Deutsch v. My Pillow, Inc.

Background

Brandon Deutsch sued My Pillow, Inc., individually and on behalf of similarly situated call-center employees. The remaining claims concerned alleged unpaid time that employees spent starting their computers, logging into Windows and required programs, accessing the timekeeping system, and clocking in before taking customer-service or sales calls. The employees asserted claims under the Fair Labor Standards Act (FLSA) for unpaid overtime and under the Minnesota Payment of Wages Act (MPWA) for unpaid straight-time wages. The employees also sought remedies available to the Minnesota Commissioner of Labor and Industry. Their Minnesota Fair Labor Standards Act recordkeeping claim and allegations concerning post-break time had previously been dismissed by stipulation.

The named and opt-in plaintiffs worked as call-center representatives at My Pillow’s Chaska, Minnesota call center. My Pillow required or expected employees to use computers and software to perform their jobs, but the company’s time records did not separately record the time spent booting up and logging in. The employees gave varying estimates of how long the process took, and one employee recorded videos showing the process. The evidence also conflicted about whether My Pillow instructed employees to leave their computers on after each shift and about how employees were told to report or request payment for the time.

Summary-judgment rulings

The court denied the plaintiffs’ motion for partial summary judgment. It granted in part and denied in part My Pillow’s motion for summary judgment.

Under the FLSA, the court held that booting up the computer and logging into the required programs was an integral and indispensable part of the employees’ principal work because the employees could not perform their customer-service and sales duties without the computer and its software. The court therefore held that this time was compensable under the FLSA.

The court also found that all plaintiffs except Kenneth Gaustad had shown the existence of some uncompensated overtime work. The court granted My Pillow summary judgment as to Gaustad’s claim because testimony from his wife about what he had told her was inadmissible hearsay, and the plaintiffs had agreed not to present the case through representative evidence. For the other plaintiffs, the court found enough evidence—including employee testimony, My Pillow’s admissions, and videos—to allow a jury to estimate the amount of uncompensated time. The court rejected My Pillow’s argument that the time was de minimis, meaning too small to require payment as a matter of law, because factual disputes remained about the duration and frequency of the work.

The court nevertheless denied summary judgment to both sides on ultimate FLSA liability. Factual disputes remained about the amount of time worked, the extent of delays, My Pillow’s knowledge of those delays, and whether its time-adjustment procedures were reasonable and followed. For the same reason, the court denied the plaintiffs’ request for summary judgment on liquidated damages. The court did not decide willfulness.

For the MPWA, the court held that the 2019 amendment creating a substantive right to payment of wages did not apply to claims arising before July 1, 2019. It also rejected the plaintiffs’ argument that their offer letters created a separate contract-based right to payment for the computer start-up and login time. The court therefore held that the plaintiffs could not maintain their MPWA claims under that provision for the pre-July 1, 2019 period.

For the period beginning July 1, 2019, however, the court held that the computer start-up and login process was compensable under the MPWA. The court reasoned that the process was an obligatory task connected to the employees’ work and that the employees could not perform their duties without completing it. The court denied My Pillow summary judgment on that issue.

The court granted My Pillow summary judgment on Count IV, which sought Commissioner’s remedies. It held that the private right of action in the Minnesota Fair Labor Standards Act covered violations of that act, not violations of the MPWA. Because the Minnesota Fair Labor Standards Act claim had been dismissed by stipulation, the plaintiffs could not pursue those remedies through Count IV.

Class certification

The court granted the plaintiffs’ motion for class certification and modified the class definition. The certified Rule 23 class is:

All former Call Center Representatives, or other job titles performing similar job duties, employed by My Pillow, Inc., at any time from July 1, 2019 to December 31, 2020, who were not paid for all hours worked.

The class was certified for the plaintiffs’ MPWA claim under Minnesota Statutes section 181.101(a). The court found that the requirements of Rule 23 were satisfied, including sufficient numbers of class members, common questions, typical claims, adequate representation, predominance of common issues, and superiority of a class action. The court concluded that the central liability questions—whether My Pillow had a practice of not paying call-center representatives for the computer start-up and login process and whether it knew about that practice—could be decided using common evidence, even though damages might differ among employees.

The court appointed Brandon Deutsch and Craig Lyons as class representatives and appointed Jacob R. Rusch, Timothy J. Becker, Zackary S. Kaylor, and Jennell K. Shannon as class counsel. It also ordered the parties to submit a proposed class notice.