SPARKS et al v. THE CHILDREN'S PLACE, INC.

Filing 35

MEMORANDUM AND ORDER THAT DEFENDANTS MOTION TO DISMISS IS GRANTED IN PART AND DENIED IN PART. THE CLERK OF COURT SHALL PLACE THIS CASE IN SUSPENSE; ETC.. SIGNED BY HONORABLE GENE E.K. PRATTER ON 10/19/17. 10/20/17 ENTERED AND E-MAILED.(jl, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

NICOLE SPARKS et al.,
Individually and on behalf of all others
Similarly Situated,
Plaintiffs,

CIVIL ACTION

v.
THE CHILDREN'S PLACE,
Defendants.

No. 17-1057

MEMORANDUM
PRATTER,

J.

OCTOBER

19, 2017

After opting in to an FLSA collective action against The Children's Place filed in the
District ofNew Jersey, Nicole Sparks and Amirah Pasha filed this purported class action lawsuit
pursuant to the Pennsylvania Minimum Wage Act ("PMWA") based on the same facts
underlying the FLSA suit. The Children's Place moved to dismiss the Complaint or to compel
arbitration. After hearing oral argument and allowing supplemental briefing, the Court will grant
The Children's Place's motion, but stay the case, rather than dismiss it.
BACKGROUND

Nicole Sparks and Amirah Pasha allege that when they worked as store managers for
Defendant The Children's Place, they were not paid overtime and were misclassified as exempt
from the PMWA to avoid the payment of overtime, despite the fact that their job duties did not
significantly differ from non-exempt employees. In their one-count Complaint, they seek to
represent a class of all store managers who worked in The Children's Place stores located in
Pennsylvania in the past three years.

Plaintiffs originally filed their Complaint in state court, and The Children's Place
removed the case to this Court on the basis of diversity jurisdiction. The Children's Place then
moved to dismiss on two grounds - claim splitting and an arbitration agreement which they
argue applies to the Named Plaintiffs.
DISCUSSION

The Children's Place argues that these claims should be dismissed under the doctrine of
claim splitting. 1 "The longstanding rule against improper claim splitting prohibits a plaintiff
from prosecuting his case piecemeal and requires that all claims arising out of a single alleged
wrong be presented in one action." Prewitt v. Walgreens Co., No. CIV.A. 12-6967,2013 WL
6284166, at *5 (E.D. Pa. Dec. 2, 2013). The Children's Place argues that because the Plaintiffs
are also opt-in Plaintiffs in a nationwide FLSA collective action that is currently pending in the
District of New Jersey, Essex v. Children's Place, Civil Action No. 15-cv-5621 (D.N.J.), the
Complaint in this matter should be dismissed because it amounts to improper claim splitting.
In the Essex case, a court certified an FLSA collective action2 involving the same issues
complained of in this case - that store managers at The Children's Place were misclassified as
exempt in order to avoid paying earned overtime compensation. Both of the Named Plaintiffs in
this action opted in to that litigation, and the same lawyers represent the Plaintiffs in both suits.
The fact sections of the complaints in both cases are identical. The Children's Place urges that
because both lawsuits involve the same parties, the same or similar claims, and the same set of
1

Alternatively, The Children's Place asks the Court to compel the Plaintiffs to arbitrate their claims, an
issue which raises unsettled questions of law. See, e.g., Note, The Substantive Waiver Doctrine in
Employment Arbitration Law, 130 Harv. L. Rev. 2205 (2017) (discussing the split of authority over
whether agreements to individually arbitrate statutory employment claims are enforceable, an issue that
has been taken up by the Supreme Court in Lewis v. Epic Sys. Corp., 137 S. Ct. 809 (2017) (granting
cert.)). Because the Court will resolve this matter on the claim splitting issue, however, the Court need
not and, hence, does not reach the arbitration issue.
2

The Essex matter also involves claims under Maryland wage and hour laws.
2

operative facts, the Court should dismiss this second-filed suit as duplicative. See Hebert v.
MudTech Servs., No. 15cv0933, 2015 WL 5602669, at *6-7 (W.D. Pa. Sept. 23, 2015)

(dismissing case in which plaintiff attempted to bring a PMWA class action claim after he had
opted in to an FLSA collective action in another district involving the same failure to pay
overtime); Bradley v. The Children's Place, Case No. 2017 CH 01124 (Ill. Cir. Ct. Cook Cty.,
Aug. 21, 2017) (staying state law class action lawsuit brought by opt-in plaintiffs in the Essex
litigation under Illinois state law's claim splitting doctrine).
Plaintiffs advance several arguments against The Children's Place's claim splitting
theory, none of which are availing. First, they counter that they seek to represent more than 65
store managers in Pennsylvania who did not join the Essex action. Of course, the fact that other
potential class members are not splitting their claims, however, does not change the fact that the
Named Plaintiffs are. These Plaintiffs have offered no rejoinder to this logical circumstance.
Plaintiffs also argue that they are not actual plaintiffs in Essex, but rather "party
plaintiffs." Indeed, in Plaintiffs' attempt to discredit Hebert, a case that is strikingly similar to
this one, they argue that a major flaw in Hebert is that the court there did not deal with the
differences between party plaintiffs and actual plaintiffs. Plaintiffs do not, however, cite to any
case law or statute that explains how a "party plaintiff' differs from a plaintiff in any meaningful
way, other than to point out that a party plaintiffs claims are dismissed without prejudice if a
collective action is decertified and to argue, without citing authority, that as party plaintiffs they
could not have sought to amend the complaint in Essex to include Pennsylvania state law claims.
The Third Circuit Court of Appeals, however, has explained that the significance of the opt-in
requirement of collective actions, in contrast to class actions involving opt-outs, is that '"every
plaintiff who opts in to a collective action has party status, whereas unnamed class members

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in Rule 23 class actions do not."' Halle v. W Penn. Allegheny Health Sys., Inc., 842 F.3d 215,
225 (3d Cir. 2016) (quoting 7B Charles Alan Wright & Arthur R. Miller, Fed. Prac. & P. § 1807
(3d Ed. 2016)).
It is true that courts have not yet fully sculpted what "party status" means under these

circumstances. See id. However, at a minimum, Plaintiffs affirmatively joined in Essex and
agreed to be bound by the outcome of that case. When they did so, these Plaintiffs knew that

Essex did not include Pennsylvania state law claims and, for that matter, that any final judgment
reached in that case on the FLSA claims likely would have a preclusive effect as to any
analogous Pennsylvania state law claim, even though, as Plaintiffs point out, there are some
differences between the PMW A and the FLSA, including the potential amount of damages that
would be recoverable. Even if they could not have moved to amend the complaint in Essex
successfully to add Pennsylvania state law claims (something they did not seek to do), their
status does not differ significantly from plaintiffs in other cases whose claims were barred by the
claim splitting doctrine after they tried and failed to amend a complaint in a first-filed action.

See, e.g., Prewitt, 2013 WL 6284166, at *5-6.
Plaintiffs also claim there is a risk that Essex will not be finally certified for trial, which
will lead to their claims being dismissed from that action without prejudice. They argue that if
they have to wait for their role in Essex to end to bring their Pennsylvania claims, their claims
will be worth less because the statute of limitations will bar recovery for wages earned more than
three years prior to the filing of the new case. 3 While this argument does not provide a defense

3

Along the same lines, in finding fault with the Hebert court, Plaintiffs argue that the Hebert court
dismissed that case without prejudice but did not deal with the consequences of doing that (i.e., the loss of
claim value as the statute of limitations crept forward). However, the Plaintiffs mischaracterize Hebert.
Plaintiffs attempt to portray Hebert as forcing that plaintiff to await the resolution (on the merits or
otherwise) of his prior case before filing a new case based on state law claims. However, in Hebert, the
plaintiff argued that he had voluntarily withdrawn his claim in the FLSA action and therefore was not
4

to Plaintiffs' claim splitting, it does provide a reasonable basis for staying this matter, just as the
Bradley court did under nearly identical circumstances, rather than dismissing it. See Bradley,

Case No. 2017 CH 01124, at 8-9 (staying state law wage claim while Essex remains pending to
protect plaintiffs' claims if Essex is decertified). The doctrine of claim splitting is intended to
prevent a defendant from having to deal with piecemeal litigation of the same issues. Staying the
case will prevent The Children's Place from having to spend resources on duplicative litigation,
but will also preserve the Plaintiffs' claims in the event that Essex is decertified and the
Plaintiffs' claims in that action are dismissed without prejudice.
CONCLUSION

For the foregoing reasons, the Court will grant in part and deny in part Defendant's
motion. An appropriate Order follows.

filing duplicative litigation. Hebert, 2015 WL 5602669, at *4. From a review of the docket in the
previously filed case, the court concluded that the plaintiff had filed a motion to withdraw from that
action, but that the motion was still pending. !d. Therefore, the court dismissed the case without
prejudice, noting that the plaintiffs voluntary withdrawal from the other suit would cure the claim
splitting issue and allow him to refile his PMWA claim. !d. at *7. Thus, the decision to dismiss the claim
without prejudice did not ignore the risks that the plaintiffs claims in the first-filed action would be
dismissed without prejudice, leaving that plaintiff with only a delayed remedy under state law, but rather
it simply allowed the plaintiff to extricate himself from the first action voluntarily, a process he had
already begun, before his claims in the second case proceeded.
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