The employer who is fighting a collective or class action must make the argument that there is too much of a need for individual scrutiny to allow a class to proceed.  There are times that argument works, and times it does not.  An Illinois federal Judge has recently conditionally certified a class of logistics workers where the Judge rejected the employer’s contention there was too much dissimilarity.  The case is entitled Parker et al. v. IAS Logistics DFW LLC, and was filed in federal court in the Northern District of Illinois.

The Judge did, however, rule that only workers at one facility should be in the class as the workers in the trucking division should not be included because they were not similarly situated to the other employees.  The Company had contended that a class was inappropriate because it sought to include workers across many States, without regard for the positions they held, or their service sector, hours worked or compensation structure.  The Judge believed that the plaintiffs could meet the conditional certification tests without having to demonstrate the members of the class worked in the same positions.  As the Judge noted, the “plaintiffs can be similarly situated for purposes of the FLSA even though there are distinctions in their job titles, functions, or pay.”

The Judge also rejected the contention that conditional certification was inappropriate for those employees who were working under arbitration agreements. The Seventh Circuit recently held that employees with arbitration agreements and potentially join a collective action (i.e. receive the opt-in notice) unless the “defendant fighting notice proves that a valid arbitration agreement exists for each worker it seeks to exclude from receiving notice.”  In this case, the Judge observed that “not only do [Parker and Rhodes] allege that the arbitration agreements and waiver provisions were entered into with another entity, not Pinnacle, but Pinnacle also does not seek discovery on the agreements to establish their validity.”

The workers rely on a well-established “basis” or “theory” for their claims.  They contend that the Company violated the FLSA (and Illinois and Maryland law) by automatically deducting a half-hour to an hour from each shift for lunches, even if they allegedly worked during their meal periods.  The suit also claims the Company did not include shift differentials (e.g. nights, weekends) when computing the regular rate for overtime calculations.

The Takeaway

Well, at least they managed to exclude one facility from the calculus and that is a victory.  I always first look for a legal out, a magic bullet, such as to content the workers are all “exempt” or the case is preempted by a union contract, something that makes it all go away in one fell swoop.  If that option is not in the picture, then we (always) argue the individual scrutiny “angle.”

Sometimes the magic works, sometimes it doesn’t…


I have blogged on this topic many times but I never tire of it. What is the way to defeat a class action? The magic bullet? The answer? Too much individual scrutiny is needed! Another Judge has proven me right on this. A federal judge has denied a motion to certify a class of distributors who distributed products for a bakery with brands such as Wonder Bread and Nature’s Own. The drivers alleged that they were misclassified as independent contractors and should have been overtime-eligible employees. The case is entitled Soares et al. v. Flowers Foods Inc. et al. and was filed in federal court in the Northern District of California.

Copyright: maxsheb / 123RF Stock Photo

The judge acknowledged that there were common questions as to the drivers’ substantive claims. However, it was the varying nature of their businesses, such as differences in operations, whether they hired their own “employees” and whether they did business with other entities that would have necessitated the individual evaluation(s). The Judge noted that “individualized issues over how to determine which distributors personally serviced their routes and whether the distributors operated distinct businesses prevents common questions of fact or law from predominating, and class wide treatment is not superior to individual actions.”

The class members bought exclusive rights to sell products in designated geographic territories and were responsible for delivering, displaying and selling the products in their chosen territories. The agreements designated the distributor as “an independent contractor with the resources, expertise and capability to act as a distributor.” The documents also specifically stated that the distributors would not be subject to Company control “as to the specific details or manner” of their business. In October 2015, they filed suit alleging that the Company misclassified them as independent contractors.

The Judge noted that although the class was confined to distributors who “personally serviced” their routes, the sorting out of those distributors that actually did that and when they did that “cannot be answered in one fell swoop.” The Court indicated that some distributors did engage their own employees who performed the routes some of the time and neither party could show through evidence, which distributors “personally serviced” their routes and which did not or how many days they did or did not personally service the routes.

The Court stated that “there would need to be mini-trials into these distributors’ recollections of how often they personally serviced their routes, and when and how often, if at all, they provided distribution services for other companies. Thus, some distributors might be found to operate businesses distinct from Flowers’ operation, while for others this factor would weigh in favor of an employment relationship, and thus this factor is not subject to common proof.”

The Takeaway

This is the object lesson for employer-defendants. I believe these independent contractor cases are peculiarly susceptible to these defenses. The employer must always look at and focus upon the “individual scrutiny” defense because it could be a single stroke method of making the whole thing go away.

Whenever a class action is defended, the main defense is, always, too much individual scrutiny is needed to allow a class to be formed.  This is exactly what a group of defendants has just now urged a California federal court to find and thus decertify a conditional class of workers claiming they were denied overtime pay in violation of the Fair Labor Standards Act.  The case is entitled Sandoval et al. v. Ali et al.. and was filed in federal court in the Northern District of California.

Copyright: leaf / 123RF Stock Photo
Copyright: leaf / 123RF Stock Photo

The workers clam that they were not paid for non-repair-related tasks and they also claim that they were not properly compensated for downtime; the employers claim that each of these claims has to be assessed individually because they are not similar enough to belong to a single class or to opt in to the conditionally certified FLSA class.  Indeed, the defendants noted that the court itself already compared the theories of recovery to “shifting sands.”

The defendants brief aptly noted that “each variation has been tied to unique, individualized or specifically anecdotal scenarios based on cases that are dissimilar to the facts of this case, but there has not been any evidence of any class-wide policy, procedure or practice at use [in] all shops let alone a single shop that would warrant the FLSA conditionally certified class to continue as a class action.”

The defendants argued that the standard for conditional certification is much lower because that kind of certification is granted “not on the merits,” but rather because, in that limited and narrow setting, naked allegations can carry the day.  However, the defendants cogently argued that “by contrast, [for] the decertification of FLSA collective actions or final certification of FLSA collective actions, the burden on plaintiffs is substantially greater and requires a demonstration of substantial similarity between the plaintiffs and opt-ins.”  The defendants conclude by bluntly noting that “plaintiffs cannot meet this burden.”

The Takeaway

Anything that can be espoused that will tend to show individuality or that individual scrutiny is needed should be thrown up as a defense.  For example, in this case, there were several FLSA class members and a number of opt-in workers that allegedly had claims beyond the statute of limitations period, so their circumstances would also be different.  The employer here has cogently asserted that decertification is mandated because proving liability under these circumstances will necessarily default into making numerous individual inquiries over time worked.

Music to my ears.  Hope it works.

A FLSA class is usually conditionally certified.  The next tactical step for the employer is to seek that class’ decertification. If it succeeds in doing so, the case is over (subject to appeals).  The key to that effort is to convince the district court that too much individual scrutiny of class members is required so there does not exist the commonality, the “pattern or practice” that binds all class members together.

An employer has adopted this very technique in contending that a class of workers who claim they were misclassified as exempt should be de-certified because the court would be compelled to look at the duties discharged by each employee to ascertain what their primary duties were.  The Court would then have to determine they, that is to say, for each one of them, are exempt or not. The case is entitled Heffelfinger et al. v. Electronic Data Systems Corporation and was filed in federal court in the Central District of California.

The Ninth Circuit had upheld certification for one class of EDS workers but remanded this case to the district court judge, due to a concern relating to significant differences in the job duties/tasks of information technology employees.  The defense argued that ” the mere descriptions of those job categories” could not address or resolve the issue of whether all putative class members were exempt.  In this regard, the company contended that this class sought to include employees whose position descriptions were very similar to employees in another EDS class action where class certification was denied.

Thus, the company argued that individual scrutiny would be required for every member of the class, thus making its continuation as a class action inappropriate.  The plaintiffs have countered by alleging that these employees “do basically the same kind of thing, that is, computer programming, and that is the kind of duty the Ninth Circuit has said is not in and of itself qualitatively exempt.”

The issue has been joined on whether these employees fit within the administrative exemption, which is often the grayest and toughest to fit within.  This decision will turn on whether the putative class members performed administrative work for the Company’s customers.  The employer contends that this fact no longer supports a class, but rather the need for individualized scrutiny.

I can’t wait for the decision, hoping we get another defendant’s road map for finding our way to the need for individual attention, and, therefore, the dismissal of the plaintiffs’ FLSA collective action.

Maybe a trend is developing.  Maybe employer-defendants are starting to turn the tide of what seems like an incessant trend towards the granting of conditional certification in FLSA cases and the maintenance of those classes in the face of motions to de-certify.  I say this because a federal district court in Alabama recently decertified a class of Dollar Tree Stores managers who claimed they were misclassified as exempt employees.  The case is entitled Knott v. Dollar Tree Stores Inc. filed in the Northern District of Alabama.

The defendant argued that the duties of each of the managers would need to be scrutinized and investigated to determine if their primary duty was management and if they fit within the exemption. Thus, the necessary and fundamental element needed to sustain a class—a common pattern, practice or policy, was missing.  The judge agreed.

The judge noted that “while Dollar Tree applied its executive exemption across-the-board, the defense is individuated in this case as plaintiffs’ job duties and employment experiences vary dramatically.  Although some may have performed uniform tasks mandated by a corporate manual, others routinely exercised their independent judgment, and the amount of time they spent performing managerial duties is a matter of individual.”

The court also sounded the death knell of the plaintiffs’ action by asserting that “because they performed a wide array of differing exempt job duties with varying degrees of importance, one group of them cannot reasonably be said to be representative of them all.”

The plaintiffs had argued that because an alleged majority of their time was spent doing manual labor, they could not be exempt.  However, this premise proved to be the plaintiffs undoing as the contention called for the very individual scrutiny that dooms a class action.  It should be noted that the plaintiffs had been granted conditional certification, which entails meeting a much lower, “lenient” standard.  The judge made plain, however, that the plaintiffs did not meet the more stringent second tier standard for the maintenance of a collective action.

The lesson, the strategy, is (again) plain for defense counsel.  Attack the alleged commonality.


The issue of misclassification of workers as exempt when they might not be has been around for a very long time. Another class of such workers has been certified in the health care industry. The federal Judge has granted final certification to two classes of workers claiming they are entitled to overtime. The classes will allow more than seventy (70) client service managers to pursue their overtime claims.

The Company had argued that the guidelines it issued to assist the client service managers were not enforced uniformly, as the workers performed many different tasks, which depended on the location that worked at, as well as the supervisory policies and approach of the particular local manager they worked for. The Judge found that “while the existence of uniform policies is not dispositive, it is strong evidence to support plaintiffs’ burden of showing how they are similarly situated.”

The employees allege that they spend the vast amount of their time, between 70-95%, performing non-exempt duties. They allege that “from corporate documents and corporate admissions, to seven plaintiffs’ depositions — shows that those CSMs who joined this lawsuit spend most of their time performing substantially similar, non-exempt tasks.”

The Company countered by asserting that there existed too much individuality amongst the alleged class to allow for such certification. The Company contended that each of the plaintiffs worked at different places in a network spanning thirteen (13) States, with each facility having its unique staffing levels and different supervisors giving varying guidance about the work and timekeeping. The Company stressed that there were sufficient differences in the duties and workloads of the plaintiffs to undermine the contention that they were all “similarly situated.” Although there was a policy book, the Company asserted that was no evidence that all of the Client Service Managers were treated the same. The case is entitled Ivanovs et al. v. Bayada Home Health Care Inc., and was filed in federal court in the District of New Jersey.

The Takeaway

I think the Court got it wrong. As I have written about many times, the best attack against certification is the contention that too much individual scrutiny is needed and/or that the employees are too dissimilar to warrant inclusion in an overall class working under a single, overall policy. The employer here seemed to make that case very cogently with a good deal of factual foundation.

It’s a shame…

I love it when the employer wins an exemption case because the deck is so often stacked against the employer on these kinds of cases. This is especially so when the action is a collective one under the FLSA. In this instance, a RN who was employed as a health insurance claims consultant was found to be exempt as a professional employee because she utilized her specialized knowledge when she performed her duties, even though they were not hands-on patient care. The case is entitled Isett et al. v. Aetna Life Insurance Company and issued from the US Court of Appeals for the Second Circuit.

The appellate panel affirmed the decision below, where the employer had won summary judgment. This employee did not work with patients or perform clinical duties. Her function was to analyze claims submitted to determine if the procedures performed were medically necessary. If they were, she approved the coverage, but if she thought they should be denied, she denied them. The Second Circuit acknowledged that this analysis was different because the worker was not functioning in the typical nursing environment.

The Court stated the issue: “We address the applicability of the FLSA’s professional exemption to an employee who acts in a manner consistent with the central characteristics of the profession at issue but does so outside of that profession’s traditional employment setting.” The Court then concluded that the professional exemption applied.

The employee conducted what were known as “utilization reviews,” where she scrutinized patient appeals of their insurance claims which had already been denied within the Company. She worked without hardly any supervision. There were more than twenty (20) other Nurse Consultants who had opted into the suit and their claims were dismissed as well.

The appellate Court concluded that the professional exemption, which requires “specialized intellectual instruction” in a field of “science or learning” applied because the named plaintiff used that specialized knowledge as a RN in conducting these reviews. The Court noted her limited supervision as well. The Court stated that her primary duty “as a nurse consultant requires the discretion and judgment characteristic of registered nursing — the ability to act independently, or under limited supervision, on the basis of collected clinical data. Accordingly, we conclude that Isett’s job required the use of advanced knowledge, thereby satisfying the first prong of the primary duty test.” The panel also concluded that the employee’s advanced knowledge that allowed her to make these determinations was at “the core of the specialized training that registered nurses receive before entering their profession.”

The Takeaway

This is the best kind of victory for an employer because the exemption is a magic bullet that eliminates every potential plaintiff in one fell swoop. There is, in this regard, no need for the employer to start mounting the “too much individual scrutiny needed” defense. It is also an object lesson for employers to be aware of a potential exemption defense.

And, know this, they may not always be readily apparent…

I love Assistant Manager class actions because it gives a defense lawyer a “golden” opportunity to defeat class certification by asserting that too much individual scrutiny is required to allow a class action to proceed.  A beautiful example of this is a recent Walmart case where a group of Assistant Managers dropped their misclassification lawsuits, after they were unable to secure class certification.  They did, however, arrive at settlements for themselves.  The case is entitled Swank et al. v. Walmart Stores Inc., and was filed in federal court in the Western District of Pennsylvania.

The plaintiffs alleged they were misclassified as exempt.  On the surface, it seemed that there was some superficial appeal to their claims as they were three levels down on the hierarchy of Walmart management personnel, after Store Managers and Co-Managers.  They claimed (as the plaintiffs in these cases usually do) that they spent the overwhelming majority of their time performing non-exempt work, i.e. the same work as their subordinates, worked sixty (60) hours per week and did not receive overtime.  Thus, as a result, they claimed they were making less than the hourly employees.

These employees also claimed that they could not hire or fire and were given no authority to make (or have input into) decisions regarding the operation of the stores.  The cases of these different plaintiffs were consolidated in 2015.  The Judge indicated the Complaints could survive motions to dismiss, but was dubious whether a class could survive as the classes of Assistant Managers had too varied experiences that would allow a class action to proceed.  The plaintiffs asked for reconsideration which was denied and which also brought a rebuke from the Judge for trying a legal argument the plaintiffs had opposed when Walmart sought to do that same thing earlier on in the case.

A Walmart spokesperson observed that “we believe our roles are properly classified under the FLSA and applicable state law, and the court denied class treatment to these plaintiffs earlier this year.  While we deny the plaintiffs’ allegations, we elected to resolve many of the cases with the individual plaintiffs in the best interest of the company. We are glad we could resolve these matters.”

The Takeaway

This case highlights the efficacy of using the individualized defense to defeat class actions.  With any group of these types of employees, who perform subordinate-type work but who also perform and discharge management functions, one size certainly does not fit all.  It is the advocate’s job to highlight this need to look at every single Assistant Manager to see if they fit within the exemption, which is the anathema to a bona fide class action.

Works (almost) every time…

I have blogged numerous times about these automatic lunch deduction cases and have suggested remedies.  Yet, these cases proliferate.  Another very recent example is that of a hospital that has agreed to pay more than $4,000,000 to settle a FLSA collective action where the workers allege that their employer violated the Fair Labor Standards Act by automatically deducting a thirty-minute lunch break, every day, whether or not the employees allegedly worked through lunch.  The case is entitled Small et al. v. University Medical Center of Southern Nevada and was filed in federal court in the District of Nevada.

The workers were a class of respiratory therapists; there were 600 workers in the settlement.  Interestingly, the plaintiffs’ attorneys received more than $1.2 million in attorney fees.  The class members will receive, on average, approximately $3,500 each.  Settlement was appropriate, as pointed out in the parties’ joint motion for approval of the settlement.  The brief stated that “this case was particularly risky as it involved a large class that defendants allege plaintiffs would have trouble to sustain because of alleged distinctions between each individual plaintiff’s job function and departmental management structure.”

The USDOL had investigated the hospital and had concluded that the hospital automatically deducted one half-hour every day for lunch whether the workers in fact took the lunch.  Significantly, the employer was cognizant of its errant automatic deduction policy but nevertheless continued to enforce it.  The class was certified, notwithstanding that the employer argued that too much individual scrutiny was required to determine who was owed money.

The hospital defended by asserting that workers could override the automatic deductions by entering a cancellation code into the computer system that kept track of employee work hours. The hospital also defended by claiming that it did not know this was happening because employees never complained to HR or used the override system.

The Takeaway

The employer here was on the right track (so to speak) because it had an override policy in place but the employees either did not know about it or did not know how to utilize it.  That was the employer’s failing here.  It is permissible to use such an automatic deduction policy, but there must be put in place a fail-safe system, some kind of reporting mechanism that employees have full knowledge of and use to report a supposedly missed lunch.

That is the employer’s ultimate protection…

This is an interesting case because it combines the elements of necessary, but not proven, commonality of situation for class certification and a quirky element of overtime calculation based on a unique FLSA provision.  The bottom line is that the two workers who sought a class action on both the federal and state levels lost both because of the need for too much individual scrutiny of worker claims.  The case is entitled Sinclair et al. v. PGA Inc., and was filed in federal court in the Western District of Wisconsin.

The Judge rejected the claim, for a class, that the Company should have paid the higher wage rates for skilled labor (e.g. trade work, such as carpentry) as opposed to generic wage rates.  The Judge also agreed to decertify a FLSA collective whose overtime rates were allegedly miscalculated or underestimated.  The Judge opined that the state-law part of the suit did not possess several elements of a viable class action under Rule 23, citing to the need for too much individual attention needed for each worker’s situation.  The Judge also observed that no other worker had opted into the suit, and this fact “undermines the entire purpose of a collective action.”

The theory was that the employer violated the Wisconsin prevailing wage law by paying workers at a lower, general for work done to support more skilled work.  The plaintiffs alleged that this practice violated the FLSA because the rate should have been that which they earned before overtime kicked in as opposed to the lower-rated work they were actually performing in the overtime hours.

Importantly, the Judge denied the request for class certification on the prevailing wage claims.  The Court held that the workers failed to meet the numerosity requirement, as they could not make a showing as to the actual number of workers who worked the lower-rated support work.  They also could not meet the “predominance” requirement, meaning that the underpayment theory applied to most members of the class.

The Judge stated that the claim of the employees is based “not just on the amount, but also on the type of work” each class member did, and would force the court to make “an individual determination of whether an employee’s work on a specific week, day and even hour made possible, supported or cleaned up after a skilled trade worker.”  The Court added that a trial would focus on individual workers’ “unique work on an hourly, daily or weekly basis” and whether it should have been paid at higher wages, the workers did not meet the “superiority” requirement that they show a single class case would be better than a series of individual cases.

The Takeaway

Here, the workers lost the federal and state class actions.  The state case is quite interesting because it shows a path for employers sued in class actions in prevailing wage cases how they can defeat the motion for class certification.  I have preached this dogma for years and repeat it proudly now, again.

Individual scrutiny destroys a class!