Dentons Digest
On May 15, 2024, in Piddock v. Community Living Network, 5:22-cv-10715-JEL-CI (E.D. Mich.), District Judge Judith E. Levy of the District Court for the Eastern District of Michigan, denied Plaintiff’s request for conditional certification and court-facilitated notice under § 216(b) of the Fair Labor Standards Act (“FLSA”). Specifically, the district court held that the employee failed to show a “strong likelihood” that other employees were similarly situated to her, and thus, failed to meet the new, “strong likelihood” standard outlined in Clark v. A&L Homecare & Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023), for sending court-facilitated notices to potential plaintiffs in collective action suits. Judge Levy’s opinion showcases the higher burden that plaintiffs now face in seeking court-facilitated notices to potential plaintiffs in FLSA actions.
Case Background
Plaintiff Sheila Denise Piddock alleges that Community Living Network (“Community Living”) as a “third-party employer,” employed her and others as Direct Care Staff that provided “companionship services, namely the fellowship and protection of individuals with disabilities who require assistance in caring for themselves.” Id. at 2. Piddock alleges that Community Living failed to compensate her or other employees at the appropriate overtime rate for hours worked in excess of forty hours per week, in violation of the Fair Labor Standards Act (“FLSA”). Id.
On May 19, 2023, the Sixth Circuit issued its critical decision in Clark v. A&L Homecare and Training Center, LLC, 68 F.4th 1003 (6th Cir. 2023). In Clark, the Sixth Circuit rejected the “lenient” or “modest factual showing” standard that had previously been required to prompt court-approved notice to members of a proposed collective. Instead, the Court adopted a stricter standard, requiring FLSA plaintiffs to establish a “strong likelihood” that the plaintiff is similarly situated to potential opt-ins.
Piddock initially filed her Motion for Conditional Certification and Notice after conducting limited discovery. Id. at 3. However, before the Court could rule on her motion, Piddock withdrew her Motion, conducted additional limited discovery, and filed a Renewed Motion for Conditional Certification and Notice, incorporating the “strong likelihood” standard. Id. In her Motion, Piddock sought to send notice to “[a]ll current and former Direct Care Staff working with participants in Medicaid-funded Self-Directed Services programs and paid by the financial management system Community Living Network at any time from three (3) years preceding the filing of this lawsuit through the culmination of this litigation who worked over 40 hours in a workweek since April 1, 2019, and were not paid time and a half for the hours worked in excess of 40.” Id. at 6.
The District Court’s Holding
The district court, applying the Sixth Circuit’s stricter, “strong likelihood” standard in Clark, denied Piddock’s Motion for Conditional Certification and Notice. Id. at 12.
First, the district court found that she failed to demonstrate a strong likelihood that she and other Direct Care Staff were subject to a single, FLSA-violating policy or that their claims were unified by common theories of Community Living’s statutory violations. Id. at 7. The district court explained Piddock failed to establish that Community Living had a general policy of not paying employees the correct overtime rate because some of her designated records showed that Community Living actually paid employees overtime pay. Id. at 9. The district court noted that Piddock failed to offer any affidavits from potential plaintiffs to further support her allegations. Id. at 8-9 fn. 4. The district court further explained that Piddock’s other designated evidence of Community Living’s email threads did not establish that Community Living had a company-wide practice of not paying its employees the proper overtime rate—if anything, it showed that Community Living’s efforts to keep “consumers” within budget by reducing overtime hours suggested that some workers were properly paid for their overtime hours. Id. at 9. The court opined that, as a whole, Piddock’s designated evidence from 10-15 workers deprived of overtime, out of the pool of roughly 2,000 workers that Piddock identified as potential opt-ins, did not establish a strong likelihood of a single, company-wide policy of not paying overtime. Id. at 10.
Second, the court found that Piddock had not sufficiently established that Community Living was the source of the alleged policy or practice resulting in improper overtime pay. Id. at 10. Community Living designated evidence and argued that it paid wages according to what the consumers using workers’ services submitted, and maintained no discretion over the issue. The court found that while Piddock disputed Community Living’s alleged lack of responsibility over setting wages, she failed to offer sufficient evidence contradicting Community Living’s evidence or even an alternative explanation for discrepancies between Community Living paying some workers overtime pay and other workers straight-time for overtime hours. Id. at 11-12.
Implications for Companies
Piddock was one of the first decisions from the Eastern District of Michigan to apply the strong likelihood standard. This decision is unique because the court a) analyzed the plaintiff’s designated evidence with a closer eye on whether it supported her theory that the employer had a general policy of not paying employees the correct overtime rate as opposed to just some employees, and b) required the plaintiff to put forth more. In addition, the court required more evidence from potential opt-ins to support her request for a larger proposed collective.
