Damassia v. Duane Reade, Inc.Damassia v. Duane Reade, Inc.
OPINION AND ORDER
In these related suits for failure to pay overtime wages, plaintiffs move to certify classes pursuant to
BACKGROUND
Plaintiffs in these two related suits, Damassia v. Duane Reade, Inc., No. 04 Civ 8819 (“Damassia”), and Chowdhury v. Duane Reade, No. 06 Civ 2295 (“Chowdhury” ) are former assistant managers at stores operated by defendants Duane Reade, Inc., and Duane Reade Holdings, Inc. (collectively, “Duane Reade”), the New York drug store chain. Plaintiffs allege that the company failed to pay them overtime as required under the Fair Labor Standards Act (“FLSA”),
Duane Reade admits that it has not paid assistant managers overtime, but contends that it is not required to do so “by virtue of their status as exempt executives and/or administrators.” (Damassia Answer to Second Amended Compl. (“Damassia Answer”) 18, 21; Chowdhury Answer (“Chowdhury Answer”) 5, 8-9.) Duane Reade also contends that its decision to classify plaintiffs as exempt was made in “good faith” reliance on an administrative opinion of the Department of Labor. (Damassia Answer 21; Chowdhury Answer 9.)
This Court eаrlier granted plaintiffs’ motions to authorize collective actions for their FLSA claims, which are actions that allow employees to sue on behalf of themselves and other employees who are “similarly situated.” See
All persons employed by Duane Reade, Inc. as assistant managers whom Duane Reade classified as exempt from the overtime requirements of the NYLL at any time between November 5, 1998 and the date of final judgment in this matter.
PI. Mot. for Class Certification 2.
DISCUSSION
I.
In order to certify the proposed class, plaintiffs must demonstrate that the class
(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
A district court must undertake a “rigorous analysis” in order to determine whether each of these
II. Claims and Defenses Presented
Because
However, the issue in dispute in this case is not whether Duane Reade paid overtime, which it admits it did not, but whether its failure to pay overtime is excused by one or more of the statutory exceptions to the requirement. Employees are “exempt” from the overtime requirements, among other exceptions, if they are working in “a bona fide executive [or] administrative” capacity.
III. Application of
A. Numerosity
The first requirement of
B. Commonality
The second requirement of
Here, both disputed questions of law are common to all class members’ claims for relief: (1) whether the class member is exempt from NYLL overtime requirements because he or she performs either “executive” or “administrative” dutiеs; (2) whether Duane Reade’s decision to qualify the class member as exempt is excused by “good faith” reliance on an audit by the Department of Labor. Defendants do not contest that these legal issues are common to all class members.
Defendants do argue that plaintiffs will require individualized proof of at least the first issue, because “whether or not each [class member] is properly classified as exempt can only be determined by an individual examination of ... each potential class member.” (D. Opp’n 7.) This does not defeat commonality. As an initial matter, Duane Reade only contests the commonality of the proof of the first legal question. It does not contest the commonality of proof with regard to the “good faith” defense. Nor does it contest that the first question of law is common to all plaintiffs, even if some questions of fact it raises are not. Givеn the “liberal]” construction of commonality, these common questions of law and fact are sufficient to satisfy the requirement.
Moreover, even with regard to the first question of law, there are significant elements of proof that are common across all class members, and that do not require an individualized examination. A single Duane Reade document lays out in some detail the duties of the assistant manager position. (Neilan Deck Ex. G.) It states that assistant store managers are responsible for such things as “[a]nswer[ing] customers’ questions and handling] complaints,” “directing] the packing, scanning and storage of seasonal merchandise for future sales,” “maintaining] store appearance,” and “assigning] specific duties and overseeing] day to day work of store personnel.” (Id.) It may be true that, as Duane Reade argues, “the work actually performed by an employеe ... and not any description or agreement ... controls the determination of the employee’s primary duty.” (Def. Opp’n 8).
There is also testimony by Michael DeFazio, Duane Reade’s Director of Store Operations, about the authority of assistant managers to perform many store functions. (Neilan Decl. Ex. PP (“DeFazio Dep.”) 130-66). For example, DeFazio testified that an assistant manager is not permitted on his own authority to hire employees (id. 135), fire employees (id. 138), give them raises (id. 138-39), promote them (id. 141-42), or transfer them to another store (id. 146). .The authority to perform these functions does not, according to DeFazio, vary from assistant manager to assistant manager, but rather, is set by “protocols” that are “aрplied to all Duane Reade stores in New York State.” (Id. 147.) This testimony is clearly relevant to the question of whether the assistant manager is either an “executive” or “administrative” position. Hence, the weight accorded to it presents common questions of fact applicable to all class members.
Finally, there is evidence about the basis for Duane Reade’s decision, in 1998, to reclassify assistant managers as exempt. According to testimony by Jim Rizzo, Duane Reade’s Vice President of Human Resources, the decision was made not because of changes to the duties of assistant managers, nor because of a systematic re-evaluation of what duties the position entailed, but rather based on an agreement struck between Duane Reade and its employees’ union to end the union’s representation of assistant managers. (Neilan Deck Ex. CCC (First Rizzo Dep.) 78-79; Neilan Deck Ex. E (Arbitration Award) 11; Neilan Deck Ex. DDD (“Second Rizzo Dep.”) 65-68.) As with the job description, evidence of Duane Reade’s basis for the policy change does not answer the question of whether the assistant manager’s duties are of an “executive” or “administrative” nature. Indeed, it may be, as Duane Reade contends, that this evidence is “simply an acknowledgment ... that Duane Reade [assistant managers] were, in fact, supervisors who should not have the same labor representative as the employees they supervise.” (Def. Opp’n 11.) But that is a question for the fact-finder on the merits, not for the Court on this motion for class certification, and the appropriate interpretation of this evidence is a question that is common among all class members.
In spite of these common issues, Duane Reade argues that there are material differences in thе duties of different assistant managers that make an individual examination of each position necessary. But this argument does not refute the existence of common issues. Rather, it argues that whatever common issues exist are overwhelmed by issues particular to individual class members. As such, the argument is more appropriately addressed below in respect to the predominance requirement. As for commonality, plaintiffs have demonstrated that there are common questions of law as to whether or not the assistant manager’s duties fall into the “executive” or “administrative” exceptions, and whether Duane Reade is entitled to an affirmative defense of “good faith” reliance on a Department of Labor audit, and that there are common factual issues relevant to answering each question. Particularly in light of the “liberal” construction of the commonality requirement of
C. Typicality
The next requirement of
As discussed above, all class members’ claims, including those of named plaintiffs, are based on the same course of events and legal theory, namely, that Duane Reade’s decision to classify its assistant managers as “exempt” is inconsistent with the requirements of the NYLL. Duane Reade attempts to defeat typicality by pointing out examples of management responsibilities that some assistant managers testify they exercised. For example, they say that some named plaintiffs testify that they were “in charge” of the store when store managers were absent, that they had responsibilities to train and supervise other store employees, to make recommendations on hiring and firing employees, to recommend ordering of supplies, and that they attended management meetings. (Def. Opp’n 14-16.)
This evidence does not defeat typicality. First, as will be discussed below with regard to predominance, the evidence does not establish significant differences in the responsibilities exercised by different assistant managers. Second, to the extent that there are such differences, they do not make named plaintiffs’ claims atypical. For all assistant managers, the essential issue is whether their “executive” or “administrative” responsibilities, if any, were extensive enough to be considered their “primary duty.” Because this disputed issue “occupies] essentially the same degree of centrality” for named plaintiffs as for the rest of the class, typicality is satisfied. See Caridad,
D. Adequacy
Adequacy requires that “the representative parties will fairly and adequately protect the interests of the class.”
E. Predominance
Having satisfied the four prerequisites of
As discussed above in regards to commonality, plaintiffs have established that there are disputed issues that can be resolved through generalized proof. However, Duane Reade argues that “individual issues predominate” because “the duties and responsibilities of [assistant managers] varied ... in ways that bear upon an analysis of whether or not management was the ‘primary dut/ of individual [assistant managers].” (Def. Opp’n 24.) It contends that аssistant managers’ duties depend on a number of factors, such as the store manager they work under, the amount of experience they have, and specific differences in the stores, such as their size, hours of operation, sales volume, and location. (Id. 18-20.) Duane Reade asserts that some assistant managers have “testified at length regarding their management responsibilities.” (Id. 14.)
The weight of evidence does not support Duane Reade’s position. As pointed out in an earlier opinion of the Court, Duane Reade has “conceded that the business practices at issue in this case are uniform among its stores,” and that the duties and responsibilities of assistant managers are “centrally derived.” Chowdhury,
Nor does the testimony of assistant managers themselves reveal material differences in their responsibilities. It is true that each side has submitted declarations by assistant managers describing their job responsibilities in ways that to some extent vary from one another. (Compare Neilan Decl. Exs. I-L, N-AA, DD-HH, with Fuchs Deck Exs. 31-42.) These declarations might suggest that there are material differences in responsibilities aсross assistant managers, if they were credible. However, the declarations were clearly composed by lawyers, with little input, it seems, from the assistant managers themselves. Plaintiffs’ declarations are in all material respects identical one another, and very neatly contradict those declarations offered by Duane Reade, which are in turn identical to one another. Each side’s declarations contain statements obviously crafted to describe a position that either does or does not conform to the “executive” or “administrative” exceptions to the overtime require-
These declarations are simply not credible in light of the deposition testimony of assistant managers. (See Fuchs Deck Exs. 5, 6, 9, 15-17, 19, 24, 26-27.) In some cases, the deposition testimony directly contradicts the declarations. For example, Dayanand Bal-deo declares in her written statement, using the same boilerplate language that appears in all of plaintiffs’ declarations, that she “did not really direct the work of other employees,” and that she “did not make any recommendations” on hiring, firing or promotions. (Neilan Deck Ex. J ITU 11-12.) But in her deposition testimony she contradicts this, agreeing that she could “direct [an employee] to perform another task,” and that she “did make recommendations about hiring, firing, promoting and demoting employees.” (Fuchs Deck Ex. 6 at 329, 332.)
More generally, there is nothing in the deposition testimony to support the extreme discontinuity in the roles of different assistant managers that a literal reading of the declarations would suggest: some assistant managers devoted almost*exclusively to manual labor, others almost exclusively to management. Rather, the deposition testimony suggests that while assistant managers regularly spend significant parts of their shifts performing manual labor activities like sweeping and mopping the store, they are at the same time responsible for directing the work of other store personnel engaged in similar tasks. (See, e.g., Fuchs Decl. Ex. 9 at 233-34; Fuchs Decl. Ex. 13 at 301-02; Fuchs Deck Ex. 15 at 45; Fuchs Deck Ex. 16 at 143-44; Fuchs Deck Ex. 17 at 257-58.) It is not possible (or necessary) at this stage to decide precisely how the mix of responsibilities is apportioned, but it appears from the depositions to be largely consistent across assistant managers. While the declarations of assistant managers offered by the parties are sharply at odds with one another, the Court finds the deposition testimony more reliable than these prepared written statements, because it is in the witnesses’ own words, and because opposing counsel has had an opportunity for cross examination. Giving little weight to the written declarations of assistant managers, the remaining evidence supports that the responsibilities of assistant managers are largely consistent.
Moreover, to the extent that there are differences, there is no evidence that thеy are of such a magnitude as to cause individual issues to predominate. Where, as here, there is evidence that the duties of the job are largely defined by comprehensive corporate procedures and policies, district courts have routinely certified classes of employees challenging their classification as exempt, despite arguments about “individualized” differences in job responsibilities. See, e.g., Krzesniak v. Cendant Corp., No. C 05-05156,
In sum, the record establishes that the responsibilities of assistant managers are derived and controlled by policies and protocols issued by Duane Reade, and do not vary materially from store to store. Apparent inconsistencies in the record are the result of overly aggressive lawyering rather than credible testimony of assistant managers or anyone else. Because the weight of evidence supports the position that the job responsibilities for assistant managers are largely and materially consistent, there is no merit to Duane Reade’s argument that inconsistencies in the position defeat predominance. In light of all the evidence of common issues among plaintiffs, and the lack of evidence of individual issues, the Court finds that the predominance requirement is satisfied.
F. Superiority
The final question to be addressed under
A collective action is similar to a class action in that it “allows employees to sue on behalf of themselves as well as employees who are ‘similarly situated.’ ” Damassia,
While there is no provision under the NYLL for a collective action, Duane Reade argues, correctly, that potential class members could pursue their NYLL claims through a collective action by opting in to the FLSA collective action, and then asking this Court to adjudicate their pendent NYLL claims through an exercise of supplemental jurisdiction. (Def. Opp’n 26, citing Leuthold v. Destination Am., Inc.,
Whether a plaintiffs can satisfy the
Duane Reade argues that the two actions are, in some abstract sense, incompatible with each other, because one permits what the other forbids, but “[tjhere is no legal doctrine, of which the Court is aware, that permits the Court to dismiss a cause of action solely on the grounds that it is ‘inherently incompatible’ with another action before it.” Id., quoting Westerfield v. Wash. Mut. Bank, No. 07-CV-2817,
Second, defendants’ concern about the exercise of supplemental jurisdiction where the number of state law claimants outnumber the federal law claimants is unwarrаnted. It is true that if a class is certified, there would likely be more NYLL claimants than FLSA claimants, since only about 10% of those eligible for the FLSA collective action have opted in (see Fuchs Deck HIT 2-3.), while far more class members would likely choose to remain in a class action under the NYLL. But while a federal court may decline to exercise supplemental jurisdiction where a state law claim “substantially predominates” over the federal claims, such predominance refers to the type of claim, not the number of claimants. Lindsay v. Government Employees Ins. Co.,
Moreover, the decision to decline supplemental jurisdiction should be guided by an assessment of “judicial economy, convenience, fairness and comity,” Guzman,
Third, concerns about class plaintiffs being bound by res judicata and waiving rights to liquidated damages are misplaced. It is true that potential class members who do not opt out of the class action could have “all claims that could have been brought in that action, including any FLSA claim, resolved by res judicata without opting in to the FLSA aсtion.” Guzman,
Thus, the disadvantages of a class action advanced by Duane Reade really only affect those potential class members who desire to opt out of the class action, but who fail to do so for some reason, such as a failure to receive notice, or to understand the substance and requirements of that notice.
Fourth, the potential confusion to class members of receiving multiple notices is not a significant concern. Any possibility of confusion “can be allayed through careful wording of the class notice,” and “any confusion that the dual notices may cause” does not “significantly undermine the superiority of a class action.” Id.
Finally, while Duane Reade cites a number of authorities from outside the Second Circuit in which courts have refused to certify state labor law classes in FLSA actions, “courts in the Second Circuit routinely certify class action[s] in FLSA matters so that New York State and federal wage and hour claims are considered together.” Duchene v. Michael L. Cetta, Inc.,
A class action is superior to other available methods of adjudication in these disputes because it allows for a more cost-efficient and fair litigation of common disputes. Duane Reade’s argument that class certification should be denied because it is preferable that potential class members proceed through an FLSA collective action is unpersuasive, particularly in light of the overwhelming precedent in the Second Circuit supporting certification of simultaneous NYLL class actions and FLSA collective actions. Hence, the superiority requirement of
IY. Conflict with Rules Enabling Act
Duane Reade argues that class certification be deniеd for the independent reason that such certification is prohibited by the Rules Enabling Act, which prevents a federal court from applying a procedural rule in such a way as to “abridge, enlarge or modify any substantive right.”
These arguments are unpersuasive. Duane Reade relies on a single district court decision from another circuit for the proposition that the Rules Enabling Act prevents the certification of a class for state wage claims related to FLSA wage claims. See Ellis v. Edward D. Jones & Co., L.P.,
It is far more natural to see the opt-in provisions of the FLSA, like the class action rules they resemble, simply as procedural mechanisms for vindication of the substantive rights provided by the FLSA. See Wester-field,
Y. Appointment of Class Counsel
Having satisfied all the requirements for certification of the classes pursuant to
As discussed above in regard to the adequacy requirement of
CONCLUSION
For the reasons discussed, the Court grants plaintiffs’ motion for class certification. Kelvin Damassia, Arnold Caballero, Dayanand Baldeo, Marlon Fergus, Mohammed Hoque, Muhammed Khawaja, Ifea-nyi Malu, Mourad Mansy, Maxwell Okeke, Delfín Ruiz, and Enamul Chowdhury are appointed class representatives, and Outten & Golden LLP and Locks Law Firm, PLCC, are appointed class counsel.
SO ORDERED.
Notes
. The FLSA exceptions set forth in
. The regulations defining the executive and administrative exceptions were amended in 2004, but those amendments are not relevant to the issues presented by this motion. Compare 29 C.F.R. 541.100 (2008) with 29 C.F.R. 541.1 (2004), and
. Duane Reade purports to quote 29 C.F.R. 541.700 for this proposition, but the purported quote does not appear in that regulation. A simitar proposition appears at
. Duane Reade cites a number of cases in which courts denied class certification to employees alleging misclassification, because the courts found that the proof of the actual duties of the job would be highly individualized. (See Def. Opp’n 8, 21-23.) These cases are distinguishable because in none of them did plaintiffs offer substantial evidence, as they have here, of comprehensive corporate policies that defined the job’s duties. See Myers v. Hertz Corp., No. 02 Civ. 4325,
. Duane Reade misquotes