Maldanado v. Cultural Care, Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 20-10326-RGS

FERNANDA MALDONADO and HEATHER LIEBER,

on behalf of themselves

and all others similarly situated

v.

CULTURAL CARE, INC., GORAN RANNEFORS,

NATALIE JORDON, and JENS APPELKVIST

MEMORANDUM AND ORDER ON

PLAINTIFFS’ MOTION TO CERTIFY CLASS

July 27, 2021

STEARNS, D.J.

Plaintiffs Fernanda Maldonado and Heather Lieber,1 purporting to

represent a nationwide group of local childcare consultants (LCCs), filed this

hybrid class action against Cultural Care, Inc., a company that places foreign

au pairs with host families in the United States.2

1 The Amended Complaint, filed on May 1, 2020, substituted Lieber, a

Massachusetts resident, for Christine Sgueglia. Am. Compl. (Dkt # 14). On

February 10, 2021, the third named plaintiff, Thais Blando, a New York

resident, dismissed her claims against defendants. See Stipulation of Partial

Dismissal (Dkt # 40).

2 Plaintiffs also name as defendants Cultural Care officers Goran

Rannefors, the president; Natalie Jordon, a senior vice president; and Jens

Appelkvist, the treasurer. Under the Fair Labor Standards Act, “a corporate

officer with operational control of a corporation’s covered enterprise is an

employer along with the corporation, jointly and severally liable . . . .”

In the Amended Complaint, plaintiffs assert that Cultural Care

misclassified LCCs as independent contractors and, in so doing, violated the

minimum wage requirements of the federal Fair Labor Standards Act (FLSA)

(Count I) and the wage laws of Massachusetts (Count II), New York

(Count III), and California (Count IV). The parties have engaged in over six

months of class discovery – extended from its initial sixty days – exchanging

more than 15,000 pages of documents and data files, producing declarations

from several LCCs, and deposing multiple witnesses.

Plaintiffs now move to conditionally certify a collective action under

the FLSA (the FLSA Class), 29 U.S.C. ¶ 216(b), and to certify a class on the

Massachusetts and California state law claims, Fed. R. Civ. P. 23. Plaintiffs

also seek an order approving the proposed FLSA Notice and Consent Form

and requiring defendants to provide them the names, addresses, email

addresses and telephone numbers of all members of the FLSA Class. In

support, plaintiffs have filed lengthy memoranda (including a reply brief)

and six affidavits attaching hundreds of pages of exhibits. Similarly,

defendants submitted an opposition, sur-reply, and over 600 pages of

exhibits. For the following reasons, the court will deny plaintiffs’ motion.

Manning v. Bos. Med. Ctr. Corp., 725 F.3d 34, 47 (1st Cir. 2013) (citation

omitted).

BACKGROUND

Cultural Care is one of fifteen State Department-approved

organizations that places foreign au pairs with host families in the United

States. Am. Compl. ¶ 12. Cultural Care recruits, trains, places, and

supervises the au pairs in exchange for fees from the host families. The State

Department requires Cultural Care and similar agencies to use “local

organizational representatives” – here, LCCs – to carry out many of its

program requirements.3 22 C.F.R. § 62.31.

LCCs work for Cultural Care as the primary contacts with the au pairs

and their host families. Am. Compl. ¶ 15. Their duties include, among other

things, “provid[ing] year-round support to au pairs and host families,

host[ing] meetings, . . . interview[ing] host families and welcom[ing] au

pairs to the community, and promot[ing] . . . the program . . . .” Id. ¶ 16; see

also id. ¶¶ 18-19. LCCs perform most of these activities, which require

varying lengths of time, on their own schedule. Also, LCCs are on-call to

address au pairs’ or host families’ concerns, such as mediating disputes that

may arise between an au pair and a host. Id. ¶¶ 25-30.

3 The State Department requires the LCCs, as authorized

representatives of Cultural Care, to live within one hour of each host family,

to conduct orientations within fourteen days of an au pair’s arrival, and to

maintain at least monthly contact with host families and au pairs. See Am.

Compl. ¶ 18.

Cultural Care classifies LCCs as independent contractors. Jordan Dep.

I (Dkt # 65-4) at 263:15-23. LCCs’ compensation, which is paid monthly,

falls into three categories: (1) a flat fee for “monthly servicing activities,”

which ranges from $25 to $82 depending on seniority, id. at 252:13-22; Pond

Decl. (Dkt # 66) ¶ 14; (2) payments for the specific tasks LCCs perform, such

as $75 for conducting interviews of prospective host families, completing

check-in calls, or attending in-person orientation meetings,4 Jordan Dep. I

at 253:10-256:5; Pond Decl. ¶ 7; and (3) commissions for identifying and

referring prospective host families, see Pond Decl. ¶ 12; see also, e.g., Lieber

Dep. (Dkt #65-3) at 180:8-181:22, 253:13-21. LCCs may also receive other

recruitment incentives. See, e.g., Ex. AA to Marini Decl. (Dkt # 65-27) (chart

listing commissions and sales incentives for LCCs); Barr Decl. (Dkt # 65-10)

¶ 6.

Cultural Care applied uniform rules to LCCs and tracked their activities

in a central database. Jordan Dep. II (Dkt # 57-1) at 33:23-35:4. However,

these activities varied in intensity from one LCC to another. While some

LCCs provide services to as few as three host families per month, others serve

4 The FLSA permits employers to pay on a piecework basis rather than

to pay an hourly wage so long as the pay earned divided by hours worked

does not fall short of the minimum wage. See 29 C.F.R. §§ 776.5, 778.111;

accord Montoya v. CRST Expedited, Inc., 404 F. Supp. 3d 364, 396 (D. Mass.

2019).

ninety or more families. See, e.g., Lieber Dep. at 176:21-177:23 (three

families); Barr Decl. ¶ 4 (90 host families); Ex. A to Carlsson Decl. (Dkt # 65-

12) (9 to 58 host families); Ex. A to Perrino Decl. (Dkt # 65-15) (3 to 37 host

families). Consequently, some LCCs are engaged on a nearly full-time basis

and earn five or six figures per year while others work on a part-time basis

and receive compensation that varies monthly depending on the number of

families they served. See Jordan Dep. at 252:23-253:9; Pond Decl. ¶ 15;

compare Exs. A-I to Pond Decl. (1099s of LCCs showing annual

compensation of amounts over $100,000), with Lieber Dep. at 12:18-17:13,

22:14-23:15, 41:9-13 (holding full-time job and several part-time positions in

addition to work as LCC).

DISCUSSION

Unlike a class action under Rule 23, prospective class members in an

FLSA “collective action” must be “similarly situated” and affirmatively opt

into the action. 29 U.S.C. § 216(b). While neither the FLSA nor the First

Circuit have defined “similarly situated,” most courts apply a two-tier

approach to determine whether a purported class qualifies:5

5 Alternatively, some courts have applied “an approach coextensive

with the requirements of class certification under Fed. R. Civ. P. 23.” Kane v.

Gage Merch. Serv., Inc., 138 F. Supp. 2d 212, 214 (D. Mass. 2001). But see

Klapatch v. BHI Energy I Power Servs., LLC, 2019 WL 859044, at *1 (D.

Mass. Feb. 22, 2019) (“[T]he FLSA allows plaintiffs to proceed collectively

First, the court makes an initial determination of whether the

potential class should receive notice of the pending action. This

determination is made using a fairly lenient standard, which

typically results in conditional certification. The plaintiff must

show only that there is some factual support – as opposed to

mere allegations – that the potential plaintiffs are similarly

situated. Second, after discovery is complete, the court makes a

final similarly situated determination. Pertinent factors at this

stage include: (1) any disparate factual and employment settings

– for example, whether plaintiffs were employed in the same

corporate department, division, and location; (2) the various

defenses available to the defendant which appear to be individual

to each plaintiff; and (3) fairness and procedural considerations.

Dyse v. HealthAll Consulting, 433 F. Supp. 3d 35, 38 (D. Mass. 2020)

(internal marks and citations omitted). After discovery is complete, if the

district court concludes that the putative class members are not similarly

situated, it “may decertify the class, and dismiss the opt-in plaintiffs without

prejudice.” Kane, 138 F. Supp. 2d at 214 (citation omitted).

This case is at the more lenient first step, which requires only “a modest

factual showing,” Comer v. Wal-Mart Stores, Inc., 454 F.3d 544, 547 (6th

Cir. 2006), or “‘reasonable basis’ for [the] claim that there are other similarly

situated employees,” Morgan v. Family Dollar Stores, 551 F.3d 1233, 1260

(11th Cir. 2008). However, the rigor of the standard increases with the scope

based on a lesser showing than that required by Rule 23.”), quoting

Prescott v. Prudential Ins. Co., 729 F. Supp. 2d 357, 359 (D. Me. 2010);

Doyon v. Rite Aid Corp., 279 F.R.D. 43, 48 (D. Me. 2011) (same).

of the parties’ fact-finding. See Botero v. Commonwealth Limousine Serv.

Inc., 2014 WL 1248158, at *3 (D. Mass. Mar. 25, 2014) (“When the progress

of litigation falls between the filing of the pleadings and the close of

discovery, courts have used an ‘intermediate’ approach.”); cf. Yayo v.

Museum of Fine Arts, 2014 WL 2895447, at *4 (D. Mass. June 26, 2014)

(proceeding directly to the second-stage determination where the factual

record was complete). Because the parties have conducted six months of

class discovery, the court will adopt an approach closer to the second stage

inquiry.

In the Amended Complaint, plaintiffs defined the putative class as

LCCs who “w[ere] misclassified as . . . independent contractor[s] and . . . paid

less than they were entitled to based on the hours they worked multiplied

[by] the applicable state or federal minimum wages.” Am. Compl. ¶ 66; see

also id. ¶¶ 72, 86, 99, 102, 113.6 The relevant period spans from February 19,

6 Plaintiffs also purport to represent a class on two other theories.

First, they argue that their misclassification as independent contractors –

apart from any underpayment – is a common practice susceptible to class

action treatment. Class Cert. Mot. (Dkt # 52) at 17. However,

misclassification, without more, is not a violation of the FLSA. See

Manning v. Bos. Med. Ctr. Corp., 725 F.3d 34, 43 (1st Cir. 2013) (listing as

one of the “basic elements” of a FLSA claim that plaintiffs “performed work

for which they were under-compensated”), quoting Pruell v. Caritas Christi,

678 F.3d 10, 12 (1st Cir. 2012).

Second, plaintiffs allege they were “late paid” because Cultural Care

paid them monthly rather than semi-monthly. Class Cert. Mot. at 5-6, 10,

2017, through December 31, 2019.7 Lieber and Maldonado were each

engaged as LCCs for approximately five months during the relevant period.

Lieber worked for Cultural Care from October of 2015 until September of

2017, when she was suspended after being arrested on an unrelated matter

in June of 2017. Maldanado worked for Cultural Care from June to

December of 2019.

16-20. Although Massachusetts and California wage laws require weekly or

bi-weekly pay periods, see, e.g., Mass. Gen. Laws c. 149, § 148; Cal. Lab. Code

§§ 204, 207, the FLSA does not, see Olson v. Superior Pontiac-GMC, Inc.,

765 F.2d 1570, 1575 (11th Cir. 1985) (monthly pay periods longer than a week,

including a month, are permissible under the FLSA); Biggs v. Wilson, 1 F.3d

1537, 1540-1542 (9th Cir. 1993) (FLSA requires “regular” pay, but does not

specify pay period frequency).

Because plaintiffs do not have standing to represent the FLSA Class on

either of these theories – nor, for reasons to be explained, on their primary

underpayment theory — the court will not retain jurisdiction over the

pendent state law claims. See 28 U.S.C. § 1367(c)(3); see also Cosme

Nieves v. Deshler, 786 F.2d 445, 452 (1st Cir. 1986) (“Section 218(a) simply

makes clear that the FLSA does not preempt any existing state law that

establishes a higher minimum wage or a shorter workweek than the federal

statute. It does not purport to incorporate existing state law . . . .”).

Accordingly, the court need not reach the question of class certification with

respect to the state claims.

7 Plaintiffs filed this action on February 19, 2020, and the applicable

statute of limitations under the FLSA or state claims is three years; however,

as of January 1, 2020, all LCCs had signed a CCI-LCC agreement containing

a class action waiver and mandatory arbitration provision. Between

February of 2017 and March of 2021, 1,213 of 2,195 LCCs nationwide (and all

current LCCs) signed this agreement, including 70 of 149 LCCs (and all

current LCCs) in Massachusetts and 16 of 295 LCCs (and all current LCCs)

in California. See Pond Decl. ¶¶ 22-25.

Class allegations, however, do not relieve named plaintiffs of an

essential jurisdictional prerequisite – namely, a showing of standing. “In a

putative class action under the FLSA, as in any other class action, the named

plaintiff must individually fulfill the standing requirement at the time of

filing before she may represent a class of employees.” Cavallaro v. UMass

Mem’l Health Care Inc., 2011 WL 2295023, at *2 (D. Mass. June 8, 2011)

(collecting cases), vacated on other grounds, 678 F.3d 1 (1st Cir. 2012).

That a suit may be a class action . . . adds nothing to the question

of standing, for even named plaintiffs who represent a class

“must allege and show that they personally have been injured,

not that injury has been suffered by other, unidentified members

of the class to which they belong and which they purport to

represent.”

Lewis v. Casey, 518 U.S. 343, 357 (1996), quoting Simon v. E. Ky. Welfare

Rts. Org., 426 U.S. 26, 40 n.20 (1976).

According to plaintiffs’ own testimony, even if they were classified as

employees, they have not shown that they were paid below the minimum

wage for any relevant pay period. The time that Lieber estimated for her LCC

tasks amounted to fewer than eleven hours worked in each complete month

at issue, which, based on her pay statements, see Ex. W to Marini Decl. (Dkt

# 65-23), comes to hourly compensation ranging from $24 to over $59 per

hour, Opp’n (Dkt # 64) at 8 n.35 (calculating Lieber’s minimum wage).

Maldonado, for her part, testified repeatedly that there was “no way to tell”

how much time she spent working as an LCC for any given period or on any

of her LCC activities, even when shown records documenting those activities.

Maldonado Dep. I (Dkt # 65-2) at 223:4-224:3; 230:5-8; see also Opp’n at 7

n.32 (summarizing Maldonado’s inability to recall an approximate time

spent on LCC activities); Ex. V to Marini Decl. (Dkt # 65-22). She

acknowledges, by extension, that it is not possible to determine her hourly

pay rate. Maldonado Dep. I at 196:7-18, 223:4-224:3.

Although plaintiffs have submitted affidavits contesting this prior

testimony, see Lieber Aff. (Dkt # 53-1); Maldonado Aff. (Dkt # 54-1), the

court will not consider these accounts. “[W]here a party has given ‘clear

answers to unambiguous questions’ in discovery, that party cannot ‘create a

conflict and resist summary judgment with an affidavit that is clearly

contradictory,’ unless there is a ‘satisfactory explanation of why the

testimony [has] changed.’” Escribano-Reyes v. Prof’l Hepa Certificate

Corp., 817 F.3d 380, 386 (1st Cir. 2016), quoting Hernandez-Loring v.

Universidad Metropolitana, 233 F.3d 49, 54 (1st Cir. 2000). Here, filing

these affidavits after the close of class discovery suggests that the statements

were made solely in an after-the-fact attempt to rehabilitate a failure to

establish class standing. Cf. Orta-Castro v. Merck, Sharp & Dohme Química

P.R., Inc., 447 F.3d 105, 110 n.2 (1st Cir. 2006) (summary judgment stage).

Here, plaintiffs submitted affidavits at the same time they moved for

conditional class certification on March 12, 2021, over two weeks after the

close of class discovery on February 26, 2021. Lieber now attests to one

minimum wage violation occurring in the two-week period from February 16

to March 1, 2017.8 See Lieber Aff. ¶¶ 11-12. For example, she claims to recall

a telephone call with a host family that took some 20 minutes, id. ¶ 10(b),

contrary to her deposition testimony that monthly host family calls usually

lasted 5-10 minutes and that she was unable to recall any “calls that took

longer” in the relevant period, Lieber Dep. at 140:20-141:19. Likewise,

although Maldonado disclaimed having any recollection of how much time

she spent on her activities during each of the pay periods about which she

was questioned, including the period from August 16 to September 15, 2019,

Maldonado Dep. at 215:10-238:23, she now claims that she worked for 10.5

hours from August 16 to August 30, 2019, yet earned only $87.50,

Maldonado Aff. ¶¶ 11-14.9

8 Contrary to defendants’ argument that this “cherry picked” violation

is “not even relevant” because these dates fall partially outside the limitations

period (commencing on February 19, 2017), Opp’n at 8, the violation itself is

timely. Under the FLSA, “[a] new cause of action accrues at each payday

immediately following the work period for which compensation is owed.”

Dent v. Cox Commc’ns Las Vegas, Inc., 502 F.3d 1141, 1144 (9th Cir. 2007)

(emphasis added); see also 29 C.F.R. § 790.21.

9 The minimum wage violation that Maldonado asserts is not only

contradictory to her prior testimony, but also omits pay that she did receive

That plaintiffs “did state the amount of time those tasks took” in

limited ways during their depositions does not, as they argue, resolve these

inconsistencies. Reply (Dkt # 71) at 2. During her deposition, for example,

Lieber estimated the duration of certain LCC activities; however, while she

testified in her deposition that these activities consumed brief amounts of

time, she roughly doubled these estimates in her affidavit. Moreover, the

testimony from Maldonado’s deposition to which plaintiffs cite either does

not align with the time period addressed in her affidavit or consists of

generalizations that materialized only after she repeatedly testified that she

had no relevant recollection. See, e.g., Maldonado Dep. II (Dkt # 72) at

237:7-11, 268:9-13, 269:10-18, 283:8-19, 287:11-16.

As justification for the deviations from their deposition testimony,

plaintiffs suggest that prior to submitting the affidavits they did not “ha[ve]

an opportunity to review the hundreds of entries” on the spreadsheets that

tracked their activities. Reply at 4; see also id. at 2-3. This rationale comes

up empty. Plaintiffs do not explain why their testimony is inconsistent nor

during the same timeframe. Even if the court were to accept that Maldonado

worked for 10.5 hours – though she claims to have talked for 20 minutes

daily with host families who complain she never contacted them at all, see

Maldonado Dep. I at 166:5-13, 168:18-169:16 – her pay records reflect that

she received $75 for an orientation conducted during the same two-week

period and that she made $400 that month, Ex. V to Marini Decl.

why their recollections were refreshed weeks later rather than

contemporaneously with questioning during their depositions (which, the

court notes, involved a painstaking examination of the specific entries on the

relevant spreadsheets). In any event, defendants assert (without

contradiction) that they produced these documents (including plaintiffs’ pay

statements) in December of 2020, months before plaintiffs were deposed.

Sur-Reply (Dkt # 73) at 4. Given the unsatisfactory explanation of plaintiffs’

inconsistent and damaging testimony, it is clear that neither plaintiff is

qualified as a class representative, and accordingly lacks standing to pursue

the FLSA minimum wage claims.10 The case will therefore be dismissed.11

10 Plaintiffs’ apparent failure to review these documents in preparation

for their deposition calls into question their adequacy as class

representatives. Although this is a separate inquiry under Rule 23, the court

also notes that Maldonado unexpectedly cut her deposition short, traveled to

Brazil without regard for the completion of her deposition, and ultimately

did not finish her deposition. See Defs.’ Emergency Mot. to Compel (Dkt.

No. 42); Order (Feb. 20, 2021) (Dkt. No. 43); Maldonado Dep. I at 172-173,

187-189.

11 On a final note, the court is skeptical about the feasibility of bringing

this case as a class action given the LCCs’ varying levels of participation in

Cultural Care. Because each LCC provides services to a different number of

host families often involving a unique menu of services, the purported

members of the FLSA Class do not appear to be similarly situated in any

legally acceptable sense of the term.

ORDER

For the foregoing reasons, Plaintiffs’ motion for class certification is

DENIED and the case is DISMISSED in its entirety.

SO ORDERED.

/s/ Richard G. Stearns _____

UNITED STATES DISTRICT JUDGE