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Castaneda v. Empath, LLC

United States District Court, M.D. Louisiana

July 5, 2019




         Before the Court is a Supplemental Emergency Motion for Protective Order, Sanctions, and Corrective Notice (the “Motion”)[1] filed by plaintiffs, Jonaser Castaneda and Greg Paliaro (“Plaintiffs”). For the reasons set forth herein, Plaintiffs are ordered to serve the Motion and this Notice and Order on defendant, Empath, LLC (“Defendant”), confer with Defendant regarding the Motion, and file either a Supplemental Certification or a Motion to Withdraw the Motion. In the event the parties are unable to resolve the issues raised in the Motion, Defendant shall file a response to the Motion within twenty-one (21) days of service of the Motion and this Notice and Order.

         I. Background

         On February 28, 2019, Plaintiffs filed a Collective Action Complaint (the “Complaint”) pursuant to the Fair Labor Standards Act (“FLSA”) on behalf of themselves and “all other similarly situated Technicians”[2] based on Defendant's alleged failure to pay Plaintiffs and other Technicians for “all hours worked” and “appropriate overtime wages….”[3] Plaintiffs seek an award of wages for all hours worked up to forty (40) hours per week, overtime compensation for all hours worked in excess of forty (40) hours per week, an equal amount as liquidated damages, and reasonable attorneys' fees and costs.[4]

         Per the instant Motion, Plaintiffs assert that on May 21, 2019, one day following Defendant's receipt of the Complaint, “Defendant called a meeting of its cable technicians at the Baton Rouge office and attempted to settle their overtime and unpaid wage claims in exchange for the potential class members execution of certain confidentiality agreement[s] and waive[r] of litigation and FLSA rights.”[5] Plaintiffs contend that Defendant's actions warrant sanctions, and request an order from this Court “requiring (1) that Defendant provide a listing of all telephone numbers and e-mail addresses of putative class members that received Defendant's documents evidenced by Exhibit 2, (2) monetary sanctions that would include attorneys' fees and costs, including the costs of a third-party to evaluate the monetary claim of all potential class members; (3) the delivery of a corrective notice to the class to be paid for by Defendant, (4) striking as invalid any signed agreements and waivers, and (5) a tolling of the claims of all potential class members.”[6]

         II. Law and Analysis

          “[C]ourts have the authority to govern the conduct of counsel and parties in § 216(b) collective actions, just as they do in Rule 23 class actions.”[7] “[B]ecause of the potential for abuses in collective actions, such as unapproved, misleading communications to absent class members, a district court has both the duty and the broad authority to exercise control over a class action and to enter appropriate orders governing the conduct of counsel and parties.”[8] “This ‘managerial responsibility begins once the collective action is filed, before the court conditionally certifies the class or authorizes a section 216(b) notice.'”[9]

         As one district court recently explained:

Communications found violative of the principles of Rule 23 include misleading, coercive, or improper attempts to undermine Rule 23 by encouraging class members not to join a suit. Unlimited contacts by defendants with class members or potential class members may serve to undermine the purposes of Rule 23 by allowing defendants to reduce their liability and encourage potential class members not to join a suit. Thus, where an alleged class action has been filed but certification has not yet been decided, a court may issue a limitation on ex parte contact under Rule 23, if it is clear the defendant is attempting to engage in conduct which would undermine the purposes of the rule. This rule also applies after a district court has certified a class, and the notices have been approved.
An order limiting communications between parties and class members, however, is a prior restraint on speech. The Court will only consider the narrowest possible relief “that limits speech as little as possible consistent with the rights of the parties under the circumstances.” However, “when a given form of speech is inherently conducive to overreaching and duress, ” a showing of a particular existing harm is not required; a likelihood of serious abuse is sufficient. Speech between parties with an ongoing business relationship is inherently conducive to coercive influence, and an employer-employee relationship is a salient example of this type of ongoing business relationship.
Nonetheless, an order limiting communications between parties and potential class members should be based on a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties. The Eleventh Circuit identified four criteria that are relevant to determining whether an order limiting contacts with class members is needed: the severity and likelihood of the perceived harm, the availability of a less onerous alternative, the precision with which the order is drawn, and the duration of the order.[10]

         Applying this standard, courts in this Circuit “may not restrict communications ‘without a specific record showing by the moving party of the particular abuses by which it is threatened'”[11] and have refused to limit a defendant's communications with potential class members based on insufficient or speculative evidence.[12] Conversely, narrow limitations on the right to contact potential class members have been imposed where there is a showing that communications “in some way deprive members of the putative class of their rights.”[13] For example, in Belt v. Emcare, Inc., [14] the Eastern District of Texas restricted defendants' ex parte communications with absent class members in a FLSA collective action where, one day prior to the issuance of the court approved notice to potential class members, defendant EmCare unilaterally sent a letter to potential class members in which EmCare “mischaracterized the damages available to the putative class by ignoring statutory liquidated damages” and “represented that attorney's fees would be deducted from any recovery….”[15] The court found EmCare's letter to be misleading as well as coercive, [16] enjoined defendants from making any ex parte communications with absent class members regarding the litigation until the end of trial, [17] and imposed sanctions including the issuance of a corrective notice and an extension of the delay for claimants to opt into the collective action.[18]

         Here, Plaintiffs attach the affidavit of one of the plaintiffs, Jonaser Castaneda, as well as a copy of the document which Defendant allegedly asked technicians to sign.[19] Per his affidavit, Mr. Castaneda states that he refused to sign the proffered waiver, and that following the May 21, 2019 meeting, Defendant's representative met with him individually “and stated that he does not want to deal with lawyers and lawyers would be bad for me because lawyers will take a fee out of any overtime payment owed.”[20] Plaintiffs argue that Defendant's “actions are a not so thinly veiled threat to the employment of anyone who decides to join this lawsuit, and will potentially have a chilling effect on class member participation, ”[21] and that during the May 21, 2019 meeting “Defendant fail[ed] to mention this pending litigation, the class members' rights under the law, and misleads (sic) the reader into believing that the execution of the document is necessary for continued employment.”[22]

         At this stage of these proceedings, the Court does not rule on the merits of Plaintiffs' Motion. Significantly, and assuming arguendo that Plaintiffs are entitled to all or some of the sought, Plaintiffs have provided no explanation as to how this Court can impose any limitation or sanction on Defendant at this point. Significantly, “[i]n the absence of service of process (or waiver of service by the defendant), a court ordinarily may not exercise power over a party the complaint names as defendant.”[23] “Accordingly, one becomes a party officially, and is required to take action in that capacity, only upon service of a summons or other authority-asserting measure stating the time within which the party served must appear and defend.”[24] Defendants have not made an appearance in this action. Plaintiffs explain that although they “have been unable to affect service of the Complaint on the Defendant, ” Defendant “is well aware of this litigation as it has received a certified copy of the Complaint and Waiver of Summons.”[2 ...

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