Lee et al v. GAB Telecom, Incorporated

Filing 25

OPINION AND ORDER Granting 15 Motion for Conditional Certification and Judical Notice. Signed by District Judge Gershwin A. Drain. (Bankston, T)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
HORACE LEE,
DESHON TAYLOR, and all
other similarly situated,

Plaintiffs,
Case No.12-cv-14104
HON. GERSHWIN A. DRAIN

vs.

GAB TELECOM, INC.,
Defendant.
_____________________________/
OPINION AND ORDER GRANTING
PLAINTIFFS’ MOTION FOR CONDITIONAL CERTIFICATION AND JUDICIAL NOTICE
[#15]
I. INTRODUCTION
This lawsuit arises out of Plaintiffs’ claim that Defendant violated the Fair Labor
Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”) by misclassifying them as “independent
contractors” rather than full-time employees and that they are entitled to overtime pay
because of this misclassification. This claim is currently before the Court on Plaintiffs’
Motion for Conditional Certification and Judicial Notice. For the reasons stated below, the
Plaintiffs’ Motion is GRANTED. This Opinion and Order sets forth the Court’s ruling.

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II. FACTUAL BACKGROUND
On September 14, 2012, Plaintiffs filed the present Complaint alleging that
Defendant violated section 207(a) of the FLSA by not paying Plaintiffs time-and-a-half when
they worked more than forty hours a week. Presently, the named Plaintiffs in this action
include Mr. Horace Lee, Mr. Deshon Taylor, Mr. Terris Walker, and Mr. Dexter Johnson.
Both plaintiffs and the putative class members were employed as cable installation
technicians by Defendant. Plaintiffs allege that Defendant engaged in a singular, common
policy and practice of violating FLSA by misclassifying Plaintiffs as independent contractors
and not paying them time-and-a-half for hours worked in excess of forty hours a week.
Plaintiffs were hired as cable installation technicians by Defendant GAB Telecom in
2008 and worked out of Defendant’s main office in Madison Heights, Michigan as of 2009.
Defendant provides installation, repair, maintenance and disconnection services of cable
TV, internet and telephone customers of WOW!. See Lee Aff. Ex. C, at 1-2; Walker Aff. Ex.
D, at 1-2.

Technicians, such as Plaintiffs, were hired to provide these services to

customers. Defendant paid technicians on a per-job-basis, meaning that they received the
same compensation for a completed job regardless of the number of hours they worked.
See Taylor Aff. Ex. B, at 3. Initially, technicians were labeled as independent contractors,
but were reclassified as employees by Defendant as of July 2012. Compl. ¶¶ 10-12;
Walker Aff. Ex. D, at 6.
Plaintiffs allege that other technicians employed by Defendant also frequently
worked in excess of forty hours a week without receiving overtime pay. Plaintiffs claim to
have acquired personal knowledge of Defendant’s treatment of other technicians by: (1)
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observing other technicians’ assignments, (2) speaking with other technicians about the
amount of hours they worked, (3) attending staff meetings where GAB’s owner Mr. Mike
Dyer and manager Mr. Matt Bradley discussed compensation for technicians in general
terms and (4) observing other technicians’ billing statements. See Walker Supplemental
Aff. Ex. B, at 2; Lee Supplemental Aff. Ex. C, at 1; Taylor Supplemental Aff. Ex. D, at 2.
Plaintiffs estimate that the putative class could include as many as 200 technicians
employed by Defendant during the statutory period.
On December 14, 2012, Plaintiffs filed a Motion for Conditional Certification and
Judicial Notice so that they may provide notice to putative class members of their eligibility
to opt-in to the lawsuit. For the reasons stated below, Plaintiffs’ Motion is GRANTED.

III. ANALYSIS
A. Standard of Review
Section 207(a) of the FLSA requires employers to pay time-and-a-half for employee
labor in excess of forty hours per week. See 29 U.S.C. § 207(a). Employees can sue on
their own behalf and for “similarly situated” persons. Id. at § 216(b). There are two
requirements for a collection action: (1) the plaintiffs must be “similarly situated,” and (2)
all plaintiffs must file written consent to participate in the action. Id. In determining whether
to certify a collective action or to authorize notice to potential opt-in plaintiffs, many courts
utilize a two-stage certification process to determine whether opt-in plaintiffs and lead
plaintiffs are similarly situated. O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 583
(6th Cir. 2009).

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During this initial stage, courts employ a “fairly lenient standard for determining
whether the plaintiffs are similarly situated, based solely on the pleadings and affidavits that
have been filed.” Pacheco v. Boar’s Head Provisions Co., Inc., 671 F. Supp. 2d 957, 959
(W.D. Mich. 2009); see also Harris v. FFE Transportation Services, Inc., No. 3:05-cv-007-P,
2006 U.S. Dist. LEXIS 51437, *7 (N.D. Tex. May 15, 2006) (“At the initial stage, a court
ordinarily possesses ‘minimal evidence’ and is thus instructed to apply a lenient standard
in determining whether to conditionally certify.” At this stage, which occurs at the beginning
of discovery, the plaintiff must show that “his position is similar, but not identical, to the
positions held by the putative class members.” Comer v. Wal-Mart Stores, Inc., 454 F.3d
544, 546-47 (6th Cir. 2006). If the court grants collective action certification at this stage,
“the certification is conditional and by no means final.” Id. at 546.
“At the second stage, following discovery, trial courts examine more closely the
question of whether particular members of the class are, in fact, similarly situated.” Id. at
547. Using the more rigorous standard at the second stage, “district courts have based
their final-certification decisions on a variety of factors, including the ‘factual and
employment settings of the individual plaintiffs, the different defenses to which the plaintiffs
may be subject on an individual basis, and the degree of fairness and procedural impact
of certifying the action as a collective action.’” O’Brien, 575 F.3d at 584; Harris, U.S. Dist.
LEXIS 51437, at *7 (“[W]here the parties have had the opportunity to conduct discovery on
the issue of certification, the similarly situated inquiry is more stringent. Courts generally
consider the evidence submitted and the two-step inquiry collapses into one.”).

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B. Plaintiff’s Motion for Conditional Certification and Judicial Notice
Since this case is at the “notice” stage, the question of certification is subject to a
more lenient standard based on pleadings and affidavits. The bulk of Plaintiffs’ evidentiary
support consists of the affidavits and supplemental affidavits of three former technicians
that are named Plaintiffs in this action. The affidavits allege that Plaintiffs shared the
following characteristics with the putative class: (1) working exclusively for Defendant as
cable installation technicians, (2) being paid a flat rate for each installation completed, (3)
misclassified as independent contractors and (4) working over forty hours a week without
being paid overtime.
Defendant argues that even subject to a lenient factual standard, Plaintiffs failed to
meet their burden for conditional certification because their affidavits amount to nothing
more than conclusory allegations. Specifically, Plaintiffs have failed to allege that they: (1)
worked with other independent contractors throughout the day, (2) had first-hand
knowledge of the manner of compensation of other independent contractors, and (3)
observed other independent contractors work over forty hours a week. Defendant points
to two cases with very similar factual situations where plaintiffs’ evidence was found
insufficient for conditional certification. See Swinney v. Amcomm Telecommunications,
Inc., 12-12925, 2013 WL 28063 (E.D. Mich. Jan. 2, 2013); Arrington v. Michigan Bell Tel.
Co., 10-10975, 2011 WL 3319691 (E.D. Mich. Aug. 1, 2011). Like in these cases,
Defendant claims that Plaintiffs have not provided sufficient evidence that putative class
members were subject to the same practices complained of by Plaintiffs.
Unlike in Swinney and Arrington, Plaintiffs have alleged personal knowledge of the
characteristics shared with the putative class. For example, in his supplemental affidavit
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Mr. Walker provided a plausible account for how he acquired personal knowledge that other
technicians worked more than forty hours a week. He stated that all technicians were
required to report to Defendant’s headquarters between 7:00 and 7:45 in the morning to
receive their route assignments for the day. Since the assignments were placed in the
open on a table, Mr. Walker was able to verify that the other technicians “were regularly
assigned jobs stretching from 8:00 am until 8:00 pm.” Walker Supplemental Aff. Ex. B, at
2. Additionally, Mr. Walker claims to have engaged in conversations with approximately
30 fellow technicians during this morning period and throughout the day about their job
assignments and how much they were working. Id. Based on these observations, Mr.
Walker concluded that all fellow technicians he knew worked overtime, with the exception
of new employees who were “eased in until they got up to speed.” Id.
Plaintiffs supplemental affidavits similarly support the assertion that other technicians
were not paid overtime when they worked more than forty hours a week.

In his

supplemental affidavit, Mr. Lee claims he was told by Mr. Dyer and Mr. Bradley that
installers could only join the company as a contractor. See Lee Supplemental Aff. Ex. C,
at 1. Mr. Lee further alleges that he was familiar with the way all installation technicians
were compensated because Mr. Bradley discussed technician compensation generally at
weekly meetings attended by all installers.

Id. at 2.

Mr. Taylor also claims that

compensation was discussed at meetings with other technicians and adds that he observed
the billing paperwork of other technicians that had the same billing codes that he used.
See Taylor Supplemental Aff. Ex. D, at 2.
At this early stage of litigation, where a minimal amount of discovery has taken
place, these allegations provide a sufficient basis to conclude other technicians were
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similarly situated to the Plaintiffs. Conditional certification requires merely a showing based
on the pleadings and affidavits that Plaintiffs are in a similar situation with the putative
class. The affidavits provided by Plaintiffs, their supplemental affidavits in particular, have
met that lower bar. It must be remembered that, “certification is conditional and by no
means final.” Comer, 454 F.3d at 546. Once the parties have had the opportunity to
engage in further discovery class certification will be re-examined under the rigor of the
second stage analysis.

IV. CONCLUSION
For the reasons stated above, Plaintiffs’ Motion for Conditional Certification and
Judicial Notice [#15] is GRANTED.
SO ORDERED.
Dated: April 16, 2013

/s/Gershwin A Drain
GERSHWIN A. DRAIN
United States District Court Judge

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