United States District Court, N.D. Indiana, South Bend Division
JOSEPH SAGENDORF, individually and on behalf of similarly situated persons, Plaintiff,
QUALITY HUTS, LLC, et al., Defendants.
OPINION AND ORDER
P. SIMON, JUDGE
a collective action under the Fair Labor Standards Act
brought by pizza delivery man Joseph Sagendorf. Presently
before me is the Plaintiff's Motion for Step-One Notice
Pursuant to the Fair Labor Standards Act [DE 29] and Joint
Motion to Approve Stipulated Form of Notice of Collective
Action [DE 32]. Defendants have consented to an order
conditionally certifying this case as a collective action and
authorizing the distribution of the notice and consent to
join attached as DE 32-1. For the reasons enumerated below, I
will grant both motions and conditionally certify this case
under the FLSA.
action is brought on behalf of current and former individuals
employed as delivery drivers by Defendants Quality Huts, LLC,
Quality Huts East, LLC, Quality Huts, Indianapolis, LLC,
Quality Huts Mid Atlantic, and Quality Huts Midwest, LLC
(collectively “Quality Huts”). Defendants own and
operate Pizza Hut franchise stores nationwide. Those Pizza
Huts employ delivery drivers to deliver pizzas and other food
to customers' homes or work, maybe even to a courthouse.
named plaintiff, Mr. Sagendorf, alleges that he and other
similarly situated current and former delivery drivers were
illegally denied minimum wage rates because they were not
properly reimbursed for the required expenditures. Sagendorf
was employed as a delivery driver at the Pizza Hut store in
South Bend, Indiana, from approximately November 2017 to
February 2018. Another delivery driver, Plaintiff Daniel
Baer, has already joined this suit as an early opt-in.
mentioned earlier, Defendants employ drivers to deliver pizza
and food to customers. Defendants require their delivery
drivers to provide their own vehicles and the vehicles must
be insured and kept in a safe, legally-operable condition.
[Answ., DE 10, at ¶ 13.] Sagendorf alleges that
Defendants pay all of their delivery drivers below minimum
wage hourly rates, relying on a tip credit applied according
to the time that they perform deliveries. [Compl., DE 1,
¶¶1-23; DE 29 Exs. C-D.] He claims the practical
effect of using the tip credit is to standardize all the
employees at the same nominal wage rate. Sagendorf claims
that although drivers incur costs like gasoline, vehicle
maintenance, insurance, depreciation, and other expenses,
Defendants do not pay drivers for their actual out-of-pocket
automobile expenses. For example, Defendants commonly pay the
drivers $0.32 per mile, which Sagendorf claims is below the
IRS rate of between $0.535 and $0.56 per mile. [DE 29 Exs. C,
D.] This failure to reimburse, the argument goes, means the
actual wages the delivery drivers received “free and
clear” fell below minimum wage.
complaint states a claim under the FLSA and requests that the
case proceed as a collective action under 29 U.S.C. §
216(b) on behalf of all delivery drivers of the Defendants
who consent to joint the action (Count I). Sagendorf also
asserts Indiana state law claims as a Rule 23 class action
(Count II). But I note that in their joint motion to approve
the stipulated form of notice of the collective action, the
parties state that they have agreed to dismiss Count II, the
Rule 23 class action for Indiana state law claims, with
prejudice. [DE 32 at 2.] While the parties are commended for
trying to work some things out in this litigation, it is not
proper to dismiss a count with prejudice without filing a
separate motion in accordance with Rule 41. See Fed.
R. Civ. P. 41; N.D. Ind. L.R. 7-1. (requiring a separate
motion for each request). As such, the parties are granted
leave to file dismissal papers for Count II in accordance
with the applicable rules.
29 U.S.C. § 216(b), an employee may bring an action to
recover unpaid overtime compensation on “behalf of
himself . . . and other employees similarly situated.”
This is known as a “collective action.”
Harkins v. Riverboat Servs., Inc., 385 F.3d 1099,
1101 (7th Cir. 2004) (quoting 29 U.S.C. § 216(b)). No.
employee may be a party plaintiff to a collective action
“unless he gives his consent in writing to become such
a party and such consent is filed in the court in which such
action is brought.” 29 U.S.C. § 216(b).
actions under the FLSA are fundamentally different than class
actions under Federal Rule of Civil Procedure 23. Plaintiffs
in a collective action must “opt-in” to the
action to be bound by a judgment while plaintiffs in a Rule
23 class action must “opt-out.” See King v.
General Elec. Co., 960 F.2d 617, 621 (7th Cir. 1992);
Woods v. New York Life Ins. Co., 686 F.2d 578, 580
(7th Cir. 1982). Because of the “opt-in”
requirement, a representative plaintiff in a collective
action has to be able to inform other individuals who may
have similar claims that they may join his lawsuit.
Austin v. CUNA Mut. Ins. Soc'y, 232 F.R.D. 601,
605 (W.D. Wis. 2006).
216(b) does not explicitly provide for court-ordered notice.
Nonetheless, the Supreme Court has held that, in appropriate
cases, district courts have the discretion to implement
§ 216(b) by facilitating notice to potential plaintiffs.
Hoffmann-La Roche, Inc. v. Sperling, 493 U.S. 165,
169 (1989). Such court-authorized notice serves the broad,
remedial purpose of the FLSA and comports with the
court's interest in managing its docket. Id. at
courts within the Seventh Circuit have commonly applied a
two-step approach to determine whether an FLSA claim should
proceed as a collective action. See, e.g., Cramer v. Bank
of Am., N.A., No. 12 C 8681, 2013 WL 6507866, at *1
(N.D. Ill.Dec. 12, 2013); In re FedEx Ground Package
Sys., Inc., Employment Practices Litig., 662 F.Supp.2d
1069, 1081 (N.D. Ind. July 27, 2009); Veerkamp v. U.S.
Sec. Assocs., Inc., No. 1:04-CV-0049 DFH-TAB, 2005 WL
775931, at *2 (S.D. Ind. Mar. 15, 2005). First, the
plaintiffs have to demonstrate, based upon “pleadings,
affidavits, and declarations” that they are
“similarly situated” to “employees they
seek to notify.” Hart v. Crab Addison, Inc.,
No. 13-CV-6458 CJS, 2015 WL 365785, at *2 (W.D.N.Y. Jan. 27,
2015). If Plaintiffs make this relatively modest showing,
then notice and an opportunity to “opt-in” can be
sent to those employees who are similarly situated to the
named plaintiff. See Cameron-Grant v. Maxim Healthcare
Servs., Inc., 347 F.3d 1240, 1243 n.2 (11th Cir. 2003).
The lenient standard applicable to the first stage
“typically results in conditional certification”
of a collective action. Ruffolo v. LaSalle Group,
Inc., No. 18 C 3305, 2019 WL 978659, at *2 (N.D. Ill.
Feb. 28, 2019) (quotation omitted). The action then proceeds
through discovery as a representative or collective action.
second stage occurs only after the opt-in process is complete
and the parties have taken discovery. Cramer, 2013
WL 6507866, at *2. The defendant may then ask the Court to
“reevaluate the conditional certification to determine
whether there is sufficient similarity between the named and
opt-in plaintiffs to allow the matter to proceed to trial on
a collective basis.” Jirak v. Abbott Labs.,
Inc., 566 F.Supp.2d 845, 848 (N.D. Ill. 2008) (quotation
omitted). At this second step, courts apply a more stringent
test and consider whether any affirmative defenses have to be
applied to individual plaintiffs, as well as fairness or
procedural concerns. Id.
case, Defendants consent to an order conditionally certifying
the case as a collective action under the FLSA. [DE 32 at 2.]
I find this appropriate, as Plaintiff has provided
declarations of other employees describing similar pay issues
[DE 29-3, 29-4], colorably argued that a company-wide ...