Court Opinion

ID: 4704352
Source: CourtListenerOpinion
Date Created: 2021-07-16 20:00:45.101394+00
Date Added: 2024-06-11T08:05:15.668540
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                    ____________________

No. 20-2046
PEGGY JO SMITH, individually and on behalf of
similarly situated individuals,
                                          Plaintiff-Appellant,

                                v.

PROFESSIONAL TRANSPORTATION, INC., and RONALD D.
ROMAIN,
                                     Defendants-Appellees.
                    ____________________
           Appeal from United States District Court for the
          Southern District of Indiana, Evansville Division.
       No. 3:13-cv-00221-RLY-MPB — Richard L. Young, Judge.
                    ____________________

     ARGUED DECEMBER 9, 2020 — DECIDED JULY 16, 2021
                ____________________

   Before WOOD, BRENNAN, and ST. EVE, Circuit Judges.
    WOOD, Circuit Judge. Between November 2011 and August
2013, Peggy Jo Smith worked for Professional Transportation
Inc. (PTI), a company that transports railroad crews to and
from their places of work. Believing that her position was mis-
classiﬁed for purposes of the Fair Labor Standards Act (“the
2                                                                     No. 20-2046

Act”) and that she was not receiving proper overtime wages,
she ﬁled this action “individually and on behalf of similarly
situated individuals” on December 26, 2013. The Act permits
both individual actions and collective proceedings. See 29
U.S.C. § 216(b). Unlike the better-known class action under
Federal Rule of Civil Procedure 23(b)(3), however, which in-
cludes everyone in the class who does not opt out, the FLSA
collective action requires group members aﬃrmatively to opt
into the collective action in order to participate.
   At ﬁrst, it seemed that Smith’s eﬀort to serve as a named
representative of a collective action under the Act was pro-
ceeding well. Her initial ﬁling was well within the two years
that the Act provides for the commencement of litigation. See
29 U.S.C. § 255(a). (Indeed, the Act has a three-year limitation
period for allegations of willful conduct. Id.) The parties ﬁled
a joint case management plan on March 25, 2014, three
months after the case was ﬁled, and the district court
promptly approved it. Docs. 15, 16. Part IV of that plan ad-
dressed “class certiﬁcation matters.” And the district court’s
docket sheet shows numerous putative group members con-
senting to opt into the litigation.1
   The case went oﬀ the rails, however, when PTI pointed out
that Smith herself had not ﬁled anything in addition to her

    1  Some of the docket entries represent one person’s act of opting in,
while others represent multiple people. The number of people is indicated
in parentheses. See Docs. 5 (1), 11 (1), 12 (1), 17 (1), 18 (1), 19 (1), 36 (1), 37
(1), 38 (1), 39 (1), 40 (1), 41 (1), 53 (1), 75 (1), 93 (2), 94 (4), 96 (2), 99 (6), 101
(8), 103 (9), 106 (3), 108 (2), 110 (1), 112 (12), 114 (5), 116 (2), 118 (3), 120 (3),
122 (2), 124 (1), 128 (4), 130 (1), 132 (5), 134 (3), 136 (7), 138 (6), 140 (6), 142
(2), 144 (3), 146 (1), 148 (1). This was a healthy rate of opt-ins: 118 people
in addition to Smith herself, whose status we discuss below.
No. 20-2046                                                    3

complaint indicating that she herself wished to participate in
the group action. Relying on our decision in Harkins v. River-
boat Services, Inc., 385 F.3d 1099 (7th Cir. 2004), the district
court deemed this a fatal ﬂaw for the collective action. It held
that Smith’s group action could not “commence” until such a
consent was ﬁled. 29 U.S.C. § 256. Moreover, by the time the
court reached this conclusion, both the two-year and the
three-year statutes of limitations had run. The court then con-
cluded that Smith’s complaint also failed to allege timely in-
dividual claims, and on that basis it dismissed the case in its
entirety.
    Aside from some stray references to the underlying puta-
tive collective action, Smith’s appeal contests only the district
court’s refusal to allow her individual action to move ahead.
We thus do not have before us the diﬃcult question whether
every member of a collective action, including the named
plaintiﬀ(s), must ﬁle a separate document entitled a Consent,
or if it is enough for the named plaintiﬀ(s) to indicate in the
complaint that they aﬃrmatively wish to proceed in that ca-
pacity. We conclude, however, that the court erred by refusing
to allow Smith to proceed on her individual claims, and so we
vacate that part of its judgment and remand for further pro-
ceedings.
                                I
    PTI is an Indiana-based corporation that provides ground
transportation to the people who service the nation’s rail-
roads. By providing 24-hour shuttles and drivers, PTI helps
railroad crews and train workers get to their destinations and
back home after their shifts’ end. Peggy Jo Smith began her
career there as a driver. Two years later, she was promoted to
an administrative role. But a few months into this new
4                                                    No. 20-2046

position, Smith began to suspect that PTI was not paying her
what she was due. Unable to secure what she perceived to be
her proper wages—particularly her overtime wages—she re-
signed on August 20, 2013. On December 26, 2013, Smith ﬁled
this lawsuit.
   The Fair Labor Standards Act authorizes a worker to sue a
noncompliant employer on “behalf of [her]self or themselves
and other employees similarly situated.” 29 U.S.C § 216(b).
Tracking this authorization, Smith stated in the opening par-
agraph of her second amended complaint that her suit was
brought by “plaintiﬀ, Peggy Jo Smith, individually and on be-
half of similarly situated opt-in persons who are current or
former [PTI] employees.” Doc. 87 (emphasis added).
    In contrast to the more familiar mechanisms for class ac-
tion contained in Federal Rule of Civil Procedure 23, collective
actions under the Act require putative group members aﬃrm-
atively to opt into the action by giving their “consent in writ-
ing to become such a party.” 29 U.S.C. § 216(b). “Such con-
sent” must be “ﬁled in the court in which such action is
brought.” Id. In addition to evincing consent to become a
party to a collective action, the ﬁling itself “commences” the
action for statute of limitations purposes:
       In determining when an action is commenced
       for the purposes of section 255 of this title [i.e.,
       the statute of limitations], an action commenced
       on or after May 14, 1947 under the Fair Labor
       Standards Act of 1938, as amended … shall be
       considered to be commenced on the date when
       the complaint is ﬁled; except that in the case of a
       collective or class action instituted under the Fair
       Labor Standards Act of 1938, as amended …, it
No. 20-2046                                                   5

       shall be considered to be commenced in the case
       of any individual claimant—
       (a) on the date when the complaint is ﬁled, if he
       is speciﬁcally named as a party plaintiﬀ in the
       complaint and his written consent to become a
       party plaintiﬀ is ﬁled on such date in the court
       in which the action is brought; or
       (b) if such written consent was not so ﬁled or if
       his name did not so appear—on the subsequent
       date on which such written consent is ﬁled in
       the court in which the action was commenced.
29 U.S.C. § 256 (emphasis added). The Act has a two- or three-
year statute of limitations, 29 U.S.C. § 255(a), which means
that, if the written consent requirement applies, plaintiﬀs
seeking to be represented in the collective action need to ﬁle
the written consent within that time.
    Over one hundred current and former PTI employees
opted into Smith’s collective action by ﬁling timely written
consent forms. But Smith herself, having already ﬁled her
complaint, did not submit an additional written consent form
indicating her desire to join her own suit. As we indicated, the
district court regarded this as the kiss of death for both her
collective and her individual actions, and it dismissed the
case, paving the way for this appeal.
                               II
   Before turning to Smith’s individual claim, we think it
prudent to say a few words about our decision not to address
the collective aspect of her case. The question whether a
named plaintiﬀ, or plaintiﬀs, must ﬁle a separate written con-
sent form in addition to indicating their desire to proceed
6                                                     No. 20-2046

collectively in the pleadings turns out to be a complex one.
Some things, however, are clear. Congress chose the opt-in
format for FLSA collective actions because it wished to “pre-
vent the ﬁling of claims on behalf of a large group of unnamed
and nonparticipating plaintiﬀs.” Anderson v. Montgomery
Ward & Co., Inc., 852 F.2d 1008, 1016 (7th Cir. 1988). The writ-
ten consent forms assure the court that the signers “want to
have their rights adjudicated in [a collective] proceeding or be
represented by counsel chosen by other plaintiﬀs.” Harkins v.
Riverboat Servs., Inc., 385 F.3d 1099, 1101 (7th Cir. 2004). A ﬁled
written consent is “important” because it protects plaintiﬀs
from binding judgments obtained by counsel whom they may
not fully trust. Id.
     The named representative, however, diﬀers in certain
ways from the other members of the group. Note, for exam-
ple, the somewhat awkward language of section 256(a) of the
statute, reproduced above, and compare it to the language of
section 256(b). Section 256(a) establishes a rule for speciﬁcally
named plaintiﬀs whose written consent to become a party
plaintiﬀ is ﬁled with the complaint, while subpart (b) ad-
dresses the unnamed members of the group. We leave for an-
other day the question whether the statute requires that writ-
ten consent to be in a separate document, or if instead it is
enough if the complaint itself clearly indicates the intent of
the plaintiﬀ to proceed collectively. Complaints, after all, are
either signed by the plaintiﬀ’s attorney or personally, if the
litigant is unrepresented. See FED. R. CIV. P. 11(a). It is impos-
sible for a named plaintiﬀ to be surprised with an unwanted
collective action, and she herself selected her lawyer.
   But the language of section 256(a), which admittedly ad-
dresses not the processing of a collective action, but instead
No. 20-2046                                                     7

the statute of limitations, can be read otherwise. Our caselaw
is somewhat inconsistent on the question whether a separate
form must be ﬁled. We have held that in a representative ac-
tion brought under the Age Discrimination in Employment
Act—a statute that follows the FLSA opt-in model, 29 U.S.C.
§ 626(b)—the ﬁling of a “routine written consent” is not nec-
essary when the named plaintiﬀs “hired a lawyer to ﬁle a
complaint on their behalf and had thus clearly indicated their
consent to suit.” Anderson, 852 F.2d at 1018–19 (cleaned up).
On the other hand, in Harkins we did not follow Anderson’s
approach to written consents. It is diﬃcult to reconcile these
two cases, even though nothing in Harkins indicates that the
panel invoked Seventh Circuit Rule 40(e) to overrule or mod-
ify Anderson.
    Our sister circuits also appear to be split on this issue. The
Eighth Circuit has followed the Harkins approach and has
thus required even the named plaintiﬀ to ﬁle a separate con-
sent form, in order to be entitled to proceed as a party in the
collective action. Gomez v. Tyson Foods, Inc., 799 F.3d 1192,
1194 (8th Cir. 2015). Other circuits have apparently taken a
diﬀerent path, although to be fair, the question has not always
been squarely presented and thus the analysis has been some-
what thin. That said, in decisions from the Fourth, Fifth,
Ninth, and Eleventh Circuits, named plaintiﬀs were not re-
quired to ﬁle a separate written consent. See Mickles v. Country
Club Inc., 887 F.3d 1270, 1276 (11th Cir. 2018) (stating that
named plaintiﬀs need only “ﬁle [a complaint] on behalf of
herself and ‘other “similarly situated” employees’” to become
a proper plaintiﬀ, whereas only ‘the opt-in employee’ ‘must
give’ her written consent to become a party to the action”);
Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 758
(4th Cir. 2011) (“[I]n a collective action under the FLSA, a
8                                                     No. 20-2046

named plaintiﬀ represents only himself until a similarly-situ-
ated employee opts in as a ‘party plaintiﬀ’ by giving ‘his con-
sent in writing.’”); Sandoz v. Cingular Wireless LLC, 553 F.3d
913, 916–17 (5th Cir. 2008) (“[I]n a FLSA collective action, the
statute of limitations for a named plaintiﬀ runs from the date
that the plaintiﬀ ﬁles the complaint, while the limitations pe-
riod for an opt-in plaintiﬀ runs from the opt-in date.”); see
also Partlow v. Jewish Orphans' Home of S. Cal., Inc., 645 F.2d
757, 758 (9th Cir. 1981) (“Under the FLSA, a member of the
class who is not individually named in the complaint is not a
party to the lawsuit unless he aﬃrmatively ‘opts in’ by ﬁling
a written consent with the court.”); Kinney Shoe Corp. v. Vorhes,
564 F.2d 859, 862 (9th Cir. 1977) (same).
    The state of the law on this issue is thus far too unsettled
for us to reach out and decide an issue that the appellant her-
self has barely briefed. Collective actions under the FLSA are
relatively common, and we are conﬁdent that this issue will
return to us in a fully briefed form at some point.
                                III
    We turn, then, to the heart of the present case: whether the
district court erred by dismissing Smith’s individual claim
along with her collective claims. The question is whether sec-
tion 216(b) authorizes “dual capacity” suits, in which a plain-
tiﬀ sues simultaneously as a group representative and as an
individual. The answer is yes, for a number of reasons.
    The Federal Rules of Civil Procedure permit a party to
“join, as independent or alternative claims, as many claims as
it has against an opposing party.” FED. R. CIV. P. 18(a). It is the
federal pleading rules—not section 216(b)—that determine
No. 20-2046                                                     9

whether multiple claims under the Fair Labor Standards Act
may be joined together.
    To determine whether Smith has stated individual claims
in her complaint against PTI, we must conduct a de novo re-
view to determine whether she has included enough facts to
put PTI on notice of her individual claims. See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). In contrast, when reviewing a deci-
sion rendered on summary judgement, we need not limit our-
selves to the pleadings. We may look at the full record that
was developed on summary judgment, taking it in the light
most favorable to Smith, to see if a trier of fact could rule in
her favor. Moreover, to the extent that materials that were
added to the record later show that PTI was aware of Smith’s
intention to pursue her individual claims, we also may rely
on those materials.
    The district court thought that the facts alleged in Smith’s
second amended complaint related only to the collective ac-
tion and not to her individual claims. This was error. While it
is true that Smith captioned the two substantive sections of
her complaint “Collective Action Allegations” and “National
Collective Action Pursuant to the FLSA,” the very ﬁrst para-
graph of the complaint said that she was also proceeding in
an individual capacity. We should be long past the point
when the label attached to a group of allegations in a com-
plaint displaces the content taken as a whole.
   Read in the light most favorable to Smith, we conclude
that the second amended complaint contained suﬃcient fac-
tual allegations related to her individual claims to put PTI on
notice that she intended to sue it both in an individual and a
representative capacity. She explicitly stated as much in the
10                                                 No. 20-2046

caption of both her original complaint and in her second
amended complaint, which was the operative pleading.
    Paragraphs 21 through 33 of Smith’s second amended
complaint further demonstrate the district court’s error. There
the complaint describes with speciﬁcity Smith’s role at PTI,
her duties, and her pay and time allocations. Several of these
allegations are unique to Smith and are not incorporated into
the parts of the complaint that refer to the group.
    For example, Paragraph 25 alleges that Smith “was en-
couraged to make over-the-road trips to supplement” any
shortfall in her wages but was “forbidden from working as a
driver so that she would be working over 40 hours in any
week.” Paragraph 29 alleges that Smith was “paid $375 per
week on a salary basis, for the performance of executive or
managerial duties, regardless of the number of hours she was
actually required to work to accomplish her duties.” Para-
graph 33 explains how, after PTI began requiring more exten-
sive time logging, Smith “was told not to submit claims for
overtime, as that was what caused her predecessor to be ter-
minated [sic], and that she would not be paid for such over-
time.” And in the complaint’s prayer for relief, it is “plaintiﬀ
Peggy Jo Smith, and all other similarly situated [employees]”
that request a favorable judgment (emphasis added). The sec-
ond amended complaint suﬃced to put PTI on notice that
Smith was, among other things, pursuing her personal claim
against the company. But there’s more.
   On August 14, 2014, defendant’s counsel deposed Smith
and obtained the following clariﬁcation:
No. 20-2046                                                   11

       Q: At the top of Exhibit 1, Ms. Smith, on the very
       ﬁrst page, on the top left, it says Peggy Jo Smith,
       in capital letters. Do you see that?
       A: Yes.
       Q: It says individually. What do you under-
       stand that means? That you’re individually su-
       ing the defendants?
       A: Yes.
       Q: And then it says, and Peggy Jo Smith on be-
       half of similarly situated individuals. Do you
       see that?
       A: Yes.
Dkt. 210:6 at 18. Then a few years later, when moving to de-
certify the class, defendant’s counsel implored the district
court to “grant PTI’s motion to decertify this collective action,
dismiss the Opt Ins without prejudice, and allow Smith’s
claims to proceed individually.” Dkt. 217 (Jan. 20, 2017).
     Nothing more need be said. The operative complaint and
later developments in the case indicate that PTI was under no
illusions about Smith’s intentions to bring individual claims.
Regardless of what happens to the collective action, she is en-
titled to proceed individually.
                               IV
    We VACATE the district court’s summary judgment order
in part and REMAND with instructions to permit Smith’s indi-
vidual claims to proceed. Each side is to bear its own costs on
appeal.