THOMAS E. PEREZ, Plaintiff,
AMERICAN FUTURE SYSTEMS, INC., et al., Defendants.
L. FELIPE RESTREPO, District Judge.
On November 1, 2012, the Department of Labor ("DOL") filed a Fair Labor Standards Act ("FLSA") action against two defendants, American Future Systems, Inc. ("AFSI") and its CEO, Edward Satell. Now before the Court is a motion for a discovery plan filed by Defendants, asking that DOL be forced to disclose, two and half months prior to the conclusion of discovery, the identity of twenty representative witnesses who will testify at trial, so that they may be deposed by Defendants. Further, Defendants ask that these twenty representatives, once identified, be the only witnesses allowed to provide representative testimony on behalf of Plaintiff, whether by declaration in support of a motion for summary judgment or through testimony at trial. Plaintiff objects, and, among other things, refuses to reveal identities of potential witnesses at this stage, based on the so-called informer's privilege.
Finding that the identities of DOL's witnesses are protected by the informer's privilege and that it would be premature for this Court to make any decision on the size of a representative group of employee-witnesses, Defendants' motion will be denied.
I. Factual and Procedural Background
The Complaint alleges that AFSI sells business publications through a number of telemarketing call centers in Pennsylvania, Ohio and New Jersey. Compl. ¶¶ 2, 6. The gravamen of the Complaint is that AFSI employees are not paid for short periods of time that DOL believes are properly compensable. According to DOL, this occurs because employees must log on to a computer system during the time that they are making calls or recording the results of those calls. Id. ¶ 7. The employees are paid for the time that they are logged on to the system, but once logged off, they are no longer paid. Id. Thus, employees are uncompensated for any number of short periods of time during the work-day, including breaks of a few minutes, breaks for water, breaks to use the restroom, and for work activities that the employees may be performing while not logged on to the system. Id. ¶¶ 8-9. The Complaint further alleges that as a result of failing to compensate employees for these short periods, Defendants fail to pay many of them the federal minimum wage and otherwise properly compensate them, in violation of the FLSA. Id. ¶ 10. As such, DOL seeks, among other things, back pay for over 1, 800 allegedly aggrieved employees. Id., Ex. A.
It is clear that much of this case will revolve around an issue of law: Are the short periods of time at issue those for which an employee must be paid? DOL relies on, among other things, 29 C.F.R. § 785.18, for the proposition that breaks of less than twenty minutes must be compensable. Defendants, in their Answer, in the instant motion, and in representations to the Court, do not dispute that AFSI does not compensate employees for these short periods. Instead, they argue that these shorts breaks are those in which their employees are completely relieved from duty and hence, are properly not compensable, pursuant to 29 C.F.R. § 785.16. Defs.' Mot. 3-4.
On August 12, 2013, the Court held a status conference in the matter, where Defendants requested that the Court impose a discovery plan that would have two main components: First, Defendants asked that DOL and Defendants should each select twenty representatives from the group of alleged employees. Defs.' Mot. 5. Under Defendants' plan, no employee outside of these representatives would be allowed to testify, either at the summary judgment stage or at trial. Id. at 6. Second, Defendants asked that these representatives be revealed two and one half months prior to the close of discovery. Id. at 5.
DOL objected to this proposed plan. It stated that it was willing to provide redacted statements of potential employee-witnesses, but, pursuant to the informer's privilege, it did not intend to reveal names of these "informers" until the summary judgment stage, to the extent it filed such a motion, or at the pre-trial conference. Pl.'s Mot. 11-12. The Court asked each side to provide a memorandum of law identifying their positions, especially with regard to the appropriateness of the informer's privilege. Each side ably did so.
a. The Informer's Privilege
"The informant's privilege serves a significant public service encouraging citizens to report illegal activity." Chao v. Sec. Credit Sys., Inc., No. 08-267, 2009 WL 1748716, at *3 (W.D.N.Y. June 19, 2009) (citation omitted). The privilege "is well established and its soundness cannot be questioned." Mitchell v. Roma, 265 F.2d 633, 635 (3d Cir. 1959). Further, "[o]ne of the most common applications of the privilege in civil cases is in cases arising under the FLSA and in these cases courts have generally refused disclosure." Sec'y of Labor v. Superior Care Inc., 107 F.R.D. 395, 397 (E.D.N.Y. 1985) (citations omitted).
"The purpose of the privilege is the furtherance and protection of the public interest in effective law enforcement." Donovan v. Fasgo, Inc., No. 81-129, 1981 WL 2402, at *2 (E.D. Pa. Oct. 6, 1981). "By preserving the anonymity of citizens who provide information, the privilege encourages citizens to perform their obligation of communicating to law enforcement their knowledge of the commission of crimes and to make retaliation impossible." Chao v. Westside Drywall, Inc., 254 F.R.D. 651, 656 (D. Or. 2009) (citations and quotations omitted).
The informer's privilege is deeply entrenched in FLSA jurisprudence in this Circuit. Mitchell, 265 F.2d 633; Chao v. Raceway Petrol., Inc., No. 06-3363, 2008 WL 2064354 (D.N.J. May 14, 2008); Donovan, 1981 WL 2402 at *2. So, too, is the privilege ingrained in FLSA cases throughout the country. Brock v. Gingerbread House, Inc., 907 F.2d 115, 116-17 (10th Cir. 1990); Brennan v. Engineered Prods., Inc., 506 F.2d 299, 302-05 (8th Cir. 1974); Hodgson v. Charles Martin Inspectors of Petrol., Inc., 459 F.2d 303 (5th Cir. 1972); Solis v. Delta Oil Co., Inc., No. 11-233, 2012 WL 1680101 (S.D. Ohio May 14, 2012); Sec. Credit Sys., 2009 WL 1748716 at *2-4; Westside Drywall, 254 F.R.D. 651; Martin v. New York City Transit Auth., 148 F.R.D. 56, 62-65 (E.D.N.Y. 1993).
While often invoked, "[t]he informer's privilege is not absolute. Its scope is limited by the underlying purpose of the privilege as balanced against the fundamental requirements of fairness and disclosure in the litigation process." Delta Oil, 2012 WL 1680101 at *3 (quotations and citation omitted). That said, the overwhelming majority of courts presented with the assertion of the privilege in FLSA cases have granted it, particularly during the discovery stage. See, e.g., Perez v. L & J Farm Picking, Inc., No. 12-24426, 2013 WL 5446625, at *3 (S.D. Fla. Sept. 30, 2013) ("Defendants have failed to show a sufficient need to require Plaintiff to disclose the identity of its trial witnesses two and a half months early."); Superior Care, 107 F.R.D. at 397 (noting a "virtually unanimous refusal to compel disclosure"); Sec. Credit Sys., 2009 WL 1748716 at *3 n.1 (noting "vast majority" of courts tend to uphold the privilege); Brock v. J.R. Sousa & Sons, Inc., 113 F.R.D. 545, 546 ...