Author: LegalEase Solutions
QUESTIONS PRESENTED
- What are the possible defenses that can be raised against Plaintiff’s FLSA complaint?
- What are the possible challenges that can be raised against a class action application where Plaintiff is about to request class certification?
SUMMARY
- A defendant can have a number of potential defenses against the Plaintiff for denying his collective action under FLSA. These include the “good faith” defense, overtime exemptions, a FLSA exemption, exempt employee status, the window of correction, the statute of limitations, willfulness, a bar on liquidated damages, and mootness.
- A defendant can challenge numerosity, typicality, impracticable joinder, the predominance requirement, and collusion or conflicting interests between the representative and the class.
RESEARCH FINDINGS
- What are the possible defenses that can be raised against Plaintiff’s collective action complaint?
The Good Faith Defense
The Good Faith defense embodied in “ § 10 of the Portal to Portal Act of 1947, 29 U.S.C. § 259,6 provides the exclusive estoppel defense to actions under [FLSA] by giving protection against the recovery of back wages in certain limited circumstances. Section 10 requires that a defendant plead and prove that it relied on an opinion in writing from the Administrator of the Wage and Hour Division.” Usery v. Godwin Hardware, Inc., 426 F.Supp. 1243, 1268 (W.D.Mich.1976). Consequently, oral representations and interpretations from other sources will not qualify as a basis for this defense. Id.
Herman v. Palo Grp. Foster Home, Inc., 976 F. Supp. 696, 704 (W.D. Mich. 1997) aff’d, 183 F.3d 468 (6th Cir. 1999)
Overtime Exemptions
FLSA overtime exemptions are “affirmative defense[s] on which the employer has the burden of proof,” Corning Glass Works v. Brennan, 417 U.S. 188, 196–97, 94 S.Ct. 2223, 41 L.Ed.2d 1 (1974), see also Douglas v. Argo–Tech Corp., 113 F.3d 67, 70 (6th Cir.1997), and those exemptions “are to be narrowly construed against the employers seeking to assert them,”Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960). In Ale v. Tennessee Valley Authority, 269 F.3d 680, 691 n. 4 (6th Cir.2001), we stated that “[t]he defendant must establish through ‘clear and affirmative evidence’ that the employee meets every requirement of an exemption.” Id. (quoting Roney v. United States, 790 F.Supp. 23, 26 (D.D.C.1992)).
Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 501 (6th Cir. 2007)
A FLSA exemption
The applicability of an FLSA exemption is an affirmative defense that an employer must establish by a preponderance of the evidence. Renfro v. Indiana Michigan Power Co., 497 F.3d 573, 576 (6th Cir.2007) (citing Walling v. Gen. Indus. Co., 330 U.S. 545, 547-48, 67 S.Ct. 883, 91 L.Ed. 1088 (1947)).
Baden-Winterwood v. Life Time Fitness, Inc., 566 F.3d 618, 626 (6th Cir. 2009)
Exempt employee status
An employer may raise a plaintiff’s status as an exempt employee as an affirmative defense to claims brought under the FLSA. Thomas v. Speedway SuperAmerica, *847 LLC, 506 F.3d 496, 501 (6th Cir.2007). Exemptions, however, “ ‘are to be narrowly construed against the employers seeking to assert them.’ ” Id. (quoting Arnold v. Ben Kanowsky, Inc., 361 U.S. 388, 392, 80 S.Ct. 453, 4 L.Ed.2d 393 (1960)). The employer bears the burden of establishing the affirmative defense by a preponderance of the evidence, and the employer satisfies this burden only by providing “clear and affirmative evidence that the employee meets every requirement of an exemption.” Id. (internal quotation marks omitted).
Orton v. Johnny’s Lunch Franchise, LLC, 668 F.3d 843, 846-47 (6th Cir. 2012)
Window of correction
We conclude that the Secretary’s interpretation of the regulation, that the “window of correction” defense is not available to an employer who has a policy of making pay deductions from claimed salaried employees due to disciplinary infractions, is both reasonable and consistent with the FLSA regulations. Indeed, we agree that, when read in its entirety, the “window of correction” regulation allows use of the defense only after an employer has first demonstrated an intention to pay its employees on a salary basis. See id. at 901 (“Use of the word ‘lost’ suggests that an employer must first establish that it was entitled to the exemption, which requires inter alia that the employer demonstrate it was paying its employees on a salary basis.”).
Takacs v. Hahn Auto. Corp., 246 F.3d 776, 783 (6th Cir. 2001)
Statute of Limitations
While the FLSA normally has a two-year statute of limitations for actions to recover unpaid overtime, the Act extends the limitations period to three years if the defendant’s violation was willful. 29 U.S.C. § 255(a).
Elwell v. Univ. Hospitals Home Care Servs., 276 F.3d 832, 842 (6th Cir. 2002)
“[A]n FLSA plaintiff must prove by a preponderance of the evidence that he or she performed work for which he or she was not properly compensated.”Myers v. Copper Cellar Corp., 192 F.3d 546, 551 (6th Cir.1999) (citations and internal quotation marks omitted). “Work not requested but suffered or permitted is work time.” 29 C.F.R. § 785.11.
White v. Baptist Mem’l Health Care Corp., 699 F.3d 869, 873 (6th Cir. 2012)
Lack of Willfulness
An ordinary violation of the FLSA is subject to a two-year statute of limitations. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 135, 108 S.Ct. 1677, 1680, 100 L.Ed.2d 115 (1988). However, where a violation is “willful” a three-year statute of limitations applies. Id. In Richland Shoe, the Supreme Court held that “[t]o obtain the benefit of the 3–year exception, the Secretary must prove that the employer’s conduct was willful as that term is defined in [Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 125–30, 105 S.Ct. 613, 623–26, 83 L.Ed.2d 523 (1985) ].” The standard of willfulness adopted in Thurston requires the Secretary to show “that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute….” Id. at 133, 108 S.Ct. at 1681.
Dole v. Elliott Travel & Tours, Inc., 942 F.2d 962, 966-67 (6th Cir. 1991)
Liquidated Damages
An employer who violates the FLSA’s overtime provisions is liable to the employee in the amount of the unpaid overtime compensation “and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). Liquidated damages under the FLSA “are compensation, not a penalty or punishment.” Elwell v. Univ. Hosp. Home Care Serv., 276 F.3d 832, 840 (6th Cir.2002) (internal quotes omitted). Although liquidated damages are the norm and have even been referred to as “mandatory,” see, e.g., Martin v. Cooper Elec. Supply Co., 940 F.2d 896, 907 (3rd Cir.1991) (emphasis in original), Congress has provided the courts with some discretion to limit or deny liquidated damages. See 29 U.S.C. § 260; Martin, 940 F.2d at 907. Under this exception, if an employer demonstrates both good faith and reasonable grounds for the incorrect classification, then a court may exercise its discretion to limit or deny liquidated damages. Elwell, 276 F.3d at 840; Martin, 940 F.2d at 907. But “[t]his burden on the employer is substantial,” Elwell, 276 F.3d at 840, and if the employer fails to carry it, the court may not limit or deny liquidated damages. Elwell, 276 F.3d at 840; Martin, 940 F.2d at 907.
Martin v. Indiana Michigan Power Co., 381 F.3d 574, 584 (6th Cir. 2004)
Mootness
“Simply stated, a case is moot when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” UAW v. Dana Corp., 697 F.2d 718, 720–21 (6th Cir.1983) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969)). Generally speaking, “[s]ettlement of a plaintiff’s claims moots an action.” Brunet v. City of Columbus, 1 F.3d 390, 399 (6th Cir.1993)
Pettrey v. Enter. Title Agency, Inc., 584 F.3d 701, 703 (6th Cir. 2009)
Admittedly, special mootness rules exist for class actions. Once a class is certified, the mooting of the named plaintiff’s claim does not moot the action, the court continues to have jurisdiction to hear the merits of the action if a controversy between any class member and the defendant exists. Sosna, 419 U.S. at 399, 95 S.Ct. at 557. Where, on the other hand, the named plaintiff’s claim becomes moot before certification, dismissal of the action is required. Board of School Comm’rs v. Jacobs, 420 U.S. 128, 95 S.Ct. 848, 43 L.Ed.2d 74 (1975) (per curiam);
Brunet v. City of Columbus, 1 F.3d 390, 399 (6th Cir. 1993)
A case becomes moot “ ‘when the issues presented are no longer ‘live’ or parties lack a legally cognizable interest in the outcome.’ ” County of Los Angeles v. Davis, 440 U.S. 625, 631, 99 S.Ct. 1379, 59 L.Ed.2d 642 (1979) (quoting Powell v. McCormack, 395 U.S. 486, 496, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969)). In other words, a case becomes moot only when subsequent events make it absolutely clear that the allegedly wrongful behavior cannot reasonably be expected to recur and “interim relief or events have completely and irrevocably eradicated the effects of *531 the alleged violation.” Id. The heavy burden of demonstrating mootness rests on the party claiming mootness. Id.
Cleveland Branch, N.A.A.C.P. v. City of Parma, OH, 263 F.3d 513, 530-31 (6th Cir. 2001)
- What are the possible challenges that can be raised against a class action application, where Plaintiff is about to request class certification.
Requirements for a class action
As we reiterated recently, “[i]n order to obtain class certification, [a] plaintiff must first satisfy Rule 23(a)’s requirements of numerosity, commonality, typicality, and adequacy of representation.”Coleman v. Gen. Motors Acceptance Corp., 296 F.3d 443, 446 (6th Cir.2002). The district court concluded that Golden failed to prove numerosity. fed. R. Civ. P. 23(a)(1). This conclusion was not an abuse of the court’s discretion; we therefore affirm.
Golden v. City of Columbus, 404 F.3d 950, 965 (6th Cir. 2005)
Challenge Numerosity
Turning first to numerosity, Rule 23(a) requires that the proposed class be “so numerous that joinder of all members is impracticable.” There is “no strict numerical test for determining impracticability of joinder,” In re American Medical Systems, supra, *156 75 F.3d at 1079, and, as Plaintiffs point out, “classes with as few as twenty-five or thirty members have been certified by some courts,” Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1038 (5th Cir.1981). However, “[t]he mere allegation that the class is too numerous to make joinder practicable, by itself, is not sufficient to meet this prerequisite.” Fleming v. Travenol Laboratories, Inc., 707 F.2d 829, 833 (5th Cir.1983). Instead, “a plaintiff must ordinarily demonstrate some evidence or reasonable estimate of the number of purported class members.” Zeidman, 651 F.2d at 1038. In general, the numerosity inquiry “requires examination of the specific facts of each case,” In re American Medical Systems, supra, 75 F.3d at 1079 (internal quotations and citations omitted), and turns upon such factors as the dispersion of class members across a wide geographic area and the ease of identifying class members, see Andrews v. Bechtel Power Corp., 780 F.2d 124, 131–32 (1st Cir.1985).
Marquis v. Tecumseh Products Co., 206 F.R.D. 132, 155-56 (E.D. Mich. 2002)
Even though other factors may be considered, the Sixth Circuit has distinctly emphasized that “[w]hen class size reaches substantial proportions, … the impracticability requirement is usually satisfied by the numbers alone.” In re Am. Med. Sys., Inc., 75 F.3d at 1079. The modern trend for meeting the numerosity factor is to require at a minimum “between 21 and 40” class members. See Rodriguez v. Berrybrook Farms, Inc., 672 F.Supp. 1009, 1013 (W.D.Mich.1987); see also Roman v. Korson, 152 F.R.D. 101, 105–06 (W.D.Mich.1993). This Court has found that “[a]lthough not an absolute rule, it generally is accepted that a class of 40 or more members is sufficient to satisfy the numerosity requirement.” Crawford v. TRW Auto. U.S. LLC, 06–14276, 2007 WL 851627 at *3 (E.D.Mich. Mar. 21, 2007) (citations omitted).
Davidson v. Henkel Corp., 302 F.R.D. 427, 436 (E.D. Mich. 2014)
Generally, the numerosity requirement is fulfilled when the number of class members exceeds forty. See Stewart v. Abraham, 275 F.3d 220, 226–27 (3d Cir.2001).
Phillips v. Philip Morris Companies Inc., 298 F.R.D. 355, 362 (N.D. Ohio 2014)
Only when joinder is impracticable is there a need for a class action device.” 1 Herbert B. Newberg & Alba Conte, Newberg on Class Actions, § 3.01, at 3–4 (3d ed. 1992). There is no strict numerical test for determining impracticability of joinder. Senter, 532 F.2d at 523 n. 24 (and citations therein). Rather, “[t]he numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations.” General Tel. Co. v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 1706, 64 L.Ed.2d 319 (1980). When class size reaches substantial proportions, however, the impracticability requirement is usually satisfied by the numbers alone. 1 Newberg, supra, § 3.05, at 3–26.
In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996)
Challenge Typicality
The district court found that Plaintiffs’ claims were not typical of the class under Rule 23(a)(3); that Plaintiffs were not adequate representatives of the proposed class under Rule 23(a)(4); and that neither Stout nor Brown showed a sufficient relationship between their experiences and the experiences of putative class members. Rule 23(a)(3) typicality “determines whether a sufficient relationship exists between the injury to the named plaintiff and the conduct affecting the class, so that the court may properly attribute a collective nature to the challenged conduct.” Sprague, 133 F.3d at 399. This Court has summarized this standard: “[a]s goes the claim of the named plaintiff, so go the claims of the class.” Id.
Stout v. J.D. Byrider, 228 F.3d 709, 717 (6th Cir. 2000)
Challenge Adequacy of Representation
Similarly, we agree that the district court did not abuse its discretion in determining that Plaintiffs are not adequate representatives of the putative class. See Fed.R.Civ.P. 23(a)(4). Under Rule 23(a)(4), a plaintiff seeking to represent the class must demonstrate that he or she will fairly and adequately represent and protect the interests of the class. See In re American Med. Sys., Inc., 75 F.3d 1069, 1083 (6th Cir.1996). The court reviews the adequacy of class representation to determine whether class counsel are qualified, experienced and generally able to conduct the litigation, and to consider whether the class members have interests that are not antagonistic to one another. See id. Interests are antagonistic when there is evidence that the representative plaintiffs appear unable to “vigorously prosecute the interests of the class.” Id.
Stout v. J.D. Byrider, 228 F.3d 709, 717 (6th Cir. 2000)
“To meet the predominance requirement, a plaintiff must establish that issues subject to generalized proof and applicable to the class as a whole predominate over those issues that are subject to only individualized proof.”Randleman, 646 F.3d at 352–53 (citing Beattie v. CenturyTel, Inc., 511 F.3d 554, 564 (6th Cir.2007)). Further, “the fact that a defense may arise and may affect different class members differently does not compel a finding that individual issues predominate over common ones.” Beattie, 511 F.3d at 564 (citation and internal quotation mark omitted). While the commonality element of Rule 23(a)(2) requires showing one question of law or fact common to the class, a Rule 23(b)(3) class must show that common questions will predominate over individual ones.
Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 544 (6th Cir. 2012)
“FLSA collective actions require potential class members to notify the court of their desire to opt in to the action”; in contrast, class actions governed by Fed.R.Civ.P. 23 require “potential class members … to opt out of the action.”Anderson v. Cagle’s, Inc., 488 F.3d 945, 950 n. 3 (11th Cir.2007); see also Hunter v. Sprint Corp., 346 F. Supp 2d 113, 117 (D.D.C.2004).
Thomas v. Speedway SuperAmerica, LLC, 506 F.3d 496, 501 (6th Cir. 2007)
Rule 23(a)(4) allows certification only if “the representative parties will fairly and adequately protect the interests of the class.” Fed.R.Civ.P. 23(a)(4). “In order for representative parties to adequately represent a class, there must be no evidence of collusion or conflicting interests between the representative and the class.” 59 Am.Jur. 2d Parties § 59.
Compressor Eng’g Corp. v. Mfrs. Fin. Corp., 292 F.R.D. 433, 445 (E.D. Mich. 2013)
Federal Rule of Civil Procedure 23(a)(1) requires as a prerequisite to class action that “the class [be] so numerous that joinder of all members is impracticable.”See In re Am. Med. Sys., Inc.,75 F.3d at 1079. “While no strict numerical test exists, ‘substantial’ numbers of affected consumers are sufficient to satisfy this requirement.” In re Whirlpool, 678 F.3d at 418 (citing Daffin v. Ford Motor Co., 458 F.3d 549, 552 (6th Cir.2006)). Nonetheless, “impracticability of joinder must be positively shown, and cannot be speculative.”Golden v. City of Columbus, 404 F.3d 950, 966 (6th Cir.2005).
Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 541 (6th Cir. 2012)
“To obtain class certification, a claimant must satisfy two sets of requirements: (1) each of the four prerequisites under Rule 23(a), and (2) the prerequisites of one of the three types of class actions provided for by Rule 23(b). A failure on either front dooms the class.”Pilgrim, 660 F.3d at 946.
- Rule 23(a) Requirements
Under Rule 23(a), the party seeking certification must demonstrate, first, that: 1) the class is so numerous that joinder of all members is impracticable; 2) there are questions of law or fact common to the class; 3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and 4) the representative parties will fairly and adequately protect the interests of the class.
If the party seeking certification demonstrates that the requirements of Rule 23(a) are met, then the Court must consider whether one of the three requirements in Rule 23(b) has been met. Here, Plaintiffs assert that the requirements of Rule 23(b)(3) have been met.
- Rule 23(b) Requirements
“Rule 23(b)(3) states that a class may be maintained where ‘questions of law or fact common to class members predominate over any questions affecting only individual members,’ and a class action would be ‘superior to other available methods for fairly and efficiently adjudicating the controversy.’ ” Wal–Mart Stores, Inc., 131 S.Ct at 2549 n. 2. Rule 23(b) further provides that “matters pertinent to these findings” include: “(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;” “(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;” “(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum;” and “(D) the likely difficulties in managing a class action.” Fed.R.Civ.P. 23(b)(3).
Compressor Eng’g Corp. v. Mfrs. Fin. Corp., 292 F.R.D. 433, 444 (E.D. Mich. 2013)
As the Supreme Court has noted, a “class cannot be certified on the premise that [a defendant] will not be entitled to litigate its statutory defenses to individual claims.”Wal–Mart Stores, Inc. v. Dukes, ––– U.S. ––––, 131 S.Ct. 2541, 2561, 180 L.Ed.2d 374 (2011) (citations omitted).
Compressor Eng’g Corp. v. Mfrs. Fin. Corp., 292 F.R.D. 433, 453 (E.D. Mich. 2013)
Under the FLSA, we review class action certification rulings for an abuse of discretion. O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567, 584 (6th Cir.2009).
White v. Baptist Mem’l Health Care Corp., 699 F.3d 869, 873 (6th Cir. 2012)