I have often written about the scourge of Assistant Manager class actions. The employee category is particularly subject to this kind of lawsuit as these workers often perform some non-exempt work and it is unclear many times if they possess and exercise sufficient and proper supervisory authority. A recent case in New Jersey provides yet another example. A federal judge has just conditionally certified a class of Assistant Store Managers who work for Panera Bread. They allege that they were misclassified as exempt. Interestingly, the Court would not certify such classes in Massachusetts and New York.  The case is entitled Friscia v. Doherty Enterprises Inc. and was filed in federal court in the District of New Jersey.

Waitress carrying three platesThe judge concluded that the lead plaintiff Jacqueline Friscia made a “modest factual showing” concerning the alleged misclassification but refused to certify classes in other states. The court stated that “put simply, Friscia has not produced sufficient evidence to show that she is similarly situated to assistant managers in New York or Massachusetts.”

As is typical in these cases, the named plaintiff claims she worked 55-80 hours per week. She also claims that she performed many non-exempt tasks and that these tasks comprised the majority of her work time per week These tasks included preparing food, taking food orders, cleaning the store, working at the cash register and dish washing. Other than her weekly salary of $800, she asserted that she never received overtime for her long hours.

The company took the position that since the named plaintiff worked in only one store, she could not know conditions at other stores or whether the other Assistant Managers were “similarly situated.” The company also contended that there was an arbitration agreement in place and thus the workers could not be included all together in the same class actions. The judge was not impressed by these arguments, finding that the plaintiffs had met the “lenient burden” to receive conditional certification.

The Takeaway

The company can still defeat this class action by making a motion to de-certify the class later on. This would entail taking more discovery, perhaps many more depositions, in an effort to show that there is too much individual difference between the workers across the system to allow for class treatment. This will be expensive and may not be successful.

Or, the company can bite the bullet and settle…

I have blogged (somewhat incessantly, I admit) about manager FLSA class actions and what the line(s) of defense are for the employer in these cases, and how to defeat these cases. Another case in point. A federal judge has now decertified a collective class, following the Magistrate Judge’s recommendation against the class continuing in this overtime action. The case is entitled McEarchen et al. v. Urban Outfitters Inc., and was filed in federal court in the Eastern District of New York.

Retail clothing storeJudge Roslynn R. Mauskopf adopted the Magistrate Judge’s report and recommendations, concluding that there was no plain error in the Report. Moreover, the Managers had not lodged objections to the Report/Recommendations. Magistrate Judge James Orenstein had ruled that there were too many differences in duties, responsibilities and authority among the members of the class to allow the claims to proceed as a collective action.

The Managers stated that they agreed not to object to the Report if the Company gave the Managers more time to file, perhaps, individual lawsuits. The original lawsuit alleged misclassification, i.e. that the Managers did not fit the executive exemption, they were not true managers and therefore were non-exempt under the FLSA. The plaintiffs moved to certify a class of all current/former department Managers at the Company’s 179 stores. The plaintiffs argued that all of the Managers had similar job duties and lacked meaningful discretion. There were notices sent to 1,500 potential opt-ins, following the granting of conditional certification. More than two hundred opted in and several were deposed.

The Magistrate Judge found that there were major differences between the duties and experiences of the opt-in plaintiff and the named plaintiffs. The Judge found that the opt-ins seemed to be exempt, as opposed to the named plaintiffs. The named plaintiffs asserted that they had little say in hiring and firing decisions. To the contrary, many opt-ins “described being active participants in the hiring and firing process,” Judge Orenstein wrote. The named plaintiffs posited that they spent but little time training hourly workers, but many opt-ins testified to a broad range of training responsibilities.

The Takeaway

This is another lesson for employers, not only in these Manager type cases but also for all employers defending almost any kind of FLSA (or state) class/collective action.  Bang away at individual differences in the class. It sure helps if the opt-ins to the class give favorable testimony at the expense of their own self-interest (and wallet). The interesting twist is that the plaintiffs extracted more time for possible plaintiffs to file their own individual cases.

Maybe they know something…

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 recent survey shows that class actions are the biggest worry for US corporate counsel.  This is based on a polling of approximately 800 corporate counsel where the results were that 25% of those polled labeled class actions as their biggest fear and that almost two of five answered that they have endured such an action in the last year.

This fear is well founded.  A big reason for this is United States laws have developed in a manner that, if they do not make these suits more likely, they have made such suits very dangerous and prohibitively expensive for employers to defend, much less, prevail upon.

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

Employment class actions are a major concern within this genre.  Two of five companies dealing with class actions were sued for employment causes of action.  Included in this subset are the wage hour/FLSA actions.  These are of particular concern because they are fee-shifting laws, which make a full-blown, lengthy defense very risky and potentially financially devastating.  Added to this is that conditional class certification is often (far too) easily granted, which forces the employer to put all of its eggs in the effort to de-certify the class or hope that not too many people opt in.  Motions to de-certify are expensive, especially for a result that is, at best, problematic.

I have found, however, that the biggest concern in FLSA class actions is the fact that often employers are not, in fact, complying with the laws, and not out of any design or intent to do avoid proper compliance. Many of these issues (e.g. working time, preliminary, off-the-clock work, exemption issues) are filled with gray.  If the employer has, in good faith, made certain determinations, it may feel compelled to defend those decisions to the hilt and then forced to pay for it!

That is why so many of these cases settle.

The Takeaway

No employer can control if/when it will be sued, or where—state court, federal court, state DOL, federal DOL.  What the employer can try to control, however, is the factual foundation on which such a lawsuit will be fought.  Scrutiny of all existing compensation practices (everything from classification to vacation, commission and bonus plans) and the fixing of what may be broken is the way of covering the flank in these situations.  Fix what is wrong and then let time erode away the statute(s) of limitation.

We are all happy with the falling gasoline prices we have experienced, but, as lawyers, we (seemingly) always look for the dark spot in the sky. Some commentators are positing that the sharp drop in oil prices may trigger an increase in Fair Labor Standards Act suits against employers in the energy sector, as involuntarily separated workers seek out lawyers who look for weaknesses in employer compensation procedures, such as dubious classifications of workers as exempt or independent contractors. In fact, I recently posted on just such a misclassification lawsuit in this industry (won by the plaintiffs).

Factors possibly impelling this increase are the rather lenient standard for securing conditional collective action certification in FLSA cases and the widespread use of independent contractors by oil companies.  From numerous experiences, I can safely say that the issue of who is and who is not an independent contractor is often a murky question and the term “consultant” is used a little too loosely.

The use of independent contractors is more pervasive in the energy space industry, as opposed to other industries, according to Becky Baker, of Houston’s Bracewell & Giuliani.  She opines that oil companies rely “heavily on a contract workforce in the field.”  Although using independent contractors is certainly lawful, the issue of whether such workers are actually employees is extremely fact sensitive and the law is generally tilted (in any State) in favor of finding people to be employees.

Starting a FLSA lawsuit is easier for plaintiff side attorneys because many of them now use a detailed intake questionnaire, which probes not only “standard” type discrimination issues but also ferrets out the manner and mode of payment of the potential client, whether they receive overtime and whether they are in fact classified as independent contractors.   If the person answers that they do not receive overtime, then a whole line of inquiry opens, with now a new focus on FLSA type issues.

The Takeaway

Perhaps the larger energy companies, which may have already been sued on classification issues (exemption and independent contractor status) may be well positioned to defend such new cases, but there will be many opportunities for plaintiff lawyers to go after small and mid-size employers.  Although lower/falling oil prices may not be good for all kinds of employment cases, wage-hour suits specifically are a genre of cases that may have legs.  This is because, unlike many discrimination lawsuits, which must first begin with the filing of a Charge before the Equal Employment Opportunity Commission, FLSA plaintiffs do not have to go through this procedural hurdle, as they would for a Title VII claim.

Further, although an employer can ultimately seek to decertify a FLSA collective action, there is only a modest burden placed on plaintiffs to secure conditional certification, which then triggers the sending of notices to all putative plaintiffs, which then raises the stakes geometrically.  Also, is extraordinarily expensive to defend such actions and the fee shifting nature of the FLSA further multiplies the fees at issue.

So, fill up and let’s ride…

A federal judge has dismissed a FLSA class action lawsuit where the theory was the group of employees was improperly classified as exempt.  There were more than one thousand current and former KPMG LLP employees who could have potentially been class members.  The liability would have been, to put it mildly, geometric.  The case is entitled Pippins et al. v. KPMG LLP, and was filed in the Southern District of New York.

The judge concluded, in granting the defendant’s summary judgment motion, that the workers fell within the professional exemption and thus there was no legal obligation to pay them overtime. Many of the opt-ins possessed undergraduate and, in some cases, graduate degrees in accounting, business or finance.  They also received training from the Company and were all ready to sit for the CPA exam, which influenced the Court to reach its conclusion.  A CPA is, by definition, exempt under the FLSA regulations.

Judge McMahon noted that the “audit associates are not bookkeepers or clerks and they should not be treated as anything less than the professionals they both are and aspire to be.”  Waxing almost philosophically, the Court also pronounced that “they are well-educated and they are well-compensated.  They are not the sort of employees the FLSA was intended to protect.”

The case had been conditionally certified in early 2012, as the granting of this conditional certification is not an onerous burden for the plaintiffs.  The action gets more intense, however, and the burden to sustain the class more difficult as the defendant-employer then mounts a decertification attack or, as here, proffers a single magic-bullet theory to eliminate any and all putative plaintiffs.  In analyzing the employees fell within the exemption, the Court examined their actual job duties and concluded that there were performing audits at a professional level of expertise and meeting certain professional standards.  That, coupled with their educational achievements, compelled the Court to rule as it did.

Although the employees performed some clerical tasks, the Court found that these were minor duties and the “primary duty” of the employees remained their professional accounting work.  In a similar vein, if this “clerical work” is closely, integrally related to the “professional” work, it becomes part and parcel of the professional work being performed.

I applaud this result.  It is a rarity that plaintiffs mount a class action where there is a seemingly obvious defense, i.e. the professional exemption.  I imagine the thinking of the plaintiffs’ lawyers was that the amount of clerical work allegedly being done would so overwhelm any professional work performed, as to destroy the “primary duty” element of the exemption.

Not the case.  In this case.


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.


When I begin defending a Fair Labor Standards Act collective action, one of the first strategies I look for is to find some way to kick the named plaintiff out of the lawsuit, whether through, perhaps, a Rule 68 Offer of Judgment or a contention that they are not a valid part of the lawsuit and so the whole thing must go away.  The Sixth Circuit has recently shown that this maxim still holds true. The Court dismissed a collective action in which the lead plaintiff, a Nurse, had not filed the required consent form, i.e. opt-in, prior to the running of the statute of limitations (for the named plaintiff).  The case is entitled Frye v. Baptist Memorial Hospital Inc. et al.

The plaintiffs contended that they were not paid for working through their lunch breaks. The Court noted that the failure of the lead plaintiff to file the opt-in, although, on one level, a minor detail, yet doomed the lawsuit.  The Court observed that “redundant though it may seem to require consents from the named plaintiffs in a class action, the FLSA’s mandate is clear.”  The Court also affirmed the lower court’s decertification of the class, as there was not enough evidence to show that all members of the putative class were similarly situated.

The theory of the plaintiffs was that the automatic deduction of time for a lunch violated the law, but the Court duly noted that such a policy was itself compliant with the FLSA.  As such, the mere existence of the policy could not serve as the linchpin of an argument that all employees were similarly situated.  I believe this is extremely important, as there has been an explosion of class action cases involving so-called automatic lunch deduction cases.

It is also significant from the perspective of attacking the propriety of class certification simply because off-the-clock work may occur amongst a group of employees.  This is because the circumstances that lead to an employee working off the clock or through lunch are individual in nature and cause and this require individual scrutiny, which (as I have often preached) is the anathema of a class action attempt for certification.

The lead plaintiff had argued that the FLSA did not require him to file an opt-in and also that his attorney-services agreement and his deposition satisfied the requirement in a de facto manner. The Sixth Circuit soundly rejected that claim, noting that there was a qualitative difference between an individual action and a collective action.  The Court also specifically stated that an unsigned deposition did not constitute a written consent, although the Court noted that the FLSA does not dictate a particular manner in which the written consent must be done.

In sum, here there was a confluence of two very strong defense tactics—knock out the named plaintiff, by any means necessary, and, hit hard at the need for individual scrutiny. ff

I have often written that conditional certification in a FLSA collective action is fairly easy to get and de-certifying a class is difficult, once that conditional certification has been achieved.  Well, every rule has its exceptions.  A federal district court judge has recently de-certified a class of IBM call center employees who were claiming compensation for preliminary work.  The case is entitled Seward v. IBM Corp. and was filed in federal court in the Southern District of New York.

The court concluded that too much individual assessment was warranted, thus destroying the needed commonality for the class to exist.  The court stated that the “plaintiff did not show he shares common factual and employment settings with all of the opt-in plaintiffs due to the existence of a sufficiently uniform and pervasive policy requiring off-the-clock work.”

The plaintiffs had requested that the judge assign them to sub-classes as opposed to a single “large” class, but as they had not raised that issue before the Magistrate Judge (who had issued a report recommending de-certification) the Judge refused to consider that request.  The response from the plaintiffs is that they will file individual suits.  Their lawyer asserted that they "intend to file dozens of individual cases to protect our clients’ rights."

This case is similar to others I have posted on and is typical of this new wave of class action suits based on off-the-clock working time that is allegedly not being paid.  The lead plaintiff claimed that he (and the others) were not compensated for their time booting up their computers and the computer programs that were necessary for them to do their work.  Thus, their theory is that these preliminary activities were integral to the performance of their primary job.

The company seized upon the “individual” defense.  It argued that the workers worked on a number of different teams, in different departments and also their work procedures differed as well.  The Magistrate Judge agreed, finding that there was not the requisite commonality or overall practice that required off-the-clock work.  The Magistrate found that as there were differences in their job duties, as well as management expectations of the various teams, commonality was lacking.

I applaud this result.  I emphasize again that the first line of defense in collective actions is the individuality theory.  A caveat—-don’t wish for something because you may just get it. If the defense succeeds in destroying the class, the employer, as here, may be faced with and left to defend dozens (or hundreds) of individual lawsuits.