Pierce v. Wyndham Vacation Resorts, Inc.

922 F.3d 741
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 29, 2019
DocketNos. 18-5258/5298
StatusPublished
Cited by42 cases

This text of 922 F.3d 741 (Pierce v. Wyndham Vacation Resorts, Inc.) 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
Pierce v. Wyndham Vacation Resorts, Inc., 922 F.3d 741 (6th Cir. 2019).

Opinion

SUTTON, Circuit Judge.

In this collective action, sales employees for Wyndham allege that the company violated the Fair Labor Standards Act by failing to compensate them for overtime. After a bench trial, the district court found that the employees were similarly situated and had presented sufficient representative evidence to show that Wyndham violated the Act. The court concluded that the 156 employees worked an average of 52 hours per week and awarded about $ 5 million in damages. The parties each appealed. We affirm in part, reverse in part, and remand for further proceedings.

I.

Wyndham owns and operates resorts around the world. At issue in today's case are its four destinations in Tennessee: two in the Smoky Mountains; one in Nashville; and one in Fairfield Glade, between Knoxville and Nashville. As part of its business model, it sells ownership interests (timeshares) and non-ownership trial packages to customers.

Wyndham employs three types of sales employees at the four locations. Front-line sales employees sell ownership interests to people who do not own Wyndham timeshares. In-house sales employees sell upgraded ownership interests to existing Wyndham owners. And discovery sales employees sell non-ownership trials to prospects.

Wyndham pays its salespeople based mainly on commission. While they receive a minimum-wage draw based on the hours they record each week, Wyndham deducts that amount from their commissions. In 2009, Wyndham began paying overtime to its sales force.

Jesse and Michael Pierce filed this collective action under the Fair Labor Standards Act in 2013, alleging that Wyndham required sales employees to underreport their hours or altered the employees' timesheets to avoid paying overtime. The district court granted Wyndham's motion for summary judgment on some of the employees'

*745claims. And it certified the rest of the group-156 employees from all three positions and all four locations-as a collective action and allowed them to proceed to trial based on representative evidence.

After a 14-day bench trial, the district court found that the employees' evidence was representative of the testifying and non-testifying sales employees. It found that the evidence showed that Wyndham violated the Act by "prohibiting Sales [employees] from recording or recovering overtime, despite working overtime, and by instructing sales managers to edit timecards to misrepresent the time that Sales [employees] worked to achieve that result." R. 427 at 127. It found that, on average, each employee had worked 52 hours per week during the recovery period-October 21, 2010, to October 31, 2013. And it awarded the sales employees $ 2,512,962.91 in overtime pay and an equal amount in liquidated damages. The parties each appealed.

II.

Wyndham bats first. It argues that the district court erred by (1) certifying the collective action, (2) finding that the representative evidence established that Wyndham violated the Act, and (3) finding that each employee worked 52 hours per week.

Collective-action certification. Wyndham argues that the district court erred in allowing the case to proceed as a collective action, a decision we review for an abuse of discretion. O'Brien v. Ed Donnelly Enters. , 575 F.3d 567, 584 (6th Cir. 2009), abrogated on other grounds by Campbell-Ewald Co. v. Gomez , --- U.S. ----, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). A mistake of law, it bears recalling, amounts to an abuse of discretion. Koon v. United States , 518 U.S. 81, 100, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996).

The Fair Labor Standards Act requires employers to pay overtime to most employees who work more than 40 hours a week. 29 U.S.C. § 207(a)(1). Employees may bring a collective action to enforce the Act on "behalf of ... themselves and other employees similarly situated." Id. § 216(b). Like-situated employees may join the lawsuit if they consent in writing. Id. To determine whether plaintiffs are similarly situated, we consider (1) "the factual and employment settings of the individual[ ] plaintiffs," (2) "the different defenses to which the plaintiffs may be subject," and (3) "the degree of fairness and procedural impact of certifying the action as a collective action." O'Brien , 575 F.3d at 584 (quotation omitted). The heart of the matter is whether the plaintiffs should be permitted to bring their claims of liability and damages as a group based on representative, rather than personal, evidence. See 7B Charles Alan Wright et al., Federal Practice and Procedure § 1807 (3d ed. 2005). Employees bear the burden of satisfying this requirement. O'Brien , 575 F.3d at 584.

The district court treated the 156 members of the collective action as similarly situated because Wyndham executed a common policy requiring off-the-clock work and altering timesheets to avoid paying overtime. The employees, it reasoned, "had the same job duties, were paid utilizing the same compensation method, and kept track of hours using the same time system, despite their different job titles." R. 427 at 154.

The district court did not abuse its discretion in certifying the collective action as to the in-house and front-line salespeople. Yes, the job titles differ. But the roles require identical tasks, just aimed at different customers. Both groups of employees arrive at work at approximately the same time each morning for a mandatory *746meeting. They participate in "tours" throughout the day-meetings with guests or other customers to pitch Wyndham timeshares-trying to sell the same product (deeded ownership interests). Both participate in "nightline" (pitching guests as they check into the hotel) and in "party weekends" (treating guests to a stay at the resort in hopes they will buy ownership interests). Wyndham compensates the employees under the same plan and tracks their hours under the same system.

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922 F.3d 741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pierce-v-wyndham-vacation-resorts-inc-ca6-2019.