Penley v. NPC Int'l, Inc.

• Court: U.S. District Court — Western District of Tennessee
• Writing for the Court: J. DANIEL BREEN, CHIEF UNITED STATES DISTRICT JUDGE
• Citation: Penley v. NPC Int'l, Inc., 206 F.Supp.3d 1341 (W.D. Tenn. 2016)
• Decision Date: 29 June 2016
• Docket Number: Case No. 13-1031
• Parties: Tiffney PENLEY, individually and on behalf of others similarly situated, Plaintiff, v. NPC INTERNATIONAL, INC., Defendant.

206 F.Supp.3d 1341

Tiffney PENLEY, individually and on behalf of others similarly situated, Plaintiff,

v.NPC INTERNATIONAL, INC., Defendant.

Case No. 13-1031

United States District Court, W.D. Tennessee, Eastern Division, at Jackson.

Signed June 29, 2016

James L. Holt, Jr., Jackson Shields Yeiser Holt Speakman & Lucas, Timothy A. Perkins, Timothy A. Perkins, Attorney at Law, Memphis, TN, Joseph Russ Bryant, Paula Rachelle Jackson, Gordon E. Jackson, Jackson Shields Yeiser & Holt, Cordova, TN, for Plaintiff.

Audrey M. Calkins, Thomas L. Henderson, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Memphis, TN, for Defendant.

ORDER GRANTING PLAINTIFFS' MOTION FOR EQUITABLE TOLLING

J. DANIEL BREEN, CHIEF UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

This is a Fair Labor Standards Act ("FLSA") collective action, one of five similar cases,¹ initiated on January 29, 2013, by Plaintiff, Tiffney Penley, against Defendant NPC International ("NPC"). (Docket Entry ("D.E.") 1.) Since that date, a number of other individuals have opted into the suit. Plaintiffs seek to recover unpaid wages, minimum wages, and overtime wages for Plaintiffs' "off-the-clock" work performed at Pizza Hut restaurants owned by NPC. Before the Court is Penley's November 11, 2015 motion for equitable tolling of the statute of limitations on behalf of the opt-in plaintiffs and potential opt-in plaintiffs.

II. FACTUAL BACKGROUND

These five cases, not yet in the discovery phase, have already had a lengthy procedural history. The lawsuits were summarized by the Sixth Circuit as follows:

Defendant NPC International, a Kansas corporation, operates Pizza Hut Restaurants in numerous states across the country. In January 2013, five separate actions were commenced against NPC in the Western District of Tennessee. The plaintiffs in all five cases are represented by the same counsel. Each of the actions asserts claims under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), for unpaid minimum wages and overtime compensation by a different class of current or former employees of NPC. Plaintiff Skylar Gunn brought action on behalf of herself and other similarly situated tipped employees, also classified as waiters/waitresses/servers; plaintiff William Harris proceeded on behalf of cooks; Candace Jowers on behalf of delivery drivers; Tiffney Penley on behalf of shift managers; and Leah Redmond on behalf of customer service representatives. In each case, NPC is alleged to have established uniform policies and practices that denied the named plaintiff and other similarly situated employees compensation they were entitled to, in violation of the FLSA.

Gunn v. NPC Int'l, Inc. , 625 Fed.Appx. 261, 263 (6th Cir.2015). On March 8, 2013, NPC filed an answer to the complaint (D.E. 13), asserting forty-eight affirmative defenses—among them that the FLSA claims were barred "by all applicable statutes of limitation, including, but not limited to, 29 U.S.C. § 255." (Id. at 10.)

On March 28, 2013, Defendant filed an Emergency Motion to Plaintiffs to Cease and Desist, alleging that Plaintiffs were attempting to recruit potential plaintiffs in an objectionable manner. (D.E. 16.) One week later, Magistrate Judge Edward Bryant instructed the parties to "attempt to settle the issues raised in the emergency motion." (Minute Entry, D.E. 21.) Shortly thereafter, the parties indicated to the Magistrate Judge that "the issues precipitating the motion ha[d] been resolved." (Minute Entry, D.E. 23.) Thus, the emergency motion was dismissed as moot. (D.E. 25.)

Nearly a year later, NPC moved to dismiss the lawsuit for lack of jurisdiction or, in the alternative, to compel individual arbitration and for a stay. (D.E. 68.) NPC argued that each of the Plaintiffs had signed a mandatory arbitration agreement when they applied for employment with NPC, and thus, this Court did not have jurisdiction over the FLSA claims. (Id. ) Defendant further averred that the arbitration issue should be evaluated individually as to each opt-in Plaintiff instead of considering the Plaintiffs as a group. Gunn , 625 Fed.Appx. at 267. Plaintiffs then filed a motion for conditional certification of a collective action under § 216(b) of the FLSA. (D.E. 71.) Before ruling on the motion, the Court denied Defendant's pending motion to dismiss or compel arbitration. (D.E. 95.) NPC appealed the denial. (D.E. 100.) The Court also dismissed Plaintiffs' motion for conditional certification without prejudice for administrative purposes, (D.E. 114), and Plaintiffs moved to equitably toll the claims of all opt-in plaintiffs. (D.E. 115.) The motion was denied on grounds that the then-pending appeal rendered this Court without jurisdiction to consider the issue of equitable tolling. (D.E. 123.)

The Sixth Circuit issued its ruling on August 28, 2015, upholding this Court's denial of the motion to dismiss. (D.E. 134.) The appellate court found that NPC delayed almost fifteen months before raising the arbitration issue in any of the five cases. (D.E. 135.) "Indeed," the court stated, "the timing of NPC's tardy assertion of its right tends to corroborate the district court's conclusion, in denying reconsideration, that NPC was ‘employing dilatory tactics and creating expense for the Plaintiffs.’ " Gunn , 625 Fed.Appx. at 265. The Sixth Circuit approved this Court's finding that NPC was sufficiently on notice of the claims against it as of the date of filing in January, 2013. Id. Moreover, it held that adopting NPC's approach would undermine the remedial design of the FLSA collective action mechanism, i.e., efficient vindication of employees' rights. Id. at 267–68. The court stated,

[b]ecause all five cases were brought in the same court and assigned to the same judge, and all plaintiffs are represented by the same counsel and assert claims for violations of FLSA rights pursuant to the same uniform policies, the effects of NPC's failure to timely raise arbitration—in unnecessary delay and expense—is effectively the same for all plaintiffs, irrespective of when they opted in. In relation to the issues posed by the waiver question, all plaintiffs are "similarly situated." Here too, as we observed in O'Brien , "it is clear that plaintiffs are similarly situated when they suffer from a single FLSA-violating policy, and when proof of that policy or of conduct in conformity with that policy proves a violation as to all the plaintiffs." ... [E]ach opt-in plaintiff's filing of consent to join "did not substantially alter the scope or theory of this matter in such a way as to revive the defendant's right to compel arbitration."

Id. at 267.

Once the Sixth Circuit issued its mandate, the Plaintiffs filed a second motion to certify class (D.E. 138) and a second motion for equitable tolling on behalf of the opt-in and potential opt-in plaintiffs (D.E. 140). The Plaintiffs asserted that the statute of limitations for FLSA claims should be tolled as to all Plaintiffs who have already opted in and as to those who have yet to join the action. (Id. ) Without tolling, Penley insisted that the statute of limitations would continue to run "against potential opt-ins [who] will suffer severe prejudice, including possible preclusion from bringing any claim, due not to their own delay but to Defendant's extreme delay in this case." (Id. at 2.) As to those who have already opted in, the Plaintiffs maintain that they would have consented to join the lawsuit earlier had they received timely notice; however, Defendant's procedural maneuverings had prevented it. (Id. at 1.) Plaintiffs aver that without tolling, their claims and those of all potential opt-in Plaintiffs will be significantly diminished, and NPC will consequently benefit from its own dilatory tactics. (Id. ) Defendant responds that the motion for equitable tolling is premature and/or without merit. (D.E. 146.)

III. APPLICABLE LAW

FLSA lawsuits are unique in character as they are statutory mechanisms by which employees may assert their rights to fair labor conditions against their employers. See Powell v. U.S. Cartridge Co. , 339 U.S. 497, 509–11, 70 S.Ct. 755, 94 L.Ed. 1017 (1950) ("[T]he primary purpose of Congress ... was to eliminate, as rapidly as practicable, substandard labor conditions throughout the nation."). The statutory scheme was designed by Congress to "correct labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." Keller v. Miri Microsystems LLC , 781 F.3d 799, 806 (6th Cir.2015) (quoting Dunlop v. Carriage Carpet Co. , 548 F.2d 139, 143 (6th Cir.1977) ). The FLSA is designed to be "a broadly remedial and humanitarian statute." Fegley v. Higgins , 19 F.3d 1126, 1132 (6th Cir.1994) (quoting Dunlop v. Carriage Carpet Co. , 548 F.2d 139, 143 (6th Cir.1977) ). As such, the Sixth Circuit construes the Act's provisions "liberally to effectuate the broad policies and intentions of Congress." Id. (quoting Dunlop , 548 F.2d at 144 ).

Under the FLSA, a lawsuit to recover unpaid compensation must "be commenced within two years after the cause of action accrued," unless the action arose "out of a willful violation," in which case the lawsuit must be initiated within three years after accrual. 29 U.S.C. § 255(a). Under the continuing violation doctrine, "a cause of action is deemed to accrue, as a general rule, at each regular payday immediately following the work period during which the services were rendered for which the wage or overtime compensation is claimed." Archer v. Sullivan County , Nos. 95–5214, 955215, 1997 WL 720406, at *2 (6th Cir. Nov. 14, 1997) (quoting Halferty v. Pulse Drug Co. , 821 F.2d 261, 271 (5th Cir.), modified on other grounds , 826 F.2d 2 (5th Cir.1987) ). Subject to certain exceptions, an action is "commenced" on the date the complaint is filed. 29 U.S.C. § 256. In the case of a collective action, if an individual claimant does not immediately file written consent to become a party plain...