UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION. v. 1:13-CV-1092-CAP ORDER

Transcription

1 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 1 of 14 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION JORDAN DESTIN, individually and on behalf of other persons similarly situated who were employed by WORLD FINANCIAL GROUP, INC., Plaintiff, CIVIL ACTION NO. v. 1:13-CV-1092-CAP WORLD FINANCIAL GROUP, INC., Defendant. ORDER This matter comes before the court on the plaintiff s refiled motion for conditional certification pursuant to 29 U.S.C. 216(b) [Doc. No. 185]. 1 The underlying action is brought pursuant to the Fair Labor Standards Act ( FLSA ), 29 U.S.C. 207, 216(b), to recover unpaid wages and overtime wages allegedly owed to the plaintiff and other similarly situated persons [Doc. No. 102 at 1-2]. 1 The court refers to the plaintiff as a singular subject since Jordan Destin has been replaced as the sole named plaintiff. As discussed in more detail below, there are additional opt-in plaintiffs in this case.

2 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 2 of 14 The plaintiff asks the court to certify a collective of all persons who have been World Financial Group, Inc. ( WFG ), Associates at any time on or after January 16, 2010 [Doc. No at 3]. Upon granting the first request, the plaintiff seeks an order requiring the defendant to produce the names and contact information of all collective members [id. at 2]. I. WFG s Business Model WFG, acting through its Associates, markets and sells financial products and securities through affiliated companies. Susan E. Davies Decl. at 2, 5 [Doc. No ]. WFG offers insurance through several insurance companies (collectively, WFGIA ) and sells securities through its relationship with an affiliated securities broker dealer, Transamerica Financial Advisors, Inc. ( TFA ). 2 Id. at 2-3. WFG enters into business relations with individuals who seek to run their own insurance and/or financial services businesses. The relationship between WFG and those individuals who are referred to generally as Associates is governed by an Associate Membership Agreement ( AMA ). Id. at 3. These individuals enter into an independent contractor relationship with WFG once they sign the AMA and pay an administrative processing fee 2 Before January 2012, WFG had an affiliation with World Group Securities, Inc., and Investment Advisors International, Inc. Both of these affiliates merged into TFA in January

3 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 3 of 14 of $ Id. WFG does not classify these individuals as employees but rather expressly as independent contractors. Id. WFG does however consider individuals working at its corporate headquarters in John s Creek, Georgia, to be employees of the company. Id. at 4. Associates are paid a commission by WFG. Associates may earn commissions in two ways: (1) commissions from the sales of the products and services they themselves recommend, offer and sell; and (2) override commissions from the sales of products and services sold by downline Associates within a sales hierarchy who the upline associate directly or indirectly recruited, so long as the upline Associate is appropriately licensed or registered to sell the products on which the commission is based. Id. at 6. Associates are not reimbursed by WFG for business-related expenses, such as travel, education, and licensing fees, nor does WFG provide offices, computers, or other business instruments to its Associates. Id. at 8. Other than licensing requirements and the terms of the AMA, WFG Associates are free to run their business affairs in any manner they see fit, though many opt to use WFG s marketing materials. See generally id. at

4 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 4 of 14 II. Discussion A. Certification Under the FLSA The FLSA authorizes collective actions, stating: An action... may be maintained against any employer... by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. 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). The court has discretion to authorize the sending of notice to potential class members in a collective action. Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165, (1989); Hipp v. Liberty National Life Insurance Co., 252 F.3d 1208, 1219 (11th Cir. 2001); Haynes v. Singer Co., 696 F.2d 884, (11th Cir. 1983). The Eleventh Circuit suggests a two-tiered approach to class certification in FLSA cases: The first determination is made at the so-called notice stage. At the notice 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. The second determination is typically precipitated by a motion for decertification by the defendant usually filed after discovery is largely complete and 4

5 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 5 of 14 the matter is ready for trial. At this stage, 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. Hipp, 252 F.3d at 1218 (quoting Mooney v. Aramco Servs. Co., 54 F.3d 1207, (5th Cir. 1995)). At the notice stage, the determination is made using a fairly lenient standard, and typically results in conditional certification of a representative class. Id. (quoting Mooney, 54 F.3d at 1216). The plaintiffs need show only that their positions are similar, not identical, to the positions held by the putative class members. Grayson v. K Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996) (citations omitted) (internal quotations omitted). Nevertheless, before deciding whether to authorize notice to other potential members of the putative class, the court should determine (1) whether the employees sought to be included in the putative class are similarly situated with respect to their job requirements and pay provisions, and (2) whether there are other employees who wish to opt in the action. Dybach v. State of Florida Department of Corrections, 942 F.2d 1562, (11th Cir. 1991). Once the court determines that these conditions are 5

6 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 6 of 14 met, the court has broad power to establish specific procedures for opting-in the case. Id. Here, the parties dispute whether the plaintiff s motion for conditional certification should be viewed under the more lenient standard at the notice stage, or, alternatively, whether the motion should be assessed according to the heightened standard commonly associated with the second stage. Since discovery in this case has concluded, the defendant argues for the more stringent standard. As acknowledged by Ide v. Neighborhood Rest. Partners, the Eleventh Circuit has not articulated the exact standard of proof applicable to a motion for conditional certification filed after extensive discovery has taken place. Ide v. Neighborhood Rest. Partners, LLC, 1:13-CV (N.D. Ga. 2014). Though Ide applied the much stricter standard of similarity, the court concludes that because the potential collective has not yet been certified (and hence notice has not been sent to the entire putative class), it would be improper to view the plaintiff s motion as one related to the second stage of certification. The purpose of the second step of the certification analysis is to take a closer look at the putative class in light of the much more information [the court has] on which to base its decision. Mooney, 54 F.3d at If the putative class was closely scrutinized for factual similarities prior to sending 6

7 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 7 of 14 notice to potential class members, the court would be unable to discern whether the potential class members are similarly situated because those members would not have had the opportunity to opt in pursuant to 216(b). The court would be left to determine whether an unascertainable group of potential class members are similarly situated. Since this result cuts against the purpose of the two-tier certification analysis, the plaintiff s motion will be reviewed according to the more lenient standard applicable at the notice stage; however, the court will consider evidence produced during discovery in determining whether the plaintiff meets his burden. See Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1261 (11th Cir. 2008) ( The second stage is triggered by an employer s motion for decertification. ) (citing Anderson v. Cagle s, Inc., 488 F.3d 945, 953 (11th Cir. 2007)). B. Analysis The court is mindful that the only question before it is (1) whether other Associates of the defendant desire to opt-in, and (2) whether these other Associates are similarly situated with respect to their job requirements and pay provisions. Dybach, 942 F.2d at ; Rojas v. Garda CL Se., Inc., 297 F.R.D. 669, 675 (S.D. Fla. 2013). The plaintiff s motion does not present an occasion for the court to determine whether the defendant improperly classified its Associates as independent contractors. Rojas, 297 F.R.D. at 7

8 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 8 of ; Kerce v. West Telemarketing Corp., 575 F. Supp. 2d 1354, 1358 (S.D. Ga. 2008) ( In considering a motion to conditionally certify the class in a wage and hour dispute, the Court does not reach the merits of the case. ). 1. Similarly Situated The plaintiff bears the burden of establishing that he is similarly situated with the group of employees he wishes to represent. Grayson, 79 F.3d at As noted above, the plaintiff s burden at the notice stage is lenient, and the plaintiff is not required to prove that he and the putative class members held identical positions, only similar ones. See Hipp, 252 F.3d at 1217; Grayson, 79 F.3d at However, there must be more than only counsel s unsupported assertions that FLSA violations are widespread and that additional plaintiffs [will join in the suit]. Morgan, 551 F.3d at 1261 (citation omitted). Here, the plaintiff has submitted deposition testimony from five opt-in plaintiffs [Doc. Nos ], declarations from two additional opt-in plaintiffs [Doc. Nos , 185-5], deposition testimony and a declaration from Susan E. Davies 3 [Doc. Nos. 180, 181, 185-3], and several other affidavits that collectively show the following: (1) all Associates were classified as independent contractors by WFG; (2) all Associates were required to sign, 3 Davies is one of the defendant s Rule 30(b)(6) witnesses. 8

9 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 9 of 14 and were subsequently bound by, the AMA; (3) all Associates were paid under the same commission plan; (4) all Associates were bound by the same fundamental WFG rules and policies; (5) all Associates were given discretion to carry out their individual business affairs; and (6) all Associates had the fundamental job of selling WFG-affiliated products and recruiting new Associates. The defendant nevertheless maintains that courts routinely hold that a uniform classification of individuals as independent contractors... is not a sufficient basis on which to conclude that individuals are similarly situated for certification purposes. [Doc. No. 188 at 32]. With respect to the plaintiff s assertion that the AMA shows similarity among Associates, the defendant argues that what occurs in practice is determinative ; and since Associates practices under the AMA differ, the fact that all Associates are required to sign an AMA is insignificant. The defendant s fundamental argument pertaining to the similarly-situated analysis is that discovery has underscored the vast differences among Associates, which the defendant says militates strongly against certification. 4 4 Through its analysis, the defendant relies on a common questions, common answers test, citing an opinion of the United States District Court for the District of Connecticut. See Mike v. Safeco Ins. Co. of Am., 274 F. Supp. 2d 9

10 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 10 of 14 The court has determined that the defendant s arguments are without merit. First, while a uniform misclassification of individuals as independent contractors, alone may be insufficient to show similarity, the plaintiff has accompanied this showing with several other indicators of uniformity among Associates. See Hipp v. Liberty Nat. Life. Ins. Co., 252 F.3d 1208, 1219 (11th Cir. 2001) (certifying class because all [p]laintiffs held the same job title, and they all alleged similar, though not identical, discriminatory treatment. ). Second, the defendant s argument that the AMA and other provisions are not enforced by WFG in practice is not persuasive. The defendant cites Scantland v. Jeffry Knight, Inc. for the proposition that the economic realities test controls this analysis. Scantland v. Jeffry Knight, Inc., 721 F.3d 1308, 1311 (11th Cir. 2013). However, the defendant s reliance on Scantland is misplaced. The court s discussion in that case pertained to the multifactor economic reality test that courts use to determine whether an individual falls into the category of an FLSA-covered employee or the exempted grouping of independent contractor. Id. Because the court will not use the instant motion to address the merits of the plaintiff s FLSA claim, and because the court is aware of no authority applying the economic realities 216, 220 (D. Conn. 2003). Of course, neither this test, nor this opinion, is binding on this court. 10

11 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 11 of 14 test at the notice stage, the court concludes that the AMA contracts support the plaintiff s showing of collective uniformity. The defendant s final contention is also without merit. The defendant contends that discovery has unambiguously revealed that vast differences exist among Associates. However, because the court approaches this motion as one presented at the notice stage, variations in specific duties, job locations, working hours, or the availability of various defenses are examples of factual issues that are not considered at this time. J Hon Mainor v. Lazer Spot, Inc., No. 1:11-CV-971-CAP (N.D. Ga. 2011) (citing Scott v. Heartland Home Finance, Inc., No. 1:05-CV-2812-TWT, 2006 WL , at *3 (N.D. Ga. May 3, 2006)). The appropriate time to address issues of individual differences between putative class members is during the second stage of the certification determination. Id. Under the lenient standard appropriate at the notice stage, the court finds that the plaintiff is similarly situated to other Associates employed by the defendant. 2. Sufficiency of Interest by Other Individuals in the Lawsuit Next, the plaintiff must demonstrate that other Associates wish to opt in the action before this court may grant conditional certification. Dybach, 11

12 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 12 of F.2d at So far, seven opt-in plaintiffs have joined the plaintiff in this suit. 5 The court disagrees with the defendant s contention that the joinder of seven opt-in plaintiffs is not sufficient to show interest in the case. See Guerra v. Big Johnson Concrete Plumbing, Inc., 2006 WL , at *2 (S.D. Fla. May 17, 2006) (holding that one opt-in plaintiff is sufficient); Tyler v. Payless Shoe Source, Inc., No. 22:05 CV 33F (WO), 2005 WL , at *3 (M.D. Ala. Nov. 23, 2005) (holding that three consents to join filed by putative opt-in plaintiffs is sufficient to satisfy this prong); Bell v. Mynt Entm t, LLC, 223 F.R.D. 680, 683 (S.D. Fla. 2004) (holding that the affidavits of seven opt-in plaintiffs indicating they were aware of others expressing desire to join suit if certified are sufficient). Even though actual notice has not been sent to the potential class members who may be spread over a wide geographic area, the fact that seven opt-in plaintiffs from four states have joined is sufficient to demonstrate an interest by other employees to opt in the suit. The plaintiff has demonstrated, for purposes of conditional certification, that he is similarly situated to other Associates employed by the defendant and that other Associates wish to opt in the case. See Dybach, The court dismissed one opt-in plaintiff s claim (Adam Edwards) on the grounds that he did not have standing to bring his FLSA claim [Doc. No. 173]. 12

13 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 13 of 14 F.2d at The certification of collective actions in an FLSA case is based on a theory of judicial economy by which [t]he judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged... activity. Barten v. KTK & Associates, Inc., No. 8:06-CV-1574-T-27EAJ, 2007 WL , at *1 (M.D. Fla. July 26, 2007) (quoting Hoffmann-La Roche Inc., 493 U.S. at 170). In this case, these efficiencies can be realized through a collective action even if a final resolution on the merits requires some factual determinations individual to each opt-in plaintiff. Should the defendant later move for decertification, the court will revisit the certification issue and make a final determination as to whether the similarly situated requirement has been met. At this stage, however, the court will permit the plaintiff to send notice of opt-in rights to potential members of the class. III. Conclusion The plaintiff s motion for conditional certification [Doc. No. 185] is hereby GRANTED. The class shall be defined as follows: All current and former persons who have been WFG Associates at any time dating back [three years from the date notice is sent]; and worked more than forty hours during one or more workweeks while employed by the defendant but was not paid overtime wages for the hours worked over forty in a workweek. The class 13

14 Case 1:13-cv CAP Document 197 Filed 02/11/15 Page 14 of 14 shall also include all current and former WFG Associates at any time dating back [three years from the date notice is sent] that were paid no wages or insufficient wages under 29 U.S.C The parties are ORDERED to confer regarding the form, content, and manner of distribution of the Notice of Lawsuit within fourteen days of the date of this order. The parties must submit a joint status report no later than seven days after the aforesaid deadline indicating whether the parties have agreed to the same. Concomitant with the joint status report, the parties must submit the proposed Notice of Lawsuit. Furthermore, the defendant is ORDERED to provide the plaintiff, within twenty-days of the date of this order, a list of all putative class members that contains the last known contact information of all persons employed by the defendant as Associates dating back [three years from the date of this order] including: names, addresses, telephone numbers, dates of employment, locations of employment, and addresses. SO ORDERED this 11th day of February, /s/ Charles A. Pannell, Jr. CHARLES A. PANNELL, JR. United States District Judge 14