Espencheid v. DirectSat USA, LLC et al

Filing 129

ORDER granting in part and staying in part 65 Motion for Conditional Certification of Class. Signed by District Judge Barbara B. Crabb on 6/4/10. (krj)

IN THE UNITED STATES DISTRICT COURT FO R THE WESTERN DISTRICT OF WISCONSIN --------------------------------------------AA R O N L. ESPENSCHEID, GARY IDLER and RICARDO BOLANO, on behalf of themselves and a class of employees and/or former employees sim ilarly situated,

OPINION AND ORDER 0 9 - cv -6 2 5 - b b c

P l a i n t i ff s , v. D I R E C T S A T USA, LLC and U N IT EK USA, LLC, D efendan ts. --------------------------------------------This is a civil action for monetary and injunctive relief under the Fair Labor Standards A ct (FLSA), 29 U.S.C. §§ 201-219, and wage and overtime compensation laws of Wisconsin, M in n eso ta and Pennsylvania. Plaintiffs Aaron Espenscheid, Gary Idler and Ricardo Bolano con tend that defendants DirectSat USA, LLC and UniTek, LLC violated the FLSA and state law by not compensating them for certain activities related to their jobs as installation technicians. Plaintiffs brought this lawsuit as a class action on behalf of four separate classes of installation technicians employed or formerly employed by defendants: (1) a nationwide

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o p t-in class for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219; (2 ) a Wisconsin class for violations of Wisconsin wage and overtime compensation laws; (3) a Minnesota class for violations of Minnesota wage and overtime compensation laws; and (4 ) a Pennsylvania class for violations of Pennsylvania wage and overtime compensation law s. Plaintiffs have moved for conditional certification of an opt-in nationwide collective action under 29 U.S.C. § 216(b) and seek authorization to notify potential class members of their right to join this case. Dkt. #65. Plaintiffs also request that defendants be ordered to identify those similarly situated individuals to whom the notice should be distributed and provide names, last known mail and email addresses and telephone numbers for potential class members. (Plaintiffs do not seek certification of classes under Fed. R. Civ. P. 23 for their state law claims at this time. The deadline for seeking such certification is September 2, 2010.) Jurisdiction is present. 29 U.S.C. § 216(b) and 28 U.S.C. § 1331. Plaintiffs have made a modest factual showing that they and potential class members w ere victims of a common policy or plan that violated the law. Therefore, plaintiffs may proceed with the proposed collective action and notify potential class members of the existence of this lawsuit. However, I will reserve ruling on the final content of the notice form until I decide whether defendants' counterclaims should be dismissed or included in the notice. I anticipate such decision to be made within the month. Once the form of the no tice is approved, plaintiffs may distribute the notice by first class mail and opt-in plaintiffs

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w ill have 60 days in which to opt in to the lawsuit. Also, plaintiffs may create a website con taining the notice and issue a court-approved press release directing potential class m em bers to the website. In determining whether the class should be conditionally certified, I considered the allegations in the amended complaint and any affidavits that have been submitted. Sharpe v. APAC Customer Services, Inc., 2010 WL 135168, *4 (W.D. Wis. Jan. 11, 2010); Sjoblom v. Charter Communications, LLC, 571 F. Supp. 2d 961, 967-68 (W.D. Wis. 2008). Before I address the parties' arguments, I will summarize the relevant allegations contained in plaintiffs' amended complaint and the affidavits, documents and deposition transcripts attached to the parties' briefs.

A LL EG A T IO N S OF FACT A. The Parties D e fen dan ts DirectSat USA, LLC and UniTek USA are citizens of Delaware and Pen nsylvania. DirectSat USA is a subsidiary of UniTek USA. Defendants are engaged in the satellite installation business and perform installations and make service calls throughout the United States. They employ more than 1,500 installation technicians who are

re sp o nsible for installing, upgrading, troubleshooting and maintaining defendants' installation of DirecTV's satellite equipment.

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Plaintiff Aaron Espenscheid is a citizen of Wisconsin and resides in Beaver Dam, W iscon sin. He was employed in defendant DirectSat's Madison, Wisconsin office. Plaintiff G ary Idler is a citizen of Minnesota and was employed in DirectSat's Claremont, Minnesota office, and plaintiff Richard Bolano is a citizen of Pennsylvania who was employed in D i rectS a t's King of Prussia, Pennsylvania office. Plaintiffs were employed as installation tech nician s and were required to drive company-owned or personally-owned vehicles to and from various job sites to perform work related to DirectSat's installation of satellite television s for DirecTV. They were not paid for certain "productive" and "nonproductive" activities related to their work as installation technicians. In addition to their own declarations, plaintiffs have submitted declarations from 26 current or former DirectSat employees who worked at offices in 11 different states and the D istrict of Columbia in at least 18 different field offices. These employees declare that they w e re installation technicians who performed DirecTV installations and were not paid for certain productive and nonproductive activities.

B . Pay System for Installation Technicians D efendants UniTek and DirectSat have common human resources and payroll p o licies, and UniTek provides human resources, facilities, logistics and inventory functions to DirectSat. All corporate functions, including human resources and payroll, are located

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at their national headquarters in Montgomery County, Pennsylvania, and all individuals who are responsible for setting wage and hour policies are employed there. Defendants' policies and procedures governing payroll are set forth in DirectSat's national employee handbook, w hich was also developed at their national headquarters. Field offices cannot have a policy or practice that differs from what is required by the national employee handbook. DirectSat also has a national fleet policy handbook that governs policies related to installation technicians' work vehicles, including traffic violations, fleet maintenance and safety. These po licies apply across the country and are mandatory for all defendants' technicians. All technicians have the same job description. According to defendants' payroll m an ager, Yvette Shockman, defendants' official policy is that technicians be compensated for all work-related activities, including required training and meetings, work related telephone calls, vehicle maintenance, picking up equipment and conducting inventory. H o w e ver, Shockman is aware of no document that is provided to new employees instructing th em how to account for time spent loading and unloading equipment, reconciling eq uip m e n t, completing paperwork or engaging in other essential "nonproductive" (noninstallation ) work activities. P lain tiffs and putative class members are not compensated for certain productive and nonproductive time under defendants' compensation system. Instead, plaintiffs and putative class members are compensated, in part, under a "piece rate," or flat fee, system in which

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they receive a set amount of compensation for each completed service call, depending on the na ture of the services provided. The "set amount" that each class member receives is tied to an "efficiency rating." Plaintiffs and class members are assigned to specific, numerically ran ked levels of seniority or proficiency within each job category, typically ranging from 1-3. In divid ual rates are determined using a scorecard system that takes into account how efficient the class members are in completing installations. This efficiency rating is

determ ined by dividing the total compensation for piece rate tasks by the number of hours th a t the class members reported on their timesheets. Under this system, the higher the efficiency rating for plaintiff or the class member, the more points that class members earn on their scorecards, and the higher the "set amount" for each assigned job. Class members' pay is determined by multiplying the number of completed installations by their piece rate. Also, class members with higher efficiency ratings and more points on their scorecards have a better chance of being promoted to a higher pay rate. In describing the company's "Compensation Philosophy," DirectSat's employee h an db oo k refers to the piece rate pay system as one "component" of the installation technicians' compensation. There is no agreement between defendants and plaintiffs or the putative class members that the piece-rate system compensates the class members for all no np rod uctive tasks. Under the piece rate system, installation technicians are compensated o n ly for that time they spend completing installations. They receive no compensation for

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w ork performed before the first piece-rate job of the day, after the final piece-rate job of the day and at various times throughout the work day.

C. Uncompensated Non-installation Work Activities T o complete their assigned installation jobs, class members are required to complete a number of "nonproductive" tasks for which they are not compensated. These tasks are req uired under defendants' national policies and explained in employee policy manuals. At the start of each work day, class members must load tools and equipment from their homes o r a DirectSat office into their work vehicles. The employees who submitted declarations spen d between 10 and two hours loading equipment each day. Many class members then call their dispatchers regarding installations scheduled for the day, call customers to discuss installation and estimated arrival times and use their computer or GPS device to obtain directio ns for installation sites. Plaintiffs and declarants spend between ten minutes and two hours on these activities. They may also spend up to three hours calling their dispatchers throughout the day. Some installation technicians drive to a DirectSat office before their first installation job , either to pick up equipment or to confirm their daily routes. The travel time ranges from 30 minutes to one hour, and these technicians head to their first job from the office, w hich may be anywhere from a few minutes to an hour away from the office. Other class

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m em bers head directly from home to their first installation job of the day. They spend an average of twenty minutes to two hours traveling to their assigned job sites in the morning an d traveling home from their last job at the end of the day. Between one and five times each week, class members must restock their vehicles with in stallatio n equipment and supplies at a DirectSat warehouse or from another installation technician. This task takes 20 minutes to two hours to complete. Once out in the field, class members provide assistance to other technicians at job sites, often at the direction of supervisors. Providing assistance takes up from four or five hours a month to two hours e v e r y day. After an installation, if a customer calls the class member with a question or

com plaint, class members are required to return to the customer's home to correct the pro blem . Most employees who submitted declarations state that this takes approximately o n e to five hours a week, though the exact time varies widely. Declarants are not paid for any of these activities or for installation jobs that cannot be completed because of no fault of their own. At the end of a work day, class members have another set of nonproductive work activities that must be completed, for which they are not compensated. First, they must rem ove all garbage and used equipment from their vehicles. Next, they must load

eq uip m e n t, including drills, "hand-helds," meters and receivers, into their homes for safekeeping and recharging. These activities take from 10 to 60 minutes.

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C lass members must also read and respond to work-related emails. These emails pro vide the next day's job assignments so that class members may plan their driving routes using a mapping website or GPS device. This task takes five minutes to one hour. Finally, class members complete their time cards or other paperwork, which are usually submitted to DirectSat via email. Declarants report that it takes them between five and 60 minutes to complete their end-of-day paperwork and time sheets. In stallatio n technicians also have mandatory obligations that occur periodically for w hich they are not compensated. On a weekly basis, most class members attend mandatory w o r k meetings that last between 30 minutes to two hours for which they are not co m p en sated . Some technicians receive a "reduced" or minimum wage for the time spent in the meetings. Once each month, many class members drive to a DirectSat warehouse for an "all count" or "all scan" inventory, in which every item in the work vehicle is counted un der warehouse supervision. This activity takes between 15 minutes and two hours, depen ding on where the technicians are in the inventory line. Finally, several employees r e po rt that they are required to clean and maintain their vehicles without compensation, including performing oil changes. They report that maintaining their vehicles takes between on e-and-a-half hours each month to 30 minutes each day. Plaintiffs and putative class members routinely start work early and end work late in ord er to complete the required number of expected jobs each day without getting "written

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up" under defendants' performance policies and procedures. Often, class members work through their lunch breaks and supervisors instruct class members to deduct the lunch breaks from their productive time. Putative class members report that they complained to their supervisors on several occasions that they were not being compensated for nonproductive tim e, but that supervisors responded by saying they were being compensated according to com pany policy. D eclaran ts that acted as trainers at some point during their employment with d efen dan ts stated that they instructed technicians that their pay started at the beginning of a job and ended when they finished the job. This instruction was consistent with the trainers' understanding of company policy.

D . Uncompensated Overtime for Installations Pursuant to DirectSat's national policies, class members are directed to complete their assigned jobs "with minimal overtime." To avoid overtime and achieve a higher proficiency rating and higher rate of pay per completed job, class members do not report all the time they spend performing installations. Management is aware of the underreporting and in som e cases encourages it. Class members underreport their hours by up to 20 hours each w eek, with their supervisors' knowledge and acquiescence. As a result, plaintiffs and the

putative class members are not compensated for overtime hours for performing installations.

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E. Management Knowledge P lain tiffs and putative class members have complained to management about not g e ttin g paid for non-installation work and not being able to record time spent in these n o n p r o d uctive tasks. Also, management is generally aware of the time that technicians spend engaged in productive and nonproductive tasks. In particular, DirectSat installs GPS tracking devices in all of the company-owned vehicles assigned to installation technicians. Acco rding to DirectSat's GPS policy, the system gives DirectSat "the ability to track [its] technicians at all times." Dkt. #96, Ex. C, at 20. The system monitors technicians' "speed, w o rk hours, surrounding arrival and departure times, job duration and after-hour vehicle usage." Id. A related version of the GPS policy states that "[t]he GPS system provides the capab ility to locate a company vehicle 24 hours a day. This enables tracking the travel history of the vehicle back in time." Dkt. #96, Ex. D, at 8. In October 2009, defendants were involved in several wage and hour law suits and m od ified some of their practices regarding compensation for nonproductive work time. D e fen dan ts issued a new time sheet that permitted technicians to record their time for training, meetings and a category described as "other hours." Dkt. #96, Ex. E, at 117. The tim e sheet defines "other hours" to include "any hours worked that are not classified as Pro duction , Training, or Meeting hours." Id. Dan Yannantuono, the CEO of DirectSat, e x p lained in a memo that one example of "other" compensable hours is "hours worked

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associated with picking up equipment necessary for [technicians'] routes at the warehouse." D kt. #69, Ex. F. In addition, Yvette Shockman testified that "other" compensable hours w ou ld include time that a technician spends unloading his or her vehicle pursuant to com pany policy. Dkt. #96-2, Ex. A, at 132. Shockman also testified that the intent of the "o th er" hours category was to capture any work that technicians performed that was not p ro du ctive work, such as meetings or training. Id. at 130. Thus, after October 4, 2009, som e class members began receiving compensation for nonproductive tasks for which they h ad previously received no compensation.

O PIN IO N A . Conditional Certification of FLSA Collective Class Action P lain tiffs seek conditional certification of a collective action for alleged violations of F LS A 's unpaid minimum wage and overtime compensation, 29 U.S.C. §§ 206 and 207. U nder 29 U.S.C. § 216(b), such an action may be maintained "by any one or more em ployees for and in behalf of himself or themselves and other employees similarly situated." As this court has held before, "[a]lthough § 216(b) does not explicitly require the district co urt to certify a collective action under the FLSA . . . the duty is implicit in the statute and th e Federal Rules of Civil Procedure." Spoerle v. Kraft Foods Global, Inc., 253 F.R.D. 434,

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43 8 (W.D. Wis. 2008). T h is court has adopted a two-step process for class certification under the FLSA. S harpe, 2010 WL 135168, at *4 ; Kelly v. Bluegreen Corp., 256 F.R.D. 626, 628-89 (W.D. W is. 2009); Sjoblom v. Charter Communications, LLC, 2007 WL 4560541, *7-8 (W.D. W is. Dec. 19, 2007); Austin v. Cuna Mutual Insurance Society, 232 F.R.D. 601, 605 (W.D. W is. 2006). At the first step, plaintiffs must make "a modest factual showing" that they are sim ilarly situated to potential class members and that they and potential class members were "victim s of a common policy or plan that violated the law." Austin, 232 F.R.D. at 605. This d eterm in atio n does not involve adjudication of the merits of the claims; rather, plaintiffs m ust demonstrate only that there is some factual nexus that connects them to other po tential plaintiffs as victims of an unlawful practice. Sjoblom, 571 F. Supp. 2d at 967. If this showing is made, the court conditionally certifies a class and authorizes notice to potential class members and the parties conduct discovery. Austin, 232 F.R.D. at 605. The second step occurs at the close of discovery upon a motion for decertification from the defen dant. At that point the court determines whether the plaintiffs are in fact similarly situated to those who have opted in. Id. In this case, the parties find themselves at the first stage of the process, with plaintiffs seeking conditional certification of the following class: All current and former DirectSat and Unitek employees who engage or have

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en gaged in tasks and activities identified in paragraph (21)(A)(i)-(xvi) of Plaintiff's Amended Complaint without receiving proper compensation, within the past three years. P lain tiffs' theory of liability is that defendants' nationwide piece-rate compensation po licy pays technicians only for the time they spend completing installations and fails to com pen sate technicians for nonproductive activities. Also, plaintiffs contend that under d efen dan ts' policy, technicians were encouraged to under report their hours spent working an d as a result, technicians are not paid overtime for hours worked in excess of 40 hours a w e ek . A cco rd in g to plaintiffs, they are similarly situated to the proposed class of installation tech ni c i a n s because all technicians have similar job duties set by company-wide position description s, all technicians drive a personally-owned or company-owned vehicle to complete th o se job duties, all technicians are compensated in part through the piece-rate system, all technicians performed uncompensated nonproductive and productive work for defendants p ursu an t to nationwide, uniform company policies that are tied to a centralized decision m akin g apparatus and managers aware of the fact that class members performed un com pen sated work activities. Defendants challenge plaintiffs' motion for conditional certification on several grou nd s. First, defendants contend that conditional certification is unwarranted because the ir formal wage and hour policies comply with the FLSA because their piece-rate policy

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d o e s in fact capture the time technicians spend performing nonproductive work tasks. D efendan ts point to provisions in their employee handbooks that instruct technicians to "reco rd the actual time worked," and require employees to obtain permission before working ov ertim e. Also, defendants state that they do "not permit altering, falsifying, tampering with tim esheets, or recording time on another Employee's timesheet." Defs.' Response Br., dkt. # 1 0 4, at 5-6. Because their pay policy is legal, defendants argue, plaintiffs must present evidence suggesting that there was a corporate-wide "policy-not-to-follow" the formal policy. D e fen dan ts contend that plaintiffs' evidence suggests only that some employees were not fully compensated because certain "rogue" managers and employees refused to comply with d efen dan ts' lawful, written policies. Defs.' Response Br., dkt. #104, at 11. The problem with defendants' argument is that plaintiffs have presented several affidavits from putative class members around the country, stating that defendants' piecerate compensation policy did not pay technicians for nonproductive work or for hours w o r ked in excess of 40 hours a week. The statements in defendants' employee handbook are insufficient to defeat the motion for conditional certification because an employer's resp o n s i b i li ty under the FLSA extends beyond merely promulgating rules to actually enfo rcing them. Plaintiffs and declarants aver that, in practice, defendants did not pay them in full for the hours they worked and encouraged them to understate their actual hours. D efendan ts' handbook may not immunize defendants from an FLSA action where there is

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su bstan tial evidence that they did not follow their own guidelines. C.f. 29 C.F.R. § 785.13 ("[M anagem ent] cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the po w er to enforce the rule and must make every effort to do so.") In contrast to the cases they cite, including Thompson v. Speedway SuperAmerica LLC, 2009 WL 130069, *2 (D. Minn. Jan. 20, 2009) and Pacheco v. Boar's Head Provisions Co., 671 F. Supp. 2d 957, 964 (W.D. M ich. 2009), defendants have presented no evidence to contradict plaintiffs' assertions, such as declarations from installation technicians and field managers averring that they were in fact compensated for overtime and nonproductive work or other evidence that the company follow ed its formal policies. Further, although defendants state that "technicians have agreed and acknowledged that job rates applicable to their productive work are intended to cover nonproductive work," D e fs.' Response Br., dkt. #104, at 14, defendants offer no evidence to support this assertion. B y contrast, a number of plaintiffs' declarants [?] worked at various times as trainers or su perviso rs and acknowledge that as managers, they understood that technicians were not paid for overtime or nonproductive work according to company policy. DeSerre Dec., dkt. # 75 , ¶ 27, Braniff Dec., dkt. #70, ¶ 27-28, Johnson Dec., dkt. #82, ¶¶ 27-28, Hanson Dec., dkt. #80, ¶¶ 27-28. Also, given the number and varying geographic locations of the

declaran ts, plaintiffs have offered sufficient evidence to suggest that the alleged failure to

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co m p en sate technicians fully was not attributable solely to "rogue managers." In light of this available, uncontested testimony, plaintiffs have made a modest showing that a corporate policy, endorsed by field managers, caused installation technicians to under report their hours. D efendan ts' next argument against conditional certification is that even if their po licies did violate the FLSA, ultimate liability and damages will require individualized inq uires and thousands of mini-trials, running contrary to the "economy of scale" envisioned b y § 216(b) of the FLSA. In part, defendants point out that each technician spent varying am o un ts of time performing nonproductive tasks and working overtime each week and d ifferen t managers oversaw the technicians' work and timekeeping practices. Also,

defendants argue, plaintiffs' claims will require the court to determine whether individual technicians performed the tasks they purport to have performed, whether they recorded the tim e they worked, whether they were paid for the work and whether defendants were aware of the work. Individual circumstances are inevitably present in a collective action. In some

cir c u m s t a n c es, the individualized nature of the plaintiffs' claims may make certification inap pro priate. However, this court has rejected the notion that individualized differences preclude conditional certification at this early stage of the analysis. Sharpe, 2010 WL 13 51 68, at *7 ("[A]rguments regarding similar situation, individual issues and manageability

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of a nationwide class will become relevant at the second stage . . . at which point the court w i ll examine in detail the evidence and arguments submitted by the parties on the question of similar situation.") (citing Austin, 232 F.R.D. at 695); Sjoblom, 2007 WL 4560541, at *9 ("[D]efendants detailed arguments about the predominance of individualized inquiries an d the dissimilarities between plaintiff and other employees are best raised after the parties have conducted further discovery and can present a more detailed factual record for the court to review."); see also Shabazz v. Asurion Insurance Service, 2008 WL 1730318, *3 (M.D. T enn . Apr. 10, 2008) (holding that defendant's 47-page memorandum explaining specific differences among plaintiffs and the putative class "effectively ignore[d] the requirement that Plaintiffs need only establish a `modest factual showing' that they are similarly situated em ployees in order to gain initial conditional class certification and the issuance of Notice."); M u sarra v. Digital Dish, Inc., 2008 WL 818692, *5 (S.D. Ohio Mar. 24, 2008) (individualized inquiries inappropriate at first stage of certification analysis); Gambo v. L ucent Technologies, Inc., 2005 WL 3542485, *6 (N.D. Ill. Dec. 22, 2005). In this case, plaintiffs are challenging the lawfulness of defendants' company-wide piece-rate pay system. The declarations and other evidence offered by plaintiffs suggest that defendan ts had central control over the compensation system and that the same piece-rate system applied to all installation technicians. Thus, I am not persuaded at this stage that th e technicians' individualized situations should preclude certification. Monroe v. FTS USA,

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LLC , 257 F.R.D. 634, 638 (W.D. Tenn. 2009) (rejecting defendant's argument that individu al inquiries preclude certification because "[i]t is the lawfulness of the [piece-rate] po licy that is challenged in this litigation"); see also Kautsch v. Premier Communications, 504 F. Supp. 2d 685, 690 (W.D. Mo. 2007) (rejecting defendants' argument that individualized inquiries precluded certification because despite differences in individual technicia n s' circumstances, they all performed "essentially the same job for the same em ployer and [were] paid using [defendant's] piece-rate system" ). Finally, defendants contend that plaintiffs have not demonstrated that they are sim ilarly situated to the proposed class members, citing several cases in which district courts denied certification when plaintiffs provided only a handful of affidavits from potential class m em b ers. Plaintiffs seek conditional certification of a collective action for more than 5,000 individu als working at approximately 25 locations throughout the country. Defendants co n ten d that the 29 declarations plaintiffs submitted, representing approximately 0.6% of the proposed class, are insufficient to show that plaintiffs are similarly situated to the in divid uals they seek to represent. At most, defendants argue, plaintiffs' submissions show that a few employees and supervisors applied company policies illegally. As I stated in Sharpe, 2010 WL 135168, at *6, "[a]dducing evidence from a small percen tage of the potential class does not preclude conditional certification of a class under th e FLSA." A representative plaintiff is not required to adduce evidence of hundreds of

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particular wage and overtime violations to make the requisite factual showing for conditional certificatio n . Kelly, 256 F.R.D. at 629. "Where an apparent company-wide policy is behind the alleged FLSA violations, the plaintiff seeking certification for a company-wide class action should not be required to collect specific violations from each location or from each state before seeking authorization to provide notice to employees from all locations." Id. at 63 1. In this case, plaintiffs have submitted an adequate sampling of declarations to permit a reasonable inference that plaintiffs are similarly situated to the prospective class members. These declarations are drawn from 11 different states and the District of Columbia, and at least 18 different field offices. With these declarations and other evidence, plaintiffs have dem onstrated that defendants' installation technicians have the same job duties, are co m p e nsa ted according to company-wide policies, are required to perform and actually perfor m nonproductive work activities for which they are not compensated and work under m an agers who regularly instructed technicians that they could not record all of their time on tim e sheets. At this stage, plaintiffs need demonstrate only that there is some factual nexus that co n n ects their claims to other potential plaintiffs as victims of an unlawful practice. Austin, 2 3 2 F.R.D. at 605. They have met this initial burden. Defendants' arguments regarding in divid ual issues and manageability of a nationwide class may become relevant at the second stage. At the close of discovery, defendants may move to decertify the class, at which point

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the court will examine in detail the evidence and arguments submitted by the parties on the q uestio n of similar situation. If the court finds that any of the opt-in plaintiffs are not sim ilarly situated to the representative plaintiffs, it may dismiss them without prejudice. A lso , the court may decertify the entire class if none of the class members are similarly s i tu a t e d . In sum, because plaintiffs have made a colorable showing that they are similarly situ ated to the putative class members with respect to nonpayment for productive and no np rod uctive time, I will grant their motion for conditional certification of the class pro po sed in the complaint and allow them to notify potential members of the class.

B . Notice Along with their brief in support of conditional certification, plaintiffs submitted a pro po sed notice and consent form and ask that opt-in plaintiffs be allowed 60 days to file th e approved consent forms and opt in to the lawsuit. Plaintiffs also seek approval for certain methods of distributing the notice to potential class members. Defendants object to bo th the content of the notice and the proposed methods of dissemination. As an initial matter, plaintiffs ask the court to "strike the unprofessional statements" fro m defendants' objections and "admonish Defendants' counsel that future incidences of su ch conduct will result in sanctions." Plfs.' Reply Br., dkt. #108, at 14. I will not strike

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language from defendants' brief; however, I have disregarded accusations regarding the c ha r acter of counsel in this matter because they are irrelevant to the legal issues at hand. T he parties and their counsel would be well advised to focus on the legal issues in the case an d not spend their time criticizing opposing counsel. Turning to the parties' substantive disputes, one of defendants' objections to the con tent of the notice is that the notice must contain information regarding defendants' co un terclaim s against plaintiffs Espenscheid, Idler and Bolano and all opt-in plaintiffs for m isrepresentation, unjust enrichment and detrimental reliance. Defs.' Supplemental Objs., dkt. #117. Defendants contend that potential class members must be warned that they may be sued if they opt in to the collection action. Id. Plaintiffs object to inclusion of this w arnin g, contending that defendants' counterclaims lack merit, constitute an impermissible act of retaliation and would have a chilling effect on the proposed collective action. Dkt. # 1 1 9 . Plaintiffs have also filed a motion to dismiss defendants' counterclaims that is being b riefed by the parties. Dkt. #123. Defendants' opposition brief is due on June 8, 2010 and plaintiffs' reply is due June 18. I anticipate ruling on the motion within the month. Because I conclude that it would be prudent to wait until the court has ruled on the motion to dism iss to determine whether defendants' counterclaims should be included in the notice form , I will reserve ruling on the final content of the notice. However, the parties also have the following disputes that can be resolved at this time.

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1. Content of the Notice D efendan ts object to the content of the proposed notice on several grounds. First, d efen dan ts contend that the proposed notice form should not be addressed to employees of "U niT ek" and DirectSat because UniTek, as the parent company of DirectSat, is a separate legal entity that does not employ the individuals who comprise the proposed class. However, plaintiffs' claims are brought against DirectSat and UniTek as a joint employer of the proposed class members. Plaintiffs have adduced evidence that UniTek and DirectSat are closely connected companies with common human resource and payroll policies and both exercise control over installation technicians. Thus, it is appropriate to identify UniTek as an "employer" in the notice form. S econ d, defendants contend that the notice form provides insufficient space to defendants' litigation position by "tactically plac[ing] [it] in an unfavorable and subtly hidden location." Defs.' Br., dkt. #106, at 4. Defendants request that they be permitted to have an entire section of the notice dedicated to their legal position. Under the heading "D escriptio n of the Lawsuit," the proposed notice form states that "[d]efendants deny plain ti ffs ' allegations that they violated the FLSA and contend that they properly co m p en sated employees for all compensable working time." This is a sufficient description o f defendants' position for purposes of the notice form and is consistent with other FLSA n o tice forms that have been approved by this court. E.g., Sharpe v. APAC Customer

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S ervices, Inc., 2010 WL 1292154, *1 (W.D. Wis. Mar. 29, 2010) ("[Defendant] denies p lain tiff's allegations and has asserted various defenses to plaintiff's claims."); Austin, 232 F.R .D . at 608 ("[Defendant] denies that it violated the Fair Labor Standards Act.") H ow ever, as discussed above, I am reserving ruling on whether a description of defendants' cou nterclaim s should also be included in the notice form. Defendants' third objection is that the proposed notice "downplays" the burden optin plaintiffs may face after joining the lawsuit, such as testifying in depositions or at trial. As it is written, plaintiffs' proposed notice states that individuals "may be required to participate in the discovery process." Plaintiffs have agreed to amend the notice form to state that "While this lawsuit is pending, individuals who opt in may be required to provide info rm ation or documents, appear for a deposition, testify at trial or otherwise participate in this action." Thus, the proposed notice form should be amended accordingly. D efendan ts' fourth objection is that plaintiffs' disclosure concerning plaintiffs' cou nsel is "misleading" and "deceptive." Under the heading "Your Right to Participate in This Suit," the notice states in boldface type that opt-in plaintiffs "are not required to pay an y money to participate" in the lawsuit. Under the heading "Effect of Joining This Suit," the notice states that [R]epresentative plaintiffs in this lawsuit have entered into a contingency fee agreem en t with plaintiffs' lawyers, which means that if there is no recovery, there will be no attorneys fees or costs chargeable to you from plaintiffs'

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law y ers. If there is a recovery, plaintiffs' lawyers will receive a part of any settlem ent obtained or money judgment entered in favor of all members of the class, subject to the discretion of the court. D efendants contend that this language improperly "promotes the services of the two law firm s" representing plaintiffs, suggests that plaintiffs' attorneys have agreed to represent the putative plaintiffs gratuitously and fails to inform prospective plaintiffs that defendants are entitled to recover their costs from plaintiffs if defendants are successful. Defendants' criticism s are misplaced and are more suggestive of an animosity toward plaintiffs' counsel than of concern about whether opt-in plaintiffs are adequately informed. The proposed descriptions serve the purpose of informing putative class members that plaintiffs have retained counsel on a contingency fee basis and there are no up-front costs to participate in th e lawsuit. This language is appropriate and has been approved by this court on at least one p revio us occasion. E.g., Sjoblom v. Charter Communications, LLC, 07-cv-451-bbc, Mar. 7, 20 08 Order, attached as Ex. C to Modl Aff., dkt. #109. Further, I will not require plaintiffs to include a statement regarding defendants' costs, because as I explained in Austin, 232 F.R .D . at 608, "the [FLSA] is silent with respect to fee shifting for prevailing defendants" an d "such a warning would chill participation in collective actions." Also, as plaintiffs point ou t, defendants' proposed language regarding costs is inaccurate according to plaintiffs' fee agreem ent with counsel in which opt-in plaintiffs are not required to pay costs. Defendants' fifth objection to plaintiffs' proposed notice is that the notice describes

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the protections of the FLSA inaccurately. The "Description of Lawsuit," portion of the no tice states that the "FLSA requires that an employer pay both wages and overtime com pen sation for all work-related activities that are compensable under federal law." D efendants contend that this statement is deceptive because the FLSA requires only that em p lo yers pay (1) the minimum wage and (2) overtime for hours worked in excess of 40 ho urs, and does not require that an employer pay wages for "all work-related activities." A lth ou gh I disagree with defendants that the statement in the notice form is a misstatement of the law, I will modify the language slightly to state: The FLSA requires that an employer pay minimum wages for all work perform ed on an employer's behalf and pay overtime compensation for hours w orked in excess of 40 hours per week. D efend a n ts ' sixth objection is that plaintiffs' proposed notice "deceptively em pha size[s] the importance of joining this suit," and seeks to "scare potential class m em bers into joining this action" by stating in boldface type that it is "extremely important" fo r individuals to return the consent form and emphasizing the running of the statute of lim itation s. Defs.' Br., dkt. #106, at 7. Defendants suggest that plaintiffs' counsel included this language in an attempt to maximize the amount of attorney fees they will recover. I disagree with defendants. This language appropriately notifies potential class members that if they are to participate in the lawsuit, they must file the opt-in notice within a given time. In addition, the language appropriately notifies potential plaintiffs that the statute of

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lim itatio n s continues to run on FLSA claims until a plaintiff opts in to the collective action or files an individual lawsuit. I see no problems with including this language in the notice. D efendants' seventh objection is that the notice fails to advise recipients that they can file their own lawsuit with their own attorney or join in this lawsuit with their own attorney. D e fen dan ts again suggest that plaintiffs' counsel left out this information with hopes of co llectin g more attorneys fees. However, under the section labeled "No Legal Effect in Not Joining This Suit," the notice states that If you choose not to join this lawsuit, you will not be affected by any judgment or settlement for the Fair Labor Standards Act claims in this case, whether fa v o r a b le or unfavorable to the class. You will not be entitled to share any am ou nts recovered by the class. You will be free to file your own lawsuit, if you w ish to do so. D kt. #95, Ex. A, at 46 (emphasis added). This language is sufficient to notify recipients that they may file their own lawsuits. Moreover, I disagree with defendants that potential plaintiffs must be informed of their right to join this collective action with their own attorneys. As I explained in Kelly, 232 F.R.D. at 632, "[a]nyone who knows how lawyers w ork knows that a collective action allowing each opt-in plaintiff to have his or her own law yer is simply not workable. Potential plaintiffs who want a different lawyer are free to take action on their own instead of opting into the suit, as the notice already explains." (internal quotations omitted). Finally, defendants object that the notice section titled "Further Information" is

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"su perflu ou s" and is either an "oversight or blatant effort to convince individuals to call and talk to Plaintiffs' counsel directly." Defs. Br., dkt. #106, at 9. The section states that Further information about this Notice or the lawsuit may be obtained from plaintiffs' attorney at the addresses, telephone numbers, fascimile numbers, o r email addresses identified above, or on the Internet at ____ ____ ____ ____ ____ __. Please see the website for information and updates on the lawsuit. T h e preceding section is titled "Right to Consult With Us," and states that "[i]f you want to talk with us about this lawsuit, please feel free to call, write or email us from your personal (no t work) e-mail account during non-working time . . . ." I agree with plaintiffs that the "Further Information" section is neither unnecessarily redun dan t or biased. The "Right to Consult With Us" section informs the putative class m em bers that they have the right to discuss the lawsuit with plaintiffs' counsel, and provides counsels' contact information. The subsequent section states that putative class members m ay obtain information regarding the notice form and lawsuit from plaintiffs' counsel or o n li n e . There is nothing improper about highlighting the recipients' right and ability to co ntact class counsel.

2 . Opt-in period D efendan ts request that the court set a 45 day opt-in period for putative class m em bers to opt in to this action, while plaintiffs request a 60 day opt-in period. In the past,

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this court has approved 60 and 90-day opt-in periods for nationwide FLSA classes. E.g., Sharpe, 2010 WL 1292154, at *2 (60 days); Kelly, 256 F.R.D. at 632 (90 days). In light of the size of the FLSA national class and its widespread geographic dispersal, I conclude that a 60 day opt-in period is reasonable.

3 . Three-year statute of limitations F LS A violations are subject to a two-year statute of limitations unless the violation is willful, in which case a three-year statute of limitations applies. 29 U.S.C. § 255(a). D e fen dan ts object to the notice form because it contemplates a three-year statute of lim itations for putative class members, contending that plaintiffs have made no showing that an y FLSA violation was "willful." Whether defendants violated the FLSA and whether any su ch violations were willful are questions pertaining to the merits of this action and are not pro perly entertained at this early stage of the proceeding. At this stage of litigation, justice is most readily served by notice reaching the largest number of potential plaintiffs. T herefore, any notice sent will assume a three-year statute of limitations.

4. Distribution of the notice Plaintiffs seek approval of the following methods for notifying potential class m em bers:

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·

D istribution of the notice and consent to current and former DirectSat em ployees who fall within the class by first-class mail to the employees' last-kn ow n address, as provided by DirectSat; Em ail notification attaching the notice and consent form to both current and former employees who fall within the class, to email addresses provided by DirectSat; C reating a website containing the notice and consent form; A court-approved press release directing putative class members to the w ebsite; If these methods are unsuccessful in providing notice to former D irectS a t employees who fall within the class, phone contacts with putative class members by plaintiffs' counsel using a court-approved script; A grant of leave for plaintiffs to seek additional methods of notice if the m eth od s are shown to be inadequate to reach a significant number of putative class members;

·

· ·

·

·

T o effectuate this notice process, plaintiffs ask that defendants be required to produce the names and last-known regular and email addresses for all putative class members. In additio n, where plaintiffs are unsuccessful in providing notice to former employees who fall w ithin the class, plaintiffs ask that defendants be required to provide all available last-known telepho ne numbers of former employees. D efendan ts object to plaintiffs dissemination of notice by any means other than first class mail, contending that alternate methods are unnecessary and overbroad. Plaintiffs do not explain why they need to distribute notice through so many channels, other than

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asserting that this court has approved its proposed method in the past. With respect to em ail notification, some courts, including this one, have allowed email distribution of notice form s for FLSA collective actions. E.g., Sjoblom, 07-cv-451-bbc, Mar. 7, 2008 Order, attached as Ex. C. to Modl Aff., dkt. #109; Davis v. Westgate Planet Hollywood Las Vegas, LLC , 2009 WL 4019424, *3 (D. Nev. Nov. 19, 2009); Lewis v. Wells Fargo & Co., 669 F. S upp. 2d 1124, 1128-29 (N.D. Cal. 2009); Cranney v. Carriage Services, Inc., 2008 WL 6086 39, *5 (D. Nev. Feb. 29, 2008). Other courts have denied requests to notify potential class members by email, citing concerns about distortion or misleading notification through m od ification of the notice itself or the addition of commentary. Hintergerger v. Catholic H ealth System, 2009 WL 3464134, *13 (W.D.N.Y. Oct. 21, 2009); Kuznyetsov v. West P en n Allegheny Health System, Inc., 2009 WL 1515175, *6 (W.D. Pa. June 1, 2009) (quoting Reab v. Electronic Arts, Inc., 214 F.R.D. 623, 630 (D. Colo. 2002)); Gordon v. K aleida Health, 2009 WL 3334784, *11 (W.D.N.Y Oct. 14,2009); Karvaly v. eBay, Inc., 2 4 5 F.R.D. 71, 91 (E.D.N.Y.2007). Although this court has allowed email distribution of no tices in a previous case, I agree with the reasoning of the courts suggesting caution be used in allowing email notification because of the potential for recipients to modify and redistribute email messages. In some circumstances, email notification may be necessary to reach potential class members. Plaintiffs have provided no reason why it is necessary in this case. Thus, plaintiffs may not send the notice form by email and defendants are not

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requ ired to provide email addresses of former employees to plaintiffs at this time. W ith respect to plaintiffs' proposed website and press release, defendants do not explain how such notice methods, if pre-approved by the court, carry the same risks as email n o tificatio n . As long as plaintiffs post only the pre-approved notice form on the website and p u b li sh only a court-approved press release, I see no problem with these methods of d istrib utio n . Also, defendants have not explained why plaintiffs should be prohibited from con tacting putative class members by telephone, using a court-approved script, if other m eth o ds of notice are unsuccessful. In sum, once the final notice and consent form is approved by the court, plaintiffs are perm itted to distribute the notice and consent form to current and former DirectSat em p lo yees by first-class mail. Plaintiffs may also create a website containing the notice and consent form and publish a court-approved press release directing putative class members to the website. After using these methods, if plaintiffs are unsuccessful in contacting former em ployees within the class, plaintiffs' counsel may attempt to contact those employees by telep ho ne, using a court-approved script. Defendants must provide to plaintiffs the full na m es and last known mailing addresses for all potential class members. If necessary under the terms of this order and upon plaintiffs' request, defendants must provide plaintiffs with all available last known telephone numbers of former employees.

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5. Restriction of plaintiffs' counsel's contacts with potential class members F in ally, defendants request that this court prohibit plaintiffs' counsel from contacting p utative class members by any other methods than those approved by the court for giving notice. In response, plaintiffs' counsel has agreed to limit their contacts with putative m em bers of the FLSA class during the opt-in period to those methods approved by the court. H ow ever, plaintiffs' counsel request that, if necessary, they be allowed to contact during the opt-in period those individuals who may also assert claims as members of the proposed Fed. R . Civ. P. 23 state-law classes for investigation and fact-finding purposes, agreeing that they w ill not encourage these individuals in any way to opt in to the FLSA portion of the case. I conclude that contact for investigative and fact-finding purposes is reasonable. Thus, durin g the opt-in period, plaintiffs' counsel may contact putative FLSA class members only by those methods approved by the court, including first class mail, a court-approved press release, website and telephone calls, and for the limited purpose of investigating the state-law claim s also asserted in this case.

OR DER IT IS ORDERED that 1 . The motion for conditional certification and court facilitation of notice, dkt. #65,

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filed by plaintiffs Aaron Espenscheid, Gary Idler and Ricardo Bolano is GRANTED in part an d STAYED in part. Conditional certification of the FLSA nationwide class proposed in plaintiffs' amended complaint is GRANTED. A decision is STAYED regarding the final con tent of the written notice and consent form that will be distributed to potential opt-in plaintiffs, pending a decision on plaintiffs' motion to dismiss defendants' counterclaims, dkt. #123. 2. Once the court approves a notice and consent form, defendants will have 14 days w i th in which to provide plaintiffs with the full names and last known mailing addresses for all potential class members. If necessary under the terms of this order and upon plaintiffs' request, defendants shall provide plaintiffs with all available last known telephone numbers of former employees within the class. 3. Once the court approves a notice and consent form, plaintiffs are authorized to send the notice to all DirectSat and UniTek current and former employees by the methods authorized in this order. 4. Once the court approves a notice and consent form, opt-in plaintiffs will have a 60 -day period within which to file notices of consent to join the lawsuit. 5. Plaintiffs' counsel may communicate with potential opt-in plaintiffs only by those m ethods approved by the court, with the exception that plaintiffs' counsel may contact po tential opt-in plaintiffs who may also be plaintiffs in the proposed Fed. R. Civ. P. 23 state

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actions for the limited purpose of investigation and fact-finding related to the state-law c la i m s . E n tered this 4th day of June, 2010. B Y THE COURT: /s/ B AR B AR A B. CRABB D istrict Judge

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