Guanzon v. Vixxo Corporation

MOTION for Partial Summary Judgment

D. Ariz.February 11, 2019

1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark D. Samson, Esq. (SBN 011076) Chanele N. Reyes, Esq. (SBN 034898) KELLER ROHRBACK L.L.P. 3101 North Central Avenue, Suite 1400 Phoenix, AZ 85012 Tel: (602) 248-0088 Fax: (602) 248-2822 T. David Copley, Esq. (SBN 009952) KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Tel: (206) 623-1900 Fax: (206) 623-3384 Attorneys for Plaintiff and Opt-In Class [Additional counsel listed on signature page] UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Vickie Guanzon, Individually and on Behalf of All Other Similarly Situated Current and Former Employees, Plaintiff, vs. Vixxo Corporation, a Maryland corporation, Defendants. No. 2:17-cv-01157-DWL PLAINTIFFS’ MOTION AND MEMORANDUM IN SUPPORT OF MOTION FOR PARTIAL SUMMARY JUDGMENT Oral Argument Requested Pursuant to FED. R. CIV. P. 56, Plaintiff Vickie Guanzon moves for partial summary judgment against Defendant Vixxo Corporation. This Motion is supported by the following Memorandum of Points and Authorities, the accompanying Statement of Facts, and the Declaration of Mark D. Samson, as well as the pleadings and documents contained in the Court’s record, all of which are incorporated herein by reference. Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 1 of 8 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION Eleven Plaintiffs in this collective action signed separation agreements with Defendant Vixxo Corporation (“Vixxo”) as part of their exit from the company. See Plaintiffs’ Statement of Facts (“SOF”) at ¶ 1. These agreements included a broad release of claims arising from federal, state, and local laws. They did not specifically exempt potential claims under the Fair Labor Standards Act (“FLSA”). SOF ¶¶ 3-4. Later, the eleven Plaintiffs at issue in this Motion opted into the pending action to pursue a claim for unpaid overtime wages under the FLSA. SOF at ¶ 2. Factually, this is not a complex Motion. Between March 2016 and July 2017, Plaintiffs ended their employment with Vixxo and signed separation agreements with nearly identical releases of any claims against Vixxo. SOF at ¶ 1.1 At a later date, they opted into this collective action under the FLSA. SOF at ¶ 2.2 The separation agreements addressed in this Motion do not reference the FLSA, do not mention collective actions, and do not contain alternative forum references, such as arbitration clauses. SOF at ¶ 4. Thus, the matter before the Court at this time is purely one of law: whether the releases are effective against Plaintiffs’ FLSA claim of a right to unpaid overtime wages. Under the case law, they are not, so Plaintiffs request the Court to grant partial summary judgment in their favor, finding that, as a matter of law, Plaintiffs did not release or waive their rights to participate in a collective action FLSA claim. II. FACTUAL BACKGROUND Vixxo provides facility maintenance and management to retail, restaurant, convenience stores, and grocery stores. Complaint and Defendant’s Answer at ¶12. 1 The release language varied by addressing certain state statutory claims according to the place they were employed, and Plaintiff Vertucci included an attachment involving a stay of the agreement, which does not affect the arguments in this Motion. SOF ¶ 3. 2 Not at issue in this Motion are the facts that underlie the Plaintiffs’ claims for FLSA relief. SOF ¶ 4. Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 2 of 8 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs were all employees of Vixxo that ended their employment with the company3 between March 2016 and July 2017.4 SOF at ¶ 1. In consideration for agreeing to return all company property, representing that there were no unreported work injuries, signing the general release of claims against Vixxo, and promising to keep Vixxo’s operations information confidential, Plaintiffs received monetary severance packages from Vixxo, based on their individual circumstances. SOF at ¶ 5. Aside from references to state-specific laws,5 the 2016-2017 separation agreements were uniform from Plaintiff to Plaintiff. Of relevance to this Motion, the agreements included a broad “General Release” of claims (Section 5(a)(vi)). Among these claims were [A]any and all claims under any and all federal, state and local statutes, ordinances, executive orders or common law (whether in contract, tort or otherwise), including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Equal Pay Act, the Genetic Information Nondiscrimination Act, the Family and Medical Leave Act, [individual state laws] all, as amended . . . SOF at ¶ 6. Tellingly, the FLSA is not specifically mentioned in the release, which also states that it “does not serve to waive any claims that pursuant to law cannot be waived or subject to a release of this kind. . .” General Release at Section 5(b). SOF ¶ 7. As noted above, the agreements are silent regarding collective actions and do not contain mandatory arbitration clauses. 3 The circumstances related to Plaintiffs’ departure are immaterial to this Motion. 4 Plaintiff Dubek also left Vixxo in 2013, but he returned to the company and then left again in March 2016, making the 2016 separation agreement the relevant one here. 5 Plaintiffs Cassone, Dubek, Morgan, Oestreicher, Salzarulo, and Weekes were subject to Connecticut laws; Plaintiffs Bailey and Hastings were subject to Texas laws; Plaintiff Ettling was subject to Florida laws; Plaintiffs Morse (formerly Travers) was subject to Arizona laws; and Plaintiff Vertucci was subject to Illinois laws. (SOF ¶¶ 3, 5) Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 3 of 8 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In April 2017, named Plaintiff Vickie Guanzon6 brought a complaint against Vixxo for violation of the FLSA for unpaid overtime compensation. Complaint at ¶¶ 28- 37. Plaintiffs later opted into the class action, between February and April 2018 (SOF at ¶ 2) long after they had signed their severance agreements (SOF at ¶¶ 1-2). III. ARGUMENT Summary judgment shall be granted when the moving party demonstrates there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a). This Motion deals with a very discrete issue: whether those Plaintiffs who signed a separation agreement with a broad “General Release” of claims upon their exit from Vixxo thereby released their rights to proceed in this collective action under the FLSA. This Motion does not ask the Court to rule or comment upon the merits of the FLSA claim itself, but simply asks the Court to enforce the long-established precedent that purported releases of FLSA rights are legally unenforceable. The FLSA was enacted to “protect all covered workers from substandard wages and oppressive working hours.” Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728, 739, 101 S. Ct. 1437, 1444 (1981). Among the provisions of the FLSA, employers must pay their employees time and a half for hours worked over forty hours per week, unless the employees fall in a statutory exemption.7 29 U.S.C. § 207(a)(1). 29 U.S.C. § 216(b) authorizes the recovery of unpaid overtime compensation, liquidated damages, and reasonable attorney’s fees and costs. The Supreme Court has recognized that, in light of the unequal bargaining power between employers and employees, FLSA rights to statutory wages or liquidated 6 Plaintiff Guanzon is not one of the eleven Plaintiffs in dispute in this Motion, and she is mentioned only as her role as the named Plaintiff. 7 Plaintiffs allege they do not fall under a statutory exemption and do not ask the Court to address that issue in this Motion. Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 4 of 8 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 damages cannot be waived.8 Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706-08, 65 S. Ct. 895, 902-03 (1945). Employees’ rights to minimum wage and overtime pay under the FLSA are inviolable and “cannot be abridged by contract or otherwise waived because this would ‘nullify the purposes’ of the statute and thwart the legislative policies it was designed to effectuate.” Barrentine, 450 U.S. at 740. Vixxo’s own separation agreements recognize that some legal claims lie beyond their reach by stating: “This release does not serve to waive any claims that pursuant to law cannot be waived or subject to a release of this kind. . .” General Release at Section 5(b). SOF 7. And despite providing a laundry list of federal and state statutes that are purportedly included in the release, the separation agreements are absolutely silent about the FLSA, one of the most significant, long-lived labor laws in the United States. That absence is implicit recognition of the fact that FLSA rights to recover for overtime wage violations cannot be waived. Plaintiffs also have the right to pursue their claims collectively. The FLSA specifically provides for collective actions. Employees may join a collective action if they are “similarly situated” to the original plaintiff and affirmatively opt in. 29 U.S.C. § 216(b); see also Campbell v. City of Los Angeles, 903 F.3d 1090, 1108 (9th Cir. 2018). The statutory right to participate in the collective action is held “equally and individually by each party plaintiff,” regardless if the employee appeared in the complaint or opted in. Id. Once the action is filed, other similarly situated employees will show affirmative consent by filing written consent with the court. 29 U.S.C. § 216(b); see also Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1259 (11th Cir. 2008). 8 There are limited circumstances in which there may be a waiver of FLSA rights, but none are relevant to the instant case. For example, in lieu of private suit, the Department of Labor may supervise the settlement of an FLSA claim under 29 U.S.C. § 216(c), and waiver may result from that settlement. See Dent v. Cox Comm. Las Vegas, Inc., 502 F.3d 1141 (9th Cir. 2007). Additionally, a state class-action settlement may bar FLSA claims arising from the same conduct. See Rangel v. PLS Check Cashers of Cal., Inc., 899 F.3d 1106 (9th Cir. 2018). Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 5 of 8 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Just as they are silent about FLSA claims, the Vixxo releases are also silent as to participation in collective actions. Thus, the argument that Plaintiffs released or waived their right to participate in a collective action to enforce their FLSA claims fails in two separate ways based on the plain language of the Vixxo releases.9 IV. CONCLUSION The undisputed facts and the law support Plaintiffs’ assertion: the release contained in their separation agreements with Vixxo did not waive their right to pursue a claim under the FLSA, individually or collectively. Accordingly, Plaintiffs respectfully request that the Court grant their motion for partial summary judgment. DATED this 11th day of February, 2019. /s/ Mark D. Samson Mark D. Samson Chanele N. Reyes KELLER ROHRBACK L.L.P. 3101 North Central Avenue, Suite 1400 Phoenix, AZ 85012 Tel: (602) 248-0088 Fax: (602) 248-2822 msamson@kellerrohrback.com creyes@kellerrohrback.com 9 One of the few potential exceptions to the Supreme Court’s rule that FLSA claims cannot be waived arises if an employer includes an arbitration agreement in a severance document. Some courts have found that because arbitration clauses provide an alternative forum in which to pursue enforcement of FLSA claims, they do not really violate the basic principle that employment or severance agreements cannot bar the right to seek FLSA relief. See Killion v. KeHE Distributors, LLC, 761 F.3d 574 (6th Cir. 2014). (“[C]onsiderations change when an arbitration clause is involved. Boaz explained that ‘an employee can waive his right to a judicial forum only if the alternative forum allow[s] for the effective vindication of [the employee's] claim.’ Arbitration, it noted, is such a forum.”); see also Johnson v. West Suburban Bank, 225 F. 3d 366, 378 (3rd Cir. 2000) (“Only those who consent to [ ] agreements with binding arbitration clauses are forced to abandon [collective action]; those who do not consent to arbitration in their contracts have the full selection of forums.”) Here, none of the separation agreements at issue contain an arbitration clause, so the issue is moot. Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 6 of 8 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 T. David Copley KELLER ROHRBACK L.L.P. 1201 Third Avenue, Suite 3200 Seattle, WA 98101 Tel: (206) 623-1900 Fax: (206) 623-3384 dcopley@kellerrohrback.com Harris L. Pogust Kara D. Hill POGUST BRASLOW & MILLROOD, LLC Eight Tower Bridge, Suite 940 161 Washington Street Conshohocken, PA 19428 Tel: (610) 941-4204 Fax: (610) 941-4245 hpogust@pbmattorneys.com khill@pogustmillrood.com Nichols Jason Enoch Stanley Lubin Kaitlyn Alissa Redfield-Ortiz LUBIN & ENOCH PC 349 North 4th Avenue Phoenix, Arizona 85003 Tel: (602) 234-0008 Fax: (602) 626-3586 nick@lubinandenoch.com stan@lubinandenoch.com kaitlyn@lubinandenoch.com Attorneys for Plaintiff and Opt-In Class Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 7 of 8 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CERTIFICATE OF SERVICE The undersigned hereby certifies that on February 11, 2019, the foregoing was electronically filed with the Clerk of the Court using the CM/ECF system which sent notification of such filing to all counsel of record. /s/ Leslie Nims Leslie Nims 4812-7163-0728, v. 1 Case 2:17-cv-01157-DWL Document 152 Filed 02/11/19 Page 8 of 8