Ferguson v. Texas Farm Bureau et al
Filing
136
ORDER GRANTING IN PART 129 Motion for Reconsideration. 79 MOTION to Strike 65 Brief, MOTION for Protective Order filed by Christopher Ferguson is GRANTED IN PART AND DENIED IN PART filed by Christopher Ferguson. Signed by Judge Robert Pitman. (mc5)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
WACO DIVISION
CHRISTOPHER FERGUSON,
individually and on behalf of all others
similarly situated,
Plaintiff,
v.
TEXAS FARM BUREAU BUSINESS
CORP., et al.,
Defendants.
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6:17-CV-111-RP-JCM
ORDER
Before the Court is Plaintiffs’ Motion to Reconsider Plaintiffs’ Objection and Motion to
Strike Defendants’ Improper Agency Manager Affidavits (“Motion to Reconsider”), (Dkt. 129), and
the responses thereto, (Dkts. 134, 135). Plaintiffs urge the Court to reconsider its text order of
March 21, 2018, in which the Court declared Plaintiffs’ Objection and Motion to Strike Defendants’
Improper Agency Manager Affidavits, (Dkt. 79), to be moot. For the reasons stated below,
Plaintiffs’ Motion to Reconsider is GRANTED IN PART.
I. BACKGROUND
Plaintiff Christopher Ferguson filed this action on April 20, 2017, for alleged violations by
his former employer of the Fair Labor Standards Act (“the FLSA”). (Compl., Dkt. 1, ¶ 1). He
alleged that Defendants violated the FLSA by misclassifying Agency Mangers—individuals who
helped Defendants sell insurance policies by recruiting and supervising individual insurance agents—
as independent contractors and failing to pay them overtime. (Id. ¶¶ 2, 54–55). Plaintiff seeks to
represent similarly situated Agency Managers and filed an FLSA class certification motion on May 8,
2017. (Mot. Cert. Class, Dkt. 13, at 1).
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On June 21, 2017, the Texas Farm Bureau Defendants filed a response in opposition to
Plaintiffs’ motion for certification. (TFB Defs.’ Resp., Dkt. 65). Attached to this response were
approximately eighty fill-in-the-blank affidavits from Agency Managers that the Texas Farm Bureau
Defendants included “in support of individualized analysis and independent contractor status.”
(TFB Defs.’ Resp., Dkt. 65, at 1 n.1). Five days later, Defendants filed a motion for leave to file
twenty additional affidavits. (TFB Defs.’ Mot. Leave, Dkt. 75). On June 28, 2017, Plaintiff filed a
motion to strike these affidavits and for a protective order. (Mot. Strike, Dkt. 79).
In that motion, Plaintiff argued that the affidavits attached to the Texas Farm Bureau
Defendants’ response were obtained by misleading the affiants regarding their rights—in particular,
by telling affiants that signing an affidavit might effectively waive their right to later become a class
member. (Id. at 5). Plaintiff also argued that the nature of the relationship between the affiants and
Defendants creates a situation rife for coercion and inappropriate influence. (Id. at 6–7). Plaintiff
asked the Court to strike the affidavits, require Defendants to seek prior Court approval for
communications with Agency Managers regarding the lawsuit, and send a corrective notice regarding
the affidavits to Defendants. (Id. at 7). Defendants responded that Plaintiff has failed to provide
evidence that their contact was inappropriate or coercive. (TFB Resp. Mot. Strike, Dkt. 82, at 2).
On March 20, 2018, the Court entered an order adopting the report and recommendation of
a magistrate judge and conditionally certifying Plaintiffs’ proposed class. (Order, Dkt. 128). The
next day, the Court entered a text order declaring Plaintiffs’ Motion to Strike moot in light of the
disposition of Plaintiffs’ class certification motion. Plaintiffs subsequently filed the instant Motion
for Reconsideration, which argues that the Motion to Strike was not rendered moot by the
conditional certification of the proposed class and that evidence supports granting Plaintiffs the
relief they sought in that motion. (Mot. Reconsider, Dkt. 129).
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II. STANDARD OF REVIEW
On April 14, 2017, the Fifth Circuit clarified when courts considering motions for
reconsideration should apply Federal Rule of Civil Procedure 54(b) and when they should apply
Rule 59(e). Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017). “Rule 59(e) governs
motions to alter or amend a final judgment,” while “Rule 54(b) allows parties to seek reconsideration
of interlocutory orders and authorizes the district court to revise at any time any order or other
decision that does not end the action.” Id. (internal quotation marks and citations omitted). This
Court will therefore consider Plaintiffs’ motion under Rule 54(b). “Under Rule 54(b), ‘the trial court
is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence
of new evidence or an intervening change in or clarification of the substantive law.’” Id. (quoting
Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir. 1990)).
III. DISCUSSION
“A court may not limit communications ‘without a specific record showing by the moving
party of the particular abuses by which it is threatened.’” Vogt v. Tex. Instruments Inc., No. 3:05-CV2244-L, 2006 WL 4660133, at *3 (N.D. Tex. 2006) (quoting Gulf Oil Co. v. Bernard, 452 U.S. 89, 102
(1981)). “The ‘mere possibility of abuses’ does not justify routine adoption of a communications
ban.” Id. (quoting Gulf Oil, 452 U.S. at 104)). “While actual harm need not be proved to justify an
order limiting class contacts, the movant must at least present evidence that a potential likelihood
for serious abuse exists.” Id. (internal citation omitted).
“Few courts have addressed how communications initiated by plaintiffs or their counsel to
potential class members should be regulated during the interim period after suit has been filed, but
before the court conditionally certifies a collective action or authorizes a notification pursuant to [29
U.S.C. § 216(b)]. Id. Generally speaking, “district courts enjoy wide latitude in managing complex
litigation in general and class actions in particular.” Gates v. Cook, 234 F.3d 221, 227 (5th Cir. 2000).
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However, “courts should not per se prohibit precertification communications.” Vogt, 2006 WL
4660133, at *4.
In support of their Motion to Strike, Plaintiffs first directed the Court to the approximately
100 fill-in-the-blank affidavits attached to the Texas Farm Bureau Defendants’ response to the
certification motion. (See Affs., Dkt. 65-3). The typed content of each of these affidavits appears to
be identical. The beginning of the affidavit provides a space for the affiant to put their name and list
the county in which they live. The first paragraph provides that “I have personal knowledge of the
matters set forth in the Affidavit, unless otherwise stated,” and that “[i]f called as a witness, I would
be competent to testify to the matters in this Affidavit.” (Davidson Aff., Dkt. 65-3, ¶ 1). The next
paragraph provides:
I have been advised that a lawsuit has been filed seeking to conditionally certify a
class of Agency Managers like myself, claiming that Agency Managers have been
improperly classified as independent contractors and not employees. I also
understand that the lawsuit alleges that such Agency Managers who were allegedly
improperly classified as independent contractors are entitled to overtime
compensation for all hours worked over 40 per week going back a number of years. I
was informed of my right to speak with an attorney and my right to decline to be
interviewed by counsel for the Defendants. I have further been advised that as an
Agency Manager, I am potentially a member of the class seeking to be conditionally
certified. I submit this affidavit freely and without threat of coercion or reprisal.
(Id. ¶ 2). The affidavits then address some of the job qualifications and job duties Agency Managers.
(Id. ¶ 3). The affidavits then address the Agency Manager’s independent contractor status, stating
Under my contracts, I agreed and intended to operate as an independent contractor
whereby I was to provide the creative selling, professional counseling, and prompt
and skillful service essential to the creation and maintenance of successful multipleline companies and agencies. I determine the manner, means and methods by which
I operate. While I do have production and sales goals, I do not consider those
production and sales goals as creating an employment relationship with the Farm
Bureau Defendants.
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(Id. ¶ 5). Within the nine pages of the affidavit, three paragraphs provide space for the affiant to fillin his own responses. These blanks ask for information including the affiant’s name, years of
experience, and amount of time with the business. (Id. ¶¶ 1, 3–4).
As the Court made clear at the hearing, while the Texas Farm Bureau Defendants’ conduct is
cause for serious concern on the part of the Court, it is not as egregious as the behavior referenced
in many of the cases cited by Plaintiff. Certainly, the contact here has failed to meet the standard set
in Gulf Oil, which governs when a Court may intervene in or prohibit communications between a
party and potential class members. But, contrary to the suggestion of the Texas Farm Bureau
Defendants’ counsel at the hearing, Gulf Oil neither sets the standard for when a court may strike
evidence submitted in opposition to a motion for certification nor limits or controls when a court
may issue a corrective communication.
While the Court agrees with Plaintiffs that Defendants should have provided more
information to potential class members regarding the potential effect signing an affidavit might have
on their right to join the lawsuit, it concludes that Defendants’ failure to do so, alone, does not
warrant granting the relief Plaintiff requests. The disclosures made in the affidavit, if presented in
the right way, could have been sufficient to advise potential plaintiffs of the impact on their rights.
More worrying to the Court is whether the affidavits are reliable. Testimony at the hearing held on
Plaintiffs’ motion suggested that Defendants had not actually interviewed any agency managers,
despite the affidavits’ suggestion that they were based on an interview with Defendants’ counsel.
(See, e.g., Davidson Aff., Dkt. 65-3, ¶ 2). At least one potential plaintiff indicated that the information
in his affidavit was inaccurate when he signed and submitted it. For unknown reasons, he later
requested that his affidavit not be included.
Given the disposition of Plaintiffs’ Motion for Conditional Certification, the Court sees no
need to strike the affidavits from the record. To that end, Plaintiffs’ Motion to Strike is DENIED.
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But the Court does deem it necessary to issue a corrective notice to potential Plaintiffs. In that
respect, their Motion to Strike is GRANTED. Because the Proposed Corrective Notice filed by
Plaintiffs is substantially overbroad, however, the parties are instructed to use the Corrective Notice
accompanying this order.
IV. CONCLUSION
Plaintiffs’ Motion to Reconsider Plaintiffs’ Objection and Motion to Strike Defendants’
Improper Agency Manager Affidavits, (Dkt. 129), is GRANTED IN PART. Plaintiffs’ Objection
and Motion to Strike Defendants’ Improper Agency Manager Affidavits, (Dkt. 79), is GRANTED
IN PART AND DENIED IN PART, consistent with the terms of this order.
SIGNED on March April 2, 2018.
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE
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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
WACO DIVISION
CHRISTOPHER FERGUSON,
individually and on behalf of all others
similarly situated,
Plaintiff,
v.
TEXAS FARM BUREAU BUSINESS
CORP., et al.,
Defendants.
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6:17-CV-111-RP-JCM
COURT-ORDERED CORRECTIVE NOTICE
You are receiving this Court-Ordered Corrective Notice because Defendants Texas Farm
Bureau Business Corporation, Texas Farm Bureau Casualty Insurance Company, Texas Farm
Bureau Mutual Insurance Company, Texas Farm Bureau Underwriters, Farm Bureau County
Mutual Insurance Company of Texas, Southern Farm Bureau Life Insurance Company, and
Texas Farm Bureau (collectively, “Defendants”) have represented to the Court that they
approached you about signing an affidavit to assist them in this lawsuit, which you may or may
not have signed.
This Corrective Notice is intended to eliminate any confusion created by Defendants’
statements to you or the affidavit itself. Regardless of whether or not you signed an affidavit, you
may still join this lawsuit, if you so choose.
The Court takes no position in this case. Please do not direct any questions regarding this
lawsuit to the Court.
ROBERT PITMAN
UNITED STATES DISTRICT JUDGE
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