Nationwide Certification Granted in CVS Call Center Overtime Lawsuit

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF MISSOURI WESTERN DIVISION TIMOTHY WOODS and KIMBERLY GIBSON, On Behalf Of Themselves And All Others Similarly Situated, Plaintiffs, v.

CAREMARK PHC, L.L.C. d/b/a CVS CAREMARK CORPORATON and CAREMARK, L.L.C. Defendants.

) ) ) ) ) ) ) ) ) ) ) ) )

Case No. 4:14-cv-583-SRB

ORDER Before the Court is Plaintiffs’ Motion and Memorandum in Support of their Motion for Conditional Certification Pursuant to 29 U.S.C. § 216(b). (Doc. #108). The Court finds for purposes of conditional certification, Plaintiffs have established a colorable basis for their claim that the putative collective members were victims of a single decision, policy, or plan implemented by Defendants (“Caremark/CVS”) resulting in violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b). Upon consideration of the parties’ briefing and exhibits, as well as the record made at the in-person hearing on May 24, 2016, and for the reasons stated more fully below, the motion (Doc. #108) is GRANTED. I.

Background Plaintiffs brought this collective action under the FLSA on behalf of themselves and

“similarly situated” employees of Caremark/CVS. Plaintiffs allege they, along with other Customer Care Representatives, performed pre-shift work for which they were not paid in violation of the FLSA. On February 20, 2015, the Court granted conditional certification of an FLSA collective action including “all current and former [Caremark] non-exempt hourly CCRs

Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 1 of 8

who worked at [Caremark’s] Lee’s Summit call center as a telephone-dedicated customer service employee in the past three years.” (Doc. #43, p. 2). Thereafter, the parties engaged in limited discovery focused on the prospect of nationwide conditional certification. On March 4, 2016, Plaintiffs moved the Court to conditionally certify a nationwide collective of all current and former Caremark/CVS non-exempt hourly CCRs who worked at any of Caremark’s/CVS’ call centers as a telephone-dedicated customer service employee in the past three years. Plaintiffs also requested that the Court “adopt the same notice and dissemination plan as previously ordered – i.e. mailing notice as well as emailing reminder notice.” (Doc. #108, p. 10).

II.

Legal Standard Sections 206 and 207 of the FLSA require employers to pay employees a regular hourly

rate for up to forty (40) hours a week and overtime compensation at a rate of one and one-half times the regular rate for hours worked in excess of forty (40). 29 U.S.C. §§ 206, 207(a)(1) (2016). The FLSA provides for a private right of action to recover damages for violations of the Act’s overtime provisions. 29 U.S.C. § 216(b). Employers are liable for the amount of unpaid wages, plus an equal amount in liquidated damages for violations of §§ 206 and 207. 29 U.S.C. § 216(b).

Section 216(b) provides that a FLSA action may be brought by an employee for himself and on behalf of “other employees similarly situated.” A district court may certify a case as a collective action only if members of the collective are “similarly situated” or raise similar legal issues regarding coverage, exemption, or nonpayment of wages or benefits. Hoffman-La Roche, Inc. v. Sperling, 493 U.S. 165, 168-71 (1989). The plaintiff bears the burden of establishing he or she is similarly situated to other members of the proposed collective. Young v. Cerner Corp., 503 F. Supp. 2d 1226, 1229 (W.D. Mo. 2007). A collective action under the FLSA differs

2 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 2 of 8

significantly from a Fed. R. Civ. P. 23 class action in that a similarly situated employee does not become a plaintiff (and is not bound by a subsequent judgment) in a case proceeding under § 216(b) “unless he gives his consent in writing to become such a party” and files a consent in the court where the action is pending. 29 U.S.C. § 216(b).

The FLSA does not define the term “similarly situated.” In order to determine whether the plaintiff and the potential plaintiffs are “similarly situated” for purposes of conditional certification, district courts use a variety of standards. Davis v. Novastar Mortg., Inc., 408 F. Supp. 2d 811, 815 (W.D. Mo. 2005). The Eighth Circuit has not articulated a standard for conditionally certifying FLSA cases. However, a majority of the district courts in the Eighth Circuit use a two-step analysis. See, e.g., McClean v. Health Sys., Inc., No. 11-CV-03037-DGK, 2011 WL 6153091 (W.D. Mo. Dec. 12, 2011); Chankin v. Tihen Commc’ns, Inc., No. 08-CV196-HEA, 2009 WL 775588 (E.D. Mo. Mar. 20, 2009); Kautsch v. Premier Commc’ns, 504 F. Supp. 2d 685, 688 (W.D. Mo. 2007).

The first step in the two-step analysis for conditional certification is the notice stage. At this stage, the plaintiff may move to certify the putative collective for notice purposes, prior to the completion of discovery. Davis, 408 F. Supp. 2d at 815. For purposes of conditional certification, the district court applies a lenient evaluation standard, which is considerably less stringent than Rule 23(b)(3) class action standards. Fast v. Applebee’s Int’l, Inc., 243 F.R.D. 360, 362-63 (W.D. Mo. 2007) (citing Grayson v. K Mart, 79 F.3d 1086, 1096 (11th Cir. 1996)).

At this early stage, the district court should not consider the merits of the plaintiff’s claims; rather, “the plaintiff[] need only establish a colorable basis for [his] claim that the putative class members were the victims of a single decision, policy, or plan.” Carden v.

Scholastic Book Clubs, Inc., No. 10-CV-01112-NKL, 2011 WL 2680769, at *2 (W.D. Mo. July

3 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 3 of 8

8, 2011) (citation omitted); see also Davis, 408 F. Supp. 2d at 815. A “colorable basis” is established with “something more than the mere averments” in the plaintiff’s complaint.

Carden, 2011 WL 2680769, at *2 (citation omitted). The plaintiff can meet this requirement with only a modest factual showing. Kautsch, 504 F. Supp. 2d at 688. “Although credibility determinations and findings of fact are not appropriate at this stage, some identifiable facts or legal nexus must bind the claims so that hearing the cases together promotes judicial efficiency.”

Jost v. Commonwealth Land Title Ins. Co., 08-CV-734-CDP, 2009 WL 211943, at *2 (E.D. Mo. Jan. 27, 2009) (citation omitted). “While the burden on the plaintiff is relatively low at this initial stage, it is not invisible.” Id. (citation omitted).

The second step of the conditional certification process occurs after discovery is complete and the parties and district court have full information. Kautsch, 504 F. Supp. 2d at 688. If the district court conditionally certifies the collective, the potential collective members are sent notice and given an opportunity to “opt-in.” Id. At that point, the defendant may move to decertify the collective. Id. This second “decertification stage” requires a heightened standard of review to determine whether the plaintiff and other members of the collective are similarly situated, such that the lawsuit can proceed.

Caremark/CVS argue that a heightened “intermediate” standard should apply to Plaintiffs’ motion for nationwide conditional certification because the parties have conducted some discovery regarding certification. Caremark/CVS rely primarily on McClean v. Health Sys., Inc., No. 11-CV-03037-DGK, 2011 WL 6153091 (W.D. Mo. Dec. 12, 2011), in which the court described the intermediate standard it applied: [I]n order to provide some measurable standard by which to judge if Plaintiffs have made a sufficient modest “plus” factual showing . . . this Court will compare Plaintiffs’ allegations set forth in their Complaint with the factual record assembled through discovery to determine whether Plaintiffs have made sufficient 4 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 4 of 8

showing beyond their original allegations that would tend to make it more likely that a class of similarly situated employees exists.

Id. at *1 (citation omitted).

In so holding, the McClean court recognized that other courts within this district have applied the lenient standard even when some discovery had been conducted. Id. at *3 (citing Carden, 2011 WL 2680769, at *2 (applying lenient standard where “parties [had] not yet completed discovery”); see also Speer v. Cerner Corp., No. 14-CV-0204-FJG, 2016 WL 1267809, at *4 n.3 (W.D. Mo. March 30, 2016)). While an intermediate standard may be appropriate in certain situations, given the amount of discovery conducted in this case to date, the Court finds the lenient standard should apply. Plaintiffs have taken only one Fed. R. Civ. P. 30(b)(6) deposition where the deponent was unable to testify regarding all of the noticed topics, and the parties have conducted only limited written discovery. Even so, the Court further finds that regardless of the standard applied, i.e. lenient or intermediate, Plaintiffs have satisfied their burden for nationwide conditional certification.

III.

Discussion In support of nationwide conditional certification, Plaintiffs submitted 23 declarations

from 22 different CCRs all of whom had the same or similar primary job duty of answering telephone inquiries about products and services provided by Caremark/CVS. Plaintiffs summarized the declarations: CCRs are regularly scheduled to work 40 or more hours per week. Ex. A ¶¶ 5 & 23; Ex. B ¶ 5; Exs. C-V ¶ 3. CCRs must be prepared to take calls at the beginning of their scheduled start time. Ex. A ¶¶ 8-11; Ex. B ¶ 11; Exs. C-V ¶ 5; Ex. W ¶ 3. In order to be prepared to take calls at the beginning of their scheduled shift time, CCRs are expected to arrive at work between 10-15 minutes early to perform pre-shift activities. Ex. A ¶ 8 & 19; Ex. B ¶¶ 11 & 21; Exs. C-V ¶ 6. These pre-shift activities include logging onto a computer, logging into CVS’ network and opening up required computer programs and applications (“Pre-Shift Work”). Ex. A ¶¶ 11 & 20; Ex. B ¶¶ 15 & 23; Exs. C-V ¶ 6.

5 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 5 of 8

CCRs were not paid for all the hours they worked, because CCRs were required to perform all of their Pre-shift Work prior to their scheduled start time, but CVS did not pay for the time CCRs spent on Pre-Shift Work prior to logging onto the phone system. Ex. A ¶¶ 8-10, 20 & 23; Ex. B ¶¶ 8-11, 23 & 28; Exs. CV ¶ 7. CVS tracked CCRs time through the phone system. Ex. A ¶ 9; Ex. B ¶ 9; Exs. C-V ¶ 7. Because CVS required the CCRs to be “ready to work” before logging into the phone system, the phone system did not track the time spent on the Pre-Shift Work. Ex. A ¶ 10; Ex. B ¶¶ 9-11; Exs. C-V ¶ 7. Rather than pay the CCRs for this required Pre-Shift Work, CVS only paid CCRs for work done after they logged into the phone system. Ex. A ¶¶ 9-10; Ex. B ¶¶ 9-11 & 20; Exs. C-V ¶ 7.

(Doc. #108, pp. 4-5). Plaintiffs also submitted certain Caremark/CVS documents stating that CCRs must perform Pre-Shift Work prior to their shift start time and be ready to take calls promptly at the beginning of their shift. (Doc. #108, pp. 5-6).

Caremark/CVS opposes nationwide conditional certification arguing: 1) Plaintiffs fail to adequately define the group for whom they seek conditional certification; 2) discovery conducted to date reveals the absence of a nationwide policy requiring off-the-clock work and variations in the type and duration of off-the clock work performed; and 3) nationwide notice would be futile because many putative collective members are bound by individual arbitration agreements.

(Doc. #113, pp. 1-2).

Initially, Caremark/CVS argues Plaintiffs’ use of the phrase “hourly, non-exempt telephone-dedicated call center employees” does not adequately inform Caremark/CVS who Plaintiffs seek to include in the collective. The Court finds, however, that the phrase is straightforward and adequately defines who Plaintiffs seek to include. Caremark/CVS also argues they are uncertain which call centers are included. As Plaintiffs point out, while discovery has not yet revealed the identity of each and every Caremark/CVS call center, Plaintiffs provide evidence from the call centers about which they are aware to pursue conditional certification of “hourly, non-exempt telephone–dedicated call center employees” at

6 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 6 of 8

all call centers, known and unknown. (Doc. #118, p. 6). The Court finds Plaintiffs described with sufficient specificity the group of persons to be included in the conditional certification order.

Caremark/CVS next argue that Plaintiffs ignore contradictory evidence requiring denial of conditional certification. Caremark/CVS direct the Court to evidence of variances in the frequency, duration, and type of Pre-Shift Work as well as to evidence of post-shift and lunchtime off-the-clock work. The post-shift and lunch-time off-the-clock evidence is immaterial as “Plaintiffs do not seek conditional certification of the lunch or post-shift claims.” (Doc. #118, p.

1 n.1). Further, the evidence of variances in the frequency, duration, and type of Pre-Shift Work does not defeat conditional certification as such evidence is relevant to the stage-two inquiry, not stage one.

Caremark/CVS finally argue that if the Court grants nationwide conditional certification, individuals who signed an arbitration agreement in connection with their employment should not receive notice. Caremark/CVS cite no case in support of their argument that only limited notice should be sent. Regardless, by separate order the Court denied Caremark/CVS’ motion to compel arbitration, and Caremark/CVS’ argument on this point is now moot.

The Court finds Plaintiffs have presented at least a modest factual showing that Plaintiffs and the putative class members were victims of a single decision, policy, or plan.

Caremark/CVS’ arguments to the contrary fail. Accordingly, it is hereby ORDERED: 1. Plaintiffs’ Motion for Conditional Certification Pursuant to 29 U.S.C. § 216(b) (Doc. #108) is GRANTED; 2. Defendants Caremark/CVS shall produce to Plaintiffs within fourteen (14) days of this Order the names, last known addresses, and electronic e-mail addresses of all

7 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 7 of 8

former and current employees of Caremark/CVS who worked as non-exempt, hourly, telephone-dedicated customer service employees at any of Caremark/CVS call centers at any time up to three years prior to the agreed tolling date; and 3. The same notice and dissemination plan previously ordered – i.e. mailing notice as well as emailing reminder notice – is approved.

IT IS SO ORDERED.

/s/ Stephen R. Bough JUDGE STEPHEN R. BOUGH UNITED STATES DISTRICT COURT DATED: August 2, 2016

8 Case 4:14-cv-00583-SRB Document 141 Filed 08/02/16 Page 8 of 8