Getchman v. Pyramid Consulting, Inc.
MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that plaintiff's motion to dismiss for lack of jurisdiction 21 is DENIED. IT IS FURTHER ORDERED that plaintiff's motion for equitable tolling of the statute of limitations for FLSA collective action claims 36 is GRANTED IN PART as set forth above. IT IS FURTHER ORDERED that plaintiff's motion for order conditionally certifying collective action 4 is GRANTED, and the Court conditionally certifies a class of all current and form er hourly non-exempt employees of defendant Pyramid Consulting, Inc., who were paid per diem amounts or rates by defendant for a period of three (3) years preceding July 22, 2016 and ongoing. IT IS FURTHER ORDERED that defendant shall provide plain tiffs attorneys with the names, employment dates, and last known addresses of all potential class members within 14 days of the date of this Order. IT IS FURTHER ORDERED that plaintiff may send out a notice and consent to join consistent with Exhibits 1 and 2 of her memorandum and including the amendments discussed above. Signed by District Judge Catherine D. Perry on February 23, 2017. (MCB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
DEBORAH LYNN GETCHMAN,
individually and on behalf of others
PYRAMID CONSULTING, INC.,
Case No. 4:16 CV 1208 CDP
MEMORANDUM AND ORDER
In this collective action named plaintiff Deborah Lynn Getchman claims that
defendant Pyramid Consulting violated the Fair Labor Standards Act, 29 U.S.C. §
201 et seq., when it failed to properly calculate and pay overtime to its employees,
including Getchman. Before me now are a motion to dismiss based on lack of
subject matter jurisdiction filed by Pyramid, a motion for conditional certification
of the class, and a motion for equitable tolling of the statute of limitations for the
collective action claims. For the reasons discussed below, I am denying the motion
to dismiss for lack of subject matter jurisdiction, granting the motions for
conditional certification, and granting in part the motion for equitable tolling of the
statute of limitations.
Pyramid is a company based in Alpharetta, Georgia that provides
information technology staffing and enterprise solutions to small and mediumsized businesses. Getchman began working as a consultant for Pyramid in June
2014. In accordance with her employment agreement, she worked on site at one of
Pyramid’s client locations as a contract project coordinator/manager. The terms of
Getchman’s employment, including her hourly compensation, were set out in a
Consultant Agreement and Work Order. Prior to July 23, 2015, Getchman’s work
order indicated a split between her taxable hourly wages (the “Consultant’s Rate”)
and her “per diem” hourly wages, which were untaxed and purportedly meant to
cover her daily expenses. For instance, as a hypothetical illustration, Getchman’s
total hourly rate of pay would be $15, but that would be split into a “Consultant’s
Rate” of $10, and a per diem rate of $5. From the time she was hired in July 2014
through early July 2015 Getchman’s hours were split in this manner. During this
period, Getchman’s overtime pay was calculated using only the consultant’s rate
and excluding the per diem rate. Using the above hypothetical rates, this means
she would have been paid an overtime rate of $15 ($10 x 1.5) instead of $22.5 ($15
Apparently, Pyramid stopped separating Getchman’s consultant and per
diem rates and began paying her overtime based on a combined rate calculation in
mid-July 2015. In August 2015 Getchman contacted Pyramid’s human resources
department informing them that she believed her overtime rate had been
improperly calculated during the previous year. After some back and forth
communication, Pyramid sent her a check, which Getchman deposited, for
$2708.91. The memo line of the check stated “OT hrs arrear.” Pyramid indicated
that that it had arrived at this amount by first identifying the amount Getchman was
owed in overtime pay1 as $11,945.91. It then calculated and subtracted $8564.73
as the amount of taxes that would have been due on Getchman’s per diem pay for
the entire year if her per diem pay had been included in her consultant’s rate.2
Getchman disputed that the amount of the check was sufficient, and ultimately, she
filed this lawsuit in July 2016 on behalf of herself and a class of similarly situated
“hourly, non-exempt consultants” alleging violations of the overtime wage
provisions of the FLSA. Simultaneously with her complaint, Getchman filed a
motion to certify a class conditionally for an FLSA collective action. She seeks to
certify this case as a collective action and receive authorization to send notice
under § 216(b) of the FLSA to all current and former “hourly non-exempt
employees [of Pyramid] paid per diem amounts or rates by defendant within the
last three years.”
By adding her per diem rate into her hourly rate before calculating her overtime rate.
In other words, once the per diem amounts were included in Getchman’s consultant’s rate to
calculate her overtime, she owed taxes on all of her per diem money.
On or around September 30, 2016, two months after Getchman’s complaint
and motion for conditional certification was filed, Pyramid served a Rule 68 offer
of judgment on Getchman, in which Pyramid offered to have judgment taken
against it and have the court determine reasonable attorneys’ fees and costs.
Stapled to the offer of judgment was a $15,000 check, which Pyramid contends
“exceeds the overtime and liquidated damages that Plaintiff ever could possibly
recover in this case.” The memo line on the check read “Settlement.” The check
was returned to defendant’s counsel with a letter from Getchman’s counsel stating
the offer of settlement was rejected. Pyramid then filed a motion to dismiss this
case for lack of jurisdiction and requested a stay of discovery and pending
deadlines while that motion was under consideration by the Court. I granted
Pyramid’s motion for a stay.
Pyramid’s Motion to Dismiss
In its motion to dismiss, Pyramid claims it has tendered to Getchman
everything she is asking the Court to award her in her individual claim. As a
result, Pyramid asserts there is no remaining Article III controversy and
Getchman’s lawsuit is moot. In response, Getchman argues Pyramid’s tender does
not moot her claim because it does not constitute an offer of full and complete
relief and because a defendant cannot unilaterally moot a plaintiff’s claim with a
rejected tender of relief.
Article III of the Constitution limits federal court jurisdiction to “cases” and
“controversies.” U.S. Const. Art. III, § 2. This has been interpreted by the
Supreme Court to mean that an actual controversy must be “extant at all stages of
review, not merely at the time the complaint is filed.” Arizonans for Official
English v. Arizona, 520 U.S. 43, 67 (1997). Pyramid’s argument here is that a
tender of full relief on Getchman’s individual claim in addition to an offer of
judgment leaves no existing case or controversy as to Getchman herself, and
because no class has been certified, the entire case is moot. The Supreme Court of
the United States recently addressed Article III standing under similar
circumstances in Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016). The
plaintiff in Campbell-Ewald filed a putative class action complaint under the
TCPA. Id. at 667. Defendant in that case proposed to settle plaintiff's individual
claim through a Rule 68 offer of judgment and simultaneous settlement offer. Id.
at 667-68. The plaintiff rejected the offers, and the defendant moved to dismiss
pursuant to FRCP 12(b)(1) for lack of subject matter jurisdiction, arguing no “case
or controversy” existed because plaintiff had been offered complete relief. Id. at
668. The Court rejected defendant's “pick off” attempt, holding that an unaccepted
settlement offer simply has “no force,” and like other unaccepted contract offers
“creates no lasting right or obligation.” Id. at 666. Furthermore, the Court opined,
“[A] would-be class representative with a live claim of her own must be accorded a
fair opportunity to show that certification is warranted.” Id. at 672.3
The Campbell-Ewald decision pointedly left open the question of
whether a full tender of settlement would be sufficient to moot a plaintiff’s
claim. Id. (“[t]hat question is appropriately reserved for a case in which it is
not hypothetical”). Since then, courts that have looked at the issue have
been somewhat split. Compare Geisman v. American Homepatient, Inc.,
No. 4:14cv1538 RLW, 2016 WL 3407815 (E.D. Mo. June 16, 2016)
(defendant not permitted to tender payment to a class representative on his
individual claims, over plaintiff’s objection, to incapacitate the class action
before plaintiff has a fair opportunity to show that certification is warranted)
and Ung v. Universal Acceptance Corp., Civ. No. 15-127 (RHK/FLN), 2016
WL 3136858 (D. Minn. June 3, 2016) (plaintiff’s TCPA claims were not
rendered moot by a tendered but rejected check for settlement of plaintiff’s
individual claims) and Brodsky v. HumanaDental Ins. Co., No. 1:10-CV03233, 2016 WL 5476233 (N.D. Ill. Sept. 29, 2016) (plaintiff’s claims in
TCPA class action were not moot where defendant had placed full amount
of plaintiff’s expected individual recovery in escrow for payout to plaintiff
In so holding, the Court adopted the reasoning applied by Justice Kagan in her dissent in
Genesis Healthcare Corp., 133 S. Ct. 1523, 1533 (2013). Notably, the plaintiff’s claims in
Genesis were brought under the FLSA.
upon entry of judgment by court) and O’Neal v. America’s Best Tire LLC,
No. CV-16-00056-PHX-DGC, 2016 WL 3087296 (D. Ariz. June 2, 2016)
(rejecting defendants' argument that tender of checks for unpaid
compensation and liquidated damages in FLSA putative collective action
rendered the case moot because “[p]laintiffs have not accepted the checks
tendered by [d]efendants”) and Martelack v. Toys R US, 13-CV-7098, 2016
WL 762656, at *3 (D. N.J. Feb. 25, 2016) (concluding that defendant's
tender of an uncashed check in an attempted satisfaction of plaintiff's FLSA
claim “do not moot [p]laintiff's claims for unpaid wages”) with McNerney v.
A.M.T. Grp., Inc., No. 115CV1260 (GTS/DJS), 2016 WL 5107117, at *5
(N.D.N.Y. Sept. 20, 2016) (denying motion to dismiss on other grounds but
noting “the Court is inclined to find that, where an FLSA plaintiff is
tendered full relief in the form of a check, he cannot avoid mootness by
refusing to cash that check”) and S. Orange Chiropractic Ctr., LLC v. Cayan
LLC, No. CV 15-13069-PBS, 2016 WL 1441791 (D. Mass. Apr. 12, 2016)
(named plaintiff no longer had “live claim” where defendant offered to
deposit a check with the court satisfying all of plaintiff's individual claims
and have the district court enter judgment in plaintiff's favor).
Although the Eighth Circuit has not examined this question in the
wake of Campbell-Ewald, it previously held that judgment could be “entered
against a putative class representative on a defendant’s offer of payment
only where class certification [had] been properly denied and the offer
satisfie[d] the representative’s entire demand for injuries and costs of the
suit.” Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1539 (8th Cir. 1996)
(further noting, the “[a]cceptance of a tendered offer need not be mandated
… since the defendant has not offered all that has been requested in the
complaint (i.e. relief for the class)”). Similarly, when another judge of this
court addressed the question of whether a tender of full settlement can
unilaterally moot a plaintiff’s claim, he extended Campbell-Ewald’s logic,
finding there to be “no principled difference between a plaintiff rejecting a
tender of payment and an offer of payment.” Giesmann, MD, P.C. v.
American Homepatient, Inc., No. 4:14cv1538 RLW, 02016 WL 3407815, at
*3 (E.D. Mo. June 16, 2016).
I agree with the foregoing reasoning. The facts before me indicate
that Pyramid made a tender offer of settlement via a check that was
subsequently refused and returned by Getchman. This is not materially
different than if Pyramid had communicated an offer of settlement that
Getchman in turn rejected. In both scenarios, the “‘unaccepted [offer]—like
any unaccepted contract offer—is a legal nullity, with no operative effect,’”
and plaintiff is left without satisfaction of either her individual or her class
claims. Campbell-Ewald, 136 S.Ct. at 670 (quoting Genesis Healthcare
Corp., 133 S. Ct. 1523, 1533 (2013) (Kagan, J., dissenting)). Moreover, as
noted by this court in Giesman, if I were to accept that a defendant’s rejected
tender of payment moots a plaintiff’s individual claims, “[d]efendants would
essentially have control of the putative class.” Giesmann, 02016 WL
3407815, at *3 (citing Ung v. Universal Acceptance Corporation, Civ. No.
15-127 (RHK/FLN), 2016 WL 3136858, at *7 (D. Minn. June 3, 2016)).
“The law does not countenance the use of individual offers to thwart class
litigation, because the class-action device is designed to allow similarly
situated plaintiffs to aggregate smaller claims, promoting judicial
efficiency.” Ung, 2016 WL 3136858, at *5 (internal quotation marks and
citation omitted). Accordingly, I am denying Pyramid’s motion to dismiss
for lack of jurisdiction.
Getchman’s Motion to Conditionally Certify an FLSA Collective
As noted, and based on the background described above, Getchman
brings a collective action for unpaid compensation under the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 201, et seq., on behalf of herself and
others similarly situated. She has moved for conditional certification of this
case as a collective action under FLSA so that she may notify certain of
Pyramid’s past and present employees of this action and provide them the
opportunity to “opt in” as plaintiffs to this litigation. Pyramid opposes
conditional certification, but I will grant Getchman’s motion for the reasons
Section 7 of the Fair Labor Standards Act mandates that an employer
may not subject non-exempt employees to a work week in excess of 40
hours unless the employee is compensated for her overtime with additional
pay of at least one and one half times the regular rate at which she is
employed. 29 U.S.C. § 207.4 The Act also provides that any employer who
violates this restriction “shall be liable to the employee or employees
affected in the amount of their . . . unpaid overtime compensation . . . and in
an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b).
An action to recover the overtime and liquidated damages may be
maintained “by any one or more employees for and on behalf of himself or
themselves and other employees similarly situated.” Id. The FLSA does not
define the term “similarly situated.” Although the Eighth Circuit Court of
Appeals has not decided the standard to determine whether potential opt-in
An employee’s regular rate is defined as “all remuneration for employment,” 29 U.S.C. §
207(e), but it does not include “reasonable payments for traveling expenses, or other expenses,
incurred by an employee in the furtherance of his employer’s interests and properly reimbursable
by the employer.” 29 U.S.C. § 207(e)(2). Pyramid does not appear to dispute at this juncture that
Getchman’s “per diem” wages should have been included in calculating her regular rate and thus
her overtime rate.
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plaintiffs are “similarly situated” under § 216(b), the district courts in this
circuit use a two-step analysis. See, e.g., Simmons v. Enterprise Holdings,
Inc., 2011 WL 855669, *2 (E.D. Mo. Mar. 9, 2011); Littlefield v. Dealer
Warranty Services, LLC, 679 F. Supp. 2d 1014, 1016 (E.D. Mo. 2010);
Parker v. Rowland Express, Inc., 492 F. Supp. 2d 1159 (D. Minn. 2007);
Davis v. Novastar Mortgage, Inc., 408 F. Supp. 2d 811 (W.D. Mo. 2005);
Dietrich v. Liberty Square, L.L.C., 230 F.R.D. 574 (N.D. Iowa 2005);
McQuay v. American International Group, Inc., 2002 WL 31475212 (E.D.
As is typical under the two-step process, Getchman has moved for
conditional certification for notice purposes at an early stage of the
litigation. See Davis, 408 F. Supp. 2d at 815. At this first step in the
process, I do not reach the merits of her claims. Kautsch v. Premier
Communications, 504 F. Supp. 2d 685, 688 (W.D. Mo. 2007); Hoffmann v.
Sbarro, Inc., 982 F. Supp. 249, 262 (S.D.N.Y. 1997) (citation omitted).
Plaintiff’s burden at this stage is not onerous. See Kautsh, 504 F. Supp. 2d
at 688; Smith v. Heartland Automotive Services, Inc., 404 F. Supp. 2d 1144,
1149 (D. Minn. 2005) (burden at first stage is “not rigorous”). Conditional
certification at the notice stage requires “nothing more than substantial
allegations that the putative class members were together the victims of a
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single decision, policy or plan.” Davis, 408 F. Supp. 2d at 815. “Plaintiffs
need not show that members of the conditionally certified class are actually
similarly situated.” Fast v. Applebee’s International, Inc., 2007 WL
1796205, *3 (W.D. Mo. June 19, 2007). That determination is made during
the second step of the process, after the close of discovery. Id.
“Determining whether such a collective action is the appropriate means for
prosecuting an action is in the Court’s discretion.” Heartland, 404 F. Supp.
2d at 1149 (citation omitted). Once the Court conditionally certifies the
class, potential class members are given notice and the opportunity to “optin.” Parker, 492 F. Supp. 2d at 1159.
At the second step of the process, the defendant may move to
decertify the class. See Dernovish v. AT&T Operations, Inc., 2010 WL
143692, *1 (W.D. Mo. Jan. 12, 2010). This is typically done after the close
of discovery when I have more information and am able to make a factual
determination as to whether the members of the conditionally certified class
are similarly situated. See Davis, 408 F. Supp. 2d at 815. To be similarly
situated, however, “class members need not be identically situated.” Fast,
2007 WL 1796205, *4 (W.D. Mo. June 19, 2007).
Having reviewed Getchman’s motion in light of the relevant
standards, I find that she has cleared the relatively low hurdle of
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demonstrating that conditional certification of the collective action is
appropriate. Getchman has come forward with substantial allegations that
she and the other members of the proposed collective action were victims of
a single decision, policy, or plan to deprive them of compensation, namely,
that they did not receive all overtime pay for those hours worked in excess
of forty per week because of Pyramid’s exclusion of certain compensation
(the “per diem” pay) from its calculation of the regular rate. Pyramid has
argued that Getchman’s motion must fail because she has not presented
evidence that any other similarly-situated employee seeks to join the lawsuit.
But evidence of “interest” from similarly situated employees is not required
at this stage of the case. See Arnold v. DirecTV, Inc., No. 4:10-cv-352-JAR,
2012 WL 4480723, at *6 (E.D. Mo. Sept. 28, 2012). As noted by the Court
in Ondes v. Monsanto, a rule requiring plaintiff to submit evidence that
potential class members desire to opt-in at the first stage of certification
would effectively require plaintiffs to issue their own form of informal
notice. No. 4:11CV197 JAR, 2011 WL 6152858, at *5 (E.D. Mo. Dec. 12,
2011). Besides posing a risk of “unnecessarily [giving] rise to potential
ethical issues,” Id. (citation omitted), this would seem to confound the nature
of evidence required at the first and second steps, turning the process on its
head. The verified complaint contains sufficient allegations of the likely
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existence of a putative class, and as such, Getchman has met her burden for
As Getchman has pled a willful violation, a three-year certification
period is appropriate. See Simmons, 2011 WL 855669, at *4 (three-year
certification period); Beasely v. GC Services LP, 270 F.R.D. 442, 445 (E.D.
Mo. 2010) (same).
Pyramid has argued that the proposed class should be limited only to
consultants whose employment began before January 1, 2015 because no
consultants hired after that date, except one, were placed into the same pay
plan as Getchman. Pyramid cites no legal support for this argument, and I
see no reason to artificially limit the class in this way. The notice is
addressed to “hourly non-exempt employees paid per diem amounts or rates
by defendant within the last three years.” If no employees after January 1,
2015, fall into this category, then the class will be self-limiting.
Pyramid also argues that Getchman’s proposed notice should be
modified to add language regarding an opt-in plaintiff’s potential
responsibilities after joining the suit. Specifically, Pyramid seeks to add the
following language to the notice:
While this lawsuit is proceeding, you may, among other things,
be required to provide information, sit for depositions, and if
the case proceeds to trial or is otherwise necessary, testify in
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court in St. Louis, Missouri. If Plaintiff prevails , you may be
entitled to an award of back pay for your overtime hours
worked, which may include an additional amount of liquidated
damages and/or prejudgment interst. If you opt-in and are
unsuccessful on the merits of your claim, you may be
responsible for Pyramid’s costs in this matter.
Pyramid contends that the Consent to Join form is similarly deficient
and proposes adding the following language:
I understand that while this lawsuit is proceeding, I may, among
other things, be required to provide information, sit for
depositions, and, if the case proceeds to trial or is otherwise
necessary, testify in court in St. Louis Missouri. I understand
that I will be entitled to share in any recovery by the Plaintiff
and, further, that if no monetary judgment, payment or
settlement is obtained, I will receive nothing. I understand that
if I opt-in and am unsuccessful on the merits of my claim, I
may be responsible for defendant’s costs in this matter.
In her reply, Getchman argues that these changes should be rejected as
they seek only to intimidate or discourage participation by potential opt-in
The purpose of the notice forms is to inform potential class members
of the existence of the lawsuit and allow them to evaluate whether they wish
to join it. Littlefield v. Dealer Warranty Servs., LLC, 679 F. Supp. 2d 1014,
1018 (E.D. Mo. 2010) (citations omitted). A court should not alter a
plaintiff’s proposed notice “unless certain changes are necessary.” Perrin v.
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Papa John’s Intern., Inc., No. 4:09CV1335 AGF, 2011 WL 4815246, at *3
(E.D. Mo. Oct. 11, 2011) (citing id.).
Here, I conclude that the language informing plaintiffs of their
potential participatory responsibilities is proper. See, e.g.,Huang v. Gateway
Hotel Holdings, 248 F.R.D. 225 (E.D. Mo. 2008) (upon objection by
defendant, ordering amendment of the form of notice to include language
regarding opt-in plaintiffs’ potential discovery and trial obligations) and
Ahle v. Veracity Research Co., Civil No. 09-00042 ADM/RLE, 2009 WL
3103852, at *6 (D. Minn. Sept. 23, 2009) (same); see also Reab v.
Eelectronic Arts, Inc., 214 F.R.D. 623, 630 (D. Colo. 2002) (approving
“precatory rather than mandatory language” in the form of notice that
informed opt-in plaintiffs of their potential obligation to participate in the
litigation). Therefore, the following sentence should be added to
Getchman’s proposed form of notice:
“While this lawsuit is proceeding, you may, among other
things, be asked to provide information, sit for depositions,
and if the case proceeds to trial, testify in court.”
And the following sentence should be added to plaintiff’s proposed
consent to join:
“I understand that while this lawsuit is proceeding, I may,
among other things, be asked to provide information, sit for
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depositions, and, if the case proceeds to trial, testify in
In contrast, because the chance of a plaintiff incurring anything other
than de minimus costs is remote, I agree with Getchman that Pyramid’s
proposed language regarding plaintiffs’ responsibility for defendant’s costs
is improper. See Hussein v. Capital Building Services Group, Inc., 152 F.
Supp. 3d 1182, 1196-97 (D. Minn. 2015) (“the threat of payment of defense
costs to absent class members…is out of proportion to the risk and including
such a warning could have a chilling effect on participation in the collective
action”) (collecting cases), but see Perrin, 2011 WL 4815246, at *4
(requiring proposed notice be amended to add language regarding plaintiffs’
potential liability for defendant’s costs).
Finally, as to Getchman’s motion for equitable tolling of the statute of
limitations, I agree that tolling the limitations period for the time it took the
Court to consider this motion is appropriate. Therefore, the statute of
limitations will be tolled as of the date Getchman filed her motion for
conditional certification, July 22, 2016, through the date of this order. See
Holliday v. J S Exp. Inc., No. 4:12CV01732 ERW, 2013 WL 23953333, at
*8 (E.D. Mo. May 30, 2013) (permitting tolling during the time it took for
the Court to consider a pre-trial motion)(citing Putnam v. Galaxy 1
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Marketing, Inc ., 276 F.R.D. 264, 276 (S.D.Iowa, 2011) and Davenport v.
Charter Commc’ns, LLC, No. 4:12CV00007 AGF, 2014 WL 2993739, at *4
(E.D. Mo. July 3, 2014). To the extent Getchman’s motion asks for further
tolling, the motion is denied.
I will set a Rule 16 Conference for this case by separate order.
IT IS HEREBY ORDERED that plaintiff’s motion to dismiss for
lack of jurisdiction  is DENIED.
IT IS FURTHER ORDERED that plaintiff’s motion for equitable
tolling of the statute of limitations for FLSA collective action claims  is
GRANTED IN PART as set forth above.
IT IS FURTHER ORDERED that plaintiff’s motion for order
conditionally certifying collective action  is GRANTED, and the Court
conditionally certifies a class of all current and former hourly non-exempt
employees of defendant Pyramid Consulting, Inc., who were paid per diem
amounts or rates by defendant for a period of three (3) years preceding July
22, 2016 and ongoing.
IT IS FURTHER ORDERED that defendant shall provide plaintiff’s
attorneys with the names, employment dates, and last known addresses of all
potential class members within 14 days of the date of this Order.
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IT IS FURTHER ORDERED that plaintiff may send out a notice
and consent to join consistent with Exhibits 1 and 2 of her memorandum and
including the amendments discussed above.
CATHERINE D. PERRY
UNITED STATES DISTRICT JUDGE
Dated this 23rd day of February, 2017.
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