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Hamilton v. Diversicare Leasing Corp.

United States District Court, W.D. Arkansas, El Dorado Division

October 1, 2014

TRACEY HAMILTON, et. al., Plaintiffs,
v.
DIVERSICARE LEASING CORP., et. al., Defendants.

MEMORANDUM OPINION AND ORDER

SUSAN O. HICKEY, District Judge.

Before the Court is Defendants' Motion for Decertification of a putative collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b). (ECF No. 150). Plaintiffs have responded to Defendants' Motion for Decertification. (ECF No. 156). Defendants have filed a replied. (ECF No. 163). This matter is ripe for the Court's consideration.

BACKGROUND

The named Plaintiffs, who are all certified nursing assistants ("CNAs") and licensed practical nurses ("LPNs"), are current and former employees of healthcare facilities owned and operated by Defendants. Defendants Diversicare Leasing Corp. ("DLC") and Diversicare Management Services Co. ("DMS") are wholly owned subsidiaries of Diversicare Healthcare Services, Inc. ("DHS"), formerly known as Advocat, Inc. (hereinafter DLC, DMS, and DHS are collectively referred to as "Diversicare"). On June 22, 2012, Plaintiffs filed this action under §§ 207, 216(b) of the FLSA on behalf of themselves and other hourly employees claiming that Diversicare denied overtime pay in violation of the FLSA. They allege that a 30-minute unpaid meal break was automatically deducted from their hours worked, even when they worked through the break. Some Plaintiffs also allege that they were not compensated for overtime hours worked before or after their scheduled shifts. The Court granted conditional class certification of a collective action under § 216(b) on August 12, 2013 (ECF No. 49). Subsequently, notice of the putative collective action was issued to potential opt-in plaintiffs, and Plaintiffs report that approximately 1, 592 employees have consented to join in this lawsuit. After the opt-in period expired, Diversicare filed a Motion for Decertification.

All of the named Plaintiffs are CNAs and LPNs who worked at five of Diversicare's facilities located in Arkansas. The other hourly positions in the conditionally certified class include "ancillary" employees at Diversicare facilities, such as kitchen staff, housekeeping staff, maintenance staff, activities coordinators, social services coordinators, bookkeepers, payroll staff, van drivers, receptionists, and admissions coordinators.

During the three years at issue in this lawsuit, [1] Diversicare owned and operated healthcare facilities located in Alabama, Arkansas, Florida, Kentucky, Ohio, Tennessee, Texas, and West Virginia. All hourly employees at all of Diversicare's facilities were subject to the same employee handbook and used the same time clock system. Diversicare required most of its hourly employees to take uncompensated 30-minute meal breaks during each shift.[2] Most employees could leave the facility for their meal break, but had to clock out and back in if they chose to leave. Some employees who worked the night shift had to remain on the premises. Employees who did not leave the facility for their meal break were not required to clock in and out, but thirty minutes per shift was automatically deducted from those employees' hours worked. New time clock systems were installed in all Diversicare facilities in 2012. The new time clocks require employees to answer several prompts when they clock in and out, including whether to use their scheduled shift as their recorded time or their actual swipe-in and swipe-out times. Similarly, the new time clock asked whether the employees took their 30-minute meal break. As a result of the new time clocks, employees could record any changes to their scheduled shifts.

As stated in the employee handbook, Diversicare has a company-wide policy that prohibits employees from working off-the-clock and provides a procedure for employees to follow when they do have to work off-the-clock. The employee handbook used under the old time clock system states:

If you are requested by your supervisor to work during your meal break, you will be paid for the time worked. Review your time record when you clock out to verify that any additional time you worked during your meal period has been recorded. If it has not, see your supervisor.

(Divericare Employee Handbook - June 2009, Ex. 6, ECF No. 139-11). Similar procedures were in place for time worked before or after a shift. The time policy is covered at each new employee's orientation and each new employee is taught how to use the time clock and the time-keeping procedures. New employees are given a copy of Diversicare's Employee Handbook and acknowledge receipt in writing.

LEGAL STANDARD

Section 216(b) of the FLSA provides that a collective action for unpaid overtime compensation may be maintained against an employer by "any one or more employees for and in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). The opt-in collective action mechanism for plaintiffs in § 216(b) sets forth two requirements: (1) the plaintiffs must be "similarly situated" and (2) all party plaintiffs must give their affirmative written consent to participate in the action. Wright v. Pulaski Cnty., 4:09 CV 00065 SWW, 2010 WL 3328015, at *9, 2010 U.S. Dist. LEXIS 87283, at *32 (E.D. Ark. Aug. 24, 2010). "[T]he fundamental inquiry in determining whether a collective action under § 216(b) is appropriate is whether or not the plaintiffs are similarly situated.'" Smith v. Heartland Auto. Servs., Inc., 404 F.Supp.2d 1144, 1149 (D. Minn. 2005). Section 216 does not define "similarly situated" and courts have adopted varying approaches to certify a class of similarly situated plaintiffs for purposes of § 216(b).

Courts in the Eighth Circuit approach the certification of collective actions in two stages. First, a plaintiff may seek conditional certification of a collective action, authorizing notice to potential opt-in plaintiffs. Smith, 404 F.Supp.2d at 1149. At the conditional certification stage, the plaintiffs' burden is not rigorous. The plaintiffs must only establish that they have a colorable basis for their claim and that the named plaintiffs are similarly situated with potential collective action members. Douglas v. First Student, Inc., 888 F.Supp.2d 929, 933 (E.D. Ark. 2012). Such a showing can be made with minimal evidence that the putative collective action members were victims of a common policy or plan that may have violated the FLSA. See Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001). In this action, the Court conditionally certified a collective action pursuant to the FLSA and authorized notice to potential opt-in plaintiffs. (ECF No. 49). Plaintiffs report that approximately 1, 592 employees have consented to join this lawsuit.

At the second stage, now germane, named Plaintiffs must make a stronger showing to continue to proceed on a collective basis. Wright, 2010 WL 3328015, at *9, 2010 U.S. Dist. LEXIS 87283, at *34. The court has much more information on which to base its decision and can make a factual determination on the similarly situated question. See Mooney v. Aramco Services, Co., 54 F.3d 1207, 1214 (5th Cir. 1995). A court may consider "(1) disparate factual and employment settings of the individual plaintiffs; (2) the various defenses available to defendant which appear to be individual to each plaintiff; [and] (3) fairness and procedural considerations." Bouaphakeo v. Tyson Foods, Inc., 2014 WL 4197378, at *2, 2014 U.S.App. LEXIS 16283, at *8 (8th Cir. Aug. 25, 2014). Plaintiffs do not need to be identically situated to proceed collectively. See Kautsch v. Premier Commc'ns, No. 06CV04035, 2008 WL ...


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