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FLSA Collective Action Discovery Strategies

Discovery Tactics Before and After Conditional Certification of the Opt‐In Class

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1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific WEDNES DAY, JANUARY 19, 2011

Today’s faculty features: William C. Martucci, Partner, Shook Hardy & Bacon, Washington, D.C.

Kristen A. Page, Partner, Shook, Hardy & Bacon, Kansas City, Missouri

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Jenny R. Y ang, Partner, Cohen Milstein Sellers & Toll, Washington, D.C.

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FLSA Collective Action Di St t i Discovery Strategies

Discovery Tactics Before and After Conditional Certification of the Opt-In Class

Wednesday, January 19, 2011

William C. Martucci, Partner, Shook, Hardy & Bacon, Washington, D.C. Kristen A. Page, Partner, Shook, Hardy & Bacon, Kansas City, Missouri Jenny R. Yang, Partner, Cohen Milstein Sellers & Toll, Washington, D.C.

4 Shook, Hardy & Bacon

Contact Information

Willi C M t i William C. Martucci Shook, Hardy & Bacon 816-474-6550, 202-783-8400 wmartucci@shb com wmartucci@shb.com Kristen A. Page Shook, Hardy & Bacon , y 816-559-2511 kpage@shb.com Jenny R. Yang Cohen Milstein Sellers & Toll 202-408-4600

5 Shook, Hardy & Bacon

jyang@cohenmilstein.com

Program Overview

Outline Outline

 Introduction – The FLSA “Wage War” Litigation Environment and Procedural Issues  The FLSA Collective Action Discovery Foundation  The FLSA Collective Action Discovery Foundation  Focused Considerations in FLSA Collective Action Discovery  Discovery Challenges and Resolving Disputes  Special Discovery Issues for Consideration  Selected Trial Issues in FLSA Actions  Wrap Up and Questions

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The FLSA Litigation Environment

Outline Outline

Introduction – The FLSA “Wage War” Litigation Environment and Procedural Issues

• The Wage War Litigation Setting
• Procedural Issues That May Impact Discovery Scope
• Procedural Issues That May Impact Discovery Scope

– Jurisdiction, Removal and Statutes of Limitation

• Foundation for the Discovery Discussion

Foundation for the Discovery Discussion – Basic FLSA Case Sequence and Two-Tier Framework – Overview of Notice, Opt-In and Decertification Steps

7 Shook, Hardy & Bacon

, p p

The Age of “Wage Wars”

• Workers

from truck drivers to stockbrokers are

• Workers – from truck drivers to stockbrokers – are

winning huge overtime lawsuits.

• These are the days of “the wage wars,” according to

Business Week.

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Significant Issues – High Stakes

No one tracks precise figures, but lawyers on both sides estimate that over the No one tracks precise figures, but lawyers on both sides estimate that over the last few years companies have collectively paid out more than $1 billion annually to resolve these claims, which are usually brought on behalf of large groups of employees. What’s more, companies can get hit again with suits on behalf of different groups of workers or for alleged violations of different i i f l t t f l F d th ll f Att provisions of a complex tapestry of laws. Framed on the wall of Attorney Thierman’s office, for example, is a copy of a check from a case he settled for $18 million in 2003 on behalf of Starbucks store managers in California. (Thierman is a former corporate defense counsel.) But the coffee chain is currently defending overtime lawsuits filed by other attorneys in Florida and currently defending overtime lawsuits, filed by other attorneys, in Florida and

• Texas. Wal-Mart Stores is swamped with about 80 wage and hour suits, and in

the past two years has seen juries award $172 million to workers in California and $78.5 million in Pennsylvania.

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A Dramatic Rise in Complaints

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The Wage Wars and the “New Deal” Foundation Foundation

• The core wage and hour law the federal Fair Labor
• The core wage and hour law, the federal Fair Labor

Standards Act (FLSA), has been on the books since 1938. Th N D l t t t hi h d t d th t b d

• The New Deal statute, which mandated that a broad

swath of the workforce receive 90 minutes’ pay for every hour worked beyond 40 in a week, had two goals.

• One was to reward laborers who put in long hours.
• Another was to expand employment by making it

cheaper for companies to hire additional workers than cheaper for companies to hire additional workers than pay existing ones time and a half.

• This New Deal law is the foundation for the wage and

hour explosion

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hour explosion.

Foundational Procedural Issues – FLSA Jurisdiction FLSA Jurisdiction

• The FLSA authorizes court actions by employers and the Secretary
• The FLSA authorizes court actions by employers and the Secretary
• f the Department of Labor to recover damages for violation of the

Act’s Minimum Wage and Overtime provisions and to enforce the prohibition against retaliation. 29 U.S.C. § 216(b) and (c). prohibition against retaliation. 29 U.S.C. § 216(b) and (c).

• Federal and state courts thus have concurrent jurisdiction over

FLSA claims. See generally Forsyth v. Central Foundry Co., 240 Ala 277 1 WH Cases 1039 (Ala 1940) Federal courts have

• Ala. 277, 1 WH Cases 1039 (Ala. 1940). Federal courts have

federal question jurisdiction over suits brought under the FLSA. 28 U.S.C. § 1331.

• A federal court that hears an FLSA claim may exercise

supplemental jurisdiction over a related state claim. See 28 U.S.C. § 1367.

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Foundational Procedural Issues – Removal of FLSA Claims Removal of FLSA Claims

• Defendants may remove cases alleging FLSA claims to
• Defendants may remove cases alleging FLSA claims to

federal court as a matter of right. 28 U.S.C. § 1441(a); Breuer

• v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691 (2003).

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Foundational Procedural Issues – Statutes of Limitation as They May I t Di S Impact Discovery Scope

• The FLSA provides a period of two years “after the cause of action accrued”
• The FLSA provides a period of two years after the cause of action accrued

in which to file a complaint for unpaid wages, overtime, or liquidated damages in federal or state court, 29 U.S.C. §255(a). The FLSA limitations period is extended to three years after such causes of action accrue for period is extended to three years after such causes of action accrue for violations that are “willful.” 29 U.S.C. §255(a). The plaintiff carries the burden of pleading and proving that a violation is willful.

• The FLSA’s statute of limitations does not preempt state limitations periods

for state wage and hour violations (in some instances, they may be longer).

• Failure to plead the FLSA’s statute of limitations as a defense will result in

waiver of the defense. Hodgson v. Humphries, 454 F.2d 1279, 1283-84, 20 WH Cases 444 (10th Cir. 1972) (holding statute of limitations waived if not

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( ) ( g asserted in pleading).

Statutes of Limitation and the Willfulness Issue Willfulness Issue

• In McLaughlin v Richland Shoe Co

486 U S 128 28 WH Cases

• In McLaughlin v. Richland Shoe Co., 486 U.S. 128, 28 WH Cases

1017 (1988), the Supreme Court held that the standard of willfulness used in awarding liquidated damages under the Age Discrimination in Employment Act (ADEA) also applies in determining whether in Employment Act (ADEA) also applies in determining whether violations of the FLSA are “willful,” so as to extend the statute of limitations period to three years.

• Under Richland Shoe, a violation is willful if the defendant either

knew his or her conduct violated the FLSA or showed reckless disregard for whether his or her actions complied with the Act. g p

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Commencement of the Action and Timing Considerations Timing Considerations

• Section

7

• f

the Portal to Portal Act distinguishes between

• Section

7

• f

the Portal-to-Portal Act distinguishes between “individual” actions and “collective” (i.e., representative) or “class” actions for purposes of determining the date that an action has

• commenced. Section 7 states in relevant part:
• commenced. Section 7 states in relevant part:

– “In determining when an action is commenced for the purposes of [S]ection 6 [29 U.S.C. §255], an action…under the Fair Labor Standards [S]ection 6 [29 U.S.C. §255], an action…under the Fair Labor Standards Act…shall be considered to be commenced on the date when the complaint is filed; except that in the case of a collective or class action instituted under the…Act…, it shall be considered to be commenced in the case of any individual claimant–

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Commencement of the Action and Timing Considerations, Cont. Timing Considerations, Cont.

• (a) On the date when the complaint is filed

if he is

• (a) On the date when the complaint is filed, if he is

specifically named as a party plaintiff in the complaint and his written consent to become a party plaintiff is filed on such date in the court in which the action is brought; or date in the court in which the action is brought; or

• (b) If such written consent was not so filed or if his name did

not so appear – on the subsequent date on which such not so appear

• n the subsequent date on which such

written consent is filed in the court in which the action was commenced.

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Commencement of the Action and Timing Considerations, Cont. Timing Considerations, Cont.

• A representative or collective action is not commenced as to each
• A representative or collective action is not commenced as to each

individual claimant, however, until the date that his or her individual consent is filed in court, if it was not so filed when the complaint was

• filed. 29 C.F.R. §790.21(b).
• filed. 29 C.F.R. §790.21(b).
• Under the regulations, an individual action commences when the

individual files the complaint regardless of whether a consent form individual files the complaint, regardless of whether a consent form has been filed; however, in a representative action, the action is not deemed to commence for any individual until his or her written consent to be a party has been filed in court. p y

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FLSA Litigation – Typical Case Sequence Sequence

• 1. Filing.
• 2. Preliminary, limited discovery.

y, y

• 3. Early motion for conditional certification.
• 4. If conditionally certified, broadened discovery.

5 Potential motion to decertify

• 5. Potential motion to decertify.
• 6. Resolution – dismissal, settlement or trial.

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Common FLSA “Tw o Tier” Framew ork Framew ork

Most courts apply a “two-tier” framework: Most courts apply a two-tier framework: – “Notice” phase, typically early in case to facilitate class- wide discovery. – “Decertification” phase, typically after full discovery and close to trial. Lusardi v Xerox Corp 122 F R D 463 (D N J 1988); see also Lusardi v. Xerox Corp., 122 F.R.D. 463 (D.N.J. 1988); see also Hoffmann-La Roche v. Sperling, 493 U.S. 165, 170 (1989).

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Step 1: The “Notice” Phase

• The issue during the early “notice” phase is whether to notify other potential
• The issue during the early notice phase is whether to notify other potential
• pt-in plaintiffs that the case is pending.
• If granted, certification during this phase is conditional. It is revisited during

the decertification phase following the opt-in process and discovery the decertification phase, following the opt-in process and discovery.

• The focus at the “notice” stage is on whether sufficient evidence exists to

suggest that the named plaintiffs and putative class members are similarly it t d t th i l ti ll d E L D i ’ Pi LLC situated as to the violation alleged. E.g., Laroque v. Domino’s Pizza, LLC, 557 F. Supp. 346, 352 (E.D.N.Y. 2008).

• The court determines whether plaintiffs have made the necessary “modest

factual showing” that they are similarly situated to absent class members.

• A lenient standard, but not automatic.

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What is “similarly situated?” – Understanding the Discovery Focus Understanding the Discovery Focus

“Similarly Situated” Similarly Situated

• An action under the FLSA may be maintained against any

employer…“in any Federal or State court of competent jurisdiction b l f d [ ] b h lf f hi lf by any one or more employees for and [on] behalf of himself or themselves and other employees similarly situated.” 29 U.S.C. § 216(b) (emphasis added).

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What is “similarly situated?” – Cont.

“Similarly Situated” Similarly Situated

• In the absence of statutory or regulatory guidance defining the term

“similarly situated,” various tests have developed to determine when ti b di t ib t d R l 23 “ lit ” i t i notice may be distributed. Rule 23 “commonality” requirement is more stringent than the “similarly situated” requirement of Rule 216(b).

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What is “similarly situated?” – Cont.

“Similarly Situated” Similarly Situated

• Key factors in assessing whether members of a collective action are

“similarly situated” typically include: – The employment and factual settings of plaintiffs; – Evidence of a company-wide policy; The various defenses available to defendants; and – The various defenses available to defendants; and – Considerations of fairness, procedure, and manageability. See, e.g., Kasten v. Saint-Gobain Performance Plastics Corp., 556 F. Supp. 2d , g , p , pp 941, 956 (W.D. Wisc. 2008); Kautsch v. Premier Comms, 2008 WL 294271, at *2 (W.D. Mo. 2008); Harper v. Lovett’s Buffet, Inc., 185 F.R.D. 358 (M.D. Ala. 1999) (failure to establish uniform corporate practice).

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Pre-Conditional Certification Fact Gathering Gathering

Pre-Discovery Efforts By Plaintiffs’ Counsel Pre-Discovery Efforts By Plaintiffs Counsel

• Factual Interviews
• Declarations

Declarations

• Key Policies
• Investigators

g

• Advertising
• Emails, Letters and Websites

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Pre-Conditional Certification Discovery of Contact Information f P t ti l O t I Pl i tiff for Potential Opt-Ins Plaintiffs

Early-Discovery Strategy Considerations Early-Discovery Strategy Considerations

• Some courts, in granting motions to compel the production of

names and addresses of class members prior to conditional tifi ti h t t d th d ti i t i t l i tiff certification, have stated the production is to assist plaintiffs in supporting their claims of class-wide FLSA violations and to identify individuals who may wish to join. See, e.g., Baldozier v American Family Mut Ins Co 375 F Supp 2d Baldozier v. American Family Mut. Ins. Co., 375 F. Supp. 2d 1089, 1091-93 (D. Colo. 2005).

• Courts that have denied such discovery have held such

t t b t i t d i i h th requests to be premature prior to a decision on whether notice should be approved. See, e.g., Barton v. The Pantry, Inc., 2006 U.S. Dist. LEXIS 62989, at *4-6 (M.D. N.C. Aug. 31 2006)

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31, 2006).

Step 2: The “Decertification” Phase

• During the “decertification” phase a more stringent standard
• During the decertification phase, a more stringent standard

is applied.

• Courts analyze the full discovery presented in order to

y y p evaluate the: – Impact of factual and employment settings of opt-in plaintiffs plaintiffs. – Defenses available to defendants that are individual to the

• pt-in plaintiffs.

p p – Fairness and procedural considerations.

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In the Middle: The Opt-In Process

• If the action is conditionally certified notice is sent to potential
• If the action is conditionally certified, notice is sent to potential

class members.

• Eligible individuals must opt-in by filing consent forms with the

g p y g Court.

• Not an opt-out process like a Rule 23 class.
• Employees who do not opt-in cannot be bound by the result

and can pursue separate lawsuits.

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Background on Notice Contents

In general notices contain a description of some or all of the following: In general, notices contain a description of some or all of the following: 1. The purpose of the notice; 2. The nature of the lawsuit filed and the relief being sought; 3. The proposed class composition; 4. The legal effect of joining the lawsuit; 5 The fact that the court has not taken any position regarding the merits of the 5. The fact that the court has not taken any position regarding the merits of the lawsuit; 6. How to join the lawsuit; 7 Th l l t t f th d i i d th l l ff t f t j i i th 7. The purely voluntary nature of the decision and the legal effect of not joining the lawsuit; 8. The prohibition against retaliation;

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9. The relevant contact information for any inquiries.

Notice Contents, Cont.

• A blank consent form is then attached to the notice

Sample

• A blank consent form is then attached to the notice. Sample

notices can be found in cases where a copy of the court- approved notice is appended to the actual opinion.

• Courts require that the notice be drafted in neutral, clear, and
• bjective language. Ayers v. SGS Control Servs., Inc., 2004

WL 2978296, at *2 (S.D.N.Y. Dec. 21, 2004) (language , ( , ) ( g g should be “fair and balanced”).

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FLSA Discovery

Outline Outline

The FLSA Collective Action Discovery Foundation

• The Rule 26 Framework
• The Two-Stage Sequencing Approach

g q g pp

• Instructive Case Study Examples

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The Rule 26 Framew ork – Foundational for the General Scope Foundational for the General Scope

Rule 26 is the starting place and sets the general scope Rule 26 is the starting place and sets the general scope.

• “Unless otherwise limited by court order, the scope of discovery is as

follows: Parties may obtain discovery regarding any nonprivileged matter th t i l t t t ' l i d f i l di th i t that is relevant to any party's claim or defense — including the existence, description, nature, custody, condition, and location of any documents or

• ther tangible things and the identity and location of persons who know of

any discoverable matter For good cause the court may order discovery of any discoverable matter. For good cause, the court may order discovery of any matter relevant to the subject matter involved in the action. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence ” reasonably calculated to lead to the discovery of admissible evidence. F.R.C.P. 26(b)(1).

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Rule 26 Sets Parameters and a Framew ork for Limitations Framew ork for Limitations

Rule 26 sometimes provides protection Rule 26 sometimes provides protection…

• “A party or any person from whom discovery is sought may move for a

protective order in the court where the action is pending — or as an lt ti tt l ti t d iti i th t f th di t i t alternative on matters relating to a deposition, in the court for the district where the deposition will be taken. The motion must include a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action The affected parties in an effort to resolve the dispute without court action. The court may, for good cause, issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden….” F.R.C.P. 26(c)(1).

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The Essence of Rule 26 – Cooperation and Collaboration Cooperation and Collaboration

But significantly Rule 26 requires cooperation and But, significantly, Rule 26 requires cooperation and collaboration –

• “In conferring, the parties must consider the nature and basis of their claims

d d f d th ibiliti f tl ttli l i th and defenses and the possibilities for promptly settling or resolving the case; make or arrange for the disclosures required by Rule 26(a)(1); discuss any issues about preserving discoverable information; and develop a proposed discovery plan The attorneys of record and all unrepresented a proposed discovery plan. The attorneys of record and all unrepresented parties that have appeared in the case are jointly responsible for arranging the conference, for attempting in good faith to agree on the proposed discovery plan and for submitting to the court within 14 days after the discovery plan, and for submitting to the court within 14 days after the conference a written report outlining the plan.” F.R.C.P. 26(f)(2).

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Rule 26 Principles are the Foundation in FLSA Actions Foundation in FLSA Actions

Summary – Rule 26 Basics – Critical in FLSA Actions – Summary – Rule 26 Basics – Critical in FLSA Actions –

• General, broad scope.

General, broad scope.

• Potential for limitation and protection.
• Cooperation and collaboration required.

p q These principles are perhaps most meaningful in class and ll ti liti ti collective litigation.

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FLSA Discovery Contours Are Informed by the Tw o-Tier Case E l ti A h Evaluation Approach

The “certification” stage generally determines the The certification stage generally determines the scope of discovery in FLSA actions –

• Pre Conditional Certification – More Limited
• Post Conditional Certification – More Robust (But often

still quite limited in light of the “representative” context ) still quite limited in light of the representative context.)

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Foundational Concepts for Pre- Conditional Certification Discovery Conditional Certification Discovery

• Prior to conditional certification plaintiffs’ discovery focus is to
• Prior to conditional certification, plaintiffs discovery focus is to

make a threshold showing that they and members of the proposed collective action are “similarly situated.” Most courts require only a “modest factual showing.” courts require only a modest factual showing.

• Courts generally do not evaluate the merits of the claims or

make credibility determinations during the initial evaluation.

• Courts have observed that it makes sense for the FLSA

conditional certification standard to be less stringent than under FRCP 23 because the FLSA’s opt-in procedure id t it f t ti l l i tiff t j i b t d provides an opportunity for potential plaintiffs to join, but does not bind those who do not (unlike R. 23). See, e.g., Patton v. Thomson Corp., 364 F. Supp 2d 263, 267 (E.D.N.Y. 2005).

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Foundational Concepts, Cont.

• Determinations as to collective action conditional certification
• Determinations as to collective action conditional certification

are sometimes made based on detailed allegations in a complaint, as supported by sworn statements, and not through expansive discovery. through expansive discovery.

• Some courts require nothing more than sufficient allegations

in the complaint. See, e.g., Gayle v. United States, 85 Fed. Cl 72 (2008) (deeming plaintiff’s allegations sufficient to

• Cl. 72 (2008) (deeming plaintiff s allegations sufficient to

support granting conditional certification).

38 Shook, Hardy & Bacon

Foundational Concepts, Cont.

• Therefore the conditional certification decision may be made
• Therefore, the conditional certification decision may be made

prior to discovery being conducted at all.

• Some courts will, however, allow for some discovery to be

l t d i t d idi h th ti h ld b ll d completed prior to deciding whether notice should be allowed.

• Importantly, the amount of discovery that is actually taken

prior to filing a motion for conditional certification can, in some p g courts, affect the standard that the court will apply in deciding

• certification. See, e.g., Valcho v. Dallas Cnty. Hosp. Dist.,

574 F. Supp. 2d 618, 622 (N.D. Tex. 2008) (explaining that th f l i t t d d t i ll di the reasons for lenient standard typically disappear once discovery has been conducted).

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Pre-Conditional Certification Discovery – When It Is Allow ed Discovery When It Is Allow ed

• Courts that allow discovery prior to ruling on notice generally
• Courts that allow discovery prior to ruling on notice generally

do so in circumstances where plaintiffs have sought discovery they believe necessary to presenting their motion for conditional certification. conditional certification.

• Such discovery is generally described by courts as “limited.”
• Specifically, for example, courts have permitted discovery of

p y p p y matters such as prior litigation or administrative investigations

• f defendant’s wage and hour practices, job descriptions, and

similar information common to groups of employees.

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Pre-Conditional Certification Discovery – When It Is Not Allow ed Discovery When It Is Not Allow ed

• Courts that deny discovery sought by defendants generally do
• Courts that deny discovery sought by defendants generally do

so on the grounds that such discovery is inconsistent with the two-step process for certification of collective actions – reasoning that extended discovery: reasoning that extended discovery: – Inevitably leads defendants to argue for applying the more stringent second-stage standard; or – Causes unacceptable delay, given that the statute of limitations will continue to run until a decision is made.

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Pre-Conditional Certification Discovery – An Example When Not All d Allow ed

• An example case is Anderson v Perdue Farms 2007 WL
• An example case is Anderson v. Perdue Farms, 2007 WL

4554002 (M.D. Ala. Dec. 20, 2007).

• The Court granted plaintiffs’ motion to quash notices of

d iti d t di th t d f d t ht t deposition and stay discovery that defendant sought to respond to plaintiffs’ motion for notice.

• In making its decision, the Court reasoned that allowing

g g detailed discovery at the notice stage would effectively move the case to the more rigorous second-stage analysis, which would not be appropriate in light of guiding case law.

• Defendant was limited to submitting affidavits or other

evidence in its possession to oppose notice.

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Summary Observations on Discovery Prior to Certification Discovery Prior to Certification

• If pre-conditional certification discovery is requested by
• If pre-conditional certification discovery is requested by

a plaintiff, it is more likely to be granted.

• If pre-conditional certification discovery is requested by

d f d t it i lik l t b d i d a defendant, it is more likely to be denied.

• In any case, early pre-notice requests for discovery

should be narrowly tailored to enhance the likelihood of y being enforced by a court.

• On occasion, the parties agree to focused discovery

before the court notice is sent out and prior to a before the court notice is sent out and prior to a conditional certification decision.

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Foundational Concepts for Post- Conditional Certification Discovery Conditional Certification Discovery

• Discovery in the post-certification phase of FLSA cases will be

broadened – the parties will be looking ahead to the decertification stage, which involves a much more stringent standard as to the “similarly situated” question.

• At the decertification stage, courts will be looking to three factors:

– The disparity or similarity of the factual employment settings of the individual plaintiffs; settings of the individual plaintiffs; – The various defenses available to the defendant and whether those may be asserted collectively or individually as to each plaintiff; and – Fairness and procedural considerations. Therefore post certification disco er ill aim at these iss es

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• Therefore, post-certification discovery will aim at these issues.

Post-Conditional Certification Discovery – Contours Discovery Contours

• Generally more broadly allowed and more extensive
• Generally, more broadly allowed and more extensive.
• But, courts expect parties to work together to develop the

contours and scope.

• The case proceeds as a representative action, therefore,

representative sampling for discovery will be a part of the discussion – depending on the number of opt-ins. p g p

• If opt-ins number in the few hundred – individualized

discovery more likely. If greater, a representative approach and related collaboration on sampling nearly certain and related collaboration on sampling nearly certain.

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Discovery Limitations & Strategies

Outline Outline

Focused Considerations in FLSA Collective Action Discovery

• Pre-Discovery Preservation
• Collaborative Discovery Planning
• Timing and Sequencing of Discovery
• Bifurcation Considerations
• Effective Use of Discovery Tools

Electronic Disco er Matters

46 Shook, Hardy & Bacon

• Electronic Discovery Matters

Preservation Obligations

• Preservation obligations are important for plaintiffs and defendants
• Preservation obligations are important for plaintiffs and defendants.
• Consider likely sources of information and how best to

maintain/preserve.

• For employers, be mindful of obligation to issue internal “litigation

hold” once party “reasonably anticipates litigation.”

• Zubulake v UBS Warburg (Zubulake IV) 220 F R D 212
• Zubulake v. UBS Warburg (Zubulake IV), 220 F.R.D. 212

(S.D.N.Y 2003). (See also Zubulake V on obligations of counsel.)

• Pension Committee v. Bank of America Securities, LLC, 210

WL 184312 (S.D.N.Y. Jan. 15, 2010) (“failure to issue written litigation hold constitutes gross negligence”).

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Discovery Planning and Collaboration Collaboration

• Courts consistent with Rule 26 require collaboration and
• Courts, consistent with Rule 26, require collaboration and

expect the parties to consider the claims and develop a plan for discovery early on. P ti h ld id th t i t d

• Parties should consider the amount in controversy and

potential recovery as part of the calculus in determining discovery scope. Courts will likely be receptive to this practical approach given the expanse of wage and hour practical approach, given the expanse of wage and hour litigation and manageability concerns.

• Depending on strategy considerations, foreshadowing

t ti l di iti i f th C t h l f potential dispositive issues for the Court may help focus discovery and keep costs manageable.

48 Shook, Hardy & Bacon

Discovery on a “Microcosm”

• As a case management approach some courts have had parties select a certain number
• As a case management approach, some courts have had parties select a certain number
• f opt-in plaintiffs as a microcosm of the entire class and limited discovery to those opt-ins.
• For example – Hogan v. Allstate Insurance Co., 210 F. Supp. 2d 1312 (M.D. Fla. 2002),

affirmed in part, vacated and remanded in part, 361 F.3d 621 (11th Cir. 2004). – The district court directed each side to choose three test plaintiffs for purposes of discovery and dispositive motions. – The parties eventually filed cross motions for summary judgment, and the Court granted them in favor of defendant for all six plaintiffs and for the remaining 2,300 opt- in members in members. – The Eleventh Circuit affirmed judgment on the six opt-ins, but vacated as to the non- test plaintiffs because the district court had not given them the required 10-day notice t t R 56( )

49 Shook, Hardy & Bacon

pursuant to R. 56(c).

Document Collection and Cost Issues Issues

• The scope of discovery is highly dependent on factual matters in each case
• The scope of discovery is highly dependent on factual matters in each case.
• Collaborate with opposing counsel when possible and consider potential

cost-sharing throughout the case planning dialogue. – Many courts have e-discovery protocols that guide the document collection, search, and production process – for example, the Eastern District of Pennsylvania, Middle District of Tennessee, District of Maryland, and Western District of North Carolina. – Such protocols typically require parties to address together and up-front a host of challenging discovery issues including potential cost-sharing a host of challenging discovery issues, including potential cost sharing. – Affirmatively proposing an agreed e-discovery protocol, even in a jurisdiction where it is not required, may be an ideal approach and can take into account paper production issues as well

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take into account paper production issues as well.

Potential for Bifurcation to Manage Discovery Costs Discovery Costs

• Bifurcation is governed by F R C P 42(b) which provides:
• Bifurcation is governed by F.R.C.P. 42(b), which provides:

– “For convenience, to avoid prejudice, or to expedite and economize, the court may order a separate trial of one or t i l i l i t l i more separate issues, claims, cross claims, counterclaims,

• r third-party claims. When ordering a separate trial, the

court must preserve any federal right to a jury trial.”

• Bifurcation is often a matter of stipulation or can be raised by

motion – the approach can be applicable to trial and/or discovery.

• Discretionary to the trial court.

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E-Discovery Considerations

• Parties should attempt to work together to:
• Parties should attempt to work together to:

– Develop an appropriate e-discovery framework tailored to the anticipated discovery needs in a given case (some t h di d b ilt i t l l l d courts have an e-discovery order built into local rules and procedures). – Designate an e-discovery coordinator for each party to g y p y facilitate e-discovery matters. – Identify vendors early on to enhance coordination. L l t i t l d i l th i ht l – Learn electronic systems early and involve the right people to minimize expense. Knowledge is important. – Seek and provide input to maximize resources.

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p p

Challenges and Resolving Disputes

Outline Outline

Discovery Challenges and Resolving Disputes

• Court-Specific Frameworks
• MDL Considerations for Multiple Litigation

p g

• Guidance from the Manual for Complex Litigation
• Case Study When Discovery Scope is Not Agreed

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Multi-District Litigation and Multiple FLSA Actions – The Standard and M h i Mechanics

A h t i lti l i il ti i t

• A common approach to managing multiple similar actions is to

seek consolidation or coordination through a multi-district transfer under 28 U.S.C. § 1407.

• MDL transfers are common in FLSA cases where sufficient

common factual issues exist. Additional factors are: – Where the earliest case was filed; Where the earliest case was filed; – Where the most procedurally advanced case is; – What is most convenient for the parties and witnesses; p ; and – Which court has the resources to handle a transferred case

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case.

Other Consolidation Mechanisms

• Cases that do not warrant Section 1407 transfer can still be
• Cases that do not warrant Section 1407 transfer can still be

consolidated or coordinated using other procedural vehicles.

• Those may include:

– A transfer pursuant to 28 U.S.C. 1404(a), based on principles of forum non-conveniens; Consolidation for pretrial and/or trial; or – Consolidation for pretrial and/or trial; or – Severance of some claims and transfer.

• Principles of federal comity and the “first to file” rule may also

Principles of federal comity and the first to file rule may also be instructive.

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The Guidance of the Manual on Complex Litigation Complex Litigation

• The Manual for Complex Litigation (Fourth) explains:
• The Manual for Complex Litigation (Fourth) explains:

– “Depositions are often overused and conducted ineffectively and thus tend to be the most costly and time- i ti it i l liti ti Th j d h ld consuming activity in complex litigation. The judge should manage the litigation so as to avoid unnecessary depositions, limit the number and length of those that are taken and ensure that the process of taking depositions is taken, and ensure that the process of taking depositions is as fair and efficient as possible.” Manual § 11.451.

• In this context, the Court will evaluate “the need for proposed

d iti th bj t tt t b d d th depositions, the subject matter to be covered, and the available alternatives.” Manual § 11.451.

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In Re: Pilgrim’s Pride Litigation – Case Study of When the Parties C t A Di S Cannot Agree on Discovery Scope

• Coordinated in the Western District of Arkansas
• Coordinated in the Western District of Arkansas.
• Extensive discovery plan briefing was undertaken by the parties and

presented to the district court.

• The parties suggested varying time and scope of discovery – each

arguing their plan was more appropriate and targeted to the issues. See generally, In Re: Pilgrim’s Pride FLSA Litigation, 489 F. Supp. 2d 1381 (J.P.M.L. 2007).

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In Re: Pilgrim’s Pride Litigation – Case Study, Cont. Case Study, Cont.

• Ultimately the Court set a discovery schedule that combined
• Ultimately, the Court set a discovery schedule that combined

requests from both sides – focused on limits and contours. – Test facilities for discovery. – Hour limits on depositions. – Limitations on written discovery. – Prescribed document production for those to be deposed.

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In Re: Pilgrim’s Pride Litigation – Case Study, Cont. Case Study, Cont.

• Review of “Discovery Order” pages 1 and 2 for In Re: Pilgrim’s
• Review of Discovery Order pages 1 and 2 for In Re: Pilgrim s

Pride Fair Labor Standards Act Litigation (NOTE: This document was emailed to participants as a PDF l ith th lid f thi bi It b d i along with the slides for this webinar. It can be accessed in the “Program Materials” box at http://www.straffordpub.com/products/flsa-collective-action- discovery strategies 2011 01 19 or behind the “Handouts” tab discovery-strategies-2011-01-19 or behind the “Handouts” tab

• n the webinar platform)

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Selected Related Discovery Issues

Outline Outline

Special Discovery Issues for Consideration

• Contact with Collective Action Members
• Presentation of Good Faith Defenses and Privilege Considerations

g

• Rule 68 Offer

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Contact With Collective Action Members – The Landscape Members The Landscape

• Once certification is conditionally granted parties have
• Once certification is conditionally granted, parties have

generally not disputed that plaintiffs’ counsel may communicate with opt-ins and defendants’ counsel may not. Th ti i t h t t t l i tiff ’ l d

• The question remains to what extent plaintiffs’ counsel and

defense counsel may communicate with putative collective action members before they join and become party plaintiffs – this may impact the scope of what counsel may do in this may impact the scope of what counsel may do in developing a record supporting or opposing conditional certification and notice.

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General Principle and Supreme Court Guidance Court Guidance

• General principle – very dependent on the jurisdiction – courts
• General principle – very dependent on the jurisdiction – courts

generally support an open dialogue between plaintiff’s and defendant’s counsel and putative collective action members, so long as there is no evidence of misleading or coercive so long as there is no evidence of misleading or coercive communications.

• Instructive, foundational Supreme Court decisions –

– Hoffmann-La Roche v. Sperling, 493 U.S. 195 (1989) – Shapero v. Kentucky Bar Association, 486 U.S. 466 (1988) G lf Oil C B d 452 U S 89 (1981) – Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981)

• Most lower courts, in light of these decisions, have refused to

restrict communications by plaintiff’s counsel that are not

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y p misleading.

Misleading Communications a Problem for Plaintiff and Defense C l Counsel

• Although there is broad latitude for communicating with
• Although there is broad latitude for communicating with

putative collection action members prior to certification, courts have issued protective orders where there is evidence of false, misleading, or coercive communications. false, misleading, or coercive communications.

• Examples where courts have found communications

misleading or inappropriate: – Communication suggested that employees had to join the lawsuit to be able to recover lost wages; – Communication falsely suggested to recipients that Communication falsely suggested to recipients that defendant had provided their contact information; – Communication intimidated employees and discouraged them from joining the lawsuit

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them from joining the lawsuit.

Plaintiff’s Counsel Contacts w ith Potential Opt-Ins – Privilege C id ti Considerations

• Pre-notice communications by plaintiffs’ counsel with potential
• Pre-notice communications by plaintiffs counsel with potential
• pt-in plaintiffs may not be protected by the attorney-client

privilege. P ti t i ti b l i tiff ’ l ith

• Pre-notice ex parte communications by plaintiffs’ counsel with

managerial and supervisory employees is a sensitive area – consult state rules of professional conduct.

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Defense Counsel Contacts w ith Potential Opt-Ins – Cautious Area Potential Opt Ins Cautious Area

• Most courts follow the approach of Gulf Oil applicable to
• Most courts follow the approach of Gulf Oil applicable to

plaintiffs’ counsel and do not restrict non-misleading, non- coercive communications. B t diti l tifi ti h b t d d

• But, once conditional certification has been granted and

notice has been authorized, courts take a more restrictive view of permissible communications by defense counsel.

• Some courts have taken the view that the employer-employee

relationship is sufficiently inherently coercive that limits are appropriate.

• Important to check the decisions in each jurisdiction – courts

have reached a variety of conclusions.

• Especially critical to consider when gathering declarations

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• Especially critical to consider when gathering declarations.

Good Faith Defenses and Privilege Waiver Considerations Waiver Considerations

• Employers asserting “good faith” defenses in FLSA actions
• Employers asserting good faith defenses in FLSA actions

frequently have consulted with attorneys as to compliance with the Act. If l ffi ti l i t d id f it

• If an employer affirmatively introduces evidence of its

attorneys’ advice in support of its defense, waiver of the privilege as to communications on the same subject matter is a possibility a possibility.

• An employer may not use certain privileged communications

as a “sword,” while maintaining the “shield” of privilege as to th i d f l t d i ti the remainder of related communications.

• Similarly, if witnesses testify about directions provided by their

attorneys, waiver will likely be the result.

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y , y

Rule 68 Offer Considerations

• Section 16(b) defines attorneys’ fees separately from court
• Section 16(b) defines attorneys fees separately from court
• costs. Consequently, unlike attorneys’ fees in civil rights

actions governed by Section 1988, which allow a reasonable attorneys’ fee as part of the costs, attorneys’ fees in an FLSA attorneys fee as part of the costs, attorneys fees in an FLSA action are not automatically shifted by a Rule 68 offer greater than recovery.

• Rule 68 thus does not bar plaintiffs from recovering
• Rule 68 thus does not bar plaintiffs from recovering

reasonable attorneys’ fees for services rendered in their FLSA action after the Rule 68 settlement offer was made.

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Rule 68 Offer Considerations, Cont.

• Nevertheless as part of the reasonableness calculation under
• Nevertheless, as part of the reasonableness calculation under

Section 16(b), a district court will often consider the amount of the Rule 68 offer, the stage of the litigation at which the offer was made, what services were rendered thereafter, the was made, what services were rendered thereafter, the amount obtained by judgment, and whether it was reasonable to continue to litigate after the Rule 68 offer was made in

• rder to determine if a lodestar adjustment is warranted

j because of the results obtained.

• The Ninth Circuit has indicated that “[j]ust because a plaintiff

has an FLSA violation in her pocket does not give her a has an FLSA violation in her pocket does not give her a license to go to trial, run up the attorney fees and then recover them from the defendant.” Haworth v. Nevada, 56 F.3d 1048, 1052 (9th Cir. 1995).

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( )

Discovery Issues in the FLSA Trial Setting Setting

Outline Outline

Selected Trial Issues in FLSA Actions

• Representative Aspects
• Ratio Considerations
• Potential DOL Testimony
• Damage Calculations

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Selected Trial Issues in FLSA Litigation Litigation

Representative Aspects Representative Aspects

• Test Plaintiffs
• Bellweather Trials

Bellweather Trials

• ADR considerations

– Mediation – Focus Groups – Mini-Trials

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Presentation of Trial Evidence in FLSA Actions FLSA Actions

Representative Evidence Representative Evidence

• The scope of the representative testimony will vary depending on the facts
• f each case.
• E.g., Herman v. Hogar Praderas de Armor, Inc., 130 F. Supp. 2d 257, 265

(D.P.R. 2001) (“the adequacy of the representation is based on the nature

• f the work, working conditions, and on-the-job-relationships.”).
• No fixed ratio for determining the percentages of employees who must

testify.

• Compare Reich v. S. New England Tel. Corp., 121 F.3d 58, 55-58 (2d Cir.

p g p ( 1997) (sample of 2.5% of all affected employees adequate), with Archie v. Grand Cent. P’ship, 86 F. Supp. 2d 262, 272 (S.D.N.Y. 2000) (damages calculations for 6% of plaintiff class based on records for remainder of class members)

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members).

Potential for DOL Testimony at Trial

Compliance Officer Compliance Officer

• In many instances, the parties may rely on testimony or reports of a

compliance officer from the Department of Labor with respect to li bilit d E B k S t 790 F 2d 1446 1449 (9th liability or damages. E.g., Brock v. Seto, 790 F.2d 1446, 1449 (9th

• Cir. 1986) (refusal to admit compliance officer’s testimony about

back wage comparisons was error).

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Damage Calculations

Burden of Proof Burden of Proof If the employee fails to produce evidence of the precise amount of work

• r evidence to rebut the reasonableness of the inference to be drawn

f th l ’ id f k f d ith t from the employee’s evidence of work performed without proper compensation, “the court may then award damages to the employee, even though the result be only approximate.” Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946).

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Damage Calculations, Cont.

Precision vs Approximation Precision vs. Approximation The employee is not required to compute FLSA damages with precision, but rather need only present evidence sufficient to estimate d th h “j t d bl i f ” Mt Cl 328 damages through a “just and reasonable inference.” Mt. Clemens, 328 U.S. at 687-88.

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Damage Calculations, Cont.

Recent Cases How Much Precision? Recent Cases – How Much Precision?

• The West Coast Litigation Involving Farmers (California).

The West Coast Litigation Involving Farmers (California).

• The East Coast Litigation Involving Geico (District of Columbia).

g g ( )

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