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Griffin v. Aldi, Inc.

United States District Court, N.D. New York

May 11, 2017

ANTHONY GRIFFIN, et al., Plaintiffs,
ALDI, INC., et al., Defendants.




         Plaintiffs Anthony Griffin, Mark McIndoo, and Susan DeTomaso commenced this class and collective action against defendant Aldi, Inc. and Doe Defendants 1-10 pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and New York state law, Dkt. No. 1 (“Complaint”) ¶ 1. Presently before the Court is Plaintiffs' motion for restrictions, penalties, and other relief related to Aldi's communications with potential collective members. Dkt. No. 54 (“Motion”); see also Dkt. No. 56 (“Supplemental Memorandum”). Aldi filed a response, Dkt. No. 58 (“Response”), and on April 26, 2017, the Court held a hearing on Plaintiffs' Motion, Dkt. No. 61. For the following reasons, Plaintiffs' Motion is granted in part and denied in part.


         The facts alleged in the Complaint are summarized in this Court's previous decision dismissing Plaintiffs' unjust enrichment claim. Griffin v. Aldi, Inc., No. 16-CV-354, 2016 WL 7235787, at *1-2 (N.D.N.Y. Dec. 14, 2016). According to Plaintiffs, Aldi has continually misclassified its store managers as “exempt” employees who are not entitled to overtime pay under the FLSA and New York state law. Compl. ¶ 1. The misclassification stems from the alleged lack of managerial tasks performed by store managers. Id. ¶¶ 47-48. Since store managers do not exercise managerial discretion, Plaintiffs suggest that they are properly categorized as non-exempt employees entitled to overtime pay under the FLSA and New York state law. Id. ¶ 1.

         Plaintiffs filed their Complaint on March 29, 2016. Compl. They described the case as a “[c]lass and [c]ollective action, ” id. ¶ 1, and they included allegations relevant to the requirements for maintaining such actions, id. ¶¶ 167-85. On December 14, 2016, the Court dismissed Plaintiffs' unjust enrichment claim, Griffin, 2016 WL 7235787, at *5, and on February 22, 2017, U.S. Magistrate Judge Andrew T. Baxter granted Plaintiffs' motion for conditional certification, Dkt. No. 45 (“February Order”) at 1.[1] On March 14, 2017, Judge Baxter approved the proposed notice of suit, which was to be sent to potential collective members in order to inform them of their right to participate in this action. Dkt. No. 48-1 (“Proposed Notice”); Dkt. No. 49. Judge Baxter also approved the parties' stipulation that “Defendant's Counsel will not affirmatively contact or communicate with any potential members of the collective, unless the contact or communication occurs within the normal course of Defendant's business.” Dkt. No. 48 (“Stipulations”) at 1; Dkt. No. 49. On April 20, 2017, Plaintiffs filed an emergency motion due to their discovery that, without mentioning this litigation, Aldi was asking departing store managers to sign releases that waived their right to participate in any class or collective action against the company. Dkt. No. 54-1 (“Memorandum”) at 1.

         According to Plaintiffs, since this case began in March 2016, Aldi “has been improperly disseminating [r]eleases to terminated putative class members . . . without providing any notice of their potential rights in this litigation.” Dkt. No. 54-2 (“Melamed Affidavit”) ¶ 4. The releases are contained in separation agreements, one example of which is attached as an exhibit to the Melamed Affidavit. Melamed Aff. Ex. A. This particular separation agreement was offered to Ryan Jon Truman, a former Aldi store manager who was fired on March 24, 2017. Id. Ex. B, ¶¶ 5-6. Truman's separation agreement provided that he would receive a “Separation Benefit” of $2, 696 in exchange for agreeing to give up his “right to bring, or be a member of any class, representative or collective action against ALDI.” Id. Ex. A, at 1. The agreement also stated that it was “strictly confidential, ” that any claims for “pay/compensation/benefits” were forfeited, and that Truman “ha[d] been properly paid for all hours worked, including overtime.” Id. at 1-2.

         The agreement did not mention this lawsuit, and Truman says he was never told about the case. Id. Ex. B, ¶ 7. Truman also claims that although he was given twenty days to sign the agreement, he received four phone calls on April 6, 2017-six days before the signing deadline-from an Aldi “District Operator” who “request[ed] that [he] sign the Agreement.” Id. ¶¶ 6, 10, 12. Truman told the district operator that he “still had 6 days to review the Agreement, ” to which the district operator “responded that if [he] did not sign the Agreement now, . . . Aldi would proceed with contesting [his] unemployment claim.” Id. ¶¶ 12-13. Truman never signed the agreement; indeed, on April 1, 2017-five days before the calls from the district operator-he had joined this lawsuit. Dkt. No. 51 (“Truman Consent-to-Sue Form”).

         Plaintiffs say their “counsel has received numerous telephone calls from putative collective and class members in response to the recently disseminated [separation agreements].” Dkt. No. 56-1 (“Second Melamed Affidavit”) ¶ 13. These former store managers have signed the agreements, and many are confused about their right to participate in this action. Id. ¶¶ 14-15. They are particularly concerned about violating the agreement's confidentiality clause, and they worry that if they get in touch with Plaintiffs' counsel, they will have to return the severance they received from Aldi. Id. ¶¶ 15-16. At least some of these former store managers contacted Plaintiffs' counsel anonymously, and some have said they were not advised to speak with an attorney before signing. Id. ¶¶ 17-18. It is unclear whether these former store managers signed the separation agreements before or after conditional certification and the distribution of the notice of suit. Plaintiffs speculate that “hundreds, if not thousands, of putative class members may have been subject to . . . improper Separation Agreements.” Suppl. Mem. at 3.

         Plaintiffs seek the following relief for Aldi's allegedly improper conduct:

(i) all contact between putative class members and Defendant, Defendant's legal counsel, or any agent [shall] cease and desist immediately with respect to any element of this action; (ii) Defendant [shall] be precluded from using the improperly obtained Releases; (iii) Defendant [shall] furnish Plaintiffs' counsel with a list containing the names and addresses of every putative class member who received a Release and/or has been contacted concerning this action; [and] (iv) Plaintiffs' counsel [shall] be permitted to distribute a Court-approved Corrective Notice to all putative class members who received the misleading communication.

Id. at 14. Aldi has agreed that the seventeen store managers “who signed a separation agreement that did not expressly carve out this pending litigation after Magistrate Judge Baxter conditionally certified a collective in this lawsuit . . . [will] be notified that they may join this lawsuit as an opt-in party plaintiff if they so desire.” Resp. at 1. Aldi has also agreed that if it “offers separation agreements to additional Store Managers while the opt-in period is still open . . . it will carve out th[is] . . . litigation from the release provisions and the waiver of the right to participate in a class or collective action.” Id. at 11. Otherwise, Aldi opposes the relief sought by Plaintiffs. Id. at 2.

         As part of its response to Plaintiffs' Motion, Aldi submitted the declaration of Bruce Persohn, the “Division Vice President of the South Windsor Division [of Aldi, ] which encompasses stores in southeast New York, Connecticut, Massachusetts, Vermont, Rhode Island, and New Hampshire.” Dkt. No. 58-1 (“Persohn Declaration”) ¶ 2. He asserts that since 2011 or earlier, Aldi has regularly “offer[ed] severance to employees who are not fired for serious misconduct or otherwise determined to be ineligible for a separation agreement to assist them monetarily as they transition to a new job or begin a job search.” Id. ¶ 4. According to Persohn, these separation agreements have “been largely the same” since December 2013, id., and Aldi has not changed the language in these agreements since this lawsuit began, id. ¶ 5. Aldi does not present the separation agreements as “‘take it or leave it' offers, ” and the “separation offer [is designed] to be non-coercive.” Id. ¶ 8. The agreements are often negotiated “without the involvement of legal counsel.” Id. ¶ 7.

         On May 9, 2017, Plaintiffs submitted a letter stating that Aldi has continued to offer departing store managers separation agreements and has “threatened [these managers] with a challenge to their otherwise legitimate unemployment claims unless they sign.” Dkt. No. 66 (“Plaintiffs' Letter Brief”) at 1. Plaintiffs point to George Cruz, a former Aldi store manager who was fired on May 8, 2017. Id. According to Plaintiffs, the day Cruz was fired, he was offered a separation agreement by Tom Fangras, his director of operations, who told him that if he did not sign, Aldi would contest his unemployment claim. Id. Cruz “stood his ground” and refused to sign, at which point Fangras told Cruz that if he did not “join any lawsuits” and Aldi did not “hear from [him] for four weeks, ” Fangras would get back to him and “try to get [him] the severance package again.” Id. at 1-2. Cruz submitted an affidavit that reiterates these charges. Dkt. No. 67 (“Cruz Affidavit”).

         On May 10, 2017, Aldi responded to Plaintiffs' submission. Dkt. No. 68 (“Aldi Letter Brief”). Aldi offers a completely different account of Cruz's termination. According to Aldi, since the April 26, 2017 hearing before this Court, it “has instructed operations in the field not to offer separation agreements to Store Managers upon termination of employment pending this Court's ruling [on Plaintiffs' Motion].” Id. at 1. Aldi also says that Cruz was never even offered a separation agreement, “much less pressure[d] . . . into signing one, ” and that Fangras told Cruz that Aldi had “no control over whether unemployment benefits w[ould] be awarded to him because that is a decision that is made by the state.” Id. Apparently, “District Manager Chris Collins” was also present during this conversation, though he is not mentioned in Plaintiffs' Letter Brief. Id. Collins and Fangras submitted declarations ...

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