Goodly v. Check-6, Inc. et al
Filing
357
OPINION AND ORDER by Chief Judge Gregory K Frizzell ; terminating party Joseph Flatley, David Andrew Fuller, Aleksandr Aleksandrovich Goncharov, Thomas M Howard, Lia Mastronardi, Randal Brian Newbold, Joseph Powers, Keith Proze, Harold Richard Schmitt, III, Randall J Scully, Gary Snells, Edward Swanda, Randall D Tashjian, Stephen M Wall, George Matthew Wilson, Richard Wolfe, Gary Daigle and John David ; granting 301 Motion for Miscellaneous Relief (kjp, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
JOSEPH GOODLY, on behalf of himself
and other persons similarly situated,
Plaintiffs,
v.
Case No. 16-CV-334-GKF-JFJ
CHECK-6, INC., YAREMA SOS, BRIAN
BRURUD, DENNIS ROMANO, S. ERIC
BENSON, LAURA OWEN, and JOHN
DILLON,
Defendants.
OPINION AND ORDER
In this action, the plaintiffs seek overtime compensation pursuant to the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. §§ 201, et seq. Before the court is the defendants’ Motion to
Decertify Plaintiff’s Collective Class [Doc. 301]. For the reasons set forth below, the court grants
the motion.
I. Procedural Background
On March 7, 2016, the named plaintiff, Joseph Goodly, commenced this action, asserting
claims “on behalf of himself and all others similarly situated.” [Doc. 1, p. 1 ¶ 1]. On November
4, 2016, the court conditionally certified the claims as a collective action pursuant to 29 U.S.C.
§ 216(b). [Doc. 45, p. 7]. The court defined the class of potential plaintiffs in this collective action
as follows: “All persons who worked for Check-6, Inc. as ‘Coaches’ and were paid a ‘day rate’ at
any time in the three years preceding the date of [the] order.” [Id.]. Thereafter, eighteen opt-in
plaintiffs filed consent forms indicating their intent to join the collective action. [Doc. Nos. 49–56,
58, 61–63, 75, 80, 83–85, 95]. After the close of discovery, the court ruled on four separate
summary judgment motions. [Doc. 318; Doc. 343; Doc. 351; Doc. 352]. Among other things, the
court entered an order on October 26, 2018 granting the defendants summary judgment on the
claims asserted by four of the opt-in plaintiffs—Aleksandr Goncharov, David Fuller, Edward
Swanda, and Stephen Wall—pursuant to the foreign workplace exemption, 29 U.S.C. § 213(f).
[Doc. 352, p. 11].
II. Standard of Review
The FLSA permits legal action against an employer “by any one or more employees for
and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C.
§ 216(b). The FLSA does not define the phrase “similarly situated.” See Thiessen v. Gen. Elec.
Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001). Nevertheless, courts must determine who is
similarly situated in a “manner that is orderly, sensible, and not otherwise contrary to statutory
commands or the provisions of the Federal Rules of Civil Procedure.” Hoffmann–La Roche Inc.
v. Sperling, 493 U.S. 165, 170 (1989).
The Tenth Circuit has approved an ad-hoc, two-step approach to § 216(b) certification
claims. See Thiessen, 267 F.3d at 1102. Under this approach, a court “makes an initial notice stage
determination of whether plaintiffs are similarly situated,” requiring “nothing more than
substantial allegations that the putative class members were together the victims of a single
decision, policy, or plan.” Id. (internal quotation marks omitted). Then, after discovery, the court
makes a second, stricter similarly-situated determination considering “(1) disparate factual and
employment settings of the individual plaintiffs; (2) the various defenses available to defendant
which appear to be individual to each plaintiff; [and] (3) fairness and procedural
considerations . . . .” Id. at 1103 (internal quotation marks omitted). The decision whether to
decertify a collective action is generally within the district court’s trial management discretion. Id.
at 1105; see also In re Chipotle Mexican Grill, Inc., No. 17-1028, 2017 WL 4054144, at *3 (10th
Cir. Mar. 27, 2017).
2
III. Analysis
The issue is whether the named plaintiff and the remaining fourteen opt-in plaintiffs are
“similarly situated” within the meaning of 29 U.S.C. § 216(b), such that it would be appropriate
to proceed to trial on all of their claims together. The court finds that the plaintiffs are not similarly
situated and that, under the circumstances, decertification is warranted by individualized issues,
which include, but are not limited to, the application of the foreign workplace exemption pursuant
to 29 U.S.C. § 213(f) and the determination of each plaintiff’s status as an independent contractor
or employee.
A. Foreign Workplace Exemption
Previously, the defendants moved for partial summary judgment on the ground that the
overtime claims of certain plaintiffs fall, in whole or in part, within the foreign workplace
exemption pursuant to 29 U.S.C. § 213(f). [Doc. 277]. For the reasons set forth in its Opinion and
Order issued on October 26, 2018, the court granted the motion in part and denied it in part.
[Doc. 352]. Among other issues, that Opinion and Order addressed a dispute between the parties
regarding how the foreign workplace exemption applies to workweeks in which some of the
plaintiffs worked part of the week abroad and claim to have worked part of the week in the United
States. [Doc. 352, pp. 9–11]. It is undisputed that the plaintiffs worked in various locations with
differing schedules. Application of the foreign workplace exemption will require an individualized
analysis with respect to when and where each remaining plaintiff performed his or her work for
Check-6, particularly in weeks involving travel to or from the United States. This would cause the
proceedings to “devolve into numerous mini-trials, causing the jury to evaluate testimony from
countless witnesses and other evidence that is unique to particular Plaintiffs, and thus incompatible
with collective actions.” Blair v. TransAm Trucking, Inc., 309 F. Supp. 3d 977, 1010 (D. Kan.
3
2018) (quoting Green v. Harbor Freight Tools USA, Inc., 888 F. Supp. 2d 1088, 1104 (D. Kan.
2012)).
At oral argument, plaintiffs’ counsel contended that the plaintiffs have the burden of
proving work within the territorial jurisdiction of the United States, and that burden is the same
with respect to all of the plaintiffs. Nevertheless, the circumstances of this case would require the
court to instruct the jury regarding the foreign workplace exemption, which the jury would need
to consider on a workweek-by-workweek and plaintiff-by-plaintiff basis when determining
liability and damages. This would significantly increase the complexity of the trial and the risk of
jury confusion. The plaintiffs argue that individualized damages calculations are not a sufficient
reason to grant decertification, but the foreign workplace exemption adds complexity beyond that
found in typical unpaid overtime calculations. Under the circumstances, the foreign workplace
exemption cannot be applied on a class-wide basis, and therefore weighs in favor of decertification.
B. Employment Status
A central question in this case is whether the plaintiffs were “employees” or “independent
contractors” for purposes of the FLSA, which establishes overtime protections for covered
employees. See 29 U.S.C. § 207(a)(1). The court previously denied the parties’ cross-motions for
summary judgment as to this issue. [Doc. 318; Doc. 351]. As discussed in those prior decisions,
the Tenth Circuit applies a multi-factor “economic realities” test to determine whether an
individual is an independent contractor or employee. Acosta v. Paragon Contractors Corp., 884
F.3d 1225, 1235 (10th Cir. 2018) (citing Baker v. Flint Eng’g & Const. Co., 137 F.3d 1436, 1440
(10th Cir. 1998)). The test focuses on “whether the individual is economically dependent on the
business to which he renders service, or is, as a matter of economic fact, in business for himself.”
Barlow v. C.R. England, Inc., 703 F.3d 497, 506 (10th Cir. 2012) (quoting Doty v. Elias, 733 F.2d
720, 723 (10th Cir. 1984)).
4
The Tenth Circuit instructs that, in focusing on the economic realities of the worker’s
economic dependence on the business, the economic realities ordinarily turn on six factors:
(1) the degree of control exercised by the alleged employer over the worker,
(2) the worker’s opportunity for profit or loss,
(3) the worker’s investment in the business,
(4) the permanence of the working relationship,
(5) the degree of skill required to perform the work, and
(6) the extent to which the work is an integral part of the alleged employer’s business. 1
Paragon, 884 F.3d at 1235. The overarching inquiry depends on the totality of the circumstances,
and no single factor is dispositive. Id. (citing Johnson v. Unified Gov’t of Wyandotte Cty., 371 F.3d
723, 729 (10th Cir. 2004)).
Because the economic realities test is fact intensive and may require an individualized
analysis, “a number of courts have determined that whether an individual is an independent
contractor or an employee is not appropriate for determination on a class-wide basis.” Roberson
v. Rest. Delivery Developers, LLC, 320 F. Supp. 3d 1309, 1320 (M.D. Fla. 2018) (granting motion
to decertify) (quoting Demauro v. Limo, Inc., No. 8:10-CV-413-T-33AEP, 2011 WL 9191, at *3
(M.D. Fla. Jan. 3, 2011)); see also In re FedEx Ground Package Sys., Inc., Employment Practices
Litig., 662 F. Supp. 2d 1069, 1083 (N.D. Ind. 2009) (declining to certify FLSA collective action
because economic realities factors required individualized examination).
In their supplemental brief, the plaintiffs discuss the “hybrid” test, which focuses on an employer’s right to control
the means and manner of a worker’s performance. [Doc. 355-1, pp. 1–2]. The plaintiffs cite Knitter v. Corvias
Military Living, LLC, 758 F.3d 1214, 1226 (10th Cir. 2014), but that was a Title VII case, not an FLSA case. The
plaintiffs have not identified any Tenth Circuit decisions applying the hybrid test in the FLSA context. Cf. Oestman
v. Nat’l Farmers Union Ins. Co., 958 F.2d 303, 305 (10th Cir. 1992) (explaining that courts typically apply the hybrid
test in Title VII and ADEA cases, whereas the economic realities test “is most often applied to cases arising under the
[FLSA]”).
1
5
Here, many of the relevant facts that must be considered under the economic realities test
vary between the plaintiffs.
For example, the plaintiffs pursued various other business
opportunities and had various other sources of income, including military pensions. [Doc. 290,
pp. 1–3 ¶¶ 1–9; Doc. 311-1, pp. 1–4 ¶¶ 1–9]. Some of the plaintiffs worked as airline pilots for
major airlines concurrently with their relationship with Check-6. [Doc. 290, p. 2 ¶ 5; Doc. 311-1,
p. 3 ¶ 5]. Such facts alone are not dispositive because an employee can work for multiple
employers; however, they are relevant to assessing each particular plaintiff’s economic
dependence on Check-6. Indeed, the Tenth Circuit has held that evaluating the “degree of control”
factor includes consideration of the worker’s “ability to work for other employers.” Paragon, 884
F.3d at 1235 (noting that worker “had engaged in flooring and plumbing work for other companies”
as support for determination of independent contractor status); see also Perez v. Off Duty Police
Servs., Inc., No. 3:13-CV-935-DJH, 2016 WL 10695150, at *8 (W.D. Ky. June 17, 2016) (holding
that “other employment and sources of income” were relevant to determination of employee
status). The plaintiffs here are ex-military officers who followed their service with practice in
various professions or vocations (e.g., airline pilot, lawyer, electrician, plumber, and aircraft
mechanic)—a variable that is likely to bear upon each individual plaintiff’s “ability to work for
other employers.”
Furthermore, the plaintiffs worked for different Check-6 clients and had different
responsibilities at job sites. In their deposition testimony, the plaintiffs offered individualized
accounts regarding the degree of their autonomy while working for Check-6 and their expectations
with respect to the permanence of the working relationship. [See Doc. 290, pp. 4–8 ¶¶ 12–13, 25–
30 (collecting testimony)]. Because the relevant facts vary between the plaintiffs, the “totality of
6
the circumstances” for purposes of the economic realities test is unique to each plaintiff. See Blair,
309 F. Supp. 3d at 1003. Therefore, this issue also weighs in favor of decertification.
The plaintiffs argue that decertification will prompt the same issue to be litigated in several
separate cases, wasting limited judicial time and resources. However, “the efficiency gained by
holding one trial as opposed to many cannot be obtained at the expense of a defendant’s due
process rights.” Blair, 309 F. Supp. 3d at 1010 (quoting Scott v. Chipotle Mexican Grill, Inc., No.
12-CV-8333 (ALC)(SN), 2017 WL 1287512, at *9 (S.D.N.Y. Mar. 29, 2017)).
Although
decertification precludes the opt-in plaintiffs from trying this case in a single trial, they “likely
benefitted from the implementation of class-wide discovery on many of the issues relevant to their
FLSA claims.” Green, 888 F. Supp. 2d at 1104.
IV. Conclusion
WHEREFORE, the defendants’ Motion to Decertify [Doc. 301] is granted. The court
decertifies the collective action and dismisses the claims of the opt-in plaintiffs without prejudice.
To avoid prejudice to the opt-in plaintiffs who may choose to file their own cases, the court invokes
its equity power to toll the applicable statute of limitations for twenty days following the issuance
of this order. The case remains pending as to the individual claims of the named plaintiff, Joseph
Goodly.
IT IS SO ORDERED this 1st day of November, 2018.
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?