Duane Morris Wage & Hour Class and Collective Action Revew …

DISCLAIMER The material in this Review is of the nature of general commentary only. It is not meant as or offered as legal advice on any particular issue and should not be considered as such. The views expressed are solely those of the authors. In addition, the authors disclaim any and all liability to any person in respect of anything and of the consequences of anything done wholly or partly in reliance on the contents of this Review. This disclaimer is from the Declaration of Principles jointly adopted by the Committee of the American Bar Association and a Committee of Publishers and Associations.

Wage & Hour Class And Collective Action Review – 2024

CITATION FORMATS All citations in the Duane Morris Wage & Hour Class And Collective Action Review – 2024 are designed to facilitate research. If available, the preferred citation of the opinion included in the West bound volumes is used, such as Clark, et al. v. A&L Homecare & Training Center, LLC , 68 F.4th 1003 (6th Cir. 2023). If the decision is not available in the preferred format, a Lexis cite from the electronic database is provided, such as Ademi, et al. v. Central Park Boathouse, LLC, 2023 U.S. Dist. LEXIS 170402 (S.D.N.Y. Sept. 25, 2023). If a ruling is not available in one of these sources, the full case name and docket information is included, such as Pittman, et al. v. CACI International, Case No. 21-CV-2044 (C.D. Cal. Oct. 26, 2023). eBOOK HIGHLIGHTS The Duane Morris Wage & Hour Class And Collective Action Review- 2024 is available for use on a smartphone, laptop, iPad, or any personal electronic reader by using any eBook reader application. eBook reading allows users to quickly scroll, highlight important information, link directly to different sections of the Review, and bookmark pages for quick access at a later time. The eBook is designed for easy navigation and quick access to informative data.

iii

Wage & Hour Class And Collective Action Review – 2024

NOTE FROM THE EDITORS The stakes at issue in wage & hour class and collective action litigation are often significant. A company’s market share and corporate reputation are typically implicated by a class action, as are the careers of senior management. For obvious reasons, these exposures and risks put immense pressure on corporate decision-makers. The purpose of the Duane Morris Wage & Hour Class And Collective Action Review is multi- faceted. We hope it will demystify some of the complexities of class action litigation, and keep corporate counsel updated on the ever-evolving nuances of Rule 23 and FLSA collective action issues. In this respect, we hope this book will provide our clients with an analysis of trends and significant rulings in the wage & hour space that enable them to make informed decisions in dealing with complex litigation risks. Defense of wage & hour class and collective actions is a hallmark of the litigation practice at Duane Morris. We hope this book – manifesting the collective experience and expertise of our class action defense group – will assist our clients by identifying developing trends in the case law and offering practical approaches in dealing with class and collective action litigation. Gerald L. Maatman, Jr. Jennifer A. Riley Gregory Tsonis

General Editor February 15, 2024

Wage & Hour Class And Collective Action Review – 2024

CONTRIBUTORS

Eden Anderson

Nick Baltaxe

Natalie Bare

Elizabeth Bassani

Rebecca Bjork

Derek Franklin

Katelynn Gray

Alex Karasik

Nathan Norimoto

Christian Palacios

Eisha Perry

George Schaller

Gregory Slotnick

Brandon Spurlock

Shireen Wetmore

Tyler Zmick

Jeffrey Zohn

Nicolette Zulli

Wage & Hour Class And Collective Action Review – 2024

GLOSSARY AND KEY U.S. SUPREME COURT DECISIONS Adequacy Of Representation – Plaintiffs must show adequacy of representation per Rule 23(a)(4) to secure class certification. It requires representative plaintiffs and their counsel to be capable of fairly and adequately protecting the interests of the class. Amchem Products, Inc. v. Windsor, et al. , 521 U.S. 591 (1997) – Windsor is the U.S. Supreme Court decision that elucidated the requirements in Rule 23(b), insofar as common questions must predominate over any questions affecting only individual class members and class resolution must be superior to other methods for the adjudication of the claims. Ascertainability – Although not an explicit requirement of Rule 23, some courts hold that the members of a proposed class must by ascertainable by objective criteria. Comcast Corp. v. Behrend, et al. , 569 U.S. 27 (2013) – Comcast is the U.S. Supreme Court decision that interpreted Rule 23(b)(3) to require that, for questions of law or fact common to the class, the plaintiffs’ damages model must show damages are capable of resolution on a class-wide basis. Commonality – Plaintiffs must show commonality per Rule 23(a)(2) to secure class certification. This requires that common questions of law and fact exist as to the proposed class members. Class – A group of individuals that has suffered a similar loss or alleged illegal experience on whose behalf one or more representatives seek to bring suit. Class Action – The civil action brought by one or more plaintiffs in which they seek to sue on behalf of themselves and others not named in the suit but alleged to have suffered the same or similar harm. Class Certification – The judicial process in which a court reviews the submissions of the parties to determine whether the plaintiffs have met their burden of showing that class treatment is the most appropriate form of adjudication. In federal courts, the process is governed by Rule 23 of the Federal Rules of Civil Procedure. Collective Action – A type of representative proceeding governed by 29 U.S.C. § 216(b) where one or more plaintiffs seeks to bring suit on behalf of others who must affirmatively opt-in to join the litigation. It is applicable to claims under the Fair Labor Standards Act, the Age Discrimination in Employment Act, or the Equal Pay Act. Cy Pres Fund – In class action settlement agreements, this is the money set aside for distribution to a § 501(c) organization when class members do not return a settlement claim form and money is left over after distribution to the class. Decertification – Following an order granting conditional certification of a collective action or certification of a class action, a defendant can move for decertification based on the grounds that the members of the collective action are not actually similarly-situated or that the requirements of Rule 23 are no longer satisfied for the class action. Opt-In Procedures – Under 29 U.S.C. § 216(b), a collective action member must opt-in to join the lawsuit before he or she may assert claims in the lawsuit or be bound by a judgment or settlement. Opt-Out Procedures – If a court certifies a class under Rule 23(b)(3), class members are bound by the court ’ s judgment unless they opt-out after receiving notice of the lawsuit.

Wage & Hour Class And Collective Action Review – 2024

Numerosity – Plaintiffs must show that their proposed class is sufficiently numerous that adding each class member to the complaint would be impractical. This is a requirement for class certification imposed by Rule 23(a)(1). Ortiz, et al. v. Fibreboard Corp., 527 U.S. 815 (1999) – Ortiz is the U.S. Supreme Court ruling that interpreted Rule 23(b)(3) to require personal notice and an opportunity to opt-out of a class action where money damages are sought in a class action. Predominance – The Rule 23(b)(3) requirement that, to obtain class certification, the plaintiffs must show that common questions predominate over any questions affecting individual members. Rule 23 – This rule from the Federal Rules of Civil Procedure governs class actions in federal courts and requires that a party seeking class certification meet four requirements of section (a) and one of three requirements under section (b) of the rule. Rule 23(a) – It prescribes that a class meet four requirements for purposes of class certification, including numerosity, commonality, typicality, and adequacy of representation. Rule 23(b) – To secure class certification, a class must meet one of three requirements of Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3). Rule 23(b)(1) – A class action may be maintained if Rule 23(a) is satisfied and if prosecuting separate actions would create a risk of inconsistent or varying adjudications with respect to individual class members or adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests. Rule 23(b)(2) – A class action may be maintained if Rule 23(a) is satisfied and the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. Rule 23(b)(3) – A class action may be maintained if Rule 23(a) is satisfied and questions of law or fact common to class members predominate over any questions affecting only individual members and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Similarly-Situated – Under 29 U.S.C. § 216, employees may bring suit on behalf of themselves and others who are similarly-situated. The standard is not clearly defined in the statute and many courts have found that, if plaintiffs make a preliminary showing that they are similarly situated to those they seek to represent, conditional certification is appropriate. A finding in this regard is usually not based on the merits of the claims. Superiority – The Rule 23(b)(3) requirement that a class action can be permitted only if class resolution is the superior method of adjudicating the claims. Typicality – The plaintiffs’ claims and defenses must be typical to those of proposed class members’ claims. This is required by Rule 23(a)(3). Wal-Mart Stores, Inc. v. Dukes, et al., 564 U.S. 338 (2011) – Wal-Mart is the U.S. Supreme Court ruling that tightened the commonality requirement of Rule 23(a)(2) and held that judges must conduct a “rigorous analysis” to determine whether there is a “common” contention central to the validity of the claims that is “capable of class-wide resolution.”

vii

Wage & Hour Class And Collective Action Review – 2024

TABLE OF CONTENTS

Page

I. Introduction……………………………………………………………………………………..1 II. Key Rulings In FLSA / Wage & Hour Class And Collective Actions In 2023……......5 1. Standard-Setting Decisions By The Sixth Circuit And The U.S. Supreme Court…..6 2. Rulings Granting Conditional Certification Motions…………………………………….7 3. Rulings Denying Or Substantially Limiting Conditional Certification………………15 4. Rulings Decertifying Collective Actions Or Denying Rule 23 Class Certification..28 5. Rulings Denying Decertification Or Granting Rule 23 Class Certification…………33 6. Other Rulings On Class And Collective Action Motions………………………………42 III. Top FLSA / Wage & Hour Class And Collective Settlements In 2023……………….45 IV. Appendix…………………………………………………………………………………….....47 1. Table Of 2023 Class Action And Collective Action Litigation Rulings………………47

viii

Wage & Hour Class And Collective Action Review – 2024

I. Introduction Wage & hour litigation has long been a focus of the plaintiffs’ class action bar. The relatively low standard by which plaintiffs can achieve conditional certification under the Fair Labor Standards Act (FLSA), often paired with state law wage & hour class claims, offers a potent combination by which plaintiffs can pursue alleged misclassification or unpaid overtime claims, for example. Over the last few years, approximately 8,000 FLSA collective action suits have been filed in courts nationwide each year, and there is little reason to think that the number of filings will decrease in the near future. In 2023 alone, there were over 2,600 new FLSA collective action lawsuits filed. This does not include filings under state wage & hour laws or individual wage & hour actions. The map below shows the dispersion of the filings throughout the United States. Leading the way with new collective action lawsuits filed were New York (775), Florida (296), Texas (231), Ohio (145), and Illinois (140). In 2023, courts again issued more certification rulings in FLSA collective actions than in other types of cases. Plaintiffs historically have been able to obtain conditional certification of FLSA collective actions at a high rate, which surely has contributed to the number of filings in this area.

Significant developments and trends emerged in wage & hour litigation in 2023. Further, the U.S. Department of Labor has indicated its intention to broaden the number of employees that are eligible for overtime pay, in part by revising the executive, administrative, and professional exemptions to the FLSA.

Wage & Hour Class And Collective Action Review – 2024

While the impact of anticipated actions cannot be yet known, the Duane Morris Wage & Hour Class Action Review is intended to not only to explain recent developments that have occurred, but also their importance on the challenges facing employers in 2024 and beyond.

In 2023, courts considered more motions for certification in FLSA matters than in any other substantive area. Overall, courts issued 183 rulings. Of these, 165 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 18 addressed second-stage motions for decertification of collective actions. Of the 167 rulings that courts issued on motions for conditional certification, 125 rulings favored plaintiffs, for a success rate of nearly 75%. These numbers are lower than the numbers observed in 2022, during which courts issued 236 rulings. Of these, 219 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 18 addressed second- stage motions for decertification of collective actions. Of the 219 rulings that courts issued on motions for conditional certification, 180 rulings favored plaintiffs, for a success rate of 82%. Such rate was in line with and slightly higher than the historic rate of success that plaintiffs have achieved with respect to such motions.

The decline in success rates in 2023 likely reflects the impact of courts in certain federal circuits more closely scrutinizing motions for conditional certification. Until recently, courts almost universally applied a two-step process to certification of FLSA collective actions. At the first stage, courts applied a lenient burden such that they required a plaintiff to make only a “modest factual showing” that he or she was similarly situated to others, and plaintiffs often met such burden by submitting declarations from a limited number of potential collective action members. At the second stage, courts conducted a more thorough examination of the evidence to determine whether in fact the plaintiff was similarly situated to those he or she sought to represent such that the matter should proceed to trial on a representative basis.

Wage & Hour Class And Collective Action Review – 2024

Recently, however, federal appellate courts in two circuits – the Fifth Circuit and Sixth Circuit -- took a closer look at the so-called two-step process. In 2021, the Fifth Circuit in Swales v. KLLM Transport Services, LLC , 985 F.3d 430, 436 (5th Cir. 2021), rejected the two-step approach to evaluating collective action certification, holding instead that district courts must “rigorously scrutinize the realm of ‘similarly situated’ workers … at the outset of the case.” This past year, in 2023, the Sixth Circuit joined the Fifth Circuit in jettisoning the traditional two-step approach. In Clark, et al. v. A&L Homecare & Training Center, LLC , 68 F.4th 1003 (6th Cir. 2023), the Sixth Circuit rejected the traditional two-step approach, but expressly declined to adopt the standard approved by the Fifth Circuit. Instead, the Sixth Circuit introduced a new standard that focuses on whether the plaintiff has demonstrated a “strong likelihood” that other employees he or she seeks to represent are “similarly situated” to the plaintiff. As these new, stricter standards in the Fifth and Sixth Circuits take hold, we are likely to see success rates normalize as plaintiffs shift their case filings away from these two circuits toward jurisdictions with more lenient, more plaintiff-friendly standards for conditional certification. Indeed, the success rate for plaintiffs in the Fifth Circuit declined by a noticeable amount in 2023, likely as a trickle-down effect of Swales . In 2022, courts in the Fifth Circuit issued 7 rulings on motions for conditional certification, and plaintiffs prevailed in 5, or 71%. In 2023, courts in the Fifth Circuit issued 6 rulings on motion for conditional certification, and plaintiffs prevailed in 3, or 50%. At the decertification stage, courts generally have conducted a closer examination of the evidence and, as a result, defendants historically have enjoyed an equal if not higher rate of success on these second-stage motions as compared to plaintiffs. The results in 2023 were no exception. Of the 18 rulings that courts issued on motions for decertification of collective actions, 8 rulings favored defendants, for a success rate of 44%. Such rate aligns with the success rate defendants enjoyed in 2022, and aligns with the historic rate of success that defendants have achieved at the decertification stage. An analysis of these rulings demonstrates that a disproportionate number emanated from traditionally pro- plaintiff jurisdictions, including the judicial districts within the Second Circuit (27 decisions) and Ninth Circuit (44 decisions), which include New York and California, respectively. Similar to recent years, however, the number of rulings emanating from the Sixth Circuit (22 decisions) proved nearly as high if not higher than the number of rulings in the traditional pro-plaintiff forums, a trend that, as mentioned above, is likely to reverse as we start to see the impact of Clark and plaintiffs begin

shifting their filings toward other jurisdictions. The following map illustrates these variations:

Wage & Hour Class And Collective Action Review – 2024

The numbers no doubt flow from the different standards and approaches that courts in different federal circuits take in evaluating motions for conditional certification and decertification and, in turn, the likelihood of plaintiffs’ success on such motions. If more courts join the Fifth and Sixth Circuits in abandoning the traditional two-step certification process, and thereby increase the time and expense of gaining a conditional certification order, it may lead to a reshuffling of the deck in terms of where plaintiffs file their cases and the types of claims they pursue. The U.S. Supreme Court also weighed in on the FLSA ’ s highly-compensated exemption in 2023. Through its decision in Helix Energy Solutions Group, Inc. v. Hewitt, et al. , 143 S. Ct. 677 (2023), the Supreme Court offered significant clarification on the “salary basis” test under the FLSA, especially for highly- compensated employees (HCEs) paid daily. This ruling impacts employers with high-earning employees under non-traditional salary structures.

Wage & Hour Class And Collective Action Review – 2024

In 2023, the plaintiffs’ bar continued its long-running success in achieving conditional certification in FLSA cases. Once again, plaintiffs’ motions for conditional certification were granted in a large majority of cases, thereby continuing to demonstrate the ease with which the plaintiffs’ bar can satisfy the low evidentiary threshold for conditional certification. Of the 167 total motions for conditional certification filed in federal courts, the plaintiffs won conditional certification 125 times, or at a rate of 75%, while 42 motions were denied. This is significant decrease when comparing the statistical totals in 2022, when the plaintiffs’ bar won 82% of first stage conditional certification motions, and 2021, when the plaintiffs’ bar secured a success rate of 84% of such motions, and also reflects for a portion of the year the Sixth Circuit ’ s stricter first-stage certification requirements. Regarding decertification motions, employers achieved approximately the same success in 2023 as they did in 2022. In 2023, 18 decertification decisions were issued, and plaintiffs prevailed in 10 cases while defendants achieved decertification in 8 decisions. The plaintiffs’ success rate of 56% is slightly higher than their 2022 success rate of 50%, as compared to 53% in 2021.

Once again, continuing a recent trend, the top jurisdictions for FLSA-related litigation, and those perceived as most plaintiff-friendly, are the Second, Ninth, and Sixth Circuits. Given the Sixth Circuit ’ s abandonment of the traditional two-step certification process, which allows the plaintiffs’ bar to conditionally certify a collective action with ease and exert substantial settlement leverage with minimal work and expense, a substantial decline in FLSA cases filed in that jurisdiction is an expected trend in 2024. II. Key Rulings In FLSA / Wage & Hour Class And Collective Actions In 2023 The significant decisions in 2023 can be grouped into several categories, discussed below, which include: (i) key standard-setting decisions from the Sixth Circuit Court of Appeals and the United States Supreme Court; (ii) rulings granting conditional certification, even based on minimal evidence; (iii) rulings denying or substantially limiting conditional certification based on insufficient proof; (iv) rulings denying conditional certification based on procedural or technical arguments; (v) rulings decertifying collective actions or denying Rule 23 class

Wage & Hour Class And Collective Action Review – 2024

certification; (vi) rulings denying decertification or granting Rule 23 class certification; and (vii) rulings adjudicating class and/or collective actions on the merits. 1. Standard-Setting Decisions By The Sixth Circuit And The U.S. Supreme Court Two decisions rendered in 2023 have the potential to substantially impact the outcome of FLSA cases in the coming years. In perhaps the most critical FLSA-related decision in 2023, the Sixth Circuit jettisoned the conventional two-step process for conditionally certifying a FLSA collective action in Clark, et al. v. A&L Homecare & Training Center, LLC , 68 F.4th 1003 (6th Cir. 2023). The named plaintiffs brought a putative collective action under the FLSA against their former employer and its owners, challenging pay practices they alleged ran afoul of the FLSA ’ s overtime and minimum wage requirements. The named plaintiffs filed a motion with the district court seeking conditional certification of three collective actions of employees alleged to have been subject to the same pay practices. In 2021, the district court granted plaintiffs’ motion as to two of the three proposed collective actions in Holder, et al. v. A&L Home Care & Training Ctr., LLC , 552 F. Supp. 3d 731, 740 (S.D. Ohio 2021). In conditionally certifying two collective actions, the district court applied the oft-used two-step framework set forth in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987). Under the Lusardi framework, the named plaintiffs need only present what courts have described as a “modest factual showing” that similar potential plaintiffs exist to satisfy the first step, i.e. , certification of a collective action on a conditional basis. In the second step, assuming others have joined the lawsuit as opt- in plaintiffs and the parties have completed discovery on the merits, the district court makes a final determination whether the opt-in plaintiffs actually qualify as parties to the litigation on the basis of substantial similarity to the named plaintiffs in what is known as a second-stage final certification order. The district court acknowledged that the Fifth Circuit in Swales, et al. v. KLLM Transport Services, L.L.C ., 985 F.3d 430, 443 (5th Cir. 2021), had rejected the Lusardi approach in favor of “rigorous” enforcement of the similarity requirement in a single step, after a period of preliminary discovery. The Sixth Circuit declined to follow suit. Recognizing the district courts’ need for guidance on the standard for sanctioning notice to putative opt-in plaintiffs in FLSA cases, the district court certified its decision for immediate interlocutory review by the Sixth Circuit under 28 U.S.C. § 1292(b). The Sixth Circuit accepted the appeal in order to address, for the first time, the legal issue of what a plaintiff needs to show in order to convince a court to allow notice to others of their ability to join the plaintiff ’ s FLSA lawsuit. The Sixth Circuit rejected both the Lusardi approach and the Swales approach. The majority opinion suggested that the new standard involves two steps. The Sixth Circuit analogized the showing of similarity required under the new standard to what a movant must show to secure a preliminary injunction, i.e., that, to a certain degree of probability, the movant will prevail on the underlying issue when the court makes its final decision whether to enjoin or not. The Sixth Circuit focused on the first step, which requires a named plaintiff to show it is strongly likely that members of the putative collective action are “in fact similarly-situated” to the named plaintiff, without stating the contours of the second step. Id. at *11. This standard, according to the majority, will “confine the issuance of court-approved notice, to the extent practicable, to employees who are in fact similarly-situated; and it would strike the same balance that courts have long struck in analogous circumstances.” Id. at *13. Given that the statute of limitations period continues to run during pre-trial discovery in order to determine whether potential opt-in plaintiffs should get notice of the lawsuit, the opinion cautioned district courts to “expedite” ruling on motions for such notice in FLSA cases in light of the general two-year statute of limitations period for FLSA claims. See Id. ; 29 U.S.C. § 255(a). Importantly, as to what district courts should consider in applying the new standard, Sixth Circuit agreed that district courts should consider the impact of the different defenses to which potential members of the collective action may be subject in making the notice determination. Id. at *15-*16. For example, whether some potential plaintiffs signed arbitration agreements and whether the statute of limitations would bar some potential plaintiffs’ claims are fair game in a district court ’ s decision whether to allow notice.

Wage & Hour Class And Collective Action Review – 2024

Another pivotal case in 2023 was the U.S. Supreme Court ’ s decision to weigh in on the applicability of an FLSA exemption for highly-compensated employees with atypical payment structures. In Helix Energy Solutions Group, Inc. v. Hewitt, et al., 143 S. Ct. 677 (2023), the plaintiff, a former “tool pusher” on an offshore oil rig, filed an action alleging that his employer failed to pay overtime compensation in violation of the FLSA. The plaintiff typically worked 12 hours per day for 28 days straight and then had the next 28 days off work before returning to the vessel. His pay rate ranged from $963 to $1,341 per day. Under this compensation structure, he earned at least $200,000 annually throughout the course of his employment. In response to the lawsuit, the defendant argued that the plaintiff qualified for the FLSA ’ s executive exemption and was therefore not entitled to overtime. The plaintiff argued that his compensation did not meet the salary basis test because his employer paid him a daily rate, not a weekly salary. The district court disagreed with the plaintiff ’ s analysis and granted summary judgment in the defendant ’ s favor. On appeal, the Fifth Circuit reversed and held that the plaintiff ’ s pay did not meet FLSA ’ s salary basis requirement. In so holding, the Fifth Circuit reasoned that: (i) a daily rate employee does not receive the weekly preset salary required by § 541.602(a), and (ii) the plaintiff ’ s pay did not satisfy the conditions of the special rule of § 541.604(b) that authorizes pay for exempt employees on an hourly, daily, or shift basis. The U.S. Supreme Court granted certiorari and affirmed the Fifth Circuit ’ s decision. The Supreme Court sided with the plaintiff and held that paying a daily rate ― even to a highly compensated worker ― is not paying on a “salary basis.” Id. at 679. The Supreme Court stated that only two compensation structures pass the “salary basis” test under the rules, including: (i) the employer satisfies § 602(a) by paying the employee a pre-determined salary of at least the minimum salary level (currently $684) computed on a weekly (or less frequent) basis regardless of hours, days or shifts worked; or (ii) the employer satisfies § 604(b) by computing the employee ’ s pay on an hourly, daily, or shift basis, but guarantees a weekly amount of at least the minimum salary level (now $684) and ensures that a “reasonable relationship” exists between the guaranteed amount and the amount actually earned. Id. at 684. The employer acknowledged that the plaintiff ’ s compensation did not satisfy § 604(b) ’ s conditions ( i.e. , the reasonable relationship test). The case therefore hinged on whether the employer had paid the plaintiff on a salary basis as described in § 602(a). According to the Supreme Court, the employer had not done so because “a daily-rate worker ’ s weekly pay is always a function of how many days he has labored. It can be calculated only by counting those days once the week is over - not, as §602(a) requires, by ignoring that number and paying a predetermined amount.” Id. at 686. The Supreme Court rejected the employer ’ s argument that § 602(a) requires only the minimum salary amount (then $455 per week) on a weekly or less frequent basis because “a ‘ basis’ of payment typically refers to the unit or method for calculating pay, not frequency of its distribution.” Id. at 687. Section 602(a) “describes those paid a weekly rate.” Id. The Supreme Court ’ s Helix decision may indicate a willingness to strictly construe the FLSA ’ s requirements when assessing whether an employer can fit within the criteria exempting it from paying overtime, particularly in novel or non- traditional salary structures. 2. Rulings Granting Conditional Certification Motions Considering the minimal evidence required, it is not surprising that the bulk of motions seeking conditional certification in 2023 were granted, continuing a long-standing trend in the federal courts. The exact evidentiary burden required in these instances can differ significantly, which is often influenced by the case ’ s specific legal stage. Typically, plaintiffs’ lawyers rely on declarations from one or more individuals who use their personal experiences to demonstrate the requisite facts and circumstances that show the plaintiff and potential collective action members are similarly-situated. However, due to the more stringent criteria for certification of a FLSA collective action set by the Fifth Circuit in 2021 and the Sixth Circuit in 2023, the plaintiffs in those jurisdictions must be prepared to present more comprehensive evidence to secure collective action certification. Ademi, et al. v. Central Park Boathouse, LLC, 2023 U.S. Dist. LEXIS 170402 (S.D.N.Y. Sept. 25, 2023), demonstrates that even a single affidavit from a plaintiff can support conditional certification. The plaintiff, a former long-tenured server who worked at the Central Park Boathouse from approximately January 2011

Wage & Hour Class And Collective Action Review – 2024

through October 16, 2022, filed a collective action on behalf of himself and all current and former front-of- the-house tipped employees (captains, assistants, bartenders, bussers, runners, and servers) employed at the Boathouse within the last six years. The plaintiff sought to recover unpaid wages (including overtime) due to an invalid tip credit policy, unreimbursed costs for maintenance of uniforms, and unpaid wages due to improper meal credit deductions in violation of the FLSA and the New York Labor Law (NYLL), as well as failure to provide proper wage statements under the NYLL. The plaintiff filed a motion for conditional certification of a collective action, and the court granted the motion. The plaintiff claimed that he was regularly scheduled to work seven hours a day, five days per week, but also regularly worked two or three double-shifts per week, totaling approximately 49 to 56 hours worked per week. Id. at *4. The plaintiff ’ s declaration included a list of the first (but not last) names of six other servers also allegedly scheduled to work similar hours and shifts, and he claimed there were additional names of other workers as well. Id. The plaintiff asserted that the Boathouse paid tipped front-of-the-house employees tip-credited wages without providing them notice that tip credits would be taken against their wages. Id. at *5-6. The complaint claimed the Boathouse thus paid the tipped employees below the New York minimum and overtime rate based on the tip credit, and attached paystubs generated between 2016 and 2020 confirming such rates. Id. The plaintiff claimed he personally observed and discussed the Boathouse paying below the required minimum amounts with named and unnamed co-workers. The complaint also alleged the Boathouse maintained a tip credit policy despite requiring tipped workers spend more than 20% of their total weekly hours performing non-tipped work and required the workers to maintain their own uniforms without proper cost reimbursement to offset cleaning costs. Id. at *6. Finally, the plaintiff alleged the restaurant improperly deducted meal credits from wages of all tipped front-of-house employees for meals that often made co-workers sick and often consisted of unsold chicken and seafood leftovers. The court noted that case law authorities in the Second Circuit have “routinely” granted conditional certification of a FLSA collective action based on a single plaintiff ’ s affidavit when the employee establishes that other co- workers were subjected to similar pay practices. The court stated that the plaintiff satisfied his minimal burden of showing he was “similarly-situated” to the proposed collective action members. The court found that the plaintiff set forth a factual basis for his claims of common policies violating the FLSA, i.e. , specifically, policies “depriving tipped front-of-house workers of wages, failing to reimburse workers for uniform maintenance, and deducting improper meal credits.” Id. at *15. The court agreed with the Boathouse that because two of the job positions the plaintiff sought to include in his proposed collective action (captains and assistants) did not actually exist at the restaurant while it was owned and operated by the defendants, those positions should not be included in the scope of the collective action. Id. Accordingly, the court granted the plaintiff ’ s motion for conditional certification of a collective action. Another single-declaration case that resulted in conditional certification is Lagunas, et al. v. La Ranchera, Inc., 2023 U.S. Dist. LEXIS 149827 (S.D. Tex. Aug. 25, 2023). The plaintiff, a driver and sales representative, filed a collective action alleging that the defendant failed to pay overtime wages and made improper wage deductions in violation of the FLSA. The plaintiff filed a motion for conditional certification of a collective action, and the court granted the motion. The plaintiff offered his own declaration in support of his motion. The declaration averred that all drivers had common job descriptions, and that they were all subject to the same policies and procedures imposed by the defendant, which resulted in denial of overtime compensation. The court noted that despite a minor distinction in the payment provisions of their employment agreements, the drivers shared many essential similarities in their agreements and job responsibilities, including requirements to keep clean and well-maintained delivery vehicles, adhering to certain performance standards, following pricing and customer requirements set by the defendant, and displaying the company ’ s signs on their vehicles. The court determined that the plaintiff made the requisite showing necessary to establish that he was similarly-situated to the proposed collective action members for purposes of conditional certification. For these reasons, the court granted the plaintiff ’ s motion. Similarly, in Kenan, et al. v. Global Payments, Inc., 2023 U.S. Dist. LEXIS 104461 (M.D. Ga. June 15, 2023), the plaintiffs, two Remote Fraud Specialists (RFSs), filed a collective action alleging that the defendant failed to pay for time spent booting up their computer systems before work, and thereby failed to pay overtime compensation in violation of the FLSA. The plaintiffs filed a motion to conditionally certify the

Wage & Hour Class And Collective Action Review – 2024

collective action, supported only by the declarations of the two plaintiffs. The declarations stated that all RFSs performed the same job duties of providing customer support services, including assistance with fraudulent transactions and obtaining new credit cards, they all were hourly employees, and that in order to perform their job duties, RFSs must complete an “extensive computer boot up process” to open various work programs taking up to 30 minutes per day. Id. at *3. In December 2022, the defendants changed their policy to require RFSs to boot up their systems at the start of (and not before) their scheduled shift. Id. at *4-5. The court found that the plaintiffs provided sufficient evidence to show that they were-similarly- situated to other RFSs, as they shared common job requirements and hourly wages. The court also credited the assertions in plaintiffs’ declarations that based on conversations with “numerous” other employees, plaintiffs expected that those employees would join the litigation, noting that “[i]f that interest never materializes, this action can be decertified.” Id. at *6. Ultimately, the court granted conditional certification for the FLSA collective action. Weinmann, et al. v. Construction Land Staffing, LLC, 2023 U.S. Dist. LEXIS 102226 (W.D. Penn. June 8, 2023), is another example of the minimal evidence needed to conditionally certify a collective action. The plaintiff, a Right of Way Agent, filed a collective action alleging that the defendant, a land management consulting company, failed to pay overtime compensation in violation of the FLSA. The plaintiff filed a motion for conditional certification of a collective action, and the court granted the motion. In support of her motion, the plaintiff offered declarations from four opt-in plaintiffs, three employee placement forms that described the terms of their compensation, deposition testimony from various employees, and responses to interrogatories that the defendant provided in a similar action. Id. at *9. The defendant argued that since the parties already exchanged some discovery, it would be appropriate to hold the plaintiff to a higher evidentiary standard because the plaintiff had a more robust factual record at her disposal. The court declined to apply the more rigorous analysis given the amount of discovery conducted thus far in the litigation. The court found that the plaintiff made the requisite factual showing required to establish that she was similarly-situated to the members of the proposed collective action. For these reasons, the court granted the motion for conditional certification of a collective action. Quay, et al. v. Monarch Healthcare Management LLC, 2023 U.S. Dist. LEXIS 134751 (D. Minn. Aug. 3, 2023), is an excellent example of how the low evidentiary burden at the conditional certification stage can expose a defendant to a nationwide collective action. The plaintiffs, a group of certified nurses, filed a collective action alleging that the defendant failed to pay for missed meal breaks in violation of the FLSA and Minnesota state law. The plaintiffs filed a motion for conditional certification of their FLSA claim, asserting that they were similarly-situated because all were or are nurses, were paid as non-exempt subject to overtime, had the same job duties, and were all subjected to the same practice of automatic meal deductions despite not actually receiving those breaks. Id. at *10-11. In support of their contentions, the plaintiffs provided declarations from nine individuals at five facilities alleging violations of overtime pay, and there were an additional 11 opt-in plaintiffs listed from five additional facilities. The court ruled that the plaintiffs made the requisite showing necessary to demonstrate that all nurses were similarly-situated in that they were all subject to the defendant ’ s allegedly unlawful meal period deduction policy. The court was also satisfied that others wanted to join the litigation, as there were 20 additional opt-in filings since the litigation commenced. Despite the “relatively low number of declarations” representing only 5 facilities, the court granted the plaintiffs’ motion for conditional certification of a collective action that included 45 facilities, reasoning that the totality of the opt-ins represented 10 total facilities. Id. at *11-12. Haro, et al. v. Walmart, Inc., 2023 U.S. Dist. LEXIS 32051 (E.D. Cal. Feb. 27, 2023), similarly demonstrates the ability to certify a nationwide collective action, even where the defendant mounts a vigorous defense. The plaintiffs, a group of retail employees, filed a collective action alleging that the defendant required its non-exempt, hourly workers to undergo COVID-19 screenings before clocking-in for their shifts without providing overtime pay in violation of the FLSA. The plaintiffs filed a motion for conditional certification of two collective actions, including one for California employees and another for employees outside California. The court determined that the defendant waived its personal jurisdiction challenge. Further, the court held that the plaintiffs’ evidence, which included declarations from several

Wage & Hour Class And Collective Action Review – 2024

experts and 12 current or former employees, sufficiently established that the plaintiffs were similarly- situated to the members of the proposed collective action for the purpose of conditional certification. Though Walmart attacked plaintiffs’ declarations as factually inconsistent and provided numerous declarations from employees rebutting the allegations in plaintiffs’ declarations, the court opined that it need not resolve factual disputes and did not even need to consider evidence offered by defendant to determine the propriety of conditional certification. Accordingly, the court granted the plaintiffs’ motion and conditionally certified a collective action consisting of California employees as well as a nationwide collective action. Another example demonstrating the low evidentiary burden is Greene, et al. v. County Of Essex, 2023 U.S. Dist. LEXIS 120354 (D.N.J. July 13, 2023). The plaintiffs, a group of Essex County Correctional Police and Police Superior Officers, filed a collective action alleging that the defendant, the County of Essex, failed to pay for overtime compensation in violation of the FLSA. The plaintiffs filed a motion for conditional certification of a collective action, and the court granted in part and denied in part the motion. The plaintiffs contended that they and putative opt-in plaintiffs were similarly-situated because they all had the same job title, job duties, and were subject to the same terms and conditions of employment, pay scale, and employee benefits. The plaintiffs asserted that they were required to attend and serve as instructors for trainings outside of their normal 40-hour workweek and were not compensated for this time. In support of their motion, the plaintiffs offered declarations from an Essex County Correctional Police Officer and a Police Lieutenant addressing instances where they worked more than their normal 40-hour workweek but were not paid for these excess hours. Id. at *5-6. The court found that the allegations and evidence provided made the requisite showing that the plaintiffs were similarly-situated to the members of the proposed collective action, such that conditional certification would be appropriate. For these reasons, the court granted the plaintiffs’ motion. The ease of achieving conditional certification is again demonstrated by Coyne, et al. v. Las Vegas Metropolitan Police Department , 2023 U.S. Dist. LEXIS 143215 (D. Nev. Aug. 15, 2023). The plaintiffs, a group of police officers, filed a collective and class action alleging that the defendant, the Las Vegas Metropolitan Police Department (LVMPD) failed to pay overtime compensation for certain pre-shift and post-shift activities related to scheduled overtime shifts in violation of the FLSA and Nevada wage & hour law. The plaintiffs specifically alleged that the defendant failed to pay for collecting specialized equipment, inspecting and refueling department vehicles, and returning equipment and vehicles. The plaintiffs filed a motion for conditional certification of a collective action, and the court granted the motion. In support of the motion, the plaintiffs offered their own declarations in which they averred that they and other potential members of the collective action all were subject to the LVMPD ’ s practice of requiring off-the-clock overtime work to collect and return specialized equipment. While the LVMPD argued that the plaintiffs were not similarly-situated because each scheduled overtime shift was unique, the court found that these differences should be addressed in the second step of the certification process, not at the conditional certification stage. Accordingly, the court granted the plaintiffs’ motion for conditional certification of a collective action. Evidence challenging a plaintiff ’ s factual allegations often will not bar conditional certification, as many courts see such evidence as pertaining to the merits of the plaintiff ’ s claims. For example, in Morrison, et al. v. Columbus Family Health Care LLC, 2023 U.S. Dist. LEXIS 79494 (S.D. Ohio May 5, 2023), the plaintiff, a home health aide, filed a collective action alleging that the defendant failed to compensate for her travel time between clients’ homes during her shifts in violation of the FLSA. The plaintiff filed a motion for conditional certification of a collective action, and the court granted in part the motion. In support of her motion, the plaintiff offered her own declaration in which she outlined that the defendant had a policy of not paying home health aides for travel time between clients’ homes during a single shift and that the plaintiff had personal knowledge of this practice extending to other home health aides. The defendant argued and submitted evidence that the plaintiff ’ s alleged uncompensated travel time between clients was significantly less than what was alleged, and that much of the alleged uncompensated travel time was actually non- compensable waiting time. The court found that defendant ’ s argument went to the merits of the plaintiff ’ s

Wage & Hour Class And Collective Action Review – 2024

allegations, and therefore was not suitable to consider at the conditional certification stage. The court reasoned that the plaintiff made the requisite showing necessary to demonstrate that she was similarly- situated to other home health aides for purposes of conditional certification. Accordingly, the court granted the plaintiff ’ s motion. Another example is Loy, et al. v. Rehab Synergies, LLC, 71 F.4th 329 (5th Cir. 2023). The plaintiffs filed a collective action against the defendant alleging violations of the FLSA. The plaintiffs in this case were employed as either speech language pathologist (SLP), physical therapist (PT), physical therapist assistant (PTA), occupational therapist (OT), or certified occupational therapist assistant (COTA), at 20 of defendant ’ s facilities serving a variety of patients with different conditions, including patients with dementia and patients recovering from strokes, accidents, and surgeries. All plaintiffs were subject to productivity requirements, and they claimed they did unpaid off-the-clock work to meet these requirements, which resulted in unpaid overtime. The plaintiffs filed a motion for conditional certification of a collective action, and the district court granted the motion. On appeal, the Fifth Circuit affirmed the district court ’ s ruling. The district court had ruled that the plaintiffs were similarly-situated based on their shared experiences with off- the-clock work, despite differences in their job roles and facilities. The defendant argued that the district court abused its discretion and erred in analyzing whether the plaintiffs were similarly-situated by misidentifying the “merits question” as whether the plaintiffs were subject to a common productivity requirement instead of whether the defendant knew or should have known that the plaintiffs were working overtime. Id. at 337. The Fifth Circuit determined that the district court properly considered whether the plaintiffs were similarly-situated. The Fifth Circuit also held that there were no unfairness or procedural issues in how the district court ruled in the action. The Fifth Circuit concluded that after reviewing the briefs, the record, and the relevant law, the district court applied the correct legal standards and that its factual findings were not clearly erroneous. The Fifth Circuit opined that because the plaintiffs were similarly-situated, it would have been inconsistent with the FLSA to require 22 separate trials for each individual plaintiff. The Fifth Circuit therefore affirmed the district court ’ s ruling granting the plaintiffs’ motion for conditional certification. A plaintiff ’ s declaration may also supply factual allegations that a non-employer entity ’ s employees are properly within the scope of the collective action. In Ramirez, et al. v. Liberty One Group LLC, 2023 U.S. Dist. LEXIS 121174 (S.D.N.Y. July 30, 2023), the plaintiff, a cleaner, filed a class and collective action alleging that the defendants, real estate companies specializing in property acquisitions, investments, development, and management, failed to pay overtime compensation and engaged in time shaving practices in violation of the FLSA and the New York Labor Law. The plaintiff filed a motion for conditional certification of a collective action, and the court ultimately granted the motion. The plaintiff asserted that defendant Liberty Brooklyn was a subsidiary of defendant Liberty One. Liberty Brooklyn was the plaintiff ’ s nominal employer according to her pay stubs, but she was interviewed and hired at an office space shared by both defendants. The plaintiff asserted that she was regularly scheduled to work from 7:00 a.m. to 4:30 p.m. five days a week, for a total 47.5 scheduled hours per week. Id. at *3. The plaintiff further contended that she was paid $15.00 per hour and overtime compensation of $22.50 per hour. The plaintiff alleged that she was often required to clock-out at 4:30 p.m. but was still required to complete work, and was not compensated for that time. Id. The plaintiff alleged that other cleaners were subject to the same procedure and that it represented a company-wide pattern. The plaintiff further asserted that the employees refrained from complaining out of fear of retaliation. The court found that the plaintiff adequately alleged that Liberty One and Liberty Brooklyn acted as a single integrated enterprise, as both operated from the same office space, shared executive officers, had a common human resources department, and used the same phone number. Thus, the court ruled that both defendants were proper parties to the action. The court found that the plaintiff made the requisite showing necessary to establish that she and the other workers were similarly-situated for purposes of conditional certification. Given the low evidentiary hurdle to conditional certification, even evidence demonstrating substantial variation and the absence of a common policy may not prevent conditional certification. In Gomez, et al. v. Epic Landscape Products, L.C., 2023 U.S. Dist. LEXIS 74772 (D. Kan. Apr. 28, 2023), the plaintiffs, a

Wage & Hour Class And Collective Action Review – 2024

Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63

www.duanemorris.com

Made with FlippingBook - professional solution for displaying marketing and sales documents online