FLSA Collective Action Discovery Strategies Discovery Tactics Before and After Conditional Certification of the Opt In Class

Transcription

1 Presenting a live 90 minute webinar with interactive Q&A FLSA Collective Action Discovery Strategies Discovery Tactics Before and After Conditional Certification of the Opt In Class WEDNESDAY, JANUARY 19, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: William C. Martucci, Partner, Shook Hardy & Bacon, Washington, D.C. Kristen A. Page, Partner, Shook, Hardy & Bacon, Kansas City, Missouri Jenny R. Yang, Partner, Cohen Milstein Sellers & Toll, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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4 FLSA Collective Action Discovery Strategies t Discovery Tactics Before and After Conditional Certification of the Opt-In Class Wednesday, January 19, 2011 William C. Martucci, Partner, Shook, Hardy & Bacon, Washington, D.C. Kristen A. Page, Partner, Shook, Hardy & Bacon, Kansas City, Missouri Jenny R. Yang, Partner, Cohen Milstein Sellers & Toll, Washington, D.C. 4 Shook, Hardy & Bacon

5 Contact Information William C. Martucci Shook, Hardy & Bacon , Kristen A. Page Shook, Hardy & Bacon Jenny R. Yang Cohen Milstein Sellers & Toll Shook, Hardy & Bacon

6 Program Overview Outline Introduction The FLSA Wage War Litigation Environment and Procedural Issues The FLSA Collective Action Discovery Foundation Focused Considerations in FLSA Collective Action Discovery Discovery Challenges and Resolving Disputes Special Discovery Issues for Consideration Selected Trial Issues in FLSA Actions Wrap Up and Questions 6 Shook, Hardy & Bacon

7 The FLSA Litigation Environment Outline Introduction The FLSA Wage War Litigation Environment and Procedural Issues The Wage War Litigation Setting Procedural Issues That May Impact Discovery Scope Jurisdiction, Removal and Statutes of Limitation Foundation for the Discovery Discussion Basic FLSA Case Sequence and Two-Tier Framework Overview of Notice, Opt-In and Decertification Steps 7 Shook, Hardy & Bacon

8 The Age of Wage Wars Workers from truck drivers to stockbrokers are winning huge overtime lawsuits. These are the days of the wage wars, according to Business Week. 8 Shook, Hardy & Bacon

9 Significant Issues High Stakes No one tracks precise figures, but lawyers on both sides estimate that over the last few years companies have collectively paid out more than $1 billion annually to resolve these claims, which are usually brought on behalf of large groups of employees. What s more, companies can get hit again with suits on behalf of different groups of workers or for alleged violations of different provisions i of a complex tapestry t of laws. Framed on the wall of Attorney Thierman s office, for example, is a copy of a check from a case he settled for $18 million in 2003 on behalf of Starbucks store managers in California. (Thierman is a former corporate defense counsel.) But the coffee chain is currently defending overtime lawsuits, filed by other attorneys, in Florida and Texas. Wal-Mart Stores is swamped with about 80 wage and hour suits, and in the past two years has seen juries award $172 million to workers in California and $78.5 million in Pennsylvania. 9 Shook, Hardy & Bacon

10 A Dramatic Rise in Complaints 10 Shook, Hardy & Bacon

11 The Wage Wars and the New Deal Foundation The core wage and hour law, the federal Fair Labor Standards Act (FLSA), has been on the books since The New Deal statute, t t which h mandated d that t a broad swath of the workforce receive 90 minutes pay for every hour worked beyond 40 in a week, had two goals. One was to reward laborers who put in long hours. Another was to expand employment by making it cheaper for companies to hire additional workers than pay existing ones time and a half. This New Deal law is the foundation for the wage and hour explosion. 11 Shook, Hardy & Bacon

12 Foundational Procedural Issues FLSA Jurisdiction The FLSA authorizes court actions by employers and the Secretary of the Department of Labor to recover damages for violation of the Act s Minimum Wage and Overtime provisions and to enforce the prohibition against retaliation. 29 U.S.C. 216(b) and (c). Federal and state courts thus have concurrent jurisdiction over FLSA claims. See generally Forsyth v. Central Foundry Co., 240 Ala. 277, 1 WH Cases 1039 (Ala. 1940). Federal courts have federal question jurisdiction over suits brought under the FLSA. 28 U.S.C A federal court that hears an FLSA claim may exercise supplemental jurisdiction over a related state claim. See 28 U.S.C Shook, Hardy & Bacon

13 Foundational Procedural Issues Removal of FLSA Claims Defendants may remove cases alleging FLSA claims to federal court as a matter of right. 28 U.S.C. 1441(a); Breuer v. Jim s Concrete of Brevard, Inc., 538 U.S. 691 (2003). 13 Shook, Hardy & Bacon

14 Foundational Procedural Issues Statutes of Limitation as They May Impact Discovery Scope The FLSA provides a period of two years after the cause of action accrued in which to file a complaint for unpaid wages, overtime, or liquidated damages in federal or state court, 29 U.S.C. 255(a). The FLSA limitations period is extended to three years after such causes of action accrue for violations that are willful. 29 U.S.C. 255(a). The plaintiff carries the burden of pleading and proving that a violation is willful. The FLSA s statute of limitations does not preempt state limitations periods for state wage and hour violations (in some instances, they may be longer). Failure to plead the FLSA s statute of limitations as a defense will result in waiver of the defense. Hodgson v. Humphries, 454 F.2d 1279, , 20 WH Cases 444 (10 th Cir. 1972) (holding statute of limitations waived if not asserted in pleading). 14 Shook, Hardy & Bacon

15 Statutes of Limitation and the Willfulness Issue In McLaughlin v. Richland Shoe Co., 486 U.S. 128, 28 WH Cases 1017 (1988), the Supreme Court held that the standard of willfulness used in awarding liquidated damages under the Age Discrimination in Employment Act (ADEA) also applies in determining whether violations of the FLSA are willful, so as to extend the statute of limitations period to three years. Under Richland Shoe, a violation is willful if the defendant either knew his or her conduct violated the FLSA or showed reckless disregard for whether his or her actions complied with the Act. 15 Shook, Hardy & Bacon

16 Commencement of the Action and Timing Considerations Section 7 of the Portal-to-Portalto Act distinguishes between individual actions and collective (i.e., representative) or class actions for purposes of determining the date that an action has commenced. Section 7 states in relevant part: In determining when an action is commenced for the purposes of [S]ection 6 [29 U.S.C. 255], an action under the Fair Labor Standards Act shall be considered to be commenced on the date when the complaint is filed; except that in the case of a collective or class action instituted under the Act, it shall be considered to be commenced in the case of any individual claimant 16 Shook, Hardy & Bacon

17 Commencement of the Action and Timing Considerations, Cont. (a) On the date when the complaint is filed, if he is specifically named as a party plaintiff in the complaint and his written consent to become a party plaintiff is filed on such date in the court in which the action is brought; or (b) If such written consent was not so filed or if his name did not so appear on the subsequent date on which such written consent is filed in the court in which the action was commenced. 17 Shook, Hardy & Bacon

18 Commencement of the Action and Timing Considerations, Cont. A representative or collective action is not commenced as to each individual claimant, however, until the date that his or her individual consent is filed in court, if it was not so filed when the complaint was filed. 29 C.F.R (b). Under the regulations, an individual action commences when the individual files the complaint, regardless of whether a consent form has been filed; however, in a representative action, the action is not deemed to commence for any individual until his or her written consent to be a party has been filed in court. 18 Shook, Hardy & Bacon

19 FLSA Litigation Typical Case Sequence 1. Filing. 2. Preliminary, limited discovery. 3. Early motion for conditional certification. 4. If conditionally certified, broadened discovery. 5. Potential motion to decertify. 6. Resolution dismissal, settlement or trial. 19 Shook, Hardy & Bacon

20 Common FLSA Two Tier Framework Most courts apply a two-tier framework: Notice phase, typically early in case to facilitate classwide discovery. Decertification phase, typically after full discovery and close to trial. Lusardi v. Xerox Corp., 122 F.R.D. 463 (D.N.J. 1988); see also Hoffmann-La Roche v. Sperling, 493 U.S. 165, 170 (1989). 20 Shook, Hardy & Bacon

21 Step 1: The Notice Phase The issue during the early notice phase is whether to notify other potential opt-in plaintiffs that the case is pending. If granted, certification during this phase is conditional. It is revisited during the decertification phase, following the opt-in process and discovery. The focus at the notice stage is on whether sufficient evidence exists to suggest that the named plaintiffs and putative class members are similarly situated t as to the violation alleged. E.g., Laroque v. Domino s Pizza, LLC, 557 F. Supp. 346, 352 (E.D.N.Y. 2008). The court determines whether plaintiffs have made the necessary modest factual showing that they are similarly situated to absent class members. A lenient standard, but not automatic. 21 Shook, Hardy & Bacon

22 What is similarly situated? Understanding the Discovery Focus Similarly Situated An action under the FLSA may be maintained against any employer in any Federal or State court of competent jurisdiction by any one or more employees for and [on] behalf of himself or themselves and other employees similarly situated. 29 U.S.C. 216(b) (emphasis added). 22 Shook, Hardy & Bacon

23 What is similarly situated? Cont. Similarly Situated In the absence of statutory or regulatory guidance defining the term similarly situated, various tests have developed to determine when notice may be distributed. ib t d Rule 23 commonality requirement is more stringent than the similarly situated requirement of Rule 216(b). 23 Shook, Hardy & Bacon

24 What is similarly situated? Cont. Similarly Situated Key factors in assessing whether members of a collective action are similarly situated typically include: The employment and factual settings of plaintiffs; Evidence of a company-wide policy; The various defenses available to defendants; and Considerations of fairness, procedure, and manageability. See, e.g., Kasten v. Saint-Gobain Performance Plastics Corp.,, 556 F. Supp. 2d 941, 956 (W.D. Wisc. 2008); Kautsch v. Premier Comms, 2008 WL , at *2 (W.D. Mo. 2008); Harper v. Lovett s Buffet, Inc., 185 F.R.D. 358 (M.D. Ala. 1999) (failure to establish uniform corporate practice). 24 Shook, Hardy & Bacon

25 Pre-Conditional Certification Fact Gathering Pre-Discovery Efforts By Plaintiffs Counsel Factual Interviews Declarations Key Policies Investigators Advertising s, Letters and Websites 25 Shook, Hardy & Bacon

26 Pre-Conditional Certification Discovery of Contact Information for Potential ti Opt-Ins Plaintiffs Early-Discovery Strategy Considerations Some courts, in granting motions to compel the production of names and addresses of class members prior to conditional certification, have stated t the production is to assist plaintiffs in supporting their claims of class-wide FLSA violations and to identify individuals who may wish to join. See, e.g., Baldozier v. American Family Mut. Ins. Co., 375 F. Supp. 2d 1089, (D. Colo. 2005). Courts that have denied such discovery have held such requests to be premature prior to a decision i on whether notice should be approved. See, e.g., Barton v. The Pantry, Inc., 2006 U.S. Dist. LEXIS 62989, at *4-6 (M.D. N.C. Aug. 31, 2006). 26 Shook, Hardy & Bacon

27 Step 2: The Decertification Phase During the decertification phase, a more stringent standard is applied. Courts analyze the full discovery presented in order to evaluate the: Impact of factual and employment settings of opt-in plaintiffs. Defenses available to defendants that are individual to the opt-in plaintiffs. Fairness and procedural considerations. 27 Shook, Hardy & Bacon

28 In the Middle: The Opt-In Process If the action is conditionally certified, notice is sent to potential class members. Eligible individuals must opt-in by filing consent forms with the Court. Not an opt-out process like a Rule 23 class. Employees who do not opt-in cannot be bound by the result and can pursue separate lawsuits. 28 Shook, Hardy & Bacon

29 Background on Notice Contents In general, notices contain a description of some or all of the following: 1. The purpose of the notice; 2. The nature of the lawsuit filed and the relief being sought; 3. The proposed class composition; 4. The legal effect of joining the lawsuit; 5. The fact that the court has not taken any position regarding the merits of the lawsuit; 6. How to join the lawsuit; 7. The purely voluntary nature of the decision i and the legal l effect of not joining i the lawsuit; 8. The prohibition against retaliation; 9. The relevant contact information for any inquiries. 29 Shook, Hardy & Bacon

30 Notice Contents, Cont. A blank consent form is then attached to the notice. Sample notices can be found in cases where a copy of the courtapproved notice is appended to the actual opinion. Courts require that the notice be drafted in neutral, clear, and objective language. Ayers v. SGS Control Servs., Inc., 2004 WL , at *2 (S.D.N.Y. Dec. 21, 2004) (language g should be fair and balanced ). 30 Shook, Hardy & Bacon

31 FLSA Discovery Outline The FLSA Collective Action Discovery Foundation The Rule 26 Framework The Two-Stage Sequencing Approach Instructive Case Study Examples 31 Shook, Hardy & Bacon

32 The Rule 26 Framework Foundational for the General Scope Rule 26 is the starting place and sets the general scope. Unless otherwise limited by court order, the scope of discovery is as follows: Parties may obtain discovery regarding any nonprivileged matter that t is relevant to any party's claim or defense including the existence, description, nature, custody, condition, and location of any documents or other tangible things and the identity and location of persons who know of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. F.R.C.P. 26(b)(1). 32 Shook, Hardy & Bacon

33 Rule 26 Sets Parameters and a Framework for Limitations Rule 26 sometimes provides protection A party or any person from whom discovery is sought may move for a protective order in the court where the action is pending or as an alternative ti on matters relating to a deposition, in the court for the district i t where the deposition will be taken. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden. F.R.C.P. 26(c)(1). 33 Shook, Hardy & Bacon

34 The Essence of Rule 26 Cooperation and Collaboration But, significantly, Rule 26 requires cooperation and collaboration In conferring, the parties must consider the nature and basis of their claims and defenses and the possibilities for promptly settling or resolving the case; make or arrange for the disclosures required by Rule 26(a)(1); discuss any issues about preserving discoverable information; and develop a proposed discovery plan. The attorneys of record and all unrepresented parties that have appeared in the case are jointly responsible for arranging the conference, for attempting in good faith to agree on the proposed discovery plan, and for submitting to the court within 14 days after the conference a written report outlining the plan. F.R.C.P. 26(f)(2). 34 Shook, Hardy & Bacon

35 Rule 26 Principles are the Foundation in FLSA Actions Summary Rule 26 Basics Critical in FLSA Actions General, broad scope. Potential for limitation and protection. Cooperation and collaboration required. These principles are perhaps most meaningful in class and collective litigation. 35 Shook, Hardy & Bacon

36 FLSA Discovery Contours Are Informed by the Two-Tier Case Evaluation Approach The certification stage generally determines the scope of discovery in FLSA actions Pre Conditional Certification More Limited Post Conditional Certification More Robust (But often still quite limited in light of the representative context.) 36 Shook, Hardy & Bacon

37 Foundational Concepts for Pre- Conditional Certification Discovery Prior to conditional certification, plaintiffs discovery focus is to make a threshold showing that they and members of the proposed collective action are similarly situated. Most courts require only a modest factual showing. Courts generally do not evaluate the merits of the claims or make credibility determinations during the initial evaluation. Courts have observed that it makes sense for the FLSA conditional certification standard to be less stringent than under FRCP 23 because the FLSA s opt-in procedure provides an opportunity for potential ti plaintiffs to join, but does not bind those who do not (unlike R. 23). See, e.g., Patton v. Thomson Corp., 364 F. Supp 2d 263, 267 (E.D.N.Y. 2005). 37 Shook, Hardy & Bacon

38 Foundational Concepts, Cont. Determinations as to collective action conditional certification are sometimes made based on detailed allegations in a complaint, as supported by sworn statements, and not through expansive discovery. Some courts require nothing more than sufficient allegations in the complaint. See, e.g., Gayle v. United States, 85 Fed. Cl. 72 (2008) (deeming plaintiff s allegations sufficient to support granting conditional certification). 38 Shook, Hardy & Bacon

39 Foundational Concepts, Cont. Therefore, the conditional certification decision may be made prior to discovery being conducted at all. Some courts will, however, allow for some discovery to be completed prior to deciding whether notice should be allowed. Importantly, the amount of discovery that is actually taken prior to filing a motion for conditional certification can, in some courts, affect the standard that the court will apply in deciding certification. See, e.g., Valcho v. Dallas Cnty. Hosp. Dist., 574 F. Supp. 2d 618, 622 (N.D. Tex. 2008) (explaining that the reasons for lenient standard d typically disappear once discovery has been conducted). 39 Shook, Hardy & Bacon

40 Pre-Conditional Certification Discovery When It Is Allowed Courts that allow discovery prior to ruling on notice generally do so in circumstances where plaintiffs have sought discovery they believe necessary to presenting their motion for conditional certification. Such discovery is generally described by courts as limited. Specifically, for example, courts have permitted discovery of matters such as prior litigation or administrative investigations of defendant s wage and hour practices, job descriptions, and similar information common to groups of employees. 40 Shook, Hardy & Bacon

41 Pre-Conditional Certification Discovery When It Is Not Allowed Courts that deny discovery sought by defendants generally do so on the grounds that such discovery is inconsistent with the two-step process for certification of collective actions reasoning that extended discovery: Inevitably leads defendants to argue for applying the more stringent second-stage standard; or Causes unacceptable delay, given that the statute of limitations will continue to run until a decision is made. 41 Shook, Hardy & Bacon

42 Pre-Conditional Certification Discovery An Example When Not Allowed An example case is Anderson v. Perdue Farms, 2007 WL (M.D. Ala. Dec. 20, 2007). The Court granted plaintiffs motion to quash notices of deposition and stay discovery that t defendant d sought to respond to plaintiffs motion for notice. In making its decision, the Court reasoned that allowing detailed discovery at the notice stage would effectively move the case to the more rigorous second-stage analysis, which would not be appropriate in light of guiding case law. Defendant was limited to submitting affidavits or other evidence in its possession to oppose notice. 42 Shook, Hardy & Bacon

43 Summary Observations on Discovery Prior to Certification If pre-conditional certification discovery is requested by a plaintiff, it is more likely to be granted. If pre-conditional certification discovery is requested by a defendant, d it is more likely l to be denied. d In any case, early pre-notice requests for discovery should be narrowly tailored to enhance the likelihood of being enforced by a court. On occasion, the parties agree to focused discovery before the court notice is sent out and prior to a conditional certification decision. 43 Shook, Hardy & Bacon

44 Foundational Concepts for Post- Conditional Certification Discovery Discovery in the post-certification phase of FLSA cases will be broadened the parties will be looking ahead to the decertification stage, which involves a much more stringent standard as to the similarly situated question. At the decertification stage, courts will be looking to three factors: The disparity or similarity of the factual employment settings of the individual plaintiffs; The various defenses available to the defendant and whether those may be asserted collectively or individually as to each plaintiff; and Fairness and procedural considerations. Therefore, post-certification discovery will aim at these issues. 44 Shook, Hardy & Bacon

45 Post-Conditional Certification Discovery Contours Generally, more broadly allowed and more extensive. But, courts expect parties to work together to develop the contours and scope. The case proceeds as a representative action, therefore, representative sampling for discovery will be a part of the discussion depending on the number of opt-ins. If opt-ins number in the few hundred individualized discovery more likely. If greater, a representative approach and related collaboration on sampling nearly certain. 45 Shook, Hardy & Bacon

46 Discovery Limitations & Strategies Outline Focused Considerations in FLSA Collective Action Discovery Pre-Discovery Preservation Collaborative Discovery Planning Timing and Sequencing of Discovery Bifurcation Considerations Effective Use of Discovery Tools Electronic Discovery Matters 46 Shook, Hardy & Bacon

47 Preservation Obligations Preservation obligations are important for plaintiffs and defendants. Consider likely sources of information and how best to maintain/preserve. For employers, be mindful of obligation to issue internal litigation hold once party reasonably anticipates litigation. Zubulake v. UBS Warburg (Zubulake IV), 220 F.R.D. 212 (S.D.N.Y 2003). (See also Zubulake V on obligations of counsel.) Pension Committee v. Bank of America Securities, LLC, 210 WL (S.D.N.Y. Jan. 15, 2010) ( failure to issue written litigation hold constitutes gross negligence ). 47 Shook, Hardy & Bacon

48 Discovery Planning and Collaboration Courts, consistent with Rule 26, require collaboration and expect the parties to consider the claims and develop a plan for discovery early on. Parties should consider the amount in controversy and potential recovery as part of the calculus in determining discovery scope. Courts will likely be receptive to this practical approach, given the expanse of wage and hour litigation and manageability concerns. Depending on strategy considerations, foreshadowing potential ti dispositive iti issues for the Court may help focus discovery and keep costs manageable. 48 Shook, Hardy & Bacon

49 Discovery on a Microcosm As a case management approach, some courts have had parties select a certain number of opt-in plaintiffs as a microcosm of the entire class and limited discovery to those opt-ins. For example Hogan v. Allstate Insurance Co., 210 F. Supp. 2d 1312 (M.D. Fla. 2002), affirmed in part, vacated and remanded in part, 361 F.3d 621 (11 th Cir. 2004). The district court directed each side to choose three test plaintiffs for purposes of discovery and dispositive motions. The parties eventually filed cross motions for summary judgment, and the Court granted them in favor of defendant for all six plaintiffs and for the remaining 2,300 opt- in members. The Eleventh Circuit affirmed judgment on the six opt-ins, but vacated as to the nontest plaintiffs because the district court had not given them the required 10-day notice pursuant to R. 56(c). 49 Shook, Hardy & Bacon

50 Document Collection and Cost Issues The scope of discovery is highly dependent on factual matters in each case. Collaborate with opposing counsel when possible and consider potential cost-sharing throughout the case planning dialogue. Many courts have e-discovery protocols that guide the document collection, search, and production process for example, the Eastern District of Pennsylvania, Middle District of Tennessee, District of Maryland, and Western District of North Carolina. Such protocols typically require parties to address together and up-front a host of challenging discovery issues, including potential cost-sharing sharing. Affirmatively proposing an agreed e-discovery protocol, even in a jurisdiction where it is not required, may be an ideal approach and can take into account paper production issues as well. 50 Shook, Hardy & Bacon

51 Potential for Bifurcation to Manage Discovery Costs Bifurcation is governed by F.R.C.P. 42(b), which provides: For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or more separate issues, claims, cross claims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any federal right to a jury trial. Bifurcation is often a matter of stipulation or can be raised by motion the approach can be applicable to trial and/or discovery. Discretionary to the trial court. 51 Shook, Hardy & Bacon

52 E-Discovery Considerations Parties should attempt to work together to: Develop an appropriate e-discovery framework tailored to the anticipated discovery needs in a given case (some courts have an e-discovery order built into local l rules and procedures). Designate an e-discovery coordinator for each party to facilitate e-discovery matters. Identify vendors early on to enhance coordination. Learn electronic systems early and involve the right people to minimize expense. Knowledge is important. Seek and provide input to maximize resources. 52 Shook, Hardy & Bacon

53 Challenges and Resolving Disputes Outline Discovery Challenges and Resolving Disputes Court-Specific Frameworks MDL Considerations for Multiple Litigation Guidance from the Manual for Complex Litigation Case Study When Discovery Scope is Not Agreed 53 Shook, Hardy & Bacon

54 Multi-District Litigation and Multiple FLSA Actions The Standard and Mechanics A common approach to managing multiple l similar il actions is to seek consolidation or coordination through a multi-district transfer under 28 U.S.C MDL transfers are common in FLSA cases where sufficient common factual issues exist. Additional factors are: Where the earliest case was filed; Where the most procedurally advanced case is; What is most convenient for the parties and witnesses; and Which court has the resources to handle a transferred case. 54 Shook, Hardy & Bacon

55 Other Consolidation Mechanisms Cases that do not warrant Section 1407 transfer can still be consolidated or coordinated using other procedural vehicles. Those may include: A transfer pursuant to 28 U.S.C. 1404(a), based on principles of forum non-conveniens; Consolidation for pretrial and/or trial; or Severance of some claims and transfer. Principles of federal comity and the first to file rule may also be instructive. 55 Shook, Hardy & Bacon

56 The Guidance of the Manual on Complex Litigation The Manual for Complex Litigation (Fourth) explains: Depositions are often overused and conducted ineffectively and thus tend to be the most costly and time- consuming activity it in complex litigation. The judge should manage the litigation so as to avoid unnecessary depositions, limit the number and length of those that are taken, and ensure that the process of taking depositions is as fair and efficient as possible. Manual In this context, the Court will evaluate the need for proposed depositions, the subject matter to be covered, and the available alternatives. Manual Shook, Hardy & Bacon

57 In Re: Pilgrim s Pride Litigation Case Study of When the Parties Cannot Agree on Discovery Scope Coordinated in the Western District of Arkansas. Extensive discovery plan briefing was undertaken by the parties and presented to the district court. The parties suggested varying time and scope of discovery each arguing their plan was more appropriate and targeted to the issues. See generally, In Re: Pilgrim s Pride FLSA Litigation, 489 F. Supp. 2d 1381 (J.P.M.L. 2007). 57 Shook, Hardy & Bacon

58 In Re: Pilgrim s Pride Litigation Case Study, Cont. Ultimately, the Court set a discovery schedule that combined requests from both sides focused on limits and contours. Test facilities for discovery. Hour limits on depositions. Limitations on written discovery. Prescribed document production for those to be deposed. 58 Shook, Hardy & Bacon

59 In Re: Pilgrim s Pride Litigation Case Study, Cont. Review of Discovery Order pages 1 and 2 for In Re: Pilgrim s Pride Fair Labor Standards Act Litigation (NOTE: This document was ed to participants as a PDF along with the slides for this webinar. It can be accessed in the Program Materials box at discovery-strategies strategies 19 or behind the Handouts tab on the webinar platform) 59 Shook, Hardy & Bacon

60 Selected Related Discovery Issues Outline Special Discovery Issues for Consideration Contact with Collective Action Members Presentation of Good Faith Defenses and Privilege Considerations Rule 68 Offer 60 Shook, Hardy & Bacon

61 Contact With Collective Action Members The Landscape Once certification is conditionally granted, parties have generally not disputed that plaintiffs counsel may communicate with opt-ins and defendants counsel may not. The question remains to what extent t plaintiffs counsel and defense counsel may communicate with putative collective action members before they join and become party plaintiffs this may impact the scope of what counsel may do in developing a record supporting or opposing conditional certification and notice. 61 Shook, Hardy & Bacon

62 General Principle and Supreme Court Guidance General principle very dependent on the jurisdiction courts generally support an open dialogue between plaintiff s and defendant s counsel and putative collective action members, so long as there is no evidence of misleading or coercive communications. Instructive, foundational Supreme Court decisions Hoffmann-La Roche v. Sperling, 493 U.S. 195 (1989) Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988) Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981) Most lower courts, in light of these decisions, have refused to restrict communications by yplaintiff s counsel that are not misleading. 62 Shook, Hardy & Bacon

63 Misleading Communications a Problem for Plaintiff and Defense Counsel Although there is broad latitude for communicating with putative collection action members prior to certification, courts have issued protective orders where there is evidence of false, misleading, or coercive communications. Examples where courts have found communications misleading or inappropriate: Communication suggested that employees had to join the lawsuit to be able to recover lost wages; Communication falsely suggested to recipients that defendant had provided their contact information; Communication intimidated employees and discouraged them from joining the lawsuit. 63 Shook, Hardy & Bacon

64 Plaintiff s Counsel Contacts with Potential Opt-Ins Privilege Considerations Pre-notice communications by plaintiffs counsel with potential opt-in plaintiffs may not be protected by the attorney-client privilege. Pre-notice ex parte communications by plaintiffs counsel with managerial and supervisory employees is a sensitive area consult state rules of professional conduct. 64 Shook, Hardy & Bacon

65 Defense Counsel Contacts with Potential Opt-Ins Cautious Area Most courts follow the approach of Gulf Oil applicable to plaintiffs counsel and do not restrict non-misleading, noncoercive communications. But, once conditional certification has been granted and notice has been authorized, courts take a more restrictive view of permissible communications by defense counsel. Some courts have taken the view that the employer-employee relationship is sufficiently inherently coercive that limits are appropriate. Important to check the decisions in each jurisdiction courts have reached a variety of conclusions. Especially critical to consider when gathering declarations. 65 Shook, Hardy & Bacon

66 Good Faith Defenses and Privilege Waiver Considerations Employers asserting good faith defenses in FLSA actions frequently have consulted with attorneys as to compliance with the Act. If an employer affirmatively introduces evidence of its attorneys advice in support of its defense, waiver of the privilege as to communications on the same subject matter is a possibility. An employer may not use certain privileged communications as a sword, while maintaining the shield of privilege as to the remainder of related communications. Similarly, if witnesses testify about directions provided by their attorneys, waiver will likely be the result. 66 Shook, Hardy & Bacon

67 Rule 68 Offer Considerations Section 16(b) defines attorneys fees separately from court costs. Consequently, unlike attorneys fees in civil rights actions governed by Section 1988, which allow a reasonable attorneys fee as part of the costs, attorneys fees in an FLSA action are not automatically shifted by a Rule 68 offer greater than recovery. Rule 68 thus does not bar plaintiffs from recovering reasonable attorneys fees for services rendered in their FLSA action after the Rule 68 settlement offer was made. 67 Shook, Hardy & Bacon

68 Rule 68 Offer Considerations, Cont. Nevertheless, as part of the reasonableness calculation under Section 16(b), a district court will often consider the amount of the Rule 68 offer, the stage of the litigation at which the offer was made, what services were rendered thereafter, the amount obtained by judgment, and whether it was reasonable to continue to litigate after the Rule 68 offer was made in order to determine if a lodestar adjustment is warranted because of the results obtained. The Ninth Circuit has indicated that [j]ust because a plaintiff has an FLSA violation in her pocket does not give her a license to go to trial, run up the attorney fees and then recover them from the defendant. Haworth v. Nevada, 56 F.3d 1048, 1052 (9 th Cir. 1995). 68 Shook, Hardy & Bacon

69 Discovery Issues in the FLSA Trial Setting Outline Selected Trial Issues in FLSA Actions Representative Aspects Ratio Considerations Potential DOL Testimony Damage Calculations 69 Shook, Hardy & Bacon

70 Selected Trial Issues in FLSA Litigation Test Plaintiffs Bellweather Trials ADR considerations Mediation Focus Groups Mini-Trials Representative Aspects 70 Shook, Hardy & Bacon

71 Presentation of Trial Evidence in FLSA Actions Representative Evidence The scope of the representative testimony will vary depending on the facts of each case. E.g., Herman v. Hogar Praderas de Armor, Inc., 130 F. Supp. 2d 257, 265 (D.P.R. 2001) ( the adequacy of the representation is based on the nature of the work, working conditions, and on-the-job-relationships. ). No fixed ratio for determining the percentages of employees who must testify. Compare Reich v. S. New England Tel. Corp., 121 F.3d 58, (2d Cir. 1997) (sample of 2.5% of all affected employees adequate), with Archie v. Grand Cent. P ship, 86 F. Supp. 2d 262, 272 (S.D.N.Y. 2000) (damages calculations for 6% of plaintiff class based on records for remainder of class members). 71 Shook, Hardy & Bacon

72 Potential for DOL Testimony at Trial Compliance Officer In many instances, the parties may rely on testimony or reports of a compliance officer from the Department of Labor with respect to liability or damages. E.g., Brock v. Seto, 790 F.2d 1446, 1449 (9 th Cir. 1986) (refusal to admit compliance officer s testimony about back wage comparisons was error). 72 Shook, Hardy & Bacon

73 Damage Calculations Burden of Proof If the employee fails to produce evidence of the precise amount of work or evidence to rebut the reasonableness of the inference to be drawn from the employee s evidence of work performed without t proper compensation, the court may then award damages to the employee, even though the result be only approximate. Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, (1946). 73 Shook, Hardy & Bacon

74 Damage Calculations, Cont. Precision vs. Approximation The employee is not required to compute FLSA damages with precision, but rather need only present evidence sufficient to estimate damages through h a just and reasonable inference. Mt. Clemens, 328 U.S. at Shook, Hardy & Bacon

75 Damage Calculations, Cont. Recent Cases How Much Precision? The West Coast Litigation Involving Farmers (California). The East Coast Litigation Involving Geico (District of Columbia). 75 Shook, Hardy & Bacon