Kaesemeyer v. Legend Mining U S A Inc, et al
Filing
39
ORDER granting 23 Motion to Certify Collective Action. IT IS FURTHER ORDERED that Defendants shall have 14 days from the entry of this Court's Order to provide Plaintiff with a computer-readable database that includes the names of all potenti al members of the FLSA Collective Class, along with their current or last known mailing address, email address, telephone number, and social security number. IT IS FURTHER ORDERED that the parties meet, confer, and thereafter submit to the Court a jo int proposal of Notice no later than 21 days from the entry of this Court's Order. IT IS FURTHER ORDERED that potential class members may opt in to this collective action if: (1) they have mailed their consent form to counsel for the class within sixty (60) days after the notice and consent forms have been mailed out to the class; or (2) they show good cause for any delay. Signed by Magistrate Judge Carol B Whitehurst on 9/11/2018. (crt,Chicola, C)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
LAFAYETTE DIVISION
Kaesemeyer
Civil Action No. 6:17-cv-01520
versus
Unassigned District Judge
Legend Mining USA Inc et al
Magistrate Judge Carol B. Whitehurst
ORDER
Before the Court is Plaintiff, Daniel Kaesemeyer=s, Renewed Motion to
Certify Collective in which Plaintiff moves to conditionally certify the FLSA
collective action filed by Plaintiff [Rec. Doc. 23] against Defendants, Legend
Mining USA, Inc. (“Legend USA”) and Legend Mining, Inc., Defendants’
Opposition [Rec. Doc. 27] and Plaintiff=s Reply [Rec. Doc. 36]. For the following
reasons, Plaintiff’s Motion for Conditional Certification will be granted in part and
denied in part.
I. Background
Plaintiff, a resident of the State of Washington, worked for Legend USA,
the American subsidiary of Legend Mining, Inc., at the Weeks Island salt mine in
Iberia. 1 The terms and conditions of Plaintiff=s employment are set forth in the
employment contract (AContract@) as follows:
1 Legend USA is the wholly owned United States subsidiary of Legend Mining Inc., the parent company, located
in Canada. R. 27.
Remuneration:
An hourly base rate of US $24.00/hr will be paid in arrears, on the 10th
and 25th of each month. In addition you will receive 100% of set site
bonus. You will be eligible for overtime on your base hourly rate after
40 hours worked per week.
R. 10-2. p. 2 (emphasis in original). Plaintiff signed and returned the Contract on
July 13, 2017. R. 10-2 at p. 6. Plaintiff worked at the Weeks Island salt mine for 10
days (approximately 132 hours) and left Legend USA=s employ on October 17,
2017. Id.,&& 16, 18.
Plaintiff alleges he was told that pay dates would be the 10th and 25th of every
month. R. 1, & 17. Plaintiff alleges he never received a pay check for the 10 days
he worked in October, 2017. Id. at && 19-22. Plaintiff filed this action alleging
causes of action under the Fair Labor Standards Act (AFLSA@) for nonpayment of
wages and miscalculated regular rate, the Louisiana Wage Payment Act, La. R.S.
'' 23:631-632 and breach of contract. R. 1. In his Complaint, Plaintiff seeks
certification of a collective pursuant to 29 U.S.C. ' 216(b) consisting of:
All employees of Legend Mining Inc., and Legend Mining USA, Inc.,
within the United States of America, who worked within the three
years prior to the filing of this Complaint and were not paid overtime
premiums consisting of one and a half times their regular rate under
the FLSA.
2
R. 1, & 33. Paragraph 34 states, Aplaintiff and the members of the collective have
been injured in an amount to be proven at trial.@ Id. at & 34.
II. Procedural Background
Plaintiff initially filed a motion for conditional certification under 29 U.S.C.
' 207 of the FLSA in this action on January 17, 2018. Plaintiff contended that
Defendants failed to pay him (and similarly situated employees) overtime pursuant
to the terms of his employment contract. R. 10. On March 26, 2018, the Court
denied that motion on the grounds that Plaintiff had failed to establish that the
allegedly unlawful overtime calculation reflected a general corporate policy. R. 18.
Thereafter, Plaintiff propounded his first set of Requests for Admission and
Requests for Production on Defendants. R. 23-2, Stiegler Aff., ¶ 2. Defendants
provided supplemental responses on May 23, 2018, which included a Legend USA,
“Corporate Policy” for the company’s “Renumeration[sic] 2 Calculation.” While
Defendants designated the document as “confidential” allegedly pursuant to the
parties’ Protective Order, R.20, Plaintiff filed a motion challenging the designation.
R. 21. Following in camera review of the document, the Court granted Plaintiff’s
2 The Corporate Policy uses the term “Renumeration Calculation”. The Court assumes the word “Renumeration”
is a typographical error of the word “Remuneration.” The Court will therefore refer to the Policy for
“Remuneration Calculation.”
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motion and held that the “Remuneration Calculation” would not be designated as
“confidential.”
In his renewed motion, Plaintiff maintains that Defendants calculated his
overtime premium based only on the $24 hour base rate, and did not include the $20
per hour site bonus in the time-and-a-half overtime calculation. Plaintiff alleges
this is a violation of Section 7 of the FLSA, 29 U.S.C. ' 207, which requires that
overtime premiums include all compensation within an employee=s Aregular rate.@
Plaintiff contends that Legend USA’s “Remuneration Calculation” policy as well
as Defendants’ Responses to Plaintiff’s Requests for Admissions, establish that the
exclusion of the “site bonus” from overtime calculations is a company-wide policy.
While Plaintiff moves the Court to certify a collective action of all employees of
Legend Mining USA, Inc., and Legend Mining, Inc., who were subject to similar
allegedly unlawful overtime calculations, the Court finds that the evidence in the
record is related only to Legend USA. Accordingly, the Court will not consider
Legend Mining, Inc. in the conditional certification and will refer to Legend USA
as “Defendant.”
III. Applicable Legal Standard
The Fair Labor Standards Act (AFLSA@) requires covered employers to pay
non-exempt employees for hours they have worked in excess of the defined
4
maximum hours. 29 U.S.C. ' 207(a). Section 216(b) creates a cause of action for
employees against employers violating the overtime compensation requirements.
29 U.S.C. ' 216(b). Section 216(b) provides:
An action ... may be maintained ... by any one or more employees for
and in behalf of himself or themselves and other employees similarly
situated. No employee shall be a party plaintiff to any such action
unless he gives his consent in writing to become such a party and such
consent is filed in the court in which such action is brought.
29 U.S.C. ' 216(b). Thus, unlike a class action filed under Federal Rule of Civil
Procedure 23(c), a collective action under ' 216(b) provides for a procedure to
Aopt-in,@ rather than Aopt-out.@ Roussell v. Brinker Int'l, Inc., 441 Fed.Appx. 222,
225 (5th Cir.2011) (citing Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 916 (5th
Cir.2008)). District courts have discretion in deciding whether and how to provide
Atimely, accurate, and informative@ notice to prospective plaintiffs. HoffmanBLa
Roche Inc. v. Sperling, 493 U.S. 165 (1989).
The FLSA permits employees to maintain an action on behalf of themselves
and others similarly situated, provided that the similarly situated employees only
become plaintiffs if they opt-in to the litigation in writing. 29 U.S.C. ' 216(b);
Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1212 (5th Cir. 1995), overruled on
other grounds by Desert Palace v. Costa, 539 U.S. 90 (2003). To determine whether
to certify a collective action and thus send notice of the suit to potential opt-in
5
plaintiffs, the majority of federal courts follow the two-step approach developed in
Lusardi v. Xerox Corporation, 118 F.R.D. 351 (D.N.J. 1987). See Mooney, 54 F.3d
at 1213-14. AUnder Lusardi, the trial court approaches the >similarly situated=
inquiry via a two-step analysis.@ Mooney, 54 F.3d at 1213. The first step occurs at
the notice stage. Id.
The two stages of the Lusardi approach are the Anotice stage@ and
theAdecertification stage.@ Mooney, 54 F.3d at 1216. The first Lusardi step is to
decide whether to issue notice to potential class members. See id. at 1213B14. At
the notice stage, the district court Adetermines whether the putative class members=
claims are sufficiently similar to merit sending notice of the action to possible
members of the class.@ Acevedo v. Allsup's Convenience Stores, Inc., 600 F.3d 516,
519 (5th Cir.2010). The court's decision at this stage is often based only on the
pleadings and any affidavits that have been submitted. Id. ABecause the court has
minimal evidence, this determination is made using a fairly lenient standard, and
typically results in >conditional certification= of a representative class@ that provides
potential class members with notice and the opportunity to opt-in. Mooney, 54 F.3d
at 1214. However, even this lenient standard requires substantial allegations that
potential members Awere together the victims of a single decision, policy, or plan....@
See id. at 1214 n. 8.
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At the notice stage the plaintiff “bears the burden of making a preliminary
factual showing that other similarly situated individuals exist such that the court
should provide notice of the action to putative class members.” White v. Integrated
Electronic Technologies, Inc., 2013 WL 2903070, at *3 (E.D.La. June 13, 2012).
Generally courts require only a minimal showing that (1) there is a reasonable basis
for the plaintiff's allegations, (2) that the aggrieved putative class members are
similarly situated with regard to the claims and defenses asserted, and (3) that these
individuals desire to opt-in to the suit. Walker v. Honghua America, LLC, 870
F.Supp.2d 462, 465-66 (S.D.Tex.2012) (citing Aguirre v. SBC Communications,
Inc. (“Aguirre I”), 2006 WL 964554, *5 (S.D.Tex. Apr. 11, 2006). Some courts do
not require the third element, which is not mentioned in § 216(b).
Due to the limited evidence available at this stage of the litigation, courts
usually employ a Afairly lenient standard@ that typically results in conditional
certification of a representative class. Mooney, 54 F.3d at 1214. See also Stiles, 2010
WL 935469 at *2. Yet, A[w]hile the standard at this stage is not particularly
stringent, it is by no means automatic.@ Lima v. Int'l Catastrophe Sols., Inc., 493 F.
Supp. 2d 793, 798 (E.D. La. 2007) (citing Hipp v. Liberty Nat'l Life Ins. Co., 252
F.3d 1208, 1213 (11th Cir. 2001)). As a practical matter, most district courts in this
Circuit Arequire some factual basis to the plaintiff=s allegations that a collective
7
actions is warranted before granting notice and conditional certification.@ Simmons
v. T-Mobile USA, Inc., 2007 WL 210008, at * 4 (S.D. Tex. Jan. 24, 2007).
IV. Analysis
Plaintiff contends that this case centers on Legend USA’s calculation of
overtime premiums. In particular, he contends that Defendant calculated his
overtime premium based only on the $24/ hour base rate and did not include the
$20/hour site bonus in the time-and-a-half overtime calculation. Legend USA
argues that the “set-site bonus,” is a bonus as defined by 29 U.S.C. 207(e) and is
not a “regular rate” entitled to overtime.
The FLSA requires that any hours worked over 40 in a workweek must be
paid “at a rate not less than one and one-half times the regular rate at which [the
worker] is employed.” 29 U.S.C. § 207(a). The term “regular rate” is defined in
Section 7(e) of the FLSA and “shall be deemed to include all remuneration for
employment paid to, or on behalf of, the employee,” subject to eight statutory
exceptions. 29 U.S.C. § 207(e). Those exceptions are, broadly speaking:
1. Holiday gifts or bonuses;
2. Vacation or holiday pay, or reimbursement of expenses incurred by
the employee;
3. Bonuses which are discretionary both as to their existence and their
amount;
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4. Employer contributions to retirement plans or other employee
benefit plans;
5. Premium rates paid for working past eight hours in a day;
6. Premium rates paid for weekend or holiday work;
7. Premium rates paid pursuant to a collective bargaining agreement;
and
8. Payments related to employee stock plans.
29 U.S.C. § 7(e)(1)-(8); see generally 29 C.F.R., Part 778, Subpart C.
Plaintiff contends that the “site bonus” does not fit into any of the above
statutory exemptions, and therefore, Legend USA’s failure to include it in the
employee’s regular rate is in violation of the FLSA. Plaintiff states that as the
employer, Legend USA bears the burden of demonstrating that certain payments
should not be included in determining its employees’ regular rate. Johnson v. Big
Lots Stores, Inc., 604 F. Supp. 2d 903, 927 (E.D. La. 2008) (citing Idaho Sheet
Metal Works, Inc. v. Wirtz, 383 U.S. 190, 209 (1966)). He argues that the Code of
Federal Regulations explicitly warns against “[a]rtificially labeling part of the
regular wages a ‘bonus,’” and states that “the term [bonus] is improperly applied if
it is used to designate a portion of regular wages which the employee is entitled to
receive under his regular wage contract.” 29 C.F.R. § 778.502(a). Ultimately, he
contends that the exclusion of the site bonus from the overtime calculations results
9
in “[p]ayment for overtime on the basis of an artificial ‘regular’ rate” which is not
in compliance with the overtime provisions of the Act. 29 C.F.R. § 778.500.
Legend USA contends that “a ‘set-site’ bonus” is done on a production basis
for an amount of work actually performed, and does not include work not
performed, such as hours obtained for training, and other non-performance based
incentive.” It asserts that Plaintiff fails to meet his burden to establish that a class
should be conditionally certified and notice authorized because he has failed to
identify any other potential plaintiffs and failed to obtain affidavits from any
potential plaintiffs, and continues in failing to demonstrate any evidence of a
widespread discriminatory plan.
The Court disagrees. Plaintiff’s allegations have satisfied the critical factor
of whether a common policy exists. Through discovery, Plaintiff has presented a
company-wide policy of Legend USA’s method of calculating the remuneration of
all its workers. The Court notes that the Corporate Policy states that it relies on the
Employment Standards Act, an Act of the Legislature of Ontario which regulates
employment in the province, “including wages, maximum work hours, and
workplace health and safety.” Wikipedia, https://www.en.wikipedia.org/wiki
/Employment_Standards_Act (Last visited August 27, 2018). The FLSA allows a
plaintiff to bring a collective action on behalf of “similarly situated” employees, but
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the statute does not define the phrase, “similarly situated.” Although “similarly
situated” is not defined under the FLSA, courts have found that for conditional
certification “putative class members need only show that they were affected by a
common policy, plan, pattern or practice.” McKnight v. D. Houston, Inc., 756
F.Supp.2d 794, 803 (S.D.Tex.2010). Further, “it is enough for the plaintiff to
present evidence that there may be other aggrieved individuals to whom a class
action notice should be sent, without requiring evidence that those individuals
actually intend to join the lawsuit.” White v. Integrated Elec. Techs., Inc., 2013 WL
2903070, at *7 (E.D. La. June 13, 2013).
Based on the foregoing, it appears that the Corporate Policy applies to all
employees of Legend USA, effectively making it company-wide. Where “there is a
reasonable basis to conclude that the same policy applies to multiple locations of a
single company, certification is appropriate.” McCloud v. McClinton Energy Grp.,
L.L.C., 2015 WL 737024, at *8 (W.D. Tex. Feb. 20, 2015); Ryan v. Staff Care, Inc.,
497 F. Supp. 2d 820, 825 (N.D. Tex. 2007) (where “actions or policies were
effectuated on a company-wide basis, notice may be sent to all similarly situated
persons on a company-wide basis”); Donohue v. Francis Servs., Inc., 2004 WL
1161366, at *2 (E.D. La., May 24, 2004) (“collective action certification is not
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precluded by the fact that the putative plaintiffs performed various jobs in differing
departments and locations”).
Defendant opposes Plaintiff’s proposed notice and method of providing
notice as overly broad. They argue that Plaintiff=s request for notice to all employees
within the United States would encompass a multitude of job types, at all of
Defendant’s United States locations. They further argue that such notice would
include a great number of employees in different job positions (some in salt mines
some in office buildings), with different hours, duties and pay─”[s]ome exempt,
some non-exempt.” They maintain that these employees would not be “similarly
situated.”
A broad geographic scope or numerous locations is not enough to defeat
certification across locations. See Donohue v. Francis Servs., Inc., 2004 WL
1406080 (E.D.La. June 22, 2004) (holding that employers should not be able to
“escape FLSA liability by making sure to underpay vast numbers” of their
employees and then claim that the class definition is too broad). If there is a
reasonable basis to conclude that the same policy applies to multiple locations of a
single company, certification is appropriate. Vargas v. Richardson Trident Co.,
2010 WL 730155, at *6 (S.D.Tex. Feb.22, 2010); Falcon v. Starbucks Corp., 580
F.Supp.2d 528, 539–40 (S.D.Tex.2008) (certifying a class even though they were
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store managers working in various locations under supervision of different
individuals because there was evidence of a common policy).
Here, Plaintiff has produced a company-wide Policy which defines the
“Remuneration” of all employees paid a “Base rate” and receiving a “Site Bonus.”
Further, Legend USA admits that “payment for a site bonus is not included in the
regular rate of pay when calculating overtime.” R. 23-2, No.10. In other words,
Legend USA “employs a “top-down, centralized policy regarding overtime …
throughout the organization.” Wilson v. Navika Capital Group, LLC, 2014 WL
223211, at *12 (S.D.Tex., 2014). Such evidence places these employees in the same
situation as Plaintiff as to whether or not they were eligible for overtime pay
pursuant to the FLSA, 29 U.S.C. § 207, and did not receive full overtime
compensation.
The Court finds it necessary to allow discovery based on Plaintiff’s proposed
class definition. If the alleged illegal pay scheme does exist, discovery based on
Plaintiff’s proposed class definition will uncover the extent and depth of such a
scheme—i.e., whether Legend USA engaged in any violations of the FLSA with
regard to its “Site Bonus.” While the Court recognizes Defendants’ concerns, the
Court again notes the lenient standard applied at this “notice stage.” At the “notice
stage, ‘courts appear to require nothing more than substantial allegations that the
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putative class members were together the victims of a single decision, policy, or
plan infected by discrimination.” Mooney, 54 F.3d at 1214 n. 8 (citing Sperling v.
Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988)). Thus, the Court finds
that at this stage conditional certification is appropriate. Defendants may later file a
motion for decertification after a more extensive discovery process has been
conducted, if it is determined at that stage that Plaintiff has failed to carry his burden
of establishing that he and members of the proposed class are similarly situated.
Defendants object to the content of Plaintiff’s proposed Notice. Section
216(b) imparts the district court with discretionary authority to facilitate notice to
potential plaintiffs. Lima, 493 F. Supp. 2d at 800 (citing Hoffmann-La Roche Inc.
at 169). When considering the content of the notice, courts often find that these
issues are best resolved by mutual agreement of the parties. See, e.g., Banegas v.
Calmar Corp., 2015 WL 4730734, at *6 (E.D.La.,2015); Perkins v. Manson Gulf,
L.L.C., 2015 WL 771531, at *5 (E.D.La.,2015). Accordingly, the parties are
directed to meet and confer regarding the proposed notice and attempt to resolve
these disputes in good faith as ordered below.
As to Defendants objection to Plaintiff’s request that the Notice be posted
in all of Legend USA’s locations, the Court agrees with Plaintiff that such posting
is “an efficient, cost effective method to notify potential opt-in distributors of this
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class action and would not be burdensome on Defendants.” See Coyle v. Flowers
Foods Incorporated, 2016 WL 4529872, at *7 (D.Ariz., 2016) (“Posting Notices
at the warehouses is a cost-efficient way to notify potential opt-in plaintiffs of the
action and places no burden on Defendants”).
Accordingly,
IT IS ORDERED that Plaintiffs= Motion to Conditionally Certify FLSA
Collective Action [Rec. Doc. 13] is GRANTED.
IT IS FURTHER ORDERED that Defendants shall have fourteen (14) days
from the entry of this Court's Order to provide Plaintiff with a computer-readable
database that includes the names of all potential members of the FLSA Collective
Class, along with their current or last known mailing address, email address,
telephone number, and social security number.
IT IS FURTHER ORDERED that the parties meet, confer, and thereafter
submit to the Court a joint proposal of Notice no later than twenty-one (21) days
from the entry of this Court’s Order. If the parties are unable to agree on the
proposed notice, the parties shall file the appropriate motion(s) with their objections
within seven (7) days.
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IT IS FURTHER ORDERED that potential class members may opt in to
this collective action if: (1) they have mailed their consent form to counsel for the
class within sixty (60) days after the notice and consent forms have been mailed out
to the class; or (2) they show good cause for any delay.
THUS DONE AND SIGNED in Lafayette, Louisiana, this 11th day of
September, 2018.
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