Geiger et al v. Master United 12 LLC et al

Filing 110

ORDER granting 62 Plaintiffs' Motion for Conditional Collective Action Certification and Notice Approval. By Judge Robert E. Blackburn on 3/10/2015.(alowe)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Robert E. Blackburn, Judge
Civil Action No. 14-cv-00240-REB-NYW
ZACH GEIGER, et al.,
Plaintiffs,
v.
Z-ULTIMATE SELF DEFENSE STUDIOS LLC. et al.,
Defendants.

ORDER GRANTING MOTION FOR CONDITIONAL CERTIFICATION
Blackburn, J.
This matter is before me on the Plaintiffs’ Motion for Conditional Collective
Action Certification and Notice Approval [#62]1 filed August 27, 2014. The
defendants filed a response [#65], and the plaintiffs filed a reply [#67]. I grant the
motion.
I. JURISDICTION
I have jurisdiction over this case under 28 U.S.C. § 1331 (federal question), 29
U.S.C. § 216(b) (Fair Labor Standards Act), and 28 U.S.C. § 1367 (supplemental).
II. STANDARD OF REVIEW
This case involves alleged violations of the wage and record keeping provisions
of the Fair Labor Standards Act (FLSA or Act). The plaintiffs seek to pursue a collective
action under the Act on behalf of themselves and other similarly situated current and
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“[#62]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.

former Chief Instructors employed by the defendants. Section 216(b) of the FLSA
provides the exclusive means of bringing such class-wide claims to redress alleged
violations of the FLSA. See 29 U.S.C.A. § 216(b); Brown v. Money Tree Mortgage,
Inc., 222 F.R.D. 676, 678-79 (D. Kan. 2004). Contrary to the procedures governing a
typical class action under Rule 23, plaintiffs who wish to participate in a FLSA collective
action must opt in to the action. See 29 U.S.C. § 216(b) (“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.”); In re American
Family Mutual Insurance Co. Overtime Pay Litigation, 638 F.Supp.2d 1290, 1298
(D. Colo. 2009).
A collective action under the FLSA may be maintained only by and among
employees who are “similarly situated.” The Tenth Circuit has adopted a two-step
analysis governing this determination. At the initial “notice stage,” the trial court must
determine whether plaintiffs have made “substantial allegations that the putative class
members were together the victims of a single decision, policy, or plan.” Thiessen v.
General Electric Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001), cert. denied,
536 U.S. 934 (2002) (citation and internal quotation marks omitted). The court makes
this determination relying on the allegations of the complaint and any supporting
affidavits filed by plaintiffs. Brown, 222 F.R.D. at 680. Certification at this step is
conditional, and the standard of proof “is a lenient one that typically results in class
certification,” allowing notice to be sent to the putative class members and discovery to
be undertaken. Id. at 679.
After discovery is complete, the second, or “decertification,” stage occurs. At that
point, the court applies a much stricter standard to determine whether class members
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are similarly situated and, consequently, whether the action should continue as a
collective action. In making that determination, the court must evaluate, inter alia, “the
disparate factual and employment settings of the individual plaintiffs; the various
defenses available to defendant which appear to be individual to each plaintiff; fairness
and procedural considerations; and whether plaintiffs made any required filings before
instituting suit.” Brown, 222 F.R.D. at 679 (citing Thiessen, 267 F.3d at 1103).
III. FACTS
The plaintiffs brought this action on behalf of themselves and other similarly
situated current and former Chief Instructors employed by the defendants. The action
was brought under 29 U.S.C. § 216(b).
According to the plaintiffs, the defendants have created a complex matrix of
corporate entities which operate martial arts studios known as dojos. The studios
generally use the name Z-Ultimate Defense. Each studio is its own corporate entity,
and often a studio is owned by a separate corporation. The required marketing,
accounting and training services for each studio are all provided by additional separate
corporate entities, all of which are operated under the direction and control of the
individual defendants, William Clark, Paul Taylor, Kris Eszlinger, Frank Ley, and Hans
Prosch, acting through various holding companies. The plaintiffs contend this scheme
is specifically designed to shield the defendants from liability for violations of state and
federal law including the FLSA.
The plaintiffs allege that defendants, Paul Taylor, William Clark, Frank Ley, Hans
Prosch, Kris Ezslinger, and the Z-Ultimate Enterprise, purposefully deceived Chief
Instructors about their employee classification. Each Chief Instructor allegedly was
required to work more than 75 hours per week training students, marketing Z-Ultimate,
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and maintaining each dojo while being paid a rate far below the minimum wage and
overtime pay requirements of the FLSA. This is accomplished, the plaintiffs allege, by
classifying Chief Instructors as independent contractors rather than as employees.
IV. ANALYSIS
The actions alleged in the complaint [#22], if proven, violate the provisions of the
FLSA. Further, the allegations in the complaint constitute substantial allegations that
the plaintiffs were together the victims of a single decision, policy, or plan of the
defendants. The contrary arguments of the defendants are not persuasive.
The proposed Notice of Collective Action Lawsuit shown at Exhibit P to the
Plaintiffs’ Motion for Conditional Collective Action Certification and Notice
Approval [#62] generally provides adequate notice to potential plaintiffs and is
approved. However, the plaintiffs have not demonstrated a valid basis to include in the
notice the statement, shown on page one of the proposed notice, “You are eligible to
join this lawsuit if you believe you were paid less than $670.62 in any one-week period.”
That statement must be excised from the notice.
Because potential issues concerning tolling of the statute of limitations may
remain, the Notice of Collective Action Lawsuit shall provide notice to Chief
Instructors who worked for the defendants between March 10, 2011, and the present.
To the extent the plaintiffs seek to include in this case claims which fall outside of the
generally applicable period of limitations, the plaintiffs will be required to demonstrate a
valid basis for tolling the period of limitations as to such plaintiffs and claims.
The form of notice delivered to potential plaintiffs shall provide that any and all
Consent To Join Collective Action forms must be received by counsel for plaintiffs no
later than June 10, 2015. The Consent To Join Collective Action form proposed by
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the plaintiffs, shown at Exhibit Q to the Plaintiffs’ Motion for Conditional Collective
Action Certification and Notice Approval [#62], is approved.
V. ORDERS
THEREFORE, IT IS ORDERED as follows:
1. That the Plaintiffs’ Motion for Conditional Collective Action Certification
and Notice Approval [#62] filed August 27, 2014, is GRANTED on the terms stated in
this order;
2. That under 29 U.S.C. § 216(b), this case is CONDITIONALLY CERTIFIED as
a collective action concerning the claims of the named plaintiffs under the Fair Labor
Standards Act on behalf of all current and former Chief Instructors who worked for the
defendants or any of them, whether designated as an employee or as an independent
contractor, between March 10, 2011, and the present and who (a) were not paid the
minimum wage for all hours worked; and/or (b) were not paid for hours worked in
excess of 40 hours in one week at the required overtime rate of pay; and/or (c) for
whom the defendants failed to keep accurate employment records;
3. That with the amendments specified in this order, the Notice of Collective
Action Lawsuit and the Consent To Join Collective Action forms proposed by the
plaintiffs are APPROVED;
4. That the Notice of Collective Action Lawsuit form SHALL PROVIDE that
any and all Notice of Collective Action Lawsuit forms must be received by counsel for
plaintiffs no later than June 10, 2015;
5. That the Notice of Collective Action Lawsuit form SHALL NOT INCLUDE
the statement ““You are eligible to join this lawsuit if you believe you were paid less than

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$670.62 in any one-week period”;
6. That on or before March 30, 2015, the defendants SHALL PROVIDE to the
plaintiffs the names, addresses, telephone numbers, and e-mail addresses of all current
and former Chief Instructors employed by any of the defendants on or after March 10,
2011, whether designated as an employee or as an independent contractor;
7. That when identifying current and former Chief Instructors, as required in
paragraph six (6) above, the defendants SHALL SPECIFY also the dates of
employment, whether designated as an employee or as an independent contractor, of
each such individual and the specific location and business name at which each such
person was employed by any of the defendants; and
8. That on or before April 20, 2015, counsel for the plaintiffs SHALL DELIVER
the Notice of Collective Action Lawsuit and the Consent To Join Collective Action
forms, as approved in this order, to all potential plaintiffs via first class mail.
Dated March 10, 2015, at Denver, Colorado.
BY THE COURT:

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