Ecoquij-Tzep v. Hawaiian Grill

Filing 48

MEMORANDUM OPINION AND ORDER: The Court GRANTS Plaintiff's #33 Motion for Conditional Certification Pursuant to 29 U.S.C. 216(b). Further, the Court ORDERS that by 7/21/2017 the parties must confer and submit a Federal Rule of Civil Procedure 26(f) joint report to address a court authorized notice period, any remaining Phase 1 (class-wide) discovery, Phase 2 (individualized) discovery, and/or a motion for decertification, as the case may be, as well as a deadline for settlement negotiations and possibly mediation to take place shortly after the ruling on conditional certification and deadlines related to expert witnesses and other dispositive motions. (Ordered by Magistrate Judge David L. Horan on 6/21/2017) (ykp) Modified on 6/28/2017 (mcrd).

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
PASCUAL ECOQUIJ-TZEP, and all
others similarly situated under 29
USC 216(b),
Plaintiffs,
V.
HAWAIIAN GRILL also known as MW
Hawaiian Grill,
Defendant.

§
§
§
§
§
§
§
§
§
§
§
§

No. 3:16-cv-625-BN

MEMORANDUM OPINION AND ORDER
Plaintiff Pascual Ecoquij-Tzep, on his own behalf and on behalf of those
similarly situated, brought this putative collection action under 29 U.S.C. § 216(b), a
provision of the Fair Labor Standards Act, 28 U.S.C. § 206, et seq. (the “FLSA”), to
recover minimum wage and overtime pay. See Dkt. No. 1 (Complaint); Dkt. No. 11
(First Amended Complaint). Plaintiff moves for conditional certification. See Dkt. No.
33.
For the reasons and to the extent explained below, the Court GRANTS the
motion for class certification.
Background
Plaintiff Pascual Ecoquij-Tzep was a cashier and server employed on an hourly
basis by Defendant Hawaiian Grill from December 3, 2014 through January 25, 2016.
Ecoquij-Tzep alleges that he worked an average of 70 hours per week and was paid in

-1-

lump sum payments regardless of the actual number of hours worked. Ecoquij-Tzep
further alleges that he was not paid the extra half-time rate for any overtime hours
worked above 40 hours per week and was paid an average effective hourly rate below
the applicable minimum wage. See Dkt. No. 11; 29 U.S.C. § 206(a)(1) (minimum wage),
§ 207(a)(1) (overtime).
Ecoquij-Tzep brings this lawsuit as a putative collective action under 29 U.S.C.
§ 216(b). He requests conditional certification and asks the Court to set a date for the
parties to confer and submit a second Federal Rule of Civil Procedure 26(f) report to
address either a court-authorized notice period, any remaining Phase 1 (class-wide)
discovery, Phase 2 (individualized) discovery, and other matters listed in paragraph
three of the Court’s Initial Scheduling Order [Dkt. No. 23]. See Dkt. No. 33.
Ecoquij-Tzep describes the proposed class as hourly employees employed by
Defendant from March 5, 2013 to the present, including cashiers, servers, and cooks,
who were paid a fixed sum regardless of the total hours worked instead of being paid
by the hour. Ecoquij-Tzep argues that these employees are similarly situated because
Defendant has a common policy or practice to pay hourly employees lump sum
payments regardless of the actual number of hours worked, in violation of the FLSA’s
minimum wage and overtime requirements. See id.
To support this argument, Ecoquij-Tzep relies on the deposition of Defendant’s
corporate representative, Shizhong Zhang, who testified that Defendant had a practice
of paying fixed sums instead of minimum wage and overtime to certain hourly
employees, including cashiers, servers, and cooks. See Dkt. No. 34. Mr. Zhang testified
-2-

that Ecoquij-Tzep was paid bi-monthly on the first and sixteenth of the month and that
he was paid a set amount regardless of the hours he worked. See id. at 8-9. Mr. Zhang
also testified that one or two other cashiers and servers like Ecoquij-Tzep were paid bimonthly, as were the two cooks. See id. at 11-13. Ecoquij-Tzep also relies on
Defendant’s response to requests for production, in which Defendant identifies three
former “waiters/cashiers,” “Lorenzo, Johnny and Moises,” as persons who are similarly
situated to Plaintiff. See id. at 26.
Defendant objects to Ecoquij-Tzep’s request for conditional certification. See Dkt.
No. 40. Defendant argues that a class definition based solely on bi-monthly payment
is too broad and that cashiers/servers and cooks are not similarly-situated employees
because they are in different lines of work and have different job duties, working
schedules, and working conditions.
Defendant also argues that Ecoquij-Tzep fails to show how these hourly wage
employees were subject to the same employment practices or common policy as EcoquijTzep. Defendant asserts that it provided W-2s for more than sixty employees who
worked or are currently working in the restaurant from 2014 to 2016 and that EcoquijTzep claims there may be possible FLSA violations for only five of them.
Finally, the parties disagree in their interpretations of the Court’s Memorandum
Opinion and Order [Dkt. No. 24] and its effect on the request for conditional
certification. In that order, the Court concluded that Ecoquij-Tzep’s individual coverage
allegations are insufficient to state a claim and it dismissed Ecoquij-Tzep’s FLSA claim
based on individual coverage with prejudice. Dkt. No. 24 at 9.
-3-

Defendant argues that, even if the cashiers/servers and cooks are similarly
situated to Ecoquij-Tzep, the Court’s Order precludes any FLSA claim because, like
Ecoquij-Tzep, the cashiers/servers and cooks could not state a claim for individual
coverage. See Dkt. No. 40 at 4-5.
Ecoquij-Tzep replies that, like him, they could still pursue their FLSA claims
under an enterprise coverage theory. See Dkt. No. 42 at 5-6.
Legal Standards
Ecoquij-Tzep seeks the conditional certification of this action as a collective
action pursuant to the FLSA, which provides:
An action ... may be maintained ... by any one or more employees for and
in behalf of himself or themselves and other employees similarly situated.
No employee shall be a party plaintiff to any such action unless he gives
his consent in writing to become such a party and such consent is filed in
the court in which such action is brought.
29 U.S.C. § 216(b). Unlike class actions brought under Federal Rule of Civil Procedure
23, classes under Section 216(b) are opt-in classes, requiring any employee wishing to
become a party to the action to “opt in” (rather than “opt out”) by filing his consent
with the court in which the action is brought. See id.
Although the United States Court of Appeals for the Fifth Circuit has not
adopted a specific standard to be used in determining the propriety of class certification
under the FLSA, it has affirmed at least two approaches. See Portillo v. Permanent
Workers, L.L.C., 662 F. App’x 277, 279 & n.10 (5th Cir. 2016). The first approach,
which tracks Rule 23, entails district courts’ evaluating FLSA collective actions against
the well-established requirements of numerosity, commonality, typicality, and
-4-

adequacy. See id. The second is the “Lusardi approach,” named for an opinion
describing a two-stage certification process consisting of a notice stage and a
certification stage. See id. (citing Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987)).
The Court will follow the Lusardi approach as the legal standard for collective
action certification. See Dkt. No. 23 at 3; Portillo, 662 F. App’x at 280 & n.14; Sandoz
v. Cingular Wireless LLC, 553 F.3d 913, 916 n.2 (5th Cir. 2008); Mooney v. Aramco
Servs. Co., 54 F.3d 1207, 1213-16 (5th Cir. 1995), overruled on other grounds by Desert
Palace, Inc. v. Costa, 539 U.S. 90 (2013)); see also Lee v. Metrocare Servs., 980 F. Supp.
2d 754, 758 (N.D. Tex. 2013) (recognizing and applying two-stage test as prevailing
test among federal courts); Valcho v. Dallas Cnty. Hosp. Dist., 574 F. Supp. 2d 618, 621
(N.D. Tex. 2008) (noting that the Northern District of Texas federal courts apply the
two-stage test “that prevails among federal courts”).
During the notification stage,
the plaintiff moves for conditional certification of his or her collective
action. The district court then decides, usually based on the pleadings
and affidavits of the parties, whether to provide notice to follow
employees who may be similarly situated to the named plaintiff, thereby
conditionally certifying a collective action.
Portillo, 662 F. App’x at 280 (quoting Sandoz, 553 F.3d at 921 n.2). The plaintiff must
establish that there are other potential class members who are “similarly situated in
their job requirements and pay provisions.” Marshall v. Eyemasters of Tex., Ltd., 272
F.R.D. 447, 449 (N.D. Tex. 2011) (internal quotations omitted). If a court is satisfied
that a plaintiff has satisfied this test, the court may, in its discretion, decide to

-5-

conditionally certify the class and facilitate notice of the lawsuit to potential class
members. See Valcho, 574 F. Supp. 2d at 621-22.
Because plaintiffs seeking conditional certification need not identify other
hypothetical collective action members, the stage one standard is considered to be
“fairly lenient. ”Portillo, 662 F. App’x at 282. The decision whether to conditionally
certify “lends itself to ad hoc analysis on a case-by-case basis,” but the court typically
grants certification. Id. (quoting

Mooney, 54 F.3d at 1214). Once conditional

certification is granted, “notice of the action should be given to potential class
members,” allowing them the opportunity to “opt-in” to the collective action. Id.
(quoting Mooney, 54 F.3d at 1214); 29 U.S.C. § 216(b).
In the certification stage, the court determines whether the class should be
maintained through trial. See Mooney, 54 F.3d at 1214. This stage typically begins
when the defendant moves to decertify the class after discovery is largely complete. See
id. The collective action will proceed if the court finds the potential class members
similarly situated, but the class will be decertified if discovery fails to adequately
identify a pool of claimants that is similarly situated. See id.; see also Proctor v.
Allsups Convenience Stores, Inc., 250 F.R.D. 278, 280 (N.D. Tex. 2008) (“At this second
stage, the burden is on the Plaintiff to prove that the individual class members are
similarly situated.”).
At this stage, courts are much less likely to allow the collective action to
continue to trial. See Portillo, 662 F. App’x at 281. The court may consider: “(1) the

-6-

disparate factual and employment settings of the individual plaintiffs; (2) the various
defenses available to [defendant] which appear to be individual to each plaintiff; [and]
(3) fairness and procedural considerations.” Id. (internal quotation marks omitted).
Analysis
At this, the notice stage of this case, plaintiffs must show that they and potential
class members were “similarly situated.” Marshall, 272 F.R.D. at 449. Though it is
admittedly lenient, the Lusardi approach still requires plaintiffs to present
“substantial allegations that the putative class members were together the victims of
a single decision, policy, or plan.” Mooney, 54 F.3d at 1214 n.8 (citing Sperling v.
Hoffmann-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988)).
Ecoquij-Tzep contends that the proposed class members are similarly situated
based on Defendant’s policy to pay hourly employees set amounts on a lump sum basis,
which resulted in minimum wage and overtime violations, and not on the similarity
of their job duties. “Similarly situated” does not mean identically situated, and EcoquijTzep has alleged a strong nexus between himself and the potential class members that
binds them together as victims of an alleged policy or practice, despite the different job
duties of cashiers, servers, and cooks. See Melson v. Directech Southwest, Inc., Civ. A.
No. 07-1087, 2008 WL 2598988, at *4 (E.D. La. June 25, 2008).
The Court determines that Ecoquij-Tzep has shown that there are at least five
potential class members who are similarly situated based on Defendant’s alleged policy
to pay hourly employees on a lump sum basis regardless of the hours worked.

-7-

The Court’s prior Memorandum Opinion and Order [Dkt. No. 24] does not
preclude certification of the proposed class members. In the order, the Court concluded
that Ecoquij-Tzep failed to allege sufficient facts to state a claim for individual
coverage under the FLSA and dismissed Ecoquij-Tzep’s FLSA claim based on
individual coverage with prejudice. See Dkt. No. 24 at 18-9, 5. The Court also ordered
that Ecoquij-Tzep may proceed on his FLSA claim based on enterprise coverage. See
id. at 15. That ruling is consistent with granting conditional certification on that
remaining claim.
Conclusion
The Court GRANTS Plaintiff’s Motion for Conditional Certification Pursuant to
29 U.S.C. § 216(b) [Dkt. No. 33]. Further, the Court ORDERS that by July 21, 2017,
the parties must confer and submit a Federal Rule of Civil Procedure 26(f) joint report
to address a court-authorized notice period, any remaining Phase 1 (class-wide)
discovery, Phase 2 (individualized) discovery, and/or a motion for decertification, as the
case may be, as well as a deadline for settlement negotiations and possibly mediation
to take place shortly after the ruling on conditional certification and deadlines related
to expert witnesses and other dispositive motions.
SO ORDERED.
DATED: June 21, 2017

_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
-8-