Benedict v. Hewlett-Packard Company, No. 5:2013cv00119 - Document 446 (N.D. Cal. 2016)

Court Description: ORDER GRANTING 413 DEFENDANT'S MOTION TO DECERTIFY FLSA COLLECTIVE. Signed by Judge Beth Labson Freeman.(blflc2S, COURT STAFF) (Filed on 7/13/2016)
Download PDF
1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 ERIC BENEDICT, 7 Case No. 13-cv-00119-BLF Plaintiff, 8 v. 9 HEWLETT-PACKARD COMPANY, 10 Defendant. ORDER GRANTING DEFENDANT'S MOTION TO DECERTIFY FLSA COLLECTIVE [Re: ECF 413] United States District Court Northern District of California 11 12 This case, which challenges Hewlett-Packard (“HP”)’s classification of certain employees 13 14 as exempt, began as a purported class action and Fair Labor Standards Act (“FLSA”) collective 15 action. The Court1 conditionally certified the FLSA collective, see ECF 175, but denied 16 certification of the Rule 23 class, see ECF 388. Discovery has closed and HP now asks the Court 17 to decertify the FLSA collective action. For the reasons stated below, the Court GRANTS 18 Defendant’s motion. I. 19 BACKGROUND A. Procedural Background 20 Defendant is a global corporation that provides information technology products and 21 22 services around the world. Plaintiff Eric Benedict worked for Defendant as a Technical Solutions 23 Consultant (“TSC”) III from April 2011 to February 2012, Benedict ¶¶ 2-3, ECF 310; and Plaintiff 24 David Mustain worked as a TSC II from December 2008 to September 2013, Mustain ¶¶ 2-3, ECF 25 311.2 Plaintiffs allege that Defendant misclassified them as exempt from overtime pay, and that 26 1 27 28 References to “the Court” encompass actions taken by Judge Koh, to whom this case was previously assigned. 2 The Second Amended Complaint names four representative plaintiffs, see ECF 258, but Mr. Benedict and Mr. Mustain are the only two who remain. Defendant states and Plaintiffs do not 1 they and their similarly-situated colleagues routinely worked more than 40 hours per week without 2 overtime pay in violation of the FLSA, 29 U.S.C. §§201 et seq. SAC ¶¶ 67-77, ECF 258. 3 On February 13, 2014, the Court conditionally certified the following FLSA collective: 4 7 All persons who were, are, or will be employed by HP nationwide from January 10, 2010, to end of the opt-in period (a) in the Technical Solutions Consultant I, II, or III; Field Technical Support Consultant I, II, or III; or Technology Consultant I, II, or III Job titles, (b) with the HR designation “Individual Contributor,” and (c) classified as Exempt from the overtime pay requirements of the FLSA. 8 Benedict v. Hewlett-Packard Co., No. 13-CV-00119-LHK, 2014 WL 587135, at *14 (N.D. Cal. 9 Feb. 13, 2014). Notice was then mailed out and 1,385 individuals (“Opt-Ins”) opted in to the 5 6 collective. See Order Granting Stipulation Re Dismissal of Opt-in Plaintiffs at 1 (“Opt-In 11 United States District Court Northern District of California 10 Dismissal Order”), ECF 354. 12 Plaintiffs then sought certification of the following state classes under Rule 23(b)(3): 13 California Class: All persons employed in California as a Technical Solutions Consultant I, II, or III by HP’s (1) Enterprise Group, Customer Solutions Center; (2) HP Software Support Delivery / IMBU Support; and/or (3) HP Software Enterprise Security Products organization at any time between January 10, 2009 and the present who was designated an “Individual Contributor” and was classified as exempt from the overtime pay requirements of California. 14 15 16 17 18 19 20 21 22 23 24 25 26 Colorado Class: All persons employed in Colorado as a Technical Solutions Consultant I, II, or III by HP’s (1) Enterprise Group, Customer Solutions Center; (2) HP Software Support Delivery / IMBU Support; and/or (3) HP Software Enterprise Security Products organization at any time between January 10, 2010 and the present who was designated an “Individual Contributor” and was classified as exempt from the overtime pay requirements of Colorado. Massachusetts Class: All persons employed in Massachusetts as a Technical Solutions Consultant I, II, or III by HP’s (1) Enterprise Group, Customer Solutions Center; (2) HP Software Support Delivery / IMBU Support; and/or (3) HP Software Enterprise Security Products organization at any time between January 10, 2010 and the present who was designated an “Individual Contributor” and was classified as exempt from the overtime pay requirements of Massachusetts. Before the Court had ruled on the Motion for Class Certification, the parties stipulated to 27 28 contest that Kilricanos Vieira is barred from this collective action, see ECF 390, and that Richard Bowders has withdrawn as a representative plaintiff. See Lazerson Decl. ¶ 14. 2 1 amend the definition of the conditionally-certified collective as follows: 2 Opt-Ins who were or are employed (a) in U.S. Technical Solutions Consultant I, II, or III Job titles within the Enterprise Group - Customer Solutions Center, HP Software Support Delivery/ IMBU Support, and/or HP Software Enterprise Security Products organizations; or (b) in U.S. Field Technical Support Consultant I, II, or III job titles within the Enterprise Group – TS AMS Signage – US, and/or Printing and Personal System – Graphics Solutions Business organizations. 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 (“Collective Members”) Opt-In Dismissal Order at 3. This revised definition largely mirrors the putative class definitions, but on a nationwide basis and with the addition of Field Technical Support Consultants (“FTSCs”). The revised group includes approximately 130 current and former employees3 and excludes more than 1,000 of the initial Opt-Ins, whose claims were dismissed without prejudice. Id. at 2. On March 28, 2016, the Court denied certification of the putative state classes because 12 13 14 15 Plaintiffs “failed to carry their burden of demonstrating predominance” and superiority under Rule 23(b)(3). See Order Denying Plaintiffs’ Motion to Certify Class (“Order Denying Class Certification”) at 31, ECF 388. Discovery closed on April 5, 2016. Plaintiffs reviewed more than 600,000 HP documents 16 17 18 19 20 and deposed nine Rule 30(b)(6) witnesses. Sagafi Decl. ¶ 7, ECF 419; see also Lazerson Decl. ¶ 2, ECF 413-1. Defendant deposed the named Plaintiffs and more than 10 Collective Members. Sagafi Decl. ¶ 7; Lazerson Decl. ¶ 2. On the basis of that discovery, Defendant now seeks to decertify the FLSA collective, while Plaintiff argues that decertification would be improper. B. Factual Background 21 The exhibits and depositions attached to the parties’ briefing establish the following. As 22 23 24 25 26 27 28 described at length in the Order Denying Class Certification, Defendant uses a Job Architecture (“JA”) Policy “to organize work and classify employees using a global hierarchy of jobs.” See Order Denying Class Certification at 2-3. Under the JA, each employee has a Job Title that maps to a Job Function, Job Family, and Job Level. Id.; see also Exh. A to Sagafi Decl. at HP00000001, 3 The parties disagree on the precise number of Collective Members, with HP claiming that there are 129 and Plaintiffs claiming that there are 135 members. See Mot. at 5; Opp. at 1, n.1. This difference does not affect the Court’s reasoning. 3 1 ECF 419-1; Def.’s Exh. 42, ECF 414-42. Each Job Title also comes with a Job Level Definition, 2 but these definitions do not necessarily reflect the day-to-day work of Collective Members. 3 Compare Exh. A to Sagafi Decl. at HP0000004 (TSC I-IIIs are not “Expert”) with Def.’s Exh. 43 4 at 5 (describing a TSC as a “Subject Matter Expert (SME)”), ECF 412-66. 5 Relevant to this case, each Collective Member is classified as a TSC I, TSC II, TSC III, or 6 FTSC. TSCs and FTSCs all fall under the “Services” Job Function. However, TSCs are in the 7 “Customer Solutions Center – Technical” Job Family, which is “made up of teams that provide 8 remote (offsite) service,” see Exh. A to Sagafi Decl. at HP00000001, while FTSCs are in the 9 “Field Technical Support” Job Family, which “focuses on managing the onsite delivering of . . . 10 services,” see Def.’s Exh. 42 at HP00000006. United States District Court Northern District of California 11 Collective Members who are TSCs and FTSCs also come from different business 12 organizations within HP. The TSCs come from (1) HP’s Enterprise Group – Customer Solutions 13 Center, (2) HP Software Support Delivery/IMBU Support, and (3) HP Software Enterprise 14 Security Products, while the FTSCs come from either Enterprise Group – TS AMS Signage – US 15 or Printing and Personal System – Graphics Solution Business. Lazerson Decl. ¶ 14; see also Opt- 16 In Dismissal. These groups focus on different products and for different customers. 17 During the relevant time period, Collective Members had at least 104 different direct 18 managers, in part because certain Members had numerous managers. Def.’s Exh. 52 (Rowe Decl.) 19 ¶ 4, ECF 412-82. In addition, Collective Members worked at 21 different locations nationwide, 20 not including 30 Members who telecommuted. Id. ¶ 5. Their salaries ranged from below 21 $40,000/year to more than $100,000/year. Id. ¶ 6. Such variation existed even for individuals with 22 the same Job Title in the same location at the same time. Id. ¶ 6 (three Collective Members who 23 were TSC IIIs in San Diego in 2013 earned base salaries of $55,393, $92,586, and $103,592). 24 1. TSCs 25 Because the parties refer to TSCs’ “tiers,” which are distinguishable from their division 26 into Is, IIs, and IIIs, and “titles” or “roles,” which differ from the “TSC” Job Title, the Court 27 reviews this vocabulary from the Order Denying Class Certification. A TSC’s tier generally 28 indicates how many engineers have attempted to address an issue before it comes to him/her. See 4 1 Order Denying Class Certification at 5. For example, a Tier 1 engineer is the first TSC to respond 2 to a case, regardless of whether that TSC is I, II, or III, while a Tier 2 engineer generally receives a 3 case after a Tier 1 engineer has been unable to solve it, and so on. Id. at 5. In addition, the TSC 4 Job Title also encompasses numerous “functional titles” or “roles,” which exist at a level below 5 the JA classification. Id. at 8. For example, Collective Members who are TSCs include “TAMs” 6 (Technical Account Managers), see Def.’s Exh. 49 at 6, ECF 412-78, “TSSs” (Technical Solution 7 Specialists), see Def.’s Exh. 50 at 5, ECF 412-80, “CAs” (Customer Advocates), see Def.’s Exh. 8 12 at 31:15-18, and “RSAAs” (Remote Support Account Advocates), see Def.’s Exh. 43. The Court now turns to the TSCs’ work experience.4 Collective Members who are TSCs 9 respond to customers’ requests for technical solutions. The procedure for responding is dictated by 11 United States District Court Northern District of California 10 policies and standard practice though, as noted below, some Collective Members regularly follow 12 this practice, while others “might” or “occasionally” follow it. The Court summarizes standard 13 practice and some Collective Members’ deviation from it below. 14 According to standard practice, TSCs first review a customer’s log files for information on 15 the problem. See, e.g., Pls.’ Exh. O (“Mustain Pl.”) at 66:7-10, ECF 419-15; Pls.’ Exh. H (“Chang 16 Pl.”) at 115:15-18, ECF 419-8; Pls.’ Exh. K (“Ihling Pl.”) at 28:22-25, ECF 419-11; Pls.’ Exh. L 17 (“Jessen Pl.”) at 77:20-78:23, ECF 419-12; see also Pls.’ Exh. F (“Austin Pl.”) at 58:19-25 18 (testifying that he “might” review log files), ECF 419-6; Pls.’ Exh. G (“Benedict Pl”) at 200:20-23 19 (describing log file review as a possible first step), ECF 419-7. Next, TSCs search knowledge bases, search engines, and internal documentation for 20 21 known problems and solutions. See, e.g., Austin Pl. at 63:8-15; Benedict Pl. at 134:5-17; Pl.’s 22 Exh. I (“Ford Pl.”) at 35:5-12, ECF 419-9. Then, according to standard practice, TSCs test 23 possible solutions in a simulated customer environment. As with reviewing log files, some 24 Collective Members “always” test the solution, see, e.g., Austin Pl. at 86:16-87:3, while others 25 “occasionally” or “often” do, see, e.g., Chang Pl. at 84:24-85:5; Ford Pl. at 90:8-13. Finally, if a 26 TSC cannot find a solution, s/he escalates to the next tier of TSC or to R&D. See, e.g., Benedict 27 4 28 Though some Collective Members no longer work for Defendant, the Court uses present tense for simplicity. 5 1 Pl. at 203:5-16; Chang Pl. at 20:2-6; Pls.’ Exh. R (“Shropshire Pl.”) at 19:16-22. Some Collective Members describe this work as simple “cut[ting] and past[ing]” from 2 3 Google, see Def.’s Exh. 5 (“Benedict Def.”) at 209:4-15, ECF 412-10, while others describe even 4 the first step as “very technical.” Austin Pl. at 57:13-19. In addition, several Collective Members who are TSCs worked on tasks not covered by the 5 6 process described above. For example, Ann Holiday planned workshops for customers and was 7 responsible for assigning accounts to other TSCs, mentoring team members, and proactive 8 “customer advocacy tasks.” Def.’s Exh. 43 (Holiday 2010 Performance Review) at 3; Def.’s Exh. 9 44 (Holiday 2011 Performance Review) at 4, ECF 412-68. Ms. Holiday also built “excellent rapport with her customer community” and was “highly respected in her field of expertise.” Def.’s 11 United States District Court Northern District of California 10 Exh. 43 at 4-5; Def.’s Exh. 44 at 4-6. Similarly, Janet Aman also had pro-active duties, including 12 “creating the process for the [sic] delivering advisories to [datacenter] customers,” “deliver[ing] 13 trainings to all team members,” and working on “Proactive Care services.” Def.’s Exh. 47 (Aman 14 Accomplishments) at 1, ECF 412-74. And Thomas Chan created a video for customers. Def.’s 15 Exh. 48 (Chan 2014 Performance Review) at 4, ECF 412-76.5 Other Collective Members describe choosing to work on unique assignments. For example, 16 17 Rebeka Levin “took it upon [herself]” to create a new orientation program for employees “as a 18 side project.” Def.’s Exh. 14 (“Levin Def.”) at 18:8-17, 21:20-22:1, ECF 414-14. Ms. Levin was 19 also responsible for tracking response times and escalations for customer tickets and offered 20 recommendations on how to cut down on response time. Id. at 39:9-40:6, 40:15-17, 68:16-70:24. 21 Similarly, on his own time, Howard Greenspan reverse-engineered a process to program a tool that 22 enabled customers to send files of any size to a back-end server. Def.’s Exh. 17 (“Greenspan 23 Def.”) at 32:1-33:5, ECF 412-24. In addition, Collective Members who were TSCs also testified that their work differed 24 25 from that of other TSCs. See Def.’s Exh. 12 (“Ihling Def.”) at 45:6-9; 45:20-23, ECF 414-12. For 26 5 27 28 Plaintiffs argue that the Court should give evidence taken from performance reviews little weight as such reviews “are typically used to highlight exceptional accomplishments and not the day-today duties of employees.” Opp. at 12, n.8. However, Plaintiffs do not challenge the veracity of the performance reviews. The Court affords this evidence the appropriate weight. 6 1 example, Whitney Ihling testified to “beg[i]n[ning] the basic work” when faced with a technical 2 question, but “generally escalat[ing] or elevat[ing] that ticket to an engineer.” Id. at 31:9-11, ECF 3 414-12. Ms. Ihling explained that those engineers were “within th[e] Technical Solutions 4 Consultant role just like me, but with a different emphasis” and that “[t]he Technical Solutions 5 Consultant role was a broad umbrella that held . . . the customer advocacy team and also included 6 the more specialized . . . product specialist.” Id. at 31:12-13, 31:25-32:4. Ms. Ihling’s own work 7 included revamping the process for handling defective equipment, id. at 32:17-19, 58:16-25, and 8 producing portions of her team’s newsletter, Def.’s Exh. 13 (Ihling Performance Review) at 1, 9 ECF 412-18. Collective Members also experienced different levels of autonomy, creativity, and 11 United States District Court Northern District of California 10 responsibility. For example, Ken Shropshire and Andrew Kennedy were both Tier 2 engineers, but 12 Mr. Shropshire described his work as nothing more than passing solutions on to customers from 13 Tier 3 engineers without any discretion, Def.’s Exh. 10 (“Shropshire Def.”) at 158:8-159:3, ECF 14 412-14, while Mr. Kennedy “exercise[d] independen[ce] to identify and propose next actions and 15 solutions,” Def.’s Exh. 31 (Kennedy 2013 Performance Review) at 3, ECF 412-46. 16 Collective Members testified that a person’s work could vary by his/her role, his/her years 17 of experience, and the complexity of the product. See Def.’s Exh. 15 (“Chang Def.”) at 29:23-30:2 18 (her group was considered to be one that handled more complex problems), ECF 412-20; Def.’s 19 Exh. 21 (“Austin Def.”) at 34:9-19, 35:15-36:11 (job duties of TSC IIIs varied by “level of 20 knowledge” and years of experience), ECF 412-32. 21 2. FTSCs 22 Six Collective Members are FTSCs, but the parties have provided minimal information 23 regarding FTSCs. Neither named Plaintiff is an FTSC and Plaintiffs have not sought a Rule 24 30(b)(6) deposition or document production on the business units for which the Collective 25 Members who are FTSCs worked. Lazerson Decl. ¶ 14. Plaintiffs represent in their Opposition 26 that the parties are in discussions to withdraw the remaining FTSCs from the collective and 27 resolve their claims with HP individually, see Opp. at 3, n.2, but the parties have not advised the 28 Court of any withdrawal or dismissal of these Collective Members. 7 1 II. LEGAL STANDARD 2 The FLSA authorizes employees to bring a collective action on behalf of themselves “and 3 other employees similarly situated.” 29 U.S.C. § 216(b). Though neither the FLSA nor the Ninth 4 Circuit has defined “similarly situated,” courts in this circuit generally apply a “two-step approach 5 involving initial notice to prospective plaintiffs, followed by a final evaluation whether such 6 plaintiffs are similarly situated.” Leuthold v. Destination America, Inc., 224 F.R.D. 462, 467 (N.D. 7 Cal. 2004); see also Benedict v. Hewlett-Packard Co., No. 13-CV-00119-LHK, 2014 WL 587135, 8 at *5 (N.D. Cal. Feb. 13, 2014). 9 At the initial stage, the Court considers the pleadings and affidavits submitted by the parties to determine whether the proposed class should be given notice of the action. Santiago v. 11 United States District Court Northern District of California 10 Amdocs, Inc., No. C 10-4317 SI, 2013 WL 5444324, at *3 (N.D. Cal. Sept. 30, 2013). The 12 standard “is a lenient one that typically results in certification.” Benedict, 2014 WL 587135, at *5. 13 Once discovery is complete, “‘the party opposing the certification may move to decertify 14 the class.’” Id. at *5 (citing Adams v. Inter–Con Sec. Systs., Inc., 242 F.R.D. 530, 536 (N.D. Cal. 15 2007). At the second stage, the Court considers whether “the claims of the class members are 16 sufficiently alike to allow the Court to efficiently manage the case.” Wren v. RGIS Inventory 17 Specialists, 256 F.R.D. 180, 212 (N.D. Cal. 2009). The Court “engage[s] in a fact-specific inquiry 18 to evaluate various factors,” including “(1) the disparate factual and employment settings of the 19 individual plaintiffs; (2) the various defenses available to the defendants with respect to the 20 individual plaintiffs; and (3) fairness and procedural considerations.” Id. at *4 (quoting 21 Beauperthuy v. 24 Hour Fitness USA, Inc., 772 F.Supp.2d 1111, 1118 (N.D. Cal. 2011)). 22 At the second stage, the Court applies a stricter standard than at the initial stage, but a more 23 lenient one than the requirement for class action certification under Rule 23(b)(3). Benedict, 2014 24 WL 587135, at *6 (citing Lewis v. Wells Fargo & Co., 669 F.Supp.2d 1124, 1127 (N.D. Cal. 25 2009)). Plaintiffs bear the burden of providing “substantial evidence to demonstrate that [the 26 collective members] are similarly situated.” Santiago, 2013 WL 5444324, at *3 (quoting Reed v. 27 County of Orange, 266 F.R.D. 446, 449 (C.D. Cal. 2010). “Ultimately, the decision whether to 28 proceed as a collective . . . turns on whether this device is the superior way of resolving a 8 1 controversy. The benefits to the parties of a collective proceeding need to be balanced against any 2 prejudice to the defendant and any problems of judicial administration that may surface.” 3 Beauperthuy, 772 F. Supp. 2d at 1118 (citation omitted). “The decision whether to decertify a 4 collective action is within the district court's discretion.” Id. at 1118. 5 III. 6 DISCUSSION Defendant argues that, based on the record before the Court, the Court must decertify the FLSA collective. Defendant first notes that it has been unable to find any case in which a court has 8 denied certification of a Rule 23 class and then allowed a similarly-defined FLSA collective action 9 to proceed. Defendant concedes that the Court’s denial of class certification does not dictate the 10 result of this motion, but argues that the factual findings underlying the Court’s prior order apply 11 United States District Court Northern District of California 7 equally to the opt-in class and demonstrate why decertification is required at this stage. Mot. at 13. 12 In response, Plaintiffs do not offer a case that allows an FLSA collective to proceed where 13 a Rule 23 class was not certified, but they note that “courts have repeatedly rejected attempts . . . 14 to equate FLSA class actions and Rule 23 class actions because . . . [to do so] would effectively 15 ignore Congress’ directive.” Opp. at 7 (quoting Flores v. Velocity Express, Inc., No. 12 Civ. 16 05790, 2013 WL 2468362, at *7 (N.D. Cal. June 7, 2013)). 17 The Court agrees with Plaintiffs that this motion stands on its own, separate from the Rule 18 23 motion, on the basis of evidence specific to Collective Members and pursuant to a more lenient 19 standard. See, e.g., Flores, 2013 WL 2468362, at *7; Villa v. United Site Servs. of Cal., Inc., No. 20 12 Civ. 00318, 2012 WL 5503550, at *14 (N.D. Cal. Nov. 13, 2012); Church v. Consol. 21 Freightways, Inc., 137 F.R.D. 294, 305 (N.D. Cal. 1991). With that in mind, the Court turns to the 22 parties’ arguments regarding each factor of the second-stage FLSA inquiry. 23 24 A. Factual and Employment Settings The first factor in the second-stage analysis is “the degree of similarity among plaintiffs’ 25 factual and employment settings.” Santiago, 2013 WL 5444324, at *4 (quoting Beauperthuy, 772 26 F. Supp. 2d at 1122). “Courts look at whether plaintiffs had differing job titles or duties, worked in 27 different geographic locations, worked under different supervisors, or allege different types of 28 violative conduct.” Id. at *4 (citing Reed, 266 F.R.D. at 449). The greater the variation, the less 9 1 manageable an FLSA collective becomes. 2 Defendant argues that the employment settings of the Collective Members vary by product, 3 manager, and location. Opp. at 14 (citing Def.’s Exh. 52 ¶¶ 4-6). In addition, Defendant highlights 4 that Collective Members who are TSCs had a range of functional titles, including Technical 5 Account Manager (“TAM”), Remote Support Account Advocate (“RSAA”), Consumer Advocate 6 (“CA”), and Duty Manager, and included engineers at Tiers 1, 2, and 3, reflecting significant 7 variation in day-to-day work experiences, activities, relationships with customers, and expertise. 8 Defendant notes that the roles of some Collective Members included creating and transferring 9 knowledge, conducting trainings, and taking on special assignments. Defendant also contends that even the Collective Members who worked in “technical support” or “troubleshooting” roles had 11 United States District Court Northern District of California 10 vastly different factual and employment settings, with some describing routine experiences and 12 others testifying to working on complex issues, building tools, and exercising discretion. 13 Plaintiffs respond that Collective Members are similarly situated with respect to their 14 claims for misclassification by virtue of three simple facts: they were all “employed by HP as 15 TSCs, performed similar duties, and were classified as exempt under the FLSA.” Opp. at 6. 16 Plaintiffs argue that Defendant overemphasizes minor variations in location, manager, education, 17 and salary, while ignoring the shared fact that Collective Members who were TSCs performed the 18 same essential function: providing technical support to customers pursuant to standard procedures 19 and practices. Id. at 11, 13-14. In addition, Plaintiffs contend that any individual side projects did 20 not constitute Collective Members’ primary duties and are therefore irrelevant for classification 21 purposes. Plaintiffs also contest Defendant’s characterization of certain employees, such as Ms. 22 Ihling and Ms. Holiday, as primarily non-technical in its Motion, id. at 11-12, and argue that the 23 strength of Collective Members’ relationships with their customers did not change the substance 24 of their troubleshooting duties, id. at 13. Finally, Plaintiffs concede that, “[i]f the Court were to 25 find TSCs assigned RSAA, TAM or other similar duties were not similarly situated, the Court 26 could, within its discretion, remove only those Plaintiffs from the collective.” Id. at 13, n.9. 27 Having reviewed the cases cited by the parties, the Court finds Santiago v. Amdocs, Inc., 28 No. C 10-4317 SI, 2013 WL 5444324 (N.D. Cal. Sept. 30, 2013) particularly instructive because 10 of its similarities to this case. Much like here, Santiago considered whether to decertify a 2 conditionally-certified FLSA collective of “current and former Information Technology 3 employees at [a global technology firm]” Id. at *1. As here, the employees alleged “that their job 4 duties consisted primarily of providing computer support, trouble shooting, testing related to 5 repairs and problem-solving, and technical services” and that they had been misclassified as 6 exempt. Id. at *1. Much like HP, the defendant in Santiago used a “global job classification 7 system” to “map” employees into “job families” and “bands” and, much like Plaintiffs, the 8 Santiago plaintiffs argued that their family and band classifications negated any need for 9 individual determinations because they correlated to each employee’s level of discretion and 10 independent judgment. Id. at *2, 5. In other words, the plaintiffs asserted that the global job 11 United States District Court Northern District of California 1 classification system itself “determined which employees are similarly situated.” Id. at *5. 12 The Santiago court found the plaintiffs’ position unpersuasive. Even assuming that job 13 family reflected “similar education [,] experience and competencies,” the court explained that such 14 similarities did not, “on [their] own, establish that all employees within the same Job Family and 15 Band rank are similarly situated.” Id. at *5. The court also rejected the plaintiffs’ reliance on the 16 defendant’s blanket classification of the plaintiffs as exempt because the Ninth Circuit has held 17 that such a policy “does not eliminate the need to make a factual determination as to whether class 18 members are actually performing similar duties.” Id. at *6 (quoting In re Wells Fargo Home 19 Mortg. Litig., 571 F.3d 953, 959 (9th Cir. 2009)). Instead, the court was persuaded by the 20 purported collective members’ actual experience, which showed significant disparities in job 21 duties and employment settings within the same band and family, such as one employee simply 22 running existing applications while another wrote and revised code. Id. at *6. The court also found 23 it “significant that class members worked in a variety of locations and settings, with some working 24 at home for some portion of time, and many class members having little to no direct interaction 25 with their supervisors.” Id. at *6. 26 Another court in this district similarly rejected a conditionally-certified collective’s 27 contention that an employer’s job classification scheme offered sufficient evidence of substantial 28 similarity. Beauperthuy considered a misclassification claim brought by managers at a nation-wide 11 1 gym who argued that their subdivision into three silos, “GMs, OMs, and FMs,” sufficed to 2 establish that they “had the same duties and responsibilities as other managers in the same position 3 across all clubs, regions, and states.” Beauperthuy v. 24 Hour Fitness USA, Inc., 772 F. Supp. 2d 4 1111, 1129 (N.D. Cal. 2011). The plaintiffs also contended that because the employer “classified 5 managers as exempt based solely upon their job title without performing any sort of individualized 6 inquiry into each particular manager’s job duties,” the court should not have to either. Id. at 1129. 7 As in Santiago, the Beauperthuy court was not persuaded by either argument because deposition testimony “show[ed] that the job duties of managers varied significantly across silos,” 9 with some individuals focused on paperwork while others managed trainers and worked directly 10 with clients, and within silos, with individuals “testif[ying] to vastly different roles in the hiring 11 United States District Court Northern District of California 8 process” and “in disciplining subordinates.” Id. at 1130. The court concluded that this evidence of 12 actual experience showed that the silo classification itself was insufficient to support a finding that 13 the plaintiffs were similarly situated. Id. at 1130. With regard to the blanket classification policy, 14 Beauperthuy, like Santiago, relied on In re Wells Fargo to conclude that “an analysis of what job 15 duties each employee actually performed is more probative than an employer's classification 16 policy when considering whether plaintiffs are similarly situated.” Id. at 1131. 17 Returning to the case at hand, the Court finds that, as in Santiago and Beauperthuy, 18 Plaintiffs’ attempt to gloss over significant differences in Collective Members’ job duties by 19 relying on their shared Job Title and HP’s blanket exemption policy fails to show that they are 20 similarly situated for several reasons. 21 First, Plaintiffs argue that all Collective Members are classified as TSCs, but this ignores 22 the six remaining Opt-Ins who are FTSCs. Thus, as Defendant correctly argues, even if the Court 23 were to agree that a shared Job Title suffices to show substantial similarity in factual and 24 employment settings, Plaintiffs’ argument would weigh in favor of decertifying the collective 25 because it contains disparate Job Titles. See Mot. at 25. Though Plaintiffs bear the burden of 26 establishing substantial similarity at this stage, Defendants have provided the only evidence 27 regarding FTSCs on this motion—and that evidence shows that Collective Members who are 28 FTSCs have a different Job Title, belong to a different Job Family, and work for different HP units 12 1 than the Collective Members who are TSCs. Perhaps recognizing this disparity, Plaintiffs state that 2 they are working with Defendant to stipulate to the dismissal of the FTSCs but, as noted above, 3 they have not notified the Court of any such resolution.6 Furthermore, even if the Court were to focus on TSCs alone, the testimony of Collective 4 Members shows that their work and employment settings also varied. For example, as Defendants 6 correctly identify, one TSC testified to simply acting as a conduit for solutions from a higher- 7 tiered engineer to a customer, see Shropshire Def. at 15:8-159:3, while another recalled reverse 8 engineering a process in order to write code for customers, see Greenspan Def. at 32:1-33:5, and 9 yet another “exercise[d] independen[ce] to identify and propose next actions and solutions.” 10 Kennedy Performance Review at 3. This shows significant disparity in Collective Members’ 11 United States District Court Northern District of California 5 factual and employment settings. See Santiago, 2013 WL 5444324 at *6 (noting difference 12 between one employee who ran existing applications and another who wrote and revised code). Collective Members themselves confirmed that their jobs differed. One TSC, Ms. Ihling, 13 14 agreed that her primary duties differed from those of others TSCs, while Ms. Chang and Mr. 15 Austin acknowledged that work could vary by an individual’s role, complexity of assigned 16 product, and years of experience. See Ihling Def. at 45:6-9, 45:20-23; Chang Def. at 29:23-30:2; 17 Austin Def. at 34:9-19, 35:15-36:11.7 Thus, as in Santiago and Beauperthuy, Collective Members’ 18 actual experience belies Plaintiffs’ argument that their Job Title suffices to establish substantial 19 similarity and instead reveals significant disparity. 20 The Court finds Plaintiffs’ reliance on the uniform exemption policy equally unpersuasive. 21 “The fact that an employer classifies all or most of a particular class of employees as exempt does 22 not eliminate the need to make a factual determination as to whether class members are actually 23 24 25 26 6 Plaintiffs suggest that the Court can exercise its discretion to cut out the FTSCs—and even TSCs with certain functional titles, like TAMs and RSAAs. The Court declines to do so, particularly given that the parties have failed to offer a list of Collective Members by Job Title or functional title and that, at the hearing, Defendant represented that doing so would prove difficult. 7 27 28 Plaintiffs devote substantial briefing to challenging Defendant’s focus on differences in location and knowledge of internal processes. See Opp. at 13-15. The Court agrees that these differences are not dispositive. However, as discussed above, other differences that TSCs describe in their factual and employment settings weigh in favor of decertifying the collective. 13 1 performing similar duties.” In re Wells Fargo Home Mortg. Overtime Pay Litig., 571 F.3d 953, 2 959 (9th Cir. 2009)). “Although Wells Fargo dealt with a Rule 23 class action, other courts in this 3 district have extended its reasoning to FLSA cases.” Beauperthuy, 772 F. Supp. 2d. at 1131. Thus, 4 as in the Order Denying Class Certification, the Court finds that the uniform exemption policy 5 “suggests that HP considered the employees to be similar at least to some degree, but does not 6 obviate the need for individual inquiries into whether or not HP’s classification was correct.” 7 Order Denying Class Certification at 27. Thus, the Court agrees with Defendant that the first 8 factor weighs in favor of decertifying the FLSA collective. 9 10 B. Available Defenses Under the second factor of the second-stage FLSA inquiry, the Court considers “the United States District Court Northern District of California 11 various defenses available to the defendants with respect to the individual plaintiffs.” Santiago, 12 2013 WL 5444324, at *4 (quoting Beauperthuy, 772 F. Supp. 2d at 1122). As the Court explained 13 in the Order Granting Conditional FLSA Certification, “[t]he FLSA requires employers to pay 14 covered employees overtime compensation of one and one-half times the regular rate of pay for all 15 hours worked in excess of forty hours per week, unless an exemption applies.” Benedict, 2014 WL 16 587135, at *4 (citing 29 U.S.C. § 207(a)(1)). Here, Defendant would invoke four exemptions as 17 defenses: the administrative, computer employee, combination, and highly-compensated employee 18 exemptions. See Mot. at 15; see also Order Denying Class Certification at 28-29. 19 The administrative and computer employee exemptions both include a salary or fee basis 20 minimum. In addition, both exemptions discuss “primary duties,” which “means the principal, 21 main, major or most important duty that the employee performs.” 29 C.F.R. § 541.700. 22 “Determination of an employee's primary duty must be based on all the facts in a particular case, 23 with the major emphasis on the character of the employee's job as a whole.” Id. Relevant factors 24 “include, but are not limited to, the relative importance of the exempt duties as compared with 25 other types of duties; the amount of time spent performing exempt work; the employee's relative 26 freedom from direct supervision; and the relationship between the employee's salary and the 27 wages paid to other employees for the kind of nonexempt work performed by the employee.” Id. 28 The administrative exemption applies to individuals whose “primary duty is the 14 1 performance of office or non-manual work directly related to the management or general business 2 operations of the employer or the employer's customers” and “includes the exercise of discretion 3 and independent judgment with respect to matters of significance.” 29 C.F.R. § 541.200(a). 4 The computer employee exemption applies to individuals whose primary duty consists of 5 (1) [t]he application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; (2) [t]he design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; (3) [t]he design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (4) [a] combination of the aforementioned duties, the performance of which requires the same level of skills. 6 7 8 9 10 29 C.F.R. § 541.400. United States District Court Northern District of California 11 The “combination exemption” applies to employees who “perform a combination of 12 exempt duties,” including those outlined in the administrative and computer exemptions. 29 13 C.F.R. § 541.708. “Thus, for example, an employee whose primary duty involves a combination 14 of exempt administrative and exempt [computer] work may qualify for exemption.” Id. 15 Finally, the highly-compensated employees exemption applies to individuals “with total 16 annual compensation of at least $100,000” who “customarily and regularly perform[ ] any one or 17 more of the exempt duties or responsibilities of an executive, administrative or professional 18 employee.” 29 C.F.R. § 541.601. Under this exemption, “[a] high level of compensation is a 19 strong indicator of an employee's exempt status, thus eliminating the need for a detailed analysis 20 of the employee's job duties.” Id. As a result, a highly-compensated employee may qualify as 21 exempt even if s/he “does not meet all of the other requirements” for another exemption. Id. 22 Courts have read this to require only “that the employee perform one of the exempt duties of an 23 administrative employee.” Alakozai v. Chase Inv. Serv., No. CV 11-09178, 2014 WL 5660697 at 24 *11 (C.D. Cal. Oct. 6, 2014); see also Mamola v. Grp. Mfg. Serv. Inc., No. CV-08-1687, 2010 WL 25 1433491 at *12 (D. Ariz. Apr. 9, 2010). 26 Defendant argues that in order to determine whether any of these exemptions applies, the 27 Court would have to engage in an individualized inquiry to determine each individual’s primary 28 duty. In particular, Defendant points to significant disparities in salary, which it contends are 15 1 relevant to both the highly-compensated employee exemption and the general primary duty test. 2 Defendant also notes disparities in the complexity and sophistication of each Collective Member’s 3 technical work, which are relevant to the computer employee exemption, as well as the following 4 inquiries for the administrative exemption: “whether they exercise independent judgment and 5 discretion in handling cases and in their problem-solving techniques; the depth of their customer 6 relationships; the extent to which they are responsible for training or transferring knowledge 7 internally and externally; and whether on their particular teams they act as team leads or subject 8 matter experts or handle special projects.” Mot. at 18. 9 Defendant again relies on Santiago, which found that differences in the plaintiffs’ titles, locations, and duties would have required the court to “engage in individualized inquiries to 11 United States District Court Northern District of California 10 determine whether each class member was properly classified as exempt.” 2013 WL 5444324, at 12 *8. Defendant also offers Hill v. R+L Carriers, Inc., No. C 09-1907 CW, 2011 WL 830546 (N.D. 13 Cal. Mar. 3, 2011), which considered a conditionally-certified collective of city dispatchers and 14 relied on the fact that “some City Dispatchers exercised more discretion than others” to find that 15 “[t]he requirements of the administrative exemption alone evince the necessity of individualized 16 inquiries in this case.” Id. at *5. 17 Plaintiffs concede that individualized defenses exist in this case, but argue that, given the 18 number of Collective Members, the individualized defenses would not result in unmanageability. 19 Opp. at 15-16. Instead, Plaintiffs argue, the Collective Members’ shared job attributes show that 20 the defenses are generalizable to most of them. 21 As discussed at length above, the Court disagrees with Plaintiffs that the Collective 22 Members’ jobs consisted primarily of shared attributes. Rather, the Court agrees with Defendant 23 that the evidence shows substantial variation in their work—and that, due to this variation, 24 adjudicating Defendant’s defenses would require significant individualized inquiries. The Court 25 notes that the evidence shows variation in “the exercise of discretion and independent judgment,” 26 compare Shropshire Def. at 15:8-159:3 with Kennedy Def. at 3. In addition, some Collective 27 Members described work that may “directly relate[ ] to . . . management,” see Holiday 2010 28 Performance Review at 3, while others made no mention of such experience. Similarly, many 16 1 employees described work that may be characterized as “testing or modification of computer 2 systems or programs,” but others stated that they escalated such work to others. See Ihling Def. at 3 31:9-11. 4 The Court identifies these differences not to reach the merits of any claim, which Plaintiffs correctly argue are not before the Court on this motion. Rather, the Court notes these differences 6 to highlight the numerous individualized inquiries that reaching the merits would necessitate. In 7 other words, much as it found in the Order Denying Class Certification, the Court determines that 8 the wide variety in Collective Members’ tasks and responsibilities shows that each individual’s 9 “work may or may not qualify as exempt, depending on the employee[’]s[ ] specific duties.” Order 10 Denying Class Certification at 29. Moreover, “even for the TSCs whose work appears similar but 11 United States District Court Northern District of California 5 includes both exempt and non-exempt work,” including Collective Members like Mr. Greenspan 12 and Ms. Levin who worked on unique “side projects,” “the proportion of each varies such that an 13 individualized inquiry would be necessary to determine each employee’s primary duty.” Id. at 30- 14 31. And the need for individualized inquiries is only exacerbated by the fact that the analysis for 15 Collective Members who earned more than $100,000 would involve a different standard than the 16 analysis for those earning less. See 29 C.F.R. § 541.601. 17 Thus, while the Court agrees with Plaintiffs that “the district court has the discretion to 18 determine whether the potential defenses would make the class unmanageable,” Opp. at 16 19 (quoting Moss v. Crawford & Co., 201 F.R.D. 398, 410 (W.D. Pa. 2000)), the Court exercises its 20 discretion to find that the potential defenses here would do precisely that. Contrary to Plaintiffs’ 21 contention, neither the number of Collective Members (approximately 130), nor the nature of their 22 jobs, which the Court finds to be varied, would make adjudication of the defenses manageable. 23 Thus, this factor also weighs in favor of granting decertification. 24 3. Fairness and Procedural Considerations 25 Finally, the Court considers the third factor of the second-stage inquiry: “fairness and 26 procedural considerations.” Beauperthuy, 772 F. Supp. 2d at 1118. Defendant argues that a 27 collective action would be neither fair nor efficient because Plaintiffs can offer no common source 28 of evidence that would address the issues in this case. Instead, Defendant contends, the case would 17 1 devolve into many “mini-trials” because relying on the testimony of only one or some subset of 2 Members would run the risk of misrepresenting the claims of others. Plaintiffs respond that the alternative, a multiplicity of duplicative suits, would burden the 3 4 Court and could risk inconsistent judgments on claims arising from the same events and brought 5 under the same laws. Opp. at 17. Plaintiffs argue that, given the remedial nature of the FLSA, the 6 Court must look “to the purposes of § 216(b) actions under the FLSA: (1) reducing the burden on 7 plaintiffs through the pooling of resources, and (2) efficiently resolving common issues of law and 8 9 10 United States District Court Northern District of California 11 fact that arise from the same illegal conduct.” Id. (quoting Morgan v. Family Dollar Stores, Inc., 551 F.3d 1233, 1264 (11th Cir. 2008)). Plaintiffs note that when faced with “close calls,” courts have maintained collective actions due to fairness and efficiency considerations. Id. (citing Falcon v. Starbucks Corp, 580 F. Supp. 2d 528, 541 (S.D. Tex. 2008)). The Court again agrees with Defendant. Having determined that the evidence shows wide 12 variation in the responsibilities and tasks of Collective Members, the Court finds that a single trial 13 for all Members would not only be unmanageable and inefficient, but it would also fail to serve 14 the purpose of the FLSA as it would require Plaintiffs to prioritize the claims of certain Collective 15 16 17 18 Members over those of others. As Defendant correctly notes, Plaintiffs have failed to meet their burden of demonstrating that Collective Members are substantially similar such that certain Members could offer representative testimony to cover the experiences of all Members.8 Thus, the third factor also weighs in favor of granting decertification. 19 20 Accordingly, the Court GRANTS Defendant’s Motion to Decertify the FLSA Collective Action. 21 22 IT IS SO ORDERED. Dated: July 13, 2016 23 ______________________________________ BETH LABSON FREEMAN United States District Judge 24 25 8 26 27 28 Instead, as noted above, Plaintiffs invite the Court to dissect the Collective to exclude FTSCs, RSAAs, and TAMs. While the Court recognizes Plaintiffs’ duty to advocate all possible avenues for certification, the Court declines to slice away each problematic subgroup of opt-in Plaintiffs in order to repackage the collective into something more manageable. Such repackaging inevitably would bring with it a whole host of unanticipated consequences not subject to briefing by the parties or this Court's consideration. 18