Nancy Torresen, United States Chief District Judge.
Before the Court are the Plaintiffs' motion for class certification with respect to
In 2007, Deutsche Lufthansa Berlin-Stiftung purchased three Lockheed Super Star aircraft at auction. LTNA Am. Answer ¶ 13 (ECF No. 38). Defendant Lufthansa Technik North America Holding Corporation ("
As GAS began its wing work, it became clear that there was significant corrosion inside at least one wing and on other parts of the aircraft. GAS Dep. 26:3-14 (ECF No. 79-1); Oct. 8, 2014 Young Decl. ¶ 4. In light of these developments, LTNA asked GAS to provide sheet metal technicians to help with the additional work. GAS Dep. 26:3-14 (ECF No. 79-1). In 2010, GAS agreed to supply sheet metal workers to LTNA on the Auburn site.
Plaintiff Venegas filed suit in 2014 on behalf of himself and other workers on the Super Star project alleging violations of federal and Maine wage and hour laws. Compl. ¶¶ 62-69 (ECF No. 1). The crux of Venegas's claims is that GAS and LTNA (the "
In August of 2015 I held a conference of counsel to discuss class certification/collective action decertification motions, a motion for summary judgment on exemption/preemption, and a contemplated motion from LTNA on joint employer issues. See Local Rule 56(h) Pre-Filing Conference Report & Order 1-3 (ECF No. 93). Counsel agreed that the class certification/decertification motions should be resolved first. Local Rule 56(h) Pre-Filing Conference Report & Order 1.
In the motion for class certification, the Plaintiffs request that I certify a Federal Rule of Civil Procedure 23(b)(3) class with respect to their state law claims, defined as follows:
Pls.' Mot. for Class Certification 2 (ECF No. 73).
Additionally, both Defendants now seek to have me decertify the collective action which I conditionally certified on February 5, 2015. Global Aircraft Service, Inc.'s Mot. to Decertify the Conditional Certification of this Matter as a Collective Action Under the FLSA ("
Federal Rule of Civil Procedure 23 governs class actions. Under that rule, an individual may sue in a representative capacity if certain conditions are met. First, the party moving for class certification must demonstrate the following prerequisites:
Fed. R. Civ. P. 23(a). Next, the named plaintiff must show that the class is maintainable under one of the types of class actions described in Rule 23(b). Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2548, 180 L.Ed.2d 374 (2011). Plaintiffs seeking damages proceed under Rule 23(b)(3). "To qualify for certification under Rule 23(b)(3), a class must meet two requirements beyond the Rule 23(a) prerequisites: Common questions must `predominate
As described below, Venegas has established the Rule 23(a) prerequisites: numerosity, commonality, typicality, and adequacy.
Rule 23(a)(1) requires that the class be "so numerous that joinder of all members is impracticable." Rule 23(a)(1) does not mandate any strict numerical cutoff for class certification, but courts in this circuit have generally found that a class of 40 or more individuals satisfies numerosity. See, e.g., Coffin v. Bowater, Inc., 228 F.R.D. 397, 402 (D.Me.2005). Here, Venegas maintains that the class would consist of "well over" 80 workers.
Rule 23(a)(2) requires that there be "questions of law or fact common to the class." The Supreme Court analyzed this requirement at length in Wal-Mart, Inc. v. Dukes, 564 U.S. 338, 131 S.Ct. 2541, 2550-2557, 180 L.Ed.2d 374 (2011). Under Dukes, commonality analysis requires an understanding of the merits of the plaintiffs' underlying claims. Dukes, 131 S.Ct. at 2552. The Dukes majority directs courts resolving class certification motions to consider not just whether there exist common questions among the class, but also whether there exist "`common answers apt to drive the resolution of the litigation.'" Id. at 2551 (quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 132 (2009)).
In Dukes, a group of employees alleged that Wal-Mart's practice of affording discretion to local managers over pay and promotion decisions caused a disparate impact on women, and the company's failure to limit that discretion, knowing men were disproportionally advantaged by it, amounted to disparate treatment. Dukes, 131 S.Ct. at 2548 (citing 42 U.S.C. § 2000e-2(a), (k)). Given the facts of the case and the applicable legal standard, in order to establish liability the employees would have had to come forward with "`significant proof' that Wal-Mart `operated under a general policy of discrimination.'" Id. at 2553 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 159 n. 15, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)). The Court found that Wal-Mart's policy of allowing discretion for local managers did not meet that standard. Id. at 2555-56. The Court explained that the commonality requirement meant that there needed to be a common answer to the question of why each employee was disfavored. Id. at 2552. But on the record before it, there was no evidence that local managers exercised discretion in some common fashion. Id. at 2555-56. Thus, since the same employment practices did not "touch and concern all member of the class," there were no common questions of law or fact. Id. at 2557 n. 10 (internal quotations and citation omitted).
Under Rule 23(a)(2) plaintiffs are required to identify at least one common contention capable of class-wide resolution. Dukes, 131 S.Ct. at 2556. Here, liability will be determined by whether the workers
Rule 23(a)(3) requires that "the claims or defenses of the representative parties are typical of the claims or defenses of the class." Typicality is satisfied when the representative plaintiff's "injuries arise from the same events or course of conduct as do the injuries of the class and when plaintiff's claims and those of the class are based on the same legal theory." In re Credit Suisse-AOL Sec. Litig., 253 F.R.D. 17, 23 (D.Mass.2008).
Venegas, like the rest of the class, worked for an hourly wage on the Super Star restoration project in Auburn, Maine. Venegas's alleged injuries arise from the Defendants' decision to classify him as an independent contractor rather than an employee for the time he engaged in that work. The class members' purported injuries arise from that same decision. Venegas's legal theory — that the Defendants misclassified him — is the same legal theory as the rest of the class. The Defendants have not identified any defenses that are unique to Venegas.
The Defendants suggest that Venegas is not typical of the rest of the class because his experiences on the Super Start project were different than other class members. GAS Opp'n to Pls.' Mot. for Class Certification 18-20 ("
Rule 23(a)(4) requires that "the representative parties will fairly and adequately protect the interests of the class." The adequacy requirement "serves to uncover conflicts of interest between named parties and the class they seek to represent," and "factors in competency and conflicts of class counsel." Amchem Prods., Inc., 521 U.S. at 625, 626 n. 20, 117 S.Ct. 2231.
LTNA argues that Venegas will not adequately represent the class because he had a supervisory role with respect to other class members.
LTNA has identified two Title VII cases where supervisors were deemed inadequate representatives for classes of supervisory and nonsupervisory employees. LTNA Opp'n 15 (citing Wagner v. Taylor, 836 F.2d 578 (D.C.Cir.1987); Fewlass v. Allyn and Bacon, Inc., No. 76-3685-T, 1978 WL 149 (D.Mass.1978)). But part of the adequacy problem in those cases was that the named plaintiff had evaluative authority over other class members, meaning that Title VII liability could ultimately turn on actions the named plaintiffs took against other class members. Wagner, 836 F.2d at 595; Fewlass, 1978 WL 149, at *1. Unlike these Title VII cases, liability in this case will not turn on actions taken among class members, but rather on the relationship between class members and the Defendants. So even if Venegas performed supervisory duties, he is not at odds with other class members on the legal theory uniting the class: whether the Defendants properly classified the workers as independent contractors. The adequacy requirement is satisfied.
Neither Defendant has challenged the adequacy of the Plaintiffs' counsel, but I must assess it in order to appoint class counsel, as Rule 23(g) instructs. Nicholas Woodfield of The Employment Law Group, P.C. has provided information on his experience and expertise in the area of wage and hour misclassification cases. See June 15, 2015 Decl. of Nicholas Woodfield (ECF No. 73-4). Attorney Woodfield has been involved in this suit at least since the Complaint was filed in June of 2014. See Compl. His filings reflect a commitment of time and resources to representing the class. I find that Attorney Woodfield will adequately represent the class.
Once a plaintiff seeking class certification has met the Rule 23(a) prerequisites, that plaintiff must next demonstrate that common questions predominate over any individual questions, and that handling the matter as a class action is superior to other methods of resolving the controversy. Fed. R. Civ. P. 23(b)(3).
Predominance analysis requires me to determine whether common questions predominate over individual questions. See Fed. R. Civ. P. 23(b)(3); Scovil, 886 F.Supp.2d at 48. With respect to the predominance requirement, "the need for some individualized determinations at the liability and damages stage does not defeat class certification." In re Nexium Antitrust Litig., 777 F.3d 9, 21 (1st Cir.2015). "Rather, the question is whether there is `reason to think that [individualized] questions will overwhelm common ones and render class certification inappropriate....'" Id. (quoting Halliburton Co. v. Erica P. John Fund, Inc., ___ U.S. ___, 134 S.Ct. 2398, 2412, 189 L.Ed.2d 339 (2014)).
To analyze whether individual issues will overwhelm common ones, I must begin by identifying what the class members will ultimately have to prove to prevail on their state law claims. Liability in this case will
The Law Court has not yet had an occasion to describe the test to be used to determine whether a worker is an employee or an independent contractor under 26 M.R.S.A. § 664, but Judge Hornby, deciding a class certification question in a case similar to this one, has predicted that the Law Court is likely to apply the "right to control" test which utilizes the eight-factors set forth in Murray's Case, 130 Me. 181,154 A. 352 (1931).
Murray's Case, 154 A. at 354. I agree with Judge Hornby that this is the likely test for the state claims in this case, and I also agree that "the right to control, the nature of the work, and its importance to [the employer's] business" are the most critical factors when analyzing a claim under a statute designed to protect workers.
The first Murray's Case factor is the existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price. Murray's Case, 154 A. at 354. Here, each worker signed the same agreement with GAS to work for an unspecified amount of time, at an hourly rate, with weekly paydays. GAS Agreement; GAS Dep. 57:16-20 (ECF No. 73-1). Each worker agreed that "the length of contract will be determined by workload and performance." GAS Agreement. The parties have not pointed to any other agreements defining the relationship between the workers and the Defendants. There will be common proof on whether any of the workers had contracts for the performance of a specific piece or kind of work for a fixed price.
The third factor is the worker's employment of assistants with the right to supervise their activities. Murray's Case, 154 A. at 354. There is no evidence that class members employed their own assistants to work on the Super Star project. This factor is subject to common proof.
The fourth factor is the worker's obligation to furnish necessary tools, supplies, and materials. Id. Class members were generally required to bring their own hand tools — meaning those tools that would fit in their personal toolboxes.
The fifth factor — which has been singled out as a crucial factor — is the worker's right to control the progress of the work, except as to final result. Murray's Case, 154 A. at 354; Scovil, 886 F.Supp.2d at 52-53 (collecting cases). The Defendants maintain that there was wide variation among the workers on the level of direction and supervision they received. GAS Opp'n 5-7, 9; LTNA Opp'n 2-3, 22. The evidence does show that some class members largely performed their assigned tasks with autonomy, while others had periods of constant supervision. Compare, e.g., Ramirez Dep. 27:2-16 (ECF No. 79-7), with, e.g., Rodgers Dep. 82:23-83:4 (ECF No. 79-5). But the factor five question is whether the Defendants had the right to control the workers' progress, not whether the Defendants actually exercised that right. GAS agreed that LTNA would provide supervision and job assignments to the workers and dictate their work schedules. GAS Dep. 49:5-21, 57:21-25 (ECF No. 73-1). Workers had to ask in advance if they wanted to take time off for vacation and at times had to move their vacations to accommodate the project schedule. See, e.g., Goodman Dep. 95:6-8 (ECF No. 79-11); Huynh Dep. 80:17-81:10 (ECF No. 79-9); Oct. 14, 2014 Stainback Decl. ¶ 14 (ECF No. 50-2). LTNA had a general rule that workers limit lunch periods from 11:30 a.m. to noon, though seemingly did not enforce it. Oct. 14, 2014 Stainback Decl. ¶ 11.
Another aspect of the right to control is whether "if instructions were given they would have to be obeyed," meaning whether the worker could be discharged for disobedience. Murray's Case, 154 A. at 354; see also Timberlake, 438 A.2d at 1297 ("In the past we have emphasized the right to control and stated that it is best established by the right in the employer to discharge the employee at will."). Over the course of the project, Joe Lusky of LTNA (the project's chief inspector and production manager) decided to terminate workers because they were not working hard enough or "weren't producing the quality needed or the right attitude." GAS Dep. 47:16-18 (ECF No. 73-1). There will be common proof on whether the Defendants had the right to control the workers as to the progress of their work.
The sixth factor is the time for which the worker is employed. Murray's Case, 154 A. at 354. The length of time each class member worked on the project varies.
The seventh factor is whether payment was made by time or by job. Murray's Case, 154 A. at 354. The eighth factor is whether the work is part of the regular business of the employer. Id. The Law Court has identified this eighth factor as being particularly important in evaluating how a worker should be classified. Legassie, 741 A.2d at 445 n.4. LTNA concedes that common questions will prevail over individual questions on these seventh and eighth factors. LTNA Opp'n 18-19 n.24.
For its part, GAS argues that as a general rule in misclassification cases, without operating agreements or policy manuals governing the nature of the work and establishing the nature of the working relationship, plaintiffs cannot make the required showing on commonality or predominance.
Six of the eight Murray's Case factors are subject to common proof, including the crucially-important fifth and eighth factors. There will be some, though not overwhelming, difference among class members on the weighty second factor. There will also be differences on the sixth factor. Looking at the record as a whole, in light of the applicable Murray's Case factors, I do not believe that individualized questions will overwhelm common ones, and, accordingly I find that the Plaintiffs have demonstrated predominance.
The next question is whether "a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3). Non-exhaustive factors relevant to this determination include:
Id.
As described above, liability in this case turns on classification. And common proof predominates on whether the workers were employees or independent contractors. So, a class action is a superior method for adjudicating this matter because it will resolve the claims in a single, consolidated proceeding, rather than through a duplicative series of trials.
On the factors set out in Rule 23(b)(3), I find that the class members do not have any interest in individually controlling separate actions. There is no other litigation brought by or against class members concerning this controversy. And while LTNA notes (without citation to the record) that "a majority of potential class members no longer reside in Maine or work on the project for LTNA," they do not suggest that class members are now concentrated in some other, more convenient forum. See LTNA Opp'n 25. Further, because this case involves Maine claims, it makes sense to adjudicate it in a Maine forum. LTNA also suggests that variation in individual damage amounts will make this case difficult to manage as a class action. See LTNA Opp'n 25 n.30. But class members recorded their hours on timesheets, so these calculations are possible without individual testimony at trial. See generally Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32, 40 (1st Cir.2003) (discussing how "individual factual determinations can be accomplished using computer records, clerical assistance, and objective criteria....").
Finally, class actions are uniquely superior in wage cases, because workers may not feel comfortable suing their employers directly and affirmatively, for fear of compromising how they make their livings. See Overka v. Am. Airlines, Inc., 265 F.R.D. 14, 24 (D.Mass.2010). And while many class members may have since moved on from the Super Star project, at least at the time depositions were taken, the project was still on-going. GAS Dep. 27:17-20 (explaining that there were approximately 28 workers on the project in February of 2015) (ECF No. 73-1); Cull Dep. 22:23-24 (stating that he was still on the project in May of 2015) (ECF No. 79-10). With a class action, workers will have the option of participating by declining to opt-out,
Under the Fair Labor Standards Act, similarly situated employees may sue collectively for violations of the rule requiring employers to pay overtime compensation to employees who work more than 40 hours per week. 29 U.S.C. §§ 207, 216(b). The plaintiff bears the burden of showing that the members of the collective are "similarly situated," and that term is neither defined by statute nor elucidated by precedent within this Circuit. In order to assess whether plaintiffs are similarly situated, a three-factor test is generally followed that considers: (1) the factual and employment settings of the individual plaintiffs; (2) the different defenses to which plaintiffs may be subjected on an individual basis; and (3) the degree of fairness and procedural impact of decertification. Scovil, 886 F.Supp.2d at 57; Prescott v. Prudential Ins. Co., 729 F.Supp.2d 357, 364 (D.Me.2010). Although plaintiffs are required to be similarly situated to one another, they need not be identically situated. Scovil, 886 F.Supp.2d at 57. "Generally... courts have found that similarly situated employees have similar (not identical) job duties and pay provisions, and are victims of a common policy or plan that violated the law." Prescott, 729 F.Supp.2d at 364 (internal citations and quotations omitted).
The Defendants claim that the members of the collective have disparate factual and employment settings. They again marshal record support for their assertions that there are differences in the level of control over individual Plaintiffs, that the Plaintiffs' entrepreneurial opportunities were dissimilar, that the Plaintiffs' investments in tools varied, that the Plaintiffs had differing degrees of skill and initiative, and that the time the Plaintiffs spent working on the project differed from each other both on a daily basis and over the entire term of their work. The Plaintiffs dispute these assertions. Essentially, both sides reiterate the arguments they made under the predominance inquiry of the Rule 23 analysis.
To determine whether an individual is an employee covered by the FLSA or an independent contractor who is not, courts look to the economic realities of the relationship. For this analysis, "[t]he focal point is whether the individual is economically dependent on the business to which he renders service or is, as a matter of economic fact, in business for himself." Bolduc v. Nat'l Semiconductor Corp., 35 F.Supp.2d 106, 112 (D.Me.1998). The "economic realities" test looks at many of the same factors used in the Murray's Case test:
Id. (citations omitted). The one meaningful difference is that under the Murray's Case test courts must assess the employer's "right to control the progress of the work," Murray's Case, 154 A. at 354, whereas
At the collective action decertification stage I assess only whether the members of the collective are similarly situated, and I do not reach the underlying merits of the plaintiffs' claims. I have already concluded that common questions predominate over individual ones on the Murray's Case factors under Rule 23 class certification analysis, and I will not repeat that analysis where it overlaps with the economic realities factors. But I have yet to analyze evidence of the Defendants' actual control over the workers, so I will address that aspect of the economic realities test here.
The Defendants argue that the level of control they exercised varied substantially from worker to worker. They claim that the opt-in Plaintiffs had different levels of supervision, were on different teams, and did different tasks depending on whether they were team leads, inspectors or mechanics. LTNA acknowledges that it had "overall control" of the project and admits that it provided blueprints and a timeline for completion, but claims that the "actual control" it exercised was limited, and that such control was different depending on team assignment. LTNA Mot. to Decertify 11. GAS echoes these claims. GAS Mot. to Decertify 6-14. The Plaintiffs respond that GAS hired the workers to provide contract labor, and Joe Lusky from LTNA and Richard Brown from GAS together assigned and reassigned the workers as needed to teams. See GAS Dep. 90:12-15 (ECF No. 98-1); Cull Dep. 22:25-23:3 (ECF No. 98-6); Rojas Dep. 54:7-9 (ECF No. 98-7); Ramirez Dep. 24:16-21 (ECF No. 98-9); Lopez Dep. 26:6-25 (ECF No. 98-10). Lusky and Brown chose team leaders and inspectors. GAS Dep. 45:22-47:7 (ECF No. 98-1); LTNA (Lusky) Dep. 42:2-11 (ECF No. 98-11). Workers were intermittently designated team leaders or inspectors and received no additional pay along with these distinctions. Venegas Dep. 217:14-19 (ECF No. 97-2); Huynh Dep. 91:7-19 (ECF No. 97-8). If Lusky wanted a worker removed from the project, GAS would terminate the individual. GAS Dep. 42:24-43:7, 47:8-15 (ECF No. 98-1).
Although LTNA personnel may have been at the top of the project's organizational chart and may not have had as much day-to-day oversight over some of the teams, the record shows common evidence on whether LTNA and GAS were actually in control of the project and the workers on it. Providing blueprints, setting a schedule, assigning workers to teams, and doling out tasks all point to common evidence on actual control.
Finally, deciding whether the tasks the workers performed were similar across the collective depends on how closely one zooms in. The fact that some workers were doing door conversion while others were doing wing repairs does not carry the day. All of the collective members were working on LTNA's airplane restoration project at the GAS hangar in Auburn, Maine. Their actual duties, at the micro level, do not need to be identical for the first prong of the similarly situated analysis to be met.
The Defendants assert that the individuals in the collective are subject to different defenses. Both Defendants claim that some workers are subject to a statute of limitations defense. GAS Mot. to Decertify 22; LTNA Mot. to Decertify 21-22. LTNA claims that some workers are more vulnerable to its defense that it was not a joint employer. LTNA Mot. to Decertify 20-21. Both GAS and LTNA claim that the evidence as to whether the opt-in Plaintiffs were misclassified as independent contractors
As Judge Hornby found in Scovil, a successful defense on statute of limitations grounds will affect whether a particular plaintiff is included in the collective action, not whether a collective action is appropriate. Scovil, 886 F.Supp.2d at 58. As far as the joint employer defense goes, LTNA focuses on supervision and control (one of the four parts of the joint employer test). For the reasons described above with respect to actual control, there is common proof on LTNA's supervision and control over the workers.
Finally, with regard to the idea that the Plaintiffs will be subject to individualized defenses based on their own unique working situations, I agree with Judge Hornby's conclusion in Scovil that this argument is dubious. The Defendants characterized all of the workers as independent contractors from the outset. The Defendants would be allowed to present evidence that the individuals classified as independent contractors were not treated uniformly on issues of negotiation, pay, investment in tools, or levels of supervision whether there was a single plaintiff or a class.
Scovil, 886 F.Supp.2d at 54. No individualized defenses have emerged that run counter to the decision to proceed collectively.
As far as fairness is concerned, because the Defendants characterized all the members of the collective as independent contractors, that alone is strong evidence that the Plaintiffs, at least as far as their status is concerned, are similarly situated. Scovil, 886 F.Supp.2d at 55 & n. 15, 57 n. 18, 58; Norland v. Caribou Coffee Co., Inc., 564 F.Supp.2d 1010, 1024 (D.Minn.2007) ("The Court finds it disingenuous for Caribou, on one hand, to collectively and generally decide that all store managers are exempt from overtime compensation without any individualized inquiry, while on the other hand, claiming the plaintiffs cannot proceed collectively to challenge the exemption.")
With regard to procedural impact, although the Defendants claim that the case will devolve into mini-trials, as Judge Hornby points out in Scovil, evidence of variation among workers, as an emblem of independent contractor status, would be admissible even if these cases proceeded one-by-one. Given the significant amount of common proof in this case, it would be procedurally expedient to proceed collectively.
For the reasons stated above, the Court
SO ORDERED.
