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Guy v. Casal Institute of Nevada, LLC

United States District Court, D. Nevada

May 12, 2014

MARNI M. GUY, Plaintiff,
v.
CASAL INSTITUTE OF NEVADA, LLC dba AVEDA INSTITUTE OF NEVADA, et. Al., Defendants.

ORDER

GEORGE FOLEY, Jr., Magistrate Judge.

This matter is before the Court on Plaintiff's Motion for Circulation of Notice of the Pendency of this Action Pursuant to 29 U.S.C. § 216(b) and for Other Relief (#20), filed on April 4, 2014. Defendants filed their Response to the Motion (#27) on April 21, 2014. Plaintiff filed her Reply (#28) on May 1, 2014. The Court conducted a hearing in this matter on May 6, 2014.

BACKGROUND

Plaintiff Marni M. Guy has brought this collective/class action on behalf of herself and other similarly situated individuals for relief pursuant to the Fair Labor Standards Act ("FLSA") for Defendants' alleged failure to pay minimum wages and/or overtime wages as required by 29 U.S.C. § 201-218 et. seq. Complaint (#1), ¶1. Plaintiff also seeks recovery of unpaid minimum wages and/or overtime wages on behalf of herself and other class members pursuant to Nevada law. Id., ¶¶52-65. Plaintiff alleges that Defendants operate a for-profit cosmetology and esthetics services school, Aveda Institute Las Vegas ("Aveda"), which trains paying students to practice the trades of cosmetology and esthetic services. ¶19. Defendants also operate a for-profit business that provides cosmetology and esthetic services to the public in exchange for the payment of fees. ¶¶ 20, 21. Defendants allegedly require Aveda's cosmetology students to perform these cosmetology and esthetic services without compensation. This practice allegedly allows the Defendants to offer the services to the public at lower costs than are typically charged by cosmetology salons which do not use uncompensated labor. ¶¶ 21-28. Plaintiff alleges that Defendants' failure to pay the students for their services violates the FLSA and Nevada law which require employers to pay their employees minimum wages and overtime wages.

The Complaint is devoid of any specific factual allegations regarding Plaintiff Marni M. Guy. Ms. Guy has, however, submitted a declaration in support of her motion for circulation of notice. Motion (#20), Exhibit 1, Guy Declaration. Ms. Guy states that she attended Defendants' Aveda Institute Las Vegas from March 27, 2011 through February 1, 2012 as a student in the cosmetology training program. Guy Declaration, ¶2. While participating in the training program, she was required to perform cosmetology services on customers at Aveda's salon which was located on the school campus. This salon work requirement was imposed on all students in the cosmetology training program and a student could not graduate from the program without performing such salon work. ¶3. Ms. Guy further states that the customers paid significant fees to Aveda for the cosmetology services provided by the students. ¶4. Ms. Guy and the other students were not paid anything for the cosmetology services they provided to Aveda's customers, even though the students typically worked in the salon approximately 8 hours a day, four days a week. On a single day, Ms. Guy's work would sometimes generate $150 to $200, or more, in customer charges collected by Aveda. Based on her observations of the work performed by other students, Ms. Guy believes that Aveda often collected similar charges for the cosmetology work they performed. ¶5.

Ms. Guy also alleges that Aveda required the students to perform other work necessary to the operation of the salon, including general cleaning and janitorial duties, stocking and displaying hair products in the salon, taking inventory, performing laundry tasks, and working at the color dispensary. ¶6. Aveda also pressured the students to sell hair products to salon customers. Aveda held contests which awarded prizes to the students who sold the most products, but did not pay commissions or other compensation to the students for the products they sold. ¶7. Ms. Guy estimates that there were in excess of 60 students attending the Aveda cosmetology training program during the time she attended the program. ¶9.

Plaintiff requests that the Court conditionally certify an FLSA opt-in class consisting of "all Aveda Institute Las Vegas students who performed salon services on paying clients in Aveda's salon and: A. who performed such work after December 10, 2010, and B. who did not receive minimum wage as required by the FLSA." Motion for Circulation of Notice (#27), Exhibit 2, Proposed Notice of Collective Action, pg. 2.

Defendants argue in their response that the Court should defer ruling on the motion to circulate notice until after the Court rules on their pending motion to dismiss for failure to state a claim upon which relief can be granted. Response to Motion (#27), pg. 2. See also Defendants' Motion to Dismiss (#10). Defendants argue that requiring students to perform cosmetology services as part of their educational training does not violate federal or state minimum wage and overtime laws. Defendants also argue that Plaintiff has not met her burden to show that there are other similarly situated individuals who desire to join this action. Response (#27), pgs. 3-4. Defendants have not, however, submitted any evidence to counter Ms. Guy's declaration regarding Defendants' alleged practices.

DISCUSSION

Under the FLSA, an employee may initiate a collective action on behalf of herself and other similarly situated people. 29 U.S.C. § 216(b). The requirements for class action certification under Fed.R.Civ.P. 23(a) do not apply to claims arising under the FLSA. Kinney Shoe Corp. v. Vorhes, 564 F.2d 859, 862 (9th Cir. 1977); Davis v. Westgate Planet Hollywood Las Vegas, 2009 WL 102735 *8 (D. Nev. 2009). Although a plaintiff may bring an action on behalf of herself and others similarly situated, "no employee shall be a party to any such action unless he gives his consent in writing to become such a party and such consent is filed with the court in which such action is brought." 29 U.S.C. § 216(b). District courts have the discretion in appropriate cases to implement § 216(b) by facilitating notice to potential plaintiffs. Hoffmann-LaRouche, Inc. v. Sperling, 493 U.S. 165, 169, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989); Edwards v. City of Long Beach, 467 F.Supp.2d 986, 989 (C.D. Cal. 2006).

The Court must determine whether the potential plaintiffs are "similarly situated" to create an opt-in class under § 216(b). Davis v. Westgate Planet Hollywood Las Vegas, 2009 WL 102735 at *9, citing Grayson v. K-Mart Corp., 79 F.3d 1086, 1097 (11th Cir. 1996). A named plaintiff seeking to create a § 216(b) opt-in class need only show that his/her position is similar, but not identical, to the positions held by putative class members. Sperling v. Hoffman-La Roche, Inc., 118 F.R.D. 392, 407 (D.N.J. 1988), aff'd in part and repealed and dismissed in part, 862 F.2d 439 (3rd Cir. 1988), aff'd, 493 U.S. 165 , 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). The similarly situated requirement of § 216(b) is more elastic and less stringent than the joinder and severance requirements found in Rule 20 and Rule 42 respectively of the Federal Rules of Civil Procedure.

I. Whether Plaintiff Has Made A Sufficient Showing for Conditional Class Certification.

The Ninth Circuit has not yet formulated a test to determine whether putative class members are similarly situated. Numerous district court decisions, however, apply a two-step approach for determining whether potential plaintiffs are similarly situated. Davis v. Westgate Planet Hollywood Las Vegas, supra , at *9. At the first stage, the court makes a preliminary determination whether to conditionally certify a class under § 216(b) and send notice to potential class members and give them the opportunity to join the action. After discovery is completed, the defendant may move, at the second stage, to decertify the collective action and the court then makes a final determination, based on the evidence, whether the FLSA collective action should go forward.

At the first stage, the court relies "primarily on the pleadings and any affidavits submitted by the parties, " [to decide] "whether the potential class should be given notice of the action." Davis, supra , at *9, citing Leuthold v. Destination America, Inc., 224 F.R.D. 462, 466 (N.D. Cal. 2004). A fairly lenient standard is applied at this stage because the court has "minimal evidence" to make its determination. Mooney v. Aramco Services, Co., 54 F.3d 1207, 1213-14 (5th Cir.1995); Kane v. Gage, 138 F.Supp.2d 212, 214 (D. Mass. 2001). A plaintiff need only make substantial allegations that the putative class members were subject to a single decision, policy, or plan that violated the law. Mooney, 54 F.3d at 1214 n. 8. See also Byard v. Verizon West Virginia, Inc., 287 F.R.D. 365, 369 (N.D.W.Va. 2012) ("District courts in this Circuit have found conditional certification appropriate where plaintiffs put forward at least a modest factual showing' that the members of the putative class were victims of a common policy or practice that violated the FLSA.") The Sixth Circuit has given implicit approval to the two step approach and the lenient standard applied at the first step. Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 546-547 (6th Cir. 2006).

Although a lenient standard is applied at the initial stage, a plaintiff does not meet her burden through unsupported assertions of widespread violations. Edwards v. City of Long Beach, 467 F.Supp.2d 986, 990 (C.D. Cal. 2006). See also Bernard v. Household Intern., Inc., 231 F.Supp.2d 433, 435 (E.D. Va. 2002) ("Mere allegations will not suffice; some factual evidence is necessary"); and Smith v. Sovereign Bancorp., Inc., 2003 WL 22701017, *2 (E.D. Pa. 2003) (same). Affidavits in support of a motion for conditional certification must be based on the affiant's personal knowledge, which may be inferred based on what the affiant would have probably learned during the normal course of employment. White v. MPW Industrial Services, Inc., 236 F.R.D. 363, 369 (E.D. Tenn. 2006). The court, however, does not resolve factual disputes, decide substantive issues on the merits or make credibility determinations at the first stage. Fisher v. Michigan Bell Telephone Co., 665 F.Supp.2d 819, 826 (E.D. Mich. 2009); Byard v. Verizon West Virginia, Inc., 287 F.R.D. at 371.

Some courts have held that a motion for conditional class certification must be based on admissible evidence. Harrison v. McDonald Corp., 411 F.Supp.2d 862, 865-866 (S.D. Ohio 2005); Richards v. Computer Scis. Corp., 2004 WL 2211691, *1 (D. Conn. 2004); and Threatt v. Residential CFR, Inc., 2005 WL 463199, *5 (N.D. Ind. 2005). Other courts state, however, that evidence submitted in support of a motion for conditional certification does not have to meet the admissibility standard applicable to summary judgment motions. White v. MPW Industrial Services, Inc., 236 F.R.D. 363, 368 (E.D. Tenn. 2006); Crawford v. Lexington-Fayette Urban County Government, 2007 WL 293865, *2-*3 (E.D. Ky. 2007); Bredbenner v. Liberty Travel, Inc., 2009 WL 2391279, *2 n. 1 (D.N.J. 2009); Howard v. Securitas Security Services, 2009 WL 140126, *3 (N.D.Ill. 2009); and Longcrier v. HL-A Co., Inc., 595 F.Supp.2d 1218, 1224 n. 8 (S.D. Ala. 2008). Fisher v. Michigan Bell Telephone Co., 665 F.Supp.2d at 826 states that "[b]ecause final disposition is not an issue at the conditional certification stage, requiring a plaintiff to present evidence in favor of a conditional certification that meets the hearsay standards of the Federal Rules of Evidence fails to take into account that the plaintiff has not yet been afforded an opportunity, ...


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