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James X. Bormes (pro hac vice admission pending)

LAW OFFICE OF JAMES X. BORMES, P.C.

Illinois State Bar No. 620268

8 South Michigan Avenue

Suite 2600

Chicago, Illinois 60603

(312) 201-0575

jxbormes@bormeslaw.com

LEAD ATTORNEY IN CHARGE FOR 

PLAINTIFF AND CLASS MEMBERS

Thomas M. Ryan (pro hac vice admission pending)

LAW OFFICE OF THOMAS M. RYAN, P.C.

Illinois State Bar No. 6273422

35 East Wacker Drive

Suite 650

Chicago, Illinois 60601

(312) 726-3400

Tom@tomryanlaw.com

Attorney for Plaintiff 

LOCAL COUNSEL:

Michelle R. Matheson #019568

MATHESON & MATHESON, P.L.C.

15300 North 90th Street

Suite 550

Scottsdale, Arizona 85260

(480) 889-8951

mmatheson@mathesonlegal.com

Attorney for Plaintiff

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

TERRI HAYFORD, individually and

on behalf of all others similarly situated,

Plaintiff,

v.

MAGELLAN HEALTH, INC., 

Defendant.

No.: 15-CV-02643-PHX-JJT

PLAINTIFF’S FIRST AMENDED 

COLLECTIVE ACTION COMPLAINT

(JURY TRIAL REQUESTED)

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Plaintiff, Terri Hayford, individually and on behalf of all other persons similarly 

situated, known and unknown, through her attorneys, complains against Defendant

Magellan Health, Inc. (“Defendant”), as follows:

NATURE OF PLAINTIFF’S CLAIMS 

1. This lawsuit arises under the Fair Labor Standards Act, 29 U.S.C. § 201 

et seq. (“FLSA”), for Defendant’s failure to pay Plaintiff and other similarly situated 

persons all overtime pay for all time worked in excess of forty (40) hours per week.

2. Defendant employs the telephone-based workers who are the putative class 

members in this lawsuit.

3. Defendant knowingly required and/or permitted Plaintiff, who worked as 

a telephone-dedicated employee in the position of Customer Service Associate and 

other similarly situated telephone-dedicated employees to perform unpaid work before 

and after the start and end times of their shifts, including but not limited to booting up 

computers, initializing several software programs, reading company issued emails and 

instructions, and completing customer service calls.

4. In addition, Defendant was aware that Plaintiff and those similarly situated 

to her also performed work for Defendant on their break periods, including meal breaks, for 

which they were not paid. The work that Plaintiff and similarly situated employees 

performed during break periods includes, but is not limited to, completing customer 

orders, finishing customer service calls, logging back into the phone system, re-booting 

their computers and initializing software programs. 

5. The amount of uncompensated time Plaintiff and those similarly situated to 

her spend or have spent on these required and unpaid work activities averages 

approximately fifteen to twenty minutes per day per person.

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6. Defendant’s conduct violates the FLSA, which requires non-exempt 

employees to be compensated for their overtime work at a rate of one and one-half times 

their regular rate of pay. See 29 U.S.C. § 207(a).

7. Plaintiff brings her FLSA overtime claims as a collective action pursuant to 29 

U.S.C. § 216(b) on behalf of telephone-dedicated employees who worked for Defendant

throughout the country at call centers owned by Magellan Health, Inc. (“Magellan”).

JURISDICTION AND VENUE

8. This Court has original jurisdiction over Plaintiff’s FLSA claims in this 

action under 29 U.S.C. § 1331 and 29 U.S.C. § 216(b).

9. Venue is proper in this Court as the illegal conduct alleged herein occurred 

in this district. 

THE PARTIES

10. Plaintiff Terri Hayford is an individual who Defendant employed from 

approximately June 2014 to approximately November 2014 as an hourly, non-exempt 

Customer Service Associate who was placed to work in a call center operated by Magellan

located at 4802 E. Washington Road in Tempe, Arizona. Plaintiff Hayford resides in and 

is domiciled within this judicial district.

11. Magellan offers contact call center and business process outsourcing services 

to small to medium sized enterprises. Magellan operates a telephone call center on 

Washington Road in Tempe, Arizona and, upon information and belief, elsewhere, where 

telephone-dedicated hourly employees handle phone calls regarding various medical 

authorization and insurance inquiries, among other things. Magellan directly employs 

Customer Service Associates at its call centers. 

12. Defendant employed Plaintiff and other similarly situated persons as 

“employees,” as that term is defined by Section 3(e) of the FLSA, 29 U.S.C. § 203(e).

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13. At all material times, Defendant has been an enterprise in commerce or in 

the production of goods for commerce within the meaning of 3(s)(1) of the FLSA because 

it has had employees engaged in commerce. 29 U.S.C. § 203(s)(1).

14. Furthermore, Defendant has had, and continues to have, an annual gross 

business volume in excess of $500,000.

15. At all relevant times, Defendant was an “employer” of Plaintiff and other 

similarly situated persons, as that term is defined by Section 203(d) of the FLSA, 29 U.S.C. 

§ 203(d).

16. At all material times, Plaintiff and FLSA Class Members were individual 

employees who engaged in commerce or in the production of goods for commerce as 

required by 29 USC § 206-207.

17. Further, at all material times, Defendant has operated as a “single enterprise” 

within the meaning of 3(r)(1) of the FLSA. 29 U.S.C. § 203(r)(1). That is, Defendant

performs related activities through unified operation and common control for a common 

business purpose. See Brennan v. Arnheim and Neely, Inc., 410 U.S. 512, 515 (1973); Chao 

v. A-One Med. Servs., Inc., 346 F.3d 908, 914–15 (9th Cir. 2003).

FACTUAL ALLEGATIONS

A. Defendant’s Practice of Requiring and/or Permitting Telephone-Based 

Hourly Employees to Work Before the Start of Their Scheduled Shift Time

18. Magellan operates and has operated “call centers” in Arizona and across the 

nation where telephone-dedicated employees similar to Plaintiff handle phone calls 

regarding various call center services including medical authorization and insurance 

inquiries offered by Magellan to its customers. 

19. Prior to starting work on the call center floor, Plaintiff and other similarly 

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situated telephone-based employees were and are interviewed by employees and managers 

of Magellan.

20. Magellan had the power to hire and fire Plaintiff and other persons similarly 

situated.

21. At the Magellan call center where Plaintiff Hayford worked, Magellan had 

managers on the floor of the call center during the workday, managing the work activities 

of the Plaintiff and other similarly situated persons.

22. Defendant does not allow telephone-based employees to use its phones and 

computers for any personal use. Additionally, Defendant generally prohibits and does not 

allow telephone-based employees to use their own personal cell phones on the call center 

floor. Under Defendant’s policies and practices, telephone-based employees are required 

to store their personal cell phones during the work day and can generally only use them on 

breaks and off the call center floor. 

23. At the Magellan call center where Plaintiff worked, Magellan’s managers on 

the call center floor could and did regularly see with their own eyes that Plaintiff and 

similarly situated telephone-based employees arrived at their work stations before the start 

of their scheduled shift time, logged into Magellan’s computers, and began working on 

their computers prior to the start of their scheduled shift time.

24. Despite seeing and knowing that Plaintiff and similarly situated telephonebased employees performed work at their work stations prior to their scheduled shift time 

start, Defendant and its managers on the floor of the call center did not make any effort to 

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stop or otherwise disallow this pre-shift work and instead allowed and permitted it to 

happen.

25. Defendant possesses, controls and/or has access to information and 

electronic data that shows the times Plaintiff and similarly situated telephone-based 

employees logged into their computers each day and the time they logged into their 

telephone systems. 

26. By possessing, controlling and/or accessing this information, Defendant 

knew that Plaintiff and similarly situated telephone-based employees worked prior to the 

start of their scheduled shift time.

27. Despite having this information and knowing that Plaintiff and similarly 

situated telephone-based employees logged into their computers, initialized necessary 

software programs, and read company issued emails and instructions prior to the start of 

their scheduled shift time, Defendant did not make any effort to stop or otherwise disallow 

this pre-shift work and instead allowed and permitted it to happen. 

28. Defendant knowingly required and/or permitted Plaintiff and those similarly 

situated to her to perform unpaid work before and after the start and end times of their 

shifts, including but not limited to booting up computers, initializing several software 

programs, and reading company issued emails and instructions prior to the start of their 

scheduled shift time, and completing customer service calls, closing down the software 

programs, and logging off the system after the end of their scheduled shift times.

29. In addition, by having managers on the call center floor and having access to 

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the electronic data, among other things, Defendant was aware that Plaintiff and those 

similarly situated to her also performed work for Defendant on their break periods, for which 

they were not paid. The work that Plaintiff and similarly situated employees performed 

during break periods includes, but is not limited to, completing customer orders, 

finishing customer service calls, logging back into the phone system, re-booting their 

computers and initializing software programs.

30. The amount of uncompensated time Plaintiff and those similarly situated to 

her spend or have spent on these required and unpaid work activities averages 

approximately fifteen to twenty minutes per day per person.

31. Defendant monitored and directed the work activities of Plaintiff and other 

similarly situated persons, including the unpaid work at issue.

B. Defendant Knew of and Assented to the Pre-Shift Work

32. Defendant’s policy and practice permits and/or requires telephone-based 

employees to be logged into their phones by the employee’s scheduled start time. 

33. In order to be logged into Magellan’s telephone systems, Defendant required 

and/or permitted Plaintiff and similarly situated telephone-based employees to arrive at 

their work station prior to their scheduled shift time and boot up computers, initialize 

several software programs, and read company emails and instructions. 

34. Defendant’s policy and practice disciplines telephone-based employees if 

they are not logged into their phones and ready to handle calls by the start of their scheduled 

shift time. 

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35. This policy and practice of Defendant results in telephone-based employees, 

including the Plaintiff, to boot up their computers, initialize several software programs 

and/or read company emails and instructions prior to their start of their scheduled shift 

time. 

36. As set forth herein, via its policies and practices and through its own 

telephone and computer systems, Defendant knew and was aware that the telephone-based 

employees performed work prior to the start of their scheduled shift. 

37. Defendant did not instruct Plaintiff and similarly situated telephone-based 

employees to not log into their computers or telephone, or to not read company emails prior 

to the start of their scheduled shift time. Rather, Defendant required, permitted and/or 

allowed Plaintiff and the putative class members to work prior to their scheduled shift time.

38. By knowing of, permitting and/or requiring Plaintiff and similarly situated 

telephone-based employees to log into their computers, initialize their various software 

programs and/or read company email and instructions prior to the start of their scheduled 

shift time, Defendant assented to them performing this work. 

C. Defendant’s Failure to Pay Overtime Wages to Its Telephone-Based 

Hourly Employees

39. Defendant determined the rate of pay for Plaintiff other similarly situated 

persons.

40. Defendant’s managers reviewed and approved Plaintiff and other similarly 

situated persons’ time records prior to receiving their paychecks. 

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41. Defendant supervised and controlled the work schedule of Plaintiff and other 

similarly situated persons.

42. Defendant issued paychecks to Plaintiff other similarly situated persons, and 

was involved in determining the actual amount of compensation paid by the paycheck.

43. Plaintiff and those employees similarly situated are individuals who were, or 

are, employed by Defendant in customer service, sales, and similar positions at 

Magellan’s call centers who were not paid for some or all of their work activities prior to 

the beginning of their shifts, during meal and rest breaks, or after the end of their shifts.

44. Plaintiff and the other employees are similarly situated to one another 

because their duties consisted primarily of providing services related to handling phone calls 

regarding various call center services including medical authorization and insurance 

inquiries offered by Magellan to its customers while working in Magellan’s call centers. 

Plaintiff and others similarly situated all shared similar policies, job titles, job descriptions, 

training, job duties and compensation, among other things.

45. Plaintiff and the other employees are also similar because Defendant did not 

pay them for all time they actually worked. Defendant knowingly required Plaintiff and the 

similarly situated individuals to perform unpaid work before and after their scheduled 

shifts, including but not limited to booting-up computers, initializing several software 

programs, reading company emails and instructions, and completing customer service 

calls. Additionally, Defendant was aware that Plaintiff and those similarly situated to her 

also performed work for Defendant on their break periods, for which they were not paid.

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46. The net effect of Defendant’s policies and practices, instituted and approved 

by company managers, is that Defendant willfully failed to pay regular and overtime 

compensation to Plaintiff and others similarly situated, and willfully failed to keep accurate 

time records to save payroll costs. Defendant thus enjoyed ill-gained profits at the expense 

of its hourly employees.

47. Plaintiff and others similarly situated at times work or worked in excess of 

forty hours per week for Defendant in a given workweek.

48. Defendant’s policy and practice of requiring and/or permitting its employees, 

including Plaintiff and other non-exempt, hourly employees, to perform work without pay 

for such work performed, violates Section 6 of the FLSA, 29 U.S.C. § 206.

49. Defendant’s policy and practice of requiring its employees to perform work 

without pay in many instances has caused and continues to cause Plaintiff and certain other 

similarly situated hourly employees to work in excess of forty hours per week, without 

being properly compensated at a wage of 1.5 times their respective hourly rate for such 

work performed, as required by Section 7 of the FLSA, 29 U.S.C. § 207.

50. Defendant’s failure to compensate its non-exempt, hourly call center 

employees with the full amount of the applicable regular wage or overtime wage has caused 

Plaintiff and other similarly situated non-exempt call center employees to suffer harm.

51. Defendant’s non-exempt, call center hourly employees are entitled to 

compensation for all time they worked without pay in any given workweek.

COLLECTIVE ACTION ALLEGATIONS

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52. Plaintiff brings Count I of this Complaint as a collective action on behalf of 

herself and all other current and former hourly employees of Defendant who Defendant 

required to perform the work described herein without pay at any time during the three 

years prior to the commencement of the action to present at call centers owned by 

Magellan. 

53. Plaintiff has actual knowledge that FLSA Class Members have also been 

denied overtime pay for hours worked over forty hours per workweek. That is, Plaintiff 

worked with other telephone dedicated employees who worked at the Magellan call center. 

As such, she has first-hand personal knowledge that the same pay violations occurred to 

other class members. Furthermore, other telephone dedicated employees at Magellan call 

centers have shared with her similar pay violation experiences as those described in this

complaint.

54. Other employees similarly situated to Plaintiff work or have worked at 

Magellan call centers, but were not paid overtime at the rate of one and one-half their 

regular rate when those hours exceeded forty hours per workweek. 

55. Although Defendant permitted and/or required the FLSA Class Members to 

work in excess of forty hours per workweek, Defendant has denied them full compensation 

for their hours worked over forty. Defendant has also denied them full compensation at 

the federally mandated minimum wage rate.

56. FLSA Class Members perform or have performed the same or similar work 

as Plaintiff.

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57. FLSA Class Members regularly work or have worked in excess of forty hours 

during a workweek.

58. FLSA Class Members are not exempt from receiving overtime pay at the 

federally mandated wage rate under the FLSA.

59. As such, FLSA Class Members are similar to Plaintiff in terms of job duties, 

pay structure, and the denial of overtime wages.

60. Defendant’s failure to pay the overtime compensation wage rate required by 

the FLSA results from generally applicable policies or practices, and does not depend on 

the personal circumstances of the FLSA Class Members.

61. The experiences of Plaintiff, with respect to her pay, are typical of the 

experiences of the FLSA Class Members.

62. The specific job titles or precise job responsibilities of each FLSA Class 

Member do not prevent collective treatment.

63. All FLSA Class Members, irrespective of their particular job requirements, 

are entitled to overtime compensation for hours worked in excess of forty during a 

workweek.

64. Although the exact amount of damages may vary among FLSA Class 

Members, the damages for the FLSA Class Members can be easily calculated by a simple 

formula. The claims of all FLSA Class Members arise from a common nucleus of facts. 

Liability is based on a systematic course of wrongful conduct by Defendant that caused 

harm to all FLSA Class Members.

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65. As such, Plaintiff brings her FLSA overtime as a collective action on behalf 

of the following class, and Plaintiff’s Counsel seek to send notice of this lawsuit to the 

following described persons:

All persons who worked for Defendant as telephone dedicated 

employees, however titled, who were compensated, in part or 

in full, on an hourly basis at Magellan call centers at any time 

between December 28, 2012 and the present who did not 

receive the full amount of overtime wages earned and owed to 

them.

66. There are questions of law or fact common to the employees described in 

paragraph 65.

67. Plaintiff is similarly situated to the employees described in paragraph 65, as 

Plaintiff’s claims are typical of the claims of those persons.

68. Plaintiff’s claims or defenses are typical of the claims or defenses of the 

persons described in paragraph 65.

69. This is not a collusive or friendly action. Plaintiff has retained counsel 

experienced in complex employment litigation, and Plaintiff and her counsel will fairly and 

adequately protect the interests of the persons described in paragraph 65.

70. A collective action is the most appropriate method for the fair and efficient 

resolution of the matters alleged in Count I.

71. At all relevant times, Defendant employed Plaintiff and the persons described 

in paragraph 65.

72. At all relevant times, Defendant paid Plaintiff and the persons described in 

paragraph 65 to work.

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73. At all relevant times, Defendant has been an “employer” of Plaintiff and the 

persons described in paragraph 65, as the term “employer” is defined by Section 3(d) of 

the FLSA, 29 U.S.C. § 203(d). 

74. At all relevant times, Plaintiff and the persons described in paragraph 65 have 

been “employees” of Defendant as defined by Section 3(e) of the FLSA, 29 U.S.C. § 

203(e).

COUNT I – FLSA

(Failure to Pay Overtime Wages)

75. Plaintiff re-alleges and incorporates by reference paragraphs 1 through 74

as paragraph 75 of this Count I.

76. Plaintiff, individually and on behalf and the members of the class described 

in paragraph 65, asserts claims for unpaid overtime pursuant to the FLSA.

77. At any and all times relevant hereto, Defendant was an “enterprise engaged 

in commerce” within the meaning of Section 3(s) of the FLSA, 29 U.S.C. § 203(s).

78. At any and all times relevant hereto, Defendant was an “employer” of the 

Plaintiff and the members of the class described in paragraph 65 within the meaning of 

Section 3(d) of the FLSA, 29 U.S.C. § 203(d). 

79. At any and all times relevant hereto, Plaintiff and the members of the class 

described in paragraph 65 were “employees” of Defendant as defined by Section 3(e) of 

the FLSA, 29 U.S.C. § 203(e).

80. Plaintiff and the members of the class described in paragraph 65 were not 

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paid for all time worked in excess of 40 hours in a week during the applicable statutory 

time period, in violation of the maximum hours provisions of the FLSA, 29 U.S.C. § 207.

81. At all times relevant hereto, Defendant’s failure to pay Plaintiff and the 

members of the class described in paragraph 65 premium pay for all time worked over 40 

hours in a week was willful in that, among other things:

a. Defendant knew that the FLSA required it to pay time and one-half 

for all time worked over 40 hours in a week;

b. Defendant failed to maintain true and accurate time records; and

c. Defendant encouraged Plaintiff and other similarly situated 

employees to not record all time worked.

82. As a direct and proximate result thereof, Plaintiff and the members of the 

class described in paragraph 65 are due unpaid back wages and liquidated damages, 

pursuant to 29 U.S.C. § 216.

DAMAGES SOUGHT

83. Plaintiff and the FLSA Class Members are entitled to recover compensation 

for the hours they worked for which they were not paid at the federally mandated overtime 

wage rate.

84. Plaintiff and the FLSA Class Members are also entitled to an amount equal 

to all of their unpaid wages as liquidated damages. 29 U.S.C. § 216(b).

85. Plaintiff and FLSA Class Members are entitled to recover their attorneys’ 

fees and costs as required by the FLSA. 29 U.S.C. § 216(b).

WHEREFORE, Plaintiff, individually and on behalf of all others similarly situated, 

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by and through her attorneys, demands judgment against Defendant and in favor of Plaintiff 

and all others similarly situated, for a sum that will properly, adequately and completely 

compensate them for the nature, extent and duration of their damages, the costs of this 

action and as follows:

A. Conditionally certify the class described in paragraph 65, and grant Plaintiff’s 

counsel leave to send notice of this lawsuit to the members of the class and allow 

them the opportunity to opt-in as party plaintiffs pursuant to Section 16 of the FLSA, 

29 U.S.C. § 216;

B. Declare and find that the Defendant committed one or more of the following acts:

i. Violated provisions of the FLSA for Plaintiff and all persons who opt-in as 

party plaintiffs; and

ii. Willfully violated provisions of the FLSA for Plaintiff and all persons who 

opt-in as party plaintiffs.

C. Award compensatory damages, including all wages and overtime pay owed, in 

an amount according to proof;

D. Award liquidated damages on all wages and overtime compensation due to Plaintiff 

and all persons who opt-in as party plaintiffs;

E. Award all costs and reasonable attorneys’ fees incurred prosecuting this claim;

F. Grant leave to amend to add claims under applicable state and federal laws to 

conform with the proofs at trial;

G. Grant leave to add additional plaintiffs by motion or any other method approved by 

the Court to conform with the proofs at trial; and 

H. Grant such further relief as the Court deems just and equitable.

DATED this 20th day of April 2016

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LAW OFFICE OF JAMES X. BORMES, P.C.

s/ James X. Bormes

(pro hac vice admission pending)

James X. Bormes

LAW OFFICE OF JAMES X. BORMES, P.C.

Illinois State Bar No. 620268

8 South Michigan Avenue

Suite 2600

Chicago, Illinois 60603

(312) 201-0575

jxbormes@bormeslaw.com

Thomas M. Ryan

(pro hac vice admission pending)

LAW OFFICE OF THOMAS M. RYAN, P.C.

Illinois State Bar No. 6273422

35 East Wacker Drive

Suite 650

Chicago, Illinois 60601

(312) 726-3400

tom@tomryanlaw.com

LOCAL COUNSEL:

Michelle R. Matheson #019568

MATHESON & MATHESON, P.L.C.

15300 North 90th Street

Suite 550

Scottsdale, Arizona 85260

(480) 889-8951

mmatheson@mathesonlegal.com

Attorney for Plaintiff

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CERTIFICATE OF SERVICE 

I hereby certify that on April 20, 2016, I filed the attached document via the 

CM/ECF system which will send notification of such filing to counsel for Defendant, via 

the email addresses listed below:

LITTLER MENDELSON

Mark Ogden

mogden@littler.com 

Cory G. Walker

cgwalker@littler.com 

/s/ Catherine P. Sons, attorney

Case 2:15-cv-02643-JJT Document 25 Filed 04/20/16 Page 18 of 18