United States District Court, D. Minnesota
Marcus Harris, Julius Caldwell, DeMarkus Hobbs, and Dana Evenson, on behalf of themselves and all others similarly situated, Plaintiffs,
Chipotle Mexican Grill, Inc., Defendant
[Copyrighted Material Omitted]
For Plaintiffs: Kent M. Williams, Williams Law Firm, Long Lake, MN; Kyle Bachus, Karen O'Connor, Bachus & Schanker, LLC, Denver, CO; Adam S. Levy, Law Office of Adam S. Levy, LLC, Oreland, PA.
For Defendant: Jennifer M. Robbins, Robins, Kaplan, Miller & Ciresi LLP, Minneapolis, MN; John K. Shunk, Andrew A. Smith, Messner Reeves LLP, Denver, CO; Richard J. Simmons, Sheppard Mullin Richter & Hampton LLP, Los Angeles, CA.
MEMORANDUM OPINION AND ORDER
SUSAN RICHARD NELSON, United States District Judge.
This matter is before the Court on Defendant's Objections [Doc. No. 93] to the April 10, 2014 Report and Recommendation (" R & R" ) on Plaintiffs' Motion for Conditional Collective Action Certification. The Magistrate Judge recommended that the motion be granted in part and denied in part. For the reasons set forth below, Defendant's objections are sustained in part and overruled in part, and the Court adopts the R & R in part.
The factual and procedural background of Plaintiffs' case is well documented in the Magistrate Judge's R & R and is incorporated herein by reference. In this lawsuit, Plaintiffs Marcus Harris, Julius Caldwell, DeMarkus Hobbs, and Dana Evenson (collectively, " Plaintiffs" ) brought claims, on behalf of themselves and all others similarly situated, against Defendant Chipotle Mexican Grill, Inc. (" Defendant" ) pursuant to the Fair Labor Standards Act, 29 U.S.C. § § 201-219, and the Minnesota Fair Labor Standards Act, Minn. Stat. § § 177.21-177.35. (Consolidated Am. Class Action Compl. [Doc. No. 31] (" Am. Compl." ) ¶ 1.) Plaintiffs allege that Defendant has a company-wide policy of requiring hourly-paid employees to work " off the clock" and without pay, and they seek to
recover allegedly unpaid overtime compensation and other wages. (See id. ¶ ¶ 3-4.)
A. Defendant's Business
Defendant operates more than 1,500 Mexican food restaurants, in 43 states and the District of Columbia, as well as internationally. (Gottlieb Decl. [Doc. No. 50] ¶ ¶ 4, 7.) Defendant's domestic restaurants are divided into seven geographic regions, and regional directors or executive team directors are responsible for the operations of the restaurants within their region. (Id. ¶ ¶ 8-9.) The staffing in each restaurant may include, in order of descending authority, a general manager, one or more apprentice managers, one or more service managers, one or more kitchen managers, and 15 to 35 crew members. (Id. ¶ 13.) Service managers, kitchen managers, and crew members are paid on an hourly basis. (Id. ¶ 18.) Defendant currently employs more than 40,000 hourly employees in the United States, approximately 1,600 of whom work in Minnesota. (Id. ¶ 17.) However, in any given year, Defendant employs roughly 90,000 hourly employees in the United States. (Id.)
Defendant has a formal " timekeeping/time punch policy," which states that " [a]ll hourly employees are paid for all time worked. This is the law and Chipotle's policy." (Id., Ex. 1 (Crew Handbook), at 22;
id., Ex. 3 (Restaurant Management Handbook), at 19.) It also states that " [h]ourly employees must always work on the clock, not 'off the clock'." (Id., Ex. 1 (Crew Handbook), at 23; id., Ex. 3 (Restaurant Management Handbook), at 20.) In addition, the policy provides a procedure for editing the time recorded in the timekeeping system. (See id., Ex. 1 (Crew Handbook), at 23-24 ; id., Ex. 3 (Restaurant Management Handbook), at 20-22.) Defendant's timekeeping system, called " Aloha," records the hourly-employees' time. (Id. ¶ 33.) This system automatically re-sets at 12:30 a.m., which has the effect of clocking out any employee who was clocked in when the re-set occurred. (Id. ¶ 41.)
B. The Named Plaintiffs and Their Allegations
The named Plaintiffs are each current or former hourly-paid employees at Defendant's Crystal, Minnesota restaurant. (See Supplemental Harris Decl. [Doc. No. 64] ¶ ¶ 2-3; Supplemental Caldwell Decl. [Doc. No. 63] ¶ 2; Hobbs Decl. [Doc. No. 39] ¶ ¶ 3-5; Evenson Decl. [Doc. No. 40] ¶ ¶ 3-5; Gottlieb Decl. ¶ ¶ 20-23.) While
Plaintiffs Harris and Hobbs were employed solely as crew members, Plaintiffs Caldwell and Evenson were both employed first as crew members and later as kitchen and service managers. (See Supplemental Harris Decl. ¶ 3; Supplemental Caldwell Decl. ¶ ¶ 3-5; Hobbs Decl. ¶ 5; Evenson Decl. ¶ 5; Gottlieb Decl. ¶ ¶ 20-23.) As stated in their Amended Complaint, Plaintiffs allege that, in order to reduce its payroll budget, Defendant " maintains a company-wide policy of not paying hourly-paid restaurant employees for all time worked, and encouraging its general managers to require that work be performed off the clock." (Am. Compl. ¶ 25.) Plaintiffs further allege that Defendant implements this policy by setting payroll budgets such that they can only be met if hourly employees work off the clock, and by rewarding general managers for staying within their payroll budget. (Id. ¶ 26.) Therefore, according to Plaintiffs, hourly employees are required to punch out (or are automatically punched out by Defendant's timekeeping system) although they must continue working. (Id. ¶ 29.) Plaintiffs claim that these directives are issued from Defendant's corporate offices in Colorado and are carried out by general managers at its restaurants nationwide. (Id. ¶ 32.) Finally, Plaintiffs allege that they are similarly situated to other putative members of the collective action because they:
(a) worked for Chipotle during the applicable time period; (b) performed the same or similar duties; (c) had limited or no administrative responsibilities; (d) were and are not professionals within the meaning of the FLSA; and (e) were required to work off the clock, without compensation.
Id. ¶ 56.)
C. Plaintiffs' Motion
Plaintiffs filed their motion for conditional collective action certification on October 23, 2013, seeking conditional certification of the following class:
All current and former hourly-paid restaurant employees of Chipotle Mexican Grill, Inc. who, on or after [July 2, 2010], were automatically punched off the clock and continued to work, or who otherwise worked " off the clock," resulting in non-payment of regular wages or overtime wages.
Mem. in Supp. of Pls.' Mot. for Conditional Collective Action Certification and for Judicial Notice to Class [Doc. No. 35] (" Pls.' Mem." ), at 1-2.) In support of their motion, they each submitted a declaration stating that they had been " forced to work off the clock." (Harris Decl. [Doc. No. 37] ¶ 6; Caldwell Decl. [Doc. No. 38] ¶ 6; Hobbs Decl. ¶ 6; Evenson Decl. ¶ 6.) Plaintiffs Harris and Hobbs stated that they were not compensated for time worked after being made to punch out at the end of a shift, that Defendant's timekeeping system would automatically punch them out even when they continued working, that Defendant would cut their hours for the following week if they complained about not being paid for all of the hours they worked, and that they witnessed other employees being subjected to the same treatment. (Harris Decl. ¶ ¶ 7-10; Hobbs
Decl. ¶ ¶ 7-10.) Plaintiffs Caldwell and Evenson also stated that they were not compensated for time worked after being made to punch out at the end of a shift, that Defendant's timekeeping system would automatically punch them out even when they continued working, and that they witnessed other employees being subjected to the same treatment. (Caldwell Decl. ¶ ¶ 7-9, 11; Evenson Decl. ¶ ¶ 7-9, 11.) They also stated that Defendant's general and apprentice managers told them to " do what is necessary to stay within payroll budget, including requiring hourly-paid employees to punch out early and work off the clock." (Caldwell Decl. ¶ 10; see Evenson Decl. ¶ 10.)
In addition to these declarations, Plaintiffs submitted copies of three complaints that were filed with the Minnesota Department of Labor & Industry (collectively, the " DOLI Complaints" ). (See Williams Aff. [Doc. No. 36] ¶ 4 & Ex. C.) The first complaint was submitted by an employee at Defendant's Rochester, Minnesota location. (Id., Ex. C.) The employee states only that he was owed money for time worked as detailed on his pay stub. (See id.) The second complaint was submitted by an employee at Defendant's Crystal, Minnesota location who stated that he was forced to work off the clock on one occasion as punishment and was not paid for all hours worked. (See id.) The third complaint was submitted by an employee at Defendant's Burnsville, Minnesota restaurant who stated that she was being forced to work off the clock. (See id.) Plaintiffs also filed a Notice of Filing Consent to Join Forms showing that the named Plaintiffs, along with three other current or former employees of Defendant--Leah Turner, Ryan Cox, and Todd Ayotte--had consented to join the lawsuit. (See Pls.' Notice of Filing Consent to Join Forms Pursuant to the FLSA [Doc. No. 32].)
Plaintiffs argue that, through this evidence, they met their " minimal burden" of establishing a " colorable basis" for their claim that the putative collective action members were the victims of a single decision, policy, or plan. (See Pls.' Mem. at 2, 8.) They contend that Defendant's employees are " routinely" required to work off the clock, without pay, pursuant to a timekeeping system that clocks them out each evening even if they are still working and under other circumstances, such as during training. (Id. at 14-15.) They also argue that, to be considered " similarly situated," they need not be identical and, here, " [o]nly minor, inconsequential differences are likely to exist among the members of the proposed Class." (Id. at 15.) Thus, Plaintiffs contend that variations in job duties or in the amount of damages are not relevant. (See id. at 13.)
Finally, Plaintiffs argue that judicial notice is appropriate and request that Defendant be ordered to provide Plaintiffs' counsel with a list of all putative collective action members, including each member's name, residence address, telephone numbers, email address, job title and dates of employment with Defendant, location of employment with Defendant, employee number, date of birth, and social security number. (Id. at 16-17.) Plaintiffs ask the Court to order notice to be delivered via email and first-class mail, as well as posted on a website and at each of Defendant's restaurants. (Id. at 18-19.)
In response, Defendant argues that the four named Plaintiffs have failed to establish the existence of an unlawful policy, plan, or decision applicable to the entire collective, or that they are similarly situated to a nationwide collective of over 100,000 employees. (Def.'s Opp. to Pls.' Mot. for Conditional Collective Action Certification [Doc. No. 49] (" Def.'s Opp." ), at 1, 19.)
Rather, Defendant argues that its policy is to pay hourly employees for all time worked, and that Plaintiffs have at most demonstrated that unnamed managers at a single store violated that policy. (See id. at 1.) Defendant also argues that the proposed class consists of two groups--crew members and managers--who are not similarly situated to each other because the hourly-paid managers are responsible for ensuring that the crew members are paid properly. (See id. at 34-35.) Finally, Defendant argues that Plaintiffs' proposed notice and distribution process should be rejected because Plaintiffs request too much personal information regarding each potential collective action member, requiring four forms of notice is unreasonable, the notice does not accurately describe the lawsuit, and notice should only be distributed to individuals employed by Defendant within three years of the Court's authorization of notice. (Id. at 37, 49-50.)
In conjunction with its opposition memorandum, Defendant submitted the declaration of David Gottlieb, Defendant's Director of Compliance and Projects [Doc. No. 50]; the declaration of Joel Chrisman, Defendant's Executive Director of IT and Training [Doc. No. 51]; as well as seven declarations of current and former hourly-paid employees (both crew members and managers) of Defendant [Doc. Nos. 52-1, 52-2, 52-3, 52-4, 52-5, 52-6, 52-7]. These employees--at least six of whom work, or worked, at Defendant's Crystal, Minnesota location --state that they were never instructed or allowed to work off the clock and that they have been paid for all time worked. (See Beebe Decl. [Doc. No. 52-1] ¶ ¶ 5, 12; Borja-Granizo Decl. [Doc. No. 52-2] ¶ ¶ 5, 13; Ceron Decl. [Doc. No. 52-3] ¶ ¶ 5, 11; Hawkins Decl. [Doc. No. 52-4] ¶ ¶ 5, 11; Hernandez Decl. [Doc. No. 52-5] ¶ ¶ 5, 12; Martinez-Herrera Decl. [Doc. No. 52-6] ¶ ¶ 5, 13; Reyes-Jiminez Decl. [Doc. No. 52-7] ¶ ¶ 5, 12.)
In their reply brief, Plaintiffs reiterate their argument that the standard for conditional certification is lenient and that the Court is not to make any credibility determinations or to weigh the merits of their claims. (See Reply Mem. in Supp. of Pls.' Mot. for Conditional Collective Certification and for Judicial Notice to Class [Doc. No. 62] (" Pls.' Reply" ), at 6-7.) Plaintiffs claim that, at this stage, Defendant's written policy is irrelevant because there is contrary evidence of an unwritten, unlawful policy of requiring off-the-clock work. (See id. at 8-11.) Moreover, Plaintiffs argue, conditional certification of a nationwide collective action is appropriate " based on relatively little evidence" and is not " inherently unmanageable." (Id. at 11, 13.) Plaintiffs claim that they are similarly situated because they are non-exempt, hourly-paid employees, and the fact that some are hourly-paid managers versus crew members should not be considered until the second certification stage. (See id. at 16-17.) Finally, Plaintiffs argue that their proposed notice plan should be approved because they need the requested information to locate the potential collective action members, there is nothing improper about providing notice to all employees who " may" have a claim, and notice should be provided to all persons who were employed by Defendant within three years of the date the Complaint was filed.
(See id. at 21-25.) They assert that any issues regarding the exact language of the notice can be resolved in a ...