As relevant here, Plaintiffs Alan Meyer and David Cornelius have brought this putative collective action pursuant to the Fair Labor Standards Act ("FLSA"),
Plaintiffs have filed a Motion for Conditional Certification and Court-Authorized Notice Pursuant to Section 216(b) of the FLSA and the DCMWA.
I. BACKGROUND
Plaintiffs filed their original complaint on March 29, 2017. ECF No. 1. On January 30, 2018, Plaintiffs filed their original motion for conditional certification (ECF No. 11) and Defendant filed a motion to dismiss Plaintiffs' original complaint (ECF No. 10). On May 17, 2018, Plaintiffs, with Defendant's consent, filed the operative Amended Complaint (ECF No. 29), which substituted Panera, LLC, as the defendant
The Amended Complaint also alleges that Defendant "has the power to control the terms and conditions of employment for Plaintiffs and those similarly situated, including with respect to their compensation and classification as exempt or non-exempt employees"; that it "maintained control, oversight, and direction over Plaintiffs and similarly situated employees"; and that it "applies the same employment policies, practices, and procedures to all [assistant managers]."
As relevant here, the Amended Complaint alleges a collective under the FLSA consisting of all similarly situated assistant managers
whom Defendant classified as exempt from overtime requirements, who worked more than 40 hours per week for Defendant in the United States-excluding New York, New Jersey, [California,]3 and Massachusetts-at any time between March 25, 2014 and the date of final judgment in this matter, and who elect to join this action (the "FLSA Collective").
Plaintiffs thereafter filed a renewed Motion for Conditional Certification on June 5, 2018. ECF No. 36 at 2. That motion requests conditional certification of the FLSA Collective and the DCMWA Collective, as well as ancillary relief, including authorizing notice to potential collective members. The motion is supported by declarations from nine former employees of Defendant (ECF Nos. 36-5 through 36-11 and 36-19 through 36-20), two of which Defendant has sought to strike, contending that the declarations are "a sham."
II. DISCUSSION
A. Legal Standard
Both the FLSA and the DCMWA require employers to pay their workers the minimum wage and, if the employee works more than forty hours in a workweek, overtime compensation.
Courts in this Circuit and others have implemented a two-stage inquiry for determining when a collective action is appropriate. Stephens ,
At issue here is the first stage-conditional certification. This initial stage requires that the plaintiff make only a "modest factual showing sufficient to demonstrate that [he] and potential plaintiffs together were victims of a common policy or plan that violated the law." Castillo v. P & R Enters., Inc. ,
"[D]efendants may not thwart conditional certification merely by contradicting plaintiff's claims, even if defendants provide 'voluminous documentation' purporting to show that no violations occurred." Stephens ,
B. Conditional Certification of FLSA Collective
The FLSA requires employers to pay their employees a wage equal to one and one-half times their regular wage after the employee has worked more than 40 hours during a work week.
The declarations from the assistant managers are very similar to each other, and assert that the declarants
Panera's vice-president of human resources asserts that, in 2016, Defendant reclassified assistant managers from exempt employees to hourly non-exempt in response to "the federal government's publication of a final rule that would have substantially increased the salary level requirement for employees to be classified as exempt from the [FLSA's] minimum wage and overtime requirements." ECF No. 36-12, ¶ 5. Plaintiffs point out that although Defendant allegedly reclassified assistant managers as non-exempt and began paying them overtime, the duties performed by assistant managers did not change, thus suggesting that the original classification
Plaintiffs have thus presented evidence that the assistant managers in the putative collective were classified as exempt from the FLSA's overtime provisions although the bulk of the work that they performed was non-managerial. They have further presented evidence that assistant managers regularly worked more than 40 hours per week. That is, Plaintiffs have presented evidence that their classification as exempt was improper under the statute, and that they should been paid overtime wages for any hours they worked over 40 per week. However, Plaintiffs do not allege that it was Defendant's official policy that assistant managers perform primarily non-managerial duties. Therefore, "to obtain conditional certification, [they] must make a modest factual showing that they were subject to a common 'de facto illegal policy,' " by "providing evidence of 'some identifiable nexus which binds the named plaintiffs and potential class members together as victims of a particular practice.' " Costello v. Kohl's Ill., Inc. , No. 13-CV-1359,
Plaintiffs have presented evidence through declarations that Panera's corporate headquarters exerted significant control over the operations of its restaurants. They have indicated that the ordinary management hierarchy-regional director, general manager, assistant manager-tended to require that assistant managers perform non-managerial duties, as the bulk of the managerial duties were reserved, at the restaurant level, to the general manager. Moreover, they have linked the performance of these non-managerial duties to a corporate policy of strictly controlling labor costs. And they have done so through declarations from employees working in seven different states around the country, as well as job postings from fifteen states.
This case is therefore similar to Costello . In that case, the plaintiffs sought conditional certification of a nationwide collective of assistant store managers who were allegedly misclassified as exempt by a company that operated over 1,000 stores. Costello ,
So it is here. Plaintiffs' eight declarations from seven states have indicated that Defendant's corporate policy of cutting labor costs "affected [assistant managers] nationwide," id. , causing them to spend a majority of their time performing non-managerial duties.
Defendant makes a number of arguments directed at undermining this conclusion. None of them succeed, because each would require the Court to pass on issues that are premature at this stage. For example, Defendant presents evidence designed to undermine the credibility of Plaintiffs' declarants. ECF No. 38 at 23-26. But making credibility determinations is inappropriate when considering a motion for conditional certification. See, e.g. , Waggoner .
Defendant also presents various merits-based arguments. For example, it contends that the duties of assistant managers differed depending on the restaurant at which they worked. ECF No. 38 at 18-23. However, "at this early juncture, the burden upon [P]laintiffs is extremely low, and ... issues [of the actual job duties of potential collective members] need not be conclusively resolved." Puglisi ,
Defendant's argument that the Department of Labor has "conducted audits of multiple cafés within the scope of the proposed collective" and found no violations is also unavailing. ECF No. 38 at 26-27. Again, such arguments go to the merits of Plaintiffs' claims and do not "negate [Plaintiffs'] modest factual showing of common unlawful policies." Jason v. Falcon Data Com, Inc. , No. 09-CV-3990,
Finally, noting that in 2016 Defendant sent arbitration agreements to all restaurant employees who then worked for the company (except those in California), which required employees to "use binding arbitration, instead of going to court" for wage and hour claims, Defendant argues that granting conditional certification would not be efficient because "the record shows that collective litigation would devolve into a series of mini-trials on enforcement of arbitration agreements and on whether each remaining plaintiff's duties satisfy an FLSA exemption." ECF No. 38 at 34-35; ECF 38-2 at 15. But courts have generally found that the existence of an arbitration agreement is irrelevant to conditional certification of a collective action, because the enforceability of such agreements is a merits-based determination better dealt with at the decertification stage. See, e.g. , Friscia ,
Therefore, the Court shall conditionally certify a collective pursuant to the FLSA.
C. Conditional Certification of DCMWA Collective
Prior to February 27, 2015, the DCMWA provided for opt-in collective actions only. See Vasquez v. Grunley Constr. Co. , No. 15-cv-2106 (GMH),
The DCMWA defines "similarly situated employees" as those who "[a]re or were employed by the same employer ... at some point during the applicable statute of limitations period," who "[a]llege one or more violations that raise similar questions as to liability," and who "seek similar forms of relief."
D. Proposed Notice Period
Defendant challenges the proposed FLSA notice period, which Plaintiff begins on March 25, 2014, based on the FLSA's three-year statute of limitations for willful violations plus an additional 249 days during which a tolling agreement was purportedly in place.
Defendant does not claim that the calculation is inaccurate. However, it asserts that the calculation relies on "multiple dubious assumptions," including (1) that the Amended Complaint relates back to the filing of the original complaint and that the three-year statute of limitations applies; (2) that the timeliness of a collective action member's claim is based on the date she consents to join the collective rather than the date of the filing of the complaint; and (3) that the tolling agreement is ambiguous on its face and "does not operate to extend the FLSA's statute of limitations in the manner Plaintiffs claim." ECF No. 38 at 12-13 & nn.7-8.
As to the relation back issue, Rule 15(c) of the Federal Rules of Civil Procedure states that an amendment to a pleading relates back to the date of the original pleading when, in relevant part, "the amendment asserts a claim ... that arose out of the conduct, transaction, or occurrence set out ... in the original pleading," and, if the amendment changes the "party or the naming of the party against whom a claim is asserted," the party to be brought in received timely notice of the action and "knew or should have known that the action would have been brought against it, but for a mistake concerning the proper party's identity." Fed. R. Civ. P. 15(c)(1)(B), (C). Defendant makes no argument that these requirements are not met here. Indeed, the Amended Complaint contains factual allegations nearly identical to those in the original complaint as well as an allegation that Panera received notice of the claim on the day it was filed and knew or should have known it was the intended defendant. ECF No. 29, ¶ 38. The undersigned will therefore assume, for the purposes of determining the notification period, that the Amended Complaint relates back to the date of the filing of the original complaint. Further challenge based on relation back can be addressed, if necessary, in connection with any future motion for decertification.
The Amended Complaint also contains allegations supporting an inference that Defendant willfully violated the FLSA. It asserts that Defendant controlled, oversaw, and directed the duties of potential collective members, including by assigning or being aware of the non-exempt duties that they were regularly performing, and that Defendant was or should have been aware that federal law required it to pay an overtime premium for hours worked in excess of 40 per week to employees performing those duties.
Finally, Defendant contends that the tolling agreement, which was executed on June 1, 2016, is at best ambiguous and at worst void ab initio for lack of a meeting of the minds. ECF No. 38 at 6 & n.7. The agreement between Defendant and two Panera assistant managers states that it tolls the statute of limitations "on any claim under the FLSA or any state wage and hour law" (other than claims from California assistant managers) such that the limitations period "will not run against Plaintiffs" (identified as David Cornelius and Steve Willms) "or Potential Plaintiffs" (identified as "all Assistant Managers, however variously titled, who work at any corporate-owned Panera store"). ECF No. 36-14 at 2. The agreement further states that "[n]either party shall put forward or rely upon the period of time that this Agreement is or was in effect as a bar or laches or for any other purpose to defeat the claims made or to be made in the [contemplated lawsuit] on the basis that the claims made or to be made are untimely."
Defendant again presents a bare-bones argument that need not be decided at this stage of the litigation. Plaintiff relies on the tolling agreement to support its request that the notification period be extended for the length of time the agreement was in effect, that is, 249 days, and its interpretation of the agreement's meaning is quite plausible.
As to the end of the notice period, Plaintiffs ask that the DCMWA notice period end on February 27, 2015 (ECF No. 36-1 at 28)-the date that the statute was amended to allow litigation to proceed as a class action-and Defendant does not object. Regarding the FLSA notice period, however, Defendant represents that it reclassified assistant managers as non-exempt over the course of two and one-half months in the Fall of 2016, and that the reclassification was complete on November 16, 2016. ECF No. 36-12, ¶ 5. It asserts, therefore, that November 16, 2016, is "the last possible date on which any person could have worked as a salaried-exempt employee in that role." ECF No. 38 at 15. Plaintiffs point out that, as discovery has not commenced in this case, they have not been able to test that statement. ECF No. 36-1 at 12. Therefore, the FLSA notice period should end, as Plaintiffs request, on the date of this Memorandum Opinion and Order granting their motion for conditional certification issues. ECF No. 36-1 at 28.
In sum, notice of the pendency of this FLSA action shall be sent to employees who worked at Panera restaurants operated by Defendant nationwide (with the exception of New York, New Jersey, California, and Massachusetts) as assistant managers beginning on March 25, 2014-which, as explained above is three years plus 249 days prior to the filing of this action-and the date of this opinion. Notice of the pendency of the DCMWA action shall be sent to employees who worked at Panera restaurants operated by Defendant in the District of Columbia as assistant managers between March 25, 2014, and February 27, 2015. See, e.g. , Stephens ,
E. Notice
Plaintiffs request that Defendant provide certain information to facilitate notice to the collective and that the Court authorize particular methods of distribution of notice, set a 60-day opt-in period, and approve the form and content of its proposed notices and content-to-sue forms. Defendant opposes the bulk of the requests.
Plaintiffs seek from Defendant "a computer-readable list of the names, last known mailing addresses, last known telephone numbers, last known email addresses, dates of work, and locations" for all potential members of the FLSA and DCMWA collectives, as well as the social security numbers for any potential members of the collectives "whose notices are returned undeliverable." ECF No. 36-1 at 30. Defendant asserts that they should be ordered to produce only "names and last known home addresses" and that the request for email addresses and phone numbers should be denied.
Defendant argues that notice by mail is sufficient and objects to production of email addresses and telephone numbers because providing notice by email presents a "risk of contamination and unauthorized distribution" and notice provided via text message is unnecessarily intrusive. ECF No. 38-1 at 10-12. Following the recent decision in Stephens , "the Court agrees with Plaintiffs that some form of electronic notice is justified in this case."
The Court is even more concerned about ordering Defendant to provide Plaintiffs with potential collective members' social security numbers, which Defendant is understandably reticent to do. ECF No. 38-1 at 15. Courts are "cautious when it comes to social security numbers, which implicate serious privacy concerns."
2. Methods of Distribution and Opting-In
As should be obvious from the discussion above, the undersigned will order distribution of notice via first-class mail and email. Plaintiff also seeks an order requiring Defendant to include notice in current assistant managers' pay envelopes and authorization to create a stand-alone website through which putative collective members could opt-in to the action by submitting their forms electronically. ECF No. 36-1 at 32-33.
Distribution in pay envelopes has been denied on the basis that "this form of notice 'could imply Defendants' endorsement of the Notice or lead to situations in which Defendants were the ones answering questions about the Notice or lawsuit.' " Stephens ,
Plaintiffs also seek to "create [a] standalone website through which opt-ins can electronically submit their claim forms." ECF No. 36-1 at 32. In response, Defendant questions "whether and how any such website would provide information to recipients beyond [any] court-approved notice[,] ... how access would be limited to members of the putative collective," and how the website would be administered. ECF No. 38-1 at 13. Plaintiffs fail to respond to these concerns. Therefore, at this time, when there is no indication that more traditional opt-in procedures will be insufficient, the request is denied.
3. Opt-In Period and Reminder Notices
Plaintiffs seek a 60-day period after notice has been sent for potential collective members to send in their consent-to-sue forms, and asks permission to mail and email them a reminder notice 30 days into the opt-in period.
As in Stephens , the Court agrees with Plaintiffs that thirty days is "unreasonably short," and that the opt-in period in this case should be 60 days.
As to the reminder notice, Defendant argues that it might communicate the Court's "encouragement to join the suit or approval of its merits." ECF No. 38-1 at 14. "[T]here is no general consensus among district courts ... as to the propriety of sending reminder notices. Some courts deny requests to send reminder
4. Proposed Notice and Consent-to-Sue Forms
Defendant presents a litany of objections to Plaintiffs' proposed notice and consent-to-sue forms. ECF No. 38 at 49-50; ECF No. 38-1 at 3-9. These run the gamut from suggesting that potential collective members plaintiffs be informed of the possibility that they could be liable for costs and could be referred to arbitration, to requesting elimination of perceived redundancies in the proposed notices, to targeting specific language in the proposed notices as misleading or confusing. In light of the sheer number of objections, Defendant's suggestion that, if the motion for conditional certification is granted, the parties should be directed to "work together to draft mutually agreeable documents" is well-taken. ECF No. 38-1 at 15. The parties shall meet and confer to decide on the form and content of the opt-in notice, reminder notice, and consent-to-sue forms, and submit those proposed documents to the Court within 14 days of the date of this decision. See, e.g. , Galloway ,
III. CONCLUSION
For the foregoing reasons, it is
ORDERED that Plaintiffs' Motion for Conditional Certification and Court-Authorized Notice Pursuant to Section 216(b) of the FLSA and the DCMWA (ECF No. 36) is GRANTED IN PART and DENIED IN PART as discussed above. It is further
ORDERED that the parties shall meet and confer to agree on the form and content of the opt-in notice, reminder notice, and consent-to-sue forms, and submit those proposed documents to the Court within 14 days of the date of this Memorandum Opinion and Order. It is further
ORDERED that if the parties are unable to agree on the form and content of the noticed and consent to sue forms, within 14 days of the date of this Memorandum Opinion and Order, they shall submit a joint filing to the Court presenting each side's positions on the remaining disputes,
SO ORDERED.
Notes
This case was referred to the undersigned for full case management. Local Civil Rule 72.2 permits a magistrate judge to "hear and determine any pretrial motion other than those specified" in Local Civil Rule 72.3. LCvR 72.2(a). Local Civil Rule 72.3 lists, among other submissions, "[m]otions for judgment on the pleadings, for summary judgment, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, or otherwise dismiss an action involuntarily" as motions that a magistrate judge must address in a report and recommendation. LCvR 72.3(a)(3). However, a motion for conditional certification of a collective action is not listed in Local Rule 72.3. The local rules therefore indicate that a such a motion may be heard and determined by a magistrate judge. The weight of authority supports the interpretation that such motions are non-dispositive and therefore may be finally resolved by a magistrate judge pursuant to
The docket entries connected with this motion are the Amended Complaint (ECF No. 29); Plaintiffs' Motion for Conditional Certification and Court-Authorized Notice Pursuant to Section 216(b) of the Fair Labor Standards Act and the D.C. Minimum Wage Act and Exhibits (ECF Nos. 36 through 36-21); Defendant's Opposition to Plaintiffs' Motion for Conditional Certification and Court-Authorized Notice Pursuant to the Fair Labor Standards Act and the D.C. Minimum Wage Act and Exhibits (ECF Nos. 38 through 18-21); and Plaintiffs' Reply Memorandum of Law in Support of Motion to Conditional Certification and Court-Authorized Notice Pursuant to Section 216(b) of the Fair Labor Standards Act and the D.C. Minimum Wage Act and Exhibits (ECF Nos. 39 through 39-2).
In its reply brief, Plaintiffs "agree to exclude California [assistant managers] from the collective" based on Panera's representation that [assistant managers] in California were "paid on an hourly basis given the more stringent exemption requirements under California law." ECF No. 36-14, ¶ 2; ECF No. 39 at 9 n.1.
As discussed in Section III.D, infra , Plaintiffs derive the starting date for the collectives, that is, March 25, 2014, by subtracting three years from the date the original complaint was filed in this case-the FLSA has a three-year statute of limitations for willful violations, see
On July 3, 2018, in response to an order of the Court, the parties elected to stand on the briefing of Defendant's motion to strike as it had been filed originally. ECF No. 41.
Defendant's argument that the Court should apply a higher standard-a "modest 'plus' " standard-because Plaintiffs rely on certain evidence filed in Friscia v. Panera Bread Co. , No. 2:16-cv-3754,
Ms. Romano does not discuss her training as an assistant manager.
Defendant is correct that those job postings do not contain a description of the job duties of assistant managers. However, the fact that they are materially identical, including as to the vague description of the position and the requirements for candidates "[is] some evidence that [Defendant] viewed the position the same, whether it was in Ohio or Oregon." Waggoner v. U.S. Bancorp ,
To be sure, some of the declarations are from assistant managers who are not part of the putative collective in this case, but, rather, worked in states that are included in Friscia , a different, but similar, FLSA action in the District of New Jersey . Friscia , No. 2:16-cv-3754,
Defendant argues that the Supreme Court's recent decision in Epic Systems Corp. v. Lewis , --- U.S. ----,
The Supreme Court's recent statement "reject[ing] the principle" that "exemptions to the FLSA should be construed narrowly," Encino Motorcars, LLC v. Navarro , --- U.S. ----, ----,
Plaintiffs also request a DCMWA notice period beginning on March 25, 2014. ECF No. 36-1 at 28. The DCMWA has a three-year statute of limitations, whether the violation is willful or not.
Indeed, Plaintiffs' interpretation is more plausible than Defendant's. The tolling agreement, read as a whole, appears to be a clear exchange of promises. Defendant agreed to toll the statute of limitations for the period that the agreement was in force and not to rely on that period to try to defeat as untimely any claims Plaintiffs might bring. ECF No. 36-14 at 2. Plaintiffs agreed not to sue during the period the agreement was in force: "[d]uring the term of this Agreement, Plaintiffs shall refrain and forbear from commencing, instituting, or prosecuting any lawsuit, arbitration, action, or other proceedings against Panera raising FLSA or state wage and hour claims."
The majority of Defendant's arguments regarding notice, including the manner of providing notice and the content of the notice, is included in a fifteen-page brief (submitted as an addendum to its 44-page merits brief) for which Defendant failed to seek permission to file. ECF No. 38-1. Plaintiffs ask that the brief be stricken as violative of the 45 page-limit for opposition briefs contained in Local Civil Rule 7(e). ECF No. 38 at 31-32. Defendant argues that the brief was necessary because Plaintiffs "attached multiple pages of proposed notices and related documents to their [motion for conditional certification], and those submissions presented multiple additional issues to which Panera has a right to respond." ECF No. 38 at 49 n.39. Defendant's argument is not well-taken for two reasons. First, if Defendant required additional pages, it should have sought leave of court pursuant to the Local Rules. See LCvR 7(e) (allowing additional pages with "prior approval of the Court"). Second, a number of Plaintiffs' arguments that Defendant responds to in its supplemental brief were not raised in any attachments to Plaintiffs merits brief, but rather are included in the brief itself. Yet Defendant chose to address them fully in an unauthorized supplemental filing.
Nevertheless, the undersigned will not strike the excess pages, but will consider them to the extent they are helpful in resolving the issues presented. Defendant is warned, however, that it must strictly follow both the Federal Rules of Civil Procedure and the Local Civil Rules in future submissions.
Defendant appears to take no position on providing dates of work and employment locations (ECF No. 38 at 49-50), which the Court takes as a concession. See, e.g. , Cooper v. Farmers New Century Ins. Co. ,
As the undersigned has already denied Plaintiffs' request to send notice via text message, that method of delivery is not addressed in this discussion.