United States District Court, W.D. Wisconsin
DOUG WERNER AND WILLIAM WIESNESKI, both individually and on behalf of all other similarly situated persons, Plaintiffs,
WATERSTONE MORTGAGE CORPORATION, Defendant.
OPINION & ORDER
D. PETERSON DISTRICT JUDGE
Doug Werner and William Wiesneski were loan originators for
defendant Waterstone Mortgage Corporation. Plaintiffs contend
that Waterstone violated their rights under the Fair Labor
Standards Act in two ways: (1) failing to pay them overtime
when they worked more than 40 hours in a week; and (2)
requiring them to pay their own business expenses, which
reduced their pay below minimum wage.
the second case in which loan originators for Waterstone
brought the same claims. In Herrington v. Waterstone
Mortgage Corporation, No. 11-cv-779 (W.D. Wis. Dec. 4,
2017), the court recently confirmed an arbitration award in
which the arbitrator awarded more than $7 million for unpaid
wages to a class of 174 loan originators across the country
who alleged that Waterstone failed to pay them overtime and
reimburse their business expenses.
reasons they do not explain, plaintiffs did not join the
original arbitration class. But now they seek to represent a
new collective action of loan originators who worked for
Waterstone at any office in the United States and at any time
between August 1, 2010, and the present. Plaintiffs have
filed a motion for conditional certification, Dkt. 22, which
is ready for review.
court will deny plaintiffs' motion. The standard for
granting a motion for conditional certification is not
demanding, but this is one of those relatively rare cases in
which the plaintiffs have failed to make even a modest
showing that plaintiffs are similarly situated to the other
potential members of the collective action. The evidence
plaintiffs cite either lacks any probative value or relates
to claims that are untimely. Under these circumstances,
conditional certification is not appropriate.
§ 216(b) of the Fair Labor Standards Act, employees may
bring a collective action on behalf of themselves and other
“similarly situated” employees for an
employer's failure to pay overtime or a minimum wage to
employees who are covered by the statute. In determining
whether a class should be certified conditionally under 29
U.S.C. § 216(b), the question is whether the plaintiffs
have made a “modest factual showing” that they
and potential class members were victims of a common policy
or plan that violated the law. De Leon v. Grade A Constr.
Inc., No. 16-cv-348, 2017 WL 1957537, at *2-3 (W.D. Wis.
May 11, 2017); Kelly v. Bluegreen Corp., 256 F.R.D.
626, 628-29 (W.D. Wis. 2009). The inquiry focuses 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.” Holmes v.
Sid's Sealants, LLC, No. 16-cv-821, 2017 WL 5749684,
at *2 (W.D. Wis. Nov. 28, 2017) (internal quotations
a relatively liberal standard and it “typically
results” in conditional certification of a
representative class. De Leon, 2017 WL 1957537, at *2-3. But
this is an unusual case because there has already been class
litigation of the claims plaintiffs are raising. In fact,
plaintiffs are asking to send notice to many of the same
employees as the plaintiffs in Herrington. Compare Dkt. 23-1
(notice to any current or former employee who worked for
Waterstone “from August 1, 2010 to the present”)
with Dkt. 23-4 (notice to any current or former employee who
worked for Waterstone “from November 28, 2008 to the
present”). Plaintiffs rely heavily on the
arbitrator's findings in Herrington as evidence that
Waterstone has a policy of failing to comply with the FLSA,
but that reliance is misplaced, even if the court assumes
that Herrington has preclusive effect as plaintiffs contend.
As to claims that accrued after Herrington, the
arbitrator's findings regarding a policy that existed
before that case was litigated is not evidence that
Waterstone has the same policy now. It is not reasonable to
infer without some other evidence that Waterstone maintained
an unlawful policy in defiance of the arbitrator's
older claims, there are at least two problems. First, the
statute of limitations for a claim under the FLSA is two
years, or three years for willful violations, 29 U.S.C.
§ 255(a), which suggests that claims that accrued before
2014 are untimely. Plaintiffs say that it is premature to
determine which claims are timely, but this and other
courts' general practice is to limit notice to employees
with claims that accrued within the two or three years before
the lawsuit was filed. E.g., De Leon, 2017 WL 1957537, at *4;
Fosbinder-Bittorf v. SSM Health Care of Wisconsin,
Inc., No. 11-cv-592, 2013 WL 3287634, at *4 (W.D. Wis.
Mar. 21, 2013); Witteman v. Wisconsin Bell, Inc.,
No. 09-cv-440, 2010 WL 446033, at *1 (W.D. Wis. Feb. 2,
2010). See also Smith v. Alamo Claim Serv., No.
13-1481, 2015 WL 13594414, at *5 (C.D. Ill. Mar. 31, 2015)
(citing cases in which courts authorized notice to employees
with claims within three-year statute of limitations);
Wiyakaska v. Ross Gage, Inc., 10-cv-01664, 2011 WL
4537010, at *5 (S.D. Ind. Sept. 28, 2011) (refusing to
approve class definition that included claims accruing
outside limitations period). It makes no sense to devote
resources to locating and contacting potential members of the
collective action if those individuals have no plausible
basis for asserting that they have timely claims. Adopting
plaintiffs' view would prevent courts from placing any
time limits on notice, regardless of the scope of the
plaintiffs' proposed time frame or how obvious it was
that the claims were untimely.
their reply brief, plaintiffs say that they are entitled to
equitable tolling, relying on the arbitrator's findings
that Waterstone delayed the arbitration proceedings and
attempted to dissuade employees from asserting their rights.
But again, even assuming that the arbitrator's findings
are preclusive, the arbitrator already cured any unfair
prejudice caused by Waterstone's conduct by allowing
employees to raise untimely claims in the context of the
arbitration. Plaintiffs do not explain why employees who
failed to join the arbitration would be entitled to a second
opportunity to bring an untimely claim and the court cannot
discern any grounds for tolling the claims.
leads to the second problem with relying on Herrington to
show that conditional certification is appropriate as to
older claims, which is that any employee with a claim that
accrued during the period covered by Herrington already had
an opportunity to bring a claim but declined to do
Plaintiffs do not identify any reason to believe that
employees who received notice in Herrington and declined to
opt in would be any more likely to join this case. In fact,
plaintiffs identify no case in which a court certified a
collective action for a group of employees who already had an
opportunity to raise their claim in an earlier case.
addition to relying on Herrington, plaintiffs cite four new
declarations of former Waterstone employees, but none of
those are helpful either. Two of the employees left
Waterstone more than three years before plaintiffs filed this
case and identify no basis for tolling their claims. Dkt. 24,
¶ 3 and Dkt. 27, ¶ 3. Even as to the other two
employees (the two named plaintiffs), both of them began
working for Waterstone more than ten years ago and neither of
them alleges that any policy of failing to comply with the
FLSA continued after 2014. Dkt. 25, ¶ 4 and Dkt. 27,
are other problems with the declarations. The two employees
worked at the same office in Wisconsin, so they are not
probative of policies and practices at the dozens of other
Waterstone offices across the country. Even as to the
Wisconsin office, the allegations in the declarations are so
conclusory that they provide little insight into
Waterstone's policies. The employees do not point to a
particular policy or even to particular individuals
responsible for implementing an unlawful practice. Rather,
they allege generally that “Waterstone” told them
to underreport their hours or even more vaguely that
“[i]t was just understood” that they were
supposed to do so. Dkt. 25, ¶ 17 and Dk. 26, ¶ 24.
Regardless, because there are only eight employees at the
office, Dkt. 45, ¶ 7, a collective action is not needed
to resolve those employees' claims.
plaintiffs have not made even a modest factual showing that
they are similarly situated to enough other employees that a
collective action would facilitate efficient resolution of
common claims. Accordingly, the ...