1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. Pending before the Court is Defendant's Motion to Decertify Collective Action (Doc. #281). For the following reasons, Defendant's Motion is denied. I. FACTS AND PROCEDURAL HISTORY The facts of this case are set forth in the Court's Order of March 29, 2007. LEGAL STANDARD The Court in Edwards v. City of Long Beach, 467 F. Supp.2d 986 (C.D.Cal. 2006) details the procedure for certification in collective actions under the Fair Labor Standards Act ("FLSA"). The FLSA allows for a collective action by an employee on behalf of other "similarly situated" employees. 29 U.S.C. § 216(b). The district court has discretion to determine whether a certification of a § 216(b) collective action is appropriate. Leuthold v. Destination
Case 2:03-cv-02262-ROS Document 322 Filed 03/31/2007 Page 1 of 6
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA
Kaye K. Hutton, as an individual and as) representative of a class consisting of other) ) similarly situated, ) ) Plaintiff, ) ) v. ) ) ) Bank of America, ) ) Defendant. ) )
No. CV 03-2262-PHX-ROS ORDER
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America, Inc., 224 F.R.D. 462, 466 (N.D. Cal. 2004). Most courts follow a two-step approach for determining whether certification of a § 216(b) collective action is appropriate. See Leuthold, 224 F.R.D. at 466. The first step is for the court to decide, "based primarily on the pleadings and any affidavits submitted by the parties, whether the potential class should be given notice of the action." Id. at 467; see also Pfohl, 2004 WL 554834 at *2. Given the limited amount of evidence generally available to the court at this stage in the proceedings, this determination is usually made "under a fairly lenient standard and typically results in conditional class certification". Id. It is the plaintiffs' burden to show that "the proposed lead plaintiffs and the proposed collective action group are `similarly situated' for purposes of § 216(b)." Leuthold, 224 F.R.D. at 466. The second step occurs once discovery is complete, the case is ready for trial, and the party opposing § 216(b) collective action treatment moves to decertify the class. Leuthold, 224 F.R.D. at 466 (citing Kane v. Gage Merchandising Svcs., Inc., 138 F.Supp.2d 212, 214 (D.Mass.2001)). Decertification is a factual determination and the following factors are considered: 1. 2. The disparate factual and employment settings of the individual plaintiffs; The various defenses available to the defendants with respect to the individual plaintiffs; and Fairness and procedural considerations.
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Id. (citing Pfohl, 2004 WL 554834 at **2-3). If after examining the factual record, the court determines that the plaintiffs are not similarly situated, then the court may decertify the collective action and dismiss the opt-in plaintiffs without prejudice. Id. (citing Kane, 138 F.Supp.2d at 214; Edwards, 467 F.Supp.2d at 989-90. Here, the Court has already completed stage one of the two tiered certification analysis. See Court's Order of December 22, 2004. Discovery has been conducted, and
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Defendant moved to decertify the collective action. The Court addresses the second step of the analysis. III. DISCUSSION There are three time periods in question: 1. Prior to March 2002 - the Client Managers were classified by Defendant as exempt from the FLSA overtime requirement. March 2002 - April/July 20051 - the Client Managers were classified by Defendant as overtime eligible. Post April/July 2005 - the Client Managers were reclassified by Defendant as exempt from the FLSA overtime requirement.
2. 3.
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The periods when Plaintiffs were classified as overtime exempt
The first issue is whether the potential Plaintiffs are substantially similar during time periods one and three. On the first factor, the disparate factual and employment settings of 13 the individual plaintiffs, the Court notes that all of the proposed class members have near14 identical jobs as either Premier Client Managers or Small Business Client Managers. The 15 only distinction between the two positions is that the Premier Client Managers' clients are 16 individuals, while the Small Business Client Managers' clients are businesses. Further, all 17 of the Client Managers are employed by Defendant at office locations in Arizona - Tucson, 18 Southwest Maricopa, and Scottsdale. 19 While Client Managers are managed by different Market Managers depending on their 20 office location, this fact is not relevant for these time periods because all of the potential 21 Plaintiffs were affected identically by Defendant's decision not to classify the Client 22 Managers as overtime eligible under the FLSA. As recognized by Defendant in its Motion 23 to Decertify, an illegal policy or practice that is common to all potential Plaintiffs is a strong 24 25 26 27 28
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In April 2005 Defendant reclassified the Small Business Client Managers back to exempt from the overtime requirements of the FLSA. In July 2005, the reclassification was done for the Premier Client Managers. -3Filed 03/31/2007 Page 3 of 6
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factor in favor of certification. See Basco v. Wal-Mart Stores, Inc., 2004 WL 1497709 (E.D. La. 2004); England v. New Century Financial Corp., 370 F. Supp. 2d 504 (M.D. La. 2005). Further, since there is an alleged common policy challenged by Plaintiff's (that they were improperly classified as overtime exempt under the FLSA), Defendant's defense will in large measure be the same with respect to all Plaintiffs - that Defendant properly classified Plaintiffs as exempt. This factor weighs in favor of certification. Finally under factor three, fairness and procedural considerations, it is reasonable and efficient to grant certification at this stage because if certification were denied and the individual Plaintiff's maintained separate suits, inconsistent interpretations of whether Defendant properly classified Plaintiffs as overtime exempt may result. This factor weighs in favor of certification. Since all three factors weigh in favor of certification, Defendant's Motion to Decertify will be denied to the extent that Plaintiff's claims exist during the time periods when they were classified as exempt by Defendant. B. The time period Plaintiffs were classified as overtime eligible.
During the time period when potential Plaintiffs were classified by Defendant as overtime eligible, there is no allegedly formal illegal policy or plan that affected all Plaintiffs similarly. Rather, each Plaintiff alleges, that either he or she was told by an individual Market Manager to work unpaid overtime, or that certain Market Managers were aware that he or she was working overtime, was not paid for it, and the Market Managers acquiesced in it.. See Newton v. City of Henderson, 47 F.3d 746, 748 (5th Cir. 1995) (quoting Forrester v. Roth's I.G.A. Foodliner, Inc., 646 F.2d 413, 414 (9th Cir.1981)) (stating that "[a]n employer who is armed with [knowledge that an employee is working overtime] cannot stand idly by and allow an employee to perform overtime work without proper compensation, even if the employee does not make a claim for the overtime compensation"); Bjornson v. Daido Metal U.S.A., Inc., 12 F.Supp.2d 837, 842 (N.D. Ill.1998) (requiring that employer have either actual or constructive knowledge that Plaintiff was working unpaid overtime). Though -4Case 2:03-cv-02262-ROS Document 322 Filed 03/31/2007 Page 4 of 6
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Defendant is correct that while Plaintiffs still have near identical job duties for this time period, they cannot point to one alleged formal illegal policy or plan. This weakens Plaintiff's case for certification under factor one. Further, the various defenses available to the Defendant with respect to the individual Plaintiffs may be unique to those individual Plaintiffs in each of the three offices. Then it is possible that the outcome for each Plaintiff may not be identical with the other Plaintiffs. In theory, Plaintiff might be able to show that the Tucson office was illegally deprived of overtime, but unable to establish the same was true of the Scottsdale office. Nonetheless, the Court concludes that certification is proper during this time period. It is not necessarily true that all of the proposed Plaintiffs will have to testify at trial because all Plaintiffs allege that they were told expressly or implicitly in groups to work unpaid overtime. Additionally, Plaintiffs do not have to necessarily show that Defendant explicitly told each Plaintiff that he or she should not report overtime actually worked. Rather, Plaintiffs must show that Defendant had either actual or constructive knowledge that an employee was working unpaid overtime. Newton v. City of Henderson, 47 F.3d at748; Bjornson v. Daido Metal U.S.A., Inc., 12 F.Supp.2d at 842. This fact may be established by the very similar nature of what each Plaintiff alleges he or she was told by various Market Managers during the specific time periods alleged. Thus, Plaintiffs may meet their burden of proof by showing that Market Managers at each individual office were aware that employees were working unpaid overtime, and yet nothing was done.2 While this will be a more fact intensive inquiry than time periods one and three, the interests of fairness, procedural concerns, and judicial efficiency are furthered more greatly by granting
Plaintiffs have submitted affidavits with sufficient admissible evidence which demonstrate that they may be able to meet this burden at trial. See McClintic Declaration at ¶¶10-17, Massignani Declaration at ¶¶10-20, Krebsbach Deposition at 99. 70-73, Hutton Declaration at p. 187, Larkin Declaration at ¶¶ 14-18, Lyftogt Declaration at ¶¶11-16, Peterson Declaration at ¶¶11-14. -5Case 2:03-cv-02262-ROS Document 322 Filed 03/31/2007 Page 5 of 6
2
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certification, rather than decertifying the action. The fact that Plaintiffs have claims that span both exempt and non-exempt time periods weighs in favor of certification, as it is in the interests of judicial efficiency to keep all of the claims and Plaintiffs together in one case. Decertifying and splintering the proceedings would only result in a waste of judicial resources, as a new judge and possibly a new jury would have to re-acquaint themselves with the facts and issues of each case for each Plaintiff. The Court concludes that certification during time period two is proper.3 IV. CONCLUSION Accordingly, IT IS ORDERED THAT Defendant's Motion to Decertify Collective Action (Doc. #281) is DENIED.
DATED this 31st day of March, 2007.
Plaintiffs Julia Cooper and Richard Landis, however, do not have claims during the overtime eligible era. Plaintiffs have conceded that Ms. Cooper has waived her claims during this period and Mr. Landis was not employed during this period. -6Case 2:03-cv-02262-ROS Document 322 Filed 03/31/2007 Page 6 of 6
3