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Kolish v. Metal Technologies, Inc.

United States District Court, S.D. Indiana, Terre Haute Division

February 8, 2017

FANNIE M. KOLISH, Plaintiff,
v.
METAL TECHNOLOGIES, INC., Defendant. KEVIN GRAVES, Intervenor Plaintiff,
v.
METAL TECHNOLOGIES, INC., Defendant.

          ORDER

          Hon. Jane Magnus-Stinson, Chief Judge United States District Court.

         Plaintiffs Fannie Kolish and Kevin Graves were employees of M Technologies, Inc., (“M Technologies”). Ms. Kolish initiated this litigation on behalf of herself and a class of similarly situated individuals, claiming that M Technologies violated the Fair Labor Standards Act (“FLSA”) and the Indiana Wage Payment Act (“IWPA”) when it automatically treated short, recorded lunch breaks of twenty minutes or less as thirty-minute, unpaid lunch breaks. [Filing No. 1.] Mr. Graves sought leave to intervene as a named plaintiff, [Filing No. 39], and the Court granted that request, [Filing No. 47]. Presently pending before the Court are the following motions filed by Plaintiffs: (1) a Motion to Certify a Combined Class Action and FLSA Collective Action, [Filing No. 41]; (2) a Motion for Approval of Class and Collective Action Notice, [Filing No. 43]; and (3) a Motion for an Oral Argument on Plaintiffs' Motion for Approval of Class and Collective Action Notice, [Filing No. 44].

         I.

         Background

         A. Weil v. M Technologies

         This case is related to Weil v. M Technologies, Inc., 2016 WL 286396 (S.D. Ind. 2016). The plaintiffs in Weil sought to certify several Rule 23 class action and FLSA collective action sub-classes. Id. In particular, the plaintiffs attempted to certify a Rule 23 sub-class and a collective action sub-class to address M Technologies' failure to pay its employees for lunch breaks of twenty minutes of less. Id. at *8, *15. This Court found that the plaintiffs were not adequate class representatives and on January 25, 2016, the Court denied certification of the two sub-classes. Id. at *16.The Court did, however, conditionally certify the following sub-classes: a Rule 23 class and a collective action class regarding an allegedly unlawful rounding policy related to clock-in and clock-out times at the beginning and end of the work day that uniformly shorted employees, and a Rule 23 class action regarding the allegedly unlawful wage deductions for uniforms. Id. at *16-17.Because Weil is related to this case, the Court has issued an entry to allow the parties to use discovery materials from Weil in this case. [Filing No. 45.]

         B. M Technologies

         M Technologies is a manufacturing facility located in Bloomfield, Indiana, that manufactures automobile parts for car manufacturers, including General Motors, Ford, Chrysler, Hyundai, and Honda. [Filing No. 54-1 at 5.] The employees work one of the three shifts: the first shift begins at 7:30 a.m. and ends at 3:30 p.m., the second shift begins at 3:00 p.m. and ends at 11:30 p.m., and the third shift begins at 11:00 p.m. and ends at 7:30 a.m. [Filing No. 54-1 at 8.] Kirbie Conrad is the Human Resources Manager who is responsible for administering M Technologies' payroll. [Filing No. 42-2 at 2-3.] She testified that from January 2012 to the present, M Technologies has employed approximately 500 to 550 employees. [Filing No. 54-1 at 2.] M Technologies paid its employees based on their scheduled shift times, and automatically deducted thirty minutes to account for their lunch break. [Filing No. 54-1 at 9.]

         C. Employment Handbook Policies

         Ms. Conrad testified that every new employee was given a copy of M Technologies' Employee Handbook, [Filing No. 42-11], and that she would spend 45 minutes with each new employee going through the policies in the handbook and require the employee to read and sign a form that stated that the employee would adhere to the policies, [Filing No. 42-2 at 74-75]. The Employee Handbook states the following with respect to payment of wages and timekeeping policies:

         Time Clock Records

By law, we are obligated to keep accurate records of the time worked by employees. This is done by either time clocks or other written documentation.
Your time punch is the only way the payroll department knows how many hours you worked and how much to pay you. Your time punch indicates when you arrived and when you departed. You are to punch in and out for lunch and for brief absences like a doctor or dentist's appointment. All employees are required to keep Human Resources, their cell leader or Shift Supervisor advised of their departures from and returns to the premises during the workday.
You are responsible for your time punch. Remember to record your time. If you forget to punch in or make an error on your punch, a “missed punch form” must be filled out with the Shift Supervisor or cell leader initials next to it for approval and Human Resources must be notified. Cell leader and Shift Supervisor time tickets require the Plant Manager's approval. You are not permitted to punch in more than 15 minutes before your scheduled starting time nor more than 15 minutes after your scheduled quitting time without the group leader or Shift Supervisor's approval. This would be considered unapproved overtime.
No one may record hours worked on another's punch or time slip for any reason. Tampering with yours or another's time punch is cause for disciplinary action, including possible immediate dismissal, of both employees. Do not alter another person's record, or influence anyone else to alter your record for you. In the event of an error in recording your time, please report the matter to Human Resources, your group leader, or your Shift Supervisor immediately.

[Filing No. 42-11 at 7.]

         With respect to business hours and work schedules, the Employee Handbook states the following:

Business Hours Our regular office hours are 7:30 a.m. to 5:00 p.m., Monday through Friday. Your particular hours of work and the scheduling of your lunch period will be determined and assigned by your Plant Manager or shift supervisor. Most employees are assigned to work a 40-hour workweek. You are required to take a 30-minute unpaid lunch period daily. Please understand that you may not “work through lunch” in order to arrive late or to leave early or to work extra time, unless approved by the Plant Manager.
* * *
Work Schedules & Rules The normal workweek consists of five (5) days, eight (8) hours long, Monday through Friday. You will be notified promptly whenever a change is necessary. Should you have any questions concerning your work schedule, please ask your shift supervisor or Plant Manager.

[Filing No. 54-2 at 6-7.]

         If any employee wished to work more than eight hours per day, the employee was required to complete an Overtime Authorization form in order to be paid for his or her time. [Filing No. 54-1 at 9-10.]

         D. Rounding of Employees' Lunches

         From January 20, 2013 to March 20, 2016, M Technologies maintained a system that recorded the times its employees clocked out for lunch and clocked back in to return to work. [Filing No. 42-2 at 49; Filing No. 42-3; Filing No. 42-4; Filing No. 42-5; Filing No. 42-7; Filing No. 42-8.] Ms. Conrad testified that M Technologies paid employees for scheduled hours of work, and rounded the time records in the company's favor and to the employees' detriment. [Filing No. 42-2 at 14-15; Filing No. 42-2 at 52-53.] According to Ms. Conrad, M Technologies applied its time rounding practices uniformly against all of its hourly paid employees, [Filing No. 42-2 at 40-41; Filing No. 42-2 at 64-65], and the policy punished employees for clocking in as little as one minute late, [Filing No. 42-2 at 28; Filing No. 42-2 at 72-73]. However, M Technologies did not take into account the employee's recorded lunch breaks that purported to demonstrate when the employee clocked out and back in, and instead automatically calculated the employee's time as though the employee took a thirty-minute, unpaid lunch break as called for by M Technologies policy. [Filing No. 42-2 at 49-53.]

         In addition, Ms. Conrad testified that she would review the time records regarding the times that employees would clock out for lunch and clock back in to return to work, and admitted that there were times she noticed that an employee's lunch break was twenty minutes or less. [Filing No. 42-2 at 50.] She claimed that she would treat the employee's time as though he or she took a thirty-minute lunch break, despite having time clock punches that show the lunch break was twenty minutes or less. [Filing No. 42-2 at 49-53.]

         According to Ms. Conrad, sometime in March 2016, M Technologies stopped collecting data that recorded the start and end time of the employees' lunch breaks, and the employees also stopped recording their lunch breaks. [Filing No. 42-1 at 5.] She further testified that the company continued to automatically deduct thirty minutes from each employee's work day without maintaining any other time clock system to record the duration of the lunch breaks. [Filing No. 42-1 at 5-7.]

         E. Payroll Records of Short Lunch Breaks

         Plaintiffs' counsel filed an Affidavit with a summary of time and payroll records of 275 participating plaintiffs in Weil. [Filing No. 42-13 at 4-7.] Plaintiffs' counsel explained that for 275 participating plaintiffs, a total of 5, 814 breaks of one to twenty minutes were identified. [Filing No. 42-13; Filing No. 42-16.] Out of that number, Plaintiffs' counsel claims that the records of 228 Rule 23 class members show that there were 4, 886 unpaid breaks of one to twenty minutes, which resulted in unpaid wages at the regular rate of $12, 800.17. [Filing No. 42-13.] The Affidavit also explained that for the records of 47 FLSA opt-in plaintiffs, there were a total of 928 breaks of one to twenty minutes, which resulted in $3, 064.04 unpaid wages at the regular rate.

         F. Class Representatives

         1. Ms. Kolish

         Ms. Kolish was an employee at M Technologies who worked as a parts inspector on a line along with a team of four or five other employees. [Filing No. 54-5.] She and the employees at her line would take their lunch break around the same time. [Filing No. 54-5 at 9.] Although her typical lunch break was from 12:00 p.m. to 12:30 p.m., the length of time in her recorded lunch breaks varied. [Filing No. 54-5 at 9-10]

         Ms. Kolish had twenty-four different unpaid lunch breaks that lasted between one and twenty minutes. [Filing No. 42-1 at 8-12; Filing No. 42-4; Filing No. 42-8.] She testified that although she was not verbally told to go back to work during her lunch break, she felt pressured by her supervisors to return to work, which is the reason she took short lunch breaks. [Filing No. 54-5 at 8.] The records also show that there were 88 times when Ms. Kolish clocked out and back in for lunch in the same minute. [Filing No. 42-1 at 8-12; Filing No. 54-5 at 11.] When asked why she clocked out and back in during the same minute or clocked in right after clocking out for one to a few minutes, Ms. Kolish could not recall. [Filing No. 54-5 at 11.] Ms. Kolish was never disciplined in any way. [Filing No. 42-10 at 4.] Ms. Kolish's supervisor, Duane Cunningham, stated that he never saw Ms. Kolish return early from her lunch break to begin working, that he was under the impression that Ms. Kolish took thirty-minute lunch breaks, and that had Ms. Kolish notified him that she worked during her lunch break, he would have instructed her to complete an Overtime Authorization form. [Filing No. 54-6 at 2-3.] Ms. Kolish testified that she expected to be paid for “a full 40-hour paycheck” for her work each week. [Filing No. 54-5 at 9.] She also stated that it “never occurred to her” that she should be getting paid for the part of her lunch that she worked. [Filing No. 54-5 at 9.]

         On September 13, 2016, the Magistrate Judge presiding over this case held a settlement conference, [Filing No. 32], and Ms. Kolish, who was required to attend, told her attorney that she was not able to be there because she had to attend a funeral of a family member in Massachusetts, [Filing No. 54-7]. During her deposition, Ms. Kolish initially stated that she left town for the funeral on September 6, 2016 and returned the night of September 13, 2016. [Filing No. 54-5 at 3.] However, after being confronted with Facebook posts that showed she was in Indiana on September 9, 2016, Ms. Kolish changed her testimony and admitted that she had returned to Indiana on September 9, 2016, but that she left her attorney with the impression that she was still out of town. [Filing No. 54-5 at 3; Filing No. 54-5 at 5.]

         2. Mr. Graves

         Mr. Graves was hired by M Technologies in 2011, [Filing No. 54-8 at 3], and he resigned from his job on October 27, 2013, [Filing No. 54-2 at 1]. During his time at M Technologies, he was an inspector of four-cylinder engines at two separate cells, one for Hyundai and one for Chrysler. [Filing No. 54-8 at 3.] Each of those cells had two inspectors and one cell leader. [Filing No. 54-8 at 5.] Mr. Graves' payroll records demonstrate that from January 20, 2013 until his resignation, he had 32 different unpaid lunch breaks that lasted between one to twenty minutes. [Filing No. 42-13; Filing No. 42-14; Filing No. 42-15.] He testified that he would return to work early after taking his lunch break because he wanted to get back to work. [Filing No. 54-8 at 6.] He stated that because the machines were down during lunch, he would sweep or find something else to do when he returned to work. [Filing No. 54-8 at 6.] He further testified that he was not instructed by anyone from M Technologies to return to work early and he was not aware if anyone else was working during their lunch break. [Filing No. 54-8 at 7.] He stated that no one else on their team worked during their lunch break, that he understood he had to complete a form to get paid for the time that he worked during his lunch break, and that he never asked to be paid for the time he spent working during his lunch break. [Filing No. 54-8 at 6-7.] In addition, Mr. Graves' supervisor, Mr. Cunningham, claimed that he had no knowledge of Mr. Graves ever working during his lunch breaks, that he believed Mr. Graves always took a thirty-minute lunch break, and that if Mr. Graves would have informed him that he worked during his lunch break, Mr. Cunningham would have instructed him to fill out an Overtime Authorization form. [Filing No. 54-6 at 2-3.]

         G. Declarations from M Technologies Employees

         M Technologies obtained twenty-two declarations from employees who testified that they took a thirty-minute lunch break every day. [SeeFiling No. 54-3.] John Smith, one of the declarants, testified that regardless of what his recorded time shows, he always took a thirty-minute lunch break every day, and does not remember ever taking a lunch break of twenty minutes or less. [Filing No. 54-4 at 1.] He further testified that he was aware that M Technologies automatically deducted thirty minutes for lunch breaks, and that he knew he needed to complete a form if he ever worked during his lunch break. [Filing No. 54-4 at 1.]

         II.

         Discussion

         At the outset, the Court notes the Seventh Circuit Court of Appeals' instruction that “employees who institute a collective action against their employer under the terms of the [FLSA] may at the same time litigate supplemental state-law claims as a class action certified according to Federal Rule of Civil Procedure 23(b)(3).” Ervin v. OS Rest. Servs., 632 F.3d 971, 973-74 (7th Cir. 2011); see alsoRobertson v. Steamgard, 2012 WL 1232090, *2 (N.D. Ill. 2012) (“the Seventh Circuit has held that the FLSA is ‘amenable to state-law claims for related relief in the same federal proceeding'”). This Court ...


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