The U.S. District Court for the Western District of New York decertified a collective action under the Fair Labor Standards Act and denied the plaintiff’s motion for class certification of the state law claims under Rule 23. Tracy v. NVR, Inc. (W.D.N.Y. 4.29.13). Plaintiffs alleged that the national home-builder misclassified them as non-exempt sales and marketing representatives (SMRs) and thus failed to pay them the appropriate overtime compensation. The defendant argued that the SMRs were exempt from FLSA’s overtime provisions under the outside sales exemption. The district court granted conditional certification as a FLSA action in June 2007. Numerous SMRs opted-in to the suit after more than four years of costly discovery and vigorous motion practice.
First, the district court determined that the plaintiffs had failed to demonstrate that they (and other SMRs in the putative class) had sufficiently similar factual and employment settings for purposes of the FLSA, that defenses available to NVR would be similar for each plaintiff, or that interests of fairness or judicial economy would be preserved by a collective action. Given the broad variations demonstrated by exemplar SMRs, the court determined that it would be impossible to make a blanket determination concerning the exempt status of the entire class of putative plaintiffs under the FLSA or to extrapolate experiences of exemplar SMRs to the more than one-hundred opt-in class members. The wide variety of practices and time management requirements would require dozens of mini-trials to determine whether each employee’s particular time away from the “office” met the “1-2 hours, at least 2 days a week” threshold indicated by the DOL’s definition for outside salesperson. The court concluded that the proposed class was not appropriate for collective action and decertified the class.
The district court also denied plaintiffs’ motion for class certification under Rule 23. “Because the plaintiffs’ claims pertain to different SMRs in different locations, under different managers, who performed duties outside of their offices to varying degrees and in different ways, the plaintiffs’ claims – as well as any determinations to be made concerning damages – are too highly individualized to form the basis for a class action.” Citing Wal-Mart Stores, Inc. v. Dukes and Comcast Corp. v. Behrend, the court, in concluding that predominance under Rule 23(b)(3) was not established, stated that class certification under Rule 23 is not appropriate where plaintiffs cannot provide a method for computing damages that takes into account all pertinent differences between putative class members and where broad disparities between employees’ job settings, caused by broad discretion given to managers, would require resolution by a series of mini-trials rather than single action.
This case is yet another example demonstrating how employers should invoke the principles of Dukes and now, Behrend, to emphasize dissimilarity and lack of uniformity among putative class members to defeat class certification.