O'BRIEN v. ED DONNELLY ENTERPRISES, INC.

Full title: Teresea O'Brien, et al., Plaintiffs, v. Ed Donnelly Enterprises, Inc., et…

Court: United States District Court, S.D. Ohio, Eastern Division

Date published: Nov 30, 2006

Case No. 2:04-CV-00085 (S.D. Ohio Nov. 30, 2006)

Opinion

Case No. 2:04-CV-00085.

November 30, 2006

OPINION AND ORDER

GEORGE SMITH, District Judge

Teresea O'Brien and Dallas Prater ("Plaintiffs") filed this action on behalf of themselves and a putative class under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA"). Plaintiffs allege that they, and those similarly situated to them, were not paid the minimum hourly wage and overtime compensation due them in connection with their employment at two McDonald's facilities in Bellefontaine, Ohio. Plaintiffs also assert state law claims under O.R.C. Chapters 4111 and 4113, and claims under the common law of Ohio. This matter is currently before the Court on Defendants' Motion to Decertify this Action as a Collective Action (Doc. 106). For the reasons that follow, Defendants' motion is GRANTED.

I. FACTUAL BACKGROUND

On February 2, 2004, Plaintiffs filed the Complaint in this action. An Amended Complaint was since filed, which identifies the two named Plaintiffs as hourly employees who were not exempt from the overtime and hourly wage laws of the United States and of the State of Ohio. (Doc. 43, Am. Compl. at ¶ 15). It is alleged that Defendants "intentionally altered the hourly time records pertaining to Plaintiffs' actual hours of work in order to reduce the number of Plaintiffs' reported hours and in order to pay Plaintiffs less in wages and/or overtime than they were entitled to receive." Id. at ¶ 14. The two named Plaintiffs seek to bring the action under the FLSA as a collective action on behalf of a class of similarly-situated persons. Id. at ¶ 20.

On April 4, 2004, Plaintiffs filed a motion requesting that the Court conditionally certify the putative class and to authorize notice to be sent to potential class members of their ability to "opt-in" to this collective action. (Doc. 34). Plaintiffs alleged that the putative class "was reasonably believed to number over 100 persons." (Am. Compl. at ¶ 19). The Court granted Plaintiffs' motion to conditionally certify the putative class on November 8, 2004. (Doc. 38).

On December 15, 2004, the Court approved the form of the notice that was to be sent to the putative plaintiffs. (Doc. 41). Notice was subsequently sent to the putative plaintiffs and, currently, this action consists of two named plaintiffs and eight individuals who have formally consented to opt-in: Teresea O'Brien, Dallas Prater, Debbie Brunke, Jill Wagner-Puff, Jessica West, Stevie LeVan, Ben Wallace, Chad Lawson, Nathan Buscher, Derrick Kinchen. (Docs. 45-51).

On January 10, 2006, Defendants filed a motion to modify the case schedule to permit them the opportunity to file a motion to decertify the conditionally certified class. (Doc. 99). On January 20, 2006, this Court granted that motion and permitted Defendants to file a motion to decertify the conditionally certified class by January 31, 2006, and permitted the parties to file dispositive motions within forty five (45) days from the date this Court ruled on the motion for class decertification. (Doc. 103).

On January 31, 2006, Defendants filed Defendants' Motion to Decertify (Doc. 106), and on February 24, 2006, Plaintiffs filed Plaintiff's Memorandum in Opposition to "Defendants' Motion to Decertify this Action as a Collective Action." (Doc. 112). On March 9, 2006, Defendants filed Defendants' Reply Memorandum in Support of their Motion to Decertify this Action as a Collective Action. (Doc. 115).

II. DISCUSSION

To recover unpaid overtime compensation and/or unpaid minimum wage under the FLSA, § 216(b) provides that employees, under certain circumstances, may collectively sue an employer. Specifically, § 216(b) states:

Any employer who violates [the minimum wage or maximum hours provisions of this title] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages. . . . An action to recover [such] liability may be maintained . . . in any . . . court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated.

Determining whether a collective action is the appropriate means for prosecuting an action is left to the Court's discretion. See, e.g., Glass v. IDS Fin. Servcs., Inc., 778 F.Supp. 1029, 1081 (D. Minn. 1991); Smith v. Heartland Automotive Services, Inc., 2005 U.S. Dist. LEXIS 32696, *9 (D. Minn. 2005).

To proceed as a "collective action" pursuant to § 216(b) of the FLSA, Plaintiffs must demonstrate that they are "similarly situated" to the employees they seek to notify of the suit. To determine whether the plaintiffs have made this showing, "[c]ourts have generally adopted a two-tiered certification approach. . . ." Harrison v. McDonald's Corp., 411 F. Supp.2d 862, 864-65, (S.D. Ohio 2005) (J. Holschuh); see also Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987) (adopting two-tiered approach); Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208 (11^th Cir. 2001).¹ "The preliminary certification is intended to provide notice and opportunity to opt in." Smith v. Lowe's Home Ctrs., 236 F.R.D. 354, *7, 2006 U.S. Dist. LEXIS 26686, (S.D. Ohio May 5, 2006) (M.J. King). The named plaintiff's burden at this stage is "fairly lenient," and requires only "a modest factual showing" that he or she is similarly situated to the other employees sought to be notified. Harrison, 411 F. Supp.2d at 865 ( citing Olivo v. GMAC Mortgage Corp., 374 F. Supp.2d 545, 548 (E.D. Mich. 2004)). "Thus, employees whose causes of action under the FLSA accrued at about the time and place in the approximate manner of the named plaintiff would be similarly situated and can opt into the action." Miklos v. Golman-Hayden Co., Inc., 2000 WL 1617969, *1, (S.D. Ohio October 24, 2000) (M.J. King).

1 Although some courts have recognized the use of other tests for determining whether plaintiffs and putative plaintiffs are similarly situated for purposes of § 216(b), and the United States Court of Appeals for the Sixth Circuit has not yet decided which standard applies, the greater weight of authority, including authority from this Court and its sister district courts, suggests that a two-step analysis is the proper test. See, e.g., Harrison v. McDonald's Corp., supra, 411 F. Supp.2d 862, 864, 865, (S.D. Ohio 2005) (J. Holschuh); Landsberg v. Acton Enter., Inc., 2006 U.S. Dist. LEXIS 23439, *3 (S.D. Ohio March 22, 2006) (M.J. Kemp); White v. MPW Indus. Serv., Inc., 2006 U.S. Dist. LEXIS 17388, *5-6 (E.D. Tenn. March 21, 2006); Olivo v. GMAC Mortgage Corp., 374 F. Supp.2d 545, 548 (E.D. Mich. 2004); Belcher v. Shoney's, Inc., 927 F. Supp. 249, 251 (M.D. Tenn. 1996). See also Thiessen v. GE Capital Corp., 267 F.3d 1095, 1108 (10^th Cir. 2001); Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1219 (11^th Cir. 2001); Moeck v. Gray Supply Corp., 2006 U.S. Dist. LEXIS 511, No. 03-1950 (WGB), 2006 WL 42368, at *4 (D. N.J. Jan. 6, 2006); Aguayo v. Oldenkamp Trucking, 2005 WL 2436477, at *2-3 (E.D. Cal. Oct. 3, 2005); Mike v. Safeco Ins. Co. of Am., 274 F. Supp.2d 216, 219 (D. Conn. 2003); Realite v. Ark Rests. Corp., 7 F. Supp.2d 303, 308 (S.D. N.Y. 1998).

The Court notes that Judge Holschuh, in Harrison (a case that is premised upon facts identical to those in the instant action), denied even preliminary certification concluding that plaintiff "failed to satisfy even her minimal burden of showing that other McDonald's employees are similarly situated. . . ." Harrison, supra, at 871. Based on Harrison, it would appear that this Court's endeavor into a more stringent analysis of whether named-plaintiffs are similarly situated to the opt-in plaintiffs would be futile. However, since this case was conditionally certified before Harrison was issued, and discovery has been conducted on that basis, the Court will engage in the second tier analysis, considering the information now available as a result of the discovery already completed.

"The second stage of analysis is much more stringent, and to avoid decertification, a plaintiff must meet a stricter standard of proving that the putative plaintiffs are `similarly situated.'" White v. MPW Indus. Serv., Inc., 2006 U.S. Dist. LEXIS 17388, *10 (E.D. Tenn. March 21, 2006) ( citing as examples, Thiessen, 267 F.3d at 1102-03; Hipp, 252 F.3d at 1218-19; Aguayo, 2005 U.S. Dist. LEXIS 22190, 2005 WL 2436477, *2; Olivo, 374 F. Supp. 2d at 548)). See also Vaszlavik v. Storage Tech. Corp., 175 F.R.D. 672, 678 (D. Colo. 1997).

At this second tier of analysis,

the court has much more information on which to base its decision, and makes a factual determination on the similarly situated question. If the claimants are similarly situated, the district court allows the representative action to proceed to trial. If the claimants are not similarly situated, the district court decertifies the class, and the opt-in plaintiffs are dismissed without prejudice. The class representatives — i.e. the original plaintiffs — proceed to trial on their individual claims.

Smith v. Lowe's Home Ctrs, 236 F.R.D. 354 at *10-11 ( quoting Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214, n. 8 (5^th Cir. 1995)).

Although U.S.C. § 216(b) does not define "similarly situated," Courts have considered the following factors:

1. the extent and consequences of disparate factual and employment settings of the individual plaintiffs;

2. whether individual issues would predominate at trial;

3. whether a trial of the action could be coherently managed and evidence presented in a manner that would not confuse the jury or unduly prejudice any party; and

4. whether certification would serve the purposes of a collective action under § 216(b) of the FLSA.

See Smith v. Lowe's Home Ctrs., supra; Vaszlavik, 175 F.R.D. at 678 (D. Colo. 1997) (citing Hoffman-LaRoche Inc. v. Sperling, 493 U.S. 165, 170 (1989)); Smith v. Heartland Automotive Services, Inc., 404 F. Supp. 2d 1144, (D. Minn. 2005); Stone v. First Union Corp., 203 F.R.D. 532, 543 (S.D. Fla. 2001). "[T]he burden is on the Plaintiff to prove that other employees are similarly situated." Harrison, 411 F.Supp.2d at 870.

Plaintiffs, in an attempt to meet their burden of showing that the original and the opt-in Plaintiffs are similarly situated, first argue that the original and opt-in Plaintiffs are similarly situated because "[a]ll plaintiffs worked at one or both of Defendants' McDonald's restaurant franchises . . . between February 16, 2002 and June 17, 2001," all Plaintiffs "were compensated as hourly-paid employees," and "each of the Plaintiffs performed virtually identical job tasks for Defendants. . . ." (Pls' Memo. in Opp. at 43). Defendants do not dispute the similarity between the Plaintiffs' compensation or job duties. Rather, Defendants point out, and this Court agrees, that similarities in job duties alone does not suffice to show that the Plaintiffs are "similarly situated" for purposes of avoiding decertification. Instead, as Judge Holschuh recently articulated in a case brought by the same plaintiffs' counsel and making identical allegations, "Plaintiff must show that, like her, they were not paid all of the wages to which they were entitled because their payroll records were improperly edited." Harrison, 411 F. Supp.2d at 868. Thus, Plaintiffs must demonstrate that the Defendants had a common policy or plan in violation of the FLSA that negatively impacted the original and opt-in Plaintiffs. See, e.g., Vaslavik, 175 F.R.D. at 678.

Plaintiffs next argue that the original and opt-in Plaintiffs are similarly situated because they both "were cheated out of wages by Defendants through two types of unlawful wage and hour practices: (1) by working `off the clock'; and (2) by managers improperly changing Plaintiffs' recorded hours of work to reduce their hours of pay. (Pls' Memo. in Opp. at 43-45). The Court rejects Plaintiffs' arguments and finds that Plaintiffs have not carried their burden of proving that other employees are similarly situated for two reasons.

First, the Court finds that Plaintiffs are not "similarly situated" because they have not demonstrated the existence of an unlawful common policy or plan that victimized both the original and opt-in plaintiffs. In Flores v. Lifeway Foods, Inc., 289 F.Supp.2d 1042 (N.D. Ill. 2003), the court considered whether the named plaintiff had demonstrated that the potential claimants were similarly situated such that a collective action under the FLSA would be appropriate. The Flores court found that the original and potential plaintiffs were not similarly situated because the named plaintiff failed to show that the potential claimants were victims of a common policy or plan that violated the FLSA. Id. In reaching this conclusion, the Flores Court opined:

. . . a demonstration of [the Defendant Employer's] payment practice concerning two out of fifty employees (four percent of Defendant's workforce) does not rise to the level of a common policy or plan by [Defendant Employer] that violated the FLSA. This is not even a "modest factual showing" of a common policy or plan, as that term has been used in other cases.

Id. at 1046 (emphasis added). In the instant case, Plaintiffs' efforts at demonstrating a common plan or policy are even less impressive. Approximately 426 current and former hourly EDE employees received a form notice of this lawsuit from Plaintiffs' counsel. There are only 10 remaining Plaintiffs in this action. By Plaintiffs' own admission, only five of these Plaintiffs, Prater, Larson, West, Buscher and Kinchen, (approximately 1.17% of the contacted employees), allege their time records were improperly changed to reduce their hours of work. (Pls' Memo. in Opp. at 18-23, 45). Similarly, Plaintiffs' acknowledge that only five Plaintiffs, Prater, Larson, West, Wallace and O'Brien, (again, approximately 1.17% of the contacted employees), allege that they worked "off the clock." (Pls' Memo. in Opp. at 12-18, 45). Finally and significantly, three of the ten Plaintiffs, Brunke, Wagner-Puff and LeVan, fail to allege that they were victims of either alleged unlawful practice. Based upon the foregoing, the Court finds that Plaintiffs have failed to offer sufficient evidence to establish existence of a common plan or policy violating the FLSA, and therefore, the Court finds that the original and opt-in Plaintiffs are not "similarly situated."

Second, the Court finds, as an additional reason, that Plaintiffs are not "similarly situated" because each claim would require extensive consideration of individualized issues of liability and damages. In Dudley v. Texas Waste Systems, Inc., 2005 WL 1140605 at *2, the court denied plaintiff's motion for authority to proceed as a collective action under § 216(b) based upon its finding that the plaintiff failed to demonstrate the existence of a "similarly situated" class of employees. The Dudley plaintiff claimed that the employer wrongfully reduced the employees' hours worked to account for lunch breaks that were never taken. Id. In reaching its conclusion, the Dudley court reasoned that analysis of plaintiffs' claims would require "individualized testimony regarding whether drivers regularly took lunch breaks, or only occasionally." Id. The following brief descriptions of the Plaintiffs' allegations makes clear that, as it did with the Dudley plaintiffs' claims, consideration of individualized issues would predominate with Plaintiffs' claims in the instant case: Teresea O'Brien Dallas Prater, Jill Wagner Puff's Ben Wallace Debbie Brunke's Stevie LeVan See, e.g. Chad Larson Jessica West Derrick Kinchen Nathan Buscher

• alleged in her deposition that, as an opening manager, she came to work 1 ½ hours before the restaurant opened, but did not clock in immediately. She admits that she was scheduled to come in only one hour before opening and that Mr. Donnelly had instructed her that it only takes one hour to get the store ready to open. Nonetheless, Ms. O'Brien claims she should have been paid for coming in earlier than she was scheduled and than she was instructed to arrive. (O'Brien Depo. at 35-37). Defendants argue that this claim is not pleaded in the Amended Complaint, is subject to legal defenses and refuted by Ms. O'Brien's own deposition testimony. • at his deposition, alleged that he was not paid for the occasional days that he had gone from the north store, where he usually worked, to help out at Defendant EDE's south store (Prater Depo. at 108); however, he also testified that, as far as he knew, he had always been clocked in at the north store before going to help out at the south store, and he does not know that he ever worked off the clock at the south store. (Prater Depo. at 101-10). • Opt-in Plaintiff alleged unpaid overtime claim consists entirely of 8.5 hours alleged to have been worked on June 22, 2004, for which she was not paid. (Puff Depo., Ex. 2). The basis of Ms. Puff's claim is that Ferron Associates told her she was on the schedule for that day, and "If I was on the schedule, I worked." (Puff Depo. at 39-40). Defendants point out that Ms. Puff was unaware, until her deposition, that her name had been crossed of the June 22, 2004, schedule. Ms. Puff admitted in deposition that she does not know whether she worked on that day or not. (Puff Depo. at 40-41 and Ex. 3). Defendant EDE has no record of her having clocked in or out on that day. Ms. Puff testified that she was careful to always clock in and out, and that "there would never be a day, no, that I did[n't] do it altogether." (Puff Depo. at 35). • Opt-in Plaintiff did not like Defendants' clock out procedure which required him to clock out around midnight and then again at the time he left work. Defendants argue that Mr. Wallace's records illustrate that he was clocked back in immediately after his first clock-out time, and therefore was paid for all of his time. Plaintiffs argue that the records show that Mr. Wallace was not clocked back in. Mr. Wallace testified that he does not know if Defendants owe him money or not. Mr. Wallace also alleges that a break was improperly deducted from his minutes worked on April 30, 2004, and that he was not payed for .52 hours of overtime he worked on May 12, 2004. (Pls' Memo. in Opp. at 17). • Opt-in Plaintiff "damage calculations" allege that she attended a three-hour orientation for which she was not paid. Ms. Brunke testified in her deposition that she had only about 15-20 minutes of training on her first day of work and did not attend any sort of formal orientation. (Brunke Depo. at 64-65). • Opt-in Plaintiff also claims that she was not paid for three hours of orientation. (, LeVan Depo. at 32-33). Defendants argue that her payroll records refute this claim and demonstrate that pay for three hours of time had, in fact, been added to her paycheck for orientation. (LeVan Depo. at 27-32 and Ex. 1). Ms. LeVan admitted in her deposition that she does not know whether she was paid for orientation and that she had no other explanation for the additional hours added to her first (and only) paycheck. (LeVan Depo. at 29-31). • Opt-in Plaintiff alleges he was in charge of ordering product for the restaurants and that when he "would forget to order double of or a little of [a product] . . . I would have to go from store to store to get that product to fill what we needed." (Larson Depo. at 58). Mr. Larson alleges he did not clock in for that time because he was told by Chad Totsch "that if I messed it up, I've got to fix it." None of the other Plaintiffs allege they were responsible for ordering product, or that they were required to pick up additional product from other restaurants while working off the clock. Additionally, Mr. Larson claims that his time punches were changed by managers to reduce the amount of time reflected. (Pls' Memo. in Opp. at 22-24). Mr. Larson admitted in his deposition that he had no evidence of any corrections made to his time records that did not accurately reflect the time he actually worked. (Larson Depo. at 39). • Opt-in Plaintiff alleges that, as a minor, she worked past 12:30 at night, but was always clocked out at 12:30. Ms. West does not have any specific recollection of having been asked to work past 12:30, but she alleges she worked past 12:30 while knowing that Defendants did not want her to work past 12:30, and knowing that she would not be paid for the time. (West Depo. at 68-71). Ms. West claims that her time punches were changed by managers to reduce the amount of time reflected. (Pls' Memo. in Opp. at 22-24). Ms. West testified in her deposition that, while she knew her time punches had to be corrected from time to time, she has no knowledge that the time punch modifications failed to accurately reflect the time she actually worked. (West Depo. at 51-54). • Opt-in Plaintiff alleges that he never clocked in for himself during the entire time he worked for Defendants, but rather that he was clocked in and out by a manager. (Kinchen Depo. at 38-40). Mr. Kinchen testified that Defendants "probably" owe him money. (Kinchen Depo. at 46). The "damage calculation" produced for Mr. Kinchen reflects that he is not alleging any unpaid overtime pay and was never paid less than minimum wage, even when all alleged hours worked are factored in. (Kinchen Depo., Ex. 3). • Opt-in Plaintiff alleges that he only took a thirty-minute lunch break once, but that his time records show four such breaks. (Pls' Memo. in Opp. at 20). Mr. Buscher therefore alleges that the Defendants improperly edited his time punches to insert lunch breaks. Defendants deny this allegation and argue that even if Mr. Buscher's allegations were true, Mr. Buscher cannot demonstrate that he was denied overtime, as would be necessary to state a claim under the FLSA. Based upon the foregoing widely varied and individualized allegations, the Court has determined that the evidence presented thus far suggests that each claim would require extensive consideration of individualized issues of liability and damages rather than collective consideration of common questions of fact and law. Consequently, the Court finds that Plaintiffs' have not met their burden to prove that the original and opt-in Plaintiffs are "similarly situated," and therefore, Defendants are entitled to have their Motion to Decertify granted.

V. CONCLUSION

For all of the foregoing reasons, the Court GRANTS Defendants' Motion to Decertify This Action as a Collective Action. (Doc. 106).

The Clerk shall remove Document 106 from the Court's pending motions list.

IT IS SO ORDERED.