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Ware v. CKF Enterprises, Inc.

United States District Court, E.D. Kentucky, Central Division, Lexington

July 9, 2019

JULIA WARE, et al., Plaintiffs,
CKF ENTERPRISES, INC., et al., Defendants.


          Danny C. Reeves United States District Judge

         The parties have tendered a stipulation and proposed agreed order to stay litigation and toll the statute of limitations. The parties' filing has been docketed as a motion. [Record No. 37] The stipulation and proposed agreed order state that the parties have conferred and agreed to a framework for exploring settlement through alternative dispute resolution, including mediation. Further, the parties indicate that a stay would allow them to focus on the mediation process and would promote judicial economy. They also request that the Court set aside the deadline to conduct the Rule 26(f) meeting and extend the submission deadline for a proposed discovery plan until the stay has been lifted. Having considered the matter, the parties' request will be granted in part and denied in part.


         The plaintiffs filed a purported class action Complaint, asserting that the defendants have violated the Fair Labor Standards Act (“FLSA”) and the Kentucky Wage and Hour Act (“KWHA”). [Record No. 1] They contend that they worked over 40 hours per week as independent contractors for the defendants, but their pay did not include an overtime premium. [Id.] While the plaintiffs assert that they were classified as independent contractors, they contend that the plaintiffs and members of the class are actually employees as a matter of economic reality. [Id.]


         a. The Proposed Stay of the Proceeding

         “[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. North American Co., 299 U.S. 248, 254 (1936). Additionally, “[t]here is a strong public interest in encouraging settlement of complex litigation and class action suits because they are notoriously difficult and unpredictable and settlement conserves judicial resources.” Dick v. Sprint Commc'n. Co. L.P., 297 F.R.D. 283, 297 (W.D. Ky. 2014) (internal quotations omitted). Because the present case is asserted to be a class action (if subsequently certified), there is a strong public interest in encouraging settlement. Further, staying the proceedings would conserves judicial resources while allowing the parties to attempt settlement through alternative dispute resolution. Accordingly, a stay would promote judicial economy and is in the public and the parties' best interest.

         b. The Proposed Tolling of the Statute of Limitations for the FLSA

         The parties also propose that the Court toll the statute of limitations of the FLSA for the length of the stay. The FLSA has a two-year statute of limitations; however, if the violation is willful, the limitations period extends to three years. 29 U.S.C. § 255(a). “The FLSA statutory structure creates inherent hurdles for opt-in plaintiffs because the statute of limitations continues to run for those who haven't yet filed their consent.” In re, No: 14-md-02504, 2014 U.S. Dist. LEXIS 100716, at *16-17 (W.D. Ky. July 23, 2014).

         “Generally, a litigant seeking equitable tolling bears the burden of establishing two elements: (1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstances stood in his way.” Pace v. DiGuglielmo, 544 U.S. 408, 418 (2005). The decision to equitably toll a statute of limitations must be made on a case-by case basis and should be granted sparingly. Amini v. Oberlin College, 259 F.3d 493, 500 (6th Cir. 2001).

         Because the parties jointly seek to toll the FLSA statute of limitations in the present case, the Court can deduce that the parties believe that tolling “will encourage settlement and lessen concerns about forfeiting the chance to assert certain claims due to settlement discussions.” Sparacino v. Sheperd Communications, Inc., No: 3:14-cv-298, 2015 U.S. Dist. LEXIS 17050, at *9 (W.D. Ky. Feb. 12, 2015). While the Court understands this concern, the plaintiffs must demonstrate that the Pace factors are satisfied, and they have failed to meet that burden.

         The plaintiffs filed this action against the defendants which indicates that they have pursued their rights. However, it is ultimately unnecessary to conclude whether this is sufficient to satisfy the first element of the Pace test because the second element has not been briefed. The parties fail to indicate whether some extraordinary circumstance stood in the way of the plaintiffs asserting their claims. Instead, they indicate that they wish to toll the statute of limitations for a specific period of time while they explore the possibility of settlement. While courts encourage settlement (especially in purported class actions), the plaintiffs do not allege deception or wrongdoing by the defendants causing a delay in asserting their FLSA claims. Accordingly, the parties have failed to demonstrate that equitable tolling is appropriate.

         Further, this Court specifically rejects tolling for all the putative opt-in plaintiffs. “It appears premature to grant blanket tolling for plaintiffs who are currently hypothetical and have not yet come before this court.” In re, 2014 U.S. Dist. LEXIS 100716 at *21. While other courts in this circuit have allowed tolling to unknown opt-in plaintiffs, those cases are distinguishable. In many of the cases, the courts had already granted conditional certification or a motion for certification had been pending for a significant period of time. Id. at *20-21 (citing Struck v. PNC Bank N.A., 931 F.Supp.2d 842, 844, 848-49 (S.D. Ohio Mar. 19, 2013). Because the Court cannot identify the putative opt-in plaintiffs, it cannot determine whether they have diligently pursued their rights or whether some extraordinary circumstance stood in the way.

         c. The Proposed Tolling of the Statute of ...

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