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Shahlai v. Comcast Cable Communications Management, LLC

United States District Court, D. Colorado

August 15, 2018

RAMIN SHAHLAI, on his own behalf and on behalf of all others similarly situated, Plaintiff,
v.
COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC, Defendant.

          ORDER GRANTING IN PART THE PARTIES' JOINT MOTION FOR CONDITIONAL CERTIFICATION OF CLASS AND PRELIMINARY APPROVAL OF SETTLEMENT AGREEMENT

          William J. Martínez, United States District Judge.

         Plaintiff Ramin Shahlai brings this action against Defendant Comcast Cable Communications Management, LLC, for violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201 et seq., and the Colorado Minimum Wage Act (“Minimum Wage Act”), Colo. Rev. Stat. §§ 8-6-101 et seq. (ECF No. 21.) Plaintiff claims that Defendant failed to properly reimburse employees for expenses and improperly deducted sums from employee paychecks for employer-provided tools, and that these actions resulted in Defendant paying employees less than the federal and Colorado minimum wage and applicable overtime rates.

         Currently before the Court is the parties' Joint Motion for Conditional Certification of Class and Preliminary Approval of Settlement Agreement (“Joint Motion”). (ECF No. 68.) The parties seek conditional certification of an FLSA collection action, certification of a Rule 23 class action, and preliminary approval of the executed Final Settlement Agreement and Final Release resolving the FLSA and state law claims (ECF No. 70). For the reasons explained below, the Court grants in part the parties' Joint Motion, conditionally certifies a collective action under the FLSA for the claim brought under that statute, and certifies a class action under Rule 23 with respect to the Minimum Wage Act claim.

         I. BACKGROUND

         Unless otherwise noted, the following facts are drawn from Plaintiff's amended complaint and the Joint Motion.

         Plaintiff and other members of the proposed class were cable technician employees of the now-defunct Icon Cable, Inc. As cable technicians, Plaintiff and others were responsible for installing Comcast's cable and internet service devices in Comcast's clients' homes. Plaintiff claims that Icon Cable was a contractor for Comcast and that Comcast is liable for Icon Cable's wage and hour violations as a “joint employer” under the FLSA and Minimum Wage Act. (ECF No. 21 ¶¶ 1, 24.) Comcast disputes that it was or is an employer or joint employer of any Icon Cable cable technician. (ECF No. 30 ¶ 24.)

         Plaintiff worked for Icon Cable in 2014 providing commercial and residential cable and internet installation services at client sites. Plaintiff drove his vehicle to and among worksites to perform his work. Defendant did not reimburse Plaintiff for vehicle expenses incurred. In addition, Plaintiff's paycheck was docked for tool expenses. Plaintiff alleges that failure to reimburse vehicle expenses and charging for tool expenses resulted in Defendant paying less than the federal and Colorado minimum and overtime wage rates. For example, Plaintiff contends that he drove approximately 50 miles per day, incurring $196 in vehicle expenses each week (based on the prevailing Internal Revenue Service milage rate of $0.56 per mile in 2014). From October 12-18, 2014, Plaintiff worked 42.62 hours and, taking into account $196 of unreimbursed expenses, Plaintiff earned $155.44 for the week, or $3.65 per hour, less than minimum wage. Plaintiff contends that all Icon Cable employees were subject to the same policies regarding vehicle and tool costs.

         On October 13, 2016, Plaintiff filed a complaint against Comcast alleging failure to pay minimum and overtime wages in violation of the FLSA and Minimum Wage Act, and alleging collective action and class action claims. The parties engaged in “extensive discovery” on the issue of whether Comcast was a joint employer with Icon Cable. On October 27, 2017, Comcast filed a notice of settlement (ECF No. 52) and on February 23, 3018, the parties filed the present Joint Motion (ECF No. 68). The parties' supplemented the Joint Motion on March 6, 2018 with a Final Settlement Agreement and Release. (ECF No. 70.)

         The parties seek conditional certification of the FLSA collective action, certification of the Rule 23 class action, and preliminary approval of the settlement agreement. (ECF No. 68 at 1.) The parties propose the following notice and settlement procedure: after certification of a conditional FLSA collective action and Rule 23 class action, a settlement administrator will send a class notice to each class member. (Id. at 4-5.) Under the procedure proposed by the parties, the notice will contain the basic terms of the settlement agreement, an estimated sum of damages of the class member, and the procedure by which a class member may object to or opt out of the class action within sixty days of mailing of the notice. (Id. at 5.) The parties submitted a proposed notice that references both the state and federal claims. (ECF No. 68-1 at 27-31.) That notice contains information related to opting out of the class or objecting to the settlement. It does not describe the opt-in procedure for FLSA claims or provide a consent to join form for the FLSA claims, but does note that FLSA claims will be released if the class member signs and cashes the check. (Id. at 31.)

         After the close of the opt-out period, the parties propose to move for final approval of the settlement agreement. (ECF No. 68 at 5.) After final approval of the settlement agreement, the settlement administrator will then send checks to class members who do not opt out (“Qualified Class Members”) according to an agreed-upon methodology which combines settlement payments for the FLSA and Minimum Wage Act claims. (Id. at 4-9; ECF No. 70 § 4.5) The back of settlement checks issued to those Qualified Class Members will state:

By endorsing this check, I hereby consent to join the lawsuit titled Ramin Shahlai, on behalf of himself and all others similarly situated v. Comcast Cable Communications Management, LLC, No. 16-cv-02556-WJM-MJW, and release all federal and state wage and hour claims, including those described in the notice I received, from the beginning of time through the date of [insert Final Approval Date].

(ECF No. 70 § 6.7.2.) By cashing the settlement check, a Qualified Class Member waives his or her federal FLSA claims against Comcast. (Id. § 5.3.) If a Qualified Class Member does not cash the settlement check by a certain date, he or she becomes an “Affected Class Member, ” who releases all Minimum Wage Act claims but not FLSA claims. (Id. § 5.2.) Essentially, by signing the settlement check, a Qualified Class Member opts into the FLSA action. (ECF No. 68 at 28.)

         II. LEGAL STANDARDS

         A. Rule 23 Class Certification Standards

         A party seeking class certification must demonstrate that the four prerequisites of Federal Rule of Civil Procedure 23(a) are clearly met. Shook v. El Paso Cnty., 386 F.3d 963, 971 (10th Cir. 2004); see also Tabor v. Hilti, Inc., 703 F.3d 1206 (10th Cir. 2013). These threshold elements are: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative party are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. Fed.R.Civ.P. 23(a). A plaintiff who meets these threshold requirements must then demonstrate that the action falls within one of the three categories of lawsuits set forth in Rule 23(b). Shook, 386 F.3d at 971. Here, Plaintiff seeks certification pursuant to Rule 23(b)(3). (ECF No. 28 at 7, 11-12.)

         In determining the propriety of a class action, the question is not whether a plaintiff has stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met. Anderson v. City of Albuquerque, 690 F.2d 796, 799 (10th Cir. 1982). When deciding whether the proposed class meets the requirements of Rule 23, the Court accepts the plaintiff's substantive allegations as true, though it need not blindly rely on conclusory allegations and may consider the legal and factual issues which the complaint presents. Shook, 386 F.3d at 968; see also Vallario v. Vandehey, 554 F.3d 1259, 1265 (10th Cir. 2009). The Court should not pass judgment on the merits of the case, but must conduct a “rigorous analysis” to ensure that the requirements of Rule 23 are met. D.G. ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1194 (10th Cir. 2010). The decision whether to grant or deny class certification “involves intensely practical considerations and therefore belongs within the discretion of the trial court.” Tabor, 703 F.3d. at 1227.

         B. FLSA Collective Action Conditional Certification Standards

         The FLSA permits collective actions where the allegedly aggrieved employees are “similarly situated.” 29 U.S.C. § 216(b). Whether employees are similarly situated is judged in two stages: a preliminary or “notice stage” and then a more searching, substantive stage, usually after the close of discovery. Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102-03, 1105 (10th Cir. 2001). At the notice stage, a plaintiff must offer “nothing more than substantial allegations that the putative [collective action] members were together the victims of a single decision, policy, or plan.” Id. at 1102 (internal quotation marks omitted); see also Boldozier v. Am. Family Mut. Ins. Co., 375 F.Supp.2d 1089, 1092 (D. Colo. 2005) (applying Thiessen standard).

         If the plaintiff meets this standard, then the Court may order that the defendant provide contact information for all employees and former employees that may be eligible to participate in the collective action, and the Court may approve a form of notice to be sent to all of those individuals. See Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 169-74 (1989). Such notice is often necessary because, unlike class actions under Federal Rule of Civil Procedure 23, FLSA collective actions require a party to opt in to the litigation rather than opt out of the class. See 29 U.S.C. § 216(b) (“No employee shall be a party plaintiff to any [collective] 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.”). Obviously, current or former employees cannot opt in if they do not know about the pending action.

         III. PROPOSED CLASS

         The parties have stipulated to the following class definitions:

(1) As to the Minimum Wage Act class action claims, a class ...

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