OPINION AND ORDER
JOHN G. KOELTL, District Judge:
The plaintiffs, Frederick L. Winfield, Zultna G. Muniz, James Steffensen, Adoram
The plaintiffs were previously employed by the defendant as "Personal Bankers." (Winfield Am. Compl. ¶ 12; Ruiz Compl. ¶ 9.) They bring this motion for conditional certification with respect to two actions that have been consolidated for the purposes of this motion and general pre-trial proceedings. In the Ruiz action, plaintiff Digna Ruiz, a resident of New York, brings claims under the FLSA and the New York Labor Law ("NYLL"), § 650 et seq. (Ruiz Compl. ¶¶ 32-41.) She seeks to bring her FLSA claims on behalf of all current and former Personal Bankers employed by the defendant nationwide since August 6, 2007, and her NYLL claims on behalf of all current and former Personal Bankers employed in the defendant's New York branches since August 6, 2004. (Ruiz Compl. ¶¶ 3-4.) Dara Ho, also a New York resident, has opted-in to this action.
In the Winfield action, plaintiffs Frederick Winfield, Zulma G. Muniz, James Steffensen, and Adoram Shen bring claims under the FLSA, purportedly on behalf of all Personal Bankers employed at the defendant's branches nationwide since September 22, 2007.
As Personal Bankers, the plaintiffs' primary job responsibility was to sell the defendant's financial products and services to the general public in Citibank branches. (Winfield Am. Compl. ¶ 21; Ruiz Compl. ¶ 15). The plaintiffs were employed in several different Citibank branches throughout the United States. The plaintiffs allege that all Personal Bankers were classified as "non-exempt" employees and were therefore eligible for overtime payments under federal and state laws. (Winfield Am. Compl. ¶ 22; Ruiz Compl. ¶ 9.) The plaintiffs contend that the defendant engaged in a policy and practice of failing to pay overtime compensation for all hours worked in excess of forty hours per week.
The plaintiffs assert that the defendant employed a "dual-edged" policy of strictly limiting the amount of overtime that Personal Bankers could accrue while imposing rigorous sales quotas that could not feasibly be met in a forty-hour work week. The plaintiffs contend that Personal Bankers faced an untenable position where they needed to work overtime to meet sales quotas that, if not met, would subject them to discipline or termination, but were told
The plaintiffs now seek an order pursuant to 29 U.S.C. § 216(b) granting conditional certification and authorizing the plaintiffs to send notice to all Personal Bankers identified on a Class List provided by the defendant, representing approximately 4,000 Personal Bankers employed by the defendant nationwide during the FLSA class periods identified in the complaints. (Decl. of Murielle J. Steven Walsh ("Walsh Decl."), Ex. 7.) The plaintiffs have included a proposed notice to all prospective class members and consent to joinder. (Walsh Decl. Ex. 2.)
The defendant opposes the plaintiffs' motion, arguing that the plaintiffs have failed to show that they are similarly situated to one another and to potential opt-in plaintiffs nationwide. The defendant also contends that the plaintiffs have not shown that they were subject to a common, unlawful policy or practice rather than merely to anomalous FLSA violations committed by individual, rogue managers. The defendant argues that, even if the Court does conditionally certify the class, it should not authorize nationwide notice but should instead limit notice to those branches where the plaintiffs or declarants personally worked. Finally, the defendant objects to certain aspects of the plaintiffs' proposed notice.
The defendant also brings a motion to strike all hearsay statements relied upon by the plaintiffs in their papers in connection with this motion.
Under § 216(b) of the FLSA, employees may maintain actions to recover unpaid wages collectively where the employees are "similarly situated" and give consent in writing "to become ... a party [to the action] and such consent is filed [with the Court]." 29 U.S.C. § 216(b). "District courts have discretion, in appropriate cases, to implement § 216(b) by facilitating notice to potential plaintiffs of the pendency of the action and of their opportunity to opt in as represented plaintiffs." Klimchak v. Cardrona, Inc., No. 09 Civ. 4311, 2011 WL 1120463, at *4 (E.D.N.Y. Mar. 24, 2011) (internal quotation marks and alterations omitted) (quoting Myers v. Hertz Corp., 624 F.3d 537, 554 (2d Cir.2010)). The Second Circuit Court of Appeals has endorsed a two-step
In exercising its discretion at the conditional certification stage, "the court does not resolve factual disputes, decide substantive issues going to the ultimate merits, or make credibility determinations." Cunningham v. Elec. Data Sys. Corp., 754 F.Supp.2d 638, 644 (S.D.N.Y.2010) (internal citations omitted). The plaintiffs need only make a "modest factual-showing that they and potential opt-in plaintiffs together were victims of a common policy or plan that violated the law." Myers, 624 F.3d at 555 (internal quotation marks and citations omitted).
If the plaintiffs demonstrate that "similarly situated" employees exist, the Court should conditionally certify the class, order that appropriate notice be given to putative class members, and the action should continue as a "collective action throughout the discovery process." Cunningham, 754 F.Supp.2d at 644. "At the second stage, the district court will, on a fuller record, determine whether a so-called `collective action' may go forward by determining whether the plaintiffs who have opted-in are in fact `similarly situated' to the named plaintiffs. The action may be `de-certified' if the record reveals that they are not, and the opt-in plaintiffs' claims may be dismissed without prejudice." Myers, 624 F.3d at 555.
The defendant moves to strike all hearsay statements relied upon by the plaintiffs that are contained in the deposition testimony and declarations submitted in support of this motion. The defendant contends that this testimony recounts statements made by others, namely statements by other Personal Bankers that they were not paid for all overtime hours worked, and statements by Branch Managers allegedly repeating what Area or Regional Managers told them about overtime policies.
On a motion for conditional certification "courts in this Circuit regularly rely on [hearsay] evidence to determine the propriety
Thus, it is unnecessary to strike any hearsay statements at this preliminary stage of the litigation. The Court will afford any such hearsay statements the weight to which they are entitled.
In this case, the plaintiffs have satisfied their minimal burden of showing that they are similarly situated to one another and to potential opt-in plaintiffs. Five plaintiffs, one opt-in plaintiff,
Other courts have found plaintiffs to be similarly situated when they made common allegations that dual-edged policies similar to those alleged here effectively required them to work uncompensated overtime. See Burkhart-Deal v. Citifinancial, Inc., No. 07 Civ. 1747, 2010 WL 457127, at *2 (W.D.Pa. Feb. 24, 2010) ("In this case, all affidavits submitted by Plaintiff contain a sufficiently similar allegation of injury, based on an unwritten `policy' involving sales targets, job responsibilities, and managerial personnel, that discouraged them from recording or requesting overtime. They ... all allege that they worked for Defendant ..., were de facto required to work more than forty hours per week, and were not always compensated for that overtime."); Falcon v. Starbucks Corp., 580 F.Supp.2d 528, 536-37 (S.D.Tex.2008) (concluding, on motion for decertification, that plaintiffs were similarly situated where they presented evidence that the defendant's policy of requiring them "to perform job duties that could not easily be completed within 40 hours while, at the same time, strongly discouraging overtime" resulted in off-the-clock work and time shaving); Levy v. Verizon Info. Servs., Inc., No. 06 Civ. 1583, 2007 WL 1747104, at *2, *4 (E.D.N.Y. June 11, 2007) (finding telephone sales representatives similarly situated where they alleged that they were encouraged to work overtime to meet strict sales quotas but that overtime had to be and rarely was pre-approved, resulting in a failure to pay overtime hours worked).
The defendant contends, however, that the plaintiffs are not similarly situated to one another and to other potential opt-in plaintiffs because their testimony reveals inconsistencies regarding the plaintiffs' motives for working overtime; how much overtime, if any, they were paid; and what job duties they performed, among other purported discrepancies. However, the relevant "issue ... is not whether Plaintiffs and [potential opt-in plaintiffs] were identical in all respects, but rather whether they were subjected to a common policy to deprive them of overtime pay when they worked more than 40 hours per week." Raniere v. Citigroup, Inc., No. 11 Civ. 2448, 2011 WL 5881926, at *25 (S.D.N.Y. Nov. 22, 2011) (internal quotation marks and citation omitted). The plaintiffs need not demonstrate that they are similarly situated in every respect, provided they are similarly situated with respect to the FLSA violations they allege. See, e.g., Falcon, 580 F.Supp.2d at 536-37 (rejecting argument that differing job duties and motivations for working overtime defeated a similarly situated finding where all employees alleged that they were not compensated for overtime hours worked); Hallissey v. Am. Online, No. 99 Civ. 3785, 2008 WL 465112, at *2 (S.D.N.Y. Feb. 19, 2008) (noting that "[t]he proper inquiry in a § 216(b) determination is whether plaintiffs are similarly situated with respect to their allegations that the law has been violated" and rejecting the argument that "circumstances unique to each [employee]" precluded a similarly situated finding) (internal quotation marks and citation omitted).
The defendant argues, however, that the plaintiffs have not made a modest factual showing that they and potential opt-in plaintiffs are similarly situated in that they were subject to "a common policy or plan that violated the law." Myers, 624 F.3d at 555. Instead, the defendant contends, the plaintiffs have at best shown that they may have been victims of anomalous FLSA violations committed by individual, rogue managers.
The defendant first contends that the Court should not rely on facially lawful policies of limiting the amount of overtime accrued as a basis for presuming a common pattern or practice of FLSA violations. The defendant emphasizes that it has a written policy requiring that all overtime hours worked be recorded and paid. However, the existence of a formal policy that is facially unlawful is not a prerequisite for conditional certification. Instead, it is sufficient to show that a facially lawful policy was implemented in an unlawful manner, resulting in a pattern or practice of FLSA violations. Indeed, several courts have held that "de facto policies" of this nature can be actionable under the FLSA. See Burkhart-Deal, 2010 WL 457127, at *3 ("An unwritten policy or practice resulting in unpaid overtime, such as hinging management pay on meeting hours targets, may be actionable under the FLSA."); Falcon, 580 F.Supp.2d at 536 ("Defendants correctly note that it is not unlawful for an employer to have a policy of discouraging overtime. Where such a policy, however, in combination with other factors, leads to a consistent pattern of FLSA violations, it can support a finding that plaintiffs are similarly situated for purposes of section 216."); Blakes v. Illinois Bell Tel. Co., No. 11 Civ. 336, 2011 WL 2446598, at *5 (N.D.Ill. June 15, 2011) ("[Plaintiffs] assert that AT & T Illinois enforces an unwritten de facto policy that discourages employees from seeking compensation for work performed outside their shift and that forces them to perform uncompensated work off-the-clock. Courts in this district regularly allow plaintiffs to pursue collective actions under the FLSA in these circumstances." (internal quotation marks and citations omitted)).
The plaintiffs here concede that the defendant's policies of strictly limiting the number of overtime hours that could be accrued and of requiring Personal Bankers to meet strict sales quotas were lawful on their face. The plaintiffs do not contend that these policies themselves constitute the "common policy or plan that violated the law" that they must show for conditional certification. Myers, 624 F.3d at 555. However, they present evidence that these policies resulted, in practice, in a pattern of FLSA violations. The plaintiffs allege that their Branch Managers reconciled the competing imperatives of limiting overtime and meeting sales quotas by permitting or encouraging Personal Bankers to work overtime to meet their quotas but at the same time forbidding them from or pressuring them not to report overtime; refusing to approve timesheets indicating overtime hours worked; or shaving hours off timesheets they submitted. (Ho Dep. 124-30, 219, 240, 242-43; Muniz Dep. 48-49, 51, 53-54, 141; Winfield Dep. 182, 215, 241-42; Steffensen Dep. 161-64; Ruiz Dep. 157-60; Shen Dep. 143-44; Ash Decl. ¶¶ 7, 10-12; Handy Decl. ¶¶ 10-13;
The defendant contends, however, that even if the plaintiffs and declarants were themselves subject to a common, unlawful policy or practice, the de facto policy alleged here cannot serve as a basis for inferring that their experiences are typical of Personal Bankers nationwide. In support of this argument, the defendant cites several cases that have refused to grant nationwide conditional certification where the plaintiffs made similar allegations that a facially lawful policy resulted in employees being effectively required to work uncompensated overtime. However, none of those cases held that facially lawful policies like those at issue here could never serve as a basis for inferring a nationwide pattern or practice of FLSA violations. Instead, those cases held that certain aspects of the facially lawful policies at issue or certain deficiencies in the evidence presented made it inappropriate to infer that the FLSA violations alleged by individual plaintiffs were likely to be widespread across a nationwide class. See, e.g., Eng-Hatcher v. Sprint Nextel Corp., No. 07 Civ. 7350, 2009 WL 7311383, at *3-*4 (S.D.N.Y. Nov. 13, 2009) (no evidence other than plaintiff's own deposition to show that there was a widespread pattern of FLSA violations); Seever v. Carrols Corp., 528 F.Supp.2d 159, 173-74 (W.D.N.Y.2007) (denying nationwide conditional certification of class of 100,000 where only evidence was allegations of two plaintiffs who worked at one store, one affidavit from employee at another store, and additional affidavits that were "incomprehensibly vague as to the material circumstances" surrounding the alleged policy); Simmons v. T-Mobile USA, Inc., No. H-06-1B20, 2007 WL 210008, at *6-*7 (S.D.Tex. Jan.
Here, in contrast, the plaintiffs have made a stronger showing that the defendant's facially lawful policies of limiting overtime and enforcing strict sales quotas resulted in widespread FLSA violations. Unlike in the cases cited by the defendant, the plaintiffs here provide testimony from Personal Bankers employed in different branch locations across the nation. The five plaintiffs, one opt-in plaintiff, and four declarants have worked, collectively, in thirteen different branches in six of the thirteen states where the defendant operates, as well as the District of Columbia, and allege that they were not properly compensated for overtime worked at each of these locations. Moreover, three of the plaintiffs and declarants testify that they are aware of other Personal Bankers who similarly worked overtime without proper compensation. (Ho Dep. 208-09, 263; Steffensen Dep. 187-91; Wilson Decl. ¶¶ 12-13.) The plaintiffs also submit emails indicating that FLSA violations may have occurred at other branch locations. As described above, an email from one Branch Manager at the Richmond Hill, New York branch expressed concern that Personal Bankers at the branch had been working unpaid overtime, and a follow-up email referenced three affected individuals by name. (Walsh Suppl. Reply Decl. Ex. 15.) In addition, an email from a Personal Banker at the District of Columbia branch states that his Branch Manager had instructed him to falsify his timesheets to indicate that he had not worked overtime. (Walsh Suppl. Reply Decl. Ex. 17.) Thus, in total, the evidence produced by the plaintiffs spans over a dozen branches and six states, as well as the District of Columbia.
Moreover, in this case, the nature of the defendant's facially lawful policies supports the plaintiffs' allegations that those policies caused managers to commit FLSA violations. The plaintiffs here have offered evidence that those managers who allegedly committed FLSA violations did so because they were instructed, compelled, forced, or encouraged to do so by the policies of preventing accrual of overtime while still requiring Personal Bankers to meet rigorous sales goals. Several plaintiffs testified that their Branch Managers, in instructing them not to report overtime or in refusing to approve timesheets reflecting overtime hours worked, linked these actions to a directive from regional management to keep overtime costs to a minimum. For example, plaintiff Muniz stated that her Branch Manager told her
The defendant next contends that, because the defendant had a written policy requiring payment for all overtime worked, any violations of this policy must have been anomalous incidents instigated by rogue managers. However, the existence of a formal policy of requiring overtime pay should not immunize the defendant where the plaintiffs have presented evidence that this policy was commonly violated in practice. See, e.g., Burkhart-Deal, 2010 WL 457127, at *3 (concluding that "[t]he fact that Defendant has a written policy requiring overtime pay ... does not defeat conditional certification" and noting that such arguments "skirt the merits" and are inappropriate for resolution on motion for conditional certification); Beauperthuy v. 24 Hour Fitness USA, Inc., No. 06-0715 S.C. 2008 WL 793838, at *4 (N.D.Cal. Mar. 24, 2008) ("An employer's responsibility under the FLSA extends beyond merely promulgating rules to actually enforcing them.... That Defendants published a handbook cannot immunize them against an FLSA violation where there is substantial evidence that they did not follow their own guidelines."); Levy, 2007 WL 1747104, at *2 (granting conditional certification despite argument that defendant's written policy requiring payment of overtime meant that "any deviations from this provision ... are at best isolated incidents and do not implicate the company's overtime policy"); Vennet v. Am. Intercontinental Univ. Online, No. 05 Civ. 4889, 2005 WL 6215171, at *7-*8 (N.D.Ill. Dec. 22, 2005) (rejecting argument that defendant's written policy requiring payment for all overtime necessarily meant that "any contrary instruction from individual supervisors would have to be proven on an individualized basis and be based on anecdotal evidence").
Conditional certification is appropriate even though the plaintiffs allege that the FLSA violations were caused by a widespread de facto policy carried out by individual managers. See Falcon, 580 F.Supp.2d at 539 (rejecting the notion that "an informal policy requiring off-the-clock work cannot be litigated collectively where a large number of plaintiffs were employed at many different locations and the decision to allow or require off-the-clock work was carried out by individual managers"). As the court in Falcon stated:
580 F.Supp.2d at 539-40.
The plaintiffs need not show that "all managers nationwide [acted] in lockstep"
The plaintiffs have therefore made a modest factual showing that they and potential opt-in plaintiffs were subject to an unlawful policy or practice whereby they were effectively required to work uncompensated overtime.
The defendant also contends that the plaintiffs have not made a modest factual showing that they were subject to an unlawful common policy or practice because they have not satisfied the commonality requirement as articulated in the Supreme Court's recent decision in Wal-Mart Stores, Inc. v. Dukes, ___ U.S. ___, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011). In Dukes, the Supreme Court held that, to satisfy the commonality requirement of Federal Rule of Civil Procedure 23(a), putative class members' claims must "depend upon a common contention" that is "of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each of the claims in one stroke." Id. at 2551. The defendant asserts that, on this motion for conditional certification, the plaintiffs must similarly demonstrate that there is a common basis on which to generate common answers to the liability issues central to their claims.
However, the stringent requirements for class certification under Rule 23 are not identical to the minimal burden that plaintiffs carry on a motion for conditional certification under § 216(b) of the FLSA. Courts in this Circuit have repeatedly emphasized that the more exacting Rule 23 requirements are not applicable to conditional certification motions. See Myers, 624 F.3d at 556; Rosario v. Valentine Ave. Discount Store, Co., Inc., No. 10 Civ. 5255, 828 F.Supp.2d 508, 513, 2011 WL 5244965, at *3 (E.D.N.Y. Nov. 2, 2011). Accordingly, numerous courts, including district courts in this Circuit, have refused to apply Dukes on motions for conditional certification under the FLSA, concluding that the Rule 23 analysis had no place at this stage of the litigation. See, e.g., Pippins v. KPMG LLP, No. 11 Civ. 0377, 2012 WL 19379, at *7 (S.D.N.Y. Jan. 3, 2012); Ware v. T-Mobile USA, No. 11 Civ. 411, 828 F.Supp.2d 948, 955-56, 2011 WL 5244396, at *6 (M.D.Tenn. Nov. 2, 2011); Faust v. Comcast Cable Commc'ns Mgmt., LLC, No. 10 WMN 2336, 2011 WL 5244421, at *1 n. 1 (D.Md. Nov. 1, 2011); Troy v. Kehe Food Distribs., Inc., 276 F.R.D. 642, 651-52 (W.D.Wash.2011); Alli v. Boston Market Co., No. 10 Civ. 4, 2011 WL 4006691, at *5 n. 3 (D.Conn. Sept. 8, 2011); Sliger v. Prospect Mortg., LLC, No. 11 Civ. 465, 2011 WL 3747947, at *2 n. 25 (E.D.Cal. Aug. 24, 2011); but cf. MacGregor v. Farmers Ins. Exch., No. 10 Civ. 3088, 2011 WL 2981466, at *4 (D.S.C. July 22, 2011).
Thus, to make a modest factual showing that they were subject to a "common
The defendant also objects to certain aspects of the plaintiffs' proposed notice. The defendant contends (1) that notice should only be provided to those Personal Bankers employed within three years of the date the notice was mailed rather than within three years of the date the Ruiz complaint was filed; and (2) that notice should not extend to Personal Bankers whose claims would be time barred under the three-year FLSA statute of limitations but not under the six-year New York Labor Law statute of limitations.
With respect to the defendant's first objection, it is true that, because the three-year statute of limitations period for willful FLSA violations runs for each individual plaintiff until that plaintiff consents to join the action, notice should generally be directed to those employed within three years of the date of the mailing of the notice. See 29 U.S.C. § 255; Whitehorn v. Wolfgang's Steakhouse, Inc., 767 F.Supp.2d 445, 451 (S.D.N.Y.2011). However, because equitable tolling issues often arise for prospective plaintiffs, courts frequently permit notice to be keyed to the three-year period prior to the filing of the complaint, "with the understanding that challenges to the timeliness of individual plaintiffs' actions will be entertained at a later date." Whitehorn, 767 F.Supp.2d at 451; see also Thompson v. World Alliance Fin. Corp., No. 08 Civ. 4951, 2010 WL 3394188, at *7 (E.D.N.Y. Aug. 20, 2010); Fasanelli, 516 F.Supp.2d at 323 n. 3 (S.D.N.Y.2007). It is appropriate here for the plaintiffs to send notice to all Personal Bankers employed within three years of the date the Ruiz complaint was filed. The defendant is free, however, to challenge the timeliness of individual plaintiffs' claims in the future.
It is also permissible to extend the notice period to six years for those Personal Bankers who were employed in New York and might therefore have New York Labor Law claims. Because the plaintiff in the Ruiz action also brings state law NYLL claims, that are governed by a six-year statute of limitations, this Court may exercise supplemental jurisdiction over those claims pursuant to 28 U.S.C. § 1367. There may be a number of employees with both timely FLSA and state law claims, and several courts in this Circuit have deemed it appropriate to grant six-year rather than three-year notice periods in such circumstances. See, e.g., Schwerdtfeger, 2011 WL 2207517, at *6; Klimchak v. Cardrona Inc., No. 09 Civ. 4311, 2011 WL 1120463, at *7 (E.D.N.Y. Mar. 24, 2011); Avila v. Northport Car Wash, 774 F.Supp.2d 450, 455-56 (E.D.N.Y.2011);
The defendant alludes to other potential defects in the plaintiffs' proposed notice.
The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the remaining arguments are either moot or without merit. For the foregoing reasons, the defendant's motion to strike hearsay statements is
January 27, 2012