By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown
Duane Morris Takeaways: On September 27, 2023, District Court Judge Charles E. Fleming in Woods et al. v. First Transit, Inc., et al., 21-cv-739 (N.D. Ohio Sept. 27, 2023) denied plaintiffs’ motion for court-authorized notice of bus drivers’ claims of alleged unpaid overtime wages under the Fair Labor Standards Act (FLSA). The district court applied the Sixth Circuit’s newly-minted standard to conclude the plaintiffs failed to demonstrate a “strong likelihood” exists that they are similarly situated in relevant respects to other employees of the defendant transportation company. The court’s rejection of the plaintiffs’ “self-serving declarations” and consideration of the defendants’ competing evidence illustrates how the Sixth Circuit’s new standard is a game changer for FLSA litigants in Ohio, Michigan, Tennessee and Kentucky.
Case Background
On April 6, 2021, three named plaintiffs filed a class and collective action lawsuit asserting claims of unpaid overtime in violation of the FLSA and Ohio, California and New York state laws. The plaintiffs alleged that the defendant failed to pay overtime wages to fixed-route bus drivers for work performed before and after their shifts. The plaintiffs also alleged the defendant deducted 30 minutes’ worth of time from their pay for unpaid meal breaks even when they did not receive uninterrupted break time. After the district granted the defendant’s partial motion to dismiss the New York and California state law claims, only the Ohio state law claims survived. Additionally, only two named plaintiffs remained after one of the named plaintiff s was shown never to have worked as a fixed-route bus driver.
Two individuals filed consents to join the lawsuit as opt-in plaintiffs in October 2021 and a third joined the lawsuit in February 2022.
After approximately six months of fact discovery solely on the issue of conditional certification, the named plaintiffs moved for conditional certification of their claims under the FLSA on June 29, 2022. If granted, the plaintiffs would have authority to issue notice to a collective including any person who drove a fixed bus route for the defendant in any week during the prior three years.
In support of their motion, the plaintiffs submitted sworn declarations of the two named plaintiffs and three putative opt-in plaintiffs, job descriptions, an employee handbook and a user guide for time entry. In opposition to the motion, the defendant submitted sworn declarations of managers at the locations at which the named or opt-in plaintiffs had worked, declarations of corporate human resources and payroll staff and collective bargaining agreements governing fixed-route bus drivers at various locations.
After the parties fully briefed the motion, the district court deferred ruling on the motion until the Sixth Circuit Court of Appeals issued its anticipated decision on the standard for conditional certification in FLSA cases.
On May 19, 2023, the Sixth Circuit in Clark v. A&L Homecare and Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023), announced a new standard for determining whether FLSA plaintiffs may issue court-sanctioned notice to other employees. Rejecting the prior standard in which a plaintiff need only make a “modest factual showing” to win court-authorized notice, the Sixth Circuit held that plaintiffs must put forth sufficient evidence to demonstrate a “strong likelihood” exists that they are similarly situated to other employees. Factors relevant to the analysis include whether the potential other plaintiffs performed the same tasks and were subject to the same timekeeping and pay policies as the named plaintiffs. After Clark, the parties submitted supplemental briefs arguing how the new standard applied to the plaintiffs’ pending motion.
The Court’s Decision
Upon weighing the parties’ competing evidence, the district court answered “no” to the question whether a strong likelihood exists that the named plaintiffs experienced the same policies of unpaid overtime wages as other employees of the defendant.
The district court concluded that the plaintiffs did not introduce any evidence of a “company-wide policy” binding on all fixed-route bus drivers that potentially violates the FLSA. The court stated that the only evidence of the alleged unlawful overtime pay practices came in the form of “self-serving declarations” of doubtful credibility. For example, an opt-in plaintiff declared that she worked as a fixed-route bus driver until December 2020. However, the manager who oversaw the opt-in plaintiff’s location declared that no driver at that location drove a fixed bus route. The court reasoned no “strong likelihood” exists that the opt-in plaintiff is similarly situated to the named plaintiffs given that the opt-in plaintiff could not be in the proposed collective of fixed-route bus drivers.
The court also considered the evidence of written policies regarding meal breaks, or the lack thereof, for fixed-route bus drivers. Contrary to the plaintiffs’ allegation of company-wide automatic pay deductions for meal break time, the manager of the location at which one of the named plaintiffs had worked declared that drivers at that location did not even receive meal breaks.
The collective bargaining agreements in evidence showed that different locations of work had different policies governing time entry and breaks for fixed-route bus drivers. For example, a collective bargaining agreement for one location stated that the defendant paid drivers for 15 minutes of time prior to their route to perform pre-shift work. A collective bargaining agreement for another location said the defendant paid drivers 20 minutes for pre-shift work.
In sum, the court reasoned that the evidence revealed dissimilarity in policies and practices concerning compensation for the company’s fixed-route bus drivers. Because the evidence showed employees were subject to different policies concerning key issues such as how they report time, how schedules are set, what period of time is compensable, whether they receive a meal break and how meal breaks are paid, the court concluded the plaintiffs did not satisfy the “strong likelihood” standard announced in Clark to obtain court-authorized notice of their FLSA claims.
Implications For Employers
The district court’s ruling in Woods leaves no doubt that FLSA plaintiffs in the Sixth Circuit face a heightened evidentiary burden to obtain court-authorized notice in the wake of the Sixth Circuit’s new standard in Clark. The district court clarified that the “strong likelihood” standard in Clark is an evidentiary standard, not a pleading standard. The court’s analysis in Woods shows defendants have a genuine opportunity to present evidence to attack the plaintiffs’ efforts to show a common policy of FLSA-violating conduct and thereby block notice to other employees who may expand the scope of the lawsuit exponentially. Employers with operations in the Sixth Circuit ought to use Clark as an opportunity to look anew at their wage and hour policies and practices to guard against the risk of costly and time-consuming FLSA litigation.