We’ve noted before that while conditional certification motions are often granted, such classes fare far less well at the second decertification stage and just as poorly on the eve of trial. See: “Ninth Circuit Affirms Decertification of FLSA Off-the-Clock Case” from Sept. 21, 2018, and “Ohio District Court Decertifies Class of Health Care Workers in Meal Break Case” from Feb. 12, 2013. The problem in many respects is that some courts will conditionally certify even questionable cases with the expectation that they will settle, and will only begin to grapple seriously with the underlying problems after the parties have expended considerable time, money and effort. A recent case demonstrates this point.
In Kumar v. Tech Mahindra (Americas) Inc., Case No. 4:16-cv-00905-JAR (E.D. Mo. March 25, 2019), the plaintiffs brought suit against an IT consulting business on behalf of an alleged class of technical workers, contending that they were misclassified as exempt from overtime. The proposed class included those working in “engineer” roles across several pay bands. They asserted claims not only under the FLSA, but also under the laws of Missouri and Washington state.
The District Court, applying the lower standard for conditional certification under the FLSA, authorized notice in 2017, and approximately 58 class members opted in. Of those, a total of 11 withdrew, were found not to be in the class or had time-barred claims, frequent occurrences in this type of litigation.
And as is typical, discovery revealed that differences abounded among the putative class members. At the close of that discovery, the plaintiffs moved to certify the state law claims, and the defendant moved to decertify the FLSA class.
The defendant argued based on the record that the various class members provided a range of duties that varied over time, and based on the specific assignment, supervisor, job duties and skill level. None of this should have come as a surprise given the dynamic and highly differentiated functions that would ordinarily accompany a high-level technical function. The District Court ultimately found that these differences showed that the tech workers were not “similarly situated” and that, given those differences, even representative testimony would not solve the need for the finder of fact to hear from a substantial number of class members.
The court also accepted the need to consider the defendants’ defenses, one often overlooked by plaintiffs. These defenses are particularly difficult in the IT industry, as employees may be covered under one, two or three of the “white collar” exemptions for executive, administrative and professional employees. The court similarly found no basis to certify the state law classes under Rule 23, finding that the same reasons demonstrated the lack of predominance and superiority under Rule 23(b)(3) and Rule (b)(2).
At the end of the day, the employer prevailed, but the district court also noted that the opt-ins could file their own individual claims, which itself can entail significant time and expense. The problem, once again, is that it should have been obvious from the outset that the claims were unlikely to survive decertification. As the Fifth Circuit recently emphasized, the two-step procedure is a device to promote efficiency, but should not be used to “stir up litigation.”
The bottom line: Employers that continue to challenge the existence of a class following FLSA conditional certification stand a good chance of obtaining decertification, but at a cost.