper. In particular, defendants' position is that the tip pool was valid because servers were required to share tips with bussers, rather than dishwashers. (Doc. 59, at 7-8, 15-18.)
Of central importance to the pending Motions are Employment Arbitration Agreements executed in March 2015 by some 75 servers (all of whom are prospective opt-in plaintiffs) employed by defendant Fried Stewed Nude, Inc. at Wintzell's Oyster House restaurants in Downtown Mobile, Saraland and West Mobile. (R. Omainsky Decl. (doc. 59, Exh. A), ¶¶ 41, 57.) In relevant part, those Agreements specified as follows:
(R. Omainsky Decl., Exh. A-3, at 1.)
Such Agreements were not executed by
However, seven would-be opt-in plaintiffs (Courtney Booth, Dante' Henry, Morgan Wade, Allison Odom, Christina Guess, Stormy Lord and Rebecca Glynn Smith) signed the FSN Employment Arbitration Agreement. After these individuals filed consent forms to join this action, defendants filed Motions to Dismiss and Compel Mediation/Arbitration (docs. 60 & 74), seeking to enforce the ADR provisions of those Agreements as to each of these seven opt-in plaintiffs. In opposing FSN's efforts to enforce those mediation/arbitration requirements, plaintiffs railed against the Agreements as being both substantively and procedurally unconscionable.
The net result of the December 3 Order, then, is that the claims of opt-in plaintiffs Courtney Booth, Morgan Wade, Allison Odom, Dante' Henry, Christina Guess, Stormy Lord and Rebecca Glynn Smith were stayed pending the results of mediation and (if appropriate) arbitration. The arbitrator(s) will be tasked with making certain threshold determinations as to the arbitrability disputes (i.e., the validity, scope and enforceability of the Employment Arbitration Agreements). Depending on the outcome of those proceedings, it is entirely possible that one or more opt-in plaintiffs may rejoin this litigation (that is, have the stay of his or her claims lifted) based on an arbitrator's determination that the Employment Arbitration Agreement is not binding on him or her, or that it is not enforceable as to the instant dispute.
The named plaintiffs (Raven Williams. D'Andre Wilkerson, Tiffany Newburn, Danielle Powe and Jennifer Hampton) have come forward with a pair of motions through which they seek conditional certification of this case as an FLSA collective action, court-facilitated notice to potential plaintiffs, and curative measures to correct for what plaintiffs characterize as "the harm of Defendants' conduct" with respect to the roll-out, implementation and execution of the Employment Arbitration Agreements. (Doc. 78, at 1.) As to conditional certification, plaintiffs propose the following class definition:
(Doc. 65, at 2.) With regard to notice, plaintiffs "request that the Court include a curative instruction approved for use in alerting potential class members of their right to opt-in. . . . This curative instruction is necessary to counteract the retaliation and misleading information Defendants have and are communicating to their employees." (Doc. 78, at 18.) Plaintiffs propose not only that notice be mailed to putative opt-in plaintiffs, but also that defendants be ordered to "post the notice letter in its entirety in the common areas or at the time clocks of each of [their] facilities." (Id.)
The appropriate analytical starting point is whether conditional certification of this action is appropriate at this time. If so, the Court will move on to address whether court-facilitated notice is warranted and, if so, what the form, contents and methodology of such notice should be.
Pursuant to Section 216(b) of the FLSA, an action to recover unpaid minimum wages "may be maintained against any employer . . . by any one or more employees for and in behalf of himself or themselves
The Eleventh Circuit has emphasized that "[t]he key to starting the motors of a collective action is a showing that there is a similarly situated group of employees." Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008); see also Anderson, 488 F.3d at 952 ("To maintain a collective action under the FLSA, plaintiffs must demonstrate that they are similarly situated.") (citations and internal quotation marks omitted). Thus, before authorizing notice to prospective plaintiffs, a "district court should satisfy itself that there are other employees . . . who desire to `opt-in' and who are `similarly situated' with respect to their job requirements and with regard to their pay provisions." Dybach v. State of Florida Dep't of Corrections, 942 F.2d 1562, 1567-68 (11
"[U]ltimately, whether a collective action is appropriate depends largely on the factual question of whether the plaintiff employees are similarly situated to one another." Morgan, 551 F.3d at 1262. The wrinkle is that neither Congress nor the Eleventh Circuit has precisely defined "similarly situated" in the context of a motion for conditional certification. See id. at 1259 ("The FLSA itself does not define how similar the employees must be before the case may proceed as a collective action. And we have not adopted a precise definition of the term."). Nonetheless, lower courts performing the "similarly situated" inquiry at the conditional-certification stage of an FLSA action have considered the following factors, among others, to evaluate whether plaintiffs have met their burden: "(1) whether plaintiffs held the same job title; (2) whether they worked in the same geographic location; (3) whether the alleged violations occurred during the same time period; (4) whether plaintiffs were subjected to the same policies and practices, . . . established in the same manner and by the same decision maker; and (5) the degree to which the actions constituting the claimed violations are similar." Pena v. Handy Wash, Inc., 28 F.Supp.3d 1289, 1296 (S.D. Fla. 2014) (citation omitted).
At this stage, "[a] plaintiff has the burden of showing a `reasonable basis' for his claim that there are other similarly situated employees." Morgan, 551 F.3d at 1260. The Eleventh Circuit characterizes the legal standard for determining similarity at the conditional-certification stage as being "not particularly stringent, . . . fairly lenient, . . . flexible, . . . not heavy, . . . and less stringent than that for joinder under Rule 20(a) or for separate trials under 42(b)." Id. at 1261 (citations and internal marks omitted); see also Beecher v. Steak N Shake Operations, Inc., 904 F.Supp.2d 1289, 1297 (N.D. Ga. 2012) (although "[p]laintiffs bear the burden of establishing that they are similarly situated with the group of employees they wish to represent," that burden "is not heavy" at the conditional-certification stage) (citations omitted); Longcrier v. HL-A Co., 595 F.Supp.2d 1218, 1242 (S.D. Ala. 2008) ("The law erects only a low hurdle for FLSA plaintiffs seeking to obtain conditional class certification and court-facilitated notice to potential class members.").
As noted, plaintiffs' burden at the conditional-certification stage is to demonstrate a "reasonable basis for [their] claim that there are other similarly situated employees." Morgan, 551 F.3d at 1260 (citations and internal quotation marks omitted). Here, plaintiffs show that the three Wintzell's Oyster House restaurant locations (Downtown Mobile, Saraland, and West Mobile) where conditional certification is sought have all been owned by the same entity, Fried Stewed Nude, Inc., since November 5, 2012. (R. Omainsky Decl. (doc. 59, Exh. A), ¶ 4.) Plaintiffs also show that servers at all three locations have received $2.25 per hour plus tips, have been notified that Fried Stewed Nude will take a tip credit to ensure they receive minimum wage for all hours worked, and have been required to contribute to a tip pool devised and administered in an identical manner at each location. (Id., ¶¶ 28-32; Dyer Decl. (doc. 30, Exh. 1), ¶ 3; Curry Decl. (doc. 30, Exh. 4), ¶ 3.) Plaintiffs' litigation position, of course, is that Fried Stewed Nude operated this "tip pool" arrangement in an invalid manner by requiring servers at each location to share tips with non-tipped employees.
The "similarly situated" status of servers at the Downtown Mobile, Saraland and West Mobile restaurant locations during the relevant time period is reinforced by evidence that defendants conducted identical, mandatory meetings at each of the three locations in March 2015, to roll out the Fried Stewed Nude Employment Arbitration Agreement. (R. Omainsky Decl., ¶¶ 41-42.) During each meeting, management read from the same "script" delineating Fried Stewed Nude's policies, mission statements, and programs, all of which were uniform for all three locations. (Id., ¶ 42.) Again, this evidence suggests that Fried Stewed Nude treated servers at all three locations the same (or, at least, in a substantially similar manner) with regard to the compensation practices at the heart of this litigation.
Based on plaintiffs' showing that Fried Stewed Nude utilized uniform tip pool policies and practices at the three locations during the relevant time period, and that such policies and practices applied to all servers at those locations, the Court readily concludes that plaintiffs have met their fairly lenient burden. Specifically, plaintiffs have made a reasonable showing that all servers who worked at the three subject Wintzell's Oyster House restaurant locations between November 5, 2012 (the date that Fried Stewed Nude purchased the restaurants) and March 6, 2015 (the date that plaintiffs filed their Complaint) are similarly situated. Moreover, plaintiffs have filed numerous "Consent to Join Forms" signed by would-be opt-in plaintiffs, including most recently Thomas Card, a server at the Downtown Mobile location whose form was dated January 4, 2016. (See doc. 86.) These opt-in plaintiffs are complaining about the same pay policy, practice, or scheme (i.e., mandatory contributions to a tip pool for the benefit of non-tipped employees) by Fried Stewed Nude, resulting in the same purported FLSA violations (i.e., disqualification of Fried Stewed Nude's eligibility for the tip credit, meaning that plaintiffs received sub-minimum-wage cash wages, all in violation of the FLSA) during the same time period. On this factual showing, the Court concludes that plaintiffs have met their modest burden of establishing the existence of a similarly situated group of employees by showing that the prospective class members are all victims of a singular policy.
Notwithstanding the foregoing, defendants balk that the "similarly situated" prerequisite for FLSA conditional certification is not satisfied here. In particular, defendants assert the following arguments: (i) plaintiffs have not shown that any employee of the West Mobile location desires opt-in status in this case; (ii) the arbitration agreements signed by many (but not all) Fried Stewed Nude servers negate "similarly situated" status; and (iii) there are no "similarly situated" employees for the time period from March 5, 2012 through November 5, 2012. Each contention will be addressed in turn.
First, defendants posit that plaintiffs have not met their burden of showing "similarly situated" employees because all opt-in plaintiffs identified to date are or were employed at the Downtown Mobile or Saraland locations, not the West Mobile location. On that basis, defendants insist that "the Court should not authorize notice as to any unrepresented location." (Doc. 59, at 19.) It is true enough that, in this Circuit, part of the "similarly situated" inquiry is whether "there are other employees of the [employer] who desire to `opt-in.'" Cameron-Grant v. Maxim Healthcare Services, Inc., 347 F.3d 1240, 1244 (11th Cir. 2003) (citation omitted). However, defendants identify no reasoned authorities adopting an irreducible requirement that plaintiffs must establish
In applying the "similarly situated" test to a putative class that would include multiple facilities, courts typically focus on whether plaintiffs have shown common ownership and uniform policies or practices across those establishments.
Second, defendants assert that the Fried Stewed Nude Employment Arbitration Agreement signed by 75 servers at the three subject locations in March 2015 necessitates denial of conditional certification. In defendants' words, putative opt-in plaintiffs who have signed the Agreement "are simply not similarly situated to Plaintiffs who have not signed those same agreements." (Doc. 81, at 2-3.) Defendants' position (for which they cite no direct authorities) is undermined by considerable case law to the contrary. Indeed, district courts have routinely (i) declined to address arbitration issues in adjudicating motions for FLSA conditional certification, and (ii) determined that the execution of arbitration agreements by certain prospective opt-in plaintiffs does not deprive them of "similarly situated" status vis a vis named plaintiffs who did not sign such agreements. See, e.g., Romero v. La Revise Associates, L.L.C., 968 F.Supp.2d 639, 647 (S.D.N.Y. 2013) ("courts have consistently held that the existence of arbitration agreements is `irrelevant' to collective action approval `because it raises a merits-based determination'") (citations omitted).
That said, those Arbitration Agreements will of course affect the mechanics of this action going forward. As noted, the December 3 Order concluded that seven opt-in plaintiffs who had signed such Agreements must submit their claims (including arbitrability objections) to mediation and, if necessary, arbitration. Significantly, rather than dismissing those claims, the December 3 Order stayed them because, among other reasons, (i) the opt-in plaintiffs raise threshold challenges to enforceability of the Agreements that an arbitrator might resolve in their favor, thereby allowing them to rejoin this litigation without ever having the merits decided in arbitration; and (ii) dismissing their claims at this time would implicate statute-of-limitations concerns. (Doc. 82, at 11.)
The December 3 Order's reasoning and result illuminate the proper path for handling the claims of additional opt-in plaintiffs who signed FSN's Agreement. As both the Supreme Court and defendants recognize, conditional certification "does not produce a class with an independent legal status, or join additional parties to the action," but merely results in "the sending of court-approved written notice to employees, . . . who in turn become parties to a collective action only by filing written consent." Genesis Healthcare, 133 S.Ct. at 1530. By signing the Agreement, putative opt-in plaintiffs did not forfeit the right to receive notice of this litigation or to pursue FLSA claims against Fried Stewed Nude and Omainsky; rather, they merely agreed to a different forum and procedure for resolving such disputes. Therefore, these individuals are properly afforded notice just like all other prospective class members. The difference is that when plaintiffs who have signed the Fried Stewed Nude Employment Arbitration Agreement opt-in, defendants may move to compel mediation/arbitration of their claims. Upon such an occurrence, the claims of those opt-in plaintiffs will be stayed and referred to mediation/arbitration, just as those of opt-in plaintiffs Booth, Wade, Odom, Henry, Guess, Lord and Smith were via the December 3 Order. By allowing those individuals to opt-in and then staying their claims, the Court enables these prospective class members to toll the statute of limitations.
Third, defendants object that the proposed class definition is temporally inappropriate. Once again, plaintiffs seek conditional certification of a class of servers at Wintzell's Oyster House restaurants in Downtown Mobile, Saraland, and West Mobile who were paid below minimum wage or for whom defendants claimed a tip credit "from March 6, 2012 through March 6, 2015." (Doc. 65, at 2.) The rub, defendants say, is that Fried Stewed Nude did not even own the subject restaurant locations until November 5, 2012.
This objection is sound. As the parties are well aware, plaintiffs initially named as an additional defendant an entity called Wintzell's, Inc., but reached a settlement with that defendant in November 2015. Settlement papers jointly filed by plaintiffs and Wintzell's, Inc. confirm the following pertinent facts: (i) "Wintzell's, Inc. and [Fried Stewed Nude] are unrelated licensees of the Wintzell's Oyster House brand;" (ii) defendant Robert W. Omainsky "is the President of FSN;" (iii) Wintzell's, Inc. sold the Downtown Mobile, Saraland and West Mobile restaurants to Fried Stewed Nude on November 5, 2012; and (iv) after November 5, 2012, "all employees of those restaurants have been employed by FSN, not Wintzell's, Inc." (Doc. 69, ¶ 2.) As part and parcel of their settlement, plaintiffs agreed to "withdraw and discontinue attempts to conditionally certify a class affecting Wintzell's, Inc. or involving claims or remedies against Wintzell's, Inc." (Id., ¶ 7(b).) Thus, in court filings in this case, plaintiffs have acknowledged that the remaining defendants (Fried Stewed Nude and Omainsky) did not purchase the subject restaurant locations or employ the workers there until November 5, 2012. So why, then, do plaintiffs seek conditional certification of a class of servers at those restaurants for a period that includes the span of March 6, 2012 through November 5, 2012, when Fried Stewed Nude and Omainsky did not own those locations? Plaintiffs do not say. This course of action is especially curious given that plaintiffs have settled, compromised and otherwise withdrawn their claims against the entity that they acknowledge did own the restaurants during that period.
Viewing this concern in the context of plaintiffs' burden at the FLSA conditional certification stage, the Court readily concludes that plaintiffs have failed to show a reasonable basis for their contention that servers at the Wintzell's locations in Downtown Mobile, Saraland and West Mobile from March 6, 2012 through November 5, 2012 are similarly situated to servers at those same locations from November 5, 2012 through March 6, 2015. By plaintiffs' own admission, servers during the earlier time period did not work for the named defendants in this case, whereas those during the later period did. Plaintiffs identify no facts or legal theory through which Fried Stewed Nude or Omainsky might be held liable under the FLSA for alleged minimum-wage violations at Wintzell's locations occurring before they ever purchased those locations, particularly where plaintiffs have already settled their claims against the entity that did own those Wintzell's locations during that earlier period. Simply put, how can potential opt-in plaintiffs be similarly situated to the named plaintiffs for the period of March 6, 2012 through November 5, 2012 when the named plaintiffs have received full compensation and/or withdrawn their FLSA claims against the restaurant owner during that time period?
In short, plaintiffs have failed to make even a modest showing that servers at the subject restaurants from March 6, 2012 through November 5, 2012 are similarly situated to the servers that worked there from November 5, 2012 going forward. Thus, that earlier time period is properly excluded from the class definition. While the Court grants plaintiffs' Motion for Conditional Certification, the class definition will be narrowed to cover only the time period from November 5, 2012 through March 6, 2015.
In addition to requesting conditional certification of this FLSA collective action, plaintiffs move for court-facilitated notice. It has long been recognized that the FLSA's broad remedial purpose "is best served if the district court is deemed to have the power to give such notice to other potential members of the plaintiff class to `opt-in' if they so desire and by the district court's exercise of that power under appropriate conditions." Dybach, 942 F.2d at 1567.
As noted, the parties do not see eye-to-eye about various aspects of the notice process. For starters, plaintiffs request that defendants be ordered to produce the "names, addresses, email addresses, last four digits of their Social Security numbers, and telephone numbers of potential opt-ins" (doc. 30, at 27) for notice purposes; however, defendants object to the request for Social Security numbers and telephone numbers (doc. 59, at 30). Next, plaintiffs have proposed a form notice; however, defendants disagree with the contents of that form as to identification of counsel, disclosure of the burdens of litigation, description of the lawsuit and class, and omission of various defenses (doc. 59, at 30). Further, plaintiffs request that, in addition to individual mailings, the notice be posted in common areas or at the time clocks of each restaurant location (doc. 30, at 28); however, defendants object that such postings are unwarranted and intrusive (doc. 59, at 30). Finally, plaintiffs have requested (via a separate 23-page Motion and 8-page Reply) that the notice include a "curative provision" "in order to correct the harm of Defendants' conduct" (docs. 78, 84); however, defendants object to any such remedial measures in a corresponding 10-page brief and exhibits (doc. 83).
The Court addresses these topics as follows: With regard to the requested data, plaintiffs are entitled to receive — and defendants are obligated to provide —names and contact information for all potential class members. See, e.g., PAL v. Sandal Wood Bar N Grill, 2015 WL 237226, *2 (S.D.N.Y. Jan. 15, 2015) ("In managing the notice process, courts routinely order employers to provide contact information for potential plaintiffs."). Last known mailing addresses and telephone numbers have obvious utility to plaintiffs' efforts to track down and notify prospective opt-in plaintiffs. However, plaintiffs have not shown that Social Security numbers are necessary for this enterprise, much less that the resulting incursion on employees' privacy is warranted. See, e.g., Woods v. Club Cabaret, Inc., ___ F. Supp.3d ___, 2015 WL 6444793, *7 (C.D. Ill. Sept. 28, 2015) ("the last four digits of social security numbers would be of marginal use in locating potential plaintiffs and, whatever that marginal use might be, it is substantially outweighed by the privacy concerns of potential plaintiffs"); Fasanelli v. Heartland Brewery, Inc., 516 F.Supp.2d 317, 324 (S.D.N.Y. 2007) (denying request for production of Social Security numbers of potential opt-in plaintiffs where "Plaintiff has provided no rationale to explain why he requires such extensive production of information"); Sandal Wood, 2015 WL 237226, at *2 (declining "to order disclosure of social security numbers where other means of identification are available, given the sensitivity of such information," particularly "absent a showing that other forms of identification will be insufficient"). Defendants' objection to plaintiffs' request for production of the last four digits of Social Security numbers of potential class members is
With respect to the method of notice, plaintiffs have requested that defendants be ordered to "post the notice letter in its entirety in the common areas or at the time clocks of each of [their] facilities." (Doc. 30, at 28.) Defendants object, on the theory that such postings would be "overly intrusive and should not be ordered absent evidence that mailing of notices is ineffective." (Doc. 59, at 30.) Upon consideration, the Court finds persuasive the line of authorities supporting defendants' position. See, e.g., Martinez v. Cargill Meat Solutions, 265 F.R.D. 490, 500-01 (D. Neb. 2009) (rejecting dissemination of notice via workplace posting where "[t]here is no evidence personal mailing will be an unreliable means of delivering notice to the putative plaintiffs").
Third, with regard to the content of the notice, the parties have multiple areas of divergence. However, rather than urging the Court to wade into the minutiae of the notice language, both sides propose that they be allowed to meet and confer to attempt to hammer out a mutually acceptable form of notice.
Fourth, the Court considers the parties' extensive briefing on plaintiffs' Motion for Curative Provision. Plaintiffs posit that defendants engaged in misleading, deceptive, and coercive conduct in inducing some 75 servers at Fried Stewed Nude restaurants to execute Employment Arbitration Agreements in March 2015. According to plaintiffs, defendants misled servers into thinking that signing the Agreement was mandatory, failed to disclose that they intended to utilize these Agreements to block servers from joining this lawsuit, failed to inform servers of their right to join a FLSA collective action, neglected to tell servers that they were surrendering rights under the FLSA, failed to give servers copies of relevant documents, and threatened retaliation if employees did not sign. Plaintiffs also insist that the Agreements themselves are unlawful and invalid because they purport to abridge, waive or disclaim employees' rights under the FLSA. Although plaintiffs do not delineate exactly what relief they seek, they frame it generally in the following terms:
(Doc. 78, at 18.)
The overlap between plaintiffs' Motion for Curative Provision and their procedural and substantive unconscionability arguments presented in the context of defendants' Motion to Compel Mediation/Arbitration is striking and pervasive. Via the December 3 Order, this Court has already held that, by the express terms of the Fried Stewed Nude Employment Arbitration Agreement, disputes as to the validity, scope and enforceability of same (which would encompass all of plaintiffs' substantive and procedural unconscionability arguments) are reserved for the arbitrator, not a court, to decide. Accordingly, it would be inappropriate for the Court to authorize or mandate inclusion in the notice any judicial findings concerning the validity or enforceability of the Agreements, or any judgment about the propriety of defendants' methodology in securing such Agreements. By the clear terms of the contract and the December 3 Order, this Court will not pass judgment on those matters, at least in the first instance. Insofar, then, as plaintiffs are seeking judicial endorsement of a "curative provision" that condemns or otherwise ascribes wrongdoing to defendants' conduct vis a vis the Arbitration Agreements, their request is
Notwithstanding the foregoing, the Court agrees with plaintiffs that prospective opt-in plaintiffs would benefit from inclusion in the notice of general guidance reflecting that (i) execution of an Employment Arbitration Agreement does not bar them from filing a consent form, (ii) filing a consent form may toll the statute of limitations for certain claims they may have under the Fair Labor Standards Act, (iii) they may be compelled to mediate and (if necessary) arbitrate their claims if they file a consent form after signing an Employment Arbitration Agreement, and (iv) defendants are forbidden by law from retaliating against employees who file consent forms. Alerting prospective opt-in plaintiffs to these principles is reasonably calculated to alleviate any confusion otherwise engendered by their signing of the Agreement and subsequent receipt of notice of opt-in rights in this case. Such clarification stands to benefit everyone, including both the potential opt-ins and the existing parties to this lawsuit. The Court leaves the precise language of these provisions to the parties' drafting and good-faith negotiations; however, plaintiffs' request that such concepts be embodied in the notice is
For all of the foregoing reasons, it is
