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granting conditional certification in part based on accusations made in sworn declarations that the defendant's supervisors told employees about a policy not to pay overtime wages
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Civil No. CCB-07-455.
February 26, 2008
MEMORANDUM
Plaintiffs Giovanni Montoya, et. al. ("plaintiffs") have sued S.C.C.P. Painting Contractors, Inc. ("S.C.C.P.") for alleged violations of the Fair Labor Standards Act, including unpaid wages and overtime pay. The plaintiffs have filed a Motion for Conditional Class Certification, Issuance of Notice and an Order for Certain Discovery. They have also requested that the court order S.C.C.P. to produce the names and last known addresses for all individuals who currently perform or formerly performed painting and/or painting-related work for S.C.C.P. for the previous three years, and that the court approve plaintiffs' notice to those individuals by mail. Should S.C.C.P. be unable to produce a complete name and address list, plaintiffs request that the court approve their alternative notice plan. The issues have been fully briefed, and oral argument was heard on February 7, 2008. For the reasons articulated below, plaintiffs' request to proceed as a collective action will be granted, and the proposed alternative notice plan approved.
BACKGROUND
The plaintiffs have sued S.C.C.P. and Giovanni ("John") Sulmonte ("Mr. Sulmonte"), an officer of S.C.C.P., for violations of the Fair Labor Standards Act, breach of an oral employment contract, unjust enrichment, and violations of various Maryland, Virginia and District of Columbia wage and hour laws. Plaintiffs worked for S.C.C.P. as painters during various periods between December 2005 and April 2006, and claim that S.C.C.P. had a "scheme to deny payment of wages" that took four forms: employees routinely worked in excess of 40 hours a week, but were not paid overtime; employees were not paid for entire pay periods they had worked; employees were directed to work off the clock; and S.C.C.P. withheld wages, allegedly for tax purposes, which was not actually withheld for the IRS. The plaintiffs have moved to conditionally certify a class of "all individuals who are or have been employed by Defendants as non-exempt, hourly-paid employees for the three years immediately prior to the date of conditional certification." (Mot. Certify Class 13.)
S.C.C.P. asserts that its workers were self-employed independent contractors, rather than employees. This memorandum refers to those workers as "employees," but as discussed infra, the court declines to rule at this point as to their employment status.
Attached to the motion for conditional class certification are a proposed notice plan (Ex. A) and a proposed alternative notice plan (Ex. B). The first notice plan is for notice by mail; it is intended to be mailed to the list of employees that plaintiffs have requested S.C.C.P. to produce. The second notice plan is broader: it involves posting the notice at 35 locations around the Washington metropolitan area, printing notices in three local Latino newspapers, radio advertisements on five local stations, and a posted notice on the Washington Lawyer's Committee for Civil Rights and Urban Affairs website. The total cost of the proposed alternative notice plan is estimated at $8,980.00.
ANALYSIS
Conditional Class Certification
Plaintiffs have filed this suit for unpaid wages and overtime pay pursuant to the Fair Labor Standards Act of 1938 ("FLSA"), 29 U.S.C. §§ 201 et seq., on behalf of the named plaintiffs and others similarly situated. They also have filed a motion pursuant to § 216(b), requesting that this court facilitate notice to similarly situated employees and former employees of S.C.C.P. Section 216(b) establishes "an `opt-in' scheme whereby potential plaintiffs must affirmatively notify the court of their intention to become a party to the collective action." Marroquin v. Canales, 236 F.R.D. 257, 259 (D. Md. 2006). S.C.C.P. opposes this motion, arguing that this case involves "a small number of Plaintiffs with different types of claims under separate and individual circumstances." (Def's Opp'n Conditional Class Certification 1.)District courts "have discretion, in appropriate cases, to . . . facilitat[e] notice to potential plaintiffs." Camper v. Home Quality Mgt., 200 F.R.D. 516, 519 (D. Md. 2000) (quoting Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 169 (1989)) (internal quotations omitted). It is important that employees receive "accurate and timely notice concerning the pendency of the collective action, so that they can make informed decisions about whether to participate." Hoffman-La Roche, 493 U.S. at 170. "The relevant inquiry then is not whether the court has discretion to facilitate notice, but whether this is an appropriate case in which to exercise that discretion." Camper, 200 F.R.D. at 519 (citing Hoffmann v. Sbarro, 982 F. Supp. 249, 261 (S.D.N.Y. 1997)).
The first issue in determining whether to certify a conditional class is whether plaintiffs have demonstrated that potential class members are similarly situated. Plaintiffs are required to "make a preliminary factual showing that a similarly situated group of potential plaintiffs exists." Camper, 200 F.R.D. at 519 (quoting D'Anna v. M/A-COM, Inc., 903 F.Supp. 889, 893-94 (D. Md. 1995). "This would include factual evidence by affidavits or other means, but mere allegations in the complaint would not suffice." Quinteros v. Sparkle Cleaning, Inc., ___ F. Supp. 2d ___, 2008 WL 271730, at *7 (D. Md. 2008).
Potential plaintiffs will be considered similarly situated when, collectively, they were victims of a common policy or scheme or plan that violated the law. Marroquin, 236 F.R.D. at 260 (citing Jackson v. New York Telephone Co., 163 F.R.D. 429, 431 (S.D.N.Y. 1995). Another district court within the Fourth Circuit has found that plaintiffs are similarly situated when the two groups "raise a similar legal issue as to coverage, exemption, or nonpayment o[f] minimum wages or overtime arising from at least a manageably similar factual setting with respect to their job requirements and pay provisions," but noted that "their situations need not be identical." De Luna-Guerrero v. North Carolina Growers' Ass'n, Inc., 338 F. Supp. 2d 649, 654 (E.D.N.C. 2004).
Conditional class certification in the instant case is entirely appropriate. In Marroquin, this court noted the following factors as relevant to the class certification determination: an adequate showing that there are other yet-unidentified coworkers in the same position, adequate evidence that other potential plaintiffs were subjected to the same FLSA violations, and, when determining the breadth of notice, the likelihood that there are class members not currently in the immediate area. 236 F.R.D. at 260-61.
Here, Giovanni Montoya and the other named plaintiffs have made an adequate showing that there are other current and former employees of S.C.C.P. who have yet to be identified as potential class members. In their sworn declarations, plaintiffs have consistently testified that S.C.C.P. had other employees and worksites throughout Maryland, Virginia, and the District of Columbia. ( See, e.g., Mot. Certify Class Ex. E, Aplicano Decl. ¶ 8). The estimates range from 50 employees ( See Mot. Certify Class Ex. D, Carrera Decl. ¶ 10) to 90 employees ( See Mot. Certify Class Ex. G, Montoya Decl. ¶ 8). The complaint alleges that S.C.C.P. has had over 500 employees from 2004 to the present. (Compl. ¶ 25.)
At oral argument, counsel for the plaintiffs observed that he had received approximately 3,300 payroll checks from the S.C.C.P. Checks issued biweekly, paid over a period of three years, would yield about 45 employees; plaintiffs' counsel noted that given employee turnover, a higher number was likely.
"While courts often find the presence of a company-wide policy as key to the approval of court facilitated notice . . . plaintiffs cannot reasonably be expected to have evidence of a stated policy of issuing bad checks or refusing to pay overtime." Marroquin, 236 F.R.D. at 260-61 (internal citation omitted). Here, plaintiffs' sworn declarations make the accusation that S.C.C.P. supervisors told employees it was the policy of S.C.C.P. not to pay overtime wages. (See Mot. Certify Class Ex. H, Aguilar Decl. ¶ 14; Ex. E, Aplicano Decl. ¶ 15; Ex. C, Carrera Decl. ¶ 12; Ex. F, Figueroa Decl. ¶ 13.) All of the plaintiffs, including the putative plaintiffs, claim that other S.C.C.P. employees were working more than 40 hours a week. (See, e.g., Ex. H, Aguilar Decl. ¶ 16; see also Ex. R, Zepeda Decl. ¶ 11.) During his deposition, Mr. Sulmonte admitted that it was S.C.C.P.'s policy not to pay overtime when workers exceeded 40 hours per week because they were "individuals that have agreed to work ex-amount of hours per week, for set amount of money." (Pl's Reply Ex. 1 at 217.) It is thus likely that there are other current or former S.C.C.P. employees who were denied overtime pay. Additionally, all of the named plaintiffs claim that S.C.C.P. failed to pay them for work done.
S.C.C.P. suggests, in its opposition to the motion for conditional class certification, that the plaintiffs and other putative class members opted not to enter an employer-employee relationship with S.C.C.P. because of fears about their immigration status. (Def's Opp'n 7.) Judge Gauvey has already made it clear, while handling a discovery dispute in this case, that plaintiffs' immigration status has no bearing on class certification: "the protections of the Fair Labor Standards Act are available to citizens and aliens alike, regardless of documented or undocumented status." (Order on Mot. Compel 4, docket entry no. 38) (citing In re Reyes, 814 F.2d 168, 170 (5th Cir. 1987)).
Even if S.C.C.P. is merely arguing that the plaintiffs were independent contractors and not employees, the potential misclassification of the plaintiffs, in violation of FLSA's mandate that "employee" be interpreted broadly, could be enough for class certification. See Lee v. ABC Carpet Home, 236 F.R.D. 193, 197-98 (S.D.N.Y. 2006) (recognizing that "common policy or plan" may include the misclassification of employees as independent contractors); see also Westfall v. Kendle, 2007 WL 486606, at *9-10 (N.D.W.Va. Feb. 15, 2007) (holding that misclassification of employees as independent contractors was sufficient to meet the similarly situated requirement, despite the defendant's argument that the court needed to examine each worker-employer relationship independently). Additionally, S.C.C.P. is arguing that all of its workers were independent contractors — that is, it claims they were all treated as subcontractors who were not entitled to overtime pay. (Pl's Reply 4, n. 4) Plaintiffs make the point that if all the employees were wrongly treated in the same way, this should be a factor in favor of a similarly situated finding. See Lynch v. United Svcs. Auto Ass'n, 491 F. Supp. 2d 357, 370 (S.D.N.Y. 2007). Accordingly, for all the reasons set forth above, the plaintiffs' motion for conditional class certification will be granted.
Because the complaint alleges that all employees were classified in the same way, plaintiffs argue that it is not necessary to reach the question of whether the plaintiffs were independent contractors or employees. They also cite Westfall v. Kendle Int'l, 2007 WL 486606 (N.D.W.Va. Feb. 15, 2007), an unpublished case from West Virginia in which the district judge cited, but did not appear to apply, the six-factor test for employee determination under FLSA. 2007 WL 486606, at *9. The court "recognize[d] the potential for the future individual assessment of each proposed action member," but noted that "the plaintiff has a low bar to meet" and that "the defendants' arguments [regarding independent contractor status] are more appropriate in the second [motion for decertification] stage of the similarly situated inquiry." Id.
Request for Order to Produce Names and Proposed Notice
"Court authorization of notice serves the legitimate goal of avoiding a multiplicity of duplicative suits and setting cutoff dates to expedite disposition of the action." Hoffman-La Roche, 493 U.S. at 172. Because each potential plaintiff must affirmatively opt in to the lawsuit, and because "the statute of limitations period continues to run with respect to each potential plaintiff's collective action claim until that plaintiff files the written consent form," Lee, 236 F.R.D. at 199, court-facilitated notice is crucial. The court must take pains, however, to "avoid the `stirring up' of litigation through unwarranted solicitation," and to recognize that "an employer should not be unduly burdened by a frivolous fishing expedition conducted by plaintiff at the employer's expense." D'Anna, 903 F.Supp. at 894.
Plaintiffs have had some difficulty obtaining information from S.C.C.P. regarding its current and former employees. During discovery, plaintiffs sought "[a]ll payroll records showing wages paid to all employees for the period spanning from February 21, 2004 to the present," along with timesheets and sign-in sheets documenting hours worked. (Pl's Mot. Certify Class Ex. I at 2.) S.C.C.P. has represented to the plaintiffs and to this court at oral argument that it does not have any records containing any information regarding employees, including (but not limited to) personnel files, payroll records, timesheets and government tax documents. (Pl's Mot. Certify Class Ex. O at 2.)
There is some confusion on this point. In his deposition, Mr. Sulmonte referred to a sheet with "the individual's name and job site and the hours that they worked" on it. (Pl's Reply Ex. 1 at 51.) A document with a list of names and hours worked, titled "PAY ROLL SCCP" and dated 12/1/2006, is attached to plaintiffs' motion as exhibit S. In their motion, plaintiffs refer to this document as having been "produced in response to Defendants' discovery requests," (Pl's Mot. Certify Class 9), and plaintiffs' counsel includes a sworn declaration that the document is a true and correct copy of S.C.C.P.'s document (docket entry no. 35, part 4, Varela Decl.)
Plaintiffs have thus had some difficulty identifying putative class members, and request that this court order S.C.C.P. to produce the names and addresses of putative class members dating back three years. A similar situation arose in the Marroquin case, in which the defendants "maintained poor to non-existent records." 236 F.R.D. at 262 n. 19. This court noted that the defendants, "[h]aving not maintained adequate records of their workers, as is required by law, are not in a strong position to oppose the reasonable notice efforts proposed and approved herein." Id.
Here, assuming that S.C.C.P. is unable to provide the plaintiffs with a list of former employees, the proposed alternative notice plan does not seem unreasonable, although the defendant has represented to the court that shouldering the cost of the notice plan would be a financial burden. To ensure that notice is disseminated promptly, the plaintiffs and the defendant will be directed to split the cost of implementing the plan, with plaintiffs reserving the right to seek reimbursement of costs expended should they be successful. As for current employees, S.C.C.P. will be required to disseminate the plaintiffs' proposed notice (Pl's Mot. Certify Class Ex. A) with employees' paychecks.
A separate Order follows.
ORDER
In accordance with the foregoing Memorandum, it is hereby ORDERED that:1. Plaintiffs' Motion for Conditional Class Certification (docket entry no. 35) is GRANTED;
2. The plaintiffs' proposed Alternative Notice Plan is APPROVED (see docket entry no. 35, Ex. B) in its entirety, with the costs to be borne equally by the plaintiffs and the defendants; and
3. A status report from each side is due March 21, 2008.