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Bitner v. Wyndham Vacation Resorts, Inc.

United States District Court, W.D. Wisconsin

December 28, 2016

THOMAS BITNER and TOSHIA PARKER, individually and on behalf of those similarly situated, Plaintiffs,
v.
WYNDHAM VACATION RESORTS, INC., Defendant.

          OPINION AND ORDER

          WILLIAM M. CONLEY District Judge.

         In this civil action, plaintiffs Thomas Bitner and Toshia Parker assert claims on behalf of themselves and a putative class of employees of Wyndham Vacation Resorts, Inc. (“Wyndham”), under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and applicable Wisconsin wage and hour laws. The named plaintiffs are sales representatives at Wyndham's only Wisconsin facility, located near the Wisconsin Dells, who allege that managers and supervisors maintained an unofficial policy that required them to perform unpaid, off-the-clock work. In a prior order, the court conditionally certified collective actions of current and former “In-House Sales Representatives” and “Discovery Sales Representatives” at Wyndham's Wisconsin Dells location under 29 U.S.C. § 216(b). (Dkt. #92.) Before the court now are plaintiffs' motion to certify a Rule 23(b)(3) class of all In-House Sales Representatives who worked at Wyndham's Wisconsin Dells office at any time between June 25, 2011, and the date that Wyndham converted its in-house department to a “blended line” in the fall of 2014. (Dkt. #163.) Also before the court are defendant's motion to decertify the two conditionally certified FLSA classes (dkt. #157), plaintiffs' motion for partial summary judgment (dkt. #204), defendant's motion for partial summary judgment (dkt. #214), and defendant's motion to dismiss four opt-in plaintiffs who have not responded to defendant's discovery requests (dkt. #246).

         For the reasons that follow, the court will grant plaintiff's motion to certify a class action, finding the requirements of Rule 23 satisfied. For largely similar reasons, the court will deny defendant's motion to decertify the two conditionally certified FLSA collective actions. The court will also deny the parties' cross-motions for partial summary judgment, finding factual disputes that necessitate a trial. Finally, the court will grant defendant's unopposed motion to dismiss four opt-in plaintiffs who have failed to respond to discovery requests and noticed depositions. Accordingly, the claims of those four individuals will be dismissed without prejudice.

         UNDISPUTED FACTS[1]

         A. Parties

         Defendant Wyndham Vacation Resorts, Inc., is in the business of marketing and selling vacation ownership interests. At its Wisconsin Dells location, Wyndham divides “Sales Representatives” into three departments that share the same general responsibilities but have different specific duties. For purposes of this case, “Front Line Sales Representatives” are responsible for selling ownership interests to new prospects. “In-House Sales Representatives” meet with existing timeshare owners in a “tour” or “front-end meeting, ” with the goal of convincing the owner to attend a second “back-end meeting, ” or “continuance, ” where the owner is presented with opportunities to upgrade his or her ownership interest. “Discovery Sales Representatives, ” on the other hand, attempt to sell vacation packages to potential buyers after they have decided not to purchase a package or upgrade from a Front Line or In-House Sales Representative.[2]

         Named plaintiff Thomas Bitner was an In-House Sales Representative and a Front Line Sales Representative at Wyndham's Wisconsin Dells location, and Toshia Parker was a Discovery Sales Representative. At least initially, including the named plaintiffs, the conditionally certified FLSA class of In-House Sales Representatives consists of twenty-three opt-in plaintiffs, and the class of Discovery Sales Representatives totals eight.[3] There are 109 members of the putative Rule 23 class of In-House Sales Representatives. (Decl. of David C. Zoeller (dkt. #172) ¶ 7.)

         B. Wyndham's official Wyntime timekeeping system and payment policies

         At all times relevant to this lawsuit, Wyndham classified all Sales Representatives as non-exempt from federal and state overtime and minimum wage requirements. Both In-House Sales Representatives and Discovery Sales Representatives earn an hourly minimum wage draw, commissions and bonuses. Sales Representatives who work together to initiate and close a sale earn split commissions. A Sales Representative's future commissions are paid out from a balance of hourly draw payments earned, which accumulate indefinitely until he or she stops working or earns enough in commissions to pay down the balance. Sales Representatives who work more than 40 hours in a particular week earn overtime on their regular rate of pay, which is calculated separately based on the amount of draw pay, commissions or bonuses received.

         Sales Representatives keep track of their own hours in Wyndham's “Wyntime” electronic timekeeping system. Wyndham's written policies on timekeeping and payments are incorporated in its employee handbook and are a subject for training of newly hired Sales Representatives. Among other things, the 2011 employee handbook requires Sales Representatives to: (1) be clocked in while working and clocked out during meal breaks or other periods of “non-work”; (2) notify a manager about any work done off-site; and (3) get overtime pre-approved by a manager. (Decl. of Nora R. Kaitfors, Ex. B (dkt. #63-2).) The written policies also require Sales Representatives to notify their manager in writing when they “miss a punch, ” whether by failing to clock in or to clock out.

         Managers are responsible for monitoring the hours and time records of the Sales Representatives they supervise. (See 30(b)(6) Dep. of Laura L. Klouw (dkt. #145) 48:9-14.) Wyndham also holds managers accountable for the sales results achieved by their Sales Representatives. (30(b)(6) Dep. of Eric L. Sellers (dkt. #146) 62:22-63:11.)

         C. Plaintiffs' allegations of off-the-clock work

         Despite Wyndham's written policies prohibiting Sales Representatives from performing unpaid work off-the-clock, plaintiffs allege that managers and supervisors at the Wisconsin Dells location maintained an unofficial policy of requiring off-the-clock work.

         i. In-House Sales Representatives

         During depositions, the opt-in, In-House Sales Representatives identified several different ways in which managers required them to work off-the-clock. Some understood general directions to “manage” their time or avoid working more than 40 hours in a week to be thinly veiled orders to work off-the-clock. (Dep. of Christian L. Schartner (dkt. #154) a70:8-15; Dep. of Christopher F. Sinople (dkt. #155) 89:21-23.) Others testified that managers commanded them to punch out when they neared 40 hours in a week. (Dep. of Margaret L. Zautke (dkt. #137) 137:2-6; Dep. of Justin R. Keegan (dkt. #139) 122:4-12; Dep. of Nathan G. Weyh (dkt. #141) 105:3-25; Dep. of Martin G. Mohr (dkt. #153) 73:15-16; Dep. of Sean D. Sweeney (dkt. #156) 128:16-21.)

         Plaintiffs further allege that managers carried out this unofficial, off-the-clock work policy by prohibiting them from being clocked in during certain times of the day or when performing certain work responsibilities. (Dep. of Abraham Haupt (dkt. #29) 98:4-22 (recalling four managers who told him to clock out after morning tours or at lunch and not clock in for the rest of the day); Dep. of Ernest B. Lynch (dkt. #138) 72:12-19 (managers declared during morning meetings that “if you're not setting up a continuance or doing a back end, you should be off the clock”); Dep. of Justin R. Keegan (dkt. #139) 22:24-23:23 (told to punch out between waves of tours despite attending “hoorah meetings” or training meetings); Dep. of Nathan G. Weyh (dkt. #141) 51:9-13 (stating that manager Christine Kwitek told him, “[y]ou're only on clock while you're with a customer”); Dep. of Casey O'Donnell (dkt. #142) 58:5-13 (recalling being told both as a manager and as an In-House Sales Representative that In-House Representatives should clock in while on a tour, clock out after a tour has ended and not clock back in until on another tour or in a continuance); Dep. of Martin G. Mohr (dkt. #153) 106:21-25 (managers told him “punch out after lunch and don't punch back in”); Dep. of Christian L. Schartner (dkt. #154) 22:8-10 (managers “were pushing us to punch out and be off the clock by right after that morning tour round; that was the norm and that's what we did”); Dep. of Margaret L. Zautke (dkt. #137) 137:11-20 (managers told her “hey, go punch out, you're getting high on your hours” when another Sales Representative was conducting a back end meeting for one of her customers, but then, if the customer ultimately decided to make a purchase, punch back in while they signed contracts).)

         Several In-House Sales Representatives recall being ordered to conduct back-end meetings while clocked out or being pulled out of back-end meetings and told to punch out. (Dep. of Thomas Bitner (dkt. #27) at 263:1-4; Dep. of Justin R. Keegan (dkt. #139) 53:3-15; Dep. of Ernest B. Lynch (dkt. #138) 73:7-25; Dep. of Sean D. Sweeney (dkt. #156) 116:20-25.) In addition, several In-House Sales Representatives testified at their depositions that they routinely worked off-the clock by taking calls from customers, even when they called after hours. (Dep. of Ernest B. Lynch (dkt. #138) 19:2-3; Dep. of Casey O'Donnell (dkt. #142) 61:20-23.)

         In addition, some plaintiffs testified that managers themselves would independently clock out In-House Sales Representatives when they approached 40 hours or ordered In-House Sales Representatives to clock their team members out. (Dep. of Nathan G. Weyh (dkt. #141) 105:11-25; Dep. of Christian L. Schartner (dkt. #154) 70:8-15.) At times, according to another plaintiff, managers told In-House Sales Representatives to sign a missed punch form to reduce arbitrarily the number of hours worked below 40. (Dep. of Margaret L. Zautke (dkt. #137) 54:14-24.)

         Two of the opt-in plaintiffs who worked as In-House Sales Managers further testified that In-House Sales Directors, their immediate supervisors, were aware of and condoned off-the-clock work by In-House Sales Representatives. Thomas Delmore also asserts that he ordered his team to work off-the-clock to avoid overtime at the direction of In-House Sales Director Kyle Mays. (Decl. of Thomas Delmore (dkt. #42) ¶ 6.) Similarly, In-House Sales Manager Casey O'Donnell testified at his deposition that In-House Sales Director Brandon Borelli instructed him and the other In-House Managers to “do whatever [they] need[ed] to do” to have In-House Sales Representatives make sales without reporting more than 40 hours worked, which he understood to be encouraging off-the-clock work by In-House Sales Representatives. (Dep. of Casey O'Donnell (dkt. #142) 90:5-91:7.)

         ii. Discovery Sales Representatives

         The plaintiffs who worked as Discovery Sales Representatives provided similar testimony regarding the alleged unofficial off-the-clock policy. One Discovery Sales Representatives inferred from statements made by managers that they were expected to work off-the-clock. (Dep. of Margaret L. Zautke (dkt. #137) 51:16-24 (explaining that she understood manager Mike Wilder's directive to “manage [her] hours wisely” as code for an order to work all of her scheduled hours but not record more than 40).) Another recalled more express threats. (Dep. of Elena K.D. Lahti (dkt. #140) 33:6-21 (after recording 42 hours for her first week because she stayed clocked in while on the sales floor, Lahti was told that she would be punished the next time she recorded more than 40 hours).) Yet another Discovery Sales Representative asserts managers Mike Wilder and Lance Tinsley specifically told him to punch out but “get the job done” when he approached 40 hours. (Dep. of Stuart W. Abel (dkt. #136) 107:13-23.) According to a different Discovery Sales Representative, managers' expectation for Discovery Sales Representatives to clock out for a certain amount of time for lunch each day caused them to work off-the-clock, which was facilitated by managers falsifying missed punch forms. (Dep. of Toshia Parker (dkt. #28) 152:14-25, 155:14-25.)

         D. Payment Gateway System

         Wyndham uses a system called “Payment Gateway” to keep records and process down payments customers make during a second, back-end meeting with In-House Sales Representatives. Payment Gateway creates a nearly contemporaneous time stamp when that payment is processed. (30(b)(6) Dep. of Jamie Supsinskas (dkt. #150) at 42:17-24, 44:14-21.) The most common means of payment -- by credit card and “Bill Me Later” payments[4] -- are typically processed in the Payment Gateway System while Sales Representatives are still present with a customer. (Id. at 33:19-25, 45-12:18.)

         By comparing Payment Gateway data to Wyntime data, therefore, plaintiffs were able to calculate the percentage of times that “time-stamp events in the Payment Gateway system” were recorded while a Sales Representative was not clocked into Wyntime. (Decl. of Alexander Wise (dkt. #165); Decl. of Alexander Wise (dkt. #182); Rev. Decl. of Alexander Wise (dkt. #191); Rev. Decl. of Alexander Wise (dkt. #192-1).) Based on the data provided for the seventeen opt-in, In-House Sales Representatives, plaintiffs calculated they were off-the-clock 55.74% of the time when Payment Gateway created a timestamp. (Decl. of Alexander Wise (dkt. #191) ¶ 9.) Similarly, plaintiffs calculated that the three Discovery Sales Representatives for whom defendant provided data were off-the-clock around 21.09% of the time.[5] (Rev. Decl. of Alexander Wise (dkt. #192-1) ¶ 9.) Defendant contends that plaintiffs' calculations are of limited relevance because Sales Representatives close sales only about a tenth of the time. Nonetheless, this data would suggest that more than half of the closings involving In-House Sales Representatives and approximately one-fifth of those involving Discovery Sales Representatives occurred off-the-clock.[6]

         E. Wyndham's internal investigation

         In fall of 2012, opt-in plaintiffs Abe Haupt and Martin Mohr separately informed human resources manager Dawn Franson that their time records were inaccurate after being denied medical leave under Wyndham's Family Medical Leave Act policy because they had not worked enough hours for eligibility. This prompted Franson to inquire further. By the conclusion of her investigation in January of 2013, Franson had interviewed a total of twenty-two sales representatives and six managers. (Def.'s Opening Br. (dkt. #167) 5.) Franson's investigation resulted in numerous sales representatives reporting that they were not properly recording their time, in part due to the instruction or encouragement of managers. (Pl.'s Opening Br. (dkt. #164) 21-22 (citing Decl. of David C. Zoeller Ex. E (dkt. #172-6)).)[7] Additionally, Laura Klouw, Franson's supervisor, discovered several instances of Sales Representatives apparently working off-the-clock by comparing time clock records to tour records, although Klouw questions the accuracy of those tour records. (Id. at 22 (citing Dep. of Laura L. Klouw (dkt. #145) 68-71).)

         As a result of Wyndham's investigation, the company disciplined multiple managers and supervisors at the Wisconsin Dells office. In particular, managers Christine Kwitek, Dave Brown and Lance Tinsley received corrective actions because Wyndham determined that they were not appropriately ensuring that the time records of their In-House Sales Representatives were accurate. (30(b)(6) Dep. of Barbara Masticola (dkt. #151) 90:9-91:7.) In addition, Kyle Mays, the In-House Sales Director and immediate supervisor of the disciplined managers, was demoted and transferred to another Wyndham location in part because the company determined that he was “lackadaisical” toward its timekeeping policies. (Dep. of Dawn Franson (dkt. #144) 45:4-10.)

         In connection with the investigation, Wyndham also implemented mandatory training on its timekeeping policies for sales representatives and their managers in early 2013. Wyndham further extended Sales Representatives the opportunity to claim payment owed for off-the-clock work. While only one Sales Representative actually claimed unpaid work, 44 others signed a wage and hour memorandum prepared by Wyndham confirming payment for all hours worked.[8] (Def.'s Opening Br. (dkt. #167) 5-6.) The 44 who signed the memorandum include at least seven of the fourteen opt-in plaintiffs who sat for a deposition in this case. (Id.)

         One In-House Sales Representative who signed the memorandum, however, suggests that the Sales Representatives were “pretty much coerced into” signing it. (Dep. of Christian L. Schartner (dkt. #154) 23:11-16; 50:22-51:5 (further explaining that he took seriously In-House Sales Director Don Tansor's comment, “sign this if you want to keep working here” despite acknowledging that he made it at least somewhat in jest); see also Dep. of Nathan G. Weyh (dkt. #141) 162:7-20 (responding, “I wanted to keep my job” to explain why he initialed the statement confirming that he had been paid for all hours worked).) Several Sales Representatives also claim that off-the-clock work continued despite Wyndham's efforts to improve timekeeping practices.[9] (Dep. of Margaret L. Zautke (dkt. #137) 91:12-92:22 (managers, including Mike Wilder, said, “back to business, same as normal” and warned, “make sure you don't get caught working off-the-clock” immediately after a meeting in January of 2013 at which human resources manager Dawn Franson explained how to properly record hours worked); Dep. of Ernest B. Lynch (dkt. #138) 69:19-70:1 (continued to work off-the-clock at manager's direction); Dep. of Justin R. Keegan (dkt. #139) 80:3-11 (managers continued to tell him to punch out and work off-the-clock); Dep. of Nathan G. Weyh (dkt. #141) 68:4-69:2 (continued to work off-the-clock); Dep. of Christian L. Schartner (dkt. #154) at 53:1-10 (working off-the-clock continued post-training based on “management's reaction”).)

         F. Variable daily job experiences

         Although individual In-House Sales Representatives and Discovery Sales Representatives generally shared the same responsibilities, their daily experiences varied widely depending on a number of different factors. For example, factors affecting Sales Representatives' daily start and end times included: how many customers he or she had the opportunity to meet; how long meetings with owners took; and where the Sales Representative was located on the “power line, ” which determined the order in which sales opportunities became available. Defendant explains that, among others, these variables resulted in Sales Representatives working a wide range of hours per week at different times of the year.[10]

         Also relevant to Sales Representatives' varied daily work experiences, plaintiffs recalled engaging in or observing others engaging in a number of different activities in their downtime, including studying, taking calls from owners and listening in on sales pitches. During downtime, Sales Representatives also played games on their phones, socialized and occasionally left the office to run errands, particularly when they were far down the power line and could expect a long break. Regardless of what they did during downtime, however, plaintiffs contend that generally Wyndham required Sales Representatives to receive permission from managers before leaving the office and expected Sales Representatives to remain on the sales floor to await customers. (Dep. of Kyle Wayne Mays (dkt. #152) 74:8-15.)

         OPINION

         I. Class Certification under Federal Rule of Civil Procedure 23

         A two-step analysis governs certification of a class action under Rule 23. See Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012). First, a class must satisfy the four threshold requirements of Rule 23(a): numerosity, commonality, typicality and adequacy of representation. Id. Second, the party seeking certification must satisfy one of the three alternatives under Rule 23(b). Id. The proponent of the class bears the burden of demonstrating that the class meets all of these requirements by a preponderance of the evidence. Id.

         The trial court must itself engage in a “rigorous analysis” to determine that the requirements of Rule 23 have been satisfied. CE Design, Ltd. v. King Architectural Metals, Inc., 637 F.3d 721, 723 (7th Cir. 2011). As a result, Rule 23 considerations may overlap with the merits of the case. Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541, 2551 (2011). Where they do, “the judge must make a preliminary inquiry into the merits.” Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001). If material factual disputes exist, the court must even receive evidence and resolve those disputes before determining whether to certify the class, but “should not turn the class certification proceedings into a dress rehearsal for the merits.” Messner, 669 F.3d at 811.

         A. Rule 23(a) Requirements

         i. Numerosity

         Numerosity is satisfied when “the class is so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). Defendant does not contest that plaintiffs' putative class of In-House Representatives meets the numerosity requirement, and the court is satisfied that a class consisting of 109 individuals is sufficiently large to make joinder impracticable. “The rule of thumb adopted in most courts is that proposed classes in excess of 40 generally satisfy the numerosity requirement.” 1 Joseph M. McLaughlin, McLaughlin on Class Actions § 4:5 (8th ed. 2011) (collecting cases); see also Armes v. Sogro, Inc., No. 08-C-0244, 2011 WL 1197537, at *2 (E.D. Wis. Mar. 29, 2011) (“The Seventh Circuit has indicated that a group as small as forty may satisfy the numerosity requirement.” (citing Swanson v. Am. Consumer Indus., Inc., 415 F.2d 1326, 1333 n.9 (7th Cir. 1969))).

         ii. Commonality

         To satisfy the commonality requirement of Rule 23, plaintiffs must demonstrate there are “questions of law or fact common to the class.” Fed.R.Civ.P. 23(a)(2). A single, common issue will do, although it must be “capable of classwide resolution --which means that determination of its truth or falsity will resolve an issue that is central to the validity of each of the claims in one stroke.” Dukes, 131 S.Ct. at 2551, 2556. Furthermore, the commonality standard requires that plaintiffs do more than “merely” demonstrate “that they have all suffered a violation of the same provision of law.” Id. (internal quotation marks omitted). Plaintiff must show that “the class members have suffered the same injury.” Id.

         Plaintiffs offer a number of common questions, but the one that goes to the heart of their class claims is whether Wyndham had an unofficial policy or practice of requiring Sales Representatives to work off-the-clock. Two recent Seventh Circuit decisions are instructive in determining whether putative class claims that a defendant used various methods to implement its unofficial policy of denying overtime satisfies the commonality requirement: Bell v. PNC Bank, National Association, 800 F.3d 360 (7th Cir. 2015), and Ross v. RBS Citizens, N.A., 667 F.3d 900 (7th Cir. 2012), cert granted, judgment vacated, 133 S.Ct. 1722 (2013).[11] In Ross, the plaintiff sought certification of two classes consisting of all non-exempt employees and all assistant branch managers who worked at one of defendant Charter One's over 100 bank branches in Illinois. Id. at 902-03. Plaintiff Ross alleged that Charter One had:

an unofficial policy of denying overtime pay to its non-exempt employees by: (1) instructing them not to record hours worked per week over forty; (2) erasing or modifying recorded overtime hours; (3) giving them “comp time” instead of paying overtime; and (4) requiring them to perform work during unpaid breaks.

Id. at 903. Of the 1, 129 class members of hourly employees, 96 submitted declarations “specifically alleg[ing] that the declarant had been denied lawfully due overtime compensation.” Id. at 909.

         The Seventh Circuit agreed with the district court that plaintiffs satisfied the commonality standard announced by the Supreme Court in Dukes concluding, “[a]lthough there might be slight variations in how Charter One enforced its overtime policy, both classes maintain a common claim that Charter One broadly enforced an unlawful policy denying employees earned-overtime compensation.” Id. (emphasis added). The Seventh Circuit further explained ...


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