BUSTAMANTE v. D.O. PRODUCTIONS, LLC et al

Filing 80

OPINION. Signed by Judge John Michael Vazquez on 8/30/2017. (ld, )

Case 2:16-cv-04618-JMV-JBC Document 80 Filed 08/30/17 Page 1 of 17 PageID: 1011

Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

HERMES BUSTAMANTE, on behalf of himself
and others similarly situated,
Civil Action No. 16-4618

Plaintff
V.

OPINION

D.O. PRODUCTIONS, LLC and MCCAIN
FOODS USA, INC.,
Defendants.

John Michael Vazguez, U.S.D.J.

The present matter comes before the Court on Defendant D.O. Productions, LLC’s’
(“Defendant” or “D.O. Productions”) motion to dismiss the Complaint pursuant to Rule 12(b)(1)
for lack of subject matter jurisdiction.2

D.E. 71.

Plaintiff Hermes Bustamante (“Plaintiff’)

opposes the motion on behalf of himself and others similarly situated.3 This case concerns

Defendant McCain Foods USA, Inc. (“McCain”) answered the Complaint on October 14, 2016.
D.E. 69. Collectively, Defendant D.O. Productions and Defendant McCain will be referred to as
“Defendants.”
2

While Defendant also moves pursuant to 12(b)(6), Plaintiff asserts that “[Defendant’s] legal
arguments do not address Rule 12(b)(6) at all.” P1. Opp’n at 32. Defendant does not respond to
this argument, and the Court could not find a Rule 12(b)(6) analysis in Defendant’s moving papers.
The Court therefore considers Defendant’s motion solely pursuant to Rule 12(b)(1).
Defendant’s brief in support of its motion to dismiss the Complaint will be referred to hereinafier
as “Def. Br.” (D.E. 71); Plaintiffs opposition to Defendant’s motion to dismiss will be referred to
“P1. Opp’n” (D.E. 75); and Defendant’s reply brief will be referred to “Def. R.Br.” (D.E. 79).

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allegations that Defendants failed to pay Plaintiff, and other similarly situated employees,
compensation for rest time and overtime, as required by law. This motion was decided without
oral argument pursuant to federal Rule of Civil Procedure 78 and Local Civil Rule 78.1. The
Court has considered the parties’ submissions and denies Defendant’s motion without prejudice.
I. FACTUAL4 & PROCEDURAL HISTORY

The facts of this matter are derived from Plaintiffs Complaint (“Compl.”).

D.E. I.

Defendants manufacture frozen foods at their facility in Lodi, New Jersey (the “Lodi Facility”).
Compi.

¶J 9, 11, 26. The Lodi Facility was owned and operated for many years by Defendant

McCain. Id.

¶ 27. On or about November 1, 2014, Defendant D.O. Productions bought the

business from McCain. Id.

¶J 13, 27.

Plaintiff was an employee at the Lodi Facility, first for McCain and subsequently for D.C.
Productions. Id.

¶ 6. Plaintiff alleges that Defendants failed to pay him for compensable rest

periods and overtime pay for hours worked in excess of 40 hours per week. Id.

¶ 15. Specifically,

Plaintiff asserts that he was required to take two rest periods of 20 minutes during his shifi, but
was only paid for five minutes of each rest period. Id.

¶ 28. According to Plaintiff, he should have

been paid for the full 20-minute rest periods and overtime wages, where applicable. Id.

¶ 30.

Plaintiff filed his Complaint on behalf of himself and similarly situated individuals on July
29, 2016, alleging causes of action for (1) unpaid wages and overtime under the Fair Labor
Standards Act (“fLSA”); and (2) unpaid wages and overtime under the New Jersey Wage and
Hour Law (“NJWHL”). D.E. I. On August 17, 2016, Plaintiff filed consent forms on behalf of
himself and 41 individuals to participate in the current action. See D.E. 6-47. Additional consent

When reviewing a motion to dismiss, the Court accepts as true all well-pleaded facts in the
complaint. fowler v. UPliCShadyside, 578 F.3d 203, 210 (3d Cir. 2009).
2

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forms were filed on August 24, 2016 for ten more individuals, as well as for two more persons on
August 31, 2016 and October 5, 2016. D.E. 51-60, 63, 6$. On October 12, 2016, Defendant served
on Plaintiff and the remaining opt-ins an offer of judgment pursuant to Rule 68. Defendant
McCain answered the Complaint on October 14, 2016. D.E. 69. In lieu of answering, Defendant
D.C. Productions moved to dismiss the Complaint for lack of subject matterjurisdiction. D.E. 71.
Plaintiff opposes Defendant’s motion. D.E. 74.
II. STANDARD OF REVIEW

Rule 12(b)(1) permits a party to move to dismiss a complaint based on “lack of subject
matter jurisdiction.” See Fed. R. Civ. P. 12(b)(1). In deciding a Rule 12(b)(1) motion to dismiss,
a court must first determine whether the party presents a facial or factual attack because that
distinction determines how the pleading is reviewed. See Mortensen v. first fed. Say. & Loan
Ass ‘n, 549 f.2d 884, 891 (3d Cir. 1977). “A facial attack concerns an alleged pleading deficiency
whereas a factual attack concerns the actual failure of a plaintiffs claims to comport factually with
the jurisdictional prerequisites.” Yotcng v. United States, 152 F. Supp. 3d 337, 345 (D.N.J. 2015)
(quotations and citation omitted).
Here, the parties dispute whether the proper standard is a factual or facial attack. See P1.
Opp’n at 7-9; Def. R.Br. at 2-3. Plaintiff argues that Defendant’s motion must be construed as
facial because Defendant has not yet filed an answer. P1. Opp’n at 7-9. Defendant argues that the

federal Rule of Civil Procedure 68 provides, in relevant part:
At least 14 days before the date set for trial, a party defending
against a claim may serve on an opposing party an offer to allow
judgment on specified terms, with the costs then accrued. If within
14 days after being served, the opposing party serves written notice
accepting the offer, either party may then file the offer and notice of
acceptance, plus proof of service. The clerk must then enter
judgment.
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Supreme Court and Third Circuit have held that the timing of a motion to dismiss is irrelevant
when determining whether the attack is factual or facial. Def. R.Br. at 2-3. Therefore, Defendant
contends that the Court should construe its motion as a factual attack and consider allegations
outside the pleadings. Id. at 3.
Defendant cites to Bernardi v. Swanson Memorial Lodge No. 48 of the fraternal Order of

Police, 920 F.2d 198 (3d Cir. 1990) for support. There, the Third Circuit specifically held that the
timing of filing a motion to dismiss is not determinative of whether the attack is factual or facial.
Id. at 200. Thus, the Third Circuit concluded that the defendant’s motion was properly considered

a factual attack, despite the fact that it was brought pre-answer. Id.
While Bernardi has not explicitly been overruled, recent Third Circuit cases suggest that
only facial attacks, and not factual attacks, can be brought in a motion to dismiss before an answer
is filed. See, e.g., Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014) (“The

[defendant] filed the attack before it filed any answer to the [c]omplaint or otherwise presented
competing facts. Its motion was therefore, by definition, afacial attack.” (emphasis added)); Askew
v. Trustees of Gen. Assembly of Church of the Lord Jesus Christ of the Apostolic faith Inc., 684

F.3d 413, 417 (3d Cir. 2012) (concluding that “[a]s the defendants had not answered and the parties
had not engaged in discovery, the first motion to dismiss was facial.”). Other courts in this district
have reached the same conclusion. See, e.g, Curlin Med. Inc. v. ACTA Med., LLC, No. 16-2464,
2016 WL 6403131, at *2 (D.N.J. Oct. 27, 2016) (finding that recent Third Circuit cases support
the conclusion that factual attacks to jurisdiction can only be brought post-answer); Smalls v.
Jacoby & Meyers, LLP, No. 15-6559, 2016 WL 354749, at *2 (D.N.J. Jan. 26, 2016) (same).
This Court will follow the recent development in Third Circuit law and construe the present
motion as a facial attack, since Defendant brought a pre-answer motion to dismiss for lack of

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subject matter jurisdiction. Accordingly, “the court must only consider the allegations of the
complaint and documents referenced therein.

.

.

in the light most favorable to the plaintiff.” Gould

Elecs. Inc. v. United States, 220 F.3d 169, 176 (3d Cir. 2000).
III. DISCUSSION

Even though the Court is reviewing Defendant’s motion pursuant to a facial attack, the
Court will nevertheless cite to the extraneous factual allegations raised by Defendant so that the
record is complete.
Facts Averred by Defendant
Defendant alleges that when it purchased the business from McCain, the Collective
Bargaining Agreement (“CBA”) in place required production employees, such as Plaintiff, to take
two 20-minute rest periods, of which five minutes would be paid. Def. Br. at 2-3. During the
months leading up to April 7, 2016, Defendant negotiated a new CBA with production employees.
Id. In these negotiations, Defendant was represented by “experienced labor counsel”

6

and the

production employees were represented by the local union (the “Union”). Id. Defendant and the
Union ultimately agreed to and ratified the CBA, including the provision for two 20-minute rest
periods, of which five minutes were paid. Id.
On May 13, 2016, the Wage and Hour Division of the United States Department of Labor
(“USDOL”) advised Defendant of its intent to investigate Defendant’s compliance with the FLSA.
Id. at 4. Defendant alleges it cooperated with the investigation, including providing USDOL with

6

Even were the Court to consider a factual attack, and thereby consider the additional information
cited by Defendant, it would still deny the motion to dismiss at this stage. Defendant makes
numerous factual assertions, which the Court would have to find as true, in support of its
arguments. For example, as noted, Defendant claims that it was represented by competent,
experienced counsel in collective bargaining negotiations and reasonably relied on the advice of
such counsel. Such fact-finding is not appropriate at this stage of the proceedings.
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payroll and time records for all employees for the previous two years. Id. After reviewing the
records, the USDOL concluded that current and former employees should have been paid for the
full 20-minute rest periods taken during their shifts and, where applicable, overtime compensation
between November 9, 2014 and June 5, 2016. Id. at 5. By a letter dated August 1$, 2016, the
USDOL advised Defendant of its determination of the specific amount of back wages due to 57
current and former employees. Id.
In response, Defendant agreed to pay the back wages recommended by the USDOL. Id.
The U$DOL also prepared a “Receipt for Payment of Back Wages, Liquidated Damages,
Employment Benefits, or Other Compensation,” Form WH-58, in both English and Spanish, to
distribute to each current and former employee who was due payment pursuant to the agreement:
Id. When Defendant distributed payment and the form WH-58 to its employees, it also attached

a cover letter and rider, which included a release for all claims of back wages, including claims
under the NJWHL. Id. at 6. Defendant alleges that “[t]o date, 43 of the 57 current and former
production employees signed and returned the releases and accepted payment issued to them.” Id.
Two employees received, but did not sign, the releases and accepted the payment issued to them.
Id. at 7. Thus, 11 employees refused to sign the Form WH-58, the Rider, or accept payment. Id.

Defendant alleges that it “complied with the USDOL’s instruction to distribute such payments
and completed waivers to employees along with a cover letter and rider that were reviewed and
approved prior to distribution.” Def. Br. at 2; see also Id. at 22 (“[T]he cover letter and rider.
were approved by the USDOL”). Subsequently, the USDOL wrote to the parties, indicating that
while it had reviewed the rider, it expressly disproved of it. D.E. 73-1 at 2-3. Additionally, the
USDOL stated that it had never reviewed the cover letter, but had a policy that employers could
not attach or distribute additional waiver-related documents to employees with the WH-58 forms.
Id. at 3. It is troubling, to say the least, that Defendant would send a rider to its employees when
the rider had been expressly disapproved by the U$DOL. As to Defendant’s claim that it
erroneously, but in good faith, represented to the Court that the documents had been approved by
the USDOL, the Court accepts Defendant’s representation.
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On October 12, 2016, Defendant offered judgment to each of the remaining 11 current and fonner
employees who declined to accept payment, including Plaintiff. Id. at 10.
On September 8, 2016, “counsel for Defendant contacted Plaintiffs counsel by telephone
and advised of the pending supervised payments.” Id. at 9. On September 9, defense counsel
again contacted Plaintiffs counsel to provide a copy of the documents given to Plaintiff and the
other employees in connection with the conclusion of the USDOL investigation. Id. In response,
Plaintiffs counsel stated that any of the releases signed by his clients “should be considered null
and void.” Id. Plaintiffs counsel later clarified that that by his “clients” they meant “all of [his]
clients, i.e. all of the employees or former employees of [D] efendants who have submitted FLSA
consent forms.” Id. Thereafter, Defendant sent Plaintiffs counsel a letter, disputing that the
releases were null and void, but nevertheless giving Plaintiffs counsel an option to return the
payments for those employees who claimed that the releases were invalid. Id. at 10. Defendant
alleges, and Plaintiff does not dispute, that “[t]o date, Plaintiffs counsel has not returned any
payments that were accepted by current or former employees.” Id.
Waiver
First, Defendant argues that Plaintiff and other putative opt-in class members’ claims have
been waived, are fully satisfied, or do not exist. Def. Br. at 11. Specifically, Defendant argues
that 37 opt-in class members waived their claims against Defendant because they accepted
payment in full and signed the Form WH-5$ and the rider. Id. at 12-13. Additionally, the two
individuals who accepted payment but did not sign the form WH-58 have also waived their claims
according to Defendant, since payment in full accompanied by a warning of waiver is sufficient to
waive claims under the FLSA. Id. at 14-16.

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Plaintiff argues that it is too early to determine whether the releases signed by Plaintiff and
the opt-ins were valid. P1. Opp’n at 9-10. Thus, without discovery, Plaintiff alleges, “it is unclear
whether [Defendant] demanded that the releases be signed or if employees understood what the
proffered settlements were even for.” Id. at 10. Plaintiff also argues that Defendant’s improper
attachment of cover letters and riders rendered the Form WH-58 null and void. Id. at 15-17.
“The FLSA establishes federal minimum-wage, maximum-hour, and overtime guarantees
that camot be modified by contract.” Davis v. Abington Mem ‘1 Hosp., 765 F.3d 236, 241 (3d Cir.
2014) (quoting Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523, 1527 (2013)). If employers
violate the FL$A’s provisions, they are liable to affected employees “in the amount of their unpaid
minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional
equal amount as liquidated damages.” Id. (citing 29 U.S.C.

§ 216(b)). Employees may bring

FL$A claims as collective actions on behalf of themselves and others similarly situated. Genesis
Healthcare Corp., 133 S. Ct. at 1527. However, Section 216(c) of the FLSA “provides th[e] right
[to bring an action] may be voluntarily waived by the employee or terminated by a suit brought by
the Secretary [of Labor].” Abmad v. Daniyal Enters., LLC, No. 14-1142, 2015 WL 6872481, at
*3 (D.N.J. Nov. 9, 2015).
The waiver provision authorizes the Secretary of Labor to supervise settlement agreements
between employees and employers. It provides as follows:
The Secretary [of Labor] is authorized to supervise the payment of
the unpaid minimum wages or the unpaid overtime compensation
owing to any employee or employees under section 206 or section
207 of this title, and the agreement of any employee to accept such
payment shall upon payment in full constitute a waiver by such
employee of any right he may have under subsection (b) of this
section to such unpaid minimum wages or unpaid overtime
compensation and an additional equal amount as liquidated
damages....

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29 U.S.C.

§ 2 16(c). “Thus to establish a valid waiver, the F LSA requires that the employee agree

to accept the amount tendered, and that the employee receive the payment in full of that amount.”
Miii fu v. Hunan of Morris Food Inc., No. 12-0587 1, 2013 WL 5970167, at *4 (D.N.J. Nov. 6,
2013); see also Dent v. Cox Commc ‘ns Las Vegas, Inc., 502 f.3d 1141, 1146 (9th Cir. 2007) (“To

establish a valid waiver, 29 U.S.C.

§ 2 16(c) plainly requires that the employee agree to accept the

amount tendered by the employer, and that the employee receive payment in full of that amount.”).
An agreement is more than mere acceptance of funds, and must exist “independent of payment.”
Mm Fit, 2013 WL 5970167, at *4 (citing Walton v. United Consumers Club, Inc., 786 f.2d 303,
305 (7th Cir. 1986)).

Both parties agree that 11 persons who opted-in did not sign the proposed waivers or accept
the offered payments. Defendant’s waiver argument does not apply to these eleven individuals.
Instead, Defendant argues that 38 other opt-ins did waive their rights: 36 who accepted payment
and signed the waiver and 2 who accepted the payment but did not sign the waiver after receiving
it. If the facts alleged by Defendant are true, it appears that the 36 individuals, who accepted
payment and signed the Form WH-58, waived their right to bring their FLSA claims.8 However,
reviewing the facts alleged in the Complaint pursuant to a facial attack, the issue of waiver is not

Defendant also argues that six other opt-in members are not appropriate: one because he never
worked for Defendant and five because they worked as sanitors, who were paid for their full rest
periods. Def. Br. at 27. These six opt-ins are therefore not “similarly situated” to Plaintiff, a
production employee, as required by the FLSA. Id. at 28. Whether or not an opt-in is “similarly
situated” to the named plaintiff is a factual determination that should be evaluated at the class
certification stage. See Carnesi v. Univ. ofPittsburgh Med. Ctr., 729 f.3d 239, 243 (3d Cir. 2013)
(finding that courts in the Third Circuit “follow a two-step process for deciding whether an action
may properly proceed as a collective action under the FLSA. at the first step, the court makes
a preliminary determination as to whether the named plaintiffs have made a ‘modest factual
showing’ that the employees identified in their complaint are ‘similarly situated.”) (citation
omitted). Thus, at this stage, these opt-ins will remain a part of the class.
8

.

9

.

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raised. Moreover, even if the Court were to consider the waivers pursuant to a factual attack, it
could not determine at this time the circumstances surrounding the waiver and therefore its
validity. This is especially true given the USDOL’s concerns with the rider that accompanied the
Form WH-5$. Defendant essentially asks the Court to accept disputed facts as true. In short,
Defendant appears to make a strong argument concerning waiver or, alternately, ratification. But
the Court cannot consider such assertions in a facial attack analysis. The appropriate time to
consider such arguments is at the class certification or summary judgment stage.9
Similarly, Defendant appears to make a valid argument as to the two individuals who
accepted payment and received the WH-5$ Form, but did not sign the release, also waived their
claims. See Btackwell v. United D,ywatl Supply, 362 F. App’x 56, 58 (11th Cir. 2010) (affirming

At the appropriate time for reviewing Defendant’s waiver argument, the Court will also consider
Plaintiffs arguments that the waiver was subject to fraud and duress and therefore is void. “A
number of courts have concluded that an employee who signs a WH—5$ under duress has not
‘agreed’ in a maimer sufficient to support a release of his FLSA claims.” Guzman v. Concavage
Marine Constr. Inc., 176 F. Supp. 3d 330, 337 (S.D.N.Y. 2016) (aggregating cases); see also
Victoria v. Alex Car, Inc., No. 11-9204, 2012 WL 1068759, at *4 (N.D. 111. Mar. 29, 2012)
(indicating agreement with analysis that “the relevant inquiry in a FLSA waiver situation is
whether the plaintiffs intended to settle their claims, and [that] intent can be vitiated in cases of
fraud or duress”); Woods v. RJ-IA/Tennessee Grp. Homes, Inc., 803 F. Supp. 2d 789, 800 (M.D.
Tenn. 2011) (“[A]n employee’s agreement to accept payment and waive his or her FLSA claims
is invalid if the employer procured that agreement by fraud or duress.”)
At this stage of litigation, the Court cannot determine whether Defendant providing the
opt-ins with a cover letter and rider was a misrepresentation of material terms of the waiver. See
Mm ftt, 2013 WL 5970167, at *6 (“The balance between the potential fraud and/or
misrepresentation present here and [plaintiffs] potential negligence in signing the document is a
question of fact which is premature to consider at this stage of litigation. Defendants are
sufficiently on notice of the claims against them, and [plaintiff] should be afforded the opportunity
to offer evidence in support of his claims.”). Therefore, Plaintiff may raise any issues as to
Defendant’s misrepresentation in connection with its cover letter and rider when the Court
considers the waiver argument.
At the same time, Defendant will be free to argue that even if there was fraud or duress
(which Defendant strongly contests), the opt-ins nevertheless ratified the waiver by refusing to
return the payments or deposit the monies in escrow.
‘

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the district court’s holding “that receipt of a WH-5$ form and cashing of the employer’s check is
sufficient to effect a waiver of the right to sue under the FLSA.”). Yet, again, a facial attack
analysis does not permit the Court to consider such facts. Moreover, even were the Court to
consider such allegations, the Court could not determine the precise circumstances surrounding
the waiver and thus would not determine whether these two opt-ins waived their rights under the
°
FLSA at this time. The Court therefore denies Defendant’s motion.

Liquidated Damages
Defendant also argues that liquidated damages are not warranted as a matter of law because
Defendant acted in good faith. Def. Br. at 16. Plaintiff responds that he is entitled to liquidated
damages, and that this issue is better decided at the summary judgment stage. P1. Opp’n at 10-29.
The fLSA permits an award of liquidated damages in an amount equal to any award of
economic damages upon a finding that the employer violated the FLSA. See 29 U.S.C.

§ 2 16(b).

Liquidated damages are presumed and are only limited in cases where the employer shows “the
act or omission giving rise to such action was in good faith and that he had reasonable grounds for
believing that his act or omission was not a violation of the [FLSA].” Martin v. Cooper Flee.
Supply Co., 940 F.2d $96, 907 (3d Cir. 1991)(quoting 29 U.S.C.

§ 216). Thus, an employer “must

show good faith and reasonable grounds before a court may exercise ‘sound discretion’ to deny or
limit liquidated damages.” Id. “[A] defendant opposing the award of liquidated damages bears
the burden of demonstrating that it acted in subjective good faith on objectively reasonable

Both parties also raise numerous other factual issues, including whether acceptance of payment
by Plaintiff and the opt-ins ratified the releases and whether Defendant can condition payment of
FLSA back wages on an employee’s waiver of their rights under state law. See Def. Br. at 22-24;
P1. Opp’n at 16-17. Again, Defendant’s arguments as to ratification appear plausible, but the Court
cannot consider these facts on a motion to dismiss. See Def. R.Br. at 7-10. The parties may re
raise such arguments at the motion for summary judgment or certification stage.
10

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*7 (D.N.J. Oct. 24,
grounds.” Walsh v. Britjil Enters. mc, No. 15-0872, 2016 WL 6246764, at
2016) (citing Martin, 940 F.2d at 907-08). The employer’s burden to demonstrate good faith is “a

difficult one to meet.” Punter v. Jasmin Int’l Corp., No. 12-7828, 2014 WL 4854446, at *6 (D.N.J.
Sept. 30, 2014). “If the employer fails to come forward with plain and substantial evidence to
satisfy the good faith and reasonableness requirements, the district court is without discretion to
deny liquidated damages.” Brooks v. Viii. of RidgejIeld Park, 185 F.3d 130, 137 (3d Cir. 1999)
(quoting Martin, 940 F.2d at 907-08). Further, a district court is required to “make findings prior
*7 (citing
to exercising its discretion on liquidated damages.” Walsh, 2016 WL 6246764, at

Martin, 940 F.2d at 907).
Defendant makes four arguments in support of its good faith: (1) that it undertook its
actions pursuant to a fully-negotiated CBA; (2) that it used experienced labor counsel to negotiate
the CBA; (3) that it cooperated fully in the USDOL investigation; and (4) that there was a
reasonable basis in the law to support not paying employees for 20 minute breaks. Def. Br. at 1622.
The issue of Defendant’s good faith is a factual issue, and thus not appropriate to decide at
the motion to dismiss stage.

The Court does not have all the necessary information to determine

that Defendant’s actions were taken in good faith. As to Defendant’s first argument, the fact that

The cases relied on by Defendant were decided at the summary judgment stage. See, e.g.,
Brooks, 185 F.3d at 130; Featsent v. City of Youngstown, 70 F.3d 900 (6th Cir. 1995); Lugo v.
Farmer’s Pride Inc., 802 F. Supp. 2d 598 (E.D. Pa. 2011). Others cases cited by Defendant
confirm that a factual analysis is necessary when determining an employer’s good faith. See, e.g.,
Lttgo, $02 F. Supp. 2d at 616 (“Whether an employer’s conduct under the FLSA was in good faith
and reasonable is a mixed question of law and fact.”); Pingatore v. Town of Johnston, No. 11068S, 2011 WL 6056891, at *6 n.5 (D.R.I. Oct. 31, 2011), report and recommendation adopted,
No. 11-068, 2011 WL 6097979 (D.R.I. Dec. 6, 2011) (“[T]he issue of liquidated damages
requires a factual examination of the totality of circumstances.”).
.

12

.

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the CBA supports Defendant’s position does not alter the fact that Defendant failed to comply with
the law. See Barrentine v. Arkansas-Best freight Sys., Inc., 450 U.k. 728, 740—41(1981) (holding

that “congressionally granted fLSA rights take precedence over conflicting provisions in a
collectively bargained compensation arrangement.”).
As to Defendant’s reasonable reliance on the advice of experienced labor counsel,
Defendant does not provide (1) the identity of its labor counsel, (2) counsel’s relevant experience
and training, or (3) all of the underlying facts and circumstances demonstrating Defendant’s
reasonable reliance. See P1. Opp’n at 23. Without such information, the Court cannot properly
analyze Defendant’s claim. See Brttmley v. Camin Cargo Control, Inc., No. 08-1798, 2010 WL
1644066, at *$ (D.N.J. Apr. 22, 2010) (finding it premature to rule on the issue of liquidated
damages when the record was sparse as to the advice received from defendant’s attorneys as to
compliance with the FL5A).
Defendant’s cooperation with the U5DOL occurred after Defendant’s violation, and
therefore is not considered in the Court’s good faith analysis. See Martin, 940 F.2d at 910
(requiring “retrospective analysis of an employer’s conduct with respect to violations of the FLSA,
not appraisal of an employer’s post-violation conduct”) (emphasis added).

Additionally,

Defendant did not uncover a potential violation and voluntarily report it to the U$DOL. Instead,
Defendant responded to a USDOL investigation, as it is obligated to do. While failure to cooperate
can certainly be considered bad faith, see Dole v. Haulaway Inc., 723 F. Supp. 274, 28$ (D.N.J.
1989), aff’d 914 F.2d 242 (3d Cir. 1990), complying with a proper USDOL investigation does not
necessarily bespeak of good faith.
As to Defendant’s legal ambiguity argument, courts have consistently found that the FLSA
requires compensation for breaks ranging from five to twenty minutes. See, e.g., Perez v. Am.

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Future Sys., Inc., No. 12-6171, 2015 WL 8973055, at *8 (E.D. Pa. Dec. 16, 2015) (“{C]ourts

considering break periods of 20 minutes or less consistently find such breaks compensable in all
types of working environments.”); Solis v. Cindy’s Total Care, Inc., No. 10-7242, 2012 WL 28141,
at *9, 19 (S.D.N.Y Jan 5, 2012) (citing

§ 785.18 to support the conclusion that compensable time

“also includes work breaks approximately of 20 minutes or less in duration”); Martin
Waldbattrn, Inc., No. 86-0861, 1992 WL 314898, at *2 (E.D.N.Y. Oct. 16, 1992) (concluding as a
matter of law that “breaks of less than twenty minutes are compensable”).
Therefore, at this stage, Defendant has not proven that it acted in good faith as a matter of
law.
Offers of Judgment
Lastly, Defendant argues that since it served an offer ofjudgment on the eleven remaining
opt-ins (including Plaintiff), their claims are moot. Def. Br. at 24. Since the offer of judgment
“provide[s] Plaintiff and the remaining opt-ins with the amount equal to, or greater than, the full
amount of damages that the Plaintiff and remaining opt-ins sought,” Defendant argues that no
further relief is warranted. Id. at 27. Thus, pursuant to Federal Rule

67,12

Defendant seeks leave

to deposit the proffered funds with the Court, arguing that it will thereby moot Plaintiffs claims.
Id. at 27.’

12

Rule 67 provides, in pertinent part, that
[i]f any part of the relief sought is a money judgment or the
disposition of a sum of money or some other deliverable thing, a
party—on notice to every other party and by leave of court—may
deposit with the court all or part of the money or thing, whether or
not that party claims any of it. The depositing party must deliver to
the clerk a copy of the order permitting deposit.

Defendant also argues, in a footnote, that if Plaintiff and the remaining opt-ins refuse to accept
the offers of the judgment, they will not be able to meet “the numerosity requirement for collective
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Plaintiff responds that an unaccepted offer of judgment does not moot his claims, and
therefore this Court retains jurisdiction over the Complaint. P1. Opp’n at 30. Additionally,
Plaintiff argues that the offers of judgment are inadequate in that they do not constitute the full
potential relief available to Plaintiff and the opt-ins because, among other things, they do not
include liquidated damages.’4 Id. at 31-32. Without the benefit of discovery, Plaintiff argues, the
Court cannot determine that “no further relief is warranted” as Defendant suggests, and
Defendant’s Rule 67 motion should be denied.
Article III of the United States Constitution limits the jurisdiction of the federal courts to
actual cases and controversies. U.S. Const., Art. III,
provision to require that “an actual controversy

.

.

.

§ 2. The Supreme Court interprets this

be extant at all stages of review.” Campbell

Ewald Co. v. Gomez, 136 S. Ct. 663, 669 (2016). Thus, “[i]f an intervening circumstance deprives

the plaintiff of a ‘personal stake in the outcome of the lawsuit,’ at any point during litigation, the
action can no longer proceed and must be dismissed as moot.” Id. (quoting Genesis Healthcare
Corp., 133 S. Ct. at 1528).

Previously, the Third Circuit considered an offer of complete relief to be an intervening
circumstance that “will generally moot the plaintiffs claim,” since, “at that point the plaintiff
retains no personal interest in the outcome of the litigation.” Weiss v. Regal Collections, 385 f.3d

actions.” Def. Br. at 24 n.24. Plaintiff responds that Defendant is incorrect because “[t]here is no
numerosity requirement for collective actions.” P1. Opp’n at 32. The Court agrees. “[A] party
seeking conditional certification of a collective action need not demonstrate the Rule 23
requirements of numerosity, commonality, typicality, and adequacy of representation.” Jenkins v.
TJX Companies Inc., 853 F. Supp. 2d 317, 320 (E.D.N.Y. 2012).
Plaintiff also argues that they do not constitute full relief because they do not account for
Defendant’s potential successor liability for Defendant McCain. P1. Opp’n at 31-32. Since the
potential for liquidated damages defeats Defendant’s argument, the Court will not address
successor liability at this time.
“

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337, 340 (3d Cir. 2004), abrogated by Gomez, 136 S. Ct. at 193. However, in Gomez, the Supreme
Court overruled this holding, concluding that “an unaccepted settlement offer or offer ofjudgment
does not moot a plaintiffs case.” 136 S. Ct. at 672. Thus, “[a plaintiff] still ha[s] a personal stake
in the outcome of the litigation even though he was offered complete relief under Rule 6$.”
Richardson v. Bledsoe, $29 F.3d 273, 2$2 (3d Cir. 2016).
Here, neither party disputes that eleven remaining opt-ins, comprised of Plaintiff and ten
other individuals, did not accept Defendant’s offer ofjudgment. Nonetheless, Defendant attempts
to distinguish Gomez, pointing out that the Gomez Court declined to consider “whether the result
would be different if a defendant deposits the full amount of the plaintiffs individual claim in an
account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.”
136 S. Ct. at 672; Def R.Br. at 6. Since Defendant moves to deposit the funds pursuant to Rule
67, it argues that Gomez is not controlling.
“In the wake of {Gomez], defendants before a number of {] district courts have also sought
to use Rule 67 deposits to compel findings of mootness.” Jarzyna v. Home Props., L.P., 201 F.
Supp. 3d 650, 656 (E.D. Pa. 2016). A “majority of courts to confront Rule 67 motions under such
circumstances have denied them.” Id. (aggregating cases). Nonetheless, the Court does not need
to determine whether Defendant’s Rule 67 motion moots Plaintiffs claims because the offer of
judgment does not afford Plaintiff “complete relief.” As discussed, liquidated damages cannot be
resolved at this stage. Therefore, the Court cannot rule as a matter of law that Defendant’s offer
constitutes full relief. See Dean v. CVS Pharmecy, Inc., No. 14-2 136, 2015 WL 4470474, at *2
(E.D. Pa. July 21, 2015) (finding that “[the] offer ofjudgment did not moot the active controversy
between the parties due to the ongoing dispute over the sufficiency of the Offer”). Defendant’s
Rule 67 motion is denied without prejudice.

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IV. CONCLUSION
In sum, the Court DENIES Defendant’s motion to dismiss without prejudice. The Court
also DENIES Defendant’s motion to deposit funds pursuant to Rule 67. An appropriate Order
accompanies this Opinion.

Date: August 30, 2017

7

jouN MICHAEL VAtJQtYEZ
UNITED STATES DISTRICT JUDGE

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