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Britt v. Mississippi Farm Bureau Casualty Insurance Co.

United States District Court, N.D. Mississippi, Aberdeen Division

February 26, 2019

MEGAN BRITT, et al PLAINTIFFS
v.
MISSISSIPPI FARM BUREAU CASUALTY INSURANCE COMPANY, et al DEFENDANTS

          MEMORANDUM OPINION

         The Court has before it Plaintiffs' motion to certify a collective action under the Fair Labor Standards Act, Doc, 63, and Defendants' motion to modify the proposed notice and notice plan, Doc. 79. Having considered the matter, the Court finds that the motion to certify class should be granted in part, and the motion to strike should be granted in part and denied in part.

         Plaintiffs are current and former insurance agents who sold insurance policies for Defendants. Plaintiffs contend that despite being nominally considered independent contractors, Defendants exerted a level of control over them to make them employees, that they worked in excess of 40 hours a week, and that Defendants did not pay them overtime.

         Plaintiffs seek to certify a collective action pursuant to 29 U.S.C. § 216(b), and ask this Court to order Defendants to provide Plaintiffs with the contact information of potential class members. Further, Plaintiffs ask the Court to authorize them to provide the proposed notice and reminder notice attached to their motion to potential class members.

         Defendants object to certification of the putative class. Additionally, Defendants object to the proposed notice and notice plan submitted by the Plaintiffs.

         Section 216(b) Certification Standard

         The Fair Labor Standards Act (FLSA) requires that employers pay employees who work more than 40 hours a week with overtime pay on those excess hours, unless the statute exempts those employees. 29 U.S.C § 207(a). Section 216(b) of the Act provides that an employee not paid such wages may bring an action for himself and any "other employees similarly situated" who join the action by providing written consent. Id. § 216(b).

         Courts within this circuit utilize the Lusardi approach to determine certification under FLSA. See Johnson v. Big Lots Stores, Inc., No. CIV.A.04-3201, 2007 WL 5200224, at *3 (E.D. La. Aug. 21, 2007) (collecting cases); Brown v. United Furniture Indus., Inc., No. 1:13-CV-00246-SA-DAS, 2015 WL 1457265, at *6 (N.D. Miss. Mar. 30, 2015). Although Defendants urge this Court to apply a Rule 23-style analysis, that other district courts have used, see Shushan v. Univ. of Colo, at Boulder, 132 F.R.D. 263 (D. Colo. 1990), the Supreme Court has noted that that "Rule 23 actions are fundamentally different from collective actions under the FLSA." Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 74, 133 S.Ct. 1523, 1529, 185 L.Ed.2d 636 (2013). The Fifth Circuit has specifically declined to endorse one approach as correct, Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1216 (5th Cir. 1995) overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003), but in light of the Supreme Court's statement, as well as the uniform use of the Lusardi approach amongst district courts in this circuit, the Court finds the Lusardi approach correct in this instance. Johnson, 2007 WL 5200224, at *3 ("Since Mooney district courts in the Fifth Circuit have uniformly used [the Lusardi approach] to determine whether a collective action should be certified under the FLSA.")

         The Lusardi approach proceeds in two stages: the "notice stage" and the "decertification stage." Dyson v. Stuart Petroleum Testers, Inc., 308 F.R.D. 510, 512 (W.D. Tex. 2015) (citing Mooney, 54 F.3d at 1216). In the notice stage, the court "determines whether the putative class members' claims are sufficiently similar to merit sending notice of the action to possible members of the class." Acevedo v. Alsup's Convenience Stores, Inc., 600 F.3d 516, 519 (5th Cir. 2010). Because this stage "typically occurs early in the litigation[, ] the Court's review is usually based on the pleadings and any attached affidavits[, ] and 'the determination is made using [a] fairly lenient standard." Brown, 2015 WL 1457265, at *4 (quoting Mooney, 54 F.3d at 1214). "If the court finds that the putative class members are similarly situated, then conditional certification is warranted and the plaintiff will be given the opportunity to send notice to potential class members," and discovery is then conducted. Dyson, 308 F.R.D. at 512. After discovery, the defendant may move for decertification, "at which time the Court conducts a more factually intensive inquiry into the similarly situated question to determine whether the suit may proceed as an FLSA collective action. Brown, 2015 WL 1457265, at *4 (citing White v. NTC Trnasp., Inc., 2013 WL 5874566, at * 1-2 (N.D. Miss. Oct. 31, 2013)). This case has not yet proceeded to discovery, and so the Court conducts the notice stage inquiry.

         Conditional certification is appropriate where there are "substantial allegations that the putative class members were together victims of a single decision, policy, or plan . . . ." Mooney, 54 F.3d at 1214 n.8 (internal quotations omitted). "[T]his determination is made using a fairly lenient standard, and typically results in 'conditional certification' of a representative class." Id. The question is whether "based on the pleadings and attached affidavits, Plaintiffs have made a preliminary showing that the proposed class members are similarly situated" Brown, 2015 WL 1457264, at *6 (citing Mooney, 54 F.3d at 1214) (emphasis in Brown). "Relevant factors to guide the Court are 'whether potential plaintiffs were identified, whether affidavits of potential plaintiffs were submitted, and whether evidence of a widespread plan was submitted.'" White, 2013 WL 5874566, at *1 (N.D. Miss. Oct. 31, 2013) (quoting Songer v. Dillon Resources, Inc., 569 F.Supp.2d 703, 707 (N.D. Tex. 2008)).

         Analysis

         1. Certification of Putative Class

         Plaintiffs initially defined the putative class as follows:

All individuals who, through a contract or agreement with Mississippi Farm Bureau Casualty Insurance Company, Southern Farm Bureau Life Insurance Company and/or Southern Farm Bureau Casualty Insurance Company, perform or performed as insurance agents for and who were classified on paper by Mississippi Farm Bureau Casualty Insurance Company, Southern Farm Bureau Life Insurance Company and/or Southern Farm Bureau Casualty Insurance Company as "independent contractors" anywhere in the State of Mississippi at any time from the date that is three years preceding the commencement of this action through the close of the Court-determined opt-in period and who file a consent to join in this action pursuant to 29 U.S.C. § 216(b);

         Through briefing, Plaintiffs voluntarily refined the class definition to be:

All individuals who, through a contract or agreement with Mississippi Farm Bureau Casualty Insurance Company, Southern Farm Bureau Life Insurance Company and/or Southern Farm Bureau Casualty Insurance Company, perform or performed as insurance agents for each of them or any of them anywhere in the State of Mississippi and who were classified on paper by each of them or any of them as "independent contractors" and who work or worked in excess of forty (40) hours during any work-week at any time from the date that is three years preceding the commencement of this action through the close of the Court-determined opt-in period and who file a consent to join in this action pursuant to 29 U.S.C. § 216(b).

         Defendants oppose certification on the grounds that members of this putative class would not be similarly situated. But under the lenient notice-stage standard, Plaintiffs have made the preliminary showing necessary for conditional certification. The complaint contains numerous allegations of policies showing an employment relationship between Defendants and its agents. In addition to their own affidavits, the named Plaintiffs have provided an additional four affidavits from other agents, asserting that they were treated as employees and worked overtime hours without pay. See Affidavits, Docs. 63-1 through 63-12.

         Defendants assert that the Court should disregard Plaintiffs' affidavits because they are largely identical. Courts in this district have previously discounted that argument, noting the low burden on plaintiffs at the notice stage. See Burke v. Mgmt. & Training Corp., No. 3:16-CV-00152-NBB, 2017 WL 3166840, at *3 (N.D. Miss. July 25, 2017) ("To be sure, if the court required more proof at this stage, it would be overlooking the purpose behind the two-stage inquiry.") (internal quotations omitted).

         The Defendants attach their own affidavits to assert that the Plaintiffs are not similarly situated. In each, the affiants contradict Plaintiffs' factual assertions that Defendants controlled them to the extent to render them "employees" rather than "independent contractors. See Affidavits, Doc. 76-1 through Doc. 76-10. But, "it is not the Court's function to resolve these factual disputes at notice stage," even if the plaintiffs allegations are "substantially contradicted by Defendants' own affidavits." Brown, 2015 WL 1457265, at *6 n.5.

         Defendants further argue that each potential class member's employment status, and any applicable defenses, must be analyzed individually, meaning that the putative class members are not similarly situated. Although Defendants cite several cases on this point, none are persuasive. In one, the court noted that plaintiffs were making dissimilar claims. See Harris v. FFE Tramp. Servs., Inc., 2006 WL 1994586, at *4 (N.D. Tex. May 15, 2006) (some plaintiffs asserted that they were misclassified as exempt, and other asserted that defendants did not pay them for hours actually worked). In another case, the court was considering a decertification motion, with its attendant higher standards. See Lipnicki v. Meritage Homes Corp., No. 3:10-CV-605, 2014 WL 5620603, at *2 (S.D. Tex. Nov. 4, 2014). Still, in three more, the parties had conducted a large amount of pre-certification discovery, and so the court proceeded directly to the second-stage analysis. Odem v. Centex Homes, No. CIV.A.3:08CV1196-L, 2010 WL 424216, at *3 (N.D. Tex. Feb. 4, 2010) ("At this stage, the court generally has much more information upon which to base its decision than it has at the notice stage, and as a result, employs a stricter standard"); Blake v. Hewlett-Packard Co., No. 4:11-CV-592, 2013 WL 3753965, at *5 (S.D. Tex. July 11, 2013) ("In other words, because Plaintiffs have been allowed the opportunity to gather more than just 'minimal evidence,' they are required to support their motion with more than minimal evidence. Pfohl v. Farmers Ins. Grp., No. CV03-3080 DT (RCX), 2004 WL 554834, at *3 (CD. Cal. Mar. 1, 2004) ("In this case, the parties do not dispute that discovery has been undertaken relating to the issues of certification of this action as a collective action. As such, the Court can proceed to the second determination discussed above and weigh relevant factors to determine whether the plaintiffs are similarly situated.")

         Here, the Plaintiffs each make an identical claim: That although Defendants called all of its agents "independent contractors," Defendants maintained practices concerning its management of its agent force that effectively treated them like "employees," that they all worked in excess of 40 hours a week, and that Defendants did not pay them overtime. "[Allegations alone are sufficient to satisfy the fairly lenient conditional certification standard." Martinez v. Tri-State Enterprises LLC, No. 3:16-CV-00032-MPM, 2016 WL 8808666, at *3 (N.D. Miss. Oct. 13, 2016). The Plaintiffs allege that Defendants treated all of its contracted insurance agents similarly. That is sufficient for conditional certification. See White v. NTC Transp., Inc., 2013 WL 5874566, at *4 (denying motion to decertify class even under the rigorous decertification standard because "[t]hough the effect of Defendants' alleged policies may have differed with regard to individual Plaintiffs, the policies themselves did not vary.").

         Finally, Defendants oppose the proposed class definition on the grounds that it does not limit the definitions to agents who worked more than 40 hours a week or to agents who considered themselves to be employees. With respect to the first objection, Plaintiffs agreed to modify the class definition as stated above to include a limitation to those agents who worked more than 40 hours a week.

         With respect to the second objection, however, Defendants have not shown that limiting the class definition to only agents who subjectively considered themselves employees is appropriate. It is not the "label" that each party attaches to relationship that is determinative. Rutherford Food Corp. v. McComb, 331 U.S. 722, 729, 67 S.Ct. 1473, 1476, 91 L.Ed. 1772 (1947). Instead, employment status is determined by the "economic reality" of the relationship between the two. Watson v. Graves, 909 F.2d 1549, 1553 (5th Cir. 1990). In other words, even if an agent believed themselves to be an independent contractor, Defendants would still be liable for any FLS A violations if the facts establish the agent was actually an employee.

         Finally, the Defendants argue that the relevant period is not the three years prior to filing suit but the three years ...


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