United States District Court, N.D. California
ORDER GRANTING MOTION FOR CONDITIONAL CERTIFICATION OF COLLECTIVE ACTION AND APPROVING ISSUANCE OF NOTICE RE: ECF NO. 45
JON S. TIGAR, District Judge.
Plaintiff Michael Deatrick moves to conditionally certify a collective action pursuant to the Fair Labor Standards Act ("FLSA"). Defendant Securitas Services USA, Inc. ("Securitas") opposes the motion. After considering the moving papers, the arguments of the parties at the hearing held on September 18, 2014, and good cause appearing, the Court will grant the motion and approve issuance of notice to potential class members.
A. The Parties and Claims
Plaintiff Michael Deatrick is a former employee of Defendant Securitas, a national provider of security services. ECF No. 42. Deatrick alleges that Securitas failed to pay him and other security guards the full overtime compensation they were owed because Securitas does not take into account in its overtime calculations the payments that security guards receive in connection with Securitas's "Vacation Pay Plan" ("the Plan"). Id . Deatrick alleges that Securitas improperly treated these payments as vacation payments under the FLSA, even though such payments were, in practice, retention or productivity bonuses. Id.
Deatrick filed the present action on October 28, 2013, seeking to represent a nationwide collective of security guards employed by Securitas under the FLSA as well as current and former California employees in a traditional class action. ECF No. 1. In the currently operative Second Amended Complaint, ECF No. 42, Deatrick asserts a claim under the FLSA for failure to pay overtime wages against Securitas on his own behalf and on behalf of a putative class of Securitas employees who were subject to the Plan. Additionally, Deatrick asserts the following claims under California law on his own behalf and on behalf of two putative classes of Securitas employees who were employed by Securitas in California: (1) a claim for failure to pay overtime wages in violation of California Labor Code sections 510 and 1198; (2) a claim for inaccurate wage statements in violation of California Labor Code sections 226 and 1174; (3) a claim for waiting time penalties under California Labor Code section 203 for failure to pay the wages owed upon termination; (4) a claim under California's Unfair Competition Law; and (5) a claim under California's Private Attorneys General Act.
Securitas employs around 70, 000 to 72, 000 security guards throughout the United States. ECF No. 45-5. Approximately 60, 000 are employed full-time. Id . While employed by Securitas as a security guard, Plaintiff received "vacation pay" through the Securitas USA Vacation Pay Plan, which applies to "Contract Services Employees" in California, Colorado, Illinois, Maine, Massachusetts and Nebraska. ECF Nos. 45-6, 45-4. The "Contract Service Employee" category encompasses security guards with a variety of titles. ECF Nos. 42, 43. Under the Plan, eligible Contract Services Employees do not receive pay while on vacation. ECF Nos. 45-4, 31-2 Ex. T, U, V. Instead, annual payments are calculated using a non-discretionary formula based on (1) the employee's years of service; (2) the number of hours worked in the immediately preceding year; and (3) the employee's most frequent rate of pay during that year. ECF Nos. 45-4, 31-2 Ex. T, U, V. A Contract Services Employee must work a minimum of 1560 hours in the preceding year to receive a payment. ECF No. 45-4. The annual payment is forfeited if a Contract Services Employee leaves Securitas for any reason before his employment anniversary. ECF Nos. 45-4, 31-2 Ex. T, U, V. These terms may vary depending on the existence of a client contract or collective bargaining agreement. ECF No. 45-4.
In its order denying Defendant's motion for summary judgment, the Court concluded that "based on their substance, the payments at issue are non-discretionary bonuses, which must be factored into the regular rate calculation." ECF No. 38. In its pleadings, Securitas has stated that it does not include this "vacation pay" in the regular rates of its employees when calculating overtime pay. ECF No. 43.
In states other than California, Colorado, Illinois, Maine, Massachusetts and Nebraska, Contract Services Employees receive payments under a Vacation Pay Policy ("the Policy") that, although it is funded differently, operates in the same way as the Plan. ECF Nos. 45-3, 45-4, 45-5.
The Court has jurisdiction over this FLSA collective action under 28 U.S.C. § 1331.
II. LEGAL STANDARD
The Fair Labor Standards Act provides that actions against employers for violation of its overtime requirements may be brought "in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated." 29 U.S.C. § 216(b). "Under [the] FLSA, a potential plaintiff does not benefit from (and is not bound by) a judgment unless he or she affirmatively opts in to the lawsuit. This rule is in contrast to a typical Rule 23 class action, where a potential plaintiff must opt out to be excluded from the class." Busk v. Integrity Staffing Solutions, Inc. , 713 F.3d 525, 528 (9th Cir. -) (internal citations and quotation marks omitted).
Collective actions allow aggrieved employees "the advantage of lower individual costs to vindicate rights by the pooling of resources." Hoffman-LaRoche Inc. v. Sperling , 493 U.S. 165, 170 (1989) (discussing collective action provision, 29 U.S.C. § 216(b), in the context of Age Discrimination in Employment Act claims). The judicial system also benefits from "the efficient resolution in one proceeding of common issues of law and fact arising from the same" unlawful activity. Id . These benefits "depend on employees receiving accurate and timely notice concerning the pendency of the collective action, so that they can make informed decisions about whether to participate." Id . See also McElmurry v. U.S. Bank N.A. , 495 F.3d 1136, 1139 (9th Cir. 2007). Courts have authority to manage this process to ensure that employees receive notice in an "orderly, sensible" manner. Hoffmann-LaRoche v. Sperling , 493 U.S. 165, 170 (1989).
Certification requires a showing that the potential class members are "similarly situated." Lewis v. Wells Fargo & Co. , 669 F.Supp.2d 1124, 1127 (N.D. Cal. 2009) (citation omitted). A majority of courts, including district courts in this circuit, follow a two-step process for determining whether a class is "similarly situated." See Harris ...