The United States District Court has rendered a decision that is interesting in at least two respects. First, it is a lengthy and thoughtful opinion denying certification of a putative class of 1,100 café managers under the Fair Labor Standards Act (FLSA). Second, the court based the decision, at least in part, on the recent United States Supreme Court decision in Encino Motor Cars, LLC v. Navarro, 138 S. Ct. 1134 (2018), which more than arguably altered prior case law requiring FLSA exemptions to be construed narrowly. We previously blogged that decision here.
In Brown v. Barnes and Noble, Inc., Case No. 1:16-cv-07333 (RA) (KHP) (June 25, 2018), the plaintiffs brought a putative collective action against the Barnes & Noble book chain purportedly on behalf of its café managers. The plaintiffs moved for conditional certification early in the case, which the court denied without prejudice, in part because the plaintiffs had not provided the claimed improper company policies. Following a period of discovery, the plaintiffs then moved again for conditional certification.
The plaintiffs likely believed that the case would be conditionally certified – the Southern District of New York in the past has been a favorable forum for plaintiffs seeking to assert FLSA collective action claims. And exemption claims involving retail or food and beverage managers have proven lucrative for the plaintiffs’ bar.
In this instance, however, the court found that the differences among the café managers demonstrated that the claims should not be certified. While some courts apply a minimal standard for conditional certification, in this case, the court viewed such an action is simply a case management tool that will make it more efficient and economical to handle the case.
[t]he Court’s power to manage actions before it must be balanced against the purpose of the consent requirement and the general principle that courts should not “use their power for a purpose that neither achieves nor assists the resolution of claims before them.” Id. at 178. The ultimate question is whether conditionally certifying a collective action and permitting the plaintiffs to send a court-authorized notice will “make for more efficient and economical adjudication of cases.”
The court similarly found that it was the plaintiffs’ burden to demonstrate that the case could be resolved by representative proof. The plaintiffs were required to demonstrate that they were subject to a policy or plan that violated the law. It also found, given the fact that significant discovery had been conducted, that a somewhat higher standard would apply to the conditional certification decision.
In one of the first post-Navarro cases, the court also noted that:
In April 2018, the Supreme Court rejected the long-standing notion that FLSA exemptions should be construed narrowly. Instead, the Court advised that FLSA exemptions should be given a “fair” reading. See Encino Motorcars, LLC v. Navarro, et. al., 138 S. Ct. 1134, 1142 (2018).
The court found that this fair reading would affect its analysis of the plaintiffs’ claims.
Although the Court does not determine whether any of the Plaintiffs are exempt or non-exempt on a motion for conditional certification, it nevertheless is cognizant of the Supreme Court’s recent pronouncement about FLSA exemptions when evaluating whether Plaintiffs have met their burden of demonstrating the existence of common nationwide policies suggesting that other Café Managers across the nation may be similarly situated with respect to being misclassified as exempt, notwithstanding their job title and duties contained in their common job description.
Ultimately, the court found that the café managers were not similarly situated. Predictably, these included matters such as the amount of nonexempt work they performed, their input on hiring and firing, the number of nonexempt workers at a café at various times, whether and when the managers simultaneously performed exempt and nonexempt tasks, etc. It also chided the plaintiffs for relying on policies regarding things such as the steps baristas should take to make various drinks or less-than-complete recitations of the duties contained in job descriptions. Based on these differences, the court found that even under a light standard, the managers were not similarly situated and no FLSA collective class could be certified.
The bottom line: The fair reading of FLSA exemptions under the Supreme Court’s recent Navarro decision may bolster employers’ chances in opposing conditional certification.