Teresa O'Brien v. Ed Donnelly Enterprises, Inc. ( 2009 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 09a0273p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
-
TERESA O’BRIEN, et al. (No. 07-4553);
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JESSICA DELLARUSSIANI, et al. (No. 08-
3184), -
Plaintiffs-Appellants, -
Nos. 07-4553; 08-3184
,
>
-
-
v.
-
-
ED DONNELLY ENTERPRISES, INC., and ED
DONNELLY, -
Defendants-Appellees. N
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
Nos. 04-00085; 07-00253—George C. Smith, District Judge.
Argued: December 2, 2008
Decided and Filed: August 5, 2009
*
Before: MOORE and WHITE, Circuit Judges; TARNOW, District Judge.
_________________
COUNSEL
ARGUED: Lisa A. Wafer, FERRON & ASSOCIATES, Columbus, Ohio, for
Appellants. Loriann E. Fuhrer, KEGLER, BROWN, HILL & RITTER, Columbus,
Ohio, for Appellees. ON BRIEF: Lisa A. Wafer, John W. Ferron, Jessica G. Fallon,
FERRON & ASSOCIATES, Columbus, Ohio, for Appellants. Loriann E. Fuhrer,
KEGLER, BROWN, HILL & RITTER, Columbus, Ohio, for Appellees.
TARNOW, D. J., delivered the opinion of the court, in which MOORE, J.,
joined. WHITE, J. (p. 53), delivered a separate opinion concurring in part.
_________________
OPINION
_________________
ARTHUR J. TARNOW, District Judge.
*
The Honorable Arthur J. Tarnow, United States District Judge for the Eastern District of
Michigan, sitting by designation.
1
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I. Factual and Procedural Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
II. The Dellarussiani suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Considering the offer of judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Mootness of counts I and II in view of offer of judgment . . . . . . . . . . . . 8
C. Reasonable attorneys’ fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. Liquidated damages under Ohio’s Prompt Pay Act . . . . . . . . . . . . . . . . 11
III. Motion to dismiss Dellarussiani plaintiffs from O’Brien appeal . . . . . . . . . . . 14
A. Mootness due to Dellarussiani judgment on counts I and II . . . . . . . . . 15
B. Defendants’ argument that mootness of the FLSA claim necessarily renders
any supplemental claims moot . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
C. Res judicata and the Dellarussiani plaintiffs’ Prompt Pay Act claim in
O’Brien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
D. Res judicata and Dellarussiani plaintiffs’ common-law claims in O’Brien
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
IV. The O’Brien suit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A. Decertification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1. Standard of review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2. The meaning of “similarly situated” . . . . . . . . . . . . . . . . . . . . . . 22
B. The lead plaintiffs in O’Brien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1. Spoliation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2. O’Brien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
a. Rogan deposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
b. Deposition in the instant case . . . . . . . . . . . . . . . . . . . . . 32
c. Affidavit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
d. Summary Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3. Prater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
a. Affidavit ¶¶ 6-9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
b. Affidavit ¶¶ 10-13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
c. Affidavit ¶¶ 15-16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
d. Affidavit ¶ 14; Exhibits 6 and 7 . . . . . . . . . . . . . . . . . . . 49
e. Summary judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4. Burden of proof . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
V. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
These appeals involve two related cases in which former employees of two
McDonald's franchises allege that their employer refused to pay the employees the
wages that they were due, in violation of the Fair Labor Standards Act (“FLSA”), 29
U.S.C. § 216(b); the corresponding Ohio statute; and other Ohio law. For the reasons
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that follow, in the Dellarussiani appeal, we affirm the district court’s entry of judgment
pursuant to the defendants’ Fed. R. Civ. P. 68 offer of judgment, except that the issue of
attorney fees is remanded to the district court. Having achieved all the relief that they
could hope to get on their most important claims, the Dellarussiani plaintiffs no longer
have a stake in these claims in the O’Brien case. As for an Ohio Prompt Pay Act claim,
which plaintiffs lost in Dellarussiani on summary judgment, and as to common-law
claims pleaded in O’Brien but not in Dellarussiani, the appeal is not moot, though these
claims will be barred by res judicata. Therefore, defendants’ motion to dismiss the
Dellarussiani plaintiffs from the O’Brien appeal is granted in part, but denied in part as
to the Prompt Pay Act and common-law claims. Though we disagree with the standard
that the district court applied in deciding whether the O’Brien plaintiffs were “similarly
situated” under the FLSA, we affirm the decertification. We do so, because in view of
our dismissal of most of the Dellarussiani plaintiffs’ claims from the O’Brien appeal,
there is only one possible opt-in plaintiff who could join the lead plaintiffs in O’Brien.
But the district court correctly observed that this particular opt-in plaintiff failed to
allege that she suffered from any unlawful practices. She is clearly not similarly situated
to the lead plaintiffs. Nor are the Dellarussiani plaintiffs, who have only a few extant
supplemental claims, similarly situated to the lead plaintiffs, given that these claims will
inevitably be barred by res judicata. Therefore, we affirm the district court’s
decertification of the collective action. That leaves the claims of the lead O’Brien
plaintiffs. As to the lead plaintiffs, we reverse the district court’s grant of summary
judgment in defendants’ favor as to the lead plaintiffs’ “off the clock” claims and vacate
the grant of summary judgment as to the lead plaintiffs’ claim that their time-sheets were
improperly altered.
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I. Factual and Procedural Background
The defendants in this case are Ed Donnelly and the corporation that he and his
wife own, Ed Donnelly Enterprises, Inc. O’Brien J.A. 150. Defendants bought two
McDonald’s stores in Bellefontaine, Ohio in February 2002. O’Brien J.A. 155.
For varying lengths of time between 2002 and 2004, plaintiffs worked in at least
one of these two stores. They earned wages between $6.25 and $9.00 per hour. O’Brien
Appellants’ Br. at 7.
Plaintiffs allege that there were two main ways in which defendants and their
managers paid plaintiffs less than what they had earned. The first practice involved
requiring plaintiffs to work “off the clock,” that is, before they had punched into, or after
they had punched out of, the computerized system that tracked employees’ start, end,
and break times.
The second manner in which plaintiffs claim they were cheated is this: plaintiffs
say that defendants electronically altered the times that had previously been entered by
the timekeeping system when an employee punched in or out of work. These edits,
according to plaintiffs, reduced the total number of hours recorded in the employees’
payroll reports to a number less than what the employees had actually worked.1
In O’Brien v. Ed Donnelly Enterprises, Inc., and Ed Donnelly, plaintiffs brought
the following claims: the first cause of action was for violations of the FLSA; the
second, for violations of Ohio’s corresponding wage-payment law, O.R.C. § 4111; the
third, for violations of Ohio’s Prompt Pay Act, O.R.C. § 4113.15(B); the fourth, for
fraud; the fifth, for breach of contract; and the sixth, for promissory estoppel.
The district court initially certified a class of plaintiffs under the FLSA. The
ultimate class of plaintiffs (two lead plaintiffs and eight opt-in plaintiffs) moved for
1
Through the same counsel who represent the O’Brien and Dellarussiani plaintiffs, employees
at these same two McDonald’s restaurants had sued the former owner in October 2001. The employees
alleged that employee time records had been improperly edited in violation of the FLSA. See O’Brien
Resp. Br. at 2; O’Brien Reply Br. at 7.
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sanctions against defendants for spoliation of evidence. This request was denied. After
discovery, the district court found that the opt-in plaintiffs were not similarly situated
and decertified the class, dismissing the eight opt-in plaintiffs without prejudice. All
plaintiffs but one appealed the decertification order, and this appeal is before this court.
Retaining the same counsel as used in the O’Brien action, six opt-in plaintiffs refiled
individual suits, which were consolidated as Dellarussiani v. Ed Donnelly Enterprises,
Inc., and Ed Donnelly. Stevie LeVan, another opt-in plaintiff, did not file an individual
action, but joins the O’Brien appeal.
The two lead plaintiffs in O’Brien proceeded individually in that case. After
striking several affidavits as inconsistent with prior deposition testimony, the district
court granted summary judgment in favor of the defendants against both plaintiffs. The
two O’Brien plaintiffs appealed this final judgment and several of the evidentiary
decisions made by the district court. This appeal is also before this court.
Each of the Dellarussiani plaintiffs filed a three-count complaint. Count I
claimed violations of the FLSA; count II claimed violations of the corresponding Ohio
statute; and count III alleged that defendants were required to pay liquidated damages
under Ohio law, separate from any FLSA damages. Defendants made an offer of
judgment pursuant to Fed. R. Civ. P. 68 with regard to counts I and II. Defendants
offered to pay $6,142.20 (the full amount of claimed damages for counts I and II) plus
reasonable attorney fees as determined by the district court. The offer allowed the
district court to decide count III on the merits. The Dellarussiani plaintiffs rejected the
offer; however, the district court found that defendants’ offer of judgment mooted counts
I and II. The district court entered judgment in favor of the Dellarussiani plaintiffs in
the amount of the offer on counts I and II.
The district court also determined reasonable attorney fees and costs to be
$6,024.94. In making this determination, the district court found that the bills submitted
by the Dellarussiani plaintiffs’ counsel included time spent both on the unsuccessful
O’Brien case and the successful Dellarussiani case. In addition, the bills did not
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properly explain what expenses were incurred in preparation solely for Dellarussiani.
The district court awarded attorney fees and costs only for the work it determined was
done solely for the Dellarussiani action, even though some of the evidence used in
Dellarussiani was gathered during the O’Brien action.
Regarding count III, the district court granted defendants’ motion for summary
judgment, finding that the wages in question were in dispute. According to the district
court, under Ohio Rev. Code § 4113.15(B), if wages are in dispute, an employer is not
liable for liquidated damages. The Dellarussiani plaintiffs appealed the district court’s
entry of judgment on counts I and II, the attorney-fees award, and the grant of summary
judgment on count III. Defendants filed a motion with this court to dismiss the
Dellarussiani plaintiffs from the O’Brien appeal, asserting that the Dellarussiani
plaintiffs’ claims in O’Brien were mooted by the district court’s entry of judgment in the
Dellarussiani plaintiffs’ favor.
II. The Dellarussiani suit
The six Dellarussiani plaintiffs contend that the district court erred (1) when it
considered defendants’ offer of judgment, (2) when it dismissed counts I and II of their
complaint for mootness in view of the offer of judgment, (3) when it refused to award
any attorneys’ fees that were incurred in O’Brien while prosecuting the Dellarussiani
plaintiffs’ claims, and (4) when it granted summary judgment in defendants’ favor on
count III. We affirm the district court’s disposition of these issues, except as to the
award of attorney fees.
A. Considering the offer of judgment
Plaintiffs maintain that the district court abused its discretion by even considering
the offer of judgment, because Fed. R. Civ. P. 68(b) states that “[e]vidence of an
unaccepted offer is not admissible except in a proceeding to determine costs.”
The district court considered the offer of judgment on defendants’ Rule 12(b)(1)
motion to dismiss for lack of subject-matter jurisdiction. Both the district court and the
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defendants explain that a district court can consider an offer of judgment to determine
whether a claim is moot, in order to ascertain whether there is a justiciable case or
controversy under Article III of the Constitution. In other words, an offer of judgment
cannot be used to support or challenge the merits of a claim and to thereby influence the
trier of fact. See Hopper v. Euclid Manor Nursing Home, 867 F.2d 291, 295 (6th Cir.
1989) (“The rule contemplates that whether jury or judge tries the case the
decisionmaker will be unaware of the extraneous fact that an offer of judgment has been
made. This ensures that the trier of fact will not be influenced in its evaluation of the
case by any knowledge of a rejected offer or the consequences thereof.”). But a Rule 68
offer can be used to show that the court lacks subject-matter jurisdiction. See Greisz v.
Household Bank (Ill.), N.A., 176 F.3d 1012, 1015 (7th Cir. 1999) (an offer of judgment
that encompasses the relief claimed “eliminates a legal dispute upon which federal
jurisdiction can be based,” because “[y]ou cannot persist in suing after you’ve won”);
cf. Drs. Hill & Thomas Co. v. U.S., 392 F.2d 204 (6th Cir. 1968) (government offered,
though not pursuant to Rule 68, to give more money to tax-refund claimant than was
claimed and district court correctly dismissed the claim as moot).
We agree with the Seventh Circuit's view that an offer of judgment that satisfies
a plaintiff's entire demand moots the case and reject the plaintiffs' contention that the
offer of judgment could not be considered. We also note that our decision does not
implicate Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 922 (5th Cir. 2008). That
court held that a Rule 68 offer of judgment cannot moot a lead plaintiff’s FLSA claim
when the lead plaintiff timely moves for collective certification, because the motion
relates back to the lead plaintiff’s filing of the complaint. Of course, if the court
eventually denies the motion, then the lead plaintiff represents only herself, and her
claim is moot. Contrary to the Sandoz plaintiff, the Dellarussiani plaintiffs did not
purport to bring a collective action, so we are not concerned that the Dellarussiani
plaintiffs have been picked off by defendants to avoid the onslaught of a putative
collective action.
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We disagree, however, with the Seventh Circuit’s view that a plaintiff loses
outright when he refuses an offer of judgment that would satisfy his entire demand. See
Greisz, 176 F.3d at 1015 (barring recovery of any damages or attorney fees when the
plaintiff refused an offer of judgment for the full amount of damages plus reasonable
costs and attorney fees). Instead, we believe the better approach is to enter judgment in
favor of the plaintiffs in accordance with the defendants’ Rule 68 offer of judgment, as
the district court did in this case, following the lead of district courts in the Second
Circuit. See Greif v. Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 258 F. Supp.
2d 157, 160-61 (E.D.N.Y. 2003); Ambalu v. Rosenblatt, 194 F.R.D. 451, 453 (E.D.N.Y.
2000).
B. Mootness of counts I and II in view of offer of judgment
Plaintiffs maintain that the district court erred in dismissing counts I and II for
mootness. In particular, plaintiffs argue that the defendants’ offer of judgment did not
include attorneys’ fees and costs.
True, the defendants’ offer did not offer a number certain for plaintiffs’
attorneys’ fees. But the defendants did offer to pay costs accrued and a reasonable
attorneys’ fee to be determined by the court. Dellarussiani J.A. 281. Plaintiffs do not
argue that they could have obtained anything more for their substantive claims in counts
I and II than what the defendants offered. The only issue is whether an offer of judgment
which offers to pay a reasonable attorneys’ fee as later determined by the court — but
which does not offer to pay whatever sum reported by opposing counsel — moots the
FLSA and corresponding Ohio claim in this case.
The district court noted that offers of judgment with language similar to
defendants’ offer have been deemed by other district courts sufficient to moot the claims
at issue. See Ambalu, 194 F.R.D. at 452; see also Greisz, 176 F.3d at 1014 (defendant
who offered judgment of “$1,200 plus reasonable costs and attorneys’ fees” in a Truth
in Lending Act case was “offering [plaintiff] more than her claim was worth to her in a
pecuniary sense”). Furthermore, the FLSA does not entitle a prevailing plaintiffs’
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counsel to get whatever fee counsel claims. Rather, under the statute, the “court . . . shall
. . . allow a reasonable attorney’s fee.” 29 U.S.C. § 216(b). Defendants’ offer to pay the
reasonable attorneys’ fee as determined by the court is consonant with the statutory
language which requires that the court “allow” the reasonable fee when it awards a
judgment to a FLSA plaintiff.
Plaintiffs also contend that the offer did not purport to satisfy plaintiffs’ claim for
liquidated damages under Ohio Revised Code § 4113.15(B). However, the offer was
only extended as to counts I and II. Dellarussiani J.A. 281. Count III, which entailed
plaintiffs’ claim to liquidated damages under Ohio law, proceeded to summary judgment.
See infra Part II.D.
Therefore, the district did not err when it dismissed counts I and II as moot in
view of the offer of judgment.
C. Reasonable attorneys’ fees
Plaintiffs’ counsel incurred fees of roughly $6,000 in this case and $150,000 in
O’Brien. Dellarussiani J.A. 42. The district court determined that the reasonable fee
to which plaintiffs’ counsel were entitled did not include the O’Brien fees. Dellarussiani
J.A. 47. We review under an abuse-of-discretion standard. Wells v. New Cherokee
Corp., 58 F.3d 233, 239 (6th Cir. 1995).
Plaintiffs contend that the Dellarussiani plaintiffs’ claims were prosecuted
primarily in O’Brien. But the district court and defendants reason that the statute
authorizes an award of fees only in “the action” where a plaintiff prevails. 29 U.S.C.
§ 216(b) (“The court in such action shall, in addition to any judgment awarded to the
plaintiff or plaintiffs, allow a reasonable attorney’s fee to be paid by the defendant, and
costs of the action.”) (emphasis added); Dellarussiani J.A. 44. The plaintiffs did not
prevail in O’Brien, and therefore, say defendants, any fees incurred in O’Brien cannot
be awarded.
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Such a wooden reading of the statute is unnecessary, and at a different point in
the district court’s opinion, the court appears to acknowledge this. See Dellarussiani
J.A. 46 (district court expressing difficulty in determining “how much time was spent
on tasks in the O’Brien matter that were necessary, not redundant, and contributory to
the success of the six plaintiffs” on counts I and II of Dellarussiani). The reality is that
discovery concerning the Dellarussiani plaintiffs’ claims took place in O’Brien.
Expenses that plaintiffs’ counsel incurred while trying to obtain collective-action
certification in O’Brien should not be attributed to prosecution of the Dellarussiani
plaintiffs’ particular claims, unless these expenses benefitted the Dellarussiani plaintiffs’
individual claims. For instance, fees for depositions in O’Brien that uncovered the facts
surrounding the Dellarussiani plaintiffs’ claims, even if the depositions were conducted
as part of the O’Brien plaintiffs’ effort to obtain collective-action certification, should
not be rejected on the basis of the FLSA.
Consonant with our conclusion that the statute does not bar the district court from
awarding attorney fees incurred in the O’Brien suit for the Dellarussiani plaintiffs’
claims, the proper amount of attorney fees is an issue remanded to the district court. We
do so notwithstanding the inadequacy and perhaps even the impropriety in the billing
records that plaintiffs’ counsel had originally presented to the district court. The
plaintiffs can have one more opportunity to present records that reflect fees incurred in
pursuit of and which benefitted the Dellarussiani plaintiffs’ claims on which they
prevailed pursuant to the Rule 68 offers that included reasonable attorney fees.
Plaintiffs are advised, however, that Hensley v. Eckerhart, 461 U.S. 424, 435
(1983) does not entitle them to the entirety of their fees incurred in O’Brien. As we
explained in Imwalle v. Reliance Medical Products, Inc., 515 F.3d 531, 554–55 (6th Cir.
2008), Hensley held that a prevailing plaintiff’s lodestar amount — that is, the hours
expended multiplied by the hourly billing rate — cannot be reduced for lack of overall
success if some claims were successful and others were unsuccessful, when all of those
claims “are based on a common core of facts or are based on related legal theories.”
Imwalle, 515 F.3d at 554. Hensley does not mean that all of the fees in O’Brien can be
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recouped, even if arguendo the claims of all of the O’Brien plaintiffs, including those
who splintered off to Dellarussiani, were based on a “common core of facts.”
Addressing some of defendants’ concerns, we note that, absent a specific
showing of benefit to the Dellarussiani plaintiffs, fees cannot be recovered for expenses
incurred for the claims of O’Brien plaintiffs who did not file suit in Dellarussiani, nor
for the claims of the lead plaintiffs in O’Brien who remained after the collective action
was decertified.
D. Liquidated damages under Ohio’s Prompt Pay Act
Count III of the Dellarussiani complaint sought liquidated damages available
under Ohio Revised Code § 4113.15(B), also known as the Prompt Pay Act or the
Prompt Payment Act, which states:
Where wages remain unpaid for thirty days beyond the regularly
scheduled payday or, in the case where no regularly scheduled payday is
applicable, for sixty days beyond the filing by the employee of a claim
or for sixty days beyond the date of the agreement, award, or other act
making wages payable and no contest[,] court order or dispute of any
wage claim including the assertion of a counterclaim exists accounting
for nonpayment, the employer, in addition, as liquidated damages, is
liable to the employee in an amount equal to six per cent of the amount
of the claim still unpaid and not in contest or disputed or two hundred
dollars, whichever is greater.
(Emphasis added).2 The district court found that disputes accounting for nonpayment
of the wages claimed by plaintiffs did exist and that therefore as a matter of law,
plaintiffs could not receive liquidated damages. See Dellarussiani J.A. 28. So the trial
court granted the employer’s motion for summary judgment on count III. We agree.
The district court correctly reasoned that Ohio law requires that a dispute
accounting for nonpayment precludes the award of liquidated damages to a wage
2
Although the statute says that a claimant may be entitled to 6 % of the unpaid claim, plaintiffs
claimed roughly $12,000 in Ohio liquidated damages compared to the roughly $6,000 they sought in
counts I and II. See Dellarussiani Resp. Br. at 6. At oral argument, defendants’ counsel explained that
the $12,000 figure was tallied by adding $200 for each alleged violation.
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claimant. See, e.g., Jones v. Select Indus. Corp., 2006 WL 1705201, at *6 (S.D. Ohio
2006) (“where the employer disputes the wage claim, no liquidated damages are due”).
Plaintiffs contend that there was no dispute in this case, because the employer never
informed its employees that the employer was disputing the employees’ entitlement to
certain wages. Dellarussiani Appellants’ Br. at 36. But the statute does not require such
interaction between an employer and an employee. And even though the cases cited by
defendants involve situations where an employer had to decide whether wages were due
as a matter of policy, nothing in the statute limits a dispute accounting for nonpayment
to such situations. See Fridrich v. Seuffert Construction Co., Inc., 2006 WL 562156, at
*4 (Ohio Ct. App. 2006) (deciding that “dispute existed as to whether Seuffert
Construction's vacation policy required the payout for unused vacation days”); Haines
& Company, Inc. v. Stewart, 2001 WL 166465, at *3 (Ohio Ct. App. 2001) (holding that
where parties disputed whether certain commissions were “wages” under Prompt Pay
Act, a “contest” existed, meaning no liquidated damages were available). We see no
reason why a factual dispute over the hours worked could not suffice as a dispute
accounting for nonpayment.
Next, plaintiffs suggest that the district court’s broad interpretation of what
constitutes a dispute allows any recalcitrant employer to reflexively invoke the safe
harbor that a dispute existed. Dellarussiani Reply Br. at 9.3 That, according to
plaintiffs, would render as surplus the statute’s provision of liquidated damages.
But there could be situations where, under the district court’s interpretation of
the statute, the liquidated-damages provision could come into play. Suppose an
3
Plaintiffs cite Twaddle v. RKE Trucking Co., 2006 WL 840388 (S.D. Ohio 2006) as an instance
where a trial court ruled that liquidated damages under O.R.C. 4113.15(B) are available, even though
defendants disputed liability on certain claims. Twaddle, at *13, *2. Twaddle’s analysis of liquidated
damages under Ohio law was truncated. The court thought it was for the trier of fact to decide whether
the defendant employer could show it acted with “good faith.” A showing of good faith would allow the
employer to avoid liquidated damages under FLSA. See 29 U.S.C. § 260 (“if the employer shows to the
satisfaction of the court that the act or omission giving rise to such action [under § 216(b)] was in good
faith and that he had reasonable grounds for believing that his act or omission was not a violation of the
[FLSA], the court may, in its sound discretion, award no liquidated damages” or limit liquidated damages”)
(emphasis added). However, O.R.C. 4113.15(B) does not contain this language about good faith or
reasonable grounds. It is not self-evident that FLSA law on liquidated damages should control the
interpretation of a “dispute . . . accounting for nonpayment” under Ohio statute.
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employer had promised to pay a certain sum, and the employees agreed that this sum was
their due wage. However, a clerical glitch prevented the sum from being delivered to
the employees. In such a situation, the employer could not reasonably maintain that a
“dispute” accounted for nonpayment. Likewise, if an employer were short on incoming
cash, and consequently had to delay paying its employees, but conceded the employees’
entitlement to payment, the employer could not reasonably argue that a “dispute”
accounted for nonpayment. Further, because application of the statute’s safe harbor
requires that there be a contest, court order, or dispute of a wage claim accounting for
nonpayment, it is proper to focus on whether the asserted dispute accounts for the
nonpayment. Thus, it is not the case that any recalcitrant employer can simply declare
that there is a dispute and then retroactively insulate its actions.
Concerning Dellarussiani, the defendants disputed that they owed anything more
than what they paid their employees according to the employer’s own payroll records.
Contrary to plaintiffs’ argument, the offer of judgment does not undermine the existence
of a dispute accounting for nonpayment, because the Rule 68 offer did not concede
liability; it was a procedural tool to encourage the quick resolution of litigation.
Dellarussiani J.A. 281–82.
Plaintiffs suggest that a jury decide whether a dispute existed. Dellarussiani
Appellants’ Br. at 36. However, plaintiffs have failed to raise a genuine issue of material
fact, as required under Rule 56, as to whether defendants’ disputes with the plaintiffs
count as “dispute[s]” under the statute. The district court examined the facts surrounding
each of the plaintiffs’ claims and concluded that a dispute accounting for nonpayment
did indeed exist. Dellarussiani J.A. 32–38. The district court framed its inquiry as one
determining whether the evidence demonstrated “a reasonable basis upon which
Defendants disputed” the plaintiffs’ claims. Although asking whether the defendant has
a “reasonable basis” for disputing the claims does not flow directly from O.R.C.
§ 4113.15(B), the district court’s “reasonable basis” gloss aided its consideration of
whether there was a genuine issue regarding whether there was a contest or dispute
“accounting for nonpayment.” Plaintiffs have not shown that the district court erred
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in concluding as a matter of law that there was no genuine issue of material fact whether
there was a contest or dispute accounting for nonpayment. Even if plaintiffs may have
provided evidence creating an issue of fact as to whether the underlying FLSA and
wage-payment violations occurred, that evidence, even when viewed most favorably
towards plaintiffs, does not suggest that there was no dispute accounting for
nonpayment. Rather, the evidence, even when viewed in the required light, establishes
that a contest or dispute regarding defendant’s liability for further wages accounted for
its nonpayment.
Alternatively, if plaintiffs had evidence that the wages were withheld even
though defendants conceded or reasonably had to concede that the wages were due, such
evidence — like evidence about clerical glitches or cash-flow problems — could create
a triable issue of fact on the Prompt Pay Act claim. But in our case, the plaintiffs have
no such evidence: the reason that the lawsuit has continued is that defendants do not
concede that the wages claimed by plaintiffs are due. Therefore, the district correctly
granted summary judgment in defendants’ favor on count III.
III. Motion to dismiss Dellarussiani plaintiffs from O’Brien appeal
Arguing that we lack subject-matter jurisdiction due to mootness, defendants
move to dismiss from the O’Brien appeal the plaintiffs who splintered off from the
O’Brien case following decertification so that they could file individual claims in
Dellarussiani. The motion is granted in part and denied in part. We explain why in four
parts: (A) mootness due to Dellarussiani judgment on counts I and II; (B) defendants’
argument that mootness of the FLSA claim necessarily renders any supplemental claims
moot; (C) the hurdle of res judicata for the Dellarussiani plaintiffs’ Prompt Pay Act
claim in O’Brien; (D) and the res judicata bar against the common-law claims that
Dellarussiani plaintiffs have in O’Brien.
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A. Mootness due to Dellarussiani judgment on counts I and II
Because we affirm the district court’s entry of judgment in the Dellarussiani
plaintiffs’ favor on counts I and II, any of the plaintiffs’ corresponding claims in O’Brien
— claims that they hope to maintain if the district court’s decertification is reversed on
appeal — are now moot. There is no longer a live controversy as to the FLSA and the
corresponding Ohio wage-payment claim, Gottfried v. Med. Planning Servs., Inc., 280
F.3d 684, 691 (6th Cir. 2002), because there is no other relief that plaintiffs could obtain
on those claims in O’Brien, given our overall affirmance of the district court’s rulings
in Dellarussiani and our remand of the attorney-fees issue in Dellarussiani.
B. Defendants’ argument that mootness of the FLSA claim necessarily renders
any supplemental claims moot
Defendants suggest that our inquiry stops here, because the only claim in O’Brien
that is statutorily capable of proceeding collectively is the FLSA claim. Appellees’
Reply in Supp. of Mot. to Dismiss at 3. Given that the FLSA claim that the
Dellarussiani plaintiffs had in O’Brien has been mooted by the judgment entered in
Dellarussiani pursuant to the Rule 68 offer, the collective-action device is unavailable,
according to defendants’ theory, for the Dellarussiani plaintiffs’ supplemental claims
that remain in O’Brien. Defendants maintain that because the Dellarussiani plaintiffs’
appeal in O’Brien seeks reinstatement into a collective action, the unavailability of this
vehicle means that their appeal is moot.
We reject this argument. In general, as we discuss in Part IV.A, if a FLSA lead
plaintiff also brings supplemental state claims and then seeks certification as a collective
action, a district court evaluates whether the opt-in plaintiffs are “similarly situated”
under 29 U.S.C. § 216(b). If the opt-in plaintiffs are similarly situated to the lead
plaintiffs, it does not make sense to suggest, as defendants seem to, that only the FLSA
claims may proceed collectively, while the supplemental claims would have to proceed
individually or would be required to run in parallel to the collective action only by
satisfying the more stringent requirements of Fed. R. Civ. P. 23. See, e.g., Molina v.
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First Line Solutions, 566 F. Supp. 2d 770, 789–90 (N.D. Ill. 2007) (declining to certify
a parallel Fed. R. Civ. P. 23(b)(3) class of supplemental claims alongside a FLSA
collective action, but allowing any opt-in plaintiffs to pursue supplemental claims as part
of a collective action). To disjoin FLSA and supplemental claims in the manner
proposed by defendants would defeat the purpose of supplemental jurisdiction, which
is to facilitate the resolution of claims that are so closely related to claims for which
federal jurisdiction originally lies that the supplemental claims are part of the same case
or controversy as the claim independently invoking federal jurisdiction. See 13D
Wright, Miller, Cooper, & Freer, Federal Practice and Procedure § 3657 at 317 n.4 (3d
ed. 2008). Notwithstanding the lack of express statutory authority in the FLSA for
collective certification of non-FLSA claims, supplemental claims by definition are
treated as part of the same controversy animated by a particular employee’s FLSA claim.
See 28 U.S.C. § 1367(a).
So far, we have explained that an opt-in employee with FLSA and supplemental
claims can have both of those claims certified as part of a collective action where a lead
plaintiff has FLSA and supplemental claims. That is the background for the situation we
face, where a lead plaintiff has FLSA and supplemental claims, but an opt-in employee
only has supplemental claims.
In Exxon Mobil Corp. v. Allapattah Services, Justice Ginsburg explained the
Court’s unanimous understanding that 28 U.S.C. § 1367(a) confers supplemental
jurisdiction in cases where one plaintiff has a claim invoking federal-question
jurisdiction, 28 U.S.C. § 1331, but other plaintiffs only have state claims. 545 U.S. 546,
587–88 (2005) (Ginsburg, J., dissenting); see id. at 559 (majority opinion) (“If the court
has original jurisdiction over a single claim in the complaint, it has original jurisdiction
over a ‘civil action’ within the meaning of §1367(a), even if the civil action over which
it has jurisdiction comprises fewer claims than were included in the complaint. Once the
court determines it has original jurisdiction over the civil action, it can turn to the
question whether it has a constitutional and statutory basis for exercising supplemental
jurisdiction over the other claims in the action.”); see also Lindsay v. Gov’t Employees
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Ins. Co., 448 F.3d 416, 423 (D.C. Cir. 2006) (analyzing Allapattah and holding in a case
involving FLSA and state-law claims that “so long as the district court has original
jurisdiction over a single claim, it may exercise supplemental jurisdiction over any
additional claim that forms part of the same Article III case or controversy”). Under
Allapattah, § 1367(a)'s requirement that the section only apply “in any civil action of
which the district courts have original jurisdiction” is clearly satisfied when a single
claim invoking federal-question jurisdiction exists. Thus, an inquiry whether
supplemental jurisdiction exists over state-law claims need only examine whether the
state claims are so closely related to the federal claim that the state claims form part of
the same Article III case or controversy as the federal claim.
Therefore, as long as someone in a collective action has a FLSA claim,
employees who are similarly situated can be part of the collective action, even if the
other employees only have supplemental claims. Accordingly, if for some reason, a
particular employee or group of employees did not have viable FLSA claims, due to
mootness or claim preclusion, for instance, but had extant supplemental claims, a court
would examine whether these employees were still similarly situated to the lead
plaintiffs, which they may or may not be.
The short of our discussion is that we have jurisdiction to consider whether the
Dellarussiani plaintiffs, who have only supplemental claims that are still alive, could
still be part of the collective action, were we to remand the case for recertification. Even
though the Dellarussiani plaintiffs’ FLSA claim in O’Brien is now moot due to the
Dellarussiani judgment, the FLSA only requires an analysis of whether these plaintiffs
are similarly situated to the lead plaintiffs whom they would join upon a putative remand
for recertification of the collective action. That similarly-situated analysis is not mooted
by the lack of a FLSA claim on the part of the employees who seek to opt into the
collective action.
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C. Res judicata and the Dellarussiani plaintiffs’ Prompt Pay Act claim in
O’Brien
We turn therefore to the other supplemental claims. With respect to the
plaintiffs’ third claim in O’Brien for liquidated damages under Ohio’s Prompt Pay Act,
O.R.C. § 4113.15(B): In Dellarussiani, this claim died on summary judgment, and
above, we explain why we affirm the district court’s disposition of count III. But the
Dellarussiani plaintiffs still have a Prompt Pay Act claim in O’Brien. Mootness
typically would not bar the Dellarussiani plaintiffs’ § 4113.15(B) claim in O’Brien, in
view of their loss at summary judgment on an identical claim in other litigation.
Ordinarily, when a claim has already been resolved in a prior suit, mootness is invoked
as a bar to subject-matter jurisdiction when “full relief” has been accorded by the prior
tribunal. See, e.g., Davis v. Sun Oil Co., 148 F.3d 606, 611 n.4 (6th Cir. 1998). Indeed,
this is the case for counts I and II of Dellarussiani: plaintiffs have already won on these
claims in Dellarussiani, and there is nothing more for them to win on a putative remand
in O’Brien, particularly since we are remanding to the Dellarussiani district court the
issue of what attorney fees can be recouped. That is why the Dellarussiani plaintiffs’
are dismissed from the O’Brien appeal as to their FLSA and O.R.C. § 4111 claims.
But with regard to the Prompt Pay Act claim for liquidated damages, the
Dellarussiani plaintiffs in O’Brien are not, strictly speaking, barred by mootness but by
claim preclusion. This fine distinction is worth discussing, because if mootness were to
apply when a losing party received an adverse ruling but persisted in seeking relief in a
subsequent suit, a federal court sitting in that subsequent suit would be required to sua
sponte inquire into its own subject-matter jurisdiction over the previously losing party’s
claim. In other words, whether res judicata applied would be probative of whether the
subsequent claim was moot and whether the claim was justiciable. But Fed. R. Civ. P.
8(c) clearly frames res judicata as an affirmative defense, which means that it can be
waived and that it does not go to subject-matter jurisdiction. See O’Connor v. Pierson,
426 F.3d 187, 194 (2d Cir. 2005). Therefore, losing a claim on summary judgment in
a previous suit does not moot such a claim in a subsequent lawsuit. Rather, the
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subsequent claim is barred under the doctrine of claim preclusion. See Ohio Nat. Life
Ins. Co. v. U.S., 922 F.2d 320, 325 (6th Cir. 1990).
Under Sixth Circuit Rule 27(d)(1), “[m]otions to dismiss ordinarily may not be
filed on grounds other than lack of jurisdiction.” This rule favors denying the
defendants’ motion to dismiss as to the Dellarussiani plaintiffs’ Prompt Pay Act claim
in O’Brien, because claim preclusion, not mootness, is the obstacle that plaintiffs face
on this claim. The individual Dellarussiani plaintiffs could then conceivably be
recertified into a collective action along with the lead plaintiffs in O’Brien, given our
conclusion, which we discuss later in Part IV.A.2, that the district court applied the
wrong standard in decertifying the collective action in O’Brien. However, on remand,
the defendants would surely raise res judicata and ask the district court to dismiss the
extant Dellarussiani plaintiffs’ claim once and for all. Res judicata in this instance is
an “insurmountable hurdle” that has mootness-like effects. See Myer v. Americo Life,
Inc., 469 F.3d 731, 733 (8th Cir. 2006).
Rather than grant the defendants’ motion to dismiss the Dellarussiani plaintiffs’
appeal in O’Brien as to their Prompt Pay Act claim, we instead choose to avoid
transgressing the boundary between mootness and claim preclusion. The motion is
denied as to the claim for § 4113.15(B) liquidated damages, but we find that under
§ 216(b) of the FLSA, the Dellarussiani plaintiffs are not “similarly situated” to the lead
plaintiffs in O’Brien, given the inevitable preclusion of both the Prompt Pay Act claims
and the common-law claims, as discussed next in Part III.D. Therefore, on the merits,
we affirm the district court’s decertification of these plaintiffs’ Prompt Pay Act claim.
Thus, the Dellarussiani plaintiffs are unable to rejoin the collective action. Technically,
they could attempt to file individual actions, as we are affirming the district court’s
decertification and dismissal without prejudice of their claim. But such suits would be
nipped in the bud by the affirmative defense of claim preclusion.
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D. Res judicata and Dellarussiani plaintiffs’ common-law claims in O’Brien
Finally, we must consider whether the Dellarussiani plaintiffs’ appeal from the
decertification order in O’Brien is moot as to common law claims pleaded in O’Brien.
Because the FLSA and common-law claims appear to be based on the same alleged
conduct, we are skeptical that the district court would afford any more relief upon a
putative remand on the common-law claims in O’Brien than what the plaintiffs already
received on counts I and II pursuant to the offer of judgment in Dellarussiani.
Nevertheless, we cannot say as a matter of law how the disposition of a FLSA claim
affects the common-law claims. That would require an analysis of the elements of and
remedies offered by the common-law claims compared to the FLSA claim. It is possible
that a federal claim could be moot while a supplemental claim based on the same
conduct might not be.
The doctrine that would definitively bar the Dellarussiani plaintiffs from
pursuing their common-law claims in O’Brien upon a putative remand is claim
preclusion, not mootness. Therefore, for the reasons discussed in the previous section,
we have subject-matter jurisdiction over the Dellarussiani plaintiffs’ appeal as to the
common-law claims, and the motion to dismiss is accordingly denied with respect to
these claims.
The plaintiffs pled for common-law relief in O’Brien, but not in Dellarussiani.
See O’Brien J.A. 11–14; Dellarussiani J.A. 4–6. Because the district court dismissed
the Dellarussiani plaintiffs from O’Brien without prejudice, the Dellarussiani plaintiffs
could have brought the common-law claims in Dellarussiani. But they did not.
Therefore, they will inevitably be barred by res judicata. We affirm the decertification
in O’Brien as to the Dellarussiani plaintiffs: they are not similarly situated under the
FLSA to the lead plaintiffs, because they will not have any claims grounded in the
actionable conduct. They have nothing left to litigate in O’Brien, as all of their claims
in O’Brien are moot or will be claim-precluded.
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IV. The O’Brien suit
Therefore, only the two lead O’Brien plaintiffs and Stevie LeVan are now parties
to the appeal from the O’Brien district court’s decertification order. After we discuss
why the district court’s application of the “similarly situated” language from the FLSA
was partly in error, we explain why the district court’s decertification of the collective
action will be affirmed. We then discuss the district court’s evidentiary and summary-
judgment rulings concerning the two lead O’Brien plaintiffs.
A. Decertification
The Fair Labor Standards Act provides a private cause of action against an
employer “by any one or more employees for and in behalf of himself or themselves and
other employees similarly situated.” 29 U.S.C. § 216(b) (emphasis added).
Unlike class actions under Fed. R. Civ. P. 23, collective actions under FLSA
require putative class members to opt into the class. See 29 U.S.C. § 216(b) (“No
employee shall be a party plaintiff to any such action unless he gives his consent in
writing to become such a party and such consent is filed in the court in which such action
is brought.”). These opt-in employees are party plaintiffs, unlike absent class members
in a Rule 23 class action. See 7B Wright, Miller, & Kane, Federal Practice and
Procedure § 1807 at 474 n.13 (3d ed. 2005).
The district court followed a two-stage certification process, as many courts do,
to determine whether the opt-in plaintiffs and lead plaintiffs were similarly situated. See
id. § 1807 at 487 n.48. After the initial conditional certification of the class, the parties
entered into discovery. At the second stage, the district court reviewed the evidence
produced during discovery and decertified the class for two main reasons. First, the
district court stated that each claim presented by each plaintiff would require an
extensive individualized analysis to determine whether a FLSA violation had occurred,
frustrating the “collective consideration of common questions of fact and law.” O’Brien
J.A. 72. Second, the alleged violations were not based on a broadly applied, common
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scheme, nor were the violations widespread even among the plaintiffs, who constituted
only a small fraction of the total number of potential collective-action members. See
J.A. 69. Specifically, out of the 426 potential collective-action members, the district
court noted that evidence produced through discovery revealed that only five of the ten
plaintiffs alleged that their time-sheets were altered, only five alleged that they were
required to work off the clock, and three plaintiffs failed to allege that they suffered from
either practice. Id.
1. Standard of review
The Sixth Circuit has not previously announced its standard for reviewing a
district court’s certification rulings in the FLSA context. But the Eleventh Circuit
reviews collective-action–certification decisions for abuse of discretion, and even the
plaintiffs suggest that the court apply this deferential standard. See Anderson v. Cagle’s,
Inc., 488 F.3d 945, 953–54 (11th Cir. 2007). We adopt this standard.
2. The meaning of “similarly situated”
The Fair Labor Standards Act does not define “similarly situated,” and neither
has this court. However, district courts have based their final-certification decisions on
a variety of factors, including the “factual and employment settings of the individual[]
plaintiffs, the different defenses to which the plaintiffs may be subject on an individual
basis, [and] the degree of fairness and procedural impact of certifying the action as a
collective action.” See 7B Wright, Miller, & Kane, supra, § 1807 n.65 at 497; Anderson,
supra, 488 F.3d at 953 . The lead plaintiffs bear the burden of showing that the opt-in
plaintiffs are similarly situated to the lead plaintiffs. See 7B Wright, Miller, and Kane,
supra, § 1807 at 476 n.21. Showing a “unified policy” of violations is not required,
though. See Grayson v. K Mart Corp., 79 F.3d 1086, 1095 (11th Cir. 1996) (suit
alleging age discrimination under Age Discrimination in Employment Act (ADEA), 29
U.S.C. §§ 621–34, which incorporates by reference the enforcement provisions of the
FLSA). But see Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1214 n. 8 (5th Cir.1995)
(for conditional certification so that notice to putative class members could be sent, court
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required that plaintiffs allege that they were victims of a single decision, policy, or plan
infected by discrimination), overruled on other grounds by Desert Palace, Inc., v. Costa,
539 U.S. 90 (2003); Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1105 (10th
Cir. 2001) (same).
Plaintiffs argue that they did indeed allege two common ways by which the
employer violated the FLSA, namely, (1) that the defendant made employees work off
the clock, and (2) that the employer or its agents improperly edited employees’ time
punches after the fact, thus cutting the hours for which plaintiffs were paid. Both the
district court and the defendant note that to determine whether a particular violation of
the FLSA took place in this case requires an individualized analysis that examines the
facts of each alleged violation. For this reason, the district court decertified, determining
that individualized issues predominated.
But such a collection of individualized analyses is required of the district court.
Under the FLSA, opt-in plaintiffs only need to be “similarly situated.” While Congress
could have imported the more stringent criteria for class certification under Fed. R. Civ.
P. 23, it has not done so in the FLSA. See Grayson, 79 F.3d at 1096 (section 216(b)’s
“similarly situated” requirement is less stringent than Rule 20(a) requirement that claims
“arise out of the same action or occurrence” for joinder to be proper, or even Rule
23(b)(3)’s requirement that common questions predominate for a 23(b)(3) class to be
certified). But see Shushan v. Univ. of Colo. at Boulder, 132 F.R.D. 263, 266–67
(D. Colo. 1990) (applying Rule 23 to collective actions under 216(b) for purpose of
effective management of litigation). The district court implicitly and improperly applied
a Rule 23–type analysis when it reasoned that the plaintiffs were not similarly situated
because individualized questions predominated. See O’Brien J.A. 70. This is a more
stringent standard than is statutorily required.
Granted, it is clear that plaintiffs are similarly situated when they suffer from a
single, FLSA–violating policy, and when proof of that policy or of conduct in
conformity with that policy proves a violation as to all the plaintiffs. In the instant case,
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proof of a violation as to one particular plaintiff does not prove that the defendant
violated any other plaintiff’s rights under the FLSA. Nevertheless, the plaintiffs are
“similarly situated” according to § 216(b). Furthermore, it is possible that representative
testimony from a subset of plaintiffs could be used to facilitate the presentation of proof
of FLSA violations, when such proof would ordinarily be individualized. See Morgan
v. Family Dollar Stores, Inc., 551 F.3d 1233, 1263–65, 1279–80 (11th Cir. 2008) (as
amended) (determining that although proof of exemption from FLSA’s overtime-pay
requirements might appear to be individualized, certain plaintiffs’ representative
testimony could be used to show exemption’s inapplicability, as all plaintiffs in
collective action were similarly situated), petition for cert. filed, 77 U.S.L.W. 3596 (U.S.
Apr. 15, 2009) (No. 08-1287). We do not purport to create comprehensive criteria for
informing the similarly-situated analysis. But in this case, the plaintiffs were similarly
situated, because their claims were unified by common theories of defendants’ statutory
violations, even if the proofs of these theories are inevitably individualized and distinct.
The claims were unified so, because plaintiffs articulated two common means by which
they were allegedly cheated: forcing employees to work off the clock and improperly
editing time-sheets. We do not mean to require that all collective actions under § 216(b)
be unified by common theories of defendants’ statutory violations; however, this is one
situation where a group of employees is similarly situated.
Plaintiffs offer their own interpretation of what “similarly situated” means.
Instead of arguing that Rule 23(b)(3) predominance should not be a criterion for § 216(b)
collection actions, plaintiffs say that putative collective-action members whose “causes
of action under the FLSA accrued at about the time and place in the approximate manner
of the named plaintiff would be similarly situated” to the lead plaintiffs. See O’Brien
Appellants’ Br. at 20 (citing Pritchard v. Dent Wizard Intern. Corp., 210 F.R.D. 591,
595 (S.D. Ohio 2002)). Defendants explain that those cases cited by plaintiffs arise in
situations where a court has to decide whether a certain class of employees is exempt
from the FLSA’s overtime-pay requirements. Those cases, argue defendants, lend
themselves to collective adjudication because common questions predominate. For
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instance, a court can easily decide whether all the dent-removal technicians (as in
Pritchard) are exempt from overtime-pay requirements, without having to examine the
specific factual situation of each dent-removal technician.
While we agree with plaintiffs that “about the time and place in the approximate
manner” is a starting point for understanding what “similarly situated” means, such an
interpretation can result in a standard that is more demanding than what the statute
requires, unless one excludes Rule 23 predominance from being an implicit requirement
for § 216(b) collective actions. And protecting § 216(b) in this way is what we have
outlined above. We do not suggest that aspects of Rule 23 could never be applied to a
FLSA collective action. Rather, applying the criterion of predominance undermines the
remedial purpose of the collective action device.
As for the argument that the alleged unlawful practices — making employees
work off the clock and altering the time-sheets — were not alleged by all of the
plaintiffs, this argument ultimately requires us to affirm the decertification. Stevie
LeVan is the only opt-in plaintiff who could possibly benefit from the recertification of
the collective action. Unlike the Dellarussiani plaintiffs, LeVan had opted into O’Brien
but did not pursue her claim in Dellarussiani. As the district court observed, LeVan is
clearly not similarly situated to the lead plaintiffs, because she failed to allege that she
suffered from either unlawful practice. O’Brien J.A. 69 (district-court opinion), 289
(LeVan Dep. at 33). And as we explained in Part II, the Dellarussiani plaintiffs cannot
be recertified because some of their claims are moot and the others will be claim-
precluded, leaving them without any claims to pursue and necessarily excluding them
from being “similarly situated” under § 216(b).
In general, though, a district court should examine whether partial decertification
is possible, when faced with the situation where a subset of the plaintiffs fail to allege
violations of the FLSA. The option of partial certification is important to consider,
because it counters the argument that a collective action must be totally decertified if
some members are not similarly situated to the others. In general, plaintiffs who are not
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similarly situated — for instance, plaintiffs who did not allege suffering under either
unlawful practice — could be dismissed while keeping intact a partial class. Plaintiffs
who do present evidence that they are similarly situated to the lead plaintiffs should not
be barred from the opportunity to be part of a FLSA collective action, because the
collective action serves an important remedial purpose. Through it, a plaintiff who has
suffered only small monetary harm can join a larger pool of similarly situated plaintiffs.
See Hoffman–La Roche, Inc., v. Sperling, 493 U.S. 165, 170 (1989). That pool can
attract effective counsel who knows that if the plaintiffs prevail, counsel is entitled to a
statutorily required reasonable fee as determined by the court.4 In the age-discrimination
context, which also requires that opt-in plaintiffs be similarly situated for certification
of a collective action, “Congress has stated its policy that ADEA plaintiffs should have
the opportunity to proceed collectively.” See Grayson, 79 F.3d at 1096. As some
district courts have noted, “imposing any additional restrictions from Rule 23 would be
contrary to the broad remedial goals” of the FLSA and its sister statutes — such as the
Equal Pay Act, 29 U.S.C. § 206(d), and the ADEA, 29 U.S.C. § 626(b) — which
incorporate the same statutory language concerning collective actions. See 7B Wright,
Miller, and Kane, supra, § 1807 at 481 n.25, at 468–69 nn.2–3.
A final word on the parties’ less persuasive points. Defendants note that some
of the plaintiffs were managers and therefore could not be “similarly situated.” This is
not a compelling argument, because managers could also have been cheated by
defendants. Also, in their reply brief, plaintiffs mischaracterize the reasoning of the
district court, implying that the district court decertified the class because plaintiffs
alleged two ways, instead of one way, in which the plaintiffs suffered violations. As
discussed, the district court decertified because it did not see how plaintiffs’ claims, even
if based on two theories of how the FLSA violations were committed, could be
adjudicated but in an individualized manner.
4
But see Greisz v. Household Bank (Ill.), N.A., 176 F.3d 1012, 1013 (7th Cir. 1999) (in Rule 23
context, “[t]he smaller the individual claim, the less incentive the claimant has to police the class lawyer’s
conduct, and the greater the danger, therefore, that the lawyer will pursue the suit for his own benefit rather
than for the benefit of the class.”)
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B. The lead plaintiffs in O’Brien
Having affirmed the district court’s decertification of the collective action, we
turn to the claims of the lead plaintiffs in O’Brien. The district court denied their motion
for sanctions due to spoliation, granted defendants’ motions to strike plaintiffs’
affidavits, and in the end, granted defendants’ motion for summary judgment. We
conclude that spoliation may have taken place; therefore, this issue is remanded for the
district court’s consideration. As for the district court’s other evidentiary rulings, the
affidavits should not have been stricken. Apart from any consideration of the effect of
possible spoliation sanctions on the merits of the lead plaintiffs’ claims, we disagree with
the district court in part and reverse as to the lead plaintiffs’ off-the-clock claims. We
vacate the district court’s entry of summary judgment on the lead plaintiffs’ time-
sheet–alteration claims, so that the district court may revisit this disposition once it
decides the spoliation issue.
1. Spoliation
In a motion for discovery sanctions, plaintiffs alleged that the defendants
intentionally lost or destroyed some of the Time Punch Change Approval (TPCA)
Reports. O’Brien J.A. 55. In addition to seeking monetary sanctions, the employees
wanted the district court to infer that the missing reports would have been adverse to the
employer. Id. at 4. These TPCA reports were printed by defendants’ computer system
at the end of each day, but the computer system itself only held the past 72 days in
backup. O’Brien J.A. 161–62. Plaintiffs maintain that these reports are the only records
that would reveal improper changes made by defendant to the time-sheets punched by
the employees. See O’Brien J.A. 178–79.
Although a district court’s discovery rulings are reviewed for abuse of discretion,
see U.S. v. Guy, 978 F.2d 934, 938–39 (6th Cir. 1992), we reverse the district court and
remand for its consideration whether it was reasonably foreseeable that the missing
reports would be needed in future litigation.
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The magistrate judge’s opinion, adopted by the district court, reasons that
destruction or loss of evidence before notice of the O’Brien lawsuit is not a basis for
sanctions. O’Brien J.A. 60. That is true, but the issue here concerns when the defendant
was or should have been on notice that litigation requiring the missing reports as
evidence might ensue. See John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008) (duty to
preserve evidence is triggered when a “party has notice that the evidence is relevant to
litigation or . . . should have known that the evidence may be relevant to future
litigation”). The magistrate judge appears to assume that the defendant was on notice
only when the O’Brien lawsuit was filed. However, the district court should consider
whether the defendants should have been on notice earlier than the date of the filing of
the O’Brien suit.
As the district court has not yet considered whether the employer was on notice
of its duty to preserve evidence before the O’Brien lawsuit, we do not conclude in the
first instance that spoliation did take place. Rather, the district court can consider facts
which could suggest that the employer should have anticipated that the missing records
needed to be preserved. For instance, plaintiffs assert that within four to six weeks after
buying the McDonald’s stores, defendant Donnelly learned that the prior owners had
been sued by a former employee who claimed she had not been paid wages due her. See
O’Brien Reply Br. at 7.5 Plaintiffs also maintain that Donnelly knew that one of his
managers was changing employees’ time records by inserting breaks and that one of the
managers was making employees work off the clock. See O’Brien Reply Br. at 7, 9–10.6
If the district court concludes that spoliation did take place, the district court can
consider, under its inherent authority, whether it was negligence or bad faith that
motivated the defendants and relatedly, what sanction, if any, should be imposed.
Adkins v. Wolever, 554 F.3d 650, 653 (6th Cir. 2009) (en banc).
5
Although the reply brief cites particular pages of Donnelly’s deposition transcript, those pages
are not included in the joint appendix or the supplemental appendix.
6
Here again, the reply brief cites and reproduces excerpts from one Chad Totche’s deposition
transcript, but those pages are not included in the appendices.
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Plaintiffs also argue that the defendants were under a duty to preserve for longer
than 72 days the electronic versions of the TPCA reports. O’Brien Appellants’ Br. at 29.
But plaintiffs provide no authority for that proposition. What matters is whether the
employer produces the reports in discovery, in either hard copy or electronic form.
Defendants also maintain that they did in fact produce payroll records which
show the hours worked. O’Brien Resp. Br. at 27. However, the payroll records would
not show whether edits were made by defendants to employees’ time-sheets. The TPCA
reports are therefore relevant to one of plaintiffs’ theories of how the alleged FLSA
violations happened. Defendants may argue that any edits were made for good reason,
see id., but the question of whether the edits were proper is separate from defendants’
obligation to produce relevant, non-privileged discovery materials. Finally, defendants
argue that of the missing reports, all but two pertain to the time period before the lawsuit
was filed. See O’Brien Resp. Br. at 26. But as stated above, the district court should
consider whether the defendant had a duty to preserve the records even before O’Brien
was filed.
2. O’Brien
Plaintiffs appeal the district court’s decision to strike portions of an affidavit that
O’Brien filed with her summary-judgment papers because they allegedly conflicted with
portions of her prior deposition testimony. The district court based its decision on the
rule that “a party cannot create a genuine issue of material fact by filing an affidavit,
after a motion for summary judgment has been made, that essentially contradicts [her]
earlier deposition testimony.” Penny v. United Parcel Serv., 128 F.3d 408, 415 (6th Cir.
1997).
The district court found that O’Brien “twice testified that the first thing she did
when she walked into the restaurant was clock in.” O’Brien v. Ed Donnelly Enters., Inc.,
No. 2:04-CV-00085, 2007 WL 4510246, at *3 (S.D. Ohio Dec. 18, 2007) (emphasis in
the original). The two sources the court looked to were (1) pages 45 and 46 of O’Brien’s
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deposition testimony in another case, Rogan v. Ed Donnelly Enterprises, and
(2) O’Brien’s deposition in this case. Id.
However, plaintiffs pointed out that O’Brien also testified at her deposition in the
instant case that O’Brien performed work tasks before clocking in. Defendants’
argument as to this was that “the testimony ‘was given by O’Brien after she had already
testified under oath twice to the contrary, after consultation with her lawyer, and upon
questioning from her own lawyer at her deposition,’” and “that [t]his belated
testimony—given with assistance of counsel—is no different from the submission of an
inconsistent affidavit.” Id. (quoting defendants’ brief). Faced with O’Brien’s
subsequent deposition testimony that she worked before clocking in, the court framed
the question before it accordingly: “The essential question Plaintiffs’ argument poses
under [Reid v. Sears, Roebuck & Co., 790 F.2d 453 (6th Cir. 1986)] is whether there is
a compelling reason to allow deposition testimony that conflicts with prior testimony,
where such conflicting testimony clearly would not be allowed if it were contained in
an affidavit.” O’Brien, 2007 WL 4510246 at *4. The court looked to the purpose
behind barring subsequent contradictory affidavits—“screening out sham issues of fact”
(quoting Reid)—and decided to strike the conflicting portions of the O’Brien affidavit.
The court reasoned accordingly:
In the instant case, Plaintiff O’Brien twice testified — once during
deposition in the Rogan case, and once during deposition in the instant
case — that the first action she took upon arriving at work was clocking
in. (Rogan O’Brian Depo. at 45-46; O’Brien Depo. at 37). Plaintiff
O’Brien’s subsequent testimony that Ed Donnelly told her to clock in
half an hour late directly conflicts with her two prior statements. The
fact that Plaintiff O’Brien twice stated that she clocked in before starting
work, and only once stated that she performed work before clocking in
is of only minor importance. It is more than simple arithmetic that
convinces this Court that Plaintiff O’Brien’s later conflicting testimony
should not be allowed. Plaintiff O’Brien’s testimony during deposition
in the instant case — at a new time, in a new place, in a new action,
under circumstances removed from her prior testimony in the Rogan case
— serves as an independent reaffirmation of the testimony she originally
provided during deposition in Rogan. It is this entirely consistent
reaffirmation of her testimony in Rogan that convinces this Court that
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Plaintiff O’Brien’s subsequent testimony looks like a discrepancy that
creates a “transparent sham” and not a discrepancy that creates “an issue
of credibility . . . or go[es] to the weight of the evidence.” Bank of
Illinois at 1169-70. Accordingly, Defendants’ Motion to Strike is
well-taken with respect to the conflicting portions of the O’Brien
Affidavit.
Id.
We hold that the district court abused its discretion when it struck portions of
O’Brien’s affidavit. See Seay v. Tenn. Valley Auth., 339 F.3d 454, 480 (6th Cir.2003)
(applying abuse-of-discretion standard to district court’s ruling on motion to strike
evidentiary submissions). We consider the evidence chronologically — first, the Rogan
deposition; then, the deposition in the instant case; and finally, the affidavit filed with
appellants’ summary-judgment papers.
a. Rogan deposition
The district court found that O’Brien’s testimony in the instant case was an
“independent reaffirmation” of her deposition testimony in the earlier Rogan v. Ed
Donnelly Enterprises, Inc., et al., case. The court looked to pages 45–46 of the Rogan
deposition, where O’Brien testified that her first action upon arriving at work was to
clock in. However, the Rogan deposition itself contains conflicting testimony. A few
pages earlier in O’Brien’s deposition of April 4, 2005 in Rogan, O’Brien testified about
the various tasks she would perform when opening the store:
Q. . . . Will you explain what you did to open the store; that is,
getting in, what you turned on, that sort of thing.
A. Oh, boy. It’s been a while.
Q. I understand.
A. Go in, you turn on some nights [sic], because it was dark. The
fryer had to be turned on. Then you go boot up the computers for the
register, the computer for the registers; count the drawers; put the
drawers in; turn on the registers.
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J.A. 355 (O’Brien Rogan Dep. 42) (emphasis added). Thus, at one point in the Rogan
deposition, O’Brien testified that she would do a series of tasks before she turned on the
registers.
Shortly thereafter, however — after testifying about those tasks — she was
specifically asked about clocking in:
Q. How did you clock in in the morning?
A. On the cash register.
Q. Okay. Did you have to turn it on before you clocked in?
A. I believe you could do that when you walked in.
Q. Okay.
A. You just had to turn on the register.
Q. Okay. So as you would walk in, you would –
A. Clock in your number.
Q. – clock in and then go about doing the things you described,
turning on the computer in the back, the fryer, that sort of thing, correct?
A. Yes.
J.A. 226-27 (O’Brien Rogan Dep. 45–46) (emphasis added).
The district court only cited to the latter portion of O’Brien’s deposition in
Rogan, in which O’Brien testified that she would clock in first. See O’Brien, 2007 WL
4510246, at *3-4 (citing O’Brien Dep. 45-46). Yet, the earlier portion of her Rogan
testimony indicates the opposite — that O’Brien performed certain tasks before turning
on the register and clocking in. Therefore, the testimony in the Rogan case was
internally inconsistent.
b. Deposition in the instant case
Months later, at the November 21, 2005 deposition in the instant case, opposing
counsel read part of O’Brien’s previous testimony in the Rogan case back to her — the
part about clocking in — and plaintiff affirmed that it had been transcribed accurately.
The following exchange then occurred:
Q. So is that the way it would work, that you would go in and then
you would clock in at the register and then go about doing the other
duties that you had as opening manager?
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A. Yes. Poke in your number and then – you had to turn on the lights
so you could see.
Q. Turn on the lights because it’s the middle of the night?
A. Yes.
Q. And then the first thing you would do is you’d clock in at the
registers, correct?
A. Yes.
Q. So that’s the first thing you would do before you’d go on and do
the other things?
A. You clock in and you turn on the fryer and just keep walking
backwards.
J.A. 206-07 (O’Brien Dep. 36-37) (emphasis added). It is clear from this testimony that
the first thing O’Brien would do after arriving in the morning, after turning on the lights
so that she could see, was clock in — that she would clock in before performing her
other tasks. Moreover, she testified she “clocked in approximately the same time every
day,” which was when she “came to work”:
Q. So you clocked in at the time that you came to work and clocked
out at the time you left?
A. Yes.
J.A. 208 (O’Brien Dep. 40) (emphasis added).
However, later in O’Brien’s deposition in the instant case, her attorney conducted
some direct examination with the stated purpose of “clarify[ing] some testimony from
earlier.” J.A. 215 (O’Brien Dep. 76). On direct examination — after at least one recess
had occurred7 — the following exchange occurred:
Q. You also testified earlier that you would clock in in the mornings
when you would come in to work, right?
A. Yes.
Q. Did you ever perform any work tasks before you would actually
clock in?
A. Yes.
Q. What work tasks would you perform?
7
See J.A. 215 (O’Brien Dep. 76) (noting that a “short recess” was taken right before concluding
defendants’ portion of the deposition).
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A. Turn on the lights. Turn on the fryer, the prep tables, the grill,
the oven. Count – unlock the safe, pull out the register drawers and
count the money there, count the safe. Turn on the computers. Turn on
the computers, you’d clock in, put the drawer – the register drawers in
the registers.
Q. Is there a – how long would you say it took for you to perform
those tasks before clocking in?
A. About 15 minutes.
Q. Was there any reason you didn’t clock in as soon as you would
come into the restaurant in the morning?
A. Ed told me not to. He said it only took an hour to open the store.
But I knew from working for KCJ. It took about an hour and a half.
Because if your computers didn’t come up, you had to be on the phone
with the computer company getting help to bring those up. Otherwise
you had no registers and you had to take your orders by hand and
calculate by hand.
J.A. 216-17 (O’Brien Dep. 77-78) (emphasis added).
Later in the deposition, defense counsel resumed their examination of O’Brien.
O’Brien testified that the schedule would have her set to come in an hour before the
restaurant opened, but she would come in at approximately 4:30 a.m. to have additional
time to perform tasks before the restaurant opened:
Q. And you did that on a volunteer basis?
A. No.
Q. Well, Mr. Donnelly told you not to come in until an hour before
the restaurant opened, right?
A. He said it only took an hour to open the restaurant, but it took
closer to an hour and a half.
Q. But your instructions from your employer was to come in an hour
before the restaurant opened, right?
A. To clock in.
Q. Did Mr. – well, your instruction was to come in an hour before
the restaurant opened, right?
A. Yes.
***
Q. Mr. Donnelly never instructed you to come in an hour and a half
before the restaurant opened, correct?
A. Correct.
***
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Q. [Your manager] Nancy never instructed you to come in an hour
and a half before the restaurant opened?
A. No.
Q. . . . [D]id you ever tell Ed that you were coming into the
restaurant more than an hour before?
A. I told him that I come in at approximately 4:30 so I could have a
good opening and the restaurant would open on time.
Q. And is that when he said, no, come in at 5:00?
A. He said it only takes an hour to open the store. And he didn’t
want me clocking in until closer to 5:00.
Q. He never agreed to pay you for any time more than an hour before
the store opened, correct?
[Objection]
A. I don’t believe there was an agreement.
Q. He never said, I’ll pay you for more than an hour before the store
opened, correct?
A. He only wanted to pay for an hour because he thought that’s all
you needed. And you did need more.
J.A. 218-20 (O’Brien Dep. 80-82) (emphasis added).
O’Brien’s deposition testimony in the instant case, like her deposition testimony
in the Rogan case, is internally inconsistent. Admittedly, the more favorable testimony
for O’Brien is testimony that her attorney elicited from her after a recess. The district
court was convinced that this was an attempt to create a “sham” issue of fact because
O’Brien’s initial deposition testimony in the instant case was “an independent
reaffirmation of the testimony she originally provided during deposition in Rogan.”
O’Brien, 2007 WL 4510246, at *4. Indeed, the court concluded, “[i]t is this entirely
consistent reaffirmation of her testimony in Rogan that convinces this Court that
Plaintiff O’Brien’s subsequent testimony looks like a discrepancy that creates a
‘transparent sham’ and not a discrepancy that creates ‘an issue of credibility . . . or go[es]
to the weight of the evidence.’” Id. (emphasis added) (quoting Bank of Ill. v. Allied
Signal Safety Restraint Sys., 75 F.3d 1162, 1169-70 (7th Cir. 1995)).8 As shown above,
however, the Rogan testimony itself was not consistent. There is no real discrepancy
8
Given such reasoning, it seems doubtful that the district court would have recognized the
attempted creation of a sham discrepancy if there had been no Rogan deposition at all.
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between O’Brien’s two depositions. If anything, what the O’Brien testimony in the
instant case reaffirms is that her Rogan testimony was likewise internally inconsistent.
That O’Brien could be inconsistent in both her depositions regarding this subject may
indicate a lack of credibility on her part or go to the weight of the evidence.9
c. Affidavit
In her affidavit filed at the summary-judgment stage of this case, O’Brien averred
the following:
6. Throughout my employment with Defendants, as an opening shift
swing manager, I routinely reported to work for Defendants at the North
store at 4:30 a.m. on weekdays and Saturdays. And, when I worked on
Sundays, I routinely regularly reported to work at 5:30 a.m.
7. I was required to report for work at these early times so that I, and
other crew members at the North store, could perform necessary tasks to
open the restaurant and begin serving food to customers at the time the
North store when it [sic] opened to the public.
8. These opening job tasks included turning on the lights, turning on
the computers, warming up the grills and fryers, turning on and placing
drawers in each of the five cash registers and preparing salads, yogurt
parfaits and breakfast foods.
9. Even though I was required to report to work at 4:30 a.m. during
the week, and 5:30 a.m. on Sundays, Mr. Donnelly instructed me not to
clock in on the cash register until closer to 5:00 a.m., and 6:00 a.m., on
Sundays. And, I followed Mr. Donnelly’s instruction in this regard.
10. As a result, Defendants’ timekeeping records relating to my hours
of work do not reflect all of the time that I worked at the North store.
J.A. 330-31.
O’Brien’s initial testimony in her deposition in the instant case that she clocked
in first before performing other tasks only unambiguously contradicts the last sentence
of paragraph 9 of the affidavit — that O’Brien followed Donnelly’s instruction not to
9
Moreover, in the Seventh Circuit case of Bank of Illinois v. Allied Signal Safety Restraint
Systems, which defendants and the district court cited, the prior statements that were made under oath in
a judicial proceeding were made in a child custody hearing and in responses to interrogatories. See Bank
of Ill., 75 F.3d at 1165. That case does not stand for the proposition that testimony in a later portion of a
deposition may be disregarded when it conflicts with testimony in an earlier portion of the same
deposition. Cf. also Srisavath v. City of Brentwood, 243 F. App’x. 909, 911-12, 917 (6th Cir. 2007) (cited
by plaintiffs at Reply Br. 18).
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clock in until a certain time. But as discussed above, other testimony suggests that,
consistent with the affidavit, Donnelly also instructed O’Brien to not clock in until a
certain time. O’Brien never testified at her deposition that Donnelly instructed her to
clock in when she arrived. Indeed, she testified at her deposition that Donnelly did not
want her clocking in until closer to 5:00 and only wanted to pay her for an hour.
In short, the deposition testimony in O’Brien and Rogan did not speak with one
voice. In Aerel, S.R.L. v. PCC Airfoils, L.L.C., 448 F.3d 899, 908 (6th Cir. 2006), we
explained that when deciding the admissibility of a post-deposition affidavit at the
summary-judgment stage, the district court must first determine whether the affidavit
“directly contradicts” prior sworn testimony. The internal inconsistencies in O’Brien’s
testimony mean that the affidavit did not directly contradict the prior deposition
testimony. Because there is no direct contradiction, then, the court must not disregard
the affidavit, unless the court determines that the affidavit “constitutes an attempt to
create a sham fact issue.” Aerel, 448 F.3d at 908 (citing Franks v. Nimmo, 796 F.2d
1230, 1237 (10th Cir. 1986)). One of the factors to consider in determining whether the
affidavit tries to create a sham fact issue is whether the affiant was cross-examined
during earlier testimony. Aerel, 448 F.3d at 909. This factor matters, because a party
who is cross-examined but nevertheless offers unequivocal testimony, only to be
contradicted by a later affidavit, has indeed tried to create a sham fact issue. See
generally Franks, 796 F.2d at 1237 (citing Camfield Tires, Inc., v. Michelin Tire Corp.,
719 F.2d 1361, 1364–65 (8th Cir. 1983) for factors to consider whether sham fact issue
exists). That is not the case here, because “the alleged inconsistency created by the
affidavit existed within the deposition itself.” Kennett-Murray Corp. v. Bone, 622 F.2d
887, 894 (5th Cir. 1980). The district court should not have disregarded the affidavit.
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d. Summary Judgment
Yet this portion of paragraph 9 of the affidavit is not essential for the Rule 56
analysis:10 a genuine issue of material fact had already been “raised by the deposition
even without consideration of the affidavit.” Kennett-Murray, 622 F.2d at 894.
The remaining portion of paragraph 9 and a portion of paragraph 7 remain to be
considered. O’Brien claims in paragraph 9 that she “was required to report to work at
4:30 a.m. during the week, and 5:30 a.m. on Sundays.” This apparently conflicts with
O’Brien’s deposition testimony, discussed above, that Donnelly “never instructed [her]
to come in an hour and a half before the restaurant opened” — nor did Nancy, her
manager. To avoid a conflict with this deposition that would call for the affidavit to be
stricken as an attempt to create a sham dispute of fact, this portion of the affidavit should
be read in a limited manner — i.e., that O’Brien “was required” to report to work at
those earlier times, but not that Ed Donnelly or Nancy (O’Brien’s manager) required her
to do so. By interpreting this sentence as O’Brien feeling required — perhaps by what
she deemed to be the demands of the job—to report early, the affidavit does not conflict
with her deposition and is therefore not subject to being stricken. Indeed, her deposition
testimony supports such a reading: Donnelly only wanted to pay for an hour of prep
time while, according to O’Brien, “you did need more.” This reading of this portion of
paragraph 9 and of the similar language in paragraph 7 saves them from being stricken,
but effectively neutralizes their usefulness for plaintiffs. Nevertheless, the
inconsistencies within the O’Brien and Rogan depositions, when read with the affidavit,
reveal a genuine issue of material fact.
The other aspect of the affidavit that should be considered is paragraph 10, which
significantly overlaps with plaintiffs’ legal claim on which the district court proceeded
10
A district court’s order granting summary judgment is reviewed de novo. Ciminillo v.
Streicher, 434 F.3d 461, 464 (6th Cir. 2006). In reviewing a motion for summary judgment, we must
determine whether the evidence presents a sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a matter of law. Patton v. Bearden, 8 F.3d 343,
346 (6th Cir. 1993). When deciding a motion for summary judgment, the court must view the evidence
and draw all reasonable inferences in favor of the nonmoving party. Matsushita Electric Industrial Co.,
v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
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to grant summary judgment to defendants that O’Brien worked “off the clock.”
Paragraph 10 of the affidavit reads as follows: “As a result, Defendants’ timekeeping
records relating to my hours of work do not reflect all of the time that I worked at the
North store.” Though defendants moved for it to be stricken, it is not clear that the court
struck it. See O’Brien, 2007 WL 4510246, at *2 (noting that “Defendants ask the Court
to strike paragraphs 6-11,” but then listing the “at-issue paragraphs” of the O’Brien
Affidavit as paragraphs 6-9). We assume it was effectively stricken because the court
struck the paragraphs preceding it, on which it explicitly relied.
Striking or disregarding paragraph 10 (to the extent the court did so) and granting
summary judgment to defendants on O’Brien’s “off the clock” claim was erroneous.
Admittedly, a colorable argument can be made that this court should affirm the district
court’s grant of summary judgment for defendants as to O’Brien’s “off the clock” claim
notwithstanding our ruling that the district court should not have stricken portions of the
O’Brien affidavit. Plaintiffs’ FLSA claims are of two varieties: that defendants
improperly altered the plaintiffs’ time records and that defendants did not pay plaintiffs
for time worked “off the clock.” As for the latter, O’Brien testified at her deposition as
follows:
Q. So you clocked in at the time that you came to work and clocked
out at the time you left?
A. Yes.
Q. So assuming that the computer accurately accepted the
information you punched into it and that it wasn’t later changed, the
computer records would reflect the actual time that you worked?
A. The computer records would.
J.A. 208 (O’Brien Dep. 40) (emphasis added). This italicized testimony is damaging to
O’Brien’s “off the clock” argument. Of course, it is only damaging if one assumes that
the computer records were accurate and were not later changed.
Therefore, before we discuss whether the deposition testimony just cited
extinguishes plaintiff’s off-the-clock theory, we have to discuss the time-sheet–alteration
theory. Plaintiffs provide no evidence to support an allegation that the time records were
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subsequently altered to O’Brien’s detriment. Plaintiffs write in their appellate brief that
“[d]iscovery in the case below revealed that, on many occasions, Appellees’ managers
improperly changed many of the Appellants’ recorded hours of work in order to pay
them less than they were due.” Appellants’ Br. 11. They cite multiple sources for this
argument — none of which, as far as we can determine, support either O’Brien’s or
Prater’s time-sheet–alteration claim. Moreover, as the district court observed, O’Brien
testified at her deposition that she has no personal knowledge whether her time records
were altered by Ed Donnelly Enterprises or Ed Donnelly himself — that, aside from
being told by her attorney that her time records were altered, she has never heard that her
time records had been altered by Ed Donnelly Enterprises. J.A. 211-12 (O’Brien Dep.
50-51). Thus, O’Brien’s allegation regarding her time records is unsupported and thus
insufficient to survive summary judgment. However, the district court’s reconsideration
of the spoliation issue may alter its summary-judgment analysis of the alteration claims.
Therefore, we vacate the grant of summary judgment.
Returning to the off-the-clock theory: Assuming, then, that the computer was
accurate and was not subsequently changed, O’Brien’s deposition testimony that the
computer records reflected her actual time worked would initially seem to imperil
O’Brien’s “off the clock” claim. To the extent the subsequent affidavit contradicts this
testimony (as paragraph 10 of the affidavit does) it would seem to not have been error
to strike it. However, this excerpt of O’Brien’s deposition testimony should be read in
context. The question preceding this testimony about computer records concerned
clocking in: O’Brien answered “Yes” to the question of whether she “clocked in at the
time that [she] came to work and clocked out at the time [she] left.” See supra.
Although this is also not helpful testimony for O’Brien, we have already discussed how
she later contradicted this testimony in the same deposition, and how the Rogan
deposition was unclear on this point as well. Thus, the conflicting testimony within the
depositions raises a genuine issue of material fact as to the off-the-clock claim which
precludes summary judgment for defendants on this theory.
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Defendants raise one other argument. According to defendants, even if the
affidavit is considered and a factual dispute exists as to whether O’Brien clocked in first
or worked first before clocking in, defendant is not liable under the FLSA because there
is no evidence that defendants knew that O’Brien was working without compensation.
Appellees’ Br. at 37. But O’Brien’s deposition testimony clearly creates a genuine
factual issue, because she asserts that Donnelly knew that she was working off the clock.
See J.A. 223 line 22 (O’Brien Dep. at 89).
Thus, the district court did not err in granting defendants’ motion for summary
judgment as to the claim that O’Brien’s time records were altered. However, because
the district court’s ruling on spoliation might create a fact issue as to the alteration
claims, we vacate the grant of summary judgment. The district court did err in striking
portions of O’Brien’s affidavit and thus erred when it granted defendants’ motion for
summary judgment as to O’Brien’s “off the clock” claim.
3. Prater
Plaintiffs appeal the district court’s decision to strike portions of the affidavit and
other documentation filed at the summary-judgment stage by plaintiff Dallas Prater. The
district court struck or otherwise disregarded paragraphs 6-9 of the affidavit as
inadmissible hearsay; paragraphs 10-13 for violating the Best Evidence Rule; paragraphs
15-16 for being inconsistent with deposition testimony and thus barred by the rule
discussed above; and exhibits 6 and 7 and paragraph 14 of the affidavit (which is based
on exhibit 7) because the exhibits do not qualify as “pedagogical devices,” which is what
the plaintiffs argued that they were. O’Brien, 2007 WL 4510246, at *4-10. We consider
each in turn.
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a. Affidavit ¶¶ 6-9
Paragraphs 6-9 of Prater’s affidavit read as follows:
6. Throughout my employment with Defendants, I often noticed
significant discrepancies on my paycheck as compared with the actual
number of hours I worked for Defendants.
7. At the time I worked for Defendants, I wrote down the number of
hours I worked in a ledger to compare with my paychecks. And, on at
least four occasions, I noticed that my paychecks did not reflect all the
hours I had noted working in my ledger.
8. As a result, I complained to Chad Totche, the restaurant manager
at the North store, on at least two occasions about the apparent shortages
in my pay.
9. On those occasions, Mr. Totche told me that he would look into
the pay discrepancy and get back to me, or words to that effect. But, Mr.
Totche never did follow up with me.
J.A. 333. The district court struck these paragraphs as inadmissible hearsay. O’Brien,
2007 WL 4510246, at *5-6. The district court pointed to Prater’s testimony, as
characterized by the district court, that, “without his ledger, he does not know whether
he worked overtime in any given week, and he has no recollection of when he worked
on any given day.” Id. at *5 (citing Prater Dep. 83, 98). The district court also pointed
to Prater’s testimony that, as the district court put it, “he cannot identify any overtime
for which he claims he was not paid without referencing the ledger.” Id. Thus, the
district court concluded, Prater’s testimony that he was underpaid “is based entirely on
his recollection of the information contained in the personal ledger. In 2003, however,
Plaintiff Prater threw away his ledger and pay records. Consequently, Defendants argue
that any testimony about the information stated in the ledger amounts to inadmissible
hearsay.” Id. (citations omitted).
The district court agreed with defendants’ argument that testimony about the
contents of the ledger—beyond the fact that Prater kept a ledger—is inadmissible
hearsay and should be stricken. “[T]he Court can consider the statements to show that
Plaintiff Prater created a ledger. The Court, however, will disregard Plaintiff Prater’s
attestations regarding the contents of the ledger.” Id. at *6.
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The district court erred when it disregarded these paragraphs of Prater’s affidavit.
First, paragraphs 6 and 9 and most of paragraph 8 in Prater’s affidavit do not discuss the
ledger. Second, the statements in the affidavit are not hearsay. As plaintiffs argue,
Prater’s testimony merely describes the actions he personally took in the
past. . . . Prater’s affidavit properly describes that he personally wrote
down the hours he worked in a ledger because he believed Appellees
were shorting him hours and wages in his paychecks. Prater’s testimony
regarding his use of the ledger, which itself is not in evidence because
Prater later misplaced it, is not an out of court statement made by
someone other than the declarant that is offered for the truth of the matter
asserted.
Appellants’ Br. 37-38 (citation omitted; emphasis in the original). The affidavit does not
purport to introduce the contents of the ledger as evidence. Rather, it shows that Prater
kept a ledger (a fact the district court said it could consider; see supra), that he “noticed”
at least four times that the ledger diverged from his paychecks as to the number of hours
worked, and that, “[a]s a result,” he complained to Chad Totche. His affidavit provides
a foundation for why Prater believes he was cheated by defendants; it might also be used
to corroborate or dispute any testimony by Totche. Though the ledger’s contents
themselves may be inadmissible (for example, to prove that the ledger actually diverged
from Prater’s paychecks), what Prater remembers he noticed in the ledger is admissible
for the purposes plaintiffs offer this portion of the affidavit.
Thus, the district court swept too broadly when it declined to consider Prater’s
“attestations regarding the contents of the ledger.” O’Brien, 2007 WL 4510246, at *6
(emphasis added).
b. Affidavit ¶¶ 10-13
Paragraphs 10-13 of the Prater affidavit read as follows:
10. As an opening shift crew member, I routinely reported to work for
Defendants at the North store at 4:00 a.m.
11. When I reported to work at 4:00 a.m., I often times had to wait for
an opening shift manger [sic] - including Chad Totche, Angela Tall and
David Clark - to arrive at the North store to open the restaurant.
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12. Once an opening shift manager had arrived at the North store, I
would begin working right away without clocking in because the opening
shift managers told me they would clock me in at 4:00 a.m., which was
the time I arrived at the North store.
13. In this lawsuit, Defendants produced some of my timekeeping
records relating to showing the times that restaurant managers clocked
me in on Defendants’ computer system. However, my beginning work
times, as entered by the restaurant managers on Defendants’ computer
and reflected on Defendants’ timekeeping records, are later than the time
I usually reported to work for Defendants, which was 4:00 a.m.
J.A. 333-34.
In evaluating these paragraphs, the district court was mindful of Prater’s previous
deposition testimony—most importantly, it seems, the following colloquy:
Q. Are you telling me, though, that every time that you worked it
was in accordance with the schedule at the restaurant?
A. Yes.
J.A. 257 (Prater Dep. 73).
Based on this deposition testimony, the district court ruled that paragraphs 10-13
of the affidavit violated the Best Evidence Rule, which states that “[t]o prove the content
of a writing . . . , the original writing . . . is required, except as otherwise provided in
these rules or by Act of Congress.” Fed. R. Evid. 1002. The court acknowledged that
plaintiffs correctly pointed out that Rule 1002 does not apply when the proponent of the
evidence is not seeking to prove the contents of the writing. The court then
characterized plaintiffs’ argument as to Rule 1002’s application to the instant case:
Plaintiffs conclude that the Rule is inapplicable here because Mr. Prater’s
testimony is not offered to prove the contents of the schedule, but instead
is offered to establish his actual hours of work, and to demonstrate that
Defendants’ timekeeping records are inaccurate. In other words,
Plaintiffs assert that the Prater Affidavit is not disputing the content or
accuracy of the schedules, but instead it attests to when Plaintiff Prater
reported to work.
O’Brien, 2007 WL 4510246, at *7 (citation omitted). The court rejected this argument:
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Plaintiffs’ argument, however, ignores Plaintiff Prater’s prior deposition
testimony in which he testified that he always worked in accordance with
the written schedules. If Plaintiff Prater always reported to work in
accordance with the written schedules, the best evidence of when
Plaintiff Prater reported to work on any given day is in the written
schedule for the day. Consequently, Fed. R. Evid. 1002 operates to bar
testimony that Plaintiff Prater's scheduled start time was anything other
than what is presented in the written schedules.
Id. (citation omitted).
Alternatively, the court ruled that the testimony was barred as inconsistent with
Prater’s prior deposition testimony:
Plaintiff Prater testified that he always reported to work in accordance
with the written schedules. The written schedules reflect that Plaintiff
Prater was never scheduled to begin work at 4:00 am during his first
period of employment with Defendants. Accordingly, Plaintiff Prater's
attestations that he routinely reported to work at 4:00 a.m. are
inadmissible contradictions of his prior deposition testimony.
Id. (citation omitted).
The district court’s decision to disregard these paragraphs in the affidavit was
error. First, these averments themselves were not offered to “prove the content of a
writing.” By its terms, that is the only time that Rule 1002 applies. The district court
concluded that the averments in the affidavit were deficient because they were not “the
best evidence of when Plaintiff Prater reported to work on any given day.” Id.
(emphasis added). The best evidence to prove that contention may be the schedules, but
requiring the best evidence available (here, apparently, the schedules) to prove
something besides the “content” of the schedules is not what the Best Evidence Rule
demands. See Allstate Ins. Co. v. Swann, 27 F.3d 1539, 1543 (11th Cir. 1994) (“Rule
1002 requires production of an original document only when the proponent of the
evidence seeks to prove the content of the writing. It does not, however, require
production of a document simply because the document contains facts that are also
testified to by a witness.”) (citations and internal quotation marks omitted); see also
Simas v. First Citizens’ Fed. Credit Union, 170 F.3d 37, 51 (1st Cir. 1999) (quoting
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Allstate for the proposition that “there is no general rule that proof of a fact will be
excluded unless its proponent furnishes the best evidence in his power” and reasoning
that a plaintiff “can prove he filed a loan application simply through his own trial
testimony” and does not need to furnish the application).
Second, this affidavit does not contradict the deposition when the deposition is
construed in the light most favorable to plaintiffs, as is required at the summary
judgment stage. The questions immediately preceding the colloquy quoted above
concerned any “days” that Prater was scheduled to work but did not work, and vice
versa. Thus, when read in context, it seems Prater’s statement that “every time” that
Prater worked he worked in accordance with the schedule was only testimony as to the
days he worked. By contrast, these paragraphs in the affidavit concern the hours that
Prater alleges he worked on the days he worked. Thus, there is no contradiction —
especially not one that would call for Prater’s affidavit to be disregarded. The district
court was in error when it ruled otherwise.
c. Affidavit ¶¶ 15-16
The court granted defendants’ motion to strike paragraphs 15 and 16 of the Prater
affidavit as being inconsistent with prior deposition testimony. The affidavit states:
15. On approximately nine occasions, I arrived for work at the North
store in the morning and was instructed by one of the North store
managers that I was needed to work at the South store because it was
short staffed. Then, on thee [sic] occasions, I traveled to the South store
to work a shift as a grill cook. But, I did not clock in at the South store
to record my hours of work.
16. Instead, I was told by the South store managers that one of the
North store managers would clock me in and out at the North store.
However, none of the records Defendants produced in this lawsuit show
any of my work hours at the South store, which averaged ten hours per
shift.
J.A. 334. The district court ruled that these paragraphs conflict with Prater’s deposition
testimony — that, as the district court put it, Prater “admitted that he has no independent
recollection of when he worked or of how much time he worked on any given day. He
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also admitted that he has no knowledge of ever having worked off the clock at the South
store. Finally, Plaintiff Prater testified that he never worked ten hours without pay[.]”
O’Brien, 2007 WL 4510246, at *8 (citations omitted).
The district court erred. Prater at his deposition answered “Well, yeah” to the
question about whether it would be “very hard sitting here today [i.e., at the deposition]
for me [i.e., opposing counsel] to ask you particular days of the year back in 2002 how
many hours you worked or when you showed up that day, wouldn’t it?” J.A. 261 (Prater
Dep. 83). Thus, the question was whether it would be “very hard” to “ask” such a
question. (Emphasis added.)11 This question followed a query to which Prater
acknowledged he did not know the answer and that it would be “hard to remember,” but
that query was worded as follows: “And other than that generalized recollection, if I
asked you a particular week, like, the first week in November of 2002, do you know
whether you worked overtime that week from your memory?” Id. (emphasis added).
Later in the deposition, the following colloquy occurred:
Q. And for any of the days that we would go through here in these
time punch records, you don’t have any independent recollection of when
you worked on those days, do you?
A. No. Not right offhand, no.
J.A. 262 (Prater Dep. 98). First, we note the qualification that Prater does not have any
such “independent recollection” “right offhand.” This is not a clear admission that
Prater has no independent recollection. Second, it is not clear what an “independent
recollection” is or why a recollection of events of several years ago that is not
“independent” would be insufficient. Third, and probably most importantly, the question
involves a potential day-by-day inquiry — for each date, Prater would be asked when
he worked — but the paragraphs of Prater’s affidavit in question do not allege any
specific dates. Indeed, the affidavit implicitly acknowledges that Prater does not know
11
Such a reading of the question is far from charitable to defendants, but on summary judgment
such a reading is appropriate, as the testimony must be reasonably read in the best light for the nonmovant.
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the specific dates, as it states that Prater arrived at the North store and was instructed to
go to the South store on “approximately nine occasions.” (Emphasis added.)
Finally, Prater disputed an exhibit shown to him at his deposition that said he
worked 10 hours off the clock on September 18, 2002:
Q. Do you have any understanding of why someone would say you
worked 10 hours on that day off the clock?
A. No, I wasn’t working no 10 hours off the clock without getting
paid for it. Maybe 5, 10, even 15 minutes, but not 10 hours.
J.A. 269-70 (Prater Dep. 107-08). After a brief discussion off the record, Prater then
testified as follows:
A. That’s why I ain’t got no records. That might be when I worked
at south store.
Q. What do you mean, when you worked at the south store?
A. There was times I went down to the south to work for them down
there. When I went in they needed – they would call and said they
needed somebody down there, so I would go down there and work. And
whoever the manager was in charge would say that they would punch us
– punch me in, I – because I would ask them if I would wait until I got
down there and punch in or what. And they say, no, we’ll punch you in
here. So, you know, I went on down and worked.
J.A. 270 (Prater Dep. 108). Opposing counsel accused Prater of changing his testimony,
but Prater explained:
A. Well, because I forgot about me going down to the south store
and working.
Q. Do you know whether or not you were punched in when you went
to the south store to work?
A. No, I do not.
Q. So you don’t know of having ever worked 10 hours off the clock
at the south store, do you?
A. That’s right. I don’t mind giving them a few minutes, but ten
hours, not [sic].
J.A. 271 (Prater Dep. 109).
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Here, Prater is testifying in the present tense: as of his deposition, he does not
know whether someone else punched him in when he went to the South store and
whether he worked off the clock at the South store for ten hours. Such testimony is
admittedly not helpful for plaintiffs’ case. But the affidavit does not contradict this
testimony — paragraph 16 of the affidavit only says that “none of the records
Defendants produced in this lawsuit” show any of his work hours at the South store. In
other words, Prater may not personally know whether he was punched in, but he could
still discern whether the records produced by the defendants reflect the hours that he
asserts he worked. Moreover, paragraphs 15 and 16 are consistent with Prater’s
deposition testimony explaining needing to go down to the South store, that he would
not punch in himself, and that he was told that a North store manager would clock him
in at the North store. The district court’s characterization that “Prater alleges in his
affidavit that he is claiming he worked ten-hour days without pay at the South store”
(O’Brien, 2007 WL 4510246, at *8 (emphasis added; citing paragraph 16 of affidavit))
is technically erroneous.
For all these reasons, the district court erred when it struck these paragraphs in
the Prater affidavit.
d. Affidavit ¶ 14; Exhibits 6 and 7
The district court disregarded plaintiffs’ exhibits 6 and 7, and thus paragraph 14
of Prater’s affidavit which was based on exhibit 7, because the exhibits do not qualify
as “pedagogical devices” as defined by United States v. Bray, 139 F.3d 1104, 1111 (6th
Cir. 1998),12 which is what the plaintiffs claimed they are.13 The court found that the
12
This court understands a “pedagogical device” to be:
an illustrative aid such as information presented on a chalkboard, flip chart, or drawing,
and the like, that (1) is used to summarize or illustrate evidence, such as documents,
recordings, or trial testimony, that has been admitted in evidence; (2) is itself not
admitted into evidence; and (3) may reflect to some extent, through captions or other
organizational devices or descriptions, the inferences and conclusions drawn from the
underlying evidence by the summary’s proponent. This type of exhibit is “‘more akin
to argument than evidence’ since [it] organize[s] the jury’s examination of testimony
and documents already admitted in evidence.” Trial courts have discretionary authority
to permit counsel to employ such pedagogical-device “summaries” to clarify and
simplify complex testimony or other information and evidence or to assist counsel in the
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portions of the exhibits that were based on portions of plaintiffs’ affidavits that the court
already found to be inadmissible were themselves inadmissible. The court also observed
that “the exhibits are not accurate representations of the evidence.” O’Brien, 2007 WL
4510246, at *10.
Since these exhibits are pedagogical devices and are not themselves evidence, it
does not matter whether the district court considered them or not. Any decision by a
district court to strike or otherwise not consider a “pedagogical device” at the summary-
judgment stage would be, at most, harmless error. A pedagogical device is not evidence.
On a motion for summary judgment, such a device is offered merely to “aid” the court.
If a district judge — for whatever reason — believes that a pedagogical device would
not help him or her to rule on a motion for summary judgment, such a device is, by
definition, useless.14
e. Summary judgment
Plaintiffs articulate two theories of recovery: that plaintiffs’ time records were
changed to their detriment and that plaintiffs worked “off the clock.” The first theory
fails as to Prater, and the district court was not in error when it entered summary
judgment for defendants as to that claim. Prater has testified that managers would
“fix[]” the time-in and time-out when necessary, but he was not aware of any such
changes being inaccurate. See J.A. 256 (Prater Dep. 67); see also J.A. 268 (Prater Dep.
presentation of argument to the court or jury.
Bray, 139 F.3d at 1111 (internal citations omitted).
13
Although plaintiffs initially state in their brief that their “damage calculations are proper
evidence under Fed. R. Civ. P. 56(c),” they then go on to argue that their “damage calculations are not
evidence themselves, but are the consolidation of evidence adduced from relevant and admissible evidence
already presented to the district court in this case. Therefore, Appellants’ damage calculations are proper
pedagogical devices that should have been considered by the district court.” Appellants’ Br. 42, 45
(emphasis added).
14
Note that this discussion is restricted to a court’s consideration of a motion for summary
judgment and other proceedings in which there is no jury present to consider evidence. A district court
does not have license to keep any pedagogical device it wishes from a jury’s eyes. Cf. Bray, 139 F.3d at
1111 (noting that trial courts have “discretionary authority” to permit the use of such devices).
Furthermore, note the obvious limit that a district court does not have license to disregard whatever
evidence it wants to. We are only discussing “pedagogical devices” characterized as such by the party that
brings them before the court.
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106). He also testified that he has no knowledge of anyone intentionally altering his
hourly time records or anyone else’s hourly time records. J.A. 274 (Prater Dep. 141);
see also J.A. 258 (Prater Dep. 77). As stated, though, we vacate the district court’s grant
of summary judgment, because the spoliation issue remains open for the district court
to consider on remand.
However, given the evidentiary rulings above, the district court erred when it
granted defendants’ motion for summary judgment as to Prater’s “off the clock” claim.
We reverse and remand.
4. Burden of proof
Plaintiffs raise another argument on appeal, which the district court did not
discuss in its opinion, but which pertains to our decision to affirm the grant of summary
judgment on some of plaintiffs’ claims. To begin with, a “FLSA plaintiff must prove by
a preponderance of evidence that he or she ‘performed work for which he [or she] was
not properly compensated.’” Myers v. Copper Cellar Corp., 192 F.3d 546, 551 (6th Cir.
1999) (citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 686–87 (1946),
superseded by statute on other grounds as stated in Carter v. Panama Canal Co., 463
F.2d 1289, 1293 (D.C. Cir. 1972)). To determine the extent of damages, the plaintiff can
“prove his or her ‘under-compensation’ damages through discovery and analysis of the
employer's code-mandated records. However, if the employer kept inaccurate or
inadequate records, the plaintiff's burden of proof is relaxed, and, upon satisfaction of
that relaxed burden, the onus shifts to the employer to negate the employee's inferential
damage estimate.” Id. (emphasis added) (citing Mt. Clemens Pottery, 328 U.S. at
687–88).
Plaintiffs imply that their claims should not have been dismissed on summary
judgment because they only needed to satisfy this lesser initial burden, as the defendants’
records were inaccurate and inadequate. However, Mt. Clemens Pottery and its progeny
do not lessen the standard of proof for showing that a FLSA violation occurred. Rather,
Mt. Clemens Pottery gives a FLSA plaintiff an easier way to show what his or her
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damages are. When an employer keeps inaccurate or inadequate records, for a FLSA
plaintiff to show what his or her damages were, a FLSA plaintiff does not need to prove
every minute of uncompensated work. Rather, she can estimate her damages, shifting
the burden to the employer. If the employer cannot negate the estimate, then the “court
may award damages to the employee, even though the result be only approximate.” Mt.
Clemens Pottery, 328 U.S. at 688. In short, Mt. Clemens Pottery does not help plaintiffs
show that there was a violation under the FLSA. It would only allow them to prove
damages by way of estimate, if they had already established liability. Plaintiffs’ failure
to show a genuine issue of material fact as to the time-sheet–alterations claims required
the district court’s entry of summary judgment against them, though as discussed, the
grant of summary judgment is vacated for the district court to revisit the spoliation issue.
V. Conclusion
We reverse the district court’s rulings with regard to the affidavits presented by
the lead plaintiffs on summary judgment. And we vacate the entry of summary judgment
against plaintiffs on the time-sheet–alteration claims, because we have also remanded
for the district court’s consideration whether sanctions for spoliation are warranted. This
may alter the merits of the summary-judgment analysis of the lead plaintiffs’ time-
sheet–alteration claims.
The district court’s decertification of the collective action in O’Brien is affirmed.
Regarding Dellarussiani, the entry of judgment in plaintiffs’ favor due to mootness, as
well as the entry of summary judgment in defendants’ favor are affirmed, with the
exception that the issue of the attorney fees awarded in Dellarussiani is remanded to the
district court.
Accordingly, the district court is AFFIRMED IN PART and REVERSED IN
PART. Defendants’ motion to dismiss the Dellarussiani plaintiffs from the O’Brien
appeal is GRANTED IN PART, but DENIED IN PART as to the Prompt Pay Act and
common-law claims. These cases are REMANDED for further proceedings consistent
with this opinion.
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____________________________
CONCURRING IN PART
____________________________
WHITE, Circuit Judge, concurring in part. I concur in the majority opinion
except with regard to its determination that the Dellarussiani plaintiffs’ common-law
claims in O’Brien are necessarily barred by res judicata. I would leave such a
determination to the district court on remand.