Grove v. Meltech, Inc.

ANDREA GROVE, individually and on behalf of similarly situated individuals;and CHRYSTINA WINCHELL, individually and on behalf of similarly situated individuals; Plaintiffs, v. MELTECH, Inc.; H&S CLUB OMAHA, INC., and SHANE HARRINGTON, Defendants.

8:20CV193

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

December 3, 2020

MEMORANDUM and ORDER

This matter is before the Court on the plaintiffs Andrea Grove's and Chrystina Winchell's motion for conditional certification as a collective action under 29 U.S.C. § 216, Filing No. 14.¹ This is an action for wages under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and the Nebraska Wage and Hour Act, Neb. Rev. Stat. § 48-1201, et seq. In their amended complaint, the plaintiffs allege that defendants Meltech, Inc., H&S Club Omaha, Inc., and Shane Harrington misclassified them as independent contractors rather than as employees, failed to pay them minimum and overtime wages, and required them to pay fees and tip-outs in violation of the FLSA and Nebraska law, and retaliated against them for filing this action. They seek conditional certification of a collective action, on behalf of herself and similarly situated persons employed at Club Omaha as exotic dancers.

I. BACKGROUND

The plaintiffs seek classification of a conditional collective class consisting of "all exotic dancers who have worked at Club Omaha during the last three years and were classified as independent contractors." Filing No. 14, Motion. In support of their motion, the plaintiffs submit the declarations of several exotic dancers. See Filing No. 16-3, Exhibit ("Ex.") C, Declaration of Andrea Grove; Filing No. 16-4, Ex. D, Declaration of Autumn Smith; Filing No. 16-5, Ex. E, Declaration of Cassandra Schueth; Filing No. 16-6, Ex. F Declaration of Chrystina Winchell; Filing No. 16-7, Ex. , Declaration of Destinee Magnuson. Several dancers have already filed opt-in consents to the litigation.² See Filing Nos. 2, 12.

In their declarations, the dancers state that they were employed by Club Omaha, were classified as independent contractors, were required to work on certain days, required to schedule shifts in advance, required to work a certain number of hours and perform a certain number of dances per shift and were fined if they failed to do so. See id. The declarants also state they were not paid wages, but were compensated in the form of tips from customers and were required to tip the manager, security, and the DJ at the end of each shift. See e.g., Filing No. 16-3, Grove Decl. Further, they state that Club Omaha determined the rates of private dances and set rules for appearance and conduct. Id. The plaintiffs also submit a proposed notice and opt-in consent forms. See Filing Nos. 16-1, Ex. A, proposed notice; Filing No. 16-2, Ex. B, proposed opt-in consent form.

In opposition to motion for class certification, the defendants submit Club Omaha Independent Contract Dancer Agreements and Membership Application contracts, and the affidavits of Shane Harrington and plaintiffs' counsel, Evan Spencer. Filing No. 23-1, agreements; Filing No. 23-2, Affidavit of Shane Harrington ("Harrington Aff."); Filing No. 23-3, Affidavit of Evan Spencer ("Spencer Aff.") They argue in their brief conditional collective class certification should be denied for the reason that the proper forum for this dispute is the American Arbitration Association ("AAA") in Colorado. Filing No. 23, Brief at 2. That argument is based on an arbitration clause in the independent contractor agreements. See Filing No. 23-1, agreements. In his affidavit, Harrington states:

Plaintiffs, the 9 opt-ins and their attorneys have violated these 30 contracts by defaming me and my business, by violating confidentiality, by fraudulently attempting to obtain wages for minimum wage and overtime, by fraudulently claiming they were required to tip when their contracts specifically state it is optional, and by filing a class action complaint and motion for conditional certification, and emergency motion with this court when all 30 contracts have an arbitration clause and class action waiver selecting the forum of AAA in Denver, Colorado for resolution of all individual disputes by arbitration.

Filing No. 23-2, Harrington Aff. at 2. Spencer states, "[a]ll 30 of these contracts contain arbitration clauses, class action waivers, confidentiality clauses, and a 30-day good faith dispute resolution process" and contends that the plaintiffs and their attorneys violated the dispute resolution provisions and committed "perjury, defamation, attempted fraud, breach of contract, and tortious interference with contracts." Filing No. 23-3, Spencer Aff. at 1.

In response to the defendants' showing, the plaintiffs argue that they have shown that the potential conditional collective class members (sometimes referred as "potential opt-ins") are similarly situated and argue that conditional class certification isappropriate regardless of any arbitration agreement. Filing No. 28, plaintiffs' Reply Brief at 3-8. They contend that the arbitration provisions "are riddled with procedural and substantive unconscionability" and state that the defendants have waived their right to rely on the arbitration provisions by bringing claims against several of the opt-ins in court. Id. at 2-3. Also, the plaintiffs incorporate by reference the arguments and evidence they present in response to the defendants' motions to dismiss, wherein the defendants also rely on the arbitration clauses.³ Id. at 2, 9.

In a declaration in the record, plaintiff Grove states that she and the other dancers were presented with an independent contractor agreement immediately before their shifts, were offered no opportunity to negotiate, and were not provided a copy of the contract. Filing No. 32-2, Declaration of Andrea Grove.

II. LAW

Section 216(b) of the FLSA allows named plaintiffs to sue "for and in behalf of . . . 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." Id. The sole consequence of conditional certification under § 216 is the sending of court-approved written notice to employees who in turn become parties to a collective action only by filing written consent with the court. Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036, 1043 (2016) (assuming, without deciding, that the thatthe standard for certifying a collective action under the FLSA is no more stringent than the standard for certifying a class under the Federal Rules of Civil Procedure).⁴ The court overseeing the action has discretion to authorize the sending of notice to potential plaintiffs, informing them of the opportunity to opt in. Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170-71 (1989); see also Bigger v. Facebook, Inc., 947 F.3d 1043, 1046-47 (7th Cir. 2020). In the notice, the court must respect judicial neutrality and avoid even the appearance of endorsing the action's merits. Hoffman-La Roche, 493 U.S. at 174.

"The plaintiff bears the burden of establishing he or she is similarly situated to other members of the proposed class." Haworth v. New Prime, Inc., 448 F. Supp. 3d 1060, 1066 (W.D. Mo. 2020) (quoting Taylor v. Bear Commc'ns, LLC, No. 4:12-CV-01261-BCW, 2013 WL 3270971, at *2 (W.D. Mo. June 27, 2013) (citation omitted)).

"Plaintiffs may be similarly situated when 'they suffer from a single, FLSA-violating policy, and when proof of that policy or of conduct in conformity with that policy proves a violation as to all the plaintiffs.'" Bouaphakeo v. Tyson Foods, Inc., 765 F.3d 791, 796 (8th Cir. 2014)("Bouhaphakeo I"), aff'd, 136 S. Ct. 1036 (2016) (quoting Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1103 (10th Cir. 2001)); see also Campbell v. City of Los Angeles, 903 F.3d 1090, 1117 (9th Cir. 2018) ("Party plaintiffs are similarly situated, and may proceed in a collective, to the extent they share a similar issue of law or fact material to the disposition of their FLSA claims."). To determine whether a class is similarly situated, "[a] court may consider '(1) disparate factual andemployment 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.'" Bouhaphakeo I, 765 F.3d at 796 (quoting Thiessen, 267 F.3d at 1103).

Although the Eighth Circuit has not articulated a standard for conditionally certifying FLSA classes, the majority of the district courts in the Eighth Circuit use the two-step analysis set out in Mooney v. Aramco Services Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003). See Haworth, 448 F. Supp. 3d at 1066; Kautsch v. Premier Commc'ns, 504 F. Supp. 2d 685, 688-89 (W.D. Mo. 2007) (collecting cases). "First, plaintiff moves for conditional certification at an early stage in the litigation, wherein a class is certified for notice purposes. Then, at the second step, defendants are allowed the opportunity to move for de-certification at the close of discovery." Davis v. NovaStar Mortg., Inc., 408 F. Supp. 2d 811, 815 (W.D. Mo. 2005).

The plaintiff's motion for certification is typically filed at an early stage of the litigation thus requiring a lenient evaluation standard and typically resulting in conditional certification of a representative class. Mooney, 54 F.3d at 1213-14; see also Grayson v. K Mart, 79 F.3d 1086, 1096 (11th Cir. 1996) (noting that the "similarly situated" standard is considerably less stringent than Rule 23(b)(3) class action standards); Del Toro v. Centene Mgmt. Co., LLC, No. 4:19-CV-02635-JAR, 2020 WL 2085650, at *2 (E.D. Mo. Apr. 30, 2020) (stating that at the first stage, conditional certification, courts typically apply a lenient standard...