DECISION AND ORDER
Plaintiff, Fredrick Scholtisek, commenced this action against his former employer, Eldre Corporation (“Eldre”), alleging that Eldre has violated the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., and the New York Labor Law by willfully making impermissible deductions in the pay of employees who are paid on a salary basis. Plaintiff seeks declaratory relief and money damages, on behalf of himself and all other similarly situated employees (“class members”).
STATUTORY FRAMEWORK
I. Rule 23 Certification
Class actions are “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” General Tel. Co. v. Falcon,
In order to qualify for class certification, an action must first meet the four requirements of Rule 23(a): (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.
If that showing is made, then the party seeking class certification must show that at least one of the three conditions set forth in Rule 23(b) have been met. The first of those is that the prosecution of separate actions by individual class members would create a risk of either (1) inconsistent adjudications that “would establish incompatible standards of conduct for the party opposing the class,” or (2) adjudications with respect to individual class members that would either be dispositive of the interests of other, non-party class members, or substantially impair their ability to protect their interests. Fed.R.Civ.P. 23(b)(1).
The second condition of Rule 23(b) is met when “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole ....” Fed.R.Civ.P. 23(b)(2). Certification under this subsection, then, is only appropriate if at least some of the relief sought is injunctive in nature. See Robinson v. Metro-North Commuter R.R.,
The third condition is met when the court concludes that (1) questions of law or fact common to the class members predominate over any questions affecting only individual members, and (2) a class action would be superior to other available methods for the fair and efficient adjudication of the controversy. Factors bearing on those findings include: class members’ interests in individually controlling the prosecution of separate actions; the extent and nature of any litigation concerning the controversy that has already been commenced by members of the class; whether it would be desirable to concentrate the litigation of the claims in the particular forum; and the difficulties likely to be encountered in the management of a class action. Fed.R.Civ.P. 23(b)(3); Kern v. Siemens Corp.,
In seeking certification of a class, the plaintiff bears the burden of establishing that the action satisfies these requirements. Amchem Prods., Inc. v. Windsor,
Notwithstanding the district court’s ability to look beyond the pleadings, though, its resolution of a class certification motion should not become “a preliminary inquiry into the merits” of the case. Eisen v. Carlisle & Jacquelin,
In sum, a court considering a class certification motion “must look somewhere between the pleading and the fruit of discovery ____ [E]nough must be laid bare to let the judge survey the factual scene on a kind of sketchy relief map, leaving for later view the myriad of details that cover the terrain.” Sirota,
II. FLSA Collective Actions
Section 216(b) of Title 29 provides in part that
[a]n action to recover [unpaid wages] may be maintained against any employer ... in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.
This section, which was enacted prior to Rule 23, thus provides something akin to a class action. A so-called “collective action” under the FLSA differs from a Rule 23 action in some respects, however.
Courts utilize a two-step approach when certifying collective actions under the FLSA. See, e.g., Mooney v. Aramco Services Co.,
In this early phase, courts employ a relatively lenient evidentiary standard in determining whether a collective action is appropriate. “At the notice stage, courts appear to require nothing more than substantial allegations that the putative class members were together the victims of a single decision, policy, or plan infected by discrimination.” Id. at 1213. To demonstrate that other potential plaintiffs are similarly situated to him, then, a plaintiff must make only a “modest factual showing sufficient to demonstrate that [he] and potential plaintiffs together were victims of a common policy or plan that violated the law.” Hoffmann v. Sbarro, Inc.,
“The second phase of an FLSA collective action inquiry occurs after discovery is largely complete and ‘is typically precipitated by a motion for “decertification” by the defendant.’ ” Scott v. Aetna Services, Inc.,
III. “Exempt Employees” under the FLSA
In general, the FLSA requires employers to pay their employees overtime, at the rate of one and one-half times their usual hourly wage, for hours worked in excess of forty hours per week. See 29 U.S.C. § 207(a). Employees who are “employed in a bona fide executive, administrative, or professional capacity” are exempt from these overtime pay requirements, however. 29 U.S.C. § 213(a) (1994).
In order to qualify for this exemption, an employee must satisfy both a “duties test” and a “salary basis” test. See 29 C.F.R. §§ 541.100, 541.200, 541.300. With respect
[w]hose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
[w]ho customarily and regularly directs the work of two or more other employees; [and]
[w]ho has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.
29 C.F.R. § 541.100.
Similarly, the regulations provide that an “administrative” employee is one:
[w]hose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers;
and
[w]hose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
29 C.F.R. § 541.200.
A “professional” employee is defined as an employee “[w]hose primary duty is the performance of work” that either “[r]equir[es] knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction,” or “[r]equir[es] invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.” 29 C.F.R. § 541.300.
To fit into one of these three categories, the employee must also meet the salary basis test. The salary basis test covers employees who “regularly receive[ ] each pay period ... a predetermined amount constituting all or part of the employee’s compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed.” 29 C.F.R. §§ 541.602(a). Subject to certain exceptions, “an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.” Id. The regulations further provide that “[a]n employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business,” and that “[i]f the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” Id. (emphasis added).
“In Auer v. Robbins, the Supreme Court adopted the Secretary of Labor’s view that the salary basis test denies ‘exempt status when employees are covered by a policy that permits disciplinary or other deductions in pay “as a practical matter.” That standard is met ... if there is either an actual practice of making such deductions or an employment policy that creates a “significant likelihood” of such deductions.’ ” Kelly v. City of Mount Vernon,
DISCUSSION
I. FLSA Claim
A. Conditional Certification
Plaintiff, who worked for Eldre from July 1999 until December 2001, alleges that Eldre (a manufacturer of “bus bars,” which transmit electrical power in various applications, see Affidavit of Debbie Kaufman, Dkt. # 48 at H 3) has a policy and practice of willfully making impermissible deductions from the pay of salaried employees. Specifically, plaintiff alleges that Eldre has a practice of: (1) docking salaried employees in partial-day increments when the employees have not worked a full day; (2) maintaining a policy that creates a significant likelihood of improper deductions from the pay of exempt employees; and (3) instructing exempt employees not to report to work for certain days on account of “plant shutdowns,” and then reducing those employees’ weekly pay.
Defendant contends that there is no basis for a collective action here because plaintiff is not similarly situated to the other members of the proposed class. Eldre bases that argument largely on its assertion that plaintiffs job of assistant sales manager was dissimilar from those held by many of the other potential class members, who include engineers, supervisors, etc. I disagree, however, and find that plaintiff has satisfied his burden, at this preliminary stage at least, of showing that the other members of the proposed class are similarly situated to him, and that this case should proceed as a collective action under the FLSA.
In support of its argument, defendant cites several cases in which courts found a collective action inappropriate because the plaintiffs failed to show that there were similarly situated class members. Those cases are inapposite, however. For one thing, the problem in some of those cases was not that the plaintiffs had identified other class members who were not similarly situated; they failed to identify other class members at all. For example, in Davis v. Chamen Pokphand (USA), Inc.,
It should also be noted that those cases involved claims for unpaid overtime by employees who contended that they had been wrongly classified as exempt. In such cases, the purported class members’ job duties, and any dissimilarities among them, will often be relevant to whether the employees are similarly situated for purposes of the FLSA, insofar as their job duties relate to whether they were correctly classified as exempt from the FLSA’s overtime requirements. See, e.g., Holt v. Rite Aid Corp.,
Here, however, plaintiff does not allege that he should have been paid overtime, or that he was improperly classified as exempt, but that he and other exempt employees’ pay should not have been docked for partial-day absences or plant shutdowns. Plaintiff has also submitted evidence, in the form of his and other employees’ affidavits and time-cards, indicating that such deductions were widespread at Eldre. See Lee A. Begy Aff. (Dkt. #41 Att. 4); Herve Dauvergne (Dkt. # 41 Att. 5); Martin Melich Aff. (Dkt. # 41 Att. 6); Fredrick Scholtisek Aff. (Dkt. # 41
That these employees may have had different duties and performed different types of work is not particularly relevant to whether they are similarly situated with respect to plaintiffs claims. What is important is that these employees were allegedly subject to a common practice or scheme on Eldre’s part of docking salaried employees’ pay in violation of the FLSA.
In that regard, I also note that plaintiff alleges that Eldre maintained an explicit policy directed at all its salaried employees that created a significant likelihood of impermissible pay deductions. Specifically, plaintiff points to a provision in Eldre’s employee handbook, under the heading, “Exempt Employees,” stating that if an employee who has used up all his sick, personal and vacation time is absent from work for more than three hours on any given day, “the employee cannot and will not be allowed to come to work. The employee will not be paid for the entire day.” Scholtisek Aff. (Dkt. #41) Ex. F. Plaintiff contends that this policy violates the regulatory provision that salaried employees’ pay cannot be docked for absences occasioned by the employer. See 29 C.F.R. § 541.602(a); Baudin v. Courtesy Litho Arts, Inc.,
Also, insofar as the policy is concerned, all employees subject to it would be similarly situated regardless of whether their pay was actually docked during the limitations period. What matters is whether the policy created a significant likelihood of improper deductions. See Auer,
Defendant also contends that the proposed class is overbroad because it includes Eldre officers who were responsible for developing and implementing the alleged unlawful policies and practices. It does not appear that there are very many such officers relative to the size of the class as a whole, however, and at this preliminary stage, I see no prejudice to defendant if the case proceeds as a collective action.
Defendant also attempts to show that the policy does not violate the FLSA, and that any deductions that have been made from salaried employees’ pay were proper. Those matters, however, go to the merits of plaintiffs claims, which are not relevant at this stage. Ayers,
Given the modest burden on plaintiff at this preliminary stage, then, I conclude that he has adequately shown the existence of similarly situated employees, and that notice should be sent to them to afford them the opportunity to join the case. See Braunstein v. Eastern Photographic Labs., Inc.,
II. Class Action Certification
A. Supplemental Jurisdiction
In addition to his federal FLSA claims, plaintiff alleges that defendants’ pay deductions also violated New York’s Labor Law. Both “[t]he FLSA and New York state labor laws entitle employees to time-and-a-half overtime for hours worked in excess of forty hours per week.” Noble v. 93 University Place Corp.,
Plaintiff has moved to certify his state law claims as a class action under Rule 23. In opposition to the motion, defendant contends that the court should decline to exercise supplemental jurisdiction over these claims because they raise novel and complex issues of state law.
In support of its contention that plaintiffs state law claims present “novel and complex” issues of New York law, defendant states that its “research reveals that there is not a single case, state or federal, addressing whether the salary basis test applies to claims under the New York State Labor Law.” Defendant’s Memorandum of Law (Dkt. # 36) at 15. Apparently defendant’s research did not unearth Dingwall v. Friedman Fisher Associates, P.C.,
The reason for this difference is that although New York regulations require that any “employee” receive overtime pay as provided in-the FLSA, the regulations also exclude from the definition of “employee” anyone who works in an executive, administrative or professional capacity. See 12 N.Y.C.R.R. § 142-2.14(c)(4). The definitions of those three categories require that the person perform certain types of job duties, but do not require that the person be paid on a “salary basis,” as do the federal regulations.
This hardly seems to present a “novel and complex” issue of state law. Rather, this is simply a modest difference between the two statutory schemes, which-as a number of courts have observed-are otherwise quite similar if not identical. See Galasso v. Eisman, Zucker, Klein & Ruttenberg,
B. Rule 23 Requirements
I also find that class certification is appropriate under Rule 23. First, the numerosity requirement has been met, since the proposed class numbers about 140.
The commonality and typicality requirements have also been met. “The commonality requirement is met if plaintiffs’ grievances share a common question of law or of fact.” Marisol A. v. Giuliani
Defendant’s arguments concerning these elements mirror the arguments it advanced concerning the “similarly situated” requirement of plaintiffs FLSA claims: primarily that the various proposed class members held many different types of jobs within Eldre. I reject those arguments in the Rule 23 context for essentially the same reasons I rejected them with respect to the FLSA claims. All the proposed class members were allegedly subject to the same types of unlawful deductions, regardless of their job titles or duties, and it appears that plaintiffs claims are typical of the other class members’.
Defendant also correctly observes that any inquiry into an employee’s exempt status is necessarily fact-intensive, see Burke v. County of Monroe,
Plaintiff can also fairly and adequately protect the interests of the class. In response to defendant’s contention that plaintiff has not demonstrated his financial ability to prosecute this action, plaintiff has adequately done so in an affidavit, see Dkt. # 39, Attachment 1, H 4, and I see no other impediments to plaintiffs ability to protect the class members’ interests.
In addition, I find that plaintiff has satisfied the requirements of Rule 23(b)(3).
I also believe that a class action is superior to other available methods of adjudicating the class members’ claims. For one thing, the state law claims clearly arise out of the same nucleus of operative facts as the FLSA claims, which are going to be adjudicated in this Court in any event. Exercising jurisdiction over the state law claims will therefore promote judicial economy and avoid the risk of duplicative litigation here
In addition, many of the individual class members’ claims are probably relatively small, meaning that those persons could lack sufficient incentive to bring individual suits. That factor also tends to make a class action “superior.” See Velez,
Defendant also argues that it will be confusing if Eldre employees are simultaneously advised about their right to opt into the FLSA action, and their right to opt out of the class action. While I am not unconcerned about that possibility, I believe that the risk of such confusion can be adequately minimized through a carefully crafted notice. “The presence of both FLSA and state claims has not prevented courts from certifying the state claims under Rule 23(b)” in other cases, Ladegaard,
Finally, I am not persuaded by defendant’s suggestion that a state law class action would have to be limited to those employees who filed consents to opt into the FLSA action. The supplemental-jurisdiction statute, 28 U.S.C. § 1367, provides that, with some exceptions not applicable here,
in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
Plaintiffs state law claims unquestionably form part of the same case or controversy as the FLSA claims; indeed, they are virtually identical, except for the fact that the state law claims have a longer limitations period. See McLaughlin,
III. Content of Notice
Plaintiff has submitted a proposed notice to the class members, see Dkt. #42 Ex. A. Aside from its opposition to the sending of any notice, defendant also objects to certain aspects of the form and content of the proposed notice.
I do not believe that it is necessary for the Court to resolve these disputes at this time. For one thing, the proposed notice relates only to plaintiffs FLSA claims, and says nothing about plaintiffs state law claims. My decision to certify a class as to the state law claims means that notice will also have to be sent to the class members pursuant to Rule 23(c)(2). Plaintiffs proposed notice, by itself, is therefore inadequate to notify the class members about the class action. Thus, the notice must be revised, or added to, in any event. Preferably, the parties will be able to agree on an acceptable notice addressing all of plaintiffs claims, and I will give them an opportunity to do so, as set forth in the Conclusion to this Decision and Order.
CONCLUSION
Plaintiffs motions for class certification (Dkt. #30) and for the issuance of notice regarding plaintiffs claims under the Fair Labor Standards Act (Dkt. # 41) are granted.
This action is also hereby certified as a class action with respect to plaintiffs claims under New York law, pursuant to Fed. R.Civ.P. 23(b)(3). The class is defined as all individuals who: (1) are or were employed by defendant Eldre Corporation from December 27, 1997 to date at any location in New York State; and (2) who are or were classified as exempt or salaried employees.
Defendant is hereby directed to provide to plaintiffs’ counsel a list of all individuals who meet the above class description, including their current or last known address and telephone number within fifteen (15) days of the issuance of this Decision and Order.
The parties are directed to work together to draft a mutually acceptable notice to be sent to class members advising them of this lawsuit and their opt-in/opt-out rights. The parties should work together and submit a proposed order for such purpose. The proposed notice (or, if the parties cannot agree on the form and content of the notice, each side’s proposed notice) shall be submitted to the Court for approval within twenty (20) days of the issuance of this Decision and Order. Once the Court has approved a notice, it will issue an order directing issuance of the notice to class members.
IT IS SO ORDERED.
Notes
. For the sake of convenience, all references to "collective actions” or to "class actions” will be understood to refer to such actions under the FLSA or Rule 23, respectively.
. In a letter to the Court dated February 2, 2005, plaintiff's attorney states that as of that date, 41 Eldre employees have signed consent forms to participate in this action.
. The third case cited by defendant, Sheffield v. Onus Corp.,
. Eldre does not appear to contend that any of these employees were paid on an hourly basis, and that their pay could therefore be docked for hours not worked. See Defendant’s Memorandum of Law (Dkt. #49) at 11 ("each of the putative class members are exempt employees under federal and state law”). Of course, since the proposed class consists solely of exempt employees, by definition the class would not include any hourly employees.
. According to plaintiff's attorney, the proposed class would number 141 persons, eight of whom are the individuals that Eldre contends had a hand in developing or implementing the challenged policies. See Stanley J. Matusz Aff. (Dkt. #30, Att. 3) V 12.
. Defendants also raise some other arguments why the Court should not exercise its supplemental jurisdiction over plaintiff's state law claims, but they are all premised on the Court denying plaintiff's motion for conditional certification of his FLSA claims. My decision to grant that motion renders those other arguments moot.
. The definitions of "executive” and “administrative” do contain a requirement that the person be "paid for his services a salary” of at least $386.25 per week, but do not use the term "salary basis,” nor is that term (or any equivalent of the salary basis test) contained anywhere in the New York regulations. 12 N.Y.C.R.R. §§ 142-2.14(c)(4)(i)(e), 142 — 2.14(c)(4)(ii)(d). The definition of "professional” contains no minimum salary requirement. 12 N.Y.C.R.R. § 142-2.14(c)(4)(iii).
. Although defendant argues that far fewer employees have been alleged to have suffered from unlawful deductions, that misses the point that all of Eldre’s salaried employees were subject to the policy concerning partial-day absences. That policy could therefore have subjected all the proposed class members to a "significant likelihood” of deductions. See Auer,
. Since the class would number around 140, it is not clear how that would result in "hundreds” of • mini-trials. I also note that although defendant raises the specter of hundreds of mini-trials in this context, it simultaneously downplays the size of the proposed class with respect to the numerosity requirement.
. There is authority that "[w]hen either subsection (b)(1) or (b)(2) is applicable, ... b(3) should not be used, so as to avoid unnecessary inconsistencies and compromises in future litigation.” DeBoer v. Mellon Mortgage Co.,
Furthermore, the chief difference between subsection (b)(3) and the other two subsections is that the former provides for mandatory notice and opt-out rights, see Fed.R.Civ.P. 23(c)(2), whereas the latter do not. See 2 Alba Conte & Herbert B. Newberg, Newberg on Class Actions § 4.1 at 5 (2002) (describing differences between certification under (b)(3) and under (b)(1) and (b)(2)). A district court has discretion to permit opt-outs in a(b)(l) or (h)(2) action, however, see In re Monumental Life Ins. Co.,