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class certificationClass Certification Denied

Co-authored by Laura Maechtlen and Nadia S. Bandukda

Last week, in Till v. Saks Inc., U.S. District Judge Saundra Brown Armstrong of the Northern District of California denied Plaintiffs’ motion to certify a class of present and former exempt managers and associates at Saks’ Off 5th retail stores, and granted Saks’ preemptive bid to deny approval of a nationwide FLSA certification.  At issue in the case was the executive exemption.  Plaintiffs claim they were improperly classified as exempt, and alleged various related claims under the FLSA and California Labor Code.

Citing the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, the court reasoned that the commonality requirement is not met by generalized questions that don’t meaningfully advance the litigation and where Plaintiffs and putative class members have not suffered the “same injury.”   Indeed, the court recognized that, “[d]issimilarities within the proposed class may ‘impede the generation of common answers’” and, “[i]f there is no evidence that the entire class was subject to the same allegedly discriminatory practice, there is no question common to the class.”

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Plaintiffs here pointed to a single purported common question to support class certification, namely: “whether the job duties of Assistant Managers qualify for the executive exemption under California law.”  They alleged that the answer could be shown by “common proof,” consisting of:  (1) inadequate labor budgets which required Assistant Managers to perform non-exempt functions; (2) corporate directives which stripped managers of their discretion; (3) expectation that customer service is “number one” priority, which resulted in the performance of non-exempt duties; (4) Defendants’ alleged knowledge that Managers performed non-exempt functions; and, (5) the fact that Assistant managers did not manage a “department” or “subdivision.”   But the court ruled that the experiences of the named Plaintiffs “diverge significantly” from the proposed class members, and at most were typical of only some of the proposed class members.   Indeed, there was conflicting evidence regarding the experience of the putative class members, sometimes within the same store, and variety among stores themselves; accordingly, Plaintiffs’ anecdotal evidence was insufficient to be representative of other class members and/or a showing of common proof of a classwide practice or policy.  Thus, Plaintiffs failed to show commonality, typicality, and predominance.

The Court then took it one step further and denied nationwide collective action certification under the FLSA.  Plaintiffs never even moved for conditional certification, so the court took up Defendants’ affirmative motion to deny collective treatment.  In doing so, the court found that:  (1) the factual record confirms the disparate experiences of putative class members, which vary by store and individuals within the same store; (2) some of the putative FLSA Plaintiffs may be subject to releases, which Plaintiffs acknowledged is an individualized defense; and (3) Plaintiffs have not identified any particular fairness and procedural considerations that justify permitting Plaintiffs to proceed on their FLSA claims on a collective basis.

Take-aways:  Wal-Mart Stores remains important in the litigation of complex wage-hour cases.  Here, the case was instrumental in showing that there must be some “glue” that holds the class together – without it, no class action could proceed.  In that same vein, employers should not continue to stress evidence showing dissimilar experiences within a class, in an effort to demand a detailed examination of the differences among work experiences within job classifications.  In Till, the court recognized actual differences in job experiences, including, labor budgets, stores (sales volume, square footage, store hours, number of entrances and store location), method and manner of work within the same store location, level and type of customer service, support for non-exempt employees, and time spent on managerial vs. non-managerial duties.  For this reason, employers are well-served to show those differing experiences in opposing class certification motions and/or affirmatively moving to deny certification.

Find this article and others by Seyfarth Shaw LLP here.