RIGGAN LAW FIRM OBTAINS RULE 23 CLASS CERTIFICATION IN AUTO WARRANTY REP OVERTIME CASE

RIGGAN LAW FIRM OBTAINS RULE 23 CLASS CERTIFICATION IN AUTO WARRANTY REP OVERTIME CASE

Previously, this blog reported on the class action overtime case of Rikard, et al. v. U.S. Auto Warranty, LLC ("USAP"), et al. a case being handled by Riggan Law Firm, LLC--a St. Louis overtime law firm--and Weinhaus & Potashnick. The lawsuit involves claims by a group of former sales representatives to recover unpaid overtime wages. About a year ago, the Court granted Plaintiffs' Motion for Conditional Certificationpursuant to the Fair Labor Standards Act ("FLSA"), which prompted a class notice being sent to approximately 500 potential class members. After issuance of the class notice, more than 100 former USAP employees exercised their right to opt-in to the lawsuit and assert claims for unpaid wages.

On November 30, 2012, the Court issued an Order granting Plaintiffs' Motion for Class Certification pursuant to Rule 23 of the Federal Rules of Civil Procedure. The ruling is significant because while many class/collective action wage lawsuits are conditionally certified as collective actions pursuant to the FLSA, few such suits are certified as class actions pursuant to Rule 23. In particular, the Rikard case is one of the first of its kind from the U.S. District Court for the Eastern District of Missouri to involve Rule 23 certification, seemingly because few wage cases involving multiple plaintiffs have made it this far into the litigation process and because few law firms are pursuing state law claims for unpaid wages pursuant to Rule 23.

The Rikard case was originally filed in September 2011. The suit alleges that salespersons at USAP (inclusive of set-up employees, or pre-screeners, and closers) worked more than 40 hours per week and were not provided with overtime pay as required by the FLSA and Missouri law. The job of USAP salespersons was to sell extended automobile warranties (also called vehicle service contracts) to customers via telephone. For most of their employment, salespersons were paid a draw plus commissions. For a short period of time in mid-2011, USAP switched from a draw/commission pay structure to paying salespersons an hourly rate of pay with overtime. However, as evidence has shown in the case, USAP made a decision to discontinue paying overtime because it was too costly, and changed back to a draw/commission pay structure.

While USAP went out of business in the latter part of 2011, the lawsuit continues because the class members have made claims against individual owners/managers of USAP. Federal and Missouri law provides that individual owners/managers of a business can be individually liable for wage violations where they had operational control over the business. In Rikard, the individual defendants include Ray Vinson,Shawn Vinson, and Matthew McLain, all of whom are and/or have been affiliated withVinson Mortgage Group in St. Louis, Missouri.

Before a class can be certified pursuant to Rule 23, the following four conditions must be present: (1) numerosity, which means the class must be "so numerous that joinder of all members is impracticable"; (2) commonality, which requires that "there are questions or law or fact common to the class"; (3) typicality, which requires that "the claims or defenses of the representative parties are typical of the claims or defenses of the class"; and (4) adequacy, which ensures that "the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a); see also Paxton v. Union Nat'l Bank, 688 F.2d 552, 559 (8th Cir. 1982). The defendants in Rikard did not contest the numerosity of the class, and so the Court considered whether the remaining three elements were met.

In its November 30, 2012 Order, the Court found that the commonality element was met. The Court acknowledged that while Plaintiffs' situations are not identical (defendants argued that commonality was not met because various employees' hours, circumstances, managers, and payment schemes differed during their employment), such dissimilarity does not defeat the commonality standard. The Court stated that "if the Defendant companies refused to pay overtime in accordance with Missouri law, then they were in violation of Missouri law as to each Plaintiff who was subjected to such action no matter their differing hours, owners, circumstances, managers, or payment plans." The Court also noted that its finding of commonality is bolstered by the fact that all Plaintiffs worked at a single call center.

The Court also found that Plaintiffs met the typicality standard. The Defendants argued that typicality was not satisfied because "each plaintiff will need to produce evidence of overtime worked, as each worked during different time periods, under different payment plans, reported to different managers, and allege to have worked differing amounts of overtime." The Court rejected this argument and found that Plaintiff Rikard's claim of allegedly going uncompensated for certain hours worked is typical of the other Plaintiffs, no matter the factual differences asserted by Defendants.
In analyzing the adequacy prong of Rule 23, court focus on whether: (1) the class representatives have common interests with the members of the class, and (2) the class representatives will vigorously prosecute the interests of the class through qualified counsel. In Rikard, the Defendants did not contest the adequacy of Plaintiffs' counsel, nor did they dispute that the prospective class of Plaintiffs shares the interests of Plaintiff Rikard. Instead, Defendants argued that Plaintiff Rikard "has a history of theft, deceit, and criminal behavior, which call her credibility in this matter into serious question, and are likely to create an adverse impact on the class." The Court stated that while Defendants make brief mention of Plaintiff Rikard's allegedly checkered past, the Court does not find that "there exists admissible evidence so severely undermining plaintiff's credibility that a fact finder might reasonably focus on plaintiff's credibility, to the detriment of the absent class members' claims." The Court noted that Plaintiff Rikard's alleged failings are unrelated to her employment with Defendants, and the Court pointed out that "few plaintiffs com to court with halos above their heads; fewer still escape with those halos untarnished."

If you are an employee who works more than 40 hours per week and are not paid time-and-a-half for overtime hours, you may be entitled to additional compensation. To inquire about asserting a claim, or to learn more about your rights, you should contact a Missouri overtime lawyer.

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