Juvera v. Salcido
| Decision Date | 16 December 2013 |
| Docket Number | No. CV-11-2119-PHX-LOA,CV-11-2119-PHX-LOA |
| Parties | Jose Pablo Rodriguez Juvera; Kenia V. Nunez; Ricardo Aguiar Romero; Yesenia Vazquez DeLabra; and a class of others similarly situated, Plaintiffs, v. Victor M. and Carmen Salcido, husband and wife; and Factor Sales, Inc., an Arizona corporation, Defendants. |
| Court | U.S. District Court — District of Arizona |
This Fair Labor Standards Act collective and class action arises after the parties reached a settlement and this Magistrate Judge conducted a fairness hearing on October 29, 2013. On November 13, 2012, the Honorable James A. Teilborg, Senior United States District Judge, referred this action to the undersigned to oversee the procedural and logistical aspects of settling this case. (Docs. 35, 52 at 11-12) On October 31, 2013, and with the approval of Judge Teilborg, the parties consented to proceed before this Magistrate Judge for all further proceedings, pursuant to 28 U.S.C. § 636(c).1
This lawsuit alleges violations of federal and Arizona minimum-wage labor laws filed by cashiers against their employer, an Arizona grocery store chain. On October 27, 2011, four Plaintiffs, either current or former cashiers employed by Defendants, filed this collective2 and class action lawsuit, alleging willful violations of the Plaintiffs' and class members' statutory right to receive the requisite federal and state minimum wages for nonexempt employees under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq.; the Arizona Wage Act ("AWA"), Arizona Revised Statutes ("A.R.S.") § 23-350, et seq.; and the Arizona Minimum Wage Act ("AMWA"), A.R.S. § 23-363, et seq. (Doc. 1) Defendant Factor Sales, Inc. is an Arizona corporation with its main office located in San Luis, Arizona. (Id., ¶ 14 at 4; doc. 10, ¶ 14 at 3) Defendants Victor and Carmen Salcido, husband and wife, served as Factor Sales' corporate President and Secretary, respectively, at all material times herein. According to the Complaint, the Salcidos exercised complete control over, and responsibility for, the operation of Factor Sales, and are, or were, Plaintiffs' "employer" as defined in the FLSA, 29 U.S.C. § 203(d); the AWA, A.R.S. § 23-350(3); and the AMWA, A.R.S. § 23-362(B). (Doc. 1, ¶¶ 12-13, 16 at 4)
Defendants (collectively "Factor Sales") own and operate retail grocery stores, called King Market, Factor Warehouse, and Del Sol, in southwestern Arizona in and around San Luis, Yuma County, Arizona. (Doc. 52 at 1) At all relevant times, Factor Sales' cashiers were responsible for ensuring that each item purchased was charged correctly to, and paid for by, the stores' customers; checking customers out; bagging the customers' groceries; and guaranteeing that each cash register's drawer balanced at the end of their shift. (Doc. 1, ¶ 23at 6) The named Plaintiffs and class members are, or were, employed by Factor Sales as cashiers, performing the same basic duties and subject to the same two policies at issue in this lawsuit. (Id. at 4, 6) The two disputed policies are: 1) if a cashier's cash-handling drawer was short of the correct amount of money at the end of the cashier's shift, Factor Sales required the cashier to repay the missing funds to Factor Sales (the "shorts" policy); and 2) Factor Sales initially paid for a cashier's work uniform, name and security tag, but required a cashier to repay Factor Sales for the replacement cost if a cashier's uniform, name or security tag was lost or a new one was needed (the "uniform" policy). (Doc. 72 at 2)
At least one named Plaintiff worked in each of Factor Sales' stores between 2008 and 2012. In April 2013, it was believed there were approximately 200 current and former cashiers who are potential members of the proposed class. (Doc. 52 at 6) By the time of the October 2013 fairness hearing, there were 425 class members. Factor Sales' cashiers were, and are, paid at, or slightly above, the applicable minimum wage rates. Plaintiffs claim that, when the cash drawer or till did not add up correctly, Factor Sales' company policy required the cashiers to reimburse Factor Sales for the shortage, but Factor Sales did not credit the cashiers if there were any cash overages. (Id. at 1-2) Plaintiffs further allege that Factor Sales had a policy of requiring its employees to pay Factor Sales for the cost of replacement uniforms, employee name and security tags. Plaintiffs allege these policies had the effect of reducing Plaintiffs' and class members' wages below the minimum wage required by federal and Arizona law.
In the October 27, 2011 Complaint, Plaintiffs allege Defendants violated 29 U.S.C. § 206(a) of the FLSA and the AMWA, A.R.S. §§ 23-363(A), and 23-351(c). After engaging in some discovery, the parties stipulated the case be referred to a magistrate judge for a settlement conference, and, if a settlement were reached, the magistrate judge would oversee the procedural and logistical aspects of resolving the lawsuit. (Doc. 34) Thereafter, the assigned District Judge granted the parties' stipulation and the case was randomly assigned to the undersigned Magistrate Judge for further proceedings consistent with the referral.
On January 31, 2013, this Magistrate Judge conducted a settlement conference at thePhoenix courthouse with all counsel, a Spanish-speaking interpreter, several corporate representatives, and numerous Plaintiffs and family members physically present. (Doc. 44) Shortly thereafter, Plaintiffs filed a Notice of Settlement, indicating the parties had reached a settlement, but sought approval for pursuing a FLSA conditional collective action and certification for a Rule 23 class action as part of the settlement. (Doc. 45) Without objection by Factor Sales, Plaintiffs requested a collective action and class certification because the parties were only in the discovery phase of the litigation and no depositions had been taken, citing Lopez v. Arizona Public Service Co., 2010 WL 1403873 (D. Ariz. Jan. 27, 2010) and Murillo v. Pacific Gas & Elec. Co., 266 F.R.D. 468 (E.D. Cal. 2010) as authority for their requests.
On February 25, 2013, Plaintiffs filed an Unopposed Motion to Certify Conditionally Collective Action and Class Action, requesting an order, inter alia, certifying this action as: 1) a conditional collective action, and 2) authorizing the named Plaintiffs and the putative class of similarly situated individuals to proceed as a class action pursuant to Rule 23, Fed.R.Civ.P., on the state law claims. (Doc. 50 at 1) In a detailed April 4, 2013 Order, Judge Teilborg concluded that Plaintiffs' pleadings and declarations support their claims that the named Plaintiffs and members of the potential collective action group are, or were, all employed by Factor Sales as cashiers at the Factor Sales' stores in Arizona and were subject to the same policies requiring reimbursement or charge backs for cash shortages, replacement uniforms, name and security tags, resulting in the reduction of the cashiers' pay below the required minimum wage. (Doc. 52 at 4) Judge Teilborg found that "the evidence that Plaintiffs have proffered [was] sufficient [to] certify a collective action under the FLSA." (Id.) (citing, among others, Hipp v. Liberty Nat. Life Ins. Co., 252 F.3d 1208, 1217 (11th Cir. 2001), modified on other grounds, Anderson v. Cagle's, Inc., 488 F.3d 945 (11th Cir. 2007); Adams v. Inter-Con Sec. Sys., Inc., 242 F.R.D. 530, 536 (N.D. Cal. 2007) (internal citation omitted)).
In that same order, and after conducting a thorough Rule 23(a), Fed.R.Civ.P., analysis,Judge Teilborg found that Plaintiffs met the requirements of Rule 23(a) and granted Plaintiffs' motion to conditionally certify this lawsuit as a collective FLSA action and class action. (Doc. 52 at 10) Furthermore, Judge Teilborg also reviewed Plaintiffs' proposed notice and found that it met the requirements of Rule 23(c)(2)(B), Fed.R.Civ.P., as it provided accurate and timely notice of the pendency of this collective action, so that potential claimants could make informed decisions to participate in this class action or opt-out of it. (Id.) He further authorized Plaintiffs to mail and post their proposed notice to potential members of this collective and class action and ordered Factor Sales to produce the names and last known addresses of such members in order to facilitate the notification process. (Id.) In the April 4, 2013 Order, Judge Teilborg also appointed Plaintiffs' counsel as class counsel under Rule 23(g), Fed.R.Civ.P., and entered other orders to facilitate the settlement of this lawsuit. (Id. at 10-12)
Unlike most private settlements negotiated between parties in a civil action for damages, in a FLSA case or class action, the parties must seek the district court's approval of the settlement's terms to ensure that it is enforceable and fair. See Nall v. Mal-Motels, Inc., 723 F.3d 1304 (11th Cir. 2013) (); Lopez v. Arizona Public Service Co., 2010 WL 1403873, at *1 (D. Ariz. Jan. 27, 2010) (quoting Lynn's Food, 679 F.2d at 1352-53); Rule 23(e), Fed.R.Civ.P.("The claims, issues, or defenses of a certified class may be settled, . . . or compromised only with the court's approval[.]"); Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir. 1998) ().
A. Class Action Settlements
Unless the Class Action Fairness Act of 2005 applies,3 Alberto v. GMRI, Inc., 252 F.R.D. 652,...
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