FREDERICK J. MARTONE, District Judge.
Before the court is plaintiffs' motion to confirm collective certification (doc. 312), defendants' response (doc. 317), and plaintiffs' reply (doc. 318).
On May 24, 2011, we conditionally certified a class of current and former AutoZone Store Managers whom AutoZone classifies as exempt from the overtime pay requirement under the executive exemption of the Fair Labor Standards Act, 29 U.S.C. § 213(a)(1) (doc. 67). We also granted summary judgment in favor of AutoZone, concluding that it had established that the Store Manager position meets each element of the FLSA executive exemption.
The Fair Labor Standards Act ("FLSA") requires that employers pay their employees time and a half for hours worked in excess of forty hours per week, unless the employees fall into one of the statutory exemptions. 29 U.S.C. § 207(a)(1). Exempt employees include "any employee employed in a bona fide executive . . . capacity."
Applying a two-tiered approach, we have already conditionally certified a class of Store Managers and notice was given (doc. 67 as amended by doc. 87). Subsequently, 1,476 current or former AutoZone Store Managers opted into this action under 29 U.S.C. § 216(b). At step two-the decertification stage-we apply a more rigorous analysis, with the benefit of a more fully developed record, to determine whether the plaintiffs are "similarly situated" to justify proceeding as a collective action. Plaintiffs must "provide substantial evidence to demonstrate" that they are "similarly situated" to the individuals whom they intend to represent.
Similar does not mean identical.
Although the "similarly situated" requirement is more stringent at the second stage, it remains less stringent than the requirement that common questions predominate in certifying class actions under Rule 23, Fed. R. Civ. P. "All that need be shown . . . is that some identifiable factual or legal nexus binds together the various claims of the class members in a way that hearing the claims together promotes judicial efficiency and comports with the broad remedial policies underlying the FLSA."
In determining whether plaintiffs are "similarly situated," we consider factors such as (1) disparate factual and employment settings of the individual plaintiffs; (2) whether defendants' various defenses will require individual proof; and (3) fairness and procedural considerations.
The executive exemption applies to an employee (1) who is compensated on a salary basis of not less than $455 per week; (2) whose primary duty is management; (3) who "customarily and regularly directs the work of two or more other employees"; and (4) who "has the authority to hire or fire other employees or whose suggestions and recommendations. . . are given particular weight." 29 C.F.R. § 541.100(a). The primary duty analysis is based on the totality of the circumstances, "with the major emphasis on the character of the employee's job as a whole." 29 C.F.R. § 541.700(a).
AutoZone argues that the propriety of the Store Managers' exempt executive classification hinges on the "intensely factual nature" of their individual job duties, which would require individualized scrutiny, resulting in hundreds of mini-trials, and that without this individualized scrutiny, it will be deprived of its ability to present legitimate defenses to the asserted claims. We disagree.
When comparing the factual and employment settings of class members as part of a similarly situated inquiry, we consider factors such as whether plaintiffs had differing job titles or duties, worked in different geographic locations, worked under different supervisors, or allege different types of violative conduct.
AutoZone's nationwide stores are operated in a highly standardized manner. The country is divided into geographical divisions, regions, and districts, with each district containing between 8 and 10 stores, with an average of 8 to 11 employees in each store. Each region has a Regional Manager, and each district has a District Manager who directly supervises the Store Manager in each of the stores within a district.
AutoZone admits that it does not classify Store Managers based on individual performance, but instead classifies every Store Manager as exempt under the executive exemption.
Every Store Manager has the same job title and same job description. Each Store Manager receives a base salary and no paid overtime regardless of hours worked. Each is subject to the same corporate labor model that capitalizes on Store Manager's exempt status by transferring non-managerial duties to Store Managers to perform during unpaid overtime hours.
Store Managers are also alike in that all hiring and firing authority rests with the District and Regional Managers, and not the Store Managers. Initial job applications are processed by a computerized eHire system. A Store Manager follows a preset script in interviewing a prospective employee, filing out a checklist, and submitting the form to the District Manager who then evaluates and hires candidates. (Doc. 265 ¶¶ 15(d), 18, 21). All Store Managers are similar in their inability to authorize raises or promotions, to close stores in emergencies, or to make any decisions concerning pricing or inventory. (Doc. 265 ¶ 13(j)). A computerized store management system allows District Managers to closely monitor store sales, set individual employee's schedules, and generate task lists. (Doc. 265 ¶¶ 6(c)(e), 13(f)-(g)).
Plaintiffs' legal claims—that defendants violated the FLSA by improperly classifying all Store Managers as exempt "executives" even though their primary duty was not serving as an executive—are substantially similar for all Plaintiffs. Representational proof may establish among other things (1) AutoZone's universal classification of Store Managers with the same job duties; (2) the average amount of time Store Managers spend on managerial versus non-managerial duties; (3) restrictions on Store Manager's authority to manage stores; (4) the amount of supervision of Store Managers by District Managers; and (5) Store Managers' limited authority to give pay raises or promotions, or to close stores in emergencies, or choose vendors.
The uniformity results in large part from AutoZone's companywide policies concerning job descriptions and job duties, as well as the standardization, automation, and centralized tracking and control of their day-to-day activities. A Store Manager's employment experience is therefore substantially similar regardless of geographical location.
Based on testimony of several individual Store Managers, AutoZone contends that too many disparities exist between class members' actual employment experiences to permit a finding that Store Managers are universally misclassified. For example, AutoZone cites to two Store Managers who testified that they do not believe that they were "in charge" of their stores. However, an individual Store Manager's own estimation of his primary duties, or whether he believed he was "in charge" of the store, is not dispositive of his primary duties as a Store Manager. AutoZone's focus on an individualized analysis ignores the FLSA's "major emphasis on the character of the employee's job as a whole." 29 C.F.R. § 541.700(a).
Defendants also rely on a survey circulated to the opt-in class members by Plaintiffs' expert, David Lewin, Ph.D., along with an "expert analysis" of the answers received from 1,057 of those solicited. Defendants contend that the survey results illustrate why the plaintiffs' class claim is not amenable to representative proof, and in fact suggest that at least a substantial percentage of the class was properly classified as exempt. But "[j]ust because the inquiry is fact-intensive does not preclude a collective action where plaintiffs share common job traits."
It is indisputable that the putative class members share uniform job traits and responsibilities, compensation incentives, training, and evaluation criteria. Slight variations among individual Store Manager's experiences are not enough to preclude a collective action under the FLSA. It will be up to the jury to weigh the evidence to determine whether the essential character of the Store Manager's job is executive or non-executive, but the essential character of the job can be established by representational proof.
The second factor we consider on decertification is whether AutoZone asserts defenses that would require individualized proof.
We have already concluded that the putative class members are similarly situated with respect to the essential character of their job duties. Therefore, an individualized assessment of each Store Manager's job duties, and accordingly AutoZone's defenses, is not necessary.
In evaluating the third factor, we consider the primary objectives of a collective action: (1) to lower plaintiffs' costs through the pooling of resources, and (2) to limit the controversy to one proceeding so as to efficiently resolve common issues of law and fact without prejudice to either party.
Here there exists a significant, identifiable factual and legal nexus that binds together the various claims of the class members in a way that hearing the claims together promotes judicial efficiency and comports with the broad remedial policies underlying the FLSA.