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Arceneaux v. Fitness Connection Option Holdings, LLC

United States District Court, S.D. Texas, Houston Division

November 28, 2017

WESLEY ARCENEAUX, et. al., Plaintiffs,
v.
FITNESS CONNECTION OPTION HOLDINGS, LLC, et. al., Defendants.

          MEMORANDUM AND ORDER

          NANCY F. ATLAS, SENIOR UNITED STATES DISTRICT JUDGE.

         This Fair Labor Standards Act (“FLSA”) case is before the Court on the Motion for Conditional Certification of a Collective Action and Authorization for Class Notice (“Motion”) [Doc. # 38] filed by Plaintiffs Wesley Arceneaux, Jr., Samuel Barnhardt, Adam Bellinger, Jose Benitez, Ramiro Berrones, Ethan Callahan, Damon Hodge, Willis Holman, Dwayne Jones, Herman McCord, Ike Miller, Randy Reyna, LaDerrick Stills, Sunshine Thornton, William Valk, Candace Weaver and John Yarbrough. Defendants Titan Fitness, LLC, Titan Fitness Texas, LLC, Titan Fitness NC-Charlotte, LLC, and Titan Fitness North Carolina (collectively, “Titan” or “Defendants”) filed a Response [Doc. # 42], and Plaintiffs filed a Reply [Doc. # 48]. Having carefully reviewed the record and the applicable legal authorities, the Court concludes that the pending Motion should be denied without prejudice.[1]

         I. BACKGROUND

         Defendants own and operate fitness clubs in Texas, North Carolina and Nevada under the name “Fitness Connection.” Each of the Plaintiffs is or was employed by one of the Defendants in either Texas or North Carolina. All Plaintiffs allege that they regularly worked in excess of forty hours a week throughout the course of their employment with Defendants. Collectively, the Plaintiffs have held numerous different positions as Defendants' employees.[2]

         The gravamen of Plaintiffs' Motion is that Defendants have violated the FLSA in two ways. First, Defendants have allegedly misclassified employees with certain “managerial” titles as being exempt from the FLSA's overtime compensation requirements, and as a result, Defendants have improperly denied those misclassified individuals overtime pay. More specifically, Plaintiffs contend that, notwithstanding their titles as “managers” while employed by Defendants, they spent the majority of their time engaged in sales activities that are not considered “exempt” under the FLSA. Plaintiffs reason that they are therefore entitled to overtime compensation for their work in excess of forty hours a week.[3]

         To address Defendants' alleged misclassification of these individuals, Plaintiffs seek conditional certification of the following class:

All person(s) who were/are employed by [Defendants], during the applicable period (Plaintiff[s] contend[ ] three years from the date the original complaint was filed: 11-18-2013 to present), as Operations Manager, General Manager, Assistant General Manager, General Sales Manager, Membership Manager, District Fitness Manager, Fitness Manager and Assistant Fitness Manager who were declared exempt from FLSA overtime compensation requirements.

Motion [Doc. # 38], at ECF 8 (the “Manager Class”).

         Second, Plaintiffs contend that Defendants skirted their obligations under the FLSA by requiring certain employees who are classified as non-exempt to work “off the clock, ” specifically, requiring them to perform duties before they clocked in or to continue to work after they clocked out, without overtime pay. To address Defendants' alleged policy of requiring “off the clock” work, Plaintiffs also seek conditional certification of the following class:

All person(s) who were/are employed by [Defendants], during the applicable period (Plaintiff[s] contend[ ] three years from the date the original complaint was filed: 11-18-2013 to present), as Fitness Consultants and Private Trainers who were declared non-exempt from FLSA overtime compensation requirements but were required to work in excess of 40 hours per week and not paid time and a half for all work performed in excess of 40 hours (“off the clock violation”).

Motion [Doc. # 38], at ECF 8 (the “Non-Exempt Class” and, together with the Manager Class, the “Proposed Classes”).

         Plaintiffs, in support of their Motion, rely on evidence, such as their own sworn declarations, [4] documents produced by Defendants, [5] and deposition testimony.[6] The Motion has been fully briefed and is now ripe for decision.

         II. APPLICABLE LEGAL STANDARDS

         A. FLSA Obligations

         The FLSA provides that “no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed.” 29 U.S.C. § 207(a)(1). An employee may sue his employer under the FLSA on “behalf of himself . . . and other employees similarly situated.” 29 U.S.C. § 216(b). Similarly situated employees can “opt-in” to a lawsuit under § 207(a) to benefit from a judgment.

         B. Standard for Conditional Certification

         When considering whether to certify a lawsuit under the FLSA as a collective action, courts in this federal district generally use a “two-stage approach.” See Austin v. Onward, LLC, 161 F.Supp.3d 457, 461 (S.D. Tex. 2015); see also Caballero v. Kelly Servs., Inc., Civil Action No. H-14-1828, 2015 WL 12732863, *3 (S.D. Tex. Oct. 5, 2015); Diaz v. Applied Machinery Corp., Civil Action No. H-15-1282, H-15-2674, 2016 WL 3568087, *4 (S.D. Tex. June 24, 2016); Walker v. Honghua Am., LLC, 870 F.Supp.2d 462, 465 (S.D. Tex. 2012). At the first stage, the Court decides whether to conditionally certify a class into which individuals may opt if they seek to benefit and be bound by the outcome of the case. At this stage, in essence, the Court is deciding whether to issue notice to potential class members. See Walker, 870 F.Supp.2d at 465. The second stage occurs when discovery is largely complete. If it chooses, the defendant may move to “decertify” the conditionally certified class. See Id. at 466. “Neither stage of certification is an opportunity for the court to assess the merits of the claim by deciding factual disputes or making credibility determinations.” McKnight v. D. Houston, Inc., 756 F.Supp.2d 794, 802 (S.D. Tex. 2010).

         At the notice stage, the Court's decision is generally based on the pleadings, affidavits, and other limited evidence. Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 (5th Cir. 1995), overruled on other grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003); Walker, 870 F.Supp.2d at 465. At this stage, the plaintiff is required to show that “(1) there is a reasonable basis for crediting the assertions that aggrieved individuals exist, (2) that those aggrieved individuals are similarly situated to the plaintiff in relevant respects given the claims and defenses asserted, and (3) that those individuals want to opt-in to the lawsuit.” Walker, 870 F.Supp.2d at 465-66; see also Andel v. Patterson-UTI Drilling Co., LLC, 280 F.R.D. 287, 289 (S.D. Tex. 2012). “Although collective actions under the FLSA are generally favored, the named plaintiff(s) must present some factual support for the existence of a class-wide policy or practice.” Carey v. 24 Hour Fitness USA, Inc., 2012 WL 4857562, at *1 (S.D. Tex. Oct. 11, 2012) (citing Walker, 870 F.Supp.2d at 466). Conclusory allegations that other employees are similarly situated are insufficient to justify conditional certification. Rodriguez v. Flower Foods, Inc., Civil Action No. 4:16-CV-245, 2016 WL 7210943, at *2 (S.D. Tex. Dec. 13, 2016).

         To be “similarly situated, ” there must be “substantial allegations that potential members ‘were together the victims of a single decision, policy, or plan.'” McKnight, 756 F.Supp.2d at 801 (quoting Mooney, 54 F.3d at 1213). Certification should be denied “‘if the action arises from circumstances purely personal to the plaintiff, and not from any generally applicable rule, policy, or practice.'” Id. (quoting England v. New Century Fin. Corp., 370 F.Supp.2d 504, 507 (M.D. La. 2005)). Where minimal evidence is advanced at the notice stage, the conditional class determination “is made using a fairly lenient standard, and typically results in ‘conditional certification' of a representative class” that provides potential class members with notice and the opportunity to opt in. See Id. (quoting Mooney, 54 F.3d at 1214 n.8); see also Walker, 870 F.Supp.2d at 465.

         Where the parties have conducted substantial discovery in connection with class certification, however, some courts have applied a more exacting level of scrutiny rather than the lenient one typically associated with the notice stage. See, e.g., Hardemon, 2011 WL 3704746, at *2 (“The voluminous discovery that the [p]arties have already conducted in connection with class certification in this matter . . . merits a heightened level of scrutiny . . .”); Basco v. Wal-Mart Stores, Inc., No. CIV.A. 00-3184, 2004 WL 1497709, at *4 (E.D. La. July 2, 2004) (“[I]n light of the substantial discovery that has occurred in this matter, the Court will consider the criteria for both the first and second steps in deciding whether it should certify this matter.”). These courts have made factual determinations to determine whether the claimants are similarly situated based on the totality of the circumstances. See Hardemon, 2011 WL 3704746, at *3 (citations omitted). Because the parties here have conducted some discovery on the conditional certification issues, this Court has considered applying a more exacting standard, rather than the “lenient” one advocated by Plaintiffs. Nevertheless, the Court does not use a heightened burden; the Court evaluates the parties' evidence and argument under the lenient standard typically applied in this circuit.

         III. ANALYSIS

         Plaintiffs contend that the Court should conditionally certify both the Manager Class and the Non-Exempt Class. The Court will consider the requirements for conditional certification ...


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