Minnesota Court Refuses to Decertify Class of Caribou Coffee Managers Seeking Overtime Pay; Allows Plaintiffs to Add State Law Claims
Store managers of Caribou Coffee filed suit for unpaid overtime. The Plaintiffs claimed that they were not properly classified as executives under the executive exemption to the FLSA. Previously, the district court had certified a class action for federal claims arising under the FLSA. In considering motions made by both the Plaintiffs and the Defendants, the Court made the following rulings:
(1) The Court denied the Defendant’s motion for decertification,
(2) The Court denied Plaintiff’s motion to reopen the opt-in period, and
(3) The Court granted Plaintiff’s motion for class certification of Minnesota state law claims.
At this second stage of the class certification process, the Court considered three factors (1) the extent and consequences of disparte factual and employment settings of the individuals Plaintiffs, (2) the various defenses available to Defendants which appeared to be individual to each Plaintiff, and (3) fairness and procedural considerations. The court summarized Plaintiffs evidence and found that Plaintiffs had presented specific factual evidence that Caribou store managers had the same job duties and responsibilities, consistently worked more than forty hours each week, and were all impacted by Caribou’s internal policy and practice of considering store managers similarly situated for the purposes of Caribou’s own determination and review. The Court differentiated the instant case from Smith v. Heartland Automotive Services, Inc. because the Caribou managers showed that the written job description generally defined the duties of the Caribou managers. In the Heartland case, involving Jiffy Lube store managers, the Plaintiffs argued that their actual daily duties were different from those in the company job description and therefore there was no common method of defining the job duties. Similarly, the Court differentiated the instant case from Carlson v. C.H. Robinson Worldwide, Inc. in that Carlson involved substantial variations in duties. In particular, the Plaintiffs deposed a former director of operations and district manager who testified that the job duties of the Caribou managers were uniform. The Court also found that the individuals were similarly situated in that they all worked overtime. The named Plaintiffs and eighty-five randomly selected opt-in Plaintiffs completed a questionnaire survey. These questionnaire surveys showed that Caribou managers routinely worked in excess of forty hours per workweek.
Finally, the Court found that Caribou itself considered the managers to be similarly situated when it made its own determination that managers were exempt under the executive exemption. The Court stated that Caribou’s own actions lessened any concern about variations in the Plaintiffs’ employment circumstances. The Court found it “disingenuous” for Caribou to on the one-hand collectively and generally decide that all store managers are exempt, while on the other hand, claimed that Plaintiffs cannot proceed collectively to challenge the exemption.
In considering whether Caribou’s defenses would make the proposed collective action unmanageable, the Court noted that Caribou’s defenses related only to damages. Therefore, the Court recommended a bifurcation of the case into a liability stage followed by a damages stage.
Although the Defendants failed to address the issue of fairness and procedural considerations, the Court made its own inquiry sua sponte. Noting the broad and important purposes of the FLSA and the burdens of decertification, the court concluded that fairness and procedural considerations were satisfied.
The Court then turned to the issue of Minnesota state law overtime claims, these claims must be certified under the requirements of Rule 23 of the Federal Rules of Civil Procedure.
The Court noted that it had supplemental jurisdiction over Minnesota state overtime claims because the state law overtime claims and FLSA claims arise out of the same common nucleus of operative facts. The Court rejected Defendants contention that state law claims would substantially predominate the action by comparing the number of state claims to federal claims asserted. The Court noted that there were 400 individuals who had opted in to the federal overtime claims and the estimate of individuals with state law claims ranged from 150 to 400. Rather, the ratio of state claims to federal claims was not so great as to cause state claims to predominate. The court also noted that the federal and state claims were inherently interrelated. The Court also found no “exceptional circumstances” to justify declining certification of the state law claims.
The Court then turned to the requirements of Rule 23. The Court reiterated its finding that the class members were similarly situated, that they satisfied the numerosity requirement that questions of law and fact are common to all claims, that the named Plaintiffs had claims that were typical of the class members and that the class was adequately represented.
Although several hundred individuals opted in, this case had only three named Plaintiffs. One of the named Plaintiffs, Williams-Goldberg, was not representative of the class because her claims fell outside the stated statute of limitations. The Court found that Williams-Goldberg’s failure to meet the requirements for class representative was not fatal because only “one or more member of a class” need be representative.
The Court moved onto Rule 23(b) and found that common claims dominated and that class certification of claims was superior to other methods of resolving state law claims.
The Plaintiffs moved to reopen the opt-in period because Caribou had opened over 150 stores since the original granting of class certification. The Court found that this would great a never-ending class certification process, prevent discovery with a definite beginning and ending. Presumably, store managers not covered in the instant case could file their own new FLSA action.
The case is Nerland v. Caribou Coffee Company, Inc., 564 F.Supp.2d 1010(D.Minn. May 17, 2007).
(1) The Court denied the Defendant’s motion for decertification,
(2) The Court denied Plaintiff’s motion to reopen the opt-in period, and
(3) The Court granted Plaintiff’s motion for class certification of Minnesota state law claims.
At this second stage of the class certification process, the Court considered three factors (1) the extent and consequences of disparte factual and employment settings of the individuals Plaintiffs, (2) the various defenses available to Defendants which appeared to be individual to each Plaintiff, and (3) fairness and procedural considerations. The court summarized Plaintiffs evidence and found that Plaintiffs had presented specific factual evidence that Caribou store managers had the same job duties and responsibilities, consistently worked more than forty hours each week, and were all impacted by Caribou’s internal policy and practice of considering store managers similarly situated for the purposes of Caribou’s own determination and review. The Court differentiated the instant case from Smith v. Heartland Automotive Services, Inc. because the Caribou managers showed that the written job description generally defined the duties of the Caribou managers. In the Heartland case, involving Jiffy Lube store managers, the Plaintiffs argued that their actual daily duties were different from those in the company job description and therefore there was no common method of defining the job duties. Similarly, the Court differentiated the instant case from Carlson v. C.H. Robinson Worldwide, Inc. in that Carlson involved substantial variations in duties. In particular, the Plaintiffs deposed a former director of operations and district manager who testified that the job duties of the Caribou managers were uniform. The Court also found that the individuals were similarly situated in that they all worked overtime. The named Plaintiffs and eighty-five randomly selected opt-in Plaintiffs completed a questionnaire survey. These questionnaire surveys showed that Caribou managers routinely worked in excess of forty hours per workweek.
Finally, the Court found that Caribou itself considered the managers to be similarly situated when it made its own determination that managers were exempt under the executive exemption. The Court stated that Caribou’s own actions lessened any concern about variations in the Plaintiffs’ employment circumstances. The Court found it “disingenuous” for Caribou to on the one-hand collectively and generally decide that all store managers are exempt, while on the other hand, claimed that Plaintiffs cannot proceed collectively to challenge the exemption.
In considering whether Caribou’s defenses would make the proposed collective action unmanageable, the Court noted that Caribou’s defenses related only to damages. Therefore, the Court recommended a bifurcation of the case into a liability stage followed by a damages stage.
Although the Defendants failed to address the issue of fairness and procedural considerations, the Court made its own inquiry sua sponte. Noting the broad and important purposes of the FLSA and the burdens of decertification, the court concluded that fairness and procedural considerations were satisfied.
The Court then turned to the issue of Minnesota state law overtime claims, these claims must be certified under the requirements of Rule 23 of the Federal Rules of Civil Procedure.
The Court noted that it had supplemental jurisdiction over Minnesota state overtime claims because the state law overtime claims and FLSA claims arise out of the same common nucleus of operative facts. The Court rejected Defendants contention that state law claims would substantially predominate the action by comparing the number of state claims to federal claims asserted. The Court noted that there were 400 individuals who had opted in to the federal overtime claims and the estimate of individuals with state law claims ranged from 150 to 400. Rather, the ratio of state claims to federal claims was not so great as to cause state claims to predominate. The court also noted that the federal and state claims were inherently interrelated. The Court also found no “exceptional circumstances” to justify declining certification of the state law claims.
The Court then turned to the requirements of Rule 23. The Court reiterated its finding that the class members were similarly situated, that they satisfied the numerosity requirement that questions of law and fact are common to all claims, that the named Plaintiffs had claims that were typical of the class members and that the class was adequately represented.
Although several hundred individuals opted in, this case had only three named Plaintiffs. One of the named Plaintiffs, Williams-Goldberg, was not representative of the class because her claims fell outside the stated statute of limitations. The Court found that Williams-Goldberg’s failure to meet the requirements for class representative was not fatal because only “one or more member of a class” need be representative.
The Court moved onto Rule 23(b) and found that common claims dominated and that class certification of claims was superior to other methods of resolving state law claims.
The Plaintiffs moved to reopen the opt-in period because Caribou had opened over 150 stores since the original granting of class certification. The Court found that this would great a never-ending class certification process, prevent discovery with a definite beginning and ending. Presumably, store managers not covered in the instant case could file their own new FLSA action.
The case is Nerland v. Caribou Coffee Company, Inc., 564 F.Supp.2d 1010(D.Minn. May 17, 2007).
