Le v. Regency Corp.

957 F. Supp. 2d 1079, 2013 WL 3717754, 2013 U.S. Dist. LEXIS 98276
CourtDistrict Court, D. Minnesota
DecidedJuly 15, 2013
DocketCivil No. 13-391 (DWF/SER)
StatusPublished
Cited by7 cases

This text of 957 F. Supp. 2d 1079 (Le v. Regency Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Le v. Regency Corp., 957 F. Supp. 2d 1079, 2013 WL 3717754, 2013 U.S. Dist. LEXIS 98276 (mnd 2013).

Opinion

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on Plaintiffs’ Motion for Class Certification, Court Authorized Notice, and Tolling of Statute of Limitations (Doc. No. 14) and Defendants’ Motion for Partial Dismissal of Plaintiffs’ Class and Collective First Amended Complaint (Doc. No. 44). For the reasons set forth below, the Court grants in part and denies in part the motions.

BACKGROUND

Defendant Regency Corporation d/b/a Regency Beauty Institute (“Regency”) is a domestic corporation that provides cosmetology education to students. (Doc. No. 36, Am. Compl. ¶ 8.) At all relevant times, Defendant J. Hayes Batson (“Batson”) was the sole owner, Chief Executive Officer, and Chairman of Regency.1 (Id. ¶¶ 9, 67.) Regency operates in approximately twenty states and has eighty-nine campuses across the country with its headquarters in Saint Louis Park, Minnesota. (Id. ¶ 8.) Regency employs 864 people across the United States. (Doc. No. 31, Carlson Deck ¶ 2.) Currently, 196 employees are based out of Regency’s headquarters in Saint Louis Park, including the Admissions Department. (Id. ¶ 3.) Since February 18, 2010, Regency has employed approximately 155 Representatives. (Id.)

Plaintiffs were all at one time either Admissions Representatives or Admissions Agreement Representatives (together, “Representatives”) employed by Regency. (Am. Compl. ¶¶ 3-7, 10.) Admissions Representatives place telephone calls to prospective students to try to recruit them for enrollment at Regency. (Id. ¶ 14.) Admissions Agreement Representatives work [1083]*1083to ensure enrolled students are prepared to start class, take incoming calls from prospective students, meet with financial aid advisors, and track documents for incoming students. (Id. ¶ 16.) All Representatives are subject to constant and direct supervision. (Id. ¶¶ 15,17.)

Plaintiffs allege that through December 2010, Defendants paid Plaintiffs and other similarly situated individuals on a salary basis to avoid compensating them for overtime. (Id. ¶ 20.) In November 2010, Stacey Cunningham, Regency’s Vice President of Human Resources, held a mandatory meeting for employees during which she informed Plaintiffs and other similarly situated individuals that Regency would require Plaintiffs and other “hourly employees” to start utilizing a time clock system. (Id. ¶ 21.) According to Plaintiffs, when they inquired about their status as salaried employees, Plaintiffs were told that they had always been hourly employees. (Id.)

Defendants claim that Representatives have been treated as overtime eligible since February 2010 and that until December 2010, “Representatives were compensated based on their scheduled work hours and off-schedule overtime hours they reported to Regency.” (Carlson Decl. ¶4.) Defendants acknowledge that on December 20, 2010, Representatives began reporting their work time using Regency’s biometric time clocks. (Id. ¶ 5.)

I. Plaintiffs’ Allegations

The allegations of each of the named Plaintiffs with respect to their employment at Regency are summarized below.

A. Plaintiff Michelle Le

Le worked as both an Admissions Representative and Admissions Agreement Representative for Regency from April 2007 through August 2011. (Doc. No. 17 (“Madia Aff. I”) ¶2, Ex. 1 ¶1.) Through December 2010, Le worked 45 to 55 hours per week and approximately 60 hours per week during the busy seasons, which were January through March and July through October. (Am. Comph ¶ 22; Madia Aff. I ¶ 2, Ex. 1 ¶ 12.) Le went on maternity leave in September 2010. (Madia Aff. I ¶ 2, Ex. 1 ¶ 10.) To Le’s knowledge, Regency did not use a time clock or any other hours tracking system at any time during her employment prior to maternity leave. (Id.) Le was paid an annual salary until her return from maternity leave, when she was informed that she was an hourly employee and would have to clock in and out. (Id. ¶¶ 11, 14.) As a salaried employee, Le was encouraged to and often came in early, worked nights, weekends, and from home to meet admissions goals. (Id. ¶¶ 11, 13.) Le felt “strongly pressured to meet daily, weekly and monthly admissions goals to enroll more and more students.” (Id. ¶ 13.) Le asserts that Regency knew that she was working uncompensated overtime because her supervisors “saw me, encouraged me, and sometimes required me to do so.” (Id. ¶ 13.) Le was also given a home log-in portal so that she could work remotely from home. (Id. ¶ 12.)

Upon returning from maternity leave and learning that she was an hourly employee, Le asked her supervisor JoDee Hunter: “What about all the money that I was never paid for all the overtime I worked for the last three or four years?” (Id. ¶ 14.) Hunter told Le: “You don’t want to go down that road. You don’t want to burn bridges.” (Id.) Le received the same response from “multiple other supervisors.” (Id.)

Once the time clock system was implemented, Le worked approximately one to two hours “off the clock” at the end of each scheduled shift, beyond the 40-hour week for which she was scheduled. (Id. ¶ 17.) Supervisors sent Le to campuses to [1084]*1084meet with prospective students and provide tours as well as to high schools and trade schools to recruit students. (Id. ¶¶ 17-18.) Hunter allegedly told Le to clock out prior to her campus visits, and Le was not paid for any of the time spent on these visits. (Id.)

Le and her husband filed for bankruptcy in October 2011. (Doc. No. 38 (“Madia Aff. II”) ¶ 2, Ex. 1 ¶ 8.) Le did not list her claims against Regency as an asset. (Id. ¶¶ 7-8.) The bankruptcy Trustee has since been added as a plaintiff in this action, pursuant to a stipulation of the parties. (Doc. Nos. 47 & 51-52.)

B. Plaintiff Rachel Thunstrom

Thunstrom worked as an Admissions Representative and Admissions Agreement Representative for Regency from April 2009 through September 2011. (Madia Aff. I ¶ 2, Ex. 4 ¶ 1.) Thunstrom worked approximately 50 to 55 hours per week, and 60 hours per week during the busy seasons, through December 2010. (Id. ¶ 10; Am. Compl. ¶ 28.) From April 2009 through December 2010, Regency paid Thunstrom on a salary basis. (Am. Compl. ¶ 29.) At the November 2010 staff meeting, Thunstrom, along with the other Plaintiffs and similarly situated individuals, was informed that she was and had always been an hourly employee. (Madia Aff. I ¶ 2, Ex. 4 ¶ 17.)

After the implementation of the time clock system, Thunstrom claims that her supervisors regularly required her to clock out at the end of her shift and then return to her desk to make more phone calls to reach sales goals. (Id ¶ 18.) She was typically scheduled for 40 hours per week and the time spent over 40 hours was uncompensated. (Id) Thunstrom’s supervisors would sometimes call her on the telephone on her way home after her shift to ask her questions and instruct her on tasks that still needed to be accomplished. (Id ¶ 22.) This time was also uncompensated. (Id)

Further, Defendants expected and encouraged Thunstrom to arrive early, leave late, work weekends, miss breaks, and attend uncompensated weekend “Summits.” (Am. Compl.

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957 F. Supp. 2d 1079, 2013 WL 3717754, 2013 U.S. Dist. LEXIS 98276, Counsel Stack Legal Research, https://law.counselstack.com/opinion/le-v-regency-corp-mnd-2013.