Knox v. Jones Group

208 F. Supp. 3d 954, 2016 U.S. Dist. LEXIS 126224, 2016 WL 4943825
District Court, S.D. Indiana·Decided September 16, 2016·No. 1:15-cv-01738-SEB-TAB·Published·Cited by 14 cases

Opinion

ORDER

Tim A. Baker, United States Magistrate Judge

This order comes on the heels of the District Judge’s denial of Defendants’ motion to dismiss. [Filing No. 77.] In light of this denial, and for reasons explained below, the Magistrate Judge finds it is appropriate to conditionally certify and notify potential class members about this suit. In total, four motions currently pend before the Magistrate Judge: Plaintiffs’ motion for step-one notice [Filing No. 27], Defendants’ motion to submit supplemental authority [Filing No. 75], Plaintiffs’ motion to toll the statute of limitation [Filing No. 62], and Plaintiffs’ motion to compel [Filing No. 56], Each motion is addressed below.

I. Background

Plaintiffs brought this action against Defendants for allegedly violating the Fan-Labor Standards Act. In short, Plaintiffs allege that Defendants paid them an hourly tip-wage of $2.13, but required them to perform substantial amounts of non-tipped work and pay for shortages and walkouts from their tips. Defendants filed a motion to dismiss in response to Plaintiffs’ complaint. While that motion was pending, Plaintiffs filed the present motion for step-one notice. Plaintiffs wish to pursue this [957]*957case as a collective action, and seek conditional certification to notify potential Plaintiffs about this suit and allow them to opt in. Defendants reasonably requested that the Magistrate Judge postpone ruling on the motion for step-one notice until the District Judge ruled on Defendants’ motion to dismiss. The Magistrate Judge obliged.

After a brief delay, the District Judge denied Defendants’ motion to dismiss, finding that Plaintiffs’ claims are viable. The delay was primarily to allow the District Judge an opportunity to consider the recent decision of Schaefer v. Walker Bros. Enterprises, Inc., 829 F.3d 551, 554, 2016 WL 3874171, *2 (7th Cir.2016), which recognized the Department of Labor’s interpretation of the Field Operations Handbook that a tipped employee may be paid a tip-wage, unless performing dual jobs or unrelated non-tipped work more than 20 percent of the time. [Filing No. 66.] The Schaefer court found that the majority of the duties complained about, such as making coffee and cleaning tables, were related. For time spent performing the unrelated duties, wiping burners and woodwork and dusting picture frames, the Schaefer court held that the tipped employees may be paid a tip-wage because their time spent on that work was “negligible,” and well under 20 percent of a shift. Schaefer, 829 F.3d at 555, 2016 WL 3874171, at *3.

The District Judge noted that Schaefer did not clarify whether the Department of Labor’s 20 percent rule for unrelated work is controlling. [Filing No. 77, at EOF p. 16-18.] However, because a 20 percent threshold for unrelated work is a reasonable quantifier, the District Judge denied Defendants’ motion to dismiss. The District Judge explained that unlike the plaintiffs in Schaefer, Plaintiffs here allege that they spend 50 percent of their time as servers and 35-40 percent of their time as bartenders, performing unrelated non-tipped work while earning a tip-wage.

The District Judge’s denial indicates that the pleadings sufficiently allege a violation of FLSA because the alleged time spent on unrelated non-tipped work is more than negligible and above the 20 percent threshold. With this decision in hand, the Magistrate Judge turns to whether conditional certification for step-one notice is appropriate.

II. Step-one notice

Plaintiffs ask the Court to conditionally certify their class and authorize Plaintiffs’ counsel to notify them about this action. Plaintiffs’ proposed class is comprised of “current and former employees of Defendants’ Buffalo Wild Wings restaurants who were paid sub-minimum wages in the last three years.”1 [Filing No. 27.] Plaintiffs argue these individuals are “similarly situated,” and submit a proposed notice for Court approval. [Filing No. 28-10.] Defendants argue that Plaintiffs’ proposed class is not similar enough to warrant conditional certification. Alternatively, Defendants argue that the proposed notice should be rejected and access should be limited so that participation is not encouraged. As explained below, conditional certification is appropriate and the step-one notice is approved with one addition.

[958]*958A. Similarly situated individuals

Plaintiffs moved pursuant to section 16(b) of the FLSA to conditionally certify this suit as a collective action and to authorize class notice. Section 16(b) permits a collective action against an employer for unpaid minimum wages “by any one or more employees for and on behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b) (2012); see Alvarez v. City of Chicago, 605 F.3d 445, 448 (7th Cir.2010) (“The [FLSA] gives employees the right to bring their FLSA claims through a ‘collective action’ on behalf of themselves and other ‘similarly situated’ employees.”). The appropriateness of conditional certification therefore rests on whether Plaintiffs are “similarly situated” to their proposed class.

Neither the FLSA nor the Seventh Circuit has set forth criteria for determining whether employees are similarly situated. Rottman v. Old Second Bancorp, Inc., 735 F.Supp.2d 988, 990 (N.D.Ill.2010). However, courts in this district and around the country have settled on a- two-step procedure for dealing with collective actions under the FLSA. Id.; Carter v. Indianapolis Power & Light Co., No. IP-02cv-01812-SEB-VSS, 2003 WL 23142183, *3 (S.D.Ind.2003). The first step allows the Court to analyze the pleadings and any affidavits to determine whether notice should be given to similarly situated individuals—a conditionally certified class. Carter, 2003 WL 23142183, at *3. The second step allows the Court to determine whether that class should be decertified or restricted because various potential class members are not in fact similarly situated. Id.

At step one, the Court decides whether the proposed class is similarly situated. The Court only requires Plaintiffs to make a minimal threshold showing that they are similarly situated to the employees on whose behalf they are seeking to pursue this claim. Carter, 2003 WL 23142183, *3; see also Frebes v. Mask Restaurants, LLC, No. 13 C 3473, 2014 WL 1848461, at *2 (N.D.Ill.2014) (“the ‘similarly situated’ standard is liberal”); Rottman, 735 F.Supp.2d at 990 (“courts have interpreted the ‘similarly situated’ requirement leniently”); Howard v. Securitas Security Services, USA Inc., No. 08 C 2746, 2009 WL 140126, at *5 (N.D.Ill.2009) (“the court looks for no more than a ‘minimal showing’ of similarity”). Because the similarly situated standard is liberally applied, a step-one inquiry generally results in the conditional certification of a class. Rottman, 735 F.Supp.2d at 990.

The standard is lenient at step one because the final determination of whether collective action members are similarly situated occurs at step two. Carter, 2003 WL 23142183, *3. (citing Champneys v. Ferguson Enterprises, Inc.

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Knox v. Jones Group, 208 F. Supp. 3d 954, 2016 U.S. Dist. LEXIS 126224, 2016 WL 4943825 (S.D. Ind. 2016).

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