Anderson v. Weinert Enterprises Inc
Filing
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DECISION AND ORDER signed by Chief Judge William C. Griesbach on 8/23/19. Anderson's 22 motion for class certification as to state law claims is DENIED. Anderson's 33 motion for leave to file a second amended complaint is GRANTED. We inert shall file its answer or otherwise respond within twenty-one days of the date of this order. The Clerk is directed to detach and file the second amended complaint attached to Anderson's motion and to add Joseph Young, Evin Chaulkin, and M ichael Herter as plaintiffs. Weinert's 26 motion to strike untimely opt-ins and 29 motion to decertify the FLSA collective action are DENIED as moot. The Clerk shall set this matter for a telephone conference to address further proceedings once Weinert has filed its answer to the second amended complaint. (cc: all counsel)(Griesbach, William)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
RICHARD J. ANDERSON,
on behalf of himself and
all others similarly situated,
Plaintiff,
v.
Case No. 18-C-901
WEINERT ENTERPRISES, INC.,
Defendant.
DECISION AND ORDER
Plaintiff Richard Anderson brought this wage-and-hour collective and putative class action
on behalf of himself and similarly situated current and former hourly employees of the defendant,
Weinert Enterprises, Inc. Anderson alleges in his first amended complaint that Weinert violated the
Fair Labor Standards Act (FLSA), 29 U.S.C. § 201, et seq., and Wisconsin’s wage law, Wis. Stat.
§ 109.01, et seq. Specifically, Anderson alleges Weinert violated the FLSA by paying straight time
rates for travel time between the shop and the job site and for failing to count such travel time when
calculating an employee’s eligibility for weekly overtime pay, as well as failing to account for cash
bonuses and cash fringe benefits when calculating employees’ base rates of pay to determine
overtime pay. Anderson alleges Weinert violated Wisconsin law by paying travel time at straight
time rates even when the travel occurred after 40 hours, failing to count paid travel hours when
computing overtime pay for non-traveling work, failing to count paid daily overtime hours toward
the weekly overtime threshold of 40 hours, improperly computing overtime based on the type of
work performed during overtime hours rather than based on the regular rate, and failing to account
for bonuses and cash fringe benefits when calculating an employee’s regular rate. The court has
jurisdiction over the FLSA claims pursuant to 28 U.S.C. § 1331, and over the state law claims
pursuant to 28 U.S.C. § 1367.
The court previously approved the parties’ stipulation for conditional certification of an
FLSA collective action. Dkt. No. 17. On April 30, 2019, the deadline for Anderson to file a motion
for class certification and Weinert to file a motion to decertify the FLSA collective action, Anderson
filed a motion for Rule 23 class certification of the state law claims and Weinert filed a motion to
strike the untimely opt-in consents of two individuals as well as a motion to decertify the FLSA
collective action. Rather than file a response in opposition to Weinert’s motions, Anderson
submitted a motion for leave to file a second amended complaint that seeks, among other things,
to abandon the collective action and add the three individuals who submitted consents as additional
named plaintiffs. For the reasons that follow, Anderson’s motion for class certification will be
denied, his motion for leave to amend the complaint will be granted, and Weinert’s motions will
be denied as moot.
BACKGROUND
Weinert is an industrial and commercial roofing contractor operating in northeastern
Wisconsin that contracts with public and private entities for repair, maintenance, and installation
of roofing systems. Some of the public projects Weinert worked on were subject to prevailing wage
and benefits rates that are determined by the State of Wisconsin. After January 1, 2017, Weinert
did not take on any new prevailing wage projects, and employees hired in 2018 never worked on
those types of projects. The roofing work Weinert performs is seasonal and work typically begins
in March of each year.
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Weinert employees are not required to report to the company’s shop before reporting to the
job site. If employees drive directly from their homes to a job site, they are not paid for that travel
time. But employees do have the option to carpool from the company’s shop to a job site by riding
in a company vehicle, and if an employee carpools in a company vehicle, Weinert pays the
employee for the time spent traveling. Time spent on work performed at the shop prior to arriving
at the job site would be added to the job site time. All travel time was paid at a rate equal to 1½
times the minimum wage rate of $7.25. Weinert does not pay overtime to an employee until the
employee has worked more than 40 hours of non-travel time during the week.
ANALYSIS
A.
Motion to Certify State Law Claims Under Rule 23
Anderson seeks to certify a class consisting of “[a]ll hourly employees who worked on the
jobsite for the Defendant on or after June 14, 2016.” Dkt. No. 23 at 1. However, Anderson does
not seek to certify the class as to all of his state law claims. Instead, class certification would be
limited to the following two claims: (1) that Weinert failed to count paid travel hours when
computing overtime pay for non-traveling work; and (2) that Weinert improperly computed
overtime based on the type of work performed during overtime hours rather than based on the
regular, or a blended, rate.
“Because a class action is an exception to the usual rule that only a named party before the
court can have her claims adjudicated, the class representative must be part of the class and possess
the same interest and suffer the same injury.” Bell v. PNC Bank, Nat’l Ass’n, 800 F.3d 360, 373
(7th Cir. 2015) (citing Wal-Mart Stores v. Dukes, 564 U.S. 338, 348 (2011); Chi. Teachers Union,
Local No. 1 v. Bd. of Educ. of City of Chicago, 797 F.3d 426, 432–33 (7th Cir. 2015)). To obtain
certification, the “proposed class must satisfy the requirements of Rule 23(a), as well as one of the
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three alternatives in Rule 23(b).” Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811
(7th Cir. 2012) (citing Siegel v. Shell Oil Co., 612 F.3d 932, 935 (7th Cir. 2010)).
“The general gate-keeping function of Federal Rule 23(a) ensures that a class format is an
appropriate procedure for adjudicating a particular claim . . . .” Bell, 800 F.3d at 373. Rule 23(a)
imposes four requirements that must be satisfied: numerosity, commonality, typicality, and
adequacy of representation. Fed. R. Civ. P. 23(a). “In conducting this analysis, the court should
not turn the class certification proceedings into a dress rehearsal for the trial on the merits.”
Messner, 669 F.3d at 811. Nevertheless, “a court may not simply assume the truth of the matters
as asserted by the plaintiff. If there are material factual disputes, the court must ‘receive
evidence . . . and resolve the disputes before deciding whether to certify the class.’” Id. (quoting
Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001)). The plaintiff bears the burden
of showing that a proposed class satisfies Rule 23’s requirements by a preponderance of the
evidence. Id.
Under Rule 23(a)(1), the plaintiff must show that “the class is so numerous that joinder of
all members is impracticable.” The Seventh Circuit has recognized that classes consisting of as few
as forty members could satisfy numerosity. See Pruitt v. City of Chicago, 472 F.3d 925, 926–27
(7th Cir. 2006); In re Modafinil Antitrust Litig., 837 F.3d 238, 250 (3d Cir. 2016), as amended
(Sept. 29, 2016) (“Leading treatises have collected cases and recognized the general rule that ‘[a]
class of 20 or fewer is usually insufficiently numerous . . . [a] class of 41 or more is usually
sufficiently numerous . . . [while] [c]lasses with between 21 and 40 members are given varying
treatment.’” (quoting 5 JAMES WM . MOORE , ET AL., MOORE ’S FEDERAL PRACTICE § 23.22)). “When
the number of proposed class members is relatively small, it is less reasonable to infer in the
absence of evidence that joinder is impractical.” De Leon v. Grade A Constr., Inc., No.
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16-CV-348-JDP, 2017 WL 6375821, at *2 (W.D. Wis. Dec. 13, 2017). “A variety of factors,
including the nature of the action, the size of the individual claims, and the location of the members
of the class or the property that is the subject matter of the dispute may contribute to the court’s
decision under Rule 23(a)(1) in a given case.” 7A FEDERAL PRACTICE & PROCEDURE § 1762
Joinder of All Class Members Must Be Impracticable (3d ed.).
The current putative class stands at 37 employees. One class member lives in North
Carolina, another in Georgetown, Illinois, and the remaining class members live in an
approximately 50 mile geographic radius in counties that are within the jurisdiction of the Eastern
District of Wisconsin. Anderson contends that the actual number of employees in the class will be
over 40 by the time the court decides the motion for class certification due to the likelihood of new
hires given the seasonal nature of roofing work. Weinert hired 8 new hourly job site employees
in 2016, 12 in 2017, and 9 in 2018. But because Anderson is not seeking injunctive relief, “any
certified class could not include future employees.” De Leon, 2017 WL 6375821, at *3. Including
future employees in the putative class would require improper reliance on speculation that any
future employees are subject to the same policies at issue here, that Weinert has not altered or
changed its policies in response to litigation, and that the future employees have experienced the
same type of harm based upon the same theory of liability as asserted by Anderson. See Ocampo
v. GC Servs. Ltd. P’ship, No. 16-CV-9388, 2018 WL 6198464, at *4 (N.D. Ill. Nov. 28, 2018)
(“estimates ‘may not be based on pure speculation.’” (quoting Murray v. E*Trade Fin. Corp., 240
F.R.D. 392, 396 (N.D. Ill. 2006))). In short, the court will only consider those 37 employees who
worked during the time period between June 14, 2016 and the end of 2018 in analyzing the
numerosity requirement.
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Although there are 37 employees in the proposed class, the actual number of participants
would likely be smaller as evidenced by the fact that only three employees consented to joining the
FLSA collective action. See De Leon, 2017 WL 6375821, at *2 (noting that “interest in joining the
class appears to be weak, suggesting that the actual number of class members may be significantly
fewer than 20. Only three employees other than Ramirez have consented to join the FLSA claim,
Dkts. 83–85, which raises the same issue about banking as the state law claim.”); see also Franklin
Container Corp. v. Int'l Paper Co., No. 77-3204, 1982 WL 1958, at *2 (E.D. Pa. May 12, 1982)
(“Given the overwhelming lack of interest in this litigation shown by members of the potential class,
I believe plaintiffs have failed to establish that the class is so numerous that joinder of all members
is impracticable.”). In addition, Anderson “does not allege that it would be difficult to locate and
contact each potential plaintiff to ask whether he or she would be interested in joining the case.”
De Leon, 2017 WL 6375821, at *2; B.N. ex rel. A.N. v. Murphy, No. 3:09-CV-199-TLS, 2011 WL
4496510, at *7 (N.D. Ind. Sept. 27, 2011) (stating that joining other members of an alleged class
“should not be burdensome” when all of the potential plaintiffs are known to the named plaintiff).
Nor could he, as Anderson already has all of their addresses. Dkt. Nos. 25-1, 25-2. Although two
of the potential plaintiffs live outside of Wisconsin, the remaining members are clustered within a
50-mile radius in the Eastern District of Wisconsin. In other words, this is not the type of
geographic diversity that renders joinder impracticable. See Riordan v. Smith Barney, 113 F.R.D.
60, 62 (N.D. Ill. 1986) (geographic diversity controlling when class members lived in nine states);
Markham v. White, 171 F.R.D. 217, 221 (N.D. Ill. 1997) (geographic diversity found when class
members resided in five different states and few resided in the same district).
Anderson contends that joinder will be impractical because the amount of damages for each
individual claim would be limited. He asserts that “even during a workweek with a substantial
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amount of paid travel time and involving higher prevailing wage pay, damages for Anderson were
under $60 even if overtime premiums paid for travel time cannot be offset from weekly overtime
pay owed.” Dkt. No. 23 at 8. Anderson also contends that even damages ranging from “hundreds
and a few thousand dollars” for those 20 class members who worked for Weinert for longer than
a year would not be enough to justify an individual bringing an individual federal lawsuit. Id. at 17.
But “financial ability is only one factor the Court must consider,” Murphy, 2011 WL 4496510, at
*7, and this argument has less weight, given the fact that, under the FLSA, prevailing plaintiffs are
entitled to actual attorney’s fees and costs of litigation. 29 U.S.C. § 216(b). Anderson has failed
to present evidence that the claim for each of the class members is so minimal that no attorney
would be interested in representing them. “The question under Rule 23(a)(1) is not whether it
makes sense for injured parties to combine their claims rather than litigate them individually; the
question is whether plaintiffs can combine their claims through joinder rather than through class
certification.” De Leon, 2017 WL 6375821, at *3. Here, Anderson has failed to meet his burden
of establishing that combining the claims through joinder would be impracticable. Consequently,
he has failed to satisfy Rule 23(a)’s numerosity requirement, precluding certification of the class.
Accordingly, Anderson’s motion for class certification will be denied.
B.
Motion to Amend Complaint
Anderson filed a motion for leave to file a second amended complaint (SAC) in lieu of filing
a response brief to Weinert’s motions to strike untimely opt-ins and to decertify the FLSA collective
action. The SAC seeks to, among other things, add Joseph Young, Evin Chaulkin, and Michael
Herter as named plaintiffs. The three new potential plaintiffs are the only individuals who
consented to opt in to the FLSA collective action. Dkt. Nos. 18–20. The SAC also seeks to convert
the collective FLSA action into an individual FLSA action.
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As an initial matter, Weinert contends that the court should apply the heightened good-cause
standard of Rule 16 to Anderson’s motion to amend because the motion was filed after the deadline
for motions to amend. Under Rule 16, “[a] schedule may be modified only for good cause with the
judge’s consent.” Fed. R. Civ. P. 16(b)(4). But the court’s scheduling order in this case clearly
states that Rule 15 applies to any amendment to the pleadings filed after October 15, 2018. See Dkt.
No. 11 at ¶ 2 (“Amendments to the pleadings may be filed without leave of court on or before
October 15, 2018. Fed. R. Civ. P. 15 will apply to any amendment filed after that date.”).
Moreover, the court did not set a deadline for amending pleadings without showing good cause or
indicate that the parties would be subject to Rule 16’s standard after that deadline passes.
Consequently, Rule 15 governs Anderson’s motion to amend. Sanchelima Int’l, Inc. v. Walker
Stainless Equip. Co., LLC, No. 16-CV-644-JDP, 2017 WL 3499350, at *1 (W.D. Wis. Apr. 17,
2017) (holding that where the court set a deadline for amending pleadings without leave but not a
deadline for amending pleadings without good cause, “Rule 15(a)(2), not Rule 16(b)(4), governs”).
Under Rule 15, after the time has expired for a party to amend as a matter of course, “a party
may amend its pleading only with the opposing party’s written consent or the court’s leave. The
court should freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). “The Supreme
Court has interpreted this rule to require a district court to allow amendment unless there is a good
reason—futility, undue delay, undue prejudice, or bad faith—for denying leave to amend.” Life
Plans, Inc. v. Sec. Life of Denver Ins. Co., 800 F.3d 343, 357–58 (7th Cir. 2015) (citing Foman v.
Davis, 371 U.S. 178, 182 (1962)).
Weinert asserts that Anderson unduly delayed seeking leave to amend his pleading with facts
and information learned from Weinert’s November 7, 2018 deposition and to add plaintiffs after the
January 21, 2019 deadline for consenting to the FLSA collective action. “[D]elay by itself is
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normally an insufficient reason to deny a motion for leave to amend. Delay must be coupled with
some other reason . . . [t]ypically . . . prejudice to the non-moving party.” Id. at 358. Weinert
contends that it has been prejudiced because the motion to amend was filed the same day Weinert
filed its response to Anderson’s motion for class certification and it had already filed its motion to
decertify the FLSA collective action. But Weinert has not actually suffered prejudice since
Anderson’s motion for class certification has been denied and the SAC removes the FLSA
collective action claims. Consequently, the court finds no reason under Rule 15 to deny Anderson
leave to amend on this basis.
Weinert further asserts that the motion should be denied because Anderson has not
established that joinder is improper under Rule 20. “Multiple plaintiffs may join [a lawsuit pursuant
to Rule 20] if they assert a ‘right to relief jointly, severally, or in the alternative with respect to or
arising out of the same transaction, occurrence, or series of transactions or occurrences’ and a
‘question of law or fact common to all plaintiffs will arise in the action.’” UWM Student Ass’n v.
Lovell, 888 F.3d 854, 863 (7th Cir. 2018) (quoting Fed. R. Civ. P. 20(a)(1)). “Courts interpret the
term ‘single transaction or occurrence’ as including ‘a series of many occurrences, depending not
so much upon the immediateness of their connection as upon their logical relationship.’” White v.
Coventry Health Care, Inc., No. 17-CV-01242, 2018 WL 1469025, at *2 (N.D. Ill. Mar. 26, 2018)
(quoting Lozada v. City of Chicago, No. 10-cv-01019, 2010 WL 3487952, at *2 (N.D. Ill. Aug. 30,
2010)).
Weinert contends that joinder is not appropriate because Anderson has essentially admitted
that he cannot satisfy the similarly situated standard under § 216(b) of the FLSA given the fact that
he is seeking to amend his pleadings to convert the collective FLSA action into an individual FLSA
action. But Anderson seeks to pursue an individual FLSA action not because he believes the
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plaintiffs are not similarly situated, but because the proposed collective action was small enough
to make joinder feasible. Weinert further argues that Anderson cannot satisfy Rule 20’s more
stringent “same transaction or occurrence” standard. “Although the Seventh Circuit has never
addressed the relationship between Rule 20 and § 216(b), other courts to consider the issue have
held that Rule 20’s ‘same transaction or occurrence’ standard is more stringent than § 216(b)’s
‘similarly situated’ standard.” Abraham v. Grp. O, Inc., No. 16 C 11642, 2018 WL 620034, at *5
(N.D. Ill. Jan. 30, 2018).
Here, the allegations of the SAC satisfy Rule 20’s requirements. Anderson alleges that
Weinert violated the FLSA by failing to count the plaintiffs’ travel time when determining their
eligibility for overtime pay and instead paid overtime only when the plaintiffs worked 40 hours
during a work week not counting paid travel time. SAC, Dkt. No. 33-1 at ¶¶ 10, 34. Anderson has
presented evidence that Young and Chaulkin would have received more overtime pay had their
travel time been counted as hours worked towards the weekly overtime threshold. See Dkt. No. 322 at 2. Anderson also submitted a payroll summary showing Herter received job site overtime pay
and travel pay each quarter, suggesting that Herter would likely have received more overtime pay
as well. Weinert contends that Anderson has not presented enough information to support the
claims as to the other plaintiffs. But Rule 20, by its plain language, allows for joinder based on
allegations arising out of the same transaction, occurrence, or series of transactions, and does not
require definitive evidence at the pleadings stage. Here, Anderson’s allegations are plausible based
on the payroll records presented.
Weinert also asserts that Anderson cannot establish that there are common questions as to
all of the claims in the SAC. In particular, Weinert argues that the claims regarding the overtime
rate calculations and the foremen’s bonus or foremen’s pay do not apply to all plaintiffs. However,
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“[t]he common question need not predominate; that’s a requirement for class actions, not for
permissive joinder.” Lee v. Cook Cty., Ill., 635 F.3d 969, 971 (7th Cir. 2011). Thus, the fact that
not all claims apply to all plaintiffs does not render joinder impermissible when the claims arise out
of the same occurrence. While individual inquiry may be required to ascertain damages for a
particular plaintiff, whether Weinert violated the FLSA by failing to count the plaintiffs’ travel time
when determining their eligibility for overtime pay presents a common question of law. Therefore,
the requirements of Rule 20 have been satisfied, and joinder is appropriate.
Finally, Weinert requests (1) an award of its costs and attorney’s fees incurred in challenging
the FLSA certification and the untimeliness of the two opt-in plaintiffs and (2) that the court hold
the date of entry into the lawsuit of the newly added plaintiffs as the date of the court’s order rather
than the date they consented to join the lawsuit. As an initial matter, an award of costs and
attorney’s fees is not warranted because Anderson’s motion for leave to amend his complaint in
response to Weinert’s motions to decertify was reasonable.
As to the entry date for the newly added plaintiffs, the “‘central underlying question which
a court must decide when determining whether a claim asserted by a new plaintiff shall relate back
to the time of the original plaintiff’s claim is whether the defendant had such notice of the added
claim at the time the action was commenced that relation back of the added claim will not cause
defendant undue prejudice.’” Emerus Hosp. v. Health Care Serv. Corp., No. 13 C 8906, 2016 WL
946916, at *6 (N.D. Ill. Mar. 14, 2016) (quoting Olech v. Vill. of Willowbrook, 138 F. Supp. 2d
1036, 1044 (N.D. Ill. 2000)). Here, Weinert had notice of the additional plaintiffs’ claims because
the action was originally filed as a collective FLSA action and the plaintiffs’ claims arise out of the
same actions that gave rise to Anderson’s claims. Consequently, their claims relate back to the
filing of the original complaint.
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CONCLUSION
For the foregoing reasons, Anderson’s motion for class certification as to the state law
claims (Dkt. No. 22) is DENIED. Anderson’s motion for leave to file a second amended complaint
(Dkt. No. 33) is GRANTED. Weinert shall file its answer or otherwise respond within twenty-one
days of the date of this order. The Clerk is directed to detach and file the second amended
complaint that is attached to Anderson’s motion and to add Joseph Young, Evin Chaulkin, and
Michael Herter as plaintiffs. Weinert’s motion to strike untimely opt-ins (Dkt. No. 26) and motion
to decertify the FLSA collective action (Dkt. No. 29) are DENIED as moot. The Clerk shall set this
matter for a telephone conference to address further proceedings once Weinert has filed its answer
to the second amended complaint.
SO ORDERED this 23rd day of August, 2019.
s/ William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court
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