{"id":1096,"date":"2024-01-15T17:21:26","date_gmt":"2024-01-15T21:21:26","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/classactiondefense\/?p=1096"},"modified":"2024-01-16T11:48:18","modified_gmt":"2024-01-16T15:48:18","slug":"michigan-federal-court-sets-scope-of-discovery-relevant-for-flsa-certification-motions-in-the-sixth-circ","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/classactiondefense\/2024\/01\/15\/michigan-federal-court-sets-scope-of-discovery-relevant-for-flsa-certification-motions-in-the-sixth-circ\/","title":{"rendered":"Michigan Federal Court Sets Scope Of Discovery Relevant For FLSA Certification Motions In The Sixth Circuit"},"content":{"rendered":"

\"\"<\/a>By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown<\/strong><\/p>\n

Duane Morris Takeaways: In Stewart v. Epitec, Inc., No. 2:22-CV-12857 (E.D. Mich. Jan. 9, 2024), Judge Stephen J. Murphy of the U.S. District Court for the Eastern District of Michigan ordered<\/a> the parties in an FLSA misclassification lawsuit to commence discovery under the Sixth Circuit\u2019s standard for determining notice to potential plaintiffs announced in Clark v. A&L Homecare and Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023).\u00a0 As one of the first FLSA discovery rulings under the new Clark standard, the decision is required reading for companies defending wage & hour claims in courts within the Sixth Circuit.<\/em><\/p>\n

Case Background<\/strong><\/p>\n

On November 23, 2022, the plaintiff in Stewart <\/em>filed a Complaint against his former employer, Epitec, Inc., alleging willful violations of the FLSA on behalf of over 100 similarly situated individuals who worked as recruiters for the company. The plaintiff sought unpaid overtime wages for a three-year lookback period based on his key contentions that the company misclassified his position as a recruiter as exempt and that he regularly worked 45 to 50 hours per workweek, but was not paid for work beyond 40 hours in a workweek.<\/p>\n

On April 18, 2023, the plaintiff filed a motion seeking conditional certification, expedited opt-in discovery, and notice to potential opt-in plaintiffs.\u00a0 Before the company had the opportunity to oppose the motion, the Court stayed the case on April 25, 2023 in anticipation of the Sixth Circuit\u2019s ruling in Clark<\/em>.<\/p>\n

On May 19, 2023, the Sixth Circuit published its decision in Clark<\/em>, announcing a new test for facilitating notice under 29 U.S.C. \u00a7 216(b) of the FLSA.\u00a0 In a watershed ruling, Clark<\/em> instructs district courts to authorize notice to potential plaintiffs only after the named plaintiff demonstrates a \u201cstrong likelihood\u201d that other similarly situated employees exist.\u00a0 Under the prior test used in the Sixth Circuit, a plaintiff could obtain court-sanctioned notice to others by making only a \u201cmodest\u201d factual showing that other employees are \u201csimilarly situated.\u201d\u00a0 Because notice to others who may join the lawsuit has the practical effect of increasing sharply the settlement pressure on the defendant, the new test shifts the leverage significantly in defendants\u2019 favor in FLSA litigation.<\/p>\n

In light of the Clark <\/em>standard, the Judge in Stewart <\/em>ordered the parties to submit a joint discovery plan.\u00a0 In supplemental briefing filed in August 2023, the parties articulated their opposing views of the type and scope of discovery that should proceed under the Clark<\/em> standard.<\/p>\n

The Court\u2019s Decision<\/strong><\/p>\n

The Judge in Stewart<\/em> ordered discovery both on the issue of similarly-situated status and on the defendant\u2019s need for information to test the merits of the named plaintiff\u2019s claims. In so ordering, the Court emphasized that \u201cbalance is key\u201d when it comes to the parties\u2019 respective, and contemporaneous, needs for discovery in a post-Clark<\/em> landscape.<\/p>\n

On the issue of whether a \u201cstrong likelihood\u201d exists that other similarly-situated employees exist, the Court ordered the plaintiff and the existing opt-in plaintiffs to produce communications among themselves regarding any of the matters at issue in the litigation, excluding any communications shielded by the attorney-client privilege or attorney work product doctrines.\u00a0 As the Sixth Circuit instructed in Clark<\/em>, whether the potential other plaintiffs are subject to individualized defenses is one of the factors district courts ought to consider in evaluating whether to sanction notice of the FLSA lawsuit. The Court agreed that the defendant was entitled to discovery of such communications because may be probative of individualized defenses that disfavor notification under Clark.<\/p>\n

The Court rejected the plaintiff\u2019s request for discovery of the list of putative collective action members The Court reasoned that the names and contact information of all recruiters within a three-year lookback period is precisely the type of information disclosure of which Clark<\/em> cautioned is tantamount to \u201csolicitation of claims\u201d before the Court authorizes notice.<\/p>\n

The Court ordered discovery for a three-year lookback period, consistent with the three-year statute of limitations for \u201cwillful\u201d violations of the FLSA, over the defendant\u2019s objection that the standard statute of limitations period of two years for FLSA claims should dictate the time frame of discovery.\u00a0 The Court explained that the parties\u2019 dispute over the existence of willful violations \u201cexemplifies the need for broader discovery.\u201d<\/p>\n

The Court permitted the company to proceed with depositions of the named plaintiff and all existing opt-in plaintiffs but rejected the company\u2019s request to depose potential opt-in plaintiffs.\u00a0 The Court reasoned that depositions of individuals who had not yet filed consents to join the lawsuit were not necessary to determine similarly-situated status under Clark<\/em>.\u00a0 The Court left for another day the defendant\u2019s request for leave to exceed the ten depositions permitted under the Federal Rules of Civil Procedure.<\/p>\n

The Court resolved the parties\u2019 dispute over the equitable tolling period in favor of the plaintiff\u2019s request for a broad interpretation of tolling to preserve the ability of would-be plaintiffs to recover on their FLSA claims.\u00a0 Noting that two of the three Sixth Circuit panel judges in Clark<\/em> endorsed broad equitable tolling in FLSA collective actions, Judge Murphy tolled the limitations period from April 25, 2023 through the resolution of the plaintiff\u2019s forthcoming motion for notice under Clark<\/em>.<\/p>\n

The Court ordered the parties to conduct discovery on the permitted topics within 90 days of the issuance of its January 9, 2024 order.\u00a0 The Court set a date 120 days from the issuance of its order for the plaintiff to file a motion for notice to potential plaintiffs.<\/p>\n

Implications For Employers<\/strong><\/p>\n

The Court\u2019s ruling in Stewart<\/em> is significant in that it is one of the first rulings to define the scope of pre-notification discovery under Clark<\/em>.\u00a0 The Court interpreted the Sixth Circuit\u2019s ruling to give both sides in the litigation the right to discovery relevant to their respective positions on notice, and the right to do so simultaneously.\u00a0 Likewise, the ruling is important in identifying topics, including contact information of putative class members, unnecessary to the notice determination under Clark and therefore, premature for discovery before notice is issued.\u00a0 The opinion in Stewart<\/em> has persuasive value to other district courts in Michigan, Ohio, Tennessee and Kentucky and may well influence the discovery landscape for litigants in the post-Clark<\/em> world.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Kathryn Brown Duane Morris Takeaways: In Stewart v. Epitec, Inc., No. 2:22-CV-12857 (E.D. Mich. Jan. 9, 2024), Judge Stephen J. Murphy of the U.S. District Court for the Eastern District of Michigan ordered the parties in an FLSA misclassification lawsuit to commence discovery under the Sixth … <\/p>\n

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