John Smith v. Servicemaster Holding Corp.

592 F. App'x 363
CourtCourt of Appeals for the Sixth Circuit
DecidedNovember 14, 2014
Docket14-5481
StatusUnpublished
Cited by52 cases

This text of 592 F. App'x 363 (John Smith v. Servicemaster Holding Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
John Smith v. Servicemaster Holding Corp., 592 F. App'x 363 (6th Cir. 2014).

Opinion

HELENE N. WHITE, Circuit Judge.

Defendants-Appellants ServiceMaster Holding Corp., ServiceMaster Company, Inc., Terminix International Company, L.P., and Terminix International, Inc. (collectively ServiceMaster), provide services to residential and commercial customers, including termite and pest control, lawn care, landscape maintenance, home warranties, disaster response and reconstruction, house cleaning, furniture repair, and home inspection. Plaintiffs, all at one point employees of Terminix International Company, L.P., or Terminix International, Inc. (collectively Terminix), 1 brought an action against ServiceMaster for violations of the Fair Labor Standards Act (FLSA), alleging that ServiceMaster had a policy of not compensating technicians for all hours worked and for overtime, and seeking to represent a class of similarly-situated em *365 ployees. After an arbitrator determined that Plaintiffs could proceed collectively, ServiceMaster settled with the individual Plaintiffs. Plaintiffs’ counsel then sought attorney’s fees and costs of the action. The district court awarded the full amount requested, and ServiceMaster appeals.

We VACATE the award of attorney’s fees and costs and REMAND to the district court for further consideration.

I. BACKGROUND

A. Smith’s FLSA Claim

Smith filed an action against Service-Master on July 14, 2009, in the Western District of Tennessee, alleging individual claims under the FLSA pursuant to 29 U.S.C. § 201, and sought certification of a class under 29 U.S.C. § 216(b) on behalf of himself and all similarly-situated employees. Smith worked in Terminix’s Baton Rouge, Louisiana, branch. He alleged that the number of appointments technicians were required to complete in a day often necessitated working more than eight hours, and that ServiceMaster did not properly compensate him for the overtime. Further, the complaint alleged that the time-keeping device carried by technicians did not accurately record all hours technicians worked.

B. Smith’s First Amended Complaint

The district court granted ServiceMas-ter’s motion to transfer the case to the Middle District of Louisiana on July 1, 2010. 2 However, on October 11, 2011, Smith filed an unopposed motion for leave to amend the complaint and to transfer the action back to the Western District of Tennessee. In the motion, Smith sought to add two named plaintiffs, Dominick Massaro (Massaro) and Troy Yates (Yates), to replace Smith as the collective action representatives. Massaro worked as a service representative for Terminix in Palm Beach, Florida, from the time his former employer, ServicePro, was bought by Terminix, until August 2010. Yates worked as a service representative for Terminix in Glenview, Illinois, from 2007 to 2009.

Both Massaro and Yates claimed they were improperly classified as exempt employees and thus not paid overtime wages. The amended complaint also included allegations that ServiceMaster failed to pror vide employees with meal breaks in accordance with 29 C.F.R. § 785.19 (Claim II). The district court granted the motion to amend and transfer on October 19, 2011. In addition, William Craig (Craig) and Billy Simpkins (Simpkins) filed motion-to-join forms on April 8, 2010, and, February 9, 2012, respectively. Although Smith’s counsel spent many hours preparing a motion for collective action certification, it was never submitted; thus, the district court never certified this matter as a collective action.

C.Arbitration of the Claims

On January 11, 2012, ServiceMaster moved to compel Massaro and Yates to arbitrate their claims pursuant to the arbitration provision in the employment agreements they entered into at the beginning of their employment with ServiceMaster. The agreement provided, in relevant portions, that a third-party arbitrator would decide employment disputes and that both parties would be bound by the arbitrator’s decision. Massaro and Yates objected to the motion to compel, but on March 13, 2012, the district court granted the mo *366 tion. 3 The district court did not decide whether the arbitration could proceed as a collective action; it concluded that the issue was properly within the purview of the arbitrators. Massaro and Yates submitted their individual claims to the arbitrator and sought a certification of collective action.

A telephonic arbitration-management conference was held on October 31, 2012. The arbitrator asked the parties to submit additional briefing regarding whether the arbitration clause permitted collective actions. The parties submitted their briefs, and on December 27, 2012, the arbitrator entered a partial final award finding that the “arbitration agreement [did] not preclude this arbitration from proceeding'on behalf of a class.” ServiceMaster then filed a motion to vacate the arbitrator’s award, which the district court denied on May 21, 2013.

D. Settlements with Plaintiffs and Award of Fees and Costs

Between August 16, 2013, and September 6, 2013, ServiceMaster extended Fed. R.Civ.P. Rule 68 offers to Massaro, Yates, Craig, Simpkins, and Smith. After all plaintiffs accepted an offer, the district court entered judgment on each individual’s FLSA claim in the following amounts: $6,552 for Smith, $2,295.30 for Massaro, $10,733.06 for Yates, $5,137.96 for Craig, and $57,623.20 for Simpkins. Thus, Plaintiffs’ total combined recovery was $82,341.52.

Plaintiffs filed a revised motion requesting $516,890.25 in attorney’s fees and $18,908.85 in costs on October 15, 2013. 4 ServiceMaster objected, contesting the amount and also arguing that Plaintiffs were not prevailing parties in the collective action portion of the case and should therefore not recover fees for work done in pursuit of collective action. The district court granted Plaintiffs’ motion in a five-page order awarding $516,890.25 in attorney’s fees and $18,908.85 in costs.

II. DISCUSSION

A. Standard of Review

“We review a district court’s award of attorney’s fees for abuse of discretion.” Moore v. Freeman, 355 F.3d 558, 565 (6th Cir.2004) (citing Fegley v. Higgins, 19 F.3d 1126, 1134 (6th Cir.1994)). An abuse of discretion can be found when the lower court “relies on clearly erroneous findings of fact, or when it improperly applies the law or uses an erroneous legal standard” or “when the reviewing court is firmly convinced that a mistake has been made.” Adcock-Ladd v. Sec’y of Treasury,

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592 F. App'x 363, Counsel Stack Legal Research, https://law.counselstack.com/opinion/john-smith-v-servicemaster-holding-corp-ca6-2014.