Fuerte et al v. Convergys Corporation et al
Filing
48
ORDER on Motions 10 , 35 , and 42 : This Court grants Defendants' Motion for Summary Judgment to the extent Plaintiffs' seek to pursue their claims in a representative capacity as collective and/or class action cl aims, and those claims are dismissed with prejudice. [ECF # 35 ]. However, Plaintiffs' individual FLSA violations and breach of contract claims remain before this Court as independent claims by the two individual Plaintiffs involved in this laws uit (Terry Dimery and Charlotte Jones). Plaintiffs' Motion for Conditional Class Certification and Notice is DENIED. [ECF # 10 ]. Defendants Motion to Strike Consent to Join by Lashea Moore is GRANTED. [ECF # 42 ]. Signed by the Honorable R Bryan Harwell on 03/26/2018. (lsut, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
TERRY DIMERY, individually, and on
behalf of other similarly-situated
individuals,
)
)
)
)
Plaintiffs,
)
)
v.
)
)
CONVERGYS CORPORATION, and
)
CONVERGYS CUSTOMER
)
MANAGEMENT GROUP, INC., jointly )
and severally as,
)
)
Defendants.
)
____________________________________)
Civil Action No.: 4:17-CV-00701-RBH
ORDER
On March 14, 2017, Plaintiffs Terry Dimery (“Plaintiff”) and Cynthia Fuerte filed this
Collective and Class Action Complaint, seeking recovery against former employer Convergys
Corporation (“Convergys”) and Convergys Customer Management Group, Inc. (“CCMG”)
(Collectively, “Defendants”). The Complaint asserts that Defendants engaged in willful violations
of the Fair Labor Standards Act (the “FLSA”) and breach of contract under common law [ECF
#1, p. 1]. The Complaint requested relief in the form of damages associated with the breach of
contract and violation of FLSA claims, as well as an order certifying this action as a collective
action in accordance with 29 U.S.C. § 216(b) and Rule 23 of the Federal Rules of Civil
Procedure. [ECF #1, p. 23]. Currently before the Court are several motions, including Plaintiffs’
Motion to Conditionally Certify Class based on a failure to pay overtime wages under § 216(b)
of the FLSA [ECF #10];1; Defendants’ Motion for Summary Judgment as to both Plaintiffs’ FLSA
1
This Motion for Conditional Certification does not reference a Rule 23 class.
collective action and Rule 23 class claims [ECF #35]; and Defendants’ Motion to Strike Notice
of Joinder. [ECF #42]. The Court will now consider these motions before it. In so doing, this
Court has considering all briefing and arguments by the parties, as well as all evidence of record.
Procedural History and Statement of Facts
Plaintiff Terry Dimery was employed by Defendants from November 16, 2015 until January
13, 2017. [ECF #35-1, p. 2]. Opt-in Plaintiff Charlotte Jones was employed from February 5,
2009 until April 21, 2017. [ECF #35-1, p. 2]. According to the facts as alleged in the Complaint,
Plaintiffs were employed as hourly at-home customer service representatives by Defendants. [ECF
#1, p. 2]. According to Plaintiffs, employees work from home, rather than at a central office
location. [ECF #1, p. 6]. Plaintiffs allege that Defendants failed to pay them, and all similarly
situated employees, for their pre-shift time spent booting up their computers, logging into required
computer networks and software applications, and reviewing work-related e-mails and other
information at the start of their shift. [ECF #1, p. 2].
Furthermore, Plaintiffs allege that
Defendants failed to compensate them and other similarly situated employees for all mid-shift
technical downtime incurred due to computer and other technical problems. [ECF #1, p. 2].
Plaintiffs further allege that Defendants failed to pay Plaintiffs and other similarly situated
employees for post-shift time spent doing similar tasks. [ECF #1, p. 3]. Plaintiffs thus brought
this action pursuant to 29 U.S.C. § 216(b) of the FLSA on behalf of themselves and “all current
and former hourly at-home customer service representatives who worked for Convergys at any
time from March __, 2014 through the date of judgment.” [ECF #1, p. 15]. This is the purported
definition of employees who they seek to join in the FLSA collective action. Plaintiffs also
2
brought this action pursuant to Fed. R. Civ. P. 23(b)(2) and (b)(3) on behalf of themselves, and
the same suggested defined group of employees for the class action. [ECF #1, p. 17]. After filing
the Complaint, Plaintiffs filed a Motion for Conditional Class Certification and Notice on April
3, 2017. [ECF #10]. The motion seeks an order from this Court conditionally certifying the
proposed collective FLSA class. [ECF #10-1, p. 29]. On April 27, 2017, Plaintiffs filed a Consent
to Join, naming Charlotte Jones as an Opt-In Plaintiff. [ECF #23-1]. On May 30, 2017, Plaintiff
Fuerte was dismissed from this case with prejudice. [ECF #27].
On May 31, 2017, Opt-In
Plaintiff Charlotte Jones filed a declaration stating similar allegations against Defendants as those
found in the Complaint. [ECF #29-1].
On July 14, 2017, Defendants filed a motion for summary judgment. [ECF #35].
Defendants’ argument is premised on the fact that both Plaintiffs Dimery and Jones waived their
ability to pursue a collective and class action against Defendants by signing their respective
employment application agreements, which included language to that effect. Several days later
on July 17, 2017, Defendants filed their response opposing class certification. [ECF #36]. Plaintiff
filed a reply to this opposition on July 24, 2017 [ECF #37], as well as filing a response to
Defendants’ summary judgment motion on July 28, 2017. [ECF #38]. Defendants filed a reply
in support of the requested summary judgment on August 4, 2017. [ECF #39]. On October 10,
2017, Plaintiff filed a Notice of Joinder seeking to include Lashea Moore as an opt-in Plaintiff.
[ECF #41]. On October 13, 2017, Defendants filed a Motion to Strike requesting this notice of
joinder be denied. [ECF #42]. Plaintiffs filed a response in opposition [ECF #43], and Defendants
filed a reply [ECF #44]. These matters are now before the Court for review.
3
Discussion
I. Summary Judgment
The first issue this Court will consider is whether it is appropriate to grant summary
judgment to Defendants with respect to Plaintiffs’ FLSA collective and Rule 23 class action
claims. Defendants argue that Plaintiffs have waived their right to maintain either a collective
or class action as a matter of law.
Summary judgment “shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits,
if any, show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party has the
burden of proving that summary judgment is appropriate. Once the moving party makes the
showing, however, the opposing party must respond to the motion with “specific facts showing
there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). When no genuine issue of any material
fact exists, summary judgment is appropriate. Shealy v. Winston, 929 F.2d 1009, 1011 (4th Cir.
1991). The facts and inferences to be drawn from the evidence must be viewed in the light most
favorable to the non-moving party. Id. However, “the mere existence of some alleged factual
dispute between the parties will not defeat an otherwise properly supported motion for summary
judgment; the requirement is that there be no genuine issue of material fact.”
Id. (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986)).
In this case, Defendants “bear[s] the initial burden of pointing to the absence of a genuine
issue of material fact.” Temkin v. Frederick Cnty. Comm’rs, 945 F.2d 716, 718 (4th Cir. 1991)
(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). If Defendants carry this burden, “the
4
burden then shifts to the non-moving party to come forward with fact sufficient to create a triable
issue of fact.” Id. at 718–19 (citing Anderson, 477 U.S. at 247–48).
Moreover, “once the moving party has met its burden, the nonmoving party must come
forward with some evidence beyond the mere allegations contained in the pleadings to show there
is a genuine issue for trial.” Baber v. Hosp. Corp. of Am., 977 F.2d 872, 874–75 (4th Cir. 1992).
The nonmoving party may not rely on beliefs, conjecture, speculation, of conclusory allegations
to defeat a motion for summary judgment. See id; Doyle v. Sentry, Inc., 877 F. Supp. 1002, 1005
(E.D. Va. 1995). Rather, the nonmoving party is required to submit evidence of specific facts
by way of affidavits, depositions, interrogatories, or admissions to demonstrate the existence of
a genuine and material factual issue for trial. See Fed. R. Civ. P. 56(c), (e); Baber, 977 F.2d at
875 (citing Celotex, 477 U.S. at 324)).
The nonmovant’s proof must meet “the substantive
evidentiary standard of proof that would apply at a trial on the merits.” Mitchell v. Data Gen.
Corp., 12 F.3d 1310, 1316 (4th Cir. 1993); DeLeon v. St. Joseph Hosp., Inc., 871 F.2d 1229,
1223 n.7 (4th Cir. 1989).
A. Existence of a Valid, Binding Agreement
Defendants first argue that, as a matter of law, Plaintiffs waived their right to pursue a
collective or class action against Defendants, based upon the language in the employment
application between Defendants and Plaintiffs which constitutes an enforceable contract.
Defendants reference the fact that, within the Complaint, Plaintiffs rely upon the existence of a
binding and valid contract for their purported claims. Defendants have attached to their Motion
the Declaration of Pam Castillo, the Regional Human Resources Business Partner for Convergys.
5
[ECF #35-2, pp. 2-3]. Ms. Castillo attests to the fact that both Charlotte Jones and Terry Dimery
were employed by Convergys. [ECF #35-2, pp. 2-3]. She further attests to the fact that Ms. Jones
was offered a full-time position on August 30, 2016 and signed an employment application on
August 31, 2016. [ECF #35-2]. This document, entitled “Reaffirmation of Application
Acknowledgement,” evidencing Ms. Jones’s hire date, was signed on August 31, 2016 and is
attached to Ms. Castillo’s declaration. [ECF #35-2, Exhibit B]. Greg Preston, the Director of
Application Development, also filed a declaration attesting to the fact that Terry Dimery
electronically signed an employment application on November 7, 2015. [ECF #35, Exhibit 2].
Attached to Mr. Preston’s declaration is the electronic employment agreement.2
In response,
Plaintiffs argue that this Court should deny the motion as premature because Plaintiffs have not
had the opportunity to explore the timing and the validity of the purported agreements in the
discovery process. [ECF #38, p. 10]. Discovery in this case ended January 3, 2018, and Plaintiffs
have not supplemented the record with any additional evidence or documents.
In determining the existence of a contract, federal courts look to state law for guidance.
In South Carolina, the elements of a contract include offer, acceptance and valuable consideration.
Wilson v. Willis, 786 S.E.2d 571, 579, 416 S.C. 395 (S.C. Ct. App. 2016). South Carolina law
has enacted the Uniform Electronic Transactions Act, which provides that a contract must not be
denied legal effect or enforceability because it is an electronic record. S.C. Code Ann. § 26-6-70.
2
Courts have previously held that an electronic signature of acknowledgment of the receipt of an employee
handbook containing an arbitration provision constitutes valid acceptance of an [arbitration] agreement. Jackson v.
University of Phoenix, Inc., No. 5:13-cv-736-BO, 2014 W L 672852 (E.D.N.C. Feb. 20, 2014). Furthermore,
where a defendant comes forward with evidence showing an employee electronically acknowledged receipt of an
agreement, in that case an arbitration agreement, the plaintiff’s denial that he signed an acknowledgment has
failed to provide a valid basis to submit claims to arbitration. See Jackson, 2014 W L 672852, at *1.
6
Defendants argue that the electronic signatures of Plaintiff Jones and Plaintiff Dimery in the
employment application agreement, which included a collective and class action waiver, are
enforceable. Other courts have found that a similar waiver within an employment application may
become binding on the parties. Palmer v. Convergys Corp., No. 7:10-cv-145, 2012 WL 425256
(M.D. Ga. Feb. 9, 2012) (finding a waiver very similar to the one at issue to be enforceable); see
generally Convergys Corp. v. NLRB, 866 F.3d 635 (5th Cir. 2017) (discussing the agreement that
Convergys job applicants must sign which includes a class action waiver, and ultimately finding
the waiver valid). Plaintiffs also rely upon the validity of an employment agreement in order to
bring forth certain allegations in their Complaint. For example, the Complaint alleges, “Defendant
had a binding and valid contract with Plaintiffs” and that Plaintiffs “accepted the terms of
Defendants’ contractual promises and performed under the contract.” [ECF #1, pp. 21-22]. It does
not appear Plaintiffs directly dispute the existence of a valid agreement. Instead, Plaintiffs argue
that they need time to explore the timing and validity of the agreements Defendants have provided
with their motion, and therefore argue that the motion is premature because discovery has not yet
ended. [ECF #38, p. 10]. Plaintiffs point out that there are not any “actual signatures” on the
applications; however, this Court notes that it does appear that at least as to Charlotte Jones, the
application was electronically signed. As to Plaintiff Dimery, Mr. Preston testifies that Plaintiff
Dimery “signed” the document with an electronic number unique to him. In South Carolina, an
electronic signature satisfies a law requiring a contract or “record” be in writing. S.C. Code Ann.
§ 26-6-70. Plaintiffs do not otherwise argue that they did not sign an employment application
or agreement.
7
Discovery ended on January 3, 2018. Defendants have met their initial burden of
establishing the existence of a contract in that they have provided the affidavits of Convergys
employees who have attested that these documents relate to the respective employees. Once
Defendants provided the requisite evidentiary support to establish these agreements, it was
incumbent upon Plaintiff to provide something beyond mere allegations to refute this fact.
Plaintiffs have not filed anything in the record to suggest these documents contain false signatures,
nor have Plaintiffs supplemented their response to the motion or requested additional time to
supplement the record. Plaintiffs have not otherwise come forward with evidence, affidavit or
otherwise, suggesting that Plaintiffs did not sign the agreements in question. While Plaintiffs make
mention of the fact that they need additional time to investigate these documents, Plaintiffs have
not filed an affidavit or otherwise provided any evidence to refute the testimony on Ms. Castillo
and Mr. Preston regarding the timing and veracity of the execution of these documents.
Therefore, this Court believes it is appropriate to consider the merits of the summary judgment
motion at this stage.
B. Waiver Language and Contractual Rights
Defendants argue that as a matter of law, an individual may waive his or her right to bring
or join a class action lawsuit. Thus, Defendants contend that Plaintiff Dimery and Opt-In Plaintiff
Jones waived their ability to pursue a collective and class action because they both signed an
agreement expressly stating they would “pursue any lawsuit” relating to their employment with
Defendant “as an individual, and will not lead, join, or serve as a member of a class or group
of persons bringing such a lawsuit.” [ECF #35-2, Ex. B]. In response, Plaintiffs first argue that
8
generally speaking, individuals cannot waive their private right of action under the FLSA. This
argument is tethered to a related argument in which Plaintiffs argue the right to pursue a
collective action is a substantive right, and that the clear intent of the FLSA, as well as public
policy, precludes such a waiver.
The FLSA provides that an action to recover damages, “may be maintained against any
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). An employee must consent in writing to
becoming a party plaintiff in any such action under the FLSA. 29 U.S.C. § 216(b). Defendants
have provided the affidavit of Greg Preston who avers that Plaintiff Dimery electronically signed
his employment application with a unique electronic signature ID on November 7, 2015.
Defendants have attached Plaintiff Dimery’s application for employment, which included the
following language:
I further agree that I will pursue any claim or lawsuit relating to my employment
with Convergys (or any of its subsidiaries or related entities) as an individual, and
will not lead, join, or serve as a member of a class or group of person bringing
such a claim or lawsuit.
[ECF #35-3, pp. 3-4,p. 17]. Likewise Opt-In Plaintiff Charlotte Jones electronically signed an
employment agreement containing almost identical language on August 31, 2016. [ECF #35-2, pp.
13-14].
Plaintiffs assert that the right to participate in a collective action under § 216(b) is a
substantive right provided for by the FLSA that cannot normally be waived. Plaintiffs further
argue that the right to bring a collective action under the FLSA may only be waived in very
narrow circumstances: either through an approved settlement or within the context of binding
9
arbitration agreements. A proposed settlement is not at issue in this case, nor is an arbitration
agreement. Plaintiffs argue that the cases relied upon by Defendants only involve waivers that
are in conjunction with an arbitration provision. Plaintiffs further argue that in Defendants’ case
authorities, the waivers were determined valid because of the FAA and federal policy favoring
arbitration, and because those cases had arbitration provisions. The case at hand does not have
an arbitration provision, but the Fourth Circuit in Adkins makes clear that regardless of an
arbitration provision, there is “no suggestion in the text, legislative history, or purpose of the
FLSA that Congress intended to confer a nonwaivable right to a class action under that statute.”
Adkins v. Labor Ready, Inc., 303 F.3d 496, 503 (4th Cir. 2002). Further analysis of case law
reveals that the FLSA § 216(b) “collective” action is a procedural right, rather than a substantive
one, and can be waived. This Court is aware of the current trio of pending cases before the
Supreme Court addressing whether class action waivers in employment arbitration agreements are
valid.3 However, this Court believes that the current case law before it provides sufficient
guidance within this context to consider the following arguments by the parties. There is no
arbitration provision here. There is only a waiver of collective/class action provision.
Plaintiffs principally rely on the holding in Killion v. KeHE Distributors, LLC, 761 F.3d
574, 590 (6th Cir. 2014), which provides that the right to participate in a collection action within
the context of the FLSA cannot normally be waived. Killion relied upon the Sixth Circuit’s
3
This Court notes that currently before the United States Supreme Court is the issue of whether an
employee can be required to resolve employment disputes through individual arbitration, waiving the possibility
of proceeding collectively. Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016). This case has been
consolidated with NLRB v. Murphy Oil USA, Inc., 808 F.3d 1013 (5th Cir. 2015) and Ernst & Young LLP v.
Morris, 834 F.3d 975 (9th Cir. 2016) (consolidation referenced at 137 S. Ct. 809 (2017)). The NLRB argues that
waiver provisions of class actions in employment arbitration agreements violate employees’ rights under the
National Labor Relations Act and are unenforceable. The question is whether the FAA trumps the NLRA.
10
previous holding in Boaz v. FedEx Customer Info. Servs., Inc., where the court held that an
employment agreement cannot deprive employees of their statutory rights under the FLSA, before
invalidating a clause that limited the time to file a lawsuit under the FLSA. 725 F.3d 603, 606
(6th Cir. 2013). Killion noted that no court of appeals appeared to have squarely addressed this
issue regarding the validity of a collective action waiver outside of the arbitration context at that
time.
A few years later, in Feamster v. Compucom Sys., Inc., No. 7:15-CV-00564, 2016 WL
722190 (W.D. Va. Feb. 19, 2016), a defendant moved to dismiss collective action claims because
it argued the plaintiffs had already waived their right to bring collective action litigation within
their employment agreements. Id. at *3. Feamster considered the plaintiffs’ argument that the
waivers are unenforceable as a matter law based upon the ruling in Killion. However, Feamster
ultimately rejected the Sixth Circuit’s analysis in favor of a line of cases holding the right to
collective action is waivable, even when an employment agreement does not contain an arbitration
clause, thereby declining to follow Killion. Instead, the court in Feamster relied heavily upon the
holding in Walthour v. Compucom Systems, Inc., 745 F.3d 1326 (11th Cir. 2014).
In Walthour, the Eleventh Circuit considered the validity of a collection action waiver in
the context of an arbitration clause and found that the FLSA did not preclude the enforcement
of the waiver. The Court first considered the language of Section 16(b) of the FLSA which
provides that an employee may bring FLSA violations “for and in behalf of himself . . . and other
employees similarly situated.” Walthour explained, “the FLSA contains no explicit provision
precluding arbitration or a waiver of the right to a collective action under § 16(b).” 745 F.3d at
11
1334. The Walthour court noted that the circuits that have addressed this issue at that time
concluded that the FLSA does not provide for a non-waivable substantive right to bring a
collective action. Id. at 1336 (emphasis added). Walthour reasoned that even if Congress intended
to create a “right” under the FLSA to bring a class action, if an employee has to affirmatively
“opt-in” to a class action, surely that employee has the ability to waive participation, as well. Id.
at 1335.4 Walthour thus agreed with the analysis of the Eighth Circuit in Owen v. Bristol Care,
Inc., 702 F.3d 1050, 1051-52 (8th Cir. 2013), which set forth the same reasoning in analyzing an
FLSA claim.
Perhaps more persuasive is the fact that the Eleventh Circuit determined that
Congress’s decision to specifically allow for the procedural right to collective action in the FLSA
does not thereby transform this right into a substantive one. Id. at 1336.5 The Fourth Circuit has
also determined that there is no suggestion that Congress intended to confer a non-waivable right
to a class action under this statute. Adkins v. Labor Ready, Inc., 303 F.3d 496, 506 (4th Cir.
2002).
In reviewing the applicable case law, this Court finds that based on the current case law,
including cases within the Fourth Circuit, the FLSA does not provide a substantive right to bring
a collective action based upon a certain class, despite the fact that it permits employees to bring
4
Moreover, Walthour points out that the Supreme Court has previously considered this language in a case
brought under the Age Discrimination in Employment Act, which expressly adopted the collective language
action found in the FLSA. In Amer. Exp. Co. v. Italian Colors Restaurant, the Supreme Court interpreted a
previous case in reaching the result that the Supreme Court had no qualms about enforcing class action waivers in
the context of arbitration agreements even though the ADEA expressly permitted collective actions. 570 U.S. 228,
238 (2013).
5
In fact, the Eleventh Circuit further makes clear that the decision to enact the collective action provision
within the FLSA actually limits a litigant’s procedural rights under Rule 23. W ere it not for that provision within
the FLSA, a litigant could bring a representative FLSA action without prior consent of similarly situated
individuals. Walthour, 745 F.3d at 1336.
12
such actions. This Court acknowledges Plaintiffs’ reliance on the reasoning set forth in Boaz,
however the issue in that case was whether employees can waive their claims under the FLSA
by signing an employment agreement that shortens the limitations period to bring a lawsuit. The
Boaz court found that the very right of employees to bring claims for violation of their FLSA
right to minimum wages, overtime, and liquidated damages was abridged by precluding these
employees from bringing claims within the specified statutory period. Boaz, 725 F.3d 603, 606
(6th Cir. 2013). Plaintiffs’ reliance on this case to assert that the right to bring a collective action
is nonwaivable is contrary to the controlling case law in this circuit, as well as is distinguishable
from this case in that Plaintiffs’ ability to bring their individual FSLA claims is still left intact.
As to Plaintiffs’ policy arguments regarding the waiver of class actions in suits brought
under the FLSA, the Court does not find Brooklyn Savings Bank v. O’Neil to be persuasive. 324
U.S. 697 (1945). Plaintiff argues that O’Neil supports the idea that the clear congressional intent
of Congress was to preclude waivers of collective action rights under the FLSA. This Court
agrees with Plaintiff that O’Neil undoubtedly discusses the importance of the FLSA, particularly
as it relates to wage earners. However O’Neil specifically considered whether a wage earner can
waive his or her right to recover liquidated damages under the Section 16(b). There, the Court
explained that the statutory language, legislative reports and debates do not reveal that the issue
had been specifically considered but ultimately decided to prohibit these kinds of waivers after
explaining how it is similar to the prohibition on allowing a waiver of basic minimum and
overtime wages. 324 U.S. 697, 707. In other words, a prohibition on liquidated damages was
linked to the minimum wage expressly listed in the statute. By contrast, the waiver in question
13
in this case focuses on the method by which a lawsuit may be brought, but it does not otherwise
prohibit a claimant from bringing individual claims. Therefore, this Court finds that based upon
the applicable contract language, a plaintiff may be able to waive the ability to bring their FLSA
claims as collective class actions, if provided for in the agreement and not otherwise precluded
by another applicable law. In this case, the agreement provides for a waiver of collective and
class actions; therefore, unless precluded by another law, summary judgment should be granted
to Defendants as to Plaintiffs’ collective action claims brought under the FLSA.6
C. Rule 23 Class Action Waivers
Defendants also seek summary judgment as to Plaintiffs’ Rule 23 “class action” claims.
[ECF #35-1, p. 1]. In response, Plaintiffs have not provided a response as to the invalidity of the
waiver as it relates to class actions brought under Rule 23. Federal Rule of Civil Procedure 23(a)
states that, “one or more members of a class may sue or be sued as representative parties”
provided certain requirements are met. Plaintiffs have not indicated any reason for this Court not
to find that, much like the applicability of the waiver as to the FLSA collective action, the waiver
applies to its Rule 23 cause of action, as well. Plaintiffs do not make an argument regarding the
validity of the Rule 23 class waiver. They do not argue it violates any South Carolina law, or
is otherwise unconscionable under South Carolina law. Deposit Guaranty Nat’l Bank v. Roper,
445 U.S. 326, 332 (1980) (“[T]he right of a litigant to employ Rule 23 is a procedural right only,
ancillary to the litigation of substantive claims.”). Clearly, the right to employ Rule 23 is a
6
Here, Plaintiffs argue that the National Labor Relations Act prevents these kinds of waivers. Accordingly,
this Court considers Plaintiffs’ argument with respect to the National Labor Relations Act.
14
procedural right only. As such, it can be waived.
D. Waivers and the National Labor Relations Act
Plaintiffs argue that the contractual provision with Convergys’ contract requiring its
employees to waive their right to participate in collective or class action violates the National
Labor Relations Act (the “NLRA”). Specifically, Plaintiffs focus on Section 7 of the NLRA
which protects the rights of employees to engage in concerted legal action. Defendants respond
that the NLRA does not apply because it only protects the right of current, rather than former
employees.
This Court also looks again to the analysis in Feamster, which considered the argument
that the waivers are unenforceable as a matter law based upon the ruling in Killion v. KeHE
Distributors, LLC, 761 F.3d 574, 590 (6th Cir. 2014). This Court finds the analysis in Feamster
persuasive, particularly in light of the fact that Killion has been called into doubt by Convergys
Corp. v. NLRB, 866 F.3d 635 (5th Cir. 2017). In Convergys, the Fifth Circuit Court of Appeals
was considering an appeal of a determination by the National Labor Relations Board that
Convergys violated the National Labor Relations Act (“NLRA”) by requiring job applicants to
sign a class and collective action waiver and by seeking to enforce this waiver. Thereafter, an
employee brought a class action lawsuit, but it was withdrawn after the parties settled the matter.
Id. at 636. Nonetheless, the Board’s General Counsel issued a complaint alleging Convergys had
violated Section 8(a)(1) of the NLRA by requiring job applicants to sign this waiver. Id. The
Fifth Circuit first stated that the use of class action procedures is not a substantive right. See
generally D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 357 (5th Cir. 2013); Deposit Guaranty Nat.
15
Bank, Jackson, Miss. v. Roper, 445 U.S. 326, 332 (1980) (“[T]he right of a litigant to employ
Rule 23 is a procedural right only”). The Fifth Circuit further pointed to several cases that have
held there was not substantive right to proceed collectively under the FLSA. D.R. Horton, 737
F.3d 344 at 357-358. Within the opinion, the Fifth Circuit also makes clear that it has previously
rejected the opinion that Section 7 of the NLRA (describing “concerted activities”) guarantees a
right to participate in class and collective actions. Id. at 637. In fact the Fifth Circuit stated that
it has previously held that the phrase “other concerted activities” does not contemplate
participation in class and collective actions. Id. at 640 (discussing the holding in D.R. Horton, Inc.
v. NLRB, 737 F.3d 344 (5th Cir. 2013)). Accordingly, the Fifth Circuit determined that Section
7 of the NLRA does not include the right to participate in class and collective actions. Therefore,
waivers, like the ones present in this case, do not constitute engaging in unfair labor practices for
the purposes of the Board. Id. at 640. Other circuits disagree with this analysis. In NLRB v.
Alternative Entertainment, Inc., 858 F.3d 393, 403 (6th Cir. 2017), that court found that whether
Rule 23 provides a substantive right is irrelevant because the right to concerted activity under the
NLRA is a “core substantive right.”
In reviewing the case law, this Court finds persuasive the fact that a very similar waiver
was upheld in a district court case wherein the Middle District of Georgia determined that class
action waivers are going to be upheld because they are contractual provisions which do not affect
any substantive rights. Palmer v. Convergys Corp., No. 7:10-cv-145, 2012 WL 425256, at *2
(M.D. Ga. Feb. 9, 2012). While this Court notes the apparent contrary language in Killion, the
holding in the recent Convergys action as it relates to the NLRA, as well as the analysis in
16
Feamster, provides good support for this Court to determine that these waivers do not implicate
substantive rights, do not violate the NLRA, and therefore the contractual provisions agreed upon
by the parties should be enforced.
Convergys v. NLRB, 866 F.3d 635 (5th Cir. 2017) is also instructive as to a further point
made by Plaintiffs. Plaintiffs argue that Defendants willfully and intentionally violated the National
Labor Relations’ Board Order regarding the decision in question was based upon a district court
case in the Eastern District of Missouri. In Convergys v. Grant, the district court determined that
it was a violation of Section 7 and Section 8(a)(1) of the NLRA to have employees sign
class/collective action waivers that are not part of an arbitration agreement. However as
subsequently pointed out by Defendants, on August 7, 2017, the Fifth Circuit granted a request
for review of this decision and denied the Board’s request to enforce the order. In Convergys v.
NLRB, the Court of Appeals for the Fifth Circuit held that Section 7 of the NLRA does not
include a right to participate in collective actions, and abrogation of this right does not constitute
an unfair labor practice under Section 8(a)(1).7 This Fifth Circuit decision therefore calls into
question the action referenced by Plaintiffs, Convergys Corp. and Hope Grant, 363 NLRB No.
51 (2015), also filed by the same individual in front of the administrative law judge based on the
same waiver language. Accordingly, this Court finds that there is no longer a basis upon which
to find that Defendant has willfully and intentionally violated the cease and desist order by the
National Labor Relations Board.
7
Defendants filed a Notice of Supplemental Authority explaining that the Fifth Circuit granted Convergys’
petition for review and denied the NLRB cross-application to enforce the order in Convergys Corp. & Hope
Grant, 363 NLRB No. 51 (Nov. 30, 2015). [ECF #40].
17
II. Motion to Conditionally Certify Class
Plaintiffs have also filed a Motion for Conditional Class Certification with respect to their
FLSA claims. [ECF #10]. Although this Court believes the waiver is valid as to a collective or
class action, regardless of that, and alternatively, the Court finds it inappropriate to conditionally
certify a class due to an insufficient showing of “similarly situated” employees. This Court denies
conditional class certification under the FLSA. Plaintiffs seek to conditionally certify the following
class: “[a]ll current and formerly hourly at-home customer service representatives that have worked
for Defendants at any time from September 1, 2015 through the date of judgment on this matter.”
[ECF #10, p. 1]. Plaintiffs state that these individuals were all subject to a similar policy or
scheme which created widespread FLSA violations, namely to receive proper compensation. As
previously discussed in this Order, this Court is granting Defendants’ Motion for Summary
Judgment as to the ability to bring its collective active claims. However, even if the waivers
were found to be unenforceable, this Court agrees with Defendants that Plaintiffs have not made
a proper showing to certify this collective action.
Section 216(b) of the FLSA sets forth the standard for class certification and provides:
“[a]n action . . . may be maintained against any employer (including a public agency) in any
Federal or State court of competent jurisdiction by any one or more employees for and in behalf
of himself or themselves and other employees similarly situated.” Several district courts employ
a two-step process in analyzing the certification of a collective action under the FLSA. At the first
step, the court generally considers “whether other similarly situated employees should be notified.”
Curtis v. Time Warner Enter.-Advance Newhouse Partnership, No. 3:12-CV-2370-JFA, 2013 WL
18
1874848, at *2 (D.S.C. May 3, 2013). The second step is triggered by an employer’s motion for
decertification and typically occurs after substantial discovery has taken place. Id.
Under step one, Court’s often require a plaintiff show a “reasonable basis” for his or her
claim that there are other similarly situated employees. Curtis, 2013 WL 1874848, at *2 (citing
Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1258-62 (11th Cir. 2008)). Alternatively,
courts have required plaintiffs to “make a ‘modest factual showing’ that they and potential opt-in
plaintiffs ‘together were victims of a common policy or plan that violated the law.’” Curtis, 2013
WL 1874848, at *2 (citing Myers v. Hertz Corp., 624 F.3d 537, 554-55 (2d Cir. 2010)). Other
courts have described this requirement as demonstrating “some identifiable factual nexus which
binds the named plaintiffs and the potential class members together.” MacGregor v. Farmers Ins.
Exchange, No. 2:10-CV-03088, 2011 WL 2981466, at *2 (D.S.C. July 22, 2011) (citing Heagney
v. Eur. Am. Bank, 122 F.R.D. 125, 127 (4th Cir. 1988)). Under this step, the plaintiff’s burden
has been described as “fairly lenient” because the court is trying to determine whether “similarly
situated” plaintiffs exist. Id. Still, the plaintiff bears the burden of demonstrating that notice is
appropriate. MacGregor, 2011 WL 2981466, at *2 (citing D’Anna v. M/A-COM, Inc., 903 F.
Supp. 889, 894 (D. Md. 1995)). Mere allegations will not suffice to make a proper showing;
instead, some factual evidence is necessary. MacGregor, 2011 WL 2981466, at *2 (citing Bernard
v. Household Int’l, Inc., 231 F. Supp. 2d 433, 435 (E.D. Va. 2002)).
Further, the court’s discretion to facilitate notice in these cases is not without bounds.
MacGregor, 2011 WL 2981466, at *2. Courts should not exercise this discretion unless the
plaintiff has shown that the facts and circumstances of the case present a class of “similarly
19
situated” aggrieved employees. Id. (citing Purdham v. Fairfax Cnty. Pub. Schs., 629 F. Supp. 2d
544, 547-48 (E.D. Va. 2009). If the Court determines that individualized determinations are more
likely to predominate, a collective action would hinder, rather than promote, efficient case
management. MacGregor, 2011 WL 2981466, at *2. In such a case, notice should not be granted.
Id. (citing Syrja v. Westat, Inc., 756 F. Supp. 2d 682, 686-87 (D. Md. 2010); see also England
v. New Century Fin. Corp., 370 F. Supp. 2d 504, 511 (M.D. La. 2005) (finding conditional
certification inappropriate where adjudication would have required factual inquiries into
employment relationships involving different managers at different locations)).
If a court were to grant a motion for conditional certification, the defendant may file a
motion for decertification, at which time a more stringent standard under the second step must
be met. Id. at *3. The second step usually occurs near the end of discovery, and the courts have
considered a number of factors, including (1) disparate factual and employment settings of
individual plaintiffs; (2) the various defenses available to defendants that appear to be individual
to each plaintiff; and (3) fairness and procedural considerations. Id. The term “similarly situated”
is not defined in the statute; however, courts have determined if potential class members are
similarly situated based on the existence of “issues common to the proposed class that are central
to the disposition of the FLSA claims and that such common issues can be substantially
adjudicated without consideration of facts unique or particularized as to each class member.”
LaFleur v. Dollar Tree Stores, Inc., 30 F. Supp. 3d 463, 467-68 (E.D. Va. 2014) (quoting
Houston et al. v. URS Corp. et al., 591 F. Supp. 2d 827, 831 (E.D. Va. 2008)). Courts determine
whether conditional certification of a collective action is warranted by examining the parties’
20
pleadings and affidavits. Gordon v. TBC Retail Group, Inc., 134 F. Supp. 3d 1027 (D.S.C. Sept.
30, 2015).
Here, Plaintiffs argue that Defendants employed a common policy or practice in failing to
properly pay employees by requiring them to follow a standard daily checklist while conducting
business at their homes. [ECF #10-1, pp. 10-16]. This checklist provides thirteen login steps for
the employee. [ECF #10, p. 10]. For example, Plaintiffs argue that employees must reboot a
router, which Plaintiffs state takes “an appreciable amount of time” and that the checklist duties
resulted in employees performing “a substantial amount of compensable work off the clock.” [ECF
#10, p. 11]. However, Plaintiffs do not suggest that the time was substantially the same for each
employee or what factors that difference in time would hinge upon. Plaintiffs simply provide a
range of time for each checklist activity. Plaintiffs argue that the declaration of the employees
who have already “stepped forward” and joined the lawsuit establish Defendants’ uniform and
company-wide pay practices. The two declarations provided are from Cynthia Fuerte, who is no
longer a member of this lawsuit, and Plaintiff Terry Dimery. These two declarations mirror the
same estimated time frame that Plaintiffs provided in their brief, but do not otherwise provide any
other alleged common scheme. In their reply brief, Plaintiffs filed a declaration of a former
employee who filed a declaration in another case approximately three years before this action was
filed in this Court, and prior to the time frame covered by the putative collection action.
Defendants initially argue that the fact that there is an individualized inquiry into whether
individual employees signed collective and class action waivers suggests that certification is not
appropriate. [ECF #36, p. 22]. Defendants also argue that Plaintiffs have provided inadmissible
21
evidence to support their motion in that the delcarations are essentially indistinguishable and in
fact, include the same mistakes in them. [ECF #36, pp. 12-13]. Defendants further respond and
argue that Plaintiffs have not met the “similarly situated” burden or otherwise show that the
putative class members are victims of the same unlawful policy or practice.
In doing so,
Defendants provide a variety of differences that exist about the employed home-based customer
service representatives. For example, Defendants argue that with respect to whether employees
were compensated for work allegedly performed “off the clock” would include individualized
inquiry into the project being worked on, the type of position held, access to tools and
applications, whether the employees experienced technical issues, what types of habits they
performed during their shifts, particularly at the beginning and end, and whether they used their
computer for personal reasons during the day. [ECF #36, p. 23]. Defendants provide their own
declarations to support their list of factual differences from other employees who refute that they
were subject to an unlawful policy described by Plaintiffs. [ECF #36, p. 15]; [ECF #36-2].
Defendants also point out that in other Convergys cases that have granted a motion to
conditionally certify a collective action, the class members were all “brick and mortar” agents.
[ECF #36, p. 18].
This Court is mindful of the order provided in the Cosby v. Convergys case where another
court certified a class, though it ultimately resolved as a Rule 23 class. [ECF #10-11, p. 3]. The
order is relatively brief and does not provide a sufficient basis upon which this Court can
determine the facts in that case. In any event, this Court agrees, given the nature of the fact that
these employees were all at-home technicians remotely logging in, that the individualized inquiry
22
of their claims predominates. In order to consider whether each putative class member was paid
appropriately, an individualized inquiry of each employee’s claims is necessarily implicated. Even
were this Court to agree that Plaintiff has established a common scheme or policy that violates
the law, in order to resolve each claim, an individualized determination would be necessary.
Blaney v. Charlotte-Mecklenburg Hosp. Authority, No. 3:10-CV-592-FDW-DSC, 2011 WL
4351631, at *10 (W.D.N.C. Sept. 16, 2011). This Court does not find that the declarations
provided by Plaintiffs, when considered with the arguments and evidence presented by Defendants,
meet the lenient standard for certification in this case. Plaintiffs have not satisfied the requirement
that they show Plaintiffs are “similarly situated.” Accordingly, this Court denies Plaintiffs’ motion
to conditionally certify the suggested proposed collective FLSA class.
As to a Rule 23 class, Plaintiffs have not sought to certify a group of class members under
Rule 23. In order to do so, Plaintiffs would have to meet the requirements of numerosity, common
question of law or fact, and typicality. Fed. R. Civ. P. 23. This Court notes that currently there
are two Plaintiff involved in this lawsuit, and this Court has previously determined that Plaintiffs
have not established that the parties have similar claims. However, this Court does not need to
consider whether such a certification would be appropriate in this circumstance, especially in light
of the fact that this Court finds Plaintiffs have waived their right to bring a Rule 23 class action.
III. Motion to Strike Consent to Join
On June 17, 2017, This Court entered its Conference and Scheduling Order providing the
parties until September 5, 2017 to amend their pleadings. Approximately a month after this
deadline, on October 10, 2017, Plaintiffs filed a Notice of Joinder seeking to include Lashea
23
Moore in this lawsuit. Three days later, Defendants filed a Motion to Strike the Consent to Join
Lashea Moore as untimely under Rule 16 of the Federal Rules of Civil Procedure. In response,
Plaintiffs argue that Ms. Moore contacted them on October 9, 2017 to join this action. Plaintiffs
argue that it is necessary to add Ms. Moore because she was employed from December 8, 2015
until November 21, 2016, and her statute of limitations begins to run in approximately two months
from their response date. Moreover, Plaintiffs argue that the FLSA is remedial in nature and
requires Ms. Moore to file a consent, thus she should not be punished for doing what the law
requires. Plaintiffs argue that opting in to a class action under Section 216(b) of the FLSA is
distinguishable from Rule 20 joinder cases. Finally, Plaintiffs argue good cause exists to permit
Ms. Moore to file this consent because Ms. Moore’s claim bolster and support the other claims,
and without allowing her to join this lawsuit, she would have to file a completely separate lawsuit
or will not be able to vindicate her rights. [ECF #43, p. 10]. Defendants filed a reply, arguing
that Plaintiffs did not make the proper showing for good cause under Rule 16, and further that
contrary to Plaintiffs’ assertions, the statute of limitations is not at risk of expiring because,
according to an declaration filed by Pam Castillo, Ms. Moore was not hired by Defendants until
July 11, 2016. [ECF #44-1, p. 2].
Rule 16(b)(4) of the Federal Rules of Civil Procedure provides: “[a] schedule may be
modified only for good cause and with the judge’s consent.” Good cause means that scheduling
deadlines cannot be met, despite a party’s diligent efforts. Dilmar Oil Co. v. Federated Mut. Ins.
Co., 986 F. Supp. 959, 980 (D.S.C. March 25, 1997), aff’d 129 F.3d 116 (4th Cir. 1997). This
Court is mindful of the fact that circumstances within each case sometimes necessitate for leeway
24
within scheduling order deadlines. However, Plaintiffs have not demonstrated diligence in
complying with the scheduling order deadline, and this Court is satisfied as to the veracity of Ms.
Castillo’s representations regarding Ms. Moore’s employment dates and the subsequent bearing
that has upon any statute of limitations. Moreover, this Court has previously determined in this
Order that the motion to certify the class should be denied. Thus, this Court does not believe
judicial economy will be served by allowing Ms. Moore to file a consent to join this lawsuit.
Accordingly, the Motion to Strike Ms. Moore’s Consent to Join is granted.
Conclusion
The Court has thoroughly reviewed the entire record, including all pleadings and exhibits
filed in this case. For the reasons stated above, this Court grants Defendants’ Motion for Summary
Judgment to the extent Plaintiffs’ seek to pursue their claims in a representative capacity as
collective and/or class action claims, and those claims are dismissed with prejudice. [ECF #35].
However, Plaintiffs’ individual FLSA violations and breach of contract claims remain before this
Court as independent claims by the two individual Plaintiffs involved in this lawsuit (Terry
Dimery and Charlotte Jones). Plaintiffs’ Motion for Conditional Class Certification and Notice is
DENIED. [ECF #10]. Defendants’ Motion to Strike Consent to Join by Lashea Moore is
GRANTED. [ECF #42].
IT IS SO ORDERED.
Florence, South Carolina
March 26, 2018
s/ R. Bryan Harwell
R. Bryan Harwell
United States District Judge
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