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Holmes v. Sid's Sealants, LLC

United States District Court, W.D. Wisconsin

November 28, 2017

ERIC HOLMES, on behalf of himself and all others similarly situated, Plaintiff,


          WILLIAM M. CONLEY District Judge

         In this putative collective action, plaintiff Eric Holmes claims that defendants Sid's Sealants, LLC, and North Shore Restoration, LLC, denied their employees overtime compensation in violation of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”). Plaintiff now asks the court to conditionally certify a collective action consisting of defendants' current and former employees impacted by their allegedly unlawful policies. (Dkt. #29.) Because plaintiff has made the required modest factual showing necessary for conditional certification, the court will grant the motion and authorize distribution of the attached notice.


         Defendant Sid's is a Wisconsin limited liability corporation that provides building weatherization for general contractors. Sid's employs approximately 30 union members, whose job titles range from apprentice to journeyman. Defendant North Shore is also a Wisconsin limited liability corporation that inserts floor joints and provides other entry-level work for a limited number of general contractors. North Shore employs approximately 10 non-union employees. These two defendant companies are distinct legal entities; perform different work, and have unique employer and corporate identification numbers, as well as separate unemployment compensation accounts, credit cards and bank accounts. The companies do, however, acknowledge that: defendant Sidney Arthur is the companies' registered agent and the sole member of both LLCs; the companies have sometimes been hired to work on the same projects; and their bank accounts are linked, in part to prevent overdrafts.

         There appears to be some disagreement as to which of the defendant companies employed plaintiff Eric Holmes (and for how long). (Compare Declaration of Eric Holmes (dkt. #32) ¶ 3 with Defs.' Conditional Certification Opp'n (dkt. #36) 8.) The court, however, need not resolve this dispute at this time because plaintiff purports to bring suit on behalf of those similarly situated employees of both companies.[1]

         Based mostly on Holmes' own observations and statements attributed to Arthur, plaintiff alleges that the defendant companies shared two policies that violated the FLSA. First, both companies failed to pay overtime for hours worked over 40 hours per week. Plaintiff Holmes alleges that he -- and other members of his crew -- routinely worked more than 40 hours per week, yet all their time was compensated at their regular hourly rate. To avoid paying overtime, plaintiff also alleges that both companies issued two paychecks per pay period for employees who worked more than 40 hours per week. Plaintiff further alleges that Arthur told him of his policy not to pay overtime. As further evidence of this alleged policy, plaintiff notes that Sid's paid only 69.5 total hours of overtime between 2013-2017 (all in 2014 and 2015) and North Shore paid zero hours of overtime during that same time frame.

         Second, plaintiff alleges that both companies required employees to punch out at the start of travel. While acknowledging that this policy may not be per se unlawful, plaintiff alleges that the policy was unlawful as applied by defendants because the companies did not compensate workers' for: (1) return trips from outside their home communities during normal working hours, (2) trips between worksites, and (3) trips between worksites and work at the shop, which also deprived them of the ability to earn overtime. For this claim, plaintiff again relies primarily on his observations and experience, including calls that defendant Arthur would make personally to crewmen who failed to punch out before departing a jobsite, even if returning to the shop to continue working.

         Defendants deny the existence of these policies, and defendant Arthur specifically denies making the statements attributed to him.


         I. Conditional Certification

         Under the FLSA, plaintiffs can bring a “collective action” seeking to recover unpaid compensation against an employer on behalf of themselves and “similarly situated” employees. 29 U.S.C. § 216(b). Before a plaintiff can litigate on behalf of any other employee, however, they must “consent in writing” and that consent must be filed with the court. Id. Because of this “opt in” requirement, courts engage in a two-step process to certify FLSA collective actions. Bitner v. Wyndham Vacation Resorts, Inc., 304 F.R.D. 354, 357 (W.D. Wis. 2014). In the first, the plaintiff seeks a conditional certification, after which notice is sent to putative plaintiffs and discovery proceeds, in the second, the defendants may move to decertify. Id. at 357-58.

         At the conditional certification stage, the plaintiff need only provide “a modest factual showing sufficient to demonstrate that they and potential plaintiffs together were victims of a common policy or plan that violated the law.” Id. at 357 (quoting Austin v. CUNA Mut. Ins. Soc'y, 232 F.R.D. 601, 605 (W.D. Wis. 2006)). Unlike the “rigorous analysis” required under Rule 23 of the Federal Rules, the conditional certification standard is “‘fairly lenient, '” although not “a ‘mere formality.'” Id. (quoting Fosbinder-Bittorf v. SSM Health Care of Wis., Inc., No. 11-cv-592-wmc, 2013 WL 3287634, at *4 (W.D. Wis. Mar. 21, 2013) and Berndt v. Cleary Bldg. Corp., No. 11-cv-791-wmc, 2013 WL 3287599, at *7 (W.D. Wis. Jan. 25, 2013)).

         Importantly, the court does not adjudicate the merits at conditional certification and factual disputes are resolved in favor of the plaintiff. Id. at 357-58. Showing that the named plaintiff and the putative plaintiffs are “victims of a common policy or plan that [is asserted to have] violated the law” satisfies the similarly situated requirement at conditional certification. Id. at 358 (alteration in the original) (quoting Freeman v. Total Sec. Mgmt.-Wis., LLC, No. 12-cv-461-wmc, 2013 WL 4049542, at *5 (Aug. 9, 2013 W.D. Wis. 2013)). In turn, this “requires a ‘factual nexus that connects [the named plaintiff] to other potential plaintiffs as victims of an unlawful practice.'” Id. (alteration in the original) (quoting Sjoblom v. Charter Commc'ns, LLC, 571 F.Supp.2d 961, 971 (W.D. Wis. 2008)). This inquiry centers on “whether potential plaintiffs ‘are sufficiently similar to believe a collective action will facilitate efficient resolution of a legal dispute involving claims which share common questions and common answers.” Id. (quoting Berndt, 2013 WL 3287599, at *7).

         Here, plaintiff asks the court to certify conditionally “a single class of all persons who worked as a jobsite employee . . . for either Sid's Sealants or North Shore Restoration during the time period on or after December 12, 2013.” (Pl.'s Mot. Conditional Certification (dkt. #29) 1.) While defendants raise a number of objections to conditional certification in their opposition (dkt. #36), the court finds none particularly persuasive.

         Many of defendants' objections boil down to an assertion either that (1) plaintiff has not offered additional employee declarations or (2) plaintiff's facts are wrong, and thus he has not met his burden. As outlined above, however, plaintiff was not required to present additional declarations at the conditional certification stage, and factual disputes are resolved in plaintiff's favor. Citing almost no authority, defendants nevertheless assert that plaintiff should be held to an “intermediate” standard of scrutiny, because he had access to other employees (through his prior professional relationships or by virtue of already being provided contact information by defendants). However, ...

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