United States District Court, N.D. California
ORDER DENYING PLAINTIFFS' MOTION FOR SANCTIONS AND CORRECTIVE NOTICE; DENYING MOTION TO COMPEL DEPOSITION Re: Dkt. Nos. 54, 73
WILLIAM H. ORRICK, District Judge.
After I conditionally certified a collective action and approved notice procedures in this Fair Labor Standards Act ("FLSA") suit, defendant PPG Industries, Inc. sent an email to potential plaintiffs discussing the litigation and the forthcoming notice that the potential plaintiffs would receive. The plaintiffs move to sanction PPG, arguing that the email misled potential plaintiffs, deterred them from opting into the lawsuit, and violated the parties' stipulation regarding communications with the potential plaintiffs and. The plaintiffs' motion is DENIED because the email did not mischaracterize or otherwise undermine the forthcoming notice, nor did it violate the stipulation.
In 2013, PPG acquired the architectural coatings business (e.g., paints and stains) of Akzo Nobel. The acquisition included Business Development Representatives (sometimes referred to below as "BDRs") who promoted the sale of Glidden-brand paint at The Home Depot stores. At the time of the acquisition, PPG already employed Territory Managers who promoted the sale of Olympic-brand paint at Lowe's Home Improvement and Menards stores. The Territory Manager position was similar to the Business Development Representative position. PPG classified its Territory Managers as salaried non-exempt and eligible for overtime compensation. In contrast, at the time of the acquisition, the Business Development Representatives were not classified as salaried non-exempt and eligible for overtime compensation.
Effective April 1, 2013, PPG reclassified the Business Development Representatives as salaried non-exempt and eligible for overtime compensation. PPG explained the reclassification in an April 4, 2013 letter from Catherine McKinley, Director of PPG's Home Depot Business Line, to the Business Development Representatives, stating:
As many of you know, PPG has employees who are in positions that are very similar to yours and who drive the sales of Olympic paint and stains in Lowe's and Menards stores. PPG classifies these employees as salaried non-exempt. In order to bring the BDR position into alignment with similar positions at PPG, the Business Development Rep position will be classified as salaried "non-exempt" effective April 1, 2013.
McKinley Decl. ¶ 12, Ex. 2.
In September 2013, a group of Business Development Representatives filed suit against PPG, alleging that prior to the reclassification, PPG misclassified the Business Development Representatives as exempt under the Fair Labor Standards Act, and therefore failed to pay the Business Development Representatives for all hours worked. Dkt. No. 1.
On April 30, 2014, I endorsed the parties' stipulation for conditional certification of a collective action and for the content of notice and opt-in consent forms to be mailed to potential plaintiffs. Dkt. No. 42, Stipulation Regarding Notice and Consent Procedures; Order. The stipulation provides that:
The notice and consent form will be the only unsolicited communication to such individuals about the lawsuit during the opt-in period ( i.e., there will not be a "reminder" mailing, telephone solicitations, etc.). However, Plaintiffs and Plaintiffs' counsel may speak about the litigation with individuals who complete, sign and return the consent form or who otherwise affirmatively contact Plaintiffs or Plaintiffs' counsel with regard to the litigation.
Stipulation ¶ 7.
The stipulation also provides that "[d]uring the opt-in period, Defendant and its counsel may not discourage potential opt-in plaintiffs from participating in the lawsuit or initiate communications with the potential opt-in plaintiffs regarding the litigation." Stipulation ¶ 5. The opt-in period is defined as "the period of time between the date the notice and consent form is first mailed pursuant to Paragraph 3 and the date that is sixty (60) days thereafter." Stipulation ¶ 2. The plaintiffs mailed the notice and consent forms on May 21, 2014. See Dkt. No. 55, Plaintiffs' Motion to Shorten Time ¶ 6. Accordingly, the opt-in period ran from May 21, 2014 until 60 days later, July 20, 2014.
On May 15, 2014, six days before the opt-in period commenced, McKinley sent an email to PPG's Business Development Representatives -the potential plaintiffs-stating:
From: McKinley, Catherine
Sent: Thursday, May 15, 2014, ...