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Allen v. Hartford Fire Insurance Co.

United States District Court, M.D. Florida, Orlando Division

August 25, 2017



          ROY B. DALTON JR., JUDGE

         The instant action is brought under the Fair Labor Standards Act (“FLSA”). (Docs. 1, 11.) Among other things, the FLSA requires employers engaged in interstate commerce to pay their employees overtime compensation, which is defined as at least 1.5 times the employee's regular rate for any hours exceeding forty per workweek. 28 U.S.C. § 207(a)(1). Employees who work in a bona fide administrative capacity are not entitled to overtime compensation under the FLSA. 28 U.S.C. § 213(a)(1). This exemption is often referred to as the administrative employee exemption.

         The present case was initiated by employees who claim that their employer willfully misclassified them as exempt administrative employees and, thus, failed to pay them overtime compensation to which they were entitled under the FLSA. (Docs. 1, 11.)

         Seeking relief for both themselves and a collective class of similarly situated employees, Plaintiffs request that the Court conditionally certify a nationwide class of current and former employees who: (1) worked for Defendant Hartford Fire Insurance Company (“The Hartford”) as analysts (“Analysts”)[1] processing disability claims; and (2) routinely worked more than forty hours a week without receiving overtime compensation. (Doc. 51 (“Motion to Certify”).) The Hartford vehemently opposes conditional certification. (Doc. 111 (“Response”).) But for the reasons set forth below, the Court finds that the Motion to Certify is due to be granted in part. Consequently, the Court will authorize Plaintiffs to distribute notice to individuals that fall within the class definition. However, as explained in a contemporaneously-filed Order, this class will exclude individuals that have assented to The Hartford's arbitration policy.

         I. Procedural History

         To properly assess the parties' dispute, the Court must look back more than three years to the start of a closely-related FLSA action-Monserrate v. Hartford Fire Insurance Company, Case No. 6:14-cv-149-Orl-37GJK (“Monserrate”). The named plaintiffs in Monserrate were Analysts who worked for The Hartford in Orange County, Florida. Monserrate, Doc. 51, ¶¶ 3-13. As here, the Monserrate plaintiffs alleged that The Hartford violated the FLSA by: (1) failing to pay its employees overtime compensation for hours worked in excess of forty hours a week; (2) failing to maintain accurate records of its employees' work hours; and (3) inaccurately classifying its Analysts as exempt from overtime pay despite knowledge that such Analysts were non-exempt. Id., ¶¶ 16, 19, 21, 27-29.

         A little over a year into the litigation, the named plaintiffs moved to conditionally certify a national class of similarly situated Analysts. Id., Doc. 19. The Court ultimately granted the motion in part-limiting the scope of the proposed class due to the absence of evidence that employees outside The Hartford's central Florida locations were interested in opting into the action. Id., Doc. 129 (“Monserrate Certification Order”). The named plaintiffs later moved to clarify and expand the class based on after-acquired evidence that similarly situated Analysts from additional states were interested in joining the Monserrate class. Id., Doc. 168 (“Motion to Expand”). However, the parties settled the action before the Court resolved the Motion to Expand. (See Doc. 248.)

         Three months after the Monserrate settlement, Plaintiffs initiated the instant action. (See Doc. 1.) While almost identical to the plaintiffs' pleadings in Monserrate, here the operative Complaint also references Analysts employed by The Hartford in Seminole County, Florida, Connecticut, New York, Georgia, and Minnesota. (Doc. 11, ¶¶ 5-14, 17.) Unsurprisingly, Plaintiffs have submitted evidence from Analysts that have worked in these five states to support their Motion to Certify. (See Docs 52-1 to 52-20.)

         II. Parties' Positions

         In addition to seeking conditional certification of a national class of Analysts, the Motion to Certify requests that the Court: (1) order The Hartford to produce the names, addresses, telephone numbers, and emails of each putative class member; (2) authorize notice of this action to be sent to all putative class members employed by The Hartford within the three years preceding the Motion to Certify; (3) require The Hartford to post notice of this action at its work sites and on its company intranet website; and (4) toll the statute of limitations for the putative class members' claims back to the date that the Motion to Certify was filed. (Doc. 51.)

         In its Response, The Hartford urges the Court to deny the Motion to Certify. (Doc. 111.) As grounds, The Hartford contends that: (1) conditionally certifying a collective class in a successive, near-identical action encourages serial litigation and does not serve the goals of the FLSA; (2) the Court should apply a heightened standard in assessing the Motion to Certify because the parties engaged in substantial discovery in Monserrate; (3) the Court should deny the Motion to Certify on the ground that Plaintiffs are not similarly situated due to distinct levels of discretion and independent judgment exercised in performing their duties; and (4) Plaintiffs' proposed notice to putative class members lacks critical information. (Id.)

         The Court will address each of these issues in turn.

         III. Successive FLSA Actions

         In its Response, The Hartford argues that the Court should deny the Motion to Certify because “[a]llowing [Plaintiffs] to use this second action as a vehicle to disseminate a second round of notices to an overlapping group of Hartford employees would render the opt-in deadline for collective action insignificant and would not promote resolution of multiple claims in one proceeding.” (Doc. 111, p. 7.) In making this point, The Hartford relies heavily on: (1) the fact that Plaintiffs received notice of, and the opportunity to join, the Monserrate action but allowed the opt-in deadline to pass without asserting their rights; and (2) the U.S. Supreme Court's statement in Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989), that “[t]he judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” (Id. at 6-9 (emphasis added).) The Hartford also contends that “repeat notifications supervised by the Court can risk encouraging, or appearing to endorse, serial litigation” because “[w]hen an employee repeatedly receives an official-looking notice about a case against their employer, the repetition may create the misimpression that the employer has violated the law.” (Id. at 9.)

         At a March 28, 2017 hearing on the Motion to Certify, the Court spent considerable time on the issue of whether Plaintiffs could properly assert identical and successive collective FLSA claims against The Hartford, given their opportunity to join the Monserrate class. (See Doc. 134.) Since that time, Plaintiffs have submitted supplemental authority from the Southern District of New York answering this question in the affirmative. (Doc. 142-1.) After conducting its own research, the Court agrees.

         Importantly, under the FLSA, “no employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b) (emphasis added). So unlike a class member's obligation to opt out of class litigation under Federal Rule of Civil Procedure 23, a person who fails to opt in to a § 216(b) class cannot be bound by or benefit from the judgment. See Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1216 (11th Cir. 2001). Accordingly, the Court finds that an individual's election not to opt in to a prior FLSA action does not bar him from bringing his own suit at a later date. See also Diatta v. Iguana N.Y. Ltd., No. 15 Civ. 6399(AT), 2016 WL 2865132, at *4 (S.D.N.Y. 2016) (quoting Romero v. LaRevise Assocs., L.L.C., 58 F.Supp.3d 411, 421 (S.D.N.Y. 2014)). A contrary conclusion would nullify the procedural protections provided by 29 U.S.C. § 216(b) and blur the distinction between a FLSA collective action and a Rule 23 class action.

         The Court also rejects The Hartford's argument that granting the Motion to Certify would be at odds with the goal of judicial economy. Contrary to The Hartford's position, the purpose of authorizing a § 216(b) class is “to avoid multiple lawsuits where numerous employees have allegedly been harmed by a claimed violation or violations of the FLSA by a particular employer.” Prickett v. Dekalb Cty., 349 F.3d 1294, 1297 (11th Cir. 2003) (emphasis added). Thus, “[c]ourt authorization of notice [to putative class members] serves the legitimate goal of avoiding a multiplicity of duplicative suits.” Hoffman-La Roche, 439 U.S. at 172. Indeed, certification and the issuance of notice to a national class is more likely to reduce the amount of litigation against The Hartford, as a collective action will resolve the claims of multiple plaintiffs in one proceeding. The alternative would be potentially endless piecemeal litigation, which is arguably the antithesis of judicial economy. Moreover, “[a] collective action allows . . . plaintiffs the advantage of lower individual costs to vindicate rights by the pooling of resources.” Hoffman-La Roche, 439 U.S. at 170.

         Finally, The Hartford argues that court-authorized notice is not necessary here because putative class members have likely already received notice of their rights under the FLSA due to media coverage of the Monserrate settlement. (Doc. 111, p. 8.) Even so, the Court is not persuaded to dispense with the issuance of notice where the Supreme Court has sanctioned it. As The Hartford argues, it is certainly true that “in the age of social media, ” Plaintiffs' counsel may have numerous alternative avenues by which to contact potential opt-in plaintiffs, but this does not render Court-authorized notice by mail any less viable. Despite the advancement of technology, paper has not become obsolete, and the Court declines to abandon traditional methods of issuing notice to putative class members.

         IV. Class Certification

         The FLSA authorizes aggrieved employees to maintain actions for FLSA violations on their own behalf and on behalf of “other employees similarly situated.” 29 U.S.C. § 216(b). To proceed collectively, at least one employee must act as a named plaintiff, after which other “similarly situated” employees may affirmatively opt in if the district court permits. See id.

         A. Varying standards

         Although district courts have wide discretion in determining how to manage a collective FLSA action, Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001), the U.S. Court of Appeals for the Eleventh Circuit has “sanctioned a two-stage procedure, Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1260 (11th Cir. 2008). The first stage is the “notice” or “conditional certification” stage. Morgan, 551 F.3d at 1260-61. At this stage, “the district court makes a decision-usually based only on the pleadings and any affidavits which have been submitted-whether notice of the action should be given to potential class members.” Hipp, 252 F.3d at 1218 (quoting Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995)[2]). Named plaintiffs “[have] the burden of showing a reasonable basis for [their] claim that there are other similarly situated employees” who, if notified, would opt into the action. Morgan, 551 F.3d at 1260-61. “Because the court has minimal evidence” at the notice stage, the reasonable basis standard is “fairly lenient”[3] and “typically results in conditional certification of a representative class.” Hipp, 252 F.3d at 1218 (quoting Mooney, 54 F.3d at 1213-14). “If the district court ‘conditionally certifies' the class, putative class members are given notice and the opportunity to ‘opt-in[, ]'” and “[t]he action proceeds as a representative action throughout discovery.”[4] Id. (quoting Mooney, 54 F.3d at 1213-14).

         The second stage is the “decertification” stage, so named because it is triggered by a defendant's motion to decertify the representative class “after discovery is largely complete and the matter is ready for trial.” Hipp, 252 F.3d at 1218 (quoting Mooney, 54 F.3d at 1213-14). At the decertification stage,

the court has much more information on which to base its decision, and [it] 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.

Id. The decertification stage is “less lenient” than the notice stage, and named plaintiffs “bear a heavier burden.” Morgan, 551 F.3d at 1261. At this stage, courts consider the following factors: “(1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendants that appear to be individual to each plaintiff; and (3) fairness and procedural considerations.” Id.

         However, district courts are not required to utilize this two-stage procedure. Hipp, 252 F.3d at 1219. The Eleventh Circuit has acknowledged that the two-tiered certification procedure “may be most useful when making a certification decision early in the litigation before discovery has been completed.” Anderson v. Cagle's, Inc., 488 F.3d 945, 952 (11th Cir. 2007). Consistent with this observation, district courts have departed from the two-stage analysis in circumstances where the court has ample information to make a determination.

         For example, in situations concerning multiple related actions, where substantial discovery has taken place in the first-filed action, “a number of [c]ourts have skipped the first stage altogether” when considering a motion for conditional certification in the second-filed action. See, e.g., Vaughn v. Oak St. Mortg., LLC, Case No. 5:05-cv-0311-Oc-10GJR, Doc. 85, pp. 8, 9 (M.D. Fla. Mar. 24, 2006), report and recommendation adopted in part by 2006 WL 1529178 (M.D. Fla. May 30, 2006). These courts jump straight to the second-stage analysis due to the availability of factual information upon which they can base their decision. Id.; see also Hardemon v. H&R Block E. Enters., Inc., No. 11-20193-CIV, 2011 WL 3704746, at *2-3 (S.D. Fla. Aug. 23, 2013) (bypassing the suggested two-tier approach and applying a heightened level of scrutiny due to the voluminous discovery conducted in related actions). Moreover, at least one court has applied the stricter standard where a significant number of potential plaintiffs had opted into the suit prior to the resolution of the motion for conditional certification. Morisky v. Pub. Serv. Elec. & Gas Co., 111 F.Supp.2d 493, 497-98 (D.N.J. 2000) (stating that the case was “clearly beyond the first tier” of the two-stage analysis where more than 100 potential plaintiffs had already opted in).

         “Other courts have held that when significant evidence is available, an intermediate standard applies.” Creely v. HCR ManorCare, Inc., 789 F.Supp.2d 819, 824 (N.D. Ohio 2011). Nonetheless, “courts have had a difficult time elucidating an intermediate, or hybrid, standard that falls between the lenient first-stage and the strict second-stage review.” Id. at 823. In sifting through several decisions that applied different, but unclear, intermediate standards, the district court in Creely v. HCR ManorCare, Inc. articulated a standard pursuant to which it compared the “[p]laintiff's allegations in their [c]omplaint with the factual record assembled through discovery to determine whether [the] [p]laintiffs [had] made a sufficient showing beyond their original allegations that would tend to make it more likely that a class of similarly situated employees . . . may be uncovered by soliciting opt-in plaintiffs.” Id. at 827. While continuing to characterize this as a lenient standard, the Creely court differentiated it by requiring the plaintiffs to demonstrate that they had “advanced the ball down the field”-that is, “shown some progress as a result of the discovery as measured against the original allegations and defenses.” Id. Many district courts across the country have followed suit. E.g., Sloane v. Gulf Interstate Field Servs., Inc., No. 4:16-cv-1571, at *5-6, *10 (M.D. Pa. Mar. 24, 2017); Korenblum v. Citigroup, Inc., 195 F.Supp.3d 475, 481-482 (S.D.N.Y. 2016); McClean v. Health Sys., Inc., No. 11-03037-CV-S-DGK, 2011 WL 6153091, at *4-5 (W.D. Mo. Dec. 12, 2011).

         B. Analysis

         Plaintiffs argue that the Court should apply the lenient notice-stage analysis in evaluating the Motion to Certify. (See Doc. 51, p. 12.) But, pointing to the substantial discovery completed in Monserrate, The Hartford asks the Court to apply the heightened burden traditionally reserved for the decertification stage. (Doc. 111, p. 10.) In doing so, The Hartford urges the Court to consider decertification factors, including The Hartford's evidence in support of their defense “that the employees at issue exercised sufficient discretion and independent judgment to satisfy the administrative [employee] exemption.”[5] (Id. at 11.) Based on such ...

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