Folger v. Medicalodges, Inc. et al

Filing 93

MEMORANDUM AND ORDER denying 76 Motion to Certify Class. Signed by District Judge Monti L. Belot on 6/25/2014. (smg)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

JACQUELINE FOLGER,
On Behalf of Herself and
All Others Similarly Situated
Plaintiffs,

)
)
)
)
)
v.
)
)
MEDICALODGES, INC., and GAREN FOX, )
)
Defendants.
)
)

CIVIL ACTION
No.

13-1203-MLB

MEMORANDUM AND ORDER
This case comes before the court on plaintiffs’ motion to
conditionally certify this case as a collective action under section
16(b) of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b),
to recover unpaid overtime compensation.

(Doc. 76).

been fully briefed and is ripe for decision.

The motion has

(Docs. 77, 87, 92).

Plaintiffs’ motion is denied for the reasons herein.
I.

Facts and Procedural History
Plaintiff Jacqueline Folger was employed by Medicalodges at its

Goddard nursing facility as a MDS Coordinator.

Since the filing of

the amended complaint, twelve current and former employees have opted
in as plaintiffs.1

The opt-in plaintiffs held various positions at

eleven different Medicalodges’ facilities. Defendant Garen Fox is CEO
and General Counsel for Medicalodges, which operates twenty-three
skilled nursing facilities throughout Kansas, Missouri and Oklahoma.
The amended complaint alleges that Medicalodges violated the

1

Fourteen plaintiffs filed a consent to join and subsequently,
two of those plaintiffs withdrew their consent.

FLSA by misclassifying MDS Coordinators as salaried employees (Count
1) and failing to accurately record work time and properly pay hourly
employees for the hours worked (count 2).2
Medicalodges has several policies concerning its employees.
(Doc. 77, exh. 2).

Medicalodges requires hourly employees to take a

thirty minute break during an eight hour shift.

The hourly employees

are not paid for the break and the thirty minutes is automatically
deducted from their paychecks.

In the event an hourly employee works

during a lunch break, the employee is to complete a time clock
adjustment form in order to receive compensation.

Medicalodges also

has a policy requiring employees to get approval prior to working
overtime. Plaintiffs admit that these policies comply with applicable
law.
Initially, Folger was an hourly employee. Folger testified that
she was unable to complete her job duties in a 40 hour work week and
was allegedly reprimanded for working overtime.

Folger began working

off the clock in order to complete her job duties and not incur
overtime pay.

Ultimately, Medicalodges converted Folger’s position

from hourly to salaried and Folger performed the same job duties.3
Folger alleges that she and other similarly situated hourly
2

The amended complaint also sets forth state claims which
presumably may be the subject of a Rule 23 class certification motion
after discovery has been completed.
3

There could be an inference that Folger may have been made a
salaried employee in order to avoid paying her overtime as an hourly
employee. Whether this was, or was not, Medicalodges’ motivation is
immaterial at this juncture. What is important is that the amended
complaint does not allege that such a change of status violates the
FLSA. The amended complaint also alleges that “similarly situated”
hourly personal were converted to “salaried employees” but if that
occurred, the employees are not identified, either by name or number.
-2-

employees were not properly compensated by Medicalodges for working
overtime.

Folger and other employees allegedly worked during their

lunch break with Medicalodges’ knowledge and without payment and that
Medicalodges required the employees to work during their lunch break.
The

magistrate

judge

issued

a

discovery was separated into phases.

scheduling

order

in

The first phase (phase I)

focused on issues related to collective action certification.
22).

discovery,

certification.
II.

(Doc.

During phase I, the parties served Rule 26(a)(1) disclosures,

interrogatories and took depositions.
I

which

Folger

moved

(Doc. 76).

for

At the conclusion of the phase

conditional

collective

action

Defendants oppose the certification.

Analysis
An action under the FLSA may be brought “against any employer

. . . by any one or more employees for and in behalf of himself or
themselves and other employees similarly situated.” 29 U.S.C. §
216(b).

To participate in an FLSA collective action, all plaintiffs

must give consent in writing and it must be “filed in the court in
which such action is brought.” Id.

Before notice of the pending

action is sent to putative plaintiffs, it must be conditionally
certified as a collective action.

The court may certify an opt-in

collective action so long as the aggrieved employees are similarly
situated.

Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102,

1105 (10th Cir. 2001).
situated.”

Section 216(b) does not define “similarly

The Tenth Circuit has approved an ad hoc case-by-case

basis for determining whether employees are “similarly situated” for
purposes of § 216(b).

Id.

This process involves a two-step inquiry. The first step occurs
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at the “notice stage” of the proceedings. Here, the court determines
if certification is proper for purposes of sending notice of the
action to potential collective action members.

The notice stage

“requires nothing more than substantial allegations that the putative
class members were together the victims of a single decision, policy
or plan.” Id. The requirement for “conditional certification” at the
notice stage is a “lenient one.” Thiessen, 267 F.3d at 1103. It does
not

appear

that

discovery

at

the

notice

stage

is

required.

Nonetheless, discovery was ordered by the magistrate judge and there
is nothing in the record to show that any of the parties opposed it.
The second step occurs after discovery is complete. At that
stage, defendants may file a motion to decertify and the court then
applies a stricter standard to assure that plaintiffs are actually
similarly situated.

During the second stage, the court reviews a

number of factors, including “(1) disparate factual and employment
settings of the individual plaintiffs; (2) the various defenses
available

to

defendant

which

appear

to

be

individual

to

each

plaintiff; (3) fairness and procedural considerations; and (4) whether
plaintiffs made the filings required . . . before instituting suit.”
Thiessen, 267 F.3d at 1102–03.
Defendants urge the court to apply an intermediate standard and
cite to Thiessen v. General Elec. Capital Corp., 996 F. Supp. 1071 (D.
Kan. 1998) in support of their position.

In his decision, Judge John

Lungstrum utilized an intermediate standard in which the limited
evidence was applied to the second stage factors. Judge Lungstrum
noted that he made his “determination to provisionally certify,
however, under a more lenient standard in light of deficiencies in the
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record.”

Id. at 1081.

Judge Lungstrum’s decision to conditionally

certify the class using the intermediate standard was not reviewed on
appeal.

The Tenth Circuit’s decision, issued three years later,

reviewed his decision to decertify the class.

Thiessen, 267 F.3d at

1102–03.
The intermediate standard has not been applied in any recent
District of Kansas or Tenth Circuit decisions.4

In a more recent

case, Judge Lungstrum declined to “apply an intermediate level of
scrutiny in the absence of any suggestion from the Tenth Circuit that
an examination of the specific issues in this case that might weigh
against certification can occur at any stage short of summary judgment
proceedings or final certification.”

In re Bank of Am. Wage and Hour

Emp’t Litig., 286 F.R.D. 572, 577 (D. Kan. 2012). But Bank of America
is a multi-district case with issues far more complex than those
present here.

For example, on the crucial issue of the existence of

a plan or policy, plaintiffs presented expert evidence of a “pervasive
pattern” of unpaid overtime, which would violate the FLSA.

No such

evidence has been presented in this case.
In

this

case,

the

magistrate

judge’s

decision

to

allow

discovery, while undoubtedly appropriate, presents this court with an
interesting dilemma.

Plaintiffs could have opposed discovery on the

basis that the allegations in the amended complaint satisfied the
requirements for phase I collective action certification. Apparently
that did not happen or, if it did, the magistrate judge was not
persuaded.
4

Or, the parties may have agreed to discovery.

The record

But the standard has never been rejected by the Circuit,

either.
-5-

is silent.
discovery

But regardless why it was authorized, substantial formal
has

taken

place.

(In

addition,

plaintiffs’

counsel

allegedly engaged in some “self-help” activities such as placing ads
about the case in newspapers in communities where Medicalodges’
facilities are located).

Finally, Medicalodges has submitted almost

100 “happy camper” affidavits from its employees for the ostensible
purpose of refuting allegations in the amended complaint.
So the point is this: by doing all of these things, the parties
have signaled their expectation that the court will consider matters
beyond the allegations of the amended complaint in determining whether
to allow conditional certification, even though all merits discovery
has not been completed.

Were this not the case, substantial amounts

of time and money would have been expended for naught, clearly
contrary to Fed. R. Civ. P. 1. Indeed, although plaintiffs argue that
the court should not review the evidence produced during discovery at
this

stage

testimony

of
to

the

proceedings,

support

their

plaintiffs

motion.

cited

Therefore,

to

deposition

reviewing

the

deposition testimony to determine whether there is factual support for
the existence of an unlawful policy is entirely proper at this stage.
To obtain authorization for certification, plaintiffs must set
forth “substantial allegations that the putative class members were
together the victims of a single decision, policy or plan.” Thiessen,
267 F.3d at 1102.

In determining whether plaintiffs are victims of

a single policy, the court can consider the substantial allegations
of the complaint along with any supporting affidavits or declarations.
See, e.g., id.; Renfro v. Spartan Computer Servs., Inc., 243 F.R.D.
431, 434 (D. Kan. 2007); Brown v. Money Tree Mortg., Inc., 222 F.R.D.
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676, 680-81 (D. Kan. 2004)(considering allegations and affidavits at
notice stage); Williams v. Sprint/United Mgmt. Co., 222 F.R.D. 483,
485 (D. Kan. 2004).

In considering the submissions, the court does

not weigh evidence, resolve factual disputes, or rule on the merits
of plaintiffs’ claims.

Swartz v. D-J Engineering, Inc., No. 12-1029,

2013 WL 5348585, *5 (D. Kan. Sept. 24, 2013)(citing Barnwell v. Corr.
Corp. of Am., No. 08–2151, 2008 WL 5157476, at *5 (D. Kan. Dec. 9,
2008); Gieseke v. First Horizon Home Loan Corp., 408 F. Supp.2d 1164,
1166 (D. Kan. 2006)).
A.

Hourly Employees

Plaintiffs seek to conditionally certify a class of “all hourly
employees who worked for Medicalodges’ care facilities during the last
three years.”

(Doc. 76 at 1). Plaintiffs contend that the class of

hourly employees has been a victim of Medicalodges’ policy of failing
“to compensate its employees for their off-the clock work during []
unpaid meal breaks.”

(Doc. 92 at 27).5

As pointed out, plaintiffs have acknowledged (Doc. 92 at 27) that
the mere existence and implementation of a policy or practice of
making automatic deductions for scheduled meal breaks in and of itself

5

In the amended complaint, Folger alleges that Medicalodges
failed to pay plaintiffs for “pre- and post- shift work,” “work during
unpaid meal breaks,” and “unlawfully round[ed] away employees’ time
worked to their detriment.” (Doc. 30 at 5). In plaintiffs’ motion,
however, there is no allegation of a companywide policy to not
compensate plaintiffs’ pre- and post-shift work or unlawfully round
employees’ time worked.
Plaintiffs’ reply brief states that
plaintiffs seek “conditional certification due to Medicalodges’
systematic failure to compensate its employees for their off-the clock
work during those unpaid meal breaks.” (Doc. 92 at 27). Therefore,
the court presumes that plaintiffs have abandoned the class-wide
allegations of unlawful rounding and pre- and post-shift “off the
clock” work.
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does not violate the FLSA. See Wage and Hour Division, U.S. Dep't of
Labor, Factsheet No. 53, The Health Care Industry and Hours Worked
(2008).

It is the failure of an employer to compensate employees who

work through those unpaid meal breaks that potentially runs afoul of
the Act.
FLSA.

Id.

On their face, Medicalodges’ policies comply with the

Essentially, plaintiffs appear to allege that Medicalodges

maintains an unwritten policy to violate the lawful policies.

(Doc.

77 at 3).
While plaintiffs’ burden is not heavy at this stage, plaintiffs
must establish that the entire class, all hourly workers, “were
together the victims of a single decision, policy or plan.” Thiessen,
267 F.3d at 1102.

Plaintiffs have not offered direct evidence that

Medicalodges adopted an unwritten policy not to pay for worked meal
breaks. Instead, plaintiffs have attached identical declarations from
11 opt-in plaintiffs.6

The declarations state that plaintiffs were

“routinely called away from [their] meal breaks to perform work.”
(Doc.

77,

exh.

6).

The

declarations

further

state

that

the

supervisors were aware of the situation and expected the work to be
performed.

While

the

declarations

are

comprised

of

identical

allegations that defendants violated the FLSA, the opt-in plaintiffs’
depositions do not support the conclusion that plaintiffs were the
victims

of

a

Medicalodges.

“single

decision,

policy

or

plan”

in

place

at

The individual plaintiffs’ reasons for not taking a

lunch break and/or failing to submit a time clock adjustment form are

6

The opt-in plaintiffs include a personnel manager, an activity
director, licensed practical nurses (LPNs), housekeepers, maintenance
and certified nursing assistants (CNAs).
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all across the board.
Plaintiffs’ motion further asserts that Folger was threatened
that she would be terminated for working overtime.

(Doc. 77 at 6-7).

However, there is no allegation or evidence that Folger or any
employee was terminated or even disciplined for working overtime.
Plaintiffs’ motion and declarations also contend that Medicalodges
directed employees to work during their lunch.

A review of the

deposition testimony, however, does not support this assertion.
Plaintiff Mary Nichols testified that Medicalodges’ policy is not
to allow an employee to work off the clock.

As the director of

nursing, Nichols enforced that policy and did not allow employees to
work during their lunch period. (Doc. 87, exh. E at 33).

Plaintiff

Cynthia Brown testified that she worked “off the clock” to finish her
work because it was “unfair” to leave her work for someone else.
(Doc. 87, exh. G at 44).

Brown further testified that she never

sought approval for overtime or reimbursement for a worked lunch.
Plaintiff Dawn Hunt submitted forms to receive reimbursement for
worked lunches on several occasions. (Doc. 87, exh. H at 75-77). The
forms were approved at times and denied a “couple [of] times.”
at 77.

Id.

Hunt was counseled verbally by a supervisor about her time

management

skills

due

to

Hunt’s

working

during

her

break.

Id.

Plaintiff Donna Brown testified that she was interrupted during her
lunch approximately six times a month.

(Doc. 87, exh. I at 34).

Brown did not always submit a form for reimbursement because “you
didn’t have time to go in there and get [one.]” Id.

Brown did fill

out the forms during her employment and received reimbursement on
those occasions.

Plaintiff Vicki Michel, an activity director,
-9-

testified that she ate lunch in her office and did not get an
uninterrupted lunch breach because it was busy over the lunch hour.
(Doc. 87, exh. J at 77).

Michel did not inform the individuals who

interrupted her lunch that she was on break because that’s “not the
kind of person I am.”

Id. at 79.

Michel further testified that

someone “may have known” that she was working during lunch.
90.

Id. at

Plaintiff Ashley Newill testified that she would get in trouble

for not taking her lunch because it violated Medicalodges’ policy, but
that she did not take a lunch because the residents’ care is more
important than her lunch.

(Doc. 87, exh. K at 17).

Plaintiff Stacey

Smiley testified that she processed time clock adjustment forms for
employees when she was personnel manager.

Smiley did not submit the

forms for herself because she was fearful of her supervisor, Miss
Brooks.

(Doc. 87, exh. L at 42).

Plaintiffs seek certification of more than two thousand employees
who worked for numerous managers across the Midwest at various
Medicalodges facilities.

Plaintiffs contend that they are similarly

situated to all other employees because they all were required to work
during their lunch breaks and did not get reimbursed.

As shown,

however, the deposition testimony does not provide evidentiary support
for plaintiffs’ class-wide allegations.

The depositions show that

“the opt-in plaintiffs were themselves paid for meal breaks on many
occasions during the class period—specifically, that they filed
requests to reverse the half-hour meal-break deduction, those requests
were honored, and they were paid for working through lunch.”

Saleen

v. Wast Mgm’t, Inc., 649 F. Supp.2d 937, 942 (D. Minn. 2009).
Although plaintiffs have a lighter burden at this stage, plaintiffs
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still must show a that there were the victims of a “single decision,
policy or plan” in place at Medicalodges. Thiessen, 267 F.3d at 1102.
“The mere fact that a small fraction of employees allege that they did
not receive the compensation to which they were entitled provides
almost no evidence that the reason that these employees were underpaid
was because of an unlawful companywide policy.”

Saleen, 649 F.

Supp.2d at 941.
Conditionally certifying a class of two thousand employees will
result in enormous expense to both plaintiffs and defendants.

In

light of plaintiffs’ dissimilarities and failure to identify an across
the board policy in place at Medicalodges, the court finds that the
interests

of

justice

require

the

case

to

move

forward

without

certification.
Plaintiffs’ motion to certify the class of hourly employees is
denied, without prejudice.
discovery

and

refile

Plaintiffs may continue to participate in

their

motion

at

a

later

date,

as

may

be

appropriate.
B.

Salaried MDS Coordinators

Plaintiffs seek conditional class certification of salaried MDS
Coordinators on the basis that defendants unlawfully reclassified MDS
Coordinators as salaried employees.

Plaintiffs do not point to any

provision of the FLSA which makes it “unlawful” to convert an hourly
employee to a salaried employee.

Moreover, “the mere classification

of a group of employees — even a large or nationwide group — as exempt
under the FLSA is not by itself sufficient to constitute the necessary
evidence of a common policy, plan, or practice that renders all
putative class members as ‘similarly situated’ for § 216(b) purposes.”
-11-

Colson v. Avnet, Inc., 687 F. Supp.2d 914, 927 (D. Ariz. 2010)); see
also Guillen v. Marshalls of MA, Inc., 750 F. Supp.2d 469, 476–77
(S.D.N.Y. 2010).

In a FLSA exemption case, plaintiffs must show that

“there are other employees . . . who are similarly situated with
respect to their job requirements and with regard to their pay
provisions, on which the criteria for many FLSA exemptions are based,
who are classified as exempt pursuant to a common policy or scheme.
The

‘modest

factual

showing’

‘unsupported assertions.’”

cannot

be

satisfied

simply

by

Myers v. Hertz Corp., 624 F.3d 537, 555

(2nd Cir. 2010).
Plaintiffs contend that class certification is warranted because
defendants “salaried other MDS Coordinators to avoid paying overtime
for work in excess of 40 hours each week.”

(Doc. 77 at 9).

The

deposition testimony cited by plaintiffs, however, does not support
this assertion. Mary Nichols, the only other opt-in plaintiff who was
employed as an MDS Coordinator, did not testify that her position was
reclassified at some point in time.
was a salaried position.

Rather, her testimony is that it

Therefore, plaintiffs have not met their

burden to show that Medicalodges improperly reclassified all MDS
Coordinators

pursuant

to

a

“single

decision,

policy

or

plan.”

Thiessen, 267 F.3d at 1102.
Plaintiffs’ motion to certify the class of MDS Coordinators is
therefore denied, without prejudice.
III. Conclusion
Plaintiffs’ motion to conditionally certify a collective action
is denied, without prejudice.

(Doc. 76).

A motion for reconsideration, regardless of how it is styled,
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will not be permitted.

The issue of conditional certification has

been thoroughly briefed. The case is returned to the magistrate judge
to formulate a discovery plan which will meet the requirements of Fed.
R. Civ. P. 1.

The undersigned will confer with the magistrate judge

regarding discovery and, if necessary, with counsel.

IT IS SO ORDERED.
Dated this

25th

day of June 2014, at Wichita, Kansas.

s/ Monti Belot
Monti L. Belot
UNITED STATES DISTRICT JUDGE

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