Certification Granted in Capital Bluecross Overtime Lawsuit

Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

Standards Act of 1938 § 16, 2020 WL 6576752 Only the Westlaw citation is currently available.

United States District Court, M.D. Pennsylvania.

Dawn BELLAN, individually and on behalf of all other similarly situated individuals, Plaintiff v.

CAPITAL BLUECROSS, Defendant

216(b);

[2]

Fed. R. Civ. P. 23.

Labor and Employment Behalf of Others in General

Actions on

Courts utilize a two-step, conditional and final certification process for certification of collective actions under the FLSA. Fair Labor

No. 1:20-cv-00744 | Filed 10/26/2020 Synopsis Background: Former nonmanagement utilization review employee of health insurance company brought Fair Labor Standards Act (FLSA) action against former employer, alleging that employer misclassified such employees as exempt from FLSA overtime provisions. Employee moved to conditionally certify collective action.

29 U.S.C.A. §

Standards Act of 1938 § 16, 216(b).

[3]

Labor and Employment similarly situated

29 U.S.C.A. §

Employees

Conditional certification of an FLSA collective action requires only a modest factual showing to support a factual nexus between the manner in which the employer's alleged policy affected the employee and the manner in which it affected the proposed collective action members. Fair Labor

Holdings: The District Court, Yvette Kane, Senior District Judge, held that:

Standards Act of 1938 § 16, 216(b).

29 U.S.C.A. §

[1] conditional certification was warranted; [2] additional language regarding opt-in plaintiffs' potential obligations was not warranted in notice that would be sent to potential collective action members; but

[4]

Motion granted.

29 U.S.C.A. § 216(b).

Procedural Posture(s): Motion to Conditionally Certify Collective Action; Motion to Strike.

West Headnotes (13) Labor and Employment Behalf of Others in General

Actions on

At the step-one, conditional certification inquiry of an FLSA collective action, the court does not weigh the evidence, resolve factual disputes, or reach the merits of the plaintiff's claims. Fair Labor Standards Act of 1938 § 16,

[3] employee could not serve notice via text message.

[1]

Labor and Employment Behalf of Others in General

Actions on

A collective action under the FLSA is fundamentally different from a class action under the Federal Rules of Civil Procedure. Fair Labor

[5]

Labor and Employment similarly situated

Employees

Courts do not consider whether named plaintiffs are, in fact, similarly situated enough to opt-in plaintiffs to maintain an FLSA collective action until final certification of the collective action.

Fair Labor Standards Act of 1938 § 16, U.S.C.A. § 216(b).

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

[6]

Labor and Employment similarly situated

Conditional certification of collective action was warranted in FLSA action against health insurance company by former nonmanagement utilization review employees alleging that employer misclassified them as exempt from FLSA overtime provisions; employees provided declarations that they all performed nonclinical utilization review work in accordance with employer's policies, procedures, guidelines, and criteria embedded in employer's computer system and that they could not significantly deviate from employer's guidelines or criteria in performing their work, and employees produced job descriptions for at least two utilization review employee positions that lent credence to plaintiff-employees' claims that such employees performed same or sufficiently similar work regardless of job title. Fair Labor Standards Act of 1938 § 16,

in notice sent to potential opt-in plaintiffs of conditionally certified FLSA collective action against health insurance company by former nonmanagement utilization review employees alleging that employer misclassified them as exempt from FLSA overtime provisions, where additional language would only serve to have chilling effect on potential participation. Fair

Employees

Labor Standards Act of 1938 § 16, U.S.C.A. § 216(b).

[10]

[8]

Fair Labor Standards Act of 1938 § 16, U.S.C.A. § 216(b).

29

29 U.S.C.A. § 216(b).

Labor and Employment Behalf of Others in General

Actions on

Labor and Employment opting-in

Notice and

The plaintiff's burden at the conditional certification stage of an FLSA collective action is not high. Fair Labor Standards Act of 1938 §

The defendant is not entitled to a full recitation of its defenses in the notice of a conditionally certified FLSA collective action sent to potential opt-in plaintiffs; a statement that the defendant denies liability is sufficient. Fair Labor Standards

16,

Act of 1938 § 16,

29 U.S.C.A. § 216(b).

Labor and Employment Behalf of Others in General

[12]

Actions on

Credibility determinations and merits-based arguments are more properly considered at the stage of final, rather than conditional, certification of an FLSA collective action. Fair Labor Standards Act of 1938 § 16, U.S.C.A. § 216(b).

[9]

Notice and

District courts have broad discretion in directing notice of a conditionally certified FLSA collective action to potential opt-in plaintiffs.

[11] [7]

Labor and Employment opting-in

29

Labor and Employment opting-in

29

Notice and

Additional language regarding opt-in plaintiffs’ potential obligations was unwarranted, and thus District Court would not require such language

29 U.S.C.A. § 216(b).

Labor and Employment opting-in

Notice and

District Court would permit only service via email and first-class mail, and not via text message, of notice to potential opt-in plaintiffs of conditionally certified FLSA collective action against health insurance company by former nonmanagement utilization review employees alleging that employer misclassified them as exempt from FLSA overtime provisions; potential existed for overly-duplicative and unnecessary forms of notice. Fair Labor Standards Act of 1938 § 16, 216(b).

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29 U.S.C.A. §

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

[13]

Labor and Employment opting-in

Courts regularly authorize service via email of the notice to potential opt-in plaintiffs of a conditionally certified FLSA collective action.

Fair Labor Standards Act of 1938 § 16, U.S.C.A. § 216(b).

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Attorneys and Law Firms Jack L. Siegel, Pro Hac Vice, Siegel Law Group PLLC, Dallas, TX, Scott B. Cooper, Schmidt Kramer, P.C., Harrisburg, PA, Travis Hedgpeth, The Hedgpeth Law Firm, PC, Houston, TX, for Plaintiff.

Henry A. Platt, Pro Hac Vice, Saul Ewing Arnstein & Lehr LLP, Washington, DC, Cory S. Winter, Matthew M. Haar, Saul Ewing Arnstein & Lehr LLP, Harrisburg, PA, Lisa M. Koblin, Saul Ewing Arnstein & Lehr, LLP, Philadelphia, PA, for Defendant.

ORDER Yvette Kane, District Judge *1 THE BACKGROUND OF THIS ORDER IS AS FOLLOWS: Plaintiff Dawn Bellan (“Plaintiff”) commenced this action by filing a complaint in this Court on May 6, 2020, seeking to represent a class of workers alleging that Defendant Capital BlueCross (“Defendant”) violated provisions of the Fair Labor Standards Act (“FLSA”),

29 U.S.C. § 201 et

seq., and various state wage and hour laws. 1 (Doc. No. 1.)

Presently before the Court is Plaintiff's motion requesting that the Court conditionally certify the proposed collective class and authorize the issuance of notice to members of the collective. 2 (Doc. No. 22.) The parties have not yet taken discovery in this action. Having been fully briefed (Doc. Nos. 24, 32, 33), the motion is ripe for disposition 1

sought Rule 23 certification. Accordingly, the instant Order addresses only whether Plaintiff's FLSA claims may proceed as a collective action.

Notice and

Plaintiff's state law claims are brought pursuant to Federal Rule of Civil Procedure 23. (Doc. No. 1 ¶ 12.) At this time, Plaintiff has not yet

2

Since the filing of the complaint, two additional individuals, Linda Felo and Michelle Cruse, have filed notices of consent to join the action as optin plaintiffs. (Doc. Nos. 8-1, 10-1.) After briefing closed on the instant motion, a third individual, Connie L. Leese, also filed a notice of consent to join the action as well as a supporting declaration.

(Doc. Nos. 34, 35.) As the declaration was filed after the close of briefing and during the Court's consideration of its final ruling on this matter, the Court will decline to consider the declaration of Connie Leese (Doc. No. 35) with respect to the instant motion. Accordingly, Defendant's motion to strike the declaration (Doc. No. 36) will be denied as moot.

Defendant is a Pennsylvania-based health insurance company that provides and administers health coverage for individuals throughout Pennsylvania. (Doc. No. 1 ¶ 1.) Plaintiff is a former employee of Defendant. (Id. ¶ 13.) During her time working for Defendant, Plaintiff alleges that she performed utilization review work consisting of “reviewing health insurance benefit requests submitted on behalf of members against predetermined guidelines and criteria for insurance coverage and payment purposes.” (Id. ¶ 8.) Plaintiff submits that her job duties “were routine and rote and did not include the exercise of discretion and judgment with respect to matters of significance” and that she “had authority to approve health insurance benefit requests that matched predetermined criteria, but did not have the authority to deny health insurance benefit requests.” (Id. ¶¶ 18-19.)

Plaintiff's FLSA claims stem from Plaintiff's allegation that Defendant routinely classifies non-management employees that perform utilization reviews (“Utilization Review Employees”) as exempt from federal overtime laws. (Id. ¶ 7.)

Specifically, Plaintiff argues that “[o]f Defendant's employees who performed the same primary job duties as Plaintiff in the last three years, Defendant classified some or all as exempt from the overtime provisions of the FLSA and paid them a salary.” (Id. ¶ 45.) Plaintiff submits that she is similarly situated to all collective class members because “they were paid the same and performed the same primary job duties” (id. ¶ 42), and further submits that “[o]f Defendant's employees classified as exempt and who performed the same primary duties as Plaintiff in the last three years, some or all worked

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

over 40 hours in one or more individual workweeks” (id. ¶ 46).

allegations at this pre-discovery stage by providing copies of Defendant's job descriptions and three sworn declarations from individuals who performed utilization review work *2 [1] [2] Under the FLSA, a collective action may be for Defendant. (Id. at 11.) Further, Plaintiff cites to brought “by any one or more employees for and in behalf numerous cases from around the country where district courts of himself or themselves and other employees similarly have granted conditional certification under the FLSA to employees in similar utilization review positions under situated.” See 29 U.S.C. § 216(b). “No employee shall similar misclassification schemes to that alleged here. (Id. at be a party plaintiff to any such action unless he gives his 13 n.5) (collecting cases). consent in writing to become such a party and such consent is filed in the court in which such action is brought.” Id. A In response, Defendant argues that “Plaintiff has failed to collective action under the FLSA is “fundamentally different” demonstrate that she is similarly situated to the putative from a class action under Rule 23. See Halle v. West collective action members” and that allowing this case Penn Allegheny Health Sys., 842 F.3d 215, 222-23 (3d Cir. to proceed as a collective action would “frustrate judicial economy because the claims raised by Plaintiff require an 2016) (citing Genesis Healthcare Corp. v. Symczyk, 569 individualized assessment of various employees’ job duties U.S. 66, 74, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013)). and compensation to determine their respective exemption Within the Third Circuit, courts utilize a two-step process status.” (Doc. No. 32 at 1-2.) Defendant asserts that Plaintiff's for certification of collective actions under the FLSA. See allegations are “vague and speculative generalizations” and Zavala v. Wal Mart Stores, Inc., 691 F.3d 527, 536 (3d Cir. insists that because Plaintiff worked remotely, she could 2012). not possibly have personal knowledge of the conditions of employment of any other employee. (Id. at 3, 13.)

[3] [4] [5] At the first step, conditional certification, Defendant argues broadly that the declarations provided by courts within this Circuit have determined a “fairly lenient opt-in Plaintiffs Linda Felo and Michelle Cruse are similarly deficient. (Id. at 16.) standard” applies. See id. at 535 (collecting cases). Indeed, the Third Circuit requires only a “modest factual showing” to support a “factual nexus between the manner in which the employer's alleged policy affected him or her and the manner in which it affected the proposed collective action members.” See id. at 536 n.4 (citing Symczyk v.

Genesis Healthcare Corp., 656 F.3d 189 (3d Cir. 2011), rev'd on other grounds, Genesis Healthcare, 569 U.S. 66, 133 S.Ct. 1523 (2013)). “At the step-one inquiry, the court does not weigh the evidence, resolve factual disputes, or reach the merits of plaintiff's claims.” Neal v. Air Drilling Assocs., No. 3:14-CV-1104, 2015 WL 225432, at *3 (M.D. Pa. 2015).

Therefore, courts do not consider whether named plaintiffs are, in fact, similarly situated enough to opt-in plaintiffs to maintain a collective action until final certification. See Halle, 842 F.3d at 226.

Plaintiff argues that she has met the lenient burden for conditional certification by demonstrating “(1) the uniform job duties and payment provisions applicable to UREs, and (2) that similarly situated salaried UREs exist whom [Defendant] subjected to the OT Misclassification Policy that denied all salaried UREs overtime pay.” (Doc. No. 24 at 12-13.) Plaintiff notes that she has supported her

[6] [7] The Court agrees with Plaintiff that conditional certification is warranted at this time. As noted, Plaintiff's burden at the conditional certification stage is not high. See Zavala, 691 F.3d at 536, n.4 (citing Symczyk, 656 F.3d at 193). Here, Plaintiff Dawn Bellan and opt-in Plaintiffs Linda Felo and Michelle Cruse (collectively, “Plaintiffs”) have provided declarations that they all performed nonclinical utilization review work “in accordance with [Defendant]’s policies, procedures, guidelines, and criteria/ guidelines embedded in [Defendant]’s computer system” and that they “could not significantly deviate from Defendant's guidelines or criteria” in performing their work. (Doc. Nos. 24-2, 24-3, 24-4.) All Plaintiffs assert that their knowledge of the misclassification of other Utilization Review Employees is based on, among other things: (1) conversations had over the course of Plaintiffs’ employment “with other Utilization Review Employees who talked to [Plaintiffs] about their job duties, hours of work, and how [Defendant] paid them”; (2) “training calls/webinars that [Plaintiffs] attended with Utilization Review Employees”; and (3) “training seminars [Plaintiffs] attended with other Utilization Review Employees.” (Id.) Contrary to Defendant's assertions that Plaintiffs have no knowledge of the working conditions of

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

any other employees, all Plaintiffs specifically name other coworkers they believe would be eligible to join the instant action based on their personal knowledge gained during the course of their employment. (Id.) *3 Plaintiffs have also produced job descriptions for at least two positions of Utilization Review Employees. (Doc. No. 24-5.) These job descriptions, for a “Medical Management Nurse I” and “Medical Management Nurse II” respectively, lend credence to Plaintiffs’ claims that Utilization Review Employees perform the same or sufficiently similar work regardless of job title or the type of professional license held by the employee. 3 Further, Defendant admits that it classifies all employees in Medical Management Nurse positions as exempt. (Doc. Nos. 32 at 6, 32-2 ¶ 6.) (“LPN and RN positions within the [Utilization Management] Program are salaried and perform duties that are inherently exempt from overtime compensation.”) As noted, Plaintiffs have cited numerous cases involving employees performing utilization review work where conditional certification under the FLSA was granted on similar record evidence, cases that the Court finds persuasive. See, e.g., Deakin v. Magellan Health, Inc., 328 F.R.D. 427, 436-37 (D.N.M. 2018); Jackson v. Superior Healthplan, Inc., No. 3:15-CV-3125, 2016 WL 7971332, at *7 (N.D. Tex. Nov. 7, 2016); Randolph v. Centene Mgmt. Co., No. C14-5730, 2015 WL 2062609, at *3-4 (W.D. Wash. May 4, 2015); Clark v. Centene Corp., No. A-12-CA-174-SS, 2013 WL 12108138, at *4 (W.D. Tex. May 8, 2013); Ruggles v. WellPoint, Inc., 591 F. Supp. 2d 150, 160-63 (N.D.N.Y. 2008). To the extent that Defendant argues that these cases are “inapposite, out-of-Circuit cases applying different standards to different positions at different employers” (Doc. No. 32 at 2 n.2), the Court has also identified a case within this Circuit where the United States District Court for the Eastern District of Pennsylvania granted conditional certification of a collective action to a group of “Clinical Care Reviewers,” nurses who performed utilization review work, under almost identical circumstances to those presented here with almost identical record evidence. See Wood v. AmeriHealth Caritas Servs., LLC, No. 2:17-CV-03697, Dkt. No. 49, 2018 WL 9517197 (E.D. Pa. May 15, 2018).

3

For example, although Defendant requires a Medical Management Nurse I to hold an active LPN license while a Medical Management Nurse II is required to hold an active RN license, the job responsibilities per the position descriptions appear to have substantial overlap. (Doc. No. 24-5.)

Specifically, both positions state the employee is responsible for using or applying “Milliman criteria” as well as “Medicare guidelines” to benefit requests “within the framework of established policy and procedures of Capital's Clinical Management Department.” (Id.) [8] Defendant's only remaining arguments opposing conditional certification rely on credibility or merits-based defenses, such as whether the positions held by Plaintiff or other Utilization Review Employees qualify for an exemption under the FLSA. (Doc. No. 32 at 17-20.) However, it is clearly established that credibility determinations and merits-based arguments are more properly considered at the stage of final certification. See Neal, 2015 WL 225432 at *3. Therefore, the Court declines to review Defendants’ arguments on the merits at this time and will grant Plaintiffs’ motion for conditional certification.

However, the Court's decision to conditionally certify a collective action under the FLSA does not end the inquiry.

The parties in this case do not agree on the content of the proposed notice that will be sent to potential collective action members or the method by which notice should be sent. Specifically, Defendant asserts that Plaintiff's proposed notice is “inaccurate and incomplete” and objects to providing Plaintiff with any contact information for potential collective action members beyond a residential mailing address. 4 (Doc. No. 32 at 21-26.) Defendant also requests that Plaintiff add language “fully stat[ing] [Defendant]’s position that it complied with all applicable laws,” clarifying “the proper position titles within the limited scope of putative class members,” and informing potential opt-in plaintiffs in more detail of any potential obligations they may have in connection with their participation. (Id. at 21-25.)

4

Plaintiff requests that Defendant produce addresses, phone numbers, and email addresses so that notice may be sent by mail, email, and text message. (Doc. No. 24 at 13-15.)

[9] [10] [11] It is well-established that district courts have broad discretion in directing notice to potential optin plaintiffs. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989) (holding that “district courts have discretion, in appropriate cases, to implement 29 U.S.C. § 216(b)”). The Court notes that Plaintiff has submitted a revised proposed notice in order to address some of Defendant's concerns regarding

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

clarity of positions applicable to the instant action. (Doc. No. 33-2.) As to Defendant's other objections to the content of the proposed notice, the Court finds that Plaintiff's proposed notice is sufficient to inform individuals of their rights with regard to this case. Defendant is not entitled to a full recitation of its defenses; a statement that Defendant denies liability will suffice. See Bath v. Red Vision Systems, Inc., No. 2:13CV-02366, 2013 WL 2436100 at *7 (D.N.J. 2014) (citing Delaney v. Geisha NYC, LLC, 261 F.R.D. 55, 59 (S.D.N.Y. 2009)). Further, the Court finds that requiring additional language regarding opt-in plaintiffs’ potential obligations would only serve to have a chilling effect on potential participation and is unwarranted. See id. Accordingly, the Court will approve Plaintiff's revised notice as currently proposed. *4 [12] [13] However, the Court does agree with Defendant that there should be some limitation on Plaintiff's proposed method of notice, specifically, Plaintiff's request to send notice via text message. The Court recognizes the potential for overly-duplicative and unnecessary forms of notice. Therefore, the Court will deny Plaintiff's request to serve notice via text message and will limit notice distribution to email and first-class mail. 5 5

The Court finds Defendant's concerns regarding email notice to be unfounded. Courts regularly authorize the service of notice via email in FLSA actions. See Garcia v. Vertical Screen, Inc., 387 F. Supp. 3d 598, 611 (E.D. Pa. 2019) (authorizing the dissemination of notice by email).

AND SO, on this 26th day of October 2020, upon consideration of Plaintiff's motion to conditionally certify a collective class (Doc. No. 22), IT IS ORDERED THAT: 1. Defendant's motion to strike (Doc. No. 36) is DENIED as moot; 2. Plaintiff's motion to conditionally certify a collective class pursuant to the FLSA (Doc. No. 22) is GRANTED. The following collective class will be permitted notice and an opportunity to opt in to this action: All individuals employed by Defendant in nonmanagement job titles containing the term “Medical Management Nurse” who performed similar utilization review work in the last three years who were paid on a salary basis and classified as exempt from overtime. This includes, without limitation, individuals employed under

the job title of Medical Management Nurse I, Medical Management Nurse II, or Medical Management Nurse III; 3. Within fourteen (14) days of the date of this Order, Defendant will produce to Plaintiff a list, in a computerreadable data file, of all individuals working for Defendant who are covered by the aforementioned collective definition. This list should include each putative collective member's: (1) name; (2) job title; (3) last known mailing address and telephone number; (4) last known personal and work email addresses; (5) dates of employment; (6) work locations; and (7) Social Security numbers (last four digits only); 4. Plaintiff's counsel shall not use this information for any reason unrelated to this action, and may only use this information for purposes of providing the approved notice in this action unless putative collective members have opted-in or contacted counsel for more information; 5. Plaintiff's revised proposed notice (Doc. No. 33-2) is APPROVED; 6. After receiving the aforementioned information from Defendant, Plaintiff's counsel will distribute the approved notice and opt-in consent form via first-class U.S. mail and email only; 7. The opt-in response deadline is set as the date sixty (60) calendar days from the date the notice is mailed; 8. Consistent with the parties’ joint case management plan (Doc. No. 27), the parties shall meet and confer within thirty (30) days of the close of the opt-in period for purposes of conducting a second Rule 16 conference.

Within fourteen (14) days of such conference, the parties shall submit a proposed scheduling order addressing the deadlines identified in the Court's Order of July 29, 2020 (Doc. No. 21) and a revised case management plan; and 9. A case management conference will be conducted by the Court on February 26, 2021 at 10:00 a.m. The Court prefers to hold this conference by telephone. Plaintiff's counsel shall initiate the call. The telephone number of the Court for purposes of this call is 717-221-3990.

All Citations --- F.Supp.3d ----, 2020 WL 6576752

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Bellan v. Capital BlueCross, --- F.Supp.3d ---- (2020)

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