Allen et al v. Cogent Communications, Inc.
Filing
45
MEMORANDUM OPINION re 33 MOTION FLSA Conditional Certification and Notice to Putative Plaintiffs. Signed by District Judge James C. Cacheris on 8/28/2014. (rban, )
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
MARK RYAN ALLEN, et al.,
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Plaintiffs,
v.
COGENT COMMUNICATIONS, INC.,
Defendant.
M E M O R A N D U M
1:14cv459(JCC/TRJ)
O P I N I O N
This matter is before the Court on Plaintiffs Mark
Ryan Allen, et al.’s (“Plaintiffs”) Motion for Notice to
Potential Plaintiffs and Conditional Certification.
[Dkt. 33.]
For the following reasons, the Court will grant in part and deny
in part Plaintiffs’ Motion for Notice to Potential Plaintiffs
and Conditional Certification.
I.
Background
Cogent Communications, Inc. (“Defendant”) is an
Internet and network service provider offering Internet access,
data transport, and colocation services through their Internet
data centers.
(Second Am. Compl. [Dkt. 30] ¶ 31.)
In December
2011, a group of Defendant’s sales account managers filed suit
against Defendant to recover unpaid overtime wages under the
Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”),
1
in
the District Court for the Southern District of Texas.
Lagos v.
Cogent Commc’ns, Inc., No. H-11-4523 (S.D. Tex. Mar. 12, 2014).
In Lagos, plaintiffs asserted that they routinely worked more
than forty hours a week, were entitled to receive overtime
compensation under the FLSA, and were wrongfully denied such
compensation.
Id. at 1.
Defendant claimed the plaintiffs were
exempt from the FLSA under the outside sales exemption.
4.
Id. at
The court conditionally certified the following nationwide
collective action: “all current and former Global Account
Managers and Regional Account Managers, employed by Cogent
Communications, Inc. between December 21, 2008 to the present,
who worked over 40 hours in a work week.”
Id. at 1-2.
was approved and sent to potential plaintiffs.
Notice
Id. at 2.
Following discovery, Defendant filed a motion to decertify the
collective action, arguing too many differences existed among
potential plaintiffs.
Id. at 3.
The court granted Defendant’s
motion and decertified the collective action.
Id. at 31.
Plaintiffs in the current action are Regional Account
Managers (“RAMs”) and Global Account Managers (“GAMs”) in
Defendant’s three Virginia offices.
28.)
(Second Am. Compl. ¶¶ 6-
As in Lagos, Plaintiffs assert Defendant wrongfully
withheld overtime compensation in violation of the FLSA.
¶¶ 32-36.)
(Id.
They seek to conditionally certify a collective
action of RAMs and GAMs employed by Defendant in Virginia.
2
(Pls.’ Mot. to Certify at 2.)
supervised notice.
Plaintiffs also request court-
(Id. at 14.)
Defendant argues that
Plaintiffs are collaterally estopped from proceeding with this
action.
It contends the issue of whether a statewide collective
action is appropriate was already resolved by the Lagos court.
(Def.’s Resp. in Opp’n [Dkt. 36] at 2).
In the alternative,
Defendant argues that Plaintiffs have not met their evidentiary
burden to show that the collective action should be
conditionally certified.
(Id. at 2.)
Defendant also objects to
Plaintiffs’ proposed notice and consent.
(Id. at 29.)
Plaintiffs’ Motion for Notice to Potential Plaintiffs
and Conditional Certification is now before the Court.
II.
Legal Standard
Section 216(b) of the FLSA authorizes a plaintiff to
file suit for alleged FLSA violations “for and in behalf of
himself . . . and other employees similarly situated.”
U.S.C. § 216(b).
29
These “collective actions” serve the
objectives of the FLSA “by facilitating a resolution in a single
proceeding of claims stemming from common issues of law and
fact, and [aiding] in the vindication of plaintiffs’ rights by
lowering the individuals’ costs by pooling claims and
resources.”
Houston v. URS Corp., 591 F. Supp. 2d 827, 831
(E.D. Va. 2008).
3
To certify a collective action under the FLSA, two
requirements must be met.
First, the plaintiff and other
employees must be “similarly situated.”
29 U.S.C. § 216(b).
Second, plaintiffs in the collective action must “opt-in” by
filing consents with the court to join the action.
Id.; see
Gregory v. Belfor USA Grp., Inc., No. 2:12cv11, 2012 WL 3062696,
at *2 (E.D. Va. July 26, 2012); Purdham v. Faifax Cnty. Pub.
Sch., 629 F. Supp. 2d 544, 547 (E.D. Va. 2009); Houston, 591 F.
Supp. 2d at 831; Choimbol v. Fairfield Resorts, Inc., 475 F.
Supp. 2d 557, 562 (E.D. Va. 2006).
Section 216(b) does not define “similarly situated”
and the Fourth Circuit has not yet interpreted the term.
However, courts in this district have adopted a two-stage
analysis to determine when plaintiffs are similarly situated.
Houston, 591 F. Supp. 2d at 831; Choimbol, 475 F. Supp. 2d at
562–63.
At the first stage, known as the notice or conditional
certification stage, the court decides whether to provide
initial notice to potential collective action members.
Choimbol, 475 F. Supp. 2d at 562.
The plaintiff’s evidentiary
burden at this stage is “‘fairly lenient’” and requires only
“‘minimal evidence’” since generally there has been no discovery
at this point.
Houston, 591 F. Supp. 2d at 831 (quoting
Chomboil, 475 Supp. 2d at 562).
A plaintiff must make a “modest
factual showing sufficient to demonstrate that they and the
4
potential plaintiffs were victims of a common policy or plan
that violated the law.”
Choimbol, 475 F. Supp. 2d at 563.
Though the burden on the plaintiff is light, it is not
“invisible.”
Houston, 591 F. Supp. 2d at 831.
allegations will not suffice.”
“Mere
Bernard v. Household Int’l,
Inc., 231 F. Supp. 2d 433, 435 (E.D. Va. 2002).
The court proceeds to the second stage of
certification, the decertification stage, if a defendant files a
motion for decertification.
Houston, 591 F. Supp. 2d at 832.
This occurs after discovery is practically complete.
At the
decertification stage, courts apply a heightened, fact-specific
standard to determine whether the plaintiffs are similarly
situated.
Houston, 591 F. Supp. 2d at 832; Choimbol, 475 F.
Supp. 2d at 563.
If a court determines that they are not, the
court decertifies the collective action and the original
plaintiffs may pursue their individual claims.
Houston, 591 F.
Supp. 2d at 832; Choimbol, 475 F. Supp. 2d at 563.
A court may collapse the two-stage certification
process into one stage when there is sufficient evidence in the
record at the notice stage to show certification of the
collective action is not appropriate.
at 547.
Purdham, 629 F. Supp. 2d
A court may then deny certification outright.
III.
Analysis
A. Conditional Certification
5
Id.
Plaintiffs seek to conditionally certify the following
opt-in collective action:
All current and former employees employed by
Cogent Communications, Inc. at its Herndon,
Virginia, Sterling, Virginia, and Tysons
Corner, Virginia offices as Global Account
Managers and Regional Account Managers from
[April 25, 2011] to the present, paid a
salary plus commission with no overtime
compensation,
and
classified
as
exempt
employees and thus denied overtime pay for
hours worked in excess of 40 hours in a work
week.
(Pls.’ Mot. to Certify at 14.)
Plaintiffs allege that they and
potential plaintiffs are “similarly situated” because they had
the “same duties, routinely worked more than 40 hours a week,
and were paid under the same Sales [Compensation] Plan as one
another.”
(Id. at 6.)
Defendant argues that Plaintiffs are collaterally
estopped from seeking conditional certification before this
Court because of Lagos.
(Def.’s Resp. in Opp’n at 2.)
It
claims that the Lagos court necessarily decided that a
collective action of any geographic scope would not be proper
because individual issues were too numerous.
(Id. at 8.)
In
the alternative, Defendant contends that even if Plaintiffs are
not collaterally estopped, Plaintiffs have not shown that they
and the potential plaintiffs are similarly situated under any
evidentiary standard.
Defendant argues that the Court should
collapse the two-stage certification process into one stage and
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apply a heightened standard because there has already been
“substantial discovery” in the Lagos case that the parties have
agreed to use here.
(Id. at 21-22.)
Additionally, Defendant
claims that Plaintiffs have failed to meet even the low
evidentiary burden required at the notice stage.
(Id. at 23.)
According to Defendant, Plaintiffs have only alleged similar
classification of RAMs and GAMs and have not shown that they and
potential plaintiffs performed the same type of work.
(Id. at
23.)
Contrary to Defendant’s assertions, Plaintiffs are not
collaterally estopped from seeking to certify a statewide
collective action.
Collateral estoppel prevents relitigation of
an issue where:
(1) the issue is identical to the one
previously litigated; (2) the issue was
actually resolved in the prior proceeding;
(3) the issue was critical and necessary to
the judgment in the prior proceeding; (4)
the judgment in the prior proceeding is
final and valid; and (5) the party against
whom collateral estoppel is asserted had a
full and fair opportunity to litigate the
issue in the prior proceeding.
In re Microsoft Corp. Antitrust Litig., 355 F. 3d 322, 326
(4th Cir. 2004).
Defendant’s collateral estoppel argument
fails because it cannot prove elements (1) and (2).
In Lagos, the court conditionally certified a class
consisting of all current and former GAMs and RAMs employed by
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Defendant from December 21, 2008 to November 12, 2012.
No. H-11-4523, at 9-10.
Lagos,
The opt-in plaintiffs in that case were
from fifteen different sales offices, operating under twentyeight regional sales managers and twelve directors of sales.
Id. at 4.
The Lagos court found that there was no evidence that
plaintiffs scattered across the country performed the same job
duties and operated under the same management policies so as to
merit a nationwide collective action.
Id. at 12-14.
Simply
put, the issue before the Lagos court was whether RAMs and GAMs
from across the country were similarly situated.
The issue
before this Court, however, is whether RAMs and GAMs from
Defendant’s three Virginia offices are similarly situated.
These are plainly not identical issues.
Nor did the Lagos court necessarily decide the issue
presented in this case.
In Lagos, there was no discussion of
any Virginia-specific practices.
Rather, the court determined
that plaintiffs there could not show that GAMs and RAMs were
sufficiently similar nationwide.
But that finding does not
prevent the possibility that a collective action focused on a
smaller geographic area might reveal sufficiently similar
practices warranting resolution of FLSA violations through
collective actions.
Defendant points to Breakstone v. Caterpillar, No. 0923324-CIV, 2010 WL 2164440 (S.D. Fla. May 26, 2010), as support
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for the proposition that decertification of a nationwide
collective action precludes conditional certification of a
statewide collective action.
Although it appears relevant at
first blush, Breakstone is distinguishable.
In Breakstone, the
plaintiff was collaterally estopped from seeking Fed. R. Civ. P.
23(b)(2) certification for a statewide class after an earlier
decision denied certification for a nationwide class.
Breakstone, 2010 WL 2164440, at *5-6.
However, unlike in this
case, the earlier decision necessarily decided that the claims
at issue could not meet Rule 23’s predominance requirement and
therefore were not suitable for class treatment at all.
*5.
Id. at
Here, the Lagos court did not decide whether individual
issues would always outweigh common issues.
Rather, the Lagos
court found individual differences were too great to justify
nationwide collective action.
The remaining cases cited by Defendant are not
applicable to the facts here, as those cases involved attempts
to certify a statewide class with the same claims that had been
denied class certification in other courts.
See Frosini v.
Bridgestone Firestone N. Am. Tire, LLC, No. CV 05-0578 CAS
(RZx), 2007 WL 2781656, at *9 (C.D. Cal. Aug. 24, 2007)
(applying collateral estoppel to bar certification of statewide
class after the first court had explicitly considered and
rejected both nationwide and statewide classes); Myers v. Hertz,
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No. 02-cv-42635, 2007 WL 2126264, at *2, 4-5 (E.D.N.Y. July 24,
2007) (denying Rule 23(b)(2) class certification on state law
claim because it was derivative of federal claim that had been
denied class certification); In re Dalkin Shield Punitive
Damages Litig., 613 F. Supp. 1112, 1115-16 (E.D. Va. 1985)
(denying class certification where defendant moved for
certification of identical class on identical issue); see also
In re Bridgestone/Firestone, Inc., 333 F.3d 763, 769-70 (7th
Cir. 2003) (granting injunction to bar all members of potential
national classes from attempting to certify nationwide classes
in other courts after 7th Circuit had already denied nationwide
class certification).
At least seven other district courts, including two in
this circuit, have declined to apply collateral estoppel to bar
conditional certification in statewide FLSA collective actions
after a nationwide collective action was decertified.
See
Anyere v. Wells Fargo Co., Inc., No. 09-C-2769, 2010 WL 1292494,
at *2 (N.D. Ill. March 29, 2010)(collecting cases); Whitt v.
Wells Fargo Fin., Inc., 664 F. Supp. 2d 537, 542 (D.S.C. 2009)
(“[B]ecause Plaintiffs assert claims on behalf of putative class
members located in narrower geographic regions and that fall
under a specific management hierarchy . . . the issue presented
to the court is not identical to the issue ruled on by the
[first] court.”); Clark v. Wells Fargo Fin., Inc., No.
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1:08CV343, 2008 WL 4787444, at *7 (M.D.N.C. Oct. 30, 2008) (“The
[first] court did not actually litigate, nor did it
‘necessarily’ decide, whether a statewide collective action was
appropriate.”).
As they are not collaterally estopped from pursing
conditional certification, the Court must next address whether
Plaintiffs have alleged sufficient facts to meet the “fairly
lenient” evidentiary burden at the notice stage.
finds that they have met this burden.
The Court
First, Plaintiffs have
alleged that the duties, responsibilities, and activities of the
potential plaintiffs and themselves are the same.
Though RAMs
and GAMs differ in the types of data packages, customers, or
territories in which they sell, they all sell the same product.
(Pls.’ Mot. to Certify at 4.)
To make these sales, RAMs and
GAMs communicate with customers over the phone or through email.
(Id.)
Plaintiffs have supported these allegations through sworn
declarations.
(Pls.’ Mot. to Certify, Bimba Decl. Ex. 2 ¶¶ 7-8;
Fry Decl. Ex. 6 ¶¶ 7-8; Klein Decl. Ex. 8 ¶¶ 7-8.)
Furthermore,
regardless of location, Defendant uses the same job description
for RAMs and GAMs.
(Pls.’ Mot. to Certify at 5.)
Second,
Plaintiffs and potential plaintiffs were paid under the same
compensation plan.
(Id.)
The plan pays a base salary plus
commission and possible bonus based on sales performance.
(Id.)
The plan does not provide for additional compensation for hours
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worked in excess of forty per week.
(Id. at 5-6.)
Thus,
Plaintiffs and potential plaintiffs were all regarded by
Defendant as exempt from the FLSA’s requirements.
(Id. at 5.)
Finally, Plaintiffs and potential plaintiffs all routinely
worked more than forty hours per week.
(Id. at 6.)
Plaintiffs
have provided a “sufficient reason” to believe that there is a
“common policy or plan” that applies to the Plaintiffs.
Counter to Defendant’s contentions, it is
inappropriate at this stage to consider whether an
individualized inquiry will be required to determine the
applicability of the outside sales exemption.
Opp’n at 26.)
(Def.’s Resp. in
At this stage, the only question to be resolved
is whether there are common legal and factual questions that can
be resolved through collective action.
burden.
Plaintiffs have met this
See Houston, 591 F. Supp. 2d at 831 (stating that
notice stage analysis focuses on whether potential plaintiffs
are “‘similarly situated with respect to the legal and, to a
lesser extent, the factual issues to be determined.’”
Chomboil, 475 F. Supp. 2d at 563)).
(quoting
Nor is it appropriate to
collapse the two-stage process into one stage and apply a
heightened standard in this case.
Though both parties have
agreed to use discovery from the Lagos case, discovery in that
case was for a nationwide collective action. (Def.’s Resp. in
Opp’n at 22.)
That discovery did not highlight any practices
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specific to Virginia.
(Pls.’ Resp. to Def.’s Resp. in Opp’n
[Dkt. 37] at 4; Def.’s Resp. in Opp’n at 22.)
Apart from
affidavits submitted by two of the plaintiffs and required
initial disclosures by Defendant, there has been no Virginiaspecific discovery.
4.)
(Pls.’ Resp. to Def.’s Resp. in Opp’n at
It is possible that such focused discovery will reveal
patterns and practices that were obscured in the discovery
conducted in the nationwide collective action.
Therefore, it is
not “sufficiently clear” from the record that notice is not
appropriate, making a heightened standard inapplicable here.
B.
Notice
In order to expedite collective actions, the Supreme
Court has held that district courts have discretion to
facilitate notice to potential plaintiffs.
Inc. v. Sperling, 493 U.S. 165, 169 (1989).
Hoffman-La Roche,
District courts may
do this “‘by allowing discovery of the names and addresses of
potential plaintiffs, by authorizing a notice for plaintiff’s
counsel to send to potential plaintiffs, or by some other
appropriate action.’”
Gregory, 2012 WL 3062696, at *3 (quoting
Choimol, 475 F. Supp. 2d at 563).
“This discretion is not
unfettered; the court must assess whether this is an appropriate
case in which to exercise [its] discretion.”
LaFleur v. Dollar
Tree Stores, Inc., No. 2:12-CV-0063, 2012 WL 4739534, at *4
(E.D. Va. Oct. 2, 2012) (citation omitted).
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Plaintiffs request Defendant provide the name, last
known home address, business and home email addresses, home and
cell phone numbers, and last four digits of Social Security
numbers of all RAMs and GAMs employed by Defendant from April
25, 2011 to present.
(Pls.’ Mot. to Certify at 14.)
They
propose a sixty-day opt-in period measured from the date notice
is mailed.
(Id.)
Plaintiffs seek to both mail and email the
notice and consent forms.
(Id. at 15.)
Plaintiffs also request
that they be permitted to post notice and consent forms at
Defendant’s Virginia offices.
(Id.)
Plaintiffs have provided
proposed notice and consent forms with their motion.
Defendant has three objections to Plaintiffs’ proposed
notice.
First, Defendant argues that because the statute of
limitations period for opt-in plaintiffs runs until they file
consent to join the collective action, see 29 U.S.C. § 256(b),
the Court should calculate the collective action period from the
date of notice approval so as to avoid time-barred plaintiffs
from joining the action.
(Def.’s Resp. in Opp’n at 30.)
Second, Defendant argues that the opt-in period for potential
plaintiffs should run from the date the notice is issued.
(Id.)
Finally, Defendant objects to Paragraph Four of Plaintiffs’
Proposed Consent Form.1
1
Paragraph Four states, “In the event the case is certified and then
decertified, I authorize Plaintiffs’ counsel to use this Consent Form to re-
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After considering the parties’ positions, the Court
will order the following.
The collective action period shall
run from April 25, 2011 to the present.
The interests of
judicial economy and the relatively small gap in time between
how Plaintiffs and Defendant would measure the time weigh
against a narrow construction of the collective action period at
this stage of the litigation.
Defendant is ordered to provide
the names, last known mailing addresses, business and home email
addresses, and home and cell phone numbers of RAMs and GAMs for
the relevant period in usable electronic form to Plaintiffs
within fifteen days of this Court’s order.
Plaintiffs’ request
for the last four digits of employees’ Social Security numbers
is denied.
Within fifteen days of the date of this opinion, the
parties shall submit an appropriate protective order specifying
that potential class members’ information is to be used and
distributed only for effecting notice of this litigation.
Plaintiffs’ request to post notice and consent forms in
Defendant’s offices is denied.
Plaintiffs are to make the following revisions to the
proposed notice and consent forms.
On the notice form,
Plaintiffs are to change “April 2011” to “April 25, 2011.”
Opt-
in plaintiffs have the later of sixty days from the date of this
file my claims in a separate or related action against my employer.”
Mot. to Certify, Ex. 12.)
15
(Pls.’
Court’s order or sixty days from the date on which Defendant
provides the contact information for potential plaintiffs to
file their consent to join this litigation with the Clerk of
Court.
With respect to the consent form, Plaintiffs are ordered
to remove Paragraph Four.
IV.
Conclusion
For the foregoing reasons, the Court will grant in
part and deny in part Plaintiffs’ Motion for Notice to Potential
Plaintiffs and Conditional Certification.
An appropriate Order
will issue.
August 28, 2014
Alexandria, Virginia
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
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