United States District Court, D. Colorado
ISABEL VALVERDE; MARIA SONIA MICOL SIMON; and those similarly situated, Plaintiffs,
v.
XCLUSIVE STAFFING, INC., XCLUSIVE MANAGEMENT, LLC D.B.A. XCLUSIVE STAFFING; XCLUSIVE STAFFING OF COLORADO, LLC; DIANE ASTLEY; OMNI INTERLOCKEN COMPANY, L.L.C.; OMNI HOTELS MANAGEMENT CORPORATION; JMIR DTC OPERATOR LLC; and MARRIOTT INTERNATIONAL, INC. Defendants. JOSE TREJO; MARISOL TREJO; OBDULIA JULIE CORTES; VILMA DE JESUS ALVARENGA CARRANZA; and those similarly situated Plaintiffs,
v.
XCLUSIVE STAFFING, INC.; XCLUSIVE MANAGEMENT, LLC D.B.A. XCLUSIVE STAFFING; XCLUSIVE STAFFING OF COLORADO, LLC; DIANE ASTLEY; and WESTIN DIA OPERATOR, LLC, Defendants.
ORDER
RAYMOND P. MOORE, UNITED STATES DISTRICT JUDGE
This
matter is before the Court on Plaintiffs' (excepting
Plaintiff Simon) Motion for Preliminary Approval of Proposed
Class and Collective Action Settlement Agreement (the
“Motion”) (ECF No. 296). The Plaintiffs are
parties in the two civil actions captioned above and pending
before this Court: Valverde v. Xclusive, No.
16-cv-00671-RM-NRN, and Trejo v. Xclusive, No.
17-cv-01602-RM-NRN. At the parties' request, these
actions have been consolidated for settlement approval
process.
Defendants
filed a Response, but are unopposed to the Motion. Plaintiff
Simon has indicated she opposed the Motion but filed no
response in opposition and did not appear at the July 3,
2019, hearing the Court held on the Motion. The Court has
considered the Motion and the record in this case, heard the
parties' position and arguments, and reviewed the
relevant rules and case law. After such consideration, and
being otherwise fully advised, the Motion is denied without
prejudice.
I.
BACKGROUND[1]
Defendants
Xclusive Staffing, Inc. and Xclusive Staffing of Colorado,
LLC (collectively, “Xclusive”) are staffing
agencies based in Colorado which are owned and controlled by
Defendant Diane Astley. Defendant Xclusive Management, LLC is
an affiliate of Xclusive. Xclusive provides low-wage workers
for their clients which are mostly hotels like Defendants
Omni, JMIR (Hyatt), Marriott, and Westin. Plaintiffs
allegedly work or worked at one or more of Xclusive's
client locations in Colorado providing various services such
as being a cook or server at banquets.
Plaintiffs
allege Xclusive maintains various policies and practices
which violate state and federal wage and hour laws. As
relevant here, they consist allegedly of: (1) the $3.00
deduction as an administrative charge per paycheck policy;
(2) the automatic 30-minute break deduction policy,
regardless of whether the employee was given or took a break;
and (3) the failure to provide a 10-minute break policy (as
required under Colorado law).
In the
Valverde Action, Plaintiffs named in that case
brought six claims for relief under federal and state law
seeking collective and class action certification. Former
Defendant HealthONE was dismissed after it settled the claims
brought by Plaintiff Simon on a collective and class action
bases. (Valverde, ECF No. 217.) Other claims (or
parts of claims) were dismissed by order of the Court or
voluntarily. Further, the Court ordered as follows as to the
FLSA collective action claim: (1) the $3.00 deduction policy
was certified on a nationwide basis; and (2) the 30-minute
break deduction policy was certified for Colorado workers
(w/o prejudice for nationwide certification).[2] (ECF No. 248.)
In the
Trejo Action, Plaintiffs named in that case raised
eight (8) claims under federal and state law seeking
collective and class action certification.[3] To effectuate the
proposed settlement, the parties stipulated to dismissal
without prejudice of Counts IV, V, and VIII to the extent the
class action claims are based on conduct occurring outside of
Colorado. (ECF Nos. 73, 74.)
Before
notices were sent in the Valverde Action, upon the
request of the parties, the Court stayed all matters in both
cases and tolled the statute of limitations for all members
of the conditionally certified collective classes. (ECF Nos.
251, 252.) That stay has been continued. (ECF Nos. 256, 259,
264.)
The
Motion now before the Court is filed by Plaintiffs Isabel
Valverde, Jose Trejo, Marisol Trejo, Vilma de Jesus Alvarenga
Carranza, and Obdulia Julie Cortez (collectively,
“Movants”). Movants seek, for purposes of
settlement only and for Colorado employees only,
certification of a Rule 23 class action, preliminary approval
of the Settlement Agreement and Release
(“Settlement”), and approval of the parties'
proposed notices and forms. The Motion also relies on the
Court's prior order conditionally certifying an FLSA
collective action (the “FLSA Order”). (ECF No.
248.) For the reasons stated herein, the Court finds approval
may not be had on the papers as they currently stand.
II.
LEGAL STANDARD
A.
Rule 23 Class Certification
A party
seeking class certification must show first show the
existence of the four threshold requirements of Rule 23(a).
Shook v. El Paso Cnty., 386 F.3d 963, 971 (10th Cir.
2004); see also Vallario v. Vandehey, 554 F.3d 1259,
1267 (10th Cir. 2009). These requirements 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 parties 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). These requirements are frequently
referred to as numerosity, commonality, typicality, and
adequacy of representation. Harper v. C.R. England,
Inc., 746 Fed.Appx. 712, 720 (10th Cir. 2018). In the
Court's Rule 23 analysis, “[a]lthough the party
seeking to certify a class bears the burden of proving that
all the requirements of Rule 23 are met … the district
court must engage in its own rigorous analysis of whether the
prerequisites of Rule 23(a) have been satisfied.”
Shook, 386 F.3d at 968 (quotation marks and
citations omitted). The court must accept the substantive
allegations of the complaint as true and may consider the
legal and factual issues presented by plaintiff's
complaints. Id.
Once a
plaintiff has met the Rule 23(a) threshold requirements, it
must then show the action falls within one of the three
categories of suits set forth under Rule 23(b).
Vallario, 554 F.3d at 1267. In this case, Movants
seek certification under Rule 23(b)(3) (see ECF No.
296, p. 5). Rule 23(b)(3) lays out four matters the Court
considers before certifying such a class. Fed.R.Civ.P.
23(b)(3)(A)-(D). However, where the Court is certifying a
class for settlement purposes, Rule 23(b)(3)(D) need not be
considered. Harper, 746 Fed.Appx. at 720 (citing
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 520
(1997)).
Once a
class is certified, notice must be given to the class
members. Fed.R.Civ.P. 23(e). Because class members would be
bound by any judgment or settlement, they must be afforded an
opportunity to be excluded from the class, i.e., opt-out.
See Fed. R. Civ. P. 23(c)(2)(B)(v) (Notice must
advise “that the court will exclude from the class any
member who requests exclusion.”).
B.
FLSA Conditional Collective Action Certification
The
FLSA permits collective actions where the allegedly aggrieved
employees are “similarly situated.” 29 U.S.C.
§ 216(b). Under Thiessen v. Gen. Electric Capital
Corp., 267 F.3d 1095, 1105 (10th Cir. 2001), a district
court may apply a two-stage “ad hoc” process to
determine whether putative collective action members were
“similarly situated” for purposes of §
216(b). At the initial “notice” stage, this Court
“requires nothing more than substantial allegations
that the putative class members were together the victims of
a single decision, policy, or plan.” Id. at
1102 (quotation marks and alteration omitted). If a movant
meets this burden, the district court has discretion to
facilitate notice to potential plaintiffs, such as ordering
the employer to provide the names and addresses of current
and former employees who may be eligible to participate in
the collective action and authorizing court approved notice
and consent documents be sent to such employees. See
Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 169-174
(1989). The judicial system benefits of a collective action,
however, depend on the employees receiving accurate and
timely notice of the pendency of the collective action, so
they can make informed decisions on whether to participate by
consenting to become a party, i.e., opt-in to the action.
Id. at 170.
III.
THE PROPOSED CLASSES
Movants
and Defendants have agreed to the following collective or
class action “classes” and “subclass”
definitions:
(1) The Fed.R.Civ.P. 23 Class (the “Rule 23
Class”):
ALL CURRENT AND FORMER HOURLY EMPLOYEES OF XCLUSIVE STAFFING,
INC., XCLUSIVE STAFFING OF COLORADO, LLC, OR ANY OF THEIR
AFFILIATES, WHO WORKED AT ONE OF THEIR CLIENTS' COLORADO
LOCATIONS (EXCEPT SKY RIDGE MEDICAL CENTER HCA-HEALTHONE LLC)
AND WERE EMPLOYED ON OR AFTER MARCH 22, 2013 AND UP TO AND
INCLUDING FEBRUARY 3, 2019.
(2) The Rule 23 $3 Deduction Subclass (the “$3
Subclass”):
ALL CURRENT AND FORMER HOURLY EMPLOYEES OF XCLUSIVE STAFFING,
INC., XCLUSIVE STAFFING OF COLORADO, LLC, OR ANY OF THEIR
AFFILIATES, WHO WORKED AT ONE OF THEIR CLIENTS' COLORADO
LOCATIONS (EXCEPT SKY RIDGE MEDICAL CENTER HCA-HEALTHONE LLC)
AND WERE EMPLOYED ON OR AFTER MARCH 22, 2013 AND UP TO AND
INCLUDING JULY 1, 2016.
(3) The FLSA Class:
ALL CURRENT AND FORMER HOURLY EMPLOYEES OF XCLUSIVE STAFFING,
INC., XCLUSIVE STAFFING OF COLORADO, LLC, OR ANY OF THEIR
AFFILIATES, WHO WORKED AT ONE OF THEIR CLIENTS' COLORADO
LOCATIONS (EXCEPT SKY RIDGE MEDICAL CENTER HCA-HEALTHONE LLC)
AND WERE EMPLOYED ON OR AFTER MARCH 22, 2013 AND UP TO AND
INCLUDING FEBRUARY 3, 2019.
The
Rule 23 Class and FLSA Class are coextensive.
IV.
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