Another Court Decertifies An FLSA Class
As we wrote on August 31, many plaintiffs and defendants assume, if often implicitly, that conditional certification of an FLSA class is tantamount to a win for the plaintiffs. This is so even though conditionally certified classes are frequently decertified later in the case. In fact, conditional certification, despite having the name "certification" in its name, means little more than that notice can go to the putative class to facilitate the process of opting in under section 16(b) of the Act. It is not a decision that any such class will ever be viable.
Another recent case from the United States District Court for the Northern District of California illustrates this point. In Wong v HSBC Mortgage Corp.pdf., the plaintiffs sought to represent a class of loan officers nationwide who contended that they were misclassified as exempt for overtime purposes. More specifically, they challenged whether they met the requirements of the outside salesperson exemption under the FLSA, 29 U.S.C. section 213(a)(1). The court, relying on the two-step procedure for FLSA cases now used by most courts, conditionally certified the class in 2008, and 124 class members opted in. Following class-wide discovery of over a year, the defendant moved to decertify the class, arguing that the exempt or nonexempt status of each of the opt-in class members would have to be determined on an individual basis.
The plaintiffs themselves moved for summary judgment on the merits, a step that might have been seen as a suitably aggressive position at the time, claiming that none of the loan officers met the exemption. The case, of course, was pending in a jurisdiction that has been friendly to class action plaintiffs in the past, and also related to a class of positions, loan officers, who have been the subject of wage and hour suits nationwide.
The court first denied the plaintiffs' motion for summary judgment with respect to the application of the outside salesperson exemption, finding questions of fact. It then decertified the class due, at least in part, to the same reasons dictating the denial of the summary judgment motion. The court in particular noted the lack of any sufficiently uniform policy dictating the time the class members were required to devote to the selling of financial products. The court found that, as the defendant had argued, the determination of exempt status would need to be determined on an individual basis, and that the plaintiffs were therefore not similarly situated as the statute required.
The bottom line: conditional certification is but a step in the process in collective actions under the FLSA, and decertification remains a substantial likelihood even in cases involving frequent targets for misclassification claims and in jurisdictions that are perceived as sympathetic to class action plaintiffs.