Lucas v. JJ's of Macomb, Inc.
Filing
32
OPINION: Plaintiff's Motion for Equitable Tolling of the Statute of Limitations (d/e 12 ) is GRANTED. The statute of limitations is tolled from March 9, 2017 to December 14, 2017 on Plaintiff's claim with respect to all of Defendant's current and former employees who are eligible to opt-in to this litigation. SEE WRITTEN OPINION. Entered by Judge Sue E. Myerscough on 06/28/2018. (SKN, ilcd)
E-FILED
Thursday, 28 June, 2018 01:52:50 PM
Clerk, U.S. District Court, ILCD
IN THE UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
SEBASTIAN LUCAS,
Plaintiff,
v.
JJ’S OF MACOMB, INC.,
Defendant.
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No. 16-cv-3328
OPINION
SUE E. MYERSCOUGH, U.S. District Judge.
This cause is before the Court on Plaintiff Sebastian Lucas’s
Motion for Equitable Tolling of the Statute of Limitations (d/e 12).
For the reasons stated below, the Court GRANTS the motion.
I. BACKGROUND
Plaintiff filed his Complaint (d/e 1) on December 20, 2016 and
his Amended Complaint (d/e 26) on May 30, 2018. Plaintiff brings
claims under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201
et seq. Plaintiff alleges that Defendant JJ’s of Macomb, Inc., a
Jimmy John’s franchisee, misclassified him and other assistant
managers as exempt from the FLSA’s overtime provisions. Plaintiff
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intends to file a motion to certify a collective action under § 216(b)
of the FLSA and to obtain court authorization to notify all similarly
situated current and former assistant managers of Defendant of the
opportunity to join this case. See Motion at 2.
In July 2014, over two years before Plaintiff brought this
action, another assistant manager employed at a different
franchisee than Defendant brought an FLSA collective action in the
Northern District of Illinois. That plaintiff sued her franchisee and
the Jimmy John’s corporate franchisor for unpaid overtime wages.
The Court certified the collective action, and 660 plaintiffs opted-in,
including Mr. Lucas. Mr. Lucas [hereinafter Plaintiff] then brought
this action against Defendant, who was his franchisee employer.
Defendant is different from the franchisee defendant in the
Northern District—the Northern District did not have personal
jurisdiction over Defendant. Over a dozen Northern District opt-in
plaintiffs have filed similar suits across the country. See e.g.,
Ruder v. CWL Invs. LLC, No. 16-cv-4460, 2017 WL 3834783 (D.
Ariz.); Coyne v. Four Leaf Clover Invs. LLC, No. 16-cv-1937 (E.D.
Mo.); Beck v. Savory Sandwiches, Inc., 265 F. Supp. 3d 1209, No.
17-cv-1009 (D. Col. 2017). Plaintiff brings the same claims against
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Defendant as those alleged in the Northern District against the
corporate franchisor.
On March 9, 2017, the Northern District enjoined Plaintiff and
the other collective action members who had brought similar cases
from pursuing the proceedings in this and the other District Courts.
See In re Jimmy John’s Overtime Litigation, No. 14-cv-5509 (N.D.
Ill.). On April 3, 2017, pursuant to a joint motion by both parties,
and in light of the injunction, this Court stayed the proceedings in
this matter pending further order of the Northern District. On
December 14, 2017, the Seventh Circuit reversed the Northern
District’s injunction against the proceedings in other courts against
other franchisees. See In re Jimmy John’s Overtime Litigation, 877
F.3d 756 (7th Cir. 2017). On February 28, 2018, this Court lifted
the stay on these proceedings pursuant to Plaintiff’s motion.
On April 6, 2017, three days after this Court stayed this case,
Plaintiff filed a Motion for Equitable Tolling of the Statute of
Limitations (d/e 12) asking the Court to toll the statute of
limitations from March 9, 2017, the date on which the Northern
District issued the injunction, to December 14, 2017, when the
Seventh Circuit reversed the injunction. On September 20, 2017,
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Plaintiff supplemented his motion with an order in Beck v. Savory
Sandwiches, Inc., a case similar to this one in which the Court
tolled the statute of limitations on the plaintiff’s claims with respect
to the defendant’s (another Jimmy Johns franchise operator)
current and former employees who were eligible to opt-in to that
case. (d/e 15-1).
II. LEGAL BACKGROUND
Under the FLSA, employees may bring a collective action
against an employer to recover unpaid overtime compensation on
behalf of themselves and on behalf of other similarly situated
employees. 29 U.S.C. § 216(b). Unlike class actions under Federal
Rule of Civil Procedure 23(b), where potential plaintiffs are included
in the class unless they opt out, potential plaintiffs in FLSA
collective actions must affirmatively opt in to the suit. Alvarez v.
City of Chi., 605 F.3d 445, 448 (7th Cir. 2010).
Moreover, under the FLSA, the statute of limitations continues
to run for each potential plaintiff until he or she opts in to the
lawsuit. The FLSA requires that an action “be commenced within
two years after the cause of action accrued,” unless the violation
was willful, in which case a three-year statute of limitations applies.
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29 U.S.C. § 255(a). An FLSA lawsuit commences as to an individual
claimant on: (1) the date the complaint was filed if the claimant is
specifically named as a party in the complaint and he files his
written consent to become a party plaintiff on such date; or (2) the
date on which written consent is filed. 29 U.S.C. § 256. Therefore,
the filing of the lawsuit does not toll the statute of limitations for
potential class members until they file their own consents.
The statute of limitations in FLSA suits is not jurisdictional
and equitable tolling can be applied. Bergman v. Kindred
Healthcare, Inc., 949 F. Supp. 2d 852, 860 (N.D. Ill. 2013).
Equitable tolling is warranted if the litigant establishes (1) that he
has been pursuing his rights diligently; and (2) that some
extraordinary circumstance prevented timely filing. Knauf
Insulation, Inc. v. Southern Brands, Inc., 820 F.3d 904, 908 (7th
Cir. 2016).
III. ANALYSIS
Plaintiff argues that the Court should equitably toll the statute
of limitations for the nine–month period that the injunction was in
place to avoid the possibility that putative plaintiffs will lose the
potential benefits of the lawsuit.
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A. Plaintiff diligently pursued this action and extraordinary
circumstances exist.
For equitable tolling to apply, the plaintiff must show: 1) that
he pursued his rights diligently and 2) that extraordinary
circumstances prevented a would-be party’s timely filing. Knauf
Insulation, Inc., 820 F.3d at 908. Courts grant equitable tolling
sparingly. Bensman v. U.S. Forest Serv., 408 F.3d 945, 964 (7th
Cir. 2005).
Plaintiff has diligently prosecuted this case. Plaintiff filed his
Motion to Toll the Statute of Limitations three days after this Court
stayed these proceedings. Before filing his motion, Plaintiff
obtained a modification to the injunction by the Northern District
allowing him to file the motion. This action commenced when
Plaintiff filed suit after opting into the collective action in the
Northern District to preserve the claims against this franchisee.
This case also involves extraordinary circumstances.
Litigation in the Northern District resulted in an injunction of the
proceedings in this Court. See In re Jimmy John’s Overtime
Litigation, No. 14-cv-5509 (N.D. Ill.). Such an injunction is
“particularly rare.” See In re Jimmy John’s Overtime Litigation, 877
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F.3d at 762. In response, this Court stayed these proceedings,
pending further action by the Northern District. These
circumstances are substantially more extraordinary than the delay
caused by the Court’s consideration of a motion for conditional
certification, which some courts have even found to constitute
extraordinary circumstances. See e.g., Bergman, 949 F. Supp. 2d
at 861 (24-month delay in ruling on pending motion for conditional
certification was extraordinary circumstance justifying equitable
tolling); but see Sylvester v. Wintrust Financial Corp., No. 12 C
01899, 2014 WL 10416989, at *2 (N.D. Ill. Sept. 26, 2014) (refusing
to toll statute of limitations while motion for conditional certification
was pending because “there is nothing extraordinary about a
motion for conditional certification and the delay in notice while
that motion is pending . . . . [t]o hold otherwise would be to opine
that equitable tolling should be granted in every § 216(b) case as a
matter of course during the pendency of a conditional class
certification request, thereby transforming this extraordinary
remedy into a routine, automatic one.”) (internal quotations
omitted). Other courts have allowed equitable tolling of FLSA
claims where the case’s litigation posture has delayed the plaintiff’s
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filing of a motion for conditional certification or the court’s
consideration of such a motion—such as a stay entered like the one
entered here. See e.g., Adams v. Tyson Foods, Inc., No. 07-CV4019, 2007 WL 1539325, at *2 (W.D. Ark. May 25, 2007) (tolling the
statute of limitations during stay entered pending a decision by
another court whether to transfer case into MDL).
Some courts have noted that the court cannot assess the
diligence of a plaintiff who has not opted in. See Davis v. Vanguard
Home Care, LLC, No. 16-CV-7277, 2016 WL 7049069, at *1 (N.D.
Ill. Dec. 5, 2016) (but also noting that the “court need not go as far
as holding that equitable tolling claims on a class-wide basis are
always unripe before a plaintiff opts in but it does find that
Plaintiffs’ request for equitable tolling is unripe given the posture of
this case”). However, the extraordinary circumstances of this case
are the very reason the Court cannot assess the diligence of the
putative plaintiffs. These circumstances have precluded their
notice of the action.
Courts have considered several factors when determining
whether to toll the statute of limitations despite preclusion of
assessment of the diligence of the putative plaintiffs: 1) whether the
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extraordinary circumstances were beyond the control of the plaintiff
or the putative plaintiffs; 2) whether refusal to toll the statute of
limitations would result in hardship for the putative plaintiffs; and
3) whether tolling prejudices the defendant. Struck v. PNC Bank
N.A., 931 F. Supp. 2d 842, 846 (S.D. Ohio 2013) (citing Cook v.
Comm’r of Soc. Sec., 480 F.3d 432, 437 (6th Cir. 2007)).
i. The extraordinary circumstances are beyond the control of
Plaintiff and the putative plaintiffs.
The extraordinary circumstances of this case are well-beyond
the control of Plaintiff or the potential class members. For tolling to
apply, the circumstances causing the delay and the putative
plaintiff’s ignorance must be an “external obstacle . . . that stood in
his way.” Menominee Indian Tribe of Wisconsin v. United States,
136 S.Ct. 750, 756 (2016) (internal quotations omitted). Here, the
putative plaintiffs did not receive notice due to the “external
obstacle” of the injunction. Indeed, the injunction even sought to
remove this Court’s control over its own proceedings. The stay was
not the cause of the delay. See Miller-Basinger v. Magnolia Health
Systems, Inc., No. 2:15-cv-089, 2016 WL 773191, at *2 n.2 (S.D.
Ind. Feb. 22, 2016) (refusing to toll statute of limitations and noting
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that plaintiff did not seem to be concerned about potential prejudice
to putative plaintiffs when she sought to stay the court’s ruling on
her motion to certify the collective action). The cause of the delay
was well-beyond the control of the parties.
ii. Refusal to toll the statute of limitations would result in
hardship to the putative plaintiffs.
A denial of Plaintiff’s request to toll the statute of limitations
would result in hardship to putative plaintiffs who would lose their
time to bring their claim as part of this litigation due to the delay.
This lost time works to deprive the putative plaintiffs of their claim.
See Partlow v. Jewish Orphans’ Home of Southern Cal., Inc., 645
F.2d 757, (9th Cir. 1981) (equitable tolling proper where plaintiffs
were without fault and “practical effect of not tolling the statute
would be to bar forever any claim” the employees had against
defendants), abrogated on other grounds by Hoffman-LaRoche, Inc.
v. Sperling, 493 U.S. 165 (1989). Just as the inherent benefits of
the collective action “will disappear” if plaintiffs are not notified of
the suit before their statute of limitations expires, HoffmanLaRoche, 493 U.S. at 170, putative plaintiffs will have lost the time
during the stay that could have been used to notify potential class
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members of the action. The nine-month stay constitutes 25 percent
of the three-year statute of limitations for willful FLSA violations
alleged in the Complaint or 37.5 percent of the two-year statute of
limitations. See Amend. Compl. ¶ 52. The delay constitutes a
substantial portion of the putative plaintiff’s time to bring their
claims.
Defendant argues that putative plaintiffs could have joined
this action or brought their own suit during the stay, and,
therefore, any extraordinary circumstances that may exist did not
prevent the potential opt-ins from joining the suit or otherwise
pursuing their rights. See Sylvester, 2014 WL 10416989, at *3
(“[N]othing prevented any former employee of the defendants from
either filing their own law suit or filing an opt-in notice for this law
suit before a ruling on the conditional certification motion was
issued.”); Perez v. Comcast, No. 10 C 1127, 2011 WL 5979769, at
*4 (N.D. Ill. Nov. 29, 2011) (refusing to toll the statute of limitations
because putative plaintiffs were not precluded from joining case
during stay pending approval of settlement in similar case and
resolution of pending motion to dismiss). While it is possible that a
putative plaintiff may know of his claim and join the suit or bring
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one of his own without notice, that possibility does not mean that
putative plaintiffs’ rights are not affected by delay. Defendant’s
argument “ignores the realities of FLSA claims” and “would go
against ever applying equitable tolling to a potential opt-in.”
Bergman, 949 F. Supp. 2d at 861. Further, where, as here, the
putative plaintiffs have not received notice of the action because the
Court has not conditionally certified a class due to the stay, their
ignorance is a reasonable result of the unique procedural posture of
this case. To deprive the putative plaintiffs of the time to bring their
claim during which they were reasonably ignorant of the action is to
deprive them of their right of action. Stickle v. SCIWestern Market
Support Center, L.P., No. CV 08-083, 2008 WL 4446539, at *22-23
(D. Ariz. Sept. 30, 2008).
iii. Tolling will not prejudice Defendant.
The substantial hardship suffered by the putative plaintiffs
must be balanced with the potential prejudice that tolling could
impose on the defendant. “As an equitable matter, the inquiry
should focus on fairness to both parties. As part of the
determination of the possible prejudice to the defendant, the court
should ask whether the defendant was aware of the potential scope
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of liability when the complaint was filed.” Kellgren v. Petco Animal
Supplies, Inc., No. 13cv644, 2014 WL 2558688, at *4 (S.D. Cal.
June 6, 2014) (finding the potential opt-in plaintiffs would be
unfairly prejudiced by the court’s delay in resolving the defendant’s
motion to dismiss and tolling the time between the date the first
motion to dismiss became fully briefed until the defendant filed its
answer).
Tolling will not unfairly prejudice Defendant because
Defendant was able to know the potential scope of its liability when
the Amended Complaint was filed. The Complaint defines the
putative plaintiffs as non-exempt assistant managers of Defendant
during the statutory period. See Amend. Compl. ¶ 1. It is
reasonable to assume that Defendant possesses the identity of
those persons and their work records (hours, pay, etc.). Therefore,
it is reasonable to assume that Defendant was well-aware of its
potential liability at the filing of the Amended Complaint. See
Kellgren, 2014 WL 2558688, at *5.
Given that the extraordinary circumstances of this case
prevented Plaintiff from seeking conditional certification of the
collective action and from seeking authorization to notify putative
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plaintiffs of the action, the Court agrees with Plaintiff that the
statute of limitations should be tolled for the period in which the
injunction precluded Plaintiff from pursuing this action. During
this finite period of time—from March 9, 2017 to December 14,
2017—an extraordinary circumstance existed: another court
enjoined the proceedings in this court. Despite the injunction,
Plaintiff was diligent to preserve the claims in this Court by seeking
leave from the Northern District of Illinois to file the Motion to Toll
the Statute of Limitations in this Court. In a very similarly situated
case, the Colorado District Court in Beck v. Savory Sandwiches,
Inc., tolled the statute of limitations due to the same extraordinary
circumstances as exist in this case—injunction of the proceedings
by the Northern District. 265 F. Supp. 3d at 1210. This Court
concludes that the injunction prevented potential plaintiffs from
joining the lawsuit because the stay prevented Plaintiff from seeking
Court authority to send out notices. Putative plaintiffs were not
made aware of this action and likely their claims because Plaintiff
could not pursue this litigation. While putative plaintiffs may have
been able to know about their claims without notification, it is
unfair and unrealistic to assume that they could somehow have
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become aware of this proceeding without notification. Any failure
on their part to timely file during the nine months during which the
injunction was in place arose from circumstances beyond their
control. Therefore, those nine months should not be counted
towards their deadline to file their claim(s) and to join the action.
B. This Opinion is Not Advisory.
Defendant argues that an order tolling the statute of
limitations would be advisory, arguing that tolling may have no
effect because, since Plaintiff has not sought certification, it is
possible that no plaintiff will opt-in or that the Court will not grant
the certification. See Davis, 2016 WL 7049069, at *2 (finding
several reasons not to toll, including that “even if one or more
classes is conditionally certified, whether anyone else will opt in
remains to be seen”). The Court “is without power to give advisory
opinions, because such opinions cannot affect the rights of the
litigants in the case before it.” United States v. Cook, 795 F.2d 987,
994 (Fed. Cir. 1986).
Defendant cites to several cases in which a court has denied a
motion to toll the statute of limitations because the court had not
yet conditionally certified the collective action. In United States v.
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Cook, the Federal Circuit reversed the district court’s tolling of the
statute of limitations before the court had conditionally certified the
collective action. The Federal Circuit reasoned that the district
court’s order was advisory because the putative plaintiffs were not
party to the controversy and, therefore, the order could not affect
the rights of the litigants in the case. Id.; see also Miller-Basinger,
2016 WL 773191, at *2 (finding it premature to toll the statute of
limitations for potential plaintiffs before ruling on the motion for
conditional certification).
It is axiomatic that the Court cannot issue advisory orders.
However, Cook and the other cases Defendant relies on do not
establish that tolling the statute of limitations before conditional
certification is necessarily advisory. Numerous courts have tolled
the statute of limitations for putative plaintiffs prior to conditional
certification of a collective action. See, e.g., Stickle v. SCIWestern
Market Support Center, L.P., No. CV 08-083, 2008 WL 4446539, at
*22-23 (D. Ariz. Sept. 30, 2008) (tolling granted prior to filing of
motion for conditional certification in the interest of justice to
preserve putative plaintiff’s claims against defendant from time of
filing of motion to dismiss to filing of motion for conditional
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certification); Beck v. Savory Sandwiches, Inc., 265 F. Supp. 3d at
1211 (tolling prior to conditional certification due to Northern
District injunction).
Further, a number of courts have tolled the statute of
limitations after conditional certification but before any putative
plaintiffs have opted-in or even been notified. See, e.g., Bergman,
949 F. Supp. 2d at 861 (tolling statute of limitations for period
during which motion for conditional certification was pending on
the same day the court granted that motion); Adams, 2007 WL
1539325, at *2 (tolling statute of limitations during pendency of
stay but noting “notwithstanding the stay, putative collective action
members shall be permitted to file forms with the Court indicating
their consent to join this action”). These courts did not find their
orders to be advisory even though no putative plaintiffs had yet
opted-in. See e.g., Trogdon v. Kleenco Maint. & Constr., Inc., No.
5:14-CV-05057, 2015 WL 11120400, at *2 (W.D. Ark. July 27,
2015) (tolling after conditional certification but before opt-in period
began was not advisory because the collective action already had
been conditionally certified).
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In the Northern District, 660 plaintiffs have joined the
litigation against the corporate defendant and twelve other actions
have been brought across the country against franchisees like
Defendant. The Amended Complaint identifies the putative
plaintiffs as assistant managers of Defendant, who owns six stores.
See Amend. Compl. ¶¶ 1, 6. Therefore, tolling in this case affects a
not-insubstantial group, and the case law does not support a
finding that uncertainty as to whether any putative plaintiffs will
opt-in is fatal to tolling.
Further, a litigant can assert the rights of third parties such
as a request to toll the statute of limitations as to the putative
plaintiffs if three conditions are met: 1) the plaintiff has an injury in
fact; 2) there was some hindrance to the third parties in asserting
their own rights; and 3) the plaintiff shares a close relationship to
the third parties. Campbell v. Louisiana, 523 U.S. 392, 397 (1998)
(criminal defendant could raise the constitutional rights of the
jurors of his trial).
First, Plaintiff has sufficiently alleged that he has suffered
injury of unpaid overtime wages. Amend. Compl. ¶ 42. Second, the
extraordinary circumstances here hindered the putative plaintiffs in
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asserting their own rights by preventing them from receiving notice
of the action. Third, a close relationship could be established by
the conditional certification of a collective action, as the plaintiff
must show that the members are “similarly situated” employees.
Here, however, conditional certification has been precluded and
delayed by the injunction, subsequent appellate action, and the
corresponding stay. The extraordinary circumstances of this case
are the very reason that Plaintiff was precluded from seeking the
Court’s assessment of the parameters of the similarly situated
employees.
Alternatively, Plaintiff and the putative plaintiffs may have a
close relationship if they share common issues or interests. See
Ind. Democratic Party v. Rokita, 458 F. Supp. 2d 775, 812 (S.D.
Ind. 2006) (state and county Democratic parties could assert the
voting rights of non-litigant voters who were hindered by state
voting statute because parties and voters shared common interest
of ensuring that supporters could vote for their preferred
candidates).
The Complaint defines the putative plaintiffs as assistant
managers of Defendant during the statutory period who were
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misclassified and denied overtime wages. Plaintiff, therefore, shares
the common interest with putative plaintiffs of recovering overtime
assistant manager wages from Defendant. See Amend. Compl. ¶¶
1, 47.
The issue of equitable tolling also can be an issue common
among the plaintiff and the collective action members. “Some
equitable tolling issues may, at least in theory, be common to the
similarly situated employees in a class. FLSA affirmative defenses
can, and sometimes do, present questions capable of class-wide
determination.” Davis, 2016 WL 7049069, at *3 (citations excluded)
(declining to toll statute of limitations because motion for
conditional certification not yet filed so question of delay due to
court’s adjudication was uncertain but leaving open the possibility
that when ripe, the plaintiff could seek equitable tolling on behalf of
the collective action members). In its Answer to the Amended
Complaint, Defendant raises the statute of limitations as an
affirmative defense, making this issue common to all members of
the collective action. See Answer to Amended Complaint at 6.
Here, Plaintiff seeks tolling only as to those with whom he
shares a common interest—namely, the collection of unpaid
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overtime wages as required by the FLSA from Defendant. Amend.
Compl. ¶ C. Given that the establishment of the relationship
between Plaintiff and putative plaintiffs was stymied by the unusual
injunction and stay in this case, and the common issues that apply
to Plaintiff and putative plaintiffs as to FLSA wages and this very
tolling issue, it is equitable that the statute of limitations be tolled
for putative plaintiffs for the nine months of the stay. A court that
tolls the statute of limitations acts in equity. In equity, the Court
must consider the circumstances of the case and the justice of the
outcomes. Plaintiff must be able to assert the putative plaintiffs’
rights as to the statute of limitations as justice requires.
IV. CONCLUSION
Plaintiff’s Motion for Equitable Tolling of the Statute of
Limitations (d/e 12) is GRANTED. The statute of limitations is
tolled from March 9, 2017 to December 14, 2017 on Plaintiff’s claim
with respect to all of Defendant’s current and former employees who
are eligible to opt-in to this litigation.
ENTERED: June 28, 2018
FOR THE COURT:
s/Sue E. Myerscough
SUE E. MYERSCOUGH
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UNITED STATES DISTRICT JUDGE
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