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Freeman v. Progress Residential Property Manager, LLC

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

April 3, 2018

KRISTAL FREEMAN, individually and on behalf of all others similarly situated, Plaintiff,



         Pending before this Court is Plaintiffs' Motion for FLSA Conditional Certification and Class Notice under 29 U.S.C. § 216(b) ("Motion"). Dkt. 50. The Motion has been referred to this Court. Dkt. 58. This Court has authority to enter this order pursuant to 28 U.S.C. § 636(b)(1)(A). See, e.g., Esparza v. C&J Energy Servs., Inc., No. 5:15-CV-850-DAE, 2016 WL 1737147, at *1 (W.D. Tex. May 2, 2016) (noting conditional certification involves non-dispositive issues); Wedel v. Vaughn Energy Servs., LLC, No. 2:15-CV-93, 2015 WL 5920034, at *1 (S.D. Tex. Oct. 6, 2015) (same).

         Having considered the parties' briefing, the applicable legal authorities and all matters of record, the Court GRANTS the Motion.

         I. BACKGROUND

         Progress Residential Property Manager, LLC ("Progress") is one of the largest providers of single family rental homes in the United States, with properties available across the country. Progress's corporate office is located in Scottsdale, Arizona, with regional offices serving the greater metropolitan areas of Atlanta, Charlotte, Dallas, Houston, Indianapolis, Jacksonville, Las Vegas, Memphis, Miami, Nashville, Orlando, Phoenix, Raleigh, Sarasota, and Tampa.

         Plaintiff Kristal Freeman ("Freeman") brought this lawsuit against Progress for alleged violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., on behalf of herself and similarly situated "onsite leasing agents."[1] Freeman claims that Progress required Freeman and other onsite leasing agents nationwide to work in excess of 40 hours per workweek without any overtime compensation. Two additional former Progress employees, Theresa Sands ("Sands") and Nature Carney-Francis ("Carney-Francis"), have filed Notices of Consent, opting-into the case. Plaintiffs seek conditional certification of all of Progress's current and former onsite leasing agents so that they can provide nationwide notice of this lawsuit.

         In support of their Motion, Plaintiffs have submitted declarations stating that they worked for Progress as onsite leasing agents in either the Greater Houston and/or Dallas areas. Freeman says she worked for Progress from June 2016 through October 2016; Sands claims she worked for Progress from November 2015 through November 2016; and Carney-Francis contends she worked for Progress from November 2014 to July 2016. Progress acknowledges that Freeman, Sands and Carney-Francis all worked as onsite leasing agents, but disputes the exact dates Carney-Francis worked for the company.

         The one thing the parties agree on is that the primary function of an onsite leasing agent is to sell leases for single family homes. Other than that, the parties fundamentally disagree about the role of onsite leasing agents. Plaintiffs contend that onsite leasing agents were required to perform a great deal of paperwork each day and spend several hours each day on the telephone. Plaintiffs further claim that all onsite leasing agents routinely worked in excess of 40 hours per week, including working through lunch, before and after regular business hours and on weekends. According to Plaintiffs, all onsite leasing agents were paid on a salary plus commission basis with no overtime pay, with Progress misclassifying onsite leasing agents as exempt under the FLSA. Importantly, Plaintiffs contend that onsite leasing agents at Progress performed the same or similar job duties at all of Progress's locations.

         Progress, on the other hand, claims that the onsite leasing agent position has changed considerably over time, with onsite leasing agents today spending much more time tracking performance and managing sales with mobile systems than those onsite leasing agents employed prior to 2017. Progress notes that the company moved from paper applications to online applications in late 2015, meaning that onsite leasing agents today spend much less time on paperwork than their colleagues did a few years ago. Progress also argues that the assignment of homes has changed over time within the Houston market, resulting in onsite leasing agents today spending less time in the homes to make sales than their counterparts from a few years ago. Finally, Progress contends that, starting in 2017, the company rolled out its "Let Yourself In" option by which prospects can register online and gain access to a rental property without being accompanied by an onsite leasing agent. According to Progress, this means that the job functions of onsite leasing agents today varies considerably from the job functions of onsite leasing agents a few years ago when onsite leasing agents spent a significant amount of time showing rental properties.


         The FLSA provides that an employee may file a lawsuit for unpaid overtime wages on behalf of herself as well as other similarly situated employees who opt-in to the suit. 29 U.S.C. § 216(b). Actions pursued in such a representative capacity are referred to as "collective actions." Notice to potential plaintiffs does not issue unless a court conditionally certifies the case as a collective action. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170-71 (1989). Whether to certify a suit as a collective action under the FLSA is a decision committed to the discretion of the court. Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213 (5th Cir. 1995).

         "Courts use two methods to decide whether to authorize notice to similarly situated employees advising them of their opt-in rights: the two-step Lusardi approach and the Rule 23 class-action-based Shushan approach." Austin v. Onward, LLC, 161 F.Supp.3d 457, 461 (S.D. Tex. 2015) (citing Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987); Shushan v. Univ. of Colo, at Boulder, 132 F.R.D. 263 (D. Colo. 1990)). Although the Fifth Circuit has declined to specifically adopt either test to determine when a court should certify a collective action or grant notice in a FLSA action, both the United States Supreme Court and the Fifth Circuit have made statements implying that a Rule 23-type analysis is incompatible with FLSA collective actions. See Genesis Healthcare Corp. v. Symczyk, 569 U.S. 66, 74 (2013) ("Rule 23 actions are fundamentally different from collective actions under the FLSA"); Donovan v. Univ. of Tex. at El Paso, 643 F.2d 1201, 1206 (5th Cir. 1981) ("The FLSA procedure, in effect, constitutes a congressionally developed alternative to the [Rule 23] procedures").

         Importantly, most federal courts in this District have adopted the Lusardi test. See e.g., Ridley v. Regency Vill, Inc., No. H-17-974, 2018 WL 1334813, at *5-6 (S.D. Tex. Mar. 15, 2018) (Miller, J.); Williams v. Guardian Living Servs., Inc., No. 4.T7-CV-1901, 2018 WL 1251927, at *l-2 (S.D. Tex. Mar. 12, 2018) (Ellison, J.); Harlow v. Legend Energy Servs., LLC, No. 4:16-CV-02324, 2017 WL 4856775, at *1 (S.D. Tex. Oct. 26, 2017) (Harmon, J.); Hernandez v. Robert Dering Constr., LLC, 191 F.Supp.3d 675, 679-80 (S.D. Tex. 2016) (Hanks, J.); Heeg v. Adams Harris, Inc., 907 F.Supp.2d 856, 860-61 (S.D. Tex. 2012) (Rosenthal, J.). This Court will, therefore, apply the two-step Lusardi test.

         The two stages of the Lusardi test are the "notice stage" and the "decertification stage." See Mooney, 54 F.3d at 1213-14. At the notice stage, the court determines whether to grant conditional certification and issue notice to potential members of the putative collective class. Id. In other words, the Court conducts an initial inquiry into "whether the putative class members' claims are sufficiently similar to merit sending notice of the action to possible members of the class." Acevedo v. Allsup's Convenience Stores, Inc.,600 F.3d 516, 519 (5th Cir. 2010) (citation omitted). Courts usually base this decision upon "the pleadings and any affidavits [that] have been submitted ...." Mooney, 54 F.3d at 1214. Because of the limited evidence available at this stage, "this determination is made using a fairly lenient standard, and typically results in 'conditional certification' of a representative class." Id. In fact, courts "appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan." Id. at 1214 n.8 (quoting Sperling v. Hoffmann-La ...

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