Crosby et al v. Stage Stores Inc.
Filing
132
MEMORANDUM OPINION AND ORDER denying 89 Motion for Corrective Notice. Signed by Chief Judge Waverly D. Crenshaw, Jr on 5/3/2019. (DOCKET TEXT SUMMARY ONLY-ATTORNEYS MUST OPEN THE PDF AND READ THE ORDER.)(am)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF TENNESSEE
NASHVILLE DIVISION
MAYA CROSBY and DENEEN
PATTON, on behalf of themselves
and all those similarly situated,
Plaintiffs,
v.
STAGE STORES, INC.,
Defendant.
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NO. 3:18-cv-00503
MEMORANDUM OPINION AND ORDER
Pending before the Court is Plaintiffs’ Motion for Corrective Notice. (Doc. No. 89.) Stage
Stores, Inc. (“Stage”) has responded in opposition, to which Plaintiffs have replied. (Doc. Nos.
105, 115.) For the reasons set out below, Plaintiffs’ Motion for Corrective Notice will be denied.
I. Factual Background
Plaintiffs initially sought certification of a collective class, pursuant to the Fair Labor
Standards Act (“FLSA”), 29 U.S.C. § 216(b), consisting of all past and present employees of Stage
who held various associate-level positions at Stage stores. (See Doc. No. 30.) On December 5,
2018, the Court granted Plaintiffs’ Motion for Court-Authorized Notice Pursuant to Section 216(b)
of the FLSA (Doc. No. 30) and ordered Stage to: (1) provide Plaintiffs’ counsel with a list of the
contact information (names, addresses, and email addresses) for putative class members; and (2)
confer with Plaintiffs’ counsel to arrive at an agreeable proposed Notice and Consent form. (Doc.
No. 51.) The parties filed a proposed Notice and Consent form, which informed putative class
members, among other things, that: (1) federal law prohibited an employer (i.e., Stage) from firing
or in any way retaliating against them because of their participation in the lawsuit; and (2) any
questions or additional information should be directed to Plaintiffs’ counsel. (Doc. No. 56-1 at 4.)
The Court approved the proposed Notice and Consent form and it was disseminated among the
putative class members. (Doc. No. 58.)
Subsequently, Plaintiffs filed the instant motion seeking: (1) authorization to provide
corrective notice to the putative collective class; (2) prohibition of further discussion between
Stage and putative collective members regarding the lawsuit; (3) a requirement that Stage issue a
corrective communication to its managers; and (4) extension of the opt-in period by thirty (30)
days from the issuance of the corrective notice. (Doc. No. 89.) In support, Plaintiffs’ counsel filed
three declarations: (1) her own declaration; (2) a declaration from Susan Gilson; and (3) a
declaration from Taylor Washington.
A. Counsel’s Declaration
In her own declaration, counsel explains that: (1) putative opt-in plaintiffs in at least four
stores across three states have complained that they fear retaliation for joining the lawsuit; and (2)
certain Stage Store Managers or District Managers have made misleading statements discouraging
potential, eligible employees from joining the collective class. (See Doc. No. 91.) Plaintiffs’
counsel states that a Stage employee in Georgia contacted counsel and reported that her Store
Manager told her that the instant case did not “apply to her” and it would be “fraud” for her to join
the lawsuit. (Id. at 1-2.) Plaintiffs’ counsel contacted Stage’s counsel to alert them, Stage’s counsel
requested the pertinent information (i.e., the specific store, Store Manager, etc.), but Plaintiffs’
counsel did not provide that information. (Id. at 2.) Instead, Plaintiffs’ counsel requested that Stage
issue a communication across all of its stores notifying store employees that any kind of retaliation
against potential class members for asking questions, discussing, or otherwise joining the lawsuit
was prohibited. (Id.)
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Stage’s counsel forwarded to Plaintiffs’ counsel a communication sent to all the District
Managers, informing them that any kind of retaliation against employees for asking about or
joining the lawsuit was strictly prohibited. (Id. at 2-3.) Upon receiving the communication,
Plaintiffs’ counsel requested that Stage issue a second communication reiterating that, to the extent
potential class members had questions, they should contact the notice administrator or Plaintiffs’
counsel. (Id. at 3.) Shortly after Plaintiffs’ counsel sent this request, the notice administrator
contacted Plaintiffs’ counsel and informed her that a potential collective member working in Texas
reported a fear of retaliation for joining the lawsuit. (Id. at 3.) Plaintiffs’ counsel again contacted
Stage’s counsel regarding this second complaint and requested that Stage issue the proposed
follow-up notice. (Id.)
Stage’s counsel responded that: (1) its initial communication was adequate; (2) it had sent
an additional communication to upper-level employees regarding the lawsuit, but this second
communication was privileged and could not be shared; and (3) it needed more information from
Plaintiffs’ counsel about the specifics of the new Texas-based complaint in order to initiate an
investigation. (Id. at 3-4.) Following this exchange, a Stage employee working in a store in Round
Rock, Texas, reported to Plaintiffs’ counsel that multiple employees at her store feared retaliation
for joining the lawsuit due to the District Manager. (Id. at 4.) In this instance Plaintiffs’ counsel
provided the relevant information, including the specific store and employee, to Stage and again
requested that Stage issue the previously-suggested follow-up notice. (Id.) Stage declined to issue
any further communications to its employees. (Id.)
Shortly after the Round Rock, Texas complaint (the third complaint), Plaintiffs’ counsel
received reports that Stage’s Human Resources employees had begun calling employees who
worked at the Round Rock store and inquiring as to whether these employees had joined the
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lawsuit. (Id.) Additionally, a fourth complaint was reported from Stage’s New York store, stating
that a District Manager was discouraging employees from opting into the lawsuit by suggesting
that the lawsuit did not apply to certain employees. (Id.) Plaintiffs’ counsel reported these issues
to Stage, but Stage declined to issue any corrective notice or otherwise intervene. (Id. at 4-5.)
Plaintiffs’ counsel arranged a meet and confer call to address these issues with Stage, which was
held on March 7, 2019. (Id. at 5.) The parties remained at an impasse following the call,
necessitating the instant motion. (Id.)
B. Susan Gilson Declaration
In her declaration, Susan Gilson explains that she was employed by Stage in the Round
Rock, Texas store from approximately November 2016 to March 2019. (Doc. No. 116.) She asserts
that, shortly after receiving the § 216(b) notice, she became aware that “some of my coworkers
who had also received the notice feared retaliation for joining the lawsuit.” (Id. at 1.) Gilson
“heard” that her District Manager had made threatening comments in the past, which suggested
that the District Manager “would retaliate.” (Id. at 1-2.) She also notes that, on or around March
6, 2019, Eddie Miller, a member of Stage Stores’ Human Resources department, called her and
asked her: (1) how she found out about the lawsuit; and (2) whether she had elected to join. (Id. at
2.) Miller also asked whether she had spoken with anyone about the lawsuit and whether anyone
had “intimidated her.” (Id.) Gilson states that she “did not believe it was Mr. Miller’s business to
ask whether [she] had joined the lawsuit and who [she] had spoken with regarding the lawsuit.”
(Id.)
On this same day, she also “heard” from several of her coworkers that representatives from
Store’s HR department had also contacted them, and these coworkers felt “uncomfortable and
intimidated as a result.” (Id.) Gilson also recounts that she “heard” from Dana Roberts, the Store
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Manager, that Miller had requested to speak with an employee that was not present, and, when
Roberts informed him that he could not speak with that particular employee, Miller accused
Roberts of having a “bad attitude” and reported her to the District Manager. (Id.) Gilson states that
this interaction was merely “more evidence that Stage’s HR department was intimidating, not
helpful, to employees.” (Id.) Ultimately, Gilson opted in to the lawsuit on or around March 11,
2019. (Id.)
C. Washington Declaration
Taylor Washington avers that she was employed by Stage as a Sales Associate from
approximately November to December 2018 at a Goody’s in Pine Bluff, Arkansas. (Doc. No. 117.)
She states that, in early April 2019, she received a letter form Benda Pedersen, a Stage Store HR
Business Partner, informing her that Stage had conducted an investigation and concluded that she
may be entitled to unpaid wages. (Id. at 1.) She explains that this letter was confusing because she
had previously received the § 216(b) notice and was unsure whether the letter was attempting to
resolve her potential claim, as it related to that suit, or whether her receipt of the letter precluded
her from opting in. (Id. at 1-2.) Ultimately, Washington decided to join the suit. (Id. at 2.)
Washington attaches a photograph of the letter to her declaration. (Id. at 4.)
II. Analysis
A. Plaintiffs’ Motion and Stage’s Response
Plaintiffs contend that Stage’s unilateral communications with putative class members
have undermined the Court’s ability to control the ongoing collective action. (See Doc. No. 90 at
10-18.) Plaintiffs argue that, as relief, the Court should first order that Stage, its District Managers,
and other agents cease communications with both putative class members and opt-in plaintiffs. (Id.
at 10-11.) Plaintiffs contend that courts have banned defendants from continued communication
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in similar circumstances where the defendant’s communications with class members or potential
class members was misleading or otherwise interfered with plaintiffs’ rights. (Id. at 11.) Plaintiffs
also argue that, in addition to being misleading, Stage’s communications were intimidating and
had the potential to chill participation in the suit due to the “inherently coercive nature of the
employment relationship.” (Id. at 13.)
In addition to banning further communications between Stage and its agents and class
members, Plaintiffs seek corrective notices to be issued by Stage to its managers and putative optin plaintiffs. (Id. at 14.) Plaintiffs request that the notice to all eligible employees and actual optin plaintiffs clarify that the misleading statements by Stage and its agents are not true and to direct
questions to Plaintiffs’ counsel. (Id.) Plaintiffs request that the notice sent to Stage’s managers
inform them that: (1) Stage and its employees are prohibited by law from retaliating against
employees for asking about the lawsuit or exercising their rights to join the lawsuit; (2) managers
may not discourage employees from joining the lawsuit or interfere with their rights to join the
lawsuit; and (3) if an employee has additional questions about the lawsuit they should be directed
to Plaintiffs’ counsel. (Id. at 15.) Finally, Plaintiffs request a thirty (30) day extension of the optin period following the issuance of the corrective notice to enable putative plaintiffs to benefit
from the corrective notice. (Id. at 15.)
Stage responds that Plaintiffs’ motion is a transparent attempt to market the litigation and
wrongfully extend the opt-in period. (Doc. No. 105 at 1-2.) Stage argues that Plaintiffs have not
demonstrated clear evidence of abuse or coercion sufficient to justify a restriction on its
communications with employees. (Id. at 10-12.) Further, Stage contends that Plaintiffs’ allegations
of retaliation are speculative at best. (Id. at 12-13.) Stage argues that, even accepting Plaintiffs’
allegations, they are too vague to satisfy their burden. (Id. at 13-14.) Stage maintains that the
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communications described in Plaintiffs’ motion, particularly its HR Department’s calls to potential
opt-in plaintiffs, were appropriate and do not justify the extraordinary relief that Plaintiffs seek.
(Id. at 14-19.) Accordingly, Stage requests that the Court deny Plaintiffs’ motion.
B. Applicable Law
“Because of the potential for abuse [in class actions], a district court has both the duty and
the broad authority to exercise control over a class action and to enter appropriate orders governing
the conduct of counsel and parties.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981). “But this
discretion is not unlimited, and indeed is bounded by the relevant provisions of the Federal Rules”
of Civil Procedure governing class actions, which give the court discretion to “make appropriate
orders: imposing conditions on the representative parties or on intervenors . . . [and] dealing with
similar procedural matters.” Id. at 99–100. While this suit was brought pursuant to § 216 of the
FLSA rather than Federal Rule of Civil Procedure 23, the same concerns and justifications for
judicial oversight apply in both instances, and courts apply the same standards in FLSA class
actions as they do in Rule 23 actions. See Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 171
(1989) (holding that the same justifications and potential for abuse apply).
An exercise of discretion limiting the defendants’ communications or remedying their
effect must be supported by a “clear record and specific findings that reflect a weighing of the need
for a limitation and the potential for interference with the rights of the parties.” Gulf Oil, 452 U.S.
at 101. Such a weighing should identify the potential or actual abuses being addressed and “should
result in a carefully drawn order that limits speech as little as possible, consistent with the rights
of the parties under the circumstances.” Id. at 101–02, 104 (finding that a serious restraint on
expression must be “justified by a likelihood of serious abuses” and could not be supported by the
“mere possibility of abuses”). Whereas specific findings of abuses may justify a ban on
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communications, there mere possibility of abuse does not justify “adoption of a communications
ban that interferes with formation of a class or the prosecution of a class action in accordance with
the Rules.” Id. at 104.
“As the requested protective order will limit defendants’ speech, the Court must take into
account First Amendment considerations.” Ojeda-Sanchez v. Bland Farms, 600 F. Supp. 2d 1373,
1378 (S.D. Ga. 2009). However, the speech at issue—communications regarding pending
litigation—is of a commercial nature designed to protect the defendants’ business interests at risk
in this litigation. Kleiner v. First Nat’l Bank of Atlanta, 751 F.2d 1193, 1204 n.22 (11th Cir. 1985)
(holding that defendants’ communications with potential class members regarding litigation was
commercial speech). Commercial speech is subject to more limited constitutional protection. Id.
at 1205. “In general, an order limiting communications regarding ongoing litigation between a
class and class opponents will satisfy First Amendment concerns if it is grounded in good cause
and issued with a ‘heightened sensitivity’ for First Amendment concerns.” Id. (citation omitted).
Where communications are misleading, coercive, or an improper attempt to undermine the
class action by encouraging class members not to participate in the suit, they may be narrowly
limited consistent with the First Amendment. Belt v. Emcare Inc., 299 F. Supp. 2d 664, 667–68
(E.D. Tex. 2003); see also Billingsley v. Citi Trends, Inc., 560 F. App’x. 914, 922 (11th Cir. 2014)
(collecting cases from multiple districts that demonstrate that district courts routinely “exercise
discretion to correct the effect of pre-certification communications with potential FLSA collective
action members after misleading, coercive, or improper communications are made”).
Courts have long recognized that a “unilateral communications scheme . . . is rife with
potential for coercion,” Kleiner, 751 F.2d at 1202, particularly when class members are contacted
directly and in person, see Camp v. Alexander, 300 F.R.D. 617, 623 (N.D. Cal. 2014). Second, the
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potential for coercion and abuse of the class action is especially high when there is an ongoing
business relationship between the two parties, particularly when that relationship is one of
employer to employee. See Kleiner, 751 F.2d at 1202–03; Camp, 300 F.R.D. at 622 (collecting
cases from multiple districts and noting that “[o]ther courts have also noted the potential for
coercion in situations where employers contact putative class member employees”).
“Even absent a finding of coercion, however, the court may remedy the effects of any
communications between defendants and their employees if those communications were
misleading.” Potts v. Nashville Limo & Transport, LLC, Case No. 3:14-cv-1412, 2016 WL
1622015, at *14 (M.D. Tenn. Apr. 19, 2016). A defendant may engage in “self-serving advocacy”
so long as the statements are not inaccurate or misleading. Keystone Tobacco Co., Inc. v. U.S.
Tobacco Co., 238 F. Supp. 2d 151, 157 (D.D.C. 2002). This self-serving advocacy does not,
however, allow a defendant to “mislead[ ] . . . class members about the strength and extent of their
claims and the alternatives for obtaining satisfaction of those claims.” Id. at 155 (quoting In re
Gen. Motors Corp. Engine Interchange Litig., 594 F.2d 1106, 1139 (7th Cir. 1979)); accord Camp,
300 F.R.D. at 624–25 (invalidating signed opt-out declarations where a letter sent to putative §
216 class members omitted relevant information regarding the plaintiffs’ claims, presented an
“entirely one-sided” view of the case, failed to provide contact information for the plaintiffs’
counsel, and, therefore, was misleading). Defendants may not omit details or fail to provide
relevant information regarding the plaintiffs’ claims when communicating with class members,
and courts have found certain communications to be misleading when they fail to explain the
plaintiffs’ claims, do not append the plaintiffs’ complaint to a settlement offer, or fail to provide
contact information for the plaintiffs’ counsel. See, e.g., Camp, 300 F.R.D. at 624–25; Keystone
Tobacco Co., 238 F. Supp. 2d at 155–57.
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C. Application
A comparison of Plaintiffs’ motion and Stage’s response makes clear that the parties do
not dispute the underlying factual bases for the motion. (Compare Doc. Nos. 90 at 7-10 and 91 at
1-6 with Doc. No. 105 at 3-10.) Given this, the Court’s analysis turns on whether the record reflects
clear and specific evidence that the type of communications engaged in by Stage have been abusive
and threaten this litigation. See Cox Nuclear Med. v. Gold Cup Coffee Servs., Inc., 214 F.R.D.
696, 697–98 (S.D. Ala. 2003) (“[T]he movant must show that the particular form of
communication at issue is abusive in that it threatens the proper functioning of the litigation.”).
As a preliminary matter, Plaintiffs have offered scant supporting evidence for their
requested relief, especially considering their burden to produce a “clear record and specific
findings that reflect a weighing of the need for a limitation and the potential for interference with
the rights of the parties.” Gulf Oil, 452 U.S. at 101. The bulk of Plaintiffs’ evidentiary support for
their motion comes in the form of Plaintiffs’ counsel’s declaration. (See Doc. No. 91.) Although
there are no strict parameters as to what constitutes proper evidentiary support in the context of
corrective notice motions, the Court accords Plaintiffs’ counsel’s declaration modest weight.
Counsel’s declaration is merely a recitation of four complaints that anonymous employees relayed
to her, all of which lack personal knowledge and are undoubtedly constitute hearsay. (Id. at 1-6.)
The Court acknowledges that the employees may not have been willing to file their own
declarations for fear of retaliation, and, therefore, counsel was left with little choice but to file the
declaration herself. However, it is Plaintiffs’ responsibility to provide a clear record that allows
the Court to make specific findings supporting the requested relief. Gulf Oil, 452 U.S. at 101. This
responsibility necessarily entails a trade-off. In this instance, for the Court to have a clear record
with specific findings supporting Plaintiffs requested relief, the evidentiary support must also be
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clear and direct—not the second and third-hand accounts of counsel. Plaintiffs must shed their
anonymity by providing clear, direct, and first-hand accounts of the improper communications that
threaten this litigation, thereby establishing a clear record for the Court. The prohibition against
retaliation is real and carries heavy sanctions that protects employees when stepping forward.
Accordingly, counsel’s vicarious accounts of these allegedly improper communications are
insufficient to carry Plaintiffs heavy evidentiary burden.
Plaintiffs other supporting declarations fare no better. Gilson’s declaration merely
establishes that Stage HR contacted her about the lawsuit. (Doc. No. 116 at 2.) In several hearsay
statements, Gilson explains that she “heard” from her coworkers that they felt intimidated by
Stage’s HR communications, but she neither details who these employees were nor how they felt
threatened, and she does not state that she felt intimidated. (Id. at 1-2.) Gilson, however, does
provide her first-hand personal communication with Eddie Miller, a member of Stage’s human
relations department. (Id.) Gilson reports that Miller, among other things, asked her if she ahd
joined the lawsuit and whether she had spoken with anyone about the case. Both questions were
improper and of no good concern of Stage. Washington notes only that she received a notice from
Stage about certain unpaid overtime compensation she may be entitled to, and this caused
confusion about her ability to opt-in to he lawsuit. (Doc. No. 117 at 1-2.) These declarations, while
based on first-hand personal knowledge of the declarants, do not demonstrate a “clear record” that
Stage’s communications are impeding the proper functioning of this litigation.
“Abusive practices that have been considered sufficient to warrant a protective order
include communications that coerce prospective class members into excluding themselves from
the litigation; communications that contain false, misleading or confusing statements; and
communications that undermine cooperation with or confidence in class counsel.” Cox Nuclear
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Med., 214 F.R.D. at 698. Here, notwithstanding Miller’s questions to Gilson, there is insufficient
evidence that Stage engaged in the type of abusive practices that would warrant a protective order
from the Court. Further, although the Court acknowledges that a past or present employment
relationship between the parties increases the risk that communications between them will have a
coercive effect, see Belt, 299 F. Supp. 2d at 668, there is no evidence that the alleged improper
communications actually resulted in eligible employees electing not to opt-in. Indeed, the
supporting declarations from actual employees indicates that they both decided to opt in to the
lawsuit. (Doc. Nos. 116, 117.) At bottom, Plaintiffs’ scant evidentiary support, at most,
demonstrates that there is a mere possibility of abuse, which is insufficient for the Court to impose
the extraordinary relief they seek. Gulf Oil at 101–02, 104 (finding that a serious restraint on
expression must be “justified by a likelihood of serious abuses” and could not be supported by the
“mere possibility of abuses”). Therefore, the Court will decline to exercise its discretion to issue a
corrective notice. However, the Court does not condone, and Stage should address, Miller’s
impropriety noted above.
III. Conclusion
Accordingly, for the reasons set out above, Plaintiffs’ Motion for Corrective Notice (Doc.
No. 89) is DENIED.
IT IS SO ORDERED.
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WAVERLY D. CRENSHAW, JR.
CHIEF UNITED STATES DISTRICT JUDGE
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