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Norris v. Bluestem Brands, Inc.

United States District Court, D. Minnesota

April 22, 2019

Tina Norris, Sally Michalak, and Wendy Loepp, individually and on behalf of all others similarly situated, Plaintiffs,
v.
Bluestem Brands, Inc.; Blair, LLC; and Does 1-10, Defendants.

          OPINION AND ORDER

          Eric C. Tostrud United States Judge.

         After over two years of litigation in this Fair Labor Standards Act (“FLSA”) case, the Parties seek to decertify the conditional class, dismiss the Opt-In Plaintiffs' claims without prejudice, and dismiss the Named Plaintiffs' claims with prejudice. The Parties initially presented these requests as a stipulation. ECF No. 179. In compliance with the Court's January 24, 2019 Order concluding that court approval of decertification and dismissal in FLSA matters “is at least advisable, and perhaps required, here, ” ECF No. 181 at 12, Defendants filed an unopposed motion explaining the grounds for decertification and dismissal, ECF No. 185. Although the Court erred in inferring from the Parties' stipulation that there had been a settlement (the Parties have since made clear there was no settlement), review of the requested decertification and dismissal is nonetheless required by law to ensure that they are fair and equitable, especially with respect to the Opt-In Plaintiffs. That review establishes clearly that decertification and dismissal are appropriate because discovery has revealed that the class members are not “similarly situated” and the Named Plaintiffs' claims are not viable.

         I[1]

         A

         Tina Norris, Sally Michalak, and Wendy Loepp (the “Named Plaintiffs”) bring one collective-action claim under the FLSA for failure to pay overtime wages and bring three putative class-action claims pursuant to Fed.R.Civ.P. 23 for breach of contract, unjust enrichment, and violations of the Pennsylvania Minimum Wage Act of 1968. Second Am. Compl. ¶¶ 89-140 [ECF No. 86]. Plaintiff Norris also separately asserts a claim for retaliation under the FLSA. Id. ¶¶ 141-45.

         Named Plaintiffs are three former employees of Defendants' call center in Erie, Pennsylvania; one was a full-time hourly telephone sales agent (Norris), and two were hourly customer-service agents (Michalak and Loepp) who worked full-time and part-time, respectively. Id. ¶¶ 15-17, 30, 34, 39, 43-44. They allege a modern-day donning-and-doffing routine in which they were unpaid for time spent booting up their computers, as well as completing “final calls” with customers that extended beyond the designated end time of their shifts. Id. ¶¶ 49-62. They allege that this unpaid pre-shift procedure took approximately ten minutes per shift, and that “final calls” would regularly last two to seven minutes. Id. ¶¶ 49-51, 59-62.

         B

         On July 26, 2017, the same day they filed their Second Amended Complaint, Plaintiffs moved for conditional class certification under the FLSA, relating exclusively to Count 1 for overtime wages. See Renewed Mot. to Certify Conditional Class [ECF No. 77]; Second Am. Compl.; Jan. 10, 2018 Order at 9 n.2 [ECF No. 103]. Plaintiffs sought to certify a conditional class covering all Defendants' call centers in Pennsylvania (in Erie, Franklin, and Warren), but the Court only granted certification as to the Erie location. See Id. at 11-14 (concluding that, at least at the conditional-certification stage, “[t]he work performed by customer service agents and telephone sales agents is similar enough to permit joinder” and that the “employees at the Erie call center were subject to a common injury from a common policy, ” but that “Plaintiffs ha[d] failed to provide sufficient support or allegations . . . that any employee at the Franklin or Warren call center went uncompensated”). And although Plaintiffs alleged both pre- and post-shift work went uncompensated, the Court only certified a conditional class as to pre-shift work. See Id. at 19-20 (declining to certify post-shift class because Defendants used an FLSA-compliant “rounding policy” to pay employees to the nearest quarter hour, and Plaintiffs did not come forward with “sufficient support or allegations that the rounding policy was improperly used to deprive Plaintiffs of appropriate compensation”). Specifically, Magistrate Judge Tony N. Leung certified the following class on January 10, 2018:

All current and former Telephone Sales Agents and Customer Service Agents employed by Bluestem Brands, Inc. and/or Blair, LLC, at the call center in Erie, Pennsylvania, at any time in the last three years, who were not paid for off-the-clock work during their preliminary “boot-up” time.

Id. at 22.

         Plaintiffs objected to that order. ECF No. 105 (objecting only to the exclusion of the Warren and Franklin call centers from the conditionally-certified class). Reviewing the matter de novo, District Judge Susan Richard Nelson agreed that there was an insufficient showing to justify inclusion of the two other Pennsylvania call centers in the conditionally-certified class. See Apr. 26, 2018 Mem. Op. and Order at 17 [ECF No. 148]. But Judge Nelson afforded Plaintiffs an opportunity “to file a renewed motion for conditional certification in the event that they obtain and file at least some evidence to sustain their burden of establishing that employees at the Franklin and Warren call centers were subject to the same unwritten policy as that alleged by the Erie employees.” Id. at 20. Plaintiffs subsequently sought conditional certification to include those Franklin and Warren call center employees, ECF No. 152, but their motion was denied. See Aug. 28, 2018 Order at 15-16, 18-19 [ECF No. 173] (“Without any reliable information concerning the Franklin, Pennsylvania call center, this Court again declines to include it in the conditional class. With respect to the Warren, Pennsylvania call center, Plaintiffs have failed to show a common injury from a common [unwritten] policy tying the Warren facility to the Erie facility.”). Accordingly, the contours of the conditionally-certified class remained unchanged.

         As part of its conditional-class-certification order, the Court had directed the Parties to notify the members of the class via mail and email. See Jan. 10, 2018 Order at 21-23. In total, 107 individuals have opted into this litigation (the “Opt-in Plaintiffs”). See Rollins Decl. ¶ 2 [ECF No. 187]; see also ECF Nos. 108-09, 113, 115-24, 126-47, 149-51.

         C

         Since that time, the Parties have been conducting discovery. See Pretrial Scheduling Order at 1 [ECF No. 111]; Am. Pretrial Scheduling Order at 1 [ECF No. 177] (extending fact-discovery deadline to April 1, 2019). The Parties “agreed to participate in targeted discovery in advance of a settlement conference, ” which “included limited written discovery and the depositions of the three [N]amed Plaintiffs.” Rollins Decl. ¶ 3 [ECF No. 187]. As the Defendants' unopposed motion for decertification and dismissal describes, “certain facts came to light” during the depositions of the three Named Plaintiffs that revealed “disparate work experiences” and “undermined the merits of the three Named Plaintiffs' claims.” Mot. ¶ 3 [ECF No. 185].

         In particular, the Named Plaintiffs' depositions were inconsistent with their previous sworn statements about being “required” to complete pre-shift work before clocking in. See Norris Decl. ¶ 7 [ECF No. 80]; Michalak Decl. ¶ 7 [ECF No. 81]; Loepp Decl. ¶ 7 [ECF No. 82]. Michalak testified that “[t]he company suggested you be there [early], but they didn't put it as a requirement.” Rollins Decl. Ex. C (“Michalak Dep.”) at 30:9-33:12, 46:19-50:21 [ECF No. 187-3]. She admitted that her declaration incorrectly stated that she was “required” to arrive at work early. Michalak Dep. at 129:16-130:13. Loepp similarly testified that it was not actually a requirement to arrive early at work, and that arriving early was just a way to get the “perks [of] being a good sales representative.” Rollins Decl. Ex. B (“Loepp Dep.”) at ...


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