Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 1 of 12 PageID #: 35 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS BEAUMONT DIVISION Scarlet Banegas and Odin Campos, On CIVIL ACTION NO: 1:16-CV-00086 Behalf of Themselves and Similarly Situated Employees Plaintiffs, VS. JURY DEMANDED Bona 1900, Inc. and Hnreck Nazarian a/k/a Nazarian Enterprises d/b/a IHOP ( International House of Pancakes ) Defendants. JUDGE MARCIA A. CRONE PLAINTIFFS MOTION TO CONDITIONALLY CERTIFY AN FLSA COLLECTIVE ACTION AND SEND NOTICE TO THE CLASS COME NOW, Plaintiffs SCARLET BANEGAS and ODIN CAMPOS, file this their Motion to Conditionally Certify an FLSA Collective Action and Send Notice to the Class, and in support thereof would respectfully show unto the Court as follows: 1. Plaintiffs Scarlet Banegas and Odin Campos, through the undersigned counsel, hereby move the Court to conditionally certify a Fair Labor Standards Act collective action and order notice sent to members of a class of all current and former hourly employees of Bona 1900, Inc. and Hnreck Nazarian a/k/a Nazarian Enterprises d/b/a IHOP ( International House of Pancakes ) who work or worked at restaurants owned, operated, supervised and/or managed by Defendants during the three-year period prior to the filing of this lawsuit. 2. As shown below, this case meets the standards for conditional certification as a collective action as Plaintiffs have shown that the proposed class members are similarly situated pursuant to 29 U.S.C. 216(b). Additionally, the Plaintiffs urge the Court to authorize the giving of Court- 1
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 2 of 12 PageID #: 36 supervised notice to the class, as notice to the class in an FLSA collective action serves the legitimate goal of avoiding a multiplicity of duplicative suits and establishes cut-off dates to expedite the disposition of the action. A proposed Order is submitted herewith. BACKGROUND AND SUMMARY OF MOTION 3. Plaintiffs Scarlet Banegas and Odin Campos filed this action on behalf of themselves and other similarly situated current and former employees pursuant to 29 U.S.C. 216(b). Plaintiffs allege that Bona 1900, Inc. and Hnreck Nazarian a/k/a Nazarian Enterprizes d/b/a/ IHOP ( International House of Pancakes ) failed to pay them and a class of similarly situated employees overtime wages for hours worked in excess of 40 hours per week. 4. Plaintiffs now move the Court to conditionally certify a Fair Labor Standards Act ( FLSA ) collective action and order that notice be sent to members of a class of all current and former hourly employees of Bona 1900, Inc., Hnreck Nazarian a/k/a Nazarian Enterprizes d/b/a/ IHOP ( International House of Pancakes ) who worked at restaurants owned, operated, supervised and/or managed by Defendants during the period extending from March 28, 2013, through the present. 5. The Plaintiffs motion for conditional certification is supported by the Declarations of Plaintiffs Scarlett Banegas and Odin Campos, which are attached as Exhibits A and B in the Appendix hereto and are incorporated herein for all purposes. 6. Through his website http://nazarianent.wix.com/nazarian-enterprises-2#! Defendant Hnreck Nazarian represents that he does business as Nazarian Enterprises, which Nazarian describes as a leading franchisee in the IHOP community [w]ith locations throughout the Houston and Beaumont areas. Hnreck Nazarian s above website represents to the public that 2
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 3 of 12 PageID #: 37 Nazarian Enterprises operates at least seven (7) separate IHOP Restaurant locations, as follows: a) 5875 Eastex Freeway, Beaumont, TX 77706; b) 197 Greens Road, Houston, TX 77060; c) 3830 College Street, Beaumont, TX 77701; d) 23861 Church Street, Porter, TX 77365; e) 202 E. State Highway 332, Lake Jackson, TX 77566; f) 6759 S. Highway 6, Houston, TX 77083; and g) 5001 Garth Road, Baytown, TX 77521. 7. Bona 1900, Inc. and Hnreck Nazarian a/k/a Nazarian Enterprizes d/b/a/ IHOP ( International House of Pancakes ) employ and employed workers such as Banegas and Campos as hourly, non-exempt employees. The signature of Hnreck Nazarian appears on paychecks through which Plaintiffs were denied overtime compensation. 8. Plaintiff Banegas was hired in 2014 as a food preparer at the IHOP Restaurant located at 5875 Eastex Freeway, Beaumont, Texas. She was subsequently promoted to the position of cook. During her period of employment with Defendants, she was often required to work in excess of 40 hours per week. 9. On many occasions, instead of being paid overtime wages, Defendants paid Banegas for hours worked in excess of 40 hours per week by attributing such hours to a pseudonym or a fictitious name and social security number and tendering to Banegas two paychecks. Banegas was typically given a paycheck in her own name at her regular hourly rate for hours under 40 hours per week and was given a second paycheck for hours worked in excess of 40 hours per week at a lower hourly rate and made payable under a pseudonym. 3
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 4 of 12 PageID #: 38 10. As shown through her Declaration, Plaintiff Banegas has personal knowledge that this scheme to deprive hourly workers of overtime pay has been used against other hourly employees at the 5875 Eastex Freeway, Beaumont, Texas, Nazarian Enterprises d/b/a IHOP location. The evidence further supports the position that the directive to avoid the payment of overtime was communicated to the restaurant-level managers from Hnreck Nazarian and/or his agents and representatives. 11. Plaintiff Campos was hired in the summer of 2015 as a busboy/helper, and was promoted to the position of cook. Plaintiff Campos was approached by managerial employees of Defendants and offered payment by check made payable under a pseudonym and fictitious social security number for hours worked in excess of 40 hours per week, but refused to participate in the Defendants scheme. As such, Plaintiff Campos was never paid for hours worked in excess of 40 hours per week. 12. Plaintiffs assert that, as admitted through the above-cited website, Hnreck Nazarian a/k/a Nazarian Enterprises operates, controls and manages the IHOP franchises listed above, including the hiring, training and compensation of employees, such that the goals of the FLSA will be furthered by conditional certification and notice of this lawsuit to all current and former hourly employees who have worked at any time from March 28, 2013, through the present at any of the seven (7) IHOP locations which are collectively managed and controlled by Hnreck Nazarian a/k/a Nazarian Enterprises. AN FLSA COLLECTIVE ACTION SHOULD BE CONDITIONALLY CERTIFIED AND NOTICE SENT TO THE CLASS A. Legal Standards Governing FLSA Collective Action Conditional Certification. 13. The purpose of the FLSA is to provide specific minimum protections to individual workers and to ensure that each employee covered by the Act receive[s] [a] fair day s pay for 4
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 5 of 12 PageID #: 39 a fair day s work and [is] protected from the evil of overwork as well as underpay. Barrentine v. Arkansas-Best Freight Sys. Inc., 450 U.S. 728, 739, 101 S.Ct. 1437, 1444, 67 L.Ed.2d 641 (1981). In passing the FLSA, Congress intended to address long working hours that are detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers. Barrentine, 450 U.S. at 739, 101 S.Ct at 1444. Congress also recognized that allowing individual employees subject to the same illegal practices to bring claims collectively was both fair and efficient. Hoffman-La Roche Inc. v. Sperling, 493 U.S. 165, 110 S.Ct 482, 107 L.Ed.2d 480 (1989). The FLSA provides for one or more employees to pursue an action in a representative capacity for other employees similarly situated. Id., 29 U.S.C. 216(b). 14. An FLSA collective action differs from a Rule 23 representative action in that an employee must affirmatively opt-in to a FLSA collective action by filing a written consent with the Court. Thus, there are only two requirements for an action to proceed as a collective action under 29 U.S.C. 216(b): (a) all plaintiffs must be similarly situated, and (2) a plaintiff must consent in writing to take part in the suit. This latter requirement means that a collective action follows an opt-in versus an opt-out procedure. 15. Neither the FLSA nor the Fifth Circuit Court of Appeals have articulated absolute criteria defining the phrase similarly situated, such that it is reasonable to approach the concept in light of the facts of a specific case. The Court retains discretion to approve certification of a collective action and to facilitate the provision of notice to potential plaintiffs. Sperling, supra, 110 S.Ct. at 487; Villatoro v. Kim Son Restaurant, L.P., 286 F.Supp.2d 807, 809 (S.D. Tex. 2003). Because collective actions serve to reduce litigation costs for the individual plaintiffs and further judicial efficiency, courts favor collective actions when common issues of law and fact arise from the same activity. Sperling, supra, 110 S.Ct. at 486-87. 5
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 6 of 12 PageID #: 40 16. Plaintiffs would show that the Lusardi approach to evaluation of their motion for conditional certification is appropriate here. In Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J. 1987), the court crafted a two-part standard for analyzing conditional certification questions. Lusardi was an age discrimination case, but the standards articulated therein have subsequently been applied within the Fifth Circuit to FLSA collective action matters. See, Sandoz v. Cingular Wireless LLC, 553 F.3d 913, 915 n. 2 (5 th Cir. 2008). Under the Lusardi approach, there is a notice stage and a post-discovery decertification phase. At the notice stage, the Court determines usually based solely on the pleadings and any affidavits that have been submitted, whether to certify the class conditionally and give notice to potential class members. Jones v. Cretic Energy Services, LLC, F.Supp.3d, 2015 WL 8489978, at p. 3 (S.D. Tex., Houston Div. 2015). See also, Mooney v. Aramco Services Co., 54 F.3d 1207, 1213-14 (5 th Cir. 1995) (rev d on other grounds, 539 U.S. 90, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003)). 17. Collective action certification at the notice stage is generally made using a fairly lenient standard, because the Court often has minimal evidence before it at this early stage of litigation. Mooney, supra, 54 F.3d at 1214; Jones, supra, 2015 WL 8489978 at p. 3. As noted by the District Court in Sperling, courts appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan... Sperling, 118 F.R.D. 392, 407 (D.N.J. 1988). 18. In its December 9, 2015, opinion, the United States District Court for the Southern District of Texas, Houston Division, noted that there are essentially two requirements for notice-stage certification under the Lusardi approach, namely: (1) that there is a reasonable basis for crediting the assertion that aggrieved individuals exist; and (2) those aggrieved individuals are similarly 6
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 7 of 12 PageID #: 41 situated to the plaintiff in relevant respects given the claims and defenses asserted. Jones, supra, 2015 WL 8489978 at p. 4. B. This Case Meets the Standard for Conditional Certification. 19. Plaintiffs have met their first-stage burden to show that the class of people presently or formerly employed as hourly workers by the IHOP Restaurants operated by Defendant Hnreck Nazarian a/k/a Nazarian Enterprises and who have been denied overtime pay by the Defendants are similarly situated. The burden at the notice stage of this litigation is lenient and the declarations of the Plaintiffs, the representations and admissions of the Defendants made through their website, and other documentation that the Plaintiffs offer are plainly sufficient to satisfy this burden. 20. Plaintiffs allege the systematic denial of overtime pay to hourly employees working for Hnreck Nazarian in the IHOP Restaurants operated by Hnreck Nazarian a/k/a Nazarian Enterprises. Plaintiffs have shown through their Declarations (Exhibits A and B in the Appendix) the existence of a scheme by which hourly employees were denied overtime pay and were instead issued checks made payable under pseudonyms and fictitious social security numbers as part of a plan to deprive employees of overtime. Such checks bear the signature of Hnreck Nazarian. Accordingly, the members of the putative class consisting of all hourly employees who are now or have been employed at one of the Nazarian Enterprises IHOP Restaurants are similarly situated. The collective action class should be conditionally certified for purposes of notifying all putative class members of their opportunity to join the action. C. Defendants Should Provide Information Necessary to Effectuate Notice 21. Court authorization of notice to the class in an FLSA collective action serves the legitimate goal of avoiding a multiplicity of duplicative suits and setting cutoff dates to expedite disposition of the action. Hoffman-La Roche, supra, 493 U.S. at 172, 110 S.Ct. at 487. In 7
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 8 of 12 PageID #: 42 Hoffman-La Roche, the Supreme Court recognized that courts have the authority to require employers to provide the names and addresses of putative class members, and courts regularly require such production to facilitate notice. In Jones, supra, the court approved the Plaintiff s request for putative class members e-mail addresses, mailing addresses and telephone numbers, in furtherance of the provision of notice. 2015 WL 8489978 at p. 10. 22. Plaintiffs ask the Court to order Defendants to provide Plaintiffs counsel with the full name, last known mailing address, telephone number, e-mail address, date of birth, each job title held and the dates such title(s) were held from March 28, 2013, through the present, and the last four digits of the social security number for each hourly employee at each of the seven (7) Nazarian Enterprises IHOP locations identified above. The above information is necessary in order to assist with the issuance of the notice and to increase the chances that effective notice can be given to each individual harmed by the Defendants conduct committed in violation of the FLSA. 23. Plaintiffs further requests that the Court allow Plaintiffs counsel to send the courtapproved notice to each putative class member via the US Postal Service and via e-mail, and that Plaintiffs counsel further be authorized to mail a follow-up postcard to any putative class members who have not responded within thirty (30) days after the mailing of the initial notice. Such followup mailing contributes to dissemination of information regarding the matter amongst similarlysituated employees and serves what the Supreme Court recognized in Hoffman-La Roche, supra, as Section 216(b) s goal of avoiding multiple lawsuits and expediting the resolution of such actions through timely notice. 24. Plaintiffs also request that the Court order the Defendants to post the court-approved notice at all of Defendants worksites where similarly situated hourly employees work. This includes the seven (7) IHOP Restaurants listed hereinabove operated by Hnreck Nazarian under the Nazarian 8
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 9 of 12 PageID #: 43 Enterprises umbrella and which are touted on the Nazarian Enterprises website. Plaintiffs request that the Court order that the Defendants post such notice in both Spanish and English in the same areas within their restaurants where they are required to post FLSA notices generally. See, 29 C.F.R. 516.4 (requiring posting of FLSA requirements in conspicuous places in every establishment where such employees are employed so as to permit them to observe readily a copy ). Posting of notice also contributes to dissemination of information regarding the matter amongst similarly situated employees and serves the legitimate goals articulated in the Hoffman- La Roche opinion, supra. Federal District Courts have recognized that the posting of such notice is an efficient, non-burdensome, non-punitive method of providing notice to putative class members. See, Castillo v. P & R Enterprises, Inc., 517 F.Supp.2d 440, 449 (D.D.C. 2007) (ordering notice posted in Defendant s offices or office spaces designated for Defendant s use in third-party buildings); Sherrill v. Sutherland Global Servs. Inc., 487 F.Supp.2d 344, 351 (W.D.N.Y. 2007) (allowing notice to be posted in Defendant s places of business for 90 days and mailed to all class members); Romero v. Producers Dairy Foods, Inc., 235 F.R.D. 474, 492-93 (E.D. Cal. 2006) (finding that posting of notice in workplace and mailing is appropriate and not punitive); and Veliz v. Cintas Corp., 2004 WL 2623909 at p. 2 (not reported in F. Supp. 2d) (N.D. Cal. November 12, 2004) (citing Court order to post notice in all workplaces where similarly situated persons are employed and reciting the text of the required notice). D. Plaintiffs Proposed Notice Should Be Approved 25. A copy of the notice Plaintiffs propose for transmittal to class members and posting by Defendants is attached to this motion as Exhibit C contained within the Appendix. Plaintiffs propose that this notice be given in both English and Spanish and will, with Court approval, prepare a Spanish language version of the notice. This proposed notice informs class members in neutral 9
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 10 of 12 PageID #: 44 language of the nature of the action, of their right to participate in it by filing a consent to sue form, and the consequences of their joining or not joining the action. CONCLUSION 26. For the foregoing reasons, Plaintiffs would show that conditional certification of this lawsuit as a collective action under the FLSA is appropriate and should be granted by the Court. As shown herein, the putative class is properly defined as follows: All current and former hourly employees of Bona 1900, Inc. and/or Hnreck Nazarian a/k/a Nazarian Enterprises d/b/a IHOP ( International House of Pancakes ) who work or worked at any of the seven (7) IHOP locations Restaurants owned, operated or controlled by Hnreck Nazarian a/k/a Nazarian Enterprises on or after March 28, 2013, who worked overtime hours but were not paid overtime wages during all or part of their employment. 27. In order that notice of this matter be afforded to all putative class members, Plaintiffs request that the notice requested herein be given to: All current and former hourly employees of Bona 1900, Inc. and/or Hnreck Nazarian a/k/a Nazarian Enterprises d/b/a IHOP ( International House of Pancakes ) who work or worked at any of the seven (7) IHOP locations Restaurants owned, operated or controlled by Hnreck Nazarian a/k/a Nazarian Enterprises on or after March 28, 2013. 28. Plaintiffs respectfully request the Court to grant conditional certification, approve the attached proposed notice, authorize Plaintiffs counsel to issue the proposed notice and to send follow-up postcards as requested above, and require Defendants to provide the information regarding class members described above and to post the notices in both Spanish and English in a conspicuous location in their subject workplaces. 10
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 11 of 12 PageID #: 45 WHEREFORE, Plaintiffs Scarlet Banegas and Odin Campos respectfully request that the Court grant this their Motion to Conditionally Certify a FLSA Collective Action and Send Notice to the Class, and that they be afforded such other and further relief to which they may show themselves to be justly entitled. Dated: June 2, 2016. Respectfully Submitted, WALDENREYNARD, P.L.L.C. /s/ T. Lynn Walden T. LYNN WALDEN State Bar No. 20674800 DAVID D. REYNARD, JR. State Bar No. 00784836 Post Office Box 7486 Beaumont, Texas 77726 (409) 833-0202 Telephone (409) 832-3564 Telecopier Email: twalden@wrtexaslaw.com ATTORNEYS FOR PLAINTIFFS SCARLET BANEGAS AND ODIN CAMPOS, ON BEHALF OF THEMSELVES AND SIMILARLY SITUATED EMPLOYEES CERTIFICATE OF SERVICE I hereby certify that on June 2, 2016, I electronically filed the foregoing with the Clerk of Court using the CM/ECF System of the United States District Court for the Eastern District of Texas, which shall send notification of such filing to the following: Carolyn D. Roch Texas Bar No. 00791152 1200 Smith Street, Suite 1550 Houston, Texas 77002 cdroch@hughesroch.com Telephone: (713) 588-0890 Facsimile: (713) 456-2205 11
Case 1:16-cv-00086-MAC Document 10 Filed 06/02/16 Page 12 of 12 PageID #: 46 CERTIFICATE OF CONFERENCE I hereby certify that on May 24, 2016, I conferred by telephone with Carolyn D. Roch, counsel for Defendants, regarding the foregoing Plaintiffs Motion to Conditionally Certify an FLSA Collective Action and Send Notice to the Class. I certify that said conference was conducted in accordance with and in satisfaction of the requirements of Local Rule CV-7(h). Defense counsel was unable to agree to this motion, as the Defendants take the position that class certification should not be granted while Plaintiffs take the position that it should. This motion is therefore opposed by the Defendants. Based on my conference with Defense counsel, the position of the parties on this issue is not likely to change, such that discussions have conclusively ended in an impasse, leaving this issue for resolution by the Court. /s/ T. Lynn Walden T. LYNN WALDEN State Bar No. 20674800 Post Office Box 7486 Beaumont, Texas 77726 (409) 833-0202 Telephone (409) 832-3564 Telecopier Email: twalden@wrtexaslaw.com 12