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Radford v. Pevator Companies, Ltd.

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

December 27, 2019

JAMES RADFORD, on behalf of himself and others similarly situated, Plaintiffs,


          Lee H. Rosenthal Chief United States District Judge

         The defendant, Brake Check (the trade name of Pevator Companies), asks the court to decertify a conditionally certified collective action for unpaid overtime wages under the Fair Labor Standards Act, 29 U.S.C. § 216(b). (Docket Entry No. 92). James Radford, a Brake Check Service Manager, sued on behalf of himself and other Service Managers, alleging that Brake Check improperly classified them as exempt from the Act's overtime compensation requirements. (Docket Entry No. 77). This court conditionally certified a class of current and former Service Managers who worked at Brake Check during the three years before the filing of this lawsuit. (Docket Entry Nos. 19, 32). Radford and two of the opt-in plaintiffs, DaJuan Jones and Michael Murehead, also asserted retaliation claims under the Act. (Docket Entry No. 77 at ¶¶ 7.10-7.24). After representative discovery, Brake Check moved for decertification, for sanctions against Murehead, for summary judgment, and for attorneys' fees and costs. (Docket Entry Nos. 92, 99, 104).

         Based on the pleadings, the motions, the record, and the applicable law, the court grants Brake Check's motion for decertification, dismisses the claims of the plaintiffs other than Radford without prejudice, grants Brake Check's motion for summary judgment as to Radford's claims, and denies Brake Check's motion for sanctions. The statute of limitations as to the dismissed plaintiffs' claims is tolled until February 25, 2020. Brake Check's requests for attorneys' fees and costs are denied. The reasons for these rulings are set out below.

         I. Background

         Brake Check is a chain automotive repair shop that does oil changes, brake work, and alignments. (Docket Entry No. 77 at ¶ 6.1). Brake Check locations have two operational structures. (Docket Entry No. 28-2 at 3). In the first structure, “the Store Director is the highest-level employee in charge of the store.” (Id.). The Store Director reports to a Corporate Director located at a different Brake Check location. (Id.). Service Managers report to Store Directors and the Automotive Technicians report to Service Managers. (Id.). In the second operational structure, a Corporate Director manages the store without a Store Director and Service Managers report directly to the Corporate Director. (Id.). When the Store or Corporate Director is absent, the Service Manager runs the store. (Id.).

         The plaintiffs are 45 Service Managers from Brake Check locations throughout Texas. After this court permitted discovery as to ten representative plaintiffs, Brake Check designated two individuals from locations in Austin, Corpus Christi, Houston, Missouri City, and San Antonio as the representative plaintiffs from whom it wanted discovery. (Docket Entry No. 57).[1] One representative plaintiff, Eric Sanchez, withdrew from the case. (Docket Entry No. 90).

         Discovery revealed some undisputed facts. Each Service Manager had the same job description and the same pay schedule. (Docket Entry No. 104-17 at 12-13). Service Managers performed a variety of tasks, including making general car repairs, training new team members, interacting with customers, managing inventory, and ordering new parts. Id. Service Managers also assigned tasks to Automotive Technicians;[2] ensured that the Technicians safely performed their tasks;[3] opened and closed the stores;[4] and ran the stores when Store or Corporate Directors were absent.[5] Service Managers are paid $600 per week plus a potential monthly bonus based on a store's profits. (Docket Entry No. 106-18, Hakes Dep. at 24:20-21; Docket Entry 94-19 at 3; Docket Entry No. 104-17 at 13).

         Brake Check deposed the nine remaining representative plaintiffs, plus opt-in plaintiff Stephen Gordon James and the three plaintiffs who asserted retaliation claims under the Act- Radford, Jones, and Murehead. (Docket Entry No. 104 at 7-8). Radford deposed Allen Hakes, Brake Check's Vice President of Operations and corporate representative for this case, and obtained over 4, 000 pages of records from Brake Check. (Id. at 8). After the representative discovery, Brake Check moved to decertify the class, arguing that the class members are not similarly situated. (Docket Entry No. 92). Brake Check also moved for sanctions against Murehead, contending that his claims should be dismissed with prejudice because he committed perjury in his February 14, 2019, declaration. (Docket Entry No. 99). Finally, Brake Check moved for summary judgment, arguing that it properly classified the Service Managers as exempt from the Act's overtime requirements and that it fired the three Service Managers asserting retaliation claims for legitimate reasons. (Docket Entry No. 104).

         Each motion is analyzed below.

         II. Decertification

         Most courts in this circuit use the two-step Lusardi approach to determine whether employees are “similarly situated” for certification under § 216(b). Cruz v. Conocophillips, 208 F.Supp.3d 811, 815 (S.D. Tex. 2016) (citing Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987)). The Fifth Circuit has not defined “similarly situated” or endorsed a particular test, but it has affirmed district courts using the Lusardi method. Acevedo v. Allsup's Convenience Stores, Inc., 600 F.3d 516, 518-21 (5th Cir. 2010); Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213, 1216 (5th Cir. 1995), overruling on other grounds recognized by Rachid v. Jack In The Box, Inc., 376 F.3d 305, 311 n.10 (5th Cir. 2004). At the first stage, the court conditionally certifies the class based on minimal record evidence. Mooney, 54 F.3d at 1213-14. The court did that in this case. (Docket Entry No. 32). “The second determination is typically precipitated by a motion for ‘decertification' by the defendant usually filed after discovery is largely complete and the matter is ready for trial.” Mooney, 54 F.3d at 1214.

         When a motion to decertify is filed, the court must thoroughly review the evidence to determine whether the action should continue to proceed collectively. Id. Lusardi factors include: (1) the “factual and employment settings of the individual plaintiffs”; (2) whether “the various defenses available to [the defendant] . . . appear to be individual to each plaintiff”; and (3) fairness and procedural concerns (along with a factor specific to Age Discrimination in Employment Act cases). Id. at 1213 n.7 (citing Lusardi, 118 F.R.D. at 359). If the class members are not similarly situated, the opt-in plaintiffs' claims are dismissed without prejudice, and the original party or parties may proceed individually. Id. at 1214; Acevedo, 600 F.3d at 519; see, e.g., Buehlman v. Ide Pontiac, Inc., 345 F.Supp.3d 305, 314-15 (W.D.N.Y. 2018) (“Defendants' motion for . . . decertification of the matter as a collective action . . . is granted . . . . The Opt-In Plaintiffs' claims are dismissed without prejudice, and the statute of limitations as to those claims is tolled for 30 days from entry of this Decision and Order. Defendants are granted summary judgment as to Plaintiff's unpaid overtime claims under both the [Fair Labor Standards Act] and the [New York Labor Law].”).

         1.The Factual and Employment Settings of the Individual Plaintiffs

         The plaintiffs contend that Service Managers all held the same position in Brake Check, performed comparable work, and worked similar schedules. (Docket Entry No. 94 at 4-12). Brake Check argues that even if there is a common job description, each plaintiff's daily work is highly individualized depending on the Brake Check location where the plaintiff worked. (Docket Entry No. 92 at 9-15).

         While not specifically required by the Fifth Circuit, evidence of a common policy, plan, or practice is often critical to showing that all plaintiffs have a similar employment setting. Falcon v. Starbucks Corp., 580 F.Supp.2d 528, 535 (S.D. Tex. 2008). “[A]t a minimum, there must be meaningful identifiable facts or [a] legal nexus [that] bind[s] the claims, . . . so that hearing the cases together furthers the purposes of section § 216, is fair to both parties, and does not result in an unmanageable trial.” Id. (quotation marks and citation omitted). The plaintiffs had the same job title and written job description, but their daily responsibilities varied substantially. See Aguirre v. SBC Commc'ns, Inc., No. H-05-3198, 2007 WL 772756, at *12 (S.D. Tex. Mar. 12, 2007) (“[E]mployees with the same job title are not ‘similarly situated' for the purposes of an ‘opt-in' [Fair Labor Standards Act] class if their day-to-day job duties vary substantially.”).

         As explained above, Brake Check locations have two different managerial structures. Some locations have a Store Director; at other locations, the Service Managers report directly to a Corporate Director. Some Brake Check locations perform a wider range of automotive repair functions, such as strut services or transmission replacements, than others. (Docket Entry No. 106-18, Hakes Dep. at 56:6-25). The size of the locations and the customer volumes also vary. (Docket Entry No. 106-3, Radford Dep. at 111:6-113:9; Docket Entry No. 106-7, Jones Dep. at 136:23- 137:14; Docket Entry No. 106-10, James Dep. at 85:14-86:12; Docket Entry No. 106-33, Eskridge Dep. at 27:4-28:7). At busier locations or times, or when Technicians were unavailable, short-staffed, or unable to do certain jobs, Service Managers spent more time working on cars. (Docket Entry No. 106-3, Radford Dep. at 101:5-102:13; Docket Entry No. 106-7, Jones Dep. at 137:21- 139:8; Docket Entry No. 106-32, Tung Dep. at 36:22-37:17; Docket Entry No. 106-34, Campirano Dep. at 35:1-13; Docket Entry No. 106-36, Lopez Dep. at 64:22-67:24).

         The plaintiffs' diverse testimony on the types and frequency of Service Managers' tasks shows that there was no common work routine among the class members during the class period. David Tung, a representative plaintiff from the Austin location, testified that he spent approximately 10 to 20% of his time servicing cars; Johnny Binder from Houston testified that he spent 85% of his time doing the same. (Docket Entry No. 106-32, Tung Dep. at 36:22-37:17; Docket Entry No. 106-13, Binder Dep. at 40:24-41:3). Remigio Jesus Campirano from the San Antonio location estimated that he spent approximately 20% of his time working on vehicles. (Docket Entry No. 106-34, Campirano Dep. at 35:1-13). Veronica Lopez, also from the San Antonio store, testified that the amount of time she spent on cars varied depending on how busy the store was and who was on staff. (Docket Entry No. 106-36, Lopez Dep. at 64:22-67:24). Brake Check's policies allowed Service Managers to do a range of work. (Docket Entry No. 106-18, Hakes Dep. at 56:6-25; but see Docket Entry No. 106-7, Jones Dep. at 137:15-21 (not agreeing that Service Managers' duties varied)).[6]

         The plaintiffs have not identified a consistent plan by Brake Check to deny Service Managers managerial responsibilities in favor of more menial work. See Johnson v. Big Lots Stores, Inc., 561 F.Supp.2d 567, 579 (E.D. La. 2008) (“Even though plaintiffs pitched their case as involving a uniform policy or practice of misclassifying [Assistant Store Managers], they produced no direct evidence suggesting a conscious corporate intention to deny [them] managerial responsibilities.”). Jones testified that he believed Brake Check instructed Service Managers to stay past their scheduled work hours so that they, not the Automotive Technicians, could work on cars, because the Technicians got overtime and Managers did not. (Docket Entry No. 106-7, Jones Dep. at 96:7-25). But the plaintiffs did not show that this was a consistent policy that Brake Check enforced. See Falcon, 580 F.Supp.2d at 536 (denying decertification, in part, because all assistant store managers worked off-the-clock or had time “shaved off” by their store managers). Based on the disparate testimony and other record evidence, the court finds that the individual plaintiffs' job experiences were too diverse to sustain a collective action.

         2. The Defenses

         Brake Check intends to invoke various exemption defenses if this case proceeds to trial. “Exemption defenses are ‘the most fact-intensive' part” of a Fair Labor Standards Act lawsuit. Kelly v. Healthcare Servs. Grp., Inc., 106 F.Supp.3d 808, 828 (E.D. Tex. 2015) (quoting Clark v. Centene Co. of Tex., L.P., 44 F.Supp.3d 674, 689 (W.D. Tex. 2014)). Considering the differences in the plaintiffs' testimony, trial on the exemption defenses would vary depending on the amount of time each plaintiff spent on nonexempt work. See Marshall v. Eyemasters of Tex., Ltd., 272 F.R.D. 447, 450 (N.D. Tex. 2011) (denying conditional certification under the more lenient standard of Lusardi step one because the declarations from the employees showed that “employees holding the same job title were performing different duties at different stores”).

         The plaintiffs argue that the court can adjudicate the exemption defenses collectively. (Docket Entry No. 94 at 24-26). Collective adjudication of exemption defenses is proper when the plaintiffs assert homogenous facts. See Johnson, 561 F.Supp.2d at 586 (“[T]he dissimilarity of plaintiffs' self-reported job duties makes it exceedingly difficult for Big Lots to assert its statutory exemption defense on a collective basis.”); id. at 587 (“One of the purposes of trying several overtime pay claims in a collective action is to avoid the inefficiencies of conducting multiple individual trials on the same factual and legal issues.”). The plaintiffs gave different accounts of the amount of time they spent on different tasks. Without a more homogenous class, there can be no collective determination on the exemption defenses Brake Check asserts. Cf. Vanzzini v. Action Meat Distribs., Inc., 995 F.Supp.2d 703, 723 (S.D. Tex. 2014) (“The kind of highly factual, individualized inquiry that determining whether the MCA exemption applies to Mr. Flanagan would require . . . counsels against including him in the certified class.”).

         3. Fairness and Procedural Concerns

         Collective actions often lower costs to plaintiffs, increase their access to relief, and efficiently resolve claims involving common issues of law and fact. See Hoffmann-LaRoche Inc. v. Sperling, 493 U.S. 165, 170 (1989). The burden and complexity a class action imposes on the parties, the jury, and the court may frustrate these benefits. See Lusardi, 118 F.R.D. at 370-71 (discussing “serious questions . . . concerning the fairness, manageability and meaningfulness of [many] separate jury trials under the guise of a class action before a single jury). When the claims involve individualized legal or factual determinations, the burdens may outweigh the benefits. See Id. District courts have “substantial discretion” to “define, redefine, subclass, and decertify as appropriate in response to the progression of the case from assertion to facts.” Richardson v. Byrd, 709 F.2d 1016, 1019 (5th Cir. 1983); Snively v. Peak Pressure Control, LLC, 347 F.Supp.3d 294, 301 (W.D. Tex. 2018).

         Adjudicating Brake Check's exemption defenses will require fact-intensive mini trials too variable to be addressed by creating subclasses. See Agostino v. Quest Diagnostics Inc., 256 F.R.D. 437, 471 (D.N.J. 2009), overruled on other grounds by Maniscalco v. Brother Intern. (USA) Corp., 709 F.3d 202, 207-08 (3d Cir. 2013) (“The Court concludes that there are too many individualized issues of fact for the . . . Subclass to be considered cohesive.”). In one case involving exemption defenses, Johnson, 561 F.Supp.2d at 570, the court held a bench trial with 43 hours of live testimony and presentations from attorneys, more than 40 witnesses, and more than one thousand exhibits. The court decertified the collective action because ruling on the merits would be “fundamentally unfair to both sides.” Id. at 588; see Snively v. Peak Pressure Control, LLC, 314 F.Supp.3d 734, 743-44 (S.D. Tex. 2018) (discussing Johnson as a “cautionary tale”). The risk of waste is greater here because the trial would be to a jury, making it more difficult to manage. See Snively, 314 F.Supp.3d at 743 (a bench trial provides flexibility “in juggling a potentially complex case”). The record does not show that the plaintiffs are similarly situated enough to continue to proceed as a collective action.

         Brake Check's motion to decertify is granted. The plaintiffs other than James Radford are dismissed without prejudice. This case is now an individual action on behalf of Radford.

         “[T]he statute of limitations for the putative class members resumes running when . . . a certified class is decertified.” Hall v. Variable Annuity Life Ins. Co., 727 F.3d 372, 375 (5th Cir. 2013) (citing Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S. 345, 354 (1983)). “In order to avoid prejudice to opt-in plaintiffs, courts may toll the statute of limitations in [Fair Labor Standards Act] collective actions that have been decertified, and they often do so in cases involving many opt-in plaintiffs.” McEarchen v. Urban Outfitters, Inc., No. 13-CV-3569, 2017 WL 3912345, at *2 (E.D.N.Y. Sept. 6, 2017) (collecting cases and tolling for 60 days when there were 165 opt-in plaintiffs); see also Buehlman 345 F.Supp.3d at 313-15 (tolling for 30 days when there were two opt-in plaintiffs in a matter that was “not . . . particularly complex”). A 45-day tolling period would be appropriate in this case, which involves 44 plaintiffs other than Radford, but the court adds an extra 15 days to account for the holidays. The statute of limitations as to the dismissed plaintiffs' claims is tolled until February 25, 2020.

         III. Summary Judgment

         The summary judgment motion is now examined against Radford. The relevant facts are those pertaining to his individual claims. The court cites other Service Managers' testimony to provide additional information and context.

         A. The Legal Standard

         “Summary judgment is appropriate only if ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Vann v. City of Southaven, 884 F.3d 307, 309 (5th Cir. 2018) (per curiam) (quoting Hanks v. Rogers, 853 F.3d 738, 743 (5th Cir. 2017)). “A genuine dispute of material fact exists when ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Burell v. Prudential Ins. Co. of Am., 820 F.3d 132, 136 (5th Cir. 2016) (quoting Savant v. APM Terminals, 776 F.3d 285, 288 (5th Cir. 2014)). “The moving party ‘always bears the initial responsibility of ...

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