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Misra v. Credico (USA), LLC

Superior Court of Massachusetts, Suffolk, Business Litigation Session

July 24, 2018

Kanika MISRA et al., Individually and on Behalf of All Others Similarly Situated
v.
CREDICO (USA), LLC et al.

          MEMORANDUM AND ORDER ON CREDICO’S PARTIAL MOTION TO DISMISS

          Kenneth W. Salinger, Justice of the Superior Court

          Plaintiffs allege that Credico (USA), LLC, DFW Consultants, Inc., and Jason Ward operated as their joint employers. Plaintiffs claim that Defendants violated Massachusetts law by misclassifying employees as independent contractors and by failing to make minimum wage and overtime payments that were required by law.

         This action was originally brought by Kanika Misra and Craig Levine, on behalf of themselves and others who worked for Defendants in Massachusetts.

         Credico moved to dismiss all claims against it on the ground that Ms. Misra and Mr. Levine had opted into a prior federal lawsuit in New York, joining in a collective action asserting similar claims against Credico under the federal Fair Labor Standards Act (the "FLSA"). Credico argues that Misra and Levine could have asserted claims against it under Massachusetts law in the prior action, final judgment in Credico’s favor has now been entered in that case, and this action is therefore barred by the doctrine of res judicata or claim preclusion.

         Plaintiffs then filed amended complaints adding four other named plaintiffs. Juan Melo, Jaqueline Sill, and Lee Tremblay never opted into the prior FLSA collective action. Mr. Jackson’s attempt to opt-in was rejected as untimely.

         The Court will treat the motion to dismiss as directed only at the claims asserted against Credico by Ms. Misra and Mr. Levine, as the parties agreed during oral argument.

         The Court will ALLOW the motion to the extent that it seeks dismissal of the claims by Misra and Levin. Those claims are barred by the doctrine of claim preclusion because they could have been asserted in the prior FLSA lawsuit, it is not clear that the federal court would have declined to exercise supplemental jurisdiction over those claims, and final judgment has now entered in that prior case.[1] The Court will deny the motion to dismiss with respect to the claims asserted by Mr. Melo Mr. Jackson, Ms. Sill, or Mr. Tremblay, on behalf of themselves and other putative class members who did not opt into the prior action.

         1. The Prior Federal Action

         In July 2015, four individuals sued Credico and Comex, Inc., in federal court in Illinois. That lawsuit was transferred on plaintiffs’ motion to the Southern District of New York, where it was docketed as Vasto v. Credico (USA) LLC, 15CV9298 (PAE).[2]

          The Vasto plaintiffs alleged that Credico and Comex operated as joint employers and misclassified workers as independent contractors. They brought a putative FLSA collective action, under 29 U.S.C. § 216(b), claiming that Credico and Comex violated the FLSA by not paying required minimum wages and overtime. They also brought putative class actions, under Fed.R.Civ.P. 23, claiming that Credico and Comex violated similar requirements under New York and Arizona law.

         In May 2016, the federal court conditionally certified Vasto as an FLSA collective action. Notice of the action was sent to everyone who had done face-to-face marketing work for any subcontractor of Credico in the United States, within the past three years, while classified as independent contractors. The notice informed those workers of their right to opt to participate in the Vasto case as a plaintiff.

         The court then approved the form of a notice to be sent to all such workers, informing them of their right to file a form opting in to the Vasto collective action. The federal judge ordered that any further amendments to the complaint by the then-existing plaintiffs be filed by July 10, 2016, and that any additional plaintiff wishing to opt-in to the FLSA collective action had to do so by August 15, 2016.

         Plaintiffs represent that more than 1, 700 individuals from 36 different states filed consents requesting to opt-in to the Vasto collective action under the FLSA.

         Misra and Levine opted to join in the FLSA collective action in the Vasto case. They both signed forms stating that they "consent and agree to become a ‘party-plaintiff’ in" that case, understand that the lawsuit is brought under the FLSA, and "consent, agree, and opt in to become a plaintiff ...


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