Godhigh v. Savers, LLC, No. 3:2016cv02874 - Document 63 (N.D. Cal. 2016)
Court Description: ORDER GRANTING CONDITIONAL FLSA CERTIFICATION by Hon. William H. Orrick granting 45 Motion to Certify Class. The parties shall submit an agreed-to notice on or before January 12, 2017. (jmdS, COURT STAFF) (Filed on 12/22/2016)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 EARL GODHIGH, et al., Case No. 16-cv-02874-WHO Plaintiffs, 8 v. ORDER GRANTING CONDITIONAL FLSA CERTIFICATION 9 10 SAVERS, LLC, et al., Re: Dkt. No. 45 Defendants. United States District Court Northern District of California 11 12 13 INTRODUCTION Plaintiffs Earl Godhigh and Angela Osgood seek to conditionally certify a nationwide 14 collective of similarly situated employees under the Fair Labor Standards Act (“FLSA”) alleging 15 that Retail Sales Managers (“RSMs”) and Production Managers (“PMs”) employed by TVI, Inc. 16 and Savers LLC (collectively “Savers”) were misclassified as exempt employees, and denied 17 overtime pay. Savers opposes because plaintiffs have not met their burden to show that the 18 putative collective action members are similarly situated and have not made substantial 19 allegations, supported by declarations, that the putative collective action members were subject to 20 an unlawful company-wide policy. Savers also objects to the request that Savers produce the 21 email addresses, telephone numbers, social security numbers, and location information for the 22 putative collective members on the grounds that that this information would be difficult to collect, 23 is sensitive, and plaintiffs have not provided clear reasons as to why this information is necessary. 24 Plaintiffs have a very light burden to meet at the notice stage for conditional certification in 25 a collective action, and despite the vigorous opposition of Savers, they have met their burden. 26 Plaintiffs’ Motion for Conditional FLSA Collective Action Certification is GRANTED. The 27 parties shall meet and confer on the form of Notice. 28 BACKGROUND 1 2 Savers operates thrift stores and donation centers in many states across the nation. 3 Opposition (“Oppo.”) at 2 (Dkt. No. 53). During the period relevant to this action, it operated 4 over 195 thrift stores and donation centers in 30 different states. Id. Savers stores are separated 5 into two distinct areas (1) the sales area where items are sold and (2) the production area where 6 items are received, processed, and priced for sale. Id. Savers employs RSMs to supervise the 7 sales area and PMs to supervise the production area. Id. Savers classifies RSMs and PMs as 8 exempt employees. Complaint at ¶ 12 (Dkt. No. 1). Plaintiffs allege that PMs and RSMs 9 routinely perform non-exempt duties as their primary duties, including sorting clothing, putting prices on items, and working the sales floor and are therefore misclassified as exempt and entitled 11 United States District Court Northern District of California 10 to overtime pay. Complaint ¶ 12. 12 Plaintiffs seek to conditionally certify a collective of RSMs and PMs under the FLSA so 13 that they can give notice of this action and allow PMs and RSMs to opt-in to being represented by 14 plaintiffs’ counsel in this case. Motion for Conditional Certification (“Mot.”) at 1 (Dkt. No. 45). 15 The collective plaintiffs seek to conditionally certify, the “FLSA Collective,” is: 16 17 18 All persons who have worked for Savers in any location nationwide as [Assistant Managers], including PMs or RSMs and similarly situated current and former employees holding comparable positions but different titles, at any time during the applicable limitations period prior to filing of this Complaint through the date of the final disposition of this action. 19 20 21 Complaint ¶ 15. The FLSA Collective excludes Store Managers. Id. fn1. In order to give notice to the collective, plaintiffs ask me to (1) direct Savers to produce to 22 plaintiffs a class list containing collective members’ full names, addresses, non-work phone 23 numbers, social security numbers, email addresses, and the dates and store locations where they 24 worked, (2) direct the dissemination of notice of the pendency of the action by mail and e-mail 25 using the proposed Notice, (3) permit potential Collective Members to file Consent to Join Forms, 26 by mail, fax, e-mail, or website submission, until 90 days after the date of plaintiffs’ mailing of 27 notice to the class, and (4) permit the dissemination of a reminder postcard by mail and e-mail. 28 Mot. at 1. 2 1 LEGAL STANDARD 2 An employee may bring a collective action on behalf of other “similarly situated” 3 employees. 29 U.S.C. § 216(b). Most courts follow a two-step approach to determine whether 4 employees in a proposed collective are “similarly situated.” Harris v. Vector Mktg. Corp., 716 F. 5 Supp. 2d 835, 837 (N.D. Cal. 2010) (E. Chen); see also Daniels v. Aeropostale West, Inc., No. C- 6 12-05755-WHA, 2013 WL 1758891, *5 (N.D. Cal. Apr. 24, 2013). During the first step, the court 7 must determine whether the proposed collective should be informed of the action and given 8 “notice.” Harris, 716 F. Supp. 2d at 837. The “notice” stage determination of whether the 9 putative collective members will be similarly situated is made under a “fairly lenient standard” which typically results in conditional certification. Daniels, 2013 WL 1758891, *6. At the notice 11 United States District Court Northern District of California 10 stage it is the plaintiffs’ burden to make substantial allegations that the putative collective 12 members were subject to an illegal policy, plan, or decision, by showing that there is some factual 13 basis beyond the “mere averments” in the complaint. Id. 14 Given the lenient standard at the notice stage, courts have held that plaintiffs bear a “very 15 light burden” in substantiating the allegations. Prentice v. Fund for Pub. Interest Research, Inc., 16 No. C-06-7776-SC, 2007 WL 2729187, *5 (N.D. Cal. Sept. 18, 2007) (“Given that a motion for 17 conditional certification usually comes before much, if any, discovery, and is made in anticipation 18 of a later more searching review, a movant bears a very light burden in substantiating its 19 allegations at this stage.”). Courts have also rejected attempts by defendants to introduce evidence 20 going to the merits of plaintiffs’ allegations at the notice stage. See, e.g., Labrie v. UPS Supply 21 Chain Solutions, Inc., No. C-08-3182-PJH, 2009 WL 723599 (N.D. Cal. Mar. 18, 2009) (rejecting 22 defendant’s evidence in evaluating conditional certification as “beyond the scope of this court’s 23 analysis in the first tier determination insofar as the evidence raises questions going to the merits 24 of whether plaintiffs are sufficiently similarly situated to allow this action to proceed as a FLSA 25 collective action, and is more appropriately considered as part of the court’s analysis in the second 26 tier determination on a motion to decertify after conditional certification is granted, notice has 27 been given, the deadline to opt-in has passed, and discovery has closed.”); see also Harris, 716 F. 28 Supp. 2d at 838 (“A plaintiff need not submit a large number of declarations or affidavits to make 3 1 the requisite factual showing. A handful of declarations may suffice . . . The fact that a defendant 2 submits competing declarations will not as a general rule preclude conditional certification.”). DISCUSSION 3 4 I. CONDITIONAL CERTIFICATION The key question at hand is whether plaintiffs have met their light burden by making 5 6 substantial allegations and showing the RSMs and PMs are “similarly situated.” To meet this 7 burden, plaintiffs submit declarations from the two named plaintiffs and four opt-ins testifying 8 that: 9 PMs and RSMs are all classified as exempt employees. 10 PMs and RSMs spend approximately 80-90 percent of their time doing non-exempt duties United States District Court Northern District of California 11 such as folding clothes, assisting customers, working the cash register, opening the store, 12 making deposits, and counting the safe. 13 PMs and RSMs are salaried employees. 14 Savers does not have any method for tracking PMs’ and RSMs’ overtime hours (hours exceeding 40 hours per week) and PMs and RSMs were not compensated for any overtime. 15 16 PMs and RSMs regularly worked 50-60 hours per week. 17 PMs and RSMs did not take regular, uninterrupted lunch breaks. 18 PMs’ and RSMs’ primary duties do not include hiring, firing, scheduling, conducting performance reviews, disciplining, or setting pay rates. 19 20 stores. 21 22 23 PMs and RSMs responsibilities are similar across different Savers locations. See generally, Dkt. Nos. 45-1, 45-2, 45-3, 45-4, 45-5, 45-6 (Plaintiffs’ Employee Declarations). Savers challenges this testimony and counters with declarations from 80 current Savers 24 25 Store managers, not PMs and RSMs, have ultimate authority and responsibility for the PMs and RSMs who testify that: 26 PMs and RSMs spend less than 50 percent of their time on non-exempt duties. 27 RSMs and PMs manage employees in the sales and production areas of the store. 28 There is only one RSM and one PM for each store. 4 1 PMs and RSMs directly supervise employees which includes training, disciplining employees, and completing performance reviews. 2 3 PMs and RSMs ensure employees are complying with safety standards and guidelines. 4 PMs and RSMs handle customer and donor complaints and use their discretion to resolve issues and offer discounts. 5 6 participate in the interview process. 7 8 9 PMs and RSMs help determine if more employees are needed, who to interview, and When the Store Manager is away, on vacation, or at conferences, the PMs and RSMs are ultimately responsible for managing the store. See generally Dkt. Nos. 53-5, 53-4, 53-5, 53-6, 53-7, 53-8, 53-9, 53-10. (Savers’ Employee 11 United States District Court Northern District of California 10 Declarations). 12 The only question at the conditional certification stage, at least as understood by the judges 13 in this District, is whether plaintiffs have made “substantial allegations” that the proposed 14 collective members were subject to an illegal policy, plan, or decision, by showing there is some 15 factual basis beyond the “mere averments” in the complaint for the collective allegations. Daniels, 16 2013 WL 1758891, at *6. Plaintiffs have met that burden. 17 Savers argues that conditional certification is inappropriate because determining whether 18 PMs and RSMs are properly classified as exempt employees requires an individual-by-individual 19 examination of their job duties. Oppo. at 6. Just because a classification requires a fact-intensive 20 analysis does not mean conditional certification is inappropriate. Supported by their declarations, 21 plaintiffs have asserted that PMs and RSMs had similar job duties across stores and were treated 22 similarly by Savers. If these allegations are true, common proof will be used to answer the fact- 23 intensive inquiry and assess plaintiffs’ classification. 24 If, after development of the evidence, some of the PMs and RSMs turn out to be differently 25 situated in ways that would be material to the classification analysis, then the collective definition 26 could be refined to exclude such PMs and RSMs or, the FLSA collective could be decertified. 27 Savers relies on two cases from outside the district in which courts concluded that 28 conditional FLSA certification was inappropriate where there were alleged differences among the 5 1 class members and where a fact intensive inquiry would be necessary to assess classification. 2 Trinh v. JP Morgan Chase & Co. No. 07-cv-1666, 2008 WL 1860161, at *3 (S.D. Cal. Apr. 22, 3 2008); Litty v. Merrill Lynch & Co., Inc., No. 14-cv-0425, 2014 WL 5904907, at*9 (C.D. Cal. 4 Aug. 4, 2014). I have previously rejected this type of analysis, since, if this were the test “no [] 5 misclassification case could be certified under FLSA.” Carter, 2016 WL 5680464, at *5. If there 6 are materially significant differences between employees, these issues are best addressed during 7 the second step of FLSA certification. Gilbert v. Citigroup, Inc., No. 08-cv-0385-SC, 2009 WL 8 424320 (N.D. Cal. Feb. 18, 2009) (“Defendants’ concern about individualized inquires does not 9 require the Court to deny conditional certification . . . . Under the two-stage certification procedure, Defendants can present this evidence and make these arguments as part of a motion to 11 United States District Court Northern District of California 10 decertify the class once discovery is complete.”). 12 Further, neither of the cases Savers cites matches the facts here. In Trinh, the district court 13 concluded that conditional certification was inappropriate where plaintiffs sought to certify a 14 nationwide collective of all JP Morgan loan officers based only on the declarations of two sub- 15 prime loan officers who testified that they “understood” and “believed” that “all loan officers, 16 everywhere, had the same job functions and were compensated in the same fashion and based on 17 the same criteria.” 2008 WL 1860161, at *3. In Litty, the district court concluded that plaintiff 18 had failed to present meaningful evidence that he was similarly situated to other Financial 19 Advisors (“FAs”) where he submitted only a declaration of his own job duties and the FA job 20 description but did not submit any evidence describing the job duties other FAs actually 21 performed. 2014 WL 5904907, at*9. In contrast, plaintiffs here have submitted six declarations 22 from former PMs and RSMs that outline the specific tasks employees in these two positions were 23 required to perform and demonstrate that these employees performed similar tasks, had similar 24 duties, and were similarly treated by Savers. Unlike the plaintiffs in Trihn and Litty, plaintiffs 25 have provided evidence, not just speculation, that all PMs and RSMs are similarly situated. 26 Savers also argues that plaintiffs’ six declarations are insufficient to justify conditional 27 certification of a collective of all PMs and RSMs nationwide. Oppo. at 9. Savers notes that over 28 the last three years it has operated over 195 stores in 30 states and employed approximately 537 6 1 PMs and RSMs. Id. It argues that plaintiffs declarations, representing PMs and RSMs at only a 2 handful of stores in five states, cannot possibly speak to the experiences of all PMs and RSMs 3 nationwide. Id. at 11. They add that their 80 declarations represent the experiences of far more 4 employees at 40 locations in 12 states and better represent the duties of PMs and RSMs at Savers 5 stores. Id. 6 Savers’ rebuttal declarations, at the least, raise a factual dispute, but this issue should be 7 addressed at the second stage of FLSA certification, not at the present notice stage. See, e.g., 8 Harris, 716 F. Supp. 2d at 837; see also Kellgren v. Petco Animal Supplies, Inc., No. C-13-644, 9 2015 WL 5167144, at *6 (S.D. Cal. Sept. 3, 2015) (declining to “give Defendant’s happy camper 10 declarations any weight” at the first conditional certification stage). United States District Court Northern District of California 11 Plaintiffs’ six declarations are sufficient to meet their light burden and conditional FLSA 12 certification is regularly granted on similar evidence. Sanchez v. Sephora USA, Inc., No. 11-cv- 13 03396-SBA, 2012 WL 2945753, at *3 (N.D. Cal. July 18, 2012) (granting conditional certification 14 of a collective of employees covering 280 stores based on four declarations); Gilbert v. Citigroup, 15 Inc., No. 8-cv-0385, 2009 WL 424320-SC, at *5 (N.D. Cal. Feb. 18, 2009) (granting conditional 16 certification of nationwide collective of bank employees based on five California employee 17 declarations and a compensation document); Leuthold v. Destination Am., Inc., 224 F.R.D. 462, 18 467 (N.D. Cal. 2004) (granting conditional certification of a nationwide collective based on three 19 declarations). 20 I conclude that plaintiffs have met their burden to show they are similarly situated to the 21 proposed FLSA collective members. Further, they have made substantial allegations in support of 22 the claims they intend to assert of behalf of PMs and RSMs sufficient for conditional certification 23 under the FLSA. Plaintiffs’ motion for conditional certification of the FLSA collective is 24 GRANTED. 25 II. FORM OF NOTICE 26 Savers objects to the form of notice suggested by plaintiffs. At the hearing on December 27 7, 2016, I directed the parties to review the FLSA notice I approved in Wellens et al v. Daiichi 28 Sankyo, Inc., 13-cv-00581-WHO, at Docket Nos. 127, 128, which addressed many of the issues 7 1 and objections Savers raises. The parties shall submit an agreed-to notice on or before January 12, 2 2017. If the parties cannot stipulate to the form of notice, they may submit a joint letter of not 3 more than five pages explaining their positions and attach the redlined versions of their proposals. 4 CONCLUSION 5 6 7 8 9 10 For the reasons outlined above, plaintiffs’ motion for conditional FLSA certification is GRANTED. The parties shall submit an agreed-to notice on or before January 12, 2017. IT IS SO ORDERED. Dated: December 22, 2016 ______________________________________ WILLIAM H. ORRICK United States District Judge United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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