McKinstry v. Developmental Essential Services, Inc. et al

Filing 25

OPINION and ORDER Granting 12 MOTION for Conditional Certification and Approval. Signed by District Judge Stephen J. Murphy, III. (DPar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TERRI MCKINSTRY,
Plaintiff,

Case No. 2:16-cv-12565

v.

HONORABLE STEPHEN J. MURPHY, III

DEVELOPMENTAL ESSENTIAL
SERVICES, INC. and DION E. SCHARF,
Defendants.
/
OPINION AND ORDER GRANTING MOTION FOR
CONDITIONAL CERTIFICATION AND APPROVAL OF NOTICE [12]
Plaintiff Terri McKinstry filed a collective action complaint against the Defendants
Developmental Essential Services, Inc. ("DES") and Dion Scharf pursuant to the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 201, et seq. Before the Court is McKinstry's motion for
conditional collective action certification for notice purposes under 29 U.S.C. § 216(b). For
the following reasons, the Court will grant the motion.
BACKGROUND
McKinstry, and others on whose behalf she brought suit, were healthcare workers
employed in group homes that were owned and/or operated by Defendants or their
affiliates. Compl. ¶¶ 15–16, ECF No. 1. As the owner, manager, and/or executive officer,
Scharf allegedly exercised authority and control over DES's payroll practices, business
activities, and the employees' work arrangements. Id. ¶¶ 34–38. Whether they were paid
an hourly rate without overtime or a salary based on hours worked, McKinstry alleges that
she and others were not properly compensated for hours worked over 40 in a work week.
Id. ¶¶ 17–21. They collectively seek to recover the unpaid overtime compensation as the
following conditionally certified class:

All current or former healthcare workers employed by Developmental
Essential Services, Inc. and/or Dion E. Scharf, and/or any of its or their
affiliated entities who were not paid overtime for all hours worked over 40 in
a work week from June 29, 2013 to the present.
Id. ¶ 10.
LEGAL STANDARD
The FLSA allows "any one or more employees for and in behalf of himself or
themselves and other employees similarly situated" to sue for recovery of overtime
compensation. 29 U.S.C. § 216(b). Thus, a plaintiff "who has suffered only small monetary
harm can join a larger pool of similarly situated plaintiffs." O'Brien v. Ed Donnelly
Enterprises, Inc., 575 F.3d 567, 586 (6th Cir. 2009), abrogated on other grounds by
Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). A "collective action" requires
Plaintiffs to (1) "actually be similarly situated" and (2) "signal in writing their affirmative
consent to participate." Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546 (6th Cir. 2006)
(quotations omitted). Once a district court determines "whether plaintiffs have shown that
the employees to be notified are, in fact, similarly situated," it may "authorize notification
of similarly situated employees to allow them to opt into the lawsuit." Id. (quotations
omitted).
The FLSA does not define "similarly situated," but the Sixth Circuit has provided some
parameters for the analysis: (1) FLSA plaintiffs may still be similarly situated
notwithstanding individualized questions of fact that would preclude class certification under
"the more stringent criteria" of Civil Rule 23, O'Brien, 575 F.3d at 584; (2) FLSA plaintiffs
need not demonstrate "a 'unified policy' of violations" to establish that they are similarly
situated, id.; and (3) positions held by the plaintiff and the putative class members need
only be similar — not identical, Comer, 454 F.3d at 546–47 (quoting district court opinion).
2

Overall, the standard for authorizing notice is fairly lenient, and requires only "a modest
factual showing." Id. at 547 (quotation omitted).
DISCUSSION
To support her motion, McKinstry provides declarations and pay stubs from herself
and opt-in plaintiffs Lisa McKinstry, Becky Ferree, and Heather Doss. See ECF Nos. 12-3,
12-4, 12-5, 12-6. She argues that reading the documents in concert with the allegations in
the Complaint show that the employees were paid either a fixed salary and hourly pay (the
McKinstrys and Ferree), or only hourly pay (Doss), they were regularly required to work
over 40 hours a week, and they were not paid overtime for the extra hours. Mot. Cert.
12–13, ECF No. 12; see T. McKinstry Decl. ¶¶ 9, 10, ECF No. 12-3; L. McKinstry Decl.
¶¶ 9, 10, ECF No. 12-4; Ferree Decl. ¶¶ 9, 10, ECF No. 12-5; Doss Decl. ¶ 11, ECF No.
12-6.
Specifically, McKinstry claims the declarations show that Defendants' pay policies
subjected the employees to the same unlawful practices at several different locations. The
employees' declarations state the following:
C

They worked in non-supervisory capacities with two other healthcare workers
at multiple group homes. Id. ¶¶ 7, 8, 20 (the McKinstrys and Ferree), ¶¶ 7,
8, 19 (Doss);

C

Their stated job duties were substantially similar: monitoring, communicating
with, providing meals to, and attending to the medical needs of, the patients;
documenting the patients' medical care; and providing various household
services. Id. ¶ 15 (the McKinstrys and Ferree), ¶ 14 (Doss);

C

They were scheduled to work more than 40 hours per week to ensure 24/7
coverage despite not being fully compensated for overtime. Id. ¶¶ 8–10,
12–14, 17 (the McKinstrys and Ferree), ¶¶ 8, 11–12, 16 (Doss); and

C

They were aware of other employees' similar situations: "I know from my own
personal knowledge that other health care workers worked under the same
terms and conditions and were subject to the same payroll practice";
3

"Defendants employed other health care workers who had the same job
duties and responsibilities as me [and] I know this because I have spoken
with other workers who worked with me at the group homes where I was
assigned"; and "[o]ther health care workers also worked well over 40 hours
per week and Defendants did not pay them for all hours of overtime worked."
Id. ¶¶ 13, 16, 17 (the McKinstrys and Ferree), ¶¶ 12, 15, 16 (Doss).
Defendants contend that "plaintiff has not met her burden especially with no discovery
having been done in this case," but fail to specify any deficiency. Resp. 2, ECF No. 16. It
is common for conditional certification to be determined before or early in the discovery
process. Wlotkowski v. Michigan Bell Tel. Co., 267 F.R.D. 213, 217 (E.D. Mich. 2010)
(granting conditional certification for notice purposes at an early stage in discovery). And
Defendants' reliance on Arrington v. Mich. Bell Tel. Co., No. 10-10975, 2011 WL 3319691
(E.D. Mich. Aug. 1, 2011) is unavailing. Arrington would apply if McKinstry's declaration
merely asserted a belief that other employees were subject to the same policy that denied
her overtime compensation. But the four submitted declarations show a "factual nexus" that
justifies conditional certification here. See, e.g., O'Neal v. Emery Fed. Credit Union, No.
1:13-CV-0022, 2014 WL 842948, at *2 (S.D. Ohio Mar. 4, 2014) (finding that statements
regarding the "observations of, and interactions and conversations with, other [co-workers]
in their offices are sufficient to support the inference that [the named Plaintiff and three
additional opt-in plaintiffs] had actual knowledge that their experience was not unique.").
Defendants also argue that McKinstry's proposed notice is deficient because it
improperly looks like an official court pleading, it "does not warn that opt-ins can be liable
for fees and costs if unsuccessful" and does not inform opt-in plaintiffs that they may be
required to participate in written discovery, it "does not inform that the Court has not
expressed any opinion on the case," and its 60-day opt-in period is too long. Resp. 3–4,
ECF No. 16; see Notice, ECF No. 12-11.
4

Defendants' arguments are without merit. The inclusion of the case caption serves
an important purpose, and does not make the notice improper. See, e.g., Carlson v.
Leprino Foods Co., No. 1:05CV798, 2006 WL 2375046, at *1 (W.D. Mich. Aug. 15, 2006)
("The use of the caption is important so that readers will not confuse this notice with junk
mail."). References to potential fees, costs, and discovery may deter an employee from
participating, and that adverse effect is disproportionate to the burden they may face by
joining the action. See Bath v. Red Vision Sys., Inc., No. 2:13-02366, 2014 WL 2436100,
at *7 (D.N.J. May 29, 2014) (holding those types of references are unwarranted because
they could chill participation in the action); see also Guzman v. VLM, Inc., No. 07-cv-1126,
2007 WL 2994278, at *8 (E.D.N.Y. Oct. 11, 2007) (stating that language "may have an in
terrorem effect that is disproportionate to the actual likelihood that costs or counterclaim
damages will occur in any significant degree"). The Notice explicitly states that "the Court
has not made any decision yet about who is right." See Notice, ECF No. 12-11. And a 60day opt-in period is reasonable. Compare Benion v. Lecom, Inc., No. 15-14367, 2016 WL
2801562, at *11 (E.D. Mich. May 13, 2016) (approving a 90-day opt-in period).
A review of the record and relevant law shows that the additional employees are
"similarly situated." Accordingly, McKinstry has met the requirements for conditional
collective action certification and notice. The Court will grant her motion, but will not require
Defendants to post the Notice in a location where it can be seen by current workers. That
requirement is unnecessary and punitive given the other channels of notice available.
ORDER

5

WHEREFORE, it is hereby ORDERED that Plaintiff’s Motion for Conditional
Certification and Approval of Notice [12] is GRANTED, and the present case is conditionally
certified as a collective action, as described above.
IT IS FURTHER ORDERED that Defendants shall provide Plaintiff with the last known
mailing address, email address, and employee or unique identifier number of all potential
members of the described class in electronically readable form by March 31, 2017.
IT IS FURTHER ORDERED that the proposed Notice of Fair Labor Standards Act
Lawsuit and Opt-in Consent Form, see ECF Nos. 12-11, 12-12, are APPROVED, and
Plaintiff's counsel shall promptly deliver them by United States mail or email to all
employees identified by Defendants. The Notice shall indicate the employee's right and
ability to join the collective action by opting into the lawsuit no later than May 30, 2017. If
a Notice is returned as undeliverable, Defendants shall provide Plaintiff with that person's
date of birth and telephone number in electronically readable form, and Plaintiff's counsel
may re-mail the Notice to a new address.
IT IS FURTHER ORDERED that the Reminder Postcard, see ECF No. 12-13, is
APPROVED, and Plaintiff's counsel may deliver it by United States mail or email to all
employees identified by Defendants.
SO ORDERED.
s/Stephen J. Murphy, III
STEPHEN J. MURPHY, III
United States District Judge
Dated: March 1, 2017

6

CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was served upon the parties and/or
counsel of record on March 1, 2017, by electronic and/or ordinary mail.
s/David P. Parker
Case Manager

7