Peterson v. Nelnet Diversified Solutions, LLC

          MEMORANDUM OPINION AND ORDER

          Nina Y. Wang United States Magistrate Judge.

         This civil action comes before the court on Plaintiff Andrew Peterson's (“Plaintiff” or “Mr. Peterson”) and Defendant Nelnet Diversified Solutions, LLC's (“Defendant” or “Nelnet”) cross-motions for summary judgment (“Plaintiff's MSJ” and “Defendant's MSJ”, respectively) [#158; #168] as well as Nelnet's Motion to Decertify FLSA Collective Action (“the Decertification Motion”) [#171]. The undersigned fully presides over this case pursuant to 28 U.S.C. § 636(c), the consent of the Parties [#11], and the Order of Reference dated June 26, 2017 [#12]. For the reasons stated in this Memorandum Opinion and Order, Defendant's Motion for Summary Judgment is GRANTED, Plaintiff's Motion for Summary Judgment is DENIED, and Defendant's Decertification Motion is DENIED AS MOOT. Because there are no federal claims remaining, the court declines to exercise supplemental jurisdiction and REMANDS the case to state court.

         BACKGROUND

         Plaintiff Andrew Peterson (“Plaintiff” or “Mr. Peterson”) initiated this action on April 28, 2017, by filing a Complaint asserting a collective action under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 216(b), for unpaid overtime wages “on behalf of himself and all current and former Account Managers and Call Center Representatives.”^[1] [#1]. Mr. Peterson worked for Defendant Nelnet, which is in the business of servicing loans, at its Aurora, Colorado location from approximately September 2011 to September 2014. [Id. at ¶¶ 10, 11]. Mr. Peterson alleged that Nelnet violated the FLSA by failing to pay him and other call center representatives premium overtime compensation for hours worked in excess of forty hours in a workweek. [Id. at ¶ 2]. In support of his claim, Mr. Peterson averred that Nelnet failed to accurately track or record the actual hours worked by CCRs as follows: “(i) [by] failing to provide [call center representatives] with a way to accurately record the hours they actually worked; (ii) permitting [call center representatives] to work before and after they ‘clock in' to Nelnet's timekeeping system; and (iii) allowing work during uncompensated lunch breaks.” [Id. at ¶ 6]. In his original Complaint, Mr. Peterson asserted claims for: (1) violation of the FLSA on behalf of himself and the collective; (2) violation of Colorado Minimum Wage Order on behalf of himself and a Rule 23 class of individuals (“Second Cause of Action”); and (3) violation of the Colorado Wage Act on behalf of himself and a Rule 23 class of individuals (“Third Cause of Action”). [#1]. Defendant subsequently filed a Motion to Dismiss, [#19], which was mooted when Plaintiff filed his Amended Complaint as a matter of right. [#29; #30]. The Amended Complaint included the same three claims with additional factual detail. [#29]. Defendant filed an Answer to the Amended Complaint on October 5, 2017. [#37].

         On January 31, 2018, Plaintiff filed a Motion for Court Authorized Notice Pursuant to 29 U.S.C. § 216(b) of the FLSA (“Motion for Conditional Certification”). [#50]. On April 25, 2018, the court granted the Motion for Conditional Certification in part, allowing a collective to go forward as to Advisors, Collectors, and Flex Advisors for pre-shift uncompensated log-in time (collectively, “CCRs”). [#79]. Shortly thereafter, the parties stipulated to the following definition of the conditionally certified collective:

Current and former Flex Advisors, Collectors, or Advisor Is who worked at Nelnet Diversified Solutions, LLC's Aurora, Colorado; Lincoln, Nebraska; and Omaha, Nebraska Customer Interaction Center locations at any time from July 15, 2014 to April 25, 2018 and who worked off-the-clock without compensation at the beginning of their shifts prior to clocking into the timekeeping system. Individuals who worked as Collectors in Direct Account Placement or “DAP” are not included in this collective definition.

[#82].

         On June 29, 2018, the notice administrator mailed the FLSA collection action notice to the putative collective members who worked at the relevant locations in Aurora, Lincoln, and Omaha. [#92]. Ultimately, 359 individuals opted into the FLSA collective, a few of whom have since been dismissed from the collective for unrelated reasons, primarily failure to participate in discovery. [#99; #100; #101; #102; #105; #108 at 11 n.3].

         On November 16, 2018, the Parties submitted a Joint Status Report, in which Plaintiff indicated “[t]he Plaintiff is no longer pursuing any Rule 23 class action claims.” [#117 at 1]. Plaintiff further indicated “[i]f the case reaches a trial, such trial would therefore be narrowed to the compensability of activities that plaintiff alleges he was required to perform to become call-ready before clocking in pre-shift and related potential damages issues.” [Id. at 2]. The Parties then indicated that they believed trial could be completed in five days. [Id.]. Based on this Status Report, the court dismissed the Second and Third Causes of Action from the Amended Complaint and ordered the Parties to file a Supplemental Scheduling Order. [#119]. Following a Motion to Reconsider based on an ambiguity as to whether the Aurora-based FLSA collective members were still asserting their Colorado state law claims individually if not as a class, the court affirmed its prior order and denied further relief, finding that the relevant claims remaining were the conditional class's FLSA claims and Mr. Peterson's individual state law claims. [#128; #153]. Shortly thereafter, the Parties filed the instant cross-motions for summary judgment and Defendant filed the Decertification Motion. After an extension of time harmonized the briefing schedule on the pending motions, briefing closed on June 21, 2019, and the matters are now ripe for decision.

         LEGAL STANDARD

         Summary judgment is appropriate only if “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). “A ‘judge's function' at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'” Tolan v. Cotton, 572 U.S. 650, 656 (2014) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 249 (1986)). Nevertheless, the content of the evidence presented at summary judgment must be admissible to be considered. See Fed. R. Civ. P. 56(c)(4); Thomas v. Int'l Bus. Machines, 48 F.3d 478, 485 (10th Cir. 1995).

         Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or conversely, is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at 248-49; Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000); Carey v. U.S. Postal Service, 812 F.2d 621, 623 (10th Cir. 1987). A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.'” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing First Nat. Bank of Ariz. v. Cities Service Co., 391 U.S. 253, 289 (1968)).

         ANALYSIS

         The court begins by considering the cross-motions for summary judgment. The court begins with the undisputed material facts and then examines whether the time at issue qualifies as compensable time. Finding the time compensable, the court then proceeds to consider whether the time is de minimis and concludes that the time at issue is so brief and recording it poses such an administrative challenge that the time is de minimis as a matter of law. Accordingly, the court concludes that summary judgment should enter for Defendant.

         UNDISPUTED MATERIAL FACTS

         The following undisputed material facts are drawn from the Parties' cross-motions for summary judgment.^[2]

         1. Defendant Nelnet Diversified Solutions LLC is in the business of servicing student loans. [#168-1 at 5, 39:16-20].

         2. To this end, Nelnet maintains several “customer interaction centers” in Aurora, Colorado; Lincoln, Nebraska, and Omaha, Nebraska. [Id. at 41:17-22].

         3. At these centers, Nelnet employees service student loans and interact with debtors over the phone and through email. [Id. at 2, 9:4-15]. This case is concerned with those employees who were worked as Flex Advisors, Collectors, or Advisors I from July 15, 2014 to April 25, 2018 (“the CCRs” or “the employees”).

         4. CCRs are paid once they clock into the timekeeping system at their individual workstations.^[3] [#168-8 at 2, 12:12-24]. Before a CCR may clock in to the system, he or she must first perform several steps.

         5. First, the CCR selects a workstation and moves the mouse or presses a key to wake the computer up from standby mode. [#168-11 at 3].

         6. The CCR then inserts an “Imprivata” security badge and enters his or her credentials (username, password). [Id.].

         7. The computer automatically launches Citrix, which loads the CCR's personal desktop, and Nelnet's Intranet which contains a link to the timekeeping system. [Id.].

         8. Once the Intranet has loaded, an employee has access to the timekeeping system and may, and nearly always does, clock into the system and begin receiving payment. [Id.; #168-5 at 2-3, 7:4-10:24]. The time from the Imprivata badge swipe to the Citrix session initiating is referred to as the “Boot-Up Time” and the time from Citrix initiating to the timeclock check in is referred to as the “Citrix-Active Time” and collectively, “pre-shift activities.”

         9. Completing these pre-shift activities is necessary to conduct the CCRs' principal job duties. [Id.; #159-1 at 39, 17:8-13].

         10. The median Boot-Up Time is 0.5 minutes in Omaha, 0.9 minutes in Lincoln, and 1.02 minutes in Aurora. [#168-16 at 17].

         11. The median 10th percentile Citrix-Active Time-which the parties accept as the relevant measure-is 1.1 minutes at Omaha, 1.3 minutes in Lincoln, and 1.25 minutes in Aurora. [Id.].

         12. Nelnet policy provided that CCRs were to be “call ready” within six minutes of their scheduled shift, and, by custom, permitted CCRs to clock in five minutes prior to the start of a shift. [#168-31 at 2; #168-32 at 1].

         13. Nelnet policy is that an employee should clock in at this point before launching any further programs. [Id. at 12-13, 161:9-162:8].

         14. To become call ready after booting up the computer and launching Citrix and the Intranet, a CCR must launch several additional programs. [Id. at 162:9-23].

         15. Nelnet permits its employees to use their computers for personal tasks and the timekeeping system design permits the employee to clearly delineate when the work begins and ends. [#168-23 at ¶ 13].

         16. CCRs are also permitted to do personal tasks when waiting for the pre-shift activities to complete which are basic, rote activities that do not require much if any thought or effort. [#168-18 at 2-3, 57:7-18, 138:3-140:2].

         17. Nelnet does not, and has never, used the timestamps associated with logging into Citrix or insertion of the Imprivata Badge for ...