KATHERINE POLK FAILLA, District Judge.
Plaintiffs in this consolidated matter move to certify a class action against Defendant Citibank, N.A. on behalf of current and former personal bankers for unpaid overtime in violation of the New York Labor Law (the "NYLL"), the Illinois Minimum Wage Law, and the District of Columbia Minimum Wage Act Revision Act. Defendant Citibank moves to decertify a collective action previously certified under the Fair Labor Standards Act of 1938 (the "FLSA"). For the reasons set forth in this Opinion, Plaintiffs' motion is denied and Defendant's motion is granted.
Plaintiff Digna Ruiz, a resident of New York, filed a complaint in this District on August 10, 2010, seeking to bring a nationwide collective action under the FLSA and a statewide class action under the NYLL. (Ruiz Compl. (Dkt. # 1) ¶¶ 3-4). Ruiz alleged that Citibank had failed to compensate its personal bankers for overtime hours worked in violation of both laws. (Id.). Fredrick Winfield, Zulma Muniz, James Steffensen, and Adoram Shen — residents of, respectively, Washington, D.C., Illinois, Virginia, and California — filed a complaint in this District on September 22, 2010, seeking to bring a nationwide collective action under the FLSA; statewide class actions under the labor laws of Washington, D.C., Illinois, and California;
Defendant Citibank moved in response to the Amended Winfield Complaint (Winfield Dkt. # 30) to dismiss all claims and, further, to strike the requests for injunctive relief on standing grounds. (Winfield Dkt. # 33). Judge Koeltl granted the motion in part and denied it in part, dismissing the Winfield Plaintiffs' ERISA claims. Winfield v. Citibank, N.A., 842 F.Supp.2d 560 (S.D.N.Y.2012). In addition, the Court, after limited discovery, granted conditional certification of the FLSA collective action in both cases and authorized the issuance of notice to all personal bankers employed at Citibank within the relevant time period. Winfield v. Citibank, N.A., 843 F.Supp.2d 397 (S.D.N.Y.2012).
During the class notice period, notice was sent to over 6,000 current and former Citibank personal bankers potentially eligible to join the FLSA collective action or the NYLL action, of whom 437 opted in to the FLSA collective action (including Plaintiff Ruiz). (Linthorst Decl. ¶¶ 2-3).
Upon the conclusion of the certification-focused period of discovery, the parties filed the instant motions for certification of the state law classes under Rule 23 (Dkt. # 182) and decertification of the FLSA collective action (Dkt. # 178) on April 30, 2014. Oppositions to those motions were filed on May 30, 2014 (Dkt. # 188, 190), and replies were filed on June 20, 2014 (Dkt. # 197, 200). Defendant's sur-reply in further opposition to the motion for certification was filed on July 14, 2014 (Dkt. # 204), and the briefing was complete with the filing of Plaintiffs' sur-sur-reply in further support of the motion for certification on August 4, 2014. (Dkt. # 209). The Court now considers the motions.
Defendant Citibank is a global bank with roughly 1,000 domestic branches in 13 states and the District of Columbia. (Dkt. # 46 Ex. 10 ¶ 7). Each branch is managed by a branch manager, and branch managers are supervised by roughly 65 area directors. (Id.). Each branch generally has a certain number of tellers, between one and ten personal bankers, and (depending on the size of the branch) other positions, such as assistant branch manager. (Id. ¶¶ 4-6).
Plaintiffs worked for Citibank as personal bankers during the relevant time period. The FLSA collective action consists of over 400 current or former personal bankers who have opted in to the collective action; the putative New York class consists of over 2,000 current or former personal bankers who worked for Citibank in New York during the relevant period; the putative Illinois class consists of over 330 personal bankers; and the putative D.C. class consists of 16 personal bankers. (Tyner Decl. ¶ 3).
Citibank's personal bankers are compensated on an hourly basis (Tyner Decl. Ex. 10), and are classified as non-exempt, overtime-eligible employees (id. Ex. 66). Personal bankers perform a number of client-related services, but their primary task is the sale of various banking services to current and potential clients. (Id. Ex. 10). Personal bankers have sales "hurdles," requiring them to amass monthly sales credits equal to a percentage of their annual salary, and above which they may receive
Failure to meet the sales goals is governed by the "Performance Management Progression" (or, in other years, the "Seller Corrective Action Process"), which sets escalating penalties for failure to meet goals (either the sales hurdle or a percentile rank within the seller class): an informal warning for missing the goals two out of three months; a performance improvement plan for missing the goals four out of six months; a final warning if performance does not improve on the performance improvement plan; and ultimately the possibility of termination. (Tyner Decl. Ex. 27, 28). Deposition testimony from Plaintiffs and Sample Opt-Ins suggests that penalties for failure to meet the sales targets were at the discretion of the branch manager, and unevenly imposed. (See Drago Dep. 167-68; Drews Dep. 114-15; Winfield Dep. 178). The evidence similarly suggests a striking lack of uniformity, both between personal bankers and among personal bankers from month to month, in how difficult it was to meet the sales targets while working 40 hours per week. (See Def. Decert. Br. 21-22 (collecting testimony)).
Citibank's 2009 employee handbook contains several explicit instructions to employees that they are entitled to time-and-a-half overtime pay for hours worked beyond 40 hours; that although overtime must be approved in advance, overtime must be paid for time worked regardless of preapproval; that time must be recorded accurately; and that "`off-the-clock' work is strictly prohibited. Managers may not request or require `off-the-clock' work." (Linthorst Decl. 56-C, at 23-25). The handbook also informs employees that concerns about overtime pay may be raised with Citibank's Human Resources Department, and that "[r]etaliation against any employee for raising a concern is strictly prohibited." (Id. at 25). Citibank's 2013 and 2011 employee handbooks contain similar language. (Id. Ex. 56-A, 56-B).
Personal bankers' hours are tracked through Citibank's North America Time & Attendance ("NATA") System. (Linthorst Decl. Ex. 57 (Sumoela Decl.) ¶¶ 4-5). According to Citibank's training materials, it was the primary responsibility of personal bankers to input their hours using the NATA system, but their branch managers would review and approve the hours. (Id. Ex. A, B, C, D, E). The training materials nowhere indicate that branch managers should independently edit their employees' hours, though they do indicate that it is a branch manager's responsibility to "[c]omplete and submit the time record on behalf of their employee when they are unable to complete/submit their time record." (Id. Ex. E). The deposition of Lori Sumoela, a Human Resources Risk Control Analyst at Citibank, indicates that branch managers could unilaterally edit the timesheets of personal bankers, though such edits would be logged and an audit report showing the changes could be accessed by both employees
Prior to 2011, either an employee or a manager could approve a timesheet to send it to Human Resources (Sumoela Dep. 54); in 2011, a feature was added requiring the employee to affirm that the timesheet was complete and accurate before it would be sent to Human Resources (Sumoela Decl. ¶¶ 11-13). If an employee declared that the timesheet was not accurate, a Human Resources representative would contact the employee (id. at ¶ 13; Tyner Decl. Ex. 132), though Plaintiffs suggest that such contact was primarily a device to pressure employees into selecting "I Agree" rather than to resolve concerns (Pl. Decert. Opp. 13-14).
In addition to its NATA system, Citibank tracked when employees logged onto and off of their work computers at the beginning and end of the workday. (See Tyner Decl. Ex. 124). An internal Citibank email suggests that managers were generally expected to review the audit logs to confirm the accuracy of timesheets, and that same email indicates that one branch manager's comparison of the audit logs with timesheets suggested that personal bankers were working significant amounts of unreported overtime. (Id.). Citibank's third-party security service also tracked the entry of alarm codes that were disarmed and armed at the beginning and end of every day, when the branch was opened and closed; some employees were given alarm codes, and each code was unique to an employee. (Wolter Dep. 42-45).
During the relevant period, Citibank's senior management sent out several directives to limit expenses, including among them overtime pay. (See, e.g., Tyner Decl. Ex. 70 (email identifying promotional items, stationery and supplies, travel and entertainment, and overtime pay as areas in need of expense management)). Even here, however, a common goal is difficult to discern: Different communiques set different targets, with several indicating a goal of zero overtime and others indicating nonzero targets. (Compare id. Ex. 67, 68, 72, 77 with id. Ex. 56 (25% reduction), 57 (50% reduction), 59 (75% reduction), 71 (goal of $11,000 per month for a branch)).
Some, but not all, of the directives to reduce overtime paid contained warnings that overtime incurred must be paid, and that the goal was to reduce overtime incurred. (See Tyner Decl. Ex. 67 ("That said, we absolutely MUST pay our PBs [Personal Bankers] for the time they were on the PB call last Thursday evening, even if they took the call from home. Be SURE that they record their hour (well actually minutes) that they were on that call."), Ex. 79 ("Note — As always, we pay employees for the OT hours they work and will approve such hours via the standard process."), Ex. 81 ("You may also have instances when OVERTIME is unavoidable. It is your responsibility to ensure your employees record their TIME WORKED accurately on their TIMESHEETS.")). Many of the emails also emphasize that overtime must be preapproved, though these generally state that (in accordance with Citibank policy) the approval must come before the overtime is incurred, rather than suggesting that there be nonpayment of overtime that has already been incurred. (See, e.g., id. Ex. 80 ("Inform your Employees that ANY OVERTIME ... need[s] your approval before OVERTIME IS INCURRED.... Please check timesheets on NATA with
The results of this push at the individual level were indeterminate. Citibank paid personal bankers a total of $2.39 million in overtime pay in 2009, $2.17 million in 2010, $2.07 million in 2011, $2.26 million in 2012, and $4.06 million in 2013. (Linthorst Decl. Ex. 48 (Hammond Decl.) ¶ 4). Perhaps more significantly, reviewing the payroll records of the Sample Opt-Ins, Citibank determined that every Sample Opt-In and named Plaintiff received overtime pay;
By way of background, the FLSA requires all qualifying employers
To meet the standard for certification of a class action under Federal Rule of Civil Procedure 23, Plaintiffs must establish that:
Fed.R.Civ.P. 23(a). In addition to these four requirements — often labeled numerosity, commonality, typicality, and adequacy — a class must meet one of the three standards set forth by Rule 23(b). Here, Plaintiffs seek to certify three classes under Rule 23(b)(3), which requires that "the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy."
"[A] district judge may not certify a class without making a ruling that each Rule 23 requirement is met," In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 27 (2d Cir.2006), and "[t]he party seeking certification must establish the Fed. R.Civ.P. 23 requirements by a preponderance of the evidence," Pa. Pub. Sch. Emps.' Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 119 (2d Cir.), as amended (Nov. 12, 2014). "Rule 23 does not set forth a mere pleading standard," Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011), and courts must undertake a "rigorous analysis" to ensure that the requirements of Rule 23 have been satisfied, Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). "Frequently that `rigorous analysis' will entail some overlap with the merits of the plaintiff's underlying claim." Dukes, 131 S.Ct. at 2551. Here, Defendant vigorously challenges whether the D.C. class has met the numerosity requirement, and challenges all three state classes on whether the named plaintiffs' claims are typical of the class as a whole, whether the case presents sufficient commonality to justify proceeding on a class basis, and whether such common inquiries, to the extent they exist, predominate over the individual questions.
With the exception of the adequacy of the proposed class counsel, which is not at issue, and the numerosity requirement with regard to the D.C. class, which presents an independent bar to certification of that class, the issues tend to merge into the determination of whether the state classes share common questions, susceptible to classwide proof, that advance the
The ramifications of Dukes are still being teased out by the courts, but a few observations can be made: Courts have not found that "Dukes bars certification in wage and hour cases," Morris v. Affinity Health Plan, Inc., 859 F.Supp.2d 611, 616 (S.D.N.Y.2012) (collecting cases), and Defendant wisely does not attempt such an argument. Nor should it be suggested that Dukes bars certification of a class across multiple branches. That said, Dukes makes plain that the requirements of Rule 23 are not mere speedbumps on the road to certain certification, but rather that "[t]he party seeking `class certification must affirmatively demonstrate ... compliance with the Rule,' and a district court may only certify a class if it `is satisfied, after a rigorous analysis,' that the requirements of Rule 23 are met." In re Am. Int'l Grp., Inc. Sec. Litig., 689 F.3d 229, 237-38 (2d Cir.2012) (latter alteration in original) (quoting Dukes, 131 S.Ct. at 2551).
Another focus of the Dukes opinion was the issue of scale. As Judge Sand of this District has observed,
Chen-Oster v. Goldman, Sachs & Co., 877 F.Supp.2d 113, 119 (S.D.N.Y.2012) (alteration in original) (citing Dukes, 131 S.Ct. at 2552). While Dukes certainly does not foreclose nationwide class actions, fairly read, it requires plaintiffs — like Ruiz
Finally, Dukes suggested that in the absence of an express company policy that violated employee-plaintiffs' rights, plaintiffs could nonetheless obtain class certification to challenge a practice that had sufficiently pervaded the company that it had become a de facto policy. Even here, however, plaintiffs are required to identify the "glue" holding together these disparate exercises of managerial discretion and rendering them suitable for classwide resolution. Specifically, the Court required plaintiffs to demonstrate "a common mode of exercising discretion that pervades the entire company," since "it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction." 131 S.Ct. at 2554-55.
As a practical matter, employee-plaintiffs can rarely point to an explicit policy of their employer that is violative of their rights, including their rights under the relevant wage and hour laws. Courts have recognized this fact, and proof of de facto policies has therefore become the coin of the realm. To prove such policies, plaintiffs could present evidence of the implementation or recognition of these sub silentio policies at the senior management level, but such smoking guns are also quite rare. In the alternative, plaintiffs must present enough evidence to confidently suggest a uniform, or nearly uniform, practice occurring across branch offices. Perhaps even before Dukes, but certainly after that decision, this evidence entails either (i) comprehensive statistical analyses or (ii) anecdotal evidence that reaches a certain critical mass. Plaintiffs do not attempt the former, and as set forth in the remainder of this section, do not succeed in putting forth the latter.
It has been noted that, under Rule 23(a)(2)'s commonality requirement, "[e]ven a single common legal or factual question will suffice." Freeland v. AT & T Corp., 238 F.R.D. 130, 140 (S.D.N.Y. 2006) (citing In re Agent Orange Prod. Liab. Litig., 818 F.2d 145, 166-67 (2d Cir. 1987)). Yet that common question must materially advance the litigation. As the Supreme Court has approvingly quoted, the language of Rule 23(a)(2) "is easy to misread, since `[a]ny competently crafted class complaint literally raises common questions.'" Dukes, 131 S.Ct. at 2551 (alteration in original) (quoting Richard Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L.Rev. 97, 131-32 (2009)). Thus "[w]hat matters to class certification ... is not the raising of common questions — even in droves — but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation." Id. (alteration and emphasis in original) (quoting Nagareda, supra, at 132).
Here, certain common questions are apparent and easily susceptible to classwide proof: Did Citibank have a national sales quota formula for personal bankers? Did Citibank attempt to reduce overtime hours paid to personal bankers from 2007 to 2012? Yet these types of questions, though generating common answers, are not apt to drive the resolution of the litigation. Setting production targets is a perfectly acceptable employment practice, as are "customary management
In this regard, Citibank's policies are comparable to Wal-Mart's policy of delegating significant discretion to managers over pay and promotions, which, though vulnerable to abuse, is "a very common and presumptively reasonable way of doing business." Dukes, 131 S.Ct. at 2554. And as with Dukes again, the only evidence of uniform corporate policy is Citibank's entirely legal employment practices — here, repeated admonitions in training materials, handbooks, and communications that any overtime incurred must be paid. Cf. Hinterberger v. Catholic Health Sys., 299 F.R.D. 22, 51-52 (W.D.N.Y.2014) ("Because the question of CHS's NYLL liability will come down to whether, on a department-specific basis, a particular supervisor did not follow CHS's directive to devise and implement a method for reporting mealtime work, discouraged the reporting of mealtime work, or knew the work was performed but did not audit and correct time cards as required, Plaintiffs have not met the commonality prerequisite.").
Plaintiffs identify four variations of the same common issue: "whether [personal bankers] were not properly compensated for overtime as a result [of] Citibank's `de facto' policy against the payment of overtime." (Pl. Cert. Br. 2122). And indeed, this question lies at the very heart of the litigation, suggesting "that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke." Dukes, 131 S.Ct. at 2551. Yet as noted above, this common question must be capable of "generat[ing] common answers apt to drive the resolution of the litigation." Id. (quoting Nagareda, supra, at 132). "Quite obviously, the mere claim by employees of the same company that they have suffered [a similar injury] gives no cause to believe that all their claims can productively be litigated at once." Id. If the common question posed by Plaintiffs were, standing alone, sufficient to satisfy Rule 23's commonality requirement, it would render commonality the sort of "mere pleading standard" rejected by Dukes. Accordingly, Plaintiffs seek to demonstrate by three routes a common plan or scheme to encourage and condone unpaid overtime: first, by demonstrating the common experiences of putative class members by anecdotal testimonial evidence; second, by producing communications from and among Citibank managers demonstrating a common approach to overtime; and third, by arguing that knowledge of violations — an element of all three state legal standards for overtime violations — is common across the class. None of these avenues, either individually or in tandem, leads to a common answer.
Plaintiffs' first argument is that the competing demands for high production and low hours worked created hydraulic pressure that predictably resulted in managers requiring off-the-clock work. Yet such a theory depends on demonstrating a relatively uniform response across branch managers; elsewise, Plaintiffs cannot identify "a common mode of exercising discretion that pervades the entire company." Dukes, 131 S.Ct. at 2554-55. Managers
As noted supra, the Supreme Court has disclaimed the notion that anecdotal evidence must follow a strictly proportionate relationship to the size of the class. Dukes, 131 S.Ct. at 2556 n. 9. The Court distinguished, however, between cases in which 40 accounts of discrimination represented roughly one account for every eight class members, id. at 2556 (citing Teamsters v. United States, 431 U.S. 324, 338, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977)), and Dukes itself, in which 120 affidavits represented roughly one account for every 12,500 class members, id. Here, the 31 named Plaintiffs, Declarants, and Sample Opt-Ins identified at Exhibit 130 of Plaintiffs' Tyner Declaration represent roughly one account for every 76 of the roughly 2,346 putative class members (see Tyner Decl. ¶ 3). Yet even this ratio is unduly generous to Plaintiffs. If Plaintiffs seek to prove a nationwide policy that was disseminated throughout the three class states, the denominator (all personal bankers over the relevant period nationwide) would be significantly higher than 2,346, and the ratio of anecdotal accounts to personal bankers correspondingly lower.
Moreover, even if this number of anecdotal accounts were sufficiently large to confidently be extrapolated to the class as a whole, the contradictions and heterogeneity within the group suggest the lack of a common answer. (See, e.g., Drago Dep. 57 (testifying to different practices with regard to overtime at different branches), 167-68 (no written warning for
In addition to anecdotal testimonial evidence from personal bankers, Plaintiffs point to the higher levels of Citibank's management and argue that, despite the formal policies regarding overtime pay, there is sufficient evidence of a de facto plan or policy to encourage off-the-clock work. Such evidence has not been presented to this Court and, it would appear, does not exist. Plaintiffs' evidence of such a de facto policy consists of inferences drawn from a comparatively miniscule quantity of emails among branch and area managers, and the testimony of certain personal bankers. As previously noted, many of the emails contain explicit admonitions that any overtime incurred must be paid.
Finally, Plaintiffs suggest that even if the wrongful behavior did not occur across the class, Citibank was generally put on notice as to the prevalence of denial of overtime wages, thus answering a significant common question. Even if such a common question suffices to meet the requirements of Rule 23(a)(2), the Court once again finds that the record betrays the absence of a common answer. Plaintiffs have brought forward only a handful of emails demonstrating that awareness of overtime violations percolated above the branch manager level, and these instances brought about immediate efforts to rectify the violations. In one instance, a new branch manager discovered that employees had been pressured by the previous branch manager into working off-the-clock. (Dkt. # 67 Ex. 1 (Henderson Decl.) ¶ 6). In response, Citibank's Human Resources department interviewed each personal banker at the branch, and paid each of them the highest amount of uncompensated overtime — 300 hours — estimated by any one of them. (Id. at ¶¶ 8-9). In another instance, Sample Opt-In Schornstein was paid nearly $12,000 for unreported overtime when her branch was investigated by Citibank for underreporting time. (Schornstein Dep. 183). While it is true that Citibank is liable for every violation of
The instant case is similar to that brought on behalf of personal bankers against Wells Fargo and Wachovia in Fernandez v. Wells Fargo Bank, N.A., Nos. 12 Civ. 7193(PKC), 12 Civ. 7194(PKC), 2013 WL 4540521 (S.D.N.Y. Aug. 28, 2013). The plaintiffs' theory was that "the personal bankers of Wells Fargo ... were subject to a common, [statewide] policy to limit their recorded hours or require off-the-clock work." Id. at *5. Yet as in this case, "[n]owhere in plaintiffs' papers do they cite a specific, concrete, management directive concerning plaintiffs' off-the-clock work or any purported requirement not to record hours worked." Id. And similarly, the plaintiffs' evidence consisted of email correspondence submitted with little or no context, statements made by several individuals without personal knowledge, and a significant amount of anecdotal evidence, much of which contained contradictions, and some of which lay either temporally or geographically outside the bounds of the proposed class. Id. at *5-9.
The cases upon which Plaintiffs rely are largely distinguishable, though the Court will not pretend that the entirety of federal Rule 23 jurisprudence (even, if not especially, post-Dukes) can be reconciled. Some present common questions of whether the formal classification of employees or activities as not falling within the scope of the applicable overtime law was correct; a review of the case law confirms that these "misclassification" cases are far more susceptible of classwide resolution than "off-the-clock" cases such as the instant one. In Jackson v. Bloomberg, L.P., 298 F.R.D. 152 (S.D.N.Y.2014), for example, the common questions included whether a class of employees was properly classified as exempt and whether certain work activities were properly characterized as sufficiently minimal to obviate the need for recording. Id. at 162-64; see also Jacob v. Duane Reade, Inc., 602 Fed.Appx. 3, 6, 2015 WL 525697, at *2 (2d Cir. Feb. 10, 2015) (summary order) ("[T]he common contention to be proved is whether Duane Reade misclassified its employees as exempt from New York's overtime requirements."). In other cases, the evidence of a de facto policy that deviated from a formal policy is significantly stronger than in the instant case. See, e.g., Whitlock v. FSL Mgmt., LLC, No. 3:10 Civ. 00562(JHM), 2012 WL 3274973, at *6-7 (W.D.Ky. Aug. 10, 2012) (discussing meeting notes of enforcement of unpaid promotional duties by the manager of the entire class). And in still other cases, the anecdotal evidence was far more compelling due to the more compact nature of the class. See Jimenez v. Allstate Ins. Co., No. 4:10 Civ. 8486(JAK), 2012 WL 1366052 (C.D.Cal. Apr. 18, 2012) (certifying a class of claims adjusters across 13 California market claims offices within a
The Court does not downplay the evidence amassed by Plaintiffs of individual violations, of systematic violations at the branch level, and even of violations induced by certain area directors across multiple branches. But the record in its totality shows that Citibank's formal, companywide policies are entirely legal and appropriate, and that there is no evidence of a common plan or scheme to subvert these policies. A classwide determination of liability thus depends upon demonstrating that appropriate policies have reliably translated themselves into inappropriate managerial behavior across the width and breadth of the class. Such evidence is simply not to be had from this record. All of the Sample Opt-Ins were paid overtime in at least some pay periods, with wide variation between them. While paying some overtime does not relieve Citibank of liability for the overtime it failed to pay, the variation suggests that the effects of Citibank's purported "no overtime" policy were far from uniform. To be clear, the Court does not suggest that every branch must have implemented unlawful policies for class certification to be appropriate. But at a minimum Plaintiffs must demonstrate "common direction" in the allegedly unlawful behavior or "a common mode of exercising discretion that pervades the entire company." Dukes, 131 S.Ct. at 2554-55. The Court finds the evidence insufficient to demonstrate either common direction or a common mode of exercising discretion, and accordingly finds an absence of common questions susceptible to classwide proof.
Rule 23(b)(3) requires, in part, that "the questions of law or fact common to class members predominate over any questions affecting only individual members." Yet the Court has found, under the standards set forth in Dukes, that because the plaintiffs have provided "no convincing proof of a companywide [unlawful] policy... they have not established the existence of any common question." 131 S.Ct. at 2556-57. If there are no common questions, then common questions cannot predominate over individual questions. See Amchem Products, Inc. v. Windsor, 521 U.S. 591, 624, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (finding that "the predominance criterion is far more demanding" than the commonality criterion). While the Court accordingly need not fully address the parties' disputes over predominance, it is worth noting that Defendants have raised a significant number of necessarily individualized inquiries into liability that confirms the impracticability of proceeding as a class, largely concerning the questions of whether personal bankers worked unreported overtime, at whose direction, and with whose knowledge. Such questions speak to both predominance and superiority. See Johnson v. Nextel Commc'ns Inc., 780 F.3d 128, 148 (2d Cir.2015) ("Because liability for a significant bloc of the class members and damages for the entire class must be decided on an individual basis, common issues do not predominate over
These questions of liability for unreported overtime are distinct from questions going to damages. The weight of circuit authority holds that the presence of some potential class members who have suffered no damages is not fatal to certification, so long as liability for any damages is susceptible to common proof. See In re Whirlpool, 722 F.3d at 855 (rejecting, in finding common liability for the sale of washing machines susceptible to mold, the argument "that the certified class is too broad because it includes Duet owners who allegedly have not experienced a mold problem and are pleased with the performance of their Duets"). Here, however, the issue is not merely that damages are highly particularized, but that Plaintiffs have failed to make the necessary showing that whatever damages exist are traceable to a common plan or scheme attributable to Citibank as a whole. Because the defect goes to liability and not damages, it cannot be cured by simply defining those personal bankers who worked no unpaid overtime as outside the class (see Pl. Cert. Reply 3 & n. 7) — a suggestion that, as Defendant points out, would raise serious concerns about the impermissible creation of a "fail-safe class" (see Def. Cert. Sur-Reply 2-3 (collecting cases)). It is not the existence of class members who suffered no harm that defeats certification, but rather the lack of common questions driving liability for even those class members who did suffer harm.
Furthermore, the necessity of additional individualized inquiries over damages, while not inherently fatal to class certification, "should be considered at the certification stage when weighing predominance issues." Roach v. T.L. Cannon Corp., 778 F.3d 401, 408 (2d Cir.2015). Plaintiffs argue that Defendant's database containing computer log-in and log-out times can effectively resolve the question of individualized damages in a single blow, by comparing the computer audit logs to the timesheets in Defendant's NATA system. (See Pl. Cert. Br. 31-32). However, such information would not obviate the need for individualized inquiries. Several Plaintiffs testified that they regularly worked before logging in and after logging out (see, e.g., Lindsey Dep. 120-21; Nessler Dep. 174-78; Ruiz Dep. 338-39; Winfield Dep. 317-18); conversely, the audit logs would not reveal the length of lunch breaks, or whether a logged-in employee was researching sales opportunities or taking advantage of online shopping sales (see Bodt Dep. 6870). This Court, like other courts to confront the same issue, finds that audit logs developed for a distinct purpose (monitoring computer activity) are not a reliable way of calculating hours worked. See Howard v. CVS Caremark Corp., No. 13 Civ. 4748(SJO), 2014 WL 7877404, at *9-11 (C.D.Cal. Dec. 9, 2014) (finding CVS's prescription-tracking system, Rx Connect, "to be poor `glue' for holding together Plaintiffs' claims" of unpaid off-the-clock overtime work due to "several shortcomings with the Rx Connect records"); In re Bank of Am., 286 F.R.D. at 588 ("[I]t is not possible for anyone to accurately ascertain whether an employee in fact worked off-the-clock simply by comparing the transactional data with that employee's timekeeping records."). In short, the plethora of individualized questions going to liability and damages would defeat class certification under Rule 23(b)'s predominance requirement even if a common policy or practice could be found under Rule 23(a).
As an additional defect, the Washington, D.C. class, consisting of 16 personal
Effectively as a cross-motion, Defendants have moved to decertify the FLSA collective action that was previously certified by the Court. As set forth herein, the critical inquiry under FLSA is whether the opt-in plaintiffs are "similarly situated." The Court's does not, to be clear, undertake the "rigorous analysis" prescribed by Dukes, but it is still required to find sufficient evidence of common treatment. Despite years of discovery, Plaintiffs have failed to adduce enough evidence to meet even this lesser burden. Accordingly, the Court grants Defendants' motion.
Section 216(b) of the FLSA authorizes collective actions to recover damages for unpaid wages where all employees are "similarly situated." 29 U.S.C. § 216(b). "When deciding whether to certify a class under 29 U.S.C. § 216(b), district courts in the Second Circuit apply a two-step process." Morano v. Intercontinental Capital Grp., Inc., No. 10 Civ. 2192(KBF), 2012 WL 2952893, at *4 (S.D.N.Y. July 17, 2012). The first step of this process, often termed conditional certification,
It has been noted that "the great majority of cases involve certification at the initial stages of the litigation," Torres v. Gristede's Operating Corp., No. 04 Civ. 3316(PAC), 2006 WL 2819730, at *9 (S.D.N.Y. Sept. 29, 2006); perhaps for this reason, "[t]he Second Circuit has yet to prescribe a particular method for determining whether members of a class are similarly situated" at the second, more stringent stage, Pefanis v. Westway Diner, Inc., No. 08 Civ. 002(DLC), 2010 WL 3564426, at *4 (S.D.N.Y. Sept. 7, 2010). Some courts, respecting Congress's admonition not to import Rule 23's requirements into the FLSA, have adopted a multifactor approach, see Torres, 2006 WL 2819730, at *9 (adopting the Tenth Circuit's "ad hoc" approach (citing Thiessen v. Gen. Elec. Capital Corp., 267 F.3d 1095, 1102 (10th Cir.2001))), while others have framed the inquiry in terms similar to Rule 23's commonality requirement, see Pefanis, 2010 WL 3564426, at *4 (requiring "a persuasive showing that the original and opt-in plaintiffs were common victims of a FLSA violation pursuant to a systematically-applied company policy or practice such that there exist common questions of law and fact that justify representational litigation"). Other courts have gone further, analogizing the FLSA certification inquiry to the overall standard of Rule 23. See Espenscheid v. DirectSat USA, LLC, 705 F.3d 770, 772 (7th Cir.2013) ("[T]here isn't a good reason to have different standards for the certification of the two different types of actions, and the case law has largely merged the standards, though with some terminological differences." (collecting cases)); accord Gardner v. W. Beef Props., Inc., No. 07 Civ. 2345(NGG) (JMA), 2013 WL 1629299, at *6 (E.D.N.Y. Mar. 25, 2013) ("The more opt-ins there are in the class, the more the analysis under § 216(b) will mirror the analysis under Rule 23."), report and recommendation adopted sub nom. White v. W. Beef Props., Inc., No. 07 Civ. 2345(RJD)(JMA), 2013 WL 1632657 (E.D.N.Y. Apr. 16, 2013). But see Hernandez v. Fresh Diet, Inc., No. 12 Civ. 4339(ALC) (JLC), 2014 WL 5039431, at *8 (S.D.N.Y. Sept. 29, 2014) ("A number of district courts in this Circuit have observed that the second-stage `similarly situated' analysis under FLSA § 216(b) is considerably less stringent than the requirement of Rule 23(b)(3) that common questions predominate." (internal alteration and quotation marks omitted)).
Ultimately, this Court agrees with the Tenth Circuit that, functionally, "there is little difference in the various approaches" to motions to decertify a collective action under the FLSA. Thiessen, 267 F.3d at 1105. The Supreme Court, analyzing the same "similarly situated" standard of 29 U.S.C. § 216(b) that is incorporated into both the FLSA and the Age Discrimination in Employment Act (the "ADEA"), noted that collective actions allow the judicial system to "benefit[] by efficient resolution in one proceeding of common issues of law and fact arising from the same alleged discriminatory activity." Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). The Seventh Circuit has noted the similarity between this analysis and the efficiency motivations underlying Rule 23. See Espenscheid, 705 F.3d at 772 ("[T]he provisions of Rule 23 are intended to promote efficiency as well, and in that regard are as relevant to collective actions as to class actions." (internal citations omitted)). Given this harmony of animating principles, it is not mere coincidence that courts
At the first step in the FLSA certification process, Judge Koeltl granted Plaintiffs' motion for conditional certification and authorized notice to be sent out to potential opt-in plaintiffs. The Court, noting Plaintiffs' "minimal burden of showing that they are similarly situated to one another and to potential opt-in plaintiffs" at this stage, found that they had made the "modest factual showing" necessary for the Court to conditionally certify the class. Winfield, 843 F.Supp.2d at 401-10. In doing so, the Court noted several distinctions between the standard necessary for conditional certification and the fuller inquiries required both for Rule 23 certification and for upholding conditional certification in the face of a subsequent motion to decertify. In particular, it noted that at that earlier stage "the court does not resolve factual disputes, decide substantive issues going to the ultimate merits, or make credibility determinations," id. at 402 (quoting Cunningham v. Elec. Data Sys. Corp., 754 F.Supp.2d 638, 644 (S.D.N.Y.2010)); that "courts in this Circuit regularly rely on [hearsay] evidence to determine the propriety of sending a collective action notice," id. at 402-03 (alteration in original) (quoting Moore v. Eagle Sanitation, 276 F.R.D. 54, 59 (E.D.N.Y. 2011)); and that the commonality requirement of Dukes is not applicable to a motion for conditional certification, id. at 409-10. And while accepting at that stage the testimony of several plaintiffs and declarants as to the misbehavior of several branch managers, the Court nonetheless cautioned that "[i]f further discovery reveals that such managers were indeed acting aberrantly, the defendant remains free to renew this argument by bringing a motion to decertify the class following the close of discovery." Id. at 409. Defendant has indeed renewed the argument in its motion to decertify the collective action, and has done so successfully.
With discovery relating to certification and decertification now closed, the Court turns to the fuller consideration of the record contemplated by the FLSA. Without belaboring the point, Defendant's motion to decertify the collective action succeeds for exactly the same reason Plaintiffs' motion to certify the class actions fails — a lack of commonality, even under the less stringent FLSA analysis. Plaintiffs' evidence at the point of collective certification consisted primarily of anecdotal testimony as to several managers' misbehavior, and statements that those managers attributed the need to work unpaid overtime to company policy. Winfield, 843 F.Supp.2d at 405-08. After nearly two years of discovery, dozens of deposition, and hundreds of thousands of pages of document discovery (Linthorst Decl. ¶¶ 4-16), Plaintiffs have advanced the ball very little in demonstrating a common plan or scheme. As discussed above, Plaintiffs still rely largely on anecdotal allegations of violations, second-hand statements regarding companywide policy to force unpaid overtime attributed to branch managers, and a pair of entirely appropriate workplace policies that interacted — with highly uneven and uncertain effect — across Citibank's many branches. Such evidence may suffice for conditional certification, but it does not provide a persuasive showing that the opt-in plaintiffs are "similarly situated,"
To be clear, the Supreme Court's analysis of Rule 23's commonality requirement in Dukes does not govern the "similarly situated" analysis. See 7B Charles Alan Wright & Arthur Miller, Federal Practice & Procedure § 1807 (3d ed. as modified 2014) (collecting cases and determining that district courts have "uniformly rejected" the argument that Dukes tightened the standard for FLSA collective actions). Yet the critical difference between Rule 23(b)(3) class actions and FLSA collective actions — the opt-out versus the opt-in model — carries less weight here due to the manner in which discovery proceeded. As this Court has expatiated in the preceding section, even when one examines only the sample Opt-In Plaintiffs, massive disparities are apparent in the policies of their branch managers, the difficulty in meeting their sales targets, and the frequency with which they received overtime. (See supra at n. 11). Because Plaintiffs have not shown a common policy that operated to common effect, or some other mode of evidencing shared experiences, they cannot proceed as a collective action. See Hernandez, 2014 WL 5039431, at *4 (decertifying collective action because "Plaintiffs are unable to carry their burden to demonstrate that the Defendants had a common policy or plan in violation of the FLSA that negatively impacted the original and opt-in Plaintiffs" (internal alterations and quotation marks omitted)). To find otherwise would reduce Section 216(b)'s requirement that plaintiffs be "similarly situated" to a mere requirement that Plaintiffs share an employer, a job title, and a professed entitlement to additional wages.
Where the collective action as envisioned cannot proceed, "the case may be divided, if appropriate, into subgroups. Alternatively, the claims of the opt-in plaintiffs may be dismissed without prejudice and the action proceed for the original plaintiffs alone, but not as a collective action." Pefanis, 2010 WL 3564426, at *4 (internal citation omitted). Here, there is no apparent subdivision that would correct the fatal flaws in Plaintiffs' attempt to maintain a collective action. As Citibank notes, looking at the 37 named Plaintiffs and Sample Opt-Ins who participated in discovery, there is only a single branch manager who oversaw more than one member of this group, having supervised three different Sample Opt-Ins at varying points in time. (Linthorst Decl. ¶ 14). Though consideration of the full class of 436 opt-in plaintiffs would no doubt reveal additional overlap, their employment would still have taken place at hundreds of branches scattered across the country under an even greater number of branch managers. And even branch location might not suffice as a class metric, given the potential individualized defenses to liability. Given that the number of necessary subclasses would likely approach the number of plaintiffs, there are no apparent efficiencies to be gained from proceeding collectively rather than by individual suit. Cf. Morano, 2012 WL 2952893, at *7 (decertifying a previously conditionally certified FLSA collective action, and refusing to subdivide where there were individualized defenses and multiple branch locations). Accordingly, the Court dismisses the claims of the opt-in plaintiffs without prejudice.
Because the proposed class actions lack common questions of law or fact, Plaintiffs' motion to certify class actions under the New York Labor Law, the Illinois Minimum Wage Law, and the District of Columbia Minimum Wage Act Revision Act is DENIED. In addition, because the opt-in plaintiffs are not similarly situated, Defendant's
The Court further grants the parties' letter requests to file redacted versions of their briefs and to file certain exhibits to the declarations in support of and opposition to their briefs under seal. Having weighed the factors set forth by the Second Circuit in Lugosch v. Pyramid Co. of Onondaga, 435 F.3d 110 (2d Cir.2006), the Court finds that the parties' interest in preserving Plaintiffs' financial privacy and protecting the confidentiality of certain of Defendants' manuals and training materials outweigh the public's interest in disclosure.
The remaining parties are directed to appear before the Court for a status conference on
SO ORDERED.
Defendant's opening brief in support of the motion for decertification is referred to as "Def. Decert. Br."; Plaintiffs' opposition as "Pl. Decert. Opp."; and Defendant's reply brief as "Def. Decert. Reply." Plaintiffs' opening brief in support of the motion for certification is referred to as "Pl. Cert. Br."; Defendant's opposition as "Def. Cert. Opp."; Plaintiffs' reply as "Pl. Cert. Reply"; Defendant's sur-reply as "Def. Cert. Sur-Reply"; and Plaintiffs' sur-sur-reply as "Pl. Cert. Sur-Sur-Reply."
In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 324 (3d Cir.2008), as amended (Jan. 16, 2009). Similarly, the requirement of rigorous analysis must extend to evaluating the reliability of a handful of declarations of second- or thirdhand knowledge in establishing Citibank's nationwide corporate policy. Cf. Suvill v. Bogopa Serv. Corp., No. 11 Civ. 3372(SLT)(RER), 2014 WL 4966029, at *8 (E.D.N.Y. Sept. 30, 2014) ("As a preliminary matter, the Court hesitates to give weight to those assertions in the declarations submitted by plaintiffs' counsel that have not been corroborated by deposition testimony because similar statements in the declarations have proven inaccurate and many of these assertions are not based on personal knowledge."). Put simply, in light of Dukes, the Court is unwilling to certify classes of this magnitude based on imprecise recollections of information for which Plaintiffs have no firsthand knowledge, particularly where such recollections are (i) not uniform among class members, (ii) undercut by extensive contemporaneous evidence, and (iii) contradicted by the only company-wide evidence presented to the Court.
Cognizant of this imprecision, the Court nonetheless adopts the "certification-decertification" parlance used by other courts to describe the two-step process under the FLSA.
