United States District Court, D. Kansas
CAROLYN PORTER, on behalf of herself and all others similarly situated, Plaintiff,
WEST SIDE RESTAURANT, LLC, TAYSSIR ISSA, Defendants.
MEMORANDUM AND ORDER
JULIE A. ROBINSON, District Judge.
Plaintiff brings this putative collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 216(b), against Defendant West Side Restaurant, LLC ("West Side") and Tayssir Issa, doing business as IHOP, located at 515 S. Ridge Road, in Wichita, Kansas, claiming violations of the FLSA's minimum wage and overtime pay requirements. Specifically, Plaintiff alleges that she was not informed of the restaurant's tip credit, and that its tip pool policy is invalid under the FLSA. This matter is before the Court on the following motions: Defendants' Motion for Summary Judgment (Doc. 44); Plaintiff's Motion to Strike Reply (Doc. 57); Plaintiff's Motion for Conditional Certification (Doc. 31); and Defendants' Motion to Strike Consent (Doc. 42). For the reasons explained below, Plaintiff's motion to strike the summary judgment reply is denied and Defendant's motion for summary judgment is denied. Proceeding to the conditional certification motion, the Court grants Plaintiff's motion to conditionally certify the class defined in her motion, and denies Defendants' motion to strike Alycia Geraci's consent to opt-in.
I. Procedural History
Because this case seeks to conditionally certify a collective action under § 216(b) of the FLSA, it was placed on a dual-phase discovery track. Phase 1 of discovery was completed on November 15, 2013, and was to include issues relating to the named plaintiff, and issues involved in the conditional certification of a putative class, including but not limited to whether Plaintiff is similarly situated to other servers during the statutory period, and policies, practices, and procedures applicable to servers. Soon after the initial scheduling order was entered, Plaintiff filed the Declaration of Alycia Geraci,  an opt-in plaintiff in this action.
Upon completing Phase 1 of discovery, Plaintiff filed her motion for conditional certification of a class composed of:
all Servers and other persons with similar job duties and compensation structures, employed by Defendant West Side Restaurant, LLC, at the IHOP located at 515 S. Ridge Cir. Wichita, KS, 67209, within three years from the date of certification, to the present, who were not paid all minimum wages and overtime due and owing.
Defendant responded to the motion for conditional certification and filed a motion for summary judgment, arguing there is no genuine issue of material fact that the named Plaintiff, Ms. Porter, was compensated and provided notice in compliance with the FLSA's tip pooling requirements.
In her summary judgment response, Plaintiff argued that Defendants violated the FLSA by requiring their servers to pay a portion of their tips to expediters who did not customarily and regularly receive tips, and by failing to notify its servers of certain information required for the employer to take a tip credit against the servers' minimum wages. On summary judgment, Plaintiff relied on the deposition testimony of West Side's Rule 30(b)(6) deponent, Tayssir Issa ("Tayssir"), particularly in support of her contention that the servers were not notified that their pay would be at least $7.25 per hour. In their summary judgment reply, Defendants rely on several submissions in an effort to clarify statements Tayssir made in that deposition: (1) an errata sheet Tayssir Issa completed after receiving a copy of the deposition transcript; (2) declarations by Tayssir Issa completed in preparation for summary judgment; and (3) the declaration of Ali Issa, Defendant's brother, who is also the Director of Operations of the Ridge Road IHOP. Plaintiff asks the Court to strike Defendant's reply because these three submissions are invalid attempts to modify testimony that is material to the summary judgment motion in this matter. Because this motion to strike affects the submissions that are properly before the Court in considering Defendant's summary judgment motion, it will take up this motion before proceeding to the summary judgment motion.
II. Motion to Strike Summary Judgment Reply
As set forth above, Plaintiff moves to strike Defendants' reply to her response to the motion for summary judgment on the basis that it inappropriately modifies West Side's 30(b)(6) deponent's testimony. Under Fed.R.Civ.P. 12(f), the Court may strike from a pleading an insufficient defense, or "any redundant, immaterial, impertinent, or scandalous matter." However, motions to strike are generally disfavored because striking an entire pleading is a drastic remedy and such a motion is often brought as a dilatory tactic. "The Court will usually deny a motion to strike unless the allegations have no possible relation to the controversy and are likely to cause prejudice to one of the parties."
Plaintiff argues in her motion to strike that the entire reply brief should be stricken because it relies on submissions that invalidly change Tayssir's deposition testimony. The Court declines to strike the entire reply brief on this basis. Instead, the Court construes this motion as a motion to strike the evidence submitted by Defendants that arguably contradicts the deposition testimony at issue.
Defendants admit that Tayssir was mistakenly designated by his counsel as a Rule 30(b)(6) witness. He was deposed on August 2, 2013. He signed and attached an errata sheet to the transcript of that deposition on September 11, 2013. This errata sheet is not limited to typographical errors; it makes several substantive changes to the testimony. Counsel represents that Tayssir's brother Ali Issa ("Ali"), who had been out of the country at the time of the deposition, read the transcript and identified several errors. Ali is the Corporate Director of Operations of the IHOP restaurants owned by West Side. Many of the corrections on the errata sheet state that they are corrections from Ali. Ali Issa has also filed declarations explaining certain testimony from Tayssir's deposition.
West Side designated Tayssir as its Rule 30(b)(6) deponent, to testify on its behalf. Under the rule, this designated deponent "must testify about information known or reasonably available to the organization." One of the purposes of this rule is to "curb the "bandying" by which officers or managing agents of a corporation are deposed in turn but each disclaims knowledge of facts that are clearly known to persons in the organization and thereby to it.'" The designated representative must review all information reasonably available in preparing for the deposition so that it is "a meaningful one and to prevent the sandbagging of an opponent by conducting a half-hearted inquiry before the deposition but a thorough and vigorous one before the trial."
Once notified as to the reasonably particularized areas of inquiry for a Rule 30(b)(6) deposition, the corporation then must not only produce such number of persons as will satisfy the request, but more importantly, prepare them so that they may give complete, knowledgeable and binding answers on behalf of the corporation.' Any other interpretation of the Rule would allow the responding corporation to sandbag' the deposition process.
Plaintiff argues that West Side should be bound by Tayssir's testimony at the deposition. Defendants argue that Tayssir's 30(b)(6) testimony is not binding because they immediately attempted to inform Plaintiff's counsel of the corrections to his testimony through the errata sheet and by offering the declarations of Ali and Ben Nichols. As such, they argue they cannot be accused of ambushing their opponents at trial. Regardless of the time it took to correct Tayssir's deposition answers, it is clear that he did not provide complete and knowledgeable answers on behalf of the corporation. West Side admittedly designated the wrong corporate representative and then failed to prepare that deponent as required by Rule 30(b)(6). The Court finds this case presents exactly what the rule seeks to avoid- "bandying" by the various agents of a corporation who each disclaim knowledge of facts that are clearly known to persons in the organization and thereby to the corporation. The problem here is arguably worse because Tayssir did not respond to the questions he now seeks to clarify by disclaiming knowledge of those facts. Instead, he affirmatively responded to those questions and then explained his answers after the fact.
But even if Defendant is bound by virtue of Rule 30(b)(6) to Tayssir's deposition testimony, the Court must consider whether his subsequent attempts to explain or modify the 30(b)(6) testimony are permissible. Under Fed.R.Civ.P. 30(e), a deponent is allowed to review and make changes to a deposition transcript, "in form or substance, " and may sign a statement listing those changes and the reasons for making them. "Rule 30(e) permits any changes to deposition testimony, except those material changes that fail the Burns test. " The Burns test refers to the Tenth Circuit's decision in Burns v. Board of County Commissioners of Jackson County, which explains that material changes to deposition testimony under Rule 30(e) should be considered under the "sham affidavit" analysis. Under that analysis, the Court considers the following factors: "whether the affiant was cross-examined during his earlier testimony, whether the affiant had access to the pertinent evidence at the time of his earlier testimony or whether the affidavit was based on newly discovered evidence, and whether the earlier testimony reflects confusion which the affidavit attempts to explain." Of course, this analysis also applies to any changes made to Tayssir's deposition testimony in his subsequently-filed affidavits. The Court therefore must first determine if the deposition changes are material. If they are material, the Court must then apply the Burns analysis in deciding if the changes should be stricken.
During Tayssir's deposition, Plaintiff's counsel asked a series of questions to determine (1) the scope of the IHOP expediter's duties; and (2) whether IHOP explained the tip credit or tip pool to its servers. The Court has no difficulty in finding that both areas of testimony are material. As described throughout this order, key issues to be decided on the pending summary judgment and conditional certification motions include whether Plaintiff can maintain an individual or collective action against IHOP, based on her allegations that expediters should not have been included in the tip pool because they lack the requisite customer interaction, and her allegation that the servers were not informed about the tip credit. Tayssir's testimony is material to both issues. Yet, the record does not make clear that the errata sheet and declarations actually change this testimony.
With respect to server and expediter duties, Plaintiff relies on Tayssir's deposition testimony to support her argument that the expediter remains at the "back of the house" near the kitchen and does not interact with the customers. Plaintiff's counsel asked Tayssir to review the IHOP employee manual, and confirm that the main job of the expediter is to "be at the pass bar, which is in the back of the house." Tayssir responded: "Right." Also, Tayssir was asked whether the expediters "wait on any tables or are they just in the back of the kitchen?" Tayssir responded: "They don't, but they run food." On the errata sheet, Tayssir corrects his reply of "right" on page 178 by saying that two questions were posed, and his response was only to the first one about the expediter being at the passbar. He clarifies that the passbar is between the kitchen and the dining room area and not in the "back of the house." The Court agrees that Tayssir was asked a compound question and his answer may reasonably be construed as replying to the first and not necessarily the second question. The response provided in the errata sheet is a reasonable clarification of Tayssir's answer. Moreover, this clarification is consistent with his testimony at page sixty-two, and with his declaration, which explains where the passbar is located in the restaurant. Because the errata sheet and declaration attempt to clarify and not necessarily change his deposition testimony, the Court does not find that it should be excluded under Burns. The Court will consider all of the evidence regarding the scope of the expediters' duties to determine whether there is a genuine issue of fact about whether they were properly included in the tip pool.
Next, Plaintiff relies on Tayssir's deposition testimony to argue that Defendants admit that they did not inform their servers of the tip credit requirements. During the sequence of questions at his deposition about whether the servers are notified of the tip credit, Plaintiff's counsel asked Tayssir questions about the employee handbook and about Exhibit 8, which was a form that the LLC currently uses, but did not prior to the time the case was filed, that the server fills out acknowledging that she was informed of the "tip out." The parties took a break, and apparently Tayssir called the IHOP restaurant and spoke to "the manager."
Mr. Osman: Just as we were coming back, Jim, you said that apparently they're not told about the tip credit.
Mr. Lawing: It's not mentioned here in the handbook, and Ty just called his manager, who-the one he has now, and he said he didn't-he didn't bring it up.
The Witness: They don't know anything about it.
Mr. Lawing: They don't know about it.
The Witness: See, this store, they don't know anything. I'll make a call right now to Larkspur. They're very aware of it. Same CPA firm. I'll make a call to YaYa's. They're all aware of it, and they're signing up this sheet, but I don't know why IHOP is not. It's neglect.
Q. Would this be the same at the other two, three IHOPs you own?
A. I can't answer ...