WARD v. HAT WORLD, INC.
ORDER - #43 Defendant is granted an enlargement of time, until December 28, 2017, to file her response to Plaintiff's brief is granted. #45 Motion Request for Oral Argument on His 43 Motion for Conditional Collective Action Certification is denied as moot. See order for details. Signed by Judge Tanya Walton Pratt on 11/29/2017. (MEJ)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
MATTHEW WARD, on behalf of himself
individually and on behalf of other similarly
situated current or former employees,
HAT WORLD, INC.,
Case No. 1:17-cv-02557-TWP-MJD
ORDER ON MOTION TO CONDITIONALLY CERTIFY A
COLLECTIVE ACTION AND FACILITATE NOTICE
This matter is before the Court on a Motion for Conditional Collective Action Certification
and to facilitate notice pursuant to 29 U.S.C. § 216(b) filed by Plaintiff Matthew Ward (“Ward”)
(Filing No. 43). Ward previously was employed by Defendant Hat World, Inc. (“Hat World”) as
a regional loss prevention investigator (“RLPI”). As a salaried employee, he often worked more
than forty hours per week, yet Hat World failed to pay him any overtime wages for hours worked
in excess of forty hours. Because he was not paid overtime wages, Ward initiated this lawsuit
against Hat World under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201, et seq., and
under similar state law provisions. He asks the Court to conditionally certify a collective action
for the FLSA claim and permit notice to potential plaintiffs who similarly have worked or are
working for Hat World as RLPIs and who have not been paid for overtime work. Also before the
Court is Ward’s Request for Oral Argument on his Motion. (Filing No. 45) For the following
reasons, the Court grants Ward’s Motion for conditional certification and denies the request for a
Hat World is a Minnesota corporation that operates a retail business out of Indianapolis,
Indiana. It has more than 1,000 mall-based, airport, street-level, and factory outlet locations
throughout the United States and Canada. Hat World operates businesses such as Lids, Lids
Locker Room, and Lids Clubhouse, which sell sporting teams’ apparel, accessories, novelties, and
headwear. Individual stores are organized into districts, and districts are organized into regions.
Regional loss prevention investigators work at the regional level (Filing No. 12 at 5, 8).
At any given time, Hat World employs approximately sixteen to twenty RLPIs throughout
North America. Ward was employed as an RLPI for Hat World from October 2013 to September
2016. His job interview was held in Seattle, Washington and he was interviewed by two
individuals based out of Indiana and Ohio. After receiving a job offer, Ward trained with another
RLPI in Florida.
His initial work assignment as an RLPI covered the region of Alaska,
Washington, Oregon, Western Canada, and Northern California (Filing No. 13 at 1–2).
Hat World’s “job description” document, describes the typical work that Ward and other
RLPIs performed (Filing No. 13 at 11). An RLPI counts inventory at the stores within that RLPI’s
region, which is tedious, repetitive physical work, involving manually counting every item in a
store. An RLPI also conducts investigations regarding lost inventory and performs inspection
work to detect losses of assets. RLPIs also report and communicate their findings from their
investigations and inspections to management. They provide recommendations and assistance to
the stores within their region (Filing No. 13 at 3–6).
Ward regularly worked more than forty hours in a week, but Hat World never compensated
him with overtime wages. He has talked with other RLPIs who experienced similar long work
hours without overtime compensation. Id. at 7. In addition to his own declaration, Ward also
provides declarations from John Watson and Adam Heidenreich, who were also RLPIs for Hat
World. Their declarations similarly describe their experience of regularly working more than forty
hours in a week but not receiving overtime wages. They also affirm that Ward’s description of the
duties of RLPIs is accurate (Filing No. 14; Filing No. 15).
Hat World describes the role of its RLPIs in this manner:
The primary function of the RLPI is the effective implementation of Hat
World’s program for loss prevention and shortage control in the stores assigned to
his or her respective Loss Prevention Region (“LP Region”).
This function requires RLPIs to analyze inventory results, allocate store
Loss Prevention resources to successfully reduce inventory shortage, focus
prevention activities on high shortage stores, develop complementary store-specific
programs to meet or exceed the store’s shortage goals, identify paperwork control
weaknesses and implement procedures to correct them, conduct audits for
compliance and ensure store follow-up on price accuracy initiatives, review cash
discrepancies, identify cash registers with unacceptable shortages, regularly review
loss prevention exception reports for signs of dishonesty, interview loss prevention
candidates, conduct and supervise training store personnel on loss prevention,
provide direction for store personnel that relates to the functional areas of personnel
management and human resources, train store personnel regarding emergency
procedures, robbery, fire, and other emergencies, guide store management in
conducting investigations, training, and addressing shortage related issues, develop
store associate awareness and support programs, promote customer approach
programs that ensure employees know how to approach customers in a way that is
legal and appropriate, determine what internal investigations to pursue and when to
conduct interviews, interrogate suspects and obtain confessions, ascertain
prosecutable cases, take appropriate legal steps with respect to shoplifters,
including apprehensions of suspects and the filing of police reports, select
appropriate steps to address the problem of inventory shortage and pursuing the
selected course of action by comparing and evaluating possible courses of conduct,
and testifying as a witness on behalf of Hat World. RLPIs also consult with and
provide expert advice to store management with regard to all of the foregoing.
Earning a minimum weekly salary in excess of $455 per week, RLPIs work
independently to audit scores of retail locations within one of 16 assigned LP
Regions. RLPIs plan and coordinate their own travel for each store audit and/or
investigation, and they communicate all of their itineraries with the stores in their
RLPIs provide critical support to the management of Hat World’s business,
not only in identifying costs attributable to fraud, theft, and/or poor inventory
controls, but also in developing fraud detection solutions to prevent future loss.
RLPIs coordinate the timing of audits, investigations and training programs with
District Sales Managers (“DSMs”) and partner with DSMs to discuss follow up
actions necessary to address issues revealed during audits and investigations.
(Filing No. 50 at 3–5 (citations omitted)).
Hat World provides declarations from Todd Campbell (its director of loss prevention) and
Peter Hammer, Jeremy Nerbonne, and Greg Passamonti (RLPIs), who describe the work, role, and
authority of Hat World’s RLPIs. Their descriptions align with the description noted above (Filing
No. 50-2; Filing No. 50-17; Filing No. 50-18; Filing No. 50-19).
Ward contends that Hat World improperly classified him and all other RLPIs as “exempt
administrative employees” under the FLSA and failed to pay RLPIs overtime wages for any hours
they worked in excess of forty hours in a week. He filed this lawsuit to seek overtime wages for
himself and other similarly situated RLPIs who were denied overtime wages by Hat World. Ward
asks the Court to conditionally certify his FLSA claim as a collective action.
Under the FLSA, an employee is permitted to maintain a collective action for “unpaid
overtime compensation . . . for and in behalf of himself . . . and other employees similarly situated.”
29 U.S.C. § 216(b). The “District Court has the discretion to authorize notice to similarly situated
employees so that they may opt-in to a class.” Carter v. Indianapolis Power & Light Co., 2003
U.S. Dist. LEXIS 23398, at *7 (S.D. Ind. Dec. 23, 2003). “Such a collective action differs
significantly from a Rule 23 class action. Potential class members in a collective action must
affirmatively opt-in to be bound, while in a Rule 23 action they must opt out [to] not be bound.”
Cheesman v. Nexstar Broad. Grp., Inc., 2008 U.S. Dist. LEXIS 42265, at *3 (S.D. Ind. May 27,
2008) (emphasis in original). The standards governing class certification under Rule 23 are not
applicable to FLSA collective actions. Id. at *5.
Courts in the Seventh Circuit engage in a two-step inquiry to determine whether an FLSA
action may proceed as a collective action. Id. The first step is called the “notice stage” and
“involves an analysis of the pleadings and affidavits which have been submitted to determine
whether notice should be given to potential class members.” Id. (quoting Carter, 2003 U.S. Dist.
LEXIS 23398, at *8). “The second step, which usually occurs after discovery has largely been
completed, allows a court the opportunity to determine whether the class should be decertified or
restricted because various putative class members are not in fact similarly situated as required by
the statute.” Id.
During the initial “notice stage,” a plaintiff does not have to prove his entire case. Rather,
the plaintiff must make only a threshold showing that he is similarly situated to the employees on
whose behalf he seeks to pursue claims. Coan v. Nightingale Home Healthcare, Inc., 2005 U.S.
Dist. LEXIS 15475, at *3 (S.D. Ind. June 29, 2005). This threshold showing is “relatively modest.”
Id. “The modest factual showing required at the first step of the proceedings may be lenient, but
it is not a mere formality.” Allen v. Payday Loan Store of Ind., Inc., 2013 U.S. Dist. LEXIS
169971, at *4 (N.D. Ind. Dec. 3, 2013) (citation and quotation marks omitted). “[T]o meet their
burden, Plaintiffs must provide evidence via an affidavit, declaration, or other support beyond
allegations in order to make a minimal showing of other similarly situated employees subjected to
a common policy.” Id.
Among other things, the FLSA prohibits employers from working their employees more
than forty hours in a work week without compensating the employee overtime wages at a rate of
at least time and a half for hours worked in excess of forty hours. 29 U.S.C. §§ 207, 215(a)(2).
“The FLSA exempts from overtime pay coverage those employed in a ‘bona fide executive,
administrative, or professional capacity.’” Mullins v. Target Corp., 2011 U.S. Dist. LEXIS 39997,
at *10 (N.D. Ill. Apr. 13, 2011) (quoting 29 U.S.C. § 213(a)(1)). The FLSA provides a procedural
mechanism whereby employees may litigate a collective action on behalf of similarly situated
employees. See 29 U.S.C. § 216(b).
Ward asks the Court to conditionally certify a collective action for his FLSA claim because
he can meet the lenient, relatively modest threshold showing that he is similarly situated to other
RLPIs who were denied overtime wages by Hat World. Ward additionally asks the Court to allow
him to provide notice to potential plaintiffs who similarly have worked or are working for Hat
World as an RLPI and who have not been paid for overtime work.
In support of his Motion, Ward provides declarations from himself and two other RLPIs,
John Watson and Adam Heidenreich. In their declarations, the three former employees describe
the tasks they performed, which were consistent with the “job description” document that Hat
World gave to its employees (and which is also provided to the Court as additional evidence). The
three individuals’ work descriptions and experiences are similar, they each regularly worked more
than forty hours in a week, and they each were not paid overtime wages. Each of them, like all
RLPIs, was classified by Hat World as being exempt from the overtime provision of the FLSA.
Ward asserts that this is enough to meet the lenient, relatively modest threshold showing that he is
similarly situated to other RLPIs who were denied overtime wages by Hat World. And thus, he
asserts, his claim should be certified as a collective action.
In response to the Motion, Hat World argues that it properly classified its RLPIs as exempt
under the FLSA overtime provision, so there is no unlawful common practice or policy suffered
by similarly situated employees to allow a collective action in this case. Hat World’s declarations
provide a detailed description of the day-to-day work performed by RLPIs and the discretion that
they must exercise when performing their duties. The declarations also provide an explanation of
some of the variations in work performed by the RLPIs based on the stores that they inspect. Hat
World argues that a collective action is improper because of these variations and because it has
properly classified its RLPIs as exempt employees. Hat World also very briefly argues that the
scope of Ward’s proposed class is too broad, and his proposed notice to the class is insufficient in
Both parties spend significant portions of their briefs describing the “administrative
exemption” to the FLSA, pointing to case law, federal regulations, and U.S. Department of Labor
opinion letters, and arguing their position on whether the administrative exemption should apply.
The Court notes that these arguments concern the merits of Ward’s claim against Hat World and
do not resolve the issue of similarly situated employees and conditional certification of a collective
action. Ward tends to downplay the job responsibilities of RLPIs in an effort to avoid application
of the administrative exemption. Conversely, Hat World tends to amplify the job responsibilities
of RLPIs to show that the administrative exemption should apply. However, these arguments go
to the merits of the claim, not to the similarity (or dissimilarity) of Ward to other potential
As another court in this District noted, “A plaintiff need not provide conclusive support for
their similarly situated argument, but instead merely an affidavit, declaration, or other support
beyond allegations in order to make a minimal showing of other similarly situated employees
subjected to a common policy.” William v. Angie’s List, Inc., 223 F. Supp. 3d 779, 783 (S.D. Ind.
2016) (citation and quotation marks omitted).
The declarations that the parties submitted illustrate the similarities among all of Hat
World’s RLPIs. While Hat World’s declarations provide greater detail and an alleged greater
authority held by RLPIs than Ward’s declarations, each of the declarations show similar job
responsibilities and working conditions at their core among the RLPIs.
declarations provided by Hat World actually confirm that RLPIs worked more than forty hours in
a week (and sometimes less than forty hours) and were not compensated with overtime wages.
The arguments advanced by each party and the evidence offered in support show that
RLPIs employed by Hat World have similar job responsibilities, are subject to similar company
policies and practices, and are paid under a similar compensation structure. Additionally, there
appears to be no dispute that all RLPIs have been similarly classified by Hat World as “exempt”
employees. Whether that “exempt” classification is actually appropriate is at the heart of the
parties’ dispute and is a merits question. It appears that Ward and the potential plaintiffs are
similarly situated employees who were subject to a common policy, plan, or practice. The issue
to be resolved later on the merits is whether that common policy, plan, or practice violated the law.
Therefore, the Court concludes that Ward has met his burden of making a modest factual showing
that he is similarly situated to the potential plaintiffs to conditionally certify a collective action
against Hat World.
Hat World very briefly argues that a collective action would be difficult to manage because
of differences in damages and hours worked among potential plaintiffs.
differences do not affect the propriety of conditional certification at this stage of the collective
action. The Court also determines that Hat World’s arguments concerning the scope of the class
and the sufficiency of the proposed notice are without merit.
For the foregoing reasons, the Court GRANTS Ward’s Motion (Filing No. 43) and
conditionally certifies the FLSA claim as a collective action for the following class:
All Regional Loss Prevention Investigators who are working or have worked for
Hat World, Inc. at any time in the past three years and during their employment
worked, at any time, in excess of 40 hours in a given week.
The Court ORDERS Hat World to produce the names, home addresses, home telephone
numbers, cellular telephone numbers, email addresses, and dates of employment (the “Employee
Information”) of all current and former regional loss prevention investigators who are or were
employed by Hat World during the three-year period prior to the date of this Order. Hat World is
ORDERED to provide the Employee Information in a usable electronic format to counsel for
Ward within fourteen (14) days from the entry of this Order.
The Court authorizes that the proposed “Notice of Right to Join Lawsuit” and
corresponding “Consent to Join” form submitted by Ward at Filing No. 52-1 at 4–7 and Filing No.
52-1 at 8 may be issued to those individuals whose names are provided by Hat World as required
by this Order. The Notice shall be mailed within seven (7) days after Hat World provides the
Employee Information. The “Consent to Join” form shall be enclosed with the Notice, along with
a self-addressed, postage paid return envelope. Ward is permitted to send subsequent mailings of
this Notice. The Notice and Consent forms shall be mailed by first-class mail or overnight
The potential plaintiffs shall have sixty (60) days after the deadline for mailing of the
Notice of Right to Join Lawsuit to return a Consent to Join form to opt-in to this litigation, unless
the parties agree to permit late filings or good cause can be shown as to why the form was not
returned prior to the deadline.
Ward’s Request for Oral Argument on His Motion for Conditional Collective Action
Certification (Filing No. 45) is DENIED as moot.
The Court notes that Attorneys Scott McKay, Curt Hineline, and James Morrison are not
registered for electronic filing in this district despite having been ordered to do so (See Filing No.
28). The Clerk of Court is not required to mail hard copies to the unregistered attorneys.
Service will be made electronically on all
ECF-registered counsel of record via email
generated by the Court’ ECF system
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