Dietrick v. Securitas Security Services USA, Inc.
Filing
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ORDER GRANTING MOTION FOR CONDITIONAL CERTIFICATION OF COLLECTIVE ACTION AND APPROVING ISSUANCE OF NOTICE by Judge Jon S. Tigar; granting 45 Motion to Certify Class. (Attachments: #(1) Exhibit 1, #(2) Exhibit 2, #(3) Exhibit 3, #(4) Exhibit 4) (wsn, COURT STAFF) (Filed on 10/20/2014)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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MICHAEL DEATRICK,
Case No. 13-cv-05016-JST
Plaintiff,
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v.
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SECURITAS SECURITY SERVICES USA,
INC.,
Defendant.
United States District Court
Northern District of California
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ORDER GRANTING MOTION FOR
CONDITIONAL CERTIFICATION OF
COLLECTIVE ACTION AND
APPROVING ISSUANCE OF NOTICE
Re: ECF No. 45
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Plaintiff Michael Deatrick moves to conditionally certify a collective action pursuant to the
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Fair Labor Standards Act (“FLSA”). Defendant Securitas Services USA, Inc. (“Securitas”)
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opposes the motion. After considering the moving papers, the arguments of the parties at the
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hearing held on September 18, 2014, and good cause appearing, the Court will grant the motion
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and approve issuance of notice to potential class members.
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I.
BACKGROUND
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A.
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Plaintiff Michael Deatrick is a former employee of Defendant Securitas, a national
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provider of security services. ECF No. 42. Deatrick alleges that Securitas failed to pay him and
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The Parties and Claims
other security guards the full overtime compensation they were owed because Securitas does not
take into account in its overtime calculations the payments that security guards receive in
connection with Securitas’s “Vacation Pay Plan” (“the Plan”). Id. Deatrick alleges that Securitas
improperly treated these payments as vacation payments under the FLSA, even though such
payments were, in practice, retention or productivity bonuses. Id.
Deatrick filed the present action on October 28, 2013, seeking to represent a nationwide
collective of security guards employed by Securitas under the FLSA as well as current and former
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California employees in a traditional class action. ECF No. 1. In the currently operative Second
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Amended Complaint, ECF No. 42, Deatrick asserts a claim under the FLSA for failure to pay
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overtime wages against Securitas on his own behalf and on behalf of a putative class of Securitas
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employees who were subject to the Plan. Additionally, Deatrick asserts the following claims
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under California law on his own behalf and on behalf of two putative classes of Securitas
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employees who were employed by Securitas in California: (1) a claim for failure to pay overtime
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wages in violation of California Labor Code sections 510 and 1198; (2) a claim for inaccurate
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wage statements in violation of California Labor Code sections 226 and 1174; (3) a claim for
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waiting time penalties under California Labor Code section 203 for failure to pay the wages owed
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United States District Court
Northern District of California
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upon termination; (4) a claim under California’s Unfair Competition Law; and (5) a claim under
California’s Private Attorneys General Act.
B.
Facts
Securitas employs around 70,000 to 72,000 security guards throughout the United States.
ECF No. 45-5. Approximately 60,000 are employed full-time. Id. While employed by Securitas
as a security guard, Plaintiff received “vacation pay” through the Securitas USA Vacation Pay
Plan, which applies to “Contract Services Employees” in California, Colorado, Illinois, Maine,
Massachusetts and Nebraska. ECF Nos. 45-6, 45-4. The “Contract Service Employee” category
encompasses security guards with a variety of titles. ECF Nos. 42, 43. Under the Plan, eligible
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Contract Services Employees do not receive pay while on vacation. ECF Nos. 45-4, 31-2 Ex. T,
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U, V. Instead, annual payments are calculated using a non-discretionary formula based on (1) the
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employee’s years of service; (2) the number of hours worked in the immediately preceding year;
and (3) the employee’s most frequent rate of pay during that year. ECF Nos. 45-4, 31-2 Ex. T, U,
V. A Contract Services Employee must work a minimum of 1560 hours in the preceding year to
receive a payment. ECF No. 45-4. The annual payment is forfeited if a Contract Services
Employee leaves Securitas for any reason before his employment anniversary. ECF Nos. 45-4,
31-2 Ex. T, U, V. These terms may vary depending on the existence of a client contract or
collective bargaining agreement. ECF No. 45-4.
In its order denying Defendant’s motion for summary judgment, the Court concluded that
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“based on their substance, the payments at issue are non-discretionary bonuses, which must be
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factored into the regular rate calculation.” ECF No. 38. In its pleadings, Securitas has stated that
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it does not include this “vacation pay” in the regular rates of its employees when calculating
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overtime pay. ECF No. 43.
In states other than California, Colorado, Illinois, Maine, Massachusetts and Nebraska,
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Contract Services Employees receive payments under a Vacation Pay Policy (“the Policy”) that,
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although it is funded differently, operates in the same way as the Plan. ECF Nos. 45-3, 45-4, 45-5.
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C.
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The Court has jurisdiction over this FLSA collective action under 28 U.S.C. § 1331.
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United States District Court
Northern District of California
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II.
Jurisdiction
LEGAL STANDARD
The Fair Labor Standards Act provides that actions against employers for violation of its
overtime requirements may be brought “in any Federal or State court of competent jurisdiction 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). “Under [the] FLSA, a potential plaintiff does not benefit
from (and is not bound by) a judgment unless he or she affirmatively opts in to the lawsuit. This
rule is in contrast to a typical Rule 23 class action, where a potential plaintiff must opt out to be
excluded from the class.” Busk v. Integrity Staffing Solutions, Inc., 713 F.3d 525, 528 (9th Cir.
2013) (internal citations and quotation marks omitted).
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Collective actions allow aggrieved employees “the advantage of lower individual costs to
vindicate rights by the pooling of resources.” Hoffman-LaRoche Inc. v. Sperling, 493 U.S. 165,
170 (1989) (discussing collective action provision, 29 U.S.C. § 216(b), in the context of Age
Discrimination in Employment Act claims). The judicial system also benefits from “the efficient
resolution in one proceeding of common issues of law and fact arising from the same” unlawful
activity. Id. These benefits “depend on employees receiving accurate and timely notice
concerning the pendency of the collective action, so that they can make informed decisions about
whether to participate.” Id. See also McElmurry v. U.S. Bank N.A., 495 F.3d 1136, 1139 (9th
Cir. 2007). Courts have authority to manage this process to ensure that employees receive notice
in an “orderly, sensible” manner. Hoffmann-LaRoche v. Sperling, 493 U.S. 165, 170 (1989).
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Certification requires a showing that the potential class members are “similarly situated.”
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Lewis v. Wells Fargo & Co., 669 F. Supp. 2d 1124, 1127 (N.D. Cal. 2009) (citation omitted). A
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majority of courts, including district courts in this circuit, follow a two-step process for
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determining whether a class is “similarly situated.” See Harris v. Vector Marketing Corp., 753 F.
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Supp. 2d 996, 1003 (2010); Lewis, 669 F. Supp. 2d at 1127.
At the first step, alternatively called “the notice stage” and “conditional certification,” the
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court considers whether the plaintiff has submitted sufficient evidence to justify the conditional
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certification of the class and the sending of notice of the action to potential class members. Lewis,
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669 F. Supp. 2d at 1127. In making this determination, “the court requires little more than
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Northern District of California
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substantial allegations, supported by declarations or discovery, that the putative class members
were together the victims of a single decision, policy, or plan.” Id. (internal quotation marks
omitted). “Because the court generally has a limited amount of evidence before it, the initial
determination is usually made under a fairly lenient standard and typically results in conditional
class certification.” Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 467 (N.D. Cal. 2004); see
also Lewis, 669 F. Supp. 2d at 1127.
Only after notice is sent and discovery has closed do district courts move to the second
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step, in which the court reevaluates the collective action under a stricter standard, usually
prompted by a motion for decertification by the defendant. Lewis, 669 F. Supp. 2d at 1127. At
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this point, the court considers several factors, “including the disparate factual and employment
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settings of the individual plaintiffs; the various defenses available to the defendant which appear to
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be individual to each plaintiff; fairness and procedural considerations; and whether the plaintiffs
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made any required filings before instituting suit.” Id.
III.
DISCUSSION
A.
Conditional Certification
Plaintiff asks the Court to conditionally certify the putative FLSA collective action at the
notice stage; order Defendant to produce a class list to Plaintiff’s counsel; direct dissemination of
notice of the pendency of this action; and establish a 90-day period for affected persons to opt in to
the FLSA collective action. ECF No. 45. Plaintiff argues that he has satisfied the lenient standard
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applicable at this stage by submitting detailed allegations in his Second Amended Complaint and
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by demonstrating through Securitas documents and testimony that potential class members exist
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who are “similarly situated” to him. ECF No. 45. He argues that the putative class members,
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whether they were subject to the Plan or the Policy, were “victims of a single decision, policy or
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plan” — Securitas’s practice of paying security guards a non-discretionary bonus, improperly
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labeled as “vacation pay,” and failing to include that bonus in the regular rate for calculation of
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overtime pay. ECF No. 45.
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In his motion, Plaintiff proposed the following class definition:
All persons throughout the United States, including its territories
and possessions, who are or were employed by Securitas Security
Services USA, Inc., and received lump-sum vacation pay at any time
since October 28, 2010.
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United States District Court
Northern District of California
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ECF No. 45.
Defendant Securitas “does not necessarily contest that conditionally certifying a more
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narrowly defined class . . . may be appropriate under the lenient standards governing conditional
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certification of a collective action,” but opposes Plaintiff’s motion on two principal grounds. ECF
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No. 46. First, Securitas argues that Plaintiff’s proposed class is overbroad because it includes
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(1) employees who are not “Contract Services Employees” and therefore have different vacation
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benefits and payout terms and (2) employees who receive vacation benefits under a client contract
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or collective bargaining agreement. ECF No. 46. Second, Securitas argues that employees who
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have signed a bilateral dispute resolution agreement (“DRA”) requiring both parties to resolve
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employment-related disputes through arbitration, are not similarly situated to Deatrick, who opted
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out of the agreement. ECF No. 46.
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Turning to Securitas’s first argument, Deatrick acknowledges on reply that the term “lump-
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sum vacation pay” could be interpreted to encompass cash-ins of accrued benefits by
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administrative employees or others who are entitled to paid vacation, and that such employees
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should not be part of a collective action. ECF No. 48. Plaintiff therefore proposes the following
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revised definition:
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All persons throughout the United States, including its territories
and possessions, who are or were employed by Securitas Security
Services USA, Inc., who worked under policies: (1) that did not
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provide pay during vacation; (2) that paid lump-sum vacation pay on
the anniversary of employment; and (3) that required employees to
be employed on their anniversaries of employment to receive
vacation pay. Counsel for Securitas, any Judge to whom this case is
assigned, as well as their respective staffs and immediate families
would be specifically excluded from the class.
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ECF No. 48. Plaintiff does not agree that employees covered by collective bargaining agreements
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should be uniformly excluded from the class, but points out that if a client contract or collective
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bargaining agreement provides for benefits different from those at issue in this case, employees
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receiving those benefits would not be part of the revised proposed class. ECF No. 48. With
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respect to Securitas’s second argument, concerning the inclusion of potential class members who
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have signed dispute resolution agreements, Deatrick contends that arbitration agreements are
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irrelevant to conditional certification; at this stage, the only question is whether the proposed
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plaintiffs are similarly situated “with respect to their allegations that the law has been violated.”
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Young v. Cooper Cameron Corp., 229 F.R.D. 50 (S.D.N.Y. 2005). ECF No. 48.
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United States District Court
Northern District of California
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Here, Plaintiff has met his burden to show that conditional certification is appropriate
under the lenient standard applicable at this first stage by presenting substantial allegations and
evidence in the form of Securitas documents and testimony that the putative class members, as
described in Plaintiff’s revised class definition, were subject to the same “vacation pay” policies.
The Court concludes that Defendant’s arguments concerning the dispute resolution agreement
have little to no bearing at this point in the litigation because they relate to whether “disparate
factual and employment settings” exist with respect to the putative class members and to “the
various defenses available to the defendant with respect to each plaintiff.” Lewis, 669 F. Supp. 2d
at 1127. These inquiries are reserved for the second stage of the certification process. Id. The
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Court will consider these arguments if and when Defendant moves to decertify. See Leuthold, 224
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F.R.D. at 467; Lewis, 669 F. Supp. 2d at 1128.
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For the foregoing reasons, the Court GRANTS Plaintiff’s motion and hereby conditionally
certifies a FLSA collective action defined as:
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All persons throughout the United States, including its territories
and possessions, who are or were employed by Securitas Security
Services USA, Inc., who worked under policies: (1) that did not
provide pay during vacation; (2) that paid lump-sum vacation pay on
the anniversary of employment; and (3) that required employees to
be employed on their anniversaries of employment to receive
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vacation pay. Counsel for Securitas, any Judge to whom this case is
assigned, as well as their respective staffs and immediate families
would be specifically excluded from the class.
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B.
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United States District Court
Northern District of California
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Notice and Consent Forms
Plaintiff requests that the Court approve the notice and consent forms attached Exhibits 1
and 2 to the Proposed Order filed with his motion. See ECF Nos. 45-9, 45-10. Defendant’s
proposed changes to the notice and consent forms appear at the conclusion of its motion. ECF No.
46.
The Court has concluded that conditional certification is appropriate. Accordingly,
Plaintiff may issue notice to the proposed class. See Kress v. PricewaterhouseCoopers, LLP, 263
F.R.D. 623, 628 (E.D. Cal. 2009) (“If the court finds initial certification appropriate, it may order
notice to be delivered to potential plaintiffs.”).
At the hearing on this motion, the Court stated its intent to grant Plaintiff’s motion for
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conditional certification, but stated several concerns with Plaintiff’s proposed notice and consent
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forms. Following the hearing, Plaintiff and Defendant also submitted post-hearing briefing on the
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appropriate form of notice. The Court has reviewed the parties’ competing proposals, and
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concludes that Plaintiff’s is the more appropriate. Accordingly, the Court APPROVES Plaintiff’s
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proposed Form of Notice, which is attached hereto as Exhibit 1.
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Following the hearing, Plaintiff and Defendant also submitted an agreed-upon Consent to
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Join form, Bulletin Board/Workplace Notice, and Reminder Postcard. These items, which are
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attached to this Order as Exhibits 2, 3 and 4, respectively, are also APPROVED.
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C.
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To facilitate notice, Plaintiff requests that the Court order Defendant to produce the names,
Notice Plan
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all known addresses, all known telephone numbers, and Social Security numbers of all security
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officers who have received lump-sum vacation pay at any time since October 28, 2010 pursuant to
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either the Plan or the Policy at issue. ECF Nos. 45, 45-8. Plaintiff further requests that the Court
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establish a 90-day period for affected persons to opt-in to the FLSA collective action. ECF Nos.
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45, 45-8. Plaintiff proposes a notice plan involving initial notification by mail, the issuance of
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reminder postcards, the use of telephone numbers to facilitate tracing potential class members if
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mailings are returned as undeliverable, notice via internet and social media, and workplace posting
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in lieu of or in addition to internet and social media posting. ECF Nos. 45, 48. Plaintiff has
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agreed that that the Court need not order Defendant to produce email addresses because Defendant
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has represented to the Court that Securitas does not collect or retain employee email addresses.
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ECF Nos. 46, 48.
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Defendant opposes the use of all forms of notice beyond regular mail as approved by the
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Supreme Court in Hoffmann-La Roche, 493 U.S. at 170, arguing that the proposed notice plan is
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overbroad. ECF No. 46. Defendant argues that information beyond employees’ names and
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mailing addresses should be withheld to protect employees’ privacy and to prevent improper
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solicitation by telephone. ECF No. 46. Defendant points out that Plaintiff has articulated no need
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United States District Court
Northern District of California
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for employees’ social security numbers. ECF No. 46. Defendant further objects to (1) the use of
reminder postcards; (2) Internet and social media posting, which could be misleading or
confusing; and (3) disclosure of private information to Plaintiff, rather than the third party
administrator responsible for implementing the notice plan.
Courts routinely require defendants to produce the contact information of putative class
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members. See, e.g., Hoffmann-LaRoche, 493 U.S. at 170 (holding that district courts have the
authority to compel the production of contact information of employees for purposes of facilitating
notice in FLSA collective actions). The Court therefore rejects Defendant Securitas’s suggestion
that disclosure of this information to Plaintiff violates employees’ privacy rights. The Court is
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persuaded that notice by mail, including the issuance of reminder postcards and telephone
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numbers to facilitate tracing potential class members if mailings are returned as undeliverable, is
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the most appropriate method to effectuate notice in this case.
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The Court will order Securitas to produce a list of potential class members, including the
full name, last known address, and telephone number of each.
IV.
CONCLUSION
For the foregoing reasons, the Court orders as follows:
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Plaintiff’s motion for conditional certification of the FLSA collective action is
GRANTED. The class defined as:
All persons throughout the United States, including its territories
and possessions, who are or were employed by Securitas Security
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Services USA, Inc., who worked under policies: (1) that did not
provide pay during vacation; (2) that paid lump-sum vacation pay on
the anniversary of employment; and (3) that required employees to
be employed on their anniversaries of employment to receive
vacation pay. Counsel for Securitas, any Judge to whom this case is
assigned, as well as their respective staffs and immediate families
would be specifically excluded from the class.
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is hereby conditionally certified, 29 U.S.C. § 216(b).
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United States District Court
Northern District of California
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The Court finds that notice should be sent to all potential collective action
plaintiffs, as described above.
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The Court orders Securitas to produce to Plaintiff in Microsoft Excel or a
comparable format (“the Class List”), within 14 days of the date of this Order, the names, all
known addresses, and all known telephone numbers of all security officers known as of the date of
this Order who have received lump-sum vacation pay at any time since October 28, 2010, pursuant
to (a) the Securitas USA Vacation Pay Plan, as amended and restated effective January 1, 2007
(the “Plan”) and/or (b) the Vacation Pay Policy, Security Officers and Other Employees
Performing Services Under Client Contracts.
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The Court approves Plaintiff’s revised Form of Notice, and the parties’ jointly
proposed Consent to Join form, Bulletin Board/Workplace Notice, and Reminder Postcard.
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Within ten days of receipt by Plaintiff of the Class List described in paragraph 3,
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and after first verifying and updating the addresses through the National Change of Address
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database, Plaintiff shall mail copies of the Notices and Consent to Join forms to all individuals on
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the Class List.
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6.
For any mailed Class Notices that are returned by the U.S. Postal Services as
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undeliverable as addressed, Plaintiff will perform an address trace process in order to obtain a
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more current mailing address. For any records where the address trace produces a potentially
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more current mailing address, Plaintiff will print and mail a Notice and Consent to the new
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address.
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7.
Prior to the response deadline, Plaintiff shall send a reminder postcard to all
individuals that have not filed a Consent to Join form.
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Plaintiff shall establish a website repository containing printer-friendly versions of
the Class Notices and Consent to Join forms, any other documents the parties wish to make
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available, and contact information for the notice administrator and Plaintiff’s counsel. A Consent
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to Join form may be completed online, so long as the online form provides a means by which the
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individual signifies his or her assent to the statements listed on the form comparable to signature,
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such as by checking a box on a web page.
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9.
Individuals shall be permitted to file Consent to Join forms postmarked or
completed online within 90 days after the date of first mailing set forth in paragraph 5, above.
IT IS SO ORDERED.
Dated: October 20, 2014
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JON S. TIGAR
United States District Judge
United States District Court
Northern District of California
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