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`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF WEST VIRGINIA
`AT CHARLESTON
`
`
`
`Civil Action No. 2:19-cv-00529
`
`RICHARD LUPARDUS,
`
`Plaintiff,
`
`v.
`
`ELK ENERGY SERVICES, LLC,
`
`Defendant.
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`Pending is the plaintiff’s motion for conditional
`certification of the above-styled action as a collective action
`under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et
`seq., filed February 4, 2020.
`
`I.
`
`Background
`
`The defendant, Elk Energy Services, LLC (“Elk
`Energy”), provides pipeline inspection services, environmental
`compliance management, and project staffing, among other
`services, in the construction and inspection industry. ECF No.
`1 (“Compl.”) ¶¶ 14-15. Elk Energy employs a variety of
`inspectors, such as utility inspectors, trenching inspectors,
`coating inspectors, welding inspectors, environmental
`inspectors, and testing inspectors. Id. ¶ 24. Inspectors are
`
`
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF WEST VIRGINIA
`AT CHARLESTON
`
`
`
`Civil Action No. 2:19-cv-00529
`
`RICHARD LUPARDUS,
`
`Plaintiff,
`
`v.
`
`ELK ENERGY SERVICES, LLC,
`
`Defendant.
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`Pending is the plaintiff’s motion for conditional
`certification of the above-styled action as a collective action
`under the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et
`seq., filed February 4, 2020.
`
`I.
`
`Background
`
`The defendant, Elk Energy Services, LLC (“Elk
`Energy”), provides pipeline inspection services, environmental
`compliance management, and project staffing, among other
`services, in the construction and inspection industry. ECF No.
`1 (“Compl.”) ¶¶ 14-15. Elk Energy employs a variety of
`inspectors, such as utility inspectors, trenching inspectors,
`coating inspectors, welding inspectors, environmental
`inspectors, and testing inspectors. Id. ¶ 24. Inspectors are
`
`
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`not guaranteed a set number of days to work each week or a set
`weekly payment. See id. ¶¶ 31-32. The inspectors commonly work
`more than 12 hours each day for five to six days each week,
`totaling over 40 hours each week. See id. ¶¶ 26-27. Elk Energy
`does not pay inspectors a salary but instead pays inspectors a
`flat day rate regardless of the number of hours worked. See id.
`¶¶ 28, 33. Elk Energy allegedly does not pay its inspectors
`overtime. See id. ¶ 28.
`
`The plaintiff alleges that all inspectors have the
`same basic job duties. Id. ¶ 25. Inspectors do not supervise
`other employees, do not have the authority to hire or fire other
`employees, and do not manage “a customarily recognized
`department” of Elk Energy. See id. ¶¶ 39-40. Inspectors are
`not “office” employees and their work does not relate to the
`management of the company’s operations. See id. ¶ 41. The
`primary duty of an inspector does not require independent
`judgment or discretion. See id. ¶ 43. Instead, inspectors
`perform extensive physical labor as “field” employees in
`accordance with detailed step-by-step procedures promulgated by
`Elk Energy or Elk Energy’s customers. See id. ¶¶ 41-43.
`
`The plaintiff, Richard Lupardus, worked for Elk Energy
`as a pipeline inspector from approximately 2010 until
`approximately August 2018. Id. ¶ 16. The plaintiff was
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`responsible for performing visual and non-destructive testing on
`pipelines, pipeline coating, and facilities owned and operated
`by Elk Energy customers. Id. ¶ 19. Elk Energy classified the
`plaintiff as an “employee” and, like other inspectors, paid him
`on a day rate basis, not on a salary basis, but did not pay him
`overtime when he worked in excess of 40 hours in a given week.
`See id. ¶¶ 18-23, 33-36.
`
`The plaintiff alleges that Elk Energy misclassified
`him and other inspectors as exempt from overtime pay.1 See id.
`¶¶ 20, 22, 46. As a result of this misclassification, the
`plaintiff alleges that he and other inspectors were denied
`overtime pay. See id. ¶ 47. The plaintiff further alleges that
`inspectors complained to Elk Energy about the lack of overtime
`pay and that Elk Energy either knew or showed reckless disregard
`for whether the plaintiff and other inspectors were entitled to
`overtime pay. See id. ¶¶ 48-49.
`
`The plaintiff filed this suit on July 18, 2019,
`alleging a violation of the FLSA, 29 U.S.C. § 207, for failure
`to pay the plaintiff overtime pay of time-and-a-half for all
`
`
`1 The plaintiff alleges that none of the exemptions in the FLSA
`regulating the duty of employers to pay overtime apply to the
`plaintiff, the other inspectors, or Elk Energy. See Compl.
`¶ 52; see also id. ¶ 38 (citing 29 C.F.R. §§ 541.100, 541.200,
`541.300); id. ¶ 44 (citing 29 C.F.R. § 541.203(g)).
`
`3
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`hours worked in excess of 40 hours per workweek. See id. ¶¶ 50-
`52. The plaintiff brings suit “[o]n behalf of himself and all
`other similarly situated employees” as a collective action under
`the FLSA, 29 U.S.C. § 216(b). See id. ¶¶ 1-2. The plaintiff
`filed a motion for conditional certification on February 4, 2020
`to grant conditional certification of the collective action
`under the FLSA. See ECF No. 17. The plaintiff defines the
`class of employees to be conditionally certified as: “All
`inspectors employed by Defendant Elk Energy Services, LCC in the
`last three years.” Id. at 1. The motion is fully briefed.
`
`II. Discussion
`
`A.
`
`Conditional Certification of the Collective Action
`
`The FLSA requires that employers pay overtime for each
`hour that employees work in excess of forty (40) hours per week,
`but the statute exempts “any employee employed in a bona fide
`executive, administrative, or professional capacity” (i.e., an
`“exempt” employee). See 29 U.S.C. § 213(a)(1). The FLSA
`permits private plaintiffs to bring collective action suits on
`behalf of themselves and all other employees who are “similarly
`situated” for violations of the statute. Id. § 216(b); see also
`Hoffmann–La Roche Inc. v. Sperling, 493 U.S. 165, 169–170
`(1989). “No employee shall be a party plaintiff to any such
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`action unless he gives his consent in writing to become such a
`party and such consent is filed in the court.” 29 U.S.C.
`§ 216(b). The Supreme Court has authorized courts to facilitate
`notice to potential plaintiffs in such collective actions,
`emphasizing the importance of “employees receiving accurate and
`timely notice concerning the pendency of the collective action”
`and observing that “[c]ourt authorization of notice serves the
`legitimate goal of avoiding a multiplicity of duplicative
`suits.” Hoffman-La Roche, 493 U.S. at 170-72.
`
`Many courts have chosen to adopt a two-stage approach
`
`to managing collective actions under the FLSA, a practice that
`originates in Lusardi v. Xerox Corp., 118 F.R.D. 351 (D.N.J.
`1987). The first stage involves conditional certification to
`give notice to potential class members early in the litigation,
`before much of the discovery. At this stage, the court requires
`only that the plaintiffs “make a ‘modest factual showing
`sufficient to demonstrate that they and potential plaintiffs
`together were victims of a common policy or plan that violated
`the law.’” Encinas v. J.J. Drywall Corp., 265 F.R.D. 3, 6
`(D.D.C. 2010) (quoting Castillo v. P&R Enters., Inc., 517 F.
`Supp. 2d 440, 445 (D.D.C. 2007)); see also McLaurin v. Prestage
`Foods, Inc., 271 F.R.D. 465, 469 (E.D.N.C. 2010) (requiring only
`“substantial allegations that the putative class members were
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`together the victims of a single decision, policy, or plan”).
`That showing “is ordinarily based mostly on the parties'
`pleadings and affidavits.” Chase v. AIMCO Properties, L.P., 374
`F. Supp. 2d 196, 200 (D.D.C. 2005)). The claims of the named
`plaintiff need not be identical to those of potential opt-in
`plaintiffs; the claims only need to be similar. Grayson v. K
`Mart Corp., 79 F.3d 1086, 1096 (11th Cir. 1996).
`
`The second stage is usually triggered by a
`
`decertification motion by the defendant, after much of the
`discovery has taken place, in an attempt to show that “the
`plaintiffs are not, in fact, similarly situated.” Encinas, 265
`F.R.D. at 6.
`
`Although the Court of Appeals for the Fourth Circuit
`
`has not settled on a particular test for conditional
`certification, courts nationwide generally consider the burden
`on the named plaintiffs at the first stage to be relatively
`lenient. See, e.g., Hipp v. Liberty Nat’l Life Ins. Co., 252
`F.3d 1208, 1219 (11th Cir. 2001), cert. denied 519 U.S. 982
`(quoting Grayson, 79 F.3d at 1097) (characterizing the
`plaintiff’s burden at the notice stage as “not heavy” and
`requiring it to be met by “making substantial allegations of
`class-wide discrimination”); Zavala v. Wal Mart Stores Inc., 691
`F.3d 527, 536 (3d Cir. 2012) (internal quotations omitted)
`
`6
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`(affirming the use of the two-step approach and noting that the
`first-stage “conditional certification” is “not really a
`certification” but “actually the district court’s exercise of
`[its] discretionary power . . . to facilitate the sending of
`notice to potential class members”); Mooney v. Aramco Servs.
`Co., 54 F.3d 1207, 1214 (5th Cir. 1995), overruled on other
`grounds by Desert Palace, Inc. v. Costa, 539 U.S. 90 (2003)
`(“Because the court has minimal evidence, this determination [at
`the notice stage] is made using a fairly lenient standard, and
`typically results in ‘conditional certification’ of a
`representative class.”).
`
`
`
`Some courts in this circuit have noted that:
`A court's discretion to facilitate notice is not
`unfettered. Indeed, courts should not exercise their
`discretion to facilitate notice unless ‘[t]he facts
`and the circumstances of the case illustrate’ that a
`class of ‘similarly situated’ aggrieved employees
`exists.
`Purdham v. Fairfax Cty. Pub. Sch., 629 F. Supp. 2d 544, 547-48
`(E.D. Va. 2009) (quoting Hoffman-La Roche, 493 U.S. at 170).
`“The relevant inquiry . . . is not whether the court has
`discretion to facilitate notice, but whether this is an
`appropriate case in which to exercise that discretion.” Camper
`v. Home Quality Mgmt., Inc., 200 F.R.D. 516, 519 (D. Md. 2000).
`“[A] court may determine that conditional certification is
`inappropriate where multiple claims cannot be adjudicated
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`efficiently because they would require ‘substantial
`individualized determinations for each class member.’” Syrja v.
`Westat, Inc., 756 F. Supp. 2d 682, 686 (D. Md. 2010) (citing
`Purdham, 629 F. Supp. 2d at 549).
`
`The plaintiff in this action seeks conditional
`
`certification of a class of employees defined as: “All
`inspectors employed by Defendant Elk Energy Services, LLC in the
`last three years.” ECF No. 17 at 1. The plaintiff alleges that
`Elk Energy pays all of its inspectors under a single pay system
`that universally affects all inspectors and fails to compensate
`them for the amount of overtime required by the FLSA. See id.;
`ECF No. 18 at 8-10. Under this pay system, the plaintiff
`alleges that he and the other inspectors were not paid a
`guaranteed salary but were instead paid based on the number of
`days worked. See ECF No. 18 at 10-11. The plaintiff argues
`that Elk Energy misclassified the group of inspectors as exempt
`employees “in one fell swoop,” and that, consequently, the legal
`question concerning Elk Energy’s liability can be resolved on a
`class-wide basis. Id. at 10, 18.
`
`Elk Energy presents three main arguments for denying
`
`the motion for conditional certification.
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`8
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`(1) Whether the Plaintiff is Similarly Situated
`
`First, Elk Energy asserts that the plaintiff has
`
`failed to provide any evidence that he is “similarly situated”
`to the putative class. See ECF No. 19 at 1. In particular, Elk
`Energy alleges that the plaintiff has failed to procure any
`consent, affidavit, or declaration from any other employee to
`demonstrate that such employee is similarly situated to himself.
`See id. at 5. Elk Energy contends that the plaintiff merely
`provides conclusory allegations to support his claim that other
`employees are similarly situated. Id. at 5-6.
`
`Upon review of the plaintiff’s complaint and Elk
`
`Energy’s own answers to the plaintiff’s interrogatories, the
`court finds that the plaintiff has made a sufficient showing
`that he, and other non-exempt employees working for Elk Energy
`as inspectors, were similarly situated as victims of a common
`policy or plan not to pay them overtime in accordance with the
`FLSA for all or part of the time in which these employees worked
`for Elk Energy within the last three years. See Romero v.
`Mountaire Farms, Inc., 796 F. Supp. 2d 700, 705 (E.D.N.C. 2011)
`(“[T]he standard for conditional certification is fairly lenient
`and requires ‘nothing more than substantial allegations that the
`putative class members were together the victims of a single
`
`9
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`decision, policy, or plan.’”) (quoting Thiessen v. Gen. Elec.
`Capital Corp., 267 F.3d 1095, 1102 (10th Cir. 2001)).
`
`In its answers to the plaintiff’s interrogatories, Elk
`
`Energy states that “[i]nspectors were paid a flat sum for an
`entire day, regardless the actual number of hours worked,” and
`received overtime for hours in excess of ten hours a day. See
`ECF No. 17-3 at 15. In 2016, Elk Energy alleges that it changed
`its compensation system for “inspectors” to pay each inspector
`“a flat sum for a day’s work, regardless the number of hours
`worked in that day,” and paid overtime based on hours in excess
`of forty hours in a workweek. See id. at 15-16. While Elk
`Energy alleges that this change in the compensation system began
`in late 2016 and carried over into 2017, it does not specify
`whether the compensation system continued after 2017. See id.
`
`Elk Energy classified the plaintiff as an “employee,”
`
`as defined under the FLSA, and paid him a day rate like other
`inspectors, even when he was a chief inspector. See ECF No. 17-
`6 at 3-6. Elk Energy contends that “Plaintiff was compensated
`on a salary basis because he regularly received each pay period
`a predetermined amount constituting all or part of his
`compensation.” ECF No. 17-3 at 18. However, Elk Energy’s
`answers to the plaintiff’s interrogatories indicate that the
`plaintiff was not paid on a salary basis but was instead
`
`10
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`responsible for tracking his own hours worked to submit for
`review and approval. Id. at 14. As a chief inspector, the
`plaintiff was guaranteed five days of work per work, should he
`desire to work, and full compensation for a workday, even if he
`only worked for part of a day. See id. at 14, 19-20. The pay
`was still “based on a day-rate compensation system . . .
`calculated by taking the number of days worked and multiplying
`that figure by the day-rate figure.” Id. at 14. Overtime pay
`was based on “all hours worked over ten in a day,” rather than
`the hours worked in excess of forty in a given week. See id.
`The overtime calculation changed in 2018 to compensate based on
`hours worked in excess of forty during a workweek, with overall
`compensation still based on a day rate. See id. at 14-15, 20.
`
`Elk Energy’s answers demonstrate that the plaintiff
`
`and other inspectors were subject to a common policy in which
`their pay was based on a day rate and in which overtime was not
`paid in accordance with the FLSA for some period of time. Other
`courts have found that groups of inspectors subject to a similar
`policy were also similarly situated. See, e.g., Fenley v. Wood
`Grp. Mustang, Inc., 170 F. Supp. 3d 1063, 1072 (S.D. Ohio 2016)
`(conditionally certifying a nationwide class of day rate paid
`inspectors); Wischnewsky v. Coastal Gulf & Int'l, Inc., No.
`CIV.A. 12-2277, 2013 WL 1867119, at *5 (E.D. La. May 2, 2013)
`
`11
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`(finding that the plaintiffs “have alleged facts sufficient to
`demonstrate that they and other employees who primarily
`performed field inspections to certify oil, gas, and chemical
`products were victims of a common policy or plan that violated
`the law and therefore state a collective action claim under 29
`U.S.C. § 216(b)”).
`
`(2) Whether the Proposed Class is “Over Broad”
`
`Second, Elk Energy argues that the plaintiff’s
`
`proposed class is “over broad” and that the plaintiff’s claims
`are not suitable for collective treatment because of the
`individualized nature of the claims. See ECF No. 19 at 1, 4, 6.
`Elk Energy alleges that the plaintiff seeks to create a “nearly-
`nationwide class” of employees in thirteen different inspector
`positions working pursuant to contracts with customers across
`eight to twelve different states based solely on the common job
`title of “inspector” and the unsupported, conclusory allegation
`that this group has the same job duties. See id. at 4, 8. Elk
`Energy alleges that the job duties of each individual inspector
`are shaped by the terms of Elk Energy’s service contracts with
`its customers. Id. at 8. Elk Energy further alleges that some
`of these contracts require employees to arbitrate claims,
`including claims for non-payment of overtime, and to waive the
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`right to participate in class actions. See id.; see also ECF
`No. 19-1 (arbitration agreement).
`
`Elk Energy alleges that the plaintiff spent a
`
`“significant portion of his relevant (i.e., within the statute
`of limitations) time” employed as a “Chief Inspector” with
`management responsibilities. ECF No. 19 at 8; see also ECF No.
`17-3 at 5-6 (identifying the plaintiff as a “Chief Inspector”
`from 2016-2018). Elk Energy adds that, in 2017, the plaintiff
`performed chief inspector duties on a project but was
`compensated at a general inspector rate of pay. ECF No. 17-3 at
`5. Elk Energy contends that it, in “good faith,” considered the
`plaintiff to be an exempt employee pursuant to the FLSA’s
`executive exemption for part of the time at issue in this action
`because the plaintiff was classified as a chief inspector in
`which his primary duty was “management of a customarily
`recognized department or subdivision of Elk Energy.” See id. at
`9, 18. If the court were to proceed with conditional
`certification, Elk Energy urges the court to narrow the class to
`the only positions held by the plaintiff: chief inspector and
`environmental services inspector. Id. at 10.
`
`In addressing the manageability of individualized
`
`claims of potential opt-in plaintiffs, some courts have opted to
`defer manageability concerns until the second stage of
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`13
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`collective action certification. See, e.g., Vondriska v.
`Premier Mortg. Funding., Inc., 564 F. Supp. 2d 1330, 1336 (M.D.
`Fla. 2007) (asserting that “concerns regarding the manageability
`of the proposed class and whether the interests of judicial
`economy will actually be served by a collective action . . . are
`more appropriately addressed at the decertification stage when
`additional information is available regarding the
`characteristics of the class”); Gieseke v. First Horizon Home
`Loan Corp., 408 F. Supp. 2d 1164, 1168 (D. Kan. 2006) (deferring
`manageability issues to the decertification stage). Other
`courts, however, have “exercised their discretion and have taken
`the manageability of a proposed class into account at the
`notification stage.” Syrja, 756 F. Supp. 2d at 689; see, e.g.,
`Purdham, 629 F. Supp. 2d at 552 (concluding that “conditional
`certification [was] not appropriate based on the probable
`necessity of individualized FLSA determinations for each
`putative class member”).
`
`Indeed, the court will need to evaluate the amount of
`
`damages for each plaintiff, but “it is not clear without
`additional discovery that these issues would weigh against
`certification, given that ‘[i]ndividual circumstances are
`inevitably present in a collective action.’” Randolph v.
`PowerComm Constr., Inc., 7 F. Supp. 3d 561, 576-77 (D. Md. 2014)
`
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`(quoting Butler v. DirectSAT USA , LLC, 876 F. Supp. 2d 560, 570
`(D. Md. 2012)). Even if different inspectors performed
`different job duties based on their job title and a particular
`contract with an Elk Energy customer, the compensation plan was
`the same across all inspector positions, including chief
`inspectors. The court therefore defers the evaluation of the
`individualized claims of opt-in plaintiffs until the
`decertification stage when more information is available to
`assess such claims.
`
`(3) Whether Similarly Situated Individuals Want to
`Join the Collective Action
`
`Third, Elk Energy asserts that conditional
`
`certification is not appropriate unless the plaintiff proves
`that similarly situated individuals want to join the lawsuit,
`which the plaintiff allegedly has not done. See ECF No. 19 at
`11. Elk Energy’s argument is without merit. This court has not
`required such a showing when granting conditional certification.
`See, e.g., Deskins v. S. W. Virginia Cmty. & Tech. Coll., No.
`2:18-cv-01109, 2019 WL 3987759, at *4-5 (S.D.W. Va. Aug. 22,
`2019); Mayhew v. Loved Ones in Home Care, LLC, No. 2:17-cv-
`03844, 2017 WL 5983153, at *3 (S.D.W. Va. Dec. 1, 2017).
`Requiring the plaintiff to prove that similarly situated
`individuals want to join the lawsuit at this stage creates an
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`unnecessary burden that essentially requires the plaintiff to
`initiate an informal notice process prior to moving for
`conditional certification. Such a process may mislead or
`confuse potential opt-in plaintiffs and waste the named
`plaintiff’s time and resources. The Supreme Court has even
`noted that the benefits of a collective action “depend on
`employees receiving accurate and timely notice concerning the
`pendency of the collective action, so that they can make
`informed decisions about whether to participate.” Hoffmann-La
`Roche, 493 U.S. at 170. The purpose of conditional
`certification and an official notice is merely to provide the
`opportunity for putative class members to join the collective
`action, whether or not they decide to join.
`
`Accordingly, the court finds sufficient cause to grant
`
`conditional certification and to proceed with notice to other
`potential opt-in plaintiffs.
`
`B.
`
`Scope of the Notice
`
`Elk Energy objects to the time period of the putative
`class and to the text of the plaintiff’s proposed notice.
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`(1) Time Period
`
`The length of the statute of limitations for causes of
`action under the FLSA depends upon whether the violation at
`issue was willful. See 29 U.S.C. § 255(a); Calderon v. GEICO
`Gen. Ins. Co., 809 F.3d 111, 130 (4th Cir. 2015). The statute
`of limitations is two years for non-willful violations, or three
`years for willful violations.2 See 29 U.S.C. § 255(a); Desmond
`v. PNGI Charles Town Gaming, LLC, 630 F.3d 351, 357 (4th Cir.
`2011). To establish willfulness, the employee bears the burden
`of showing that “the employer knew or showed reckless disregard
`for the matter of whether its conduct was prohibited by the
`statute.” Perez v. Mountaire Farms, Inc., 650 F.3d 350, 375
`(4th Cir. 2011) (citing McLaughlin v. Richland Shoe Co., 486
`U.S. 128, 133 (1988)). Negligence is not sufficient to
`establish willfulness. Richland Shoe, 486 U.S. at 135. The
`question of whether an employer acted willfully in violation of
`the FLSA is generally a question of fact. See Martin v.
`Deiriggi, 985 F.2d 129, 136 (4th Cir. 1993).
`
`Claims for potential plaintiffs to an FLSA collective
`action, who are not named in the original complaint, commence
`“on the subsequent date on which [the potential plaintiffs’]
`
`
`2 The FLSA action must commence within two or three years after
`the cause of action accrued, or else the action is time-barred.
`See 29 U.S.C. § 255(a).
`
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`written consent is filed in the court.” 29 U.S.C. § 256(b); Lee
`v. Vance Exec. Prot., Inc., 7 F. App'x 160, 167 (4th Cir. 2001).
`The consent forms of such potential plaintiffs do not relate
`back to the date that the complaint was filed. Lee, 7 F. App'x
`at 167. This means that the statute of limitations for the
`claims of a plaintiff who opts in to join an FLSA collective
`action runs back from when that plaintiff files a consent form
`with the district court. Id. at 168.
`
`The plaintiff seeks conditional certification for a
`
`class of inspectors employed by Elk Energy within the last three
`years. The plaintiff alleges that Elk Energy willfully violated
`the overtime provision of the FLSA. See Compl. ¶¶ 48-49; ECF
`No. 20 at 8. Elk Energy argues that the scope of the putative
`class should be limited to the last two years, in part, because
`the plaintiff has not pled facts to support a showing of a
`willful violation of the FLSA that would compel a three-year
`statute of limitations. See ECF No. 19 at 14-15.
`
`Defining the scope of the putative class to inspectors
`
`employed within the last three years is reasonable and in the
`interest of judicial economy. Limiting the scope of the
`putative class to the last two years concedes the issue of
`willfulness without the benefit of discovery. Willfulness
`remains an issue for the finder of fact. If the finder of fact
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`Case 2:19-cv-00529 Document 28 Filed 07/28/20 Page 19 of 29 PageID #: 300
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`does not find a willful violation, then any claims in the third
`year can easily be dismissed. However, if the court were to
`define a two-year putative class and the finder of fact found a
`willful violation, it would not be possible to consider claims
`in the third year and the affected class members would be unduly
`prejudiced as those claims would likely be time-barred.
`
`(2) Text of the Notice
`
`District courts play a critical role in ensuring that
`
`notices to putative class members are “timely, accurate, and
`informative.” See Hoffman-La Roche, 493 U.S. at 170-72. Elk
`Energy argues that the plaintiff’s proposed notice and consent
`forms do not meet this standard. See ECF No. 19 at 16.
`
`(i) Award of Costs to a Prevailing Defendant
`
`First, Elk Energy asserts that the notice must advise
`
`potential opt-in plaintiffs that they may be required to share
`responsibility for Elk Energy’s costs if it prevails in the
`litigation. See ECF No. 19 at 16. The plaintiff argues that
`the notice should not threaten class members with the remote
`possibility that they could be liable for Elk Energy’s costs.
`ECF No. 20 at 9. The plaintiff further argues that this effort
`only serves to chill participation by dissuading potential opt-
`
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`Case 2:19-cv-00529 Document 28 Filed 07/28/20 Page 20 of 29 PageID #: 301
`
`in plaintiffs from exercising their rights to join the
`collective action. Id. at 9-10.
`
`Section 216(b) of the FLSA provides, in pertinent
`part, that: “The court in [a collective] action shall, in
`addition to any judgment awarded to the plaintiff or plaintiffs,
`allow a reasonable attorney’s fee to be paid by the defendant,
`and costs of the action.” 29 U.S.C. § 216(b). Section 216(b)
`is silent as to the awards of costs to prevailing defendants,
`but several federal courts of appeal have found that a
`prevailing defendant may recover costs. See, e.g., Faludi v.
`U.S. Shale Sols., L.L.C., 950 F.3d 269, 276 (5th Cir. 2020)
`(holding that “the FLSA does not preclude an award of costs to a
`prevailing defendant” and that a court must articulate “some
`good reason” for denying or reducing a prevailing party’s
`request for costs); Lochridge v. Lindsey Mgmt. Co., 824 F.3d
`780, 782 (8th Cir. 2016) (holding that “neither § 216(b) nor any
`other provision of the FLSA precludes an award of costs to a
`prevailing defendant”); Frye v. Baptist Mem'l Hosp., Inc., 507
`F. App'x 506, 508 (6th Cir. 2012) (holding that “a prevailing
`defendant can recover costs under the FLSA”).
`
`Despite the possibility that Elk Energy may prevail in
`
`this action and be entitled to recover some or all of its costs,
`the court agrees that language in the notice advising potential
`
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`Case 2:19-cv-00529 Document 28 Filed 07/28/20 Page 21 of 29 PageID #: 302
`
`opt-in plaintiffs of the risk of paying litigation costs
`presents a chilling effect that subverts and is antithetical to
`the remedial purpose of the collective action. “[T]he threat of
`payment of defense costs . . . if [Elk Energy] prevails is out
`of proportion to the risk and including such a warning could
`have a chilling effect on participation in the collective
`action.” Hussein v. Capital Bldg. Servs. Grp., Inc., 152 F.
`Supp. 3d 1182, 1196-97 (D. Minn. 2015). Other federal district
`courts have rejected such language for similar reasons. See,
`e.g., Frazier v. PJ Iowa, L.C., 337 F. Supp. 3d 848, 875 (S.D.
`Iowa 2018); Littlefield v. Dealer Warranty Servs., LLC, 679 F.
`Supp. 2d 1014, 1019 (E.D. Mo. 2010). Potential opt-in
`plaintiffs should have full knowledge of the risks in order to
`make an informed decision of whether to join the collective
`action. Such risks are better discussed with an attorney who
`can properly evaluate that person’s potential claims and advise
`that person of the benefits and risks of joining the action.
`
`(ii) Court Neutrality
`
`Second, Elk Energy argues that the proposed notice
`
`should advise recipients of the court’s neutrality. See ECF No.
`19 at 17. In notice procedures for collective actions, “trial
`courts must take care to avoid even the appearance of judicial
`endorsement of the merits of the action.” Hoffman-La Roche, 493
`
`21
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`Case 2:19-cv-00529 Document 28 Filed 07/28/20 Page 22 of 29 PageID #: 303
`
`U.S. at 174. The plaintiff’s proposed notice states that the
`court has “not yet decided whether [Elk Energy] has done
`anything wrong,” ECF No. 17-10 at 2, but Elk Energy argues that
`the notice should contain a statement in bold font that reads as
`follows: “THE COURT HAS TAKEN NO POSITION ABOUT THE MERITS OF
`PLAINTIFF'S CLAIMS OR DEFENDANT'S DEFENSES,” ECF No. 19 at 17.
`
`The court agrees that any communications to the
`
`putative class must clearly and unequivocally state that the
`court has not taken a position on the merits of this case. The
`proposed language by Elk Energy is acceptable should the parties
`agree to use that language.
`
`(iii)
`
`Right to Choose Counsel
`
`Third, Elk Energy argues that the proposed notice
`
`should advise recipients that they have the right to choose
`their own counsel. See ECF No. 19 at 18. The plaintiff does
`not respond to this argument.
`
`The court agrees that the notice should inform
`
`potential opt-in plaintiffs of their option to proceed with
`plaintiff’s counsel or to choose their own counsel. Opt-in
`plaintiffs may elect plaintiff’s counsel for representation, but
`they must not be prevented from choosing their representation.
`
`22
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`Case 2:19-cv-00529 Document 28 Filed 07/28/20 Page 23 of 29 PageID #: 304
`
`(iv) Management of Consent Forms
`
`Fourth, Elk Energy argues that the consent form should
`
`be returned to the court rather than to plaintiff’s counsel.
`See ECF No. 19 at 18. The plaintiff opposes this request for
`four reasons: (1) such a process is an inefficient use of the
`court’s limited time and resources; (2) the court may be too
`busy to file consent forms promptly when they are received,
`which impacts the statute of limitations period for each opt-in
`plaintiff; (3) the consent forms will contain personal
`information that does not need to be part of the public record;
`(4) sending the forms to the court risks plaintiff’s counsel not
`being informed of new opt-in plaintiffs until the ECF notice;
`and (5) having the court receive consent forms invites the
`problem of class members contacting the court with questions
`about the case. See ECF No. 20 at 14-15.
`
`The court agrees with all of the plaintiff’s concerns.
`
`In addition to these, court management of the consent forms also
`jeopardizes the neutral position of the court. Elk Energy fails
`to provide any reason why the burden of managing the consent
`forms should be imposed upon the court. The court does not
`assume responsibility for the management of consent forms in
`this action. Even with the option to choose plaintiff’s counsel
`or separate counsel for representation, all consent forms should
`
`23
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`Case 2:19-cv-00529 Document 28 Filed 07/
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