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Ferrell v. ConocoPhillips Pipe Line Co.

May 12, 2010


The opinion of the court was delivered by: Rebecca R. Pallmeyer United States District Judge

Judge Rebecca R. Pallmeyer


Plaintiff Damon Ferrell works for Defendant ConocoPhillips loading petroleum products onto trucks. Plaintiff has sued Defendant and ten unnamed individuals,*fn1 alleging that he was not paid sufficient overtime wages in violation of the Fair Labor Standards Act ("FLSA") and California law. Plaintiff also alleges that Defendants violated California law by failing to give him an opportunity to inspect or copy his pay records upon request and originally alleged that he was denied a proper meal break in violation of California law. He has withdrawn the meal-break claim. With respect to his overtime claims, Plaintiff seeks to prosecute a collective action under FLSA as well as a class action under Federal Rule of Civil Procedure 23 based on the state law wage claims, over which the court has supplementary jurisdiction. Plaintiff has moved for conditional certification of the FLSA collective action, and Defendant has moved to strike both the FLSA and Rule 23 class allegations. Also pending are Plaintiff's motion to certify a Rule 23 class and Defendant's motion for summary adjudication, but those motions have not been fully briefed. For the reasons that follow, Defendant's motion to strike is denied, but further briefing is ordered on Plaintiff's motion for conditional certification of the FLSA collective action.


This lawsuit, filed in March 2009, was initially assigned to Judge Stephen G. Larson. Judge Larson left the bench in September 2009, and, in February 2010, the case was reassigned to this court, Judge Rebecca R. Pallmeyer of the Northern District of Illinois, sitting by designation. After reassignment, the court held a telephone status conference in which it granted Plaintiff leave to file a second amended complaint and set dates for Plaintiff's motions for certification of the FLSA and Rule 23 classes. (Order of Feb. 21, 2010.)

In his Second Amended Complaint, Plaintiff proposes to represent two different Rule 23 classes as well as an FLSA class. Plaintiff concedes that one of the proposed Rule 23 classes-the "Meal Break Class"-should be stricken.*fn2 (Pl's Br. Opposing Mot. to Strike, at 8.) The other proposed Rule 23 class is the "Hourly Employee Class:"

All persons who, from four years prior to the commencement of this action up to the time of judgment, worked for CONOCCO [sic] at a pipeline or terminal within the State of California and were paid on an hourly basis. (Compl. ¶ 11.) The Complaint proposes an FLSA opt-in class with a similar definition, albeit without a time limitation: "all hourly employees working on pipelines or terminals for CONOCO within California." (Id. ¶ 30.) As described below, in briefing, Plaintiff has offered significant modifications to the definition of the FLSA opt-in class.

Plaintiff's complaint contains six claims. Claims One and Six, brought on behalf of the "Meal Break Class," are no longer at issue. (Compl. ¶¶ 43-51, 90-94.) Claim Two is the basis for the proposed FLSA collective action; it alleges that members of the collective action were compensated using a pay system that violates FLSA. (Id. ¶¶ 52-70.) Claim Three is brought on behalf of the "Hourly Employee Class"; it alleges that by violating FLSA with respect to the opt-in class, Defendant violated California's Business and Professions Code § 17200 et seq. (Id. ¶¶ 71-75.) Claim Four is brought on behalf of Plaintiff Ferrell only; it alleges that Defendant violated California's Labor Code § 226 by failing to provide him with an opportunity to inspect or copy his pay records upon request. (Id. ¶¶ 76-82.) Claim Five is brought under California's Private Attorney General Act; it alleges that the group of aggrieved employees defined as "all hourly employees of pipelines and/or terminals based in California"*fn3 were not paid in a timely fashion. (Compl. ¶¶ 42, 83-89.)

Claim Two, the FLSA claim, underlies Claims Three and Five, and merits further explanation. Plaintiff's employment is governed by a collective bargaining agreement ("CBA") between Defendant and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC, Local 675. (Pl's Br. Supporting Conditional Certification, Ex. A.) Under the terms of the CBA, employees receive extra pay for working undesirable shifts. The shift differential payments are as follows:

Daylight Shift 8:00 a.m. to 4:00 p.m. $0.00 per hour Afternoon Shift 4:00 p.m. to 12:00 a.m. $0.50 per hour Night Shift 12:00 a.m. to 8:00 a.m. $1.00 per hour (Id. at 28.) Thus, an employee who earns a base rate of $20 per hour will be paid at that rate during the daytime, at $20.50 per hour during the afternoon shift, and at $21 per hour during the night shift. When overtime hours fall during the afternoon or night shift, an employee is paid one- and-one-half times his base rate plus one-and-one-half times the shift differential. (Id. at 25-26, 28.) So, the employee earning a regular rate of $20 per hour will earn $30 per overtime hour during the day, $30.75 per overtime hour during the afternoon, and $31.50 per overtime hour during the night.*fn4

Plaintiff's FLSA claim alleges that this method of computing overtime pay runs afoul of FLSA's requirement that an employee's overtime rate of pay be no less than one-and-one-half times the employee's "regular rate" of pay. FLSA § 7(a)(1), 29 U.S.C. § 207(a)(1). "Regular rate" does not mean the amount the employee would earn performing the work during non-overtime hours; it means "'the hourly rate actually paid the employee for the normal, non-overtime workweek for which he is employed.'" Parth v. Pomona Valley Hospital Medical Center, 584 F.3d 794, 798 (9th Cir. 2009) (quoting Walling v. Youngerman-Reynolds Hardwood Co., Inc., 325 U.S. 419, 424 (1945)). To compute it, then, one divides "all remuneration for employment paid to, or on behalf of, the employee" by the number of non-overtime hours worked. FLSA § 7(e), 29 U.S.C. 207(e). Plaintiff's claim is that Defendant's pay system does not meet this requirement because it fails to include the shift differentials, meal allowances, pay for missed meals, and educational benefits in computing the "regular rate." Defendant argues that its pay system fits comfortably within certain FLSA exceptions. At this stage in the litigation, and for the purposes of this order, however, the court need not rule on the merits of this claim.


A. Defendant's Motion to Strike

Defendant first objects to Plaintiff's Rule 23 class allegations and FLSA collective action allegations based on Plaintiff's failure to comply with Local Rule 23-3, which requires the filing of a motion for class certification within "90 days after service of a pleading purporting to commence a class action." (Def's Br. Supporting Mot. to Strike, at 3-9.) The court must overrule this objection. Assuming that Rule 23-3 applies to an FLSA collective action, the Rule itself states that it applies "unless otherwise ordered by the Court." Thus, "the Court has discretion to permit class certification after the 90 day period under the Local Rules." Misra v. Decision One Mortgage Co., LLC, 673 F. Supp. 2d 987, 993-94 (C.D. Cal. 2008.) The court effectively exercised that discretion when it granted Plaintiff's motion for leave to file an amended complaint and set deadlines for filing motions for certification of an FLSA collective action and a Rule 23 class. (Order of February 11, 2010.) Plaintiff complied with those deadlines. In any ...

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