Differing Accounts of Job Responsibilities Lead to Decertification of FLSA Class
Published by Eric A. Welter on June 19, 2017
This decision is useful for employers defending class and collective actions alleging misclassification where employees potentially exercise varying amounts of authority and have differing job duties.
On March 29, 2017, the United States District Court for the Southern District of New York rejected a motion under Rule 23 of the Federal Rules of Civil Procedure (Rule 23) to certify a class of Chipotle “apprentices,” essentially manager trainees, asserting claims for overtime pay under New York Labor Law and similar state laws in Colorado, Illinois, Missouri, North Carolina and Washington, on the theory that they were misclassified as exempt. The Court also granted Chipotle’s motion to decertify the plaintiffs’ Fair Labor Standards Act (FLSA) collective action based largely on the plaintiffs’ own varying accounts of their management responsibilities.
In Scott v. Chipotle Mexican Grill, Inc., the plaintiffs challenged Chipotle’s blanket exempt classification of the apprentice position, claiming that they performed little to no managerial work, and thus should not be exempt from receiving overtime pay. Chipotle argued that the apprentices were exempt under the executive exemption, the administrative exemption, or both.
The Court conditionally certified the class, basing its decision primarily on Chipotle’s use of a single job description and Chipotle’s earlier audit of the apprentice position, which determined that the position was properly classified as exempt nationwide because apprentices all had the “same responsibilities.” A total of 516 apprentices opted in to the action.
After years of discovery, Chipotle moved to decertify the FLSA collective class and the plaintiffs sought to certify smaller state law class actions. Deposition testimony elicited from the named plaintiffs and several opt-in class members suggested that, in practice, the responsibilities of an apprentice were not so uniform. For example, none of the six named plaintiffs had similar experiences regarding what managerial duties they performed and how frequently they performed other non-exempt tasks. The testimony of some of the opt-in plaintiffs also indicated that, generally speaking, differences in the structure of the restaurant locations, sales volume and managerial style affected the amount of time apprentices spent engaged in exempt managerial and administrative duties.
Applying Rule 23(a), the Court held that there was commonality and typicality among the plaintiffs and their claims. The Court found that the question of whether apprentices were misclassified could be answered with common proof, especially because Chipotle uniformly classified all apprentices as exempt and used a single job description for the apprentice position nationwide. The Court also found that the typicality requirement was satisfied because the claim that the apprentice position was misclassified was based on the same legal theory and factual predicates.
Despite finding that the requirements for Rule 23(a) certification were met, however, the Court emphasized that because plaintiffs’ sought certification under Rule 23(b)(3) they also had to establish predominance and superiority. The Court found that both of those elements were lacking and that individualized inquiries as to each apprentice’s management authority and job duties were necessary to determine if the exempt classification was appropriate. Thus, class certification of the state law claims was denied.
For many of the same reasons, the Court granted Chipotle’s motion to decertify the FLSA collective action. To make this decision, the Court had to decide whether the 500 or so apprentices who opted-in were “similarly situated” to the plaintiffs. The Court considered the varying amounts of authority and job duties the apprentices had. The Court emphasized the deposition testimony of an apprentice who worked in two different states and had significantly difference experiences in the managerial authority he had and the job duties he performed. The Court determined that upholding the certification of the collective action “would reduce Section 216(b)’s requirement that plaintiffs be ‘similarly situated’ to a mere requirement that plaintiffs share an employer, a job title, and a professed entitlement to additional wages.”
This decision is useful for employers defending class and collective actions alleging misclassification where employees potentially exercise varying amounts of authority and have differing job duties.Topics: certification, Class Action, Class Actions and Complex Litigation, collective action, Employee Classification, Fair Labor Standards Act, Financial Services, FLSA, Government Contracting, Healthcare, Hospitality, individualized inquiries, Media & Entertainment, Misclassification, Retail, Rule 23, Southern District of New York, Technology, Transportation, Wage and Hour Compliance and Litigation