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Schilling v. Schmidt Baking Company, Inc.

United States District Court, D. Maryland

July 20, 2018

RONALD J. SCHILLING, JR., RUSSELL E. DOLAN, JONATHAN A. HECKER, MICHAEL MCEWEN, MICHAEL HALAGER, DONALD L. BOLLINGER and MARCEL HAMILTON, Individually and on Behalf of Other Similarly Situated Employees, Plaintiffs,
v.
SCHMIDT BAKING COMPANY, INC., Defendant.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE

         Plaintiffs Ronald J. Schilling, Jr., Russell E. Dolan, Jonathan A. Hecker, Michael McEwen, Michael Halager, Donald L. Bollinger, and Marcel Hamilton (collectively, "Plaintiffs"), acting as individuals and on behalf of all similarly situated individuals, have filed this action against their employer Schmidt Baking Company, Inc. ("Schmidt"), alleging violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201-219 (2012). Plaintiffs have filed a pre-discovery Motion for Conditional Certification and a Motion for Equitable Tolling of the Statute of Limitations. Having reviewed the submitted materials, the Court finds no hearing necessary. D. Md. Local R. 105.6. For the reasons set forth below, Plaintiffs' Motions are GRANTED.

         BACKGROUND

         Schmidt, a bread production and distribution company based in Baltimore, Maryland, provides baked goods to various establishments, including restaurants, grocery stores, small businesses, schools, prisons, and warehouses, throughout the mid-Atlantic region. Schmidt employs Plaintiffs and other individuals as District Sales Managers ("DSMs"), whose formal job description states that their function is to "manage" a particular geographic region in which Schmidt's products are sold. Compl. ¶ 30, ECF No. 1.

         Plaintiffs allege that despite this job description, DSMs' primary duty is to assist a group of "independent operators"-independent contractors who lease delivery routes and vehicles from Schmidt in order to deliver Schmidt's products. Id. ¶ 31. Because independent operators are not Schmidt employees, DSMs have no authority over them. The primary way that DSMs assist independent operators is by filling in for them in driving their delivery routes, which generally take from 12 to 16 hours to complete. DSMs also fix any mistakes made by independent operators, including by retrieving incorrectly delivered products and delivering the correct ones. DSMs can be called on to take on such duties at any time, including on scheduled days off and before or after scheduled shifts, including overnight. Due to understaffing, in addition to assisting those independent operators operating within their own districts, DSMs are called upon to make deliveries originating in other districts and to correct errors occurring in those districts. Plaintiffs allege that, all told, they spend between 65 and 85 percent of their time each week making deliveries. Due to the limited number of delivery vehicles at each distribution center, DSMs use their personal vehicles to complete these deliveries approximately 90 percent of the time.

         DSMs spend the remainder of their time performing clerical duties, manual labor around Schmidt's warehouses, and work at customers' stores. Their clerical duties include routine office work such as collecting receipts for transactions, checking the status of current orders, monitoring order adjustments, and responding to calls regarding the status of deliveries. DSMs are expected to respond to calls and emails whenever an issue arises, even when they are off-duty. Their manual labor includes unloading products from delivery trucks, cleaning warehouses, and applying labels to products. Their work at customers' stores includes rearranging and stocking Schmidt's products on customers' shelves, retrieving stale or unused products, and completing one or two "product resets" per store each year, which may include changes ranging from replacing signs to constructing aisle displays. Id. ¶ 65.

         According to Plaintiffs, DSMs have no discretion in completing these tasks. They operate at the direction of Schmidt's Branch Managers, who are their direct supervisors, and Area Sales Managers. Because DSMs are salaried employees paid weekly, they receive the same salary regardless of how many hours they actually work. Although DSMs such as Plaintiffs are scheduled to work between approximately 45 and 54 hours per week, because they are expected to perform job functions even during their scheduled time off, they consistently worked between 70 and 85 hours per week, sometimes working more than 100 hours over a seven-day work week.

         On July 6, 2016, Plaintiffs Schilling, Dolan, and Hecker filed this action on behalf of all DSMs, alleging that Schmidt has unlawfully failed to pay them overtime wages. Plaintiffs brought the case as both a collective action pursuant to the FLSA, 29 U.S.C. § 216(b), and a class action pursuant to Maryland state wage laws. On July 27, 2016, Schmidt filed a Motion to Dismiss and for Summary Judgment. On September 23, 2016, the Court (Motz, J.), construing the motion as a Motion to Dismiss, granted it. Plaintiffs appealed that ruling. On November 17, 2017, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of Plaintiffs' state law claims but reversed the dismissal of the FLSA claim. Upon remand, Plaintiffs McEwen, Halager, Bollinger, and Hamilton joined the case as named Plaintiffs. On February 26, 2018, Plaintiffs filed a Motion for Conditional Certification, asking the Court to conditionally certify an FLSA collective action on behalf of all Schmidt DSMs and to assist them in identifying and notifying DSMs who are not currently parties to the Complaint. That same day, Plaintiffs filed a Motion for Equitable Tolling of the Statute of Limitations, asking the Court to toll the deadline for a putative class member to file an FLSA claim during the period from July 27, 2016, the date on which Schmidt filed its Motion to Dismiss and for Summary Judgment, to the date the Court rules on the Motion for Conditional Certification.

         DISCUSSION

         I. Motion for Conditional Certification

         A. Legal Standard

         The FLSA generally requires that employees who work more than 40 hours in a week receive overtime pay at the rate of one and one-half times their regular pay rate. See 29 U.S.C. § 207(a). If an employer violates these rules, employees may sue their employers as individuals or, if they choose, in a collective action on behalf of themselves and "similarly situated" employees. 29 U.S.C. § 216(b); see Simmons v. United Mortg. & Loan Inv., LLC, 634 F.3d 754, 758 (4th Cir. 2011). If employees choose to pursue a collective action, they may seek court-approved notice to inform similarly situated employees that they may join the litigation. See Hoffman-La Roche v. Sperling, 493 U.S. 164, 169 (1989) (discussing the parallel collective action provision under the Age Discrimination in Employment Act).

         The collective action provision serves several purposes. First, collective actions allow plaintiffs "the advantage of lower individual costs to vindicate rights by the pooling of resources." See id at 170. Second, collective actions allow the courts efficiently to resolve common issues in one proceeding. See Id. Third, FLSA collective actions promote enforcement of the law by empowering employees to "join in their litigation so that no one of them need stand alone in doing something likely to incur the displeasure of an employer." See Pentland v. Dravo Corp., 152 F.2d 851, 853 (3d Cir. 1945).

         Although the Fourth Circuit has not provided specific guidance on how to address a motion for conditional certification of an FLSA collective action, decisions from other Courts of Appeals have identified, and judges of the United States District Court for the District of Maryland generally apply, a two-step process to test the sufficiency of the purported class: (1) a pre-discovery determination that the purported class is similarly situated enough to disseminate notice (the "notice stage") and (2) a post-discovery determination, typically in response to a motion for decertification, that the purported class is indeed similarly situated. See, e.g., Thiessen v. General Electric Capital Corp.,267 F.3d 1095, 1102 (10th Cir. 2001); Hipp v. Liberty Nat'l Life Ins. Co.,252 F.3d 1208, 1218-19 (11th Cir. 2001); Mooney v. Aramco,54 F.3d 1207, 1213-14 (5th Cir. 1995); Randolph v. Powercomm Constr., Inc.,7 F.Supp.3d 561, 575 (D. Md. 2014); Syrja v. Westat, Inc.,756 F.Supp.2d 682, 686 (D. Md. 2010). At the notice stage, courts applying this process make a threshold determination whether the class is similarly situated based on ...


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