Overtime Attorney Blog

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).

On Plaintiffs’ motion, the Court dismissed the employer’s counterclaims for breach of contract, breach of fiduciary duty, and invasion of privacy. The Court found the counter-claims to be permissive, rather than compulsory. Therefore, the Court lacked jurisdiction over the counter-claims.

The citation is Williams v. Long, 558 F.Supp.2d 601 (D.Md. 2008).

In Paz-Escobar v. Muskevitsch, plaintiffs alleged they were not paid overtime for home construction as required by the FLSA and overtime law. Defendants moved to dismiss claiming they did not meet the revenue requirements required for coverage. The Court finds that the factual record is incomplete and therefore it is premature to dismiss the case before discovery. The Court opines that it would exercise supplemental jurisdiction over state claims even if FLSA jurisdiction does not exist.

The citation is Paz-Escobar v. Muskevitsch, --- F.Supp.2d ----, 2008 WL 1909213 (D.Or. April 22, 2008).

In Carvalho v. Door-Pack, Inc., plaintiffs moved to dismiss defendants counterclaims for lack of federal subject matter jurisdiction. Defendant had asserted counterclaims of defamation and tortuous interference.

The District Court found no supplemental jurisdiction because defendant's claims did not arise out of the same set of facts as plaintiffs' FLSA claims. The Court further found that a predicate for diversity jurisdiction had not been laid by defendants.

Therefore, defendants' claims were dismissed for lack of subject matter jurisdiction.

The full citation is: Carvalho v. Door-Pack, Inc., --- F.Supp.2d ----, 2008 WL 277700 (S.D.Fla. May 23, 2008).

It is hard to imagine a class of people more ripe for exploitation than immigrant farmworkers. However, the case of Centeno-Bernuy v. Becker Farms illustrates how the agricultural employer can find itself in deep manure if it fails to comply with the FLSA and other laws ensuring basic human dignity. Becker Farms sounds like a paradise; offering fresh fruits and vegetables to customers who can shop the retail store or pick their own produce. But Becker proved to be no paradise for the Peruvian H2-A migrants hired to work there from 1997-2001. These workers claim they were denied required wages and overtime, suffered unlawful wage deductions, and were housed in unsanitary conditions. The District Court’s opinion shows how a Court will hold an employer accountable for its actions.

Becker’s lawyers throw a myriad of arguments at the Court, attempting to extricate their client through summary judgment. The Court has little difficultly in casting the employer’s arguments aside and clearing the way for a trial.

The Court first notes that, in obtaining H2-A visas for its workers, the employer is bound by a DOL clearance order. The clearance order requires posting of the order, specific requirements for the hourly rate, recordkeeping requirements, payment of transportation expenses, and adequate housing. As a threshold matter, the Court finds that Becker did not provide copies of the clearance order, did not maintain daily records, made workers pay for their own transportation, and provided housing with a plugged toilet and a rat problem.

Becker begins by arguing that it is not covered by the FLSA. Becker says it is not an enterprise because it had income of less than $500,000. By including grant money and requiring Becker to include income in the year work was performed, the Court finds $500,000 in income through 1999. The Court also finds that 2001 must be included where the previous year’s receipts were $500,000 or greater citing 29 C.F.R. § 779.265. The Court did not address individual coverage, although one would think it certainly applied as well.

Becker then argues that it is exempt under the agricultural exemption because its workers performed less than 500 Man-Days of work. Indeed, the math does not seem to support the plaintiffs. Plaintiffs instead argue that because not all of their work was agricultural, the exemption is inapplicable. The Court sides again with the workers, noting time spent performing construction work, general maintenance, landscaping, valeting cars, training pigs for races, cooking, taking down decorations, and so on.

Based on Defendant’s failure to establish lack of willfulness, the Court denies summary judgment and allows claims for three years to proceed.
Defendant’s only win is the dismissal of Agriculture Worker Protection Act claims because that statute explicitly excludes temporary migrant workers with the visas that the Peruvians had received.

Plaintiffs bring claims for overtime under New York law. Although agricultural workers do not receive overtime under New York law, the law is unclear on workers who perform both agricultural and non-agricultural duties. Although the magistrate judge had dismissed these claims, the District Court modified the ruling by declining to exercise jurisdiction over the state claims. The District Court reasoned that a state court, not a federal court, should rule on this unsettled state law issue.

Of particular interest to wage and hour lawyers may be the clever use of ancillary statutes to enhance minimum wage and overtime claims. Plaintiffs assert an employment discrimination action under New York state law, citing the fact that non-Peruvian workers had their hours properly accounted for. Furthermore, plaintiffs presented evidence of fairly blatant discriminatory statements demeaning the migrant workers. Plaintiffs also assert violations of the implied warranty of habitability because of sewage and infestation issues with their housing.

Plaintiffs assert a contract claim for failure to pay for their transportation to and from the United States. Becker attempts to tie the violation to the three year FLSA limitations period. The Court finds that the provision sounds in contract and applies New York’s six year statute of limitations period.

The Court denies Defendant’s claim that the Wagner-Peyser Act strips H2-A workers of their right to file a private cause of action for failure to exhaust administrative remedies. Noting that Plaintiffs have not asserted Wagner-Peyser Act claims, the Court hold that Wagner-Peyser administrative prerequisites do not apply to the FLSA and state claims.

Finally, the Court denies Defendant’s counter claims of breach of contract asserting that plaintiffs breached a contract for term by quitting early. In light of the fact that Defendants did not provide the DOL’s clearance order containing the terms of the contract, the Court refuses to enforce its terms against Plaintiffs. The Court notes that it “is hard pressed to identify a principle more fundamental than requiring a party to be made aware of the terms of an agreement before he can be sued for breach of it.”

Having denied summary judgment on most issues, the case will proceed to trial.

The full citation is Centeno-Bernuy v. Becker Farms, --- F.Supp.2d ----, 2008 WL 2483285 (W.D.N.Y. June 17, 2008)