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Amrhein v. Regency Management Services, LLC

United States District Court, D. Maryland

March 20, 2014

DEBORAH AMRHEIN, et al., Plaintiffs
v.
REGENCY MANAGEMENT SERVICES, LLC, et al., Defendants.

SUSAN K. GAUVEY, Magistrate Judge.

Now pending is Plaintiffs' motion for collective action status under the Fair Labor Standards Act ("FLSA"). (ECF No. 35). The Court has considered Plaintiffs' motion, Defendants' response in opposition (ECF No. 40) and Plaintiffs' reply thereto (ECF No. 50). No hearing is required. Local Rule 105.6 (D. Md. 2011). The motion is GRANTED.

I. Procedural Background

On April 14, 2013, Plaintiffs Deborah Amrhein and Oswald Copeland filed a complaint, on behalf of themselves and those similarly situated, against Defendant Regency Management Services, LLC asserting intentional and willful violations of the overtime and minimum wage provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 206-207. (ECF No. 1). On December 3, 2013, this Court entered Plaintiffs' Amended Complaint, which included a total of nine (9) named Plaintiffs, Deborah Amrhein, Oswald Copeland, Brenda O'Brien, Michaela Lintz, Timothy Mercer, George Haley, Mark Miley, Mark Mazzetta, and Julie Oden, as well as four named defendants, Regency Management Services, LLC ("Regency Management"), Regency Furniture, Inc. ("Regency Furniture"), Regency Furniture of Brandywine, Inc. ("Regency Furniture of Brandywine"), and Abdul Ayyad. (ECF No. 28). Plaintiffs' Amended Complaint also added claims for unpaid wages under the Maryland Wage and Hour Law ("MWHL"), Md. Code Ann., Lab. & Empl., §§ 3-403, 3-415(a), and the Maryland Wage Payment and Collection Act ("MWPCL"), Md. Code Ann., Lab. & Empl., § 3-505. (Id. at ¶ 105-120).

On December 6, 2013, and December 21, 2013, Defendants sent offers of judgment, pursuant to Fed.R.Civ.P. 68, to all nine named Plaintiffs. (ECF No. 40, 5-8). Five (5) named Plaintiffs, Deborah Amrhein, Oswald Copeland, Brenda O'Brien, Michaela Lintz, and George Haley, have accepted Defendants' Rule 68 offers of judgment. (Id.) Four (4) named Plaintiffs, Mark Mazzetta, Timothy Mercer, Mark Miley, and Julie Oden, have rejected Defendants' Rule 68 offers of judgment. (Id.)

II. Factual Background

Defendant Regency Management, Abdul Ayyad sole member, owns and operates nineteen furniture stores located throughout Maryland and Virginia. (ECF No. 40-1, Ex. 1, ¶ 3). Defendant Regency Furniture of Brandywine, Abdul Ayyad majority shareholder, owns and operates one retail furniture outlet located in Brandywine, Maryland. ( Id., Ex. 1, ¶¶ 4, 6). Regency Management and Regency Furniture of Brandywine each employ furniture sales associates and other staff to support their furniture stores or outlets. ( Id., Ex. 1, ¶ 3). Defendant Regency Furniture does not operate any businesses and has no employees. ( Id., Ex. 1, ¶ 4). All nine named Plaintiffs were employed as "furniture sales associates" by Defendant Regency Management between May, 2011, and September, 2013. (ECF No. 36, 3; ECF No. 40, 5-6). Additionally, each named Plaintiff worked at one of three Regency Management store locations, either Bel Air, Rosedale, and/or Glen Burnie, Maryland. (ECF No. 40, 5-6).

Upon hiring, Defendant Regency Management required all named Plaintiffs to attend centralized training sessions at one of Regency Management's store locations, not necessarily the location where any particular Plaintiff ultimately worked. (ECF No. 36-2, Ex. B, ¶¶ 9-10; ECF No. 36-3, Ex. C, ¶¶ 9-10; ECF No. 36-4, Ex. D, ¶¶ 9-10). Each attendee received an identical "employee handbook, " detailing employer policies and procedures, regardless of which Regency Management location the individual Plaintiff was assigned. (ECF No. 36-1, Ex. A, ¶ 9; ECF No. 36-2, Ex. B, ¶ 11; ECF No. 36-3, Ex. C, ¶ 11, ECF No. 36-4, Ex. D, ¶ 11). This "employee handbook" identified the relevant employers as "Regency Furniture Showrooms, " "Ashley Furniture Homestore, " and "Marlo." (ECF No. 36-5, Ex. E). The handbook also included a welcome letter from Abdul Ayyad, stating "[w]hether you work at Regency Furniture, Ashley Homestore, [or] Marlo Furniture... this Employee Handbook has been developed to help you become acquainted with our company and help answer many of your initial questions." (Id.) Additionally, Abdul Ayyad regularly visits various of his stores to observe and oversee operations. (ECF No. 36-1, Ex. A, ¶ 10; ECF No. 36-2, Ex. B, ¶ 15; ECF No. 36-3, Ex. C, ¶ 14; ECF No. 36-4, Ex. D, ¶ 14). Moreover, Regency Management pools sales associates from multiple locations to a single location if they are needed for special events, such as the Glen Burnie and Bel Air store's grand opening sales. (ECF No. 36-3, Ex. C, ¶13; ECF No. 36-4, Ex. D, ¶13).

Regency Management sales associates initially earn ten dollars per hour ($10.00/hr) during a training period, except at Regency Management's Easton, Maryland, Woodbridge, Virginia, and Fredricksburg, Virginia, locations, where sales associates earn eight dollars per hour ($8.000/hr) plus a two percent (2%) commission during the training period. (ECF No. 36-2, Ex. B, ¶ 6; ECF No. 36-3, Ex. C, ¶ 6; ECF No. 36-4 Ex. D, ¶ 6; ECF No. 40, 4). Each Plaintiff earned ten dollars per hour during training. Following completion of the training period, Plaintiffs' salaries were entirely based on sales commissions. (ECF No. 36-1, Ex. A, ¶ 7; ECF No. 36-2, Ex. B, ¶¶ 7-8; ECF No. 36-3, Ex. C, ¶¶ 7-8; ECF No. 36-4, Ex. D, ¶¶ 7-8). However, after Plaintiffs became commission based employees, their pay stubs still indicated the pay rate of ten dollars per hour even if Plaintiffs commissions equaled less than ten dollars per hour for that pay period. (ECF No. 36-1, Ex. A, ¶ 8; ECF No. 36-2, Ex. B, ¶ 8; ECF No. 36-3, Ex. C, ¶ 8; ECF No. 36-4, Ex. D, ¶ 8). Plaintiffs' routinely worked more than forty hours per week, yet, received no overtime pay and for numerous pay periods earned less than ten dollars and eighty eight cents per hour ($10.88/hr) as a result of their commission based salary. (ECF No. 36-1, Ex. A, ¶ 13; ECF No. 36-2, Ex. B, ¶¶ 17-18; ECF No. 36-3, Ex. C, ¶¶ 17-18; ECF No. 36-4, Ex. D, ¶¶ 17-18).

III. Discussion

A. Rule 68 Offers of Judgment

Defendants' opposition asserts that this Court should deny Plaintiffs' motion for conditional certification because Defendants offered each named Plaintiff complete relief in the form of Fed. R. Civ. P 68 offers of judgment, effectively mooting the Plaintiffs' claims. (ECF No. 40, 10.) Before, however, the Court addresses the issue of mootness, the Court shall examine the related - though not dispositive - issue of whether Defendants' offers to have judgment entered against them constitute valid offers of judgment pursuant to Rule 68. Rule 68 provides, in relevant part:

(a) Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.
(b) Unaccepted Offer. An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible ...

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