O'Bryant v. ABC Phones of N.C., Inc.
| Decision Date | 04 August 2020 |
| Docket Number | No. 2:19-cv-02378,2:19-cv-02378 |
| Parties | JACOB O'BRYANT and MARK BRANDON BAKER, individually and on behalf of all others similarly situated, Plaintiffs, v. ABC PHONES OF NORTH CAROLINA, INC., d/b/a VICTRA, f/d/b/a A WIRELESS, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
This is an FLSA action. Before the Court are five motions. The first is a Joint Motion for Settlement Approval (the "Motion for Settlement Approval"), brought by Plaintiffs Jacob O'Bryant and Mark Baker (collectively, "Plaintiffs" or "Named Plaintiffs") and Defendant ABC Phones of North Carolina, Inc., d/b/a VICTRA, f/d/b/a A Wireless ("VICTRA"), filed on September 9, 2019.1 (ECF No. 14.) The second is putative intervenors Ron Hardney, Manuel Panngasiri, Michelle Salway, and other named persons' Motion to Intervene (the "Hardney Motion"), filed onSeptember 27, 2019. (ECF No. 15.) The third is putative intervenor James Baggott's Motion to Intervene (the "Baggott Motion"), filed on February 24, 2020. (ECF No. 39.) The fourth is putative intervenors Priscilla Solorio and Mariano Diaz's Motion to Intervene (the "Solorio and Diaz Motion"), filed on July 1, 2020. (ECF No. 57.) The fifth is the parties' Joint Motion for Approval of First Amendment to Settlement and Release Agreement to Provide Further Benefits to the Store Manager and Non-Manager Classes. (ECF No. 58.)
For the following reasons, the Motion for Settlement Approval and Motion for Approval of First Amendment to Settlement are DENIED. The Hardney Motion, the Baggott Motion, and the Solorio and Diaz Motion are DENIED WITHOUT PREJUDICE.
This dispute arises from VICTRA's alleged failure to pay overtime compensation to certain employees. VICTRA sells Verizon-compatible phones, Verizon data plans, and cellular phone accessories through VICTRA-branded locations. (ECF No. 12 ¶ 12.) VICTRA sets wage and hour policies, including employees' overtime pay, commission pay, and overtime rates. (Id. ¶ 15.) VICTRA compensates its retail associates by paying an hourly rate plus bonuses and commissions, which are paid according to frequently adjusted formulas. (Id. ¶ 16.) The commission payments and/or non-discretionary bonuses are not included inthe employees' regular rate when overtime payments are calculated. (Id. ¶ 21.)
On June 10, 2019, Plaintiffs filed a Complaint in this action (the "Initial Complaint"). (ECF No. 1.) In their Initial Complaint, Plaintiffs, VICTRA retail sales associates employed on an hourly-plus-commission basis, alleged that VICTRA employed a uniform payment structure for its retail sales associates that violated the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201, et seq. (Id. ¶¶ 8, 9, 34-39.) Plaintiffs alleged that VICTRA's payment scheme calculated the amount of overtime due by using the employees' base hourly rate rather than the regular rate as defined by 29 C.F.R. § 778.114, which required including commission payments and non-discretionary bonuses when calculating overtime. (See id. ¶¶ 19-21.) The collective action description in the Initial Complaint was:
All current and former retail employees of ABC Phones of North Carolina, Inc. or any of its subsidiaries doing business as VICTRA, who were paid an hourly wage plus commission, and who were employed in the United States at any time during the applicable limitations period covered by this Collective Action Complaint (i.e. two years for FLSA violations and, three years for willful FLSA violations) up to and including the date of final judgment in this matter, and who are Named Plaintiffs or elect to opt-in to this action pursuant to the FLSA, 29 U.S.C. § 216(b).
(Id. ¶ 4.)
On September 9, 2019, Plaintiffs filed a First Amended Complaint (the "FAC").2 (ECF No. 12.) In the FAC, Plaintiffs amended, inter alia, Baker's job description from "retail sales person" to "store manager." (Compare ECF No. 1 ¶ 9, with No. 12 ¶ 11.) The FAC adds an additional collective description, stating a separate retail "manager[]" subcollective in addition to the Initial Complaint's retail "employee[]" collective:
All current and former retail managers of ABC Phones of North Carolina, Inc. or any of its subsidiaries doing business as VICTRA, who were paid an hourly wage plus commission, and who were employed in the United States at any time during the applicable limitations period covered by this Collective Action Complaint (i.e. two years for FLSA violations and, three years for willful FLSA violations) up to and including the date of final judgment in this matter, and who are Named Plaintiffs or elect to opt-in to this action pursuant to the FLSA, 29 U.S.C. § 216(b).
(See ECF No. 12 ¶ 4). The FAC also alleges an additional violation of the FLSA: VICTRA's failure to pay its retail managers for work performed "off-the-clock." (Id. ¶¶ 23, 26-29.) Plaintiffs allege that VICTRA "converted its salaried store managers to hourly paid employees but did not substantially alter the work that such store managers, including [] Baker, were required to perform outside of their shifts"; that "store managers were not told that they should or could clock-in to complete work performed off-premises"; that these tasks included"participating in mandatory conference calls scheduled outside of manager's shifts; responding to employee calls after work, before work, and on days off; responding to employee text messages; routinely checking and responding to issues brought up in group.me[]"; and that these tasks were performed "in excess of an hour per week." (Id. ¶¶ 26-29.) The FAC alleges that Plaintiffs are aware of another putative collective action addressing the retail manager "off-the-clock" allegations:
On May 20, 2019, Ron Hardney, Manuel Panngasiri and Michelle Salway initiated a lawsuit styled as a collective action against ABC Phones of North Carolina in the District of New Jersey, 3:19-cv-12722-BRM-ZNQ, which operates as Victra Wireless, alleging that VICTRA violated the FLSA by requiring suffering and permitting its hourly-paid managers to work off-the-clock ("the New Jersey Action"). The New Jersey Action does not allege that VICTRA violated the FLSA by miscalculating its commissioned employees Regular Rate when determining overtime pay. Upon information and belief, Hardney, Panngasiri and Salway's claims in the New Jersey Action are subject to individual arbitration.
(Id. ¶ 36.)
Also on September 9, 2019, the parties filed the Motion for Settlement Approval.3 (ECF No. 14.) The parties ask the Court to approve their proposed Settlement Agreement, (ECF No. 14-1), and to dismiss this case with prejudice. (ECF No. 14 at 1.) The parties represent that, at a mediation on August 21, 2019 (the "Mediation"), they were able to settle the managers' "off-the-clock" claims. (Id. at 3.) The parties represent that in the weeks after the Mediation, they were able to reach an agreement to settle the retail employees' "payment scheme" violations. (Id.) In preparation for the Mediation, the parties represent that they "conducted informal discovery" that led to VICTRA's production of "over 400,000 payroll records containing 24 variables related to the Named Plaintiffs and putative class" and containing "hours and wage information spanning more than three years of pay periods, including regular hours and pay, overtime hours and pay, commissions and special incentive payments, extra unearned overtime payments, and other payroll components." (Id. at 2.)
On July 3, 2020, the parties filed a joint motion for Approval of First Amendment to Settlement and Release Agreement to Provide Further Benefits to the Store Manager and Non-Manager Classes. (ECF No. 58.) The parties represent that they have amended the Settlement Agreement to add $190,888 to the Gross Settlement Amount to "address the time period that has elapsed since the Settlement Agreement was filed in September 2019." (Id. at 1.) The parties also represent that they have amended the Settlement Agreement to "make[] clear that, consistent with California law, the Settlement Agreement does not intend to release any claims under the [California Private AttorneysGeneral Act of 2004, Cal. Lab. Code Sections 2698 - 2699.5 (the "PAGA")]." (Id. at 1-2.)
The relevant terms of the First Amended Settlement Agreement4 are summarized as follows:
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