Pineda v. Skinner Services, Inc.

          MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION FOR CLASS CERTIFICATION, DEFENDANTS' MOTION TO DECERTIFY THE FLSA COLLECTIVE, AND PLAINTIFFS' MOTION TO REFORM THE FLSA COLLECTIVE

          F. DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE.

         This case concerns claims by manual laborers against their employer, Skinner Services, Inc. d/b/a Skinner Demolition (“Skinner”), and supervisors Thomas Skinner, David Skinner, Elber Diniz, and Sandro Santos, for violating the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq. and Massachusetts wage laws.

         On September 6, 2017, this court conditionally certified a FLSA collective action. After discovery, plaintiffs moved to certify two classes as to their state-law claims pursuant to Federal Rule of Civil Procedure 23. The first putative class, the “Reporting Class, ” consists of individuals who allege that they were not compensated for travel time between Skinner's headquarters and jobsites. The second putative class, the “Uniform Class, ” consists of individuals who allege that their paychecks were subject to mandatory deductions for uniform cleaning services. Defendants have moved to decertify the FLSA collective action, and plaintiffs have further moved to reform the FLSA action as to the reporting and travel claims to exclude a group of laborers living in or around Boston, who would typically report directly to Boston-area jobsites. For the following reasons, plaintiffs' motion for class certification will be granted, defendants' motion to decertify the FLSA collective action will be denied, and plaintiffs' motion to reform the collective action will be granted.

         I. Factual Background

         The following facts are as set forth in the record. Because the factual record is voluminous, some potentially relevant matters have been omitted for the sake of brevity.

         Skinner Services, Inc. is a construction company with its principal place of business in Avon, Massachusetts. (Am. Compl. ¶ 15). It was founded by David Skinner, Thomas Skinner, and Elber Diniz, all of whom are owners and managers in the company. (Id. ¶ 17-39). Sandro Santos also serves as a manager in the company. (Id. ¶¶ 40-43).

         Skinner performs demolition work on construction sites, primarily in Massachusetts, although it also performs work elsewhere in New England and in New York. (Id. ¶ 16).

         Named plaintiffs Jose Pineda, Jose Montenegro, Marco Lopez, and Jose Hernandez are manual laborers who have worked for Skinner. (Id. ¶¶ 48-177). Most of the employees of Skinner are Cape Verdean and many have limited English language skills.

         A. Reporting to the Yard

         The named and opt-in plaintiffs testified that, until February 2016, Skinner had a policy (the “Policy”) requiring its laborers to report at approximately 5:45 a.m. to the company's Avon headquarters (the “Yard”), where they would receive jobsite assignments. (Pl. Ex. E at 85:14-22; Pl. Ex. F at 51:16-53:4; Pl. Ex. G at 61:8-63:13; Pl. Ex. H at 102:2-17; Pl. Ex. I at 39:19-40:7; Pl. Ex. J at 24:22-25:4; Pl. Ex. K at 19:24-20:2; Pl. Ex. L at 55:6-9; Pl. Ex. M at 63:14-64:14). At least 36 opt-in plaintiffs have also attested to that requirement in their answers to interrogatories. (See generally Pl. Ex. N). Skinner employees who are not parties to this litigation further attested in affidavits that such a Policy existed. (ECF No. 61, Ex. B at 6; ECF No. 79, Ex. 1 at 5).

         According to plaintiffs, laborers were not informed about the location of their respective jobsites by Diniz until they arrived at the Yard, even if the laborers would be assigned to the same worksite for multiple days in a row. (Pl. Ex. G at 68:16-69:11; Pl. Ex. H at 89:10-21; Pl. Ex. I at 17:20-18:3; Pl. Ex. J at 19:23-20:6; Pl. Ex. L at 26:5-23; Pl. Ex. M at 18:15-24). Once at the Yard, laborers would also load tools and equipment onto vehicles before departing. (Pl. Ex. E at 61:1-11; Pl. Ex. F at 39:15-18; Pl. Ex. G at 65:14-20; Pl. Ex. H at 89:3-6; Pl. Ex. I at 14:18-16:17; Pl. Ex. J at 26:5-28:18; Pl. Ex. K at 31:11-32:11; Pl. Ex. L at 42:10-43:14; Pl. Ex. M at 36:12-24).

         According to plaintiffs, despite being required to first report to the Yard and obtain tools there, laborers were not paid for their time until they arrived at their jobsite for the day. (Pl. Ex. F at 40:5-7; Pl. Ex. G at 61:16-62:16; Pl. Ex. H at 102:18-103:9; Pl. Ex. I at 19:12-19; Pl. Ex. J at 16:22-24; Pl. Ex. K at 37:1-3; Pl. Ex. L at 48:16-24). After leaving the jobsite, laborers would return to the Yard and unload tools there-however, they were also not compensated for time spent traveling back to the Yard. (Pl. Ex. E at 61:12-17; Pl. Ex. G at 107:17-110:15; Pl. Ex. K at 32:4-13; Pl. Ex. Q at 53:1-10). Personnel who drove crew to jobsites would be compensated for up to one hour's driving time, regardless of the amount of time actually spent driving. (Pl. Ex. D at 162:23-163:16; Pl. Ex. E at 123:5-23).

         Infrequently, laborers would report directly to a jobsite. That would occur when the jobsite was close to the laborer's home or when a supervisor ordered it. (Pl. Ex. G at 67:1-11; Pl. Ex. H at 96:2-13; Pl. Ex. L at 67:12-20; Pl. Ex. M at 17:2-19). However, Skinner laborers living in or around Boston (the “Boston Crew”) would by default report directly to Boston-area jobsites. (Pl. Ex. Q at 14:18-20; Pl. Ex. T at 40:5-19). According to plaintiffs, Skinner exempted the Boston Crew from the Yard-reporting requirement beginning in 2012. (Pl. Ex. U at 22:9-13).

         Around January 2016, Skinner purchased vans to transport its laborers to worksites. (Pl. Ex. G at 75:15-23). Soon afterward, plaintiffs contend that Skinner changed the Policy so that laborers would no longer have to report to the Yard in the early morning-instead, supervisors would communicate directly to laborers their daily assignments during the prior evening. (Pl. Ex. G at 77:11-21; Pl. Ex. H at 106:18-107:12; Pl. Ex. K at 25:8-19). A company memorandum dated February 26, 2016, confirms that employees could “use their own their own transportation to and from customer worksites.” (Pl. Ex. S). The memo also states that Skinner would provide company transportation for employees who wished to use it, but that those employees would have to report to the Yard by 5:45 a.m. (Id.).

         Defendants deny the existence of the Policy, contending that laborers would only report to the Yard if summoned by their supervisors. (Def. Ex. 3 at 139:21-142:12; Def. Ex. 4 at 102:7-14). They contend that supervisors had always notified employees of their jobsite assignments the prior day and were free to make their own travel arrangements. (Def. Ex. 5 at 38:22-41:9; Def. Ex. 6 at 141:3-143:16). Moreover, they contend that laborers were simply given an option to meet at the Yard to use company transportation to jobsites to save on travel costs. (Def. Ex. 7 at 137:3-138:24). To the extent that laborers were required to report to the Yard in the morning or bring equipment back from the jobsite, defendants contend that they were compensated for their time. (Id. at 108:19:113:18; 142:8-19).

         B. Uniform Deductions

         Beginning on August 2, 2013, Skinner contracted with a company called Cintas to provide uniform-cleaning services. (Def. Ex. 9 ¶ 5). Defendants contend that the program was voluntary and that participating employees could cancel their participation at any time. (Id. ¶ 6). Participants were provided with eleven free polo shirts and eleven free pairs of pants. (Id. ¶ 9). In return, Skinner would deduct approximately one hour of pay per week. (Id. ¶ 10; Pl. Ex. Z).

         Several plaintiffs, however, testified that Skinner coerced them into signing up for the Cintas uniform program by threatening to withhold work from, or fire, employees who refused. (Pl. Ex. E at 152:11-153:7; Pl. Ex. G at 158:2-19; Pl. Ex. H at 77:21-78:2). Another plaintiff testified that Skinner supervisors strongly indicated that participation in the Cintas program was mandatory. (Pl. Ex. M at 47:6-14; 52:9-11). Named plaintiff Jose Montenegro testified that Santos forged his signature, forcing him to take the uniforms and pay for the services. (Pl. Ex. H at 82:18-83:3). Moreover, there is evidence that laborers' weekly paychecks were deducted for the uniform service even if they expressly refused to enroll in the program. (Compare Pl. Ex. BB at 43-46 (showing that four individuals refused to sign) with Pl. Ex. Z and AA (showing that Skinner still deducted an hour's pay every week for those employees)).

         The weekly Cintas deductions appear to have varied from employee to employee. For example, Jose Pineda was charged $14 per week (Pl. Ex. BB at 1), Jose Hernandez was charged $7 per week (id. at 3), Divino Dulco was charged $13 per week (id. at 5), and Orlando Cruz was charged $15 per week (id. at 12). There appears to have been no reason for the variance in weekly charges other than the individual laborer's hourly pay.

         C. Department of Labor Investigation

         Between 2013 and 2015, the Wage and Hour Division of the U.S. Department of Labor investigated Skinner's wage practices. (Pl. Reply Ex. F at 9). The primary investigator submitted a ten-page report on April 17, 2017, concluding that Skinner had violated Section 7 of the FLSA. (Id. at 3). The report noted that “[t]he violations did not appear on the records and thus had to be reconstructed from employee interviews.” (Id.). According to the report, Skinner mandated that

the employees would show up at the shop in Avon, participate in “pre-tour” activities such as loading the truck with tools and other equipment and being assigned work, and then ride to the job site on the company vehicle, all at the instruction of the employer. All of this work was unpaid for the purposes of hours worked as defined under 29 CFR 785.38 (Travel that is all in the day's work). The employees would only begin getting paid upon arrival at the job site, by punching in on a smart phone app called “My Time Station.”

(Id.). The investigator estimated that Skinner owed back wages of $836, 819.46 to 102 employees. (Id. at 5-6). Because Skinner failed to properly compensate its laborers, the investigator further concluded that the company kept inaccurate time records in violation of Section 11 of the FLSA. (Id. at 6).

         After the primary investigator submitted her report, her supervisor, Assistant District Director Carl Loria, prepared a memorandum for the investigatory file. (Pl. Reply Ex. H). In his memorandum, Loria summarized the positions of the parties and expressed doubt as to whether there was a FLSA violation because certain employees (namely, the Boston Crew) would directly report to their jobsites. (Id.). He further noted that the Massachusetts Attorney General's office had “found no cause to continue an investigation.” (Id.). However, in light of the present litigation and a separate complaint before the Equal Employment Opportunity Commission, Loria ended the Department of Labor's investigation. (Id.).

         II. Procedural Background

         The complaint in this action was filed on November 2, 2016. An amended complaint was filed on December 9, 2016.

         The amended complaint asserts eight claims. Counts One and Two, respectively, assert claims that defendants failed to pay plaintiffs wages at one-and-a-half-times their hourly rates for overtime in violation of 29 U.S.C. § 207, and the Massachusetts Overtime Law, Mass. Gen. Laws ch. 151, §§ 1A & 1B. Counts Three and Four, respectively, assert claims that defendants failed to pay plaintiffs minimum wages for a significant number of hours worked in violation of 29 U.S.C. § 206 and the Massachusetts Minimum Wage Act, Mass. Gen. Laws ch. 151, §§ 1 & 20. Count Five asserts a claim that defendants failed to pay plaintiffs wages owed under the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148. Counts Six, Seven, and Eight, respectively, assert claims that defendants took adverse employment actions against certain plaintiffs for taking part in this action in violation of 29 U.S.C. § 215(a)(3), the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148A, and the Massachusetts Fair Wages Act, Mass. Gen. Laws ch. 151, § 19(5). The retaliation claims apply only to plaintiffs Pineda, Lopez, and Hernandez. (Am. Compl. ¶¶ 250-64).

         On September 6, 2017, the Court conditionally certified a FLSA collective action. Nine days later, the Court entered a protective order prohibiting defendants from retaliating against Skinner employees for participating or assisting in this litigation, or otherwise engaging in conduct intended to discourage employees from doing so.

         Over the next year, the parties engaged in multiple discovery disputes requiring court intervention. On August 24, 2018, defendants terminated the employment of opt-in plaintiff Manuel Goncalves. Plaintiffs' counsel subsequently filed a motion to hold defendants in civil contempt of the Court's September 15, 2017 protective order. A three-day evidentiary hearing was held on October 26, November 7, and November 13, 2018, during which the Court heard the testimony of multiple witnesses. At the conclusion of the hearing, the Court found by clear and convincing evidence that Goncalves's termination was motivated at least in part by his participation in this litigation. (Nov. 13, 2018 Tr. at 22:10-14). The Court also noted that the testimony of defendant Thomas Skinner “had a variety of inconsistencies and some illogical aspects to it.” (Id. at 23:17-21). Accordingly, on December 10, 2018, the Court awarded front and back pay and reasonable attorneys' fees related to the bringing of the contempt motion to Goncalves. Defendants have filed an interlocutory appeal of that order with the First Circuit.

         Plaintiffs subsequently moved to certify the Reporting and Uniform Classes pursuant to Rule 23. Defendants cross-moved to decertify the collective action, and plaintiffs moved to reform the FLSA collective to exclude the Boston Crew as to the reporting and travel claims.

         III. Legal Standard

         Generally, courts have held that class actions may not be brought under the FLSA. See, e.g., Trezvant v. Fidelity Emp'r Servs. Corp., 434 F.Supp.2d 40, 57 (D. Mass. 2006). As the Eleventh Circuit explained, Congress intended that suits to vindicate FLSA rights be brought as collective actions under 29 U.S.C. § 216(b). See Cameron-Grant v. Maxim Healthcare Servs., Inc., 347 F.3d 1240, 1247-48 (11th Cir. 2003). “Unlike . . . Rule 23 class actions, FLSA collective actions require similarly situated employees to affirmatively opt-in and be bound by any judgment.” Pike v. New Generation Donuts, LLC, 2016 WL 707361, at *3 (D. Mass. Feb. 20, 2016) (quotation marks and citations omitted).

         District courts “have developed two methods for determining whether potential plaintiffs are ‘similarly situated' for purposes of class certification under [Section] 216(b).” Kane v. Gage Merch. Servs., Inc., 138 F.Supp.2d 212, 214 (D. Mass. 2001). Some have followed “an approach coextensive with the requirements of class certification under [Rule 23].” Id. (citing Mooney v. Aramco Servs. Co., 54 F.3d 1207, 1213-14 (5th Cir. 1995)). Others, including most district courts in the First Circuit, have followed “a ‘two-step' approach involving notification to potential class members of the representative action followed by a final ‘similarly situated' determination after discovery is complete.” Id. At the second step, courts have considered various factors, including:

1) the disparate factual and employment settings-e.g. whether plaintiffs were employed in the same corporate department, division, and location; 2) the various defenses available to defendant which appear to be individual to each ...