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).

The Court denied Rule 23 certification of state overtime claims where the putative class involved “every exempt RHI employee in Massachusetts regardless of job title or office location based on a Handbook that explicitly gives managers discretion.” The Court found that common questions of fact and law would not exist in such a diverse class. The Court had previously denied a Section 216(b) motion for conditional class certification.

The citation is O'Donnell v. Robert Half Intern., Inc., 250 F.R.D. 77 (D.Mass. 2008)

Molina v. First Line Solutions LLC, involved customer engineers who worked on ATMs, point-of-sale, and imaging equipment. The plaintiffs claimed they were owed pay, including overtime, for off-the-clock and on call work.

Defendants raised the motor carrier exemption regarding overtime claims that occurred before a 2005 change to the Motor Carrier Act. This change narrowed the scope of the DOT's jurisdiction over motor carriers. Under the Motor Carrier exemption, workers under the jurisdiction of the DOT are exempt from the FLSA. Part of plaintiffs' job duties was to deliver equipment.

The Court held that the changes to the Motor Carrier Act were effective the day the legislation passed, i.e. August 10, 2005, not the date of the government's new fiscal year, i.e. October 1, 2005.

Plaintiffs argued that promissory estoppel and waiver prevented defendants from raising a FLSA exemption where defendants had told plaintiffs they were non-exempt. The Court concluded that plaintiffs had failed to meet their burden to show either of these defenses (or replies) to the affirmative defense.

Because the Motor Carrier exemption applies when workers are in interstate commerce, the Court considered how frequently plaintiffs had to be in interstate commerce to trigger the exemption. The Court applied DOL and DOT regulations that workers are subject to the Motor Carrier act for four months after each proven incident of transporting a shipment in interstate commerce.

The Court also distinguished state law claims. Illinois wage law requires that for the Motor Carrier exemption to apply, the defendant employer must be a motor carrier. Therefore, state law claims for unpaid overtime are not limited to after August 10, 2005.

The Court then turned to the issue of class certification. The Court had little trouble authorizing a FLSA opt-in action. The Court, however, did not authorize a Rule 23 opt-out action for state law claims. The Court found that state law claims, not FLSA claims, would dominate the action. Those who opt-in under Section 216(b), however, would be allowed to pursue their state claims.

The Court modified the notice in accordance with the order.

The citation is: Molina v. First Line Solutions LLC, --- F.R.D. ----, 2007 WL 4404330 (N.D.Ill. June 28, 2007).

In Kasten v. Saint-Gobain Performance Plastics Corp., factory worker sought unpaid wages and overtime wages under the FLSA and Wisconsin law. This is primarily a donning and duffing case. A number of issues were presented and they are addressed here in turn:

Plaintiffs' motion to strike defendants' expert witness.

Defendants hired an ergonomics expert to testify regarding the amount of donning and duffing time spent by employees. Plaintiffs sought to exclude the witness. The Court denied plaintiffs' Daubert motion with the following reasoning:

[Plaintiffs'] concerns do not address the reliability but the correctness of the report's conclusions, which are concerns best addressed through cross examination. Fernandez used clear standards in creating the time estimates in his report and he verified his conclusions through transparent testing. Plaintiffs do not disagree with the way Fernandez used the standards or the way he implemented his tests; instead, they disagree with the standards themselves and the tests that were created. Essentially, plaintiffs are arguing that Fernandez tailored his evaluation toward defendant's position regarding the time employees spent donning, doffing and walking. This does not make Fernandez's report unreliable; it merely makes it biased, which, as stated before, is something that goes to the weight to be given his report or testimony and not to its admissibility. Plaintiffs have failed to prove that Fernandez's expert report is not sufficiently reliable to qualify for admission. Therefore, their motion to strike will be denied.

(556 F.Supp.2d at 946-47.)

Defendants' motion to strike plaintiffs' lay witness testimony regarding donning and duffing time.

Plaintiffs' sought to provide lay witness testimony that donning and duffing time ranged from 6 to 30 minutes with an average time of 13.15 to 14.6 minutes.

The Court allowed it, stating

This testimony is “rationally based on the perception of the witness[es]” as required by Fed.R.Evid. 701(a). Furthermore, the witnesses' opinions are reasonable and “ ‘grounded in observation [and] other first-hand personal experience,’ ” as opposed to being “ ‘flights of fancy, speculations, hunches, intuitions, or rumors about matters remote from that experience.’ ” Payne v. Pauley, 337 F.3d 767, 772 (7th Cir. 2003) (quoting Visser v. Packer Engineering Assoc., 924 F.2d 655, 659 (7th Cir. 1991)). Although the witnesses' testimony is based on their memories and may be inexact, it is based on personal knowledge. Defendant's request that proposed fact number 56 be stricken from plaintiffs' proposed findings of fact will be denied.

(556 F.Supp.2d at 947-48.)

The Court also found emails that defendants sought to exclude to be properly authenticated.

Cross Motions for Summary Judgment

At issue in the cross-motions were issues of offset and the de minimis defense.

The Court found that no offset because the time Defendants sought to use for offset was legally compensable time. This included five minutes at the end of the day to wash hands as well as short break periods.

The Court took a dim view of the de minimis exemption. The Court notes there is no statutory authority for the exemption and the Seventh Circuit has not laid down rigid rules. The Court states:

To trigger the de minimis exception, an employer must show not merely that the time involved is minimal but that it would be difficult to measure the time in light of the realities of the industrial world.

(556 F.Supp.2d at 954.) This is an excellent restatement of the rule. The Court goes on to state that the 4.117 to 4.755 minutes claims by employer is not de minimis. In fact, if modern technology can record time to the minute, then the de minimis exemption out to be abolished.

Defendants' motion for FLSA claim decertification

Defendants claim there was no general policy, however, the only difference was amount of time spent by employees and gear involved. The Court calls defendants' claim that there was no general policy disingenuous. The Court rules:

Regardless whether plaintiffs work in different areas, on different shifts and don and doff different amounts of required protective gear, they were subject to defendant's general practice of not compensating employees for donning and doffing certain protective gear and walking to work areas, in violation of the FLSA.

To the extent damages are different among subgroups, the Court leaves the door open for the creation of subgroups at a later date.

Plaintiffs' motion for Rule 23 class certification of state law claims.

The Court did not buy into defendants' argument that a Rule 23 certification and Section 216(b) certification are incompatible.

Regarding state statutory claims, the Court found the proposed class to be definite. The Court also finds the proposed class to have numerosity, commonality, typicality, and adequate representation. The Court found common issues predominate and that class resolution under Rule 23 is superior to other methods.

Regarding state common law claims, the Court found that common issues did not predominate.

The case citation is: Kasten v. Saint-Gobain Performance Plastics Corp., 556 F.Supp.2d 941 (W.D.Wis. June 2, 2008). Overall, this is an excellent decision for the plaintiffs and friends of the firm at Nichols, Kaster & Anderson are to be congratulated.

Under Section 216(b) of the FLSA, putative class members must “opt in” to be included in an overtime class action. Under other claims, including most state law overtime claims, putative class members must “opt out” to be excluded from an overtime class action. These provisions seem inherently contradictory. So what is a Court to do when plaintiffs plead both federal FLSA (opt in) and state overtime (opt out) claims? In Lindsay v. GEICO, the District Court of the District of Columbia navigates this precise question, strictly applies the elements of Rule 23, and illustrates how a class action can be both opt out and opt in.

The plaintiffs alleged that GEICO claims adjustors were misclassified as salaried when they should have been receiving overtime. The plaintiffs pled FLSA violations on behalf of the entire class and also New York wage claims for those class members who worked in New York. Originally, the District Court granted the FLSA “opt in” action but denied Rule 23 “opt out” certification for New York state claims. Thus there was no opt out class for putative class members with New York state claims that did not opt in to the FLSA action. The District Court reasoned that it would be inappropriate for procedural reasons to have concurrent opt in and opt out actions. The D.C. Circuit Court of Appeals reversed and remanded, holding that there is no such inherent conflict.

Thus, the challenge for the District Court is how to apply the law. Resorting to strict construction, the District Court examines whether to exercise supplemental jurisdiction and whether the Rule 23 test for class certification is met.

The District Court holds that supplemental jurisdiction over state claims must be exercised unless “exceptional circumstances” can be shown. Any perceived conflict between Section 216(b) and Rule 23 does not qualify as exceptional circumstances. Indeed, because the state and federal claims are nearly identical, the Court finds that judicial economy, convenience, fairness, and comity all favor the exercise of supplemental jurisdiction.

The District Court next examines Rule 23 class certification. The District Court finds that the 228 putative members are numerous, have common claims, that the named plaintiffs have typical cases, and that named plaintiffs can provide adequate representation. Having met these four preliminary requirement, the District Court then examines whether issues of law and fact common to the class predominate and whether an opt out class is superior to alternatives. The Court has no problem finding the common issue of misclassification predominates. The issue of whether the opt out class is superior to other alternatives again raises the conflict with the opt out provisions of Section 216(b). The District Court rules that if an opt out class is not certified, some putative class members will file individual actions in state court. This does not promote efficiency. Nor did Congress necessarily seek to foreclose opt out class actions when it adopted opt in provisions for the FLSA. First, Rule 216(b) is limited to the FLSA and Congress did not address what it considered best for state law claims. Second, most courts have concluded that allowing New York state claims to proceed simultaneously as opt out classes alongside FLSA actions is superior to alternatives. Finally, having both opt out and opt in claims prevents wasteful and inefficient litigation, eliminates risk that separate courts will enter contradictory holdings, and does not present an issue of manageability for the Court.

There remains only one fly in the ointment. New York state law provides for liquidated damages that cannot be reconciled with New York law preventing class actions on liquidated damages. By waiving their right to liquidated damages under state law, the Court allows the plaintiffs to proceed with their claim.

The full citation is Lindsay v. Government Employees Insurance Company, --- F.R.D. ----, 2008 WL 2673796 (D.D.C. July 3, 2008)