Warren et al v. Cook Sales, Inc. et al

Filing 52

Order granting 14 MOTION for Conditional Certification and to Facilitate Notice. The 32 MOTION to Strike & 50 MOTION to Certify Class are moot. Memorandum of Law is due by 12/30/2016. Final Approval Hearing set for 1/18/2017 10:00 AM in Courtroom 2A before Chief Judge William H. Steele. Signed by Chief Judge William H. Steele on 8/25/2016. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ALLISON WARREN, et al.,
Plaintiffs,
v.
COOK SALES, INC., et al.,
Defendants.

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CIVIL ACTION 15-0603-WS-M

ORDER
This matter comes before the Court on plaintiffs’ filing styled “Consent Motion for Order
Certifying this Case as a Collective Action for Settlement Purposes and Authorizing Notice of
Settlement” (doc. 50). The Court understands that plaintiffs filed this Consent Motion pursuant
to a compromise settlement they negotiated with defendants. The Court further understands that
defendants object to neither the Consent Motion nor the form and contents of this Order.
I.

Background.
Plaintiffs Allison Warren, Chester Dampier, Sherri Mullinax and Evelyn Clem

(collectively, the “Named Plaintiffs”) brought this action seeking unpaid overtime compensation
under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”), against defendants,
Cook Sales, Inc. and Cook Portable Warehouses of Mississippi, LLC. The Complaint (doc. 1)
alleged that plaintiffs were employed by defendants as sales representatives and/or lot managers,
that they routinely worked more than 40 hours per week, and that defendants failed to pay them
overtime pay of one and one-half times their regular rates of pay for hours worked in excess of
40, as required by the FLSA. Plaintiffs brought their Complaint as a putative FLSA collective
action, on their own behalf and on behalf of all other similarly-situated sales representatives,
pursuant to 29 U.S.C. § 216(b). On January 28, 2016, plaintiffs filed a Notice of Filing Consents
to Join Suit (doc. 15) reflecting that Gladys Swain, Charlotte Smith, Amanda Mathis and

Shannon Rose (collectively, the “Original Opt-Ins”) had executed consent forms and sought to
join this action as parties plaintiff.1
For its part, Cook Sales vigorously disputed plaintiffs’ theory of liability and denied that
the challenged compensation practices and policies were violative of the FLSA. Most notably,
Cook Sales maintained that plaintiffs’ claims were defeated by the retail and service
establishment exemption found at Section 7(i) of the FLSA.2 Additionally, Cook Sales asserted
that its conduct was not willful, such that the FLSA’s two-year limitations period, rather than the
three-year alternative, should apply; and objected that this case was ill-suited for treatment as a
collective action because the Named Plaintiffs and putative opt-ins were not similarly situated.
(See doc. 9.)
On March 9, 2016, while plaintiffs’ Motion for Conditional Certification (doc. 14) was
pending, the parties jointly requested that these proceedings be stayed pending the outcome of
mediation. (Doc. 31.) To facilitate their negotiations, the parties entered into a Tolling
Agreement (doc. 34) that would toll the running of the statute of limitations as of December 22,
2015, for the claims of sales representatives in the putative class. The Court granted the joint
motion to stay via Order (doc. 33) entered on March 10, 2016. In the ensuing five months, the
parties have worked diligently together and with mediator Fern Singer to forge an agreement that
would resolve this matter in its entirety. They have now achieved that objective, subject to
judicial approval.

1

A fifth individual, Janice Anderson, also executed a Consent to Join form that
plaintiffs filed contemporaneously with the others. (See doc. 15-1, at 9.) On May 11, 2016,
however, the Court entered an Order (doc. 37) dismissing Anderson’s opt-in claims without
prejudice based on plaintiffs’ representation that she no longer wished to participate in this
action. For that reason, Anderson is not considered among the Original Opt-Ins identified supra
as part of plaintiffs’ January 28 Notice of Filing Consents. She remains eligible to join this
action as an opt-in plaintiff and participate in the settlement as a Future Opt-In if she so chooses.
2

That exemption provides that an employer does not violate the FLSA’s overtime
requirements by employing an employee of a retail or service establishment for more than 40
hours per workweek if “(1) the regular rate of pay of such employee is in excess of one and onehalf times the minimum hourly rate applicable to him under section 206 of this title, and (2) more
than half his compensation for a representative period (not less than one month) represents
commissions on goods or services.” 29 U.S.C. § 207(i).

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To effectuate the parties’ mediated settlement, plaintiffs request an order from this Court
certifying this case as an FLSA collective action for settlement purposes, approving the
distribution of the parties’ proposed Notice of Settlement to putative opt-in plaintiffs, and
otherwise adopting the parties’ proposed sequence and timing of subsequent steps in the
settlement implementation process.
II.

Collective Action Certification.
Pursuant to Section 216(b) of the FLSA, an action to recover unpaid overtime

compensation “may be maintained against any employer … by any one or more employees for
and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. §
216(b) (emphasis added). In contrast to the traditional Rule 23 framework in which similarly
situated persons’ interests may be litigated without their formal consent, the FLSA features an
opt-in mechanism for similarly situated employees. See id. (“No employee shall be a party
plaintiff to any such action unless he gives his consent in writing to become such a party and
such consent is filed in the court in which such action is brought.”); Anderson v. Cagle’s, Inc.,
488 F.3d 945, 950 n.3 (11th Cir. 2007) (“Unlike class actions governed by Rule 23 …, FLSA
collective actions require potential class members to notify the court of their desire to opt in to
the action.”).
The Eleventh Circuit has explained that “[t]he key to starting the motors of a collective
action is a showing that there is a similarly situated group of employees.” Morgan v. Family
Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008); see also Anderson, 488 F.3d at 952
(“To maintain a collective action under the FLSA, plaintiffs must demonstrate that they are
similarly situated.”) (citations omitted). “[U]ltimately, whether a collective action is appropriate
depends largely on the factual question of whether the plaintiff employees are similarly situated
to one another.” Morgan, 551 F.3d at 1262. In ascertaining whether the “similarly situated”
requirement has been satisfied, the Eleventh Circuit has endorsed a pragmatic two-stage analysis.
“[A]t the initial stage the district court’s decision to certify a class is based primarily on
pleadings and affidavits,” such that “courts apply a ‘fairly lenient standard’ for determining
whether the plaintiffs are truly similarly situated.” Anderson, 488 F.3d at 953 (citations omitted).
If certification is granted using this fairly lenient standard at the initial stage, then “putative class
members are given notice and the opportunity to ‘opt-in.’ The action proceeds as a
representative action throughout discovery.” Hipp v. Liberty Nat’l Life Ins. Co., 252 F.3d 1208,

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1218 (11th Cir. 2001) (citation omitted). This standard “may be most useful when making a
certification decision early in the litigation before discovery has been completed.” Anderson,
488 F.3d at 952. The parties agree for settlement purposes that the “fairly lenient standard”
described in Anderson and Hipp is properly applied here.
“[N]either Congress nor the Eleventh Circuit has precisely defined ‘similarly situated’ in
the context of a motion” like the one presented here. Williams v. Omainsky, 2016 WL 297718,
*4 (S.D. Ala. Jan. 21, 2016). Nonetheless, the parties identify three guiding principles, all of
which find support in the case law. First, “the similarities necessary to maintain a collective
action under § 216(b) must extend beyond the mere facts of job duties and pay provisions.”
Anderson, 488 F.3d at 953 (citation omitted). Second, plaintiffs’ burden of showing classwide
similarity “is not heavy” and may be satisfied by “detailed allegations supported by affidavits.”
Hipp, 252 F.3d at 1219 (citations omitted). Third, the decision of whether or not to certify a
collective action pursuant to § 216(b) “remains soundly within the discretion of the district
court.” Id.
The parties have agreed for settlement purposes that this case is properly certified as a
collective action pursuant to § 216(b) of the FLSA. On that basis, they ask that the Court grant
such certification of the FLSA claims and allow a reasonable opportunity for potential opt-in
plaintiffs (the “Potential Opt-Ins”) to sign consent forms and join in the settlement of this action
pursuant to § 216(b). There appears to be no dispute among the parties for settlement purposes
that plaintiffs have satisfied the “similarly situated” test. In particular, plaintiffs point to
declarations executed by the Named Plaintiffs some time ago reflecting that all of them were
sales representatives for Cook Portable Warehouses who worked significant overtime hours
without receiving overtime premium pay and who performed similar duties of selling and renting
portable storage sheds to prospective customers. (See doc. 14, Exhs. A-D.) Plaintiffs also
indicate that a common issue affecting the overtime claims of Named Plaintiffs, Original Opt-Ins
and Potential Opt-Ins is whether Cook Sales meets the requirements of the retail or service
establishment exemption found at 29 U.S.C. § 207(i). Although the parties disagree as to
whether the § 207(i) exemption applies, they agree for purposes of settlement that the Named
Plaintiffs, Original Opt-Ins and Potential Opt-Ins are similarly situated and that § 216(b)
certification should be granted. Upon careful consideration, and in furtherance of the parties’
settlement, the Court grants that request. This case will be certified as an FLSA collective

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action, as to which notice shall issue to all sales representatives employed by Cook Sales
between December 22, 2012 and December 22, 2015, a liability period commencing three years
prior to the effective date of the parties’ Tolling Agreement.
III.

Authorization to Provide Notice of Settlement.
By the terms of the parties’ Release and Settlement Agreement (doc. 51, Exh. 2), Cook

Sales shall pay the sum of $495,000.00 into a common fund, referred to as the “Gross Fund,” to
settle the claims of the Named Plaintiffs, Original Opt-Ins, and Potential Opt-Ins who elect to
join this action in a timely manner. (Id. at ¶ 4.) Pursuant to that Settlement Agreement, the
parties have agreed that, subject to court approval, the Gross Fund will also be used to pay
attorney’s fees, litigation costs and expenses of plaintiffs’ counsel in an amount not to exceed
$148,500.00, which constitutes 30% of the Gross Fund. (Id. at ¶ 4.a.)3 The Settlement
Agreement also provides that the Gross Fund will be used to compensate each of the four Named
Plaintiffs and each of the four Original Opt-Ins with a “service payment” of $5,000, for an
aggregate total of $40,000. (Id. at ¶ 4.b.)4 And the Settlement Agreement provides that the
Gross Fund will be used to pay all costs, fees and expenses of a Settlement Claims
Administrator, not to exceed $15,000. (Id. at ¶ 4.c.)
Pursuant to the Settlement Agreement, the Gross Fund less plaintiffs’ attorney’s fees,
costs and expenses; the Settlement Claims Administrator’s fees, costs and expenses; and the
service payments to Named Plaintiffs and Original Opt-Ins, shall be referred to as the Net Fund.
(Id. at ¶ 4.d.) The parties have agreed that the Net Fund will be used to pay back pay and
liquidated damages to Named Plaintiffs, Original Opt-Ins, and any Potential Opt-Ins who timely
submit consents to join the class (the “Future Opt-Ins”). The Net Fund will be used to make
settlement payments to Future Opt-Ins in accordance with a formula based on the number of

3

Notably, the Settlement Agreement neither requires that plaintiffs’ counsel be
compensated in the amount of $148,500 nor conditions the settlement on judicial approval of
plaintiffs’ counsel’s fees, costs and expenses in any particular sum. (Id. at ¶ 4.f.)
4

The service payments are designed to compensate these individuals for their
efforts in the investigation of this litigation, their participation in discovery, and their preparation
for and attendance at mediation, all for the benefit of themselves and Potential Opt-Ins.

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weeks each employee is reported to have worked during the liability period. (Id. at ¶ 8.)5
Payments to Future Opt-Ins will be allocated evenly between back pay and liquidated damages.
According to the Settlement Agreement, “[t]he amounts allocated to Future Opt-Ins pursuant to
this formula shall revert to Defendants for any Potential Opt-Ins who fail to timely file a claim
form.” (Id.)
With respect to Named Plaintiffs and Original Opt-Ins, however, the Settlement
Agreement fixes payments from the Net Fund in the following amounts, inclusive of back pay
and liquidated damages (without regard to the formula utilized in computing settlement
payments to Future Opt-Ins):
Evelyn Clem
Chester Dampier
Amanda Mathis
Sherri Mullinax
Shannon Rose
Charley Smith
Gladys Swain
Allison Warren

$1,955.53
$2,672.56
$987.88
$2,084.45
$832.98
$1,770.11
$2,361.97
$2,888.16

Cook Sales will pay the employer’s portion of all taxes due on the back pay awards to Named
Plaintiffs, Original Opt-Ins, and Future Opt-Ins.
The Court need not and does not make any final determination at this time with regard to
approval of this settlement. The Consent Motion does not request such final approval; rather, it
is quite properly confined to a request for preliminary approval to furnish Potential Opt-Ins with
a Notice of Settlement. The parties propose that the following procedural path govern this
action, in sequential order: (i) the Court approves the Notice of Settlement and authorizes
plaintiffs to distribute such notice to Potential Opt-Ins; (ii) plaintiffs provide notice to Potential
Opt-Ins of their right to join the collective action and, if they do so in a timely manner, their right
to file objections to the proposed settlement; and (iii) the Court conducts a final approval hearing
to ascertain whether the settlement should be approved after the deadline expires for Future Opt5

The expectation is that the formula will yield payments to Future Opt-Ins of
approximately $45.00 per week, which plaintiffs’ counsel believes – based on extensive damage
modeling – to be “very close to” the damages to which these individuals would otherwise have
been entitled for working 45 minutes off the clock per day during each week of employment as
sales representatives for Cook Sales. (Smith Decl. (doc. 51), ¶ 26.)

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Ins to join and to interpose any objections they may have. In support of this protocol, the parties
cite various unpublished case authorities from the Middle District of Florida.
Along with their Consent Motion, the parties have submitted a five-page proposed Notice
of Settlement. (Doc. 51, Exh. 3.) All parties have agreed to the form and contents of this
proposed Notice, and have stated their position that this document “fairly and clearly inform[s]
Potential Opt-Ins of their legal options with respect to participating, or not, in the settlement of
this litigation and their right to object to the Settlement.” (Doc. 50, at 20.) After review, the
undersigned deems the proposed Notice to be appropriate. The “Notice of Settlement” is hereby
approved for dissemination and transmission to Potential Opt-Ins.
IV.

Conclusion.
For all of the foregoing reasons, it is ordered as follows:
1.

The Consent Motion for Order Certifying Collective Action for Settlement
Purposes and Authorizing Notice of Settlement (doc. 50) is granted;

2.

The Court certifies for settlement purposes a class consisting of all sales
representatives employed by Cook Sales, Inc., during the period spanning from
December 22, 2012 through December 22, 2015;

3.

The proposed Notice of Settlement (doc. 51, Exh. 3) is approved and the parties
are hereby authorized to distribute such document to Potential Opt-Ins;

4.

At the parties’ request, Simpluris Class Action Settlement Administration is
appointed to serve as the Settlement Claims Administrator in this action;

5.

Pursuant to the parties’ request, within 15 days after entry of this Order, Cook
Sales shall provide the Settlement Claims Administrator with a spreadsheet listing
the names, employee identification numbers, dates of employment (during the
period of December 22, 2012 through December 22, 2015), state(s) of
employment, most recent mailing addresses, telephone numbers, e-mail addresses
(if available) and Social Security numbers of all Potential Opt-Ins. This sensitive
employee data is confidential and must be handled with great care. The parties
and the Settlement Claims Administrator are ordered to devise and implement
appropriate security measures to protect all such data from any unnecessary thirdparty access or disclosure. Prior to mailing the Notice of Settlement to Potential
Opt-Ins, the Settlement Claims Administrator shall take reasonable steps to

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attempt to confirm accuracy of names and addresses through the U.S. Postal
Service’s National Change of Address database;
6.

Within 14 days after receiving the spreadsheet from Cook Sales, the Settlement
Claims Administrator shall mail the Notice of Settlement (in substantially the
form found at doc. 51, Exhibit 3) to Potential Opt-Ins. The Notice of Settlement
shall be accompanied by the Consent to Join Form, the Settlement Share Form,
and a pre-addressed, postage-paid return envelope.

7.

For any Notice of Settlement returned as undeliverable, the Settlement Claims
Administrator shall promptly undertake to locate such Potential Opt-In via
reasonable electronic search utilizing available identifying information from the
spreadsheet. Should such an electronic search be successful, the Settlement
Claims Administrator shall promptly mail an additional Notice of Settlement and
accompanying documentation to that individual.

8.

The Settlement Claims Administrator shall mail a reminder postcard
approximately 30 days after the initial mailing of the Notice of Settlement for any
Potential Opt-In who has not yet submitted a Consent to Join Form.

9.

Defendants and their counsel must abide by the provisions of paragraph 15 of the
Settlement Agreement with regard to non-interference with the claims
administration process.

10.

The Settlement Claims Administrator shall provide electronic copies of all
executed Consent to Join Forms and any Objections to all counsel in a timely
manner. It is plaintiffs’ counsel’s responsibility to file all Consent to Join Forms
(as a single, consolidated docket entry) and any and all Objections with the Clerk
of Court within 15 days after the claims bar date.

11.

The Court must still determine whether proposed settlement is fair, adequate and
reasonable, and whether it satisfies the legal test set forth in Lynn’s Food Stores,
Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) and Crabtree v. Volkert, Inc.,
2013 WL 593500 (S.D. Ala. Feb. 14, 2013).

12.

The parties’ memoranda of law (accompanied by exhibits as appropriate) seeking
final approval of the settlement pursuant to Lynn’s Food and responding to the
Objections must be filed on or before December 30, 2016. Copies of responses

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to Objections must also be served on the opt-in plaintiff(s) who raised such
Objections.
13.

A final approval hearing is scheduled for January 18, 2017 at 10:00 a.m. in
Courtroom 2A of the United States Courthouse, 113 St. Joseph Street, Mobile,
Alabama.

14.

In light of the foregoing determinations, Plaintiffs’ Motion for Conditional
Certification and to Facilitate Notice (doc. 14) and is moot. Likewise, defendant
Cook Sales’ Motion to Strike Plaintiffs’ Supplemental Brief (doc. 32) relating to
that now-superseded Motion for Conditional Certification is moot.

DONE and ORDERED this 25th day of August, 2016.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

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