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Pierce v. Wyndham Vacation Resorts, Inc.

United States District Court, E.D. Tennessee, Knoxville

October 3, 2017

JESSE PIERCE and MICHAEL PIERCE, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
WYNDHAM VACATION RESORTS, INC., and WYNDHAM VACATION OWNERSHIP, INC., Defendants.

          MEMORANDUM AND ORDER

          C. CLIFFORD SHIRLEY, JR. UNITED STATES MAGISTRATE JUDGE.

         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 193].

         Now before the Court is the Defendants' Motion to Decertify the Conditionally Certified Collective Action [Doc. 279]. The Plaintiffs filed a Response [Doc. 298], and the Defendants filed a Reply [Doc. 307]. During a status conference with the parties on August 7, 2017, the parties stated that a hearing on the Motion was not necessary. The Motion is now ripe for adjudication. Accordingly, for the reasons stated below, the Court finds the Defendants' Motion [Doc. 279] not well-taken, and it is DENIED.

         I. BACKGROUND

         By way of background, the Defendants (collectively, “Wyndham” or “Defendants”) provide family destination vacations. [Doc. 60-1 at ¶ 3]. Customers purchase points that may be used for vacations at Wyndham resorts or other locations. [Id.]. Wyndham employs three groups of Sales Representatives: (1) Front-Line Representatives, (2) In-House Sales Representatives, and (3) Discovery Sales Representatives. [Id. at ¶¶ 4-5]. Further, relevant to the instant action, Wyndham's Tennessee operations span four Wyndham properties. [Id. at ¶ 12]. The Smoky Mountain Region includes two properties located in Sevierville: The Crossing and The Lodge. [Id.]. The Wyndham Nashville and the Wyndham Resort at Fairfield Glade (“The Glade”) comprise the other Tennessee region. [Id.].

         The Complaint in this matter was filed on October 23, 2013. [Doc. 1]. The Complaint alleges that certain Sales Representatives who worked at the Defendants' offices worked off the clock and were not paid for working in excess of 40 hours in a work week. [Id. at ¶ 2]. The Complaint alleges that the Defendants willfully violated the Fair Labor Standards Act (“FLSA”). [Id. at ¶ 3]. The action was conditionally certified on August 21, 2014. [Doc. 84]. Specifically, the collective action was defined as follows: Current and former non-exempt, commission-paid: (1) Front-Line Sales Representatives, (2) In-House Sales Representatives, (3) Discovery Sales Representatives, who were employed in the Defendants' Tennessee Resorts between October 21, 2010, to October 31, 2013.

         After the District Judge conditionally certified this action, the parties spent several months disputing over the proposed notice and opt-in form. The District Judge entered an Order with respect to the appropriate notice and opt-in form on June 1, 2015. [Doc. 125]. Subsequently, on May 31, 2016, the parties consented to the undersigned for all further proceedings. [Doc. 193]. The undersigned set a scheduling conference, but it was continued so that the parties could participate in mediation. [Doc. 197]. The mediation was unsuccessful, and the Court conducted a scheduling conference with the parties on September 15, 2016. [Doc. 202]. During the scheduling conference, the parties stated that they had agreed to allow the Defendants an additional twenty-four (24) depositions. [Doc. 203]. The Court also set a hearing to address sample representation and allowed the parties to file briefs regarding the appropriate sample representation. [Id.].

         At the hearing, the Plaintiffs proposed a sample representation of two groups: (1) opt-in Plaintiffs who worked as Sales Representatives at one of Defendants' four Tennessee resorts for more than six months (Group 1); and (2) opt-ins Plaintiffs who worked as Sales Representatives at one of the Defendants' four Tennessee resorts for less than six months (Group 2). Through random sampling, Group 1 consisted of 35 Plaintiffs (out of 139 opt-in Plaintiffs), and Group 2 constituted of 13 Plaintiffs (out of 25 opt-in Plaintiffs). Thus, both groups represent 25% and 50%, respectively. At the hearing, the Defendants argued that there should not be any sample representation in this case. The Defendants continued that they should be permitted to take each and every Plaintiffs' deposition. After hearing from both parties, the Court limited discovery to the Plaintiffs' representative sampling because it appeared to be “fair and proportional to the needs to the case” and would “minimize the burden of Plaintiffs and their counsel while still allowing the Defendants an opportunity to depose these alleged representative Plaintiffs to determine the similarity and ability to serve as representatives and/or to determine if there is any basis to their various defenses.” [Doc. 215]. The Court continued:

Once the parties complete discovery of the representative Plaintiffs, if the Defendants contend that either the Plaintiffs' claims or the Defendants' defenses are too distinct or too individualized to permit this subset of representative Plaintiffs to be used to establish a collective class action and/or liability and/or damages, then Defendants may move for either additional discovery beyond the representative list and/or try to establish class decertification.

[Doc. 215]. Later, and because the Defendants had earlier agreed with the Plaintiffs to take only twenty-four additional depositions, the Defendants moved the Court to allow them to depose the remaining members in the Plaintiffs' sample representation. The Court granted [Doc. 254] the Defendants' request.

         The Defendants have now moved for decertification.

         II. POSITIONS OF THE PARTIES

         The Defendants argue [Doc. 279] that this case cannot be tried as a collective action, citing the Supreme Court's decision in Tyson Foods, Inc. v. Bouaphakeo, 577 U.S.___, 136 S.Ct. 1036 (2016) (hereinafter, “Tyson”) and because the Plaintiffs cannot establish that they are similarly situated. With respect to the former argument, the Defendants assert that Tyson compels decertification. The Defendants argue that pursuant to Tyson, the Plaintiffs must present evidence that is both the same across the class and sufficient to prove the individual claim of each employee in an individual lawsuit. Further, the Defendants contend that with respect to “so-called representative testimony, ” it must be admissible under the Federal Rules of Evidence. The Defendants assert that the Plaintiffs' purported representative sample is statistically inadequate. Further, the Defendants submit that the Plaintiffs cannot satisfy Tyson's requirements that the “so-called representative evidence” must be sufficient to prove the claims of each of the 167 employees in individual lawsuits.[1] Finally, the Defendants assert that the Plaintiffs cannot show that they are similarly situated under the stricter standard to be applied by the Court at this stage of the litigation.

         The Plaintiffs respond [Doc. 298] that Sixth Circuit precedent supports this action being tried as a collective action. Further, the Plaintiffs state that decertification is unwarranted because the evidentiary record overwhelmingly confirms that the Plaintiffs are similarly situated. The Plaintiffs explain that they are similarly situated in their factual and employment settings and that the Defendants' defenses are assertable on a collective basis. In addition, the Plaintiffs contend that fairness and procedural considerations favor proceeding collectively. Finally, the Plaintiffs argue that the Defendants mischaracterize Tyson, they erroneously rely on inapplicable Rule 23 standards, and they ignore the Supreme Court's decision in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946).

         The Defendants filed a Reply [Doc. 307], stating that Sixth Circuit case law does not compel a denial of the Motion to Decertify. The Defendants contend that the cases cited in the Plaintiffs' Response are both factually and procedurally inapposite to this case. The Defendants argue that the Plaintiffs are not similarly situated in their factual and employment settings. In addition, the Defendants assert that their defenses require an individualized inquiry and that procedural and fairness considerations weigh in favor of decertification. Finally, the Defendants reply that they have not mischaracterized Tyson and that they did not ignore the decision in Mt. Clemens.

         III. ANALYSIS

         The Court has considered both parties' positions, and the Court finds the Defendants' request for decertification not well-taken for the reasons further explained below. The Court will begin with an overview of the FLSA and then turn to the Defendants' arguments for decertification.

         A. Overview of the FLSA

         The FLSA directs that an employee or employees may bring an action “against any employer (including a public agency) in any Federal or State court of competent jurisdiction . . . for and in behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b). However, “[n]o employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” 29 U.S.C. § 216(b).

         A plaintiff alleging a FLSA violation can bring a representative action for similarly situated persons if the plaintiffs meet two requirements: “1) the plaintiffs must actually be similarly situated, and 2) all plaintiffs must signal in writing their affirmative consent to participate in the action.” Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 545 (6th Cir. 2006) (citations omitted). An FLSA representative action is called a collective action and is different from a class action brought pursuant to Rule 23 of the Federal Rules of Civil Procedure, in that it utilizes an opt-in mechanism rather than the opt-out mechanism employed under Rule 23. See Id. Further, the FLSA “similarly situated” standard is less stringent than the predominance inquiry typically applicable to class certification disputes under Rule 23(b). O'Brien v. Ed Donnelly Enters., Inc., 575 F.3d 567, 584 (6th Cir. 2009), abrogated on other grounds by Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663 (2016).

         Proceeding as a collective action furthers several important policy goals. First, the collective action “allows . . . plaintiffs the advantage of lower individual costs to vindicate rights by the pooling of resources.” Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989). Second, “[t]he judicial system benefits by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity.” Id.

         In an FLSA action, “[t]he district court may use its discretion to authorize notification of similarly situated employees to allow them to opt into the lawsuit.” Id. at 169. Typically, courts have utilized a two-phase process in determining whether the proposed plaintiffs are similarly situated. The first phase takes place at the beginning of discovery, and the second phase occurs after opt-in forms have been disbursed and returned and discovery has been completed. See Comer, 454 F.3d at 547.

         The instant case is at the second stage, which courts apply a “stricter standard.” See Id. Named plaintiffs “bear the burden of showing that the opt-in plaintiffs are similarly situated to the[m].” O'Brien, 575 F.3d at 584 (citation omitted). The second stage follows discovery, so the Court “has much more information on which to base its decision” and “examine[s] more closely the question of whether particular members of the class are, in fact, similarly situated.” Comer, 454 F.3d at 547 (citation and internal quotation marks omitted). To avoid decertification, the named plaintiffs must introduce “substantial evidence” that the opt-in plaintiffs are similarly situated.” Frye v. Baptist Mem'l Hosp., No. CIV. 07-2708, 2010 WL 3862591, at *2 (W.D. Tenn. Sept. ...


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