Kaiser v. Revival Home Healthcare Services, Inc., et al

Filing 23

ORDER ADOPTING 20 REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE. ORDERED that Plaintiff's First Stage Motion for Notice to Potential Plaintiffs and Conditional Certification (Dkt. # 11 ) is GRANTED, and the objections of Defendants are OVERRULED. Signed by District Judge Amos L. Mazzant, III on 4/22/2019. (rpc, )

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United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

RYAN KAISER, on behalf of himself and §
§
others similarly-situated,
§
§
Plaintiff,
§
§
v.
§
REVIVAL HOME HEALTHCARE §
SERVICES, INC. and SYLVESTER C. §
§
UDEZE,
§
§
Defendants

CIVIL ACTION NO. 4:18-cv-00341
Judge Mazzant/Magistrate Judge Craven

ORDER ADOPTING REPORT AND RECOMMENDATION
OF THE UNITED STATES MAGISTRATE JUDGE
The above-entitled and numbered civil action was heretofore referred to United States
Magistrate Judge Caroline M. Craven pursuant to 28 U.S.C. § 636. On March 12, 2019, the
Magistrate Judge issued a Report and Recommendation, recommending Plaintiff’s First Stage
Motion for Notice to Potential Plaintiffs and Conditional Certification (Dkt. # 11) be granted.
Defendants Revival Home Healthcare Services, Inc. and Sylvester C. Udeze (“Defendants”) filed
objections to the Report and Recommendation. The Court conducts a de novo review of the
Magistrate Judge’s findings and conclusions.
FACTUAL BACKGROUND
This is a collective action for alleged violations of the Fair Labor Standards Act (“FLSA”),
29 U.S.C. §201 et. seq. Plaintiff Ryan Kaiser (“Plaintiff”) and potential opt-in plaintiffs are current
and former home health aides employed by Defendants. Plaintiff alleges Plaintiff and potential opt-in
plaintiffs were (1) compensated on an hourly basis for on-the-clock hours worked, (2) required to

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work in excess of 40 hours in certain workweeks between September 1, 2015, and the present, and
(3) not paid overtime premiums for on-the-clock overtime hours worked. According to Plaintiff,
these similarly situated employees and former employees of Defendants worked overtime but did not
receive overtime compensation for their overtime work. (Dkt. # 1, ¶¶ 1-2, 17-31).
According to the complaint, Plaintiff was employed by Defendant as a home health aide,
providing companionship services, from February 2016 to November 2017, and he regularly worked
more than forty hours a week during that time. Id., ¶ 4. Plaintiff alleges the “precise size and the
identity of the Putative Class Members should be ascertainable from the business records, tax records
and/or employee or personnel records of Defendants.” Id., ¶ 7. Under the “Collective Action
Allegations” section of the complaint, Plaintiff alleges the “number and identity of other plaintiffs
yet to opt-in and consent to be party plaintiffs may be determined from the records of Defendants,
and potential class members may be easily and quickly notified of the pendency of this action. These
employees are victims of Defendants’ unlawful compensation practices and are similarly situated to
Plaintiff in terms of job duties, pay, and employment practices.” Id., ¶ 36.
According to the complaint, potential collective action members may be informed of this
pendency of this collective action through direct mail, email, and office posting. Id., ¶ 37. Plaintiff
states he is aware of current and former employees of the Defendants that have been affected by the
Defendants’ policies and practices complained of in this action. Id. Plaintiff alleges Defendants’
failure to pay overtime compensation as required by the FLSA results from a generally applicable,
systematic policy and practice and is not dependent on the personal circumstances of any individual
employee. Id., ¶ 38. Thus, according to the complaint, Plaintiff and the other home health aides are
similarly situated employees. Id. Plaintiff alleges the specific job titles or precise job requirements
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of the similarly situated employees do not prevent collective treatment; all employees, regardless of
their precise job requirements or rates of pay, are entitled to be properly compensated for all hours
worked in excess of 40 hours per week at the overtime rate; and, although the issue of damages may
be individual in character, “there is no detraction from the common nucleus of liability facts.” Id.
Plaintiff further alleges there are questions of fact and law common to the class that
predominate over any questions affecting only individual members. Id., ¶ 39. According to the
complaint, the questions of fact and law common to the class arising from Defendants’ actions
include, without limitation, the following: (1) whether Plaintiffs were covered non-exempt hourly
employees; (2) whether Plaintiffs were compensated for all hours worked; (3) whether Plaintiffs
worked more than 40 hours per week; (4)whether Plaintiffs were compensated at 150% of their
regular rate for all hours worked in excess of 40 hours in any and all weeks; (5) whether Defendants’
practices accurately account for the time Plaintiffs actually were working; (6) whether Defendants’
compensation policy and practice is illegal; and (7) whether Defendants had a policy and practice
of willfully failing to compensate employees for overtime. Id. Plaintiff alleges these common
questions “predominate over any questions affecting only individual persons, and a collective action
is superior, with respect to considerations of consistency, economy, efficiency, fairness, and equity,
to other available methods for the fair and efficient adjudication of the federal law claims.” Id., ¶ 40.
Plaintiff further alleges his claims are “typical of those of the similarly situated employees
in that these employees have been employed in the same or similar positions as the Collective Action
Representative and were subject to the same or similar unlawful practices as the Collective Action
Representative and reported to the same managers.” Id., ¶ 41. Plaintiff alleges a collective action is
the appropriate method for the fair and efficient adjudication of this controversy because the
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presentation of separate actions by individual similarly situated current or former employees could
create a risk of inconsistent and varying adjudications, establish incompatible standards of conduct
for Defendants, and/or substantially impair or impede the ability of collective action members to
protect their interests. Id., ¶ 42. In addition, Plaintiff alleges the maintenance of separate actions
would place a substantial and unnecessary burden on the courts and could result in inconsistent
adjudications, whereas a single collective action can determine, with judicial economy, the rights of
all collective action members. Id., ¶ 43.
PROCEDURAL BACKGROUND
On September 28, 2018, Plaintiff served his First Set of Requests for Admission to
Defendants (“Plaintiff’s Requests for Admission”). Defendants’ response was due on October 29,
2018, but no response was provided. Plaintiff filed his First Stage Motion for Notice to Potential
Plaintiffs and Conditional Certification on November 2, 2018, relying solely on the deemed
admissions. Plaintiff’s motion seeks conditional certification of and supervised notice to home health
aides who worked for Defendants over the last three years and who worked overtime hours for which
they were not compensated at the rate of time and one-half their regular hourly rate.
Defendants filed a motion to withdraw admissions on November 15, 2018. On January 2,
2019, the Magistrate Judge denied Defendants’ motion, finding the unanswered admissions were
deemed admitted. (Dkt. # 17). The Magistrate Judge held a hearing on Plaintiff’s motion for notice
and conditional certification on February 27, 2019.
REPORT AND RECOMMENDATION
On March 12, 2019, the Magistrate Judge entered a Report and Recommendation,
recommending Plaintiff’s motion for notice to potential plaintiffs and conditional certification be
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granted. The Magistrate Judge first noted Defendants’ answer admitted certain allegations that are
relevant to the issue of whether to allow conditional certification (i.e., whether there has been a
minimal showing by the plaintiff that there is a reasonable basis for crediting the assertions that
aggrieved individuals exist; that those aggrieved individuals are similarly situated to the plaintiff in
relevant respects given the claims and defenses asserted; and that those individuals want to opt-in
to the lawsuit).
Further considering the deemed admissions, the Magistrate Judge concluded Plaintiff has met
his burden at the notice stage of demonstrating there is a reasonable basis for crediting their claims
that aggrieved individuals exist. R&R at 11. The Magistrate Judge next considered whether those
aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and
defenses asserted. Id. at 12. She concluded Plaintiff has made the necessary “modest factual
showing” sufficient to demonstrate he and potential plaintiffs together were victims of a common
policy or plan that violated the law. Id. at 13. Finally, the Magistrate Judge held Plaintiff has shown
there likely are others who seek to opt-in to this litigation. Id. Having found Plaintiff fulfilled the
three requirements for collective action certification, the Magistrate Judge concluded notice should
issue and approved Plaintiff’s proposed Notice and Consent Forms. Id.
OBJECTIONS
In their objections, Defendants assert Plaintiff’s motion was “granted solely based on the
deemed admissions, without Plaintiff providing any actual evidence to support its baseless
allegations.” (Dkt. # 21 at 2). Defendants argue “Plaintiff’s allegations that there are other
employees of Defendant that are similarly situated are false.” Id. at 3. According to Defendants,
there is a good faith dispute as to the truth of several matters made the subject of the deemed
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admissions. Id. at 4. Defendants assert they will “also show that most of the issues inadvertently
deemed admitted were previously denied by Defendants in their Original Answer.” Id.
DE NOVO REVIEW
Applicable law
The FLSA requires covered employers to compensate nonexempt employees at overtime rates
for time worked in excess of statutorily defined maximum hours. 29 U.S.C. § 207(a). Section 216(b)
of the FLSA gives employees the right to bring an action on behalf of themselves, as well as “other
employees similarly situated” for violations of the FLSA. 29 U.S.C. § 216(b). “Under § 216(b),
district courts have the discretionary power to conditionally certify collective actions and authorize
notice to potential class members.” Tice v. AOC Senior Home Health Corp., 826 F. Supp. 2d 990,
994 (E.D. Tex. 2011).
While the Fifth Circuit has not specifically addressed the meaning of “similarly situated” in
this context, “[t]wo approaches are used by courts to determine whether collective treatment under
§ 216(b) is appropriate: (1) the two-stage class certification set forth in Lusardi v. Xerox, Corp., 118
F.R.D. 351 (D. N.J. 1987); and (2) the ‘Spurious Class Action’ method outlined in Shushan v. Univ.
of Colorado, 132 F.R.D. 263 (D. Colo. 1990).” Cripe v. Denison Glass Mirror, Inc., 2012 WL
947455, at *3 (E.D. Tex. Jan 27, 2012), report and recommendation adopted, 2012 WL 947362
(E.D. Tex. Mar. 20, 2012). “The Lusardi two-stage approach is the prevailing standard among
federal courts,” Tice, 826 F. Supp. 2d at 994 (citations omitted), and the standard predominantly used
in this District. See Halleen v. Belk, Inc., 2016 WL 5118646, at *2 (E.D. Tex. 2016); Miranda v.
Mahard Egg Farm, Inc., 2016 WL 1704861, at *1 (E.D. Tex. 2016); Stier v. Great Plains Nat'l
Bank, 2016 WL 1572194, at *1 (E.D. Tex. 2016). The Magistrate Judge used the Lusardi two-stage
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approach. R&R at 3.
Under Lusardi, “certification for a collective action under § 216(b) is divided into two stages:
(1) the notice stage; and (2) the merits stage.” Id. “At the notice stage, the district court makes a
decision—usually based only on the pleadings and any affidavits which have been
submitted—whether notice of the action should be given to potential class members.” Mooney v.
Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995), overruled on other grounds by Desert
Palace, Inc. v. Costa, 539 U.S. 90 (2003).
Because the Court has minimal evidence before it at the notice stage, “the determination is
made using a fairly lenient standard requiring nothing more than substantial allegations that the
putative class members were victims of a single decision, policy or plan.” Tice, 826 F. Supp. 2d at
995. “Notice is appropriate if the court concludes that there is ‘some factual nexus which binds the
named plaintiffs and potential class members together as victims of a particular alleged [policy or
practice].’” Allen v. McWane, Inc., 2006 WL 3246531, at *2 (E.D. Tex. 2006). “If the first step [of
the Lusardi approach] is satisfied, the court conditionally certifies a class; and the action proceeds
as a collective action during discovery.” Sedtal v. Genuine Parts Co., 2009 WL 2216593, at *3 (E.D.
Tex. 2009). At the second stage, often referred to as the merits or opt-in stage, the court may
readdress whether the class is similarly situated. Mooney, 54 F.3d at 1214.
Discussion
The matter before the Court is in the notice stage. According to the Magistrate Judge, Plaintiff
bears the burden at the notice stage and must provide competent evidence to show that a similarly
situated group of potential plaintiffs exists. R&R at 4 (citing Casanova v. Gold’s Texas Holdings
Group, Inc., 2014 WL 6606573, *2 (W.D. Tex. November 19, 2014)). As noted by the Magistrate
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Judge, “[a]t the notice stage, ‘the [similarly situated] standard requires nothing more than substantial
allegations that the putative class members were victims of a single decision, policy, or plan.” Id.
(quoting Gallender v. Empire Fire and Marine Ins. Co., 2007 WL 325792, at *1 (S.D. Miss. Jan.31,
2007) (unreported) (quoting Allen, 2006 WL 3246531, at *2)). “Specifically, the first-stage test
requires a minimal showing by the plaintiff that (1) there is a reasonable basis for crediting the
assertions that aggrieved individuals exist, (2) that those aggrieved individuals are similarly situated
to the plaintiff in relevant respects given the claims and defenses asserted, and (3) that those
individuals want to opt-in to the lawsuit.” R&R at 4 (quoting Casanova, 2014 WL 6606573, at *2
(quoting Walker v. Honghua Am., LLC, 870 F. Supp. 2d 462, 465–66 (S.D. Tex.2012) (internal
citations and quotation marks omitted)).
The Magistrate Judge held Plaintiff provided evidence in the form of deemed admissions that
the putative class members (i.e. home health aides working for the Defendants) were victims of a
single decision, policy, or plan (being paid regular pay for all hours worked over 40 hours a week).
Specifically, Defendants have admitted the following in their deemed admissions:
• Between September 1, 2015, and the present, Defendants employed at least twenty
home health aides (Dkt. #11, Exh. A at Request 7);
• Between September 1, 2015, and the present, multiple home health aides other than
Ryan Kaiser worked in excess of 40 hours in certain workweeks (id. at Request 8);
• Between September 1, 2015, and the present, Defendants compensated those home
health aides at their regular hourly rate for overtime hours worked (id. at Request
9);
• Between September 1, 2015, and the present, Defendants’ payroll records show
Defendants did not compensate home health aides at a rate of 1.5 times their
regular hourly rate for all hours worked in excess of 40 hours in certain workweeks
(id. at Request 10);

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• Defendants payroll records reflect that Defendants compensated home health aides
other than Ryan Kaiser at their regular hourly rate in workweeks in which they were
compensated for more than 40 hours (id. at Request 11).
R&R at 8-9. According to the Magistrate Judge, the matters deemed admitted above are conclusively
established. Id. at 11 (citing FED. R. CIV. P. 36(b) (“[a]ny matter admitted. . . is conclusively
established unless the court on motion permits withdrawal or amendment of the admission.”)).
The Court notes Defendants’ objections contain the same arguments made in their response
in opposition to the motion. Defendants primarily argue for the withdrawal of their deemed
admissions.1 They also argue that they denied in their answer all the allegations contained in the
complaint that allege any of the Defendants’ current or former employees worked more than forty
hours in a workweek and were not paid overtime pay for said work. Defendants further assert the
Magistrate Judge found Plaintiff’s request was supported solely on deemed admissions. This is
incorrect.
Plaintiff’s motion relied only on the deemed admissions, but the Magistrate Judge did not rely
solely on the deemed admissions. In addition to the deemed admissions, the Magistrate Judge also
relied on Defendants’ answer, wherein Defendants admitted the following are questions of fact and
law common to the class arising from Defendants’ actions: (1) whether Plaintiffs were covered nonexempt hourly employees; (2) whether Plaintiffs were compensated for all hours worked; (3) whether
Plaintiffs worked more than 40 hours per week; (4) whether Plaintiffs were compensated at 150%
of their regular rate for all hours worked in excess of 40 hours in any and all weeks; (5) whether

1

Defendants filed a motion to withdraw admissions on November 15, 2018. (Dkt. # 12). On
January 2, 2019, the Magistrate Judge denied Defendants’ motion, finding the unanswered
admissions were deemed admitted. (Dkt. # 17). Defendant did not appeal the Magistrate Judge’s
decision to the undersigned.
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Defendants’ practices accurately account for the time Plaintiffs actually were working; (6) whether
Defendants’ compensation policy and practice is illegal; and (7) whether Defendants had a policy
and practice of willfully failing to compensate employees for overtime. R&R at 12 (citing Dkt. # 4,
¶ 39). Defendants also admitted in their answer that the “number and identity of other plaintiffs yet
to opt-in and consent to be party plaintiffs may be determined from the records of Defendants, and
potential class members may be easily and quickly notified of the pendency of this action; potential
collective action members may be informed of the pendency of this collective action through direct
mail, email, and office posting; and the common questions “predominate over any questions
affecting only individual persons, and a collective action is superior, with respect to considerations
of consistency, economy, efficiency, fairness, and equity, to other available methods for the fair and
efficient adjudication of the federal law claims.” R&R at 12 (citing Dkt. # 4,¶ 36 (first sentence),¶
37 (first sentence), ¶ 40).
Although the evidence presented here is far from overwhelming, the Court agrees with the
Magistrate Judge that Plaintiff has satisfied his burden at this stage of the proceedings. As the
Magistrate Judge explained, Plaintiff does not have a heavy burden at the notice stage of the twostage Lusardi analysis. There must only be a “reasonable basis” to believe that other aggrieved
individuals exist. Black v. Settlepou, P.C., 2011 WL 609884, at *3 (N.D. Tex. 2011) (citing
Tolentino v. C & J Spec–Rent Serv., Inc., 716 F. Supp. 2d 642, 647 (S.D. Tex. 2010) (internal
citations omitted)). The Court agrees with the Magistrate Judge’s finding that there is a reasonable
basis to suggest a class of similarly situated employees exists who want to opt-in to the lawsuit.
Furthermore, should other similarly situated employees eventually be found not to exist, this issue
may be raised at the decertification stage.
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Based on the foregoing, the Court finds that Plaintiff has met the lenient burden imposed
under the first stage for conditional certification. Furthermore, because Defendants will have the
opportunity under stage two of Lusardi to assert a motion to decertify the collective action if, after
discovery, they can show that the class members are not similarly situated, the Court sees no basis
to deny Plaintiff’s motion. Tice, 826 F. Supp. 2d at 996-97.
The Court has made a de novo review of the objections and is of the opinion that the findings
and conclusions of the Magistrate Judge are correct and the objections are without merit as to the
ultimate findings of the Magistrate Judge. The Court finds Plaintiff has fulfilled the three
requirements for collective action certification and notice should issue. The Court hereby adopts the
findings and conclusions of the Magistrate Judge as the findings and conclusions of the Court.
Accordingly, it is hereby
ORDERED that Plaintiff’s First Stage Motion for Notice to Potential Plaintiffs and
Conditional Certification (Dkt. # 11) is GRANTED, and the objections of Defendants
are OVERRULED. It is further
ORDERED the Court approves Plaintiff’s proposed Notice and Consent Forms. It is further
ORDERED as follows: (1) Defendants must disclose to Plaintiff’s attorney the names, last
known addresses, email addresses, and telephone numbers of potential opt-in plaintiffs within seven
days from the entry of this Order; (2) Plaintiff is permitted to distribute the Notice and Consent
Forms to potential opt-in plaintiffs via mail and email; (3) Potential opt-in plaintiffs will have a 60day opt-in period beginning on the date Plaintiff’s counsel first mails Notice and Consent Forms to
potential opt-in plaintiffs pursuant to this order, and any Consent Forms received by Plaintiff’s
attorneys or postmarked by the 60th day of the opt-in period shall be filed with the Court within 7
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.
days of the expiration of the opt-in period; and (4) Defendants shall post the Notice and Consent
Forms at Defendant Revival Home Healthcare Services, Inc.’s office facility in an area that is open
and conspicuous to home health aides.

SIGNED this 22nd day of April, 2019.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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