Lancaster v. FQSR LLC

Filing 48

MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 9/11/2020. (dg3s, Deputy Clerk)

Case 8:19-cv-02632-TDC Document 48 Filed 09/11/20 Page 1 of 19

UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND

LATOYA LANCASTER,
VICTOR L. BROWN,
MARTIN JENNINGS and

SHAMEKICA PROCTOR,Individually and
on BehalfofOthers Similarly Situated,
Plaintiffs,

Civil Action No. TDC-19-2632

V.

FQSR,d/b/a KBP Foods,
Defendant.

MEMORANDUM OPINION

Plaintiffs Latoya Lancaster, Victor Brown,Martin Jennings, and Shamekica Proctor,acting
individually and on behalf of all similarly situated individuals, have filed this action against their

current or former employer, FQSR LLC, d/b/a KBP Foods ("FQSR"), alleging violations of the
Fair Labor Standards Act("FLSA"),29 U.S.C. §§ 201-219(2018),the Maryland Wage and Hour
Law ("MWHL"), Md. Code Ann., Lab. & Empl. §§ 3-401 to 3-431 (LexisNexis 2016), and the

Maryland Wage Payment and Collection Law("MWPCL"), Md. Code Ann., Lab. & Empl. §§ 3501 to 3-509, as well as a common law claim of unjust enrichment, based on the failure to pay
them wages for all of their time worked,including overtime. Plaintiffs assert the FLSA claim as

a collective action under 29 U.S.C. § 216(b)and the state law claims as a class action under Federal
Rule of Civil Procedure 23. Pending before the Court is Plaintiffs Pre-Discovery Motion for
Conditional Certification ofthe FLSA collective action. Having reviewed the submitted materials.

Case 8:19-cv-02632-TDC Document 48 Filed 09/11/20 Page 2 of 19

the Court finds no hearing necessary. D. Md. Local R. 105.6. For the reasons set forth below,
Plaintiffs' Motion will be GRANTED IN PART and DENIED IN PART.
BACKGROUND

FQSR operates approximately 700 Kentucky Fried Chicken ("KFC") and Taco Bell
franchise restaurants across the United States. Currently, FQSR operates 20 KFC restaurants in

Maryland, seven of which were acquired by FQSR in July 2019. FQSR's Maryland restaurants
are divided into three regions. Thomas Chalkley, who has been employed by FQSR since June
2016, is the Area Coach responsible for one of those three regions encompassing the restaurants
in Prince Frederick, Kettering, Upper Marlboro, La Plata, Waldorf, and Bryans Road, Maryland.
FQSR employed each of Plaintiffs at the KFC in La Plata, with two having also worked at

various times at the KFC in Upper Marlboro,on a non-exempt hourly basis for various time periods
beginning from 2008 until the present. Plaintiffs claim that throughout their employment with
FQSR, they regularly worked in excess of 40 hours during a workweek but ultimately were not
paid for all of that time worked because FQSR managers, through various methods, eliminated or
reduced the number of work hours credited for pay. These methods included supervisors: (1)

directly adjusting downward the number ofhours iri existing time records;(2)inaccurately entering
an employee's time when the restaurant's timekeeping system requiring the employee's fingerprint
to clock in and out was not working;(3) directly clocking out employees who were still working,
without their knowledge; and (4) directing employees to clock out even while they continued
working and falsely promising to add the time to another workday. Plaintiffs allege that FQSR
incentivized its managers to engage in these practices by offering bonuses if they kept "Hourly
Labor" metrics low. Compl.f 17, ECF No. 1.

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Lancaster filed this action on behalf of herself and those similarly situated alleging that

based on these practices, FQSR unlawfully failed to pay non-exempt employees for all hours
worked and failed to provide overtime pay for certain overtime hours, in violation of the FLSA,

MWHL,and MWPCL,and resulting in unjust enrichment. Lancaster has brought her FLSA claim
as a collective action pursuant to 29 U.S.C. § 216(b) and her state law claims as a class action
pursuant to Federal Rule of Civil Procedure 23. Pursuant to 29 U.S.C. § 216(b), Brown, Jennings,
and Proctor have opted into the FLSA collective action as additional plaintiffs.
DISCUSSION

In their Pre-Discovery Motion for Conditional Certification, Plaintiffs requestecf that the
Court conditionally certify an FLSA collective action on behalf of "All individuals who have

worked at one of[FQSR's]KFC or Taco Bell restaurant franchises located in Maryland within the
last three years and were classified as nonexempt from the overtime pay mandates." Mot.
Conditional Certification ("Mot.") at 1, ECF No. 37-1. Plaintiffs have since amended their

proposed collective action definition to consist of "All individuals who have worked at one of
[FQSR's] KFC or Taco Bell restaurant franchises located in Maryland within the last three years
and were classified as nonexempt from the overtime pay mandates except those who only worked
as either 'Co-Managers' and 'Shift Managers' during the entire period." Reply at 3,ECF No. 42.
Plaintiffs contend that this putative class of employees at FQSR restaurants across Maryland
consists ofindividuals similarly situated to Plaintiffs in that they: (1)are paid on an hourly basis;

(2) have regularly worked more than 40 hours in a single workweek; and (3) have not been
compensated for all of their work activities.

Although FQSR argued, in opposing the Motion,that the Plaintiffs' original putative class
definition was too broad because it includes certain managers exempt from the overtime

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requirements but who were responsible for the allegedly unlawful practices, where Plaintiffs have
modified their class definition to exclude such managers, and FQSR has not seriously contested
that such exclusion would cure the alleged deficiency in the collective action definition, the Court
need not further address that particular argument. See, e.g., Cowan v. Nationwide Mut. Ins. Co.,
No. 2:19-cv-1225, 2019 WL 4667497, at *7(S.D. Ohio Sept 25, 2019)(considering at the FLSA
conditional class certification stage the plaintiffs amended proposed class definition as stated in
the reply brief, which narrowed the scope from all of defendant's hourly call-center employees to

all non-exempt employees who had worked at or for defendant's call centers and provided direct
customer support and assistance through phone or email systems); Sawyer v. Health Care Sols, at
Home, Inc., No. 5:16-CV-5674, 2018 WL 1959632, at *3 (E.D. Pa. Apr. 25, 2018)(considering

the plaintiffs narrowed class definition as stated in his reply brief).
1.

Legal Standard

The FLSA generally requires that employees who work more than 40 hours in a week
receive overtime pay at the rate of one and one-half times their regular pay rate. See 29 U.S.C. §
207(a). If an employer violates these rules, employees may sue their employers as individuals or,

if they choose, in a collective action on behalf of themselves and "similarly situated" employees.
29 U.S.C. § 216(b); see Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754,758(4th Cir.

2011). If employees choose to pursue a collective action, they may seek court-approved notice to
inform similarly situated employees that they may join the litigation. See Hoffman-La Roche v.
Sperling, 493 U.S. 165, 169 (1989)(discussing the parallel collective action provision under the
Age Discrimination in Employment Act).
The collective action provision serves several purposes. First, collective actions allow
plaintiffs "the advantage oflower individual costs to vindicate rights by the pooling ofresources."

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Id. at 170. Second, collective actions allow the courts efficiently to resolve common issues in one

proceeding. See id.

Third, FLSA collective actions promote enforcement of the law by

empowering employees to "join in their litigation so that no one ofthem need stand alone in doing
something likely to incur the displeasure of an employer." See Pentland v. Dravo Corp., 152 F.2d
851, 853 (SdCir. 1945).

Although the United States Court of Appeals for the Fourth Circuit has not provided

specific guidance on how to address a motion for conditional certification of an FLSA collective
action, decisions from other Courts of Appeals have identified, and judges of the United States
District Court for the District of Maryland generally apply, a two-step process to test the
sufficiency of the purported class: (1) a pre-discovery determination that the purported class is

similarly situated enough to disseminate notice (the "notice stage"); and (2) a post-discovery
determination, typically in response to a motion for decertification, that the purported class is
indeed similarly situated. See, e.g., Thiessen v. General Electric Capital Corp., 267 F.3d 1095,
1102 (10th Cir. 2001); Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1218-19 (11th Cir.
2001); Mooney v. Aramco, 54 F.3d 1207, 1213-14 (5th Cir. 1995); Randolph v. Powercomm
Constr., Inc., 7 F. Supp. 3d 561, 575 (D. Md. 2014); Syrja v. Westat, Inc., 756 F. Supp. 2d 682,
686 (D. Md. 2010).

At the notice stage, courts applying this process make a threshold

determination whether the class is similarly situated based on "substantial allegations" in the
pleadings and any submitted affidavits or declarations. See Thiessen, 267 F.3d at 1102. Then,
once discovery is largely completed, such courts perform a more stringent inquiry into whether
the class is indeed similarly situated. Mooney, 54 F.3d at 1214.

Because the record is sparse at the notice stage, courts often apply "a fairly lenient
standard." Id; Hipp, 252 F.3d at 1218 (noting that courts use a "fairly lenient standard" that

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"typically results in 'conditional certification'" at the notice stage); Randolph, 1 F. Supp. 3d at
575-76. Thus,courts require no more than "substantial allegations that the putative class members
were together the victims of a single decision, policy, or plan." Thiessen, 267 F.3d at 1102
(citations omitted); Randolph, 1 F. Supp. 3d at 575-76. Although vague allegations with meager

factual support are generally insufficient to certify a class, proponents of conditional class
certification need not conclusively demonstrate that a class of similarly situated plaintiffs exists.
See Randolph, 1 F. Supp. 3d at 576; Syrja, 756 F. Supp. 2d at 686 (requiring "relatively modest"
evidence that the putative class members are similarly situated).

This Court will apply the two-step process because a modest inquiry into the propriety of
conditional class certification before issuing court-approved notice is consistent with the purposes
of the FLSA collective action provision. Certainly, some threshold inquiry before issuing notice

to potential class members is appropriate to ensure that notice is not subject to misuse and is
"timely, accurate, and informative." See Hoffman-La Roche, 493 U.S. at 171-72. But it is equally

important that the inquiry occur under a lenient standard to be consistent with the FLSA's purposes
of promoting efficient joint adjudication of claims, lowering the costs of litigation to employee
plaintiffs, and accounting for employees' natural reluctance to challenge an employer. See id. at
llO;Pentland, 152 F.2d at 853.

Finally, because all employees who join an FLSA collective action, unlike a class action
under Federal Rule of Civil Procedure 23, must affirmatively opt into the litigation as plaintiffs,
see Simmons, 634 F.2d at 758, it would be unfair to impose an initial barrier significantly more

stringent than the one imposed on ordinary plaintiffs seeking to join a litigation under Rule 20.
For these reasons, the Court applies the two-step process and the lenient standard at the notice
stage.

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II.

Conditional Certification

The Complaint alleges that as a result ofFQSR's common business practices ofeliminating
hours actually worked from those compensated, Plaintiffs and similarly situated, non-exempt
hourly employees were not properly compensated, including with overtime pay. Plaintiffs have
submitted four declarations providing factual support for their allegations. Although FQSR argues

that some of the declarations present hearsay evidence, at this stage of the proceedings, the Court
may consider affidavits containing reports ofstatements by supervisors, which are not necessarily
hearsay, Fed, R. Evid. 801(d)(2)(D), as well as hearsay statements, such as those made by co-

workers. SeeMontoyav. S.C.C.P. Painting Contractors,/«c.,No. CCB-07-455,2008 WL 554114,
at *3(D. Md. Feb. 26,2008)(granting conditional certification in part based on accusations made
in sworn declarations that the defendant's supervisors told employees about a policy not to pay
overtime wages); Marroquin v. Canales, 236 F.R.D. 257, 260 (D. Md. 2006)(holding that the
plaintiffs adequately demonstrated that other unidentified co-workers were similarly situated in
part based on one plaintiffs declaration that a group of workers told him that they had worked for
multiple weeks without pay);

v. Empire Equity Grp., Inc.,'Ho. WDQ-09-1603,2009 WL

4018560, at *3(D. Md. Nov. 18, 2009)("Judges deciding motions for conditional certification in

this district have considered hearsay in supporting affidavits" which "is appropriate given the
modest factual support required at this stage.").
Upon consideration of the available facts, the Court finds that Plaintiffs have offered
sufficient evidence to satisfy the lenient standard at this stage as to a subset of FQSR restaurants
in Maryland. All four Plaintiffs assert in their declarations that they personally worked at the KTC
in La Plata and two also worked at the KFC in Upper Marlboro. While at those restaurants, they
all were required to perform work that was often not reflected in their paychecks. They reported

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that the same or similar tactics were employed by supervisors for reducing their hours, including
directly reducing the hours in existing time records, entering inaccurately low numbers of hours
when the timekeeping system accessible only with an employee's fingerprint was down; directly
clocking employees out even while they continued working; and directing employees to clock out
and continue working while falsely promising to add the extra work time to another workday.
Beyond their own experiences, Plaintiffs have stated that they personally observed and heard from
co-workers of similar off-the-clock manipulation of time entries against other employees.
Plaintiffs have provided a consistent explanation for these deficiencies, based on similar statements
by their managers: that supervisors were motivated to alter the time records because they received

monthly bonuses if they limited the number of hours worked by crew members to meet "labor
budgets"from the company. E.g., Lancaster Decl.14,Mot.Ex. I,ECF No.37-2. Where Plaintiffs
have provided declarations establishing that similar motivations and tactics were employed by
multiple managers at the La Plata and Upper Marlboro restaurants, against multiple employees
with the same result of a failure to pay for all hours worked, the Court finds that Plaintiffs have
sufficiently alleged that the employees at those two KFC locations were "together the victims of a
single decision, policy, or plan." Thiessen, 267 F.3d at 1102. Thus, at a minimum, employees at
these two locations are similarly situated for purposes of collective action certification. See Butler
V. DirectSAT USA, LLC,876 F. Supp. 2d 560, 569(D. Md. 2012)(certifying an FLSA collective
action for suppression ofovertime pay across multiple warehouses based on evidence that multiple

warehouse managers instructed workers, contrary to company policy, not to record all of their
time, such that the evidence was "sufficient at this early stage to demonstrate that the instructions

Plaintiffs received were not attributable solely to a rogue supervisor")(citations omitted).

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Plaintiffs further argue that the collective action should be certified across all FQSR
franchises in Maryland because they are similarly situated to employees at those locations, even if

none of Plaintiffs worked at locations other than La Plata and Upper Marlboro. Plaintiffs argue
that such a broad certification is appropriate where there is a "common policy or plan," Rosario v.
Valentine Ave. Disc. Store, Co., 828 F. Supp. 2d 508, 516(E.D.N.Y. 2011), which can oftentimes

be inferred if there is "common ownership and control of all... entities," Karic v. Major Auto.
Companies, Inc., 799 F. Supp. 2d 219,227(E.D.N.Y.2011). The Court agrees that Plaintiffs have
alleged sufficient facts at this stage to support the conclusion that workers at KFC locations in the

same region are similarly situated and thus may be part ofthe collective action to be conditionally
certified.

Beyond the evidence relating to La Plata and Upper Marlboro, Plaintiffs offer, in Brown's
declaration, the fact that a cook at the Bryans Road KFC told him that his "hours worked never

added up correctly" when he worked there for "Miss Thomas," one ofthe managers who allegedly
engaged in the tactics to reduce employees' hours worked at La Plata or Upper Marlboro. Brown
Decl. T[ 8, Mot. Ex. 3, ECF No. 37-3. Brown also stated that he heard a specific conversation in
which Area Manager "Tom" told his manager that she needed "to reduce the hours that crew

members worked at the restaurant to meet her labor budget." Id. 4. FQSR has acknowledged
|

that Tom Chalkley is the Area Coach for six Maryland locations in one ofFQSR's three Maryland
regions, which include the KFC's in La Plata, Upper Marlboro, and Bryans Road, as well as in

Prince Frederick, Kettering, and Waldorf("the Chalkley Area"). Based on Chalkley's common
supervisory role across Plaintiffs' locations of employment as well as Bryans Road, and the
reported statement that ties Chalkley to the motivation for the alleged compensation practices at

issue here. Plaintiffs have met the "relatively modest" evidentiary requirement to show that

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employees across all ofthe FQSR restaurants in the Chalkley Area are similarly situated as to such
practices and may therefore be included in the collective action to be conditionally certified. Syrja,
756 F. Supp. 2d at 686; see also Butler, 876 F. Supp. 2d at 570 n.lO (noting that the analysis for
conditional certification is not quantitative and thus a single affidavit may,in some circumstances,
be enough to shov^^ a common policy to violate the FLSA). This conclusion is bolstered by
Lancaster's statement that she had conversations with two substitute managers,"Mr. Ola and Ms.
Dale," who were "from other restaurants in Maryland," in which they warned that workers "at
other Maryland restaurants were also being short changed by their managers to keep labor budgets
low so they could get bonuses." Lancaster Deck ^ 8.
FQSR's arguments to limit the collective action to only the La Plata and Upper Marlboro

locations are unpersuasive. First, FQSR argues that it has always had mandatory policies that
employees record and be paid for all time worked. However, "it is well-settled that the
promulgation of written policies, per se, is insufficient to immunize an employer from conduct that
otherwise contravenes the FLSA." Essame v. SSC Laurel Operating Co. LLC, 847 F. Supp. 2d

821, 828 (D. Md. 2012). Second, FQSR argues that a determination whether members of the
proposed class are similarly situated would require numerous highly individualized factual
inquiries regarding time records, whether they were modified, and what role or awareness, if any,

these employees' supervisors had of these practices. "The salient flaw in this argument is that it
delves too deeply into the merits of the dispute; such a steep plunge is inappropriate for such an
early stage of a FLSA collective action. The crux of the matter is whether Plaintiffs have made a

modest factual showing that they were victims ofa common policy or scheme that contravenes the
FLSA." Id. at 826. "For the reasons articulated above. Plaintiffs have made this modest showing."
Id.

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Finally,FQSR argues that the certification should not extend to the seven restaurants FQSR
acquired in July 2019. Where FQSR has not provided any information to demonstrate how many
and which of these recently acquired locations are located in the Chalkley Area, it is unclear to
what extent this argument is relevant to the Court's identified class. In any event, as to any such
restaurants now under Chalkley's oversight, where the allegations in the submitted declarations

extend to the present day,they would now be subject to the same policies and practices as the other
FQSR restaurants in the same area. The Court will therefore conditionally certify a collective

action across the six FQSR KFC locations within the Chalkley Area. See, e.g., Mendoza v. Mo's
Fisherman Exch., Inc., No. ELH-15-1427, 2016 WL 3440007, at *14 (D. Md. June 22, 2016)
(certifying a class broader than just the locations where the plaintiffs personally worked where the
plaintiffs presented information about conversations with employees at other locations about
experiencing similar wage improprieties, and there was evidence of a common owner involved in
the operation of all of the restaurants); Andrade v. Aerotek, Inc., No. CCB-08-2668, 2009 WL-

2757099, at *5 8c n.13(D. Md. Aug. 26, 2009)(granting conditional certification to employees at
both the Charlotte office at which the plaintiffs offering evidence of improper overtime practices

worked and at a second office managed by the same individual); see also Contrera v. Longer,278
F. Supp. 3d 702, 718 (S.D.N.Y. 2017) (granting conditional certification to superintendents
working in all apartment buildings managed from the same office, based on plaintiffs'
conversations with employees from certain other buildings managed by that office that they
likewise did not receive overtime pay).

The Court will not, however, conditionally certify a class encompassing all FQSR
restaurants across the state of Maryland. For allegations of improper defacto pay policies that
may violate the FLSA,some evidence that the improper practices extend across the proposed class

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is necessary. See, e.g., Andrade,2009 WL 2757099, at *5 (declining to extend the class to offices

for which there was no evidence ofemployees instructed not to report overtime); Camper v. Home
Quality Mgmt. Inc.., 200 F.R.D. 516,520-21 (D. Md.2000)(limiting conditional certification and

notice to employees ofthe single company facility for which there had been a factual showing of
uncompensated work known to supervisors). At this stage, Plaintiffs have not provided specific
evidence that the allegedly unlawful pay practices extended beyond the Chalkley Area.
Lancaster's statement that substitute managers acknowledged that such practices existed at "other
Maryland restaurants" is too vague and non-specific to demonstrate that the practices occurred

outside of the Chalkley Area. See, e.g., Hamadou v. Hess Corp., 915 F. Supp. 2d 651, 666-67
(S.D.N.Y. 2013)(finding a single statement that defacto unlawful timekeeping practices were a

"company policy" to be insufficient to warrant statewide conditional certification but granting
certification to employees at all Hess gas stations in two regional territories within New York).

In support ofa statewide class, Plaintiffs primarily argue that because a different group of
non-exempt restaurant employees of FQSR alleged similar FLSA violations in a 2018 case filed

in the United States District Court for the Western District of Missouri, Cano v. FQSR, LLC,No.

4:18-cv-00640 (W.D. Mo. 2018), the Court should infer that there exist "common, corporate
policies ...across all FQSR's restaurants, including throughout Maryland." Reply at 9. Although

courts may consider prior, similar cases against the same,defendant in resolving the question of
collective action certification, in several ofthe cases relied upon by Plaintiffs, the court considered
a prior case involving the same or nearby work locations in support of certifying a class of
employees at a single location only. See Clinton v. Gov't Employees Ins. Co., No. 2:16CV430,

2017 WL 3025558, at *1, *4 (E.D. Va. July 14, 2017)(considering the fact that employees of a
Virginia Beach, Virginia call center were part of a certified collective action across multiple

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locations that was later decertified in granting certification of a subsequent, separate collective
action focused on that Virginia Beach location only); Alvirde v. Fresh Farms Int'l Mkt., Inc., No.

14 CV 715, 2014 WL 7265072, at *2(N.D. 111. Dec. 19, 2014)(certifying a collective action at a
single grocery store based on nine declarations of employees at that store as well as consideration
of the previous settlement of a similar lawsuit in the same district against the same defendant);
Pontonesv. San Jose Rest. /«c.,No. 5:18-CV-219-D,2019 WL 5680347, at *2(E.D.N.C. Oct. 31,

2019)(considering the previous certification and settlement of a collective action of employees
working in a group of restaurants in granting collective action certification in a subsequent case
relating to the same restaurants filed after an alleged breach ofthe settlement agreement). In other
instances, the court considered specific evidence from other lawsuits against the same defendant,
such as declarations or deposition testimony, that related to the specific geographic locations that
formed the proposed class. See Babbitt v. Broadband Interactive, Inc., No. 8:ll-CV-2855-T-24,
2012 WL 1898636, at *5 (M.D. Fla. May 23, 2012)(considering declarations filed in previously
settled cases against the defendant by employees at locations across multiple Florida counties in
granting certification of a new statewide FLSA collective action relating to Florida); Mendoza v.
Casa de Gambia Delgado, Inc., No.07CY2579(HB),2008 WL 3399067, at *2-3(S.D.N.Y. Aug.
12, 2008)(finding that deposition testimony taken in a prior lawsuit against the same defendant
was relevant in establishing a common policy in the present case). Here, Plaintiffs do not rely on
specific affidavits or other evidence from Cano, and, unlike in the cited cases, they ask the Court
to infer unlawful pay practices here in Maryland by extrapolating from a case involving practices
in a different part of the United States. The Court concludes that the second-hand statements that

the unlawful practices occurred in "other Maryland restaurants" and the allegations of similar
practices in Missouri are, without more, insufficient to meet Plaintiffs' "burden of showing that

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their claims are similarly situated" with those of employees at all FQSR KFC locations in

' Maryland. Baylor v. Homefix Custom Remodeling Corp.,443 F. Supp.3d 598,605(D. Md.2020);
see, e.g., Andrade,2009 WL 2757099, at *5; Camper,200 F.R.D. at 520-21.
In summary,the Court will grant Plaintiffs' Motion as to all individuals who have worked

at one ofFQSR's KFC or Taco Bell restaurant franchises located in the Chalkley Area(the Prince

Frederick, Kettering, Upper Marlboro, La Plata, Waldorf, and Bryans Road locations) within the
last three years and were classified as non-exempt from the overtime pay mandates, except those

who worked only as either "Co-Managers" or "Shift Managers" during the entire period. Other
cases in this District have likewise resulted in certification of a collective action under similar

circumstances. See, e.g.,Mendoza,2016 WL 3440007,aC^lAiAndrade,2009 WL 2757099, at *5
& n.l3 (certifying a collective action across two offices that were under one director's purview).
The Court will deny without prejudice the Motion as to the remaining FQSR KFC restaurants in
Maryland.
III.

Notice

Having conditionally certified the collective action, the Court will authorize the provision
of notice to members of the putative class as defined above. FQSR, however, further argues that

notice may not be sent to employees who have entered into binding arbitration agreements to
resolve any employment disputes.

The Fourth Circuit has not addressed whether, at this

conditional certification stage, courts must determine whether named plaintiffs or potential class

members have valid arbitration agreements that may impact their ability to participate in a
collective action. Nevertheless, FQSR relies on two recent out-of-circuit cases which concluded

that a court may not authorize notice to individuals who have been shown to have entered into
valid arbitration agreements and must give the defendant the opportunity to make that showing.

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See Bigger V. Facebook, Inc., 947 F.3d 1043,1050(7th Cir. 2020); In re JPMorgan Chase & Co.,
916 F.3d 494, 502-03 (5th Cir. 2019)(holding that "[wjhere a preponderance of the evidence

shows that the employee has entered into a valid arbitration agreement," a district court may not
order notice to be sent to that employee as part of any sort of certification" because "alerting those
who cannot ultimately participate in the collective merely stirs up litigation"). In Bigger,the court
adopted this requirement on the grounds that efficiency neither favors nor disfavors such a

requirement, but that any benefit of efficiency is overridden by the need for the court to "maintain
neutrality and to shield against abuse of the collective-action device." Bigger,947 F.3d at 1050.

By contrast, numerous other courts, when presented with this issue, have concluded that
evaluating the enforceability of an arbitration agreement is premature and "irrelevant" at the
conditional certification stage,as such evaluation is a"merits-based determination better dealt with
at the decertification stage." Meyer v. Panera Bread Co.,344 F. Supp. 3d 193,206(D.D.C. 2018)

(collecting cases); see also Camara v. Mastro's Restaurants LLC,340 F. Supp. 3d 46, 59(D.D.C.
2018)(holding that based on "the decisions of the majority of courts" that have addressed this
issue,"[a]t least in the circumstances ... in which the named Plaintiffhas not signed an arbitration
agreement... the Court will not prematurely limit the dissemination of notice"); Romero v. La
Revise Assocs., L.L.C., 968 F. Supp. 2d 639, 647 (S.D.N.Y. 2013)(holding that "courts have

consistently held that the existence of arbitration agreements is irrelevant to collective action
approval because it raises a merits-based determination")(internal citations omitted).

The Court agrees with the reasoning in cases such as Meyer that the existence and
enforceability ofan arbitration agreement is a merits-based determination ordinarily not addressed
at the conditional certification stage. See Thiessen, 267 F.3d at 1102(requiring at the conditional
certification stage "nothing more than substantial allegations" that the putative class members were

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victims ofa single decision, policy, or plan). The Court also has reservations about the reasoning
of Bigger and In re JPMorganChase. Although Bigger correctly focused on the "twin goals" of
collective actions of "efficiency" and "enforcement," it concluded that efficiency did not
particularly favor resolving arbitration first or deferring on the question until after conditional
certification. Bigger,947 F.3d at 1049. This Court concludes, however, that efficiency disfavors
delaying certification and notice until after the resolution of whether there are binding arbitration
agreements, because it would be highly inefficient to adjudicate the validity of one plaintiffs
purported arbitration agreement, only to receive, after the issuance of notice, additional claims of

the existence of valid arbitration agreements relating to various opt-in plaintiffs. Here, for
example, rather than assess the validity of two opt-in plaintiffs' arbitration agreements now, and
then conduct a similar analysis for an unknown number of other plaintiffs in the future, it would
be more efficient to consider and decide those questions together, after the issuance of notice.
Indeed, the Bigger court recognized that "[a]s a general matter, it may be efficient to first send
notice to a group of people and then weed out those who opt in but are in fact ineligible to join."
Bigger, 947 F.3d at 1050.
As for enforcement of the FLSA, this goal, as well as efficiency, is undermined by any

rigid requirement to resolve disputes about arbitration agreements before deciding the question of
conditional certification and issuing notice, because the inevitable delay associated with
adjudicating fact-based disputes about the validity of arbitration agreements has a substantive

impact on claims. Specifically, because on FLSA claims the statute of limitations continues to
run on potential class members' claims until they actually file a consent to opt into the collective
action,see 29 U.S.C. § 256(b), the benefits of collective actions "depend on employees receiving
accurate and timely notice concerning the pendency ofthe collective action, so that they can make

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informed decisions about whether to participate." Hoffmann-La Roche,493 at 170. Yet if notice

cannot be issued until the validity of all purported arbitration agreements have been tully
adjudicated, putative class members claims may expire in whole or in part before notice is issued.
These considerations outweigh the concem that issuing notice to individuals who may have
a valid arbitration agreement will exhibit a lack of neutrality by the court or constitute the
solicitation of claims. See Bigger, 947 F.3d at 1050. In upholding court-supervised notice of a
collective action, the Supreme Court concluded that "[c]ourt intervention in the notice process for
case management purposes is distinguishable in form and function from the solicitation ofclaims."

Hoffmann-La Roche, 493 U.S. at 174. Where the Supreme Court entrusted district courts to be

"scrupulous to respect judicial neutrality" and to avoid "even the appearance of judicial
endorsement of the merits of the action," the interest in maintaining neutrality is best addressed
through the crafting of the language of the notice to ensure that no message of endorsement is
conveyed. Id. Thus, where there is at least one named plaintiff who is unencumbered by an
arbitration agreement, the Court finds no requirement to adjudicate whether certain putative class
members have valid arbitration agreements before issuing notice. See Camara, 340 F. Supp. 3d
at 59 (holding that where the named Plaintiff had not signed an arbitration agreement and
"questions offact remain about the existence and validity ofother arbitration agreements,the Court
will not prematurely limit the dissemination of notice"). The Court will therefore order that notice
be issued.

The Court notes that even under the more restrictive approach of Bigger, notice may issue
as to all putative class members other than Brown and Jennings. First, FQSR acknowledges that
Lancaster and Proctor have not entered into arbitration agreements, so it is undisputed that there
is at least one named plaintiff not subject to^an arbitration agreement. Second, while FQSR offers

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Case 8:19-cv-02632-TDC Document 48 Filed 09/11/20 Page 18 of 19

evidence ofarbitration agreements accepted by Brown and Jennings,the validity of which remains
in dispute, it has not identified any other specific potential class member who signed a valid
arbitration agreement, nor has it provided any specific evidence establishing such a claim. Thus,
even under Bigger,the Court may issue notice to Lancaster,Proctor, and all putative class members
other than Brown and Jennings. See Bigger, 947 F.3d at 1050 (barring the issuance of notice to

employees for whom the defendant has asserted and provided evidence to prove the validity and
applicability of an arbitration agreement).
Accordingly, the Court will authorize notice to issue to all putative class members other

than Brown and Jenmngs. Though it could do so, based on the unique circumstances ofthis case,

the Court will not issue notice to Brown and Jennings for two reasons. First, where they have
already opted into this case, the question whether they should receive notice is effectively moot,
so there is no enforcement interest in such issuance. Second, where FQSR has previously sought
leave to file a Motion to Compel Arbitration as to Brown and Jennings, even before the Motion

for Conditional Certification was filed, and the Court, as a matter ofjudicial efficiency directed
that FQSR's motion be deferred until after the Motion for Conditional Certification was addressed,

the Court should fairly address the arbitration issue as to Brown and Jennings before proceeding
further with their claims. The Court will therefore defer any necessary issuance ofnotice to Brown
and Jennings until after resolution ofthe Motion to Compel Arbitration.

Finally, because Plaintiffs have not submitted proposed notice provisions, the Court will

require the parties to meet and confer and submit a comprehensive,joint proposal regarding notice
within 14 days.

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Case 8:19-cv-02632-TDC Document 48 Filed 09/11/20 Page 19 of 19

CONCLUSION

For the foregoing reasons, Plaintiffs' Motion for Conditional Class Certification will be
GRANTED IN PART and DENIED IN PART. The Motion will be granted in that the Court will
conditionally certify a collective action consisting of all individuals who have worked within the

last three years at one of FQSR's Kentucky Fried Chicken or Taco Bell restaurant franchises
located in the area of Maryland overseen by Tom Chalkley, consisting ofthe restaurants in Prince

Frederick, Kettering, Upper Marlboro, La Plata, Waldorf, and Bryans Road, Maryland, and were
classified as non-exempt from the overtime pay mandates,except those who worked only as either

"Co-Managers" or "Shift Managers" during the entire period. Notice shall issue to all putative
class members other than Brown and Jennings. The Motion will be denied without prejudice as to
the remaining FQSR restaurants in Maryland. A separate Order shall issue.

Date: September 11,2020

THEODORE D. CHUAN^
United States District Jud^

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