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News | Sep 16, 2014

MIDDLE DISTRICT OF PENNSYLVANIA CONDITIONALLY CERTIFIES COLLECTIVE OF SALES EMPLOYEES AT PENNSYLVANIA WYNDHAM VACATION RESORTS FACILITY

On September 9, 2014, the Middle District of Pennsylvania conditionally certified, pursuant to Section 16(b) of the Fair Labor Standards Act, 29 U.S.C. § 216(b), on behalf of the following collective:  All sales employees (including, inter alia, Sales Representatives) employed at the Wyndham Vacation Resorts Shawnee Village Facility in Pennsylvania during any workweek within the past three years.  See Chung v. Wyndham Vacation Resorts, Inc., 2014 U.S. Dist. LEXIS 126156 (M.D. Pa. Sept. 9, 2014).   The sales employees are represented by Winebrake & Santillo in addition to co-counsel Nichols Kaster, PLLP (Minneapolis, MN) and Hawks Quindel, S.C. (Madison, WI).

Below is the contents of the reply brief that was filed by Winebrake & Santillo approximately one week prior to the Court’s conditional certification order:

PLAINTIFFS’ REPLY BRIEF IN FURTHER SUPPORT OF THEIR CONDITIONAL CERTIFICATION MOTION

Plaintiffs have moved for conditional certification of this FLSA collective action, see Docs. 18 and 23, and Wyndham has filed an opposition brief, see Doc. 39.  Plaintiffs reply as follows:

A.   Plaintiffs’ Three Additional Declarations.

Plaintiffs’ original moving papers include declarations from five individuals who worked as Shawnee Facility salespeople and attest to the employment practices challenged in this lawsuit.  See Docs. 23-2.  Plaintiffs now submit three additional declarations.  See Exhibit C.

As indicated, these individuals worked as salespeople, and their declarations are consistent with the five previously submitted declarations.  See Ex. C.  Notably, these individuals list five different supervisors who instructed them to work off-the-clock.

B.   The Conditional Certification Stage is Not the Appropriate Time for the Court to Determine the Credibility of Competing Declaration Testimony.

To date, Plaintiffs have submitted 8 separate declarations in which sales representatives assert that various Sales Managers instructed them to work off-the-clock and/or erased reported overtime hours.  See Ex. A (Doc. 23-2), Ex. C (Doc. 43-1).  In response, Wyndham submits competing declarations.

Simply put, the parties’ competing declarations are irreconcilable.  But that does not prohibit conditional certification because, at the preliminary conditional certification stage, it is premature for the Court to consider or resolve the parties’ competing factual allegations.  There will be ample opportunity to weigh disputed evidence at the post-discovery decertification stage.  As Judge Vanaskie observed:

Where, as here, plaintiffs have adduced sufficient evidence to meet step one’s “extremely lenient standard” for conditional certification, evidence offered by the defendant purporting to show plaintiffs are not similarly situated to absent class members, while significant after discovery and during the step-two analysis, does not compel denial of conditional certification.

Gallagher v. Lackawanna County, 2008 U.S. Dist. LEXIS 43722, *27-28 (M.D. Pa. May 30, 2008); Bonds v. GMS Mine Repair & Maintenance, Inc., 2014 U.S. Dist. LEXIS 89181, *14 (W.D. Pa. July 1, 2014) (“GMS attempts to push the Court towards applying a standard that weighs evidence, finds facts and scrutinizes inconsistencies in the record. This Court declines to do so.”).

Consistent with the above principle, district courts within the Third Circuit repeatedly grant conditional certification notwithstanding employer-generated affidavits/declarations that attack the credibility of the plaintiffs’ evidence.  For example, in Pereira v. Foot Locker, Inc., 261 F.R.D. 60 (E.D. Pa. Sept. 15, 2009), the plaintiff sought conditional certification of an FLSA claim alleging off-the-clock work and time-shaving.  In response, the employer “challenged Plaintiff’s evidence with numerous declarations of putative plaintiffs who claim never to have worked off-the-clock or had their time shaved.”  Id. at 62.  Judge Joyner explained that consideration of the employer’s sworn statements was premature:

Defendant has provided affidavits from putative class members that directly refute Plaintiff’s allegations and detail the individualized circumstances of each person as to their experience with managers.  While this evidence may be significant after discovery and during step two of the process, at this stage, it does not compel us to deny preliminary certification.

Id. at 65 (internal quotations omitted).  Other judges within the Third Circuit agree with Judge Joyner’s approach.  See, e.g., Potoski v. Wyoming Valley Health Care System, 2013 U.S. Dist. LEXIS 177932, *14-15 (M.D. Pa. Dec. 19, 2013) (Caputo, J.) (refusing to consider 8 employer declarations); Goldstein v. Children’s Hospital of Philadelphia, 2013 U.S. Dist. LEXIS 24974, *16-17 n. 4 (E.D. Pa. Feb. 25, 2013) (refusing to consider employer’s “declarations from various department heads”); Goodman v. Burlington Coat Factory, 2012 U.S. Dist. LEXIS 166910, *26 (D.N.J. Nov. 20, 2012) (refusing to consider 38 employer declarations); Williams v. Owens & Minor, Inc., 2009 U.S. Dist. LEXIS 102304, *9 (E.D. Pa. Oct. 9, 2009) (refusing to consider 9 employer declarations); DeAsencio v. Tyson Foods, Inc., 130 F. Supp. 2d 660, 663 (E.D. Pa. 2001) (refusing to consider employer’s “detailed declarations”).[1]

The irrelevance of employer-obtained declarations should come as no surprise to Wyndham.  Recently, in Bitner v. Wyndham Vacation Resorts, Inc., 2014 U.S. Dist. LEXIS 101589 (W.D. Wis. July 25, 2014), Wyndham sales representatives brought an FLSA collective action challenging “Wyndham’s alleged policy of preventing its In-House and Discovery Sales Representatives from recording more than 40 hours in a week” by requiring them to “clock out of Wyndham’s timekeeping system” during the workday and whenever their recorded work hours neared 40 for the week.  See id. at *4.  In opposing conditional certification, Wyndham presented the court with declarations from sales representatives who alleged that they never worked off-the-clock.  See id. at *15, 22.  The district court found that these declarations were premature and irrelevant:

While these declarations suggest that plaintiffs may have an uphill battle ahead of them in proving the merits of their claims, . . . the court resolves all factual disputes in their favor at the conditional certification stage.

Id. at *15.[2]

 

Here, as in Bitner, Wyndham invites the Court resolve the credibility of competing declaration testimony at the conditional certification stage.  Based on the above authority, the Court should decline this invitation.

C.   Wydham’s “Time Record” Evidence Is Unavailing.

Other than the employee declarations, the only evidence presented by Wyndham in opposing conditional certification is a set of timekeeping records for one of the seven Plaintiffs in this case.  See Doc. 39-2.    Wyndham claims these records demonstrate that Plaintiff worked more than 40 hours.  See Def. Br. (Doc. 39) at pp. 2-3, 8.  Wyndham does not explain why it fails to include the time records of the other six plaintiffs.

It should not be too surprising that Plantiff’s time records consistently show less than 40 work hours per week.  Plaintiff, after all, alleges that (i) he regularly worked off-the-clock and (ii) his manager sometimes deleted time from his recorded work hours.  Of course, during the discovery phase of this lawsuit, Plaintiff’s lawyers will learn more about these time records (including how the records are maintained and interpreted).  At the pre-discovery stage, the meaning and importance of these time records is speculative.

More importantly, the extent to which Plaintiff’s time records enhance or undermine his credibility is not an issue the Court needs to resolve at the conditional certification stage.  See Section B supra.  Once again, Wyndham is prematurely presenting credibility arguments.  In Bitner, the district court explained to Wyndham that these same time records are irrelevant at the conditional certification stage.  See Bitner, 2014 U.S. Dist. LEXIS 101589, at *16 n. 4.  This Court should take the same approach.

D.   Wyndham Improperly Focuses on Merits Issues.

Wyndham’s conditional certification opposition focuses almost entirely on merits issues.  For example, one portion of Wyndham’s brief lists nine unresolved issues, see Def. Br. (Doc. 39) at p. 1, and another portion lists seven additional unresolved issues, see id. at pp. 15-16.  These issues – which include, for example, whether “Plaintiffs worked off the clock” and whether “defenses such as unclean hands and equitable estoppel apply” – concern the merits of Plaintiffs’ claims.

The problem for Wyndham is that merits issues – like credibility issues – are not properly before the Court at the conditional certification stage.  As Judge Hornak recently observed, FLSA defendants err when their “arguments against preliminary certification boil down to a generalized position that ‘we will win.’”  Stallard v. Fifth Third Bank, 2013 U.S. Dist. LEXIS 186531, *9 (W.D. Pa. Dec. 12, 2013).  Other judges agree: the ultimate merits of a plaintiff’s claim is irrelevant to the conditional certification analysis.  See, e.g., Vargas v. General Nutrition Centers, Inc., 2012 U.S. Dist. LEXIS 154073, *12 (W.D. Pa. Oct. 26, 2012) (“[t]he thrust of the Court’s inquiry at this juncture . . . ‘is not on whether there has been an actual violation of the law’”); Resch v. Krapf’s Coaches, 2012 U.S. Dist. LEXIS 89993, *6 (E.D. Pa. June 28, 2012) (“the merits of plaintiff’s claims need not be evaluated in order for notice to be approved and disseminated”); Bishop v. AT&T Corp., 256 F.R.D. 503, 507 (W.D. Pa. 2009) (“At this stage, the merits of the Plaintiff’s claims are not addressed”).

Wyndham seems pretty confident that it will win this lawsuit.  Time will tell whether such confidence is warranted.  In the meantime, Wyndham’s emphasis on the merits of its defenses and the purported shortcomings of Plaintiffs’ claims is misplaced at the conditional certification stage.[3]

E.   Wydham’s “Company Policy” Argument is Unavailing.

Like almost every other company sued for permitting uncompensated work and the under-reporting of work hours, Wyndham asserts that its official company policy prohibits such illegal conduct.  See Def. Br. (Doc. 39) at pp. 5-6.  This focus on official company policy is unavailing at the conditional certification stage, as has been explained by Judges Munley and Caputo.  See, e.g., Potoski, 2013 U.S. Dist. LEXIS 177932, at *18-20; Outlaw, 2012 U.S. Dist. LEXIS 108218, at *15-16.  Other judges agree.  See, e.g., Essame v. SSC Laurel Operating Company LLC, 847 F. Supp. 2d 821, 828 (D. Md. 2012); Pereira, 261 F.R.D. at 67.

The above decisions should come as no surprise to Wyndham.  In Bitner, the district court rejected Wyndham’s same argument that its “official” policy against uncompensated work prevented conditional certification.  See Bitner, 2014 U.S. Dist. LEXIS 101589, at *16-17.  Likewise, in Pierce v. Wyndham Vacation Resorts, Inc., 2014 U.S. Dist. LEXIS 116712 (E.D. Tenn. Apr. 24, 2014), the district court conditionally certified analogous off-the-clock FLSA claims brought by Tennessee salespeople, notwithstanding Wyndham’s argument that “it has a strict policy to ensure that all such persons are compensated for their overtime compensation.”  Id. at *4.

Here, as in Bitner and Pierce, Wyndham’s official policy prohibiting uncompensated work should have no bearing on conditional certification.

F.    There Is No “Conflict” Justifying Denial of Conditional Certification.

Wyndham also points out a purported “conflict” that arose when an individual (who worked as both a salesperson and a Sales Manager) opted-in to this lawsuit, seeking damages for a few months in which he worked as a salesperson.  See Def. Br. (Doc. 39) at 22-23.  Wyndham fails to identify any other person who raises a similar conflict.  See id.

Wyndham’s “conflict” argument fails for several independent reasons:

First, the exact same argument already was rejected by the Bitner Court, which cogently observed:  “All of those current and former sales representatives share a common interest in compensation for off-the-clock work allegedly performed in those roles pursuant to Wyndham policy, regardless of whether they have since been promoted to a management position.”  Bitner, 2014 U.S. Dist. LEXIS 101589, at *13.

Second, since this individual has withdrawn as a Plaintiff, see Doc. 38, the argument is moot.

Third, if some person other than this individual worked as both a salesperson and a Sales Manager within the relevant three-year period, the solution to the purported “conflict” would be to exclude that person from the collective, not to deny conditional certification.

G.  Plaintiffs Properly Define the Collective.

At the end of its brief, Wyndham, without citing any legal authority, recites a number of criticisms of Plaintiffs’ proposed collective definition.  See Def. Br. (Doc. 39) at pp. 23-25.  As discussed below, Wyndham’s complaints are misplaced:

First, as explained by Judge Vanaskie and many other judges, Wyndham’s assertion that the FLSA collective period should go back only two years (rather than the three years applicable to “willful” FLSA violations) is repeatedly rejected by district courts.  See Gallagher, 2008 U.S. Dist. LEXIS 43722, at *29-31.

Second, there is no merit to Wyndham’s assertion that the FLSA collective period should end in December 2012 because none of the current Plaintiffs worked after that date.  FLSA collective periods (like Rule 23 class periods) regularly extend beyond the employment dates of the originating class representatives.  Indeed, FLSA collective actions almost always are initiated by former employees (since current employees generally are afraid to file such lawsuits).  Yet, district courts consistently certify collectives that extend beyond the initiating plaintiff’s employment.  Such collective definitions are reflected in many of the cases cited in this brief, and it is no surprise that Wyndham’s same argument has been summarily rejected by Judge Munley.  See Outlaw, 2012 U.S. Dist. LEXIS 108218, at *17-18.

Wyndham also asserts that the collective should be limited to “sales representatives” rather than “sales employees.”  This assertion seemingly concerns semantics rather than substance.  Plaintiffs would be willing to limit the collective to “sales representatives” so long as the parties’ lawyers can reach a mutual understanding of which employees are covered by such terminology.  The undersigned often resolves such issues with adverse counsel prior to the mailing of FLSA notice forms.

Finally, Wyndham asserts that the collective definition should be limited to employees who “have worked more than forty hours per week” and “have been instructed to, and did, report forty or fewer hours per week when they worked more than forty hours in a workweek and/or have had their time records altered to reflect that they worked less time than they recorded.”  Def. Br. (Doc. 39) at p. 25.  This is a classic example of a “circular” class/collective definition that requires the resolution of disputed merits issues (e.g. was the putative collective member “instructed to” under-report hours; did the putative collective member have his “time records altered”) before the notices can even be mailed to the putative class/collective members.  Indeed, if the collective were defined as Wyndham requests, the mailing list produced by Wyndham presumably would be empty, since Wyndham contends that no individuals were subjected to the off-the-clock and time-shaving practices alleged in this lawsuit.  In sum, Wyndham’s proposed collective definition is self-serving and improper.  As the Court will see in reviewing the cases cited in this brief, FLSA collectives generally are defined in an objective manner that enables the putative collective members to be ascertained without nearly so much ambiguity and confusion.  Whether these individuals have meritorious claims can be determined later.

Respectfully,

/s/ Peter Winebrake

Peter Winebrake

R. Andrew Santillo

Mark J. Gottesfeld

WINEBRAKE & SANTILLO, LLC

715 Twining Road, Suite 211

Dresher, PA 19025

 

For Plaintiffs


[1]   Outside of the Third Circuit, district courts similarly disregard employer-generated declarations in deciding conditional certification.  See, e.g., Chastain v. Cam, 2014 U.S. Dist. LEXIS 102465, *14 (D. Or. July 28, 2014); Amador v. Morgan Stanley & Co., 2013 U.S. Dist. LEXIS 19103, *27-30 (S.D.N.Y. Feb. 7, 2013); Creely v. HCR ManorCare, Inc., 789 F. Supp. 2d 819, 839 (N.D. Ohio 2011).

[2]   One might question why Wyndham bothered to gather declarations from 21 current sales representatives even though, in the nearly identical Bitner case, such declarations were deemed irrelevant.  Here is a possible answer to the question:  Wyndham knows that, if conditional certification is granted and notice is issued to the putative collective, none of these 21 employees will be able join the lawsuit (having already sworn out declarations drafted by Wyndham’s lawyers or HR staff).  In essence, Wyndham has preempted the Court-supervised notice process (which is intended to foster transparency and objectivity) by unilaterally notifying at least 21 current employees of the lawsuit through the “declaration-gathering” process.

[3]   Wyndham’s opposition brief also relies on cases decided under the post-discovery “decertification” stage.  See Def. Br. (Doc. 39) at pp. 14-16 (citing Camilotes (N.D. Ill.), Tracy (W.D.N.Y.), and Martin (E.D. Pa.)).  These cases are obviously inapplicable to the instant conditional certification motion.

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