Source: https://flsaovertimelaw.com/tag/motion-for-conditional-certification/
Timestamp: 2019-04-21 01:13:09+00:00

Document:
Employers seem to getting increasingly aggressive with class waivers, arbitration agreements in the wake of recent high court rulings which are seemingly boundless. In the wake of these recent decisions, some employers—who previously did not include waivers or arbitration agreements in their employment agreements—are seeking to play catch up. Troublingly, we seem to be seeing more and more situations where employers, facing the prospect of class/collective actions based on their often willful violations of wage and hour laws are attempting to force arbitration agreements on their employees in an effort to blunt efforts by their employees to recover their rightful wages. However, most courts faced with such situations have invalidated these improperly obtained arbitration clauses, recognizing that employers are in a position to exert undue pressure on employees fearful for their jobs, and that such arbitration “agreements” are frequently anything but an agreement between two parties consenting to arbitration of their own will.
In a recent decision, the Eleventh Circuit was called upon to review one such decision by a district court (first discussed here) that held such a forced arbitration clause to be invalid, and affirmed the district court’s order denying the defendant’s motion to enforce arbitration under the agreements at issue.
Citi Trends devised and implemented a new alternative dispute resolution (“ADR”) policy in the late spring and early summer of 2012—after it was served with the complaint in this action on February 27, 2012, and after the district court set a scheduling conference for May 31, 2012. Weeks after the district court’s May 31, 2012 scheduling order, Citi Trends began to roll out its new ADR policy. The ADR policy included a mandatory agreement to arbitrate all disputes individually rather than collectively.
The human resources representative who met with the store managers advised Citi Trends in its employment decisions. Thus, the store managers reasonably believed the human resources representative had authority to make or influence employment decisions, including hiring and firing decisions.
Store managers were ordered to attend the ADR meetings by their supervisors. Citi Trends did not inform the store managers of the true purpose of the mandatory meetings. Instead of telling the store managers that the meetings concerned the company’s new ADR policy, Citi Trends told the store managers that the mandatory meetings concerned the issuance of a new employee handbook.
When a store manager arrived at the back-room meetings, a human resources representative greeted the store manager. A second individual was also at each meeting; however, this person was not introduced to, or known by, the store managers.
At the meetings, Citi Trends’s human resources representative gave the store managers these documents: the arbitration agreement, a fill-in-the-blank declaration, and the store manager disclosure. The store managers were asked to sign each of these documents at the meeting.
Opt-in plaintiffs testified that they signed the documents but felt intimidated by the human resources representative. They also felt pressured to sign the arbitration agreements to avoid losing their jobs. Even when specifically requested, Citi Trends did not give the store managers copies of the documents that the store managers signed.
Given the “broad authority” that the district court has to manage parties and counsel in an FLSA collective action, the district court did not abuse its discretion in determining that Citi Trends’s conduct in the summer of 2012 undermined the court’s authority to manage the collective action. Nor did the district abuse its discretion in determining that—to correct the effect of Citi Trends’s misconduct—it would allow putative collective action members to join the lawsuit notwithstanding their coerced signing of the arbitration agreements.
Whatever right Citi Trends may have had to ask its employees to agree to arbitrate, the district court found that its effort in the summer of 2012 was confusing, misleading, coercive, and clearly designed to thwart unfairly the right of its store managers to make an informed choice as to whether to participate in this FLSA collective action. Since the arbitration agreements by their terms will directly affect this lawsuit, the district court had authority to prevent abuse and to enter appropriate orders governing the conduct of counsel and the parties. See Hoffmann–La Roche, 493 U.S. at 171, 110 S.Ct. at 486–87; see also Kleiner, 751 F.2d at 1203 (class action).
The district court simply did what other district courts routinely do: exercise discretion to correct the effects of pre-certification communications with potential FLSA collective action members after misleading, coercive, or improper communications are made. See, e.g., Balasanyan v. Nordstrom, Inc., No. 11–CV2609–JM–WMC, 2012 WL 760566, at * 1–2, 4 (S.D.Cal. Mar.8, 2012) (refusing to enforce individual arbitration agreement in an FLSA action because the defendant’s imposition of the agreement was an improper class communication); Williams v. Securitas Sec. Servs. USA, Inc., No. 10–7181, 2011 U.S. Dist. LEXIS 75502, at *8–12 (E.D.Pa. July 13, 2011) (invalidating arbitration agreement imposed on the defendant’s employees during pre-certification stage of FLSA litigation and ordering corrective measures because the arbitration agreement was a “confusing and unfair communication” with the potential opt-in plaintiffs); Ojeda–Sanchez v. Bland Farms, 600 F.Supp.2d 1373, 1379–81 (S.D.Ga.2009) (granting a limited protective order in FLSA collective action where the defendants engaged in unsupervised, unsolicited, in-person interviews of the plaintiffs in an environment that encouraged speedy and uninformed decision-making); Longcrier v. HL–A Co., 595 F.Supp.2d 1218, 1229–30 (S.D.Ala.2008) (striking declarations obtained through the defendants’ abusive and misleading communications with prospective opt-in plaintiffs); Jones v. Casey’s Gen. Stores, 517 F.Supp.2d 1080, 1086, 1089 (S.D.Iowa 2007) (limiting the plaintiffs’ counsel from affirmatively soliciting potential opt-in plaintiffs to join the FLSA action and requiring counsel to modify their website to provide “only a factual, accurate, and balanced outline of the proceedings”); Maddox v. Knowledge Learning Corp., 499 F.Supp.2d 1338, 1342–44 (N.D.Ga.2007) (observing that district courts in § 216(b) actions rely on broad case management discretion by limiting misleading, pre-certification communications and exercising that discretion in the case before the court by ordering the plaintiffs to correct false, unbalanced, and misleading statements on their website); Belt v. Emcare, Inc., 299 F.Supp.2d 664, 667–70 (E.D.Tex.2003) (sanctioning the employer and enjoining the employer from communicating ex parte with potential class action members because the employer intentionally attempted to subvert the district court’s role in the FLSA collective action by unilaterally sending a misleading and coercive letter to potential plaintiffs that encouraged those persons not to join).
District courts’ corrective actions have included refusal to enforce arbitration agreements instituted through improper means and where the timing of the execution of those agreements was similar to the post-filing, pre-certification timing in this case. See, e.g., Balasanyan, 2012 WL 760566, at * 1–2; Williams, 2011 U.S. Dist. LEXIS 75502, at *8–12; see also In re Currency Conversion Fee Antitrust Litig., 361 F.Supp.2d at 252–54 (imposing similar corrective action in Rule 23 class action).
The district court did not abuse its discretion in correcting the effects of Citi Trends’s improper behavior in this case. The district court held an initial hearing, after which it denied Citi Trends’s motion to compel arbitration. The court then reconsidered its order, held an additional two-day evidentiary hearing, made specific and detailed findings of fact that were supported by the record, and took minimal action to correct the effects of Citi Trends’s conduct.
The district court limited its order temporally and substantively. The district court limited its order to those agreements signed under the coercive conditions used by Citi Trends in the summer of 2012. And, the district court limited its order to this particular FLSA action. The court specifically said that it was not ruling on the enforceability of the arbitration agreements as they relate to other cases or controversies. The district did not restrict Citi Trends from entering into new arbitration agreements with the store managers; nor did the court prevent store managers from electing to comply with the terms of the arbitration agreements that they signed in the summer of 2012.
The district court’s limited remedial action is not an abuse of its considerable discretion to manage this collective action. Accord Kleiner, 751 F.2d at 1203 (holding that a district court’s power to manage a class action included the power to prohibit a defendant from making “unsupervised, unilateral communications with the plaintiff class”). That is especially true given the opt-in nature of FLSA collective actions. Because FLSA plaintiffs must opt-in, unsupervised, unilateral communications with those potential plaintiffs can sabotage the goal of the FLSA’s informed consent requirement by planting the slightest seed of doubt or worry through the one-sided, unrebutted presentation of “facts.” Because the damage from misstatements could well be irreparable, the district court must be able to exercise its discretion to attempt to correct the effects of such actions. See Hoffmann–La Roche, 493 U.S. at 170, 110 S.Ct. at 486 (noting that court intervention in the collective action notice process may be necessary).
Because we affirm the district court’s decision to deny enforceability of the arbitration agreements in this case, we necessarily must affirm the district court’s order denying Citi Trends’s motion to compel arbitration.
Click Billingsley v. Citi Trends, Inc. to read the entire Opinion.
Stransky v. HealthONE of Denver, Inc.
This case was before the court on the plaintiffs’ Motion to Toll the Statute of Limitations, which was filed simultaneously with the plaintiffs’ motion for conditional certification of the case as a collective action. In granting the plaintiffs motion (in part) and tolling the statute of limitations as of the date on which the plaintiffs sought conditional certification, the court looked to the both the procedural realities of the opt-in provisions of 216(b) and the remedial purpose behind the FLSA. Significantly, the court noted that there would be no prejudice to the defendant in granting such tolling while the potential plaintiffs would be significantly prejudiced by the continued expiration of their respective statutes of limitations if the tolling were not granted.
In the case of a collective FLSA action, a least one district court in the Tenth Circuit has explained that the unique circumstances of a collective action “is not only significant but justifies tolling the limitations period [ ] for the FLSA putative class until the court authorizes the provision of notice to putative class members or issues an order denying the provision of notice.” In re Bank of America Wage and Hour Emp’t Litig., No. 10–MDL–2138, 2010 WL 4180530 (D.Kan. Oct.20, 2010). In making that equitable tolling determination, the court in In re Bank of America utilized a flexible standard, where a court considers five factors in determining whether to equitably toll a statute of limitations: (1) lack of notice of the filing requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one’s rights; (4) absence of prejudice to the defendant; and (5) the plaintiff’s reasonableness in remaining ignorant of the particular legal requirement. Id. (citing Graham–Humphreys, 209 F.3d at 561).
Plaintiffs argue that the statue of limitations should be equitably tolled here in the interest of justice in order to protect the Opt-in Plaintiffs’ diminishing claims. The Court agrees. Although early notice to Opt-in Plaintiffs in a collective action such as this is favored, such notice was not possible here as Defendant is in sole possession of the names and last known physical addresses of all potential Opt-in Plaintiffs. As such, allowing Opt-in Plaintiffs’ claims to diminish or expire due to circumstances beyond their direct control would be particularly unjust. The Tenth Circuit has also recognized the possible need for equitable tolling under such conditions. See Gray v. Phillips Petroleum Co., 858 F.2d 610, 616 (10th Cir.1988) (tolling statute of limitations where plaintiffs were lulled into inaction and defendant did not show that any “significant prejudice” would result from allowing plaintiffs to proceed; defendant was “fully apprised” of the plaintiffs’ claims). Moreover, Defendant will not be prejudiced by such equitable tolling. See Baden–Winterwood, 484 F.Supp.2d at 828–29 (defendant not prejudiced because it “had full knowledge that the named Plaintiff brought the suit as a collective action on the date of the filing” and “was fully aware of its scope of potential liability.”). Indeed, Defendant fails to claim it would be prejudiced in any manner, let alone prejudiced unduly, were this Court to toll the applicable limitations period. Thus, having considered the particular facts of this case, the Court finds that the interests of justice are best served by tolling the statute of limitations for the Opt-in Plaintiffs in this case.
However, while the court granted the plaintiffs motion, it declined to toll the statute of limitations back to the date of the filing of the original complaint. Instead, the court held the appropriate date to begin tolling was the date on which the plaintiffs filed their motion for conditional certification.
Click Stransky v. HealthONE of Denver, Inc. to read the entire Corrected Order Granting in Part Plaintiffs’ Motion to Toll the Statute of Limitations.
McGlone v. Contract Callers, Inc.
This case was before the court on plaintiff’s motion for conditional certification of a collective action, seeking to permit court approved notice. The court noted that another court, presented with a similar motion for conditional certification had previously denied same due to very significant differences in the factual circumstances in the employees’ work, depending on location. Nonetheless the court granted plaintiff’s motion and conditionally certified the case with respect to the district in which the plaintiff was employed. As discussed here, the court also granted plaintiff’s motion to equitably toll the statute of limitations for putative class members, as of the date the plaintiff filed his motion for conditional certification. In so doing, the court joined other courts who have held that court delay in issuing a decision on a motion for conditional certification is of itself an “extraordinary circumstance” warranting the tolling of the statute of limitations.
Normally in a FLSA collective action, the statute of limitations for each plaintiff runs when he or she files written consent with the court electing to join the lawsuit, not when the named plaintiff files the complaint. See 29 U.S.C. § 256(b). However, courts have discretion to equitably toll the limitations period in appropriate cases in order “to avoid inequitable circumstances.” Yahraes v. Restaurant Assocs. Events Corp., 2011 WL 844963, at *1 (E.D.N.Y. Mar.8, 2011). The Honorable Steven M. Gold stated that “the delay caused by the time required for a court to rule on a motion, such as one for certification of a collective action in a FLSA case, may be deemed an ‘extraordinary circumstance’ justifying application of the equitable tolling doctrine.” Id. at *2 (collecting cases). While plaintiffs wishing to pursue their rights cannot sit on them indefinitely, those whose putative class representatives and their counsel are diligently and timely pursuing the claims should also not be penalized due to the courts’ heavy dockets and understandable delays in rulings. Accordingly, the statute of limitations will be tolled as of the date of the filing of this motion.
While courts remain split on this issue, this is a good example of a court ruling on equitable tolling with the remedial purposes of the FLSA in mind.
Click McGlone v. Contract Callers, Inc. to read the entire Opinion.
Williams v. Securitas Sec. Services USA, Inc.
Before the court was the emergency motion of plaintiffs for a protective order and corrective mailing to address defendant’s improper communications with absent class members. While plaintiffs motion for conditional certification was pending before the court (but before it had been resolved), the defendant sought to obtain class waivers of the claims in the case from its current employees, by sending each an alternative dispute resolution agreement. The court held that such attempts by the defendant amounted to an obstruction of the court’s role in managing the collective action, granted plaintiffs motion and ordered related corrective action by defendant.
Paragraph 7 of the Agreement says that although the Agreement is meant to apply “broadly,” if an employee is “a named party plaintiff, or ha[s] joined as a party plaintiff this Agreement shall not apply to those Actions, and you may continue to participate in them without regard to this Agreement,” but “shall apply to all Actions in which you are not a plaintiff or part of a certified class.” The Agreement then lists five representative or class action lawsuits in which Securitas is a named defendant, including this lawsuit, “Frankie Williams and Kimberly Ord, filed 12/10/2010, USDC, Eastern District of Pennsylvania Case No. 2:10–CV–07181–HB.” The term “Actions” is defined as “litigation on behalf of [Securitas] employees in which those employees desire to represent claims of other employees in class, collective or other representative actions.” Thus, the term “Actions” does not appear to be limited only to the five lawsuits enumerated later in paragraph 7. The nature of the Williams action is not explained.
The Agreement further states that if the employee would like to participate in one of the “Actions,” he or she “may opt out of this Agreement by following the procedure set forth in Section 9, below.” To opt out of the Agreement, the employee must call a toll-free telephone number within 30 days of the date the employee received the Agreement. According to the Agreement, “Should an Employee not opt out of this Agreement within 30 days of the Employee’s receipt of this Agreement, continuing the Employee’s employment constitutes mutual acceptance of the terms of this Agreement by the Employee and [Securitas].” The Agreement declares that not opting out means an employee forfeits the right to participate in any collective or representative action. Securitas adds that it will not retaliate against any employee for opting out of the Agreement or for asserting claims according to its terms.
BY SIGNING BELOW, I AM ACKNOWLEDGING RECEIPT OF THE SECURITAS SECURITY SERVICES USA, INC. DISPUTE RESOLUTION AGREEMENT, EFFECTIVE IMMEDIATELY.
“Under Hoffman–La Roche, this court has a responsibility to prevent confusion and unfairness concerning this action in which plaintiffs seek to have the matter proceed as a collective action and to insure that all parties act fairly while the court decides whether and how this action will move forward under the FLSA. In the meantime, to prevent confusion and unfairness, we will order Securitas to rescind the Agreement with respect to its Pennsylvania employees as it relates to this litigation. We will require Securitas to set forth the nature of this action and advise its Pennsylvania employees that the Agreement is not binding with regard to those employees’ right to participate in this lawsuit, notwithstanding the fact that the employee may have signed the Agreement or failed timely to opt out.
Securitas’ reliance on Concepcion is inapposite because plaintiffs’ motion for a protective order does not rely on any state-law ground to invalidate the Agreement. Here the issue is quite different. This court has found the Agreement to be a confusing and unfair communication with the class of possible plaintiffs in this action under the FLSA.
Securitas argues that invalidating the Agreement merely because this class action lawsuits is pending is equivalent to preventing it from adopting any arbitration policy at all. Whatever right Securitas may have to ask its employees to agree to arbitrate, its current effort, which specifically references this lawsuit, is confusing and misleading and clearly designed to thwart unfairly the right of its employees to make an informed choice as to whether to participate in this collective action under the FLSA. Since the Agreement by its terms will directly affect this lawsuit, this court has authority to prevent abuse and to enter appropriate orders governing the conduct of counsel and the parties. Hoffman–La Roche, 493 U.S. at 171–72. Securitas did not act fairly when it gave notice through the Agreement to potential class members concerning this lawsuit.
Defendant’s proposal to resolve the plaintiffs’ pending motion for conditional class certification before resolving issues related to the Agreement is insufficient to prevent potential plaintiffs from misapprehending their rights. The confusing nature of the Agreement may cause Securitas employees to misunderstand the nature of their rights to participate in this litigation while the court determines whether to conditionally certify a class, damage not easily undone. Similarly, Securitas’s proposal to allow its Pennsylvania employees a second 30–day opt out period if the court conditionally certifies a class is also insufficient because it is for the court, not Securitas, to determine the amount of time employees shall have to consider their right to join this action. Immediate action by this court is necessary.
In the accompanying Order, the court required that the defendant submit a proposed corrective notice to the plaintiffs within 48 hours which, among other things, stated the the dispute resolution agreement was not binding on with regard to participation in the case (i.e. they would not be precluded from joining this class if they signed the agreement at issue).
Click Williams v. Securitas Security Services USA, Inc. to read the entire Memorandum Opinion and here to read the accompanying Order.
Thompson v. K.R. Drenth Trucking, Inc.
This case was before the court on plaintiffs’ motion for reconsideration of the court’s order denying their motion for conditional certification of a collective action. The case arose out of allegations that defendants violated the Fair Labor Standards Act (“FLSA”) by failing to pay a certain group of truck drivers (“plaintiffs”) overtime premiums. Initially, the court denied Plaintiffs’ Motion. In doing so, “the Court held that the Motor Carrier Act exemption applied to [the] named Plaintiffs… thus rendering them ineligible for overtime pay and unsuitable collective action representatives.” In their motion for reconsideration, the plaintiffs asserted that the court had previously erred by inappropriately resolving the merits of the Motor Carrier Act exemption, with respect to the named-plaintiffs at the conditional certification stage. The court agreed, and upon reconsideration granted conditional certification.
“In the February 11, 2011 Entry (Dkt.68), this Court acknowledged that the issue of whether Thompson and Hayden engaged in interstate commerce was “hotly contested.” Plaintiffs emphasized that both Thompson and Hayden were Non–Recyclable Drivers who regularly transported non-recyclable materials within the State of Indiana. Plaintiffs argued that since they never engaged in interstate commerce as part of their “regular” or “normal” duties, Thompson and Hayden are suitable collective action representatives. KRD counters that any of its drivers, including Thompson and Hayden, “could be called upon at any time to carry any load, whether intrastate or interstate,” meaning the MCA exemption applies. (Dkt. 71 at 4). And, indeed, Thompson and Hayden each crossed Indiana state lines on one occasion to transport KRD equipment to South Carolina.
In its prior entry, the Court found KRD’s argument persuasive, determining that the MCA exemption applied to Thompson and Hayden. In other words, even if Thompson and Hayden rarely crossed state lines (or, for that matter, hauled recyclable material destined for out-of-state purchasers), they could have been called upon to do so in their regular course of work. For this reason, the Court denied Plaintiffs’ motion for conditional certification.
Luckily for the plaintiffs here, the court recognized its initial error and corrected it almost immediately. The court’s decision serves as a reminder that courts simply do not resolve the merits of an FLSA case at the conditional certification stage.
Click Thompson v. K.R. Drenth Trucking, Inc. to read the court’s Entry on Plaintiffs’ Motion to Reconsider.
This case was before the court on the plaintiff’s motion for conditional certification. The defendant opposed the motion on several grounds. As discussed here, the court rejected the defendant’s arguments that conditional certification was inappropriate because: (1) the case and proposed class were largely duplicative of another case that had previously been certified, and (2) the plaintiffs had waited too long to move for conditional certification.
“A class action filed in the District of Connecticut makes nearly identical allegations against Defendant as the instant case. Store managers who worked for Defendant between March 14, 2005, and October 22, 2008 received notice of the Connecticut litigation and were invited to join the class action. Plaintiffs argue that the Court should order that notice of the present litigation be issued to all store managers employed by Defendant since February 22, 2007, including those who received notice of the Connecticut litigation. Plaintiffs assert that the store managers who were given notice of the Connecticut litigation and those who joined that litigation should be given the opportunity to join the instant litigation to ensure that they are properly compensated for the overtime hours they may have worked since the Connecticut litigation’s notice period. Plaintiffs further assert that choosing not to join one § 216(b) action should not preclude a person from joining another action.
Defendant, on the other hand, argues that the Court should limit notice to (1) deli managers and (2) store managers who were not noticed in Connecticut case. Defendant states that this is fair because one of the goals of § 216(b) is to avoid “a multiplicity of duplicative suits….” Hoffmann, 493 U.S. at 172. Defendant also asserts that it is not asking the Court to limit or prohibit a second FLSA class action that has the same pool of plaintiffs. Instead, Defendant asks the Court to put the burden on Plaintiffs to show that the rights of the potential class members who received notice but did not join the Connecticut litigation will be prejudiced if they are not given a second opportunity to opt-in. Defendant argues that Plaintiffs cannot satisfy this burden because there is no evidence that the store managers who received notice of the Connecticut case and declined to join would be prejudiced if they did not receive a second notice. Defendant also asserts that the forty-eight store managers who are already plaintiffs in the Connecticut case should not be re-noticed because they chose to join the Connecticut litigation and that decision should not be disturbed.
“Defendant argues that Plaintiffs unreasonably delayed in bringing the instant Motion in an attempt to obtain a four or five month delay in the trial of this matter. Defendants note that Plaintiffs waited nearly six months after filing the Complaint to request Court-supervised notice pursuant to § 216(b) of the FLSA. Because Plaintiffs’ requested notice period would expire after the November 22, 2010 trial date in this matter, Defendants argue that Plaintiffs’ request is untimely and should be denied. Plaintiffs assert that Defendant has made no argument that it has been prejudiced by Plaintiffs’ delay in bringing the Motion and that continuing the trial date should not present an issue because “[t]he judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” Hoffman, 493 U.S. at 170.

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