Heuberger v. Smith et al
MEMORANDUM OPINION AND ORDER: Court CONDITIONALLY GRANTS 18 § 216(b) Motion to Conditionally Certify Count I of Plaintiff's complaint, and the Court provisionally deems the FLSA claims in Count I as a collective action, as outlined. Co urt DENIES Plaintiff's § 216(b) Motion to conditionally certify Count III of Plaintiff's complaint as a collective action. The Court hereby DENIES as moot Plaintiff's § 216(b) Motion to conditionally certify Counts II and IV. Defendant Harry L. Smith to provide Plaintiff's counsel with a list as outlined. The Court DENIES Plaintiff's request that Defendant be compelled to post the Notice in the breakrooms of the relevant restaurants; and the Court DENIES Plaintiff's request that Defendant provide him with the social security numbers of potential plaintiffs. The Court GRANTS 15 Partial Motion to Dismiss Plaintiff's Complaint as to Plaintiff's remaining individual claims. Counts I I and IV are DISSMISSED AS MOOT, and WITH PREJUDICE in their entirety and as to all Defendants; Count III is DISMISSED WITH PREJUDICE in its entirety and as to all Defendants; Count I is DISMISSED WITHOUT PREJUDICE as to Defendants Destiny MGT, Inc., and Diamond Properties MGMT, Inc.; and Plaintiff may file an amended complaint within thirty days of this Order. Signed by Judge Jon E DeGuilio on 9/7/2017. (tc)
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 1 of 33
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
SOUTH BEND DIVISION
JASON HEUBERGER, individually,
and on behalf of others similarly situated,
HARRY L. SMITH d/b/a/ “MY-TRE
DESTINY MGT, INC., and DIAMOND
PROPOERTIES MGMT, INC.,
Case No. 3:16-CV-386-JD-JEM
MEMORANDUM OPINION AND ORDER
This is an action brought under the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. §
201 et seq., and the Indiana Minimum Wage Law (the “IMWL”), Ind. Code § 22-2-2-1 et seq.,
by Plaintiff Jason Heuberger (“Plaintiff”) against his employer, Mr. Harry Smith d/b/a My-Tre
Glamma Management (“Glamma”), and two other companies, Destiny MGT, Inc. (“Destiny”)
and Diamond Properties MGMT, Inc. (“Diamond”). [DE 1] Mr. Smith is the president of both
Destiny and Diamond. [DE 24-1 ¶ 8] Between them, Defendants own and operate a total of
nineteen McDonald’s restaurants in Indiana. [DE 18-3]
Plaintiff alleges that Defendants violated the FLSA (Count I) and the IMWL (Count II)
by failing to pay him and similarly situated employees for their attendance at and participation in
a mandatory orientation session. [DE 1 ¶¶ 1, 15, 31-50] Plaintiff further alleges that Defendants
violated the FLSA (Count III) and the IMWL (Count IV) by deducting a “crew uniform clothing
fee” of $2.00 from his and similarly situated employees’ paychecks, which reduced the
employees’ wages to below the minimum wage level. [DE 1 ¶¶ 2, 21, 23, 51-73]
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 2 of 33
Pending before the Court are two motions, filed only two days apart from one another:
Defendants’ Partial Motion to Dismiss Plaintiff’s Complaint (the “MTD”) [DE 15]; and
Plaintiff’s Motion for Conditional Collective Action Certification Pursuant to 29 U.S.C. § 216(b)
(the “§ 216(b) Motion”). [DE 18] Specifically, Defendants move to dismiss Counts II, III, and IV
of Plaintiff’s complaint pursuant to Fed. R. Civ. P. Rule 12(b)(6). [DE 15] Destiny and Diamond
further move to dismiss the complaint in its entirety as it relates to them, pursuant to Fed. R. Civ.
P. Rule 12(b)(1) for lack of standing. At the same time, Plaintiff requests that this Court certify
subclasses of employees who participated in the alleged unpaid mandatory orientation, and
whose wages were reduced by the crew uniform deductions.
At the outset, Plaintiff admits that his state law claims under Counts II and IV are moot.
[DE 25 at 1 n. 1] Therefore, the Court will dismiss those claims with prejudice and confine its
analysis below to the remaining issues.1
The Court notes that it would have dismissed Counts II and IV regardless of Plaintiff’s concession.
Claims for minimum wage and overtime compensation cannot be raised under both the IMWL and the
FLSA because the FLSA is the exclusive remedy for enforcing rights created under that federal statute.
See Parker v. Schilli Transp., 686 N.E.2d 845, 851 (Ind. Ct. App. 1997), trans. denied (addressing
overtime compensation claims). The IMWL states, in pertinent part, that the term “employer … shall not
include any employer who is subject to the minimum wage provisions of the federal Fair Labor Standards
Act....” Ind. Code § 22-2-2-3. “Thus, as a general matter, the Indiana Minimum Wage Law does not apply
to employers subject to the FLSA.” Cox v. Gannett Company, Inc., 2016 WL 3165613, at *2 (S.D. Ind.
June 7, 2016).
Under the FLSA, an “employer” is defined broadly as “any person acting directly or indirectly in the
interest of the employer in relation to an employee.” 29 U.S.C. § 203. Here, there is no question that
Glamma is an “employer” under the FLSA. Plaintiff, for one, alleges as much: “Defendants [including
Glamma] are collectively the joint employers of Plaintiff … under the FLSA’s broad definitions of
‘employer.’” [DE 1 ¶ 11] (emphasis added). He also incorporates this allegation in his state law claims.
[DE 1 ¶¶ 41, 64] See Shivers v. Miller Beach Terrace, Inc., No. 2:11-cv-204, 2012 U.S. Dist. LEXIS
55804, at *2 (N.D. Ind. Apr. 18, 2012) (dismissing IMWL claim brought alongside FLSA claim where
plaintiff alleged employer was subject to the FLSA and incorporated that allegation into state law claim).
Moreover, Defendants admit that they are “employers” under the FLSA in their MTD. [DE 16 at 10]
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 3 of 33
Defendants Glamma, Destiny, and Diamond, own and operate a total of nineteen
McDonald’s franchise restaurants in Indiana. [DE 1 ¶ 1; DE 18-3; DE 24-1] Mr. Harry Smith
owns and operates ten of these restaurants under the business name “My-Tre Glamma
Management.” [DE 24-1 ¶ 3] Six of Glamma’s restaurants are located in Elkhart, Indiana, while
the remaining four are located in Middlebury, Goshen, and Wakarusa, Indiana. Id. Mr. Smith is
also the president of both Destiny and Diamond. Id. ¶ 8. Destiny owns and operates one of the
remaining nine restaurants, and Diamond owns and operates the other eight. [DE 18-3; DE 24-1
¶¶ 6-7] None of the restaurants owned and operated by either Destiny or Diamond are located in
Elkhart. Id. Plaintiff alleges that Defendants, together, form a “single employer” or “single
integrated enterprise” and that they are “joint employers” because they jointly operate this chain
of restaurants, and maintain interrelated operations, centralized control of labor, common
management, common ownership, and common financial control. [DE 1 ¶ 11]
In or about February 2016, Plaintiff was hired to work at one of these McDonald’s
restaurants, located at 130 N. Main Street, Elkhart, Indiana. [DE 1 ¶ 12; DE 24-1 ¶ 2] This
restaurant is owned and operated by Glamma. [DE 18-3] Around the time of his hire, Plaintiff
was required to participate in an unpaid orientation session at one of the six Glamma-owned
McDonald’s restaurants in Elkhart.2 [DE 18-1 ¶ 4; DE 24-1, Exh. A] Plaintiff alleges that
Defendants required their other hourly-paid employees to undergo this same unpaid orientation
as a condition of employment. [DE 1 ¶ 14] Plaintiff’s orientation generally consisted of filling
out paperwork and going over his employer’s policies. [DE 18-1 ¶ 6] At all times relevant,
Defendants note a potential discrepancy as to where Plaintiff participated in this orientation – either at
the 130 N. Main Street location or at 3429 S. Main Street, Elkhart, Indiana. [DE 24-7] But either way,
Plaintiff’s orientation occurred at one of the six Elkhart McDonald’s owned and operated by Glamma.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 4 of 33
Plaintiff alleges that Defendants paid him and other employees the exact federal minimum wage
of $7.25 per hour. [DE 1 ¶ 19]
On or about May 1, 2016, the manager of the 130 N. Main Street restaurant, Amy Powers
[DE 18-3], gave Plaintiff and other employees a memorandum, which stated that starting that
same day, a $2.00 crew uniform clothing fee would be deducted from every paycheck. [DE 1 ¶
20; DE 18-1 ¶ 8, Exh. B] That memorandum was entitled, “MY-TRE GLAMMA
MANAGEMENT UNIFORM CONTRACT.” [DE 1 ¶ 20; DE 18-1, Exh. B] Plaintiff claims that,
because he is paid at precisely the federal minimum wage, these deductions have caused his net
wages to fall below the minimum wage. [DE 1 ¶ 21; DE 18-1 ¶ 9] Plaintiff further alleges that
“[a]ll of Defendants’ other hourly-paid minimum wage employees had similar experiences to
those of Plaintiff” because “[t]hey are subject to the same ‘crew uniform clothing fee.’” [DE 1 ¶
23] Plaintiff’s own paychecks, however, indicate that no such deductions were ever taken from
his wages. [DE 16-1; DE 24-1, Exh. E]
Plaintiff brings this case as an “opt-in” collective action, and makes the following
collective allegations regarding himself and all of Defendants’ other hourly-paid employees: they
have worked as hourly-paid employees for Defendants; they have been required to undergo two
hours of mandatory “orientation” training for Defendants as a condition of their employment;
they have not been paid for that orientation; they are and/or were paid the minimum wage; and
they have been subjected to the same “crew uniform clothing fee,” which decreases their net pay
below minimum wage. [DE 1 ¶¶ 28, 30]
It is against the backdrop of these facts that the Court conducts its analysis.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 5 of 33
Plaintiff’s § 216(b) Motion
Plaintiff is essentially asking the Court to certify two subclasses of employees who
worked at Defendants’ restaurants. The first subclass relates to Plaintiff’s allegations that
Defendants failed to pay new employees for attending the mandatory orientation session (the
“orientation subclass”). For these claims, Plaintiff proposes that “all current and former hourlypaid workers who worked at Defendants’ McDonald’s restaurants within the prior three years”
be certified together. [DE 18 at 1] Second, with regard to his claims that Defendants paid their
employees less than the minimum wage by deducting wages as part of a crew uniform fee,
Plaintiff requests certification of “all current and former hourly-paid workers who worked at
Defendants’ McDonald’s restaurants for the exact … minimum wage rate … at any time since
May 1, 2016” (the “uniform deduction subclass”). Id.
a. Collective Actions and the FLSA
The FLSA requires employers to pay wages of at least $7.25 per hour to each of their
employees. 29 U.S.C. § 206(a)(1)(C). Under 29 U.S.C. § 216(b), an employee may bring an
action to recover unpaid minimum wages on “behalf of himself . . . and other employees
similarly situated.” 29 U.S.C. § 216(b). This is known as a “collective action.” Harkins v.
Riverboat Services, Inc., 385 F.3d 1099, 1101 (7th Cir. 2004). However, no current or former
aggrieved employee may be a party plaintiff to a collective 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).
Collective actions brought under the FLSA are fundamentally different than class actions
under Fed. R. Civ. P. Rule 23. See Biddings v. Lake County, No. 2:09-cv-38, 2009 WL 2175584,
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 6 of 33
at *2 (N.D. Ind. July 15, 2009). Plaintiffs in a collective action must “opt-in” to the action to be
bound by a judgment while plaintiffs in a Rule 23 class action must “opt-out.” See id. (citing
King v. Gen. Elec. Co., 960 F.2d 617, 621 (7th Cir. 1992); Woods v. New York Life Ins. Co., 686
F.2d 578, 580 (7th Cir. 1982)). Because of the “opt-in” requirement, a representative plaintiff in
a collective action must be able to inform other individuals who may have similar claims that
they may join his lawsuit. See Biddings, 2009 WL 2175584, at *2 (citing Austin v. CUNA Mut.
Ins. Soc’y, 232 F.R.D. 601, 605 (W.D. Wis. 2006)).
Section 216(b) does not explicitly provide for court-ordered notice. 29 U.S.C. § 216(b).
However, in appropriate cases, district courts have the discretion to implement § 216(b) by
facilitating notice to potential plaintiffs. Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165,
169-70, 110 S. Ct. 482, 107 L. Ed. 2d 480 (1989). In fact, “trial court involvement in the notice
process is inevitable in cases with numerous plaintiffs where written consent is required by
statute, [and therefore] it lies within the discretion of the court to begin its involvement early, at
the point of the initial notice, rather than at some later time.” Id. at 171. Such court-authorized
notice serves the broad, remedial purpose of the FLSA and is in line with the court’s interest in
managing its docket, so long as the court takes care to avoid the appearance of judicial
endorsement of the merits of the action. Id. at 172-74.
Not only is the FLSA without instructions as to when courts should exercise their
discretion and authorize notice to potential plaintiffs, it also does not define the term “similarly
situated.” Biddings, 2009 WL 2175584, at *2. “In this circuit, district courts generally follow a
two-step inquiry when certifying collective actions. In the first step, the Court must determine
whether to conditionally certify an action as a collective action.” Williams v. Angie’s List, Inc.,
No. 1:16-cv-878, 2017 WL 1546319, at *2 (S.D. Ind. Apr. 27, 2017). “The sole consequence of
conditional certification is the sending of court-approved written notice to employees, who in
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 7 of 33
turn become parties to a collective action only by filing written consent with the court.” Genesis
Healthcare Corp. v. Symczyk, 569 U.S. 66, 133 S. Ct. 1523, 1530, 185 L. Ed. 2d 636 (2013)
(internal citations omitted).
At the first step, the Court considers “whether the representative plaintiff has shown that
she is similarly situated to the potential class plaintiffs.” Austin, 232 F.R.D. at 605. The FLSA
does not define the term “similarly situated” or instruct judges when to exercise their discretion
and authorize notice to potential plaintiffs. District courts in this circuit typically apply the
following analysis: to be similarly situated at the first step, the plaintiff needs to make only a
modest factual showing that he and the potential plaintiffs were victims of a common policy or
plan that violated the law. See, e.g., Bradley v. Arc of N.W. Ind., Inc., No. 2:14-cv-204, 2015 WL
2189284, at *2 (N.D. Ind. May 11, 2015) (citing Allen v. The Payday Loan Store of Ind., Inc.,
No. 2:13-cv-262, 2013 WL 6237852, at *1 (N.D. Ind. Dec. 3, 2013)); see also Camilotes v.
Resurrection Health Care Corp., 286 F.R.D. 339, 345 (N.D. Ill. 2012). The Court analyzes the
pleadings and any affidavits to determine whether that modest showing is made. Knox v. Jones
Group, 208 F. Supp. 3d 954, 958 (S.D. Ind. 2016).
If the Court conditionally certifies a collective action and authorizes notice to potential
participants, it proceeds to the second step in the certification process at the close of discovery
and after the opt-in process is completed. Jirak v. Abbott Labs., Inc., 566 F. Supp. 2d 845, 848
(N.D. Ill. 2008); Austin, 232 F.R.D. at 605. At that stage, the defendant can move to dismiss the
“opt-in” plaintiffs in light of the record developed during discovery. Biddings, 2009 WL
2175584, at *3.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 8 of 33
i. Plaintiff is not “similarly situated” to the proposed uniform deduction
The Court will address and dispense with the second of Plaintiff’s proposed subclasses
first. Plaintiff offers only two pieces of evidence in support of his request that the Court certify
the proposed uniform deduction subclass. First, Plaintiff submits the memorandum given to him
and other employees by his manager on or about May 1, 2016, which states that, starting that
same day, “a $2.00 crew uniform clothing fee … will be deducted every paycheck.” [DE 18-1 ¶
8, Exh. B]. Second, Plaintiff attests that “the deductions for ‘crew uniform clothing fees’ have
caused [his] net wages to fall below the federal and Indiana minimum wage.” [DE 18-1 ¶ 9]
(emphasis added). The effect of Plaintiff’s second statement, in particular, is to claim that those
deductions were in fact taken out of his paychecks. Plaintiff makes this statement without
attaching any of his paychecks.
Plaintiff’s paychecks, however, attached to Defendants’ opposition to the § 216(b)
Motion, paint a different picture. [DE 24-1, Exh. E] These paychecks cover consecutive pay
periods from February 14, 2016, Plaintiff’s first pay period [DE 18-1 ¶ 2], through the middle of
September 2016.3 [DE 24-1, Exh. E] As indicated by these paychecks, no deductions – let alone
a “crew uniform clothing fee” – were ever subtracted from Plaintiff’s wages. Id. Plaintiff was
paid at the minimum wage rate of $7.25 per hour during each of these twelve pay periods, and
additionally earned overtime pay at the rate of $10.875 per hour during four of them. Id.
Although a more lenient standard applies at this early stage, “when presented with
evidence which contradicts [Plaintiff’s] claim” that Defendants had a practice and policy that
The attached paychecks cover the entirety of Plaintiff’s employment with Glamma up to the filing of
Defendants’ opposition to the § 216(b) Motion. The pay period for the most recent paycheck ended on
September 10, 2016, with a paydate of September 19, 2016. [DE 24-1, Exh. E] Plaintiff’s next pay period
presumably ran from September 11, 2016, until September 24, 2016, with a paydate approximately nine
days thereafter. Defendants filed their opposition on September 26, 2016. [DE 24]
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 9 of 33
violated the FLSA by deducting uniform fees, the Court “‘will not stick its head in the sand and
ignore that evidence.’” Williams, 2017 WL 1546319, at *3 (quoting Hawkins v. Alorica, 287
F.R.D. 431, 441 (S.D. Ind. 2012)). It would be a waste of the Court’s and the litigants’ time to
notify a class “only to later determine that the matter should not proceed as a class action
because the class members are not similarly situated.” Id. Here, the authenticated paychecks
clearly demonstrate that Plaintiff is not a member of the class which he wishes to represent; he
and the potential plaintiffs are not “similarly situated” because no crew uniform deductions were
actually taken from his paychecks. [DE 24-1 ¶ 22, Exh. E] Thus, he has not made a “modest
factual showing that he and the other employees to whom notice is to be sent were victims of a
common policy or plan that violated the law,” Allen, 2013 WL 6237852, at *1, and the Court
will deny his request to certify the uniform deduction subclass. See Weil v. Metal Techs., Inc.,
No. 2:15-cv-16, 2016 U.S. Dist. LEXIS 8100, at *27 (S.D. Ind. Jan. 25, 2016) (denying
collective action certification for employees who had unpaid lunch breaks of twenty minutes or
less where time records showed that named plaintiffs never took a lunch break of twenty minutes
or less and therefore they were not harmed by the policy at issue); Strait v. Belcan Eng’g Grp.,
Inc., 911 F. Supp. 2d 709, 731 (N.D. Ill. 2012) (denying collective action certification where
named plaintiffs failed to identify any negative vacation recouped from their pay, any instances
of forced leave without pay as to them, or improper furlough adjustments to their pay despite
basing arguments for collective action on these theories).
ii. The proposed orientation subclass is overbroad.
The Court turns next to Plaintiff’s proposed orientation subclass, and finds that it, as
drafted, is overly broad. A proposed FLSA collective class can be overly broad. See e.g., Moss v.
Putnam Cnty. Hosp., No. 2:10-cv-28, 2010 WL 2985301, at *2 (S.D. Ind. July 21, 2010)
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 10 of 33
(limiting the proposed collective class to include only those plaintiffs compensated under the
relevant overtime policy). Yet it is important to keep in mind that certification of a collective
class is less demanding than certification of a class action under Rule 23, and does not require,
“that the named representative’s claims have the same essential characteristics as a class at large
to achieve the initial certification.” Swarthout v. Ryla Teleservices, Inc., No. 4:11-cv-21, 2011
WL 6152347, at *5 (N.D. Ind. Dec. 12, 2011) (citing Brickel v. Bradford-Scott Data Corp., No.
1:09-cv-58, 2010 WL 145348, at *1 (N.D. Ind. Jan. 11, 2010)). Plaintiff need only provide the
minimal showing that some identifiable factual or legal nexus binds the various claims of the
class members in a way that hearing the claims together promotes judicial efficiency and
comports with the broad remedial policies underlying the FLSA in order to justify notice at this
stage of the proceedings. See Boyd v. Jupiter Aluminum Corp., No. 2:05-cv-227, 2006 WL
1518987, at * 5 (N.D. Ind. May 31, 2006). Despite this lenient standard, Plaintiff has failed to
make a minimal showing of a nexus that “binds together” employees of Glamma with those of
Destiny and Diamond.
To support his argument for certifying the orientation subclass, Plaintiff only offers his
own affidavit and the orientation checklist provided to him by his employer. [DE 18-1, Exh. A]
In or about February 2016, Plaintiff was hired to work at a McDonald’s restaurant located at 130
N. Main Street in Elkhart, Indiana. [DE 18-1 ¶ 2] That restaurant is owned and operated by
Glamma; it is not owned or operated by either Destiny or Diamond. [DE 18-3] Plaintiff does not
allege that he ever worked at any of the locations operated by Destiny or Diamond. Around the
time of his hire, Amy Powers, general manager of the 130 N. Main Street restaurant, presented
Plaintiff with an orientation checklist and informed Plaintiff that he had to complete the
orientation program, which consisted of filling out paperwork and going over his employer’s
policies. [DE 18-1 ¶¶ 4-6; 18-3] Plaintiff maintains he was not paid for this two-hour orientation.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 11 of 33
Id. ¶ 6. The orientation was conducted at another Glamma location, 3429 S. Main Street, Elkhart,
Indiana.4 [DE 18-3; 24-1]
Plaintiff argues broadly that his motion is supported by “Defendants’ own form
documents,” which facially reflect a policy “not to pay for training [of] their employees.” [DE 18
at 10] (emphasis added). However, Plaintiff offers no evidence to support his assertion that all
three defendants implemented this policy. Indeed, Plaintiff’s own affidavit states, “I was required
to participate” in unpaid training, and that Amy Powers “told me that I had to complete
‘Orientation.’” [DE 18-1 ¶ 4] (emphasis added). Plaintiff makes no mention of whether any other
employees, let alone those working at Destiny and Diamond locations, underwent the same
orientation. Similarly, Plaintiff does not attest to whether other hourly-paid employees even
received the orientation checklist, which undermines his argument that it is a corporate form
document imposing a mandatory practice across the board to employees of all three Defendants:
“Amy Powers, store manager, presented me with a memo regarding ‘Orientation’ ….” [DE 18-1
¶ 4] (emphasis added). The orientation checklist does not indicate that it applies to or is used by
all three Defendants, and the only information it contains relating to any of the three Defendants
is the location of the orientation itself – a Glamma-owned restaurant. [DE 18-1, Exh. A] Thus,
this is not the situation in which corporate documents evidence a “company-wide” application of
unlawful policies across all three Defendants, as Plaintiff argues. Cf. Ravenell v. Avis Budget Car
Rental, LLC, No. 08-cv-2113, 2010 WL 2921508, at *4 (E.D.N.Y. July 19, 2010) (certifying
collective action where documents used nationwide by collective defendants revealed that all
shift managers, “wherever located, were treated as part of a category of similarly situated
The copies of the orientation checklist provided by Plaintiff cut off this location at the bottom of the
page. [DE 1-2; 18-1, Exh. 3]
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 12 of 33
employees”) (emphasis added). The Court will therefore amend the proposed orientation
subclass to exclude employees of Destiny and Diamond.
iii. The evidence supports certification of a limited version of the
proposed orientation subclass.
Though lenient, the “modest factual showing” standard is not a mere formality. Biddings,
2009 WL 2175584, at *3 (citing Flores v. Lifeway Foods, Inc., 289 F. Supp. 2d 1042, 1045-46
(N.D. Ill. 2003) (evidence of defendant’s payment practice concerning two out of fifty
employees, without more, did not provide modest factual showing that the employer had a
common policy or plan to violate the FLSA). The requisite showing may be accomplished by
providing an affidavit, declaration, or other support beyond mere allegations in order to make a
minimal showing of other similarly situated employees subjected to a common policy. Id. But, a
plaintiff cannot rely on allegations alone to make the required “modest factual showing,” unless
the defendant admits that other similarly situated employees exist. Id. (citation omitted).
Here, even though Plaintiff does not attest as to whether any other employees at the
Glamma McDonald’s were required to attend orientation, Mr. Smith, d/b/a Glamma and
president of Destiny and Diamond, clarifies the scope of this practice. Mr. Smith’s affidavit
explains that “individuals seeking employment at one of the six My-Tre Glamma McDonald’s
located in Elkhart, Indiana are asked to attend a pre-hire ‘orientation’ at … 3429 South Main
Street….” [DE 24-1 ¶ 9] Only those applicants seeking employment at these six locations are
given the orientation checklist and are required to attend this orientation. Id. ¶¶ 10-11.
Individuals applying for positions at any of the other restaurants owned and operated by
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 13 of 33
Defendants do not attend this orientation and are not provided the orientation checklist.5 Id. ¶
Mr. Smith’s admissions provide enough evidence at this stage to support a finding that
Plaintiff and similarly situated hourly-paid workers at the six Glamma McDonald’s in Elkhart,
Indiana, were subject to a common policy or plan that allegedly violates the FLSA – or more
specifically, that those Glamma employees were not paid for participating in the mandatory
orientation. Accordingly, given that Plaintiff’s proposed collective action concerns similarly
situated individuals and common issues of fact and law, and given the Court’s interest in judicial
efficiency and avoiding inconsistent results in related matters, the Court finds that a factual
showing sufficient to satisfy step one has been met by Plaintiff as to this limited subclass.
Consistent with the evidence, the Court will certify a subclass that includes only those hourlypaid workers at the six Glamma restaurants located in Elkhart, Indiana.6
b. Proposed Collective Action Notice and Consent Form
Once a collective action is conditionally approved, “the court has managerial
responsibility to oversee the joinder of additional parties to assure that the task is accomplished
in an efficient and proper way.” Hoffmann-La Roche, 493 U.S. at 170-71.
These restaurants include the four Glamma restaurants not located in Elkhart, the one restaurant owned
and operated by Destiny, and the eight restaurants owned and operated by Diamond. [DE 24-1 ¶¶ 3, 6-7]
In light of the Court’s ruling on Defendants’ MTD, especially with regard to the standing issues
surrounding Destiny and Diamond, the Court notes that Plaintiff may later seek to modify the
conditionally certified class should the progression of the case permit. See Myers v. Hertz Corp., 624 F.3d
537, 557 (2d Cir. 2010) (citing Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1241-43 (11th Cir.
2008) (noting that district court denied two motions to facilitate nationwide notice to potential plaintiffs
prior to certifying a FLSA collective action on plaintiffs’ third motion); In re Initial Pub. Offering Sec.
Litig., 483 F.3d 70, 73 (2d Cir. 2007) (“District courts have ample discretion to consider (or to decline to
consider) a revised class certification motion after an initial denial.”)).
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 14 of 33
In examining and approving any proposed notice, the Court must be careful to avoid the
appearance of “judicial sponsorship” or a “judicial imprimatur.” Id. at 174; Biddings, 2009 WL
2175584, at *4; see also Woods v. N.Y. Life Ins. Co., 686 F.2d 578, 581 (7th Cir. 1982). Because
of this, the Court will order that the case caption be removed from the notice and that the notice
instead be placed on Plaintiff’s attorneys’ letterhead. See Alexander v. Caraustar Indus., No. 11c-1007, 2011 U.S. Dist. LEXIS 68865, at *8 (N.D. Ill. June 27, 2011) (ordering same). However,
Plaintiff may still include the case number and title on the notice. Id.
Plaintiff here requests that the Court order notice of this collective action be sent to all
members of the approved class, as now revised, and that the opt-in period run 90 days from the
mailing of the notice. [DE 18 at 14-15] Plaintiff further requests that the notice be posted in the
break rooms at all of Defendants’ restaurants, id., although now this proposal is limited to
posting the notices in all six Elkhart McDonald’s locations owned and operated by Glamma.
Presumably to identify and contact members of the relevant class, Plaintiff wishes to compel
production of their names, addresses, dates of employment, and social security numbers. The
Court will limit Plaintiff’s requests as follows:
Defendants argue that plaintiff’s request to require posting of the notice in the
restaurants’ breakrooms is not only unnecessary, as the notices will already be mailed to a group
of individuals that includes current employees, but also risks miscommunicating to their
employees that they endorse the lawsuit. [DE 24 at 22-23] Other than describing this practice as
“routine,” [DE 18 at 14], Plaintiff offers no reason why posting is necessary, and accordingly his
request that the Court order Defendants to post notice will be denied. See Alexander, 2011 U.S.
Dist. LEXIS 68865, at **8-9; see also Howard v. Securitas Sec. Servs., No. 08-c-2746, 2009 WL
140126, at *9 (declining to order the defendant to post notice “absent evidence that the mailing
of notices is ineffective”); cf. Gomez v. H & R Gunlund Ranches, Inc., No. CV F 10-1163, 2010
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 15 of 33
WL 5232973, at *11-12 (E.D. Cal. Dec. 16, 2010) (authorizing posting of notices where
potential class members were migrant workers who may be difficult to reach by direct mail).
The opt-in period will run 60 days from the mailing of Plaintiff’s notice, rather than 90
days as requested by Plaintiff. This is not a case that presents a nationwide class of patients
necessitating a longer opt-in period. Rather, the class here is limited only to those employees of
six McDonald’s restaurants, all of which are located in Elkhart, Indiana. “The length of the optin period is within the Court’s discretion.” Campbell v. Advantage Sales & Mktg., LLC, No.
1:09-cv-01430, 2010 WL 4386793, at *4 (S.D. Ind. Oct. 28, 2010) (citing Hoffmann-La Roche,
493 U.S. at 170). Unlike in Campbell, however, where the plaintiffs claimed to have a class of
over 5,000 potential plaintiffs, Plaintiffs here offer no reason for their 90-day proposal other than
that 90 days is the “standard” operating procedure for district courts. [DE 25 at 8] But courts
have approved opt-in periods ranging from 30 days to 120 days. See Campbell, 2010 WL
4386793, at *4 (comparing cases). Given that a relatively small class will likely be noticed here,
the Court concludes that a 60-day opt-in period is appropriate. See Nehmelman v. Penn Nat’l
Gaming, Inc., 822 F. Supp. 2d 745, 765 (N.D. Ill. 2011) (concluding 60-day period was
reasonable given “relatively small number of potential class members”); Smallwood v. Ill. Bell
Tel. Co., 710 F. Supp. 2d 746, 753 (N.D. Ill. 2010) (noting 60-day opt-in period “provide[d]
ample opportunity for prospective class members to opt-in”); Shiner v. Select Comfort Corp.,
No. 09-c-2630, 2009 WL 4884166, at *5 (allowing for 60-day opt-in period); Brand v. Comcast
Corp., No. 12-cv-1122, 2012 WL 4482124, at *9 (N.D. Ill. Sept. 26, 2012) (same). The Court
also suggests that the parties confer and identify a cutoff date once the notices have been mailed
in order to prevent confusion.
To facilitate this noticing, Glamma will provide the names, addresses, and dates of
employment of potential plaintiffs within thirty (30) days of this order, based on the Court’s
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 16 of 33
definition of the collective class. However, the Court will not compel production of social
security numbers, which constitute highly sensitive and private information. See Brand, 2012
WL 4482124, at *9 (denying request for potential plaintiffs’ social security numbers, citing
individual privacy concerns); Blakes v. Ill. Bell Tel. Co., No. 11-cv-336, 2011 WL 2446598, at
*8 (N.D. Ill. June 15, 2015) (same). “[P]roviding sensitive personal data such as a social security
number is not to be done lightly,” Blakes, 2011 WL 2446598, at *8, and the Court sees no reason
to compel production of potential plaintiffs’ social security numbers. The Court further notes that
Plaintiff did not respond to Defendants’ arguments against providing this data in his reply brief
in support of his § 216(b) Motion. [DE 25]
The parties are directed to confer and draft a notice that complies with the contents of this
order and to submit said draft to the Court for approval prior to the notice’s issuance.
Defendants’ Partial Motion to Dismiss
Although the Court denies certain aspects of Plaintiff’s § 216(b) Motion, his leftover
individual claims “remain unaffected as the suit reverts to an individual suit on his behalf.”
Strait, 911 F. Supp. 2d at 735 (citing Alvarez v. City of Chicago, 605 F.3d 445, 450 (7th Cir.
2010)). Specifically, Plaintiff is left with his individual claims in Counts II, III, and IV against all
Defendants, and his claim in Count I against Destiny and Diamond.
Defendants move to dismiss Counts II, III, and IV of Plaintiff’s complaint pursuant to
Fed. R. Civ. P. Rule 12(b)(6). [DE 15] Destiny and Diamond further move to dismiss the
complaint in its entirety as it relates to them, pursuant to Fed. R. Civ. P. Rule 12(b)(1) for lack of
standing. Id. As discussed above, the Court will dismiss as concededly moot Counts II and IV
against all Defendants. For the reasons stated below, the Court will further dismiss Count III of
the complaint as to all Defendants for failure to state a claim upon which relief can be granted,
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 17 of 33
and will dismiss Count I of the complaint as levied against Destiny and Diamond due to
Plaintiff’s lack of standing.
Rule 12(b)(1) authorizes dismissal of claims over which the Court lacks subject matter
jurisdiction. In analyzing a motion to dismiss, the Court must accept as true all well-pled factual
allegations and must draw all reasonable inferences in favor of the plaintiff. Long v. Shorebank
Dev. Corp., 182 F.3d 548, 554 (7th Cir. 1999). Further, “[t]he district court may properly look
beyond the jurisdictional allegations of the complaint and view whatever evidence has been
submitted on the issue to determine whether in fact subject matter jurisdiction exists.” Id.
(citations omitted). The burden of establishing proper federal subject matter jurisdiction rests on
the party asserting it, which in this case is Mr. Heuberger. Muscarello v. Ogle Cnty. Bd. of
Comm’rs, 610 F.3d 416, 425 (7th Cir. 2010).
In reviewing a motion to dismiss for failure to state a claim upon which relief can be
granted under Rule 12(b)(6), the Court construes the complaint in the light most favorable to the
plaintiff, accepts the factual allegations as true, and draws all reasonable inferences in the
plaintiff’s favor. Reynolds v. CB Sports Bar, Inc., 623 F.3d 1143, 1146 (7th Cir. 2010). A
complaint must contain only a “short and plain statement of the claim showing that the pleader is
entitled to relief.” Fed. R. Civ. P. 8(a)(2). That statement must contain sufficient factual matter,
accepted as true, to state a claim for relief that is plausible on its face, Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009), and raise a right to relief above the speculative level. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). However, a plaintiff’s claim need only be plausible, not
probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930, 935 (7th Cir. 2012).
Evaluating whether a plaintiff’s claim is sufficiently plausible to survive a motion to dismiss is
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 18 of 33
“‘a context-specific task that requires the reviewing court to draw on its judicial experience and
common sense.’” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting
Iqbal, 556 U.S. at 678).
b. Plaintiff’s Wages Were Not Reduced by any Crew Uniform Deductions
Similar to his request to certify the proposed uniform deduction subclass, Plaintiff’s
individual claim for unpaid minimum wages – based on the allegation that Defendants deducted
$2.00 from each of his paychecks – fails. Defendants twice attach Plaintiff’s current paychecks
for each pay period he worked to their filings, and the documents demonstrate that no deductions
– let alone any deductions for a crew uniform fee – were ever subtracted from Plaintiff’s wages.
[DE 16-1; DE 24-1, Exh. E] Plaintiff earned a wage of $7.25 per hour during each of the pay
periods from February 2016 through August 2016, and additionally earned overtime pay at the
rate of $10.875 per hour during several of them. [DE 16-1] Plaintiff also received a raise in
August 2016 – during the pendency of this lawsuit – to $8.00 per hour. [DE 24-1, Exh. E]
The parties hotly dispute whether the Court may consider these documents that lie
outside the boundaries of the complaint. The Court can and will take these paychecks into
account in reaching its determination as to Count III. It is well settled that documents attached to
a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff’s
complaint and are central to his claim, and that the Court may consider those documents in
analyzing the motion to dismiss without converting it into one for summary judgment. 188 LLC
v. Trinity Industries, Inc., 300 F.3d 730, 735 (7th Cir. 2002). The policy of this exception that
allows the Court to consider documents outside the four corners of the complaint, is to “prevent a
plaintiff from evading dismissal under Rule 12(b)(6) simply by failing to attach a [document]
that proves his claim has no merit.” Sa’Buttar Health & Med., P.C. v. Tap Pharm., Inc., No. 0318
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 19 of 33
c-4074, 2004 WL 1510023, at *3 (N.D. Ill. July 2, 2004) (citing Tierney v. Vahle, 304 F.3d 734,
738 (7th Cir. 2002)). The case at bar presents the very scenario contemplated by this policy.
Here, contrary to Plaintiff’s claim in his opposition to the MTD [DE 20 at 12], the paychecks are
explicitly referenced in the complaint and are central to his claim that deductions have been
taken from his wages as part of a crew uniform fee. [DE 1 ¶¶ 2, 8] (“Since May 1, 2016
Defendants also have been deducting $2.00 from each of their minimum wage employee’s
paychecks to pay for each employee’s uniform items …;” “Plaintiff’s paychecks from his
employment, referenced herein….”) (emphasis added).
Plaintiff also argues in opposition that, because the paychecks have not been
authenticated, the Court should not consider them.7 [DE 20 at 12-13] The cases cited by Plaintiff
trace the “concededly authentic” language in Tierney, 304 F.3d at 738. See United States v.
Miller, 2015 U.S. Dist. LEXIS 21088, at *3 (N.D. Ind. Feb. 23, 2015) (cited by Plaintiff and
citing Santana v. Cook Cnty. Bd. of Review, 679 F.3d 614, 619 (7th Cir. 2012)) (cited by Plaintiff
and citing Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009))). According to these cases,
this language, originally included as dicta in Tierney, has subsequently morphed into a
requirement that courts can only consider documents outside the pleadings on a Rule 12(b)(6)
motion if those items are “concededly authentic.” The purpose of the “concededly authentic”
requirement is “to prevent consideration on a motion to dismiss of a document that ‘require[s]
discovery to authenticate or disambiguate.’” Archer v. Chisolm, 188 F. Supp. 3d 866, 879 n. 10
(E.D. Wisc. 2016) (citing Tierney, 556 F.3d at 739).
The set of paychecks attached to Defendants’ opposition to the § 216(b) Motion were authenticated by
Mr. Smith. [DE 24-1 ¶ 22] But, as explained herein, the Court does not need his authentication in order to
consider the set of paychecks attached to Defendants’ MTD.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 20 of 33
That said, however, there is a distinction between documents that are “unauthenticated”
and “inauthentic” that should not be overlooked. In Hecker, for example, the court approved the
district court’s consideration of documents outside the complaint on defendant’s Rule 12(b)(6)
motion that were “concededly authentic” along the lines of Tierney. 556 F.3d at 582. In doing so,
the Hecker court rejected plaintiffs’ analogy to Travel Over the World v. Kingdom of Saudi
Arabia, 73 F.3d 1423 (7th Cir. 1996), because in that case, plaintiffs actually contested the
authenticity of the document that defendants wanted to use, whereas in Hecker, they did not. 556
F.3d at 582. Thus, the documents in Hecker were “concededly authentic.”
Here, Plaintiff does not contest the authenticity of the paychecks and gives the Court no
good reason to question their authenticity. Plaintiff only argues that they “have not been
authenticated.” [DE 20 at 12] Therefore, the Court will consider the paychecks attached to
Defendants’ MTD. See ABN AMRO, Inc. v. Capital Int’l, Ltd., No. 04-c-3123, 2007 WL 845046,
at *11 (N.D. Ill. Mar. 16, 2007) (considering documents central to plaintiff’s claims where
plaintiff argued that documents were unauthenticated but did not assert that they were
inauthentic); Sa’Buttar, 2004 WL 1510023, at *3 (considering contract attached to motion to
dismiss and dismissing breach of contract claim where nonmovant claimed the contract was
unauthenticated but did not argue the document was inauthentic). Because the paychecks
demonstrate that no deductions were taken from Plaintiff’s minimum wages for crew uniform
fees or otherwise, Plaintiff has failed to sufficiently state a plausible claim for unpaid minimum
wages under this theory. Iqbal, 556 U.S. at 678. Count III is therefore dismissed with prejudice
as to all Defendants.
c. Plaintiff Lacks Standing as to Destiny and Diamond
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 21 of 33
Defendants argue that Plaintiff lacks standing to bring his individual claims against
Destiny and Diamond.8 [DE 16] In response, Plaintiff contends that he has adequately alleged
that Defendants together form a “single employer” or “single integrated enterprise” and that they
are “joint employers” such that he has standing to sue all three entities. [DE 20] For the reasons
stated herein, the Court finds that Plaintiff lacks standing to bring his individual claims against
either Destiny or Diamond.
In every case, the plaintiff has the burden of establishing the three elements of standing:
that “(1) [he or she] has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the
challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the
injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S. Ct. 693, 145 L. Ed. 2d 610 (2000) (citing Lujan
v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992)). To meet
this burden and to survive a challenge to standing under Rule 12(b)(1), a plaintiff must plead
sufficient factual allegations, taken as true, that “plausibly suggest” each of these elements. Silha
v. ACT, Inc., 807 F.3d 169, 174 (7th Cir. 2015). “[T]o bring a valid case, a plaintiff must allege
that a defendant—the very defendant sued—has somehow wronged her in a legally cognizable
way.” Payton v. Cnty. of Kane, 308 F.3d 673, 678 (7th Cir. 2002).
Under the FLSA, alleged employees’ “injuries are only traceable to, and redressable by,
those who employed them.” Berger v. Nat’l Collegiate Athletic Ass’n, 843 F.3d 285, 289 (7th
Cir. 2016) (quoting Roman v. Guapos III, Inc., 970 F.Supp.2d 407, 412 (D. Md. 2013)). The
Destiny and Diamond moved to dismiss all Counts against them for lack of standing, but because
Counts II, III, and IV will be dismissed with prejudice, the only relevant Count remaining for this
standing argument is Count I.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 22 of 33
FLSA defines “employer” as “any person acting directly or indirectly in the interest of an
employer in relation to an employee.” 29 U.S.C. § 203(d). An “employee,” in turn, is defined as
“any individual employed by an employer,” id. § 203(e)(1), and “employ” means “to suffer or
permit to work.” Id. § 203(g). Consistent with these broad definitions, “[t]he Supreme Court has
instructed courts to construe the terms ‘employer’ and ‘employee’ expansively under the FLSA.”
Vanskike v. Peters, 974 F.2d 806, 807 (7th Cir. 1992) (citing Nationwide Mut. Ins. Co. v.
Darden, 503 U.S. 318, 326, 112 S. Ct. 1344, 117 L. Ed. 2d 581 (1992); Rutherford Food Corp. v.
McComb, 331 U.S. 722, 730, 67 S. Ct. 1473, 91 L. Ed. 1772 (1947)).
Plaintiff fails to allege that Destiny and Diamond are liable as
“joint employers” of Glamma.
Plaintiff alleges that Defendants together are “joint employers” such that they may be
sued together. [DE 1 ¶ 11] The FLSA premises liability on an employer-employee relationship.
29 U.S.C. § 206(a). But, “[t]here is no suggestion in the language of the [FLSA] that an
employer is responsible to other employers’ employees unless, of course, there is a joint
employer relationship.” Villareal v. El Chile, Inc., 776 F. Supp. 2d 778, 794 (N.D. Ill. 2011)
(citing 29 C.F.R. § 791.2). “Two or more employers may jointly employ someone for the
purpose of the FLSA.” Karr v. Strong Detective Agency, Inc., 787 F.2d 1205, 1207 (7th Cir.
1986); see also 29 C.F.R. § 791.2. For a joint-employer relationship to exist, each alleged
employer must exercise control over the working conditions of the employee. See Moldenhauer
v. Tazewell-Pekin Consol. Commc’ns Ctr., 536 F.3d 640, 644 (7th Cir. 2008) (quoting Moreau v.
Air France, 343 F.3d 1179, 1182 (9th Cir. 2003)).9
While Moldenhauer involved review of an action under the Family Medical Leave Act (the “FMLA”),
the court applied the FLSA standard for determining joint employer status, because the pertinent
regulation in the FLSA mirrored that in the FMLA. 536 F.3d at 644.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 23 of 33
Under the Department of Labor’s regulations:
Where the employee performs work which simultaneously benefits two or more
employers, or works for two or more employers at different times during the
workweek, a joint employment relationship generally will be considered to exist
in situations such as:
(1) where there is an arrangement between the employers to share the
employee’s services, such as to interchange employees; or
(2) where one employer is acting directly or indirectly in the interest of the
other employer (or employers) in relation to the employee; or
(3) where the employers are not completely disassociated with respect to
the employment of a particular employee and may be deemed to share
control of the employee, directly or indirectly, by reason of the fact
that one employer controls, is controlled by, or is under common
control with the other employer.
29 C.F.R. § 791.2(b); see also Cuff v. Trans States Holdings, Inc., 768 F.3d 605, 608 (7th Cir.
In a joint employer scenario, multiple entities are considered to be the “joint employer”
of an employee, even though that employee may have worked for only one of those entities.
Take affiliated companies A, B, and C, for example. An employee may have only worked at
company A, in which case A is the employee’s employer for FLSA purposes. If certain
circumstances exist, however, then B and C can also be considered employers of the employee
under the FLSA, together with A. In that case, A, B, and C are the “joint employers” of the
employee and may all be liable for alleged FLSA violations.
“Because status as an ‘employee’ for purposes of the FLSA depends on the totality of
circumstances rather than on any technical label, courts must examine the ‘economic reality’ of
the working relationship.” Vanskike, 974 F.2d at 808 (citations omitted). To examine this
“economic reality,” courts look at several factors to determine whether multiple entities form a
“joint employer” of an employee who worked for only one of those entities. To use the above
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 24 of 33
example, those factors include whether the putative employers, companies B and C: (1) had the
power to hire and fire A’s employees; (2) supervised and controlled employee work schedules or
conditions of payments for A’s employees; (3) determined the rate and method of payment for
A’s employees; and (4) maintained employment records of A’s employees. See Moldenhauer,
536 F.3d at 644 (applying the factors from Bonnette v. California Health and Welfare Agency,
704 F.2d 1465, 1470 (9th Cir. 1983), a FLSA case).10
The Seventh Circuit has not yet addressed the factors a court should consider in
determining joint employment under the FLSA, so the Court will look to the test articulated by
the Ninth Circuit in Bonnette and applied by the Seventh Circuit in Moldenhauer, to guide its
analysis, in keeping with other district courts within this Circuit. See Morgan v. SpeakEasy, LLC,
625 F. Supp. 2d 632, 650 (N.D. Ill. 2007) (finding Bonnette appropriate to determine joint
employer status in the FLSA context).11
Plaintiff does not allege that he ever worked for either Destiny or Diamond, or that he
worked at one of their locations. In fact, he does not allege that he ever worked at any
McDonald’s location other than the one for which he was hired to work at. Plaintiff’s own
allegations make clear that his employer was My-Tre Glamma Management, as evidenced by his
While expressed in the Court’s example above, the four Bonnette factors are “whether the alleged
employer (1) had the power to hire and fire employees, (2) supervised and controlled employee work
schedules or conditions of payment, (3) determined the rate and method of payment, and (4) maintained
employment records.” 704 F.2d at 1470.
On at least one occasion, the Seventh Circuit has declined to apply Bonnette, but only under casespecific circumstances. See Vanskike, 974 F.2d at 808-10 (declining to apply Bonnette in deciding
whether a prisoner can plausibly be said to be “employed”). In Vanskike, the court explained that
Bonnette might not be helpful “in the situation presented” because Bonnette’s factors are “particularly
appropriate where (as in Bonnette itself) it is clear that some entity is an ‘employer’ and the question is
which one.” Id. at 809 (emphasis added). Bonnette focuses on whether there is enough control over an
individual to classify him as an employee, but in Vanskike, the court was faced with the opposite problem:
whether too much control over an individual – in that case, an inmate – jeopardized the employeremployee relationship. Id. at 810. Thus, Bonnette is applicable here, where it is clear that Plaintiff is
employed, but questions remain as to which Defendants actually employ him for FLSA purposes.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 25 of 33
paychecks and the documents he received by his employer. [DE 1 ¶ 8; DE 1-2; DE 1-3; DE 16-1]
Plaintiff’s paychecks issued from Defendant “Harry Leonard Smith Jr My-Tre Glamma
Management,” not from Destiny or Diamond, or from any alleged parent company controlling all
three Defendants. [DE 16-1] Furthermore, the very title of the crew uniform deduction
memorandum Plaintiff received is “MY-TRE GLAMMA UNIFORM CONTRACT,” [DE 1-3]
and the orientation checklist indicates orientation took place at a Glamma-owned restaurant [DE
1-2; DE 24-1, Exh. A] Plaintiff admits he received these policies “at his place of employment.”
[DE 1 ¶ 8]
Plaintiff makes no specific allegations against Destiny or Diamond. Instead, he attempts
to rope them in by repeatedly pleading in the collective, when his own allegations and
documentation indicate that the policies and practices he seeks to challenge – mandatory unpaid
orientation and the crew uniform deduction – were, at most, those of his employer, Glamma, not
those of “Defendants.” And as a result, Plaintiff lacks standing against Destiny and Diamond
because he cannot allege that the three Defendants together maintained control over his hiring,
supervision, or payment such that they might be considered a “joint employer” under Bonnette
Plaintiff’s alternative “enterprise” theory is misplaced.
Plaintiff alternatively argues that Defendants are included in the FLSA’s definition of
“employer” because, together, they form a “single employer” or “single integrated enterprise,”
rendering them jointly liable for violations of the statute. [DE 1 ¶ 11; DE 20] The parties cannot
agree on the applicable Seventh Circuit standard for evaluating this theory, and their discordance
only amplifies the Court’s discussion below regarding conflation of FLSA coverage and FLSA
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 26 of 33
Plaintiff advocates for a four-factor test to determine whether separate entities constitute
an integrated enterprise or single employer: “(1) interrelations of operations; (2) common
management; (3) centralized control of labor relations; and (4) common ownership and financial
control.” Naperville Ready Mix v. NLRB, 242 F.3d 744, 752 (7th Cir. 2001). Plaintiff cites to
numerous cases in his opposition to the MTD to support his argument that he has “alleged facts
sufficient to support a plausible claims for liability under either a ‘single integrated enterprise’ or
‘single employer’ theory.” [DE 20 at 5] Unfortunately for Plaintiff, most of the cases he cites in
support concern who is an “employer” for purposes of other employment laws, such as the
National Labor Relations Act (the “NLRA”); the Labor-Management Relations Act (the
“LMRA”), the Employee Retirement Income Security Act (“ERISA”), or the Family Medical
Leave Act (the “FMLA”).12 None of these cases interpret the FLSA; indeed, Naperville Ready
Mix itself is an NLRA case. As discussed above, the bottom line is that FLSA liability is
predicated on an employee-employer relationship. Plaintiff must allege sufficient facts in his
complaint that each of the other Defendants – Destiny and Diamond – qualify as his employer,
either singularly or jointly with Glamma. He has failed to do so, and his allegations indicate that
he only ever worked for Glamma.
Plaintiff does cite two cases that have applied the “single employer” or “single integrated
enterprise” theory of liability in the FLSA context as a means of including employers who did
See Lippert Tile Co. v. Int’l. Union of Bricklayers & Allied Craftsmen, Dist. Council of Wis., 724 F.3d
939 (7th Cir. 2013) (LMRA); Moriarty v. Svec, 164 F.3d 323 (7th Cir. 1998) (NLRA and ERISA);
Esmark, Inc. v. NLRB, 887 F.2d 739 (7th Cir. 1989) (NLRA); Kaufman v. CRST Lincoln Sales, Inc., 2001
U.S. Dist. LEXIS 79914 (N.D. Ind. Jun. 24, 2011) (FMLA and ERISA); Trustee of Chi. Reg’l. Council of
Carpenters Pension Fund v. Central Rug & Carpet Co., 2012 U.S. Dist. LEXIS 16889 (N.D. Ill. Feb. 10,
2012) (ERISA); Chi. Reg’l. Council of Carpenters Pension Fund v. McGreal Constr., Inc., 2012 U.S.
Dist. LEXIS 167373 (N.D. Ill. Nov. 26, 2012) (LMRA and ERISA); Chi. Reg’l. Council of Carpenters
Pension Fund v. FAC Constr. & Design, Inc., 2011 U.S. Dist. LEXIS 145411 (N.D. Ill. Dec. 15, 2011)
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 27 of 33
not employ the plaintiff. But these cases can be distinguished. In Creech v. P.J. Wichita, the
plaintiff provided far more detail than here, alleging sufficient facts as to how various Papa
John’s pizza stores were centrally managed, and described the shared policies regarding pay of
deliver drivers at all locations. No. 16-2312, 2016 U.S. Dist. LEXIS 122027, **7-9 (D. Kan.
Sept. 8, 2016). And the factual scenario in Sanchez is wholly distinguishable. In Sanchez,
plaintiffs filed suit against one corporate defendant and its individual owners, and then entered
settlement talks with all defendants. No. 14-cv-04611, 2015 U.S. Dist. LEXIS 93782, *3 (N.D.
Ill. July 20, 2015). Settlement talks fell through, and so defendants registered a new corporation
to take over the other’s business in a brazen effort to insulate the other’s assets from the
litigation, including using the same signs with the new name covering the old, employing the
same individuals, and utilizing the same office equipment, labor management, and staff. Id. at
**3-4. When plaintiffs amended the complaint to include this new company, defendants moved
to dismiss and lost. See id. The Sanchez court saw through defendants’ maneuver, and
determined the two entities a “single employer” – indeed, they were more or less the exact same
company, but for a name change. Id.
Creech and Sanchez are not binding, but regardless, it is important to note that these
cases did not apply established concepts of FLSA liability. Instead, they transferred concepts
from the contexts of labor relations and employment discrimination to the FLSA’s employeremployee relationship. See Creech, 2016 U.S. Dist. LEXIS 122027, *7 n. 15 (attributing fourfactor standard to a discrimination case under the Americans with Disabilities Act); Sanchez,
2015 U.S. Dist. LEXIS 93782, *9 (citing an NLRA case for the “single employer” standard); see
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 28 of 33
also Roman, 970 F. Supp. 2d at 414-15 (distinguishing district court opinions cited by plaintiffs
based on this same flaw).13
Roman v. Guapos III, Inc., a FLSA decision from the United States District Court for the
District of Maryland that has been repeatedly cited within the Seventh Circuit, is markedly
similar to this case. In Roman, named busboys and waiters brought a collective FLSA action for
unpaid minimum wage and overtime. See generally, 970 F. Supp. 2d 407. Plaintiffs sued five
separately incorporated restaurants all owned by the same individual. Id. at 409-410. However,
the three named plaintiffs were employed at only one of those five restaurants, and did not allege
that they ever worked at any of the other locations. Id. Like here, plaintiffs claimed that the
restaurants together formed a “single employer” or “single integrated enterprise,” and cited a
host of cases in support, all of which the court distinguished for the same reasons this Court has
discussed immediately above. Id. at 414-15. The Roman court essentially rejected the notion that
the “single employer” or “single integrated enterprise” theory of liability applies to FLSA cases,
and instead reiterated that “every circuit has applied some variation of the Bonnette test, which
correctly evaluates the relationship between employee and alleged employer, not between
employer and non-employer.” Id. at 415.
In dismissing the named plaintiffs’ claims against the restaurants for which they did not
work, the Roman court also discussed a similar case from the United States District Court for the
District of Massachusetts, Cavallaro v. UMass Memorial Health Care, Inc., 971 F. Supp. 2d 139
(D. Mass. 2013):
The Court is not persuaded by Defendants’ arguments for applying the multifactor test from Sec’y of
Labor v. Lauritzen, 835 F.2d 1529 (7th Cir. 1987). In Callahan v. City of Chicago, the Seventh Circuit
“rejected the application of Lauritzen’s multifactor test when the alleged employee’s suit didn’t ‘require a
choice between employment and independent-contractor status.’” Berger, 843 F.3d at 291 n. 3 (quoting
Callahan v. City of Chicago, 813 F.3d 658, 662 (7th Cir. 2016)). The instant matter does not involve the
need to determine whether Plaintiff was an employee or an independent contractor.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 29 of 33
Plaintiff was a registered nurse who worked at the UMass Memorial
Medical Center (“UMass”). She brought an FLSA collective action on behalf of
13,000 similarly situated hourly employees against UMass, its subsidiary medical
facilities, and individual corporate officers, which she alleged were “related
organizations with common membership, governing bodies, trustees, officers, and
benefit plans,” that had a centralized payroll system, centralized website, and
system-wide employee-benefit plans, all overseen by a single Board of Trustees.
Cavallaro alleged that the multiple defendants failed to compensate plaintiff and
the collective for hours worked. Cavallaro did not allege that hospitals other than
UMass employed her, but alleged that they were part of a single, integrated
enterprise, and thus constituted a “joint employer” who is liable under the FLSA.
The court found that plaintiff lacked standing because she failed to satisfy
the traceability and redressability requirements. The court applied the Bonnette
factors to determine whether the other hospitals were her “employer.” The court
found that plaintiff's complaint provided no basis for finding that an employeremployee relationship existed and therefore plaintiff lacked standing to assert
claims against all the corporate defendants except UMass, her actual employer.
Similar to Cavallaro, Plaintiffs allege that a multi-entity enterprise is
operating as a cohesive unit whose policies have violated the FLSA. But the
Plaintiffs in this case have the same fatal flaw as Ms. Cavallaro: they have not
demonstrated the required employer-employee relationship necessary to establish
that their injuries are fairly traceable to the Corporate Defendants, nor that a
favorable decision against the Corporate Defendants would redress Plaintiffs’
alleged injuries. Cavallaro, 971 F.Supp.2d at 146, 2013 WL 360405, at *4
(“Inclusion of class allegations does not relieve a plaintiff of the requirement that
she allege that she personally suffered an injury, fairly traceable to the challenged
action of the defendants.”) (citing Warth v. Seldin, 422 U.S. 490, 502, 95 S. Ct.
2197, 45 L. Ed. 2d 343 (1975)).
Roman, 970 F. Supp. 2d at 415-16 (citations omitted). The Court agrees with the logic and
holdings of Roman and Cavallaro. The four Bonnette factors, as used to determine whether
multiple entities are a “joint employer” for FLSA liability purposes, establish the proper analysis
to determine whether a plaintiff has standing to sue entities apart from his immediate employer.
Issues of whether an “enterprise” exists in the FLSA context, on the other hand, are more
relevant to the issue of coverage under the statute, not liability.14
While the FLSA does extend coverage to “enterprises,” 29 U.S.C. §§ 203(r), (s), “the finding of an
enterprise is relevant only to the issue of coverage. Liability is based on the existence of an employer-
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 30 of 33
Plaintiff here has not demonstrated the “required employer-employee relationship
necessary to establish that [his] injuries are fairly traceable” to Destiny or Diamond, nor that a
favorable decision against Destiny or Diamond would redress his alleged injuries. Roman, 970 F.
Supp. 2d at 415-16. Therefore, Plaintiff’s individual15 claim against Destiny and Diamond in
Count I will be dismissed, without prejudice, for lack of standing.16
employee relationship.” Cornell v. CF Center, LLC, 410 Fed. Appx. 265, 267 (11th Cir. 2011) (quoting
Patel v. Wargo, 803 F.2d 632, 637 (11th Cir. 1986)); Chao v. A-One Medical Servs., Inc., 346 F.3d 908,
917 (9th Cir. 2003) (same).
The parties somewhat conflate FLSA coverage and FLSA liability in their papers. See Richardson v.
Help at Home, LLC, No. 17-cv-60, 2017 WL 2080448, at *2 (N.D. Ill. May 15, 2017) (explaining the
difference between “enterprise” as it relates to coverage and “joint employer” as it relates to liability); see
also Villareal, 776 F. Supp. 2d at 793 (“Whether a group of companies constitute a single enterprise for
FLSA coverage and whether they are liable as joint employers under 29 U.S.C. § 207 are technically
Congress broadened the scope of the FLSA in 1961 to add enterprise coverage, which focuses on the
nature of the employer’s business. 1 Rothstein et al., Employment Law § 4:2 (5th ed. 2014). Under the
FLSA’s enterprise coverage, as opposed to individual employee coverage, “all employees of a covered
enterprise are automatically covered [under the FLSA] without regard to the duties of each individual
worker.” Id. Whether multiple entities constitute “joint employers” for FLSA liability purposes, on the
other hand, revolves around allegations that “two or more entities or individuals are statutory employers
of the same workers at the same time and therefore [are] jointly responsible for compliance with the
Although the Court has already addressed Plaintiff’s § 216(b) Motion, it is important to note that
Plaintiff would not have been able to use putative plaintiffs to bring in Destiny and Diamond under the
prediction that a future collective of uncertain composition will include employees of these two entities.
Roman, 970 F. Supp. 2d at 416 (citing Lucas v. BMS Enters., Inc., No. 3:09-cv-2159-D, 2010 WL
2671305, at *3 (N.D. Tex. July 1, 2010) (In an FLSA case, plaintiffs “allege standing to sue the ...
defendants on the basis that members of the putative class were employed by those defendants, and
accordingly suffered the same injury as did plaintiffs. That basis is inadequate to allege standing.”);
Pashby v. Delia, 709 F.3d 307, 316 (4th Cir. 2013) (“When the case is a class action lawsuit, the named
class representatives ‘must allege and show that they personally have been injured, not that injury has
been suffered by other, unidentified members of the class to which they belong.’”) (quoting Blum v.
Yaretsky, 457 U.S. 991, 1001 n. 13, 102 S .Ct. 2777, 73 L. Ed. 2d 534 (1982))).
The Court need not address Defendants’ MTD pertaining to Count I against Destiny and Diamond
under Rule 12(b)(6) for failure to state a claim. As already explained, that count is deficient as to Destiny
and Diamond. Even assuming arguendo that Plaintiff’s proposed four-factor test from Naperville Ready
Mix governs whether the three Defendants can be considered a “joint employer,” Plaintiff offers no
allegations in support thereof other than a bare recitation of those factors: “Defendants jointly operate a
chain of McDonald’s franchise stores and maintain interrelated operations, centralized control of labor
relations, common management and common ownership and financial control.” [DE 1 ¶ 11] Such
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 31 of 33
Plaintiff’s Combined Motion for Conditional Collective Action Certification
For the reasons stated herein, Plaintiffs’ § 216(b) Motion [DE 18] to conditionally certify
Count I of Plaintiff’s complaint is hereby CONDITIONALLY GRANTED, and the Court
provisionally deems the FLSA claims in Count I a collective action. However, the Court limits
this conditional certification to include only those employees who worked for one of the six
McDonald’s restaurants owned and operated by Defendant Glamma in Elkhart, Indiana. The
Court thereby excludes from this conditional certification any employees who only worked at the
four Glamma restaurants not located in Elkhart, the one restaurant owned and operated by
Destiny, and the eight restaurants owned and operated by Diamond. The Court defines the
conditionally approved collective class as follows:
Present and former hourly-paid workers at any McDonald’s restaurant operated by
Harry L. Smith d/b/a “My-Tre Glamma Management” and located in Elkhart,
Indiana, at any time between [THREE YEARS PRIOR TO THE DATE OF
MAILING] and the present.
Plaintiff Jason Heuberger shall conditionally serve as the class representative of the
conditionally certified collective class, and be represented by current counsel of record.
The Court hereby DENIES Plaintiff’s § 216(b) Motion to conditionally certify Count III
of Plaintiff’s complaint as a collective action.
The Court hereby DENIES as moot Plaintiff’s § 216(b) Motion to conditionally certify
Counts II and IV.
allegations will not survive a motion to dismiss pursuant to Rule 12(b)(6). Brooks v. Ross, 578 F.3d 574,
581 (7th Cir. 2009) (On a motion to dismiss for failure to state a claim, a district court need not accept as
true legal conclusions, or threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements.); see also Iqbal, 556 U.S. at 678; Twombly, 550 U.S. at 555-56.
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 32 of 33
Notice to Potential Plaintiffs
The Court ORDERS the Defendant, Harry L. Smith d/b/a My-Tre Glamma
Management, to provide Plaintiff’s counsel with a list, in electronic format and within
thirty (30) days of this Order, containing the names of all potential plaintiffs who have
worked during the time frame specified immediately above. The list shall include each
individual’s full name, home address, and dates of employment. The information provided
by Defendant is to be given to Plaintiff’s counsel only, and may only be used as needed for
The Court further ORDERS that: (1) the case caption be removed from the Notice
and that the Notice instead be placed on Plaintiff’s attorneys’ letterhead; (2) the opt-in
period shall run sixty (60) days from date on which the Notice is mailed; and (3) the parties
shall confer and draft a Notice that complies with this Order and submit said draft to the
Court for approval within thirty (30) days from the date of this Order. No Notice shall be
issued prior to the Court’s approval. The Court also recommends that the parties confer and
agree upon a closing date for the opt-in period once the Notice has been mailed.
The Court hereby DENIES Plaintiff’s request that Defendant be compelled to post the
Notice in the breakrooms of the relevant restaurants; and the Court hereby DENIES Plaintiff’s
request that Defendant provide him with the social security numbers of potential plaintiffs.
Defendants’ Partial Motion to Dismiss
For the reasons stated herein, the Court GRANTS Defendants’ Partial Motion to Dismiss
Plaintiff’s Complaint [DE 15] as to Plaintiff’s remaining individual claims. It is hereby:
ORDERED that Counts II and IV be DISMISSED as moot, and with prejudice in their
entirety and as to all Defendants; and it is further
USDC IN/ND case 3:16-cv-00386-JD-JEM document 30 filed 09/07/17 page 33 of 33
ORDERED that Count III be DISMISSED with prejudice in its entirety and as to all
Defendants; and it is further
ORDERED that Count I be DISMISSED without prejudice as to Defendants Destiny
MGT, Inc., and Diamond Properties MGMT, Inc; and it is further
ORDERED that Plaintiff may file an amended complaint within thirty (30) days of this
ENTERED: September 7, 2017
/s/ JON E. DEGUILIO______
United States District Court
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?