Bradford v. CVS Caremark Corp. et al
Filing
79
ORDER denying Plaintiff Bradford's 64 Motion for Summary Judgment; granting in part and denying in part 67 Motion for Summary Judgment and to Decertify the Collective Action. Granting CVS's Cross-Motion for Summary Judgment and Denying Motion to Decertify the Collective Action. Signed by Judge Thomas W. Thrash, Jr on 10/10/2013. (ss)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
PHILIP BRADFORD
on behalf of himself and others
similarly situated,
Plaintiff,
v.
CIVIL ACTION FILE
NO. 1:12-CV-1159-TWT
CVS PHARMACY, INC.,
Defendants.
OPINION AND ORDER
This is an action under the Fair Labor Standards Act. It is before the Court on
the Plaintiff Bradford’s Motion for Summary Judgment [Doc. 64], the Defendant CVS
Pharmacy, Inc.’s Cross-Motion for Summary Judgment [Doc. 67], and the Defendant
CVS Pharmacy, Inc.’s Motion to Decertify the Collective Action [Doc. 67]. For the
reasons set forth below, the Plaintiff Bradford’s Motion for Summary Judgment [Doc.
64] is DENIED, the Defendant CVS Pharmacy, Inc.’s Cross-Motion for Summary
Judgment [Doc. 67] is GRANTED, and the Defendant CVS Pharmacy, Inc.’s Motion
to Decertify the Collective Action [Doc. 67] is DENIED.
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I. Background
On April 4, 2012, the Plaintiff Philip Bradford filed this lawsuit against the
Defendant CVS Pharmacy, Inc. under the Fair Labor Standards Act. (Compl. ¶¶
60-67.) The basis of the FLSA claim was an allegation that CVS mislabeled certain
employees as "Regional Loss Prevention Managers" (RLPMs) to avoid having to
make pay overtime as required by the FLSA. (Id. ¶¶ 29-33.) On July 3, 2012, Bradford
moved for conditional certification of a collective action, which was granted on
February 4, 2013.
In addition, Bradford asserted a claim seeking a declaratory judgment regarding
certain separation agreements that CVS entered into with some of its former
employees. In exchange for severance pay, some former employees of CVS allegedly
signed separation agreements where they waived their FLSA claims, agreed not to join
a collective action, agreed to keep material information confidential, and agreed to pay
CVS’s litigation costs in the event that they violated any of the waivers. (Mot. for
Summ. J., at 2-8.) Bradford alleges that these separation agreement waivers are
invalid, and have deterred potential opt-in plaintiffs from joining the collective action.
(Mot. for Summ. J., at 8-9, 17-18.) Bradford himself never signed a separation
agreement. Bradford now moves for summary judgment requesting that the Court
issue declaratory judgments for persons not a party to this action, rendering invalid
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provisions of separation agreements that the Court has not seen.1 CVS moves for
summary judgment as to the Plaintiff’s declaratory judgment claim, primarily arguing
that Bradford lacks standing to seek a declaratory judgment regarding separation
agreements that he was not a party to. CVS also moves to decertify the collective
action.
II. Legal Standard
“[W]hen a question about standing is raised at the motion to dismiss stage, it
may be sufficient to provide general factual allegations of injury resulting from the
defendant's conduct.” Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.
2005) (internal quotation marks omitted). “In contrast, when . . . standing is raised at
the summary judgment stage, the plaintiff can no longer rest on ‘mere allegations.’”
Id. at 975-76 (internal quotation marks omitted). “Instead, the plaintiff must ‘set forth’
by affidavit or other evidence ‘specific facts.’” Bischoff v. Osceola County, Fla., 222
F.3d 874, 878 (11th Cir. 2000) (internal quotation marks omitted). “The party
invoking federal jurisdiction bears the burden of proving standing.” Id.
1
Bradford does allege that CVS issued a standard form separation agreement
to all of the potential opt-in plaintiffs that signed it. However, there is no evidence for
this allegation, and it cannot be verified until the potential opt-in plaintiffs actually opt
in and submit a copy of their separation agreements.
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Summary judgment is appropriate only when the pleadings, depositions, and
affidavits submitted by the parties show that no genuine issue of material fact exists
and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).
The court should view the evidence and any inferences that may be drawn in the light
most favorable to the non movant. Adickes v. S.H. Kress and Co., 398 U.S. 144, 158159 (1970). The party seeking summary judgment must first identify grounds that
show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477
U.S. 317, 323-24 (1986). The burden then shifts to the non-movant, who must go
beyond the pleadings and present affirmative evidence to show that a genuine issue
of material fact exists. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986).
III. Discussion
A. Collective Action Scope
As a threshold matter, the Court must determine who is bringing the declaratory
judgment claim. Bradford argues that the claim is being brought by the collective
action class, which includes the plaintiffs that have already opted in. CVS argues that
a collective action may not include non-FLSA claims. Thus, it argues that Bradford
is individually bringing the declaratory judgment claim. There is no Eleventh Circuit
authority precisely on point. Nevertheless, the Court concludes that a collective action
under the FLSA may not include non-FLSA claims. Non-FLSA claims may be
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brought in the same suit either by individual parties, or pursuant to a parallel Rule 23
class action.
"As with any question of statutory interpretation, we begin by examining the
text of the statute to determine whether its meaning is clear." Harry v. Marchant, 291
F.3d 767, 770 (11th Cir. 2002). "Where the language Congress chose to express its
intent is clear and unambiguous, that is as far as we go to ascertain its intent because
we must presume that Congress said what it meant and meant what it said." U.S. v.
Steele, 147 F.3d 1316, 1318 (11th Cir. 1998). The relevant part of the FLSA reads:
"An action to recover the liability prescribed in either of the preceding sentences may
be maintained against any employer . . . in any Federal . . . court of competent
jurisdiction by any one or more employees for and in behalf of himself or themselves
and other employees similarly situated. 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." 29 U.S.C. § 216(b)
(emphasis added). Here, the statute expressly limits a collective action to FLSA claims
described in section 216. "[M]andating an opt-in class or an opt-out class is a crucial
policy decision. Congress has selected an opt-in class for FLSA actions." De Asencio
v. Tyson Foods, Inc., 342 F.3d 301, 311 (3d Cir. 2003). "[I]n the absence of contrary
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congressional mandates, class actions in federal court are governed by Fed.R.Civ.P.
23." Id. at 311 n.16.
Although a majority of the other Circuits have not expressly addressed this
question, they have suggested that a collective action brought under the FLSA is
limited to FLSA claims. Many Circuit Courts have allowed lawsuits that include a
collective action for the FLSA claims and a parallel Rule 23 class action for
non-FLSA claims. See, e.g., Shahriar v. Smith & Wollensky Restaurant Group, Inc.,
659 F.3d 234, 244 (2d Cir. 2011); Ervin v. OS Restaurant Services, Inc., 632 F.3d
971, 976-79 (7th Cir. 2011); Lindsay v. Government Employees Ins. Co., 448 F.3d
416, 424 (C.A.D.C. 2006). The Sixth Circuit, however, concluded that a collective
action brought under the FLSA may include non-FLSA claims. O'Brien v. Ed
Donnelly Enterprises, Inc., 575 F.3d 567, 580 (6th Cir. 2009). The Sixth Circuit
reasoned that supplemental jurisdiction allows non-FLSA claims to proceed as part
of the collective action. See id. However, the Sixth Circuit acknowledged that there
was no express statutory authority for broadening the scope of a collective action. See
id. ("Notwithstanding the lack of express statutory authority in the FLSA for
collective certification of non-FLSA claims . . .."). Furthermore, supplemental
jurisdiction may give the Court the authority to hear the additional claims, but it does
not give the Court the authority to hear them pursuant to a collective action.
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Bradford states that the Eleventh Circuit made clear that "by referring to them
as 'party plaintiff[s]' Congress indicated that opt-in plaintiffs should have the same
status in relation to the claims of the lawsuit as do the named plaintiffs." Prickett v.
DeKalb County, 349 F.3d 1294, 1297 (11th Cir. 2003). However, the question in that
case was whether opt-in plaintiffs had to opt in for each individual FLSA claim. Id.
at 1296-97. The Court of Appeals rejected the district court's conclusion that the opt-in
plaintiffs had to "opt in again, in order to be considered as plaintiffs in regard to any
FLSA claim which was not in the complaint as it stood at the time they originally
joined." Id. Here, the question is whether a collective action can ever encompass
non-FLSA claims. The Court concludes that the conditionally certified collective
action cannot include Bradford’s declaratory judgment claim. Thus, the opt-in
plaintiffs that allegedly signed separation agreements cannot confer standing for the
declaratory judgment claim because they opted in to a collective action that only
encompassed the unpaid overtime FLSA claim.
B. Standing
The question then is whether Bradford has standing to seek a declaratory
judgment regarding the validity of separation agreements between CVS and third
parties. He does not. "A party has standing to bring an action under the Declaratory
Judgment Act if an actual controversy exists . . . which is the same as an Article III
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case or controversy." Arris Group, Inc. v. British Telecommunications PLC, 639 F.3d
1368, 1373 (11th Cir. 2011) (internal quotation marks omitted). An actual controversy
exists when the "dispute [is] definite and concrete, touching the legal relations of
parties having adverse legal interests." MedImmune, Inc. v. Genentech, Inc., 549 U.S.
118, 126 (2007) (emphasis added). "An 'adverse legal interest' requires a dispute as
to a legal right-for example, an underlying legal cause of action that the declaratory
defendant could have brought or threatened to bring." Arris Group, 639 F.3d at 1374.
Here, Bradford never executed a separation agreement with CVS. The dispute
regarding the separation agreements does not touch upon Bradford's legal relations
with CVS. CVS may not sue Bradford for entering into a collective action, thus there
is no adverse legal interest between Bradford and CVS concerning the enforceability
of the separation agreements. Many courts have reached the same conclusion. See,
e.g., Evans v. Sirius Computer Solutions, Inc., No. 3:12-CV-46-AA, 2012 WL
1557294, at *2 (D. Or. May 1, 2012) ("Generally, a party does not have standing to
request declaratory judgment regarding the enforceability of a contract to which it is
neither a party nor a third-party beneficiary."); Tri-State Generation and Transmission
Ass'n, Inc. v. BNSF Ry. Co., No. CV 08-272-PHX-MHM, 2008 WL 2465407, at *2
(D. Ariz. June 17, 2008) ("[A] party does not have standing to bring a declaratory
judgment claim regarding rights and obligations under a contract to which it is neither
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a party nor a third-party beneficiary."); Lufthansa Systems Infratec GmbH v. Wi-SKY
Inflight, Inc., Civil Action No. 3:10CV745-JAG, 2011 WL 862314, at *7 (E.D. Va.
Mar. 9, 2011) ("[A] party does not possess standing to bring a declaratory judgment
claim regarding rights and obligations under a contract to which it is neither a party
nor a third-party beneficiary.").
Bradford argues that he has standing because he suffered an injury to his right
to “bring, join, and participate in a collective action.” (Pl.’s Reply to Def.’s Resp. Mot.
for Summ. J., at 4.) Bradford's argument is that the severance agreements deter people
from joining his collective action, and thus his right to a collective action is "injured."
(Id. at 6, 12-15.) This argument is without merit. First, the claimed injury is
non-existent. The severance agreements do not preclude his ability to join a collective
action, and this case is evidence that it did not preclude his ability to initiate one. The
fact that the severance agreements may impact the number of people that choose to
join the collective action is of no import.2 See Cameron-Grant v. Maxim Healthcare
Services, Inc., 347 F.3d 1240, 1249 (11th Cir. 2003) ("Even if the § 216(b) plaintiff
can demonstrate that there are other plaintiffs 'similarly situated' to him . . . he has no
right to represent them."). Second, even if Bradford did suffer an injury to this
2
To be clear, CVS is incapable of depriving him of this right. His right to a
collective action is a procedural right he receives from a federal tribunal, not a private
party.
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procedural right, it is not an injury that gives him standing to litigate a third-party's
contract claim. See Warth v. Seldin, 422 U.S. 490, 500 (1975) ("[S]tanding . . . often
turns on the nature and source of the claim asserted."). To establish standing for a
contract action, a plaintiff must show that he has a legally protected interest in the
contract. See Avenue CLO Fund Ltd. v. Bank of America, NA, 709 F.3d 1072, 1077
(11th Cir. 2013) ("To establish standing for Article III purposes, the Term Lenders
must show that they held a legally protected interest in the Credit Agreement which
was injured by the Revolving Lenders."); Johnson v. University Health Services, Inc.,
161 F.3d 1334, 1338 (11th Cir. 1998) (“If A violates his supply contract with B, C
cannot sue A for breach of contract because C is not a party to the contract, and thus
not among the class of people protected by breach of contract. . . .These two facets of
a cause of action-class of plaintiff and type of injury-are the basis for the requirement
that a plaintiff have ‘standing.’”). Bradford's argument would permit any person
indirectly affected by a contract for which he is not a party to litigate its validity, no
matter how far attenuated. Third, even if Bradford overcame the cognizable injury
hurdle, he cannot establish causation. The injury must be one that "can be traced to the
challenged action of the defendant, and not injury that results from the independent
action of some third party not before the court." Simon v. Eastern Kentucky Welfare
Rights Organization, 426 U.S. 26, 41-42 (1976) (emphasis added). Here, even if
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potential opt-in plaintiffs elect not to join out of fear of having to defend against a
breach of contract suit, the decision is no less theirs. They are not precluded from
joining the collective action and challenging the contract waivers if CVS invokes them
as a defense. Bradford lacks standing to bring the declaratory judgment claim, thus
summary judgment as to that claim should be granted.3
C. Decertification
CVS requests that the Court decertify the collective action. (Def.'s Resp. to Pl.'s
Mot. for Summ. J., at 18.) CVS argues that based on the circumstances, some of the
FLSA claim waivers may be enforceable. (Id. at 20.) It argues that evaluating the
enforceability of the waivers would require a fact-intensive inquiry for each opt-in
plaintiff, thus establishing that they are not "similarly situated." (Id. at 20-23.) The
Eleventh Circuit has "sanctioned a two-stage procedure for district courts to
effectively manage FLSA collective actions in the pretrial phase." Morgan v. Family
3
CVS is correct that in Hageman v. Accenture LLP, No. CIV. 10-1759, 2010
WL 3749246 (D. Minn. Sep. 21, 2010) and Merritt v. WellPoint, Inc., 615 F. Supp.
2d 440 (E.D. Va. 2009), the courts concluded that a plaintiff who did not sign a waiver
lacked standing to challenge its validity. They went on to conclude that, as a result,
the named plaintiffs did not have standing to bring declaratory judgment claims on
behalf of the collective action. The Court reaches the same conclusion regarding
Bradford's standing. However, the Court does not address the latter question -Bradford's standing to bring the claim on behalf of the opt-in plaintiffs -- because the
Court concludes that the collective action may not include the declaratory judgment
claims to begin with.
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Dollar Stores, Inc., 551 F.3d 1233, 1260 (11th Cir. 2008). "This first step is . . .
referred to as conditional certification since the decision may be reexamined once the
case is ready for trial." Id. at 1261. "The second stage is triggered by an employer's
motion for decertification." Id. "This second stage is less lenient, and the plaintiff
bears a heavier burden." Id.
Here, CVS goes to the second step prematurely. This step is supposed to occur
"just before the end of discovery, or at its close." Id. The Court should have a "much
thicker record than it had at the notice stage, and can therefore make a more informed
factual determination of similarity." Id.; see also Anderson v. Cagle's, Inc., 488 F.3d
945, 953 (11th Cir. 2007) ("[T]he second stage . . . is typically precipitated by a
motion for 'decertification' . . . usually filed after discovery is largely complete and the
matter is ready for trial[,] . . . the court has much more information on which to base
its decision."). CVS's allegation that there will be too many material factual disparities
between the potential opt-in plaintiffs is too speculative without the presence of the
other opt-in plaintiffs and evidence regarding their circumstances.4 See Anderson, 488
F.3d at 953 (Noting that the court may base a decision to decertify on material
4
CVS acknowledges that its allegations cannot be confirmed without further
discovery: "While such factors may not be present for some putative collective
members (although one cannot tell without further discovery . . . ) they very well may
be present for other putative opt-ins." (Def.'s Reply Br., at 16-17.)
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distinctions revealed by the evidence.). The mere fact that some opt-in plaintiffs
signed separation agreements is not a reason in itself to decertify. See Morgan, 551
F.3d at 1263 ("Just because the inquiry is fact-intensive does not preclude a collective
action where plaintiffs share common job traits."). It is possible that the final
collective action class will include mostly those who did not sign separation
agreements, as CVS concedes that it is not their general policy to offer separation pay
to RLPMs. (Def.'s Resp. to Pl.'s Mot. for Summ. J., at 3.) Accordingly, CVS's motion
for decertification should be denied for now.
IV. Conclusion
For the reasons set forth above, the Court DENIES the Plaintiff Bradford’s
Motion for Summary Judgment [Doc. 64], GRANTS the Defendant CVS Pharmacy,
Inc.’s Cross-Motion for Summary Judgment [Doc. 67], and DENIES the Defendant
CVS Pharmacy, Inc.’s Motion to Decertify the Collective Action [Doc. 67].
SO ORDERED, this 10 day of October, 2013.
/s/Thomas W. Thrash
THOMAS W. THRASH, JR.
United States District Judge
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