Leuthold v. Destination America, Inc.

224 F.R.D. 462, 2004 U.S. Dist. LEXIS 20724, 2004 WL 2358255
CourtDistrict Court, N.D. California
DecidedAugust 16, 2004
DocketNo. C-03-1390 VRW
StatusPublished
Cited by102 cases

This text of 224 F.R.D. 462 (Leuthold v. Destination America, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leuthold v. Destination America, Inc., 224 F.R.D. 462, 2004 U.S. Dist. LEXIS 20724, 2004 WL 2358255 (N.D. Cal. 2004).

Opinion

ORDER

WALKER, District Judge.

Plaintiff tour directors bring this fair labor standards action against travel industry companies Destination America, Inc. (DA) and Contiki U.S. Holdings, Inc. (Contiki), as well as Richard Launder, the former president of both companies. Plaintiffs have moved to certify: (1) a 29 USC § 216(b) collective action for alleged violations of the overtime and minimum wage requirements of the Fair Labor Standards Act (FLSA); and (2) a FRCP 23(b)(3) class action for alleged violation of California labor laws. Docs # 216, 218, 219. For the following reasons, the court GRANTS plaintiffs’ motion conditionally to certify a FLSA class (Does #218, 219), although the court does so only for the limited purpose of providing notice to prospective class members. The court DENIES plaintiffs’ motion to certify a Rule 23(b)(3) class on the California labor law claims (Doc # 216).

I

A

Defendants DA and Contiki both are companies that operate package bus tours. DA is a “receptive tour operator,” meaning that it operates tours on behalf of other companies. Decl Richard Launder (Launder Decl; Doc # 251) at 2 ¶ 7. DA’s clients are wholesale tour operators that hire DA to operate their tours. Id. For large-volume clients, DA provides private label tours that are operated to the specifications of the particular clients. Id. DA also provides “seat in coach” tours, in which different wholesale clients purchase individual seats on DA’s buses, as well as special groups tours that cater to sports teams or special interest clubs. Id. at 3 ¶ 9.

Contiki is different from DA, as it has its own retail brand, designs its own tours and principally operates only its own tours. Id. at 7 ¶ 30. Contiki is not a receptive tour operator. Id. Contiki markets its tours to the 18- to 35-year-old demographic. Id.

DA and Contiki, though separate companies, are interrelated in several ways. For example, DA and Contiki share the same parent company and have shared an office since 2001. Pl. Exh 12 (Doc # 223) at 248:12-20, 384:13-20, 710:7-10. Defendant Launder is the former president of both companies, and Michael Kidd has been the chief financial officer (CFO) of both companies since 1999. Id. at 234:20-25, 235:15-23, 284:14-285:8, 497:23-498:5. Some of the companies’ corresponding departments are at least partially integrated, including their accounting, operations and information technology departments. Id. at 247:14-24, 250:1-13, 498:6-18, 499:12-23, 738:12-18, 739:21-740:9. The companies share a human resources department that oversees group employee benefits plans. Id. at 444:1-10, 498:19-499:11.

Some differences exist between DA’s tour directors and Contiki’s tour managers. DA tour directors tend to be experienced professionals who cater to the older, more experienced travelers who are customers on the tours DA operates. Launder Decl at 4 ¶ 16. All DA tour directors must have prior tour management experience. Depo Liz Cosenza (Cosenza Depo; Decl Elizabeth Thompson (Doc # 262) at 2 ¶¶ 7; 8, Exhs F, G) at 73:11-14, 74:7-10. DA tour directors are able to request certain itineraries, pick the drivers [465]*465and buses they want and are free to refuse assignments. Decl Elizabeth K Cosenza (Cosenza Decl; Doc # 252) at 2 ¶ 6. DA has a four-tiered compensation scale to address its tour directors’ varying levels of skill or experience. Consenza Depo at 561:14-562:5. Before mid-2003, DA tour directors were paid a flat amount for each tour, but since then have been paid a weekly salary. Launder Decl at 6-7 ¶¶ 25, 28. DA tour directors also earn commissions on sales of optional excursions, as well as tips from passengers. Id. at 7 ¶ 29.

Contiki tour managers, on the other hand, tend to be recent college graduates in the same age range as the typical Contiki passenger. Id. at 8 ¶ 32. Contiki only hires individuals who have graduated from Tour Manager Training School, Inc. (TMTS). Id. While prior experience in the industry is considered helpful, Contiki does not impose it as a prerequisite to employment. Id.

Some of the terms of employment for DA tour directors and Contiki tour managers appear to be similar. Most DA tour directors and Contiki tour managers residing in the United States have been classified as employees. See Exh 12 at 576:8-10, 583:18-584:5, 783:11-18. Generalized job duties are set forth in standardized documents. See, e.g., Decl Jill M Amodeo (Amodeo Decl; Doc # 242) at 2-5 ¶ 3.

Despite these standard operating procedures, DA tour directors and Contiki tour managers appear to retain a substantial level of discretion. Within the framework of the tour itinerary, the tour directors and managers have discretion to create their own unique tour programs, including commentaries, routing from point to point, rest stops, sightseeing breaks and entertainment. See, e.g., Decl Dan Agriesti (Agriesti Decl; Doc # 258) at 4 ¶ 4; Decl Judie Clark (Doc # 247) at 2-4 ¶¶ 3-7; Decl Michael Murakami (Doc #250) at 2 ¶¶ 3 — 5; Launder Decl at 1-2 ¶¶ 4-5, 3-4 ¶¶ 14-16. The policies of DA and Contiki both acknowledge and emphasize that tour directors and managers are expected to exercise a good deal of discretion. See Cosenza Depo at 63:7-64:11. The tour directors and managers are unsupervised virtually all of the time. Id. at 29:5-16; Decl Kelly Camps (Camps Decl; Doc # 253) at 2 ¶ 6. Not surprisingly, the tour directors and managers are called upon to handle unexpected situations on most tours. See, e.g., Launder Decl at 2 ¶ 5.

Plaintiffs have proposed three individuals to act as class representatives in this action. Plaintiff Mark Leuthold is a California resident who has worked as a DA tour director since the early 1990s. Decl Mark Leuthold (Leuthold Decl; Doe # 239) at 1 ¶ 1. Plaintiff Thomas F Williams is a California resident who has worked as a DA tour director since 1997. Decl Thomas F Williams (Williams Decl; Doc # 241) at 1 ¶ 1. Plaintiff Mario Restrepo is also a California resident and has worked as both as a DA tour director and as a Contiki tour manager since 1999. Decl Mario Restrepo (Doc # 240) at 1111.

B

Plaintiffs filed the original complaint in this action on April 1, 2003. Doc #1. The crux of plaintiffs’ claims are that the defendants have failed to pay the plaintiff tour directors minimum wages and overtime. The complaint includes claims pursuant to the Fair Labor Standards Act (FLSA), FRCP 23 class claims under California law and a claim under § 17200 of the California Business and Professional Code. Id. In addition to DA, Contiki and Launder, the original complaint also named Trafalgar Tours (TT), Trafalgar Tours, Inc. (TT Inc.), Trafalgar Tours USA (TT USA), Trafalgar Tours International Ltd. (TTIL), Travcorp and Travcorp USA. Id.

Beginning in May 2003, TTIL filed various motions to dismiss and motions to quash service. Docs # 18, 44, 48. In the meantime, the court had referred the parties to a magistrate judge for resolution of various discovery disputes. Doc # 104.

After taking oral argument on TTIL’s motions on March 4, 2004 (Doc # 199), the court issued an order on March 15, 2004, in which the court: (1) granted defendants’ motion to dismiss the nonexistent entities TT, TT Inc.

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Cite This Page — Counsel Stack

Bluebook (online)
224 F.R.D. 462, 2004 U.S. Dist. LEXIS 20724, 2004 WL 2358255, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leuthold-v-destination-america-inc-cand-2004.