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Williams v. Alimar Security, Inc.

United States District Court, E.D. Michigan, Southern Division

October 31, 2016

MARCUS WILLIAMS, MICHAEL TAYLOR, and AARON BRADFORD, on behalf of themselves and all others similarly situated, [1] Plaintiffs,
v.
ALIMAR SECURITY, INC., Defendant.

          OPINION AND ORDER (1) DENYING WITHOUT PREJUDICE PLAINTIFFS' MOTION FOR APPROVAL OF CLASS SETTLEMENT AND (2) DENYING AS MOOT DEFENDANT'S MOTION TO DECERTIFY COLLECTIVE ACTION CLASS

          LINDA V. PARKER U.S. DISTRICT JUDGE

         Plaintiffs filed this putative collective action on June 30, 2013, claiming that Defendant violated the Fair Labor Standards Act (“FLSA”) by failing to pay its alarm response security officers (“AROs”) time and a half for overtime work. The Honorable Bernard Friedman, to whom this case originally was assigned, conditionally certified the matter as a collective action on November 21, 2013.[2] (ECF No. 19.) On April 28, 2016, Defendant filed a motion for decertification. (ECF No. 55.) Thereafter, the parties engaged in a settlement conference before Magistrate Judge David Grand, where a settlement was reached. Plaintiffs therefore filed a Motion for Approval of Class Settlement on August 16, 2016, and submitted a settlement agreement for in camera review. (ECF No. 60.) Defendant has not responded to the motion and presumably does not object to the motion.

         Applicable Law

         The FLSA requires all qualifying employers to pay employees no less than the minimum wage, and to compensate employees for hours worked in excess of forty per work week at a rate not less than one-and-a-half times the regular rate of pay. 29 U.S.C. §§ 206(a)(1), 207(a)(1). The statute authorizes collective actions to recover damages for unpaid wages provided two conditions are satisfied: (1) the employees are “similarly situated” and (2) all plaintiffs provide written consent to becoming a party and such consent is filed with the court. 29 U.S.C. § 216(b). “This section provides a mechanism that is ‘something akin to a class action.' ” Torres v. Gristede's Operating Corp., No. 04 Civ 3316, 2006 WL 2819730, at *7 (S.D.N.Y. Sept. 29, 2006) (citing Scholtisek v. Eldre Corp., 229 F.R.D. 381, 386 (W.D.N.Y. 2005)). Nevertheless, there are differences between an FLSA collective action and a class action certified under Federal Rule of Civil Procedure 23:

(1) the collective action binds only potential plaintiffs who “opt-in, ” whereas Rule 23 requires class members to opt-out, if they wish not to be included; and (2) FLSA only requires employees be “similarly situated, ” whereas Rule 23 requirements are more detailed. Sipas v. Sammy's Fishbox, Inc., No. 05 Civ. 10319, 2006 U.S. Dist. LEXIS 24318, at *4 (S.D.N.Y. Apr. 24, 2006).

Torres, 2006 WL 2819730, at *7.

         Courts within the Sixth Circuit and in other Circuits generally apply a two-step procedure for determining whether an FLSA case should proceed as a collective action. See, e.g., Waggoner v. U.S. Bancorp, 110 F.Supp.3d 759, 764 (N.D. Ohio 2015); Watson v. Advanced Distrib. Servs., LLC, 298 F.R.D. 558, 561 (M.D. Tenn. 2014); see also Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546-47 (6th Cir. 2006) (describing the two-step process). At the first step, commonly referred to as conditional certification, the plaintiff must show that the employees in the proposed class are “ ‘similarly situated.' ” Comer, 454 F.3d at 546 (quoting 29 U.S.C. § 216(b)). “To satisfy this burden at this initial notice stage, the plaintiff must only ‘make a modest factual showing' that [the plaintiff] is similarly situated to the other employees he [or she] is seeking to notify.” Waggoner, 110 F.Supp.2d at 764 (quoting Comer, 454 F.3d at 546-47.) This “ ‘certification is conditional and by no means final.' ” Comer, 454 F.3d at 546 (quoting Pritchard v. Dent Wizard Int'l, 210 F.R.D. 591, 595 (S.D. Ohio 2002)). As indicated earlier, Judge Friedman granted Plaintiffs' motion for conditional certification. (ECF No. 19.)

         At the second step, the court “examine[s] more closely the question of whether particular members of the class are, in fact, similarly situated.” Comer, 454 F.3d at 547. The court's focus is on whether the individuals who have opted into the litigation are similarly situated. See Ruiz v. Citibank, N.A., 93 F.Supp.3d 279, 297, (S.D.N.Y. 2015). The Sixth Circuit has provided that “plaintiffs are similarly situated when they suffer from a single, FLSA-violating policy, and when proof of that policy or of conduct in conformity with that policy proves a violation as to all the plaintiffs.” O'Brien v. Ed Donnelly Enter., Inc., 575 F.3d 567, 585 (6th Cir. 2009). The court may decertify the class if it determines at this step that the plaintiffs are not similarly situated.

         In its motion to decertify the class, Defendant does not argue that Plaintiffs, generally, are not similarly situated. Instead, Defendant contends that varying circumstances render the following six individuals not entitled to relief: Jeremy Ray, Mark Allen, Darrell Cragway, Jerome Cabell, Keith Deramus, and Darren Malone. In fact, it is evident that the name Plaintiffs and the other individuals who have opted into the litigation are similarly situated as they claim to suffer a violation of the FLSA based on a single decision by Defendant-- i.e., to classify on call time as not constituting working time under the FLSA. The parties' settlement agreement, which includes payments to all of the individuals listed above (except Ray), suggests that Defendant no longer is challenging final certification of this matter as a collective action.[3]

         Whether or not a lawsuit proceeds as a collective action, most courts agree that “ ‘employees' claims under the FLSA are non-waivable and may not be settled without supervision of either the Secretary of Labor or a district court.' ” Snook v. Valley Ob-Gyn Clinic, P.C., No. 14-cv-12302, 2015 WL 144400, at *1 (E.D. Mich. Jan. 12, 2015) (quoting Gentrup v. Renovo Servs., LLC, No. 1:07cv430, 2011 WL 2532922, at *2 (S.D. Ohio Jun 24. 2011) (citing Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350, 1352-53 (11th Cir. 1982)); see also Steele v. Staffmark Investments, LLC, ___ F.Supp.3d ___, 2016 WL 1156744, at *1 (W.D. Tenn. 2016) (citing cases). Courts reach this conclusion having considered Congress' intent when enacting the FLSA:

“The legislative history of the Fair Labor Standards Act shows an intent on the part of Congress to protect certain groups of the population from substandard wages and excessive hours which endangered the national health and well-being and the free flow of goods in interstate commerce. The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result the free movement of goods in interstate commerce.”

Steele, 2016 WL 1156744, at *1-2 (quoting Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 706-07 (1945)) (footnotes omitted in Steele). “ ‘Recognizing that there are often great inequalities in bargaining power between employers and employees, Congress made the FLSA's provisions mandatory; thus, the provisions are not subject to negotiation or bargaining between employers and employees.' ” Id. at *2 (quoting Lynn's Food Stores, 679 F.2d at 1352); see also Barrentine v. Ark.-Best Freight Sys., Inc., 450 U.S. 728, 740 (1981) (noting that the Supreme Court has “frequently emphasized the nonwaivable nature of an individual employee's right to a minimum wage and to overtime pay under the Act.”).

         When reviewing a proposed FLSA settlement, the court must determine whether the settlement is a “fair and reasonable resolution of a bona fide dispute over FLSA provisions.” Lynn's Food Stores, 679 F.2d at 1355. There are several factors courts consider in making this determination:

(1) the plaintiff's range of possible recovery; (2) the extent to which the settlement will enable the parties to avoid anticipated burdens and expenses in establishing their respective claims and defenses; (3) the seriousness of the litigation risks faced by the parties; (4) whether the settlement agreement is the product of arm's-length ...

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