SUE E. MYERSCOUGH, District Judge.
This cause is before the Court on the parties' Joint Motion for Conditional Certification of Collective Action and Court Guidance on Class Notice (d/e 132). For the reasons that follow, the Court grants the Motion, conditionally certifies the class, and directs notice in the form and manner set forth herein.
Plaintiffs April R. Brashier, Richard M. Orencia, and Chad O. Lebow bring this action under the Fair Labor Standards Act of 1938 (FLSA), 29 U.S.C. § 201
Under the FLSA, employees may bring a collective action against an employer to recover unpaid overtime or minimum wages. 29 U.S.C. § 216(b). Unlike class actions under Federal Rule of Civil Procedure 23(b), where potential plaintiffs are included in the class unless they opt out, potential plaintiffs in FLSA collective actions must affirmatively opt in to the suit.
The parties have filed a Joint Motion for Conditional Certification of Collective Action and Court Guidance on Class Notice. The parties have agreed that a conditional collective notice should be issued but have unresolved issues that require the assistance of the Court. The parties specifically note that their stipulation to the notice does not affect Defendants' Motions to Dismiss or Alternative Motions to Transfer Venue or their right to file a motion to decertify this matter as a collective action at a later date. The parties also provide that the stipulation to the notice does not affect Plaintiffs' motion for tolling
Under the FLSA, employees must receive a minimum wage for each hour that they work and an overtime wage for each hour worked in excess of forty hours per week. 29 U.S.C. § 206(a); 29 U.S.C. § 207(a)(1). The FLSA contains several exemptions from these requirements, including the exemptions for "any employee employed in a bona fide executive, administrative, or professional capacity." 29 U.S.C. § 213(a)(1). Congress has delegated the authority to define the scope of the exemptions to the Secretary of Labor. 29 U.S.C. § 213(a)(1);
The Secretary of Labor's regulations define the executive, administrative, and professional exemptions. Job title alone is insufficient to establish an employee's exempt status. 29 C.F.R. § 541.2. Instead, whether an employee is exempt depends on whether the employee's salary and duties meet the regulations.
First, the employee must be compensated on a salary basis of not less than $455 per week exclusive of board, lodging, or other facilities.
Second, to qualify for the executive, administrative, or professional exemption, the employee must perform the duties set forth in the regulations. For the executive exemption, the employee's primary duty must be management of the enterprise. 29 C.F.R. § 541.100(a)(2). In addition, the employee must customarily and regularly direct the work of two or more other employees and have "the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight." 29 C.F.R. § 541.100(a)(3),(4).
For the administrative exemption, the "primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers." 29 C.F.R. § 541.200(a)(1). In addition, the primary duty for administrative employees includes "the exercise of discretion and independent judgment with respect to matters of significance." 29 C.F.R. § 541.200(a)(3).
Finally, an employee is a "professional employee' if her primary duty is the performance of work that requires "knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction" or "invention, imagination, originality or talent in a recognized field of artistic or creative endeavor." 29 C.F.R. § 541.300(2).
In the Third Amended Complaint, Plaintiffs Brashier, Orencia, and Lebow seek to bring a claim under the FLSA for owed overtime and minimum wages on behalf of themselves and a class of similarly situated employees of Defendants (Count 1). Plaintiffs allege that Defendants have a policy of classifying most of its employees as "salaried" despite those employees having few or no actual salaried work duties. Plaintiffs allege that they and similarly situated employees/former employees were not properly classified as salaried employees because they do not perform "salaried work duties" and/or Defendants lose the exemption due to deductions/compelled payments from salaries and the failure to pay the minimum salary required for salaried employees.
Plaintiffs seek to bring claims for relief for violations of the FLSA as a collective action on behalf of all misclassified salaried employees. Plaintiffs allege:
Third Am. Compl. ¶ 280. Plaintiffs further allege that Defendants deliberately paid Plaintiffs and the Collective as exempt employees when they knew or should have known of the improper salary deductions, the failure to maintain salaried work as the primary duty, and/or paying Plaintiffs and the Collective less than the required minimum salary.
The named Plaintiffs are employees of some or all of the Defendants.
Plaintiff Orencia was employed to perform multiple job duties—including housekeeping, maintenance, quasi-security, and front desk clerk—but was classified as exempt and paid a salary. Third Am. Compl. ¶¶ 191, 197-199;
Finally, Plaintiff Lebow alleges that he was misclassified as exempt and that he was paid less than the minimum wage required for exempt employees. Third Am. Compl. ¶¶ 237-238. Plaintiff Lebow also alleges that his duties did not fall within an exemption.
Plaintiffs previously filed two motions for certification of a collective action and supported the motions with affidavits of the named Plaintiffs and Defendants' own business records.
Plaintiff Orencia was also aware of other employees who worked in similar positions who were paid a salary but lacked salaried job duties. Orencia Aff. ¶¶ 37-39 (referring to housekeeper Kathy Powell) (d/e 83-2). In addition, Orencia knew that another employee, Randy, worked as a maintenance employee, was classified as salaried, but had to make regular payments for an alleged work error. Orencia Aff. ¶40-46. Plaintiff Lebow states that an individual named Nikki placed advertisements on Craigslist and was paid a salary. Lebow Aff. ¶ 29;
Defendants have submitted the Declaration of Kenneth Logan, who holds equity in the LLC Defendants' entity motels and the position of the Member Manager with Defendants' LLC entity motels. Logan Decl. ¶ 2 (d/e 133-4). Logan states that the positions of housekeeper, maintenance, and front desk are the jobs held by a majority of the employees working at Defendants' motels.
Plaintiffs and Defendants have submitted memoranda in support of their positions and have submitted a form notice and consent form for the Court's review. Defendants' forms are based on Plaintiffs' forms and show additions and deletions to Plaintiffs' forms.
Defendants object to Plaintiffs' notice on three grounds: (1) the proposed notice fails to limit the notice to those similarly situated to the named Plaintiffs and those who have already opted in and Plaintiffs fail to specify the job categories of the intended recipients; (2) the proposed notice fails to inform the intended recipients of the need to sign a consent form by hand to join the case as an opt-in plaintiff; and (3) the notice provides for notification by text and Plaintiffs seek to allow opt-ins to merely send a text indicating they want to join the litigation instead of signing the consent form.
Plaintiffs identify the areas of disagreement as follows: (1) the class definition; (2) sending notice via text message and allowing class members to join via text message; (3) whether Plaintiffs are allowed to have face-to-face meetings with the Collective; and (4) objections to what Plaintiffs refer to as complex and confusing language. Plaintiffs also ask the Court to order Defendants to provide the names and last known home, work, and email addresses and phone numbers of the potential opt-in plaintiffs.
The first disagreement between the parties is the definition of the Collective, which affects to whom the notice is sent. Plaintiffs assert that the Collective should be defined as "all salaried employees" while Defendants assert that the Collective should be limited by job categories, meaning individuals holding the title of housekeepers, maintenance staff, front desk personnel, and skilled trade construction employees or performing similar tasks.
The Seventh Circuit has not articulated the procedure for determining whether a FLSA lawsuit should proceed as a collective action.
Under the first stage, referred to as the conditional certification stage or notice stage, the plaintiff must make a minimal showing that individuals in the potential class are similarly situated.
After the opt-in process and the completion of discovery, the court proceeds to the second stage of the analysis. At stage two, the court determines whether there is sufficient similarity between the named plaintiffs and the opt-in plaintiffs to allow the case to proceed on a collective basis.
This case is at the first stage. At this stage, a plaintiff can show sufficient similarity if the plaintiff can show "`some factual nexus' [that] connects her to other potential plaintiffs as victims of an unlawful practice."
In this case, Plaintiffs' definition of the Collective—all salaried employees—is too broad. Plaintiffs have not identified a factual nexus showing that all salaried employees are similarly situated.
Plaintiffs assert that they are similarly situated to all salaried employees because Defendants classify all or nearly all of their employees as salaried. Courts have held, however, that when a plaintiff seeks to bring a collective action on the basis of misclassification, some similarity beyond the allegation that all employees were misclassified is necessary to show that the lead plaintiffs and opt-in plaintiffs are similarly situated.
Plaintiffs also allege that Defendants improperly took deductions from salaried employees and, therefore, a class of all salaried employees is appropriate. However, an employer who takes improper deductions loses the exemption only for employees in the same job classification working for the same managers responsible for the actual improper deductions. 29 C.F.R. § 541.603(b). Again, having similar duties and/or job classifications is necessary for the Collective to be considered similarly situated.
The Court finds, however, that notice should also be sent to those employees classified as exempt who were paid less than $455 per week. One of the requirements for classifying employees as exempt from the overtime and minimum wage requirements is that they are paid at least $455 per week. Plaintiff Orencia asserts that he was classified as exempt but paid less than $455 per week. Other employees who were classified as exempt and were paid less than $455 per week are similarly situated to Plaintiff Orencia regardless of those employees' job duties or job classifications.
Consequently, the notice shall be sent to all former and current employees who were classified as exempt during the Class Period and who held the position or performed the duties of housekeeper, maintenance staff, front desk personnel, skilled trade construction employee, or placing advertising on Craigslist for Defendants.
The parties also disagree on whether the notice can be transmitted by text message in addition to by U.S. Mail and email. Plaintiffs propose providing an abbreviated notice (d/e 134-2, p. 8 of 8) to potential opt-ins by text message that is intended to cause the potential opt-in to further inquire about the case.
Plaintiffs assert that notice by text message is appropriate in this case for two primary reasons. First, text communication is appropriate because Defendants lack proper records. By way of example, in the fall of 2017, Plaintiffs' counsel sent 66 Corrective Notices pursuant to court order to addresses provided by Defendants.
While notice by text message is not uniformly permitted by the courts, this Court finds that notice by text message is appropriate in this case. Plaintiffs have asserted that Defendants' work force is transitory, and the Plaintiffs themselves lived at the motels while they worked for Defendants.
The Court orders, however, that the notice by text message must, in addition to advising the individuals that they can seek additional information from Plaintiffs' attorney, direct them to a website with an electronic version of the class notice and consent documents. In addition, Plaintiffs' counsel must ensure that anyone who contacts him who only received the text message notice also receives the long form notice prior to submitting any consent form.
The parties also appear to dispute whether potential opt-ins can consent by text message. Plaintiffs' position on this issue is not entirely clear. On the one hand, Plaintiffs have submitted a proposed consent form that includes a space for the party's signature. Plaintiffs' proposed notice contemplates that all individuals who wish to join the action will complete the consent form and return the form to Plaintiffs' counsel. On the other hand, Plaintiffs argue that a signature is not required under the statute and that the individuals can consent by text without signing any document.
The FLSA provides that "[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which the action is brought." 29 U.S.C. § 216(b). While the phrase "in writing" is not defined, many courts require a signature, an electronic signature, or the person's hand-printed name.
The Court will leave for another day whether a consent sent by text message without any signature or hand-placed mark constitutes a valid consent under § 216(b). The parties have asked the Court to resolve the remaining disputes regarding the proposed notice. The proposed notice anticipates that all individuals who wish to join the lawsuit will return the consent form. The consent form contains a place for the individual's signature. The Court approves this process for completing consents. The Court also approves Plaintiffs' proposal that individuals be permitted to take a picture of the completed consent form and text the picture to Plaintiffs' counsel, as this is not significantly different than sending a consent by facsimile. In addition, if Plaintiff wishes to engage an electronic signature service, the Court will approve such a method
Plaintiffs raise several additional objections.
Plaintiffs object to Defendants including the name of all of the Defendants on the first page of the Notice of Wage Lawsuit (d/e 133-3). That objection is denied.
Plaintiffs object to Defendants' use of the phrase "certain job classifications" in the sections titled "Description of the Lawsuit" and "Who is Receiving this Notice." The Court agrees that the language could be confusing. Therefore, the "Description of the Lawsuit" section will not include that phrase. In the "Who is Receiving this Notice" section, the Court amends the language to read as follows:
Plaintiffs also ask that the Court approve face-to-face meetings between Plaintiffs and Defendants' employees because Defendants' address records for former employees are dismal, Defendants can communicate with the employees daily, Defendants have misrepresented the claims to its employees, and the claims are complex.
It is not clear exactly what Plaintiffs are seeking. Plaintiffs have a right to contact potential members of the Collective class.
Plaintiffs also ask the Court to order Defendants to produce: (1) the names of each and every salaried employee of Defendants any time after March 1, 2014, including any aliases they may have; (2) the last known home and work addresses of the salaried employees for the same time period; and (3) the email addresses of any kind which Defendants are aware of for any such employee; and (4) phone numbers of any kind which Defendants are aware of for any employees. The Court grants Plaintiffs request in part. Defendants shall provide the information requested only as to Defendants' (1) salaried/exempt employees who held the title of or performed the duties of housekeeper, maintenance staff, front desk personnel, skilled trade construction, and placing advertising; or (2) salaried/exempt employees who were paid less than $455 per week.
Finally, the Court notes that Defendants' version of the notice contains additional or amended language. The Court approves the additional language—"Defendants will dispute the calculation of damages and certain of Plaintiffs' theories of liability"—submitted by Defendants on page 2 in the section titled "Description of the Lawsuit."
For the reasons stated, the parties' Joint Motion for Conditional Certification of Collective Action and Court Guidance on Class Notice (d/e 132) is GRANTED.
(1) The Court conditionally certifies a collective action by Plaintiffs and similarly situated members of the class pursuant to 29 U.S.C. § 216(b), defined as:
(2) The Court APPROVES Plaintiffs' Proposed Notice of Pending Lawsuit, as amended herein; Plaintiffs' Consent to Sue Under the Fair Labor Standards Act form; and Plaintiffs' Proposed Text Notice, as amended herein;
(3) The Court AUTHORIZES Plaintiffs to send the approved notice to the class as defined above.
(4) Defendants are ordered to produce to Plaintiffs the names and aliases, home and work addresses, email addresses, and phone numbers of every salaried/exempt employee who held the title of or performed the duties of housekeeper, housekeeper, maintenance staff, front desk personnel, skilled trade construction employee, and placing advertising after March 1, 2014, as well as all salaried/exempt employees who were paid less than $455 per week who worked for Defendants after March 1, 2014.
(5) In light of the Joint Motion for Conditional Certification of Collective Action, the following motions are denied as moot with leave to refile: Plaintiffs' Motion to Certification of Collective Action (d/e 5); Plaintiffs' Motion for Certification of Collective Action (d/e 82); Defendant American Motels Motion to Dismiss (d/e 98); and the Motion (d/e 102) to transfer venue and for a more definite statement filed by Defendants B&W Investment Properties, LLC, Brett Burge, County Line Properties I LLC, Jefferson Property, Quentin Kearning, Kenneth Logan, Quincy Property LLC, Springfield Welcome Inn, Vandiver Motel, and Joe Wimberly.
