United States District Court, N.D. Illinois, Eastern Division
MONICA KURGAN and MADELINE DIAZ, on behalf of themselves and others similarly situated, Plaintiffs,
CHIRO ONE WELLNESS CENTERS LLC, Defendants.
MEMORANDUM OPINION AND ORDER
ROBERT M. DOW, Jr., District Judge.
Before the Court is Plaintiffs' amended motion for collective and class certification . Plaintiffs ask the Court to (1) authorize notice under 29 U.S.C. §216(b) to similarly situated current and former employees of this collective action; (2) certify Plaintiffs' IMWL overtime wage claim under Federal Rule of Civil Procedure 23(b)(3) and/or Rule 23(c)(4); (3) appoint Plaintiffs' counsel as class counsel; and (4) approve the proposed notice forms. For the reasons stated below, the Court grants Plaintiffs' amended motion for collective and class certification . This case is set for further status on 3/11/2014 at 2:00 p.m.
Plaintiffs Monica Kurgan and Madeline Diaz allege that Defendant Chiro One Wellness Centers, LLC ("Chiro One") willfully failed to pay them and other hourly workers the overtime wages to which they were entitled under the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. and the Illinois Minimum Wage Law, 820 ILCS § 105/1 et seq. They seek to proceed on their own behalf and on behalf of all others similarly situated, both as class representatives and lead plaintiffs in a collective action. See Ervin v. OS Restaurant Servs., Inc., 632 F.3d 971, 981 (7th Cir. 2011).
Chiro One is a limited liability corporation headquartered in Oak Brook, Illinois, that operates 75 "wellness centers" providing chiropractic services in Illinois, Kentucky, and Texas. Chiro One has 57 locations in Illinois, 12 locations in Kentucky, and 6 locations in Texas. Chiro One owns each location; they are not franchises. Each location is staffed with at least one Chiropractor and, typically, three or more Chiropractic Technicians ("CTs"). In the past, staffing also included Chiropractic Assistants ("CAs"). The CA job duties were completely subsumed within those of the CT. Eventually, Chiro One simply "incorporated" the CA position and job duties into the CT "role." Plaintiffs have come forward with evidence that Chiro One employs standardized corporate policies and procedures governing CTs and that the job duties of CTs are uniform throughout Chiro One. For instance, Chiro One uses "checklists, " which detail all of the duties CTs are expected to perform each day, and CTs are provided with comprehensive "scripts" for dealing with customers.
Before being assigned to a Chiro One location, CTs receive four to eight weeks of centralized, uniform training at Chiro One's corporate headquarters in Oak Brook, Illinois. During training, CTs were paid on an hourly basis. At the end of training, CTs were assigned to a Chiro One location and changed from non-exempt, hourly employees to salaried, exempt employees. Thus, after training, CTs were not paid overtime for any hours worked in excess of 40 in any work week. For most of the relevant period, Chiro One did not keep records of the hours worked by CTs. This lawsuit was filed in March 2010, and approximately a year and a half later, Chiro One began tracking the hours worked by CTs. However, Chiro One did not pay CTs for overtime worked until December 2012, when Chiro One finally reclassified all of its CTs from exempt to non-exempt.
On March 25, 2010, Plaintiffs filed their Original Complaint against Chiro One, bringing claims under the IMWL. Prior to Chiro One filing an answer, Plaintiffs amended their complaint to add claims under the FLSA. On October 7, 2010, Chiro One filed its Answer and did not plead any affirmative defenses. On September 15, 2011, Plaintiffs filed a second amended complaint. Chiro One again answered and did not plead any affirmative defenses. On May 23, 2012, Chiro One stated on the record it would not raise any affirmative defense not already raised, and this Court entered an Order barring Chiro One from doing so.
Plaintiffs seek conditional certification of their FLSA claim and request that notice be sent to "All Chiropractic Assistants and Chiropractic Technicians employed by Chiro One during the period April 21, 2007 to December 17, 2012." Plaintiffs also seek to certify their IMWL overtime claims as a class action pursuant to Rule 23(b)(3) or, in the alternative, Rule 23(c)(4). Plaintiffs' proposed class is "All Chiropractic Assistants and Chiropractic Technicians employed by Chiro One in the State of Illinois during the period March 25, 2007 to December 17, 2012."
II. Conditional Certification of a Collective Action under the FLSA
Plaintiffs have moved for conditional approval or certification of a federal collective action under the FLSA, 29 U.S.C. § 216(b), which "authorizes employees to act together to seek redress for violations of the statute's minimum wage and maximum hour provisions." Ervin v. OS Restaurant Servs., Inc., 632 F.3d 971, 974 (7th Cir. 2011). In the proposed notice, Plaintiffs identify the "class" as "[a]ll Chiropractic Assistants and Chiropractic Technicians employed by Chiro One during the period April 21, 2007 to December 17, 2012."
"[C]ertification' is neither necessary nor sufficient for the existence of a representative action under FLSA, but may be a useful case management' tool for district courts to employ in appropriate cases.'" Myers v. Hertz Corp., 624 F.3d 537, 555 n.10 (2d Cir. 2010) (quoting Hoffmann-La Roche, 493 U.S. 165, 169, 174 (1989)); see also Zavala v. Wal Mart Stores, Inc., 691 F.3d 527, 536 (3d Cir. 2012) (same). "Section 216(b) does not by its terms require any such device, and nothing in the text of the statute prevents plaintiffs from opting in to the action by filing consents with the district court, even when the notice described in Hoffmann-La Roche has not been sent, so long as such plaintiffs are similarly situated' to the named individual plaintiff who brought the action." Myers, 624 F.3d at 555 n.10. Nonetheless, "[t]he conditional approval process is a mechanism used by district courts to establish whether potential plaintiffs in the FLSA collective action should be sent a notice of their eligibility to participate and given the opportunity to participate in the collective action." Ervin, 632 F.3d at 974.
Courts generally take a two-step approach to conditional approval or certification of a federal collective action. See, e.g., Myers, 624 F.3d at 554-55; Hipp v. Nat'l Life Ins. Co., 252 F.2d 1208, 1218 (11th Cir. 2001). At the first step, the court makes an initial determination to send notice to potential opt-in plaintiffs who may be "similarly situated" to the named plaintiff with respect to whether a FLSA violation has occurred. Myers, 624 F.3d at 555. Plaintiff bears the burden of making a "modest factual showing sufficient to demonstrate that [he] and potential plaintiffs together were victims of a common policy or plan that violated the law." Russell v. Ill. Bell Tel. Co., 575 F.Supp.2d 930, 933 (N.D. Ill. 2008) (quoting Flores v. Lifeway Foods, Inc., 289 F.Supp.2d 1042, 1045 (N.D. Ill. 2003)); see also Bergman v. Kindred Healthcare, Inc., 949 F.Supp.2d 852, 855 (N.D. Ill. 2013). "The modest factual showing' cannot be satisfied simply by unsupported assertions, ' but it should remain a low standard of proof because the purpose of this first stage is merely to determine whether similarly situated' plaintiffs do in fact exist." Myers, 624 F.3d at 555 (citations omitted). It requires "some evidence, beyond pure speculation, of a factual nexus between the manner in which the employer's alleged policy affected her and the manner in which it affected other employees." Zavala, 691 F.3d at n.4 (quotation omitted); see also Molina v. First Line Sol'ns LLC, 566 F.Supp.2d 770, 786 (N.D. Ill. 2007) ("Unless defendant admits in its answer or briefs that other similarly situated employees exist, plaintiffs cannot rely on their allegations alone to make the required modest factual showing.").
If Plaintiffs are able to satisfy their initial burden, notice may be issued to prospective plaintiffs who may opt in to the action. Then, when discovery is closed, the case moves to the second step. On the more robust record, the Court determines whether the so-called "collective action" may go forward by assessing "whether the plaintiffs who have opted in are in fact similarly situated' to the named plaintiffs. The action may be de-certified' if the record reveals that they are not, and the opt-in plaintiffs' claims may be dismissed without prejudice." Myers, 624 F.3d at 555; see also Bergman, 949 F.Supp.2d at 855 (explaining that at the second step, "the defendant is given an opportunity to move for decertification"). "At the second stage, the court considers (1) whether the plaintiffs share similar or disparate factual and employment settings; (2) whether the various affirmative defenses available to the defendant would have to individually applied to each plaintiff; and (3) fairness and procedural concerns." Strait v. Belcan Eng'g Grp., Inc., 911 F.Supp.2d 709, 718 (N.D. Ill. 2012) (quotation omitted). This stage is where the certification becomes more akin to the familiar Rule 23 class certification standard, (see Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 772 (7th Cir. 2013)); "it is not until the conclusion of the opt-in process and class discovery that the court more rigorously reviews whether the representative plaintiff and the putative claimants are in fact similarly situated so that the lawsuit may proceed as a collective action.'" Tamas v. Family Video Movie Club, Inc., 2013 WL 4080649, at *3 (N.D. Ill. Aug. 13, 2013) (quoting Smallwood v. Ill. Bell Tel. Co., 710 F.Supp.2d 746, 750 (N.D. Ill. 2010)).
Defendant Chiro one does not contend that Plaintiffs have failed to meet the lenient standard ordinarily applied to conditional certification of an FLSA collective action. Instead, it asks the Court to deny notice under the "decertification" standard because "discovery * * * is already closed." However, the scheduling order in this case contemplated an initial period for "class discovery, " after which a class certification motion would be filed, and a subsequent period of discovery following the court's ruling on certification. Thus, while class discovery is complete, additional discovery remains. See Babych v. Psychiatric Solutions, Inc., 2011 WL 5507374, at *3 (N.D. Ill. Nov. 9, 2011) ("Courts refuse to skip the first step of the conditional certification inquiry where the parties' agreed schedule indicates that there will be two stages of discovery."). Further, "it is not until the conclusion of the opt-in process and class discovery that the court more rigorously reviews whether the representative plaintiff and the putative claimants are in fact similarly situated so that the lawsuit may proceed as a collective action.'" Brown v. Club Assist Rd. Serv. U.S., Inc., 2013 WL 5304100, at *12 (N.D. Ill. Sept. 19, 2013). After all, the Court is "assessing whether the plaintiffs who have opted in are in fact similarly situated' to the named plaintiffs." Id. Until the opt-in process is complete, the Court cannot compare the named plaintiffs with those "who have opted in." Id. ; Sylvester v. Wintrust Fin. Corp., 2013 WL 5433593, at *3 (N.D. Ill. Sept. 30, 2013); Babych, 2011 WL 5507374 at *3 ("unless the court is able to assess the individual claims of the employees who choose to opt-in to this FLSA collective action, it cannot make a final determination of whether the class members are similarly situated.'"); see also Bergman v. Kindred Healthcare, Inc., 949 F.Supp.2d at 855.
While the "lenient standard occasionally is heightened if plaintiffs have been allowed extensive discovery, " an intermediate standard-not the decertification standard requested by Chiro One-applies. Bergman v. Kindred Healthcare, Inc., 949 F.Supp.2d at 855 (citing Creely v. HCR ManorCare, Inc., 789 F.Supp.2d 819, 823-26 (N.D. Ohio 2011)). The intermediate standard, while more stringent than the lenient first-step standard, is less rigorous than the second-step decertification standard. "Both sides' evidentiary submissions [are] considered in determining whether there is a group of similarly situated employees who may be discovered by sending out an opt-in notice." Bergman, 949 F.Supp.2d at 856. But in "evaluating each side's submissions, it must be kept in mind that, despite the discovery that has been allowed, defendants still have greater access to evidence than plaintiffs and plaintiffs' modest showing need not be conclusive." Id. So even if a stricter standard is applied, Plaintiffs need only "make a modest plus' factual showing that there is a group of potentially similarly situated plaintiffs that may be discovered by sending opt-in notices." Id. at *3.
Here, Plaintiffs have made the minimal "modest factual showing"-indeed, have made a "modest plus" showing-sufficient to carry them past the first stage of the conditional certification process, identifying for the Court and Defendant a group of potentially similarly-situated plaintiffs who may be discovered by sending opt-in notices. At this stage, Plaintiffs have demonstrated that Chiro One has always treated CTs as a cohesive group for the purposes of applying the FLSA. It uniformly classified them as exempt from the FLSA, which, Plaintiffs allege, resulted in a systemic failure to maintain accurate records of the hours that CTs worked. And Chiro One later reclassified CTs to non-exempt employees and began paying them overtime. Plaintiffs also have showed that Chiro One employed CTs under a uniform job description, gave CTs uniform training, and structured (or "scripted") CTs' job duties to "standardize" the delivery of its services. See, e.g., Betancourt v. Maxim Healthcare Servs., Inc., 2011 WL 1548964, *6 (N.D. Ill. Apr. 21, 2011) (uniform classification as exempt supported conditional certification); Jirak v. Abbott Labs., Inc., 566 F.Supp.2d 845, 849 (N.D. Ill. 2008) (same); Vaughan v. Mortgage Source LLC, 2010 WL 1528521, *4-5 (E.D.N.Y. Apr. 14, 2010) (uniform failure to record plaintiffs' time worked supported certification); ...