Kautsch v. Premier Communications

• Decision Date: 23 January 2007
• Docket Number: No. 06-CV-04035-NKL.,06-CV-04035-NKL.
• Citation: 504 F.Supp.2d 685
• Parties: Kenneth KAUTSCH, Raymond Leigh Young, Alan Higgins, Louis Watkins, Randy Mallicoat, Jason Houston, and Roger Camden on behalf of all others similarly situated, Plaintiffs, v. PREMIER COMMUNICATIONS and Scott Aquino, Defendants.
• Court: U.S. District Court — Western District of Missouri

504 F.Supp.2d 685

Kenneth KAUTSCH, Raymond Leigh Young, Alan Higgins, Louis Watkins, Randy Mallicoat, Jason Houston, and Roger Camden on behalf of all others similarly situated, Plaintiffs, v. PREMIER COMMUNICATIONS and Scott Aquino, Defendants.

No. 06-CV-04035-NKL.

United States District Court, W.D. Missouri, Central Division.

January 23, 2007.

Jeffrey D. Pollack, Paul Ostensen, Mintz & Gold LLP, New York City, Roger G. Brown, Roger G. Brown & Associates, Jefferson City, MO, for Plaintiffs.

Eric E. Packel, Polsinelli, Shalton, Welte, Suelthaus, PC, Kansas City, MO, for Defendants.

ORDER

LAUGHREY, District Judge.

Pending before the Court is Plaintiffs' Motion for Class Certification and to Amend the Complaint [Doc. # 21]. In their Motion, Plaintiffs ask the Court to (1) "conditionally certify a class of all persons formerly and/or presently employed by defendants as a technician during the notice period" [Pls' Mot. at 1], (2) approve Plaintiffs' notice to potential class members, (3) require Defendants to produce a list of all potential class members, (4) grant Plaintiffs leave to amend their Complaint to add additional defendants and (5) toll the statute of limitations for Jefferson City technicians. For the reasons stated herein, Plaintiffs' Motion will be granted in part.

Motion to Amend

Plaintiffs move the Court for leave to amend their Complaint by adding Premier Satellite of Oklahoma, LLC ("Satellite"), and Premier Investment. Services, Inc. ("Investments"), as defendants. Plaintiffs assert that Satellite, Investments and Defendant Premier Communications ("Communications") are, in essence, the same employer.

Defendant Scott Aquino owns and serves as CEO of both Satellite and Communications. In addition, both Satellite and Communications have the same president, chief financial officer and head of payroll.

Plaintiffs worked for Communications, but were paid, and in some cases hired, by Investments. All Satellite and Communications' employees receive the same employment manual and sign the same "Employee Agreement." Both the manual and the agreement contain the Premier Communications, Inc., logo and name. When employees are transferred between the companies, they retain the same identification number and Communications' master list of technicians includes both Communications and Satellite employees.

The Court will grant a party leave to amend its complaint whenever such amendment serves the interest of justice. Fed.R.Civ.P. 15(a); Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) (holding that leave to amend should be granted unless such leave would cause undue delay, results from bad faith on the part of the movant or would unduly prejudice the opponent). Plaintiffs represent that Communications, Satellite and Investments are, for all practical purposes, the same entity. For their part, Defendants have not challenged Plaintiffs' assertions. Plaintiffs also represent, and Defendants do not dispute, that Plaintiffs only recently learned of the interrelation of Communications, Satellite and Investments and that each has been actively involved in this litigation since its inception. The Court finds no bad faith motive on the part of Plaintiffs in moving to amend. In addition, amending the complaint would not cause undue delay or prejudice the Defendants. Therefore, the Court grants Plaintiffs leave to amend their Complaint for the purpose of adding Satellite and Investments as defendants. Throughout the remainder of this Order, Defendants Communications, Satellite, Investments and Scott Aquino will be referred to collectively as "Premier."

Plaintiffs' Motion to Toll the Statute of Limitations

Plaintiffs move the Court to toll the "3 year statute of limitations for the Jefferson City employees" until August 2005 because the FLSA poster was not posted until then. [Pls' Mot. at 13.] Premier does not dispute Plaintiffs' representation that the FLSA poster was not posted in Jefferson City until August 2005. Nonetheless, the Court denies without prejudice the Plaintiffs' Motion to toll the statute of limitations. The notice of class certification will be broad enough to include all possible class members, and the issue of tolling will be resolved once it is clear which class members want to opt in. The issue is not yet sufficiently developed.

Motion for Conditional Certification

I. Background

Plaintiffs are seven former Premier field service technicians who claim that Premier denied them proper overtime compensation and, in some instances, failed to pay them minimum wage. Plaintiffs seek conditional certification of a class of persons formerly and/or presently employed by Premier as technicians during the notice period. [Pls' Mot. at 1.]

II. Facts

The technician's job is to install DirecTV systems, do upgrades and make service calls in customers' homes and commercial buildings. Technicians are given work orders and locations. Using the information in the work orders, technicians make nightly calls to customers to organize their next day's schedule. At the end of each week, the technicians turn in their weekly time sheets, as well as their work orders.

Technicians are paid a "piece-rate." In other words, technicians are paid "by the job" instead of "by the hour." No two technicians have identical circumstances. Some work longer hours than others. Some take longer to complete a job than others. And, some have a company car while others use a private vehicle. Despite these differences, Premier requires all technicians to submit weekly time sheets from which Premier is able to determine whether it is in compliance with the Fair Labor Standards Act ("FLSA") and whether technicians are owed any overtime pay. The individual technician is responsible for turning in accurate and complete time sheets.

Plaintiffs have testified in depositions and submitted sworn affidavits that they were told by Premier managers to change their time sheets to reflect 40 or fewer hours of work per week. In fact, CEO Scott Aquino told managers during a conference call to "make sure that the techs keep their weekly time sheets at 40 hours and below." [Pls' Mot. at 3.] Plaintiffs complied with this directive without ever complaining. For their part, Premier's managers have provided sworn affidavits denying that they directed the technicians to not report more than 40 hours of work per week.

Plaintiffs have also testified in depositions and submitted sworn affidavits that Premier maintained a blanket prohibition against counting job-to-job travel time or attendance at mandatory weekly team meetings as hours worked. But, at least one plaintiff testified that he was never told whether or not to include time spent in weekly team meetings on his time sheets.

In addition to taxes and mandated withholdings, Premier makes various deductions from technicians' paychecks. Authorized deductions include: "No Call No Show Escalation," "Failed Quality Control Inspection," "Lost Hardware," "Past Open Work orders," "Settled Home Damage Claims," "Service within 30 work orders," "Drop Material and Fuel Costs (if employee is a company fuel card holder)." [Pollack Decl. Ex. 16.] On two occasions, Plaintiff Watkins had so many deductions that he, effectively made less than minimum wage. In addition, Plaintiff Mallicoat was never paid for his last week of work with Premier.

III. Discussion

A. Class Certification

Section 216(b) of the Fair Labor Standards Act provides that an employee may bring an action for himself and other employees "similarly situated." 29 U.S.C. § 216(b). A 216(b) collective action differs significantly from Fed.R.Civ.P. 23 class actions. A primary difference between the two is that, under § 216(b), a similarly situated employee must "opt-in" to the collective action to be bound by the proceeding's outcome whereas, under Rule 23, a similarly situated plaintiff must "opt-out" to avoid being similarly bound. 29 U.S.C. § 216(b); Fed.R.Civ.P. 23.

Federal courts have used varying standards to determine whether potential opt-in plaintiffs are "similarly situated" under § 216(b). Davis v. NovaStar Mortgage, Inc., 408 F.Supp.2d 811, 815 (W.D.Mo. 2005). Though the Eighth Circuit Court of Appeals has not indicated which standard should be used, a majority of the district courts in the Eighth Circuit use the two-step analysis adopted in Mooney v. Aramco Services Co., 54 F.3d 1207 (5th Cir.1995). See, e.g., Davis, 408 F.Supp.2d 811; Kalish v. High Tech Institute, Inc., 2005 WL 1073645 (D.Minn.2005); Dietrich v. Liberty Square L.L.C., 230 F.R.D. 574 (N.D.Iowa 2005); McQuay v. American Int'l Group, Inc., 2002 WL 31475212 (E.D.Ark.2002).

Under this two-step process, the plaintiff first moves for class certification for notice purposes. The plaintiffs motion for certification is typically filed at an early stage of the litigation thus requiring a lenient evaluation standard and typically resulting in conditional certification of a representative class. Mooney, 54 F.3d at 1213-14; Grayson v. K Mart, 79 F.3d 1086, 1096 (11th Cir.1996) (noting that the "similarly situated" standard is considerably less stringent than Rule 23(b)(3) class action standards). At this early stage of litigation, the Court does not reach the merits of the plaintiffs claims. Hoffmann v. Sbarro, Inc., 982 F.Supp. 249, 262 (S.D.N.Y.1997) (citation omitted). Once the Court conditionally certifies the class, potential class members are given notice and the opportunity to "opt-in." Mooney, 54 F.3d at 1214.

At the second step of the process, the defendant may move to decertify the class. This is typically done after, the close of discovery when the Court has much more information and is able to make a more informed decision. Id.

Premier argues that, because the parties have engaged in discovery, the Court should skip the "notice" step and move directly to a second-step evaluation of Plaintiffs' Motion for Class Certification. Pfohl v. Farmers...