Belk v. Le Chaperon Rouge Co.
| Decision Date | 06 July 2020 |
| Docket Number | Case No. 1:18cv1954 |
| Parties | Brianna Belk, On behalf of herself and All others similarly situated, Plaintiffs, v. Le Chaperon Rouge Co., et al., Defendants. |
| Court | U.S. District Court — Northern District of Ohio |
MEMORANDUM OPINION AND ORDER
Currently pending is the Motion of Plaintiffs Brianna Belk and Tiffany Morris to Enforce Settlement. (Doc. No. 82.) Defendants Le Chaperon Rouge Company and Stella Moga-Kennedy filed a Brief in Opposition and Supplemental Briefing, to which Plaintiffs responded. (Doc. Nos. 83, 87, 88, 89.) For the following reasons, Plaintiffs' Motion to Enforce Settlement (Doc. No. 82) is GRANTED IN PART and DENIED IN PART, as follows.
On August 27, 2018, Plaintiffs Brianna Belk and Tiffany Morris, on behalf of themselves and all others similarly situated, filed a Complaint in this Court against Defendants Le Chaperon Rouge Company and Stella Moga-Kennedy, alleging violations of the overtime provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-291 and Ohio Revised Code § 4111.03. (Doc. No. 1.) Therein, Plaintiffs alleged that Defendant Le Chaperon Rouge operated child care facilities throughout northern Ohio that provided child care, development, and private elementary services for children ages six weeks through 12 years old. (Id. at ¶¶ 10-11.) Plaintiffs further alleged that Defendant Stella Moga-Kennedy was the owner, operator, and principal manager of Le Chaperon Rouge. (Id. at ¶ 9.) Plaintiffs alleged that Defendants were "joint employers"1 under the FLSA and, therefore, "responsible, both individually and jointly for compliance with all of the applicable provisions of the act, including the overtime provisions." (Id. at ¶¶ 16-18.)
Plaintiffs worked for Le Chaperon Rouge at its Solon location. (Id. at ¶¶ 13, 14.) They alleged that Le Chaperon Rouge failed to pay them for all hours worked, including for work performed before and after their paid shifts. (Id. at ¶¶ 21-24.) Plaintiffs brought the instant action as both an FLSA collective action and a Rule 23 class action and sought to certify a class of "all full-time teachers for Le Chaperon Rouge who were subject to the company's clocking-in and clocking-out practices" during the relevant time periods. (Id. at ¶¶ 29, 34.)
Defendants filed separate Answers on October 26, 2018. (Doc. Nos. 7, 8.) Then-assigned District Judge Donald Nugent conducted a Case Management Conference on November 29, 2018, at which conditional certification briefing deadlines were set. (Doc. No. 11.)
On December 10, 2018, Plaintiffs filed a Motion for Conditional Certification and Court-Authorized Notice with respect to their FLSA claims. (Doc. No. 13.) Defendants filed a Brief in Opposition, to which Plaintiffs replied. (Doc. Nos. 21, 25.) On February 7, 2019, Judge Nugent granted Plaintiff's Motion in a non-document Order. See Non-Document Order dated Feb. 7, 2019. Notice was issued pursuant to 29 U.S.C. § 216(b) and thirty-five opt-ins joined the case. (Doc. Nos. 32-34, 43, 59-62.)
The matter was re-assigned to the undersigned on July 5, 2019 pursuant to General Order 2019-13. Plaintiffs thereafter brought several discovery disputes to the Court's attention, which were referred to and subsequently resolved by Magistrate Judge Jonathan Greenberg. (Doc. Nos. 35, 40, 41, 57.) On November 24, 2019, the Court referred the matter to Magistrate Judge Greenberg for mediation proceedings. (Doc. No. 64.)
On January 31, 2020, Plaintiffs filed an Amended Class and Collective Action Complaint. (Doc. No. 71.) In addition to alleging that Defendants failed to pay for work before and after paid shifts, Plaintiffs alleged in the Amended Complaint that Le Chaperon Rouge improperly required all teachers to attend "training without pay to maintain, for the benefit of the school and not mandated by any state law or rule, certain health certifications such as CPR, First Aid, Management of Communicable Disease, and Child Abuse Recognition and Prevention." (Id. at ¶ 24.) The Amended Complaint asserted the following five claims: (1) FLSA Minimum Wage and Overtime Violations; (2) Ohio Overtime Violations; (3) Ohio Minimum Wage Violations; (4) Ohio Prompt Pay Act Violations; and (5) Ohio Record-Keeping Violations. (Id. at ¶¶ 43-64.) Plaintiffs sought compensatory damages, liquidated damages, costs, and attorney fees. (Id. at p. 14.)
The following month, on February 25, 2020, Plaintiffs filed a Motion for Rule 23 Class Certification of State-Law Claims. (Doc. No. 76.)
Shortly thereafter, on February 28, 2020, Magistrate Judge Greenberg conducted a mediation conference with counsel and parties. (Doc. No. 77.) The parties did not reach an agreement at that time but agreed to further mediation proceedings, which were set for March 12, 2020. (Id.)
During this general time period, Governor Mike DeWine began taking action relating to the developing coronavirus pandemic or "COVID-19." On March 9, 2020, Governor DeWine issued an Executive Order declaring a State of Emergency. (Doc. No. 83-1.) The next day, Governor DeWineasked colleges and universities to use online learning and remote instruction, and recommended that spectators not attend any indoor sporting events. (Doc. No. 82-9 at PageID#s 967-969, 976-979.) On March 11, 2020, the World Health Organization ("WHO") declared a worldwide pandemic. See https://www.who.int/dg/speeches/detail/who-director-general-s-opening-remarks-at-the-media-briefing-on-covid-19---11-march-2020. And, at 2:00 p.m. on March 12, 2020, Governor DeWine ordered all kindergarten through 12th grade schools in Ohio to close for several weeks. See https://governor.ohio.gov/ wps/ portal/ gov/ governor/ media/ news-and- media/announces-school-closures. On that same date, Governor DeWine also issued an Executive Order authorizing emergency changes in child day care rules.2 (Doc. No. 83-3.)
On March 12, 2020, the parties participated in continued mediation proceedings before Magistrate Judge Greenberg. (Doc. No. 79.) A settlement was reached, the material terms of which were recited on the record. (Doc. No. 81.) Among other things, these terms included the following: (1) a total settlement payment of $200,000, to be paid 40 days after Court approval; (2) a release provision; (3) submission of a joint motion for approval of settlement and proposed notice to settlement class members by no later than April 10, 2020; (4) proposed service awards to the named Plaintiffs; and (5) issuance of individual settlement checks and tax forms by Defendants to the Settlement Class Members after final approval. (Id.) The parties also agreed that the Court would retain jurisdiction to enforce the terms of the settlement agreement. (Id. at p. 10.) Magistrate JudgeGreenberg then issued an Order reporting that the parties were able to resolve their differences and ordering that a Motion to Approve Settlement be filed no later than April 10, 2020. (Doc. No. 79.)
Plaintiffs submitted a draft settlement agreement to Defendants on March 19, 2020, as well as supplemental materials (including a joint motion for approval of settlement, proposed notice, class roster, and proposed preliminary order approving the joint motion) on March 23, 2020. (Doc. Nos. 82-3 through 82-8.) When he did not receive a response, Plaintiffs' counsel emailed defense counsel to remind him that the deadline to file the Joint Motion for Approval was April 10, 2020. (Doc. No. 82-3 at PageID# 912.)
On March 31, 2020, defense counsel emailed counsel for Plaintiffs as follows: (Doc. No. 82-3 at PageID# 913.) Ultimately, Defendants failed to execute the Settlement Agreement, citing financial constraints imposed by the pandemic and Executive Orders issued by the State of Ohio impacting Le Chaperon Rouge's child care centers and private elementary school.
On April 11, 2020, Plaintiffs filed a Motion to Enforce. (Doc. No. 82.) Therein, Plaintiffs asked the Court to (1) enforce the parties' settlement agreement; (2) approve the settlement of federal wage-and-hour claims pursuant to the FLSA; (3) certify a proposed Settlement Class under Fed. R. Civ. P. 23; (4) preliminarily approve the proposed settlement of the state law wage-and-hour claims for Settlement Class Members; (5) approve a proposed Notice to Settlement Class Members; and (6) schedule a Fairness Hearing. (Id.)
Defendants filed a Brief in Opposition on April 27, 2020, in which they acknowledged that a "global settlement" was reached on March 12, 2020 and that the terms of that settlement included a means "intended to lead to approval of a class settlement." (Doc. No. 83 at p. 1.) Defendants argued,however, that "unforeseen events have arisen - specifically, the state-mandated closure of its entire business enterprise and the concomitant economic catastrophe which has resulted—which renders the settlement unenforceable under Ohio law." (Id.)
The Court conducted a telephonic status conference with counsel on April 27, 2020. (Doc. No. 84.) During that conference, Defendants argued, for the first time, that the settlement was agreed to by Defendant Le Chaperon Rouge only and not by Defendant Moga-Kennedy personally. (Id.) The Court ordered Defendants to submit a detailed declaration setting forth support for their argument regarding Defendant Moga-Kennedy's personal liability, as well as for the financial assertions set forth in their Brief in Opposition regarding Defendant Le Chaperon Rouge's alleged inability to pay the agreed-upon settlement amount. (Id.)
On May 18, 2020, Defendants filed, under seal, the Declaration of Stella Moga-Kennedy, as well as numerous financial documents as attachments and exhibits thereto. (Doc. No. 87.) On that same date, Defendants also filed Supplemental Briefing regarding the...
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