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Harris v. JMC Steel Group, Inc.

United States District Court, S.D. Alabama, Southern Division

February 16, 2017

BOBBY HARRIS, et al., Plaintiffs,
v.
JMC STEEL GROUP, INC., Defendant.

          ORDER

          WILLIAM H. STEELE CHIEF UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on defendant's Unopposed Motion for Partial Summary Judgment (doc. 64) in this FLSA collective action. Pursuant to an Order (doc. 67) dated January 18, 2017, plaintiffs' counsel filed a Response (doc. 68) detailing plaintiffs' position on the merits of the Motion, as well as counsel's efforts to notify the affected opt-in plaintiffs of the imminent dismissal of their claims and to afford them an opportunity to be heard. The Motion is now ripe for disposition.

         I. Background.

         As set forth in the First Amended Complaint (doc. 5), plaintiffs Bobby Harris, Martha Morrissette and Joyce Arnold brought this action alleging that defendant, JMC Steel Group, Inc., failed to pay each of them overtime compensation of one and one-half times their regular rate of pay for hours worked in excess of 40 in a workweek, in violation of the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq. (“FLSA”). In particular, plaintiffs maintain that they were hourly, nonexempt employees of JMC Steel, and that they regularly worked over 40 hours per workweek. According to plaintiffs, JMC Steel required them to clock in 10 or more minutes before the beginning of their work shifts and to stay on the clock 10 or more minutes past the end of their shifts performing additional duties for the benefit of their employer. Despite this practice, plaintiffs allege, JMC Steel compensated them only for scheduled shift times, with no overtime pay for the pre-shift and post-shift time that they were required to remain on duty performing tasks for their employer.

         From the outset, plaintiffs styled this case as an FLSA opt-in collective action and sought conditional certification pursuant to 29 U.S.C. § 216(b). On April 25, 2016, the Court entered an Order (doc. 42) granting plaintiffs' unopposed request for conditional certification. The April 25 Order “conditionally certifie[d] a class consisting of all present and former hourly paid employees of JMC Steel Group, Inc., for EnergeX Tube Division in Thomasville, Alabama, who worked over forty hours in one or more work weeks from January 1, 2014, to the present.” (Doc. 42, at 3.) In connection with this conditional certification, approximately 250 opt-in plaintiffs have submitted signed consent forms to participate in this action.

         Defendants now move for partial summary judgment seeking the dismissal of all claims brought by 31 opt-in plaintiffs.[1] In their supporting brief, defendants represented that “Plaintiffs' counsel … has indicated Plaintiffs do not oppose the filing of this motion or the relief requested therein.” (Doc. 65, at 6.)[2] For their part, plaintiffs filed a Response (doc. 68) confirming the following: (i) plaintiffs' counsel sent letters to 22 affected opt-in plaintiffs requesting documentation that those individuals worked for the company within the temporal parameters of the certified class, but none of them responded with evidence to that effect;[3] (ii) plaintiffs' counsel personally spoke with opt-in plaintiff Brooks Jackson, Sr., but he was unable to provide any documentation that he worked for JMC Steel at any time after January 1, 2014; (iii) plaintiffs' counsel personally spoke with opt-in plaintiff Brooks Jackson, Jr., who confirmed that he worked for the plant adjacent to JMC Steel and was paid by a company called “Tuboscope, ” not defendant; (iv) opt-in plaintiff Anthony Lett never returned plaintiffs' counsel's calls seeking documentation that he was employed by JMC Steel during the time period covered by the conditional certification order; (v) opt-in plaintiff Debra Thomas produced evidence of employment, but her documentation confirmed that she did not work for defendant but was instead employed by an entity called Lakeside Steel Alabama, Inc. (doc. 68, Exh. B); (vi) it is undisputed that opt-in plaintiffs Eddie Adams and Joshua Keith Knight consented to join this lawsuit, then filed for bankruptcy protection without identifying these FLSA claims on bankruptcy schedules; (vii) opt-in plaintiff Barry Hurd informed plaintiffs' counsel that he does not dispute that he did not work for JMC Steel at any time after January 1, 2014; (viii) plaintiffs' counsel's understanding is that opt-in plaintiff Demarious K. Dock worked at JMC Steel's facility during the relevant period, but was employed by a temporary staffing service, not by defendant; and (ix) plaintiffs' counsel's understanding is that opt-in plaintiff Damien McCaskey worked for a plant adjacent to JMC Steel and was paid by a company called “Tuboscope, ” not by defendant. (See doc. 68.) For these reasons, plaintiffs' counsel does not oppose defendant's Rule 56 Motion, although they do request that several of the opt-in plaintiffs' claims be dismissed without prejudice, in the event they are able to produce evidence of viable, timely claims against JMC Steel in the future.

         II. Analysis.

         In its Motion for Partial Summary Judgment, JMC Steel identifies four groups of opt-in plaintiffs as to whom it seeks dismissal, to-wit: (i) 24 opt-in plaintiffs who fall outside the temporal scope of the class definition; (ii) three opt-in plaintiffs who filed bankruptcy petitions after their FLSA claims accrued, but never disclosed those claims in bankruptcy schedules; (iii) three opt-in plaintiffs who never were employed by JMC Steel; and (iv) one opt-in plaintiff who worked no hours within the class period. Each category will be addressed in turn.

         A. Opt-In Plaintiffs Who Separated from Defendant Before January 1, 2014.

         With respect to the 24 opt-in plaintiffs, JMC Steel presents substantial evidence that each of them lies outside the temporal boundaries of the class definition. In particular, defendant presents the Declaration of Alexandra Buchanan, a Human Resources Manager for the entity formerly known as JMC Steel. Buchanan details the separation dates for the 24 subject opt-in plaintiffs and demonstrates via business records that (with one exception) they all predated January 1, 2014. (Buchanan Decl. (doc. 66, Exh. A), ¶ 5 & Exh. 1.)[4] The lone exception is opt-in plaintiff Thomas, whose separation date was January 2, 2014, just one day later. Because defendant's evidence is that Thomas never worked 40 hours in a work week for JMC Steel after January 1, 2014, she is properly considered in this category of opt-in plaintiffs outside the class definition. (Id.) Defendant's evidence relating to the separation dates of these 24 opt-in plaintiffs is unrebutted and unchallenged. In fact, plaintiffs' counsel acknowledges that after contacting or attempting to contact each of those individuals, counsel has obtained no documentation or other evidence supporting a conclusion that any of them worked more than 40 hours for JMC Steel in a work week after January 1, 2014, as necessary to fit within the judicially-defined class boundaries. On this showing, the Court readily finds that there are no genuine issues of material fact, and that all of these 24 opt-in plaintiffs are ineligible to participate in these FLSA collective action proceedings because their claims were brought outside the relevant class period. Accordingly, defendant's Motion for Partial Summary Judgment is granted as to those opt-in plaintiffs.

         B. Opt-In Plaintiffs Subject to Judicial Estoppel.

         The second category of opt-in plaintiffs as to whom JMC Steel seeks summary judgment are those who filed for bankruptcy after their FLSA claims accrued, yet failed to list such claims on the appropriate bankruptcy schedules. Opt-in plaintiff Eddie Floyd Adams filed a Chapter 7 petition in Bankruptcy Court on July 5, 2016. (Doc. 66, Exh. B, at 2.) His signed “Consent to Become a Party Plaintiff” form was filed in this action more than six months earlier on December 23, 2015. (Doc. 7.) Far from disclosing his FLSA claims against JMC Steel in the bankruptcy schedules, Adams checked the “No” block when asked if he had “Claims against third parties” or “Other contingent and unliquidated claims of every nature.” (Doc. 66, Exh. B, at 25.) Adams also checked the “No” block when asked in his schedules whether he had been a party in a lawsuit or court action within one year before filing for bankruptcy. (Id. at 48.) Similarly, opt-in plaintiff Gerald Jerome Huff had a pending Chapter 7 bankruptcy petition on February 2, 2016, when his consent form was filed in this action; however, he neither updated nor supplemented his bankruptcy schedules to disclose his claims against JMC Steel in this action. (See docs. 21 & 66, Exh. C at 21 & 39.) Finally, opt-in plaintiff Joshua Keith Knight filed a Chapter 7 petition in Bankruptcy Court on May 2, 2016, yet failed to disclose his FLSA claims against JMC Steel in his bankruptcy schedules, despite having signed a consent form filed in this action on December 23, 2015. (See docs. 7 & 66, Exh. D at 21 & 39.)

         As defendant correctly points out, these circumstances implicate equitable principles of judicial estoppel. “The purpose of judicial estoppel is to protect the integrity of the judicial process by prohibiting parties from changing positions according to the exigencies of the moment. … Specifically, judicial estoppel is designed to prevent a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by the party in a previous preceding [sic].” Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1273 (11th Cir. 2010) (citations and internal quotation marks omitted). Although judicial estoppel is a flexible rule, Circuit precedents identify “two primary factors for establishing the bar of judicial estoppel.” Id. “First, it must be shown that the allegedly inconsistent positions were made under oath in a prior proceeding. Second, such inconsistencies must be shown to have been calculated to make a mockery of the judicial system.” Id.

         With respect to the first factor, the failure of Adams, Huff and Knight to identify their wage-related claims against JMC Steel in their signed, sworn bankruptcy schedules plainly amounts to the taking of inconsistent positions under oath in a prior proceeding. After all, “[a] debtor seeking shelter under the bankruptcy laws must disclose all assets, or potential assets to the bankruptcy court.” Ajaka v. Brooksamerica Mortg. Corp., 453 F.3d 1339, 1344 (11th Cir. 2006); see also Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1286 (11th Cir. 2002) (“Full and honest disclosure in a bankruptcy case is crucial to the effective functioning of the federal bankruptcy system.”) (citation and internal quotation marks omitted). Moreover, “under the established law of this circuit, a [bankruptcy] debtor has a statutory duty to disclose changes in assets, ” and “a pending lawsuit seeking monetary compensation qualifies as an asset.” Robinson, 595 F.3d at 1274. “Because there is no question that [Adams, Huff and Knight] failed to assert [their FLSA claims] as an asset in the bankruptcy proceeding, the first prong of our judicial estoppel test is satisfied.” Ajaka, 453 F.3d at 1344; see also Robinson, 595 F.3d at 1275 (“By failing to update her bankruptcy schedule to reflect her pending claim, Robinson ...


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