Nickell, Eugene et al v. PGA Inc.
Filing
118
ORDER granting 45 Motion to Certify Class under Rule 23; Denying 53 Motion to Decertify Class by defendant. On or before April 4, 2018, the parties should submit a joint proposed form and method of notice, or if unable to agree, plaintiffs should submit their own proposed notice, with defendant to respond by April 11, 2018. The court will hold oral argument on the parties' cross motions for summary judgment on April 26, 2018, at 10:00 a.m. Signed by District Judge William M. Conley on 3/14/2018. (voc)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
ERIC SCHILLING, BLAINE KROHN,
and ERIK SINCLAIR,
Plaintiffs,
OPINION AND ORDER
v.
16-cv-202-wmc
PGA INC.,
Defendant.
Plaintiffs Eric Schilling, Blaine Krohn and Erik Sinclair assert claims against their
employer, PGA Inc., a company specializing in air comfort systems in central Wisconsin,
for allegedly calculating overtime wages in violation of the Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 201 et seq., and Wisconsin state labor laws. Specifically, plaintiffs
allege that: (1) PGA’s policy of not including the “cash fringe rate” in calculating overtime
violates both the FLSA and state law; and (2) PGA’s policy of paying overtime based on
the rate for the work performed during overtime hours, rather than on a “straight-time
hourly rate,” violates state law.1
The first theory is based on PGA’s alleged miscalculation of overtime pay for
prevailing wage work. Plaintiff contends that PGA violated state law and the FLSA by
failing to pay its employees overtime based on the hourly basic rate plus the cash fringe
At this time, the court opts to exercise its supplemental jurisdiction over the state law claims.
While plaintiff pursues both federal and state law claims based on the cash fringe rate theory, the
straight-time hourly rate claim only arises under state law. As such, if the court were to grant
judgment in defendant’s favor on the cash fringe rate theory, it would likely decline to continue to
exercise its supplemental jurisdiction over the straight-time hourly rate claim, consistent with the
Seventh Circuit’s direction. See Groce v. Eli Lilly & Co., 193 F.3d 496, 501 (7th Cir. 1999) (“The
usual practice is to dismiss without prejudice state supplemental claims whenever all federal claims
have been dismissed prior to trial.”).
1
rate. Instead, plaintiffs claim, PGA calculated overtime for prevailing wage work using only
the hourly base rate, and then adding the cash fringe rate to that overtime hourly rate.2
The second theory is based on plaintiffs’ PGA’s allegedly miscalculating overtime using the
rate of pay for the work completed during overtime hours, rather than the average straight
time hourly rate earned during the workweek.
Consistent with its usual two-step procedure, this court previously certified a
conditional FLSA collective action based on the “cash fringe rate” claim. (11/2/2016 Order
(dkt. #24).) Before the court is plaintiffs’ motion to certify a Rule 23 class covering both
state law claims or two subclasses (dkt. #45), as well as defendant’s motion to decertify
the FLSA collective action (dkt. #53). For the reasons that follow, the court will grant
plaintiffs’ motion for class certification, certifying a single Rule 23 class covering both
overtime claims. For the same reasons, the court will deny defendant’s motion to decertify
the FLSA collective action.
The FLSA collective action notice offers the following helpful example of how they allege PGA
miscalculated overtime pay for prevailing wage work:
2
When you worked on prevailing wage projects, the wages you
received included both cash and cash fringe payments. For example,
if you received $40 per hour in wages, $10 out of the $40 may be a
cash fringe payment, while $30 out of the $40 was a wage payment.
PGA paid you overtime pay equal to 1.5 times the wage payment
plus the cash fringe. In this example PGA paid you 1.5 times the
$30, plus the cash fringe of $10, for a total of $55 per hour.
Plaintiffs contend that you are entitled to 1.5 times the full $40 in
wages, for a total of $60; and that PGA violated the FLSA by paying
you $55 rather than $60 for your overtime hours worked. Plaintiffs
claim that you are entitled to two times the overtime pay you should
have, but did not receive as damages.
(Def.’s Proposed Notice (dkt. #23-1) 2.)
2
Finally, before the court are the parties’ cross-motions for summary judgment. (Dkt.
##85, 90.) In light of the parties’ reliance on competing Wisconsin administrative code
provisions and other administrative documents, and the limited case law as to plaintiffs’
specific legal claims, the court believes that oral argument would be worthwhile.
Accordingly, the court will hold oral argument at 10:00 a.m. on April 26, 2018.3
Depending on the oral argument and the outcome of summary judgment, the court will
reset pre-trial deadlines and a trial date, as necessary.
OPINION
I. Motion for Class Certification
A two-step analysis governs certification of a class action under Rule 23. See Messner
v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012). First, a class must
satisfy the four threshold requirements of Rule 23(a): numerosity, commonality, typicality
and adequacy of representation. Id. Second, the party seeking certification must satisfy
one of the three alternatives under Rule 23(b). Id. The proponent of the class bears the
burden of demonstrating that the class meets all of these requirements by a preponderance
of the evidence. Id.
The trial court must itself engage in a “rigorous analysis” to determine that the
requirements of Rule 23 have been satisfied. CE Design, Ltd. v. King Architectural Metals,
Inc., 637 F.3d 721, 723 (7th Cir. 2011). As a result, Rule 23 considerations may overlap
If that date or time does not work for the parties, they should promptly confer and confirm another
date and time on or around that set above by contacting my judicial assistant, Melissa Hardin, at
608-264-5087.
3
3
with the merits of the case. Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011).
Where they do, “the judge must make a preliminary inquiry into the merits.” Szabo v.
Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001). If material factual disputes
exist, the court must even receive evidence and resolve those disputes before determining
whether to certify the class, but “should not turn the class certification proceedings into a
dress rehearsal for the merits.” Messner, 669 F.3d at 811.
Here, plaintiffs seek certification of a single class that covers both theories of
recovery, or in the alternative, two subclasses that respectively address the two theories.
While both theories here concern overtime pay calculations, the claims rest on different
facts and questions of law. Still, there appears to be no conflict of interest. In other words,
the interests of class members asserting a cash fringe rate claim are not at odds with the
interest of class members asserting a straight-time hourly rate claim. Specifically, these
claims are not mutually exclusive -- a class member could have been subject to either or
both alleged overtime miscalculations.
As such, two subclasses are not required.
See
generally 3 William B. Rubenstein et al., Newberg on Class Actions § 7:29 at pp.149-50 (5th
ed. 2013) (“Because there is no conflict of interest at issue, there is no necessity that each
subclass have different representation and independently comply with all of the
requirements of Rule 23(a), (b), and (g).”). At some point, subclasses may be helpful from
a management perspective, but the court will consider plaintiff’s motion as seeking to
certify a single class concerning both overtime challenges, which would also cover both
FLSA collective action claims.
See id. (explaining the difference between compulsory
subclasses to cure conflicts and permissive subclasses for management purposes).
4
A. Rule 23(a) Requirements
i.
Numerosity
The numerosity requirement is satisfied when “the class is so numerous that joinder
of all members is impracticable.” Fed. R. Civ. P. 23(a)(1).
Plaintiffs represent, and
defendants stipulate, that at least 40 employees were paid overtime without accounting for
the cash fringe rate, and at least 22 employees were paid overtime based on the rate for the
work performed during overtime hours. (Pl.’s Br. (dkt. #46) 7 (citing Ho Decl., Ex. 2 (dkt.
#20-2) (defendant’s stipulation).) Because the court is considering plaintiff’s motion as
to certifying a single class, there are a minimum of 40 members, and perhaps more, if some
of the 22 employees asserting straight time hourly rate claims are not counted in that 40.
“The Seventh Circuit has indicated that a group as small as forty may satisfy the
numerosity requirement.” Armes v. Sogro, Inc., No. 08-C-0244, 2011 WL 1197537, at *2
(E.D. Wis. Mar. 29, 2011) (citing Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326,
1333 n.9 (7th Cir. 1969)). This is consistent with “[t]he rule of thumb adopted in most
courts . . . that proposed classes in excess of 40 generally satisfy the numerosity
requirement.” 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 4:5 (8th ed. 2011)
(collecting cases). Accordingly, the numerosity appears to be satisfied, if barely.
ii.
Commonality
To satisfy the commonality requirement of Rule 23, plaintiffs must demonstrate
there are “questions of law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). A single,
common issue will do, if it is “capable of classwide resolution -- which means that
determination of its truth or falsity will resolve an issue that is central to the validity of
5
each of the claims in one stroke.”
Dukes, 131 S. Ct. at 2551, 2556. Furthermore, the
commonality standard requires that plaintiffs do more than “merely” demonstrate “that
they have all suffered a violation of the same provision of law.” Id. (internal quotation
marks omitted). Plaintiff must show that “the class members have suffered the same
injury.” Id.
Here, plaintiffs’ have put forth sufficient evidence for a reasonable trier of fact to
find that PGA has policies of (1) not including cash fringe in the overtime calculation and
(2) calculating overtime based on the rate of pay for the work completed during overtime
hours, rather than the average straight time hourly rate earned during the workweek.
Defendant’s challenge primarily concerns the latter claim, directing the court to purported
evidence that employees, at times, were paid overtime calculated using the average wage
rate. (Def.’s Opp’n (dkt. #78) 12-13.) In its analysis, however, defendant relies on an
unsupported assumption that “PGA rounds employees’ time to the nearest half hour.” (Id.
at 13.)
Comparing defendant’s math to that of plaintiffs’, a key takeaway would appear to
be that there is very little money at stake with respect to this claim. The examples provided
by the parties demonstrate that the difference in pay (at least on a weekly basis) between
overtime calculated based on the average straight time hourly rate and the rate for the
overtime work is a matter of cents. (See, e.g., Def.’s Opp’n (dkt. #78) 12-14; Pl.’s Reply
(dkt. #82) 14-18.)
Nonetheless, defendant’s analysis does not undermine plaintiffs’
evidence that defendants’ have a policy of calculating overtime based on the rate of pay for
the work completed during overtime hours.
6
Satisfied that plaintiffs have put forth sufficient evidence to support a finding that
defendants have adopted the two challenged policies, the common issues are whether these
policies violate state law. In response, defendant simply challenges whether its calculation
of overtime based on the rate of pay for the overtime hours worked violates state law, at
least for some employees. (Def.’s Opp’n (dkt. #78) 16-19). This response, however,
addresses the merits of plaintiffs’ cash fringe claim, not whether the claim is amenable to
classwide proof. Regardless, the court finds that whether PGA’s overtime policies violate
state law are capable of classwide resolution, thus easily satisfying the commonality
requirement of Rule 23(a)(2).
iii.
Typicality
Typicality for Rule 23(a) purposes requires that a named plaintiff’s claim “arises
from the same event or practice or course of conduct that gives rise to the claims of other
class members and his or her claims are based on the same legal theory.” Keele v. Wexler,
149 F.3d 589, 595 (7th Cir. 1998) (quoting De La Fuente v. Stokely-Van Camp, Inc., 713
F.2d 225, 232 (7th Cir. 1983)). For this reason, typicality will often overlap with the
commonality requirement. See Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157 n.13
(1982). Applied with care, however, the former standard should ensure that “a plaintiff
with typical claims will pursue his or her own self-interest in the litigation and in so doing
will advance the interests of the class members, which are aligned with . . . those of the
representative.” Insolia v. Phillip Morris, Inc., 186 F.R.D. 535, 544 (W.D. Wis. 1998)
(quoting 1 Newberg & Conte, Newberg on Class Actions § 3.13 (3d ed. 1992)).
7
Named plaintiffs and proposed class representatives Schilling, Krohn and Sinclair
were all subject to the same policies excluding cash fringe from the overtime pay calculation
and calculating overtime based on the rate of pay for the work completed during overtime
hours as the putative class members. Moreover, defendant offers no reason why plaintiffs’
claims are not typical of the other class members, or how their self-interest would diverge
from the interest of the class more broadly. Instead, defendant’s opposition regurgitates
the same commonality arguments, which the court already rejected above. Since plaintiffs
Schilling, Krohn and Sinclair’s claims arise from the same legal theory as the class as a
whole, the court finds the typicality requirement satisfied.
iv.
Adequacy of Representation
The adequacy requirement under Rule 23 is intended to ensure that “representative
parties will fairly and adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4).
A class representative is not adequate if he is subject to a defense to which other class
members are not subject or could not prove the elements of the class claim for reasons
particular to him. CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 724-25
(7th Cir. 2011).
Defendant offers a cursory challenge to Schilling and Krohn’s adequacy based on
the fact that they worked for PGA for a limited period of time and do not maintain contact
with other PGA employees. (Def.’s Opp’n (dkt. #78) 23-24.) Schilling and Krohn worked
for PGA for approximately two and a half months during their summer vacation from
college. While their limited employment may impact the extent of their damages, the fact
that they initiated this lawsuit, sat for depositions and otherwise engaged in discovery
8
provides sufficient evidence of their interest in pursuing their own claims and those of a
like class of employees.
Moreover, the fact that they have not maintained contact with other employees
does not undermine their ability to represent the class fairly. Notice to class members will
be directed by the court and coordinated by class counsel. Once represented by counsel,
the class representatives need not (and arguably, should not) play a role in communicating
with other class members outside privileged conversations involving legal counsel.
Defendant also contends that Sinclair in particular is not an adequate representative
because he “testified at his deposition that he views this lawsuit as an ‘opportunity to make
the playing field more level.’” (Def.’s Opp’n (dkt. #78) 26 (quoting Schilling Depo. (dkt.
#51) 57.) Defendant assumes that “leveling the playing field” means something different
than -- and is in conflict with -- “recover[ing] wages as required by law,” but offers no
reason for this assumption, nor can the court find any. (Id.) Indeed, absent more, this is
a silly argument that warrants no response, other than to note the following. First, most
parties, and certainly most plaintiffs, would, if asked, likely either say or agree that
vindicating their rights in court was an attempt “to level the playing field.” Second, even
assuming Sinclair’s testimony encompassed labor relation issues that extend beyond the
claims of this lawsuit, it does not raise a conflict of interest or otherwise call into question
his ability to represent the interests of his subclass fairly, unless defendant had actual
evidence that Sinclair would subvert his obligations to do just that in favor of his own,
broader agenda.
9
In addition to the named plaintiffs, courts are also required to determine whether
the proposed class counsel is adequate. See Dukes, 564 U.S. 338, 350 n.5 (explaining that
adequacy “raises concerns about the competency of class counsel and conflicts of interest”
(quoting Falcon, 457 U.S. at 157–158, n.13)). Here, defendant challenges proposed class
counsel’s adequacy based on some missteps in this case, including: (1) an alleged travel
time claim, which defendant contends plaintiff’s counsel should have known at the time
of pleading was meritless; (2) the inadvertent enclosure of a Wisconsin prevailing wage
consent form in the FLSA collective action notice; and (3) the failure to file a third
amended complaint timely as directed by the court.4
Certainly, the court agrees these are reasons for concern, and it has warned plaintiff’s
counsel to “focus on the work at hand.” (6/20/17 Order (dkt. #108) 6.) In light of
plaintiffs’ counsel’s and his law firm’s experience handling class action employment cases,
however, the court neither finds that any of these missteps call into question counsel’s
competence, nor “create[] a serious doubt that counsel will represent the class
loyally.” Creative Montessori Learning Ctrs. v. Ashford Gear LLC, 662 F.3d 913, 918 (7th Cir.
2011); see also Spoerle v. Kraft Foods Glob., Inc., 253 F.R.D. 434, 442 (W.D. Wis. 2008)
(rejecting adequacy challenge to class counsel based on mistake of sending out a class notice
without court approval). While the court finds the adequacy requirement satisfied, the
Defendant also points to a sanction for a discovery-related dispute in another case. The court
similarly finds that this sanction, even coupled with the other missteps noted by defendant in this
case, does not rise to the level of “serious doubt” necessary to find class counsel inadequate.
4
10
court will continue to monitor class counsel’s actions and will not hesitate to require either
substitution of counsel or the arrangement of co-class counsel, if required.
B. Rule 23(b)(3) Requirements
Having satisfied the four requirements of Rule 23(a), plaintiffs must still fulfill at
least one of the requirements of Rule 23(b) for certification of a class action. See Puffer v.
Allstate Ins. Co., 675 F.3d 709, 716 (7th Cir. 2012). Here, plaintiffs move for certification
under Rule 23(b)(3), which requires plaintiffs to show both that: (1) “questions of law
and fact common to class members predominate over any questions affecting only
individual members”; and (2) “a class action is superior to other available methods for
fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
i.
Predominance
The “predominance inquiry tests whether proposed classes are sufficiently cohesive
to warrant adjudication by representation.” Amchem Prods., Inc. v. Windsor, 521 U.S. 591,
623 (1997). The predominance requirement is not satisfied if “individual questions . . .
overwhelm questions common to the class.” Amgen Inc. v. Conn. Ret. Plans and Tr. Funds,
568 U.S. 455, 468 (2013). On this point, the Seventh Circuit has provided specific
instructions as to how the predominance inquiry should be framed:
[T]he class claim that PNC had an unofficial policy that left it
liable under the Fair Labor Standards Act and Illinois Law
would prevail or fail for the class as a whole. “In no event will
the individual circumstances of particular class members bear
on the inquiry.” Amgen, 133 S. Ct. at 1191. It makes no
difference to the class claim as a whole how many hours of
off-the-clock work each employee worked or the intent of the
manager. These would be issues for the portion of the suit in which
11
individual damages are assessed . . . . In other words, “[a] failure
of proof on the common question . . . ends the litigation and
thus will never cause individual questions of reliance or
anything else to overwhelm questions common to the class.”
Amgen, 133 S. Ct. at 1196.
Bell v. PNC Bank, Nat. Ass’n, 800 F.3d 360, 378-79 (7th Cir. 2015) (first emphasis added).
Under Bell, therefore, questions concerning damages for individual class members,
such as the number of hours each employee worked, do not predominate over the common
contention regarding whether the two challenged policies for calculating overtime pay are
unlawful. Indeed, even the potential for “scores of separate trials” to determine the extent
to which each class member actually suffered a loss as a result of a policy does not preclude
certification because, at minimum, “it will not be necessary in each of those trials to
determine whether [defendant] had an illegal policy.” Id. at 379-380; see also McReynolds
v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 491 (7th Cir. 2012).
With respect to this requirement, defendant again repeats its challenge as to
whether the average straight time hourly rate claim satisfies the commonality requirement.
The court rejects this argument for the same reason as described above. Plaintiffs have put
forth sufficient evidence to support a finding that defendant has adopted a policy of
calculating overtime based on the rate of pay for the work completed during overtime
hours, rather than the average straight time hourly rate earned during the workweek.
Defendant also opposes class certification on the basis that plaintiffs have not
demonstrated that these policies are unlawful. As also already addressed, this argument
goes to the merits of plaintiffs’ claim, rather than whether a common liability issue on the
legality of the policies predominates over individual issues concerning the amount each
12
class member worked. In light of Bell, therefore, the court finds that plaintiffs have made
a sufficient showing that common issues will predominate over individual issues under Rule
23(b)(3).
ii.
Superiority
The court must also determine whether “a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
Relevant matters for consideration include class members’ interests in individually
litigating their claims; the extent and nature of competing litigation; the desirability of
concentrating the litigation in the particular forum; and the likely difficulties of managing
a class action. Id. Ultimately, the case must be one “in which a class action would achieve
economies of time, effort, and expense, and promote uniformity of decision as to persons
similarly situated, without sacrificing procedural fairness or bringing about other
undesirable results.” Amchem Prods., 521 U.S. at 615 (quoting Fed. R. Civ. P. 23(b)(3)
advisory committee note to 1966 Amendment).
In challenging superiority, defendant once again largely rehashes its arguments
concerning commonality and predominance. Accordingly, the court’s response is much the
same.
While determining damages may well require separate trials (or at least
individualized proof), the Seventh Circuit has already ruled that the need for separate
damages trials does not preclude a finding of superiority. See Bell, 800 F.3d at 379-80 (“If
the class prevails in demonstrating that PNC had an unofficial policy or practice that
required employees class-wide to work off-the-clock overtime hours, scores of separate trials
might be necessary to determine which class members were actually adversely affected by
13
the policy and if they were, what loss each class member sustained. At least it will not be
necessary in each of those trials to determine whether PNC had an illegal policy of denying
pay for off-the-clock work.”). In fact, a single, class trial on whether an unofficial, unlawful
policy existed is superior in terms of efficiency to requiring multiple individual actions
seeking resolution of the same liability question or, at minimum, a determination of the
preclusive nature, if any, on the determination of liability against the defendant in each
individual lawsuit.
Defendant also argues that a class action is not superior because the “potential
damages to plaintiffs is not too small to make individual actions economically
impracticable.” (Def.’s Opp’n (dkt. #78) 34.) As mentioned, this may not be true for
some, if not many, of the class members. Regardless, the possibility that enough money
may be at stake to motivate most individual claimants, however, does not undermine a
finding of superiority, especially given that litigation costs may outweigh individual
damages for many class members. See Butler v. Sears, Roebuck & Co., 727 F.3d 796, 801
(7th Cir. 2013). For these reasons, the court agrees with plaintiffs that a class action is a
superior method of adjudication.
C. Certification of Class
Consistent with the discussion above, the court will grant certification of the
following class under Rule 23(b)(3):
All persons who were employed by PGA, Inc., on or after
March 31, 2014, who (i) did not receive overtime pay equal to
1.5 times both their base rate of pay and their cash fringe rate,
(ii) were paid overtime based on the rate of pay for the work
completed during overtime hours, rather than the average
14
straight time hourly rate earned during the workweek, or (iii)
both.
The court will also appoint named plaintiffs Eric Schilling, Blaine Krohn and Erik Sinclair
as the class representatives, and it will appoint Attorney Yingtao Ho and The Previant Law
Firm, S.C., as class counsel.
A district court’s grant of certification, however, is not final. See Eggleston v. Chi.
Journeymen Plumbers’ Local Union No. 130, 657 F.2d 890, 896 (7th Cir. 1981) (“[A]
favorable class determination by the court is not cast in stone. If the certification of the
class later deemed to be improvident, the court may decertify[.]”); Espenscheid v. DirectSat
USA LLC, No. 09-cv-625-bbc, 2011 WL 2009967, at *7 (W.D. Wis. May 23, 2011), aff’d,
705 F.3d 770 (7th Cir. 2013). Therefore, the court encourages plaintiffs to continue to
develop a trial plan that will ensure this case remains manageable as a class action.
Similarly, defendant may revisit the issue should circumstances change materially.
D. Notice
For any class action certified under Rule 23(b)(3), the court “must direct to class
members the best notice that is practicable under the circumstances, including individual
notice to all members who can be identified through reasonable effort.” Fed. R. Civ. P.
23(c)(2)(B). Notice must clearly, concisely, and comprehensibly state: (1) the nature of
the action; (2) the class definition; (3) the class claims, issues or defenses; (4) that a class
member may enter an appearance through an attorney should he or she desire; (5) that the
court will exclude any class member requesting exclusion; (6) the time and manner for
requesting exclusion; and (7) the binding effect of a class judgment on class members,
15
regardless of whether a member may have a stronger individual claim of liability not
dependent on proof of an unofficial policy to deny overtime pay. Id.
The parties are directed to meet and confer on the appropriate class notice, and
submit a proposed joint notice, if possible, on or before April 4, 2018. If the parties are
unable to reach an agreement, plaintiffs should submit their proposed version by that same
deadline, with defendant’s written response and proposed, alternative version due by April
11, 2018.
II. Decertification of Conditionally Certified FLSA Collective Action
The court now turns to defendant’s motion to decertify the conditional FLSA
collective action under a two-step process. The FLSA enables employees to bring their
“claims through a ‘collective action’ on behalf of themselves and other ‘similarly situated’
employees.” Alvarez v. City of Chi., 605 F.3d 445, 448 (7th Cir. 2010) (citing 29 U.S.C. §
216(b)). In determining whether opt-in plaintiffs are similarly situated, district courts in
this circuit consider whether: (1) their factual and employment settings are similar; (2)
affirmative defenses available to the defendant must be applied individually to each
plaintiff; and (3) fairness and procedural concerns weigh in favor of a collective action. See,
e.g., Gomez, 306 F.R.D. at 174; Espenscheid, No. 09-cv-625-bbc, 2011 WL 2009967, at *4.
The Seventh Circuit has acknowledged the blurring of lines between the nominally
different standards governing class actions under Rule 23 and collective actions under the
FLSA. Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 772 (7th Cir. 2013) (“[T]here
isn’t a good reason to have different standards for the certification of the two different
types of action[.]”).
Concluding that the different consequences between the opt-in
16
procedure for collective action under the FLSA and the opt-out requirement of a class
action governed by Rule 23(b)(3) were of no consequence in Espenscheid, the court treated
the FLSA classes and Rule 23 classes together, as a single class. Id. at 771-72. Not
surprisingly, defendant’s arguments for decertifying the FLSA collective action are largely
the same arguments raised in opposition to Rule 23 class certification.
Specifically, defendant seeks decertification based on its argument that individual
issues predominate over common issues or, relatedly, that the named plaintiffs’ claims are
not typical of other employees’ claims (because there is no typical claim).5 Since the court
already rejected those arguments, it finds no basis for decertifying the FLSA collective
action based on overlapping charges.
In addition, defendant also challenges the collective action on the basis that only
11 individuals opted in.
While the number of class members is pertinent to class
certification under Rule 23, defendant does not direct the court to any FLSA opinion
requiring a threshold number to maintain a collective action. To the contrary, this court
has declined to decertify a collective action where only eight employees opted in. See Bitner
v. Wyndham Vacation Resorts, Inc., No. 13-CV-451-WMC, 2016 WL 7480428, at *15
(W.D. Wis. Dec. 29, 2016).
For the reasons described above in granting plaintiffs’ Rule 23 motion, therefore,
the court concludes that plaintiffs are similarly situated to those employees who have opted
Defendant also raises concerns based on a prior motion for leave to amend the complaint, which
the court addressed in a previous opinion denying in part and granting in part leave to amend.
(2/16/17 Op. & Order (dkt. #61).)
5
17
into the FLSA collective action. Accordingly, the court will deny defendant’s motion for
decertification.
ORDER
IT IS ORDERED that:
1) Plaintiffs’ motion for class certification (dkt. #45) is GRANTED. The court
certifies the following class pursuant to Rule 23(b)(3):
All persons who were employed by PGA, Inc., on or after
March 31, 2014, who (i) did not receive overtime pay equal to
1.5 times both their base rate of pay and their cash fringe rate,
(ii) were paid overtime based on the rate of pay for the work
completed during overtime hours, rather than the average
straight time hourly rate earned during the workweek, or (iii)
both.
2) The court appoints Eric Schilling, Blaine Krohn and Erik Sinclair as the class
representatives.
3) The court appoints Attorney Yingtao Ho and The Previant Law Firm, S.C. as
class counsel.
4) Defendant’s motion for decertification (dkt. #53) is DENIED.
5) On or before April 4, 2018, the parties should submit a joint proposed form and
method of notice, or if unable to agree, plaintiffs should submit their own
proposed notice, with defendant to respond by April 11, 2018.
6) The court will hold oral argument on the parties’ cross motions for summary
judgment on April 26, 2018, at 10:00 a.m.
Entered this 14th day of March, 2018.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge
18
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