Deutsch v. My Pillow, Inc.

Background

Brandon Deutsch sued My Pillow, Inc., individually and on behalf of similarly situated employees. The remaining plaintiffs were call-center employees who performed customer service and sales work at My Pillow’s Chaska, Minnesota call center. They alleged that My Pillow failed to pay them for time spent preparing their computers, logging into required programs, and accessing the timekeeping system before clocking in. Their claims included overtime under the Fair Labor Standards Act (FLSA), timely-payment claims under the Minnesota Payment of Wages Act (MPWA), and a request for commissioner-related remedies under Minnesota law. The parties had previously stipulated to dismissal of the Minnesota Fair Labor Standards Act recordkeeping claim.

Before taking their first call, employees generally had to turn on or wake their computers, enter Windows credentials, open programs and email, access the ADP timekeeping system, and click “clock in.” My Pillow admitted that employees spent time booting up computers and logging into programs, but it did not record that time. The employees gave differing estimates of the process, generally ranging from about one minute to fifteen minutes, with some testimony about longer delays. The record also contained two videos showing the process for one employee.

Summary Judgment Motions

Summary judgment is appropriate when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law. The plaintiffs sought summary judgment on My Pillow’s liability under the FLSA. My Pillow sought summary judgment on all remaining claims.

FLSA compensability

The court held that the boot-up and login process was compensable under the FLSA. Under the federal law, preliminary activities are compensable when they are “integral and indispensable” to an employee’s principal duties. The court found that My Pillow’s call-center representatives could not perform their principal duties—handling customer calls and sales—without a functional computer and the Annaware software accessed through it. The preparation process was therefore an intrinsic and necessary part of their work, rather than merely waiting to use a time clock.

Existence and amount of unpaid overtime

The court found that all plaintiffs except Kenneth Gaustad had shown the existence of some uncompensated overtime work. As to Gaustad, the court found that testimony from his wife about what he had told her was inadmissible hearsay and could not establish unpaid overtime in this case.

For the remaining plaintiffs, the court found sufficient evidence for a jury to reasonably estimate the amount of unpaid time. The employees testified that the process occurred every workday, and the videos provided concrete evidence of its duration. The court also found a factual dispute about whether My Pillow had an established policy requiring employees to leave their computers on. Because My Pillow had not kept records of the preparation time, the court applied a more flexible evidentiary standard for estimating damages.

My Pillow’s knowledge and the de minimis argument

The court found that My Pillow had actual knowledge that employees performed the boot-up and login process before clocking in. The employees’ testimony also created a factual dispute about whether My Pillow knew, or should have known, about delays during that process and whether its time-adjustment procedures were reasonable and followed. The court therefore denied summary judgment to both sides on ultimate FLSA liability.

The court also declined to rule as a matter of law that the time was “de minimis,” meaning too small or administratively difficult to record to require payment. Some employees described delays longer than ten minutes, and the evidence was disputed about the duration and frequency of the process. The court held that a jury must resolve the issue.

The court denied the plaintiffs’ request for summary judgment on liquidated damages because factual disputes prevented a ruling that My Pillow violated the FLSA as a matter of law. The court expressed no view on willfulness.

Minnesota Payment of Wages Act

The court ruled that the 2019 amendment to the MPWA did not apply retroactively. Accordingly, the plaintiffs could not maintain a substantive MPWA claim under Minnesota Statutes § 181.101(a) for claims arising before July 1, 2019. The court also rejected the plaintiffs’ argument that their offer letters created a separate unilateral contract requiring payment for computer preparation. The letters identified job titles, hourly pay, and general schedules but did not promise payment for the boot-up and login process.

For claims arising on or after July 1, 2019, however, the court held that the preparation process was compensable under the MPWA. The statute did not define “wages,” so the court looked to related Minnesota wage provisions and regulations. It concluded that powering on and logging into the computer were obligatory tasks connected to the employees’ work, and that the employees remained at their workstations rather than being free to use the time for personal purposes. The court also rejected My Pillow’s arguments that the time was de minimis or that the plaintiffs’ evidence was insufficient. It denied summary judgment to My Pillow on this issue.

Commissioner-related remedies

The court granted My Pillow summary judgment on Count IV. It interpreted Minnesota Statutes § 177.27, subdivision 8, as authorizing private actions for violations of the Minnesota Fair Labor Standards Act, not for violations of the MPWA. Because the plaintiffs’ Minnesota Fair Labor Standards Act claim had been dismissed by stipulation, the court held that Count IV could not proceed.

Class certification

The plaintiffs sought certification under Federal Rule of Civil Procedure 23 for their MPWA claim. The court modified the proposed class period and certified this class: “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 court found that the class satisfied Rule 23’s requirements. It estimated that the class could include about 50 people, which was sufficient for numerosity. Common questions predominated because all proposed class members were classified as call-center representatives, worked at the same location, used computers to perform their duties, and challenged an alleged companywide failure to pay for the same preparation process. Differences in individual damages did not defeat certification.

The court also found that Deutsch and Lyons had claims typical of the class and could adequately represent it. It rejected My Pillow’s arguments concerning Lyons’s computer modifications, Lyons’s public statements, Deutsch’s time-adjustment practices, and Deutsch’s level of interest in the recovery. Finally, the court found that a class action was superior because individual claims were relatively small, the relevant conduct occurred at one location, and the case presented no significant manageability problems.

Order

The court denied the plaintiffs’ Motion for Summary Judgment; granted in part and denied in part My Pillow’s Motion for Summary Judgment; and granted the plaintiffs’ Motion for Class Certification and Appointment of Class Representatives and Class Counsel. The court appointed Deutsch and Lyons as class representatives and appointed the listed plaintiffs’ lawyers as class counsel. My Pillow’s motion to exclude expert testimony was reserved for a separate order.