United States District Court, D. South Carolina, Florence Division
Richard Reynolds, Sharon Linick, Linda Neely, Joseph Schubert, Doreen Mastandrea, Jonathan Anderson, Steven Bradley, Gerry Conklin, Jennifer Crawford, Daniel Delpriora, John Maynard, April Mclean, Mike Smith, William Suitt, Donna Weinberg, Larry Marshall, Michelle Johnson, and Edmundo Velasco, individually and on behalf of other employees similarly situated, Plaintiffs,
Wyndham Vacation Resorts, Inc., and Wyndham Vacation Ownership, Inc., Defendants.
PATRICK MICHAEL DUFFY, District Judge.
This matter is before the Court on cross-motions for partial summary judgment (ECF Nos. 96 & 97), Plaintiffs' Motion in Limine (ECF No. 99), and Plaintiffs' Motion for Equitable Tolling (ECF No. 113). For the reasons set forth herein, each motion is granted in part and denied in part.
On June 10, 2014, Plaintiffs commenced this action on behalf of themselves and others similarly situated, seeking unpaid minimum wages and unpaid overtime wages pursuant to the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq. The named Plaintiffs, as well as those who have subsequently given notice of their consent to join this action, are current or former sales representatives of Wyndham Vacation Resorts, Inc. Plaintiffs seek recovery from Wyndham Vacation Resorts, Inc. and Wyndham Vacation Ownership, Inc. (collectively, "Defendants").
The parties filed their respective motions for summary judgment on September 3, 2015, their responses in opposition on September 30, and their replies on October 13. Plaintiffs filed their Motion in Limine on September 10 and Defendants responded on September 28. Plaintiffs did not file a reply. Finally, Plaintiffs filed their Motion for Equitable Tolling on October 2. Defendants filed their Response in Opposition on October 26, and Plaintiff did not file a reply. Accordingly, these matters are now ripe for consideration.
Plaintiffs' Motion for Equitable Tolling
"Equitable tolling is available when 1) the plaintiffs were prevented from asserting their claims by some kind of wrongful conduct on the part of the defendant, or 2) extraordinary circumstances beyond plaintiffs' control made it impossible to file the claims on time." Cruz v. Maypa, 773 F.3d 138, 146 (4th Cir. 2014) (quoting Harris v. Hutchinson, 209 F.3d 325, 330 (4th Cir. 2000) (internal quotation marks omitted)). "Equitable tolling is a rare remedy availably only where the plaintiff has exercise[d] due diligence in preserving [his] legal rights.'" Id. at 145-46 (quoting Chao v. Va. Dep't of Transp., 291 F.3d 276, 283 (4th Cir. 2002)). "In the interests of justice, courts have allowed equitable tolling of FLSA claims where conditional certification and notice to the prospective plaintiffs has been delayed due to the procedural posture of the case." Lorenzo v. Prime Commc'ns, L.P., No. 5:12-CV-69-H, 2014 WL 3366073, at *2 (E.D. N.C. July 9, 2014) (collecting cases).
At the outset, the Court does not find that Defendants have engaged in any sort of wrongful conduct that prevented any plaintiff from asserting his or her claim. Accordingly, the Court's decision turns on whether Plaintiffs have been prevented from timely filing their claims by circumstances beyond their control. Plaintiffs request that the court toll the statute of limitations from July 2, 2015, or, in the alternative, from the date they filed their consent forms. Plaintiffs assert they were not required to file consent forms because they were proceeding in their individual capacities. Additionally, they claim that if they were required to file consent forms, their verified answers to interrogatories and their signed declarations could act as substitutes for filed consent forms. Finally, Plaintiffs appear to assert that they were prejudiced by the Court's delay in ruling on their Motion for Conditional Certification and in authorizing notice to the class.
Conversely, Defendants assert Plaintiffs must file a consent form to toll the statute of limitations. The Court agrees. The Fourth Circuit has held that a plaintiff proceeding in his individual and representative capacity must file a consent form with the court. See Lee v. Vance Exec. Prot., Inc., 7 F.Appx. 160, 166-67 (4th Cir. 2001) (per curiam) ("For plaintiffs not named in the original complaint, a collective action under the FLSA commences on the subsequent date on which [the plaintiffs'] written consent is filed in the court.'" (quoting 29 U.S.C. § 256(b))); see also In re Food Lion, Inc., 151 F.3d 1029 (4th Cir. 1998) (table) ("The filing of a collective action under 29 U.S.C. § 216(b), however, renders consents necessary... [where claims] were brought on behalf of the named individuals and others similarly situated."). Here, it is abundantly clear that Plaintiffs intended to file this action as a collective action against Defendants. Plaintiffs' original complaint explicitly states it is a "PLAINTIFF'S ORIGINAL COLLECTIVE ACTION COMPLAINT." (Pls.' Compl., ECF No. 1, at 1.) Thus, in order to toll the statute of limitations, Plaintiffs were required to file their consent forms with the Court. Accordingly, Plaintiffs' argument that they were not required to file consent forms fails.
Next, Plaintiffs argue that their verified answers to interrogatories and signed declarations could act as substitute consents. The FLSA provides that "[n]o employee shall be a party plaintiff to any such 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). "Courts have repeatedly interpreted Section 256 [of the FLSA] as requiring all plaintiffs in an FLSA collective action, whether named or unnamed, to file written consents to toll the statute of limitations." Faust v. Comcast Cable Commc'ns Mgmt., No. WMN-10-2336, 2013 WL 5587291, at *3 (D. Md. Oct. 16, 2014). However, the requirements for a written consent are not specified by the FLSA.
"While it is clear that some document in addition to the complaint must be filed, it is not clear what form the written consent must take, especially when the alleged party plaintiff is a named plaintiff." D'Antuono v. C & G of Groton, Inc., No. 3:11cv33 (MRK), 2012 WL 1188197, at *2 (D. Conn. Apr. 9, 2012). Courts have generally shown "considerable flexibility" with respect to the form of consent, Manning v. Gold Belt Falcon, LLC, 817 F.Supp.2d 451, 454 (D.N.J. 2011), requiring only that "the signed document verif[y] the complaint, indicate[ ] a desire to have legal action taken to protect the party's rights, or state[ ] a desire to become a party plaintiff." Perkins v. S. New England Tel. Co., No. 3:07-cv-967, 2009 WL 3754097, at *3 n.2 (D. Conn. Nov. 4, 2009).
Butler v. DirectSAT USA, LLC, 55 F.Supp. 3d 793, 800 (D. Md. 2014). As in this case, the plaintiffs in Faust failed to file written consent forms. Id. at 3. However, the court in Faust allowed signed interrogatories and other documents to meet the consent requirement of the FLSA on the date those documents were filed. Id. at *18-19. Similarly, in Butler, the court permitted signed interrogatory answers and a signed declaration to constitute written consent. 55 F.Supp. 3d at 800.
Defendants object to Plaintiffs' attempt to use answers to interrogatories as a written consent because the interrogatories were signed by Plaintiffs' counsel using an "s/" signature and not signed and verified by Plaintiffs. The Court agrees. Although several of the interrogatories filed as exhibits by Plaintiffs contain a statement that the Plaintiff provided the answers to the interrogatories, none of those exhibits contain Plaintiffs' signatures. Accordingly, Plaintiffs' answers to interrogatories cannot be used in lieu of signed consent forms.
Defendants also object to Plaintiffs' use of their signed declarations because they do not contain a statement indicating Plaintiffs' consent. In determining whether a document manifests consent, the court in Faust asked "whether Plaintiffs' signed declarations and answers to interrogatories demonstrate a clear intention to join the collective action." 2013 WL 5587291, at *5. Additionally, the court in Butler stated that signed interrogatory answers and signed declarations were sufficient consents where those "documents refer[red] to the facts underlying the litigation and express[ed] [Plaintiffs'] view[s] that the alleged practices applied to all [employees]." 55 F.Supp. 3d at 800. Here, each signed declaration contains a description of that Plaintiff's job duties, a description of Defendants' business practices, and a list of other employees who were subject to those same business practices. ( See Pls.' Decls., ECF Nos. 113-1-113-13.) As a result, Plaintiffs' signed declarations meet the requirements delineated by the Court in Butler. While Plaintiffs do not explicitly state that they consent to join the present suit, their declarations demonstrate their desire to join. Accordingly, Plaintiff's Motion is granted in part, tolling the statute of limitations to the date on which Plaintiffs' declarations were first filed, July 27, 2015.
Having determined that Plaintiffs' signed declarations were sufficient to demonstrate Plaintiffs' clear intention to join the collective action, thereby tolling the statute of limitations, the Court need not consider whether equitable tolling should be granted in favor of the moving Plaintiffs.
Cross-motions for Summary Judgment
To grant a motion for summary judgment, a court must find that "there is no genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). The judge is not to weigh the evidence but rather must determine if there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). All evidence should be viewed in the light most favorable to the nonmoving party. Perini Corp. v. Perini Constr., Inc., 915 F.2d 121, 124 (4th Cir. 1990). "[I]t is ultimately the nonmovant's burden to persuade [the court] that there is indeed a dispute of material fact. It must provide more than a scintilla of evidence-and not merely conclusory allegations or speculation-upon which a jury could properly find in its favor." CoreTel Va., LLC v. Verizon Va., LLC, 752 F.3d 364, 370 (4th Cir. 2014) (citations omitted). "[W]here the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, disposition by summary judgment is appropriate." Teamsters Joint Council No. 83 v. Centra, Inc., 947 F.2d 115, 119 (4th Cir. 1991). Summary judgment is not "a disfavored procedural shortcut, " but an important mechanism for weeding out "claims and defenses [that] have no factual basis." Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986).
When opposing parties file motions for summary judgment, the trial court applies the same standard of review to both motions. See Northfield Ins. Co. v. Boxley, 215 F.Supp.2d 656, 657 (D. Md. 2002). "The role of the court is to rule on each party's motion on an individual and separate basis, determining, in each case, whether a judgment may be entered in accordance with the Rule 56 standard.'" Id. at 658 (quoting Towne Mgmt. Corp. v. Hartford Acc. & Indem. Co., 627 F.Supp. 170, 172 (D. Md. 1985)); see also Mingus Constructors, Inc. v. United States, 812 F.2d 1387, 1391 (Fed. Cir. 1987) ("[T]he court must evaluate each party's motion on its own merits, taking care in each instance to draw all reasonable inferences against the party whose motion is under consideration."). The mere fact that both parties seek summary judgment "does not establish that there is no issue of fact and require that summary judgment be granted to one side or another.'" World-Wide Rights Ltd. P'ship v. Combe Inc., 955 F.2d 242, 244 (4th Cir. 1992) (quoting Am. Fid. & Cas. Co. v. London & Edinburgh Ins. Co., 354 F.2d 214 (4th Cir. 1965)); see also ITCO Corp. v. Michelin Tire Corp., 722 F.2d 42, 45 n.3 (4th Cir. 1983) ("The court is not permitted to resolve genuine issues of material facts on a motion for summary judgment-even where... both parties have filed cross motions for summary judgment."); Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983) ("[C]ross-motions for summary judgment do not automatically empower the court to dispense with the determination whether questions of material fact exist."). Nevertheless, dueling motions for summary judgment "may be probative of the nonexistence of a factual dispute, " because "when both parties proceed on the same legal theory and rely on the same material facts the court is signaled that the case is ripe for summary judgment." Shook v. United States, 713 F.2d 662, 665 (11th Cir. 1983) (citing Bricklayers, Masons & Plasterers Int'l Union v. Stuart Plastering Co., 512 F.2d 1017, 1023 (5th Cir. 1975)); see also Nafco Oil & Gas, Inc. v. Appleman, 380 F.2d 323, 325 (10th Cir. 1967) ("[B]y the filing of a [summary judgment] motion a party concedes that no issue of fact exists under the theory he is advancing, but he does not thereby so concede that no issues remain in the event his adversary's theory is adopted.").
Plaintiffs and Defendants have each moved for summary judgment on various grounds. Plaintiffs assert they are entitled to summary judgment as to Defendants' affirmative defenses of (1) false and inaccurate time reports, (2) mitigation of damages, (3) unclean hands, laches, waiver, and estoppel, (4) breach of fiduciary duty, and (5) good faith pursuant to 29 U.S.C. §§ 216 and 260. Defendants assert they are entitled to summary judgment on the grounds of (1) statute of limitations, (2) judicial estoppel, (3) lack of a willful violation of the FLSA, (4) exempt sales representatives pursuant to 29 U.S.C. § 207(i), and (5) Plaintiffs' admissions of no overtime or minimum wage claims during certain weeks. However, because Defendants' liability is still an open question, the Court declines to reach and decide either Plaintiffs' Motion or Defendants' Motion as it relates to a willful violation and the associated three-year statute of limitations. See Regan v. City of Charleston, ___ F.Supp. 3d ___, 2015 WL 5331627, at *13 (D.S.C. Sept. 14, 2015) (declining to reach defendant's arguments as to willfulness and the § 260 affirmative defense where liability had not yet been determined); Switzer v. Wachovia Corp., No. CIV. A. H-11-1604, 2012 WL 3685978, at *5 (S.D. Tex. Aug. 24, 2012) ("Absent a violation of the FLSA, there can be no willful violation."). Accordingly, the Court denies Plaintiffs' and Defendants' motions as they pertain to willfulness and the associated three-year statute of limitations because they are premature. In light of the foregoing, the Court will first address Defendants' remaining grounds for summary judgment.
Defendants assert "Plaintiffs' claims should be dismissed to the extent they are barred by the applicable statute of limitations." (Defs.' Mot. Summ. J., ECF No. 96, at 1.) The Court agrees in part. Defendants argue the Plaintiffs' claims are subject to a two-year statute of limitations because the alleged violations of the FLSA were not willful. As discussed above, the Court declines to grant summary judgment on that ground at this time. Additionally, Plaintiffs have moved to toll the statute of limitations. As also discussed above, the Court grants Plaintiffs' Motion for Equitable Tolling in part and tolls the statute of limitations for the moving Plaintiffs from July 27, 2015, when their signed declarations were first filed. However, certain plaintiffs are time-barred even under a three-year statute of limitations dating back from July 27, 2015, including Plaintiffs Reynolds, Neely, Linick, Mastandrea, and Schubert. Because those Plaintiffs failed to either file a consent form or their written declaration within three years of their latest date of employment with Defendants, they are barred from any recovery. Accordingly, Defendants are entitled to summary judgment as to those Plaintiffs' claims.
Second, Defendants assert "[their] sales representatives are exempt from the FLSA pursuant to the exemption for commissioned employees of retail or service establishments pursuant to 29 U.S.C. § 207(i) of the FLSA (Section 7(i)')." (Defs.' Mot. Summ. J., ECF No. 96, at 2.) The Court disagrees. To qualify for the § 7(i) exemption, Defendants must prove the following:
1. The employee must be employed by a retail or service establishment;
2. The employee's regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which the overtime hours are worked; and
3. More than half the employee's total compensation in a representative period (not less than one month) must consist of commissions on goods or services.
Williams v. Trendwest Resorts, Inc., No. 2:05-CV-0605-RCF-LRL, 2007 WL 2429149, at *6 (D. Nev. Aug. 20, 2007) (citing 29 U.S.C. § 207(i)). "No statutory definition of retail or service establishment' currently exists." Davidson v. Orange Lake Country Club, Inc., No. 6:06-cv-1674-Orl-19KRS, 2008 WL 254136, at *5 (M.D. Fla. Jan. 29, 2008). However, courts ordinarily apply the since-repealed definition of "retail and service establishment" formerly contained in § 13(a)(2) of the FLSA. Id.; see also Reich v. Delcorp, Inc., 3 F.3d 1181, 1183 (8th Cir. 1993); Reich v. Cruises Only, Inc., No. 6:95-cv-660-Orl-19, 1997 WL 1507504, at *2 (M.D. Fla. June 5, 1997). "Section 13(a)(2) defined a retail or service establishment as: (1) an establishment 75 per centum of whose annual dollar volume of sales of goods or services (or both) is not for resale and (2) is recognized as retail sales or services in the particular industry." Id. (citing 29 U.S.C. § 213(a)(2) (repealed 1990)).
Typically a retail or service establishment is one which sells goods or services to the general public. It serves the everyday needs of the community in which it is located. The retail or service establishment performs a function in the business organization of the Nation which is at the very end of the stream of distribution, disposing in small quantities of the products and skills of such organization and does not take part in the manufacturing process.
29 C.F.R. § 779.318. The "determination of whether Defendant[s'] business is a retail or service establishment is a matter of statutory construction and is thus a question of law to be determined by the Court." Selz v. Investools, Inc., No. 2:09-CV-1042 TS, 2011 WL 285801, at *3 (D. Utah Jan. 27, 2011) (citing Schoenhals v. Cockrum, 647 F.2d 1080, 1081 (10th Cir. 1981)). Federal regulations interpreting § 13(a)(2) also contain "a partial list of establishments to which the retail concept does not apply, ' and this list includes real estate companies' and apartment houses.'" Davidson, 2008 WL 254136, at *5 (quoting 29 C.F.R. § 779.317).
There are only two cases that have addressed the applicability of the § 7(i) exemption in the timeshare context. Those cases, Williams and Davidson, both held that an establishment selling timeshares was not a retail or service establishment for purposes of the § 7(i) exemption. Although both district courts are in other circuits, this Court sees no reason to depart from their holdings. The key inquiry here is whether Defendants' business has a retail concept. In their Motion, Defendants frame their timeshare products as vacation packages rather than real estate interests in an effort to distinguish their business from a real estate company. Defendants emphasize that "[p]urchasers of [their] products do not purchase a partial interest in a specific condominium unit. Rather, purchasers acquire a level of points, which they can then use to make travel arrangements among many of the resort accommodations offered by [Defendants]." (Defs.' Mot. Summ. J., Ex. 3, ECF No. 96-6, at ¶5.) Nonetheless, these points "are renewed annually for life" and, like real property, "are transferable by sale, gift, inheritance or through a marital dissolution." ( Id. at ¶¶5, 6.) Finally, Defendants' assertion that purchasers may use their points for hotels, airfares, or cruises is applicable only if purchasers opt into Defendants' optional "Plus Partners" program. ( See id. at ¶7.) The Court is not persuaded that this optional program changes the interest held by the purchasers into something less like real property. Thus, the Court concludes that in spite of Defendants' assertions, they are not a retail or service establishment. Plaintiffs have presented Defendants' timeshare contract, which states in part:
Owner... is entitled: (a) to use Points to reserve the use of accommodations in the Club ("club Accommodations"), (b) to vote for directors of the Association, (c) to vote on major decisions of the Association, and (d) through the Club and the Association, to participate in the ownership of the assets of the Association.
(Pls.'s Resp. Opp'n Defs.' Mot. Summ. J., Ex. C, ECF No. 106, at 2.) After reviewing the contract, the Court finds that Defendants are selling far more than a hotel room. While purchasers of Defendants' timeshare units may not own a partial interest in a specific condominium unit, they have a far greater ownership interest than does a person who rents a hotel room for a night. Defendants' attempts to differentiate themselves from a real estate company are unavailing. The Court ...