Norris v. Bluestem Brands, Inc.

Background

Tina Norris, Sally Michalak, and Wendy Loepp sued Bluestem Brands, Inc., Blair, LLC, and Does 1–10. They asserted one collective-action claim under the Fair Labor Standards Act (FLSA) for unpaid overtime wages, three proposed class claims under Federal Rule of Civil Procedure 23 for breach of contract, unjust enrichment, and violations of the Pennsylvania Minimum Wage Act of 1968, and Norris separately asserted an FLSA retaliation claim.

The plaintiffs alleged that call-center employees were not paid for time spent booting up their computers before shifts and for customer calls that continued after scheduled shift times. The court conditionally certified only a pre-shift FLSA collective covering telephone sales agents and customer-service agents who worked at the Erie, Pennsylvania call center and were not paid for preliminary computer boot-up work. The court did not include the Franklin or Warren call centers and did not certify a class for post-shift work. One hundred seven people opted into the litigation.

Discovery and request for decertification

After targeted discovery and depositions of the three named plaintiffs, the parties agreed that collective or class treatment was inefficient. The defendants filed an unopposed motion to decertify the conditional FLSA collective and dismiss the claims. The parties clarified that they had not reached a monetary settlement and that the defendants had not paid or agreed to pay compensation to the plaintiffs or their attorneys.

The court applied the second-stage FLSA standard, which requires a factual determination after discovery about whether the plaintiffs are similarly situated. The court considered the plaintiffs’ differing work and employment experiences, individualized defenses, and fairness and case-management concerns.

The court found that the named plaintiffs’ testimony did not establish a common policy requiring unpaid pre-shift work. Each testified that arriving early was not truly required, or could not identify a reliable source for the alleged requirement. Their testimony and swipe-card records also raised different questions about whether they were present and working before their shifts. The court further found that the defendants would have individualized defenses concerning Norris’s smoke breaks, Michalak’s explanation for her building-entry records, and Loepp’s testimony that she worked early because she wanted to be organized. At least half of the opt-in plaintiffs were part-time employees, creating additional possible individualized issues concerning overtime.

Rulings

The court granted the defendants’ unopposed motion to decertify the conditional collective action and decertified the class. Because of that decertification, the court dismissed the opt-in plaintiffs’ claims without prejudice. The court ordered plaintiffs’ counsel to send the modified decertification notice to all opt-in plaintiffs within 14 days. The notice had to explain that anyone wishing to pursue a claim would need to file a new lawsuit and that statutes of limitations and other legal deadlines could apply.

The court separately considered the requested dismissal of the named plaintiffs’ claims. It declined to treat the parties’ stipulation as automatically dismissing those claims without a court order. Instead, because the claims arose under the FLSA, the court reviewed whether the agreed dismissal was fair and equitable. The court found that the parties had litigated the certification issues, conducted discovery, were represented by experienced counsel, and negotiated at arm’s length. It also found that the named plaintiffs’ claims no longer appeared viable, or at least were not strong, and that plaintiffs’ counsel had indicated they could not proceed in good faith under Rule 11. The court therefore granted the motion to dismiss all claims asserted by Norris, Michalak, and Loepp with prejudice.

The court ordered that the dismissals of both the opt-in plaintiffs’ and named plaintiffs’ claims were without costs, disbursements, or attorneys’ fees to any party.