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Michael E. Taylor; Kenneth B. Young v. Waddell & Reed

January 3, 2012

MICHAEL E. TAYLOR; KENNETH B. YOUNG; INDIVIDUALS, ON BEHALF OF THEMSELVES INDIVIDUALLY AND ON BEHALF OF
OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
WADDELL & REED, INC., A DELAWARE CORPORATION,
DEFENDANT.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge

ORDER GRANTING DEFENDANT'S MOTIONS FOR PARTIAL SUMMARY JUDGMENT AND DENYING AS MOOT PLAINTIFFS' MOTION FOR CONDITIONAL CLASS CERTIFICATION [Docs. 91, 92, 97]

Presently before the Court are the following three motions: Defendant's Motion for Partial Summary Judgment as to Plaintiff Michael Taylor (Doc. 91), Defendant's Motion for Partial Summary Judgment as to Plaintiff Kenneth Young (Doc. 92), and Plaintiffs' Motion for Conditional Collective Action Certification, Hoffmann-La Roche Notice, and Equitable Tolling (Doc. 97).

For the reasons set forth below, the Court GRANTS both of Defendant's motions for partial summary judgment and consequently DENIES AS MOOT Plaintiffs' motion for conditional class certification.

I. BACKGROUND

This matter is a proposed wage and hour collective action brought by former Waddell & Reed ("W&R") financial advisors ("Advisors"). (FAC ¶ 1.) Named Plaintiffs Kenneth B. Young and Michael E. Taylor seek to represent a class of Advisors who allege they were classified as independent contractors, when, in fact, they were employees. (Id. at ¶¶ 3, 5.)

W&R is in the business of selling financial products, which are distributed through a sales force of Advisors. (Id. at ¶ 2.) When Advisors begin working for W&R, they are required to sign a "Professional Career Agreement" ("PCA"). (Id. at ¶ 37.) This agreement provides the basic terms governing the association with W&R Inc. and Waddell & Reed Affiliates ("W&R Affiliates"). (Id.) Advisors were classified as independent contractors and were paid on a commission only basis. (Id. at ¶ 34, 114.) Advisors did not receive a salary or hourly wage and were not paid overtime. (Id. at ¶¶ 114, 117-118.) With regard to the independent contractor relationship, the PCA specifically states, "Subject to the responsibilities and limitations stated in this Agreement, you shall be free to use W&R office facilities and to exercise your own judgment as to the persons whom you solicit and the time, place, and manner of solicitation." (See John T. Mullan Decl., Exhibit 5 (emphasis added).)

According to Plaintiffs, Advisors should have been classified as employees because, among other things, Advisors could sell only under the name of W&R and could only sell securities authorized by W&R. (Id. at ¶¶ 40-41.) Advisors were assigned clients by W&R and had to surrender all client files, client lists and client data to W&R upon termination of the working relationship. (Id. at ¶ 49.) Advisors were required to work a specified number of hours and generally adhere to a schedule proposed by W&R. (Id. at ¶ 57.) Advisors were encouraged to work at W&R's offices and had to explain any activities conducted outside the office. (Id. at ¶¶ 60-61.) Advisors were required to attend meetings or face disciplinary action, and were subject to periodic performance reviews by Defendants. (Id. at ¶¶ 68-

Plaintiffs filed suit on December 28, 2009, alleging nine claims for violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206-207; the California Labor Code; and California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200, et. seq. On April 28, 2010, Plaintiffs filed the FAC. Defendant filed the instant motions for partial summary judgment on April 22, 2011.*fn1

Plaintiffs filed the instant motion for conditional class certification on April 27, 2011. The Court held a hearing on the motions on December 15, 2011.

II. LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine issue of material fact exists if there is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Miller v. Glenn Miller Prod., Inc., 454 F.3d 975, 987 (9th Cir. 2006).

In order to prevail, a party moving for summary judgment must show the absence of a genuine issue of material fact with respect to an essential element of the nonmoving party's claim, or to a defense on which the nonmoving party will bear the burden of persuasion at trial. Nissan Fire & Marine Ins. Co. v. Fritz Cos. Inc., 210 F.3d 1099, 1102 (9th Cir. 2000). When the nonmoving party would bear the burden of proof at trial, the moving party may satisfy its burden on summary judgment by simply pointing out to the Court an absence of evidence from the nonmoving party. Miller, 454 F.3d at 987. "The moving party need not disprove the other party's case." Id.

Once the movant has made that showing, the burden shifts to the opposing party to produce "evidence that is significantly probative or more than 'merely colorable' that a genuine issue of material fact exists for trial." LVRC Holdings LLC v. Brekka, 581 F.3d 1127, 1137 (9th Cir. 2009) (citing FTC v. , 265 F.3d 944, 954 (9th Cir. 2001)); see also Miller, 454 F.3d at 988 ("[T]he nonmoving party must come forward with more than 'the mere existence of a scintilla of evidence.'") (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

The Court must review the record as a whole and draw all reasonable inferences in favor of the nonmoving party. Hernandez v. Spacelabs Med. Inc., 343 F.3d 736, 738 (9th Cir. 2000). However, unsupported conjecture or conclusory statements are insufficient to defeat summary judgment. Id.; Surrell v. Cal. Water Serv. Co., 518 F.3d 1097, 1103 (9th Cir. 2008). "Thus, '[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine ...


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